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EXHIBIT 10.23
EXECUTION COPY
This instrument prepared by:
Xxxxxxx X. Xxxx, III, Esq.
Xxxxxxxxxx & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
AMENDED AND RESTATED LEASE
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between
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity
but solely as trustee,
as Lessor
and
XXXXXXXX COMMUNICATIONS, INC.
as Lessee
Dated: As of September 2, 1998
THIS AMENDED AND RESTATED LEASE HAS BEEN MANUALLY EXECUTED IN COUNTERPARTS
NUMBERED CONSECUTIVELY FROM l TO 4. TO THE EXTENT, IF ANY, THAT THIS AMENDED AND
RESTATED LEASE 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 AMENDED AND RESTATED LEASE MAY BE CREATED THROUGH THE TRANSFER
OR POSSESSION OF ANY COUNTERPART OF THIS AMENDED AND RESTATED LEASE OTHER THAN
COUNTERPART NO. 1.
This is Counterpart No.
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TABLE OF CONTENTS
(Not a part of the Lease)
Page
ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION.....................................................................1
Section 1.01 Definitions ...............................................................................1
Section 1.02 Computation of Time Periods................................................................1
Section 1.03 Accounting Terms...........................................................................1
Section 1.04 Use of Certain Terms.......................................................................1
Section 1.05 Headings and References....................................................................2
ARTICLE II THE PROPERTY..........................................................................................2
Section 2.01 Lease of the Property......................................................................2
Section 2.02 Use of Property............................................................................3
Section 2.03 Quiet Enjoyment............................................................................4
Section 2.04 Lease Schedules............................................................................5
ARTICLE III TERM.................................................................................................5
Section 3.01 Base Term..................................................................................5
Section 3.02 Extended Term..............................................................................5
Section 3.03 Lessee's Options Upon Expiration...........................................................7
Section 3.04 Property Sold..............................................................................8
Section 3.05 Non-Terminability..........................................................................8
ARTICLE IV RENT..................................................................................................9
Section 4.01 Fixed Rent.................................................................................9
Section 4.02 Additional Rent...........................................................................10
Section 4.03 Default Rate..............................................................................10
Section 4.04 Rent Payments.............................................................................10
Section 4.05 Other Payments............................................................................10
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ARTICLE V SALES AND OTHER DISPOSITIONS OF PROPERTY..............................................................11
Section 5.01 Optional Purchase by Lessee of All Property...............................................11
Section 5.02 Optional Purchase by Lessee of Items of Property..........................................11
Section 5.03 Mandatory Purchase by the Lessee of all Property..........................................12
Section 5.04 Purchase Procedures.......................................................................12
Section 5.05 Exchanges and Substitutions of Items of Property..........................................14
Section 5.06 Alterations; Removal......................................................................16
Section 5.07 Subletting................................................................................17
Section 5.08 Redeployment of the Property..............................................................18
Section 5.09 Effect of Disposition.....................................................................24
ARTICLE VI CERTAIN COVENANTS OF THE LESSEE......................................................................24
Section 6.01 Taxes and Assessments.....................................................................24
Section 6.02 Compliance with Laws......................................................................26
Section 6.03 Certain Agreements........................................................................26
Section 6.04 Liens.....................................................................................26
Section 6.05 Insurance.................................................................................27
Section 6.06 Maintenance and Repair....................................................................30
Section 6.07 Inspection Rights.........................................................................32
Section 6.08 Assignments, Etc..........................................................................32
Section 6.09 Location..................................................................................32
ARTICLE VII CONDEMNATION AND CASUALTY...........................................................................33
Section 7.01 Condemnation and Casualty.................................................................33
Section 7.02 Condemnation or Casualty with Termination.................................................34
Section 7.03 Condemnation or Casualty Without Termination..............................................34
Section 7.04 Temporary Condemnation of Lease Termination...............................................36
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ARTICLE VIII ENVIRONMENTAL MATTERS..............................................................................36
Section 8.01 Environmental Event.......................................................................36
Section 8.02 Environmental Trigger Termination.........................................................36
Section 8.03 Environmental Remediation.................................................................37
Section 8.04 Environmental Compliance..................................................................37
ARTICLE IX REMEDIES.............................................................................................37
Section 9.01 General Remedies..........................................................................37
Section 9.02 Default Remedies..........................................................................38
Section 9.03 Lessee Default Repurchase Option..........................................................40
Section 9.04 Payment on Default........................................................................40
Section 9.05 Additional Rights.........................................................................41
ARTICLE X SURRENDER.............................................................................................42
Section 10.01 Return of Property.......................................................................42
Section 10.02 No Liens.................................................................................43
Section 10.03 Environmental Compliance.................................................................43
Section 10.04 Removal of Other Property................................................................43
Section 10.05 Return Conditions........................................................................44
Section 10.06 Survival.................................................................................49
ARTICLE XI SECURITY.............................................................................................49
Section 11.01 Characterization.........................................................................49
Section 11.02 Mortgage.................................................................................50
Section 11.03 Security Agreement.......................................................................53
ARTICLE XII MISCELLANEOUS.......................................................................................54
Section 12.01 Notices, Demands and Other Instruments...................................................54
Section 12.02 No Default Certificate...................................................................54
Section 12.03 Severability.............................................................................54
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Section 12.04 Binding Effect...........................................................................54
Section 12.05 Governing Law............................................................................55
Section 12.06 Counterparts.............................................................................55
Section 12.07 No Recourse..............................................................................55
Section 12.08 Lessor's Right to Cure Lessee's Default..................................................55
Section 12.09 Lessee's Right to Contest Property Taxes.................................................56
Section 12.10 Limitations on Amounts Payable...........................................................56
Section 12.11 Payments to the Agent....................................................................56
Section 12.12 Remaining Moneys.........................................................................56
Section 12.13 Waiver of Trial by Jury..................................................................57
Section 12.14 Exculpation of Lessor....................................................................57
Section 12.15 Prior Lease..............................................................................57
Schedule 1 - Fixed Rent and Additional Rent
Schedule 2.02(b) - Supplemental Use Restrictions
Schedule 5 - Form of IRU Agreement
Schedule 6.05(i) - All-Risk Property Insurance Exclusions
Schedule 6.05(ii) - General Liability Insurance Exclusions
Schedule 11.02(b) - Supplemental Mortgage Provisions
Schedule 11.03(c) - Supplemental Security Provisions
Schedule 12.15 - Acquisition Cost, Original Capitalized Cost and
Adjusted Capitalized Cost of Certain Property
Subject to Prior Lease
Exhibit A - Certificate of Acceptance
Exhibit B - Testing Procedures
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AMENDED AND RESTATED LEASE dated as of September 2, 1998 (this
"Lease") between STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, not in its individual capacity but solely as trustee under the
Declaration, having an address at 000 Xxxxxx Xxxxxx, Xxxxxxx Square, Hartford,
Connecticut 06103, Attention: Corporate/Muni Administration (the "Lessor") and
XXXXXXXX COMMUNICATIONS, INC., a Delaware corporation having an address at Xxx
Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000 (the "Lessee").
PRELIMINARY STATEMENT
The Lessee and the Lessor desire to enter into this Lease for
certain Network Assets (as defined below) (i) to amend and restate, as set forth
herein, the Lease dated as of May 6, 1998 between the Lessor and the Lessee, as
amended, by the First Amendment (as amended, the "Prior Lease") and (ii) in
connection with the transactions referred to in the Amended and Restated
Participation Agreement dated as of September 2, 1998 by and among the Lessee,
the Lessor, as Trustee, the Persons named therein as Note Holders, Certificate
Holders and APA Purchasers, State Street Bank and Trust Company, as the
Collateral Agent, and Citibank, N.A., as the Agent, (as it may be amended,
modified, restated or supplemented from time to time in accordance with the
terms thereof, the "Participation Agreement").
The parties, therefore, hereby agree as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.01 Definitions. As used in this Agreement, terms
defined in the preceding paragraphs or in other sections of this Lease shall
have the meanings specified therein, the terms defined in Appendix A to the
Participation Agreement, and not otherwise defined herein, shall have the
meanings set forth therein.
Section 1.02 Computation of Time Periods. In this Lease in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" means
"to but excluding."
Section 1.03 Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP applied
consistently.
Section 1.04 Use of Certain Terms. Unless the context of this
Lease requires otherwise, the plural includes
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the singular, the singular includes the plural, the part includes the whole, and
"including" has the inclusive meaning of "including without limitation." The
words "hereof," "herein," "hereby," "hereunder," and other similar terms of this
Lease refer to this Lease as a whole and not exclusively to any particular
provision of this Lease. All pronouns and any variations thereof shall be deemed
to refer to masculine, feminine, or neuter, singular or plural, as the identity
of the person or persons may require.
Section 1.05 Headings and References. Section and other
headings are for reference only, and shall not affect the interpretation or
meaning of any provision of this Lease. Unless otherwise provided, references to
Articles, Sections, Schedules, and Exhibits shall be deemed references to
Articles, Sections, Schedules, and Exhibits of this Lease. References to this
Lease (and to any Articles, Sections, Schedules and Exhibits to this Lease)
include this Lease (and any Articles, Sections, Schedules and Exhibits to this
Lease) as the same may be modified, amended, restated or supplemented from time
to time pursuant to the provisions hereof. A reference to any law shall mean
that law as it may be amended, modified or supplemented from time to time, and
any successor law and to any applicable rules, regulations or orders as in
effect from time to time. A reference to a Person includes the successors and
assigns of such Person, except to the extent that this Lease, any other
Operative Document or any Securitization Document may restrict assignment or
rights of assignees. A reference in this Lease to any other Operative Document
or Securitization Document shall be deemed a reference to that Operative
Document or Securitization Document as it may be amended, modified or
supplemented from time to time.
ARTICLE II
THE PROPERTY
Section 2.01 Lease of the Property. (a) Subject to the terms
and conditions in this Lease, the Lessor hereby agrees to lease to the Lessee
and the Lessee hereby agrees to lease from the Lessor each Item of Property
listed on Schedule 1 of each Certificate of Acceptance, effective on the
Acceptance Date with respect to such Item of Property. No less often than once
per calendar quarter (ending March, June, September and December of each year),
the Lessee and the Lessor shall execute and deliver a Certificate of Acceptance
with respect to any Item of Property (i) for which a Certificate of Acceptance
has not previously been executed and delivered and (ii) which became subject to
this Lease in the previous three months.
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(b) Each Item of Property is leased to the Lessee subject to:
(i) all applicable Legal Requirements;
(ii) all applicable Insurance Requirements;
(iii) all terms, covenants and provisions in any applicable
Real Property Instrument;
(iv) all Trust Encumbrances (including the Security
Agreement);
(v) all terms, covenants and provisions in any contract,
lease (including any ground lease, sublease or xxxxxxxxx), agreement,
permit, right-of-way, license, order or other instrument (including any
IRU) governing or affecting any Item of Property; and
(vi) the terms, covenants and provisions of this Lease, the
other Operative Documents and the Securitization Documents.
(c) Each Item of Property is leased AS IS, WHERE IS, WITH ALL
FAULTS.
(d) THE LESSOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, WITH RESPECT TO THE PROPERTY OR ANY FIXTURE OR OTHER ITEM CONSTITUTING
A PORTION THEREOF, OR THE LOCATION, USE, DESCRIPTION, DESIGN, MERCHANTABILITY,
FITNESS FOR USE FOR ANY PARTICULAR PURPOSE, CONDITION OR DURABILITY THEREOF OR
AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, OR AS TO THE LESSOR'S
TITLE THERETO OR OWNERSHIP THEREOF OR OTHERWISE, IT BEING AGREED THAT ALL RISKS
INCIDENT THERETO ARE TO BE BORNE BY THE LESSEE. IN THE EVENT OF ANY DEFECT OR
DEFICIENCY OF ANY NATURE IN PROPERTY OR ANY FIXTURE OR OTHER ITEM CONSTITUTING A
PORTION THEREOF, OR LESSOR'S TITLE TO ANY OF THE SAME, WHETHER PATENT OR LATENT,
THE LESSOR SHALL HAVE NO RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO. THE
PROVISIONS OF THIS SECTION 2.01(d) HAVE BEEN NEGOTIATED AND ARE INTENDED TO BE A
COMPLETE EXCLUSION AND NEGATION OF ANY AND ALL WARRANTIES AND REPRESENTATIONS,
EXPRESS OR IMPLIED, BY THE LESSOR WITH RESPECT TO PROPERTY (INCLUDING THE
IMPROVEMENTS) OR ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF,
WHETHER ARISING PURSUANT TO THE UCC OR ANY OTHER LAW, NOW OR HEREAFTER IN
EFFECT.
Section 2.02 Use of Property. (a) The Lessee shall use the
Property solely as telecommunications facilities and in a manner that (i) is in
compliance with each of the matters referred to in Section 2.01(b)(i) through
(vi) inclusive and (ii) will not subject the Lessor to any Trust Liability or
regulation by any Governmental Authority (other than federal and state banking
regulatory authorities in those jurisdictions in which the Lessor is otherwise
conducting
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operations unrelated to the ownership and leasing of the Property).
(b) The Lessee, shall, with respect to any Property that is
Regulated Property in any state or other jurisdiction, comply with the
provisions in Schedule 2.02(b) hereof, as such Schedule may be amended, modified
or supplemented from time to time in accordance with this Lease and the other
Operative Documents.
Section 2.03 Quiet Enjoyment. (a) During the Term, the Lessor
covenants that, unless a Default, an Event of Default or an Environmental
Trigger has occurred and is continuing, it will not, and will not permit any
Person (other than the Lessee) claiming by or under the Lessor to, (i) grant,
create or suffer to exist any Lien upon the Property (or any part thereof or
interest therein) other than the Permitted Encumbrances (excluding therefrom any
Liens created by the Lessor) or (ii) interfere with the peaceful and quiet
possession and enjoyment of the Property by the Lessee or the Lessee's permitted
assigns; provided, however, that nothing herein shall affect the exercise by any
of the Lessor Group of the inspection rights set forth in Section 6.07.
(b) During the Term, unless an Event of Default has occurred
and is continuing, the Lessor will not, and will not permit any Person claiming
by, through or under the Lessor to, assign, transfer, lease or convey the
Property or this Lease, or any part thereof or interest therein other than (i)
to the Lessee or by the Lessee to any other Person pursuant to the Services
Agreement, this Lease, any of the other Operative Documents or the
Securitization Documents and (ii) to the Collateral Agent or by the Collateral
Agent to any other Person pursuant to the Security Agreement, the Interparty
Agreement, any of the other Operative Documents or any of the Securitization
Documents; provided that any such assignment, transfer or conveyance to or by
the Collateral Agent (prior to the Expiration Date and so long as no Event of
Default has occurred and is continuing) is (x) expressly subordinate to the
rights of the Lessee under this Lease and (y) subject to the rights of the
Lessee to purchase, sell, lease, exchange, redeploy or otherwise deal with the
Property pursuant to the terms of this Lease and the other Operative Documents.
(c) The Lessor, at the Lessee's sole cost and expense, shall
cooperate or assist with the Lessee's efforts to obtain all services, Permits
and contracts necessary and useful for the acquisition, construction, operation
and maintenance of the Property for the intended purposes thereof, and the
Lessor may, and to the extent required in Section 6.04(c) shall, execute such
documents or papers as may be reasonably necessary for such purposes. The Lessee
covenants that it shall at its own cost and expense on behalf of and in the name
of the Lessor, apply for, obtain and maintain all
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Permits and Consents required in order to permit the lawful ownership of the
Property by the Lessor during the Term.
(d) Any failure by the Lessor or such other Person to comply
with the foregoing provisions of this Section 2.03 or any other provisions of
this Lease shall not give the Lessee any right to cancel or terminate this
Lease, or to xxxxx, reduce or make deduction from or offset against any Fixed
Rent, Additional Rent or other sum payable under this Lease, or to fail to
perform or observe any other covenant, agreement or obligation hereunder.
Section 2.04 Lease Schedules. The Lessee shall amend and
supplement the schedules of this Lease (i) as may be reasonably requested by the
Lessor from time to time and (ii) as may be necessary or appropriate from time
to time to assure the continued accuracy in all material respects of any
representation or warranty made by the Lessee in this Lease, any Certificate of
Acceptance or any other Operative Document (whether or not any change has been
requested by the Lessor), including such changes as may be required in
connection with any acquisition, sale, exchange, change of location,
re-deployment, grant of an Approved IRU, alteration, substitution, purchase or
other disposition of any Item of Property or any change in any Law or any
ruling, directive or policy of any Governmental Authority (whether or not having
the force of Law) affecting any Item of Property in any way, including any
regulation of the operation or use of any such Item of Property, or any sale,
lease, exchange or other disposition of any such Item of Property, or the
existence, validity, enforceability, perfection or priority of any security
interest in, mortgage of, or Lien on any such Item of Property, or the taxation
or basis of taxation of any such Item of Property.
ARTICLE III
TERM
Section 3.01 Base Term. Each Item of Property is leased for a
term commencing on the Acceptance Date for such Item of Property and ending on
the Base Term Expiration Date (or any earlier Expiration Date), subject to the
provisions of Sections 3.02 and 3.04.
Section 3.02 Extended Term. (a) So long as no Default, Event
of Default or Environmental Trigger exists, the Lessee may request (in its sole
discretion) two successive 364 day extensions of the term of this Lease (each a
"Renewal Term"), by giving written notice to the Agent (i) at least twelve (12)
months prior to the Base Term Expiration Date, for the first such Renewal Term,
and (ii) on or prior to the Base Term Expiration Date, for the second such
Renewal Term.
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(b) Such request shall be accompanied by an Officer's
Certificate of the Lessee stating that, as of the date of such request, no
Default or Event of Default or Environmental Trigger has occurred and is
continuing or, if a Default or an Event of Default or Environmental Trigger
exists, setting forth the details thereof and the action, if any, the Lessee has
taken, is taking or proposes to take with respect thereto. Promptly upon receipt
of such request and the accompanying Officer's Certificate, the Agent shall
forward copies thereof to the Trustee and the Note and Certificate Holders. If,
by the date occurring thirty (30) days after the Lessee's delivery of the
extension request (the "Response Date"), Note Holders holding not less than 66
2/3% of the outstanding principal amount of the Notes and Certificate Holders
holding not less than 66 2/3% of the outstanding stated amount of the
Certificates consent to such extension, such extension shall become effective
under the Operative Documents as of the Base Term Expiration Date as to each
Extending Holder (as defined below) subject to the limitation set forth below;
provided, that, as of the Base Term Expiration Date (i) the representations and
warranties of the Lessee in the Operative Documents shall be true and correct in
all material respects, (ii) no Default or Event of Default or Environmental
Trigger shall exist and (iii) if a Default or an Event of Default or
Environmental Trigger existed at the time the request for the applicable
extension was made, then an Officer's Certificate of the Lessee shall be
delivered to the Agent certifying that such Default or Event of Default or
Environmental Trigger has been cured in accordance with the terms of the
Operative Documents. The Agent shall give prompt written notice of the
effectiveness of any such extensions to the Lessee, the Trustee, and the Note
and Certificate Holders. Notwithstanding anything to the contrary contained
herein, such extension shall be effective only as to each Note and Certificate
Holder (each, an "Extending Holder") which consented to such extension, but
shall not be effective as to any other Note or Certificate Holders (each, a
"Non-Extending Holder"). With respect to any Non-Extending Holder, the Base Term
Expiration Date shall continue to be the Expiration Date. If the Lessee fails to
obtain the requisite consents specified above by the Response Date, no extension
shall be granted. Each Holder shall be entitled to grant or withhold its consent
in its sole discretion to any extension of the Base Term Expiration Date
requested by the Lessee. Any Holder that fails to deliver its consent by the
Response Date shall be deemed to have withheld its consent. In the event that
the Lessee obtains the necessary consents specified above by the Response Date,
but there exists one or more Non-Extending Holders with respect to such
extension, the Agent will use reasonable efforts to assist the Lessee in
locating one or more Persons (whether such Persons are then current Holders or
otherwise) to replace the Non-Extending Holders (such Person or Persons being
"Replacement Holders"). If within thirty (30) days following the Response Date,
Replacement Holders have agreed to purchase
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in full the Non-Extending Holders' Notes and/or Certificates (as the case may
be), then the extension shall become effective as to the Replacement Holders. If
Replacement Holders have not so agreed by the end of such 30-day period, then no
extension shall be granted and Lessee shall elect the option under Section
3.03(a)(i) or (ii) within ten (10) days thereafter.
(c) The Lessor and the Lessee shall determine the Applicable
Rate, Fixed Rent and other terms and conditions (including the amount of the
remarketing fee in Section 3.02(c)) for the Extended Term, and the Lessee shall
take such actions and enter into all amendments and supplements to the Operative
Documents and such other agreements or documents as the Lessor in its sole
discretion determines to be necessary and appropriate in connection therewith
including, delivery to Agent of an Appraisal of the Property (satisfactory in
form and substance to the Agent in its sole discretion).
(d) If the Lease is extended for the Extended Term, the Lessee
shall pay the Agent a remarketing fee, the amount of which shall be determined
one month prior to the commencement of the Extended Term.
(e) If the Lessee does not accept the terms of the Extended
Term (including any proposed changes to the Operative Documents or the terms of
any additional agreements proposed by the Lessor), the Lessee may reject the
Extended Term and the Lessee shall be obligated to purchase the Property in
accordance with Section 3.03(a)(i).
Section 3.03 Lessee's Options Upon Expiration. (a) The Lessee
shall elect, by written notice given at least twelve (12) months prior to the
Expiration Date, either to:
(i) deliver an Offer to Purchase the Property in its
entirety and purchase the Property on the Expiration Date upon payment
of an amount equal to the Termination Value, in which case the transfer
of the Property shall be governed by the terms of Section 5.04; or
(ii) so long as no Default, Event of Default or
Environmental Trigger has occurred and is continuing, and subject to
the satisfaction of the conditions set forth in Section 3.03(b) and
Article X, terminate this Lease, release all of its interest in the
Property as of the Expiration Date and pay to the Agent, on behalf of
the Lessor on the Expiration Date, in addition to any Fixed Rent,
Additional Rent and any other amounts then due and payable to the
Lessor hereunder, an amount equal to the Residual Value Amount; or
(iii) subject to the conditions set forth in Section 3.02,
extend this Lease for up to two successive Renewal Terms.
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If the Lessee is unable to satisfy one or more of the conditions set forth
above, or fails to timely make an election as provided above, the Lessee shall
be deemed to have elected to proceed under Section 3.03(a)(i) hereof.
(b) Upon the Lessee's election to terminate this Lease
pursuant to and in compliance with Section 3.03(a)(ii), the Lessee shall use
reasonable efforts during the twelve-month period prior to the Expiration Date
("Remarketing Period") to obtain bids from unrelated third parties for the
Property. All bids received by the Lessee shall immediately be copied to the
Lessor and the Agent in writing, setting forth the amount of such bid and the
name and address of the person submitting such bid. The Lessor, the Agent, the
Certificate Holders and the B-Note Holders shall have the right, but not the
obligation, to seek bids for the Property during the Remarketing Period or at
any time thereafter. On the Expiration Date or at any time thereafter, the
Property shall be sold pursuant to the provisions of the Declaration (any such
sale, a "Qualified Sale"). The Lessee shall be entitled to receive from the
Lessor reasonable compensation for services rendered pursuant to this Section
3.03(b), in such amounts as may be agreed upon by the Lessor and the Lessee
prior to the commencement of the Remarketing Period.
Section 3.04 Property Sold. (a) The term of the Lease for any
Item of Property shall end on the date such Item of Property is sold, exchanged
or otherwise disposed of pursuant to Sections 5.02, 5.05 and 5.08(c), but there
shall be no abatement, reduction, adjustment or other change in Rent payable
pursuant to this Lease as a result of such sale, exchange or other disposal,
except as otherwise expressly provided in the Lease; provided, that with respect
to exchanges of Property made pursuant to Section 5.05, the term of the Lease
with respect to any Replacement Property (as defined below) shall commence on
the date the Item of Property which it replaces is exchanged.
(b) The term of this Lease for all of the Property shall end
on the date of any sale of all of the Property in accordance with, and subject
to the limitations set forth in, Section 5.04(d).
Section 3.05 Non-Terminability. (a) This Lease is a triple net
lease and, except as otherwise expressly provided in this Lease, any present or
future Law to the contrary notwithstanding, shall not terminate, nor shall the
Lessee be entitled to any abatement, reduction, set-off, counterclaim, defense
or deduction with respect to any Fixed Rent, Additional Rent or other sum
payable hereunder. Except as otherwise expressly provided in this Lease and
except to the extent due to the gross negligence or willful misconduct of the
Lessor, the obligations of the Lessee shall not be affected by reason of: (i)
any damage to or destruction of the Property or any part thereof by any cause
whatsoever
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(including by fire, Casualty or act of God or enemy or any other force majeure
event); (ii) any Condemnation, including a temporary Condemnation of the
Property or any part thereof; (iii) any prohibition, limitation, restriction or
prevention of the Lessee's use, occupancy or enjoyment of the Property or any
part thereof by any Person; (iv) any matter affecting title to the Property or
any part thereof; (v) any eviction of the Lessee from, or loss of possession by
the Lessee of, the Property or any part thereof, by reason of title paramount or
otherwise; (vi) any default by the Lessor hereunder or under any other Operative
Document or Securitization Document; (vii) the invalidity or unenforceability of
any provision hereof or in the other Operative Documents or Securitization
Documents or the impossibility or illegality of performance by the Lessor or the
Lessee or both; (viii) any action of any Federal, state or local governmental
authority; or (ix) any other cause or occurrence whatsoever, whether similar or
dissimilar to the foregoing. The parties intend that the obligations of the
Lessee hereunder shall continue unaffected unless such obligations shall have
been modified or terminated pursuant to an express provision of this Lease.
(b) The Lessee shall remain obligated under this Lease in
accordance with its terms and shall not take any action, unless otherwise
permitted by this Lease, to terminate, rescind or avoid this Lease,
notwithstanding any bankruptcy, insolvency, reorganization, liquidation,
dissolution or other proceeding affecting the Lessor or any action with respect
to this Lease which may be taken by any trustee, receiver or liquidator or by
any court. Except as expressly permitted in this Lease, the Lessee waives all
rights to terminate or surrender this Lease, or to any abatement or deferment of
Fixed Rent, Additional Rent or other sums payable hereunder or under the other
Operative Documents or the Securitization Documents. The Lessee shall remain
obligated under this Lease in accordance with its terms, and the Lessee hereby
waives any and all rights now or hereafter conferred by Law or otherwise to
modify or to avoid strict compliance with its obligations under this Lease. All
payments made to or for the benefit of the Lessor hereunder as required hereby
shall be final, and the Lessee shall not seek to recover any such payment or any
part thereof for any reason whatsoever, absent manifest error.
ARTICLE IV
RENT
Section 4.01 Fixed Rent. (a) During the Base Term and any
Renewal Term, the Lessee shall pay to the Agent, on behalf of the Lessor, Fixed
Rent on each Payment Date in the amounts determined in accordance with Schedule
1 hereto. The
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Lessee shall have no obligation to pay Fixed Rent during the Interim Term.
Section 4.02 Additional Rent. During the Term, the Lessee
shall pay to the Agent, on behalf of the Lessor, Additional Rent in the amounts
determined in accordance with (and at the times required under) the Operative
Documents and the Securitization Documents. The Lessor shall give the Lessee
notice of any Additional Rent due hereunder promptly after it has knowledge of
such Additional Rent, and shall use reasonable efforts to notify the Lessee in
advance of the due date and amount of such Additional Rent; provided that
failure to give such prompt notice shall not relieve the Lessee of its
obligation to pay such Additional Rent, subject to, as applicable, the Lessee's
rights, if any, under Section 6.01(b). Additional Rent shall be payable as
provided for in Schedule 1 hereto or as otherwise provided in this Lease, the
other Operative Documents and the Securitization Documents.
Section 4.03 Default Rate. During any period from and after
the date of the occurrence of an Event of Default until the earlier of (i) the
date such Event of Default has been waived or cured and (ii) the date all
amounts payable by the Lessee hereunder have been paid in full, the Lessee shall
pay to the Lessor, on demand, interest at the Default Rate on all amounts
payable by it hereunder.
Section 4.04 Rent Payments. All amounts payable by the Lessee
hereunder shall be paid in lawful money of the United States of America and in
immediately available funds by 11:00 a.m. (New York City time) on the applicable
Payment Date or on the date when due, unless any such due date is not a Business
Day, in which case payment shall be due and payable on the next succeeding
Business Day, at the Agent's address as set forth in Schedule I to the
Participation Agreement, or at such other address or to such other person in the
United States of America or in such other manner as the Lessor from time to time
may designate to the Lessee by written instructions.
Section 4.05 Other Payments. Except as otherwise provided in
this Lease or the other Operative Documents or the Securitization Documents, the
Lessee shall perform all of its obligations under this Lease at its sole cost
and expense and shall pay, when due and without notice or demand, all amounts
due hereunder or under the other Operative Documents (including amounts set
forth in Section 8.13 of the Participation Agreement) or the Securitization
Documents.
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ARTICLE V
SALES AND OTHER DISPOSITIONS OF PROPERTY
Section 5.01 Optional Purchase by Lessee of All Property. At
any time during the Term the Lessee may deliver to the Lessor and the Agent an
Offer to Purchase the Property in its entirety, at least 20 days in advance of
the Closing Date (as defined below), for an amount equal to the Termination
Value for the Property, upon and subject to the applicable terms of this Lease.
The Termination Value received by the Agent, on behalf of the Lessor, in
accordance with the provisions of this Section 5.01 and Section 5.04 shall be
applied to the payment of the Instruments in accordance with Sections 5.02(a)
and 6.01 of the Declaration and the other Operative Documents.
Section 5.02 Optional Purchase by Lessee of Items of Property.
(a) At any time during the Term, Lessee may deliver to the Lessor and the Agent,
an Offer to Purchase any Item of Property, at least 10 days in advance of the
Closing Date and at least 12 months prior to the Expiration Date (unless the
Lessee has given the notice referred to in Section 3.03(a)(i)), for an amount
equal to the Termination Value for the Item of Property identified in the Offer
to Purchase, upon and subject to the applicable terms of this Lease.
(b) The Lessee's right to deliver an Offer to Purchase
pursuant to Section 5.02(a) shall be subject to the satisfaction of the
following conditions (as determined by the Agent in its sole reasonable
discretion):
(i) No Default or Event of Default or Environmental
Trigger shall have occurred and be continuing.
(ii) The Item of Property identified in the Offer to
Purchase shall have been separately valued in an Appraisal and shall
have a minimum aggregate Termination Value of $5 million or any
integral multiple of $1 million in excess thereof.
(iii) After giving effect to the sale of the Item of
Property identified in the Offer to Purchase and any prior sales of
Property pursuant to this Section, any exchanges or substitutions of
Property pursuant to Section 5.05, any IRUs granted pursuant to Section
5.07 and any redeployment of Property pursuant to Section 5.08, on a
pro forma basis, the Property held by the Lessor shall have an
Appraised Value at least equal to the Appraised Value of the Property
held by the Lessor on the Completion Date.
(iv) The Agent and the Lessor shall have received a
certificate of a Responsible Officer of the Lessee,
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certifying as to the matters set forth in Section 5.02(b)(i), (ii) and
(iii).
