Document:

Exhibit 10.63

 

NON-QUALIFIED
STOCK OPTION AGREEMENT

FOR NON-EMPLOYEE DIRECTORS

 

UNDER THE
MAC-GRAY CORPORATION

[STOCK OPTION AND INCENTIVE PLAN]

 

Name of Optionee: ___________________________________

No. of Option Shares:
_________________________________

Option Exercise Price per Share:
________________________

Grant Date: _________________________________________

Expiration Date: _____________________________________

 

 

Pursuant to the Mac-Gray Corporation [Stock Option and Incentive Plan]
as amended through the date hereof (the “Plan”), Mac-Gray Corporation (the “Company”)
hereby grants to the Optionee named above, who is a Director of the Company but
is not an employee of the Company, an option (the “Stock Option”) to purchase
on or prior to the Expiration Date specified above all or part of the number of
shares of Common Stock, par value $0.01 per share (the “Stock”) of the Company
specified above at the Option Exercise Price per Share specified above subject
to the terms and conditions set forth herein and in the Plan.  This Stock Option is not intended to be an “incentive
stock option” under Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”).

 

1.                                       Exercisability
Schedule.  No portion of this Stock
Option may be exercised until such portion shall have become exercisable.  Except as set forth below, and subject to the
discretion of the Administrator (as defined in the Plan) to accelerate the
exercisability schedule hereunder, this Stock Option shall be exercisable with
respect to the following number of Option Shares on the dates indicated:

 

	
  Number of 

  Option Shares Exercisable

  	
   

  	
  Exercisability Date

  	
   

  
	
  (100

  	
  )%

  	
  May 1,
  [      ]

  	
   

  

 

In the event of the termination of the Optionee’s service as a Director
of the Company because of death or disability (as defined in Section 422(c) of
the Code), this Stock Option shall become immediately exercisable in full,
whether or not exercisable at such time. 
Once exercisable, this Stock Option shall continue to be exercisable at
any time or times prior to the close of business on the Expiration Date,
subject to the provisions hereof and of the Plan.

 

 

2.                                       Manner
of Exercise.

 

(a)                                  The
Optionee may exercise this Stock Option only in the following manner:  from time to time on or prior to the
Expiration Date of this Stock Option, the Optionee may give written notice to
the Administrator of his or her election to purchase some or all of the Option
Shares purchasable at the time of such notice. 
This notice shall specify the number of Option Shares to be purchased.

 

Payment of the purchase price for the Option Shares may be made by one
or more of the following methods:  (i) in
cash, by certified or bank check or other instrument acceptable to the
Administrator; (ii) through the delivery (or attestation to the ownership)
of shares of Stock that have been purchased by the Optionee on the open market
or that are beneficially owned by the Optionee and are not then subject to any
restrictions under any Company plan and that otherwise satisfy any holding
periods as may be required by the Administrator; (iii) by the Optionee
delivering to the Company a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the Company cash or
a check payable and acceptable to the Company to pay the option purchase price,
provided that in the event the Optionee chooses to pay the option purchase
price as so provided, the Optionee and the broker shall comply with such
procedures and enter into such agreements of indemnity and other agreements as
the Administrator shall prescribe as a condition of such payment procedure; or (iv) a
combination of (i), (ii) and (iii) above.  Payment instruments will be received subject
to collection.

 

The transfer to the Optionee on the records of the Company or of the
transfer agent of the Option Shares will be contingent upon (i) the
Company’s receipt from the Optionee of the full purchase price for the Option
Shares, as set forth above, (ii) the fulfillment of any other requirements
contained herein or in the Plan or in any other agreement or provision of laws,
and (iii) the receipt by the Company of any agreement, statement or other
evidence that the Company may require to satisfy itself that the issuance of
Stock to be purchased pursuant to the exercise of Stock Options under the Plan
and any subsequent resale of the shares of Stock will be in compliance with
applicable laws and regulations.  In the
event the Optionee chooses to pay the purchase price by previously-owned shares
of Stock through the attestation method, the number of shares of Stock
transferred to the Optionee upon the exercise of the Stock Option shall be net
of the Shares attested to.

 

(b)                                 The
shares of Stock purchased upon exercise of this Stock Option shall be
transferred to the Optionee on the records of the Company or of the transfer
agent upon compliance to the satisfaction of the Administrator with all
requirements under applicable laws or regulations in connection with such
transfer and with the requirements hereof and of the Plan.  The determination of the Administrator as to
such compliance shall be final and binding on the Optionee.  The Optionee shall not be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares
of Stock subject to this Stock Option unless and until this Stock Option shall
have been exercised pursuant to the terms hereof, the Company or the transfer
agent shall have transferred the shares to the Optionee, and the Optionee’s
name shall have been entered as the stockholder of record on the books of the
Company.  Thereupon, the Optionee shall
have full voting, dividend and other ownership rights with respect to such
shares of Stock.

 

2

 

(c)                                  The
minimum number of shares with respect to which this Stock Option may be
exercised at any one time shall be 100 shares, unless the number of shares with
respect to which this Stock Option is being exercised is the total number of
shares subject to exercise under this Stock Option at the time.

 

(d)                                 Notwithstanding
any other provision hereof or of the Plan, no portion of this Stock Option
shall be exercisable after the Expiration Date hereof.

 

3.                                       Termination
as Director. If the Optionee ceases to be a Director of the Company, the
period within which to exercise the Stock Option may be subject to earlier
termination as set forth below.

 

(a)                                  Termination
For Cause.  If the Optionee ceases to
be a Director for Cause, any portion of this Stock Option outstanding on such
date shall immediately terminate and be of no further force and effect.  For purposes hereof, “Cause” shall mean a
vote by the Board resolving that the Optionee shall be dismissed as a result of
(i) any material breach by the Optionee of any agreement between the
Optionee and the Company; (ii) the conviction of or plea of nolo
contendere by the Optionee to a felony or a crime involving moral turpitude; or
(iii) any material misconduct or willful and deliberate non-performance
(other than by reason of disability) by the Optionee of the Optionee’s duties
to the Company.

 

(b)                                 Termination
by Reason of Death or Disability.  If
the Optionee ceases to be a Director by reason of the Optionee’s death or
disability (as defined in Section 422(c) of the Code), any portion of
this Stock Option outstanding on such date  may be
exercised by the Optionee, his or her legal representative or legatee for a
period of 12 months from the date of death or disability or until the
Expiration Date, if earlier.

 

(c)                                  Other
Termination.  If the Optionee ceases
to be a Director for any reason other than Cause or the Optionee’s death or
disability (as defined in Section 422(c) of the Code), any portion of
this Stock Option outstanding on such date, to the extent exercisable, may be
exercised for a period of 12 months from the date of termination or until the
Expiration Date, if earlier.

 

4.                                       Incorporation
of Plan.  Notwithstanding anything
herein to the contrary, this Stock Option shall be subject to and governed by
all the terms and conditions of the Plan, including the powers of the
Administrator set forth in the Plan. 
Capitalized terms in this Agreement shall have the meaning specified in
the Plan, unless a different meaning is specified herein.

 

5.                                       Transferability.  This Agreement is personal to the Optionee,
is non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution.  This Stock Option is exercisable, during the
Optionee’s lifetime, only by the Optionee, and thereafter, only by the Optionee’s
legal representative or legatee.

 

3

 

6.                                       No
Obligation to Continue as a Director. 
Neither the Plan nor this Stock Option confers upon the Optionee any
rights with respect to continuance as a Director.

 

7.                                       Notices.  Notices hereunder shall be mailed or
delivered to the Company at its principal place of business and shall be mailed
or delivered to the Optionee at the address on file with the Company or, in
either case, at such other address as one party may subsequently furnish to the
other party in writing.

 

8.                                       Amendment.  Pursuant to the Plan, the Administrator may
at any time amend or cancel any outstanding portion of this Stock Option, but
no such action may be taken that adversely affects the Optionee’s rights under
this Agreement without the Optionee’s consent.

 

	
   

  	
  MAC-GRAY
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  

 

 

The
foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  Optionee’s Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Optionee’s
  name and address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

4Exhibit 10.67

 

LEASE AGREEMENT

(Group “A” Properties)

 

Between

 

WACHOVIA BANK, NATIONAL ASSOCIATION

as Tenant

 

and

 

FIRST STATES INVESTORS 4000B, LLC

 

as Landlord

 

Dated as of April 1, 2003

 

 

	
   

  	
  Property Name:

  	
   

  
	
   

  	
  Property:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PID #

  	
   

  
				

 

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  DEFINITIONS:

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  DEMISE; TITLE; CONDITION:

  	
  6

  
	
   

  	
   

  	
   

  
	
  3.

  	
  TERM; RENEWAL OPTION:

  	
  7

  
	
   

  	
   

  	
   

  
	
  4.

  	
  RENT:

  	
  7

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Basic Rent and Additional Rent

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Amount of Installments

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Intentionally Omitted

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Holidays

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Overdue Interest

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Additional Rent

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Rent During Renewal Term

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  USE:

  	
  9

  
	
   

  	
   

  	
   

  
	
  6.

  	
  NET LEASE; NONTERMINABILITY:

  	
  9

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Tenant to Pay All Costs

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Nonterminability

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Bankruptcy; Tenant to Remain Liable

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  TAXES AND OTHER CHARGES; LAW AND AGREEMENTS:

  	
  10

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Taxes, Assessments

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Utility Charge

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Compliance with Laws

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Contest Charges and Compliance

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  LIENS:

  	
  12

  
	
   

  	
   

  	
   

  
	
  9.

  	
  INDEMNIFICATION; FEES AND EXPENSES:

  	
  12

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Indemnification by Tenant

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Notice; Proceedings

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  ENVIRONMENTAL MATTERS:

  	
  13

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Representations

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Environmental Covenants

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Notice; Right to Contest

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Audit

  	
  15

  

 

i

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Contaminated Leased Property

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Asbestos Program

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Indemnification

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (h)

  	
  Survival

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  MAINTENANCE AND REPAIR:

  	
  17

  
	
   

  	
   

  	
   

  
	
  12.

  	
  ALTERATIONS, ADDITIONS AND CONSTRUCTION BY TENANT:

  	
  17

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  No Consent for Certain Alterations; Additional
  Improvements

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Tenant’s Equipment

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  “Costs” Defined

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  CONDEMNATION AND CASUALTY; SUBSTITUTION:

  	
  20

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Assignment of Proceeds; Tenant Authorized to Act for
  Landlord

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Partial Damage or Condemnation; Restore/Repair or
  Substitute

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  (i) Substantial or Complete Destruction or
  Condemnation: Repair, Substitute, or Terminate

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Net Award Exceeds Alteration Cost Threshold; Tenant
  in Default

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Temporary Condemnations; Routine Condemnations

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Substitution

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  INSURANCE:

  	
  27

  
	
   

  	
   

  	
   

  
	
  15.

  	
  FINANCIAL STATEMENTS:

  	
  30

  
	
   

  	
   

  	
   

  
	
  16.

  	
  DETERMINATION OF FAIR MARKET VALUE OF LEASED
  PROPERTY; RIGHT OF FIRST REFUSAL; RIGHT TO PURCHASE:

  	
  31

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Fair Market Value

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Right of First Refusal

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Right to Purchase

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  PURCHASE PROCEDURE:

  	
  33

  
	
   

  	
   

  	
   

  
	
  18.

  	
  [Intentionally Deleted]

  	
  33

  
	
   

  	
   

  	
   

  
	
  19.

  	
  QUIET ENJOYMENT:

  	
  34

  
	
   

  	
   

  	
   

  
	
  20.

  	
  TERMINATION:

  	
  34

  
	
   

  	
   

  	
   

  
	
  21.

  	
  SUBLETTING; ASSIGNMENT:

  	
  34

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Subleases Permitted

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Assignments Permitted

  	
  34

  

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Restriction on Term of Sublease or Assignment

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Intentionally Omitted

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Intentionally Omitted

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Tenant’s Obligations Continue

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Conformed Copy of Sublease or Assignment

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (h)

  	
  No Mortgages or Pledges

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  Transfers by Landlord

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
  ADVANCES BY LANDLORD:

  	
  35

  
	
   

  	
   

  	
   

  
	
  23.

  	
  CONDITIONAL LIMITATIONS—EVENTS OF DEFAULT AND
  REMEDIES:

  	
  35

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Events of Default

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Landlord’s Right to Re-enter or Terminate

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Payments by Tenant

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Receipt of Money Not A Reinstatement; No Accounting

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Re-entry Not a Termination

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Enforcement Costs

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Remedies Cumulative

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (h)

  	
  Notice of Default to Landlord

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
  NOTICES:

  	
  39

  
	
   

  	
   

  	
   

  
	
  25.

  	
  ESTOPPEL CERTIFICATES:

  	
  41

  
	
   

  	
   

  	
   

  
	
  26.

  	
  NO MERGER:

  	
  41

  
	
   

  	
   

  	
   

  
	
  27.

  	
  SURRENDER:

  	
  42

  
	
   

  	
   

  	
   

  
	
  28.

  	
  SEPARABILITY:

  	
  42

  
	
   

  	
   

  	
   

  
	
  29.

  	
  BINDING EFFECT; MERGER, CONSOLIDATION AND DISPOSAL
  OF ASSETS:

  	
  42

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Binding Effect

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Mergers, Consolidations

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Credit Rating Rules

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Landlord’s Option to Require the Surviving Entity to
  Purchase the Leased Property

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  No Restrictions on Events with Certain Subsidiaries

  	
  45

  

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  30.

  	
  SHOWING:

  	
  45

  
	
   

  	
   

  	
   

  
	
  31.

  	
  NATURE OF LANDLORD’S OBLIGATIONS:

  	
  45

  
	
   

  	
   

  	
   

  
	
  32.

  	
  SUBORDINATION:

  	
  45

  
	
   

  	
   

  	
   

  
	
  33.

  	
  GRANTING OF EASEMENTS:

  	
  46

  
	
   

  	
   

  	
   

  
	
  34.

  	
  RECORDING OF LEASE:

  	
  47

  
	
   

  	
   

  	
   

  
	
  35.

  	
  MISCELLANEOUS:

  	
  47

  
	
   

  	
   

  	
   

  
	
  36.

  	
  REASONABLE ATTORNEYS’ FEES:

  	
  48

  
	
   

  	
   

  	
   

  
	
  37.

  	
  ENTIRE AGREEMENT:

  	
  48

  
	
   

  	
   

  	
   

  
	
  38.

  	
  TERMINATION OF ORIGINAL LEASE:

  	
  48

  

 

	
  1.

  	
  Schedule A —
  Description of Leased Property

  	
   

  
	
  2.

  	
  Schedule B —
  Rent Schedule — Basic Rent

  	
   

  
	
  3.

  	
  Schedule C —
  Environmental Reports

  	
   

  
	
  4.

  	
  Schedule C-1
  — Tenant’s Environmental and Asbestos Reports

  	
   

  
	
  5.

  	
  Schedule D —
  Title Reports

  	
   

  
	
  6.

  	
  Schedule E —
  Intentionally Omitted

  	
   

  
	
  7.

  	
  Schedule F —
  Termination Value

  	
   

  
	
  8.

  	
  Schedule G —
  Representations and Warranties for Substituted Parcels

  	
   

  
	
  9.

  	
  Schedule H —
  Group A Properties Subleases

  	
   

  
	
  10.

  	
  Schedule I — Form of
  Subordination, Non-Disturbance and Attornment Agreement

  	
   

  

 

iv

 

LEASE
AGREEMENT

 

This
Lease (the “Lease”), dated as of April 1, 2003, between FIRST STATES INVESTORS 4000B, LLC (“Landlord”), a Delaware
limited liability company, having an office at c/o First States Group, L.P.,
1725 The Fairway, Jenkintown, Pennsylvania 19046 and WACHOVIA
BANK, NATIONAL ASSOCIATION (“Tenant”), having an address of Lease
Administration-Corporate Real Estate, 401 South Tryon Street, NC0114,
Charlotte, North Carolina 28288-0114.

 

BACKGROUND OF AGREEMENT

 

WHEREAS,
First Union Corporation (now known as Wachovia Corporation), First Union
National Bank of North Carolina, First Union National Bank of Georgia and First
Union National Bank of Florida (Wachovia Corporation and said banks are
collectively referred to herein as the “Original Tenants”), each a direct or
indirect predecessor by merger to Tenant, and PREFCO V Limited Partnership (the
predecessor in interest to PREFCO Five Limited Partnership), were parties to a
certain Lease Agreement dated as of July 31, 1990 (as heretofore amended
or modified,  the “Original Lease”); and

 

WHEREAS,
First States Group, L.P. has acquired the interest of PREFCO Five Limited
Partnership, as landlord, in and to the Original Lease, and, with respect to
the Leased Property hereinafter described in Article 2, has assigned such
interest to First States Investors 4000B, LLC; and

 

WHEREAS,
First States Investors 4000C, LLC has also acquired from Carolina-Relco Limited
Partnership, Newco 1 LLC and Newco 2 LLC the interest of the Remainderman in
the Leased Property, and now First States Investors 4000B, LLC, as Landlord,
owns the entire fee interest in the Leased Property; and

 

WHEREAS,
Landlord and Tenant desire to terminate the Original Lease as it pertains to
the Leased Property and enter into this Lease for the purpose setting forth
their agreement respecting the Leased Property, all as more fully hereinafter
set forth.

 

NOW,
THEREFORE, in consideration of the mutual covenants and
agreements herein contained and intending to be legally bound, Landlord and
Tenant covenant and agree as follows:

 

1.             DEFINITIONS:

 

As
used in this Lease, the following terms have the meanings set forth below.  Defined terms used in the Background of
Agreement above, but not defined below, shall have the meanings set forth in
the Original Lease:

 

“Additional Improvements” shall have the meaning given to that term in
paragraph (a) of Article 12 hereof.

 

1

 

“Additional Rent” shall have the meaning given to that term in
paragraph (f) of Article 4 hereof.

 

“Alteration Cost Threshold” shall have the meaning given to that term
in paragraph (a) of Article 12 hereof.

 

“Appraisers” shall mean individuals having not less than five years
current experience appraising commercial properties of a nature and type
similar to that of the Leased Property in the geographic area where the Leased
Property is located and who are licensed in those geographic areas where
licenses are required and who either (i) hold an MAI designation conferred
by the American Institute of Real Estate Appraisers and are in good standing as
independent members thereof, or (ii) hold the Senior Member designation
conferred by the American Society of Appraisers and are in good standing as
independent members thereof, or any organizations succeeding thereto of
similarly recognized national standing.

 

“Asbestos Report” shall mean the report, if any, relating to the
presence of any asbestos on the Leased Property prepared for the Original
Tenants and Tenant, and listed on Schedule C-1.

 

“Bankruptcy Act” shall mean Title 11 of the United States Code and any
other Federal insolvency or similar law, now or hereafter in effect.

 

“Base Price Index” shall mean the CPI for March, 2003.

 

“Basic Rent” shall have the meaning given to that term in paragraph (b) of
Article 4.

