Lease Agreement (cap One Realty)

Exhibit 10.22
-------------


LEASE AGREEMENT
(Capital One Realty, Inc.)


(Tax Retention Operating Lease)
Dated as of September 3, 1999


between


FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually,
but solely as Owner Trustee
under the Capital One Realty Trust 1998-1,
as Lessor


and


CAPITAL ONE REALTY, INC.,
as Lessee


- ------------------------------------------------------------------------------- This Lease Agreement is subject to a security interest in favor of Bank of America, N.A., as Administrative Agent (the "Agent") under a Security Agreement dated as of September 3, 1999, between First Security Bank, National Association, not individually except as expressly stated therein, but solely as Owner Trustee under the Capital One Realty Trust 1998-1 and the Agent, as amended, modified, supplemented, restated and/or replaced from time to time. This Lease Agreement has been executed in several counterparts. To the extent, if any, that this Lease Agreement constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction), no security interest in this Lease Agreement may be created through the transfer or possession of any counterpart other than the original counterpart containing the receipt therefor executed by the Agent on the signature page hereof.


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TABLE OF CONTENTS


ARTICLE I............................................................................ 1
1.1 Definitions................................................................. 1
1.2 Interpretation.............................................................. 2 ARTICLE II........................................................................... 2
2.1 Property.................................................................... 2
2.2 Lease Term.................................................................. 2
2.3 Title....................................................................... 2
2.4 Lease Supplements........................................................... 2 ARTICLE III.......................................................................... 3
3.1 Rent........................................................................ 3
3.2 Payment of Basic Rent....................................................... 3
3.3 Supplemental Rent........................................................... 3
3.4 Performance on a Non-Business Day........................................... 4
3.5 Rent Payment Provisions..................................................... 4 ARTICLE IV........................................................................... 4
4.1 Taxes; Utility Charges...................................................... 4 ARTICLE V............................................................................ 5
5.1 Quiet Enjoyment............................................................. 5 ARTICLE VI........................................................................... 5
6.1 Net Lease................................................................... 5
6.2 No Termination or Abatement................................................. 6 ARTICLE VII.......................................................................... 6
7.1 Ownership of the Property................................................... 6 ARTICLE VIII......................................................................... 7
8.1 Condition of the Property................................................... 7
8.2 Possession and Use of the Property.......................................... 8 ARTICLE IX........................................................................... 9
9.1 Compliance With Legal Requirements and Insurance Requirements............... 9 ARTICLE X............................................................................ 9
10.1 Maintenance and Repair; Return............................................. 9
10.2 Environmental Inspection................................................... 10 ARTICLE XI........................................................................... 11
11.1 Modifications.............................................................. 11 ARTICLE XII.......................................................................... 11
12.1 Warranty of Title.......................................................... 11 ARTICLE XIII......................................................................... 12
13.1 Permitted Contests Other Than in Respect of Indemnities.................... 12 ARTICLE XIV.......................................................................... 13
14.1 Public Liability and Workers' Compensation Insurance....................... 13
14.2 Permanent Hazard and Other Insurance....................................... 13
14.3 Coverage................................................................... 14 ARTICLE XV........................................................................... 15
15.1 Casualty and Condemnation.................................................. 15


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15.2 Environmental Matters...................................................... 17
15.3 Notice of Environmental Matters............................................ 17 ARTICLE XVI........................................................................... 18
16.1 Termination Upon Certain Events............................................ 18
16.2 Procedures................................................................. 18 ARTICLE XVII.......................................................................... 18
17.1 Lease Events of Default.................................................... 18
17.2 Surrender of Possession.................................................... 21
17.3 Reletting.................................................................. 21
17.4 Damages.................................................................... 21
17.5 Power of Sale.............................................................. 22
17.6 Final Liquidated Damages................................................... 22
17.7 Lessee's Purchase Option During Default.................................... 23
17.8 Waiver of Certain Rights................................................... 23
17.9 Assignment of Rights Under Contracts....................................... 23
17.10 Remedies Cumulative........................................................ 24 ARTICLE XVIII......................................................................... 24
18.1 Lessor's Right to Cure Lessee's Lease Defaults............................. 24 ARTICLE XIX........................................................................... 24
19.1 Provisions Relating to Lessee's Exercise of its Purchase Option............ 24
19.2 No Purchase or Termination With Respect to Less than All of a Property..... 24 ARTICLE XX............................................................................ 25
20.1 Purchase Option or Sale Option-General Provisions.......................... 25
20.2 Lessee Purchase Option..................................................... 26
20.3 Third Party Sale Option.................................................... 26 ARTICLE XXI........................................................................... 27
21.1 [Intentionally Omitted].................................................... 27 ARTICLE XXII.......................................................................... 27
22.1 Sale Procedure............................................................. 27
22.2 Application of Proceeds of Sale............................................ 29
22.3 Indemnity for Excessive Wear............................................... 29
22.4 Appraisal Procedure........................................................ 29
22.5 Certain Obligations Continue............................................... 30 ARTICLE XXIII......................................................................... 30
23.1 Holding Over............................................................... 30 ARTICLE XXIV.......................................................................... 31
24.1 Risk of Loss............................................................... 31 ARTICLE XXV........................................................................... 31
25.1 Assignment................................................................. 31
25.2 Subleases.................................................................. 31 ARTICLE XXVI.......................................................................... 32
26.1 No Waiver.................................................................. 32 ARTICLE XXVII......................................................................... 32
27.1 Acceptance of Surrender.................................................... 32
27.2 No Merger of Title......................................................... 32