(v) The Lessee shall have paid, or made arrangements
(satisfactory to the Lessor and the Agent, in their sole reasonable
discretion) to pay, any taxes, costs and expenses (including legal,
accounting and other professional fees and expenses) reasonably
incurred by the Lessor, the Agent and the Collateral Agent in
connection with such sale.
(c) The Termination Value received by the Agent on behalf of
the Lessor, in accordance with the provisions of this Section 5.02 and Section
5.04 shall be applied to the payment of the Instruments in accordance with
Section 5.10 of the Participation Agreement, Section 5.02(b) of the Declaration
and the other Operative Documents.
Section 5.03 Mandatory Purchase by the Lessee of all Property.
If any Termination Notice is issued pursuant to Sections 7.02 or 8.02 of this
Lease, the Lessee shall deliver (and shall be deemed to have delivered) to the
Lessor an Offer to Purchase the Property in its entirety for an amount equal to
the Termination Value for the Property, upon and subject to the applicable terms
of this Lease.
Section 5.04 Purchase Procedures. (a) The Lessee may assign to
any Person reasonably satisfactory to the Agent and the Lessor the right to
purchase property pursuant to Section 5.02. Notwithstanding any such assignment,
the Lessee shall remain liable to the Lessor for the prompt payment and
performance, as and when due, of all amounts payable (including the Termination
Value) and all obligations of the purchaser under this Lease, the other
Operative Documents and the Securitization Documents. No consent to any such
assignment, acceptance of payment from or performance by any assignee or other
action by or on behalf of the Lessor or the Agent shall release the Lessee of
any obligations under this Lease, the other Operative Documents or the
Securitization Documents, except upon full payment and performance as and when
due.
(b) Intentionally omitted.
(c) The Lessor shall be deemed to have accepted, on the date
of receipt, any Offer to Purchase the Property which materially satisfies the
conditions set forth in this Lease, including those set forth in Section 3.03
and this Article V, as applicable.
(d) The date of the closing of the Lessee's (or its
designee's) purchase of the Property or any Item of Property (the "Closing
Date") shall be (i) in the case of an Offer to Purchase made (or deemed made)
pursuant to Section 3.03(a)(i), the Expiration Date, or (ii) in the case of an
Offer to
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Purchase made (or deemed made) pursuant to Section 5.01 or 5.02, the next
scheduled Payment Date following the date of the Lessor's acceptance or deemed
acceptance of such Offer to Purchase, or (iii) in the case of an Offer to
Purchase made (or deemed made) pursuant to Section 5.03, the fifteenth day
following the date of Lessor's acceptance or deemed acceptance of such Offer to
Purchase (or if that day is not a Payment Date, the first scheduled Payment Date
following such fifteenth day), or (iv) if the Lessee shall pay the Termination
Value pursuant to Section 9.03 on the date of the Lessor's receipt of the
Termination Value.
(e) Intentionally omitted.
(f) On the Closing Date, the Lessee shall pay, or cause to be
paid, to the Agent (on behalf of the Lessor) the Termination Value, and the
Lessor shall simultaneously (i) deliver to the Lessee or its designee bills of
sale or other appropriate instruments of transfer reasonably necessary to assign
and convey to the Lessee or its designee the Property or Item of Property then
required to be assigned pursuant hereto without representation or warranty
(expressed or implied) of any kind except that the Property is free and clear of
Liens created by the Operative Documents and the Securitization Documents or
otherwise created by the Lessor (other than any Liens created by or through the
Lessee), and (ii) convey, or cause to be conveyed, to the Lessee or its designee
any Net Proceeds related to the Property and/or the right to receive the same.
Additionally, on the Closing Date, upon receipt of the Termination Value, the
Lessor and the Collateral Agent shall execute the releases and take the other
actions described in Section 8.21(b) of the Participation Agreement.
(g) Upon the completion of any purchase of the Property
pursuant to this Article V, but not prior thereto, this Lease shall terminate
except with respect to obligations and liabilities of the Lessee, actual or
contingent, which have arisen with respect to the Property or under the
Operative Documents or Securitization Documents on or prior to such date of
purchase, and except for indemnification and other obligations and liabilities
which by the terms of this Lease, the other Operative Documents or the
Securitization Documents survive termination of this Lease, the other Operative
Documents or the Securitization Documents.
(h) Notwithstanding any provisions of this Lease or the
Participation Agreement to the contrary, the Lessee shall not be required to
acquire title to the Property until such time that all necessary filings and
notifications under the HSR Act or any similar Law shall have been made
(including any filing or provision of required additional information or
documents) and the waiting period referred to in the HSR Act applicable to such
purchase shall have expired or been terminated (without any objection or
prohibition of such
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purchase). The Lessee hereby covenants to use its best efforts to secure the
prompt termination of such waiting period without objection or prohibition.
Notwithstanding the foregoing, if the Lessee is precluded from acquiring the
Property or any part thereof pursuant to the HSR Act or any similar Law, the
Lessee shall pay the Termination Value within the time and in the manner
described in this Article V as a consequence of the Lessee's exercise or deemed
exercise of its purchase option hereunder. However, if the Lessee pays the
Termination Value in compliance with the preceding sentence, then Lessee shall
be entitled to continue to lease the Property or any part thereof the Lessee is
precluded from acquiring for an additional rental payment of $1 per annum under
the terms and provisions of this Lease for an extended term expiring on the
earlier to occur of (i) one year from the date the Lessee delivers (or is deemed
to have delivered) the Offer to Purchase or (ii) the date that the Lessee is no
longer precluded from purchasing the Property pursuant to the HSR Act or any
similar Law. If Lessee (or its designee) does not purchase the Property prior to
the expiration of such extended term, then Lessor shall thereafter sell the
Property and distribute the proceeds from such sale in accordance with the
Interparty Agreement. If, prior to the voluntary exercise by the Lessee of the
purchase options hereunder, the Lessee is unable to obtain a ruling or an
unqualified legal opinion (in form and substance and from independent legal
counsel, in each case, reasonably satisfactory to the Agent) that a filing under
the HSR Act or any similar Law is not required in order to consummate such
purchase, then the Lessor shall execute such conditional sales contracts and
other documents necessary to permit the Lessee to complete such filing before
irrevocably exercising its purchase option. As a condition to executing such
conditional sales contracts and other documents, the Lessee shall deliver to the
Lessor an agreement obligating the Lessee to fully indemnify the Lessor from all
liabilities, damages, costs and expenses arising from the execution of such
documents and the completion of such filing.
Section 5.05 Exchanges and Substitutions of Items of Property.
At any time during the Term, Lessee may, upon not less than 30 days prior
written notice to the Agent and the Lessor, deliver to the Lessor replacement
Network Assets (the "Replacement Property") in exchange or substitution for any
Item of Property then held by the Lessor (the "Removed Property") subject to the
satisfaction of the following conditions (as determined by the Agent in its sole
reasonable discretion):
(i) No Default or Event of Default or Environmental
Trigger shall have occurred and be continuing.
(ii) The Removed Property shall have been separately valued
in an Appraisal.
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(iii) In the case of any Item of Property which has (a)
become obsolete, or (b) suffered a Casualty or Condemnation, or (c)
malfunctioned, the Replacement Property shall have a value, utility and
economic useful life at least equal to the original value, utility and
economic useful life of the Removed Property (as measured immediately
prior to such Item of Property becoming obsolete, suffering such
Casualty or Condemnation or malfunctioning).
(iv) Except for Replacement Property referred to in clause
(iii) above, the Replacement Property shall have a fair market value at
the time of the exchange or substitution at least equal to the
Termination Value for the Removed Property; provided, however, that
Replacement Property shall not consist of any Capacity Leases.
(v) After giving effect to the exchange or substitution
and any sales of Property pursuant to Section 5.02 and any prior
exchanges or substitutions of Property pursuant to Section 5.05, any
IRUs granted pursuant to Section 5.07 and any redeployment of Property
pursuant to Section 5.08, on a pro forma basis, the Property held by
the Lessor shall have an Appraised Value at least equal to the
Appraised Value of the Property held by the Lessor on the Completion
Date.
(vi) The Agent and the Lessor shall have received a
certificate of a Responsible Officer of the Lessee, certifying as to
the matters set forth in Section 5.05(i), (ii) and (iii).
(vii) The Lessee shall have paid, or made arrangements
(satisfactory to the Lessor and the Agent, in their sole reasonable
discretion) to pay, any taxes, costs and expenses (including legal,
accounting and other professional fees and expenses) reasonably
incurred by the Lessor, the Agent and the Collateral Agent in
connection with such redeployment.
(viii) On or prior to the date elected by the Lessee to
effect such substitution or exchange, a copy of a xxxx of sale or other
document transferring title in form and substance satisfactory to the
Agent and the Lessor, covering the replacement Item or Items of
Property, executed by the owner thereof in favor of the Lessor shall
have been duly authorized, executed and delivered and, if appropriate,
filed for recordation by the respective party or parties thereto and
shall be in full force and effect, and an executed counterpart of each
thereof shall be delivered to the Agent and the Lessor.
(ix) As soon as practicable, but no later than thirty (30)
days after the date elected by the Lessee to effect such substitution
or exchange, the following
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documents shall have been duly authorized, executed and delivered and,
if appropriate, filed for recordation by the respective party or
parties thereto and shall be in full force and effect, and an executed
counterpart of each thereof shall be delivered to the Agent and the
Lessor:
(1) a Certificate of Acceptance covering the
replacement Item or Items of Property, appropriately completed
and executed by the Lessee and Lessor;
(2) an Officer's Certificate from the Lessee
certifying that the replacement Item or Items of Property is
free and clear of all Liens other than Permitted Encumbrances;
(3) such mortgages, UCC financing statements and such
other filings covering the Item or Items of Property as are
deemed necessary or desirable by the Agent and Special
Counsel to establish and protect the security interests of
the Trustee, if any, the Agent and the Purchasers in respect
of the replacement Item or Items of Property; and
(4) such amendments and supplements of the Schedules
to this Lease covering the Item or Items of Property as are
deemed necessary or desirable by the Agent and Special
Counsel in respect of any Regulated Property or to establish
and protect the security interests of the Trustee, if any,
the Agent and the Purchasers in respect of the replacement
Item or Items of Property.
Section 5.06 Alterations; Removal. (a) At any time, so long as
no Default or Event of Default or Environmental Trigger shall have occurred and
be continuing, the Lessee may, at its sole cost and expense, make Alterations to
the Property or any part thereof; provided, however, that (i) the fair market
value of the Property shall not be lessened by such Alterations; (ii) such
Alterations shall not materially diminish the capacity, utility, efficiency, or
remaining useful life of the Property or any part thereof; and (iii) such work
shall be completed in a good and workmanlike manner free and clear of any Liens
for labor, services or materials (other than Permitted Encumbrances) and in
compliance with all applicable Legal Requirements and Insurance Requirements.
(b) Title to all Alterations shall vest in the Lessor (free
and clear of all Liens, except Permitted Encumbrances) subject to the right of
Lessee to remove such Alterations as provided hereunder. Upon any removal of the
Alterations permitted hereunder, the Lessor (at the sole cost and expense of the
Lessee) shall execute and deliver to the Lessee such instruments and releases as
are reasonably
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required to transfer the Alterations to the Lessee free and clear of Liens
created by the Operative Documents, the Securitization Documents or otherwise
created by the Lessor (other than any Liens created by or through the Lessee),
in each case, without representation or warranty (expressed or implied) of any
kind except that such Alterations are free and clear of any Lien created by the
Operative Documents, the Securitization Documents or otherwise created by the
Lessor (other than any Liens created by or through the Lessee).
(c) So long as no Default or Event of Default or Environmental
Trigger shall have occurred and be continuing, the Lessee shall be permitted at
any time during, or upon the expiration or termination of, the Term, and at its
sole cost and expense, to remove or demolish any Alterations in accordance with
prudent industry practices; provided, however, that, such removal shall not (i)
materially impair the intended use or materially reduce the fair market value of
the Property or any part thereof below its fair market value at the commencement
of the Term (less normal wear and tear); (ii) materially diminish the capacity,
efficiency, utility or remaining useful life of the Property or any part thereof
below the capacity, efficiency, utility or remaining useful life as of the
commencement of the Term; or (iii) cause a violation of any Legal Requirement or
Insurance Requirement or significantly increase any risk of liability under any
Environmental Law or any risk to human health or the environment. Any damage to
the Property or any part thereof caused by such removal shall promptly be
repaired by the Lessee and the Property (and each and every part thereof) shall
be restored to the condition (or the reasonable equivalent thereof) as it
existed immediately prior to the construction of such removed Alterations, at
the Lessee's sole cost and expense.
(d) In the event that the Lessee plans to incur expenses in
excess of $10 million for Alterations during any calendar year, then not less
than 30 days before the beginning of such calendar year, the Lessee shall
provide the Lessor and the Agent with a report of the Lessee's capital spending
plans for such calendar year for Alterations. Such report, if required, shall be
accompanied by a certification from the Lessee to the effect that all such
planned Alterations will comply with the standards set forth in Section 5.06(a).
Section 5.07 Subletting. (a) Except as provided in Section
5.07(b), the Lessee may not sublet the Property or any part thereof without the
prior written consent of the Lessor. Any sublease granted otherwise than as
expressly permitted by this Section 5.07 shall be null and void and of no force
or effect.
(b) The Lessor, at the request of the Lessee, may grant to any
Person an Approved IRU in respect of Cable Facilities and the related Cable,
Conduit and other Network
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Assets, as appropriate, provided that, after giving effect to such Approved IRU,
any prior Approved IRUs granted by the Lessee, and any sales, exchanges or
other dispositions of Network Assets pursuant to Sections 5.02, 5.05 or 5.08, at
least 10% (measured by Appraised Value) of the Network Assets constituting
Property are not subject to IRUs.
(c) An Approved IRU shall be treated hereunder, at the
Lessee's sole option, as (i) an optional purchase of an Item of Property subject
to the provisions of Section 5.02 or (ii) a redeployment of Property subject to
the provisions of Section 5.08(a)(ii).
(d) Except with respect to an Approved IRU, no IRU shall
modify or limit any right or power of the Lessor hereunder or affect or reduce
any obligation of the Lessee hereunder, and all such obligations of the Lessee
shall continue in full force and effect as obligations of a principal and not of
a guarantor or surety, as though no IRU had been granted.
(e) If the Lessee shall request, in connection with any
Approved IRU, that the Lessor execute an attornment and non-disturbance
agreement with respect to such Approved IRU, the Lessor shall consider each such
Approved IRU on a case-by-case basis and may consent to its execution and
delivery of an attornment and non-disturbance agreement.
Section 5.08 Redeployment of the Property. (a) At any time
during the Term, the Lessee may redeploy Network Assets, either by (i) removing
and relocating such Property from one location and/or use to another location
and/or use as provided in Section 5.08(b) or (ii) buying or arranging for the
sale of such Property for cash and for the reinvestment of the proceeds of such
sale in other Network Assets and/or Permissible Investments, as provided in
Section 5.08(c).
(b) The Lessee may, at its sole cost and expense, change the
location or use of any Item of Property at any time, subject to satisfaction of
the following conditions:
(i) No Default or Event of Default or Environmental
Trigger shall have occurred and be continuing.
(ii) The new use and/or location of the Item of Property
shall comply in all respects with Section 2.02.
(iii) The Lessee shall have given the Lessor and the Agent a
reasonably detailed written notice describing the Item of Property
affected and the new use and/or location of such Item of Property and
any other relevant information, (x) in the case of any Signal
Equipment, no more than three Business Days after such change in
location and/or use or (y) in the case of any other Item
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of Property not less than 30 days prior to such change in the location
and/or use of such Item of Property and neither the Lessor nor the
Agent shall have objected in writing to such change.
(iv) The new use and/or location shall not have a material
adverse effect on the value, capacity, efficiency, utility or remaining
useful life of either (1) the Item of Property affected or (2) the
Property, taken as a whole.
(v) The new use and/or location shall not adversely affect
in any way the ability to satisfy the Return Conditions.
(vi) The Lessee shall have taken (or in the case of any
change in the location and/or use of Signal Equipment, shall take
within thirty (30) days after the change in location and/or use) such
actions and executed, delivered, filed and recorded such documents
(including any amendments or supplements of Schedules to this Lease the
Agent or Special Counsel may consider necessary or appropriate) and
obtained such Consents (or in the case of any change in the location
and/or use of Signal Equipment, shall execute, deliver, file and record
such documents and obtain such Consents within ten days after the
change in location and/or use) as may be required to assure that the
Lessor, the Agent, the Collateral Agent and the Purchasers continue to
have the same rights and remedies in respect of the affected Item of
Property and the other Property, taken as a whole, after giving effect
to the new use and/or location of the Property (including rights of
access to and perfected, first-priority security interests in the
affected Item of Property and the other Property and appropriate
supplemental restrictions with respect to any Regulated Property).
(vii) The new use and/or location will not have a Material
Adverse Effect.
(viii) The Item of Property shall not be moved to a location
outside the United States without the prior written consent of the
Lessor.
(ix) The Lessee shall have delivered (or in the case of any
change in the location and/or use of Signal Equipment, shall deliver
within ten days after the change in location and/or use) to the Lessor
and the Agent a certificate of a Responsible Officer of the Lessee
certifying the matters set forth in clauses (i), (ii), (iv), (v), (vii)
and (viii).
(x) The Lessee shall have paid, or made arrangements
(satisfactory to the Lessor and the Agent, in their sole reasonable
discretion) to pay, any taxes,
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costs and expenses (including legal, accounting and other professional
fees and expenses) reasonably incurred by the Lessor, the Agent and the
Collateral Agent in connection with such redeployment.
In addition, the Lessee may, at its sole cost and expense, change the location
and/or use of any Item of Property without satisfying one or more of the
conditions set forth above provided that the aggregate Appraised Value of all
Items of Property the Lessee has elected to relocate or use differently without
satisfying all of the conditions set forth above does not at any time exceed in
the aggregate $50,000,000.
(c) The Lessee may, at its sole cost and expense, buy or
arrange for the sale of any Item of Property for cash and for the reinvestment
of the proceeds of such sale at any time, subject to satisfaction of the
following conditions:
(i) Any sale of an Item of Property shall be (1) subject
to satisfaction of the conditions set forth in Section 5.02(a) and (b),
(2) for a purchase price, paid solely in immediately available funds,
at least equal to the Termination Value of the Item of Property to be
sold and (3) conditioned on the execution and delivery by the Lessee to
the Proceeds Trustee (or any designee of the Proceeds Trustee) of
customary fee, escrow, custody, control, security, indemnity and other
agreements governing the acquisition, custody, and disposition of
Permissible Investments, consistent with the terms in this Section, as
the Proceeds Trustee (or any designee of the Proceeds Trustee) and the
Agent and the Collateral Agent may reasonably request.
(ii) Any amounts received from the sale of an Item of
Property shall be paid over to the Proceeds Trustee and applied to
purchase such Permissible Investments as the Lessee may from time to
time direct in a written notice to the Agent and the Proceeds Trustee.
(iii) Any Permissible Investments held by the Proceeds
Trustee shall be applied as follows:
(A) During the period commencing on the date of
receipt of proceeds from any sale of an Item of Property and
ending on the first to occur of (x) the 270th day thereafter
and (y) the date which is 360 days prior to the Expiration
Date, and (z) the date any Default or Event of Default or
Environmental Trigger occurs:
(1) All amounts representing interest,
dividends, distributions or yield on or in respect of
any Permissible Investments shall be paid over, on
the Business Day preceding any Payment Date, to the
Lessee or, if so directed
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in writing by the Lessee, either (x) paid over to the
Lessor for application to amounts due in respect of
Rent hereunder or (y) applied to the purchase of
Permissible Investments.
(2) All amounts representing principal
of Permissible Investments shall either be (x)
reinvested in other Permissible Investments or (y)
paid over to the Lessor to be applied to purchase
replacement Network Assets in accordance with Section
5.08(c)(iv) or to repayment of the Instruments, in
accordance with such written directions as may be
given to the Proceeds Trustee, signed jointly by the
Lessee and the Agent.
(B) Promptly after the date which is the first
to occur of (x) 270 days after receipt of proceeds from the
sale of any such Item of Property or (y) the date any Default
or Event of Default or Environmental Trigger occurs or (z) 360
days prior to the Expiration Date:
(1) All Permissible Investments held by
the Proceeds Trustee in respect of such sale shall be
redeemed, tendered for payment (or payment demanded,
as the case may be), sold or otherwise converted to
cash on such terms as the Proceeds Trustee, in its
sole discretion, considers appropriate. Except for
the obligations (x) to exercise reasonable care in
the custody of the Permissible Investments and other
property actually in the possession and control of
the Proceeds Trustee and (y) to account for and pay
over (net of any brokerage, sales or other costs,
commissions or discounts paid or incurred) any
proceeds actually received from any sale or other
disposition of Permissible Investments, the Proceeds
Trustee shall have no liability or obligation of any
kind in connection with any such sale or other
disposition of Permissible Investments, including in
respect of (a) the timing, method or manner of sale
or other disposition selected (even if another time,
method or manner of sale or other disposition may
have yielded greater net proceeds) or (b) the amount
of net proceeds realized on any such sale or other
disposition.
(2) Any proceeds from the sale or other
disposition of Permissible Investments (together with
all amounts representing interest, dividends,
distributions or yield on or in respect of any
Permissible Investments then held by the Proceeds
Trustee) shall be
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paid over to the Lessor, or upon the written
instructions of the Agent, to the Collateral Agent,
to be held as collateral security for or applied to
the payment of the Instruments, in accordance with
Section 5.09 of the Participation Agreement and the
other Operative Documents.
(iv) Any amount received by the Lessor pursuant to Section
5.08(c)(iii)(A)(2)(y) shall be applied to purchase Network Assets, in
accordance with such written instructions as may be given by the
Lessee, subject to satisfaction of the following conditions:
(A) No Default or Event of Default or
Environmental Trigger shall have occurred and be continuing.
(B) Each Item of Property to be purchased shall
comply in all respects with Section 2.02.
(C) The Lessee shall have given the Lessor and
the Agent a reasonably detailed written notice describing each
Item of Property to be purchased, the use and location of such
Item of Property, the vendor, the purchase price, the terms
and conditions for the purchase and any other relevant
information, not less than 30 days prior to proposed date for
the purchase of such Item of Property and neither the Lessor
nor Agent shall have objected in writing to such acquisition.
(D) The fair market value of each Item of
Property to be purchased shall not be less than the
Termination Value of any similar Item of Property sold,
exchanged or otherwise disposed of pursuant to this Lease
within the 270 day period referred to in this Section.
(E) Each Item of Property to be purchased and
the proposed use and/or location of such Item of Property
shall not have a material adverse effect on the value,
capacity, efficiency, utility or remaining useful life of the
Property, taken as a whole.
(F) The Lessee shall have taken such actions and
executed, delivered, filed and recorded such documents (except
as otherwise provided in clause (K) below) and obtained or
made such Consents as may be required to assure that the
Lessor, the Agent, the Collateral Agent and the Purchasers
continue to have the same rights and remedies in respect of
each Item of Property to be purchased and the other Property,
taken as a whole, as they have in respect
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of the Property held on the Completion Date, after giving
effect to the acquisition, use and location of the Item of
Property to be purchased (including title and rights of access
to each Item of Property to be purchased and the other
Property.
(G) The acquisition, use and location of each
Item of Property to be purchased will not have a Material
Adverse Effect.
(H) The Lessee shall have delivered to the
Lessor and the Agent a certificate of a Responsible Officer of
the Lessor certifying the matters set forth in clauses (A)
through (G).
(I) The Lessee shall have paid, or made
arrangements (satisfactory to the Lessor and the Agent, in
their sole reasonable discretion) to pay, any taxes, costs and
expenses (including legal, accounting and other professional
fees and expenses) reasonably incurred by the Lessor, the
Agent and the Collateral Agent in connection with such
purchase.
(J) On or prior to the date elected by the
Lessee to effect such purchase of Network Assets, a copy of a
xxxx of sale or other document transferring title in form and
substance satisfactory to the Agent and the Lessor, covering
the Item or Items of Property, executed by the owner thereof
in favor of the Lessor shall have been duly authorized,
executed and delivered and, if appropriate, filed for
recordation by the respective party or parties thereto and
shall be in full force and effect, and an executed counterpart
of each thereof shall be delivered to the Agent and the
Lessor.
(K) As soon as practicable, but no later than
thirty (30) days after the date elected by the Lessee to
effect such purchase of Network Assets, the following
documents shall have been duly authorized, executed and
delivered and, if appropriate, filed for recordation by the
respective party or parties thereto and shall be in full force
and effect, and an executed counterpart of each thereof shall
be delivered to the Agent and the Lessor:
(1) a Certificate of Acceptance covering the Item or
Items of Property, appropriately completed and
executed by the Lessee and Lessor;
(2) an Officer's Certificate from the Lessee
certifying that the replacement Item or Items
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of Property is free and clear of all Liens other than
Permitted Encumbrances;
(3) such mortgages, UCC financing statements and such
other filings covering the Item or Items of Property
as are deemed necessary or desirable by Special
Counsel to establish and protect the security
interests of the Trustee, if any, the Agent and the
Purchasers in respect of the replacement Item or
Items of Property; and
(4) such amendments and supplements of the Schedules
to this Lease covering the Item or Items of Property
as are deemed necessary or desirable by Special
Counsel in respect of any Regulated Property or to
establish and protect the security interests of the
Trustee, if any, the Agent and the Purchasers in
respect of the replacement Item or Items of Property.
Section 5.09 Effect of Disposition. Except as otherwise
expressly provided in Section 3.04 in respect of the expiration of the Term of
this Lease for Property sold and in Section 5.04 in respect of Rent and other
obligations for Property sold and except to the extent that the Instruments have
been prepaid or retired in accordance with Sections 5.01, 5.02 and
5.08(c)(iii)(B)(2), no sale, exchange, substitution, alteration, removal, IRU,
redeployment or other disposition of the Property or any Item of Property
referred to in this Article V shall cause any abatement, reduction, adjustment
or other change in the Rent payable pursuant to this Lease or any other
diminution in the payment or other obligations of the Lessor hereunder.
ARTICLE VI
CERTAIN COVENANTS OF THE LESSEE
Section 6.01 Taxes and Assessments. (a) The Lessee shall pay
or cause to be paid, subject to Section 6.01(b), all Property Charges before the
same become delinquent. If any Property Charge may legally be paid in
installments, such Property Charge may be so paid in installments; provided
that, the Lessee shall pay all such installments on or before the Expiration
Date or earlier termination of this Lease.
(b) So long as (w) no Termination Notice has been delivered,
(x) no Default, Event of Default or Environmental Trigger has occurred and is
continuing, (y) the Lessee shall not have notified the Lessor pursuant to
Section 3.03(a)(ii) that it is terminating this Lease and releasing all of its
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interest in the Property or (z) the Lessee shall not have otherwise surrendered
or be required to surrender the Property to the Lessor for any reason (including
pursuant to Section 10.01), the Lessee shall not be required, nor shall the
Lessor have the right, to pay, discharge or remove any Charges or to comply or
cause the Property or any part thereof to comply with any applicable Legal
Requirement or to pay any materialman's, laborer's or undischarged or unremoved
Lien, as long as the Lessee shall at its sole cost and expense contest, or cause
to be contested, diligently and in good faith, the existence, amount or validity
thereof by appropriate proceedings, which shall (i) in the case of an unpaid
Property Charge or undischarged or unremoved Lien, prevent the collection
thereof from the Lessor or against the Property or any part thereof, (ii)
prevent the sale, forfeiture or loss of the Property or any part thereof, and
(iii) in the case of a Legal Requirement, not subject the Lessor, the Agent, the
Collateral Agent, the Certificate Holders, or the Note Holders to the risk of
any criminal liability or civil penalties or fines for failure to comply
therewith. The Lessee shall give such assurances as may be reasonably demanded
by the Lessor to insure ultimate payment of such Charges or the discharge or
removal of any such materialman's, laborer's or mechanic's Lien or to insure
compliance with such Legal Requirement and to prevent any sale or forfeiture of
the Property, or any part thereof, or any interference with or deductions from
any Fixed Rent, Additional Rent or any other sum required to be paid by the
Lessee hereunder by reason of such non-payment, non-discharge, non-removal or
non-compliance.
(c) The Lessor shall cooperate with the Lessee in any contest
and shall allow the Lessee to conduct such contest (in the name of the Lessor,
if necessary) at the Lessee's sole cost and expense; provided that the Lessor
shall not be required to execute any documents which would materially adversely
affect the fair market value, use or operation of the Property (or any part
thereof) or be reasonably likely to subject the Lessor, the Agent, the
Collateral Agent, any Certificate Holder or any Note Holder to any liability or
result in the admission of liability, guilt or culpability on the part of such
Persons. The Lessee shall notify the Lessor of each such proceeding at least ten
days prior to the commencement thereof, which notice shall describe such
proceeding in reasonable detail.
(d) The Lessee shall, promptly after the final determination
(including appeals) of any contest brought by it pursuant to this Section 6.01,
pay and discharge all amounts which shall be determined to be payable therein
and shall be entitled to receive and retain for its own account all amounts
refunded and/or rebated as a result of any such contest and if the Lessor
receives any amount as a result of such contest to which it is not otherwise
entitled pursuant to this Lease, it shall promptly return such amount to the
Lessee.
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(e) Except as otherwise specifically provided in this Lease,
this Section 6.01 shall not apply in the case of Charges upon, or in respect of,
any Person other than the Lessor or in respect of the property or income of any
such Person.
Section 6.02 Compliance with Laws. The Lessee shall, at the
Lessee's sole cost and expense, comply, and cause the Property to comply, in all
material respects, with all Legal Requirements.
Section 6.03 Certain Agreements. The Lessee shall, and (unless
a Default, an Event of Default or an Environmental Trigger has occurred and is
continuing and the Lessor has revoked such authority) is hereby authorized by
the Lessor to, fully and promptly keep, observe, perform and satisfy, on behalf
of the Lessor, any and all obligations, conditions, covenants and restrictions
of or on the Lessor under the Declaration and any and all other material
contracts involving the Property or any part thereof so that there will be no
default thereunder and so that the other parties thereunder shall be and remain
at all times obliged to perform their obligations thereunder, and the Lessee, to
the extent within its control, shall not permit to exist any condition, event or
fact that could reasonably allow or serve as a basis or justification for any
such Person to avoid such performance.
Section 6.04 Liens. (a) The Lessee shall not create or permit
to be created or exist, and shall promptly remove and discharge, any Lien upon
this Lease, the Property or any other part thereof or interest therein, or upon
any Fixed Rent, Additional Rent or other sum paid hereunder, which Lien arises
for any reason, including any and all Liens which arise out of the ownership,
leasing, use, condition, occupancy, demolition, construction, possession, repair
or rebuilding of the Property or any part thereof or by reason of the failure to
pay dues, fees or assessments under the Declaration or by reason of labor or
materials furnished or claimed to have been furnished to the Lessee, but
excluding Liens created by the Operative Documents or the Securitization
Documents and any other Permitted Encumbrances. Lessee's obligation to remove
any of the above-described Liens arising prior to the termination of this Lease
(or arising due to circumstances occurring prior to the termination of this
Lease) shall survive the termination of this Lease. Nothing contained in this
Lease shall be considered as constituting the consent or request of the Lessor,
express or implied, to or for the performance by any contractor, laborer,
materialman or vendor of any labor or services or for the furnishing of any
materials for any construction, alteration, addition, repair or demolition of or
to the Property or any part thereof.