 

“Business Day” shall mean any day except Saturdays, Sundays and the
days observed by state chartered banks and national banks in the Commonwealth
of Pennsylvania or the State of North Carolina as public holidays.

 

“Casualty” shall have the meaning given to that term in paragraph (a) of
Article 13 hereof.

 

“Contaminated Leased Property” shall have the meaning given to that term
in paragraph (e) of Article 10 hereof.

 

“CPI” shall mean the Consumer Price Index published by the Bureau of
Labor Statistics of the United States Department of Labor for “All Urban
Consumers” in the table entitled “Consumer Price Index: United States City
Average,” or any successor index thereto, all Items (1982-84=100) for the
calendar year in question.  In the event
that the CPI is converted to a different standard reference base or otherwise
revised, the determination of the Alteration Cost Threshold to be made pursuant
to Article 12(a) hereof or pursuant to any other provisions of this
Lease or other amounts hereunder to be determined by reference to the CPI shall
be made with the use of such conversion factor, formula or table for converting
the CPI as may be published by the Bureau of Labor Statistics or, if not so
published, then with the use of such conversion factor, formula or table as may
be published by Prentice-Hall, Inc. or any other nationally recognized
publisher of similar statistical information, or if a conversion factor,
formula or table is 

 

2

 

unavailable, Landlord and Tenant shall agree on
another method to adjust the CPI, or any successor thereto, to the figure that
would have been arrived at had the manner of computing the CPI in effect on the
date of this Lease not been altered. If Landlord and Tenant fail to agree upon
a conversion factor, formula, table or other method, the matter will be
submitted for resolution by a nationally recognized firm of certified public
accountants selected by Landlord and approved by Tenant, which approval shall
not be unreasonably withheld, at Tenant’s expense.

 

“Commencement Date”
shall mean April 1, 2003.

 

“Condemnation” shall have the meaning given to that term in paragraph (a) of
Article 13 hereof.

 

“Credit Rating” shall have the meaning given to that term in Article 29
hereof.

 

“Depository” shall have the meaning given to that term in paragraph (d) of
Article 13 hereof.

 

“Environmental Laws” shall mean and include the Resource Conservation
and Recovery Act, as amended by the Hazardous and Solid Waste Amendments of
1984, the Comprehensive Environmental Response, Compensation and Liability Act,
as amended by the Superfund Amendments and Reauthorization Act of 1986, the
Hazardous Materials Transportation Act, the Toxic Substances Control Act, Clean
Air Act, the Federal Insecticide, Fungicide and Rodenticide Act and all
applicable federal, state and local environmental laws, ordinances, rules,
regulations 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, ordinances, rules, regulations and publications, now or
hereafter existing relating to regulation or control of toxic or hazardous
substances or materials.

 

“Environmental Report” means the report respecting the Leased Property
prepared for Landlord or First States Group, L.P. and listed on Schedule C hereto relating to the
presence and condition of any Hazardous Substances on the Leased Property, and
the report, if any, respecting the Leased Property prepared for the Original
Tenants and PREFCO Five Limited Partnership by Alliance Technologies
Corporation and also prepared for Tenant by other consultants, and listed on Schedule C-1.

 

“Equipment” shall have the meaning given to that term in Article 2
hereof.

 

“Event” shall have the meaning given to that term in Article 29
hereof.

 

“event of default” shall have the meaning given that term in paragraph (a) of
Article 23 hereof.

 

“Hazardous Substance” shall mean and include any, each and all
substances or materials regulated pursuant to any Environmental Laws,
including, but not limited to, any such substance, emission or material now or
hereafter defined as or deemed to be a regulated substance, hazardous
substance, toxic substance, pesticide, hazardous waste or any similar or like
classification or categorization, thereunder.

 

3

 

“Improvements” shall have the meaning given to that term in Article 2
hereof.

 

“Indemnitee” shall have the meaning given to that term in Article 10
hereof.

 

“Installment Payment Date” shall have the meaning given to that term in
paragraph (b) of Article 4 hereof.

 

“Land” shall have the meaning given to that term in Article 2
hereof.

 

 “Landlord’s Lender” shall mean
any lender or other entity providing financing to Landlord with respect to the
acquisition, development or operation of the Leased Property, including,
without limitation, any Landlord’s Mortgagee (as hereinafter defined) and any
party to whom Landlord’s interest in this Lease is assigned as security with
respect to any said financing.

 

“Landlord’s Mortgagee” shall mean the holder of a first mortgage or
deed of trust given by Landlord which encumbers Landlord’s interest in the
Leased Property.

 

“Landlord’s Yield” means Landlord’s nominal after-tax book yield and
total after-tax cash flow per dollar of equity, on the basis of the same
assumptions originally used by Landlord in computing Landlord’s Yield as of the
Commencement Date. In the event that Landlord and Tenant are unable to agree to
the amount of any adjustment of Basic Rent necessary to preserve Landlord’s
Yield hereunder, the matter will be submitted for resolution by a nationally
recognized firm of certified public accountants selected by Landlord and
reasonably approved by Tenant.

 

“Leased Property” shall have the meaning given to that term in Article 2
hereof.

 

“Like Kind Use and Value” shall have the meaning given to that term in Article 13
hereof.

 

“Net Award” shall mean the entire award, compensation, insurance
proceeds or other payment, if any, on account of any condemnation or casualty,
less any expenses (including, but not limited to, reasonable attorneys’ fees
and expenses) incurred by Landlord in collecting such award, compensation,
insurance proceeds or other payment and not paid (or reimbursed to Landlord) by
Tenant pursuant to Article 13 hereof.

 

“Overdue Interest Rate” shall have the meaning given to that term in Article 22
hereof.

 

“Permitted Encumbrances” shall mean, with respect to the Leased
Property: (a) rights reserved to or vested in any public authority by the
terms of any right, power, franchise, grant, license, permit or provision of
law affecting the Leased Property, to (i) terminate such right, power,
franchise, license or permit, provided that the exercise of such right would
not materially impair the use of the Leased Property or materially and
adversely affect the value thereof, or (ii) purchase, condemn, appropriate
or recapture, or designate a purchaser of, the Leased Property or any portion
thereof; (b) any liens thereon for taxes, assessments, fees and other
governmental and similar charges referred to in Article 7 of this Lease,
and any liens of mechanics, materialmen and laborers for work or services
performed or material furnished in 

 

4

 

connection with the Leased Property, which are not due
and payable, or which are not delinquent to the extent that penalties for
nonpayment may be assessed, or the amount or validity of which are being
contested as permitted by paragraph (d) of Article 7 hereof; (c) easements,
rights-of-way, servitudes, restrictions and other minor defects, encumbrances
and irregularities in the title to the Leased Property which do not materially
impair the use of the Leased Property or materially and adversely affect the
value thereof; (d) rights reserved to or vested in any public authority to
control or regulate or use the Leased Property, which rights do not materially
impair the use of the Leased Property or materially and adversely affect the
value thereof; (e) any mortgage affecting Landlord’s interest in the
Leased Property and any assignment of this Lease as further security for the
note or notes secured thereby; and (f) all matters affecting title
existing on the date of this Lease as set forth in Schedule
D hereto, which shall include, without limitation, all title
reports obtained in connection with the acquisition of the Leased Property by
PREFCO V Limited Partnership and all title reports or commitments obtained by
Landlord or First States Group, L.P. in connection with its acquisition of the
Leased Property.

 

“QE” shall have the meaning given to that term in paragraph (b) of
Article 4 hereof.

 

“Renewal Term” shall have the meaning given to that term in Article 3
hereof.

 

“Routine Condemnation” shall have the meaning given to that term in
paragraph (e) of Article 13 hereof.

 

“SEC” shall have the meaning given to that term in paragraph (b) of
Article 15 hereof.

 

“Security” shall have the meaning given to that term in Article 29
hereof.

 

“Substitute Parcel” shall have the meaning given to that term in Article 13
hereof.

 

“Surviving Entity” shall have the meaning given to that term in Article 29
hereof.

 

“Tenant’s Equipment” shall have the meaning given to that term in Article 2
hereof.

 

“Tenant’s Loss” shall have the meaning given to that term in paragraph (a) of
Article 13 hereof.

 

“Term of this Lease” shall have the meaning given to that term in Article 3
hereof.

 

“Termination Date” shall have the meaning given to that term in
paragraph (c) of Article 13 hereof.

 

“Termination Value” shall have the meaning given to that term in
paragraph (c) of Article 13 hereof.

 

5

 

“Third Party Offer” shall have the meaning given to that term in
paragraph (b) of Article 16 hereof.

 

2.                                       DEMISE;
TITLE; CONDITION:

 

Landlord hereby demises, leases and rents to Tenant, and Tenant hereby
leases, hires and rents from Landlord, upon and subject to the terms,
covenants, conditions and limitations hereinafter set forth, for the Term of
this Lease, those certain parcels of land (the “Land”) together with all
buildings, structures and improvements (the “Improvements”) thereon having a
street address of [                                                                                                                                                            ],
all as more fully described in Schedule A
hereto, and all easements and appurtenances thereto, and all other facilities,
fixtures, machinery, apparatus, installations, equipment and other property
(with the exception of computer systems, automated teller machines, bank
security systems including closed circuit television systems, safe deposit boxes,
modular vault, vault doors, night depository, teller equipment, counters,
undercounter equipment, shelving, signs, surrounds, modular furniture,
furniture, drive-in windows and equipment, satellite communications equipment
including antennas, trade fixtures, machinery, equipment and other property of
Tenant now or hereafter used or useful in connection with Tenant’s business,
collectively, “Tenant’s Equipment”) used in connection with the maintenance and
operation of the Improvements (including, but not limited to, all heating,
ventilating, air conditioning, plumbing, and electrical equipment, lighting and
lighting equipment, elevators and escalators, non-bank security systems,
utility lines, refuse facilities, waste removal systems, generators, transformers,
cooling towers, maintenance depots, power plants, storage tanks, fire pumps,
fire control, sprinkler and stand pipe systems, emergency power and automatic
transfer switches, air conditioning units, building and site controls, sewerage
facilities, automated mail distribution systems and all associated piping,
wiring, conduits, feeders, tracks, plumbing, and drainage facilities, but
excluding tangible personal property of negligible value used by Tenant in
connection with the maintenance and operation of the Improvements such as
janitorial supplies and cleaning equipment) now or hereafter located on the
Land and used or procured for use in connection with the Improvements
(collectively the “Equipment”; the Land, the Improvements and the Equipment
being hereinafter referred to individually or collectively from time to time as
the context requires as the “Leased Property”).

 

If as of April 1, 2003, the Leased Property shall be subject to
sublease(s) of all or a part of the Improvements, such subleases is/are
listed on Schedule H hereto.  Tenant has heretofore delivered to Landlord
true and correct copies of all of such sublease(s) in accordance with the
requirements of paragraph 21(g) hereof.

 

The Leased Property is demised and let in its present condition without
representation or warranty by Landlord, subject to (a) the rights of any
parties in possession thereof, (b) the state of the title thereto existing
at the time Landlord acquired title to the Leased Property, (c) 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,
and (e) any violations of such laws, rules, regulations, ordinances and
restrictions which may exist at the commencement of the Term of this Lease.
Tenant has examined the Leased Property, and Landlord’s title thereto, and has
found the same to be satisfactory.

 

6

 

Tenant acknowledges that Tenant is fully familiar with the physical
condition of the Leased Property and that Landlord makes no representation or
warranty, express or implied, with respect to same 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, or as to Landlord’s title thereto or ownership thereof, or
otherwise; and all risks incidental to the Leased Property shall be borne by
Tenant to the extent of matters which arise during the Term of this Lease.
Landlord leases and Tenant accepts the Leased Property as is with all faults
and in the event of any defect or deficiency of any nature in the Leased
Property or any fixture or other item constituting a portion thereof, whether patent
or latent, Landlord and Landlord’s Lender 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 LANDLORD
OF, AND LANDLORD DOES HEREBY DISCLAIM ANY AND ALL WARRANTIES BY LANDLORD,
EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASED PROPERTY 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.

 

3.                                       TERM;
RENEWAL OPTION:

 

Subject to the provisions hereof, Tenant shall have and hold the Leased
Property for a term which shall begin as of the date hereof and end on March 31,
2023 (the “Term of this Lease”).  Except
as otherwise expressly noted, the Term of this Lease shall also include any
Renewal Term(s) properly exercised by Tenant as hereinafter provided.

 

Provided that no default has occurred and is continuing hereunder
beyond any applicable cure period, and provided that Tenant is operating its
business at the Leased Property, Tenant shall have the right, upon notice
delivered to Landlord not fewer than twelve (12) months nor more than fifteen
(15) months prior to the expiration of the then current term hereof, to renew
this Lease for up to four (4) renewal terms of five (5) years each
(each, a “Renewal Term” and collectively, the “Renewal Terms”).  It shall be a condition of the effectiveness
of any such exercise by Tenant that no default shall have occurred and be continuing
hereunder beyond any applicable cure period and that Tenant shall be in
possession of the Leased Property both at the time of exercise and at the
inception of the next ensuing Renewal Term. 
Tenant shall not have the right to exercise its option to renew this
Lease for more than one (1) Renewal Term at a time; provided, however,
that at any time that two (2) or more Renewal Terms shall remain
unexercised, then subject to the aforesaid conditions, Tenant shall have the
right to exercise up to two (2) consecutive Renewal Terms with a single
notice.  All of the terms, conditions,
covenants and agreements contained herein shall continue with equal force and
effect with respect to any Renewal Terms created by the proper exercise by
Tenant of its option to renew as contained herein; provided, however, that the
Basic Rent shall be determined as provided in Article 4, paragraph (g) below.

 

4.                                       RENT:

 

(a)                                  Basic
Rent and Additional Rent.  Tenant
shall pay to Landlord all Basic Rent and (to the extent payable to Landlord)
Additional Rent by wire transfer of federal funds or 

 

7

 

collected funds immediately available to Landlord on
the dates when rent is due as provided in Section 4(b) hereof, at
Landlord’s address set forth above, or at such other place in the continental
United States as Landlord may from time to time designate.

 

(b)                                 Amount
of Installments.  During the Term of
this Lease, Tenant shall pay to Landlord, the basic rent provided for in
Schedule B annexed hereto (“Basic Rent”), in arrears, before 11:00 A.M.
Eastern time on and as of the quarter ending (“QE”) on the last day of
February, May, August and November of each year (the “Installment
Payment Dates”) as set forth on Schedule B. If such payment is received after
11:00 A.M. Eastern time, such payment shall be deemed to be received by
Landlord on the next succeeding Business Day. 
Lessee shall pay to Landlord per diem interest at the Overdue Interest
Rate from the date on which such payment was due to the date on which such
payment is deemed to be received pursuant to this paragraph.

 

(c)                                  Intentionally
Omitted.

 

(d)                                 Holidays.  If any Installment Payment Date falls on a
day which 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.

 

(e)                                  Overdue
Interest.  If Tenant shall fail to
make any payment of Additional Rent pursuant to Article 4 hereof or
purchase price for the Leased Property pursuant to Articles 13 or 16 hereof or
as liquidated damages pursuant to paragraph (c) of Article 23 hereof
in the amount and on the date provided for herein, Tenant shall be liable for
interest on such late payment at the Overdue Interest Rate from the date such
payment was due to and including the date such payment was received.

 

(f)                                    Additional
Rent.  All amounts which Tenant is
required to pay or discharge pursuant to this Lease in addition to Basic Rent
(including any amount payable as the purchase price for the Leased Property
pursuant to any provision hereof or as liquidated damages pursuant to paragraph
(c) of Article 23) together with any interest or penalty which may be
added for late payment thereof, shall constitute additional rent hereunder (“Additional
Rent”). In the event of any failure by Tenant to pay or discharge any such
amount, Landlord shall have all rights, powers and remedies provided for herein
or by law or otherwise in the case of nonpayment of Basic Rent. Tenant may pay
Additional Rent directly to the person entitled thereto.

 

(g)                                 Rent
During Renewal Term.  Basic Rent for
and with respect to each Renewal Term shall be ninety (90%) percent of the
annual fair market rent as determined by an independent appraisal of the Leased
Property, which rent shall generate not more than a nine (9%) percent yield on
the fair market value of the Leased Property (so long as Tenant’s (or any
successor entity) credit is rated at least Aa3 by Moody’s or Standard and Poor’s
equivalent), such appraisal to be for a retail branch bank use if and to the
extent that at the time of the exercise of the renewal option the Leased
Property is used as a retail bank facility. 
The fair market rent shall be determined by an Appraiser selected by the
parties, the cost of which appraisal shall be paid by Landlord.  In the event that the parties shall be unable
to agree upon an Appraiser within thirty (30) days after the date that Tenant
shall exercise its option to renew, then Landlord shall 

 

8

 

have the right, at its option, to invoke the following
appraisal procedure by notice in writing to Tenant: Landlord and Tenant shall
each appoint an Appraiser within ten (10) days next following receipt of
Landlord’s notice to Tenant that Landlord has elected to invoke this appraisal
procedure.  If either Landlord or Tenant
fails to appoint an Appraiser, the fair market rent (described as aforesaid)
shall be determined by the Appraiser which is appointed within such ten (10) day
period.  Within thirty (30) days of
appointment, the Appraiser or Appraisers shall determine the fair market rent,
and if the two Appraisers so appointed are unable to agree upon the fair market
rent, the fair market rent shall be the average of the amounts determined by
the Appraisers if the greater amount is no more than one hundred and five
(105%) percent of the lesser amount.  If
the greater amount exceeds one hundred and five (105%) percent of the lesser
amount, the determination shall be made by a third Appraiser, who shall be selected
within five (5) days after the end of the thirty (30) day period referred
to above, by the two Appraisers appointed by the parties.  Such determination shall be made by the third
Appraiser within thirty (30) days of his/her appointment.  In such event, the fair market rent shall be
the average of the two closest appraised amounts.  In the event the parties are unable to agree
on an Appraiser and Landlord invokes the appraisal procedure outlined above,
then in such event, Landlord and Tenant shall each pay one-half of the cost of
the Appraisers; otherwise, Landlord agrees that it shall bear all costs
associated with obtaining the aforesaid appraisals.

 

Basic Rent for each Renewal Term shall be determined
as aforesaid, and once determined, shall remain fixed for each respective
Renewal Term and shall be paid monthly in arrears, the provisions of Article 4
hereof regarding the payment of Basic Rent quarterly notwithstanding.

 

5.                                       USE:

 

Tenant
may use the Leased Property for the financial services business or for any
other lawful purpose, provided that any change in use shall not have any
detrimental environmental effect on the Leased Property arising out of a
violation or violations of Environmental Laws, or result in any increased risk
of liability to Landlord, in Landlord’s reasonable judgment, and provided,
further, that any and all alterations and improvements to the Leased Property
shall be subject to the terms, conditions and limitations contained in
Paragraph 12, below.  It is expressly
agreed by Landlord that Tenant’s ceasing to do business at the Leased Property
and vacating the Leased Property shall not constitute a default hereunder so
long as the Leased Property continues to be maintained by Tenant as otherwise
required by the terms hereof.

