AMENDMENT NO. 1 TO AGREEMENT FOR LEASE
THIS AMENDMENT NO. 1 TO AGREEMENT FOR LEASE (this "Amendment") is made
as of March 15, 1995 by and between Virtual Funding, Limited Partnership, a
Delaware limited partnership ("Owner") and Silicon Graphics Real Estate, Inc., a
Delaware corporation ("Agent").
W I T N E S S E T H :
WHEREAS, Owner and Agent entered into that certain Agreement for
Lease, dated as of November 18, 1993, (the "Agreement for Lease"; capitalized
terms used herein without definition shall have the meanings ascribed to such
terms in the Agreement for Lease) pursuant to which Owner appointed Agent to act
as agent for Owner in connection with the selection of Owner's fee and/or
leasehold interests in Unit Premises from time to time, and with the
construction of Unit Improvements and the installation of Unit FF&E thereon, if
any, and in connection with all matters related to such construction, all as
more particularly described in the Agreement for Lease;
WHEREAS, Owner, as lessor, and Agent, as lessee, entered into that
certain Lease Agreement, dated as of November 18, 1993, as amended by Amendment
No. 1 to Lease Agreement, dated as of the date hereof (collectively, and as the
same may hereafter be further amended, modified, supplemented or restated, being
the "Lease"), pursuant to which Owner agreed to lease or sublease to Agent, from
time to time, Property and Equipment (as such terms are defined in the Lease),
all as more particularly described in the Lease; and
WHEREAS, Owner and Agent desire to amend the Agreement for Lease in
connection with the acquisition by Owner of a leasehold interest in the North
Charleston Unit (as hereinafter defined), the construction by Owner of certain
Unit Improvements and the installation by Owner of certain Unit FF&E thereon.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Owner and Agent hereby agree as follows:
Section 1. AMENDMENTS TO AGREEMENT FOR LEASE. From and after the
Amendment Effective Date (as hereinafter defined), the Agreement for Lease shall
be and hereby is amended as follows:
(a) AMENDED DEFINITIONS. (i) The definition of "Assignee" in
Section 1.1 of the Agreement for Lease is hereby deleted in its entirety and the
following substituted therefor:
2
"ASSIGNEE: Each Person to which any part of Owner's interest under
this Agreement or in the Unit Premises and related Unit Improvements or any
item of Unit FF&E shall at the time have been assigned, conditionally or
otherwise, by Owner in accordance with Section 17 of this Agreement. For
purposes of subsection 8.5, subsection 9.6, Section 12 and clause (iii) of
paragraph (a) of Section 16 hereof, the term "Assignee" shall include each
lender to Owner or each Person providing credit support to Owner pursuant
to a Credit Agreement."
(ii) The definition of "Design Development Drawings" in Section 1.1.
of the Agreement for Lease is hereby amended by adding the following language to
the end thereof:
"Design Development Drawings shall mean with respect to the North
Charleston Unit the design development drawings approved in writing by
Owner and any Assignee at the date of the initial Acquisition Certificate
relating to the North Charleston Unit."
(iii) The definition of "Ground Lease" in Section 1.1. of the
Agreement for Lease is hereby amended by adding the following language to the
end thereof:
"With respect to the Unit Premises for the North Charleston Unit,
Owner acknowledges and agrees that for purposes of this Agreement and the
Lease the Ground Lease for such Unit Premises shall consist of the Ground
Sublease Agreement, dated as of March 15, 1995, between Agent and Owner, a
copy of which is attached hereto as Exhibit L, and Owner further
acknowledges and agrees that such Ground Sublease Agreement, subject to
Agent's compliance with the covenants set forth in Section 2(b) thereof,
shall be deemed to be a Mortgageable Ground Lease for purposes of this
Agreement and the Lease."
(iv) The definition of "Unit Completion Date" in Section 1.1 of the
Agreement for Lease is hereby amended by adding the following language to the
end thereof:
"With respect to the North Charleston Unit and all NC Sub-Units,
thirty-six (36) months from the date on which the Initial Advance for the
North Charleston Unit is made by Owner to Agent pursuant to Section 4
hereof."