(b) NOTICE IS HEREBY GIVEN THAT THE LESSOR IS NOT AND SHALL
NOT BE LIABLE TO ANY PARTY FURNISHING LABOR,
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SERVICES OR MATERIALS TO THE LESSEE, OR TO ANYONE HOLDING OR POSSESSING THE
PROPERTY OR ANY PART THEREOF THROUGH OR UNDER THE LESSEE, AND THAT NO MECHANIC'S
OR OTHER SIMILAR STATUTORY LIENS FOR ANY LABOR, SERVICES OR MATERIALS SHALL
ATTACH TO OR AFFECT THE LESSOR'S INTEREST OR ESTATE IN THE PROPERTY OR ANY PART
THEREOF.
(c) The Lessor agrees that the Lessee during the Term shall
have the exclusive right (so long as no Default, Event of Default or
Environmental Trigger has occurred and is continuing) to secure any Consents and
Permits necessary or desirable for the demolition, development, use, operation,
maintenance or condition of the Property or any part thereof; provided that the
fair market value, marketability or use of the Property is not materially
lessened by any such action. The Lessor agrees to execute such documents and
take all other actions as shall be reasonably requested, and otherwise cooperate
with the Lessee, in connection with the matters described above; provided,
however, that all reasonable costs and expenses incurred by the Lessor in
connection therewith shall be borne by the Lessee and that the Lessor shall not
be required to execute any documents which would, in the reasonable opinion of
the Agent or Lessor, materially adversely affect the value, marketability or use
of the Property, create any Trust Liability or otherwise adversely affect the
transactions contemplated by the Operative Documents or Securitization Documents
or the interests of the Lessor, the Certificate Holders or the Note Holders.
Section 6.05 Insurance. (a) The Lessee will purchase and
maintain, or cause to be purchased and maintained, insurance with respect to the
Property of the following types and in the following amounts, and in no event in
amounts less than those maintained by the Lessee or its Affiliates for other
similar facilities owned and/or operated by them:
(i) All-Risk Property Insurance: All-risk property insurance
against physical damage to the Property with a maximum self-insured
retention or deductible allowable of (i) $250,000 per occurrence prior
to the Completion Date and (ii) $5 million per occurrence on and after
the Completion Date (or as otherwise reasonably agreed to by the
Majority Holders), in each case, caused by perils now or hereafter
embraced by or defined in a manuscript "all risks" insurance policy,
including at least such perils as customarily insured for similar
Property. Prior to the Completion Date, such all-risk property
insurance shall not contain any exclusions to coverage other than the
exclusions (or exclusions that are substantially the same as those) set
forth on Schedule 6.05(a)(i), unless otherwise reasonably agreed to by
the Majority Holders;
(ii) General Liability Insurance: Comprehensive general
liability (including contractual, completed
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operations and product liability), insurance against claims for bodily
injury (including death), personal injury and property damage occurring
in respect of the Property or resulting from activities related to the
Property, in the minimum combined single limit amount of $50 million in
the annual aggregate for bodily injury (or death) and/or property
damage with (i) first-dollar coverage, no deductible or self-insured
retention allowable prior to the Completion Date and (ii) a maximum
self-insured retention allowable of $5 million on and after the
Completion Date (or as otherwise reasonably agreed to by the Majority
Holders). Prior to the Completion Date, such comprehensive general
liability insurance shall not contain any exclusions to coverage other
than the exclusions (or exclusions that are substantially the same as
those) set forth on Schedule 6.05(a)(ii), unless otherwise reasonably
agreed to by the Majority Holders; and
(iii) Other Insurance: Such other insurance, including
automobile liability, in such amounts and against such risks, as is
either (x) customarily carried by companies owning, operating or
leasing property or conducting businesses similar and/or similarly
situated to the Property and/or the Lessee, or (y) reasonably requested
from time to time by the Lessor.
Such insurance shall be written by companies that are
nationally recognized (including Lloyd's of London or other recognized
international insurers with an ISI rating of not less than BBB); primary
insurance shall be written by companies rated at least A-IX in the most recent
edition of Best's Key Rating Guide, or an equivalent rating from a nationally
recognized rating agency or as otherwise agreed to by the Agent, the Lessor and
the Purchasers, selected by the Lessee and, other than the insurance specified
in Section 6.05(a)(i), shall name SSBTC (in its individual capacity and as
Trustee) and the Agent, on its own behalf and on behalf of the Holders from time
to time of the Instruments and their assignees, as additional insureds, as their
interests may appear.
(b) The insurance referred to in Section 6.05(a)(i) may be a
blanket policy and shall (i) at all times be in a per occurrence amount at least
equal to the single largest possible loss or damage to the Property; (ii) cover
the full cost to replace or repair any loss or damage to the Property; (iii)
name the Lessor as an additional insured prior to the Completion Date; (iv)
include a lenders' loss payable endorsement in favor of the Lessor and any loss
or damage under such insurance policies shall be payable to the Lessor to be
held and applied pursuant to the terms of this Lease; (v) provide that the
interests of the Lessor, the Agent and the Holders from time to time of the
Instruments shall be insured regardless of any breach or violation by the Lessee
of
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any warranties, declarations or conditions contained in such insurance; (vi)
provide that such insurance shall not be invalidated by any act, omission or
negligence of the Lessee, the Lessor, the Agent or the Holders from time to time
of the Instruments, nor by any proceedings or notices thereof relating to the
Property or Item thereof, nor by legal title to, or ownership of the Property or
any Item thereof becoming vested in or by Lessor or its agents, nor by use of
the Property or any part thereof for purposes more hazardous than permitted by
such policy; and (vii) provide that all insurance claims pertaining to the
Property or any part thereof shall be adjusted by the insurers thereunder with
the Lessee and the Lessor may at its option participate with the Lessee and
their insurers in any compromise, adjustment or settlement.
All policies of insurance required to be maintained pursuant
to Section 6.05(a)(ii) which cover liability for bodily injury or property
damage shall provide that all provisions of such insurance, except the limits of
liability (which shall be applicable to all insureds as a group) and liability
premiums (which shall be solely a liability of the Lessee), shall operate in the
same manner as if there were a separate policy covering each such insured and/or
additional insured, without right of contribution from any other insurance which
may be carried by an insured and/or additional insured.
Every policy required under Section 6.05(a) shall (i)
expressly provide that it will not be canceled or terminated except upon 60
days' written notice to the Lessor and the Lessee, except in the case of
cancellation or termination due to a lapse for non-payment, in which case only
10 days' written notice shall be required; (ii) include a waiver of all rights
of subrogation against the Lessor, the Agent and the Holders from time to time
of the Instruments and any recourse against the Lessor, the Agent or the Holders
from time to time of the Instruments for payment of any premiums or assessments
under any policy; and (iii) not contain a provision relieving the insurer
thereunder of liability for any loss by reason of the existence of other
policies of insurance covering the Property or any Item thereof against the
peril involved, whether collectible or not, if such other policies do not name
the Lessor, the Agent and the Holders from time to time of the Instruments as
additional insureds with loss payable as provided in the Lease. The Lessee shall
advise the Lessor promptly of any policy cancellation or any change adversely
affecting the coverage provided thereby.
(c) The Lessee shall deliver to the Lessor and the Agent the
certificates of insurance evidencing the existence of all insurance which is
required to be maintained by the Lessee hereunder including descriptions of the
previously mentioned Insurance Requirements, such delivery to be made (i) as
provided in Section 2.01(j), 2.02(i) and 4.01 of the Participation Agreement,
(ii) at least twenty-one (21) days
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prior to the issuance of any additional policies or amendments or supplements to
any of such insurance, and (iii) upon the expiration date of any such insurance.
The Lessee shall notify the Lessor and Agent of any nonrenewal of any policy
required hereunder and shall cause each insurer under each policy required
hereunder to give the Lessor notice of any lapse under any such policy. The
Lessee shall not obtain or carry separate insurance concurrent in form, or
contributing in the event of loss, with that required by this Section 6.05
unless the Lessor, the Agent and the Holders from time to time of the
Instruments are named as additional insureds therein, with loss payable as
provided in this Lease. The Lessee shall immediately notify the Lessor, the
Agent and the Holders from time to time of the Instruments whenever any such
separate insurance is obtained and shall deliver to the Lessor the certificates
of insurance and any other documentation (other than blanket policies) required
by the Lessor evidencing the same as is required hereunder.
(d) The insurance requirements of this Section 6.05
(collectively, the "Insurance Requirements") shall not be construed to negate or
modify the Lessee's obligations under Section 4.01 of the Participation
Agreement.
Section 6.06 Maintenance and Repair. (a) The Lessee, at its
own cost and expense, will manage and maintain the Property in good mechanical
condition and repair (ordinary wear and tear excepted), in accordance with
prudent industry practice and in a manner consistent with that of other similar
properties owned or operated by it or its Affiliates similarly situated, and
will take all action, and will make all changes and repairs, structural and
nonstructural, foreseen and unforeseen, ordinary and extraordinary, which may be
required to maintain the Property in good mechanical condition and repair
(ordinary wear and tear excepted), in accordance with prudent industry practice,
and in compliance with (1) all Legal Requirements and Insurance Requirements at
any time in effect, and (2) any required maintenance procedures of the
manufacturers of Property relating to maintenance and operation (if and so long
as there are any manufacturer's warranties applicable) necessary to preserve the
manufacturer's warranties, if any, on the Property. The Lessee shall, in
accordance with prudent industry practice, repair or replace each Item of
Property that shall have become worn out, damaged, inoperative or obsolete in
whole or in part; provided, however, that (i) the fair market value,
marketability or use of the Property shall not be materially lessened and (ii)
such replacements shall be of a type currently used in the industry for the same
purpose and having a remaining useful life at least as long as that of the Item
of Property (or any part thereof), as the case may be, repaired or replaced
(prior to obsolescence, loss or damage and the like). All repairs, replacements
and rebuilding by the Lessee hereunder, to the extent permitted by Law, shall
immediately become and shall remain part of the Property of
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the Lessor, subject to this Lease. The Lessor shall not be required to, and
Lessee hereby waives any right to require the Lessor to, manage, maintain,
replace, repair or rebuild the Property or any part thereof and the Lessee
waives any and all rights it may now or hereafter have to make any repairs at
the cost and expense of the Lessor pursuant to any Legal Requirement, Insurance
Requirement, or otherwise, at any time in effect.
(b) All appliances, parts, instruments, appurtenances,
accessories, furnishings and other Property of whatever nature, which may from
time to time be incorporated or installed in or attached to any Item of Property
("Parts") (except for a temporary replacement Part) at any time removed from the
Property shall remain the property of the Lessor and subject to this Lease, no
matter where located, until such time as such Parts shall be replaced by Parts
that have been incorporated or installed in or attached to such Property and
that meet the requirements specified in the preceding paragraph. Immediately
upon any replacement Part (except for a temporary replacement Part) becoming
incorporated or installed in or attached to any Item of Property as provided
herein, without further act, (i) ownership of the replaced Part shall thereupon
vest in the Lessee or its designee, free and clear of all rights of the Lessor
and shall no longer be deemed a Part hereunder; (ii) ownership of such
replacement Part shall thereupon vest in the Lessor (subject only to Permitted
Encumbrances); and (iii) such replacement Part shall become subject to this
Lease and be deemed part of the Property for all purposes hereof to the same
extent as the Parts originally incorporated or installed in or attached to the
Property.
(c) Except for Permitted Encumbrances, in the event that all
or any part of the Property shall encroach upon any adjoining or adjacent
property or right-of-way, or shall violate any rights-of-way, permits, licenses,
agreements or conditions affecting the Property or any part thereof, or shall
obstruct any easement or right-of-way to which the Property or any part thereof
may be subject, then the Lessee shall, at its sole cost and expense, either (i)
contest such matter pursuant to 6.01(b) hereof, (ii) obtain valid and effective
Permits for or Consents to such encroachments and/or violations (without any
liability to the Lessor, the Agent, the Certificate Holders or the Note Holders
for which such parties are not indemnified by the Lessee) or waivers or
settlements of all claims, liabilities and damages resulting therefrom, or (iii)
make such changes, including alteration or removal, to the Property (as the case
may be) and take such other action as shall be reasonably necessary to rectify
such encroachments, violations, hindrances, obstructions or impairments, subject
to the Lessor's consent if and to the extent required by Section 6.01(b).
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Section 6.07 Inspection Rights. (a) Subject to any
restrictions that may be contained in any Real Property Instruments, the Lessor
Group shall have the right (which may be delegated to its consultants and
authorized representatives), but not the obligation, to inspect the Property and
any part thereof and records related to the construction, operation and use of
the Property and to discuss such of the affairs, finances, and accounts as are
relevant to the Operative Documents or the Securitization Documents with the
officers of Lessee, in all cases, at reasonable times in compliance with and
subject to Lessee's reasonable security and safety procedures, in effect from
time to time. Any such inspection shall be made after 10 days advance written
notice to the Lessee; provided, however, that no advance written notice need be
given if any member of the Lessor Group, in its reasonable discretion, has
reason to believe that a Default, Event of Default or Environmental Trigger has
occurred or other exigent or emergency conditions exist; and provided further,
that all such inspections upon the occurrence and during the continuance of a
Default, an Event of Default or a Environmental Trigger shall be at the expense
of the Lessee.
(b) If a Default, an Event of Default, or an Environmental
Trigger has occurred and is continuing or if the Lessee has exercised its option
to terminate this Lease pursuant to Section 3.03(a)(ii), then the Lessee shall
give or cause to be given to the Lessor Group such additional access to the
Property and to the Lessee's books and records relating to the management,
operation, use, maintenance, renovation, construction or occupancy of the
Property as it may require for any purpose, including for marketing, selling,
operating or otherwise disposing of the Property.
Section 6.08 Assignments, Etc. Except as expressly provided in
Section 5.04(a) or except in the case of the Lessee's grant of an Approved IRU,
the Lessee shall not mortgage, pledge, assign or otherwise encumber its interest
in and to this Lease or in and to any IRU or the rentals payable thereunder
without the prior written consent of the Lessor. Any mortgage, pledge or
assignment of the Lessee's interest hereunder or under any such IRU granted,
otherwise than as expressly permitted by this Section 6.08, shall be null and
void and of no force or effect. A Change in Control of Lessee by merger,
consolidation or any other means, or any assignment by operation of law shall be
deemed an assignment requiring the Lessor's prior written consent.
Section 6.09 Location. Except as expressly permitted by
Section 5.08 or other provisions of this Lease, the Lessee shall not change the
location of any Item of Property without the prior written consent of the
Lessor.
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ARTICLE VII
CONDEMNATION AND CASUALTY
Section 7.01 Condemnation and Casualty. (a) The Lessee hereby
irrevocably assigns to the Lessor any award or compensation or insurance payment
or other proceeds to which the Lessee may become entitled by reason of its
interest in the Property or any part thereof (other than proceeds from business
interruption insurance) if prior to the Expiration Date (i) the Property or any
part thereof is damaged or destroyed by fire or other casualty (each, a
"Casualty") or (ii) the use, occupancy or title of the Property or any part
thereof is taken or requisitioned or sold in, or on account of any actual or
threatened condemnation or eminent domain proceedings, or other action by any
Person having the power of eminent domain or condemnation (each, a
"Condemnation").
(b) The Lessee shall promptly notify the Lessor in writing of
any such Casualty or Condemnation and shall appear in any proceeding or action
to defend, negotiate, prosecute or adjust any claim for any award or
compensation or insurance payment on account of any Casualty or Condemnation and
shall take all appropriate action in connection with any Casualty or
Condemnation. The Lessor shall have the right to appear and participate and to
employ counsel in any such proceeding or action, and the fees and expenses of
such counsel shall be paid by the Lessor. If the Lessee shall elect not to
appear or shall fail to prosecute diligently, the Lessor may assume the
prosecution thereof and the Lessee shall pay all of the reasonable costs and
expenses of the Lessor (including, but not limited to, fees and expenses of
Lessor's Special Counsel) and the fees and expenses of Special Counsel. No
settlement of any such proceeding or action shall be made by the Lessee or the
Lessor without the written consent of the other party hereto, which consent
shall not unreasonably be withheld, conditioned or delayed.
(c) Any and all amounts representing proceeds paid in
connection with any such Condemnation or Casualty, as the case may be
(collectively, the "Proceeds"), shall be paid over to the Proceeds Trustee to be
held in trust by such Proceeds Trustee and distributed pursuant to this Section
7.01(c) and Sections 7.03 and 7.04, as appropriate (all such Proceeds, less the
costs and expenses incurred by the Lessor and the Lessee in collecting such
amounts, but including any reimbursement by the Lessee for costs and expenses in
connection therewith to which the Lessor, the Certificate Holders and the Note
Holders are entitled pursuant to the Operative Documents or Securitization
Documents, are the "Net Proceeds"). Any and all Proceeds received by the Lessee
in connection with any such proceeding or action shall be paid over to the
Lessor, shall be segregated from other funds of the Lessor and shall be
forthwith paid over to the Proceeds Trustee. The Lessee agrees that this Lease
shall control the
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rights of the Lessor and the Lessee in any such Proceeds, and any present or
future Law to the contrary is hereby waived. Any and all reasonable charges,
fees and expenses of the Proceeds Trustee shall be paid from the Net Proceeds.
Section 7.02 Condemnation or Casualty with Termination. If a
Casualty or Condemnation occurs during the Term and the Lessor has received an
opinion, which shall be at the Lessee's sole cost and expense, of the
Independent Engineer to the effect that the restoration of the Property could
not be expected to restore and rebuild the Property to an economic unit of
substantially the same capacity, efficiency and useful life as existed prior to
such Casualty or Condemnation or such restoration and rebuilding could not be
expected to be completed in full prior to the Expiration Date, then the Lessor
or Lessee shall have the option, in their sole discretion, to deliver a
Termination Notice.
Section 7.03 Condemnation or Casualty Without Termination. If,
after a Casualty or Condemnation, neither the Lessor nor the Lessee has given a
Termination Notice in accordance with 7.02, then this Lease shall continue in
full force and effect, and the Lessee shall, at its sole cost and expense,
promptly commence and diligently pursue to completion the rebuilding,
replacement or repair of any damage to the Property, caused by such event in
conformity with the requirements of Section 6.06, as applicable, in order to
restore the Property, (in the case of a Condemnation, as nearly as practicable)
to the value and operating condition thereof immediately prior to such event
(but in no event to a value less than the aggregate Original Capitalized Cost of
the Property (determined in accordance with Section I-B of Schedule 1)). In
connection with such restoration the Lessee shall, before beginning such
restoration, submit plans and specifications for such restoration, together with
an estimate of the cost thereof, and all necessary construction contracts
therefor for the Lessor's and the Independent Engineer's approval, which will
not be unreasonably withheld, conditioned or delayed; provided that (i) the
Property can be restored to an economic unit of substantially the same character
and fair market value as existed immediately prior to such Casualty or
Condemnation and (ii) if the estimated cost to complete such restoration exceeds
the amount of Net Proceeds, the Lessor is, in its sole judgment, satisfied that
the Lessee shall have sufficient funds (the "Excess Funds") available to pay
such excess, which Excess Funds shall be deposited by the Lessee with the
Proceeds Trustee and distributed to the Lessee as hereinafter provided. If the
conditions set forth in the foregoing proviso are not satisfied, the Lessor may
deliver a Termination Notice.
(b) Such work shall be completed in a good and workmanlike
manner free and clear of all Liens for labor, services or materials (except
Permitted Encumbrances) and in compliance with all applicable Legal Requirements
and
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Insurance Requirements. Upon completion of such work, the Lessee shall cause the
Independent Engineer to deliver a certificate to the effect that final
completion of the work has occurred and that the operating condition of the
Property, after taking into consideration the restoration, is equivalent to, or
better than, the operating condition that existed immediately prior to the
Casualty or Condemnation assuming compliance with Section 6.06. All fees and
expenses of the Independent Engineer in connection with any rebuilding and
restoration shall be at the Lessee's sole cost and expense.
(c) The Lessee shall be entitled to receive payment from the
Net Proceeds or the Excess Funds, as the case may be, from time to time as such
work of rebuilding, replacement or repair progresses, but only after
presentation of certificates of the Independent Engineer, delivered by the
Lessee to the Proceeds Trustee (with a copy to the Lessor) from time to time as
such work of rebuilding, replacement or repair progresses. Each such certificate
of the Independent Engineer shall describe the work for which the Lessee is
requesting permission to pay or requesting payment and the cost incurred by the
Lessee in connection therewith and shall state that such work has been properly
completed and that the Lessee has not theretofore received payment for such
work, and shall be accompanied by an Officer's Certificate of the Lessee
certifying that no Default, Event of Default or Environmental Trigger has
occurred and is continuing and that the Net Proceeds and Excess Funds held by
the Proceeds Trustee are to the best of its knowledge adequate to complete such
rebuilding, replacement or repair in accordance with this Section 7.03(c). Upon
completion of and final payment for such work, the Lessee's Officer's
Certificate shall be accompanied by duly executed Lien waivers executed by each
materialman or mechanic furnishing materials or labor for which the Lessee
requested permission to pay or requested payment.
(d) The Proceeds Trustee shall deliver, or cause to be
delivered, payment within five (5) Business Days after its receipt of the
certificates required above. In connection with such payments, the Proceeds
Trustee shall first apply the Excess Funds to the cost of such restoration prior
to the disbursement of any Net Proceeds by the Proceeds Trustee for such
purpose. Upon receipt by the Proceeds Trustee (with a copy to the Lessor) of an
Officer's Certificate from the Lessee, to the effect that final payment has been
made for any such work and stating that the rebuilding, replacement or repair
has been completed in compliance with the terms and conditions of this Lease,
the remaining amount of such Net Proceeds shall be paid to the Lessee. The
Lessee shall be responsible for the cost of any such repair, rebuilding or
restoration in excess of such Net Proceeds and Excess Funds, for which cost the
Lessee shall make adequate provision acceptable to the Lessor.
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Section 7.04 Temporary Condemnation or Lease Termination.
Notwithstanding any provision to the contrary contained in this Article VII, in
the event of any temporary Condemnation, this Lease shall remain in full force
and effect, and provided no Default, Event of Default or Environmental Trigger
has occurred and is continuing, the Lessee shall be entitled to receive the Net
Proceeds allocable to such temporary Condemnation, except that if this Lease
shall expire or terminate during such temporary Condemnation, then the Lessee
shall be entitled to the Net Proceeds allocable to the period after the
termination or expiration of this Lease only if it has paid the Termination
Value for the Property.
ARTICLE VIII
ENVIRONMENTAL MATTERS
Section 8.01 Environmental Event. (a) The Lessee shall
promptly, but in any case within five Business Days, notify the Lessor and the
Agent if (i) any environmental event has occurred or any environmental condition
is discovered in, on, beneath, from or involving the Property or any part
thereof (including, but not limited to, the presence, emission or release of
Hazardous Materials or the violation of any applicable Environmental Law) for
which a remediation or reporting could reasonably be required or (ii) the Lessee
has received notification that it, the Lessor, the Property or any part thereof
is the subject of an Environmental Action that could reasonably be expected to
result in any ordered remediation or corrective action or other liability (each
of (i) and (ii) an "Environmental Event").
Section 8.02 Environmental Trigger Termination. Following the
receipt of a notice pursuant to Section 8.01(a), the Lessor, the Agent, or the
Majority Holders, each in their sole discretion, may require the Lessee to cause
the Environmental Consultant to conduct an environmental audit of the Property,
having a scope designed to evaluate the existence and anticipated impact of the
Environmental Event at issue, at the cost and expense of the Lessee, and to
provide a copy of the Environmental Consultant's report on its audit to the
Lessor, the Majority Holders and the Agent. If it is the opinion of the Agent
and the Environmental Consultant that an Environmental Event has occurred or
exists that would result in a material adverse effect on the use, value or
condition of the Property, (an "Environmental Trigger"), the Lessor, the Agent
or the Majority Holders shall have the option, each in its sole discretion, to
deliver or cause the Lessor to deliver, within thirty days after receipt of such
report, a Termination Notice.
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Section 8.03 Environmental Remediation. Irrespective of
whether an Environmental Trigger has occurred, the Lessee shall immediately
commence, or cause to be commenced, at its sole cost and expense, such actions
as may be necessary to comply in all material respects with all applicable
Environmental Laws and to alleviate any significant risk to human health or the
environment if the same arises from a condition on or in respect of the Property
or any part thereof, whether existing prior to, on or after the date of this
Lease. Once the Lessee commences such actions, the Lessee shall thereafter
diligently and expeditiously proceed to comply in a timely manner with all
Environmental Laws and to eliminate any significant risk to human health or the
environment and shall, at the request of the Lessor or the Agent, give periodic
progress reports on its compliance efforts and actions.
Section 8.04 Environmental Compliance. The Lessee shall, and
it shall require and ensure that any and all sublessees, employees, contractors,
subcontractors, agents, representatives, affiliates, consultants, occupants and
any and all other Persons, (i) comply with all applicable Environmental Laws,
and (ii) use, employ, process, emit, generate, store, handle, transport, dispose
of and/or arrange for the disposal of any and all Hazardous Materials in, on or,
directly or indirectly, related to or in connection with the Property or any
part thereof in a manner consistent with prudent industry practice and in
compliance with all applicable Environmental Laws, and in a manner which does
not pose a significant risk to human health, safety (including occupational
health and safety) or the environment. The Lessor and the Lessee hereby
acknowledge and agree that the Lessee's obligations hereunder with respect to
Hazardous Materials and Environmental Laws are intended to bind the Lessee with
respect to matters and conditions on, in, under, beneath, from, with respect to,
affecting, related to, in connection with, or involving the Property or any part
thereof.
ARTICLE IX
REMEDIES
Section 9.01 General Remedies. In accordance with the terms
and conditions contained in this Lease, the Lessor may take all steps to protect
and enforce the rights of the Lessor or obligations of the Lessee hereunder,
whether by action, suit or proceeding at Law or in equity (for the specific
performance of any covenant, condition or agreement contained in this Lease, or
in aid of the execution of any power herein granted or for any foreclosure, or
for the enforcement of any other appropriate legal or equitable
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remedy) or otherwise as the Lessor shall deem necessary or advisable.
Section 9.02 Default Remedies. (a) Subject to Section 9.02(i),
if an Event of Default shall have occurred and be continuing, including an Event
of Default arising from the breach of a covenant, condition or other provision
hereof, then upon five Business Days' prior written notice by the Lessor to the
Lessee, in addition to all other rights, remedies or recourses available, the
Lessor may either (A) terminate this Lease by issuing a Termination Notice or
(B) terminate the Lessee's right to possession of the Property or any part
thereof.
(b) If the Lessor should elect to terminate this Lease as
provided in clause (A) of Section 9.02(a), then this Lease and the estate hereby
granted shall expire and terminate at midnight on the fifth Business Day (or
such later date as may be specified therein) after the date of such notice, as
fully and completely and with the same effect as if such date was the date
herein fixed for the expiration of the Term and all rights of the Lessee shall
terminate, but the Lessee shall remain liable as hereinafter provided.
(c) Should the Lessor elect not to terminate this Lease,
this Lease shall continue in effect and the Lessor may enforce all the Lessor's
rights and remedies under this Lease including the right to recover the Fixed
and Additional Rent as each becomes due under this Lease. For the purposes
hereof, the following do not constitute a termination of this Lease:
(i) Acts of maintenance or preservation of the Property or
any part thereof or efforts to relet the Property or any part thereof,
including termination of any sublease of the Property to a third party
and removal of such subtenant from the Property;
(ii) The appointment of a receiver upon initiative of the
Lessor to protect the Lessor's interest under this Lease; and/or
(iii) The exercise of any rights under Section 11.02.
(d) If an Event of Default shall have occurred and be
continuing, upon five Business Days' notice, the Lessor shall have (i) the
right, whether or not this Lease shall have been terminated pursuant to Section
9.02(a), to re-enter and repossess the Property or any part thereof, as the
Lessor may elect, by summary proceedings, ejectment, any other legal action or
in any other lawful manner the Lessor determines to be necessary or desirable
and (ii) the right to remove all Persons and property therefrom. The Lessor
shall be under no liability by reason of any such re-entry, repossession or
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removal. No such re-entry or repossession of the Property or any part thereof
shall be construed as an election by the Lessor to terminate this Lease unless a
Termination Notice is given to the Lessee pursuant to Section 9.02(a)(A), or
unless such termination is decreed by a court or other governmental tribunal of
competent jurisdiction. Should the Lessor elect to re-enter the Property as
herein provided or should the Lessor take possession pursuant to legal
proceedings or pursuant to any notice provided for by Law or upon termination of
this Lease of the Lessee's right to possession of the Property or any part
thereof pursuant to Section 9.02(a) or otherwise as permitted by Law, the Lessee
shall peaceably quit and surrender the Property or any part thereof to the
Lessor. In any such event, neither the Lessee nor any Person claiming through or
under the Lessee, by virtue of any Law, shall be entitled to possession or to
remain in possession of the Property or any such part thereof, but shall
forthwith quit and surrender the Property to the Lessor.
(e) At any time or from time to time after the re-entry or
repossession of the Property or any part thereof pursuant to Section 9.02(d),
whether or not this Lease shall have been terminated pursuant to Section
9.02(a), the Lessor may (but shall be under no obligation to) relet the Property
or any part thereof, for the account of the Lessee, without notice to the
Lessee, for such term or terms and on such conditions and for such uses as the
Lessor, in its sole and absolute discretion, may determine. The Lessor may
collect and receive any rents or other proceeds payable by reason of such
reletting. The Lessor shall not be liable for any failure to relet the Property
or any part thereof or for any failure to collect any rent due upon any such
reletting.
(f) No termination of this Lease or of the Lessee's right to
possession of the Property or any part thereof pursuant to Section 9.02(a), or
by operation of Law, and no re-entry or repossession of the Property or any part
thereof pursuant to Section 9.02(d), and no reletting of the Property or any
part thereof pursuant to Section 9.02(e), shall relieve the Lessee of its
liabilities and obligations hereunder, all of which shall survive such
termination, re-entry, repossession or reletting.
(g) In the event of any termination of this Lease or of the
Lessee's right to possession of the Property or any part thereof by reason of
the occurrence of any Event of Default, the Lessee shall pay to the Lessor all
Fixed Rent, Additional Rent and other sums required to be paid to and including
the date of such termination of this Lease or of the Lessee's right to
possession; and thereafter, until the end of the Term, whether or not the
Property or any part thereof shall have been relet, the Lessee to the extent
permitted by applicable Law shall be liable to the Lessor for, and shall pay to
the Agent (on behalf of the Lessor), on the days on which such amounts would be
payable under this Lease in the
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absence of such termination, re-entry or repossession, as agreed current damages
and not as a penalty: all Fixed Rent, Additional Rent and other sums which would
be payable under this Lease by the Lessee, in the absence of such termination,
re-entry or repossession, and all costs (including attorneys' fees and expenses)
incurred by the Lessor hereunder (payable on demand) and all costs of any
environmental remediation pursuant to Section 8.03.