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ARTICLE XXVIII....................................................................... 33
28.1 Incorporation of Covenants................................................ 33 ARTICLE XXIX......................................................................... 34
29.1 Notices................................................................... 34 ARTICLE XXX.......................................................................... 35
30.1 Miscellaneous............................................................. 35
30.2 Amendments and Modifications.............................................. 35
30.3 Successors and Assigns.................................................... 35
30.4 Headings and Table of Contents............................................ 36
30.5 Counterparts.............................................................. 36
30.6 GOVERNING LAW............................................................. 36
30.7 Calculation of Rent....................................................... 36
30.8 Memoranda of Lease and Lease Supplements.................................. 36
30.9 Allocations between the Lenders and the Holders........................... 36
30.10 Limitations on Recourse................................................... 37
30.11 WAIVERS OF JURY TRIAL..................................................... 37
30.12 Exercise of Lessor Rights................................................. 37
30.13 Submission To Jurisdiction; Waivers....................................... 37
30.14 USURY SAVINGS PROVISION................................................... 38


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EXHIBITS - --------


EXHIBIT A Lease Supplement No. ___ EXHIBIT B Memorandum of Lease and Lease Supplement No.___


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LEASE AGREEMENT
---------------
(Capital One Realty, Inc.)


(Tax Retention Operating Lease Agreement)


THIS LEASE AGREEMENT (Capital One Realty, Inc.) (Tax Retention Operating Lease) (as amended, supplemented or modified from time to time, this "Lease"),
----- dated as of September 3, 1999, is between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, having its principal office at 79 South Main Street, Salt Lake City, Utah 84111, not individually, but solely as Owner Trustee under the Capital One Realty Trust 1998-1, as lessor (the "Lessor"), and CAPITAL ONE REALTY, INC., a Delaware corporation, having its ------ principal place of business at 2980 Fairview Park Drive, Suite 1300, Falls Church, VA 22042, as lessee (the "Lessee").
------


W I T N E S S E T H:
- - - - - - - - - -


A. WHEREAS, subject to the terms and conditions of the Agency Agreement, Lessor will (i) purchase or ground lease various parcels of real property, some of which will (or may) have existing Improvements thereon, from one or more third parties designated by Lessee and (ii) fund the development, refurbishment and construction by the Construction Agent of Improvements on such real property; and


B. WHEREAS, the Basic Term shall commence with respect to each Property upon the Completion of such Property (the "Basic Term Commencement
----------------------- Date").


C. WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to lease from Lessor, each Property;


NOW, THEREFORE, in consideration of the foregoing, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


ARTICLE I


1.1 Definitions.
------------


Capitalized terms used but not otherwise defined in this Lease have the respective meanings specified in Appendix A to the Participation Agreement of
---------- even date herewith (as such may be amended, modified, supplemented, restated and/or replaced from time to time, the "Participation Agreement") among the
----------------------- Lessee, the Construction Agent, Capital One Bank, as Guarantor, First Security Bank, National Association, not individually, except as expressly stated therein, as Owner Trustee under the Capital One Realty Trust 1998-1, the Holders, the Lenders and the Agent.


1.2 Interpretation.
--------------


The rules of usage set forth in Appendix A to the Participation Agreement
---------- shall apply to this Lease.


ARTICLE II


2.1 Property.
--------


Subject to the terms and conditions hereinafter set forth and contained in the respective Lease Supplement relating to each Property, Lessor hereby leases to Lessee and Lessee hereby leases from Lessor, each Property. Each Property is (or will be) legally described in the applicable Lease Supplement.


2.2 Lease Term.
----------


The basic term of this Lease with respect to each Property (the "Basic
----- Term") shall begin upon the Basic Term Commencement Date and shall end on the - ---- third annual anniversary of the Initial Closing Date (the "Basic Term Expiration
--------------------- Date"), unless the Basic Term is earlier terminated or the term of this Lease is - ---- renewed (as described below) in accordance with the provisions of this Lease.