(b) NEW DEFINITIONS. The following definitions are hereby added to
Section 1.1 of the Agreement for Lease:
"NORTH CHARLESTON UNIT: The Unit located on Xxxxx Xxxxxxxxxx Xxxx,
Xxxxxxxx Xxxx, Xxxxxxxxxx; provided, however, that upon the designation of
a portion or portions of the North Charleston Unit as NC Sub-Units in
accordance with Section 20 hereof, references in this Agreement to the
North Charleston Unit shall be deemed to refer to the North Charleston Unit
and the applicable NC Sub-Units, as the context so indicates.
3
NC SUB-UNIT: Defined pursuant to Section 20 hereof.
SUB-UNIT CERTIFICATE: The written certification of Agent to be
delivered to Owner in connection with the creation of an NC Sub-Unit
pursuant to Section 20 hereof, and which is substantially in the form of
Exhibit M hereto."
(c) AMENDMENT TO SECTION 1.2 OF THE AGREEMENT FOR LEASE.
Subsection 1.2(a) of the Agreement for Lease is hereby amended by the deletion
of the term "Assignee" from the list set forth therein.
(d) AMENDMENT TO SECTION 2 OF THE AGREEMENT FOR LEASE. The
following sentence is hereby added as a new second sentence to Section 2.2 of
the Agreement for Lease:
"Owner and Agent agree that with respect to the North Charleston Unit and
all NC Sub-Units (x) the maximum aggregate cost to Owner for the
acquisition of such Unit Premises and the construction of Unit Improvements
thereon and the installation of all Unit FF&E therein shall be no more
than $110,000,000 and (y) the cost to Owner of the Unit FF&E constituting
personal property and not fixtures shall be no more than $1,000,000."
(e) AMENDMENT TO SECTION 4 OF THE AGREEMENT FOR LEASE. Paragraph
(u) of Section 4 of the Agreement for Lease is hereby deleted in its entirety
and the following paragraph substituted therefor:
"(u) ENVIRONMENTAL CERTIFICATE AND REPORT. An environmental
certificate in the form of Exhibit H hereto, duly executed by Agent, and an
environmental report certified to Owner and any Assignee and satisfactory
to Owner and any Assignee in all respects, prepared by a reputable
environmental consulting or environmental engineering firm acceptable to
Owner and any Assignee which addresses the matters set forth on Exhibit I
hereto; provided that with respect to the North Shoreline Unit the Owner
acknowledges receipt of an environmental report satisfying such requirement
and agrees that the foregoing requirement for an environmental certificate
shall be met by a certificate dated as of the date of the Acquisition
Certificate pertaining to such Unit to the effect set forth in the
certificate provided previously with respect to such location, dated July
1, 1993, attached hereto as Exhibit J; provided, further, that with respect
to the North Charleston Unit, the Owner acknowledges receipt of an
environmental report satisfying such requirement and agrees that the
foregoing requirement for an environmental certificate shall be met by a
certificate dated as of the date of the initial Acquisition Certificate
pertaining to the North Charleston Unit in the form attached hereto as
Exhibit N. If Owner or any Assignee shall reasonably require additional
assurance in connection with any Initial Advance as to any matter or
matters contained or not adequately addressed in such environmental report
in respect of Unit Premises other than the North
4
Shoreline Unit, the North Charleston Unit or any NC Sub-Unit, Owner or any
Assignee may require that a supplemental or additional environmental report
with respect to such matter or matters, satisfactory to Owner and any
Assignee in all respects, be delivered."
(f) AMENDMENT TO SECTION 8 OF THE AGREEMENT FOR LEASE. The last
sentence of Section 8.1 of the Agreement for Lease is hereby deleted in its
entirety and the following substituted therefor:
"SGREI-CA was merged into Agent on March 31, 1994, whereupon Agent by
operation of law succeeded to all of SGREI-CA's rights and obligations."
(g) AMENDMENTS TO SECTION 11.1 OF THE AGREEMENT FOR LEASE. (i)
Paragraph (g) of Section 11.1 of the Agreement for Lease is hereby deleted in
its entirety and the following substituted therefor:
"(g) GUARANTEE. Guarantor defaults in any obligation under the
Guarantee which default continues after the period of any grace period
granted to the Agent hereunder in respect of such guaranteed obligation; or
Guarantor defaults in its obligations set forth in paragraph (a), (b) or
(c) of Section 11 of the Guarantee and such default continues for twenty
(20) Business Days after notice thereof by Owner to Guarantor; or Guarantor
defaults in its obligations set forth in paragraph (d), (e) or (f) of
Section 11 of the Guarantee and such default continues for ten (10)
Business Days after notice thereof by Owner to Guarantor."