(h) To the extent permitted by Law, at such time after the
termination or expiration of this Lease if the Lessee shall have paid all
amounts required to be paid by it under this Lease, the other Operative
Documents and the Securitization Documents and the Lessee shall have discharged
any and all obligations to the Lessor, the Certificate Holders and the Note
Holders, then the Lessor shall pay and assign to the Lessee, when received, the
net proceeds, if any, of any reletting effected for the account of the Lessee
pursuant to Section 9.02(e), and any residual interest in the Property after
deducting from such proceeds all of the Lessor's expenses in connection with
such reletting (including, but not limited to, all repossession costs, brokerage
commissions, attorneys' fees and expenses, employees' expenses, alteration costs
and expenses of preparation for such reletting and all costs of any
environmental remediation pursuant to Section 8.03).
(i) The Company may, at any time prior to exercise of any
remedies by the Lessor hereunder, elect to cure any Default, Event of Default or
Environmental Trigger by purchasing the Property or Item of Property to the
extent that such purchase would cure (to the Agent's sole satisfaction) a
Default or Event of Default or Environmental Trigger and for an amount equal to
such Property's Termination Value.
Section 9.03 Lessee Default Repurchase Option. Notwithstanding
the foregoing, if an Event of Default shall have occurred, the Lessee may within
five (5) Business Days after the earliest of the Lessor's or Agent's notice of
such occurrence thereafter pay to the Agent, on behalf of the Lessor, an amount
equal to the Termination Value for all of the Property in which event the Lessor
shall be obligated to convey the Property to the Lessee in compliance with
Section 5.04.
Section 9.04 Payment on Default. The Lessor shall be entitled
to recover from the Lessee, and the Lessee will pay to the Agent (on behalf of
the Lessor) on demand, such amounts set forth below in lieu of all liquidated
damages in respect of Fixed Rent beyond the date of such demand (but in addition
to any claim for current damages in respect of Fixed Rent or Additional Rent and
any other amounts due and payable to the Lessor hereunder (prior to the date of
such demand)), at any time after termination of the Term of this Lease or
re-entry
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or repossession of the Property, in any case, by reason of the occurrence of:
(i) an Event of Default (other than an Event of Default
under Section 6.01(g) or 6.01(h) of the Participation Agreement or
claims brought by the Lessor relating to fraud, misapplication of
funds, illegal acts, or willful misconduct on the part of the Lessee)
prior to the Completion Date, an amount equal to the Residual Value
Amount, in which event the Lessee shall release all of its interest in
the Property;
(ii) an Event of Default under Section 6.01(g) or 6.01(h)
of the Participation Agreement, or claims brought by the Lessor
relating to fraud, misapplication of funds, illegal acts, or willful
misconduct on the part of the Lessee, an amount equal to the
Termination Value, in which event the Lessor shall be obligated to
convey the Property to the Lessee in compliance with Section 5.04;
(iii) an Event of Default (other than under Section
6.01(p) or 6.01(q)(i) of the Participation Agreement) on or after the
Completion Date, an amount equal to the Termination Value, in which
event the Lessor shall be obligated to convey the Property to the
Lessee in compliance with Section 5.04; or
(iv) an Event of Default under Section 6.01(p) or
6.01(q)(i) of the Participation Agreement, an amount equal to the
Residual Value Amount, in which event the Lessee shall release all of
its interest in the Property;
provided, however, that with respect to clauses (i) and (iv), the Company shall
not be obligated to pay an amount in excess of the Residual Value Amount
calculated to include all Rent and other amounts due and payable to the Lessor
as if such amounts had been paid by the Company prior thereto.
Section 9.05 Additional Rights. (a) No right or remedy
hereunder shall be exclusive of any other right or remedy, but shall be
cumulative and in addition to any other right or remedy hereunder or under the
other Operative Documents or Securitization Documents or now or hereafter
existing at Law or in equity and the exercise by the Lessor or the Collateral
Agent of any one or more of such rights, powers or remedies shall not preclude
the simultaneous exercise of any or all of such other rights, powers or
remedies. Failure to insist upon the strict performance of any provision hereof
or to exercise any option, right, power or remedy contained herein shall not
constitute a waiver or relinquishment thereof for the future. Receipt by the
Lessor (or by the Agent on behalf of the Lessor) of any Fixed Rent, Additional
Rent, Residual Value Amount, Termination Value or other sum payable hereunder or
under any other Operative Document or Securitization Documents with knowledge of
the breach by the
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Lessee of any provision hereof shall not constitute a waiver of such breach, and
no waiver by the Lessor of any provision hereof shall be deemed to have been
made unless made in writing. The Lessor shall be entitled to injunctive relief
in case of the violation or attempted or threatened violation of any of the
provisions hereof, a decree compelling performance of any of the provisions
hereof or any other remedy allowed to the Lessor at law or in equity.
(b) Except as otherwise provided in Section 9.03, the Lessee
hereby waives and surrenders for itself and all those claiming under it,
including creditors of all kinds, (i) any right and privilege which they may
have under any applicable Law or otherwise to redeem the Property or any part
thereof or to have a continuance of this Lease after termination of the Lessee's
right of occupancy by Law or by any legal process or writ, or under the terms of
this Lease, or after the termination of the Term of this Lease as herein
provided and (ii) the benefits of any Law which exempts property from liability
for debt or for distress for rent.
(c) If an Event of Default exists hereunder, the Lessee shall
pay to the Agent (on behalf of the Lessor) on demand all fees and out-of-pocket
expenses incurred by the Lessor in enforcing its rights under this Lease,
including attorneys' fees and expenses.
(d) The Lessee makes no representation or warranty concerning
the ability of the Lessor to reenter or repossess any portion of the Property
that may be located on Real Property to which access rights are restricted under
applicable Real Property Instruments.
ARTICLE X
SURRENDER
Section 10.01 Return of Property. (a) If upon the expiration
or termination of the Term or the termination of Lessee's possession of the
Property, Lessee or its designee has not purchased the Property as provided
hereunder, the Lessee shall surrender (i) all of the Property in the operating
condition, efficiency, utility and with the remaining useful life, it had upon
the commencement of the Term, acquisition or completion of construction, as the
case may be, except as repaired, rebuilt, renovated, altered, added to or built
as permitted or required hereby and except for ordinary wear and tear, and (ii)
the Alterations in good operating condition, in substantially the condition the
same were in when acquired, constructed or installed, except for ordinary wear
and tear. To the extent that the Property is not in compliance with the above
upon such expiration or termination (except as a consequence of a Casualty or
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Condemnation, as to which Article VII applies), the Lessee shall pay to the
Agent (on behalf of the Lessor) such additional amounts as are required to place
it in compliance therewith.
Section 10.02 No Liens. The Lessee shall also surrender the
Property to the Lessor free and clear of all Liens, easements, consents and
restrictive covenants and agreements affecting the Property other than Permitted
Encumbrances.
Section 10.03 Environmental Compliance. The Lessee shall also
surrender the Property in a condition such that it is in compliance with all
applicable Environmental Laws then enacted and all regulations then proposed at
the time of construction or "modification" (as such term is defined in 40 CFR
Section 51.165(a)(1)(v), Section 51.166(b)(2), Section 52.21(b)(2) and Section
60.14) of the Property by any governmental agency to the extent such regulations
contain retroactive requirements (irrespective of whether the deadline for such
compliance would otherwise expire after the end of the Term. Nothing contained
in this Section 10.01 shall relieve or discharge or in any way affect the
obligation of the Lessee to cure promptly pursuant to this Lease any violations
of Legal Requirements referred to in this Lease, or to pay and discharge any
Liens and Charges against the Property, subject, however, to the right of the
Lessee to contest the same pursuant to the provisions of Sections 12.09 and
6.01(b). Lessee shall cooperate, to the fullest extent permitted by Law, with
the Lessor, its subsequent lessees, operators or purchasers to effect the
transfer of all of Lessee's Consents and Permits for the Property to such
Persons.
Section 10.04 Removal of Other Property. The Lessee, at its
sole cost and expense, shall remove from the Property on or prior to such
expiration or termination, all property which is not owned by the Lessor and
shall repair any damage caused by such removal and shall restore the Property to
the condition and working order (or reasonable equivalent thereof) in which it
existed immediately prior to the installation or removal of such property,
except for ordinary wear and tear. Lessee shall indemnify and hold harmless the
Lessor, its successors and assigns against any loss, liability, cost, expense,
penalty or claim arising out of the Lessee's removal of such property from the
Property including any environmental liability arising therefrom. Any such
property of the Lessee not so removed shall become the property of the Lessor,
and the Lessor may cause such property to be removed and disposed of, and the
cost of any such removal and disposition of the Lessee's property and of
repairing any damage caused by such removal and of the restoration of the
Property to the condition and working order (or reasonable equivalent thereof)
in which it existed immediately prior to the installation or removal of such
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property, ordinary wear and tear excepted, shall be borne by the Lessee.
Section 10.05 Return Conditions. Upon the election of the
Lessee to terminate this Lease pursuant to Section 3.03(a)(ii), or upon other
termination of this Lease, provided that the Lessee or its designee does not
purchase the Property, the Lessee shall provide, or cause to be provided or
accomplished, at the sole cost and expense of the Lessee, to or for the benefit
of the Lessor and the holders of the Instruments, at least thirty (30) days but
not more than sixty (60) days prior to the Expiration Date or date of such other
termination of this Lease each of the following (collectively, the "Return
Conditions"):
(i) To the extent that the Property includes Real
Property, receipt by the Agent of an environmental audit, performed by
environmental consultants selected by the Lessor, satisfactory in scope
and content to the Agent, the Lessor, the Collateral Agent, each
Certificate Holder and each B-Note Holder, in each case, in their
reasonable discretion to the effect that (A) such Property is in
compliance with all applicable Environmental Laws, (B) such Property is
free from all Hazardous Materials, the presence of which could have a
Material Adverse Effect on the Property and (C) there is no pending or
threatened litigation, investigation or other legal proceeding that
could result in any liability to any B-Note Holder, Certificate Holder,
the Agent or the Lessor.
(ii) Receipt by the Agent of a report of the Appraiser
and/or the Independent Engineer, satisfactory in scope and content to
the Lessor, the Agent, the Certificate Holders and the B-Note Holders,
in each case, in their reasonable discretion, to the effect that (A)
the Projects have been constructed and maintained in accordance with
the terms and conditions of this Lease and the other Operative
Documents and the requirements of all Legal Requirements, Permits,
Consents and prudent industry standards; (B) all mechanical,
electrical, security, plumbing, fire safety, telecommunications,
structural and other systems in or constituting part of the Projects
are operating properly in accordance with standards and specifications
for such systems not less than those in effect on the commencement of
the Term, (and such other standards and specifications as may be
required by applicable Legal Requirements); and (C) no Condemnation or
Casualty or Environmental Trigger has occurred which has not been
remedied in accordance with the terms of the Operative Documents.
(iii) Receipt by the Agent of evidence satisfactory to the
Agent, the Lessor, the Certificate Holders and the B-Note Holders, in
each case, in their sole discretion, that the Lessee is, and (as of the
Expiration Date or
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date of such other termination of the Lease) will be, in full
compliance with the Services Agreement and has made arrangements
satisfactory to the Agent for the provision of services required
thereunder for the term thereof.
(iv) Receipt by the Agent of evidence satisfactory to the
Agent, the Lessor, the Certificate Holders and the B-Note Holders, in
each case, in their sole discretion, that the Lessor has a
first-priority, perfected security interest in all Network Assets held
by other Persons which are related to any IRU constituting a part of
the Property.
(v) If directed to do so by the Lessor, the Lessee (at its
sole cost and expense) shall execute and deliver any and all further
instruments, agreements and documents as may, in the reasonable opinion
of the Lessor, be necessary to confirm the termination and expiration
of this Lease and to acknowledge that the Lessee, from the date of
termination and expiration, ceases to have any interest in the Property
under this Lease and to confirm the Lessor's interest in the Property.
(vi) Receipt by the Agent of a report of an independent
appraiser and/or engineer chosen by the Lessor and satisfactory in
scope and content to the Lessor, the Agent, the B-Note Holders and the
Certificate Holders, in each case, in their sole discretion, to the
effect that the fair market value of any Property received in any
exchange, substitution, redeployment or similar transaction
contemplated by this Lease is at least equal to the fair market value
of any Property surrendered in such exchange, substitution,
redeployment or similar transaction contemplated by this Lease.
(vii) Receipt by the Lessor of the following, each in form and
substance satisfactory to the Lessor, the Agent, the B-Note Holders and
the Certificate Holders, in each case, in their sole discretion:
(A) a complete survey and title report with respect to any
Real Property in scope and content reasonably satisfactory to
the Agent, the B-Note Holders and the Certificate Holders and
in accordance with United States telecommunications industry
standards, together with all available information pertaining
to (i) ownership or right to use any specified right-of-way or
easement or other portion of Real Property, (ii) existing
agreements respecting any right-of-way or easement (including
utility crossings) or other use of any portion of the Real
Property and (iii) restrictions on the right to use or to
occupy any right-of-way or easement or other portion of the
Real Property for the purposes intended by the Operative
Documents;
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(B) conveyancing, assignment, transfer, and other documents
(including any required Consents or Permits) that are
sufficient to convey or assign to the Lessor (or its designee)
on the Expiration Date either (i) a non-exclusive license to
occupy and use any Real Property, including any easements,
rights-of-way, licenses, Permits or allowances and other
rights of use, (without regard to whether any such right is
based on historical use or direct grant of authority from the
property owner or applicable Governmental Authority) used by
the Lessee in connection with the operation of the Property,
to the same extent and in the same manner used by the Lessee
during the Term or (ii) a direct grant of authority or right
from the property owner or applicable Governmental Authority
to occupy and use any Real Property used by the Lessee in
connection with the operation of the Property, to the same
extent and in the same manner used by the Lessee during the
Term, together with amounts sufficient to pay any recording,
filing, transfer, documentary stamp or other transfer tax;
(C) a complete and current inventory of all Signal Equipment,
Racks, uninstalled Cable and other equipment constituting
Items of Property (including any Property acquired in exchange
or substitution for or redeployment or replacement thereof);
(D) detailed as-built maps (allignment sheets) showing the
location of all Cable, Conduit and Cable Facilities, including
Global Positioning System coordinates for (i) all Cable
Facilities and POPs, and (ii) all Cable at intervals of not
less than two miles and a detailed description of the identity
and location of any other easements, rights-of-way,
restrictions or other users of a specified portion or any Real
Property;
(E) as-built drawings, technical specifications and other
engineering data for all Cable Facilities, Racks and POPs;
(F) recent test reports covering the matters set forth in
Exhibit B and such other matters as the Agent, the Lessor or
any Holder of Notes or Certificates may request, each in their
sole discretion;
(G) true and complete original copies of all contracts, IRUs,
books and records, Permits, Consents, licenses, manuals,
drawings, blueprints, maps, surveys, specifications,
warranties by manufacturers, vendors or others, intellectual
property rights, Real Property Instruments and other
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documents relevant to the ownership, use and operation of the
Property.
(viii) Receipt by the Agent of evidence satisfactory to the
Lessor, the Agent, the B-Note Holders and Certificate Holders, in each
case, in their sole discretion, that:
(A) the Services Agreement is in full force and effect and
Xxxxxxxx and its Subsidiaries are capable of discharging, in a
timely and complete manner, all of their respective
obligations thereunder; and
(B) the Lessor otherwise has title to, or other rights in
respect of, in each case, satisfactory to the Lessor, the
Agent, the B-Note Holders and Certificate Holders, in each
case, in their sole discretion, all of the Property and other
assets or rights as may be necessary or appropriate either (1)
to operate the Property or (2) to sell, lease, exchange,
assign, grant rights to use, encumber or otherwise dispose of
all (as an operating business) or any portion of the Property,
in each case in conformity with all Legal Requirements,
applicable Insurance Requirements, Consents, Permits and
contractual commitments binding on the Property, including any
licenses (including any required license from the Federal
Communications Commission or other Governmental Authority),
easements, rights-of-way, and intellectual property rights.
(ix) Receipt of evidence satisfactory to the Lessor, the
Agent, the B-Note Holders and Certificate Holders, in each case, in
their sole discretion, that:
(A) all rights and obligations of the Lessor under the
Facility Agreements, other than the Surviving Facility
Agreements (as hereinafter defined) have been terminated
without cost, expense, recourse or other liability of any kind
to the Lessor, the Agent, or the Purchasers;
(B) the Surviving Facility Agreements and all other agreements
and arrangements contemplated thereby are in place, executed
by the parties thereto and are valid, enforceable and in full
force and effect (both before and immediately after the
Expiration Date);
(C) the Surviving Facility Agreements and such agreements and
arrangements adequately provide for the services and other
rights contemplated thereby; (iv) no default exists under any
of the Surviving Facility Agreements; and
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(D) none of the Surviving Facility Agreements have been
modified or amended or waived in violation of the provisions
of the Operative Documents. The "Surviving Facility
Agreements" means (x) the Services Agreement and (y) those
Facility Agreements that Lessor, the Agent and each Holder of
the B-Notes and Certificates selects (in their sole
discretion) to survive the Expiration Date.
(x) Receipt by the Agent of evidence satisfactory to the
Lessor, the Agent, the B-Note Holders and Certificate Holders, in each
case, in their sole discretion, that all outstanding obligations and
Charges relating to the Property (other than the B-Notes and the
Certificates) have been paid and discharged in full (including all such
outstanding obligations and Charges arising as a consequence of
satisfaction of the other Return Conditions under this Section).
(xi) Receipt by the Agent of an agreement (the "Return
Indemnity Agreement") executed by Xxxxxxxx and satisfactory in form and
substance to the Lessor, the Agent, the B-Note Holders and Certificate
Holders, in each case, in their sole discretion, pursuant to which
Xxxxxxxx (i) represents, warrants and covenants that the Return
Conditions have been satisfied and will remain satisfied through and
immediately after the Expiration Date and (ii) agrees to indemnify and
hold harmless the Lessor, the Agent and the Holders of the B-Notes and
the Certificates against any loss, cost, expense, (including fees and
expenses of legal counsel, accountants and other professionals), tax,
penalty or other liability of any kind incurred as a consequence of the
falsity or breach of the representations, warranties and covenants of
Xxxxxxxx described in clause (i) above. The rights of Lessor under the
Return Indemnity Agreement will be assignable to any purchaser of all
or any part of the Property (or any other successor or assignee of
Lessor).
(xii) Receipt of evidence satisfactory to the Lessor, the
Agent, the B-Note Holders and Certificate Holders, in each case, in
their sole discretion, that the Lessor will not be subject to
regulation by any Federal or state Governmental Authority as a common
carrier, public utility, intra or interstate telecommunications
provider, carrier or otherwise.
(xiii) Such other documents, instruments, legal opinions,
surveys, and other evidence establishing to the satisfaction of the
Lessor, the Agent, the B-Note Holders and Certificate Holders, in each
case, in their sole discretion, that (i) Lessor has all property,
services, permits, assets and rights necessary, to own, operate and
maintain the Property from and after the termination or expiration of
this Lease, (ii) no Default, Event of
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Default or Environmental Trigger then exists and (iii) the other Return
Conditions have been satisfied.
(xiv) If directed to do so by the Lessor, the Lessee (at its
expense) shall:
(A) Use its reasonable best efforts, available resources and
contacts with Governmental Authorities, owners of Real
Property and others, in a manner consistent with applicable
Laws, to assist the Trustee in obtaining any required
easements, rights-of-way, licenses, Consents, Permits or other
rights necessary to own, use, sell, operate or otherwise deal
with the Property.
(B) Pack and ship any or all Equipment to such location or
locations within the forty-eight contiguous United States as
the Lessor may direct.
(xv) Receipt by the Lessor in form and substance satisfactory
to the Lessor, the Agent, the B-Note Holders and the Certificate
Holders, in each case, in their sole discretion, of conveyancing,
assignment, transfer, and other documents (including any required
Consents or Permits) that are sufficient to convey to the Lessor (or
its designee) on the Expiration Date title to not less than two Lit
Fibers (including all Network Assets related thereto) that (A)
constitute a communications network and provide continuous end-to-end
and point-to-point signal transmission capacity, (B) have an aggregate
appraised value at least equal to the Appraised Value of the Projects
(utilizing substantially similar appraisal methodologies and
assumptions as used to appraise the Projects) and (C) are conveyed free
of any IRUs or Capacity Leases.
Section 10.06 Survival. The obligations of the Lessee under
this Article X shall survive the expiration or any termination of the Term of
this Lease (whether by operation of Law or otherwise) for all matters described
in this Section which occur or arise prior to such expiration or termination or
arise out of or result from facts, events, claims, liabilities, actions or
conditions occurring, arising or existing on or before such expiration or
termination.
ARTICLE XI
SECURITY
Section 11.01 Characterization. The Lessor and the Lessee
intend that the Lessee shall treat this Lease, for accounting purposes, as an
operating lease. Notwithstanding the intent of the parties, if a court of
competent
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jurisdiction determines that the transaction represented by this Lease, the
other Operative Documents and the Securitization Documents will not be treated
as an operating lease but will be treated as a financing transaction, then the
parties hereto intend that (i) this Lease be treated as a mortgage and security
agreement encumbering the Property given by the Lessee to the Lessor in a
principal amount equal to the cost of acquisition and construction of the
Property plus any other amounts owing to the Lessor, the Agent, the Collateral
Agent, the Note Holders or the Certificate Holders (collectively, the "Secured
Party") under the Operative Documents and the Securitization Documents including
Fixed Rent, Additional Rent and the Termination Value (collectively, the
"Loan"), (ii) all payments of Fixed Rent, Additional Rent and the Termination
Value be treated as payments of principal, interest and other amounts owing with
respect to such Loan, respectively, (iii) the Lessee be treated as entitled to
all benefits of ownership of the Property or any part thereof, and (iv) this
Lease be treated as (x) a mortgage that has, in respect of the Property located
in any state (the "Relevant State"), the terms set forth in Section 11.02 and
(y) a security agreement that has the terms set forth in Section 11.03.
Section 11.02 Mortgage. (a) The Lessee, as mortgagor, hereby
has mortgaged, given, granted, bargained, sold, aliened, enfeoffed, conveyed,
confirmed and assigned and by these presents does hereby forever, mortgage,
give, grant, bargain, sell, alien, enfeoff, convey, confirm and assign unto the
Lessor, as mortgagee, or any successor thereto, for the benefit of the Secured
Party, a continuing lien upon and a security interest in and to all of the
Lessee's right, title and interest in and to the following property rights and
interests:
(i) all of the Property;
(ii) all of the estate, right, title, claim or demand of
any nature whatsoever of the Lessee, either in law or in equity, in
possession or expectancy, in and to the Property or any part thereof;
(iii) all machinery, apparatus, equipment, Parts, fittings,
fixtures and other property of every kind and nature whatsoever and all
additions thereto and renewals and replacements thereof, and all
substitutions therefor now owned or hereafter acquired by the Lessee,
or in which the Lessee has or shall have an interest, now or hereafter
located upon or in, or attached to, any portion of the Property, or
constituting a portion of the Property, or appurtenances thereto, and
the right, title and interest of the Lessee in and to any of the
foregoing which may be subject to any security agreements (as defined
in the Uniform Commercial Code of the State of New York);
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(iv) all awards or payments, including interest thereon,
and the right to receive the same, which may be made with respect to
the Property, whether from the exercise of the right of eminent domain
(including any transfer made in lieu of the exercise of said right), or
for any other injury to or decrease in the value of the Property;
(v) subject to Section 11.02(d), all leases, IRUs and
other agreements affecting the use or occupancy of the Property now or
hereafter entered into and all guaranties of any of the foregoing and
the right to receive and apply the rents, issues and profits of the
Property to the payment of the Loan;
(vi) subject to Section 11.02(d), all right, title and
interest of the Lessee in and to (x) all contracts from time to time
executed by the Lessee or any manager or agent on its behalf relating
to the ownership, demolition, construction, maintenance, repair,
operation, occupancy, sale or financing of the Property or any part
thereof and all agreements relating to the purchase or lease of any
portion of the Property or any property or rights relating to property
which is adjacent or peripheral to the Property (including development
rights and air rights), together with the right to exercise such
options and all leases of Equipment, (y) all consents, licenses,
building permits, certificates of occupancy and other governmental
approvals relating to construction, completion, occupancy, use or
operation of the Property or any part thereof, and (z) all drawings,
plans, specifications and similar or related items relating to the
Property;
(vii) all proceeds, both cash and non-cash, of the
foregoing;
(viii) all proceeds of and any unearned premiums on any
insurance policies covering the Property, including the right to
receive and apply the proceeds of any insurance, judgments, or
settlements made in lieu thereof, for damage to the Property; and
(ix) the right, in the name and on behalf of the Lessee, to
appear in and defend any action or proceeding brought with respect to
the Property and to commence any action or proceeding to protect the
interest of the Lessee in the Property.
To have and to hold the above granted and described Mortgaged Property unto and
to the proper use and benefit of the Lessor, and the successors and assigns of
the Lessor, forever.
(b) The Lessee, as mortgagor, hereby confirms that, with
respect to any Property located within a Relevant State,
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the Lessor, as mortgagee, shall have, in addition to all other rights and
remedies provided in this Lease, or any other Operative Document or any
Securitization Documents, all of the rights and remedies with respect to such
Property as are provided:
(i) under the laws of the Relevant State governing
mortgages or deeds of trust; and
(ii) in any mortgage, deed of trust or similar document that
may be filed or recorded in any appropriate filing office in the
Relevant State in connection with the Property and the granting of the
security interest under the Lease; and
(iii) in the supplemental mortgage provisions for the Relevant
State, if any, annexed as Schedule 11.02(b) of this Lease.
(c) Notwithstanding any contrary provision in this Lease, the
amount of the Loan secured by any Property located within a Relevant State, and
the maximum amount that may be applied to pay the Loan from proceeds of any
foreclosure and sale of any Property located within a Relevant State, shall be
subject to the limitations in the supplemental mortgage provisions for the
Relevant State, if any, annexed as Schedule 2 of this Lease.
(d) This Section 11.02 shall not constitute an agreement to
assign, mortgage or otherwise encumber any agreement, contract, license or
interest relating to Real Property if such assignment, mortgage or other
encumbrance, without the Consent of the other party thereto, would constitute a
breach thereof, or would in any material way adversely affect the rights of the
Lessee thereunder; provided, however, that if any such Consent shall not be
obtained or any assignment, mortgage or other encumbrance would be ineffective,
or would impair the Lessee's rights thereunder so that the Lessor would not, in
effect, acquire the benefit of all such material rights, then the Lessee shall
use its best efforts to:
(i) provide to the Lessor the benefits of any such agreement,
contract, license, or interest therein;
(ii) cooperate in any reasonable and lawful arrangement
designed to provide such benefits to the Lessor; and
(iii) enforce, for the account of the Lessor, any rights of
the Lessee thereunder,
it being understood that, except upon return of the Property to the Lessor
pursuant to Section 3.03(a)(ii) or upon other termination of this Lease,
provided that the Lessee or its
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designee does not purchase the Property, such cooperation will not include any
requirement or obligation to pay any consideration, offer or grant any financial
accommodation or other benefit or release any claim or right in the absence of a
Default, Event of Default or Environmental Trigger.
(e) From the date hereof, if the Lessee enters into any new
Real Property Instrument or amends or otherwise modifies any existing Real
Property Instrument, in each case, with respect to a POP, then the Lessee shall
use its best efforts to cause such Real Property Instruments to permit an
assignment of such Real Property Instrument in favor of the Lessor and its
assigns.
Section 11.03 Security Agreement. (a) As security for the
Loan, the Lessee, as debtor, hereby grants to the Lessor, as secured party, for
the benefit of the Secured Party, a security interest in all of the Lessee's
right, title and interest in and to all personal property and all other rights
and interests, whether tangible or intangible in nature, comprising the
Property, whether now owned or hereafter acquired and all cash and non-cash
proceeds (including insurance proceeds) and products thereof (the "Collateral").
(b) If the Lessee shall default hereunder, the Lessor, in
addition to any other rights and remedies which it may have, shall have and may
exercise immediately and without demand, any and all rights and remedies granted
to a secured party upon default under the Uniform Commercial Code as in effect
at such time in New York, including, the right to take possession of the
Collateral or any part thereof, and to take such other measures as the Lessor
may deem necessary for the care, protection and preservation of the Collateral
and to sell, exchange, lease or otherwise realize on or dispose of the
Collateral. Any notice of sale, disposition or other intended action by the
Lessor with respect to the Collateral sent to the Lessee in accordance with the
provisions hereof at least seven days prior to the date of any such sale,
disposition or other action, shall constitute reasonable notice to the Lessee,
and the method of sale or disposition or other intended action set forth or
specified in such notice shall conclusively be deemed to be commercially
reasonable within the meaning of the Uniform Commercial Code unless objected to
in writing by the Lessee within five days after receipt by the Lessee of such
notice. The proceeds of any sale or disposition of the Collateral, or any part
thereof, may be applied by the Lessor to the payment of the Loan in such order,
priority and proportions as the Lessor in its discretion shall deem proper. The
Lessee shall remain liable for any deficiency between the proceeds of any sale
or other disposition of the Collateral and all unpaid amounts owed pursuant to
the Loan. The filing of a copy of this Lease (or a memorandum hereof) shall be
deemed to constitute the filing of a financing statement to perfect the security
interest in
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the Collateral and to secure the payment of all amounts due from time to time
from the Lessee to the Lessor under this Lease, the other Operative Documents
and the Securitization Documents. To the extent permitted by the Uniform
Commercial Code, the Lessor is hereby authorized to file a financing statement
covering the Collateral without the signature of the Lessee, as debtor.
(c) The Lessee, as debtor, hereby confirms that, with respect
to any Property located within a Relevant State, the provisions annexed as
Schedule 11.03(c) of this Lease shall apply.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Notices, Demands and Other Instruments. All
notices, demands, offers, consents and other instruments given pursuant to this
Lease shall be sent to the parties hereto at the addresses set forth on Schedule
I to the Participation Agreement and shall be given in the manner and shall be
effective at the times and under the terms set forth in Section 8.02 of the
Participation Agreement. The Lessee shall send to the Agent copies of all
notices, demands, offers, consents, advices and other instruments hereunder sent
to the Lessor.
Section 12.02 No Default Certificate. Each party hereto shall,
at the reasonable request of the other party hereto, deliver to such other party
a certificate stating whether such first party has knowledge that, or has
received notice from any person that, any Casualty, Condemnation, Default,
Environmental Trigger or Event of Default has occurred and is continuing.
Section 12.03 Severability. Except as expressly provided
otherwise in this Lease, each provision hereof shall be separate and independent
and the breach of any such provision by the Lessee, or a breach of any
obligation hereunder by the Lessor, shall not discharge or relieve the Lessee
from its obligations to perform each and every covenant to be performed by the
Lessee hereunder. If any provision hereof or the application thereof to any
Person or circumstance shall be invalid or unenforceable, the remaining
provisions hereof, 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 hereof shall be valid and shall be
enforceable to the extent permitted by Law.
