EXHIBIT 10.28
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AMENDED AND RESTATED MILL I LEASE
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between
CREDIT SUISSE LEASING 92A, L.P.,
as Lessor
and
TENNECO PACKAGING INC.,
as Lessee
Dated: As of November 4, 1996
Location: Town of Xxxxxxx
County of Lincoln
State of Wisconsin
THIS LEASE HAS BEEN MANUALLY EXECUTED IN COUNTERPARTS NUMBERED CONSECUTIVELY
FROM l TO __. TO THE EXTENT, IF ANY, THAT THIS 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 LEASE MAY BE CREATED
THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OF THIS LEASE OTHER THAN
COUNTERPART NO. 1.
This is Counterpart No. ____
1
TABLE OF CONTENTS
(Not a part of the Lease)
Paragraph Page
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1. Lease of Mill I Property; Title and Condition................... 2
2. Use; Quiet Enjoyment; Ownership; Hazardous Materials............ 2
2A. Acquisition; Construction; Financing............................ 4
3. Term............................................................ 5
4. Rent............................................................ 5
5. Net Lease; Non-Terminability.................................... 6
6. Taxes and Assessments; Compliance with Law; Certain Agreements.. 7
7. Matters of Title................................................ 8
8. [Intentionally Omitted]......................................... 10
9. Maintenance and Repair; Inspection.............................. 10
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Paragraph Page
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10. Mill I Alterations; Removal..................................... 11
11. Lessee's Right to Contest Real Property Taxes................... 13
12. Condemnation and Casualty....................................... 14
13. Environmental Event............................................. 18
14. Offer to Purchase............................................... 23
15. Procedure Upon Purchase......................................... 24
16. Insurance....................................................... 26
17. Subletting; Assignability; Amendment of Facility Agreements..... 29
18. Permitted Contests.............................................. 30
19. Default Provisions.............................................. 32
20. Additional Rights; Mortgage..................................... 35
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21. Notices, Demands and Other Instruments.......................... 41
22. No Default Certificate.......................................... 41
23. Surrender....................................................... 42
24. Severability; Binding Effect; Governing Law; Non-Recourse....... 44
25. Headings and Table of Contents.................................. 45
26. Lessor's Right to Cure Lessee's Default......................... 45
27. Lessee's Options Upon Expiration................................ 45
28. Protective Expenditures......................................... 50
29. Limitations on Amounts Payable.................................. 51
30. No Merger of Title.............................................. 51
31. Payments to the Agent........................................... 51
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Paragraph Page
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32. Remaining Moneys................................................ 51
33. Replace and Supersede........................................... 52
Schedule A - Description of the Mill I Parcel
Schedule B - Fixed Rent and Additional Rent Schedule
Schedule C - Environmental Disclosure
Exhibit A - Performance Tests
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AMENDED AND RESTATED MILL I LEASE dated as of November 4, 1996 (this "Lease")
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between CREDIT SUISSE LEASING 92A, L.P., a Delaware limited partnership (the
"Lessor"), having an address at 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and
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TENNECO PACKAGING INC., a Delaware corporation (the "Lessee"), having an address
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at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000. The schedules and exhibits
referred to in this Lease are hereby incorporated by reference herein.
Capitalized terms used but not defined herein shall have the respective meanings
set forth in the Participation Agreement dated as of November 4, 1996, by and
among NEW TENNECO INC., the Lessee, the Lessor, STATE STREET BANK AND TRUST
COMPANY, as Collateral Agent, and CITIBANK, N.A., as Agent, and the Persons
named therein as Note Holders (as the same may be amended, modified or
supplemented from time to time, the "Participation Agreement").
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Preliminary Statement
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The Lessor and the Lessee entered into a certain Mill I Lease dated as
of November 4, 1996, pursuant to which the Lessor agreed to sublease the Mill I
Parcel and lease Mill I, the Mill I Improvements and the Mill I Alterations to
the Lessee on the terms and subject to the provisions therein set forth (the
"Original Mill I Lease"). The Lessor and the Lessee wish to modify and amend
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certain provisions of the Original Mill I Lease and to restate, in its entirety,
the provisions of the Original Mill I Lease, all in the manner hereinafter set
forth. It is intended by the Lessor and the Lessee that (a) this Lease replaces
in its entirety and supersedes in all respects the Original Mill I Lease and (b)
that all references in the Participation Agreement and any of the Operative
Documents to the "Mill I Lease" shall mean and refer to this Lease.
As of the Financing Closing Date, the Lessor will have acquired a
leasehold interest in the Mill I Parcel described on Schedule A hereto and fee
title to Mill I located on the Mill I Parcel. The Lessor wishes to sublease the
Mill I Parcel, and lease Mill I, the Mill I Improvements and the Mill I
Alterations to the Lessee (for convenience of reference, such sublease of the
Mill I Parcel and lease of Mill I, the Mill I Improvements, the Mill I
Alterations and the balance of the Mill I Property being collectively referred
to as the lease of the Mill I Property) and the Lessee wishes to lease the same
from the Lessor for the Term, or the Extended Term (as defined below), as
applicable, and on the terms and subject to the provisions hereafter set forth.
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NOW, THEREFORE, the parties do hereby agree as follows:
1. Lease of Mill I Property; Title and Condition. (a) In
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consideration of the rents and covenants herein stipulated to be paid and
performed by the Lessee, for the Term, or the Extended Term (as applicable), and
upon the terms and conditions herein specified, (i) the Lessor hereby leases to
the Lessee the Mill I Property and (ii) the Lessee hereby leases and accepts
from the Lessor the Mill I Property. The Mill I Property is leased to the
Lessee subject to (w) the terms, covenants and provisions of the Mill I Ground
Lease, (x) all applicable Legal Requirements and all of the insurance
requirements set forth in paragraphs 16(a) through (c) hereof (collectively, the
"Insurance Requirements") now or hereafter in effect; (y) all Permitted
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Encumbrances; and (z) the terms, covenants and provisions of this Lease. The
Lessee has, as of the date hereof, examined the Mill I Property and title
thereto and has found the same satisfactory for all purposes of this Lease.
(b) THE LESSOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, WITH RESPECT TO THE MILL I 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 THE MILL I 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 PARAGRAPH 1(b) 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 THE MILL I PROPERTY 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.
2. Use; Quiet Enjoyment; Ownership; Hazardous Materials. (a) The Lessee shall
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use the Mill I Property solely as a pulp and paper mill facility, storage
facilities and related business offices, in a manner consistent with the
provisions of paragraph 9. The Lessee covenants that it will cause Mill I, the
Mill I Improvements and the Mill I Alterations (to the extent the same are or
become an integral part of the Mill I Property) at all times to be located on
the Mill I Parcel.
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(b) During the Term or the Extended Term, the Lessor covenants that, unless a
Default or an Event of Default or a Major Environmental Event has occurred and
is continuing, it will not, and will not permit any party claiming by or under
the Lessor (subject to the terms, covenants and provisions of the Ground Lease)
to, (i) grant, create or suffer to exist any Lien upon the Mill I Property (or
any part thereof or interest therein) other than the Permitted Encumbrances
(excluding therefrom any Lessor's Lien); or (ii) interfere with the peaceful and
quiet possession and enjoyment of the Mill I Property by the Lessee; provided,
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however, that the Lessor, the Agent, the Collateral Agent, the Equity Investor,
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the Independent Engineer, the Environmental Consultant, the Appraiser and their
respective successors, assigns, representatives and agents (the "Lessor Group")
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may, upon advance written notice to the Lessee (unless any member of the Lessor
Group, each in its sole discretion, has reason to believe that a Default, an
Event of Default or a Major Environmental Event has occurred and is continuing
or other exigent or emergency conditions exist, in which case no such notice
shall be necessary), enter upon and examine the Mill I Property or any part
thereof (including all records directly related to the Mill I Property) at
reasonable times in compliance with and subject to Lessee's standard safety and
security procedures, in effect from time to time; provided, further, that if a
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Default, an Event of Default or a Major Environmental Event has occurred and is
continuing or if the Lessee has exercised its option to terminate this Lease
pursuant to clause (ii) of paragraph 27(a), then the Lessee shall give the
Lessor Group such additional access to the Mill I Property and to the Lessee's
books and records relating to the management, operation, use, maintenance,
renovation, construction or occupancy of the Mill I Property as it may require
for any purpose, including, without limitation, for marketing, selling,
operating or otherwise disposing of the Mill I Property.
(c) The Lessor will not, and will not permit any party claiming by, through or
under the Lessor to assign, transfer, lease or convey the Mill I Property or
this Lease, or any part thereof or interest therein other than to the Collateral
Agent. The foregoing restriction will not apply to (i) removal of the Mill I
Alterations by the Lessee to the extent permitted under this Lease or (ii) any
assignment, transfer or conveyance of the Mill I Property or this Lease to the
Collateral Agent or as otherwise permitted under the Interparty Agreement or
under the Participation Agreement; provided that any such assignment,
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transfer or conveyance (prior to the Expiration Date or when an Event of Default
does not exist) is expressly subordinate to the rights of the Lessee under this
Lease and (y) subject to the rights of the Lessee to purchase the Mill I
Property pursuant to the Operative Documents.