 

6.                                       NET
LEASE; NONTERMINABILITY:

 

(a)                                  Tenant
to Pay All Costs.  This Lease is a “net
lease” and Tenant’s obligations arising or accruing during the Term of this
Lease to pay all Basic Rent, Additional Rent, and all other payments hereunder
required to be made by Tenant shall be absolute and unconditional, and Tenant
shall pay all Basic Rent, Additional Rent and all other payments hereunder
required to be made by Tenant 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. All costs, expenses and
obligations of every kind and nature whatsoever relating to the Leased Property
and the appurtenances thereto and the use and occupancy thereof 

 

9

 

which may arise or become due and payable with respect
to the Term of this Lease (whether or not the same shall become payable during
such Term or thereafter) shall be paid by Tenant, and Landlord shall be
indemnified and saved harmless by Tenant from and against the same other than
by reason of Landlord’s willful misconduct or gross negligence. Tenant assumes
the sole responsibility for the condition, use, operation, maintenance,
underletting and management of the Leased Property, and Tenant shall indemnify,
defend and hold Landlord harmless from and against any and all liability,
costs, damages, losses and claims (including reasonable attorneys’ fees and
expenses) to the extent of matters which arise or accrue during the Term of
this Lease, and Landlord shall have no responsibility in respect thereof and
shall have no liability for damage to the property of Tenant or any subtenant
of Tenant on any account or for any reason whatsoever other than by reason of
Landlord’s willful misconduct or gross negligence. Without limiting the
generality of the foregoing, during the Term of this Lease Tenant shall perform
all of the obligations of the sublessor under any sublease affecting all or any
part of the Leased Property which Tenant may hereafter enter into as sublessor.

 

(b)                                 Nonterminability.  Except as otherwise expressly provided in
Articles 10(e)(ii), 13(c) and(f), 16(b), 23(b)(ii) or 29(d) hereof,
this Lease shall not terminate, nor shall Tenant have any right to terminate
this Lease or to be released or discharged from any obligations or liabilities
hereunder for any reason, including, without limitation: (i) any damage to
or destruction of the Leased Property; (ii) any restriction, deprivation
(including eviction) or prevention of, or any interference with, any use or the
occupancy of the Leased Property (whether due to any defect in or failure of
Landlord’s title to the Leased Property or otherwise); (iii) any
condemnation, requisition or other taking or sale of the use, occupancy or
title of or to the Leased Property; (iv) any action, omission or breach on
the part of Landlord under this Lease or under any other agreement between Landlord
and Tenant; (v) Tenant’s acquisition of ownership of the Leased Property,
or any sale or other disposition of the Leased Property; or (vi) any other
cause, whether similar or dissimilar to the foregoing, any present or future
law notwithstanding.

 

(c)                                  Bankruptcy;
Tenant to Remain Liable.  Tenant will
remain obligated under this Lease in accordance with its terms, and will not
take any action to terminate (except in accordance with the provisions of
subsections (c) and (f) of Article 13 hereof), rescind or avoid
this Lease for any reason, notwithstanding any bankruptcy, insolvency,
reorganization, liquidation, dissolution or other proceeding affecting Landlord
or any assignee of Landlord, or any action with respect to this Lease which may
be taken by any receiver, trustee or liquidator or by any court. Tenant waives
all rights at any time conferred by statute or otherwise to quit, terminate or
surrender this Lease or the Leased Property, or to any abatement or deferment
of any amount payable by Tenant hereunder, or for damage, loss or expense
suffered by Tenant on account of any cause referred to in this Article 6
or otherwise.

 

7.                                       TAXES
AND OTHER CHARGES; LAW AND AGREEMENTS:

 

(a)                                  Taxes,
Assessments.  Tenant shall pay and
discharge, not later than the last day upon which the same may be paid without
interest or penalty, all taxes, assessments, levies, fees, water and sewer
rents and other governmental and similar charges, general and special, ordinary
or extraordinary, and any interest and penalties thereon, which are levied or
assessed and become due and payable with respect to the Term of this Lease,
whether or not the 

 

10

 

same become payable during the Term of this Lease
(including all of the taxes, assessments, levies, fees, water and sewer rents
and other governmental charges for the year in which this Lease is executed
which are now a lien but not yet due and payable) against (i) Landlord and
which relate to Landlord’s ownership of the Leased Property, the use and
occupancy of the Leased Property or the transactions contemplated by this
Lease, (ii) the Leased Property or the interest of Tenant or Landlord
therein, (iii) Basic Rent, Additional Rent or any other amount payable by
Tenant hereunder, (iv) this Lease or the interest of Tenant or Landlord
hereunder, (v) the use, occupancy, construction, repair or rebuilding of
the Leased Property or any portion thereof, or (vi) gross receipts from
the Leased Property. If any tax or assessment levied or assessed against the
Leased Property may legally be paid in installments, Tenant shall have the
option to pay such tax or assessment in installments. Anything in the preceding
sentence or in this Lease to the contrary notwithstanding, nothing in this
Lease shall require payment by Tenant of any income (including any capital
gain), franchise, estate, inheritance, or similar taxes of Landlord or Landlord’s
Mortgagee, unless such tax is in lieu of or a substitute for any other tax or
assessment upon or with respect to the Leased Property, which, if such other
tax or assessment were in effect, would be payable by Tenant hereunder. Tenant
shall furnish to Landlord, promptly, and in any event within thirty (30) days
after demand by Landlord, proof of the payment of any such tax, assessment,
levy, fee, rent or charge which is payable by Tenant. Such taxes, assessments,
levies, fees, water and sewer rents and other governmental charges shall be
apportioned between Landlord and Tenant as of the date on which this Lease
terminates or expires.

 

(b)                                 Utility
Charge.  Tenant shall pay all charges
for utility, communication and other services rendered or used on or about the
Leased Property to the extent of such matters which arise or accrue during the
Term of this Lease, whether or not payment therefor shall become due after the
Term of this Lease.

 

(c)                                  Compliance
with Laws.  Tenant shall at all times
during the Term of this Lease, at Tenant’s own cost and expense, perform and
comply with all laws, rules, orders, ordinances, regulations and requirements
now or hereafter enacted or promulgated, of every government and municipality
having jurisdiction over the Leased Property and of any agency thereof,
relating to the Leased Property, or the Improvements, 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, whether
or not such laws, rules, orders, ordinances, regulations or requirements so
involved shall necessitate structural changes, improvements, interference with
use and enjoyment of the Leased Property, replacements or repairs,
extraordinary as well as ordinary, and Tenant shall so perform and comply,
whether or not such laws, rules, orders, ordinances, regulations or
requirements shall now exist or shall hereafter be enacted or promulgated, and
whether or not such laws, rules, orders, ordinances, regulations or
requirements can be said to be within the present contemplation of the parties
hereto.

 

(d)                                 Contest
Charges and Compliance.  Tenant shall
have the right to contest, by appropriate proceedings, any tax, charge, levy,
assessment, lien or other encumbrance, and/or any law, rule, order, ordinance,
regulation or other governmental requirement affecting the Leased Property, and
to postpone payment of or compliance with the same during the pendency of such
contest, provided that in the event of such postponement or payment or
noncompliance: 

 

11

 

(i) Tenant shall not postpone the payment of any
such tax, charge, levy, assessment, lien or other encumbrance for such length
of time as shall permit the 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; (ii) Tenant shall not postpone
compliance with any such law, rule, order, ordinance, regulation or other
governmental requirement if Landlord will thereby be subject to civil liability
or criminal prosecution, or if any municipal or other governmental authority
shall commence a process according to applicable law to carry out any work to
comply with the same or to foreclose or sell any lien affecting all or part of
the Leased Property which shall have arisen by reason of such postponement or
failure of compliance; and (iii) Tenant shall pay, in a timely fashion,
all Basic Rent and Additional Rent (other than any item of Additional Rent that
Tenant is permitted to contest pursuant to this Lease, so long as Tenant
satisfies all of the requirements of this Lease relating to such contest) which
shall become due and payable under this Lease.

 

8.                                       LIENS:

 

Tenant
will promptly, but no later than sixty (60) days after the filing thereof,
remove and discharge of record, by bond or otherwise, any charge, lien,
security interest or encumbrance upon the Leased Property, or any Basic Rent,
or Additional Rent which arises for any reason, including all liens which arise
out of the possession, use, occupancy, construction, repair or rebuilding of
the Leased Property or by reason of labor or materials furnished or claimed to
have been furnished to Tenant for the Leased Property, but not including any
Permitted Encumbrances. Nothing contained in this Lease shall be construed as
constituting the consent or request of Landlord, 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 Leased Property or any
part thereof. Notice is hereby given that Landlord will not be liable for any
labor, services or materials furnished or to be furnished to Tenant, or to
anyone holding an interest in the Leased Property or any part thereof through
or under Tenant, and that no mechanic’s or other liens for any such labor,
services or materials shall attach to or affect the interest of Landlord in and
to the Leased Property. In the event of the failure of Tenant to discharge any
charge, lien, security interest or encumbrance as aforesaid, Landlord may
discharge such items by payment or bond or both, and Tenant will repay to
Landlord, upon demand, any and all amounts paid by Landlord therefor, or by
reason of any liability on such bond, and also any and all incidental expenses,
including reasonable attorneys’ fees, incurred by Landlord in connection
therewith.

 

9.                                       INDEMNIFICATION;
FEES AND EXPENSES:

 

(a)                                  Indemnification
by Tenant.  Tenant shall pay, and
shall protect, defend, indemnify and hold Landlord and Landlord’s Lender
harmless from and against all liabilities, losses, damages, costs, expenses
(including reasonable attorneys’ fees and expenses), claims, demands or
judgments of any nature arising from or in connection with the following events
to the extent such events arise during the Term of this Lease: (i) any
injury to, or the death of, any person or any damage to or loss of property on
the Leased Property or growing out of or directly or indirectly connected with
the ownership by Landlord, use, nonuse, occupancy, construction, repair or
rebuilding of the Leased Property (or adjoining property, to the extent that
any loss or damage to adjoining property arises from or out of the Leased
Property), or resulting from the 

 

12

 

condition thereof, other than any injury, death,
damage or loss arising out of Landlord’s or Landlord’s Lender’s willful
misconduct or gross negligence; and (ii) violation by Tenant of any
provision of this Lease whether or not such violation results in a violation of
any provision of any mortgage affecting Landlord’s interest in the Leased
Property, or of any law, rule, regulation, ordinance or restriction, now or
hereafter in effect and affecting the Leased Property, or of any lease or other
agreement relating to the Leased Property now or hereafter in effect to which
Tenant is a party or by which Tenant is bound, or of any agreement of which Tenant
now has actual or constructive notice and which is now in effect, affecting the
Leased Property or the ownership by Landlord, use, nonuse, occupancy,
construction, repair or rebuilding thereof.

 

(b)                                 Notice;
Proceedings.  Should any event occur
for which any party hereto is entitled to indemnification pursuant to this Article 9
or other provisions of this Lease, such party shall provide prompt written
notice to the other parties describing the nature of such claim. The
indemnifying party may assume responsibility for any action to be taken to
contest the claim, provided that the indemnifying party will notify the
indemnitees in writing of its intention to contest such claim within thirty
(30) days after receipt of notice of the claim from the indemnitees. The
indemnifying party, at its sole expense, may control all proceedings relating
to such contest. The indemnitees will cooperate with the indemnifying party in
contesting such claim, provided that the indemnifying party indemnifies and
holds harmless the indemnitees for all reasonable costs and expenses
(including, without limitation, reasonable attorneys’ fees and expenses)
relating to contesting such claim.

 

10.                                 ENVIRONMENTAL
MATTERS:

 

(a)                                  Representations.  Tenant represents and warrants to Landlord that:

 

(i)                                     to
the best of Tenant’s knowledge, except as described in the Environmental Report
and the Asbestos Report, the Leased Property complies with all Environmental
Laws;

 

(ii)                                  no
notices, complaints or orders of violation or non-compliance with Environmental
Laws have been received by Tenant and to the best of Tenant’s knowledge, no
federal, state or local environmental investigation is pending or overtly
threatened with regard to the Leased Property or any use thereof or any alleged
violation of Environmental Laws with regard to the Leased Property;

 

(iii)                               the Leased Property has
not been used by Tenant or, to the best of Tenant’s knowledge, except as
described in the Environmental Report, by any prior owner to generate,
manufacture, refine, produce, or process, or to store, handle, transfer or
transport any Hazardous Substance (other than in connection with the operation
and maintenance of the Leased Property and in commercially reasonable
quantities as a consumer thereof and in compliance with Environmental Laws);

 

(iv)                              to
the best of Tenant’s knowledge, and except as described in the Environmental
Report, no underground storage tanks or surface impoundments have been
installed in the Leased Property in violation of applicable Environmental Laws
and, to the best of Tenant’s knowledge and except as described in the
Environmental Report, there exists no 

 

13

 

petroleum contamination in violation of applicable
Environmental Laws to the Leased Property which originated on or off the Leased
Property;

 

(v)                                 to
the best of Tenant’s knowledge, and except as described in the Environmental
Report and in the Asbestos Report, the Leased Property is free of Hazardous
Substances and friable asbestos, the removal of which is required or the
maintenance of which is prohibited or penalized by any Environmental Law;

 

(vi)                              to
the best of Tenant’s knowledge, and except as described in the Environmental
Report and the Asbestos Report, the Leased Property contains no Hazardous Substances
or friable asbestos which could materially adversely affect any person, the
environment or any Property or in any case or in the aggregate, could impose a
material liability on Landlord or Landlord’s Mortgagee; and,

 

(vii)                           neither the Environmental
Report nor the Asbestos Report discloses any violation of any Environmental Law
which, individually or in the aggregate would materially and adversely affect
the financial position, business or operations of Tenant, taken as a whole.

 

(b)                                 Environmental
Covenants.  Tenant covenants that
during the Term of this Lease it (i) shall comply, and cause the Leased
Property to comply, with all Environmental Laws applicable to the Leased
Property, (ii) shall prohibit the use of the Leased Property for the
generation, manufacture, refinement, production, or processing of any Hazardous
Substance or for the storage, handling, transfer or transportation of any
Hazardous Substance (other than in connection with the operation and
maintenance of the Leased Property and in commercially reasonable quantities as
a consumer thereof and in compliance with Environmental Laws), (iii) shall
not install or permit the installation on the Leased Property of any
underground storage tanks or surface impoundments and shall not permit there to
exist any petroleum contamination in violation of applicable Environmental Laws
to the Leased Property originating on or off the Leased Property (other than in
connection with the use, operation and maintenance of the Leased Property and
then only in compliance with applicable Environmental Laws and all other
applicable laws, rules, orders, ordinances, regulations and requirements now or
hereafter enacted or promulgated of every government and municipality having
jurisdiction over the Leased Property and of any agency thereof) or
asbestos-containing materials in violation of applicable Environmental Laws and
(iv) shall cause any alterations of the Leased Property to be done in a
way so as to not expose the persons working on or visiting the Leased Property
to Hazardous Substances and in connection with any such alterations shall
remove any Hazardous Substances present upon the Leased Property which are not
in compliance with Environmental Laws or which present a danger to persons
working on or visiting the Leased Property. 
With respect to any violation of applicable Environmental Laws related
to the Leased Property caused by Hazardous Substances originating off of the
Leased Property and not generated therefrom by Tenant, its agents, employees or
contractors, Landlord, authorizes Tenant to institute any action against the
party responsible for such violation.  So
long as Tenant is diligently pursuing all available recourse against the party
responsible for such violation, and so long as such violation does not pose a
risk to public health, materially threaten the use of the Leased Property or
the value thereof, or expose Landlord or Landlord’s Lender, in any manner, to
any claim or liability, Tenant may defer taking remedial measures to correct
the violation caused by Hazardous 

 

14

 

Substances originating off of the Leased Property;
provided, however that such period of deferral may be terminated by Landlord or
Landlord’s Lender at any time if either Landlord or Landlord’s Lender, each in
its sole and absolute discretion, believes that the public health, the use of
the Leased Property or the value thereof are threatened by such violation or
such Hazardous Substances.  In no event
shall the ability to defer remedial measures relieve Tenant of the
responsibility therefor, which responsibility shall expressly survive the
expiration or sooner termination of this Lease.

 

(c)                                  Notice;
Right to Contest.  As soon as
reasonably possible after obtaining knowledge thereof, Tenant shall give to
Landlord notice of the occurrence of any of the following events: (i) the
failure of the Leased Property to comply with any Environmental Law; (ii) the
receipt by Tenant or any sublessee or assignee of Tenant of any notice,
complaint or order of violation or non-compliance of any nature whatsoever with
regard to the Leased Property or the use thereof with respect to Environmental
Laws; or (iii) the receipt by Tenant or any sublessee or assignee of
Tenant of any notice of a pending or threatened investigation that Tenant’s (or
its sublessees’ or assignees’) operations on the Leased Property are not in
compliance with any Environmental Law. Tenant shall have the right to contest,
by appropriate proceedings, any notice, complaint, order or finding of
violation or non-compliance with any Environmental Laws affecting the Leased
Property or any use thereof by Tenant or its sublessees or assignees, provided
the same will not thereby subject Landlord or Landlord’s Lender to civil
liability or criminal prosecution or permit any municipal or other governmental
authority to commence a process according to applicable law to carry out any
work to comply with the same or to foreclose or sell any lien affecting all or
any portion of the Leased Property which may arise in connection therewith. If
Tenant determines that any Property is in violation of an Environmental Law,
Tenant will promptly give Landlord written notice thereof notwithstanding the
fact that the matter giving rise to such violation may have been disclosed in
the Environmental Report delivered to Landlord and Landlord’s Lender.

 

(d)                                 Audit.  At any time that an event of default shall
have occurred and be continuing, or a notice, complaint, or order or finding of
violation or non-compliance with Environmental Laws shall have been issued with
respect to one or more parcels comprising the Leased Property, at the request
of Landlord or Landlord’s Lender, Tenant shall cause to be performed an
environmental audit or risk assessment of the relevant portion of the Leased
Property and the then uses thereof and Landlord shall retain the right, but not
the obligation, to cause to be performed such audit or assessment.  Such an environmental audit or assessment shall
be performed by an environmental consultant selected by Landlord and shall
include a review of the uses of the Leased Property and an assessment of the
possibility of violation or non-compliance of the same with Environmental Laws.
All reasonable costs and expenses incurred by Landlord or Landlord’s Lender in
connection with such environmental audit or assessment shall be paid by Tenant
within fifteen (15) days after demand by Landlord or Landlord’s Lender.