Section 12.04 Binding Effect. All provisions contained in this
Lease shall be binding upon, inure to the
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benefit of and be enforceable by, the respective permitted successors and
assigns of the Lessor and the Lessee to the same extent as if each successor and
assignee were named as a party hereto. Except for subleases and assignments
permitted or created in accordance with Sections 5.07 and 6.08, the Lessee may
not assign its rights hereunder or any interest (by operation of law or
otherwise) herein without the prior written consent of the Lessor. Subject to
the provisions of Section 2.03 of this Lease, the other Operative Documents and
the Securitization Documents, the Lessor may assign all or any part of the
Property and/or its rights under this Lease. All amendments, waivers, consents
or approvals arising pursuant to this Lease shall be consummated in accordance
with the Participation Agreement. Any amendment, waiver, consent or approval
made otherwise than as expressly permitted by this Section 12.04 shall be null
and void.
Section 12.05 Governing Law. THIS LEASE SHALL BE GOVERNED BY
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 12.06 Counterparts. The parties may sign this Lease in
any number of counterparts and on separate counterparts, each of which shall be
an original but all of which when taken together shall constitute one and the
same instrument, except that, if this Lease constitutes "chattel paper" within
the meaning of the UCC only one counterpart stamped or marked "COUNTERPART
NUMBER ONE" or "COUNTERPART NUMBER l" shall constitute, to the extent
applicable, "chattel paper" or other "collateral" within the meaning of the
Uniform Commercial Code in effect in any jurisdiction.
Section 12.07 No Recourse. No recourse shall be had against
the Lessor, the Agent, the Collateral Agent, the Proceeds Trustee, any
Certificate Holder or any Note Holder or their respective successors, assigns,
controlling persons, directors, officers, partners, employees, agents or
shareholders, and their successors and assigns for any claim based on any
failure by the Lessor in the performance or observance of any of the agreements,
covenants or provisions contained in this Lease and in the event of any such
failure, recourse shall be had solely against the Property; provided, however,
that nothing contained in this Lease shall be taken to prevent enforcement of
this Lease or of any claim against the Lessor or any other Person arising out of
or in connection with this Lease based on fraud, gross negligence or willful
misconduct of the Lessor or such other Person.
Section 12.08 Lessor's Right to Cure Lessee's Default. If the
Lessee shall fail to make any payment or perform any act required to be made or
performed under this Lease, the Lessor, without waiving any default or releasing
Lessee from any obligation, may (but shall be under no obligation to) make such
payment or perform such act for the
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account and at the cost and expense of the Lessee, and may enter upon the
Property for such purpose and take all such action thereon as, at the Lessor's
sole discretion, may be necessary or appropriate therefor. No such entry shall
be deemed an eviction of the Lessee or a breach of the Lessor's covenant for
quiet possession pursuant to Section 2.03. All sums so paid by the Lessor and
all costs and expenses (including reasonable attorneys' fees and expenses so
incurred, together with interest thereon at the Default Rate to the extent
permitted by Law) shall be paid by the Lessee to the Lessor on demand as
Additional Rent.
Section 12.09 Lessee's Right to Contest Property Taxes. The
Lessee, at its own cost and expense and in compliance with Section 6.01(c),
shall have the sole right, at any time, to seek, in good faith, a reduction in
the assessed valuation of the Property or any part thereof or to contest, in
good faith, any real or personal property taxes for the Property or any part
thereof or to contest, in good faith, any dues, fees or assessments payable
under the Declaration. The Lessor shall not be required to join in any
proceeding or contest brought by the Lessee unless the provisions of any Legal
Requirement require that the proceeding or contest be brought by or in the name
of the owner of the Property. In that case the Lessor shall join in the
proceeding or contest or permit it to be brought in the Lessor's name as long as
the Lessee reimburses the Lessor for any and all costs and expenses reasonably
incurred by the Lessor in connection therewith. The Lessee, on a final
non-appealable determination of the proceeding or contest, shall immediately
pay, discharge and satisfy any decision or judgment rendered, together with all
costs, interest and penalties incidental to the decision or judgment.
Section 12.10 Limitations on Amounts Payable. Notwithstanding
anything to the contrary contained in this Lease or any of the other Operative
Documents or the Securitization Documents, the amounts which the Lessee is
obliged to pay, as Fixed Rent pursuant to this Lease, the other Operative
Documents and the Securitization Documents, and the amounts which the Lessor,
the Agent, the Certificate Holders and the Note Holders are entitled to receive
as Fixed Rent pursuant to this Lease, the other Operative Documents and the
Securitization Documents, are subject to limitations pursuant to Section 8.17 of
the Participation Agreement.
Section 12.11 Payments to the Agent. The Lessee hereby
acknowledges, and the Lessor hereby directs, that all payments of Fixed Rent,
Additional Rent and other sums due to the Lessor hereunder shall be made to the
Agent, on behalf of the Lessor, to the account specified for the Agent in
Schedule I to the Participation Agreement.
Section 12.12 Remaining Moneys. Except as otherwise provided
for herein or in the Interparty Agreement,
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any and all moneys remaining, and all residual interests in the Property after
all payments of interest on and principal of the Notes, and all payments of
current yield on and the stated amount of the Certificates, all payments of
other sums due to the parties entitled thereto under the Operative Documents and
the Securitization Documents and all unpaid amounts in respect of Unreimbursed
Losses, have been made in accordance with the Operative Documents and the
Securitization Documents, shall be paid and assigned to the Lessee.
Section 12.13 Waiver of Trial by Jury. IN ANY ACTION OR
PROCEEDING UNDER OR RELATED TO THIS AGREEMENT, THE OPERATIVE DOCUMENTS OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION WITH THE FOREGOING, THE LESSOR AND THE LESSEE
HEREBY AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT
AND NOT BEFORE A JURY, IRRESPECTIVE OF WHICH PARTY COMMENCES SUCH ACTION OR
PROCEEDING.
Section 12.14 Exculpation of Lessor. It is expressly agreed,
anything herein to the contrary notwithstanding, that each and all of the
representations, warranties, covenants, undertakings and agreements herein made
on the part of Lessor are made and intended not as personal representations,
warranties, covenants, undertakings and agreements by Lessor, or for the purpose
or with the intention of binding Lessor, personally, but are made and intended
for the purpose of binding only the Trust Estate and this Lease is executed and
delivered by Lessor not in its own right but solely in the exercise of the
powers expressly conferred upon it as Trustee under the Declaration; and no
personal liability or personal responsibility is assumed by or shall at any time
be asserted or enforceable against Lessor on account of this Lease or on account
of any representation, warranty, covenant, undertaking or agreement of Lessor,
either expressed or implied herein, all such personal liability, if any, being
expressly waived and released by Lessee and by all Persons claiming by, through
or under it, and that all recourse against the Lessor under this Lease shall be
limited to the Trust Estate.
Section 12.15 Prior Lease. This Lease amends, restates,
supplements and replaces, in its entirety, the Lease dated as of May 6, 1998
between the Lessor and the Lessee (the "Prior Lease"); all Property subject to
the Prior Lease shall be Property subject to this Lease as of the date of this
Lease, without further action of any kind on the part of the Lessor or the
Lessee; all amounts owing as Fixed Rent, Additional Rent, indemnity payments or
other amounts under the Prior Lease (whether now due or to become due) shall, to
the extent unpaid on the date hereof, become Fixed Rent, Additional Rent,
indemnity payments or other amounts owing under this Lease; all Property subject
to the Prior Lease shall, from and after the date of this Lease, be governed by
the provisions of this Lease; as of the date of this Lease,
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the Prior Lease shall cease to have any further force or effect, except that any
references to the Prior Lease in any mortgage, financing statement or other
document filed or recorded in any jurisdiction shall be deemed a reference to
this Lease, until such time, if any, as a new mortgage, financing statement,
amendment or other document is executed, delivered, recorded and filed expressly
referring to this Lease; and all Property subject to the Prior Lease shall, for
purposes of this Lease, have an Acquisition Cost, Original Capitalized Cost and
Adjusted Capitalized Cost as set forth on Schedule 12.15.
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IN WITNESS WHEREOF, the parties hereto have caused this Lease
to be duly executed by their respective Officers thereunto duly authorized as of
the date hereof.
LESSOR:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, not in
its individual capacity but solely as
Trustee
By:
---------------------------------------
Name:
Title:
Witness:
--------------------------------
Name:
Witness:
--------------------------------
Name:
STATE OF CONNECTICUT )
: ss.:
COUNTY OF HARTFORD )
On this day of September, 1998, before me personally
came , to me known, who, being by me duly sworn, did
depose and say that he is of the State Street Bank
and Trust Company of Connecticut, National Association, the national banking
association described in and which executed the foregoing instrument; that he
knows the seal of such association; that the seal affixed to such instrument is
such association seal; that it was so affixed by order of the Board of Directors
of such association, and that he signed his name thereto by like order.
Notary Public
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LESSEE:
XXXXXXXX COMMUNICATIONS, INC.
By:
---------------------------------------
Name:
Title:
Witness:
--------------------------------
Name:
Witness:
--------------------------------
Name:
STATE OF OKLAHOMA )
: ss.:
COUNTY OF TULSA )
On this day of September, 1998, before me personally
came , to me known, who, being by me duly
sworn, did depose and say that he is the of Xxxxxxxx
Communications, Inc., the corporation described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation, and that he signed his name
thereto by like order.
----------------------------------------------
Notary Public
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The undersigned, as Agent, hereby agrees to those provisions
of this Lease applicable to the Agent.
CITIBANK, N.A.
By:
--------------------------------------
Name:
Title:
Witness:
--------------------------------
Name:
Witness:
--------------------------------
Name:
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this day of September, 1998, before me personally
came , to me known, who, being by me duly sworn, did
depose and say that he is of Citibank, N.A., the national
banking association described in and which executed the foregoing instrument;
that he knows the seal of such association; that the seal affixed to such
instrument is such association seal; that it was so affixed by order of the
Board of Directors of such association, and that he signed his name thereto by
like order.
----------------------------------------------
Notary Public
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The undersigned, as Collateral Agent and the Proceeds Trustee
hereby agrees to those provisions of this Lease applicable to the Collateral
Agent and the Proceeds Trustee.
STATE STREET BANK AND TRUST
COMPANY, NATIONAL
ASSOCIATION, not in its
individual capacity but
solely as Collateral Agent
and Proceeds Trustee
By:
---------------------------------------
Name:
Title:
Witness:
--------------------------------
Name:
Witness:
--------------------------------
Name:
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this day of September, 1998, before me personally
came , to me known, who, being by me duly sworn,
did depose and say that he is of State Street Bank
And Trust Company, National Association, the national banking association
described in and which executed the foregoing instrument; that he knows the seal
of such association; that the seal affixed to such instrument is such
association seal; that it was so affixed by order of the Board of Directors of
such association, and that he signed his name thereto by like order.
----------------------------------------------
Notary Public
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SCHEDULE 1
Fixed Rent and Additional Rent
Capitalized terms used herein and not defined herein shall
have the meanings assigned to them in the Lease (including terms defined by
reference in the Lease to the other Operative Documents and the Securitization
Documents).
I. Fixed Rent
A. "Fixed Rent" for each Payment Date during the Base Term and
any Renewal Term shall be an amount equal to the sum of:
(A) an amount equal to the sum of:
(x) the product of (i) the Series A Portion of the Original
Capitalized Cost of the Property, multiplied by (ii) the
Applicable Rate for the A-Notes during the period ended on
such Payment Date, plus
(y) the portion of the Fixed Securitization Costs attributable
to the A-Notes for the period ended on such Payment Date;
plus
(B) an amount equal to the sum of:
(x) the product of (i) the Series B Portion of the Original
Capitalized Cost of the Property, multiplied by (ii) the
Applicable Rate for the B-Notes during the period ended on
such Payment Date, plus
(y) the portion of the Fixed Securitization Costs attributable
to the B-Notes for the period ended on such Payment Date;
plus
(C) an amount equal to the product of:
(x) the Series C Portion of the Original Capitalized Cost of
the Property, multiplied by
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(y) the Applicable Rate for the Certificates during the period
ended on such Payment Date,
plus
(D) during the Extended Term, if any, an amount equal to the
Amortization Amount for the period ended on such Payment Date,
in each case calculated on the basis of a 360-day year (or 365 days if
the Applicable Rate is calculated by reference to the Base Rate) and
prorated for the actual number of days of such period.
B. The "Original Capitalized Cost" shall mean an amount equal
to the sum of:
(A) the Series A Portion of the Original Capitalized Cost of the
Property, plus
(B) the Series B Portion of the Original Capitalized Cost of the
Property, plus
(C) the Series C Portion of the Original Capitalized Cost of the
Property.
The "Series A Portion" of the Original Capitalized Cost of the
Property is equal to the then outstanding aggregate principal amount of the
A-Notes issued to finance the Acquisition Costs of the Property.
The "Series B Portion" of the Original Capitalized Cost of the
Property is equal to the then outstanding aggregate principal amount of the
B-Notes issued to finance the Acquisition Costs of the Property.
The "Series C Portion" of the Original Capitalized Cost of the
Property is equal to the then outstanding aggregate stated amount of the
Certificates issued to finance the Acquisition Costs of the Property.
C. The "Amortization Amount" for any Payment Date during any
Renewal Term shall be the amount determined pursuant to Section 3.02 of the
Lease (and the appraisal of the Property referred to therein).
II. Additional Rent
A. (1) In addition to such Additional Rent as may otherwise be
payable under the Lease, the Lessee shall pay, without duplication, within five
(5) days of a demand therefor (but subject in all cases to the rights of Lessee
70
under, and the limitations on such payments contained in, the Operative
Documents and the Securitization Documents) as Additional Rent, without
duplication, all Additional Costs. Promptly after the Lessor receives notice
from any Certificate Holder or Note Holder or any other Person requesting
payment of any Additional Costs to be payable as Additional Rent the Lessor
shall notify Lessee of the same. The failure to provide such notice as to any
Additional Costs shall not affect any Certificate Holder's or any Note Holder's
right to recover Additional Rent for the same.
(2) On the last Business Day of each March, June,
September and December of each year, commencing September 30, 1998 and ending
June 30, 2001, an amount equal to $10,895.83.
(3) On the first Payment Date to occur after the
Completion Date, the Lessee shall pay as Additional Rent, an amount equal to the
Excess Certificate Amount.
B. Upon requesting that Lessee pay Additional Rent pursuant to
paragraph II. A. above, the Lessor shall deliver to the Lessee a certificate in
reasonable detail executed by the Certificate Holders, the Note Holders or such
other Persons requesting payment of Additional Costs, as the case may be,
charging such Additional Rent and (i) setting forth the basis for and the amount
of such Additional Rent, and (ii) in the case of Increased Costs, stating that
such Increased Costs are generally being charged by such Certificate Holder or
Note Holder to other similarly situated Persons under similar arrangements. Such
certificate shall be conclusive and binding for all purposes, absent manifest
error, unless such certificate fails to set forth the information required
above.
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SCHEDULE 2.02(b)
Supplemental Use Restrictions
1. The provisions in this Supplemental Section 2.02(b)(1) shall apply to the
Regulated Property described below in:
FLORIDA
1.1. The Regulated Property in Florida subject to the supplemental use
restrictions in this Supplemental Section 2.02(b)(1) is:
All Network Assets located in Florida.
1.2. The Lessee agrees, with respect to the Regulated Property
described in Section 1.1 above, that:
(a) On the date any portion of such Regulated Property becomes
capable of transmission, the Lessee shall secure a certificate
as a telecommunications company from the Florida Public
Service Commission and present to Lessor proof satisfactory to
the Lessor of Lessee's certification.
(b) During the Term, Lessee shall maintain its status as a
certificated telecommunications company in Florida.
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SCHEDULE 6.05(i)
ALL-RISK PROPERTY INSURANCE EXCLUSIONS
To be provided.
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SCHEDULE 6.05(ii)
GENERAL LIABILITY INSURANCE EXCLUSIONS
To be provided.
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SCHEDULE 11.02(b)
Supplemental Mortgage Provisions
FLORIDA
1. Property Description: The Property located in Florida which is subject to
Section 11.01 of this Lease is:
All of the Property purchased pursuant to the MediaOne
Agreement.
2. Supplemental Rights: With respect to the Property described in Item 1 above,
the Lessor shall have the right, if an Event of Default shall have occurred:
(i) to exercise any and all remedies described in the
Participation Agreement or the other Operative Documents.
(ii) to declare the entire unpaid balance of the Notes and all
other obligations of Lessee secured hereby immediately due and payable
without further notice.
(iii) to the extent permitted by law, to take immediate
possession of the Property or any part thereof (which Lessee agrees to
surrender to Lessor) and manage, control or lease same to such person
or persons and exercise all other rights granted pursuant to the Lease.
The taking of possession under this paragraph shall not prevent
concurrent or later proceedings for the foreclosure sale of the
Property as provided elsewhere herein.
(iv) to apply, on ex parte motion to any court of competent
jurisdiction, for the appointment of a receiver and shall be entitled
to the appointment of such receiver as a matter of right, without
regard to the value of the Property as security for the amount of the
Loan, or the solvency or insolvency of any person then liable for the
payment of the amount of the Loan. In addition to the rights of
protection afforded to Lessor by Section 697.07, Florida Statutes
(1997), as amended (and not as an election of remedies), Lessor shall
be entitled, as a matter of strict right and without regard to the
value or occupancy of any security for the obligations secured hereby,
to have a receiver appointed by a court, without notice to Lessee, to
enter upon and take possession of the Property, collect the rents
75
therefrom and thereof and apply the same as the court may direct, such
receiver to have all the rights and powers permitted under the laws of
Florida. The expenses, including receiver's fees, reasonable attorneys'
fees (including any incurred in appeals), costs and agent's
compensation, incurred pursuant to the powers herein contained shall be
secured hereby. The right to enter and take possession of the Property,
to manage and operate the same, to collect the rents therefrom and
thereof, whether by a receiver or otherwise, shall be cumulative to any
other right or remedy hereunder or afforded by law, and may be
exercised concurrently therewith or independently thereof. Lessor shall
be liable to account only for such rents actually received by Lessor,
whether received pursuant to this paragraph or otherwise. The Lessee
hereby specifically waives the right to object to the appointment of a
receiver as aforesaid and hereby consents that such appointment shall
be made as an admitted equity and as a matter of absolute right to the
Lessor and that the same may be done without notice to the Lessee or
any other defendant to such suit.
(v) to foreclose on the mortgage granted hereby and in case of
sale in an action or proceeding to foreclose and Lessor shall have the
right to sell the Property in parts or as an entirety. It is intended
hereby to give to Lessor the widest possible discretion permitted by
law with respect to all aspects of any such sale or sales.
(vi) to exercise all other remedies available, whether at law
or equity, in such order as Lessor may elect. It shall also not be
necessary that Lessor pay any impositions, premiums or other charges
regarding which Lessee is in default before Lessor may invoke its
rights hereunder. All such other rights and remedies available to
Lessor hereunder shall be cumulative and may be pursued concurrently or
successively. The failure or omission on the part of Lessor to exercise
the option for acceleration of maturity and/or foreclosure or to timely
exercise any other option, right, or remedy conferred upon the Lessor
herein, or the acceptance by Lessor of partial payments hereunder,
shall not constitute a waiver of any default or the right to exercise
any such option, but such option shall remain continuously in force.
Acceleration of maturity, once claimed hereunder by Lessor, at the
option of Lessor, may be rescinded by written acknowledgment to that
2
76
effect by Lessor, but the tender and acceptance of partial payments
alone shall not, in any way, effect or rescind such acceleration of
maturity. The obtaining of a judgment or decree on the amount of the
Loan, whether in the State of Florida or elsewhere, shall not in any
way affect the lien created hereby upon the Property, and any judgment
or decree so obtained shall be secured hereby to the same extent as the
Loan is now secured.
3. Limitation of Rights: With respect to the Property described in item 1 above,
the following provisions shall apply:
"Notwithstanding anything to the contrary contained in this Lease,
Lessee and Lessor have agreed that the portion of the Property located
in the State of Florida secures only a portion of the amount of the
Loan in the maximum amount of $38,000,000, and that the value of the
Property located in Florida is $38,000,000. Therefore, irrespective of
anything contained in this Lease to the contrary, in the event of
foreclosure and sale of that portion of the Property located in the
State of Florida, the maximum recovery of Lessor in the event of a sale
of that portion of the Property located in the State of Florida to any
purchaser other than Lessor, and the maximum credit allowed toward the
payment of the amount of the Loan in bidding upon the portion of the
Property located in the State of Florida at a foreclosure sale, shall
be $38,000,000, plus such amounts as interest, costs, attorneys' fees
and other monies advanced for insurance premiums, taxes and
preservation of that portion of the Property located in the State of
Florida."
3
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SCHEDULE 11.03(c)
Supplemental Security Provisions
FLORIDA
1. Property Description: The Property located in Florida which is subject to
Section 11.03 of this Lease is:
All of the Property purchased pursuant to the MediaOne
Agreement.
2. Supplemental Provisions: With respect to the Property described in Item 1
above:
(a) The Lessee covenants and agrees with the Lessor that from and after
the date of this Lease and until the repayment in full of the Loan:
(i) At any time and from time to time, upon the written
request of the Lessor and at the sole expense of the Lessee, the Lessee
shall promptly and duly execute and deliver any and all such further
instruments and documents and take such further action as the Lessor
may reasonably deem desirable to obtain the full benefits of this
agreement and of the rights and powers herein granted, including (A)
filing any financing or continuation statements under the Uniform
Commercial Code with respect to the liens and security interests
granted hereunder or under any other Loan Document, (B) transferring
the Collateral to Lender's possession (if such Collateral consists of
documents, instruments or chattel paper or if a security interest in
such Collateral can be perfected only by possession) and (C) to obtain
waivers of liens from landlords and mortgagees. The Lessee also hereby
authorizes the Lessor to file any such financing or continuation
statement without the signature of the Lessee to the extent permitted
by applicable law. The filing of a copy of this Lease (or a memorandum
hereof) shall be deemed to constitute the filing of a financing
statement to perfect the security interest in the Collateral and to
secure the payment of all amounts due from time to time from the Lessee
to the Lessor under this Lease and the other Operative Documents.
(ii) The Lessee shall not change its name, identity or
corporate structure in any manner which might make any financing or
continuation statement filed in connection herewith seriously
78
misleading within the meaning of Section 9-402(7) of the Uniform
Commercial Code or any other then applicable provision of the Uniform
Commercial Code unless the Lessee shall have given the Lessor at least
thirty (30) days' prior written notice thereof and shall have taken all
action (or made arrangements to take such action substantially
simultaneously with such change if it is impossible to take such action
in advance) necessary or reasonably requested by the Lessor to amend
such financing statement or continuation statement so that it is not
seriously misleading.
(b) (i) The Lessee hereby irrevocably constitutes and appoints the
Lessor and any authorized officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Lessee
and in the name of the Lessee or in its own name, from time to time in
the Lessor's discretion, for the purpose of carrying out the terms of
this agreement, to take any and all appropriate action and to execute
and deliver any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this agreement
and, without limiting the generality of the foregoing, hereby grants to
the Lessor the power and right, on behalf of the Lessee, without notice
to or assent by the Lessee, and at any time, to do the following:
(A) in the name of the Lessee, in its own name or otherwise,
take possession of, endorse and receive payment of any checks, drafts,
notes, acceptances, or other instruments for the payment of monies due
under any of the Collateral;
(B) continue any insurance existing pursuant to the terms of
this agreement or any of the other Operative Documents, and pay all or
any part of the premiums therefor and the costs thereof; and
(C) receive payment of any and all monies, claims, and other
amounts due or to become due at any time arising out of or in respect
of any Collateral.
(ii) The Lessee hereby irrevocably constitutes and appoints
the Lessor and any authorized employee, officer or agent thereof, with
full power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of the
Lessee and in the name of the Lessee
2
79
or in its own name, from time to time in the Lessor's discretion, for
the purpose of carrying out the terms of this agreement, to take any
and all appropriate action and to execute and deliver any and all
documents and instruments which may be necessary or desirable to
accomplish the purposes of this agreement and, without limiting the
generality of the foregoing, hereby grants to the Lessor the power and
right, on behalf of the Lessee, without notice to or assent by the
Lessee, upon the occurrence and during the continuation of an Event of
Default, to do the following:
(A) ask, demand, collect, receive and give acquittances and
receipts for any and all money due or to become due under any of the
Collateral;
(B) pay or discharge taxes, liens, security interests, or
other encumbrances levied or placed on or threatened against the
Collateral;
(C) effect any repairs or obtain any insurance called for by
the terms of this agreement or any of the other Operative Documents and
pay all or any part of the premiums therefor and costs thereof;
(D) direct any party liable for any payment under or in
respect of any of the Collateral to make payment of any and all monies
due or to become due thereunder, directly to the Lessor or as the
Lessor shall direct;
(E) settle, compromise or adjust any suit, action, or
proceeding and, in connection therewith, give such discharges or
releases as the Lessor may deem appropriate;
(F) file any claim or take or commence any other action or
proceeding in any court of law or equity or otherwise deemed
appropriate by the Lessor for the purpose of collecting any and all
such monies due under any of the Collateral whenever payable;
(G) commence and prosecute any suits, actions or proceedings
of law or equity in any court of competent jurisdiction to collect the
Collateral or any part thereof and to enforce any other right in
respect of any of the Collateral;
(H) defend any suit, action or proceeding brought against the
Lessee with respect to any of the Collateral if the Lessee does not
defend such suit, action or proceeding or if the Lessor believes that
the Lessee is not pursuing such defense in a manner that will maximize
the recovery with respect to such Collateral; and
3
80
(I) sell, transfer, pledge, make any agreement with respect
to, or otherwise deal with any of the Collateral as fully and
completely as though the Lessor were the absolute owner thereof for all
purposes, and to do, at the Lessor's option and the Lessee's expense,
at any time, or from time to time, all acts and things which the Lessor
reasonably deems necessary to perfect, preserve, or realize upon the
Collateral and the Lessor's security interest therein in order to
effect the intent of this agreement, all as fully and effectively as
the Lessee might do.
(iii) The Lessee hereby ratifies, to the extent permitted by
law, all that said attorneys shall lawfully do or cause to be done by
virtue hereof. The foregoing power of attorney is a power coupled with
an interest and shall be irrevocable until the repayment in full of the
Loan.
(iv) The powers conferred on the Lessor hereunder are solely
to protect the Lessor's security interests in the Collateral and shall
not impose any duty upon it to exercise any such powers. The Lessor
shall be accountable only for amounts that it actually receives as a
result of the exercise of such powers and none of its officers,
directors, employees, agents or representatives shall be responsible to
the Lessee for any act or failure to act, except for their own gross
negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction.
(v) The Lessee also authorizes the Lessor, at any time and
from time to time, to (i) communicate in its own name with any party to
any contract with regard to the assignment of the right, title and
interest of the Lessee in and under such contracts and other matters
relating thereto and (ii) execute, in connection with the exercise of
its remedies provided for herein, any endorsements, assignments or
other instruments of conveyance or transfer with respect to the
Collateral.
(c) (i) If any Event of Default shall occur and be continuing, the
Lessor may exercise in addition to all other rights and remedies
granted to it under this agreement, the other Operative Documents and
under any other instrument or agreement securing, evidencing or
relating to the Loan, all rights and remedies of a secured party under
the Uniform Commercial Code as in effect at such time in the State of
New York (the "Uniform Commercial Code"). Without limiting the
generality of the foregoing, the Lessee expressly agrees that in any
such event the Lessor without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below
of time
4
81
and place of public or private sale) to or upon the Lessee or any other
Person (all and each of which demands, advertisements and notices are
hereby expressly waived to the maximum extent permitted by the Uniform
Commercial Code and other applicable law), may forthwith enter upon the
premises of the Lessee where any Collateral is located through
self-help, without judicial process, without first obtaining a final
judgment or giving the Lessee notice and opportunity for a hearing on
the Lessor's claim or action, and without paying rent to the Lessee,
and collect, receive, assemble, process, appropriate and realize upon
the Collateral, or any part thereof, and may forthwith sell, lease,
assign, give an option or options to purchase, or sell or otherwise
dispose of and deliver said Collateral (or contract to do so), or any
part thereof, in one or more parcels at public or private sale or
sales, at any exchange at such prices as it may deem best, for cash or
on credit or for future delivery without assumption of any credit risk.
The Lessor shall have the right upon any such public sale or sales,
and, to the extent permitted by law, upon any such private sale or
sales, to purchase for its benefit the whole or any part of said
Collateral so sold, free of any right or equity of redemption, which
equity of redemption the Lessee hereby releases. Such sales may be
adjourned or continued from time to time with or without notice. The
Lessor shall have the right to conduct such sales on the Lessee's
premises or elsewhere and shall have the right to use the Lessee's
premises without charge for such sales for such time or times as the
Lessor deems necessary or advisable.
(ii) The Lessee further agrees, at the Lessor's request, to
assemble the Collateral and make it available to the Lessor at places
which the Lessor shall reasonably select, whether at the Lessee's
premises or elsewhere. Until the Lessor is able to effect a sale,
lease, or other disposition of the Collateral, the Lessor shall have
the right to use or operate the Collateral, or any part thereof, to the
extent that it deems appropriate for the purpose of preserving the
Collateral or its value or for any other purpose deemed appropriate by
the Lessor. The Lessor shall have no obligation to the Lessee to
maintain or preserve the rights of the Lessee as against third parties
with respect to the Collateral while the Collateral is in the
possession of the Lessor. The Lessor may, if it so elects, seek the
appointment of a receiver or keeper to take possession of the
Collateral and to enforce any of the Lessor's remedies with respect to
such appointment without prior notice or hearing. The Lessor shall
apply the net proceeds of any such collection, recovery, receipt,
appropriation,
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realization or sale, as provided in subsection (d)(iv) hereof, the
Lessee remaining liable for any deficiency remaining unpaid after such
application, and only after so paying over such net proceeds and after
the payment by the Lessor of any other amount required by any provision
of law, including section 9-504(1)(c) of the Uniform Commercial Code
(but only after the Lessor has received what the Lessor considers
reasonable proof of a subordinate party's security interest), need the
Lessor account for the surplus, if any, to the Lessee. To the maximum
extent permitted by applicable law, the Lessee waives all claims,
damages, and demands against the Lessor arising out of the
repossession, retention or sale of the Collateral except such which may
arise out of the gross negligence or willful misconduct of such party.
The Lessee agrees that ten (10) days' prior notice by the Lessor of the
time and place of any public sale or of the time after which a private
sale may take place is reasonable notification of such matters. The
Lessee shall remain liable for any deficiency if the proceeds of any
sale or disposition of the Collateral are insufficient to pay all
amounts to which the Lessor is entitled, the Lessee also being liable
for any reasonable outside attorneys' fees incurred by the Lessor to
collect such deficiency.
(iii) The Lessee agrees to pay any and all costs of the
Lessor, including, without limitation, reasonable outside attorneys'
fees, incurred in connection with the enforcement of any of its rights
and remedies hereunder.
(iv) Except as otherwise specifically provided herein, the
Lessee hereby waives presentment, demand, protest or any notice (to the
maximum extent permitted by applicable law) of any kind in connection
with this agreement or any of the Collateral.