(d) 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 renovation and construction of the Mill I
Improvements and the acquisition, operation and maintenance of the Mill I
Property for the intended purposes thereof, and the Lessor may, and to the
extent required in paragraph 7(c) shall, execute such documents or papers as may
be reasonably necessary for such purposes. The Lessee further 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 Permits required in order to permit the
lawful ownership of the Mill I Property by the Lessor during the Term or the
Extended Term, as the case may be.
(e) Any failure by the Lessor or such other Person to comply with the foregoing
provisions of this paragraph 2 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.
(f) 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, subject to
paragraph 13, (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 Mill I 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 Mill I Property or any part
thereof.
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2A. Acquisition; Construction; Financing. (a) The Lessee has entered into the
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Agency Agreement with the Lessor pursuant to which the Lessee as Construction
Agent has agreed to complete the renovation and construction of such Mill I
Improvements as the Lessee, in its sole discretion, shall determine to construct
as contemplated by the Participation Agreement. The Mill I Improvements shall,
as the construction of same is completed upon the Mill I Parcel, become a part
of Mill I, and title thereto shall remain in the Lessor.
(b) In order to finance the acquisition by the Lessor of its leasehold interest
in the Mill I Parcel and its ownership interest in the balance of the Mill I
Property and to finance the cost of renovation and construction of the Mill I
Improvements, if any, the Note Holders, as contemplated by the Participation
Agreement, will advance to the Agent on behalf of the Lessor the Actual Project
Costs up to their respective Note Commitments, and in consideration therefor,
the Lessor will issue A-Notes and B-Notes to the Note Holders, and the Equity
Investors, as contemplated by the Participation Agreement, will make an Equity
Investment in the Mill I Property in an amount up to the Equity Investment
Amount.
3. Term. The Mill I Property is leased for an initial term (the "Term") which
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shall commence on the Financing Closing Date and shall terminate on January 30,
2002 (the "Expiration Date"), or such earlier date as this Lease shall be
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terminated pursuant to any provision hereof; provided, however, this Lease may
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be extended for an Extended Term pursuant to paragraph 27(d) hereof.
4. Rent. (a) During the Term (or the Extended Term, as applicable), the
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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 B hereto and
Additional Rent (as defined below) in the amounts determined in accordance with
(and at the times required under) the Operative Documents.
(b) All amounts that the Lessee is required to pay to the Lessor pursuant to
this Lease (other than Fixed Rent), including, but not limited to, (i) unpaid
Charges and all amounts set forth in paragraph 4(e)(ii) hereof, (ii) all sums,
costs and expenses pursuant to paragraphs 23 and 26 hereof, (iii) all costs and
expenses relating to the Mill I Property or the Lessee's use or the Lessor's
ownership thereof (or leasehold interest therein), (iv) any and all amounts
payable upon transfer or purchase of (or otherwise relating to) the Mill I
Property, together with every fine, penalty, interest and cost that may be added
for non-payment or late payment thereof, and
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(v) all Additional Costs, shall constitute "Additional Rent". The Lessor shall
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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 paragraph 18 hereof. Additional Rent shall be
payable as provided for in Section II of Schedule B or as otherwise provided in
this Lease.
(c) The Lessee shall pay to the Lessor, on demand, interest at the Default Rate
on all amounts payable by it to the Lessor hereunder from the due date thereof
until paid in full.
(d) 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.
(e) 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 (except as
otherwise provided in this Lease), all amounts due hereunder, under Section 8.13
of the Participation Agreement, or under the other Operative Documents or
Securitization Documents. The Lessee agrees to pay on demand (i) all Charges
(subject to Lessee's rights pursuant to paragraphs 11 and 18) and (ii) all
indemnity obligations and all charges, reasonable fees, expenses and out-of-
pocket costs of the Lessor, Lessor's Special Counsel, the Note Holders, the
Equity Investors, the Collateral Agent and the Agent and other amounts, in
accordance with the Participation Agreement.
5. Net Lease; Non-Terminability. (a) This Lease is a net lease and, except
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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, the obligations of the
Lessee shall not
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be affected by reason of: (i) any damage to or destruction of the Mill I
Property or any part thereof by any cause whatsoever (including, without
limitation, by fire, Casualty or act of God or enemy or any other force majeure
event); (ii) any Condemnation, including, without limitation, a temporary
Condemnation of the Mill I Property or any part thereof; (iii) any prohibition,
limitation, restriction or prevention of the Lessee's use, occupancy or
enjoyment of the Mill I Property or any part thereof by any Person; (iv) any
matter affecting title to the Mill I Property or any part thereof; (v) any
eviction of the Lessee from, or loss of possession by the Lessee of, the Mill I
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 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 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. 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.
6. Taxes and Assessments; Compliance with Law; Certain Agreements.
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(a) The Lessee shall pay or cause to be paid,
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subject to paragraph 18, 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) Subject to paragraph 13, the Lessee shall, at the Lessee's sole expense,
comply, and cause the Mill I Property to comply, in all material respects, with
all Legal Requirements; provided, however, the Lessee shall not be obligated to
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comply with any Legal Requirement whose application or validity is being
contested diligently and in good faith by appropriate proceedings (and provided
that the failure to comply with such Legal Requirements during such contest is
not reasonably likely to have a Material Adverse Effect). "Legal Requirements"
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means (i) all Laws, foreseen or unforeseen, ordinary or extraordinary, or
arising from any restriction of record or otherwise, which now or at any time
hereafter may be applicable to the (A) Lessor, as holder of the leasehold estate
in the Mill I Parcel and the owner of the balance of the Mill I Property; (B)
the Lessee, as lessee hereunder; or (C) the Mill I Property or any part thereof,
or any of the adjoining sidewalks, or the ownership, construction, operation,
mortgaging, occupancy, possession, use, non-use or condition of the Mill I
Property or any part thereof and any other governmental rules, orders and
determinations now or hereafter enacted, made or issued, and applicable to the
Lessor, as lessee of the Mill I Parcel or as owner of the balance of the Mill I
Property, the Lessee, as lessee hereunder, or the Mill I Property or any part
thereof or the ownership, construction, operation, mortgaging, occupancy,
possession, use, non-use or condition thereof whether or not presently
contemplated; and (ii) all agreements (including, without limitation, all
Facility Agreements), Permits, covenants, and restrictions applicable to the
Mill I Property or any part thereof or the ownership, construction, operation,
mortgaging, occupancy, possession, use, non-use or condition thereof.
(c) The Lessee shall, and (unless a Default, an Event of Default or a
Major Environmental Event 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 Ground Lease and any and all Facility Agreements so that there will be
no default thereunder and so
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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 allow
or serve as a basis or justification for any such Person to avoid such
performance.
7. Matters of Title. (a) The Lessee shall not create or permit to be created
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or exist, and shall promptly remove and discharge, any Lien upon this Lease, the
Mill I 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, without limitation, any and all Liens which arise out of the
ownership, leasing, use, condition, occupancy, construction, possession, repair
or rebuilding of the Mill I Property or any part thereof (including, without
limitation, by reason of construction and start-up of the Mill I Improvements)
or by reason of labor or materials furnished or claimed to have been furnished
to the Lessee or for the Mill I Improvements or any part thereof, but excluding
Permitted Encumbrances and Liens created by the Operative Documents. 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 Mill I Property or any part thereof. NOTICE IS HEREBY
GIVEN THAT THE LESSOR IS NOT AND SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR
MATERIALS FURNISHED OR TO BE FURNISHED TO THE LESSEE, OR TO ANYONE HOLDING OR
POSSESSING THE MILL I 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
MILL I PROPERTY OR ANY PART THEREOF.
(b) The Lessee hereby acknowledges that this Lease shall at all times be subject
and subordinate to the Mill I Mortgage. However, so long as no Event of Default
under this Lease shall have occurred and be continuing, in the event of a Lessor
Event of Default (as defined in the Interparty Agreement), the Collateral Agent
will not (i) take any action to disturb the Lessee's possession and occupancy of
the Mill I Property nor to
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diminish or interfere with any of the Lessee's rights and priveleges under this
Lease, and/or (ii) join the Lessee as a party defendant in any action or
proceeding for the purpose of terminating the Lessee's interest and estate under
this Lease.
(c) The Lessor agrees that the Lessee during the Term shall have the exclusive
right (so long as no Default, Event of Default or Major Environmental Event has
occurred and is continuing) to secure subdivision approvals, site plan
approvals, annexation or de-annexation approvals, zoning variances and Permits
necessary or desirable for the development, use, operation, maintenance or
condition of the Mill I Property or any part thereof; provided that the fair
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market value, marketability or use of the Mill I Property is not 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
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all 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,
adversely affect the value, marketability or use of the Mill I Property or
otherwise adversely affect the transactions contemplated by the Operative
Documents or the interests of the Lessor, the Equity Investors or the Note
Holders.