 

(e)                                  Contaminated
Leased Property.  If at any time an
event or condition shall have occurred and be continuing which results in the
Leased Property or any portion thereof being in violation of any Environmental
Law, or a notice, complaint, or order or finding of violation or non-compliance
with any Environmental Law shall have been received by Tenant with respect to
the Leased Property (“Contaminated Leased Property”), Tenant shall either:

 

15

 

(i)                                     diligently
perform all remedial work to the Contaminated Leased Property at its own cost
and expense to bring the Contaminated Leased Property into full compliance with
Environmental Laws and the requirements of this Article 10 by not later
than the end of the Term of this Lease, provided, that (x) at the time the
remedial work begins and at all times while the remedial work is continuing,
Tenant has a Credit Rating of Baa1 or higher and a net worth of One and
One-Half Billion Dollars ($1,500,000,000) or higher, or (y) (A) the
cost of such remedial work is less than One Million Dollars ($1,000,000) with
respect to the Contaminated Leased Property at the outset and at all times
while the remedial work is continuing, as determined by an environmental consultant
selected by Tenant and approved by Landlord and Landlord’s Lender, which
approval shall not be unreasonably withheld or delayed, and (B) in the
opinion of an environmental consultant selected by Tenant and approved by
Landlord and Landlord’s Lender, which approval shall not be unreasonably
withheld or delayed, the remedial work can be completed within one year and in
no event later than the end of the Term of this Lease (the consultant’s reports
referred to in (A) and (B) above being provided at the beginning of
the remediation period and updated every forty-five (45) days thereafter); or

 

(ii)                                  substitute
a Substitute Parcel for such Contaminated Leased Property or, if substitution
cannot be practically and economically accomplished according to Tenant’s good
faith determination, terminate this Lease with respect to such Contaminated
Leased Property in accordance with the terms and conditions of paragraph (c) of
Article 13 hereof within sixty (60) days of delivery of notice of any
violation of any Environmental Law to Landlord in accordance with this Lease.

 

(f)                                    Asbestos
Program.  If the Leased Property is
now or hereafter known by Tenant to contain asbestos, Tenant shall continue its
present program or shall implement a program for monitoring and maintaining any
asbestos contained in the Improvements in a manner designed to minimize the
risk of harm resulting from its presence. 
Tenant represents that its present asbestos program includes (i) procedures
to monitor the condition of any asbestos known to be contained in the
Improvements, to notify employees and third party contractors engaged to do
work in the Leased Property of a sort which might increase the risk of exposure
to asbestos and to cause any such work to be done in a manner which minimizes the
risk of such increased exposure, (ii) procedures to remove any asbestos,
the condition of which might be disturbed by any alterations or renovations of
the Leased Property undertaken by Tenant, prior to undertaking to do such
alterations or renovations, and (iii) plans to remove promptly any
asbestos which is revealed by the monitoring program to have deteriorated in
condition to a point which creates a significant risk of exposure or the
removal of which is required by any Environmental Laws.  Tenant shall also continue its present
practices respecting the possibility of the existence of asbestos in properties
not known to contain asbestos, which include (i) requiring qualified
property operations and maintenance personnel to conduct periodic inspections of
the Leased Property and to report the presence of any material suspected to be
asbestos found in the course of inspections of the Leased Property, (ii) inspection
of properties so reported to confirm the presence or absence of asbestos, and (iii) inspection
of affected areas of Improvements prior to and during alteration, repair or
renovation to confirm the presence or absence of asbestos.

 

16

 

(g)                                 Indemnification.  Tenant agrees to indemnify, defend and hold
harmless Landlord and each and all of Landlord’s members, partners,
shareholders, officers, directors, employees, attorneys and agents and Landlord’s
Lender and all of Landlord’s Lender’s members, partners, shareholders,
officers, directors, employees, attorneys and agents (collectively called the “Indemnitees”)
from and against any and all losses (including, without limitation, diminution
in value of the Leased Property), liabilities (including, without limitation,
strict liability), suits, obligations, fines, damages, judgments, penalties,
claims, charges, costs and expenses (including, without limitation, reasonable
fees and disbursements of counsel and consultants for such Indemnitees), which
may be suffered or incurred by, or asserted against, an Indemnitee and which
arise directly or indirectly out of a violation prior to and during the Term of
this Lease of this Article 10 or arise directly or indirectly from the
presence of Hazardous Substances on the Leased Property prior to or during the
Term of this Lease in amounts or concentrations requiring remediation under
applicable law or by order of governmental authority.

 

(h)                                 Survival.  The warranties and obligations of Tenant, and
the rights and remedies of Landlord under this Article 10, 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 and shall
survive the substitution of the Leased Property in accordance with Article 13
hereof and the termination of this Lease, either pursuant to the terms hereof
or following an event of default.

 

11.                                 MAINTENANCE
AND REPAIR:

 

Tenant will, at its cost and expense, keep and maintain the Leased
Property in good repair and condition, and will make all structural and
non-structural, and ordinary and extraordinary changes, repairs and
replacements which may be required to be made upon or in connection with the
improvements to the Leased Property in order to keep the same in good repair
and condition. Landlord shall not be required to maintain, alter, repair,
rebuild or replace any Improvements on the Leased Property or to maintain the
Leased Property, and Tenant expressly waives the right to make repairs at the
expense of Landlord pursuant to any law at any time in effect.

 

12.                                 ALTERATIONS,
ADDITIONS AND CONSTRUCTION BY TENANT:

 

(a)                                  No
Consent for Certain Alterations; Additional Improvements.  If Tenant complies with the requirements of
this Article 12(a), Tenant may, without the consent of Landlord, at its
own cost and expense, make additions or improvements to or alterations of the
Improvements now or hereafter erected on the Leased Property, including,
without limitation, the construction of new buildings and improvements and the
demolition of existing Improvements to replace them with new buildings and
improvements (“Additional Improvements”); provided that if and to the extent
that the Leased Property is improved as a retail bank facility prior to such
additions, improvements or alterations, the Leased Property shall continue to
be used as a retail bank facility thereafter. 
Landlord acknowledges that (a) the design, plans and physical
configuration of a retail bank facility are subject to change to reflect Tenant’s
then current design standards for retail bank facilities, as well as the
prevailing standards for retail bank facilities observed by national banks
within the same geographic region, and (b) additions, improvements, or
alterations made by or for Tenant to physically adapt and improve its retail
bank facility to 

 

17

 

meet such internal or industry standards shall not
itself constitute a change in use from a retail bank facility.  In the event that such Additional
Improvements are estimated to have a cost less than Seven Hundred Fifty
Thousand ($750,000) Dollars (the “Alteration Cost Threshold”), Tenant may make
such Additional Improvements without the consent of Landlord.  Commencing on and as of the first anniversary
of the Commencement Date and on and as of each anniversary of the Commencement
Date thereafter, the Alteration Cost Threshold for the following twelve month
period shall be calculated as the amount equal to the product derived by
multiplying Seven Hundred Fifty Thousand ($750,000) Dollars by one (1) plus
the percentage by which the CPI for such calendar year exceeds the Base Price
Index. In the event the information necessary to calculate the Alteration Cost
Threshold shall not have been published in sufficient time to permit such
calculation to be made on or before the anniversary of the Commencement Date,
the Alteration Cost Threshold shall be calculated by using the CPI for the
latest month for which it has been published. After publication of the relevant
information, Landlord and Tenant shall make appropriate adjustment of the
Alteration Cost Threshold.  In no event
shall the Alteration Cost Threshold be reduced as a result of any decrease in
the CPI.

 

Tenant may, subject to the terms and conditions contained in this Article 12,
at its own cost and expense, with the prior written consent of Landlord (which
consent will not be unreasonably withheld), make Additional Improvements with
an estimated cost in excess of the Alteration Cost Threshold. Notwithstanding
the foregoing, Tenant shall not make any Additional Improvements in violation
of the terms of any restriction, easement, condition or covenant or other
matter affecting title to the Leased Property. The making of all such
Additional Improvements shall be subject to the following conditions:

 

(i)                                     Title
to Additional Improvements.  Title to
any such Additional Improvements shall immediately vest in Landlord and shall
be a part of the Leased Property and subject to the terms, covenants and
conditions of this Lease;

 

(ii)                                  Authorizations.  No Additional Improvements shall be
undertaken until Tenant shall have procured and paid for, so far as the same
may be required from time to time, all permits and authorizations of all
municipal and other governmental authorities having jurisdiction of the Leased Property.
Landlord shall, at Tenant’s expense, join in the application for any such
permit or authorization and execute and deliver any document in connection
therewith, whenever such joinder is necessary;

 

(iii)                               Standard of
Construction.  The making of the
Additional Improvements shall be expeditiously completed in a good and
workmanlike manner and in compliance with all applicable laws, rules,
regulations, ordinances and restrictions then in effect;

 

(iv)                              Approval
of Architect or Engineer May be Required.  The making of any Additional improvements
involving changes estimated to have a cost (as defined in paragraph (c) of
Article 12 hereof) in excess of the Alteration Cost Threshold shall be
conducted under the supervision of an architect or engineer employed or engaged
and paid by Tenant and approved in writing by Landlord, which approval shall
not be unreasonably withheld and which architect or engineer shall be deemed
approved by Landlord if such approval or denial is not received within ten (10) Business
Days after receipt of said notice; and neither shall be undertaken except in
accordance with detailed plans and specifications and cost estimates 

 

18

 

prepared by Tenant and approved by Landlord, which
approval shall not be unreasonably withheld and which plans and specifications
shall be deemed approved by Landlord if such approval or denial is not received
within ten (10) Business Days after receipt of said notice;

 

(v)                                 No
Adverse Effect on Fair Market Value. 
Any Additional Improvements shall, when completed, be of such a
character as not to adversely affect the fair market value of the Leased
Property or any part thereof, as general purpose buildings, self-contained structural
unit(s), capable of being operated independently of any other buildings or
improvements, and prior to commencement of construction of the Additional
Improvements, if the cost thereof shall be in excess of the Alteration Cost
Threshold, Tenant shall furnish Landlord with a certificate (which may be in
letter form) confirming that said Additional Improvement is of such a character
as to not to adversely affect the fair market value of the Leased Property or
any part thereof; if required by Landlord’s Lender, an Appraiser reasonably
acceptable to Landlord and Tenant shall resolve any objections made by Landlord
to such certificate by appraising, at Tenant’s cost and expense, the Leased
Property in question both with or without such Additional Improvements;

 

(vi)                              No
Liens.  Subject to the provisions of Article 8,
the cost of any Additional Improvements shall be paid by Tenant when due so
that the Leased Property shall at all times be free of liens for labor and
materials supplied or claimed to have been supplied to the Leased Property;

 

(vii)                           Insurance.  During the period when any demolition or
construction in connection with any Additional Improvements is underway,
Tenant, or its contractors and subcontractors, shall maintain the following
insurance (in addition to the insurance required to be maintained by Tenant
pursuant to the provisions of Article 14 hereof): (A) completed value
builders risk insurance for the Leased Property, including all building
materials thereon, covering loss or damage from fire, lightning, extended
coverage perils, sprinkler, leakage, vandalism, malicious mischief and perils
insured in an amount not less than the cost, as estimated by Tenant, of the
construction of the Additional Improvements and (B) workmen’s compensation
insurance covering the full statutory liability as an employer of the
contractor performing the work of making such Additional Improvements;

 

(viii)                        Certificate of Occupancy.  Upon completion of the making of the
Additional Improvements in accordance with paragraph (a) of this Article 12,
Tenant shall furnish Landlord with all Certificates of Occupancy or other
certificates required by applicable laws;

 

(ix)                                Survey.  In the case of any Additional Improvements
constituting or including construction of, or a change in the exterior walls
of, a building, Tenant, upon completion of Additional Improvements, shall
furnish Landlord with a survey showing the location of said Additional
Improvements prepared by a licensed surveyor and reasonably acceptable to
Landlord and certified to Landlord, and Landlord’s Lender; and

 

(x)                                   Income
Tax.  The making of Additional
Improvements shall not constitute income to Landlord and shall not result in
some or all of the federal, state or municipal income tax deductions which
Landlord would otherwise be permitted to report with respect to 

 

19

 

the Leased Property or this Lease being deferred or
denied or cause this Lease not to be a true lease for federal income tax
purposes.

 

Without diminishing or impairing Landlord’s rights of receipt, consent
and approval as set forth in this Article 12(a) and subject to Tenant’s
compliance with the terms and conditions of this Article 12, Landlord
shall be deemed to have consented to the making of any Additional Improvements
with an estimated cost in excess of the Alteration Cost Threshold if Landlord’s
consent or denial is not received by Tenant within thirty (30) days after
Landlord’s receipt of a notice from Tenant identifying the Leased Property and
describing the proposed Additional Improvements in reasonable detail.

 

(b)                                 Tenant’s
Equipment.  Tenant may, at its own
cost and expense, install or place upon or remove and reinstall and replace at
the Leased Property Tenant’s Equipment or the Equipment. Any such Tenant’s
Equipment shall not become the property of Landlord (other than replacements of
Equipment which is the property of Landlord, which replacement shall also be
the property of Landlord). Replacements of Equipment which are property of the
Landlord shall be of at least equal quality and fair market value to the
replaced Equipment when the replaced items were new. Tenant shall repair any
damage caused by removal of Equipment from the Leased Property, at Tenant’s own
cost and expense.

 

(c)                                  “Costs”
Defined.  For the purposes of this Article 12,
the term “cost” shall include (i) all costs and expenses properly charged
or chargeable, in accordance with generally accepted accounting principles, as
capital expenditures in connection with the making of the Additional
Improvements, and including, without limitation, reasonable attorneys’,
architects’ and engineers’ fees, interest charges during construction and the
fees and charges for the preparation of the plans and specifications relating
to such Additional Improvements, and (ii) survey charges pursuant to the
provisions of clause (ix) of paragraph (a) of this Article 12.

 

13.                                 CONDEMNATION
AND CASUALTY; SUBSTITUTION:

 

(a)                                  Assignment
of Proceeds; Tenant Authorized to Act for Landlord.  Except as provided herein, Tenant hereby
assigns to Landlord any award, compensation, insurance proceeds or other
payment (including any self insurance amounts) to which Tenant may become
entitled by reason of its interest in the Leased Property, other than any
award, compensation or insurance payment made to Tenant for interruption or
loss of business, for moving expenses or for any inventory, machinery,
equipment or other personal property belonging to Tenant (hereinafter referred
to as “Tenant’s Loss”) by reason of (i) damage to or destruction of the
Leased Property by fire or other casualty or cause (a “casualty”), or (ii) by
reason of any condemnation, requisition or other taking or sale of the use,
occupancy, access, or title to the 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 or other person having the power of
eminent domain (a “condemnation”). 
Tenant is hereby authorized and empowered, at its cost and expense, in
the name and on behalf of Landlord, Tenant 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 casualty or condemnation, and to cause any such award, compensation,
insurance proceeds or other payment to be paid to Landlord, except that Tenant
shall be entitled to submit a claim for Tenant’s Loss 

 

20

 

and receive and retain any award applicable thereto.
All amounts so paid or payable to Landlord or Tenant shall be retained or paid
over to the party entitled thereto in accordance with the provisions of this Article 13.  Tenant shall take all appropriate action in
connection with each such claim, proceeding or other action, however Landlord
and Landlord’s Lender may participate in such proceeding(s), and Tenant shall
deliver all instruments reasonably requested by Landlord and Landlord’s Lender
to permit such participation, and shall pay all costs and expenses in
connection therewith.

 

(b)                                 Partial
Damage or Condemnation; Restore/Repair or Substitute.  If less than substantially all of the Leased
Property shall be damaged or destroyed by casualty, or condemned, then Tenant
shall give prompt written notice thereof to Landlord, and this Lease shall
continue in full force and effect, and Tenant shall either (i) proceed at
Tenant’s own cost and expense and in conformity with the requirements set forth
in paragraph (a) of Article 12 hereof with reasonable diligence and
promptness to carry out any necessary demolition and to restore, repair,
replace, and/or rebuild the Leased Property in order to restore the Leased
Property, as nearly as practicable, to substantially the same condition, design
and construction as that which existed immediately prior to such casualty or
condemnation or, if the Leased Property is restored to a different condition,
design or construction than that which existed immediately prior to such
casualty or condemnation, the Leased Property must be restored as nearly as
practicable to the fair market value which existed immediately prior to the
condemnation or casualty or (ii) substitute the Leased Property in
conformity with the requirements set forth in paragraph (f) of this Article 13.

 

(i)                                     No
Abatement.  If Tenant elects to
restore or substitute for the Leased Property in accordance with this paragraph
(b) of this Article 13, Basic Rent shall not abate hereunder by
reason of any such casualty or condemnation of the Leased Property, and Tenant
shall continue to perform and fulfill all of Tenant’s obligations, covenants
and agreements hereunder notwithstanding such damage or destruction.

 

(ii)                                  Cost
of Repair and Net Award.  Landlord
and Tenant shall agree on the maximum cost of such restoration, repair,
replacement or rebuilding and such cost shall be paid first out of the Net
Award and then out of Tenant’s own funds to the extent such cost exceeds the
Net Award. If the Net Award shall not exceed the Alteration Cost Threshold, and
provided Tenant is not in default under this Lease, then the Net Award shall be
paid to Tenant (and to the extent the Net Award was previously assigned to
Landlord, will be remitted by Landlord to Tenant) to be applied to the repair
and rebuilding work required by this paragraph (b). If the Net Award exceeds
the Alteration Cost Threshold, the proceeds shall be disbursed in accordance
with clauses (i) - (iv) of paragraph (d) of this Article 13.

 

(c)                                  (i)                                     Substantial
or Complete Destruction or Condemnation: Repair, Substitute, or Terminate.  If, at any time during the Term of this
Lease, Tenant shall reasonably determine that all or substantially all of the
Leased Property has been destroyed by casualty, or all or substantially all of
the Leased Property has been taken by condemnation, or after any substantial
condemnation of the Leased Property if the Leased Property is unsuitable for
continued use in Tenant’s business, Tenant shall promptly notify Landlord of
such event in writing within thirty (30) days of such condemnation or casualty.
In such event, Tenant may 

 

21

 

either (i) rebuild and/or restore the Leased
Property, at Tenant’s own cost and expense and in accordance with the
requirements set forth in paragraphs (a) and (b) of Article 12
hereof and paragraph (d) of Article 13 hereof, (ii) substitute
the Leased Property in conformity with the requirements set forth in paragraph (f) of
this Article 13 or (iii) give written notice to Landlord within
ninety (90) days after such condemnation or casualty of Tenant’s intention to
terminate this Lease in conformity with the requirements herein set forth.

 

(ii)                                  Determination
of Substantial Destruction or Condemnation. 
Substantially all of the Leased Property shall be deemed to have been
taken by condemnation if the remaining portion of the Leased Property shall not
be of sufficient size or character to permit the operation by Tenant on an
economically feasible basis of the business conducted thereon immediately prior
to the condemnation, assuming that such remaining portion had been repaired and
restored to the fullest extent possible. Substantially all of the Leased
Property shall be deemed to have been destroyed by casualty, if, as to any one
occurrence, fifty percent (50%) or more of the total net rentable square foot
area within the Leased Property shall be damaged or destroyed and Tenant
determines in its reasonable discretion that the Leased Property is no longer
suitable for use in its business.