(ii) Paragraph (i) of Section 11.1 of the Agreement for Lease is
hereby deleted in its entirety and the following substituted therefor:
"(i) PAYMENT OF OBLIGATIONS. Any indebtedness (including, without
limitation, lease obligations which are shown on the balance sheet of Agent
or Guarantor or which relate to sale-leaseback transactions) of Agent or
Guarantor in excess of $15,000,000 in the aggregate under an instrument or
agreement evidencing indebtedness in excess of $15,000,000 in the aggregate
(A) shall become or be declared to be due and payable prior to its stated
maturity and shall not be paid when due or (B) shall not be paid when due."
(h) AMENDMENT TO SECTION 11.3 OF THE AGREEMENT FOR LEASE. The
preamble of the first sentence of Section 11.3(c) of the Agreement for Lease is
hereby deleted in its entirety and the following substituted therefor :
"If there is any cessation of construction of the Unit Improvements for any
period after the date construction shall commence in excess of sixty (60)
successive calendar days (or, with respect to the North Charleston Unit or
any NC Sub-Unit, in excess of ninety (90)
5
successive calendar days), unless the conditions of each of subparagraphs
(1) and (2) hereof shall have been satisfied:"
(i) NEW SECTION 20 OF THE AGREEMENT FOR LEASE. The following
Section 20 is hereby added to the Agreement for Lease following Section 19
thereof:
"SECTION 20. SPLITTING OF THE NORTH CHARLESTON UNIT. (a) Agent
may, subject to the satisfaction of the conditions set forth in this
Section 20, elect, from time to time, to redesignate a portion or portions
of the North Charleston Unit as one or more separate and distinct Units
(each an "NC Sub-Unit").
The following are the documents to be received by Owner and any
Assignee and the conditions to be satisfied in connection with the creation
of any NC Sub-Unit:
(i) SUB-UNIT CERTIFICATE(S). With respect to each NC Sub-
Unit so designated, Agent shall deliver a duly executed Sub-Unit
Certificate pertaining to such NC Sub-Unit, including all attachments
to such Sub-Unit Certificate.
(ii) COST ALLOCATION. The total Unit Acquisition Cost for
any NC Sub-Unit (as set forth in the Unit Budget attached to the
applicable Sub-Unit Certificate) shall not exceed forty percent (40%)
of the total Unit Acquisition Cost for the North Charleston Unit (as
set forth in the Unit Budget for the North Charleston Unit prior to
the creation of any NC Sub-Units).
(iii) RESTATED ACQUISITION CERTIFICATE. Agent shall deliver
a duly executed restated Acquisition Certificate for the North
Charleston Unit modified to reflect the creation of such NC Sub-Unit
or NC Sub-Units and setting forth the information required by Section
4 hereof with respect to that portion of the North Charleston Unit
which has not been designated as NC Sub-Units.
(iv) EVIDENCE OF COMPLIANCE. Agent shall deliver such
other documents, reports, certificates or information to evidence
compliance with the provisions of this Agreement in connection with
the designation of such NC Sub-Unit as Owner or any Assignee shall,
within five (5) days of Agent's delivery of the Sub-Unit Certificate
for such NC Sub-Unit, have reasonably requested.
(b) In connection with the designation of any NC Sub-Unit, Agent
shall have the right to reallocate costs among such NC Sub-Unit, any then-
existing NC Sub-Units and the North Charleston Unit and to revise the
respective Unit Budgets for such Units to reflect such reallocation. In
such event, Agent shall deliver modified Sub-Unit Certificates with respect
to all then-existing NC Sub-Units to the extent necessary to reflect such
revision of the Unit Budgets. If an AFL Unit Leasing Record shall have
been
6
entered into with respect to any then-existing NC Sub-Unit at the time of
such reallocation, Agent shall deliver either (i) a retroactive revised
Unit Budget for such NC Sub-Unit, or (ii) a written statement that the Unit
Budget attached to the Sub-Unit Certificate for such NC Sub-Unit most
recently submitted to Owner in connection with the creation of an NC Sub-
Unit remains unmodified.