8. [Intentionally Omitted.]
9. Maintenance and Repair; Inspection. (a) Subject to paragraph 12, the
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Lessee, at its own cost and expense, will manage and maintain the Mill I
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 Mill I
Property in good mechanical condition and repair (ordinary wear and tear
excepted), in accordance with prudent industry practice, and in compliance with
all Legal Requirements (subject to paragraph 13) and Insurance Requirements at
any time in effect. The Lessee shall, in accordance with prudent industry
practice, repair or replace each item constituting Mill I and/or the Mill I
Improvements that shall have become worn out, damaged, inoperative or obsolete
in whole or in part; provided, however, that (i) the fair market value,
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marketability or use of
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the Mill I Property shall not be 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 Mill I or the Mill I
Improvements (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 Mill I Property of 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 Mill I, the Mill I Improvements 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) Except for Permitted Encumbrances, in the event that all or any part of Mill
I or the Mill I Improvements shall encroach upon any property or right-of-way
adjoining or adjacent to the Mill I Parcel or any part thereof, or shall violate
any agreements or conditions affecting the Mill I Property or any part thereof,
or shall obstruct any easement or right-of-way to which the Mill I 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 paragraph 18 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 Equity Investors
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 Mill
I or the Mill I Improvements (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 paragraph 10(a) hereof.
(c) Within 60 days after the end of the first three quarters of each fiscal year
and within 90 days after the end of the fourth fiscal quarter of each fiscal
year the Lessee shall give the Lessor and the Agent prompt written notice of any
mechanical problems which required non-scheduled shutdown of operations of Mill
I for fifteen (15) consecutive days or an aggregate of thirty (30) days during
the fiscal quarter just ended and shall state the specific reasons for such
shutdown.
11
(d) The Lessor Group shall have the right (which may be delegated to its
consultants and authorized representatives) to inspect the Mill I Property and
records directly related to the operation of the Mill I Property and to discuss
such of the affairs, finances, and accounts as are relevant to the Operative
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
advance written notice to the Lessee is given; provided, however, that no
-------- -------
advance written notice need be given if any member of the Lessor Group, in its
sole discretion, has reason to believe that a Default, Event of Default or a
Major Environmental Event 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 Major
Environmental Event shall be at the expense of the Lessee.
10. Mill I Alterations; Removal. (a) At any time, so long as no Default,
---------------------------
Major Environmental Event or Event of Default shall have occurred and be
continuing, the Lessee may, at its own cost and expense, make Mill I Alterations
to the Mill I Property or any part thereof; provided, however, that (i) the fair
-------- -------
market value of the Mill I Property shall not be lessened by such Mill I
Alterations; (ii) such Mill I Alterations shall not diminish the capacity,
utility, efficiency, or remaining useful life of the Mill I 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. "Mill I Alterations" means any and all additions to,
------------------
alterations of or replacements for the Mill I Property or any part thereof made
by or for the Lessee, at the cost and expense of the Lessee, excluding Mill I
Improvements and any replacements installed as part of scheduled maintenance
procedures.
(b) Title to all Mill I Alterations shall vest in the Lessor (free and clear of
all Liens, except Permitted Encumbrances) subject to the right of Lessee to
remove such Mill I Alterations as provided hereunder. Upon any removal of the
Mill I Alterations permitted hereunder, the Lessor (at the expense of the
Lessee) shall execute and deliver to the Lessee such instruments and releases as
are reasonably required to transfer the Mill I Alterations to the Lessee
pursuant to instruments in each case containing no representation or warranty
(expressed or
12
implied) except that such Mill I Alterations are free and clear of any Lien
created under the Operative Documents or any Lessor Lien.
(c) So long as no Default, Major Environmental Event or Event of Default shall
have occurred and be continuing, the Lessee shall be permitted at any time
during, or upon the expiration or termination of, the Term or the Extended Term
as applicable, and at its sole cost and expense, to remove or demolish any Mill
I Alterations in accordance with prudent industry practices; provided, however,
-------- -------
that, such removal shall not (i) impair the intended use or reduce the fair
market value of the Mill I Property or any part thereof below its fair market
value at the commencement of the Term; (ii) diminish the capacity, efficiency,
utility or remaining useful life of the Mill I 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 Mill I Property or any part thereof caused by such removal shall promptly be
repaired by the Lessee and the Mill I Property (and each and every part thereof)
shall be restored to its condition (or the reasonable equivalent thereof) as it
existed immediately prior to the construction of such removed Mill I
Alterations, at the Lessee's sole cost and expense. The Lessee may place upon
the Mill I Parcel or any part thereof any inventory, fixtures, machinery,
equipment or other property belonging to the Lessee or third parties and remove
the same at any time during the Term or the Extended Term, as applicable (to the
extent the same are not nor become an integral part of the Mill I Property and
so long as no Default, Event of Default or Major Environmental Event shall have
occurred and be continuing), and Lessee may (to the extent the same are not or
do not become an integral part of the Mill I Property and so long as no Default,
Event of Default or Major Environmental Event shall have occurred and be
continuing), and at the request of the Lessor shall, remove the same at the
expiration or termination hereof unless the Lessee shall have paid the Offer
Purchase Price and purchased the Mill I Property pursuant to the terms of this
Lease; provided that any damage to the Mill I Property or any part thereof
--------
caused by such removal shall promptly be repaired by the Lessee, and the Mill I
Property (and each and every part thereof) restored to its condition (or the
reasonable equivalent thereof) as it existed immediately prior to the placement
of any such
13
property upon the Mill I Parcel, all at the Lessee's sole cost and expense.
(d) Not less than 30 days before the beginning of each calendar year, the Lessee
shall provide the Lessor and the Agent with a report of the Lessee's capital
spending plans for the ensuing calendar year for Mill I Alterations and
supporting details describing any single capital expenditure for a Mill I
Alteration in excess of $5 million. Such report shall be accompanied by a
certification from the Lessee to the effect that all such planned Mill I
Alterations will comply with the standards set forth in paragraph 10(a).
11. Lessee's Right to Contest Real Property Taxes. The Lessee, at its own cost
---------------------------------------------
and expense and in compliance with paragraph 18, shall have the sole right, at
any time, to seek, in good faith, a reduction in the assessed valuation of the
Mill I Property or any part thereof or to contest, in good faith, any real or
personal property taxes for the Mill I Property or any part thereof. 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 Mill I 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 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.
12. Condemnation and Casualty. (a) General. 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 Mill I Property or any part thereof (other than proceeds from business
interruption insurance) if (i) the Mill I 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 Mill I 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"); provided,
------------ --------
however, that the Lessee shall be entitled to any proceeds as a result of any
-------
Condemnation or Casualty affecting the Mill I Alterations to the
14
extent that the Lessee would otherwise be entitled to remove such Mill I
Alterations pursuant to paragraph 10(c); and provided, further, that the Lessee
-------- -------
shall be entitled to any proceeds as a result of any Condemnation or Casualty
for which the award, compensation, insurance payment, or other proceeds to which
the Lessee may be entitled does not exceed $100,000 (the "Excluded Proceeds").
-----------------
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, including the employment of
counsel reasonably satisfactory to the Lessor. 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 Lessee.
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 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.
Any and all amounts in excess of the self insured retention limits hereunder
representing proceeds (other than proceeds from business interruption insurance,
proceeds with respect to Mill I Alterations permitted to be removed pursuant to
paragraph 10(c) and Excluded 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 (as defined below) to be held in
trust by such Proceeds Trustee and distributed pursuant to this paragraph 12 and
paragraph 15 hereof or pursuant to the Interparty Agreement, 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 Equity
Investors and the Note Holders are entitled pursuant to the Operative 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
15
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 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. "Proceeds Trustee"
----------------
shall mean the Agent or such title company or other independent bank or trust
company as may be designated by the Lessor.
16
(b) Condemnation or Casualty with Termination.
-----------------------------------------
(i) Within ten (10) days after the amount of the Proceeds to be paid
to the Lessee or the Proceeds Trustee is determined, the Lessee shall decide
whether the Lessee shall rebuild, replace and repair the damage to the Mill I
Property; provided, however, that the Lessee shall not be obligated to rebuild
-------- -------
any Mill I Alterations to the extent that the Lessee would otherwise have been
entitled to remove such Mill I Alterations pursuant to paragraph 10(c). If the
Lessee decides not to rebuild, replace and repair the damage to the Mill I
Property, the Lessee shall, within such ten (10) day period, deliver to the
Lessor an Offer to Purchase in accordance with paragraphs 14 and 15 hereof.
Prior to the Closing Date, the Lessee shall continue to pay all Fixed Rent,
Additional Rent and all other amounts due hereunder.