 

(iii)                               Notice of Termination;
Repurchase; Net Award.  Tenant’s
notice to Landlord of Tenant’s intent to terminate this Lease shall (i) contain
a brief description of the relevant condemnation or casualty, (ii) specify
such termination date, which shall be the Installment Payment Date first
occurring at least one hundred eighty (180) days after such notice is given
(the “Termination Date”), (iii) if such notice of termination shall be
based on a reasonable determination by Tenant that after such casualty or
condemnation the Leased Property is no longer suitable for use in Tenant’s
business as aforesaid, contain a certification by Tenant that a vice president
of Tenant has made such determination in good faith, and that, on or before
such Termination Date, Tenant will discontinue the use of the Leased Property
in Tenant’s ordinary course of business, (iv) contain the irrevocable
offer of Tenant to purchase Landlord’s interest in the Leased Property (and in
the Net Award hereinafter referred to) on such Termination Date at the
Termination Value (defined as the amount corresponding to the applicable
Termination Date on Schedule F
annexed hereto); and (v) contain a commitment by Tenant to deposit with a
Depository, not later than one hundred eighty days (180) days after the date of
Tenant’s notice to Landlord of Tenant’s intent to terminate this Lease, as
security for payment of the purchase price for the Leased Property, the
applicable Termination Value less the amount of any Net Award previously paid
with respect to such casualty or condemnation and held by Landlord or Landlord’s
designee pursuant to paragraph (a) of this Article 13. If Landlord
shall reject such offer to purchase by notice given to Tenant not later than
twenty (20) Business Days prior to such Termination Date, and Landlord’s Lender
(if any) shall consent in writing to such rejection, then this Lease shall
terminate on such Termination Date and the Net Award relating to such Property
shall be paid and belong to Landlord, plus an amount equal to the deductible
payable under the policy or policies of insurance, which shall be paid by
Tenant to Landlord. Unless Landlord shall (with the consent of Landlord’s
Lender, as aforesaid) reject such offer to purchase as provided in the
preceding sentence, Landlord shall be conclusively deemed to have accepted such
offer, and on such Termination Date Landlord shall transfer, and Tenant shall
purchase, Landlord’s interest in the Leased Property (and in the Net Award) in
accordance with the provisions of Article 17 hereof, and upon payment of
the purchase price, this Lease and Tenant’s obligation to pay Basic Rent shall
terminate on the Termination Date.  

 

22

 

The additional amount, if any, deposited by Tenant
pursuant to clause (v) of paragraph (c)(iii) of this Article 13
and not applied towards the purchase price of such Property shall be paid to
Tenant on the Termination Date if Tenant is not in default under this Lease.

 

(iv)                              Failure
to Give Termination Notice.  If
Tenant shall not give notice of its intention to terminate this Lease in
accordance with paragraph (c) of this Article 13 or shall not be
entitled to give notice of its intention to terminate this Lease, then this
Lease shall continue in full force and effect.

 

(d)                                 Net
Award Exceeds Alteration Cost Threshold; Tenant in Default.  If the Net Award shall exceed the Alteration
Cost Threshold, or if Tenant is in default under this Lease, then:

 

(i)                                     Net
Award Paid to Depository.  The full
amount of the Net Award shall be paid to a depository (the “Depository”) to be
selected as hereinafter provided. The Depository shall be The Chase Manhattan
Bank (National Association), New York, New York, or if The Chase Manhattan Bank
(National Association), shall be unwilling or unable to serve as the Depository,
a bank or trust company selected by Landlord and approved by Tenant, which
approval Tenant shall not unreasonably withhold or delay, which is authorized
to do business in the Commonwealth of Pennsylvania or the State of North
Carolina, and which has undivided capital and surplus of Two Hundred Million
Dollars ($200,000,000) or more. The Depository 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 Depository shall have been given an express written undertaking to do so by
Landlord and Tenant. Moneys received by the Depository pursuant to the
provisions of this Lease shall not be mingled with the Depository’s own funds
and shall be held by the Depository in trust, either separately or with other
trust funds, for the uses and purposes provided in this Lease. The Depository
shall place any moneys held by it into an interest bearing account; and the
interest paid or received by the Depository on the moneys so held in trust
shall be added to the moneys so held in trust. The Depository shall not be
liable or accountable for any action taken or suffered by the Depository or for
any disbursement of moneys made by the Depository in good faith in reliance on
advice of legal counsel. In disbursing monies pursuant to clause (ii) of
this paragraph (d), the Depository may rely conclusively on the information
contained in any notice given to the Depository by Tenant in accordance with
the provisions of said clause (ii), unless Landlord shall notify the Depository
in writing within five (5) Business Days after the giving of any such
notice that Landlord intends to dispute such information, in which case the
disputed amount shall not be disbursed but shall continue to be held by the
Depository until such dispute shall have been resolved;

 

(ii)                                  Agreement
on Repair Costs and Payment Thereof. 
Landlord and Tenant shall agree on the maximum cost of such rebuilding,
restoration or repair, and such cost shall be paid first out of the Net Award
and then out of Tenant’s own funds to the extent such cost exceeds the Net
Award;

 

(iii)                               Tenant Reimbursements
from Net Award.  From time to time,
but not more often than once in any thirty (30) day period, Tenant may request
reimbursement out of the Net Award for the actual costs and expenses incurred
by Tenant in connection with such 

 

23

 

repair and rebuilding. Such requests shall be made by
written notice to the Depository, with a copy to Landlord, setting forth in
reasonable detail all of such costs and expenses incurred by Tenant. If
Landlord shall in good faith desire to dispute the information contained in any
notice given by Tenant pursuant to this clause (iii), Landlord shall so notify
Tenant and the Depository in writing within five (5) Business Days after
the giving of such notice, specifying the amount intended to be disputed and
the nature of the dispute. After such five (5) Business Day period has
elapsed, if Landlord has not disputed the information contained in Tenant’s
Notice, the Depository shall promptly disburse to Tenant out of the Net Award
the amount of such costs and expenses; and

 

(iv)                              Excess
Net Award to Landlord.  Upon the
completion of such repair and rebuilding, any remaining Net Award shall be paid
to and belong to Landlord. Landlord will utilize such remaining Net Award to
prepay any mortgage indebtedness encumbering the Leased Property, and each
payment of Basic Rent payable during the remaining Term to occur following the
payment of such remaining Net Award to Landlord shall be reduced by an amount
so as to preserve Landlord’s Yield with respect to its ownership of the Leased
Property; provided that in no event will Basic Rent be reduced to an amount
which is less than the debt service payable with respect to the mortgage
obtained by Landlord in connection with Landlord’s acquisition of its interest
in the Leased Property.

 

(e)                                  Temporary
Condemnations; Routine Condemnations. 
Notwithstanding any other provision to the contrary contained in this Article 13,
in the event of a temporary condemnation, this Lease shall remain in full force
and effect and Tenant shall be entitled to the Net Award allocable to such
temporary condemnation; except that such portion of the Net Award allocable to
the time period after the expiration or termination of the Term of this Lease
shall be paid to Landlord.  Any
condemnation limited to street widenings and not involving damage to any
building or improvements, and in which the Net Award is reasonably estimated
not to exceed $100,000.00, is hereinafter referred to herein as a “Routine
Condemnation.”  Notwithstanding any other
provisions herein to the contrary, in the event of a Routine Condemnation,
Tenant shall be entitled to recover from the Net Award (i) Tenant’s Loss,
and (ii) Tenant’s reasonable out-of-pocket costs and expenses (including
reasonable attorneys’ fees and costs) in handling the Routine Condemnation, and
the balance of the Net Award shall be payable to Landlord.  With respect to any temporary condemnation or
Routine Condemnation, Tenant shall deliver to Landlord, promptly upon Tenant’s
receipt thereof, any notices, communications, plans and any further materials
with respect to the temporary condemnation or Routine Condemnation as Landlord
may reasonably request.  Landlord and
Landlord’s Mortgagee shall cooperate in any temporary condemnation or Routine
Condemnation, and upon request shall execute any deeds, easements, releases or
any other instruments required by the condemning authority for the temporary
condemnation or Routine Condemnation within 30 days next following receipt
thereof by Landlord and Landlord’s Mortgagee, together with such other and
further materials as either Landlord or Landlord’s Mortgagee may specify in
writing to Tenant.  If Landlord or
Landlord’s Mortgagee shall fail to execute any such deeds, easements, releases
or such other instruments as may be specifically requested by Tenant, then
Tenant may deliver to Landlord and Landlord’s Mortgagee further notice
requesting the delivery of said documents. 
Tenant’s notice shall specify in capital letters and bold face type that
if Landlord or Landlord’s Mortgagee shall fail to return the requested
documents within ten (10) days, or shall fail to specify what corrections
need be made to such documents or why, specifically, Landlord objects 

 

24

 

to the delivery of such documents, then Tenant intends
to deliver such instruments as Landlord’s attorney-in-fact.

 

Subject to the foregoing provision, in the event Landlord or Landlord’s
Mortgagee fail to deliver any such deeds, easements, releases or other
instruments within the 30 day period required above, subject to the additional
10 day notice required above, and subject to Landlord’s receipt of such other
documentation relating to the Routine Condemnation as Landlord shall reasonably
request, then in such event, Tenant is hereby authorized to act as the
attorney-in-fact for Landlord to execute and deliver on behalf of Landlord any
and all deeds, easements, releases and other instruments required by the
condemning authority for the temporary condemnation or Routine Condemnation;
provided, however, that no instrument executed by Tenant as attorney-in-fact
shall contain any covenants other than quitclaim covenants.  Tenant’s obligation to pay reasonable
attorney’s fees to Landlord and Landlord’s Mortgagee in connection with any
Routine Condemnation shall not exceed $6,000.00 for each of Landlord’s and
Landlord’s Mortgagee’s legal counsel. 
For purposes of this paragraph (e) of Article 13, commencing
on March 31, 2004, and every March 31st thereafter during the Term of
this Lease, the $6,000.00 limitation on attorney’s fees for each of Landlord
and Landlord’s Mortgagee shall be calculated as the amount equal to the product
derived by multiplying $6,000.00 by one plus the percentage by which the CPI
for such calendar year exceeds the Base Price Index.  In the event the information necessary to
calculate this amount shall not have been published in sufficient time to
permit such calculation to be made on or before March 31 of any year, the
limitation shall be calculated by using the CPI for the latest month for which
it has been published.  After publication
of the relevant information, Landlord and Tenant shall make appropriate
adjustment of the limitation.  In no
event shall the $6,000 limitation on attorney’s fees be reduced as a result of
any decrease in the CPI.

 

(f)                                    Substitution.

 

(i)                                     Tenant’s
Right; Like Kind Use and Value.  At
any time during the Term of this Lease, Tenant may give written notice to
Landlord that it intends to provide to Landlord a substitute parcel of real
property consisting of a fee estate (the “Substitute Parcel”) having a
comparable appraised “Like Kind Use and Value,” and substituted in accordance
with the requirements set forth below.  “Like
Kind Use and Value” shall mean that (i) the Substitute Parcel has,
generally, the same character, quality, use and rental value as the Leased
Property, and (ii) the Substitute Parcel has a fair market value at least
equal to the value of the Leased Property, as such value is similarly
calculated.  The Appraiser shall be
selected and mutually agreed upon by the parties and all costs therefor shall
be borne by Tenant.  If the parties shall
be unable to select and mutually agree upon an Appraiser, then either party
shall have the right, upon ten (10) days notice to the other, to invoke
the appraisal procedure set forth at Article 16 hereof to confirm the
Substitute Parcel’s Like Kind Use and Value, as above described.  In the instance of a substitution following a
casualty or condemnation (as defined in Paragraph 13(a)), of or to the Leased
Property, the appraisal of the Leased Property required under this Paragraph 13(f) shall
appraise the property in its condition immediately prior to the casualty or
condemnation.

 

(ii)                                  Appraisal;
Closing Requirements.  Tenant may not
elect to substitute a Substitute Parcel for the Leased Property unless Tenant
shall have demonstrated by 

 

25

 

appraisal pursuant to the immediately proceeding
paragraph, that the Substitute Parcel shall have a Like Kind Use and Value
equal to or greater than the Leased Property, and Tenant provides to Landlord (A) a
limited warranty deed and an amendment to this Lease and memorandum of lease
and any assignment thereof in recordable form satisfactory to Landlord in all
respects pursuant to which the Substitute Parcel shall become the Leased
Property, (B) an opinion of counsel or the written advice of a “Big Four”
independent certified public accounting firm or another accounting firm
acceptable to Landlord confirming that such replacement constitutes a tax-free
exchange to Landlord and shall not result in the reduction, denial or deferral
of any or all of the federal, state or municipal income tax deductions which
Landlord otherwise would be permitted to report with respect to the Leased
Property or cause this Lease not to be a true lease for federal income tax
purposes, which opinion shall be in a form and substance reasonably
satisfactory to Landlord and Landlord’s Mortgagee, (C) a certification
with respect to the Substitute Parcel by Tenant containing the representations
and warranties set forth on Schedule G,
attached hereto and incorporated herein by reference, (D) an endorsement
reasonably satisfactory to Landlord and Landlord’s Mortgagee to Landlord’s and
Landlord’s Mortgagee’s title insurance policy or a new policy insuring Landlord’s
and Landlord’s Mortgagee’s respective title and interest thereto and therein in
an amount at least equal to the fair market value thereof, subject only to
Permitted Encumbrances, (E) a survey of the Substitute Parcel prepared by
a licensed surveyor and reasonably acceptable to Landlord, certified to
Landlord, Landlord’s Mortgagee and the title insurance company issuing the
endorsements required under the immediately preceding clause (D), (F) a
Phase I environmental study by a firm reasonably acceptable to Landlord’s and
Landlord’s Mortgagee with respect to the Substitute Parcel, dated not more than
one hundred eighty (180) days prior to delivery thereof to Landlord, indicating
that the Substitute Parcel is in compliance with Article 10 hereof, (G) a
commitment by Tenant to pay all of Landlord’s and Landlord’s Mortgagee’s
reasonable costs and expenses (including reasonable attorney’s fees) incurred
in connection with such substitution; provided, however, notwithstanding
anything herein to the contrary, Tenant’s obligation to pay the reasonable
attorney’s fees of Landlord and Landlord’s Mortgagee in connection with such
substitution shall not exceed $7,500.00 for each of Landlord’s and Landlord’s
Mortgagee’s legal counsel, and (H) such other documents or instruments as
Landlord and Landlord’s Mortgagee may reasonably request to insure the
continued validity and enforceability of this Lease. In the event that clause (B) above
cannot be satisfied because the substitution is not a tax-free exchange to
Landlord or results in a reduction, denial or deferral of any or all of the tax
deductions otherwise available to Landlord, Tenant nevertheless will be
permitted to substitute for the Leased Property, provided that the Basic Rent
payable hereunder is changed to preserve Landlord’s Yield, provided that in no
event will Basic Rent be reduced to an amount which is less than the debt
service payable with respect to the mortgage loan incurred by Landlord at the
time of purchase of Landlord’s interest in the Leased Property.  For purposes of this paragraph (f)(ii) of
Article 13, commencing on March 31, 2004, and on and as of each March 31
thereafter during the Term of this Lease, the limitations on attorneys fees for
Landlord and Landlord’s Mortgagee set forth in this paragraph (f)(ii), shall be
calculated as the amount equal to the product derived by multiplying $7,500, by
one plus the percentage by which the CPI for such calendar year exceeds the
Base Price Index.  In the event the
information necessary to calculate this amount shall not have been published in
sufficient time to permit such calculation to be made on or before March 31
during any year, the limitation shall be calculated by using the CPI for the
latest month for which it has been published. 
After publication of the relevant information, Landlord and Tenant shall
make appropriate adjustment 

 

26

 

of the limitation. 
In no event shall the limitation on attorney’s fees of $7,500, be
reduced as a result of any decrease in the CPI.

 

(iii)                               Review Period.  Landlord and Landlord’s Mortgagee shall have
a period of thirty (30) days to review each of the items described in Article 13(f)(ii) following
receipt of such items from Tenant.  Any
such item that is not commented upon or responded to within such 30 day period
shall be deemed approved and thereafter neither Landlord nor Landlord’s
Mortgagee shall have the right to reject any such item and Tenant shall not be
responsible for any legal fees incurred after the expiration of such 30 day
period unless within such period Landlord or Landlord’s Mortgagee shall have
requested additional or clarifying information which is not delivered until
after the thirty (30) day period shall have elapsed; it being agreed by the
parties that in such instance, the thirty (30) day review period shall be
deemed extended until that date which is five (5) business days next
following the date on which Landlord and Landlord’s Mortgagee shall have
received the last remaining item requested.

 

(iv)                              Rentals
Continue in Same Amount.  Anything
herein contained to the contrary notwithstanding, the Basic Rent and the
Additional Rent payable under this Lease shall not be diminished or otherwise
affected upon the substitution of a Substitute Parcel.

 

(v)                                 Landlord’
Standard of Acceptance.  With respect
to a notice to substitute real property pursuant to paragraph (f)(i) on
the specified Termination Date, Landlord shall accept such Substitute Parcel if
such notice, the required appraisal(s), and all other documents required for
such substitution meet the requirements of subsections (f)(i) and (ii) hereof.  Landlord shall not otherwise be required to
accept such Substitute Parcel within such period if Landlord or Landlord’s
Mortgagee shall have requested additional or clarifying information which is
not delivered until after the thirty (30) day period shall have lapsed; it
being agreed by the parties that in such instance the above said thirty (30)
day review period shall be deemed extended until the date which is five (5) business
days next following the date on which Landlord and Landlord’s Mortgagee shall
have received the last remaining item requested.

 

14.                                 INSURANCE:

 

(a)                                  Tenant
shall during the term hereof, at its cost and expense, maintain valid and
enforceable insurance of the following character:

 

(i)                                     “all
risks” insurance coverage against losses by fire and lightning and other risks
for the full insurable replacement value of the Improvements and the Equipment
and all building materials, equipment, machinery, appliances and other property
which constitute part of the Leased Property, with agreed amount endorsement or
endorsements providing equivalent protection, including loss by windstorm,
hail, explosion, riot (including riot attending a strike), civil commotion,
aircraft, vehicles, smoke damage, and vandalism and malicious mischief, but
excluding insurrections, rebellions, revolutions and civil wars, in amounts not
less than the full insurable value of all buildings and other improvements on the
Leased Property. The term “full insurable value” as used herein means the
actual replacement cost, including the costs of debris removal, but excluding
the cost of constructing foundation, footings and excavations.

 

27

 

(ii)           Comprehensive
general public liability insurance covering the legal liability of Landlord and
Tenant against claims for bodily injury, death or property damage, occurring
on, in or about the Leased Property and the adjoining land or occurring as a result
of ownership of facilities located on the Leased Property or as a result of the
use of products or materials manufactured, processed, constructed or sold, or
services rendered, on the Leased Property, in the minimum amount of Five
Million Dollars ($5,000,000) with respect to any one occurrence, accident or
disaster or incidence of negligence. Coverage should include “premises/operations”,
“independent contractors”, and “blanket contractual” liabilities. If the
insurance is provided on a claims made basis, the insured amount shall be Five
Million Dollars ($5,000,000) per claim and the coverage shall be the same as
under the occurrence form. Any claims made policy shall provide that (A) coverage
will be continuous, (B) the retroactive date of the first claims made
policy shall be the expiration date of the preceding continuous occurrence
coverage, (C) at each renewal of the claims made coverage the retroactive
date shall not be advanced, (D) if the retroactive date is advanced or
coverage is cancelled for whatever reason, Tenant shall deliver to Landlord a
certificate of insurance showing that Tenant has purchased the extended
reporting period or supplemental tail endorsement under the previous policy
extending the period for an unlimited time, if reasonably available, during
which a claim may first be made, and (E) the certificate of insurance
shall show the retroactive date.