(c) From and after the date on which the conditions for designating
an NC Sub-Unit have been satisfied, each such NC Sub-Unit shall constitute
a Unit for all purposes under this Agreement, including, without
limitation, with respect to the determination of the existence of an Event
of Unit Termination or Potential Event of Unit Termination; provided,
however, that, anything to the contrary provided in this Agreement
notwithstanding, Agent's rights to request and receive a Completion Advance
with respect to any NC Sub-Unit pursuant to Section 3.1 and 7 hereof and
the right to reallocate costs among NC Sub-Units pursuant to Section 20(b)
hereof shall continue until the date that is six months after the latest
occurring Effective Date among the North Charleston Unit and the NC Sub-
Units designated in accordance with this Section 20."
(j) AMENDMENT TO AND ADDITION OF EXHIBITS. The Agreement for Lease
is hereby amended by (i) amending Exhibit A so as to reflect the amendments
provided for in Amendment No. 1 to Lease Agreement dated as of the date hereof
between Owner and Agent and (ii) the addition of new Exhibits L, M and N
thereto, to be comprised of Annex 1, Annex 2 and Annex 3, respectively, to this
Amendment.
(k) RATIFICATION AND REAFFIRMATION. Except as amended hereby, the
terms and provisions of the Agreement for Lease shall, in all other respects,
remain unmodified, are hereby ratified and reaffirmed and shall remain in full
force and effect.
Section 2. AMENDMENT EFFECTIVE DATE. This Amendment shall be
effective on the date (the "Amendment Effective Date") on which each of the
following conditions precedent have been satisfied:
(a) Owner, The Dai-Ichi Kangyo Bank, Ltd., New York Branch, as L/C
Bank and as Agent and the banks party thereto, shall have entered into that
certain Amendment No. 1 to Credit Agreement, dated as of March 15, 1995, and the
same shall have become effective.
(b) Guarantor shall have entered into that certain Amendment No. 1
to Guaranty, dated as of March 15, 1995, for the benefit of Owner.
(c) Owner and Agent shall have entered into that certain Amendment
No. 1 to Lease Agreement, dated of even date herewith.
7
Section 3. REPRESENTATIONS AND WARRANTIES. Agent represents and
warrants to Owner as of the Amendment Effective Date that:
(a) FINANCIAL STATEMENTS. Agent has caused to be furnished to
Owner Guarantor's Annual Report on Form 10-K for the year ended June 30, 1994
and Guarantor's Quarterly Reports on Form 10-Q for the quarters ended September
30, 1994 and December 31, 1994, respectively. The financial statements
contained in such documents fairly present the financial position, results of
operations and statements of cash flow of Guarantor as of the dates and for the
periods indicated therein and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis.
(b) CONTINUING REPRESENTATIONS. All representations and
warranties made by Agent in the Agreement for Lease and in the Lease are and
remain true and correct on and as of the Amendment Effective Date as if made on
and as of the Amendment Effective Date, except to the extent such
representations and warranties expressly relate specifically to an earlier date.
Section 4. NO RECOURSE. The provisions of Section 18.5 of the
Agreement for Lease are applicable to this Amendment.
Section 5. GENERAL CONDITIONS.
(a) GOVERNING LAW. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts made and intended to be wholly performed within the State of York.
(b) CAPTIONS. The captions in this Amendment are for convenience
of reference only, and shall not be deemed to affect the meaning or construction
of any of the provisions hereof.
(c) SEVERABILITY. In the event any one or more of the provisions
contained in this Amendment shall for any reason be held to be invalid, illegal
or unenforceable, such invalidity, illegality or unenforceability shall not
affect any other provisions of this Amendment and this Amendment shall be
construed as if such invalid, illegal or unenforceable provisions had never been
contained herein.
8
IN WITNESS WHEREOF, the parties have executed this Amendment as of
the day and year first above written.
Virtual Funding, Limited Partnership by
Virtual Capital, Inc., its
General Partner
By /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Assistant Secretary
Silicon Graphics Real Estate, Inc.
By /s/ Xxx Xxxxxx
------------------------------------
Name: Xxx Xxxxxx
Title: Vice President, Finance