(ii) If a Casualty or Condemnation occurs during the Term (or the
Extended Term, as applicable) 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 Mill I Property could not be expected to
restore and rebuild the Mill I Property to its previous capacity, efficiency and
remaining useful life or such restoration and rebuilding could not be expected
to be completed in full prior to the Expiration Date or that the cost of such
restoration or rebuilding would exceed 25% of the fair market value of the Mill
I Property immediately prior to such Casualty or Condemnation, then the Lessor
may, in its sole discretion, deliver a notice ("Lessor Termination Notice")
-------------------------
declaring Lessor's intention to terminate this Lease and the Lessee shall be
deemed to have delivered to the Lessor as of the date of the Lessor Termination
Notice an Offer to Purchase in accordance with paragraphs 14 and 15 hereof.
(c) Condemnation or Casualty Without Termination. If, after a
--------------------------------------------
Casualty or Condemnation, the Lessee has not given an Offer to Purchase and
Lessor has not given a Lessor Termination Notice in accordance with paragraph
12(b), 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 Mill I
Parcel, Mill I and the Mill I Improvements caused by such event in conformity
with the requirements of paragraph 9 or 10, as applicable, in order to restore
the Mill I Parcel, Mill I and the Mill I Improvements (in the case of a
Condemnation, as nearly as practicable) to the value and operating condition
thereof immediately prior to such event. 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 capacity, efficiency and utility
--------
of the Mill I Parcel, Mill I and the Mill I Improvements shall not, after such
restoration, be less than the capacity, efficiency and utility prior to such
Casualty or
17
Condemnation; (ii) the fair market value of the Mill I Parcel, Mill I and the
Mill I Improvements shall not, after such restoration, be less than its fair
market value prior to such Casualty or Condemnation; and (iii) 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 Lessee shall be deemed to have made an Offer to Purchase.
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 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 Mill I 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 paragraph 9 hereof. 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.
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 (i) an Officer's Certificate of the Lessee certifying
that no Default, Event of Default or Major Environmental Event has occurred and
is continuing and that the Net Proceeds and Excess Funds held by the Proceeds
Trustee are adequate to complete such rebuilding, replacement or repair in
accordance with this paragraph 12(c), and (ii) duly executed Lien waivers
executed by each materialman or mechanic furnishing materials or labor for which
the Lessee is requesting permission to pay or requesting payment. The Proceeds
Trustee shall deliver, or cause to be
18
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.
(d) Temporary Condemnation or Lease Termination. Notwithstanding any
-------------------------------------------
provision to the contrary contained in this paragraph 12, in the event of any
temporary Condemnation this Lease shall remain in full force and effect, and
provided no Default, Event of Default or Major Environmental Event 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 Offer Purchase Price for the
Mill I Property.
13. Environmental Event. (a) The Lessee shall promptly, but in any
-------------------
case within five (5) Business Days after discovery thereof, notify the Lessor,
the Agent, the Collateral Agent, the Equity Investors and the Note Holders of
the occurrence of a Reportable Environmental Event. For purposes hereof, an
"Environmental Event" shall mean (i) any environmental event, occurrence, or
--------------------
condition in, on, beneath, from or involving the Mill I Property or any part
thereof (including, but not limited to, the presence, emission or release of
Hazardous Materials in violation of any Environmental Law or the violation of
any applicable Environmental Law) that could reasonably be expected to result in
any ordered remediation or corrective action required by Environmental Laws, or
other liability under Environmental Laws, or that poses a significant risk to
human health or the environment or (ii) the receipt by the Lessee of
notification that the Lessee, the Lessor, the Mill I Property or any part
thereof is the subject of an Environmental Action in
19
connection with the Mill I Property that could reasonably be expected to result
in any ordered remediation or corrective action required by Environmental Laws
or other liability under Environmental Laws; provided, however, that as of the
date hereof none of the matters described on Schedule C hereto shall be deemed
an Environmental Event. For purposes hereof, a "Reportable Environmental Event"
------------------------------
shall mean an Environmental Event with respect to which the Remediation Costs
could reasonably be expected to exceed $1 million, or, when added to the
remaining Remediation Costs for all other then existing Environmental Events,
could reasonably be expected to exceed $5 million. For purposes hereof,
"Remediation Costs" include, but are not limited to, losses, fines, damages,
-----------------
civil or criminal penalties, judgments, costs and expenses (including reasonable
fees and expenses of legal counsel and consultants) incurred within a ten year
period commencing with the discovery of the Environmental Event, and arising
from activities to clean-up, remove, treat or in any other way respond to an
Environmental Event as required by Environmental Laws or as may be necessary to
avoid creating a significant risk to human health or the environment and any
other damages related thereto.
(b) If following the receipt of a notice of a Reportable
Environmental Event pursuant to paragraph 13(a), the Lessor, the Agent, or the
Holders of the Majority Interests, each in its or their sole discretion,
determines that the Remediation Costs for each Reportable Environmental Event,
alone or when combined with the remaining Remediation Costs for all other then
existing Environmental Events, could reasonably be expected to exceed $25
million, the Lessor, the Agent, the Collateral Agent or the Holders of the
Majority Interests may, at the expense of the Lessee, cause the Environmental
Consultant to conduct an environmental audit of the affected portions of the
Mill I Property and report the results of such audit to the Lessor, the Agent,
the Equity Investors, the Note Holders and the Lessee. If the Environmental
Consultant determines that the remaining Remediation Costs for all then existing
Environmental Events could reasonably be expected to exceed $25 million (an
"Environmental Trigger") but could not reasonably be expected to exceed $50
---------------------
million, the Lessee shall proceed diligently to prosecute the remediation or
cure of such Environmental Event that gave rise to the Environmental Trigger
prior to the expiration of a period of 120 days following the discovery of such
Environmental Event (the "Initial Cure Period"). If,
--------------------
20
however, such Environmental Event is not capable of being fully remediated or
cured within the Initial Cure Period, despite diligent efforts by the Lessee,
the Initial Cure Period shall be extended at the written request of the Lessee
as to such Environmental Event (i) for so long as the Lessee is proceeding
diligently to remediate in full or cure such Environmental Event and, in the
opinion of the Environmental Consultant the remaining Remediation Costs for all
then existing Environmental Events could not reasonably be expected to exceed
$50 million and (ii) for so long as the Guarantor's senior unsecured long-term
debt is rated at least Baa3 by Xxxxx'x or BBB- by S&P or, if not rated by
Xxxxx'x or S&P, has an implied rating of at least BBB- by S&P.
(c) If, in the opinion of the Environmental Consultant, the remaining
Remediation Costs for the Environmental Events contributing to the Environmental
Trigger could reasonably be expected to exceed $50 million (a "Major
-----
Environmental Event") but could not reasonably be expected to exceed $100
-------------------
million, and the Environmental Event that gave rise to such Major Environmental
Event is not capable of being fully remediated or cured within the Initial Cure
Period, the Initial Cure Period shall be extended at the written request of the
Lessee as to such Environmental Event for so long as the Lessee is proceeding
diligently to remediate in full or cure such Environmental Event and all of the
following conditions are satisfied:
(i) As promptly as reasonably practicable and in any event not
less than thirty (30) days prior to the end of the Initial Cure Period, the
Lessee shall have submitted to the Agent (a) a copy of its plan of remediation,
containing time and cost budgets and other supporting information, and (b) a
copy of its written request for an extension specifying the date to which such
extension is requested.
(ii) The Lessor shall have received a report from the
Environmental Consultant to the effect that the Environmental Consultant has
reviewed the Lessee's plan of remediation and has found such plan to be in
accordance with applicable Environmental Laws, consistent with prudent practices
of the industry, and otherwise acceptable. The Lessor shall direct the
Environmental Consultant to complete and submit such report before the end of
the Initial Cure Period. If such report has not been completed as of the end of
the Initial Cure Period, the cure period shall be deemed extended pending
completion of such report, except to the extent that failure to submit such
report on a timely basis is due in part or in whole to the failure or
unreasonable delay of Lessee to provide cooperation and/or information
reasonably required to complete such report.
(iii) The Lessee shall have delivered to the Lessor an
irrevocable and unconditional direct pay letter of credit, having a term
coterminous with the Term (or Extended Term, as applicable), issued by a
commercial bank organized under the laws of the United States or any political
subdivision thereof having a combined capital and surplus of at least $500
million and having long-term unsecured debt
21
securities then rated "A" or better by S&P and "A2" or better by Xxxxx'x and in
an amount equal to 125% of the amount by which the remaining Remediation Costs
for such Environmental Event as estimated by the Environmental Consultant are
reasonably expected to exceed $50 million. Such letter of credit shall be
increased or decreased from time to time, but not less frequently than annually,
by an amount equal to 125% of any increases or decreases in the remaining
Remediation Costs as estimated by the Environmental Consultant. Such letter of
credit shall provide that drawings may be made thereon by the Lessor upon
certification by the Lessor to the issuer that an Event of Default has occurred
and is continuing or the Term (or Extended Term as applicable) has expired and
the Lessee has failed to purchase the Mill I Property in accordance with the
terms of this Lease.
(iv) The senior unsecured long-term debt of the Guarantor shall
at all times be rated at least Baa3 by Xxxxx'x or BBB- or better by S&P or, if
not rated by Xxxxx'x or S&P, has an implied rating of at least BBB- by S&P.