(v) The proceeds of any sale, disposition or other realization
upon all or any part of the Collateral shall be applied by the Lessor
upon receipt, in the following order of priorities:
First, the payment in full of reasonable expenses of
the Lessor in connection with such sale, disposition or other
realization, including all expenses, liabilities and advances incurred
or made by the Lessor in connection therewith, including reasonable
outside attorney's fees;
Second, to the payment of accrued but unpaid interest
on the Loan;
6
83
Third, to the payment of unpaid principal of the
Loan;
Fourth, to the payment of all other obligations
secured hereby until all such other obligations shall have been paid in
full; and
Finally, to payment to the Lessee, or its successors
or assigns, to any other party lawfully entitled thereto, or as a court
of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
(d) The Lessor shall use reasonable care with respect to the Collateral in its
possession or under its control. The Lessor shall not have any other duty as to
any Collateral in its possession or control or in the possession or control of
any agent or nominee of the Lessor, or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto. Upon request of the Lessee, the Lessor shall account for any monies
received by the Lessor in respect of any foreclosure on or disposition of the
Collateral.
(e) The Lessor shall not by any act, delay, omission or otherwise be deemed to
have waived any of its rights or remedies hereunder, and no waiver shall be
valid unless in writing, signed by the Lessor and then only to the extent
therein set forth. A waiver by the Lessor of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy which
the Lessor would otherwise have had on any future occasion. No failure to
exercise nor any delay in exercising on the part of the Lessor, any right, power
or privilege hereunder, shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power or privilege hereunder preclude any
other or future exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies hereunder provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law. None of the terms or provisions of this agreement may
be waived, altered, modified or amended except by an instrument in writing, duly
executed by the Lessor and the Lessee.
3. Limitation of Rights: With respect to the Property described in item 1 above,
the following provisions shall apply:
"Notwithstanding anything to the contrary contained in this Lease,
Lessee and Lessor have agreed that the portion of the Property located
in the State of Florida secures only a portion of the amount of the
Loan in the maximum amount of
7
84
$38,000,000, and that the value of the Property located in Florida is
$38,000,000. Therefore, irrespective of anything contained in this
Lease to the contrary, in the event of foreclosure and sale of that
portion of the Property located in the State of Florida, the maximum
recovery of Lessor in the event of a sale of that portion of the
Property located in the State of Florida to any purchaser other than
Lessor, and the maximum credit allowed toward the payment of the amount
of the Loan in bidding upon the portion of the Property located in the
State of Florida at a foreclosure sale, shall be $38,000,000, plus such
amounts as interest, costs, attorneys' fees and other monies advanced
for insurance premiums, taxes and preservation of that portion of the
Property located in the State of Florida."
8
85
SCHEDULE 12.15
Acquisition Cost, Original Capitalized Cost and
Adjusted Capitalized Cost of Certain Property
Subject to Prior Lease
1. Acquisition Cost (May 6, 1998): $ 25,772,580.41
2. Original Capitalized Cost.
a. Series A Portion $ 21,903,570.55
b. Series B Portion 2,953,647.37
c. Series C Portion 915,362.49
---------------
d. Total Original Capitalized
Cost (Sept. 2, 1998) $ 25,772,580.41
===============
3. Adjusted Capitalized Cost.
a. Series A Portion $ 21,929,857.84
b. Series B Portion 2,957,249.53
c. Series C Portion 916,916.35
---------------
d. Total Adjusted Capitalized
Cost (Sept. 2, 1998) $ 25,804,023.72
===============
86
EXHIBIT A
Form of Certificate of Acceptance
CERTIFICATE OF ACCEPTANCE, dated September 2, 1998, by
Xxxxxxxx Communications, Inc., a Delaware corporation (the "Lessee"). All
capitalized terms used herein, unless defined herein, shall have the respective
meanings set forth in the Amended and Restated Lease, dated as of September 2,
1998 (the "Lease"), among the Lessee and State Street Bank and Trust Company of
Connecticut, National Association, as Trustee (the "Lessor").
W I T N E S S E T H :
WHEREAS, the Lessor and the Lessee are parties to the Lease
which provides for, inter alia, the execution and delivery of a Certificate of
Acceptance for the purpose of acknowledging acceptance of specific Items of
Property under the Lease and acknowledging the leasing of such Items of Property
under the Lease in accordance with the terms thereof.
NOW, THEREFORE, in consideration of the premises and other
good and sufficient consideration, the Lessor and the Lessee hereby agree as
follows:
1. The Lessor and the Lessee hereby acknowledge and
confirm that the Lessee leases from the Lessor under the Lease the Items of
Property specified in Schedule I hereto.
2. The Lessee hereby confirms to the Lessor that the
Lessee has accepted such Items of Property for all purposes of the Lease as
being in good working order and repair and without defect or inherent vice in
condition, design, operation or fitness for use, and otherwise in full
compliance with the Lease; provided, however, that nothing contained herein or
in the Lease shall in any way diminish or otherwise affect any right the Lessee
may have with respect to such Property against any third party (other than the
Lessor Group).
3. The Lessee hereby confirms to the Lessor that:
(a) Such items of Property do not constitute
Regulated Property.
87
(b) Schedule 2.02(b) of the Lease is hereby
amended and supplemented by adding thereto the
Supplemental Use Restrictions annexed as
Schedule II to this Certificate of Acceptance.
IN WITNESS WHEREOF, the Lessee has caused this Certificate of
Acceptance to be duly executed on the day and year first above written.
XXXXXXXX COMMUNICATIONS, INC.
By:
----------------------------------------
Name:
Title:
ACCEPTED:
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual
capacity, but solely as
Trustee
By:
------------------------------
Name:
Title:
2
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Schedule I to the Certificate of Acceptance
Description Cost of Property Appraisal Value
of Property Quantity (per unit) (if any)(1)
------------------------ ------------- ------------------ --------------------
--------
(1) Appraised Value as determined by the Appraiser.
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1 Schedule II to the Certificate of Acceptance
2 Supplemental Use Restrictions
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EXHIBIT B
Fiber Testing Standards
1. General. This exhibit defines the standard procedures for testing and
acceptance of the fiber and splices. In general, the Lessee (or its designee),
will perform all tests. The tests should follow standard industry requirements
and criteria. The Lessee will provide all test data to the Lessor upon request.
2. Initial Construction Testing
A. During initial construction, the Lessee (or its designee) shall use
an optical time domain reflectometer ("OTDR") to test splices and shall use an
OTDR and a 1-km launch reel to test pigtail connectors. Such initial
construction tests shall be uni-directional and performed at 1550 nm.
B. If the loss value of two connectors and the associated pigtail
splice exceeds 1 dB, the Lessee (or its designee) shall break the splice and
re-splice until the loss value is 1.0 dB or less. If the Lessee (or its
designee) is unable to achieve a loss value of 1.0 dB or less after five total
splicing attempts, the splice shall be marked as Out-of-Spec (OOS).
C. If the loss value for a splice, when measured in one direction with
an OTDR, exceeds 0.15 dB, the Lessee (or its designee) shall break the splice
and re-splice until the loss value is 0.15 dB or less, provided that, if the
Lessee (or its designee) is not able to achieve a loss value of 0.15 dB after
three total splicing attempts, then the maximum loss value shall be 0.3 dB. If,
after two additional resplicing attempts, the Lessee (or its designee) is not
able to achieve a loss value of 0.3 dB or less, then the Lessee (or its
designee) shall xxxx the splice as Out-of-Spec (OOS).
3. End-to-End Testing
A. After the Lessee (or its designee) has established end-to-end
connectivity on the fibers during initial construction, it shall:
o perform bi-directional end-to-end tests,
o test continuity to confirm that no fibers have been "frogged" or crossed in
any of the splice points,
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o record loss measurements using a light source and a power meter, and
o take OTDR traces and record splice loss measurements.
B. The Lessee (or its designee) shall perform the bi-directional
end-to-end tests and OTDR traces at both 1310 nm and 1550 nm. The Lessee (or its
designee) shall measure and verify losses for each splice point in both
directions and average the loss values. The Lessee (or its designee) shall xxxx
any splice points as Out-of-Spec (OOS) that have an average loss value, based on
bi-directional OTDR testing, in excess of 0.3 dB.
4. Post-Construction Testing
After performing permanent resplicing (in conjunction with repair of a
cable cut, replacement of a segment of cable, or other work after initial
installation and splicing of the cable), the test procedures set forth section 2
(End-to-End Testing), shall apply to the relevant fibers and cable segments. The
provisions in sections 4 (OTDR Equipment and Settings) and 5 (Acceptance Test
Deliverables), that are relevant to such testing shall also apply.
5. Out-of-Spec Splices
Out-of-Spec splices shall be noted, but shall not preclude acceptance
of a fiber if the Out-of-Spec condition does not affect transmission capability
(based on use of then-prevailing telecommunications industry standards
applicable to equipment generally used with the relevant type of fiber) or
create a significant possibility of an outage.
6. OTDR Equipment and Settings
A. The Lessee (or its designee) shall use OTDR equipment and settings
that are, in its reasonable opinion, suitable for performing accurate
measurements of the fiber installed. Such equipment and settings shall include,
without limitation, the equipment and settings described below.
B. The Lessee (or its designee) has approved the following OTDRs and
settings for acceptance testing: the Laser Precision TD3000 and CMA4000 models
and compatible models.
C. The Lessee (or its designee) has approved the following settings for
various OTDR tests:
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i. Index of refraction settings:
-------------------------------------------------------------------------------------------------
1310 NM 1550 NM
------------------------------ ----------------------
Lucent Truwave 1.4738 1.4732
Corning SMF-28 1.4675 1.4681
Corning SMF-LS 1.471 1.470
Corning LEAF 1.470 1.469
Sumitomo fiber 1.4670 1.4670
-------------------------------------------------------------------------------------------------
ii. Tests of a pigtail connector and its associated splice:
--------------------------------------------------------------------------------
TD3000 CMA4000
--------- -----------
4 km Range 4 km Range
50 ns Pulse 50 ns Pulse
1 m Resolution 1 m Resolution
Medium Averaging Medium Averaging
--------------------------------------------------------------------------------
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iii. End to End Segment OTDR Testing:
--------------------------------------------------------------------------------
TD3000 CMA4000
------------- ----------------
64 km Range 100 km Range
500 ns Pulse 250 ns Pulse
4 m Resolution 4 m Resolution
Medium Averaging Medium Averaging
--------------------------------------------------------------------------------
Note: If the end points are more than 64 kilometers apart, the Lessee
(or its designee) currently uses a TD3000 set at 128 km range setting
and performs bi-directional testing only at 1550 nm.
7. Acceptance Test Deliverables
The Lessee (or its designee) shall provide data sheets or computer
media containing the following information for the relevant fibers and cable
segments:
A. Verification of end-to-end fiber continuity with power level
readings for each fiber taken with a light source and power meter.
B. Verification of loss at each splice point to be below 0.3 dB as well
as the final bi-directional OTDR test data, with distances.
C. Cable manufacturer, cable type (buffer/ribbon), fiber type, cable
reel number, number of fibers, number of fibers per tube, and distance of each
section of cable between splice points.
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Schedule 5
FORM OF IRU AGREEMENT
---------------------
IRU AGREEMENT
BETWEEN
, INC. ("GRANTEE")
-------------------------
AND
XXXXXXXX COMMUNICATIONS, INC. ("XXXXXXXX")
DATED
--------------------------
( to )
----------------- ------------------
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TABLE OF CONTENTS
ARTICLE PAGE
------- ----
I DEFINITIONS......................................................................................
II CONVEYANCE OF IRU................................................................................
III CONSIDERATION....................................................................................
IV CONSTRUCTION.....................................................................................
V CONNECTION TO THE SYSTEM AND COLLOCATION VI......................................................
VI ACCEPTANCE AND TESTING OF FIBERS ................................................................
VII SYSTEM ROUTE.....................................................................................
VIII TERM.............................................................................................
IX OPERATION, MAINTENANCE, AND REPAIR OF THE SYSTEM.................................................
X RELOCATION.......................................................................................
XI USE OF THE SYSTEM................................................................................
XII AUDIT RIGHTS.....................................................................................
XIII INDEMNIFICATION..................................................................................
XIV LIMITATION OF LIABILITY..........................................................................
XV INSURANCE........................................................................................
XVI TAXES AND GOVERNMENTAL FEES......................................................................
XVII DISCLAIMER OF WARRANTIES.........................................................................
XVIII NOTICE...........................................................................................
XIX CONFIDENTIALITY..................................................................................
XX DEFAULT..........................................................................................
XXI FORCE MAJEURE....................................................................................
XXII ARBITRATION......................................................................................
XXIII RULES OF CONSTRUCTION............................................................................
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XXIV ASSIGNMENT.......................................................................................
XXV REPRESENTATIONS AND WARRANTIES...................................................................
XXVI RELATIONSHIP OF THE PARTIES......................................................................
XXVII PROHIBITION ON IMPROPER PAYMENTS.................................................................
XXVIII ENTIRE AGREEMENT; AMENDMENT; EXECUTION...........................................................
EXHIBITS
Exhibit A Xxxxxxxx System Route Map
Exhibit B Collocation Agreement
Exhibit C Fiber Splicing, Testing and Acceptance Standards
Exhibit D Fiber Specifications
Exhibit E Cable Installation Specifications
Exhibit F Transmission Site Specifications
Exhibit G AsBuilt Drawing Specifications
Exhibit H Operations Specifications
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IRU AGREEMENT
(__________________ to _________________)
THIS IRU AGREEMENT (this "Agreement") is made, as of the Effective Date
(hereafter defined), by and between ________________________________
("Grantee"), a ___________ corporation having its principal office at
________________________, _______________ and XXXXXXXX COMMUNICATIONS, INC.
("Xxxxxxxx"), a Delaware corporation, having its principal office at Xxx
Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, Xxxxxxxx has constructed or will construct or obtain rights of
use in a fiber optic communication system (the "System") along the route
depicted in Exhibit A hereto (the "Route"); and
WHEREAS, Grantee desires to acquire from Xxxxxxxx, and Xxxxxxxx desires
to provide to Grantee, an exclusive, indefeasible right to use certain optical
fibers in the System along the Route as hereafter described upon the terms and
conditions set forth below;
NOW, THEREFORE, in consideration of the mutual promises set forth
below, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms and phrases used in this Agreement shall have the
following meanings:
"Acceptance Date" means the date defined in Section 6.6 below.
"Acceptance Standards" means the standards set forth in Exhibit C with
respect to the testing and condition of the Grantee Fibers.
"Affiliates" means, with respect to any entity, an entity controlling,
controlled by, or under common control with such entity by means of
direct or indirect majority equity ownership.
"Agreement" shall have the definition set forth in the first paragraph
of this document.
"Cable" means the fiber optic cable installed pursuant to this
Agreement as part of the System (including any replacement cable) and
fibers contained therein, including the Grantee Fibers, and associated
splicing connections, splice boxes and vaults, and conduit.
"Claim" means any claim, action, dispute, or proceeding of any kind
between the Grantee (or any of its Affiliates, successors or assigns)
and Xxxxxxxx (or any of its Affiliates, successors, or assigns) and any
other claim, transaction, occurrence, loss, liability, expense or other
matter arising out of, in connection with, or in any way related to,
the Grantee IRU, the Cable, the System, this Agreement or any other
instrument, arrangement or understanding related to the Grantee IRU.
"Claimant" shall have the definition set forth in Section 13.1.
"Collocation Agreement" means Exhibit B or an executed agreement in the
form of Exhibit B, as the context indicates.
"Connecting Point" means a point where the network or facilities of
Grantee will connect to the System.
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"Contract Price" shall have the definition set forth in Section 3.1.
"Costs" means actual, direct costs incurred and computed in accordance
with the established accounting procedures used by Xxxxxxxx to xxxx
third parties for reimbursable projects. All Costs shall be computed in
accordance with generally accepted accounting principles. Such actual,
direct costs include, without limitation, the following:
(a) Labor costs, including wages and salaries, and
benefits and overhead allocable to such labor costs
(overhead allocation percentage shall not exceed the
lesser of: (i) the percentage Xxxxxxxx allocates to
its internal projects; or (ii) one hundred thirty
percent (130%)); and
(b) Other direct costs and outofpocket expenses on a
passthrough basis (such as equipment, materials,
supplies, contract services, costs of capital,
Required Rights, sales, use or similar taxes, etc.).
"Deadline Date" shall have the definition set forth in Section 4.2.
"Effective Date" means the date on which this Agreement has been fully
executed by both parties.
"Facility Owners/Lenders" shall mean any entity (other than Xxxxxxxx):
(a) owning any portion of the System or any property or security
interest therein, (b) leasing to Xxxxxxxx, or providing an IRU to
Xxxxxxxx in, any portion of the System, or (c) that is a Lender with
respect to Xxxxxxxx or any Affiliates of Xxxxxxxx.
"Fiber Acceptance Testing" means the fiber acceptance testing described
in Exhibit C and in Article VI.
"Fibers" means any optical fibers contained in the System including the
Grantee Fibers, the fibers of Xxxxxxxx and the fibers of any third
party in the System excluding, however, any fibers granted (whether
through ownership, IRU, lease, or otherwise) to governmental entities
in exchange for use of streets, rights of way, or other property under
the jurisdiction of such entity.
"Force Majeure Event" shall have the definition set forth in Article
XXI.
"Grantee" means _________________, Inc., a _________ corporation.
"Grantee Equipment" shall mean optronic (opto-electrical), electronic,
or optical equipment, or materials, facilities, or other equipment
owned, possessed, or utilized (other than the System), by Grantee.
"Grantee Fibers" means those certain fibers described in Article II and
in which Grantee shall be granted an IRU hereunder.
"Grantee IRU" shall have the definition set forth in Article II.
"Indefeasible Right of Use" or "IRU" is an exclusive, indefeasible
right to use the specified property. The grant of an IRU does not
convey title or ownership of the covered property nor any interest in
real or personal property.
"Indemnitor" shall have the definition set forth in Section 13.1.
"Initial Term" shall have the definition set forth in Section 8.1.
"Lenders" shall have the definition set forth in Section 2.2.
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"Non-Routine Maintenance" shall have the definition set forth in
Section 9.1
"Pro-Rata Share" means a proportion equal to a fraction, the numerator
of which is the number of Grantee Fibers and the denominator of which
is all other Fibers in the Cable. If this fraction varies over
different portions of the System, then the Pro Rata Share shall be
equal to the weighted average (weighted by length as set forth in
Xxxxxxxx' as-built drawings) of the relevant portions. For example, if
the fraction for 100 feet of the affected Segment is 0.1 and the
fraction for the remaining 50 feet of the affected Segment is 0.07, the
weighted average for the entire Segment would be 0.09.
"Released Party" shall mean each of the following:
(a) any Affiliates, Lenders, and Facility Owners/Lenders
of the other party;
(b) any employee, officer, director, stockholder,
partner, member, or trustee of the other party or of
its Affiliates, Lenders, or Facility Owners/Lenders;
or
(c) assignees of the entities included in the above
subparagraphs (a) or (b) and any employee, officer,
director, stockholder, partner, member, or trustee of
such assignees.
"Representatives" shall have the definition set forth in Section 19.2.
"Required Rights" shall have the definition set forth in Section 7.1.
"Right-of-way Agreements" means rights, licenses, authorizations,
easements, leases, fee interests, or agreements that provide for the
occupancy by the System of real property or fixtures (such as conduit,
bridges, river crossings, or transmission towers).
"Route" shall have the meaning set forth in the Recitals above.
"Route Miles" means the actual miles traversed by the Cable (including
spurs) based on the asbuilt drawings.
"Routine Maintenance" shall have the definition set forth in Section
9.1.
"Segment" means a discrete portion of the System and may refer to a
span (a portion of the System between two Transmission Sites or between
a Transmission Site and a point of presence or System end point), a
portion between two points of presence or a point of presence and a
System end point, or a portion of the System affected by a relocation
or other circumstance.
"System" shall have the meaning set forth in the Recitals above.
"Term" means the term of this Agreement as defined in Section 8.1,
including the Initial Term and any effective extension of the Initial
Term.
"Transmission Sites" shall mean the optical amplifier, regenerator, and
junction sites along the Route associated with the Cable.
"Xxxxxxxx" means Xxxxxxxx Communications, Inc., a Delaware corporation,
formerly known as Vyvx, Inc.
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ARTICLE II
CONVEYANCE OF IRU
2.1 Effective as of the Acceptance Date, Xxxxxxxx hereby grants to
Grantee an exclusive Indefeasible Right of Use, for the purposes described
herein, in those certain _________ (__) strands of Fibers meeting the
specifications set forth in Exhibit D (the "Grantee Fibers") in the Cable on the
terms and subject to the conditions set forth herein (the "Grantee IRU"). Such
grant of an IRU does not convey any legal title to any real or personal
property, including the Fibers, the Cable, or the System. Grantee's IRU does not
include any equipment used to transmit capacity over or "light" the Fibers.
2.2 Either party shall have the right directly or through an Affiliate,
to enter into financing arrangements (including secured loans, leases, sales
with lease-back, or leases with lease-back arrangements, purchase-money or
vendor financing, conditional sales transactions, or other arrangements) with
one or more financial institutions, vendors, suppliers or other financing
sources (individually and collectively, "Lenders"), that, with respect to
Xxxxxxxx, relate to the System and, with respect to Grantee, relate to Grantee's
IRU rights (and not to any property right in the System).
ARTICLE III
CONSIDERATION
3.1 Grantee shall pay Xxxxxxxx the amount of $____________ per Route
Mile of the Grantee Fibers (the "Contract Price"), payable as follows:
(a) An initial deposit of ____ percent (__%) of the estimated
Contract Price, as determined by multiplying the Contract
Price by the total estimated Route Miles of the Cable, as set
forth on Exhibit A, shall be due three (3) banking days after
execution hereof.
(b) The remainder of the estimated Contract Price shall be due
five (5) banking days after the Acceptance Date.
3.2 At the time Xxxxxxxx provides Grantee the as-built drawings
pursuant to Section 7.2, it shall also provide Grantee with a statement of the
actual Route Miles and any amount to be paid by Xxxxxxxx to Grantee or by
Grantee to Xxxxxxxx to reflect any difference between the Contract Price (as
computed based on actual Cable Route Miles) and the estimated Contract Price.
Xxxxxxxx shall pay to Grantee (if the amounts Grantee paid exceed the Contract
Price) or Grantee shall pay to Xxxxxxxx (if the amounts Grantee paid are less
than the Contract Price) the difference between the estimated Contract Price and
the actual Contract Price within ten (10) days of the delivery of such
statement.
3.3 Grantee shall make all payments to Xxxxxxxx set forth in this
Article by wire transfer of immediately available funds to the United States
account or accounts designated by Xxxxxxxx. All other payments to be made
pursuant to this Agreement may be made by check or draft of immediately
available funds delivered to the address designated in writing by the other
party (e.g., in a statement or invoice) or, failing such designation, to the
address for notice to such other party provided pursuant to Article XVIII.
ARTICLE IV
CONSTRUCTION
4.1 Xxxxxxxx warrants and represents that, upon the Acceptance Date,
the System shall be designed, engineered, installed, and constructed in
accordance with the specifications set forth in Exhibits C, D, E, and F.
4.2 The planned Acceptance Date is ________________. The Deadline Date
shall be the later of one hundred eighty (180) days after (a) such planned
Acceptance Date or (b) the planned Acceptance Date as extended
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due to events described in Article XXI or as expressly permitted by this
Agreement. If the Acceptance Date does not occur by the Deadline Date, then
Grantee's payment obligation set forth in Section 3.1(b) shall be reduced by ten
thousand dollars ($10,000) per month for each month (pro-rated for partial
months) until the Acceptance Date occurs. Such reduction shall not exceed a
total of sixty thousand dollars ($60,000) (i.e., no further reductions shall
apply after the sixth (6th) month following the Deadline Date).
4.3 If the Acceptance Date does not occur within one hundred eighty
(180) days of the Deadline Date, Grantee may terminate the Agreement by notice
to Xxxxxxxx. Such notice shall specify whether Grantee elects to:
(a) have Xxxxxxxx refund the amounts paid by Grantee
pursuant to Article III, in which case, as Grantee's
exclusive remedy for such non-occurrence, Xxxxxxxx
shall refund such amounts within thirty (30) days of
receipt of such notice together with interest as
provided in Section 20.3, and the parties shall have
no further obligations under this Agreement; or
(b) pursue any available remedies (excluding those
remedies provided in Sections 4.2 and Subsection
4.3(a)), subject to the provisions of this Agreement.
ARTICLE V
CONNECTION TO THE SYSTEM AND COLLOCATION
5.1 Subject to the provisions herein, Grantee shall pay for and arrange
all connections of its facilities with the Grantee Fibers. Grantee shall
reimburse Xxxxxxxx for any Costs incurred within thirty (30) days after receipt
of Xxxxxxxx' invoice therefor. Such connections shall be made only as set forth
in Exhibits B or H.
5.2 Grantee shall have the right to use Transmission Sites along the
Route pursuant to the terms of a Collocation Agreement in the form set forth as
Exhibit B. Such Transmission Sites shall meet or exceed the power and building
requirements specified in Exhibit F. Grantee shall provide, maintain, and for
all purposes be solely responsible for all Grantee Equipment at Transmission
Sites or other locations.
ARTICLE VI
ACCEPTANCE AND TESTING OF FIBERS
6.1 Xxxxxxxx shall test the Grantee Fibers in accordance with Exhibit C
("Fiber Acceptance Testing"). Fiber Acceptance Testing shall progress Segment by
Segment along the Route as cable splicing progresses, so that test results may
be reviewed in a timely manner. Grantee shall have the right, but not the
obligation, to have an individual present to observe the Fiber Acceptance
Testing (except to the extent such testing takes place prior to the period
ending fourteen (14) days after the Effective Date) and Xxxxxxxx shall provide
Grantee prior notice of Xxxxxxxx' testing schedule. Within fourteen (14) days
after the conclusion of any Fiber Acceptance Testing of the Grantee Fibers
conducted by Xxxxxxxx in any given Segment (or, if later, within fourteen (14)
days of the Effective Date), Xxxxxxxx shall provide Grantee with a copy of the
test results.
6.2 Grantee shall have the right, but not the obligation, at its sole
expense, to conduct its own Fiber Acceptance Testing of the Grantee Fibers to
verify that they meet the standards set forth in Exhibit C. If Grantee elects to
conduct its own Fiber Acceptance Testing of the Grantee Fibers, it shall notify
Xxxxxxxx of its intent to do so (including dates and locations) during or prior
to the above ten (10) day review period and shall complete such testing within
fourteen (14) days after such notice to Xxxxxxxx. Xxxxxxxx shall have the right,
but not the obligation, to have an individual present to observe Grantee's Fiber
Acceptance Testing. Within fourteen (14) days after the conclusion of Grantee's
Fiber Acceptance Testing of the Grantee Fibers, Grantee shall provide Xxxxxxxx
with a copy of the test results. Grantee's exercise or non-exercise of its right
to conduct Fiber Acceptance Testing shall not extend or shorten the time periods
for Grantee to determine, pursuant to Section 6.3, if the Fibers meet the
Acceptance Standards.
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6.3 If, within ten (10) days after receipt by Grantee from Xxxxxxxx of
the test results referred to in Section 6.1 or of the results of retesting as
set forth below, Grantee reasonably determines that Xxxxxxxx' or Grantee's test
results show that the Grantee Fibers do not meet the Acceptance Standards,
Grantee shall, within such ten (10) day period, notify Xxxxxxxx of such
determination and shall identify in writing the specific data that indicate such
failure to meet the Acceptance Standards.
6.4 Upon receiving notice pursuant to Section 6.3 that the Grantee
Fibers do not meet the Acceptance Standards, Xxxxxxxx shall either:
(a) expeditiously take such action as shall be reasonably
necessary with respect to such portion of the Grantee Fibers
to cause such portion of the Grantee Fibers to meet the
Acceptance Standards and then re-test the Grantee Fibers in
accordance with the provisions of this Article; or
(b) notify Grantee that Xxxxxxxx disputes Grantee's determination
that the Grantee Fibers do not meet the Acceptance Standards.
After taking corrective actions and retesting the Grantee Fibers, Xxxxxxxx shall
provide Grantee with a copy of the new test results and Grantee shall again have
all rights provided in this Article with respect to such new test results. The
cycle described above of testing, taking corrective action and retesting shall
take place until the Grantee Fibers meet the Acceptance Standards.
6.5 If Xxxxxxxx provides notice to Grantee pursuant to Subsection
6.4(b), the parties shall agree upon on a mutually acceptable fiber optic
testing company and such company shall re-test the Grantee Fibers. If the
testing company, after testing the Grantee Fibers, determines that the Grantee
Fibers meet the Acceptance Standards, then Grantee shall pay the testing
company's charges for performing the testing and the Grantee shall be deemed to
have accepted the relevant portion of the Grantee Fibers. If the testing
company, after testing the Grantee Fibers, determines that the Grantee Fibers do
not meet the Acceptance Standards, then Xxxxxxxx shall pay the testing company's
charges for performing the testing and shall perform the corrective action and
re-testing set forth in Subsection 6.4(a).
6.6 If Grantee does not object to the results of any of Xxxxxxxx' Fiber
Acceptance Testing or its own Fiber Acceptance Testing by written notice within
the time periods specified in Section 6.3, Grantee shall be deemed to have
accepted the Grantee Fibers. The date of Grantee's notice accepting the Grantee
Fibers or the date of deemed acceptance under this Section for the last Segment
to be accepted shall be the "Acceptance Date" of the Grantee Fibers.
ARTICLE VII
SYSTEM ROUTE
7.1 As of the Acceptance Date Xxxxxxxx represents that:
a Xxxxxxxx or the underlying facility owner for any
portion of the System shall have obtained all
Right-of-way Agreements necessary for the
installation and use of the System hereunder; and
a Xxxxxxxx shall have obtained by IRU agreement, lease,
or otherwise the right to use portions of the System
it does not own.
The rights Xxxxxxxx is required to obtain pursuant to Subsections (a) and (b)
above are referred to as "Required Rights."
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7.2 Within six (6) months after the Acceptance Date, Xxxxxxxx shall
provide Grantee with asbuilt drawings for the System complying with the
specifications for asbuilt drawings set forth in Exhibit G.
ARTICLE VIII
TERM
8.1 The Term of this Agreement shall begin on the Effective Date and
shall end on _______________________ (the "Initial Term"). Subject to the
conditions set forth below, Grantee may, by written notice, extend the Term for
an additional ten (10) year period. Grantee shall provide the written notice at
least one year in advance of the date the Term would expire absent such notice.
8.2. Grantee may not exercise its right to extend the Agreement if, at
least six months prior to the date of the proposed extension of the Term,
Xxxxxxxx, based on its reasonable opinion, notifies Grantee that Xxxxxxxx has
determined that continued operation of the System or Xxxxxxxx' continued
performance under this Agreement during such extension would be commercially
impracticable because:
(a) the terms and conditions of any Required Rights will
not permit it to perform its obligations under this
Agreement during the extended Term and that it is not
commercially practicable to renew such Required
Rights permitting such performance during such
extended Term;
(b) the costs of continued use of Required Rights is in
excess of that which is commercially reasonable for
the System;
(c) operation or maintenance of the System will not be
technically practicable during such extended Term; or
(d) the Pro-Rata Share of Routine Maintenance Costs
exceeds the charges for Routine Maintenance (as
adjusted pursuant to Section 9.2) by more than twenty
percent (20%).