To the extent no Default or Event of Default has occurred and is continuing, and if Lessee has not provided written notice to Lessor at least one hundred twenty (120) days prior to the Basic Term Expiration Date of its determination to exercise its purchase option or sale option under Article XX hereof, the term of this Lease for each Property shall be automatically extended for one (1) additional term of one (1) year's duration from the Basic Term Expiration Date (the "Renewal Term"); provided, that the expiration date for
------------ -------- such Renewal Term for each Property shall not be later than the fourth annual anniversary of the Initial Closing Date.


2.3 Title.
-----


Each Property is leased to Lessee without any representation or warranty, express or implied, by Lessor and subject to the rights of parties in possession (if any), the existing state of title (including, without limitation, the Permitted Exceptions) and all applicable Legal Requirements. Lessee shall in no event have any recourse against Lessor for any defect in title to any Property other than for Lessor Liens.


2.4 Lease Supplements.
-----------------


On or prior to each Basic Term Commencement Date, Lessee and Lessor shall each execute and deliver a Lease Supplement for the Property to be leased effective as of such Basic Term Commencement Date in substantially the form of Exhibit A hereto. - ---------


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ARTICLE III
3.1 Rent.
----


(a) Lessee shall pay Basic Rent in arrears on each Payment Date,
and on any date on which this Lease shall terminate with respect to any or
all Properties during the Term; provided, however, with respect to each
individual Property Lessee shall have no obligation to pay Basic Rent with
respect to such Property until the Basic Term has commenced with respect to
such Property.


(b) Basic Rent shall be due and payable in lawful money of the
United States and shall be paid by wire transfer of immediately available
funds on the due date therefor (or within the applicable grace period) to
such account or accounts at such bank or banks as Lessor shall from time to
time direct.


(c) Lessee's inability or failure to take possession of all or
any portion of any Property when delivered by Lessor, whether or not
attributable to any act or omission of Lessor, the Construction Agent or
Lessee, or for any other reason whatsoever, shall not delay or otherwise
affect Lessee's obligation to pay Rent for such Property in accordance with
the terms of this Lease.


3.2 Payment of Basic Rent.
---------------------


Basic Rent shall be paid absolutely net to Lessor or its designee, so that this Lease shall yield to Lessor the full amount thereof, without setoff, deduction or reduction.


3.3 Supplemental Rent.
-----------------


Lessee shall pay to Lessor or its designee or to the Person entitled thereto any and all Supplemental Rent promptly as the same shall become due and payable, and if Lessee fails to pay any Supplemental Rent, Lessor shall have all rights, powers and remedies provided for herein or by law or equity or otherwise in the case of nonpayment of Basic Rent. Lessee shall pay to Lessor, as Supplemental Rent, among other things, on demand, to the extent permitted by applicable Legal Requirements, (a) any and all unpaid fees, charges, payments and other obligations (other than the obligations of Lessor to pay the principal amount of the Loans and the Holder Amount) due and owing by Lessor under the Credit Agreement, under the Trust Agreement and/or under any other Operative Agreement (including specifically without limitation any amounts owing to the Lenders under Section 2.11, Section 2.12, Section 2.13 and Section 9.5 of the Credit Agreement and any amounts owing to the Holders under Section 3.9 or Section 3.10 of the Trust Agreement) and (b) interest at the applicable Overdue Rate on any installment of Basic Rent not paid when due (subject to the applicable grace period) for the period for which the same shall be overdue and on any payment of Supplemental Rent not paid when due or demanded by Lessor for the period from the due date or the date of any such demand, as the case may be, until the same shall be paid. The expiration or other termination of Lessee's obligations to pay Basic Rent hereunder shall not limit or modify the obligations of


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Lessee with respect to Supplemental Rent. Unless expressly provided otherwise in this Lease, in the event of any failure on the part of Lessee to pay and discharge any Supplemental Rent as and when due, Lessee shall also promptly pay and discharge any fine, penalty, interest or cost which may be assessed or added for nonpayment or late payment of such Supplemental Rent, all of which shall also constitute Supplemental Rent. Notwithstanding the foregoing, with respect to each individual Property, Lessee shall have no obligation to pay Supplemental Rent with respect to such Property until the Basic Term has commenced with respect to such Property; provided, nothing in this Section 3.3 shall excuse the
-------- Construction Agent from paying amounts (including amounts that would otherwise constitute Supplemental Rent obligations) to the extent such amounts are payable under the Agency Agreement prior to the Basic Term Commencement Date respecting such Property.


3.4 Performance on a Non-Business Day.
---------------------------------


If any Basic Rent is required hereunder on a day that is not a Business Day, then such Basic Rent shall be due on the corresponding Scheduled Interest Payment Date. If any Supplemental Rent is required hereunder on a day that is not a Business Day, then such Supplemental Rent shall be due on the next succeeding Business Day.