(v) (a) The Lessor shall have received a legal opinion
acceptable to Lessor (from counsel selected by the Lessor and the Agent and
acceptable to the Lessee) to the effect that the Lessee has obtained all permits
necessary to remediate the Environmental Event, or, to the extent such permits
are not then required, such counsel has no reason to believe that such required
permits cannot be obtained at such time as required, as well as other legal
matters reasonably requested by the Lessor. (b) The Lessor and the Agent shall
also have received a legal opinion acceptable to Lessor and the Agent (from
counsel selected by the Lessor and the Agent and acceptable to the Lessee)
addressing any change in Law after the Financing Closing Date regarding the
scope of protection from liability for Remediation Costs afforded to the Lessor
and the Agent under Environmental Laws. Without prejudice to the rights of the
Agent or the Holders of the Majority Interests under paragraph 13(d) of this
Lease, to the extent such opinion is not satisfactory to the Lessor (because of
a change of law or a change in interpretation thereof) the Lessee shall have the
right to find a replacement Lessor within 30 days after the Lessor notifies the
Lessee that such opinion is unsatisfactory to the Lessor. Upon replacement of
the Lessor hereunder, the Lessor (for the benefit of the Equity Investors) shall
receive in immediately available funds from its assignee an amount equal to the
stated amount of the Equity Investment then outstanding, accrued and unpaid
Distributions thereon to the date of payment and all other amounts due and
payable to the Lessor and each Equity Investor under the Operative Documents.
(c) Such legal counsel shall be directed by the Lessor to complete and submit
such opinions before the end of the Initial Cure Period. If such opinions are
not completed before the end of the Initial Cure Period, the cure period shall
be deemed extended pending completion of such opinions except to the extent that
failure to submit such opinions on a timely basis is due in part or in whole to
the failure of Lessee to timely provide available information reasonably
required to complete such opinions.
(vi) The Lessee shall deliver to the Lessor and the Agent monthly
progress reports during the Initial Cure Period, and quarterly progress reports
every three months thereafter, with respect to such curative actions or
remediation, including a status report on the Remediation Costs incurred and the
estimated remaining Remediation Costs, in form and substance satisfactory to the
Lessor and the Agent.
(vii) The Lessor and the Agent shall receive a report every three
months after the end of the Initial Cure Period from the Environmental
Consultant to the effect that the Lessee is complying with the remediation plan
in all material respects and with all Environmental Laws applicable to the
Environmental Event.
(viii) Upon completion of the remediation plan, the Lessor, the
Agent and the Collateral Agent shall receive a report from the Environmental
Consultant to the effect that the Lessee has
22
fully implemented the plan and is in compliance with all Environmental Laws
applicable to the Environmental Event.
(d) If an Environmental Event has occurred that results in an
Environmental Trigger or a Major Environmental Event and the Environmental Event
cannot be cured through a Permitted Remediation or if the Lessee fails to
satisfy any of the requirements in the last sentence of paragraph 13(b) or any
of the applicable conditions in paragraph 13(c) (an "Environmental Default"),
---------------------
the Lessor, the Agent, or the Holders of the Majority Interests shall have the
option, each in its or their sole discretion, to require the Lessee to purchase
the Mill I Property for the Offer Purchase Price by giving written notice to the
Lessor, and the Lessee shall then be deemed to have delivered to the Lessor, as
of the date of receipt of such notice, an Offer to Purchase in accordance with
paragraphs 14 and 15. A "Permitted Remediation" means any remediation of an
---------------------
Environmental Event undertaken by the Lessee in compliance with the requirements
of this paragraph 13, the remaining Remediation Costs of which, when combined
with the remaining Remediation Costs of all other Environmental Events then
existing, are not reasonably expected to exceed $100 million, which is permitted
and effected, at the cost of the Lessee, in compliance with all applicable
Environmental Laws.
(e) Irrespective of whether a Major Environmental Event or an
Environmental Trigger has occurred, the Lessee shall immediately initiate, and
diligently pursue at its sole cost and expense, such actions as may be necessary
to comply in all 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 Mill I 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 reasonable request of the Lessor or the Agent, give periodic
progress reports on its compliance efforts and actions.
(f) In connection with the formulation and implementation of any
remediation plan, or the evaluation or review thereof, the Lessor, the Agent,
the Note Holders, the Equity Investors,
23
the Environmental Consultant, and their respective agents and legal counsel
shall not communicate with regulatory authorities without the prior written
consent of the Lessee unless an Environmental Trigger shall have occurred and be
continuing. If any Environmental Trigger shall have occurred and be continuing,
the Lessor, the Agent, the Note Holders, the Equity Investor, the Environmental
Consultant and their respective agents and legal counsel shall first provide an
opportunity to the Lessee to participate in such communications, except to the
extent that such communications are required by Law.
(g) A Major Environmental Event shall not be deemed to be continuing
after the date upon which the remaining Remediation Costs from the Environmental
Event that gave rise to such Major Environmental Event, when combined with the
remaining Remediation Costs for all other Environmental Events contributing to
such Major Environmental Event, could no longer reasonably be expected to exceed
$50 million. An Environmental Trigger shall not be deemed to be continuing
after the date upon which the remaining Remediation Costs for the Environmental
Event that gave rise to such Environmental Trigger, when combined with the
remaining Remediation Costs for all other Environmental Events contributing to
such Environmental Trigger, could no longer reasonably be expected to exceed $25
million.
14. Offer to Purchase. (a) At any time during the Term (or the
-----------------
Extended Term, as applicable), Lessee may (unless otherwise required to do so,
in which case it shall) deliver to the Lessor and the Agent an irrevocable
written offer to purchase the Mill I Property in its entirety (an "Offer to
--------
Purchase") at least 20 days in advance of the Closing Date upon and subject to
--------
the applicable terms of this Lease.
(b) Any Offer to Purchase delivered or deemed to be delivered by the Lessee
hereunder shall, notwithstanding anything to the contrary set forth therein, be
irrevocable and unconditional and shall set forth the Closing Date and
Termination Value to be paid by Lessee.
(c) The Lessor shall be deemed to have accepted such Offer to Purchase the Mill
I Property on the date the Lessor receives the same. The procedure for the
purchase of the Mill I Property and the purchase price therefor shall be
governed by paragraph 15 hereof.
15. Procedure Upon Purchase. (a) The date of the closing of the Lessee's (or
-----------------------
its designee's) purchase of the Mill I Property (the "Closing Date") shall be
------------
(i) on the Expiration Date pursuant to paragraph 27 hereof, or (ii) if the
Lessee shall deliver (or shall be deemed to have delivered) an Offer to
24
Purchase pursuant to paragraph 14(a) hereof, on the next scheduled Payment Date
following the date of Lessor's acceptance or deemed acceptance of such Offer to
Purchase, or (iii) if the Lessee shall deliver (or be deemed to have delivered)
an Offer to Purchase pursuant to paragraphs 12(b), 12(c) or 13(d), on the
fifteenth day following the date of Lessor's acceptance or deemed acceptance of
such Offer to Purchase, or (iv) if the Lessee shall pay the Offer Purchase Price
pursuant to paragraph 19(h), on the date of the Lessor's receipt of the Offer
Purchase Price. On the Closing Date, upon receipt by the Agent of the Offer
Purchase Price, the Lessor shall convey, or cause to be conveyed, the Mill I
Property (or, in the case of Casualty or Condemnation, the remaining portion
thereof) to the Lessee or its designee by an appropriate recordable assignment
of the leasehold interest in the Mill I Parcel, limited warranty deed and xxxx
of sale to Mill I, the Mill I Improvements and the Mill I Alterations and
assignment of the Facility Agreements (other than the rights of the Lessor to
any indemnities thereunder), in each case containing no representation or
warranty (expressed or implied) except that the Mill I Property is free and
clear of Lessor Liens.
(b) On the Closing Date, the Lessee shall pay, or cause to be paid, to the
Agent (on behalf of the Lessor) the Termination Value for the Mill I Property,
as specified in the Offer to Purchase related thereto, and all Fixed Rent,
Additional Rent and other sums then due and payable hereunder and under the
other Operative Documents relating to the Mill I Property up to and including
such Closing Date (such amounts, plus all Closing Costs, are herein referred to
as the "Offer Purchase Price"), and the Lessor shall simultaneously (i) deliver
--------------------
to the Lessee or its designee the instruments referred to in paragraph 15(a)
above with respect to the Mill I Property and any other instruments reasonably
necessary to assign and convey to the Lessee or its designee the Mill I Property
and assign all Facility Agreements related to the Mill I Property (other than
any rights of the Lessor to any indemnities thereunder) and any other related
property then required to be assigned pursuant hereto, and (ii) convey, or cause
to be conveyed, to the Lessee or its designee any Net Proceeds related to the
Mill I Property and/or the right to receive the same. Additionally, on the
Closing Date, upon receipt of the Termination Value, Lessor and the Collateral
Agent shall execute the releases and take the other actions described in Section
8.23(b) of the Participation Agreement.