8.3. If Xxxxxxxx determines that continued performance under this
Agreement during a requested extension would be commercially impracticable,
Xxxxxxxx shall (a) assign its rights and obligations under this Agreement to an
entity that agrees to the requested extension, (b) offer to convey the Cable to
Grantee, (c) offer to convey the Grantee Fibers to Grantee, (d) offer to allow
Grantee, alone or together with other entities holding IRUs or ownership
interests in the System, to operate and maintain the System at Grantee's or such
entities' sole cost, or (e) propose refurbishment of the System if Xxxxxxxx
determines in its reasonable opinion that such refurbishment would be
cost-effective.
8.4 If Xxxxxxxx proposes refurbishment of the System, pursuant to
Subsection 8.3(e), it shall provide Grantee notice of such proposal at least one
hundred twenty (120) days prior to the date the Term would expire absent any
extension. The notice shall describe the refurbishment, state whether Xxxxxxxx
personnel or a contractor will perform the work, and provide an estimate of the
expected Costs thereof. Grantee shall, within thirty (30) days of receiving such
notice, notify Xxxxxxxx whether Grantee elects to participate in such
refurbishment. If Grantee so elects, the Term shall be extended and Grantee
shall reimburse Xxxxxxxx for its Pro-Rata Share of the Costs that are incurred.
If Grantee elects to participate in such refurbishment Xxxxxxxx shall provide
Grantee with monthly progress reports. Grantee shall pay its Pro-Rata Share of
the Costs from time to time within thirty (30) days of receipt of Xxxxxxxx'
invoices therefor.
8.5. Xxxxxxxx shall renew or replace existing Right-of-Way Agreements,
IRUs, or other underlying rights to continue to maintain the System in place
through at least the Initial Term.
8.6. No termination of this Agreement shall affect the rights or
obligations of any party hereto:
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(a) With respect to any payment hereunder for services rendered
prior to the date of termination;
(b) Pursuant to Articles XII, XIII, XIV, XV, XVI, XIX, XXII, and
XXIII entitled Audit Rights; Indemnification; Limitation of
Liability; Insurance; Taxes and Governmental Fees;
Confidentiality; Arbitration; and Rules of Construction,
respectively; or
(c) Pursuant to other provisions of this Agreement that, by their
sense and context, are intended to survive termination of this
Agreement.
ARTICLE IX
OPERATION, MAINTENANCE, AND REPAIR OF THE SYSTEM
9.1 During the Term of this Agreement, Xxxxxxxx shall perform all
required Routine Maintenance and Non-Routine Maintenance. "Non-Routine
Maintenance" means maintenance and repair work that Xxxxxxxx is obligated to
provide under this Agreement other than:
(a) The work specifically identified as Routine Maintenance in
Exhibit H;
(b) Work in which the aggregate amount of Costs incurred as a
result of any single event or multiple, closely related events
is less than or equal to five thousand dollars ($5,000.00); or
(c) Work for which Grantee is obligated to reimburse Xxxxxxxx for
all or a portion of the Costs incurred pursuant to other
Articles of this Agreement or a Collocation Agreement.
"Routine Maintenance" means maintenance and repair work that Xxxxxxxx is
obligated to provide under this Agreement and that is described in Subsections
9.1(a) or 9.1(b).
9.2 Grantee shall pay Xxxxxxxx _______________ dollars ($__.00) per
Route Mile per month throughout the Term of this Agreement for Routine
Maintenance. This amount shall be adjusted once each calendar year on a date
selected by Xxxxxxxx to reflect cumulative changes in the U.S. Producer Price
Index (Bureau of Labor Statistics "Finished Goods" Series - ID WPUSOP3000) since
the Acceptance Date, provided that in no event shall the above amount be less
than _________ dollars ($___.00) per Route Mile per month. Grantee shall pay
such amounts on or before the first day of each calendar month during the Term.
Payments shall be prorated, as necessary, for the first and last months of the
Term.
9.3 At the time Xxxxxxxx provides Grantee a statement of the actual
Route Miles pursuant to Section 3.2, it shall provide Grantee a statement of any
amount to be paid by Xxxxxxxx to Grantee or by Grantee to Xxxxxxxx to reflect
any difference between the Routine Maintenance charges (as computed based on
actual Cable Route Miles) and the estimated Routine Maintenance charges.
Xxxxxxxx shall pay to Grantee (if the cumulative amounts Grantee paid exceed the
estimated Routine Maintenance charges) or Grantee shall pay to Xxxxxxxx (if the
cumulative amounts Grantee paid are less than the estimated Routine Maintenance
charges) the difference the estimated Routine Maintenance charges and the actual
Routine Maintenance charges within ten (10) days of the delivery of such
statement.
9.4 Grantee shall pay its Pro-Rata Share of Xxxxxxxx' Costs of
performing Non-Routine Maintenance within thirty (30) days after receipt of
Xxxxxxxx' invoice therefor. Notwithstanding the foregoing, Xxxxxxxx shall repair
any damage caused by Grantee's negligence or willful misconduct at Grantee's
sole expense and at Xxxxxxxx' then-prevailing rates.
9.5 Xxxxxxxx may subcontract for maintenance, repair, restoration,
relocation, or other operational and technical services it is obligated to
provide hereunder or may have the underlying facility owner or its contractor
perform such obligations.
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9.6 Xxxxxxxx' maintenance and repair obligations under this Agreement
shall not include maintenance, repair or replacement of Grantee Equipment.
9.7 Grantee shall not access any part of the System (other than
pursuant to an executed and effective Collocation Agreement) without the prior
written consent of Xxxxxxxx, and then only upon the terms and conditions
specified by Xxxxxxxx.
ARTICLE X
RELOCATION
10.1 If, following the Acceptance Date, Xxxxxxxx determines in its
reasonable business judgment, or is required by a third party with legal
authority to do so, to relocate all or any portion of the System or any of the
facilities used or required in providing Grantee with the Grantee IRU, Xxxxxxxx
shall provide Grantee sixty (60) days' prior notice of any such relocation, if
possible, and shall proceed with such relocation. Xxxxxxxx shall have the right
to direct such relocation, including, but not limited to, the right to determine
the extent of, the timing of, and methods to be used for such relocation;
provided that any such relocation:
(a) Shall be constructed and tested in accordance with the
specifications and requirements set forth in this Agreement
and applicable Exhibits;
(b) Shall not result in a materially adverse change to the
operations, performance, Connecting Points with the network of
Grantee, or end points of the System; and
(c) Shall not unreasonably interrupt service on the System.
10.2 Unless such relocation is necessitated by a breach of Xxxxxxxx'
obligations under this Agreement, Grantee shall reimburse Xxxxxxxx for the Costs
incurred in the same manner as is set forth for reimbursement of Non-Routine
Maintenance Costs in Section 9.4.
10.3 At Grantee's request, Xxxxxxxx shall deliver to Grantee updated
asbuilt drawings with respect to a relocated portion of the System within the
later of one-hundred eighty (180) days following the completion of such
relocation or thirty (30) days after receipt of Grantee's request.
ARTICLE XI
USE OF THE SYSTEM
11.1 Grantee may use the Grantee Fibers for any lawful purpose.
Xxxxxxxx shall have no right to use the Grantee Fibers during the Term except in
the event of a Grantee default.
11.2 Grantee shall promptly notify Xxxxxxxx of any matters pertaining
to any damage or impending damage to or loss of System that are known to it and
that could reasonably be expected to adversely affect the System.
11.3 Grantee shall take all reasonable precautions against, and shall
assume liability for, subject to the terms of this Agreement, any damage caused
by Grantee to the System or to fibers used or owned by Xxxxxxxx or third
parties.
11.4 Grantee shall not use equipment, technologies, or methods of
operation that interfere in any way with or adversely affect the System or the
use of the System by Xxxxxxxx or third parties or their respective Fibers,
equipment, or facilities associated therewith.
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11.5 Grantee shall not cause or permit any part of the System to become
subject to any mechanic's lien, materialman's lien, vendor's lien, or any
similar lien whether by operation of law or otherwise. If Grantee breaches its
obligations under this Section, it shall immediately notify Xxxxxxxx in writing,
shall promptly cause such lien to be discharged and released of record without
cost to Xxxxxxxx, and shall indemnify Xxxxxxxx against all costs and expenses
(including reasonable attorneys' fees and court costs at trial and on appeal)
incurred in discharging and releasing such lien.
ARTICLE XII
AUDIT RIGHTS
12.1 Each party shall keep such books and records (which shall be
maintained on a consistent basis and substantially in accordance with generally
accepted accounting principles) as shall readily disclose the basis for any
charges (except charges fixed in advance by this Agreement or by separate
agreement of the parties) or credits, ordinary or extraordinary, billed or due
to the other party under this Agreement and shall make them available for
examination, audit, and reproduction by the other party and its agents for a
period of one (1) year after such charge or credit is billed or due.
ARTICLE XIII
INDEMNIFICATION
13.1 Each party ("Indemnitor") hereby releases and shall indemnify,
defend, protect, and hold harmless the other party, its employees, members,
managers, officers, agents, contractors, Facility Owners/Lenders, and Affiliates
(collectively and individually, "Claimant"), from and against, and assumes
liability for:
(a) Any injury, death, loss, or damage to any person, tangible
property, or facilities of any entity (including reasonable
attorneys' fees and costs at trial and appeal), to the extent
arising out of or resulting from the acts or omissions,
negligent or otherwise, of Indemnitor, its officers,
employees, servants, Affiliates, agents, contractors, or
underlying facility owners or from any entity for whom it is
in law responsible, or otherwise resulting from, arising in
connection with or relating to its performance (including
breach or failure thereto) under this Agreement;
(b) Any claims, liabilities or damages arising out of any
violation by Indemnitor of regulations, rules, statutes, or
court orders of any local, state, or federal governmental
agency, court, or body in connection with its performance
under this Agreement or otherwise; or
(c) Any liability to a third party arising directly or through one
or more intermediate parties, from an action or claim brought
by the Indemnitor, to the extent such third party has a right
of indemnification, impleader, crossclaim, contribution, or
other right of recovery against the Claimant for any indirect,
special, or consequential damages of the Indemnitor.
13.2 Each party's obligation to indemnify, defend, protect, and save
the Claimant harmless is a material obligation to the continuing performance of
the other party's obligations hereunder. The obligations of this Article shall
survive the expiration or earlier termination of this Agreement. The provisions
of Article XV shall not be construed as limiting the Indemnitor's obligations
pursuant to this Article or other provisions of this Agreement.
ARTICLE XIV
LIMITATION OF LIABILITY
14.1 NEITHER PARTY NOR ANY CLAIMANT (AS DEFINED ABOVE) AFFILIATED WITH
OR IN A CONTRACTUAL RELATIONSHIP WITH A PARTY SHALL BE LIABLE TO THE OTHER PARTY
FOR
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SPECIAL, PUNITIVE, EXEMPLARY, CONSEQUENTIAL, INCIDENTAL OR INDIRECT LOSSES OR
DAMAGES AS A RESULT OF THE PERFORMANCE OR NONPERFORMANCE OF ITS OBLIGATIONS
UNDER THIS AGREEMENT, OR ITS ACTS OR OMISSIONS RELATED TO THIS AGREEMENT OR ITS
USE OF THE SYSTEM, WHETHER OR NOT ARISING FROM SOLE, JOINT OR CONCURRENT
NEGLIGENCE, STRICT LIABILITY OR VIOLATION OF LAW.
14.2 Notwithstanding the provisions of Section 14.1 or any other
provision of this Agreement:
(a) except as set forth in Subsection 14.2(b), the limitations on
liability set forth in Section 14.1 shall apply to claims of a
party or third party arising from any defect, error,
interruption, delay, or attenuation of any telecommunications
service, capacity, data, or transmission; and
(b) liability arising from Grantee's failure to comply with the
provisions of Section 14.5 shall not be subject to the limits
on liability set forth in Section 14.1.
14.3 Neither party shall have any recourse of any kind against any
Released Party or any assets of a Released Party in respect of any Claim, it
being expressly agreed and understood that no liability whatever shall attach to
or be incurred by any Released Party in respect of any Claim under or by reason
of this Agreement or any other instrument, arrangement or understanding related
to the Grantee IRU. Each party waives all such recourse to the extent set forth
in this Section on behalf of its successors, assigns, and any entity claiming
by, through, or under such party.
14.4 Except as provided in Subsection 13.1(c) and Section 14.3, nothing
contained herein shall operate as a limitation on the right of either Xxxxxxxx
or Grantee to bring an action or claim for damages against any third party
(other than a Claimant affiliated with or in a contractual relationship with the
other party), including indirect, special, or consequential damages, based on
any acts or omissions of such third party as such acts or omissions may affect
the construction, operation or use of such party's fibers or the System. Each of
Xxxxxxxx and Grantee shall assign such rights of claims, execute such documents
and do whatever else may be reasonably necessary to enable the other (at such
other party's sole expense) to pursue any such action against such third party.
14.5 Grantee, in any contract or tariff offering of service, capacity,
or rights of use that in any of the preceding instances involves use of the
System, shall include in such contract or tariff a written limitation of
liability that is binding on Grantee's customers and in all material respects at
least as restrictive as the limitations set forth in Sections 14.1 and 14.3.
ARTICLE XV
INSURANCE
15.1 During the term of this Agreement, the parties shall each obtain
and maintain not less than the following insurance:
(a) Commercial General Liability Insurance, including coverage for
sudden and accidental pollution legal liability, with a
combined single limit of $10,000,000 for bodily injury and
property damage per occurrence and in the aggregate.
(b) Worker's Compensation Insurance in amounts required by
applicable law and Employers Liability Insurance with limits
not less than $1,000,000 each accident. If work is to be
performed in Nevada, North Dakota, Ohio, Washington, Wyoming
or West Virginia, the party shall participate in the
appropriate state fund(s) to cover all eligible employees and
provide a stop gap endorsement.
(c) Automobile Liability Insurance with a combined single limit of
$2,000,000 for bodily injury and property damage per
occurrence, to include coverage for all owned, nonowned, and
hired vehicles.
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The limits set forth above are minimum limits and shall not be construed to
limit the liability of either party.
15.2 Each party shall obtain and maintain the insurance policies
required above with companies rated A- or better by Best's Key Rating Guide or
with a similar rating by another generally recognized rating agency and the
other party, its Affiliates, officers, directors, and employees, and any other
party entitled to indemnification hereunder shall be named as additional
insureds to the extend of such indemnification. Each party shall provide the
other party with an insurance certificate confirming compliance with the
insurance requirements of this Article. The insurance certificate shall indicate
that the other party shall be notified not less than thirty (30) days prior to
any cancellation or material change in coverage.
15.3 If either party provides any of the foregoing coverages through a
claims made policy basis, that party shall cause such policy or policies to be
maintained for at least three (3) years beyond the expiration of this Agreement.
15.4 The parties shall each obtain from the insurance companies
providing the coverages required by this Agreement a waiver of all rights of
subrogation or recovery in favor of the other party and, as applicable, its
members, managers, shareholders, Affiliates, assignees, officers, directors, and
employees or any other party entitled to indemnity under this Agreement to the
extent of such indemnity.
15.6 Nothing in this Agreement shall be construed to prevent either
party from satisfying its insurance obligations pursuant to this Agreement under
a blanket policy or policies of insurance that meet or exceed the requirements
of this Article.
ARTICLE XVI
TAXES AND GOVERNMENTAL FEES
16.1 Grantee shall timely report and pay any and all sales, use,
income, gross receipts, excise, transfer, ad valorem or other taxes, and any and
all franchise fees or similar fees assessed against it due to its ownership of
the Grantee IRU, its use of the Grantee Fibers, including the provision of
services over the Grantee Fibers, its use of any other part of the System, or
its ownership or use of facilities connected to the Grantee Fibers.
16.2 Subject to Section 16.1 above, Xxxxxxxx shall timely report and
pay any and all sales, use, income, gross receipts, excise, transfer, ad valorem
or other taxes, and any and all franchise fees or similar fees assessed against
it due to its construction, ownership or use of the System, provided that
Grantee shall reimburse Xxxxxxxx for its Pro-Rata Share of property taxes
(including ad valorem, use, property, or similar taxes, franchise fees, or
assessments that are based on the value of property or of a property right)
attributable to the System, including taxes based on the value, operation, or
existence of the System.
16.3 If Xxxxxxxx is assessed for any taxes or fees related to Grantee's
ownership of the Grantee IRU or Grantee's use of the Grantee Fibers or that
Grantee is obligated to pay pursuant to Sections 16.1 or 16.2, Grantee shall
reimburse Xxxxxxxx for any payment of such taxes or fees within thirty (30) days
of receipt of Xxxxxxxx' invoice.
16.4 The parties shall cooperate in any contest of any taxes or fees so
as to avoid, to the extent reasonably possible, prejudicing the interests of the
other party.
16.5 If Xxxxxxxx determines that it should relocate a portion of the
System to bypass a jurisdiction that has imposed or assessed taxes or fees on
Xxxxxxxx or the System, Xxxxxxxx shall provide Grantee at least sixty (60) days
prior notice of the proposed relocation. After such 60-day period, Xxxxxxxx
shall proceed with the relocation as provided in, and Grantee shall bear its
Pro-Rata Share of the relocation Costs as set forth in, Article X.
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16.5 If the charges for Required Rights payable to governmental or
quasi-governmental agencies or for use of governmental or quasi-governmental
rights of way during a calendar year exceed twice the amount payable during the
first full calendar after the Acceptance Date, then Grantee shall pay its
Pro-Rata Share of such excess within thirty (30) days of receipt of Xxxxxxxx'
invoice therefor.
ARTICLE XVII
DISCLAIMER OF WARRANTIES
17.1 EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, XXXXXXXX MAKES
NO WARRANTY TO GRANTEE OR ANY OTHER ENTITY, WHETHER EXPRESS, IMPLIED OR
STATUTORY, AS TO THE INSTALLATION, DESCRIPTION, QUALITY, MERCHANTABILITY,
COMPLETENESS, OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY FIBERS, THE SYSTEM,
OR ANY SERVICE PROVIDED HEREUNDER OR DESCRIBED HEREIN, OR AS TO ANY OTHER
MATTER, ALL OF WHICH WARRANTIES ARE HEREBY EXPRESSLY EXCLUDED AND DISCLAIMED.
17.2 No Facility Owners/Lenders have made any representation or
warranty of any kind, express or implied, to Grantee concerning Xxxxxxxx, the
Grantee Fibers, the Cable, or the System or as to any of the matters set forth
in Sections 17.1 or 25.1. No Grantee Lenders have made any representation or
warranty of any kind, express or implied, to Xxxxxxxx concerning Grantee, the
Grantee Fibers, the Cable, or the System or as to any of the matters set forth
in Sections 17.1 or 25.1 OR AS TO ANY OTHER MATTER.
ARTICLE XVIII
NOTICE
18.1 Unless otherwise provided in this Agreement, all notices and
communications concerning this Agreement shall be in writing and addressed to
the other party as follows:
If to Grantee:
----------------------------
----------------------------
----------------------------
----------------------------
with a copy to: ----------------------------
----------------------------
----------------------------
----------------------------
If to Xxxxxxxx: Xxxxxxxx Communications, Inc.
Attn: ______________________
Xxx Xxxxxxxx Xxxxxx, Xxxxx ____
Xxxxx, Xxxxxxxx 00000
Facsimile No.: (918) 573____
with a copy to: Xxxxxxxx Communications, Inc.
Attn: General Counsel
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 0000000
or at such other address as may be designated in writing to the other party.
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18.2 Unless otherwise provided herein, notices shall be hand delivered,
sent by registered or certified U.S. Mail, postage prepaid, or by commercial
overnight delivery service, or transmitted by facsimile, and shall be deemed
served or delivered to the addressee or its office when received at the address
for notice specified above when hand delivered, upon confirmation of sending
when sent by facsimile, on the day after being sent when sent by overnight
delivery service, or three (3) days after deposit in the mail when sent by U.S.
mail.
ARTICLE XIX
CONFIDENTIALITY
19.1 If the parties have entered into (or later enter into) a
Confidentiality Agreement, the terms of such an agreement shall control and
Section 19.2 shall not apply; however, if any such Confidentiality Agreement
expires or is no longer effective at any time during the Term of this Agreement,
Section 19.2 shall be in effect during those periods.
19.2 In the absence of a separate Confidentiality Agreement between the
parties, if either party provides confidential information to the other in
writing and identified as such or if in the course of performing under this
Agreement a party learns confidential information regarding the facilities or
plans of the other, the receiving party shall protect the confidential
information from disclosure to third parties with the same degree of care
accorded its own confidential and proprietary information; provided, however,
that the parties shall each be entitled to provide such confidential information
to their respective directors, officers, members, managers, employees, agents,
and contractors, consultants ("Representatives"), Affiliates, contractors,
financial institutions, underlying facility owners, potential assignees (who are
bound by a written agreement restricting use and disclosure of confidential
information) and Representatives of Affiliates, in each case whose access is
reasonably necessary. Each such recipient of confidential information shall be
informed by the party disclosing confidential information of its confidential
nature, and shall be directed to treat such information confidentially and shall
agree to abide by these provisions. In any event, each party shall be liable
(with respect to the other party) for any breach of this provision by any entity
to whom that party discloses confidential information. The terms of this
Agreement (but not its execution or existence) shall be considered confidential
information for purposes of this Article. Notwithstanding any other provision
herein, neither Xxxxxxxx nor Grantee shall be required to hold confidential any
information that:
(a) Becomes publicly available other than through the recipient;
(b) Is required to be disclosed by a governmental, regulatory
authority, or judicial order, rule, or regulation or
proceedings with respect to this Agreement or a party's
obligations as a publicly held company;
(c) Is independently developed by the disclosing party;
(d) Becomes available to the disclosing party without restriction
from a third party; or
(e) Is required by its lender and is given to such lender on a
confidential basis.
These obligations shall survive expiration or termination of this Agreement for
a period of two (2) years.
19.3 Notwithstanding Sections 19.1 and 19.2, confidential information
shall not include information disclosed by the receiving party as required by
applicable law or regulation; provided, however, that the information disclosed
is limited to the existence and general nature of the relationship between
Xxxxxxxx and Grantee, including, as required, the scope, approximate revenues,
purposes, and expectations related to such relationship and a description of any
disputes relating thereto. Notwithstanding the foregoing, this Agreement may be
provided to any governmental agency or court of competent jurisdiction to the
extent required by applicable law.
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19.4 Neither party shall use the name, trade name, service xxxx, or
trademark of the other in any promotional or advertising material without the
prior written consent of the other. The parties shall coordinate and cooperate
with each other when making public announcements related to the terms of this
Agreement and each party shall have the right to promptly review, comment upon,
and approve any publicity materials, press releases, or other public statements
by the other party that refer to, or that describe any aspect of, this
Agreement.
ARTICLE XX
DEFAULT
20.1 Except as set forth in Section 20.2, a party shall not be in
default under this Agreement unless and until the other party provides it
written notice of such default and the first party shall have failed to cure the
same within thirty (30) days after receipt of such notice; provided, however,
that where such default cannot reasonably be cured within such thirty (30) day
period, if the first party shall proceed promptly to cure the same and prosecute
such curing with due diligence, the time for curing such default shall be
extended for such period of time as may be necessary to complete such curing.
Any event of default may be waived at the non-defaulting party's option. Upon
the failure of a party to timely cure any such default after notice thereof from
the other party and expiration of the above cure periods, then the
non-defaulting party may, subject to the terms of Article XXII entitled
Arbitration, pursue any legal remedies it may have under applicable law or
principles of equity relating to such breach.
20.2 If Grantee fails to fully pay any required payment of the Contract
Price under Article III or any other payment required to be paid under this
Agreement when due, Xxxxxxxx may, in addition to any other remedies that it may
have under this Agreement or by law, in its sole discretion, terminate this
Agreement upon ten (10) days' notice if such payment (together with applicable
interest) is not made within such ten (10) day period.
20.3 If either Xxxxxxxx or Grantee fails to make any payment under this
Agreement when due, such amounts shall accrue interest, from the date such
payment is due until paid, including accrued interest, at a rate (unless
specifically described elsewhere in this Agreement) equal to eighteen percent
(18%) per annum or, if lower, the highest percentage allowed by law. No interest
charges shall apply to the periods provided for in Sections 3.2 or 9.3 for
payments due to adjustments arising from differences between the estimated Route
Miles and the actual Route Miles.
20.4 The deposit to be paid pursuant to Subsection 3.1(a) shall be
nonrefundable unless a court or arbitrator orders rescission of this Agreement
due to Xxxxxxxx' material breach of its obligations under this Agreement.
ARTICLE XXI
FORCE MAJEURE
21.1 Neither Xxxxxxxx nor Grantee shall be in default under this
Agreement with respect to any delay in its performance (other than a failure to
make payments when due) caused by any of the following conditions (each a "Force
Majeure Event"): (a) act of God; (b) fire; (c) flood; (d) material shortage or
unavailability not resulting from the responsible party's failure to timely
place orders or take other necessary actions therefor; (e) government codes,
ordinances, laws, rules, regulations, or restrictions; (f) war or civil
disorder; or (g) any other cause beyond the reasonable control of such party.
The party claiming relief under this Article shall promptly notify the other in
writing of the existence of the Force Majeure Event relied on, the expected
duration of the Force Majeure Event, and the cessation or termination of the
Force Majeure Event. The party claiming relief under this Article shall exercise
commercially reasonable efforts to minimize the time for any such delay.
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ARTICLE XXII
ARBITRATION
22.1 Any dispute arising between Xxxxxxxx and Grantee in connection
with this Agreement that is not settled to their mutual satisfaction within the
applicable notice or cure periods provided in this Agreement, shall be settled
by arbitration in Tulsa, Oklahoma, in accordance with the Commercial Arbitration
Rules of the American Arbitration Association in effect on the date that such
notice is provided. If Xxxxxxxx and Grantee cannot agree on a single arbitrator
within fifteen (15) days after the applicable notice or cure period has expired,
Xxxxxxxx and Grantee shall each select an arbitrator within such fifteen (15)
day period and the two (2) arbitrators shall select a third arbitrator within
ten (10) days. If the parties fail to appoint arbitrators or the arbitrators
cannot agree on a third arbitrator, then either party may request that the
American Arbitration Association select and appoint a neutral arbitrator who
shall act as the sole arbitrator. The parties shall be entitled to submit expert
testimony and/or written documentation on such arbitration proceeding. The
decision of the arbitrator or arbitrators shall be final and binding upon
Xxxxxxxx and Grantee and shall include written findings of law and fact, and
judgment may be obtained thereon by either Xxxxxxxx or Grantee in a court of
competent jurisdiction. Xxxxxxxx and Grantee shall each bear the cost of
preparing and presenting its own case. The cost of the arbitration, including
the fees and expenses of the arbitrator or arbitrators, shall be shared equally
by Xxxxxxxx and Grantee unless the award otherwise provides. The arbitrator or
arbitrators shall be instructed to establish procedures such that a decision can
be rendered within sixty (60) days of the appointment of the arbitrator or
arbitrators. In no event shall the arbitrator or arbitrators have the power to
award any damages described in and limited by Article XIV which Article shall be
binding on the arbitrator(s).
22.2 The obligation to arbitrate shall not be binding upon any party
with respect to requests for preliminary injunctions, temporary restraining
orders, specific performance, or other procedures in a court of competent
jurisdiction to obtain interim relief when deemed necessary by such court to
preserve the status quo or prevent irreparable injury pending resolution by
arbitration of the actual dispute.
22.3 Any arbitrator appointed to act under this Article must agree to
be bound to the provisions of Article XIX entitled Confidentiality with respect
to the terms of this Agreement and any information obtained during the course of
the arbitration proceedings.
ARTICLE XXIII
RULES OF CONSTRUCTION
23.1 The captions or headings in this Agreement are strictly for
convenience and shall not be considered in interpreting this Agreement or as
amplifying or limiting any of its content. Words in this Agreement that import
the singular connotation shall be interpreted as plural, and words that import
the plural connotation shall be interpreted as singular, as the identity of the
parties or objects referred to may require. References to "person" or "entity"
each include natural persons and legal entities, including but not limited to,
corporations, limited liability companies, partnerships, sole proprietorships,
business divisions, unincorporated associations, governmental entities, and any
entities entitled to bring an action in, or that are subject to suit in an
action before, any state or federal court of the United States.
23.2 Unless expressly defined herein, words having wellknown technical
or trade meanings shall be so construed.
23.3 Except as set forth to the contrary herein, any right or remedy of
Xxxxxxxx or Grantee shall be cumulative and without prejudice to any other right
or remedy, whether contained herein or not.
23.4 Nothing in this Agreement is intended to provide any legal rights
to anyone not an executing party of this Agreement except under the
indemnification and insurance provisions and except that (i) the Released
Parties shall have the benefit of Sections 14.3, 24.1, and 28.2 and (ii) the
Facility Owners/Lenders shall be entitled to rely on and have the benefit of
Sections 17.2 and 28.2.
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23.5 This Agreement has been fully negotiated between and jointly
drafted by Xxxxxxxx and Grantee.
23.6 In the event of a conflict between the provisions of this
Agreement and those of any Exhibit, the provisions of this Agreement shall
prevail and such Exhibits shall be corrected accordingly.
23.7 Except as otherwise set forth herein, for the purpose of this
Agreement the normal standards of performance within the telecommunications
industry in the relevant market shall be the measure of whether a party's
performance is reasonable and timely.
23.8 Except as the context otherwise indicates, all references to
Exhibits, Articles, Sections, Subsections, Clauses, and Paragraphs refer to
provisions of this Agreement.
23.9 The failure of either Xxxxxxxx or Grantee to enforce any of the
provisions of this Agreement, or the waiver thereof in any instance, shall not
be construed as a general waiver or relinquishment on its part of any such
provision, but the same shall nevertheless be and remain in full force and
effect.
23.10 This Agreement shall be governed by and construed in accordance
with the domestic laws of the State of Oklahoma without reference to its choice
of law principles.
23.11 If any term, covenant or condition in this Agreement shall, to
any extent, be invalid or unenforceable in any respect under the laws governing
this Agreement, the remainder of this Agreement shall not be affected thereby,
and each term, covenant or condition of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
ARTICLE XXIV
ASSIGNMENT
24.1 An assignment (or other transfer) of this Agreement or a party's
rights or obligations hereunder to any other party shall not be effective
without (i) the prior written consent of the non-assigning party and (ii) the
written agreement of the assignee to be bound by the indemnification provisions
and limitations on liability and recourse set forth in this Agreement (including
those benefiting the Released Parties).
24.2 Except as set forth in Section 24.4, the non-assigning party may
withhold consent to an assignment in its sole discretion, if the assignment:
(a) is made by Grantee within one (1) year of the Effective Date,
other than as part of a sale of substantially all of Grantee's
assets; or
(b) is an assignment of less than all of a party's rights or
obligations hereunder.
24.3 Except to the extent Section 24.2 provides the non-assigning party
the right to withhold its consent in its sole discretion and except as set forth
in Section 24.5, the non-assigning party shall not unreasonably withhold its
consent to an assignment if neither the assigning party nor the proposed
assignee is in material default under this Agreement or any other agreement with
the non-assigning party.