3.5 Rent Payment Provisions.
-----------------------


Lessee shall make payment of all Basic Rent and Supplemental Rent when due (subject to the applicable grace period) regardless of whether any of the Operative Agreements pursuant to which same is calculated and is owing shall have been rejected, avoided or disavowed in any bankruptcy or insolvency proceeding involving any of the parties to any of the Operative Agreements. Such provisions of such Operative Agreements and their related definitions are incorporated herein by reference and shall survive any termination, amendment or rejection of any such Operative Agreements.


ARTICLE IV


4.1 Taxes; Utility Charges.
----------------------


Lessee shall pay or cause to be paid all Impositions with respect to the Properties and/or the use, occupancy or operation thereof and all charges for electricity, power, gas, oil, water, telephone, sanitary sewer service and all other rents, utilities and operating expenses of any kind or type used in or on a Property and related real property during the Term. Upon Lessor's request, Lessee shall provide from time to time Lessor with evidence of all such payments referenced in the foregoing sentence. Lessee shall be entitled to receive any credit or refund with respect to any Imposition or utility charge paid by Lessee. Unless an Event of Default shall have occurred and be continuing, the amount of any credit or refund received by Lessor on account of any Imposition or utility charges paid by Lessee, net of the costs and expenses incurred by Lessor in obtaining such credit or refund, shall be promptly paid over to Lessee. All charges for Impositions or utilities imposed with respect to a Property for a period during which this Lease


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expires or terminates shall be adjusted and prorated on a daily basis between Lessor and Lessee, and each party shall pay or reimburse the other for such party's pro rata share thereof.


ARTICLE V


5.1 Quiet Enjoyment.
---------------


Subject to the rights of Lessor contained in Sections 17.2, 17.3 and 20.3 and the other terms of this Lease and so long as no Lease Event of Default shall have occurred and be continuing, Lessee shall peaceably and quietly have, hold and enjoy each Property for the applicable Term, free of any claim or other action by Lessor or anyone rightfully claiming by, through or under Lessor (other than Lessee) with respect to any matters arising from and after the applicable Basic Term Commencement Date.


ARTICLE VI


6.1 Net Lease.
---------


This Lease shall constitute a net lease, and the obligations of Lessee hereunder are absolute and unconditional. Any present or future law to the contrary notwithstanding, this Lease shall not terminate, nor shall Lessee be entitled to any abatement, suspension, deferment, reduction, setoff, counterclaim, or defense with respect to the Rent, nor shall the obligations of Lessee hereunder be affected (except as expressly herein permitted and by performance of the obligations in connection therewith) by reason of: (i) any damage to or destruction of any Property or any part thereof; (ii) any taking of any Property or any part thereof or interest therein by Condemnation or otherwise; (iii) any prohibition, limitation, restriction or prevention of Lessee's use, occupancy or enjoyment of any Property or any part thereof, or any interference with such use, occupancy or enjoyment by any Person or for any other reason; (iv) any title defect, Lien or any matter affecting title to any Property; (v) any eviction by paramount title or otherwise; (vi) any default by Lessor hereunder; (vii) any action for bankruptcy, insolvency, reorganization, liquidation, dissolution or other proceeding relating to or affecting Lessor, Lessee, any Holder or any Governmental Authority; (viii) the impossibility or illegality of performance by Lessor, Lessee or both; (ix) any action of any Governmental Authority; (x) Lessee's acquisition of ownership of all or part of any Property; (xi) breach of any warranty or representation with respect to any Property or any Operative Agreement; (xii) any defect in the condition, quality or fitness for use of any Property or any part thereof; or (xiii) any other cause or circumstance whether similar or dissimilar to the foregoing and whether or not Lessee shall have notice or knowledge of any of the foregoing. The parties intend that the obligations of Lessee hereunder shall be covenants, agreements and obligations that are separate and independent from any obligations of Lessor hereunder and shall continue unaffected unless such covenants, agreements and obligations shall have been modified or terminated in accordance with an express provision of this Lease. Lessor and Lessee acknowledge and agree that the provisions of this Section 6.1 have been specifically reviewed and subject to negotiation.


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6.2 No Termination or Abatement.
---------------------------


Lessee shall remain obligated under this Lease in accordance with its terms and shall not take any action to terminate, rescind or avoid this Lease, notwithstanding any action for bankruptcy, insolvency, reorganization, liquidation, dissolution, or other proceeding affecting Lessor or any Governmental Authority, or any action with respect to this Lease or any Operative Agreement which may be taken by any trustee, receiver or liquidator of Lessor or any Governmental Authority or by any court with respect to Lessor, Lessee, any Holder, or any Governmental Authority. Lessee hereby waives all right (i) to terminate or surrender this Lease (except as permitted under the terms of the Operative Agreements) or (ii) to avail itself of any abatement, suspension ...