(c) Upon the completion of any purchase of the Mill I Property pursuant to this
paragraph 15, 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 Mill I Property or under the Operative
Documents on or prior to such date of purchase, and except as elsewhere
expressly provided herein or in the other Operative Documents.
25
(d) Notwithstanding any provisions of this Lease or the Participation
Agreement to the contrary, the Lessee shall not be required to acquire title to
the Mill I 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 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 Mill I Property or any
part thereof pursuant to the HSR Act or any similar Law, the Lessee shall pay
the Termination Value attributable to the Mill I Property within the time and in
the manner described in this paragraph 15 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 Mill I Property 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) three (3)
years from the date the Lessee delivers (or is deemed to have delivered) the
Offer to Purchase or (ii) that date that the Lessee is no longer precluded from
purchasing the Mill I Property pursuant to the HSR Act or any similar Law. If
Lessee does not purchase the Mill I Property prior to the expiration of such
extended term, then Lessor shall thereafter sell the Mill I 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 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.
16. Insurance. (a) The Lessee (or the Guarantor in lieu of the Lessee) will
---------
purchase and maintain, or cause to be purchased and maintained, insurance with
respect to the Mill I Property of the following types and in the following
amounts (or in such greater amounts as may become necessary from time to time to
prevent the Lessor, the Lessee, the Collateral Agent, the Equity Investors, CXC,
CXC'S Credit Enhancer, the Agent and the Note Holders from becoming co-insurers
of any loss), 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) Property Insurance: Insurance against physical damage to the
------------------
Mill I Property (with sublimits and deductibles as are acceptable to Lessor and
with a maximum self-insured retention allowable of $5 million) caused by perils
now or hereafter embraced by or defined in an "all risks" insurance policy,
including flood, earth movement, earthquake, subsidence and collapse, business
interruption/extra expense and boiler and machinery coverage (which boiler and
machinery coverage is currently self-insured for up to $5 million);
(ii) General Liability Insurance: Comprehensive general liability
---------------------------
(including contractual, completed operations and product liability) insurance
against claims for bodily injury (including death), personal injury and property
damage occurring on, in or in respect of the Mill I
26
Property or resulting from activities on or related to the Mill I Property and
other properties of the Guarantor and its subsidiaries, in the minimum combined
single limit amount of $100 million, for each occurrence for bodily injury (or
death) and/or property damage with a maximum self-insured retention allowable of
$10 million;
(iii) Workers' Compensation Insurance: Workers' compensation
-------------------------------
insurance at statutory levels and employers' liability insurance or self-
insurance as permitted by Law;
(iv) Builder's Risk Insurance: During the construction of any
------------------------
Mill I Improvements or Mill I Alterations, builder's "all risks" and "general
risks" insurance or equivalent coverage (with sublimits and deductibles as are
acceptable to Lessor and with a maximum self-insured retention allowable of $5
million), including flood, earth movement, earthquake, subsidence and collapse,
business interruption/extra expense and testing and commissioning coverage with
respect to the Mill I Property and any on-site and off-site work and materials
related thereto protecting the Lessee, the Lessor and all contractors and
subcontractors in an amount not less than the full replacement cost of such on-
site and off-site work;
(v) Flood Insurance: To the extent that the ALTA/ASCM surveys
---------------
of the Parcels delivered pursuant to Section 2.01(g) of the Participation
Agreement indicate that any portion of Mill I, the Mill I Facility, the Mill I
Improvements or the Mill I Alterations may lie in a flood zone, flood insurance
in amounts acceptable to the Lessor; and
(vi) 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 Mill I Property and/or the
Lessee, or (y) reasonably requested from time to time by Lessor to the extent
available on commercially reasonable terms.
Such insurance shall be written by companies (other than Lloyd's of
London) that are nationally recognized (or other recognized international
insurers with an ISI rating of not less than BBB); primary insurance shall be
written by companies rated at least AXI in the most recent edition of Best's Key
Rating Guide, or as otherwise agreed to by the Agent, the Lessor, the Collateral
Agent, the Majority Interests, selected by the Lessee and, other than the
insurance specified in paragraphs 16(a)(i), (iii) and (iv), shall name the
Collateral Agent as loss payee and the Lessor, CXC, the Equity Investors, CXC'S
Credit Enhancer, T.P.I., the Collateral Agent and the Agent, on its own behalf
and on behalf of the Note Holders, as additional insureds, as their interests
may appear. Notwithstanding the foregoing, in no event will the Lessee be
required to maintain coverage in amounts in excess of those maintained for
businesses similar in size and nature to the Lessee.
(b) The insurance referred to in paragraphs 16(a)(i) and (iv) for the
Mill I Property (as appropriate) may be a blanket policy and shall (i) at all
times be in an amount at least equal to the greater of (x) one hundred percent
(100%) of the full replacement cost value of the Mill I Property (as
appropriate) and the Lessee's leasehold improvements and (y)
27
$410,000,000; (ii) name the Collateral Agent as loss payee and the Lessor, CXC,
the Equity Investors, CXC's Credit Enhancer, T.P.I., the Collateral Agent and
the Agent, on its own behalf and on behalf of the Note Holders, as additional
insureds, as their interests may appear; (iii) provide that the interests of the
Lessor, the Agent, the Collateral Agent, the Equity Investors and the Note
Holders shall be insured regardless of any intentional or willful breach or
violation by the Lessee of any warranties, declarations or conditions contained
in such insurance; (iv) provide that such insurance shall not be invalidated by
any act, omission or negligence of the Lessee, the Lessor, the Agent, the
Collateral Agent, the Equity Investors or the Note Holders, nor by any
foreclosure or other proceedings or notices thereof relating to the Mill I
Property (as appropriate) or any part thereof, nor by legal title to, or
ownership of the Mill I Property or any part thereof becoming vested in or by
Lessor or its agents, nor by occupancy or use of the Mill I Property or any part
thereof for purposes more hazardous than permitted by such policy; and (v)
provide that all partial loss insurance claims pertaining to the Mill I Property
(as appropriate) or any part thereof shall be adjusted by the insurers
thereunder with the Lessee.
All policies of insurance required to be maintained pursuant to
paragraph 16(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), and 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 paragraph 16(a) shall (i) expressly
provide that it will not be canceled or terminated except upon thirty (30) days'
written notice to the Lessor, the Lessee and the Collateral Agent; (ii) except
for liability coverage, include a waiver of all rights of subrogation against
the Lessor, the Agent, the Collateral Agent, the Equity Investors, and the Note
Holders and any recourse against the Lessor, the Agent, the Collateral Agent,
the Equity Investors or the Note Holders 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 Mill I Property or any part thereof against
the peril involved, whether
28
collectible or not. 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 the certificates of
insurance and any other documentation required by the Lessor 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(k) of the
Participation Agreement, (ii) within thirty (30) days after the issuance of any
additional policies or amendments or supplements to any of such insurance, and
(iii) at least thirty (30) days prior to the expiration date of any such
insurance. The Lessee shall notify the Lessor, the Agent and the Collateral
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 paragraph 16 unless the Collateral Agent is named as loss payee
and the Lessor, CXC, the Equity Investors, CXC's Credit Enhancer, T.P.I., the
Collateral Agent and the Agent, on its own behalf and on behalf of the Note
Holders are named as additional insureds therein. The Lessee shall immediately
notify the Lessor, the Agent, the Collateral Agent, the Equity Investors, and
the Note Holders 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 Lessor evidencing the same as is
required hereunder.
(d) The requirements of this paragraph 16 shall not be construed to
negate or modify the Lessee's obligations under Section 8.14 of the
Participation Agreement.
17. Subletting; Assignability; Amendment of Facility Agreements. (a)
-----------------------------------------------------------
The Lessee shall not sublet the Mill I Property, or any part thereof, unless (i)
at the time of any such sublease, no Default, Event of Default or Major
Environmental Event shall have occurred and be continuing; (ii) prior to such
sublet, the Guarantor shall have confirmed that its obligations under the
Guaranty shall not be affected thereby; (iii) any such sublease shall by its
terms be expressly made subject and subordinate to the terms of this Lease (and
the Ground Lease and the Mill I Mortgage) and shall expire on or before the last
day of the Term (or the Extended Term, as the case may be) of this Lease; (iv)
the Lessee shall provide the
29
Lessor with notice of such sublease sixty (60) days prior to the effective date
of such sublease; (v) except with respect to Affiliates, the Lessee shall
provide the Lessor ten (10) Business Days prior to the effective date of such
sublease with a conformed copy of the instrument creating such sublease; (vi)
except with respect to Affiliates, the Lessor has consented to such sublease;
and (vii) except with respect to Affiliates, such sublease shall be made on
commercially reasonable terms.
(b) No sublease pursuant to this paragraph 17 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 subletting had been made or occupancy permitted.
(c) If the Lessee shall request, in connection with any sublease,
that the Lessor execute an attornment and non-disturbance agreement with respect
to such sublease, the Lessor shall consider each such sublease on a case-by-case
basis and may consent to its execution and delivery of an attornment and non-
disturbance agreement.