 

(iii)          Workmen’s
compensation insurance. Tenant shall comply with applicable workmen’s
compensation laws and shall maintain workers’ compensation insurance if and to
the extent necessary for such compliance.

 

(iv)          Such
other insurance, in such amounts and against such risks, as is customarily
maintained by operators of similar properties.

 

(v)           Excess
Liability - single limit liability insurance in the amount of Five Million
Dollars ($5,000,000) with respect to the risk referred to in clause (ii) of
this paragraph (a) of Article 14.

 

Such insurance shall be written by companies of recognized financial
standing which are rated at least A by national rating organizations and have a
claims paying ability rating from Standard & Poor’s Corporation of AAA
or a rating from Best’s of at least A:XIII, and are legally qualified to issue
such insurance, and are acceptable to Landlord and Landlord’s Mortgagee, and
shall name Tenant as the insured party and Landlord and Landlord’s Mortgagee as
additional insureds as their interests may appear in accordance with paragraph
(c)(i) of this Article 14. Such insurance may provide for such
reasonable deductible amounts as are customarily provided for in insurance
maintained by operators of comparable buildings (but in no event in excess of
Two Hundred Fifty Thousand Dollars ($250,000) per occurrence, adjusted for
increases in the CPI), and may be obtained by Tenant by endorsement on its
blanket insurance policies provided that each such endorsement on the blanket
insurance policy shall provide for a reserved amount thereunder with respect to
the Leased Property so as to assure that the amount of insurance required by
clause (i) of paragraph (a) of this Article 14 will be available
notwithstanding any losses with respect to other property covered by such
blanket policy or, if reservation of amounts under Tenant’s blanket insurance
policy is not available under the terms of such policies, shall otherwise be
acceptable to Landlord and Landlord’s Mortgagee. Tenant may, at its cost and
expense, prosecute any claim against any insurer or contest any settlement
proposed by any insurer, and 

 

28

 

Tenant may bring any such prosecution or contest during the Term of
this Lease in the name of Landlord, Tenant or both, and Landlord will join
therein at Tenant’s request, provided that Tenant shall indemnify Landlord
against any costs or expenses which Landlord may incur in connection with such
prosecution or contest. Provided that no event of default has occurred and is
continuing and notwithstanding any other provisions of this Article 14,
Tenant may maintain a prudent self insurance program that provides for the
maintenance of adequate capital reserves as determined by statutorily accepted
accounting principles provided that Tenant may maintain self insurance (i) for
public liability coverage only if Tenant at all times shall maintain a Credit
Rating of at least Baa3 and (ii) for property/hazard insurance coverage
only if Tenant at all times shall maintain a Credit Rating of at least Baal.

 

(b)           Provided that no
event of default has occurred and is continuing, insurance claims by reason of
damage or destruction to any portion of the Leased Property shall be adjusted
by Tenant, subject to the approval of Landlord if such claim exceeds the
Alteration Cost Threshold, which approval Landlord agrees not to unreasonably
withhold or delay.

 

(c)           Every insurance
policy maintained pursuant to clause (vii) of paragraph (a) of Article 12,
or paragraph (a) of this Article 14 shall: (i) name Landlord and
Landlord’s Mortgagee, as additional insureds as their interests may appear; (ii) contain
a standard first mortgage endorsement naming any mortgagee of Landlord’s
interest in the Leased Property; (iii) provide that in any instance where
the total loss proceeds payable by reason of a single occurrence shall exceed
the Alteration Cost Threshold, all of such proceeds shall be paid as provided
in Article 13 hereof; (iv) provide that the insurer waives all rights
of subrogation against Landlord, any successor to Landlord’s interest in the
Leased Property, and any mortgagee of Landlord’s interest in the Leased
Property; (v) provide that 30 days (10 days for nonpayment of premiums)
prior written notice of cancellation, modification, termination or lapse of
coverage shall be given to Landlord and any mortgagee of Landlord’s interest in
the Leased Property and that such insurance, as to the interest of such
mortgagee, shall not be invalidated by any act or neglect of Tenant or of
Landlord or any owner of the Leased Property, nor by any foreclosure or any
other proceedings relating to the Leased Property, nor by any change in the
title ownership of the Leased Property, nor by occupation of the Leased
Property for purposes more hazardous than are permitted by such policy; and (vi) be
primary and without right or provision of contribution as to any other insurance
carried by Landlord or any other interested party; and (vii) 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 or Landlord are conducted within the
jurisdiction of the United States of America).

 

(d)           Tenant shall deliver
to Landlord upon the execution and delivery of this Lease certificates of
insurance, on an Acord 27 form, signed by an authorized insurance company
representative, reasonably satisfactory to Landlord and any mortgagee of
Landlord’s interest in the Leased Property, evidencing all the insurance which
is then required to be maintained by Tenant, and Tenant shall, within 5 days
prior to the expiration of any such insurance, deliver certificates of
insurance, on an Acord 27 form, evidencing the renewal of such insurance
(signed by an authorized insurance company representative) evidencing the
renewal of such insurance.

 

29

 

(e)           Tenant shall not
obtain or carry separate insurance concurrent in form or contributing in the
event of loss with that required in this Article 14 to be furnished by
Tenant, unless Landlord and Landlord’s Mortgagee is included therein as an
additional insured, with loss payable as in this Lease provided. Tenant shall
immediately notify Landlord whenever any such separate insurance is obtained
and shall deliver to Landlord and Landlord’s Mortgagee the policy or policies
or certificates evidencing the same.

 

(f)            Tenant shall comply
with all of the terms and conditions of each insurance policy maintained
pursuant to the terms of this Lease.

 

15.                                 FINANCIAL
STATEMENTS:

 

Subject to the last paragraph of this Article 15, Tenant shall
furnish the following statements to Landlord:

 

(a)           as soon as
practicable and in any event within 120 days after the end of each fiscal year,
consolidated statements of earnings, and consolidated statements of cash flows,
consolidated statements of stockholders equity, and consolidated balance sheets
of Tenant as of the end of each such year, setting forth in each case in
comparative form corresponding consolidated figures from the preceding year,
all in the form as furnished by Tenant to the Securities and Exchange
Commission or similar federal agency having regulatory jurisdiction over
Tenant, or, if no such jurisdiction exists, in reasonable detail and reasonably
satisfactory in scope to Landlord and certified to Tenant as to consolidated
statements by independent certified public accountants of recognized national
standing selected by Tenant 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 in the
circumstances;

 

(b)           with reasonable
promptness, copies of all financial statements and reports which Tenant shall
send to its stockholders, and copies of each Form 10-K, Form 10-Q, Form 8-K,
proxy statement and, in the form having been deemed effective, registration
statement (without exhibits) (other than preliminary proxy statements and Form S-8
registration statements), or copies of any successor forms or statements
substituted therefor, which Tenant shall file with the Securities and Exchange
Commission (“SEC”) or any governmental agency substituted to the functions of
the SEC; and

 

(c)           within twenty (20)
days of a request by Landlord, (i) Tenant will deliver or cause to be
delivered to Landlord a certificate of Tenant’s President, any Vice President,
or Treasurer stating to the officer’s knowledge based on reasonable inquiry
that there exists no event of default under the Lease, or default, which, after
notice or lapse of time or both, would constitute an event of default, or, if
any such event of default exists, specifying the nature thereof, the period of
existence thereof and what action Tenant proposes to take with respect thereto
and stating 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 such modifications).

 

So long as Tenant is Wachovia Bank, National Association, and so long
as all of the financial information requested in Paragraphs 15(a) and (b) above
is available to the general 

 

30

 

public (at no cost, or if a cost shall be charged the
same shall be reimbursed to Landlord or Landlord’s Lender, as the case may be,
promptly upon invoicing) at websites maintained by either Wachovia Bank,
National Association or the Securities and Exchange Commission, Tenant’s
requirement to furnish such financial information to Landlord shall be deemed
satisfied.

 

16.                                 DETERMINATION
OF FAIR MARKET VALUE OF LEASED PROPERTY; RIGHT OF FIRST REFUSAL; RIGHT TO
PURCHASE:

 

(a)           Fair
Market Value.  With respect to the
determination of the fair market value of the Leased Property required in
connection with any right or obligation of Tenant to purchase the Leased
Property or any portion thereof under the terms of this Article 16 or Article 29(d) hereof,
or Tenant’s right of substitution under Article 13 hereof, such fair
market value shall be calculated as unencumbered by this Lease, as mutually
agreed to by Landlord and Tenant or, in the event Landlord and Tenant are
unable to agree on the fair market value within thirty (30) days after receipt
of the notice giving rise to the need to determine such fair market value, then
by appraisal as provided below.

 

Any determination of the fair market value of a Property or a portion
thereof by appraisal shall be conducted as follows:

 

The fair market value shall be determined by Appraisers selected in the
following manner: on or before ten (10) days after the expiration of the
thirty (30) day period provided for above, Landlord and Tenant shall each
appoint an Appraiser. If either Landlord or Tenant fails to appoint an
Appraiser, fair market value shall be determined by the Appraiser which is
appointed within such ten (10) day time period. Within forty-five (45)
days of the appointment, the Appraiser or Appraisers shall determine fair
market value, and if the two Appraisers so appointed are unable to agree upon
the fair market value, the fair market value shall be the average of the
amounts determined by the Appraisers, if the greater amount is no more than
105% of the lesser amount. If the greater amount exceeds 105% of the lesser
amount, a determination shall be made by a third Appraiser, who shall be
selected within five (5) days after the end of the forty-five (45) day
period referred to above by the two Appraisers appointed by the parties hereto.
Such determination shall be made by the third Appraiser within forty-five (45)
days of his appointment. In such event, fair market value shall be the average
of the two closest appraised amounts. Tenant agrees that it shall bear the
costs of all such appraisals. On the date of purchase Landlord shall convey the
Leased Property to Tenant or its designee pursuant to and upon compliance with Article 17
of this Lease.

 

(b)           Right
of First Refusal.  If at any time
during the Term of this Lease (but for purposes hereof, specifically excluding
Renewal Terms, if any), Landlord shall receive a bona fide offer (a “Third
Party Offer”) from a third party (other than a purchaser making a bid or offer
to purchase the Leased Property at any sale incidental to the exercise of any
remedy provided for in any mortgage on the Leased Property) to purchase the
Leased Property, containing terms and conditions satisfactory to Landlord,
including, without limitation, a purchase price sufficient to repay all sums
then secured by liens held by Landlord’s Lender against the Leased Property,
then Landlord shall notify Tenant of such Third Party Offer, including the
identity of the offeror.  If at the time
no event of default has occurred hereunder and is continuing, and provided that
Tenant shall not have vacated the Leased Property or 

 

31

 

subleased the entirety thereof, then for a period of
twenty (20) days after Tenant’s receipt of Landlord’s notice, Tenant shall have
the exclusive right to accept Landlord’s offer to purchase Landlord’s interest
in the Leased Property upon the terms and conditions set forth in the Third
Party Offer.  Tenant shall exercise such
right of first refusal, if at all, by delivering its written purchase offer to
Landlord within said twenty (20) days after receipt of Landlord’s notice.  Such purchase shall occur on the next
occurring Installment Payment Date that is at least twenty (20) days after
Landlord’s receipt of such notice. On the date of such purchase, Landlord shall
convey and assign to Tenant, or its designee, Landlord’s interest in the Leased
Property upon payment of the sale price therefor, in accordance and upon
compliance with the terms and conditions of the Third Party Offer, Landlord’s
Lender shall be repaid in full all amounts secured by such Lender’s liens
against the Leased Property, and this Lease shall terminate upon such
conveyance.  If Tenant fails to accept
Landlord’s offer within such twenty (20) day period, then Landlord shall be
free, subject to the restrictions set forth in paragraph (i) of Article 21
hereof, to sell the Leased Property described in the Third Party Offer at a
price not less than the purchase price contained in the Third Party Offer for a
period of twelve (12) months thereafter without offering such Leased Property
to Tenant. If Landlord does not convey its interest in such Leased Property
within such twelve (12) month period or in the event of any material change in
the terms of the Third Party Offer, Tenant’s rights pursuant to this paragraph
shall be reinstated. The term “material change” as used in the preceding
sentence shall include a change of identity of a third party or its assignee,
to a bank which is a substantial competitor in Tenant’s market. Any third party
that purchases the Leased Property pursuant to this paragraph (b) of Article 16
shall take the Leased Property subject to the terms hereof, and such purchaser
shall assume Landlord’s rights and obligations under the Lease thereafter
accruing, and this Lease shall remain in full force and effect. Landlord shall
cause any third party purchasing the Leased Property pursuant to this paragraph
(b) of Article 16 to execute and deliver to Tenant a document
confirming such third party’s assumption of Landlord’s rights and obligations
under this Lease thereafter accruing.

 

(c)           Right
to Purchase.  Provided that no event
of default has occurred hereunder and is continuing, and provided that Tenant
shall not have vacated the Leased Property or subleased the entirety thereof,
then at the expiration of the Term of this Lease or any Renewal Term, Tenant
shall have the right and option to purchase the Leased Property on and as of
the expiration date of the then current term of this Lease (unless Tenant shall
have exercised its option to renew the term hereof for any then remaining
Renewal Term, in which event Tenant shall not have the right to purchase, other
than at the end of the next ensuing Renewal Term, and provided that at such
time Tenant shall not have exercised an option for any then remaining Renewal
Term).  In that event if Tenant desires
to purchase the Leased Property, Tenant shall serve notice upon Landlord not later
than one hundred eighty (180) days prior to the expiration of the then current
Term of this Lease.  The purchase price
of the Leased Property shall be ninety (90%) percent of the appraised fair
market value of the Leased Property as a retail bank facility (if and to the
extent improved as such), or for such other purpose as the Leased Property is
then used at the time Tenant notifies Landlord of Tenant’s desire to purchase
the Leased Property pursuant to this paragraph. 
Upon Landlord’s receipt of such notice, the parties shall attempt to
agree upon the fair market value of the Property.  If the parties shall be unable to agree upon
said fair market value, the parties shall employ the appraisal procedure set
forth in paragraph 16(a) above, and the purchase price shall be set at
ninety (90%) percent of the fair market value, as so determined by the parties
or by the appraisal procedure set forth in paragraph 16(a) above.  Once 

 

32

 

delivered, Tenant’s notice of intent to purchase as
aforesaid shall be irrevocable.  Closing
shall be conducted within thirty (30) days next following the determination of
the fair market value of the Leased Property but no later than thirty (30) days
next following the expiration date of this Lease.

 

17.           PURCHASE
PROCEDURE:

 

(a)                                  In
the event of the purchase of Landlord’s interest in the Leased Property by
Tenant pursuant to any provision of this Lease, or a substitution of the Leased
Property pursuant to paragraph (f) of Article 13, the terms and
conditions of this Article 17 shall apply.

 

(b)                                 On
the closing date fixed for the purchase of Landlord’s interest in the Leased
Property or a substitution of the Leased Property:

 

(i)            in
the case of a purchase, Tenant shall pay to Landlord, in lawful money of the
United States, at Landlord’s address hereinabove stated or at any other place
in the United States which Landlord may designate, the purchase price; and

 

(ii)           in
the case of a purchase or a substitution, Landlord shall execute and deliver to
Tenant a limited warranty deed, assignment and/or such other instrument or
instruments as may be appropriate, which shall transfer Landlord’s interest in
the Leased Property sold or substituted for a Substitute Parcel, subject to, (A) Permitted
Encumbrances (except, in the case of a purchase by Tenant under paragraph (c) or
(f) of Article 13, free of the lien of any mortgage indebtedness
incurred by Landlord), (B) all liens, encumbrances, charges, exceptions
and restrictions attaching to the Leased Property after the Commencement Date
which shall not have been created or caused by Landlord unless consented to by
Tenant, and (C) all applicable laws, rules, regulations, ordinances and
governmental restrictions then in effect. In the case of a purchase of Landlord’s
interest in the Leased Property by Tenant pursuant to paragraphs (c) and (f) of
Article 13 hereof, Landlord shall also pay to Tenant the Net Award, if
any.

 

(c)                                  Tenant
shall pay all charges incident to such transfer, including all recording fees,
reasonable attorneys’ fees and expenses, transfer taxes, title insurance
premiums and federal, state and local taxes, except for any net income or
profit taxes of Landlord, except in the case of (i) a purchase by Tenant
pursuant to paragraph (b) of Article 16, in which case costs will be
allocated between Landlord and Tenant in the same manner as was provided for in
the Third Party Offer, or (ii) a purchase pursuant to paragraph (d)(ii) of
Article 29, in which case Landlord shall pay the first Fifty Thousand
Dollars ($50,000) of legal fees incurred by Landlord and Landlord’s Mortgagee
(with Tenant being responsible for drafting of all documentation) and Tenant
being responsible for legal fees in excess of such amount and all other costs
and expenses. The foregoing notwithstanding, Tenant shall not bear the expense
of any loan prepayment premium relating exclusively to any Leased Property
substitution under paragraph 13(f), above.

 

(d)                                 Tenant
shall pay all Basic Rent and Additional Rent due and payable only through the
date Tenant purchases Landlord’s interest in the Leased Property.

 

18.                                 [Intentionally
Deleted].

 

33

 

19.                                 QUIET
ENJOYMENT:

 

Upon due performance of the covenants and agreements to be performed by
Tenant under this Lease, Landlord covenants that Tenant shall and may at all
times peaceably and quietly have, hold and enjoy the Leased Property during the
Term of this Lease. Notwithstanding the preceding sentence, Landlord, Landlord’s
Lender, or their respective agents may enter into and inspect the Leased
Property at any reasonable time during normal business hours, upon the giving
of reasonable notice, if they take precautions not to unreasonably
inconvenience Tenant or any persons occupying the Leased Property in accordance
with this Lease and are accompanied by an employee or other representative of
Tenant at all times during such entry and inspection, or at any time in the
event of an emergency. Notwithstanding the foregoing, Tenant may exclude Landlord,
Landlord’s Lender or their respective agents from areas of the Leased Property
designated as security areas by Tenant, for example, vaults, modular vaults and
automated teller machines.

 

20.                                 TERMINATION:

 

In the event of the termination of this Lease as herein provided, the
obligations and liabilities of Landlord and Tenant, as the case may be, actual
or contingent, under this Lease which arose at or prior to such termination,
and which remain unpaid or unperformed, shall survive such termination.