24.4 The provisions of Section 24.2 notwithstanding:
(a) Xxxxxxxx may assign some or all of its rights and obligations
hereunder to State Street Bank and Trust Company of
Connecticut, National Association, in connection with a
financing by Xxxxxxxx of construction of its fiber optic
network; in addition, Street Bank and Trust Company of
Connecticut, National Association, may further assign this
Agreement as collateral for such
17
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financing. If Xxxxxxxx makes an assignment pursuant to this
Subsection 24.4(a), Xxxxxxxx (or its assignee pursuant to an
assignment made under the other provisions of this Article
XXIV) shall guarantee performance of the assignee's
obligations.
(b) Xxxxxxxx may assign all of its rights and obligations to the
underlying facilities owner or operator with respect to
portion(s) of the Route between two points of presence on the
System with the prior written consent of Grantee, which
consent shall not be unreasonably withheld if neither Xxxxxxxx
nor the proposed assignee is in material default under this
Agreement or any other agreement with the Grantee.
24.5 For a period of two (2) years after the Effective Date, Grantee
shall not convey any interest in the rights granted herein except by means of
the provision of capacity or a permitted assignment of this Agreement.
"Capacity" does not include IRU grants, sales, leases, assignments, or other
grants of rights in the form of "windows" or wavelengths in fiber strands, use
of optronic systems, "dark" fiber, "dim" fiber, or "lit" fiber. After such two
(2) year period, Grantee may convey such an interest provided that Grantee shall
serve as the sole point of contact with Xxxxxxxx and no party receiving such
interest shall have any contract rights against or be in privity of contract
with Xxxxxxxx as a result of such conveyance.
24.6 This Agreement and the rights and obligations under this Agreement
(including, without limitation, the limitations on liability and recourse set
forth in this Agreement benefiting the other party and the Released Parties)
shall be binding upon and shall inure to the benefit of Xxxxxxxx and Grantee and
their respective permitted successors and assigns.
24.7 Neither the provisions of this Article nor any other provisions of
this Agreement shall limit the ability of any Facility Owners/Lenders or of any
Released Parties to assign their rights under this Agreement and such Facility
Owners/Lenders and Released Parties may assign their rights hereunder at any
time and from time to time without the consent of, notice to, or any other
action by any other entity. The provisions of this Agreement benefiting the
Facility Owners/Lenders and Released Parties shall inure to the benefit of such
entities and their respective Affiliates, successors, and assigns.
ARTICLE XXV
REPRESENTATIONS AND WARRANTIES
25.1 In addition to any other representations and warranties contained
in this Agreement, each party hereto represents and warrants to the other that:
(a) It has the full right and authority to enter into, execute,
deliver, and perform its obligations under this Agreement;
(b) It has taken all requisite corporate action to approve the
execution, delivery, and performance of this Agreement;
(c) This Agreement constitutes a legal, valid and binding
obligation enforceable against such party in accordance with
its terms; and
(d) Its execution of and performance under this Agreement shall
not violate any applicable existing regulations, rules,
statutes, or court orders of any local, state, or federal
government agency, court, or body.
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ARTICLE XXVI
RELATIONSHIP OF THE PARTIES
26.1 The relationship between Xxxxxxxx and Grantee shall not be that of
partners, agents, or joint venturers for one another, and nothing contained in
this Agreement shall be deemed to constitute a partnership or agency agreement
between them for any purposes, including, but not limited to federal income tax
purposes. Xxxxxxxx and Grantee, in performing any of their obligations
hereunder, shall be independent contractors or independent parties and shall
discharge their contractual obligations at their own risk.
ARTICLE XXVII
PROHIBITION ON IMPROPER PAYMENTS
27.1 Neither party shall use any funds received under this Agreement
for illegal or otherwise "improper" purposes. Neither party shall pay any
commission, fees or rebates to any employee of the other party, or favor any
employee of such other party with gifts or entertainment of significant cost or
value. If either party has reasonable cause to believe that one of the
provisions in this Article has been violated, it, or its representative, may
audit the books and records of the other party for the sole purpose of
establishing compliance with such provisions.
ARTICLE XXVIII
ENTIRE AGREEMENT; AMENDMENT; EXECUTION
28.1 Except as set forth in Article XIX, this Agreement constitutes the
entire and final agreement and understanding between Xxxxxxxx and Grantee with
respect to the subject matter hereof and supersedes all prior agreements
relating to the subject matter hereof, which are of no further force or effect.
The Exhibits referred to herein are integral parts hereof and are made a part of
this Agreement by reference.
28.2 This Agreement may only be amended, modified, or supplemented by
an instrument in writing executed by duly authorized representatives of Xxxxxxxx
and Grantee. No such amendment, modification, or supplement shall result in any
modification of (i) any indemnity benefiting any Facility Owners/Lenders or
their respective Affiliates or (ii) any limitation of liability or recourse
benefiting any Released Parties that is adverse to such Released Parties.
28.3 This Agreement may be executed in one or more counterparts, all of
which taken together shall constitute one and the same instrument.
28.4 This Agreement may be duly executed and delivered by a party by
execution and facsimile delivery of the signature page of a counterpart to the
other party, provided that, if delivery is made by facsimile, the executing
party shall promptly deliver a complete counterpart that it has executed to the
other party.
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IN WITNESS WHEREOF and in confirmation of their consent to the terms
and conditions contained in this Agreement and intending to be legally bound
hereby, Xxxxxxxx and Grantee have executed this Agreement as of the dates set
forth below.
---------------------------------------
Date: By:
------------------- ------------------------------------
Print Name:
----------------------------
Title:
---------------------------------
XXXXXXXX COMMUNICATIONS, INC.
Date: By:
------------------- ------------------------------------
Print Name:
----------------------------
Title:
---------------------------------
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SCHEDULE 11.02(b)
Supplemental Mortgage Provisions
FLORIDA
1. Property Description: The Property located in Florida which is subject to
Section 11.01 of this Lease is:
All of the Property purchased pursuant to the MediaOne Agreement.
2. Supplemental Rights: With respect to the Property described in Item 1
above, the Lessor shall have the right, if an Event of Default shall have
occurred:
(i) to exercise any and all remedies described in the Participation
Agreement or the other Operative Documents.
(ii) to declare the entire unpaid balance of the Notes and all other
obligations of Lessee secured hereby immediately due and payable without
further notice.
(iii) to the extent permitted by law, to take immediate possession of
the Property or any part thereof (which Lessee agrees to surrender to
Lessor) and manage, control or lease same to such person or persons and
exercise all other rights granted pursuant to the Lease. The taking of
possession under this paragraph shall not prevent concurrent or later
proceedings for the foreclosure sale of the Property as provided elsewhere
herein.
(iv) to apply, on ex parte motion to any court of competent
jurisdiction, for the appointment of a receiver and shall be entitled to
the appointment of such receiver as a matter of right, without regard to
the value of the Property as security for the amount of the Loan, or the
solvency or insolvency of any person then liable for the payment of the
amount of the Loan. In addition to the rights of protection afforded to
Lessor by Section 697.07, Florida Statutes (1997), as amended (and not as
an election of remedies), Lessor shall be entitled, as a matter of strict
right and without regard to the value or occupancy of any security for the
obligations secured hereby, to have a receiver appointed by a court without
notice to Lessee, to enter upon and take possession of the Property,
collect the rents therefrom and thereof and apply the same as the
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court may direct, such receiver to have all the rights and powers permitted
under the laws of Florida. The expenses, including receiver's fees,
reasonable attorneys' fees (including any incurred in appeals), costs and
agent's compensation, incurred pursuant to the powers herein contained
shall be secured hereby. The right to enter and take possession of the
Property, to manage and operate the same, to collect the rents therefrom
and thereof, whether by a receiver or otherwise, shall be cumulative to any
other right or remedy hereunder or afforded by law, and may be exercised
concurrently therewith or independently thereof Lessor shall be liable to
account only for such rents actually received by Lessor, whether received
pursuant to this paragraph or otherwise. The Lessee hereby specifically
waives the right to object to the appointment of a receiver as aforesaid
and hereby consents that such appointment shall be made as an admitted
equity and as a matter of absolute right to the Lessor and that the same
may be done without notice to the Lessee or any other defendant to such
suit.
(v) to foreclose on the mortgage granted hereby and in case of sale
in an action or proceeding to foreclose and Lessor shall have the right to
sell the Property in parts or as an entirety. It is intended hereby to give
to Lessor the widest possible discretion permitted by law with respect to
all aspects of any such sale or sales.
(vi) to exercise all other remedies available, whether at law or
equity, in such order as Lessor may elect. It shall also not be necessary
that Lessor pay any impositions, premiums or other charges regarding which
Lessee is in default before Lessor may invoke its rights hereunder. All
such other rights and remedies available to Lessor hereunder shall be
cumulative and may be pursued concurrently or successively. The failure or
omission on the part of Lessor to exercise the option for acceleration of
maturity and/or foreclosure or to timely exercise any other option, right,
or remedy conferred upon the Lessor herein, or the acceptance by Lessor of
partial payments hereunder, shall not constitute a waiver of any default or
the right to exercise any such option, but such option shall remain
continuously in force. Acceleration of maturity, once claimed hereunder by
Lessor, at the option of Lessor, may be rescinded by written acknowledgment
to that effect by Lessor, but the tender and acceptance of
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partial payments alone shall not, in any way, effect or rescind such
acceleration of maturity. The obtaining of a judgment or decree on the
amount of the Loan, whether in the State of Florida or elsewhere, shall not
in any way affect the lien created hereby upon the Property, and any
judgment or decree so obtained shall be secured hereby to the same extent
as the Loan is now secured.
3. Limitation of Rights: With respect to the Property described in item 1
above, the following provisions shall apply:
"Notwithstanding anything to the contrary contained in this Lease, Lessee
and Lessor have agreed that the portion of the Property located in the
State of Florida secures only a portion of the amount of the Loan in the
maximum amount of $38,000,000, and that the value of the Property located
in Florida is $38,000,000. Therefore, irrespective of anything contained in
this Lease to the contrary, in the event of foreclosure and sale of that
portion of the Property located in the State of Florida, the maximum
recovery of Lessor in the event of a sale of that portion of the Property
located in the State of Florida to any purchaser other than Lessor, and the
maximum credit allowed toward the payment of the amount of the Loan in
bidding upon the portion of the Property located in the State of Florida at
a foreclosure sale, shall be $38,000,000, plus such amounts as interest,
costs, attorneys' fees and other monies advanced for insurance premiums,
taxes and preservation of that portion of the Property located in the State
of Florida."
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SCHEDULE 11.03(c)
Supplemental Security Provisions
FLORIDA
1. Property Description: The Property located in Florida which is subject to
Section 11.03 of this Lease is:
All of the Property purchased pursuant to the MediaOne Agreement.
2. Supplemental Provisions: With respect to the Property described in Item 1
above:
(a) The Lessee covenants and agrees with the Lessor that from and after
the date of this Lease and until the repayment in full of the Loan:
(i) At any time and from time to time, upon the written request of
the Lessor and at the sole expense of the Lessee, the Lessee shall promptly
and duly execute and deliver any and all such further instruments and
documents and take such further action as the Lessor may reasonably deem
desirable to obtain the full benefits of this agreement and of the rights
and powers herein granted, including (A) filing any financing or
continuation statements under the Uniform Commercial Code with respect to
the liens and security interests granted hereunder or under any other Loan
Document, (B) transferring the Collateral to Lender's possession (if such
Collateral consists of documents, instruments or chattel paper or if a
security interest in such Collateral can be perfected only by possession)
and (C) to obtain waivers of liens from landlords and mortgagees. The
Lessee also hereby authorizes the Lessor to file any such financing or
continuation statement without the signature of the Lessee to the extent
permitted by applicable law. The filing of a copy of this Lease (or a
memorandum hereof) shall be deemed to constitute the filing of a financing
statement to perfect the security interest in the Collateral and to secure
the payment of all amounts due from time to time from the Lessee to the
Lessor under this Lease and the other Operative Documents.
(ii) The Lessee shall not change its name, identity or corporate
structure in any manner which might make any financing or continuation
statement filed in connection herewith seriously misleading within the
meaning of Section 9-402(7)
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of the Uniform Commercial Code or any other then applicable provision of
the Uniform Commercial Code unless the Lessee shall have given the Lessor
at least thirty (30) days' prior written notice thereof and shall have
taken all action (or made arrangements to take such action substantially
simultaneously with such change if it is impossible to take such action in
advance) necessary or reasonably requested by the Lessor to amend such
financing statement or continuation statement so that it is not seriously
misleading.
(b) (i) The Lessee hereby irrevocably constitutes and appoints the
Lessor and any authorized officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Lessee and in
the name of the Lessee or in its own name, from time to time in the
Lessor's discretion, for the purpose of carrying out the terms of this
agreement, to take any and all appropriate action and to execute and
deliver any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this agreement and, without
limiting the generality of the foregoing, hereby grants to the Lessor the
power and right, on behalf of the Lessee, without notice to or assent by
the Lessee, and at any time, to do the following:
(A) in the name of the Lessee, in its own name or otherwise, take
possession of, endorse and receive payment of any checks, drafts, notes,
acceptances, or other instruments for the payment of monies due under any
of the Collateral;
(B) continue any insurance existing pursuant to the terms of this
agreement or any of the other Operative Documents, and pay all or any part
of the premiums therefor and the costs thereof; and
(C) receive payment of any and all monies, claims, and other amounts
due or to become due at any time arising out of or in respect of any
Collateral.
(ii) The Lessee hereby irrevocably constitutes and appoints the
Lessor and any authorized employee, officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Lessee and in
the name of the Lessee or in its own name, from time to time in the
Lessor's
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discretion, for the purpose of carrying out the terms of this agreement, to
take any and all appropriate action and to execute and deliver any and all
documents and instruments which may be necessary or desirable to accomplish
the purposes of this agreement and, without limiting the generality of the
foregoing, hereby grants to the Lessor the power and right, on behalf of
the Lessee, without notice to or assent by the Lessee, upon the occurrence
and during the continuation of an Event of Default, to do the following:
(A) ask, demand, collect, receive and give acquittances and receipts
for any and all money due or to become due under any of the Collateral;
(B) pay or discharge taxes, liens, security interests, or other
encumbrances levied or placed on or threatened against the Collateral;
(C) effect any repairs or obtain any insurance called for by the
terms of this agreement or any of the other Operative Documents and pay all
or any part of the premiums therefor and costs thereof;
(D) direct any party liable for any payment under or in respect of
any of the Collateral to make payment of any and all monies due or to
become due thereunder, directly to the Lessor or as the Lessor shall
direct;
(E) settle, compromise or adjust any suit, action, or proceeding
and, in connection therewith, give such discharges or releases as the
Lessor may deem appropriate;
(F) file any claim or take or commence any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by
the Lessor for the purpose of collecting any and all such monies due under
any of the Collateral whenever payable;
(G) commence and prosecute any suits, actions or proceedings of law
or equity in any court of competent jurisdiction to collect the Collateral
or any part thereof and to enforce any other right in respect of any of the
Collateral;
(H) defend any suit, action or proceeding brought against the Lessee
with respect to any of the Collateral if the Lessee does not defend such
suit, action or proceeding or if the Lessor believes that the Lessee is not
pursuing such defense in a manner that will maximize the recovery with
respect to such Collateral; and
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(I) sell, transfer, pledge, make any agreement with respect to, or
otherwise deal with any of the Collateral as fully and completely as though
the Lessor were the absolute owner thereof for all purposes, and to do, at
the Lessor's option and the Lessee's expense, at any time, or from time to
time, all acts and things which the Lessor reasonably deems necessary to
perfect, preserve, or realize upon the Collateral and the Lessor's security
interest therein in order to effect the intent of this agreement, all as
fully and effectively as the Lessee might do.
(iii) The Lessee hereby ratifies, to the extent permitted by law, all
that said attorneys shall lawfully do or cause to be done by virtue hereof.
The foregoing power of attorney is a power coupled with an interest and
shall be irrevocable until the repayment in full of the Loan.
(iv) The powers conferred on the Lessor hereunder are solely to
protect the Lessor's security interests in the Collateral and shall not
impose any duty upon it to exercise any such powers. The Lessor shall be
accountable only for amounts that it actually receives as a result of the
exercise of such powers and none of its officers, directors, employees,
agents or representatives shall be responsible to the Lessee for any act or
failure to act, except for their own gross negligence or willful misconduct
as determined by a final judgment of a court of competent jurisdiction.
(v) The Lessee also authorizes the Lessor, at any time and from time
to time, to (i) communicate in its own name with any party to any contract
with regard to the assignment of the right, title and interest of the
Lessee in and under such contracts and other matters relating thereto and
(ii) execute, in connection with the exercise of its remedies provided for
herein, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.
(c) (i) If any Event of Default shall occur and be continuing, the Lessor
may exercise in addition to all other rights and remedies granted to it
under this agreement, the other Operative Documents and under any other
instrument or agreement securing, evidencing or relating to the Loan, all
rights and remedies of a secured party under the Uniform Commercial Code as
in effect at such time in the State of New York (the "Uniform Commercial
Code"). Without limiting the generality of the foregoing, the Lessee
expressly agrees that in any such event the Lessor without demand of
performance or other demand, advertisement or notice of any kind (except
the notice specified below of time
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and place of public or private sale) to or upon the Lessee or any other Person
(all and each of which demands, advertisements and notices are hereby expressly
waived to the maximum extent permitted by the Uniform Commercial Code and other
applicable law), may forthwith enter upon the premises of the Lessee where any
Collateral is located through self-help, without judicial process, without
first obtaining a final judgment or giving the Lessee notice and opportunity for
a hearing on the Lessor's claim or action, and without paying rent to the
Lessee, and collect, receive, assemble, process, appropriate and realize upon
the Collateral, or any part thereof, and may forthwith sell, lease, assign, give
an option or options to purchase, or sell or otherwise dispose of and deliver
said Collateral (or contract to do so), or any part thereof, in one or more
parcels at public or private sale or sales, at any exchange at such prices as it
may deem best, for cash or on credit or for future delivery without assumption
of any credit risk. The Lessor shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale or sales,
to purchase for its benefit the whole or any part of said Collateral so sold,
free of any right or equity of redemption, which equity of redemption the Lessee
hereby releases. Such sales may be adjourned or continued from time to time with
or without notice. The Lessor shall have the right to conduct such sales on the
Lessee's premises or elsewhere and shall have the right to use the Lessee's
premises without charge for such sales for such time or times as the Lessor
deems necessary or advisable.
(ii) The Lessee further agrees, at the Lessor's request, to assemble the
Collateral and make it available to the Lessor at places which the Lessor shall
reasonably select, whether at the Lessee's premises or elsewhere. Until the
Lessor is able to effect a sale, lease, or other disposition of the Collateral,
the Lessor shall have the right to use or operate the Collateral, or any part
thereof, to the extent that it deems appropriate for the purpose of preserving
the Collateral or its value or for any other purpose deemed appropriate by the
Lessor. The Lessor shall have no obligation to the Lessee to maintain or
preserve the rights of the Lessee as against third parties with respect to the
Collateral while the Collateral is in the possession of the Lessor. The Lessor
may, if it so elects, seek the appointment of a receiver or keeper to take
possession of the Collateral and to enforce any of the Lessor's remedies with
respect to such appointment without prior notice or hearing. The Lessor shall
apply the net proceeds of any such collection, recovery, receipt, appropriation,
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125
realization or sale, as provided in subsection (d) (iv) hereof, the Lessee
remaining liable for any deficiency remaining unpaid after such application, and
only after so paying over such net proceeds and after the payment by the Lessor
of any other amount required by any provision of law, including section
9-504(l)(c) of the Uniform Commercial Code (but only after the Lessor has
received what the Lessor considers reasonable proof of a subordinate party's
security interest), need the Lessor account for the surplus, if any, to the
Lessee. To the maximum extent permitted by applicable law, the Lessee waives all
claims, damages, and demands against the Lessor arising out of the repossession,
retention or sale of the Collateral except such which may arise out of the gross
negligence or willful misconduct of such party. The Lessee agrees that ten (10)
days' prior notice by the Lessor of the time and place of any public sale or of
the time after which a private sale may take place is reasonable notification of
such matters. The Lessee shall remain liable for any deficiency if the proceeds
of any sale or disposition of the Collateral are insufficient to pay all amounts
to which the Lessor is entitled, the Lessee also being liable for any reasonable
outside attorneys' fees incurred by the Lessor to collect such deficiency.
(iii) The Lessee agrees to pay any and all costs of the Lessor, including,
without limitation, reasonable outside attorneys' fees, incurred in connection
with the enforcement of any of its rights and remedies hereunder.
(iv) Except as otherwise specifically provided herein, the Lessee hereby
waives presentment, demand, protest or any notice (to the maximum extent
permitted by applicable law) of any kind in connection with this agreement or
any of the Collateral.
(v) The proceeds of any sale, disposition or other realization upon all or
any part of the Collateral shall be applied by the Lessor upon receipt, in the
following order of priorities:
First, the payment in full of reasonable expenses of the Lessor in
connection with such sale, disposition or other realization, including all
expenses, liabilities and advances incurred or made by the Lessor in connection
therewith, including reasonable outside attorney's fees;
Second, to the payment of accrued but unpaid interest on the Loan;
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126
Third, to the payment of unpaid principal of the Loan;
Fourth, to the payment of all other obligations secured hereby until
all such other obligations shall have been paid in full; and
Finally, to payment to the Lessee, or its successors or assigns, to any
other party lawfully entitled thereto, or as a court of competent jurisdiction
may direct, of any surplus then remaining from such proceeds.
(d) The Lessor shall use reasonable care with respect to the Collateral in its
possession or under its control. The Lessor shall not have any other duty as to
any Collateral in its possession or control or in the possession or control of
any agent or nominee of the Lessor, or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto. Upon request of the Lessee, the Lessor shall account for any monies
received by the Lessor in respect of any foreclosure on or disposition of the
Collateral.
(e) The Lessor shall not by any act, delay, omission or otherwise be deemed to
have waived any of its rights or remedies hereunder, and no waiver shall be
valid unless in writing, signed by the Lessor and then only to the extent
therein set forth. A waiver by the Lessor of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy which
the Lessor would otherwise have had on any future occasion. No failure to
exercise nor any delay in exercising on the part of the Lessor, any right, power
or privilege hereunder, shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power or privilege hereunder preclude any
other or future exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies hereunder provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights and
remedies provided by law. None of the terms or provisions of this agreement may
be waived, altered, modified or amended except by an instrument in writing, duly
executed by the Lessor and the Lessee.
3. Limitation of Rights: With respect to the Property described in item 1
above, the following provisions shall apply:
"Notwithstanding anything to the contrary contained in this Lease, Lessee
and Lessor have agreed that the portion of the Property located in the
State of Florida secures only a portion of the amount of the Loan in the
maximum amount of
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127
$38,000,000, and that the value of the Property located in Florida is
$38,000,000. Therefore, irrespective of anything contained in this Lease to the
contrary, in the event of foreclosure and sale of that portion of the Property
located in the State of Florida, the maximum recovery of Lessor in the event of
a sale of that portion of the Property located in the State of Florida to any
purchaser other than Lessor, and the maximum credit allowed toward the payment
of the amount of the Loan in bidding upon the portion of the Property located in
the State of Florida at a foreclosure sale, shall be $38,000,000, plus such
amounts as interest, costs, attorneys' fees and other monies advanced for
insurance premiums, taxes and preservation of that portion of the Property
located in the State of Florida."
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SCHEDULE 12.15
Acquisition Cost, Original Capitalized Cost and
Adjusted Capitalized Cost of Certain Property
Subject to Prior Lease
1. Acquisition Cost (May 6, 1998): $25,772,580.41
2. Original Capitalized Cost.
a. Series A Portion $21,903,570.55
b. Series B Portion 2,953,647.37
c. Series C Portion 915,362.49
--------------
d. Total Original Capitalized
Cost (Sept. 2, 1998) $25,772,580.41
==============
3. Adjusted Capitalized Cost.
a. Series A Portion $21,929,857.84
b. Series B Portion 2,957,249.53
c. Series C Portion 916,916.35
--------------
d. Total Adjusted Capitalized
Cost (Sept. 2, 1998) $25,804,023.72
==============
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EXHIBIT A
Form of Certificate of Acceptance
CERTIFICATE OF ACCEPTANCE, dated September 2, 1998, by Xxxxxxxx
Communications, Inc., a Delaware corporation (the "Lessee"). All capitalized
terms used herein, unless defined herein, shall have the respective meanings set
forth in the Amended and Restated Lease, dated as of September 2, 1998 (the
"Lease"), among the Lessee and State Street Bank and Trust Company of
Connecticut, National Association, as Trustee (the "Lessor").
W I T N E S S E T H :
WHEREAS, the Lessor and the Lessee are parties to the Lease which
provides for, inter alia, the execution and delivery of a Certificate of
Acceptance for the purpose of acknowledging acceptance of specific Items of
Property under the Lease and acknowledging the leasing of such Items of Property
under the Lease in accordance with the terms thereof.
NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration, the Lessor and the Lessee hereby agree as follows:
1. The Lessor and the Lessee hereby acknowledge and confirm that the
Lessee leases from the Lessor under the Lease the Items of Property specified in
Schedule I hereto.
2. The Lessee hereby confirms to the Lessor that the Lessee has
accepted such Items of Property for all purposes of the Lease as being in good
working order and repair and without defect or inherent vice in condition,
design, operation or fitness for use, and otherwise in full compliance with the
Lease; provided, however, that nothing contained herein or in the Lease shall in
any way diminish or otherwise affect any right the Lessee may have with respect
to such Property against any third party (other than the Lessor Group).
3. The Lessee hereby confirms to the Lessor that:
(a) Such items of Property do not constitute Regulated Property.
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(b) Schedule 2.02(b) of the Lease is hereby amended and supplemented by
adding thereto the Supplemental Use Restrictions annexed as
Schedule II to this Certificate of Acceptance.
IN WITNESS WHEREOF, the Lessee has caused this Certificate of
Acceptance to be duly executed on the day and year first above written.
XXXXXXXX COMMUNICATIONS, INC.
By:
-------------------------------
Name:
Title:
ACCEPTED:
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual
capacity, but solely as
Trustee
By:
---------------------------
Name:
Title:
2
131
Schedule I to the Certificate of Acceptance
Description Cost of Property Appraisal Value
of Property Quantity (per unit) (if any)(l)
----------- -------- ---------------- ---------------
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(1) Appraised Value as determined by the Appraiser.
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1 Schedule II to the Certificate of Acceptance
2 Supplemental Use Restrictions
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EXHIBIT B
Fiber Testing Standards
1. General. This exhibit defines the standard procedures for testing and
acceptance of the fiber and splices. In general, the Lessee (or its designee),
will perform all tests. The tests should follow standard industry requirements
and criteria. The Lessee will provide all test data to the Lessor upon request.
2. Initial Construction Testing
A. During initial construction, the Lessee (or its designee) shall use an
optical time domain reflectometer ("OTDR") to test splices and shall use an OTDR
and a 1-km launch reel to test pigtail connectors. Such initial construction
tests shall be uni-directional and performed at 1550 nm.
B. If the loss value of two connectors and the associated pigtail splice
exceeds 1 dB, the Lessee (or its designee) shall break the splice and re-splice
until the loss value is 1.0 dB or less. If the Lessee (or its designee) is
unable to achieve a loss value of 1.0 dB or less after five total splicing
attempts, the splice shall be marked as Out-of-Spec (OOS).
C. If the loss value for a splice, when measured in one direction with an
OTDR, exceeds 0.15 dB, the Lessee (or its designee) shall break the splice and
re-splice until the loss value is 0.15 dB or less, provided that, if the Lessee
(or its designee) is not able to achieve a loss value of 0.15 dB after three
total splicing attempts, then the maximum loss value shall be 0.3 dB. If, after
two additional resplicing attempts, the Lessee (or its designee) is not able to
achieve a loss value of 0.3 dB or less, then the Lessee (or its designee) shall
xxxx the splice as Out-of-Spec (OOS).
3. End-to-End Testing
A. After the Lessee (or its designee) has established end-to-end connectivity
on the fibers during initial construction, it shall:
o perform bi-directional end-to-end tests,
o test continuity to confirm that no fibers have been "frogged" or crossed in
any of the splice points,
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o record loss measurements using a light source and a power meter, and
o take OTDR traces and record splice loss measurements.
B. The Lessee (or its designee) shall perform the bi-directional end-to-end
tests and OTDR traces at both 1310 nm and 1550 nm. The Lessee (or its designee)
shall measure and verify losses for each splice point in both directions and
average the loss values. The Lessee (or its designee) shall xxxx any splice
points as Out-of-Spec (OOS) that have an average loss value, based on
bi-directional OTDR testing, in excess of 0.3 dB.
4. Post-Construction Testing
After performing permanent resplicing (in conjunction with repair of a cable
cut, replacement of a segment of cable, or other work after initial installation
and splicing of the cable), the test procedures set forth section 2 (End-to-End
Testing), shall apply to the relevant fibers and cable segments. The provisions
in sections 4 (OTDR Equipment and Settings) and 5 (Acceptance Test
Deliverables), that are relevant to such testing shall also apply.
5. Out-of-Spec Splices
Out-of-Spec splices shall be noted, but shall not preclude acceptance of a
fiber if the Out-of-Spec condition does not affect transmission capability
(based on use of then-prevailing telecommunications industry standards
applicable to equipment generally used with the relevant type of fiber) or
create a significant possibility of an outage.
6. OTDR Equipment and Settings
A. The Lessee (or its designee) shall use OTDR equipment and settings that
are, in its reasonable opinion, suitable for performing accurate measurements of
the fiber installed. Such equipment and settings shall include, without
limitation, the equipment and settings described below.
B. The Lessee (or its designee) has approved the following OTDRs and settings
for acceptance testing: the Laser Precision TD3000 and CMA4000 models and
compatible models.
C. The Lessee (or its designee) has approved the following settings for
various OTDR tests:
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i. Index of refraction settings:
1310 nm 1550 nm
------- -------
Lucent Truwave 1.4738 1.4732
Corning SMF-28 1.4675 1.4681
Corning SMF-LS 1.471 1.470
Corning LEAF 1.470 1.469
Sumitomo fiber 1.4670 1.4670
ii. Tests of a pigtail connector and its associated splice:
TD3000 CMA4000
-------------- ---------------
4 km Range 4 km Range
50 ns Pulse 50 ns Pulse
1 m Resolution 1 m Resolution
Medium Medium
Averaging Averaging
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iii. End to End Segment OTDR Testing:
TD3000 CMA4000
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64 km Range 100 km Range
500 ns Pulse 250 ns Pulse
4 m Resolution 4 m Resolution
Medium Medium
Averaging Averaging
Note: If the end points are more than 64 kilometers apart, the
Lessee (or its designee) currently uses TD3000 set at 128 km
range setting and performs bi-directional testing only at 1550
nm.
7. Acceptance Test Deliverables
The Lessee (or its designee) shall provide data sheets or computer media
containing the following information for the relevant fibers and cable segments:
A. Verification of end-to-end fiber continuity with power level readings for
each fiber taken with a light source and power meter.
B. Verification of loss at each splice point to be below 0.3 dB as well as
the final bi-directional OTDR test data, with distances.
C. Cable manufacturer, cable type (buffer/ribbon), fiber type, cable reel
number, number of fibers, number of fibers per tube, and distance of each
section of cable between splice points.