(d) Except as permitted in paragraph 17(a), the Lessee shall not
mortgage, pledge, assign or otherwise encumber its interest in and to this Lease
or in and to any sublease or the rentals payable thereunder without the prior
written consent of the Lessor except that the Lessee may assign its right to
purchase Mill I Property without the consent of the Lessor so long as the Lessee
remains liable for the performance and payment of the purchase obligation. Any
sublease made, and any mortgage, pledge or assignment of the Lessee's interest
hereunder or under any such sublease granted, otherwise than as expressly
permitted by this paragraph 17, shall be null and void and of no force or
effect.
(e) The Lessee shall have the exclusive right to amend or supplement
the Facility Agreements, on the conditions that (i) the fair market value or use
of the Mill I Property is not lessened thereby, and (ii) the amendment or
supplement is not consummated without Lessor's consent (unless Lessee has
delivered an Offer to Purchase the Mill I Property or unless such amendment or
supplement could not reasonably be expected to result in a Material Adverse
Effect). Except pursuant to any sublease or assignment of this Lease permitted
hereunder, the Lessee may not assign its rights in the Facility Agreements
without the prior written consent of Lessor.
30
18. Permitted Contests. (a) So long as (w) no Lessor Termination
------------------
Notice has been delivered, (x) no Default, Event of Default or Major
Environmental Event has occurred and is continuing, (y) the Lessee shall not
have notified the Lessor pursuant to paragraph 27(a)(ii) that it is terminating
this Lease and abandoning the Mill I Property or (z) the Lessee shall not have
otherwise surrendered or be required to surrender the Mill I Property to the
Lessor for any reason (including, without limitation, pursuant to paragraph
23(a)), 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 Mill I
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 Mill I Property or any part thereof, (ii)
prevent the sale, forfeiture or loss of the Mill I Property or any part thereof,
and (iii) in the case of a Legal Requirement, not subject the Lessor, the Agent,
the Collateral Agent, the Equity Investors, 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 Mill I 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.
(b) 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 Mill I Property (or any part
thereof) or subject the Lessor, the Agent, the Collateral Agent, any Equity
Investor 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
31
prior to the commencement thereof, which notice shall describe such proceeding
in reasonable detail.
(c) The Lessee shall, promptly after the final determination
(including appeals) of any contest brought by it pursuant to this paragraph 18,
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.
(d) Except as otherwise specifically provided in this Lease, this
paragraph 18 shall not apply in the case of Charges upon, or in respect of, any
Person other than the Lessor (or the lessor under the Ground Lease) or in
respect of the property or income of any such Person.
19. Default Provisions. (a) An Event of Default as defined in the
------------------
Participation Agreement shall constitute an "Event of Default" under this Lease.
----------------
(b) 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 remedy) or otherwise as the Lessor shall
deem necessary or advisable.
(c) (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 (5) 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 or (B)
terminate the Lessee's right to possession of the Mill I Property or any part
thereof. If the Lessor should elect to terminate this Lease as provided in
clause (A) above, then this Lease and the estate hereby granted shall expire and
terminate at midnight on the fifth (5th) 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.
(ii) Should the Lessor elect not to terminate this Lease, this Lease
shall continue in effect and the Lessor may
32
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:
(A) Acts of maintenance or preservation of the Mill I Property or
any part thereof or efforts to relet the Mill I Property or any part thereof,
including, without limitation, termination of any sublease of the Mill I
Property to a third party and removal of such subtenant from the Mill I
Property;
(B) The appointment of a receiver upon initiative of the Lessor
to protect the Lessor's interest under this Lease; and/or
(C) The exercise of any rights under the Mill I Mortgage.
(d) If an Event of Default shall have occurred and be continuing,
and the Lessor has elected to terminate this Lease or terminate the Lessee's
right to possession of the Mill I Property or part thereof, upon five (5)
Business Days' notice, the Lessor shall have (i) the right, whether or not this
Lease shall have been terminated pursuant to paragraph 19(c) hereof, to re-enter
and repossess the Mill I 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 removal. No such re-
entry or repossession of the Mill I Property or any part thereof shall be
construed as an election by the Lessor to terminate this Lease unless a notice
of such termination is given to the Lessee pursuant to paragraph 19(c) hereof,
or unless such termination is decreed by a court or other governmental tribunal
of competent jurisdiction. Should the Lessor elect to re-enter the Mill I
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 Mill I
Property or any part thereof pursuant to paragraph 19(c) hereof or otherwise as
permitted by Law, the Lessee shall peaceably quit and surrender the Mill I
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 Mill I
Property or any such part thereof,
33
but shall forthwith quit and surrender the Mill I Property to the Lessor.
(e) At any time or from time to time after the re-entry or
repossession of the Mill I Property or any part thereof pursuant to paragraph
19(d) hereof, whether or not this Lease shall have been terminated pursuant to
paragraph 19(c) hereof, the Lessor may (but shall be under no obligation to)
relet the Mill I 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
Mill I 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 Mill I Property or any part thereof pursuant to paragraph
19(c) hereof, or by operation of Law, and no re-entry or repossession of the
Mill I Property or any part thereof, pursuant to paragraph 19(d) hereof, and no
reletting of the Mill I Property or any part thereof pursuant to paragraph 19(e)
hereof, 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 Mill I 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 or the Extended Term, as applicable,
whether or not the Mill I 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 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 paragraph 13. To the extent permitted by Law, at such
time after the termination or expiration of this
34
Lease as the Lessee shall have paid all amounts required to be paid by it under
this Lease and the other Operative Documents and the Lessee shall have
discharged any and all obligations to the Lessor, the Equity Investors 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 paragraph 19(e), and any residual interest in the Mill I
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 paragraph 13).
(h) Notwithstanding the foregoing, if an Event of Default shall have
occurred, the Lessee may within 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 Offer Purchase Price in which event
the Lessor shall be obligated to convey the Mill I Property to the Lessee in
compliance with paragraph 15.
(i) At any time after such termination of the Term (or the Extended
Term) of this Lease or re-entry or repossession of the Mill I Property by reason
of the occurrence of an Event of 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, 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 prior to the date of such demand),
an amount equal to the Termination Value, in which event the Lessor shall be
obligated to convey the Mill I Property to the Lessee in compliance with
paragraph 15.
20. Additional Rights; Mortgage. (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 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
35
(or by the Agent on behalf of the Lessor) of any Fixed Rent, Additional Rent,
Residual Guaranty, Termination Value or other sum payable hereunder or under any
other Operative Document with knowledge of the breach by the 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 19(h), 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 Mill I 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 (or Extended Term, as the case
may be) 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 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 jurisdiction determines that the
transaction represented by this Lease and the other Operative Documents will be
treated as a financing transaction, then the parties hereto intend that (i) this
Lease be treated as the repayment and security provisions of a loan by Lessor to
Lessee in a principal amount equal to the sum of (x) the Acquisition Costs of
the Mill I Property plus (y) the aggregate of all Advances made with respect to
the Mill I Property, plus any other amounts owing to the Lessor or the
Collateral Agent, Note Holders or Equity Investors (collectively, the "Secured
-------
Party") under the Operative Documents including, without limitation, Fixed Rent,
-----
Additional Rent, the Offer Purchase Price and the Termination Value
(collectively, the "Mill I Loan Amount"), but not to exceed the principal sum of
------------------
Eight Hundred Eighty Seven Million
36
Five Hundred Thousand Dollars ($887,500,000), (ii) all payments of Fixed Rent,
Additional Rent, the Offer Purchase Price and the Termination Value be treated
as payments of principal, interest and other amounts owing with respect to such
Mill I Loan Amount, respectively, (iii) the Lessee should be treated as entitled
to all benefits of ownership of the Mill I Property or any part thereof, and
(iv) this Lease be treated
(aa) as a mortgage from Lessee, as mortgagor, to the Lessor, as
mortgagee, for the benefit of Secured Party securing the Mill I Loan Amount,
encumbering that portion of the Mill I Property constituting real property, and
is made under those provisions of the existing laws of the State of Wisconsin
relating to mortgages and that the Lessee, as mortgagor hereby does, effective
as of the date of this Lease, mortgage, give, grant, bargain, sell, alien,
enfeoff, convey, confirm and assign unto Lessor, as mortgagee, or any successor
thereto, for the benefit of the Secured Party, Lessee's right, title and
interest in and to any real property of any kind or character comprising the
Mill I Property, whether now owned or hereafter acquired, and all proceeds
therefrom, to have and to hold said real property and all parts, rights, members
and appurtenances thereof to the use, benefit and behoof of the Lessor, for the
use and benefit of the Secured Party, and as part of this mortgage conveyance,
as additional security for the Mill I Loan Amount, Lessee does hereby, effective
as of the date of this Lease, sell, assign, transfer, demise and set over unto
Lessor all of Lessee's right, title and interest in and to the Mill I Ground
Lease, all other leases, the Mill I Property, the possession thereof, and all
the rents now due and which may hereafter become due under or by virtue of the
leases, whether written or verbal, or any letting of, or any agreement for the
use or occupancy of any part of the Mill I Property, it being the intention to
hereby establish a present and absolute transfer and assignment of all such
leases and agreements and all the avails thereunder unto Lessor. This
assignment shall run with the land and be good and valid as against Lessee and
those claiming by, under or through Lessee from the date of the execution of
this Lease. This assignment shall continue and remain in full force and effect
during any foreclosure proceedings relating to the Mill I Wisconsin Tenneco
Mortgage and the period of redemption, if any, and until the Mill I Loan Amount
shall have been paid in full. This assignment shall not be exercised unless and
until an Event of Default shall occur and be continuing and in such event (i) it
shall not be necessary for Lessor to take any action for Lessor to be
37
entitled to all rents, issues, profits and leases, (ii) Lessor may, at its sole
option without any prior notice to or approval of Lessee, take any action to
enforce this assignment including without limitation, by notifying any or all
tenants to pay directly to Lessor all rent, issues, and profits arising out of
the Mill I Property, and all payments required to be made pursuant to or by
virtue of any lease agreements, and (iii) Lessor shall be entitled to all rents,
issues, profits and leases pertaining to the Mill I Property and to enforce this
assignment without seeking the appointment of a receiver, commencing a
foreclosure action, obtaining possession of the Mill I Property or making
demand. Lessee hereby grants Lessor a power of attorney and does hereby
irrevocably appoint Lessor its agent (effective upon the occurrence and during
the continuance of an Event of Default) for the management of the Mill I
Property and Lessor may let and re-let the Mill I Property or any part thereof
according to its own discretion and may make such repairs to the Mill I Property
as it considers expedient and may do anything in and about the Mill I Property
that Lessee might do, Lessee hereby ratifying and confirming anything and
everything that Lessor may do. This assignment and power of attorney shall
continue until the Mill I Loan Amount has been fully paid, satisfied and
performed; and
(bb) as a security agreement from the Lessee, as debtor, to the
Lessor, as secured party, for the benefit of Secured Party securing the Mill I
Loan Amount, encumbering all personal property comprising the Mill I Property,
whether now owned or hereafter acquired and all proceeds therefrom.