 

21.           SUBLETTING;
ASSIGNMENT:

 

(a)           Subleases
Permitted.  Subject to subparagraphs (c) and
(f) hereof and Article 5 hereof, Tenant may sublet the Leased
Property or any portion or portions thereof, provided that (i) no event of
default has occurred and is continuing, and (ii) each sublease shall
expressly be made subject to the provisions of this Lease.

 

(b)           Assignments
Permitted.  Subject to subparagraphs (c) and
(f) hereof and Article 5 hereof, Tenant may assign its interest under
this Lease, provided that no event of default has occurred and is continuing
and provided further that such assignment shall expressly be made subject to
the terms of this Lease.

 

(c)           Restriction
on Term of Sublease or Assignment. 
The term of any subletting of the Leased Property or assignment of this
Lease shall not extend beyond the Term of this Lease. Any sublessee or assignee
shall be permitted to use the Leased Property for any lawful purpose, subject
to the limitations set forth in Article 5 hereof.

 

(d)           Intentionally
Omitted.

 

(e)           Intentionally
Omitted.

 

(f)                                    Tenant’s
Obligations Continue.  No sublease or
assignment shall affect or reduce any obligation of Tenant or right of Landlord
hereunder, and all obligations of Tenant hereunder shall continue in full
effect as the obligations of a principal and not of a guarantor or surety, as
though no subletting or assignment had been made. For the purposes of this
Lease 

 

34

 

generally and subparagraphs (a)(iii), (iv) and (v) of
Article 23 hereof in particular, the term “Tenant” shall mean Wachovia
Bank, National Association, and not its subtenants and assignees.

 

(g)           Conformed
Copy of Sublease or Assignment.  For
any sublease or assignment from which Tenant receives more than Seventy-Five
Thousand and 00/100 Dollars ($75,000.00) in annual rents, Tenant shall, within
ten (10) days after the execution of any such sublease or assignment,
deliver to Landlord a conformed copy thereof (with acknowledgements) and a
conformed copy of any short-form lease or memorandum of lease suitable for
recording.

 

(h)           No
Mortgages or Pledges.  Neither this
Lease nor the Term of this Lease hereby demised shall be mortgaged or pledged
by Tenant, nor shall Tenant mortgage, pledge or assign the interest of Tenant in
and to any sublease of the Leased Property or any portion thereof or the rental
payable thereunder. Any such mortgage, assignment or pledge, and any sublease
or assignment not permitted by this Article 21, shall be void.

 

(i)            Transfers
by Landlord.  Landlord may assign,
convey, encumber or otherwise transfer its estate, right, title and interest
hereunder or in the Leased Property or any part thereof, and upon execution and
delivery of any such assignment, conveyance or other transfer, Landlord shall be
released from its obligations hereunder arising after the date of such
conveyance or other transfer. Any such assignment, conveyance or other transfer
shall be subject to this Lease.

 

Landlord shall, within thirty (30) days after the execution of any such
instrument of mortgage, assignment, conveyance or transfer, deliver written
notice thereof to Tenant. Any failure of Landlord so to deliver a notice of
such instrument shall not, however, in any way impair or affect the validity
thereof.

 

22.                                 ADVANCES
BY LANDLORD:

 

If an event of default has occurred and is continuing, and at any time
if Tenant fails to maintain insurance in accordance with Article 14
hereof, if Tenant shall fail to make or perform any payment or act required by
this Lease within any applicable cure period, then Landlord may at its option
make such payment or perform such act for the account of Tenant, and Landlord
shall not thereby be deemed to have waived any default or released Tenant from
any obligation hereunder. All amounts so paid by Landlord and all incidental
costs and expenses (including reasonable attorneys’ fees and expenses) incurred
in connection with such payment or performance, together with interest at the
annual rate equal to the greater of (i) thirteen percent (13%) and (ii) three
percent (3%) above the prime rate as announced from time to time in New York
City by Citibank, N.A. (or at the highest rate not prohibited by applicable
law, whichever is less) (the “Overdue Interest Rate”) from and including the
date of the making of such payment or of the incurring of such costs and
expenses to and including the date of repayment, shall be paid by Tenant to
Landlord on demand.

 

23.                                 CONDITIONAL
LIMITATIONS—EVENTS OF DEFAULT AND REMEDIES:

 

(a)           Events
of Default.  Any of the following
occurrences or acts shall constitute an “event of default” under this Lease:

 

35

 

(i)            if
Tenant shall default in making payment when due of any installment of Basic
Rent or Additional Rent, and such default shall continue for two (2) Business
Days after receipt of notice of such default; provided, however, that if Tenant
has received notice under this subparagraph (i) a total of five (5) times
during the Term of this Lease, thereafter if Tenant fails to make payment when
due of any installment of Basic Rent or Additional Rent, in addition to
interest at the Overdue Interest Rate, there shall be a late payment charge
equal to one percent (1%) of the amount then due and payable, which shall
increase by one percent (1%) each second late payment thereafter to a maximum
of four percent (4%) (but not more than the highest late payment charge not
prohibited by applicable law, whichever is less); or

 

(ii)           if
Tenant shall default in the due performance of any other covenant, agreement,
obligation or condition on the part of Tenant to be performed hereunder, other
than as set forth in clause (i) or clause (vii) of this paragraph
(a), and if such default shall continue for thirty (30) days after written
notice from Landlord to Tenant specifying such default and demanding that the
same be cured (or, in the case of a default which cannot be cured with the
payment of money, or with due diligence be wholly cured within such thirty (30)
day period, if Tenant shall fail to commence to cure the same within said
thirty (30) day period, or, having promptly so commenced to cure the same shall
fail thereafter to prosecute the curing thereof in good faith and with all due
diligence, it being intended that the time within which to cure such a default
shall be extended for such period as may be necessary to complete the curing of
the same in good faith and with due diligence, provided that in no event shall
such cure period extend beyond the earlier of (i) ninety (90) days after
written notice from Landlord and (ii) the last day of the Term of this
Lease); or

 

(iii)          if
Tenant, or any corporation succeeding to Tenant 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 under any similar federal or state law now or hereafter in
effect, or shall be adjudicated a bankrupt or become insolvent or shall make an
assignment for the benefit of its creditors, or shall be unable 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 Tenant or any
corporation succeeding to Tenant by merger, consolidation or acquisition of all
or substantially all of its assets as a bankrupt or its reorganization pursuant
to the Bankruptcy Act or any similar federal or state law, now or hereafter in
effect, and (A) Tenant or its successor corporation shall consent to the
filing thereof, or (B) such petition or answer shall not be discharged, or
denied within ninety (90) 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 Tenant or any corporation
succeeding to Tenant 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 Tenant or its successor corporation or of Tenant’s or its
successor corporation’s estate or interest in the Leased Property, and shall
not be discharged within sixty (60) days thereafter or if Tenant or its
successor corporation shall consent to or acquiesce in such appointment; or

 

36

 

(vi)          if
the estate or interest of Tenant in the Leased Property or any sublease thereof
shall be levied upon or attached in any proceeding and such process shall not
be vacated or discharged within sixty (60) days after such levy or attachment,
unless Tenant shall be contesting such levy or attachment in accordance with
the requirements of paragraph (d) of Article 7 hereof; or

 

(vii)         if
Tenant fails to pay Landlord the purchase price of the Leased Property pursuant
to Article 17 hereof or if Tenant fails to maintain insurance in
accordance with Article 14 hereof; or

 

(viii)        if
the Leased Property shall be abandoned (i.e., not maintained by Tenant in
accordance with the terms hereof, except in the event of a casualty or
condemnation), for a continuous period of thirty (30) days or more; provided,
however, that Tenant shall not be deemed to have abandoned the Leased Property
as a result of vacating the Leased Property so long as Tenant maintains the
Leased Property in accordance with the terms of this Lease; or

 

(ix)           if,
as of the time when the same shall have been made, any representation or
warranty of Tenant to Landlord or Landlord’s Mortgagee set forth in any notice,
certificate, demand, request or other instrument delivered in connection with
or pursuant to this Lease shall prove to be incorrect or misleading in any
material respect.

 

(b)                                 Landlord’s
Right to Re-enter or Terminate.  This
Lease and the Term of this Lease and estate hereby granted are subject to the
limitation that whenever an event of default shall have occurred, Landlord may,
at Landlord’s option, elect to (i) re-enter the Leased Property, without
notice, and remove all persons and property therefrom, either by summary
proceedings or by any suitable action or proceeding at law, or otherwise,
without being liable to indictment, prosecution or damages therefor, and may
have, hold and enjoy the Leased Property, together with the appurtenances
thereto and the improvements thereon; and/or (ii) terminate this Lease at
any time by giving ten (10) days notice in writing to Tenant, electing to
terminate this Lease, and the Term of this Lease shall expire at the expiration
of said last mentioned ten (10) days notice as fully and completely as if
said date were the date herein originally fixed for the expiration of the Term
of this Lease hereby granted, and Tenant shall thereupon quit and peacefully
surrender the Leased Property to Landlord, with all appurtenances thereto and
all improvements thereon, without any payment therefor by Landlord, and
Landlord, upon the expiration of said last mentioned ten (10) days notice,
or at any time thereafter, may re-enter the Leased Property as provided in the
preceding clause (i).

 

(c)                                  Payments
by Tenant.  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 termination, together with such expenses,
including reasonable attorneys’ fees and expenses, as Landlord shall incur in
connection with such re-entry, termination and/or dispossession by summary
proceedings or otherwise; (ii) Landlord may in good faith relet the Leased
Property or any part or parts thereof, either in the name of Landlord or
otherwise, for a term or terms which may, at Landlord’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; (iii) Tenant shall also pay to Landlord
all other damages and expenses which 

 

37

 

Landlord shall have sustained by reason of the breach
of any provision of this Lease, including, without limitation, legal expenses,
reasonable attorneys’ fees, brokerage commissions and expenses incurred in
altering, repairing and putting the Leased Property and any buildings and
improvements thereon in good order and condition and in preparing the same for
reletting, which expenses shall be paid by Tenant as they are incurred by
Landlord; (iv) Tenant shall also pay to Landlord the amount by which the
Basic Rent reserved in this Lease exceeds the net amount, if any, of the rents
collected on account of the leases of the Leased Property for each month of the
period which would otherwise have constituted the Term of this Lease (excluding
unexercised extension options), which amounts shall be paid in monthly
installments by Tenant on the respective Installment Payment Dates specified
therefor, and any suit brought to collect said amounts for any month or months
shall not prejudice in any way the rights of Landlord to collect the deficiency
in any subsequent month by a similar action or proceeding; and/or (v) at
the option of Landlord exercised at any time, Landlord forthwith shall be
entitled to recover from Tenant 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 (iv), whichever of
the following sums Landlord shall elect:

 

(1)           an
amount equal to the Basic Rent and Additional Rent reserved in this Lease and/or
covenanted to be paid for the remainder of the Term of this Lease (excluding
unexercised extension periods), discounted at the rate of five percent (5%) per
year to present worth; provided that, if Tenant shall so request, Landlord
shall at the time of such payment assign and convey the Leased Property to
Tenant, without further consideration, in accordance with the terms and
provisions of Article 17 hereof; or

 

(2)           the
Termination Value as set forth in Schedule F hereto, plus any penalty imposed
upon Landlord pursuant to any mortgage affecting Landlord’s interest in the
Leased Property due to Landlord’s prepayment of the debt secured by said
mortgage.

 

Landlord, at Landlord’s option, may make such alterations and/or
decorations in the Leased Property as Landlord, in Landlord’s sole judgment,
considers advisable and necessary for the purpose of reletting the Leased
Property; and the making of such alterations and/or decorations shall not
operate or be construed to release Tenant from liability hereunder as
aforesaid.

 

(d)           Receipt
of Money Not A Reinstatement; No Accounting.  No receipts of moneys by Landlord from Tenant
after a termination of this Lease by Landlord shall reinstate, continue or
extend the Term of this Lease or affect any notice theretofore given to Tenant,
or operate as a waiver of the right of Landlord to enforce the payment of rent
then due or thereafter falling due, it being agreed that after the commencement
of suit for possession of the Leased Property, or after final order or judgment
for the possession of the Leased Property, Landlord 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 Property or, at the
election of Landlord, on account of Tenant’s liability hereunder. Landlord
shall have, receive and enjoy as Landlord’s sole and absolute property, without
right or duty to account therefor to Tenant, any and all sums collected by
Landlord as rent or otherwise upon reletting the Leased Property after Landlord
shall resume possession thereof as hereinbefore provided, including, without
limitation upon the 

 

38

 

generality of the foregoing, any amounts by which the
sum or sums so collected shall exceed the continuing liability of Tenant
hereunder.

 

(e)           Re-entry
Not a Termination.  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.  No such taking of possession of the Leased
Property by Landlord shall constitute an election to terminate the Term of this
Lease unless notice of such intention be given to Tenant or unless such termination
be decreed by a court having jurisdiction.

 

(f)            Enforcement
Costs.  If an action shall be brought
for the enforcement of any provision of this Lease, in which it shall be
determined that Tenant was in default, Tenant shall pay to Landlord all costs
and other expenses which may become payable as a result thereof, including
reasonable attorneys’ fees and expenses. If Landlord shall, without fault on
its part, be made a party to any litigation commenced against Tenant, Tenant
shall pay all costs and reasonable attorneys’ fees incurred or paid by Landlord
in connection with such litigation.

 

(g)           Remedies
Cumulative.  No right or remedy
herein conferred upon or reserved to Landlord 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 Landlord 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 Landlord of any Basic Rent or Additional
Rent payable hereunder with knowledge of the breach of any provision contained
in this Lease shall not constitute a waiver of such breach (other than the
prior failure to pay such Basic Rent or Additional Rent), and no waiver by
Landlord of any provision of this Lease shall be deemed to have been made
unless made under signature of an officer of Landlord.

 

(h)           Notice
of Default to Landlord.  Tenant shall
give Landlord prompt notice of any default which occurs and is continuing.

 

24.                                 NOTICES:

 

All notices and other instruments given or delivered
pursuant to this Lease shall be in writing and sent by prepaid United States
registered or certified mail, return receipt requested, and the giving of such
notice or other communication shall be deemed to have been given (i) when
delivered by hand, (ii) on the earlier of receipt and three (3) Business
Days after being sent by first class registered or certified mail, postage
prepaid, return receipt requested, (iii) when sent by telegram or cable or
(iv) on the earlier of receipt and two (2) days after being sent by a
nationally recognized overnight courier. Copies of notices must be sent to all
of the parties listed below, together with a copy thereof sent by facsimile
transmission, if reasonable under the circumstances; provided, however, that
failure to send a copy by facsimile transmission shall in no event cause any
notice sent in accordance with this Article 24 to be deemed improper.
Landlord and Tenant shall each have the right to specify, from time to time, as
its address for purposes of this Lease, any address and any addressee, in the
continental United States, upon giving fifteen (15) days’ written notice
thereof to the other party. The addresses of

 

39

 

Landlord and Tenant for
purposes of this Lease, until notice has been given as above provided, shall be
as follows:

 

	
  Landlord:

  	
   

  	
  First States Investors
  4000C, LLC

  c/o First States Group, L.P.

  1725 The Fairway

  Jenkintown, Pennsylvania 19046

  Attn: Sonya A. Huffman, Senior Vice President — Operations

  Attn: Edward J. Matey Jr., Senior Vice President and General Counsel

  FAX: 215-887-9856

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Morgan,
  Lewis & Bockius LLP

  1701 Market Street

  Philadelphia, Pennsylvania 19102

  Attn: Eric L. Stern, Esquire

  FAX: 215-963-5001

  
	
   

  	
   

  	
   

  
	
  and to:

  	
   

  	
  ReNona Chinwendu

  Credit Services Representative

  Bank of America, N.A.

  TX1-492-14-06

  901 Main Street

  Dallas, Texas 75202

  FAX:214-290-9484

  
	
   

  	
   

  	
   

  
	
  Tenant:

  	
   

  	
  Wachovia Bank, National
  Association

  Lease Administration-Corporate Real Estate

  401 South Tryon Street, NC 0114

  Charlotte, North Carolina 28288-0114

  FAX: 704-374-6832

  
	
   

  	
   

  	
   

  
	
  with copies to:

  	
   

  	
  Wachovia Bank, National
  Association

  Wachovia Legal Division

  301 South College Street, 30th Floor, NC 0630

  Charlotte, North Carolina 28288-0630

  Attn: Rebecca Reitnauer

  FAX: 704-715-4496

  

 

40

 

	
  and to:

  	
   

  	
  Smith, Anderson,
  Blount, Dorsett,

  Mitchell & Jernigan, L.L.P.

  Post Office Box 2611

  Raleigh, North Carolina 27602-2611

  Attention: Francis C. Bagbey, Esquire

  FAX: (919)821-6800

  

 

Copies of any notice sent only to Landlord or Tenant’s counsel shall
not be binding on either Landlord or Tenant. 
Notices by Tenant to Landlord’s Lender shall be delivered to the above
lender at the above notice address or to such other Landlord’s Lender, or such
other address as Landlord or such new Landlord’s Lender shall specify from time
to time, upon not less than twenty (20) days’ prior notice to Tenant.

 

Any notices to Tenant regarding real estate tax bills
shall also be sent to the following address:

 

Wachovia Bank, National
Association

Property Tax
Administration-Corporate Tax

1420 Two Wachovia Center —
NC 0200

301 South Tryon Street,
M-9

Charlotte, North Carolina 28288-0200

 

25.           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 fifteen
(15) days after request by the other party hereto, execute, acknowledge and
deliver to such other party or to any prospective purchaser, assignee or
mortgagee or third party designated by such other party, a certificate stating (a) that
this Lease is unmodified and in force and effect (or if there have been
modifications, that this Lease is in force and effect as modified, and
identifying the modification agreements); (b) the date to which rent has
been paid; (c) whether or not there is any existing default by Tenant in
the payment of Basic Rent, Additional Rent or any other sum of money hereunder,
and whether or not there is any other existing default by either party hereto
with respect to which a notice of default has been served, and, if there is any
such default, specifying the nature and extent thereof; and (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.

 

26.           NO
MERGER:

 

There shall be no merger of this Lease or of any leasehold or
subleasehold estate hereby or thereby created with the fee or any other estate
or interest or ownership interest in the 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
leasehold or subleasehold estate created hereby or thereby or any interest in
this Lease or in any such leasehold or subleasehold estate and (b) the fee
estate or other estate or interest or ownership 

 

41

 

interest in the Leased Property or any part thereof,
and this Lease shall not be terminated for any cause except as expressly
provided herein and any instrument of transfer shall so provide.

 

27.                                 SURRENDER:

 

(a)           Upon the expiration
or earlier termination of the Term of this Lease, Tenant shall surrender the
Leased Property to Landlord in the same condition and suitable for the same use
in which the Leased Property was originally received from Landlord except as
repaired, rebuilt or altered as required or permitted by this Lease (and/or
except for such casualty damage as Tenant shall not be required to repair or
restore hereunder), and except for ordinary wear and tear. Tenant shall remove
from the Leased Property on or prior to such expiration or earlier termination
all property owned or leased by Tenant from any third party except that agreed
upon by Landlord and Tenant in writing, which agreement shall be entered into
at least thirty (30) days prior to the expiration or earlier termination of the
term of this Lease, and shall repair any damage caused by such removal.
Property not so removed shall become the property of Landlord, which may cause
such property to be removed from the Leased Property and disposed of, but the
cost of any such removal and disposition and of repairing any damage caused by
such removal shall be borne by Tenant.

 

(b)           Except for surrender
upon the expiration or earlier termination of the Term of this Lease, no
surrender to Landlord of this Lease or of the Leased Property shall be valid or
effective unless agreed to and accepted in writing by Landlord.

 

28.                                 SEPARABILITY:

 

Each provision contained in this Lease shall be separate and
independent and the breach of any such provision by Landlord shall not
discharge or relieve Tenant from its obligation to perform each obligation of
this Lease to be performed by Tenant.  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 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.

 

29.                                 BINDING
EFFECT; MERGER, CONSOLIDATION AND DISPOSAL OF ASSETS:

 

(a)           Binding
Effect.  All provisions contained in
this Lease shall be binding upon, inure to the benefit of and be enforceable by
the respective successors and permitted assigns and sublessees of Landlord and
Tenant to the same extent as if each such successor or assign or sublessee were
named as a party hereto.

 

(b)           Mergers,
Consolidations.  Tenant may engage in
an Event (defined below) only in accordance with this Article 29.  Tenant may merge with, be acquired by or
consolidate into another corporation, association, partnership, or other
business organization, and Tenant may acquire by merger or consolidation or
stock or asset purchase (other than in the ordinary course of business not
requiring bank regulatory approvals) another corporation, association,
partnership, or other business organization, sell or otherwise dispose of all
or substantially all of 

 

42

 

the assets of Tenant, dispose of by merger,
consolidation or otherwise, a subsidiary or subsidiaries (in one transaction or
a series of related transactions) which constitute twenty-five percent (25%) or
more of the consolidated assets of Tenant and its subsidiaries, acquire all or
substantially all of the assets of a corporation, association, partnership or
other business organization (other than in the ordinary course of business not
requiring bank regulatory approval), or engage in a leveraged buyout
transaction or engage in a leveraged recapitalization involving the
distribution of borrowed funds to its shareholders (“Event”), if, immediately
after giving effect to the Event, Tenant, if it is the surviving entity, or the
surviving entity or transferee in the event Tenant does not remain in existence
following consummation of the Event (in either case, the “Surviving Entity”) (i) shall
comply with the rules set forth in paragraph (c) below, (ii) shall
have total consolidated common stockholder’s equity of at least One Billion
Five Hundred Million Dollars ($1,500,000,000), calculated in accordance with
generally accepted accounting principles, (iii) shall have capital
adequacy ratios which satisfy the requirements of the Office of the Comptroller
of the Currency and other applicable bank regulatory agencies, it being
understood that the approval of the Event by applicable bank regulatory
agencies shall constitute satisfaction of any such requirements, and (iv) shall
deliver to Landlord an acknowledged instrument in recordable form assuming all
obligations, covenants and responsibilities of Tenant hereunder and agreeing to
confirm the binding effect on the Surviving Entity of other documents to which
Tenant is a party as requested by Landlord and/or Landlord’s Lender; provided
however, that failure to deliver such instrument before the consummation of the
transaction shall not constitute an event of default; and (v) no event of
default shall have occurred and be continuing under this Lease. If the Event
results in a violation of clause (ii) or (iii) of this paragraph (b) where
there is no concurrent violation of paragraph (c) below, Landlord, at its
option, may exercise its rights under paragraph (d)(i) below. It is
understood and agreed that Landlord’s sole remedy for any violation of this Article 29
shall be, at Landlord’s option, to exercise Landlord’s rights under paragraph (d) of
this Article 29.

 

(c)                                  Credit
Rating Rules.  The following rules relating
to the Surviving Entity’s Credit Rating must be complied with:

 

(i)            Notwithstanding
any other provision of this paragraph (c), there shall be no restrictions on or
requirements resulting from Events under this paragraph (c) if the
Surviving Entity’s credit rating on its long-term senior unsecured indebtedness
(that is not defeased, guaranteed or otherwise supported by credit enhancement)
from Moody’s Investors Service, Inc. (“Credit Rating”) is not (within the
time periods referred to in (c)(ii) below) lower than Tenant’s Credit
Rating immediately preceding the Event. If Moody’s Investors Service, Inc.
ceases to provide a Credit Rating, the Credit Rating will be the equivalent
rating from Standard & Poor’s Corporation, or, if Standard &
Poor’s Corporation ceases to provide a Credit Rating, the Credit Rating will be
the equivalent rating from a rating organization reasonably acceptable to
Landlord and Tenant.

 

(ii)           For
purposes of this Article 29, an Event will be deemed to result in a
decrease in the Surviving Entity’s Credit Rating only if either (A) within
ninety (90) days after the Event the Surviving Entity’s Credit Rating is lower
than Tenant’s Credit Rating prior to the Event or (B) after the
announcement date of the Event but within ninety (90) days after the Event the
Surviving Entity is placed on credit watch with negative implications by Moody’s

 

43

 

Investors Service, Inc., and is subsequently
downgraded prior to being taken off such credit watch.

 

(iii)                               There
shall be no restrictions on or requirements resulting from Events under this paragraph
(c) if the Surviving Entity’s Credit Rating is not below Baal.

 

(iv)                              The
Event may not result in the Surviving Entity’s Credit Rating being below Baa3.
If the Event results in the Surviving Entity’s Credit Rating being below Baa3,
Landlord, at its option, may exercise its rights under paragraph (d)(i) below.

 

(v)                                 If
the Event results in the Surviving Entity’s Credit Rating being either Baa2 or
Baa3:

 

(A)          The Surviving Entity
will be required to provide Landlord with security in the form of either (1) a
letter of credit from a domestic bank (other than an affiliate of Tenant)
having a Credit Rating of A2 or better or (2) security in the form of cash
or securities (including certificates of deposit) considered to be the
equivalent of cash under generally accepted accounting principles (“Security”)
in an amount and on terms reasonably acceptable to Landlord and Landlord’s
Lender (and in no event less than any amount required to be provided by
Landlord to Landlord’s Lender under the terms of the mortgage or other
documents executed by Landlord to purchase, finance or refinance the Leased
Property with all earnings on such Security being retained as additional
Security, and with the Surviving Entity providing Landlord and Landlord’s
Lender with a representation that the Surviving Entity is not insolvent and
providing such Security will not render the Surviving Entity insolvent) which
Security will be additional security for the Surviving Entity’s obligations
under the Lease;

 

(B)           If the Surviving
Entity’s Credit Rating subsequently rises above Baa2, the Security will no
longer be required (unless required following a subsequent Event);

 

(C)           If, prior to rising
above Baa2, the Surviving Entity’s Credit Rating subsequently falls below Ba2
for any reason, Landlord, at its option, may exercise its rights under
paragraph (d)(ii) below, at any time thereafter prior to such Credit
Rating being raised to Ba2 or higher.

 

(d)                                 Landlord’s
Option to Require the Surviving Entity to Purchase the Leased Property.

 

(i)                                     If
the Landlord exercises its option under paragraph (b) or (c)(iv) above,
the Surviving Entity will be required to purchase the Leased Property on an
Installment Payment Date designated by Landlord and in accordance with Article 17
hereof for a price equal to the greater of (A) the applicable Termination
Value and (B) the fair market value of the Leased Property, plus, in
either case, any prepayment penalty or premium imposed by Landlord’s Lender as
a result of such transaction.

 

(ii)                                  If
Landlord exercises its option under paragraph (c)(v)(C) above, the
Surviving Entity will be required to purchase the Leased Property on an
Installment Payment 

 

44

 

Date designated by Landlord and in accordance with Article 17
hereof for a price equal to Termination Value, without any premium or penalty.

 

(e)           No
Restrictions on Events with Certain Subsidiaries.  It is understood and agreed that there shall
be no restrictions on or requirements resulting from Events under this Article 29
where the only parties involved in such Events are Tenant and/or direct or
indirect eighty percent (80%) or more owned subsidiaries of Tenant.

 

30.                                 SHOWING:

 

During the one year period preceding the date on which the Term of this
Lease shall terminate or fully expire, Landlord may show the Leased Property to
prospective tenants or purchasers at such reasonable times during normal
business hours as Landlord may select upon reasonable prior notice to Tenant.

 

31.                                 NATURE
OF LANDLORD’S OBLIGATIONS:

 

Anything in this Lease to the contrary notwithstanding, no recourse or
relief shall be had under any rule of law or equity, statute or
constitution or by any enforcement of any assessments or penalties, or
otherwise or based on or in respect of this Lease (whether by breach of any
obligation, monetary or non-monetary), against Landlord (or any officer or
partner of Landlord or any predecessor or successor corporation (or other
entity) of Landlord), it being expressly understood that any obligations of
Landlord under or relating to this Lease are solely obligations payable out of
the Leased Property and are compensable solely therefrom. It is expressly
understood that all such liability is and is being expressly waived and
released as a condition of and as a condition for the execution of this Lease,
and Tenant expressly waives and releases all such liability as a condition of,
and as consideration for, the execution of this Lease.

 

32.                                 SUBORDINATION:

 

(a)           Subject to Landlord’s
compliance with the requirements of Paragraph 32(b) below, this Lease is
and shall be subject and subordinate to all ground or underlying leases of the
Leased Property and to all mortgages that may now or hereafter be secured upon
such leases or the Leased Property and to any and all renewals, modifications,
consolidations, replacements and extensions thereof, provided that in
connection with the transfer of any interest of Landlord in the Leased Property
or any portion thereof, whether through foreclosure or otherwise, Tenant’s
possession and right to occupy the Leased Property or any portion thereof shall
not be disturbed so long as Tenant is not in default hereunder beyond any
applicable cure period, this Lease shall continue in full force and effect and
Tenant shall attorn to such party and shall execute, acknowledge and deliver
any instrument that has for its purpose and effect the confirmation of such
attornment.

 

(b)           Landlord shall
deliver to Tenant for execution a subordination, non-disturbance and attornment
agreement from its institutional first Landlord’s Mortgagee, substantially in
the form attached hereto as Schedule I
or in another form reasonably satisfactory to Tenant and such Landlord’s
Mortgagee, duly executed by Landlord and such Landlord’s Mortgagee.  As a condition to the subordination of this
Lease to any future first institutional 

 

45

 

mortgage or ground lease, Landlord shall obtain for
the benefit of Tenant a subordination, non-disturbance and attornment agreement
from the holder of such mortgage or ground lease.

 

33.           GRANTING
OF EASEMENTS:

 

If no event of default hereunder has occurred and is continuing,
Landlord will join with Tenant, from time to time at the request of Tenant (and
at Tenant’s sole cost and expense), with respect to their interests in the
Leased Property to (i) sell, assign, convey or otherwise transfer an
interest in any Leased Property to any person legally empowered to take such
interest under the power of eminent domain, (ii) grant, in the ordinary
course of business, easements, licenses, rights of way and other rights and
privileges in the nature of easements, (iii) release, in the ordinary
course of business, existing easements and appurtenances which benefit the
Leased Property, (iv) dedicate or transfer unimproved portions of the
Leased Property for road, highway or other public purposes, (v) execute
petitions to have the Leased Property annexed to any municipal corporation or
utility district, (vi) execute amendments to any covenants and
restrictions affecting the Leased Property and (vii) execute and deliver
any instrument, in form and substance reasonably acceptable to Landlord and
Landlord’s Lender, necessary or appropriate to make or confirm such grants or
releases to any person, with or without consideration, but only, except in
connection with any temporary condemnation or any Routine Condemnation, if
Landlord shall have received (x) a certificate of an authorized officer of
Tenant stating that such grant or release was granted in the ordinary course of
Tenant’s business, does not interfere with and is not detrimental to the
conduct of business on the Leased Property and does not materially impair the
usefulness of the Leased Property or materially impair the fair market value of
the Leased Property or materially impair Landlord’s interest in the Leased
Property, (y) a certificate stating the consideration, if any, being paid
for said sale, grant, easement, license, release, right of way, petition,
amendment or other such instruments described in this Article 33, is in
the opinion of Tenant fair and adequate; and (z) a duly authorized and
binding undertaking of Tenant, in form and substance satisfactory to Landlord
and Landlord’s Lender, to remain obligated under this Lease and under any
instrument executed by Tenant consenting to the assignment of Landlord’s
interest in this Lease as security for indebtedness, as though such easement,
license, right-of-way or other right or privilege has not been granted or
released, and to perform all obligations of the grantor or party effecting the
release under such instrument of grant or release during the Term of this
Lease.  Notwithstanding anything herein
to the contrary, Tenant’s obligations to pay the reasonable attorney’s fees for
each of Landlord and Landlord’s Lender in connection with the execution and
delivery of any easement or other instrument pursuant to this Article 33
shall not exceed $5,625 for each of Landlord’s and Landlord’s Lender’s counsel
in any single request by Tenant for one or more related easements or other
instruments.  Notwithstanding anything
herein to the contrary, Landlord and Landlord’s Lender shall have a period of
30 days to review the instruments and the materials requested under this Article 33.  If Landlord or Landlord’s Lender shall fail
to execute any such deeds, easements, releases or such other instruments as may
be specifically requested by Tenant in such 30 day period, then Tenant may
deliver to Landlord and Landlord’s Lender further notice requesting the
delivery of said documents.  Tenant’s
notice shall specify in capital letters and bold face type that if Landlord or
Landlord’s Lender shall fail to return the requested documents within ten (10) days,
or shall fail to specify what corrections need be made to such documents or
why, specifically, Landlord or Landlord’s Lender objects to the delivery of
such documents, then Tenant intends to deliver such instruments to Landlord’s
or Landlord’s Lender’s attorney-in-fact. 

 

46

 

Subject to the foregoing provision, in the event
Landlord or Landlord’s Lender fail to deliver any such deeds, easements,
releases or other instruments within the 30 day period required above, subject
to the additional 10 day notice required above, then in such event, Tenant is
hereby authorized to act as the attorney-in-fact for Landlord and Landlord’s
Lender to execute and deliver on behalf of Landlord and Landlord’s Lender any
all deeds, easements, releases and other instruments required; provided,
however, that no instrument executed by Tenant as attorney-in-fact shall
contain any covenants other than quitclaim covenants.  For purposes of this Article 33,
commencing on March 31, 2004, and on and as of each March 31
thereafter during the Term of this Lease, the limitations on attorneys fees for
Landlord and Landlord’s Lender set forth in this Article 33 shall be
calculated as the amount equal to the product derived by multiplying $5,625 by
one plus the percentage by which the CPI for such calendar year exceeds the
Base Price Index.  In the event the
information necessary to calculate this amount shall not have been published in
sufficient time to permit such calculation to be made on or before March 31
during any year, the limitation shall be calculated by using the CPI for the
latest month for which it has been published. 
After publication of the relevant information, Landlord and Tenant shall
make appropriate adjustment of the limitation. 
In no event shall the limitation on attorney’s fees of $5,625 be reduced
as a result of any decrease in the CPI.

 

34.           RECORDING
OF LEASE:

 

Landlord and Tenant 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 of this Lease or, if required by law, this Lease, and all other
instruments, including, without limitation, financing statements, continuation
statements, releases and instruments of similar character, which shall be
reasonably requested by Landlord or Tenant as being necessary or appropriate in
order to protect their respective interests in the Leased Property or to
publish notice of or to create, maintain and protect or terminate or release
the lien and security interest intended to be created by any assignment of
Landlord’s interest in this Lease (and the interest of Landlord’s Lender in
this Lease) or any mortgage upon, and the interest of Landlord’s Mortgagee in,
the Leased Property. If either Landlord or Tenant shall fail to comply with
this paragraph, Tenant or Landlord, as the case may be, shall be and is hereby
irrevocably appointed the agent and attorney-in-fact of Landlord or Tenant, as
the case may be, to comply therewith, but this sentence shall not prevent any
default in the observance of this Article 34 by the Tenant from
constituting an event of default hereunder.

 

35.           MISCELLANEOUS:

 

No term or provision hereof may be amended, changed, waived, discharged
or terminated orally, but only by an instrument signed by the party against
whom enforcement thereof is sought. Landlord may not enter into any amendment,
modification or supplement to any trust indenture, mortgage or other document
with any Landlord’s Mortgagee which has a material and adverse effect on the
right or obligations of Tenant hereunder without the prior written consent of
Tenant, and any such amendment, modification or supplement executed without
Tenant’s prior written consent shall have no binding effect on Tenant
hereunder.  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 

 

47

 

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 Commonwealth of Pennsylvania,
except where the laws of the State where the Leased Property is located require
such State’s own law to apply. 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.

 

36.           REASONABLE
ATTORNEYS’ FEES:

 

Notwithstanding anything herein to the contrary, the obligation of
Tenant to reimburse Landlord for or to pay reasonable attorneys’ fees shall
mean reasonable attorneys’ fees actually incurred without reference to or
giving effect to N.C.G.S. Section 6-21.2(2) or any similar provision
of the law of the state in which the Leased Property is located.

 

37.           ENTIRE
AGREEMENT:

 

This Lease constitutes the entire agreement between the parties hereto
with respect to the Leased Property, and supercedes all prior oral or written
agreements, commitments, or understandings with respect to the Leased Property,
including the Original Lease.  No
representations or warranties have been made by Landlord or Tenant except as specifically
set forth in this Lease, and no oral or written expression or non-verbal
conduct of a person intended by such person a substitute for oral or written
expression will be attributed to Landlord or the Tenant as a warranty or
representation except as specifically set forth in this Lease.  Paragraph and subparagraph headings are
inserted herein for ease of reference only, and not for purposes of expressing
or amending in any way the substantive agreement of the parties.

 

38.           TERMINATION
OF ORIGINAL LEASE:

 

The Original Lease as it pertains to the Leased Property is hereby
terminated effective as of 11:59 P.M., March 31, 2003.

 

48

 

IN WITNESS WHEREOF, Landlord and Tenant hereto have each caused this
Lease to be duly executed and delivered in their respective names and behalves,
all by authority duly given, as of the day and year first above written.

 

	
   

  	
   

  	
  FIRST STATES INVESTORS
  4000B, LLC

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Sonya A. Huffman

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WACHOVIA BANK, NATIONAL

  ASSOCIATION

  
	
  ATTEST:

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

49

 

Lease
Schedules

 

1.             Schedule A —
Description of Leased Property

2.             Schedule B —
Rent Schedule — Basic Rent

3.             Schedule C — Environmental
Reports

4.             Schedule C-1 —
Tenant’s Environmental and Asbestos Reports

5.             Schedule D —
Title Reports

6.             Schedule E —
Intentionally Omitted

7.             Schedule F —
Termination Value

8.             Schedule G —
Representations and Warranties for Substituted Parcels

9.             Schedule H —
Group A Properties Subleases

10.           Schedule I –  Form of Subordination, Non-Disturbance
and Attornment Agreement

 

50

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