(this Lease, in its capacity as such mortgage, assignment and security
agreement, the "Mill I Wisconsin Tenneco Mortgage"), and that the Lessee, as
---------------------------------
debtor, hereby, effective as of the date of this Lease, grants to the Lessor,
for the use and benefit of the Secured Party, a lien on and security interest in
the equipment, fixtures and all other personal property of any kind or character
comprising the Mill I Property and all proceeds therefrom. The Lessor shall
have all of the rights, powers and remedies of a mortgagee and a secured party
available under applicable law, including, without limitation, judicial
foreclosure. The filing of this Lease (or a memorandum hereof) shall be deemed
to constitute the filing of a mortgage and the filing of any financing statement
in connection with this Lease shall be deemed to constitute the filing of a
financing statement to perfect the security interest in the Mill I Property
aforesaid to secure the payment of all amounts due from
38
time to time from the Lessee to the Lessor under this Lease and the other
Operative Documents.
(e) The Mill I Wisconsin Tenneco Mortgage secures and shall be
security for the entire Mill I Loan Amount if a court of competent jurisdication
determines that the transaction represented by this Lease and the other
Operative Documents will be treated as a financing transaction. Secured Party
shall not be obligated to make any future advances, except in accordance with
the Participation Agreement and the other Operative Documents and
(notwithstanding any language to the contrary contained herein, in the
Participation Agreement or in any of the other Operative Documents) if all
subsequent lien holders of record (other then the holder of any Lien which is a
Permitted Encumbrance) execute subordination agreements satisfactory to Secured
Party in form and content. In order to preserve the mortgage and security
interest provided for herein, each of the Lessor and the Lessee agrees to abide
by the following provisions with regard to the Mill I Property (for purposes of
this paragraph, hereinafter referred to as "Mill I Collateral"):
-----------------
(1) Change in Location of Mill I Collateral or the Lessee's Name,
-------------------------------------------------------------
Structure or Location. The Lessee (i) will notify the Secured Party on or
---------------------
before the date of any change in (A) the location of the Mill I Collateral (B)
the location of Lessee's chief executive office or address, (C) the name of the
Lessee and (D) the corporate structure of the Lessee, and (ii) will, on or
before the date of any such change, prepare and file new or amended financing
statements as necessary so that the Secured Party shall continue to have a
perfected Lien (subject only to Permitted Encumbrances) in the Mill I Collateral
after any such change.
(2) Documents; Mill I Collateral in Possession of Third Parties. If
-----------------------------------------------------------
certificates of title or other documents evidencing ownership or possession of
the Mill I Collateral are issued or outstanding, the Lessee will cause the
interest of the Secured Party to be properly noted thereon and will, forthwith
upon receipt, deliver same to the Secured Party. If any Mill I Collateral is at
any time in the possession or control of any warehouseman, bailee, agent or
independent contractor, the Lessee shall notify such Person of the Secured
Party's security interest in such Mill I Collateral. Upon the Secured Party's
request, the Lessee shall instruct any such Person to hold all such Mill I
Collateral for the Secured Party's account subject to the Lessee's instructions,
or, if an Event of Default shall have occurred and be continuing, subject to the
Secured Party's instructions.
39
(3) Sale, Disposition or Encumbrance of Mill I Collateral. Except for
-----------------------------------------------------
Permitted Encumbrances and contests permitted under Paragraph 18, as permitted
by this Lease or any of the other Operative Documents or with the Secured
Party's prior written consent, the Lessee will not in any way encumber any of
the Mill I Collateral (or permit or suffer any of the Mill I Collateral to be
encumbered) or sell, assign, lend, rent, lease or otherwise dispose of or
transfer any of the Mill I Collateral to or in favor of any Person other than
the Secured Party.
(4) Proceeds of Mill I Collateral. Except as permitted by this Lease
-----------------------------
or any of the other Operative Documents, the Lessee will deliver to the Secured
Party promptly upon receipt all proceeds delivered to the Lessee from the sale
or disposition of any Mill I Collateral. This paragraph shall not be construed
to permit sales or dispositions of the Mill I Collateral except as may be
elsewhere expressly permitted by this Lease or the other Operative Documents.
(5) Further Assurances. Upon the request of the Secured Party, Lessee
------------------
shall (at Lessee's expense) execute and deliver all such mortgages, assignments,
security agreements, certificates, financing statements, memoranda, or other
documents and give further assurances and do all other acts and things as the
Secured Party may reasonably request to perfect the Secured Party's interest in
the Mill I Collateral or to protect, enforce or otherwise effect the Secured
Party's rights and remedies hereunder, all in form and substance satisfactory to
the Secured Party.
(6) Mill I Collateral Attached to other Property. In the event that
--------------------------------------------
the Mill I Collateral is to be attached or affixed to any real property, the
Lessee hereby agrees that a financing statement which is a fixture filing may be
filed for record in any appropriate real estate records. If the Lessee is not
the record owner of such real property, other than the Mill I Property, it will
provide the Secured Party with any additional security documents or financing
statements necessary for the perfection of the Secured Party's Lien and mortgage
in the Mill I Collateral, as requested by the Secured Party.
(7) Mill I Loan Amount. Should the Mill I Loan Amount be paid
------------------
according to the tenor and effect thereof when the same becomes due and payable
hereunder, and should Lessee perform all covenants contained in the Operative
Documents in a timely manner, then the Mill I Wisconsin Tenneco Mortgage shall
be cancelled and surrendered.
40
(8) Mortgage Remedies. If an Event of Default shall have occurred
-----------------
and be continuing, the Lessor, at the direction of the Agent and in accordance
with the Interparty Agreement, shall have the right
(i) to exercise any and all remedies available to a mortgagee under
Wisconsin law (and without prejudice to the rights of the Secured Party to
exercise any remedies described in the Participation Agreement, the Interparty
Agreement or any other Operative Documents).
(ii) to declare the Mill I Loan Amount and all other obligations of
Lessee secured by the Mill I Wisconsin Tenneco Mortgage immediately due and
payable without further notice. If Secured Party exercises its option to
accelerate the Mill I Loan Amount and all other obligations of Lessee secured by
the Mill I Wisconsin Tenneco Mortgage, such amounts shall be collectible in a
suit at law or by foreclosure action, or both, or by exercise of any other
remedy available in law or equity.
(iii) in any action to foreclose the Mill I Wisconsin Tenneco
Mortgage, Lessor shall be at liberty, without notice, to apply for the
appointment of a receiver of the rents, and shall be entitled to the appointment
of such receiver as a matter of right, without regard to the value of the Mill I
Property as security for the Mill I Loan Amount, or the solvency or insolvency
of any person then liable for the payment of the Mill I Loan Amount. Under such
circumstances, Lessee agrees that the court may appoint a receiver of the Mill I
Property without bond, and may empower the receiver to take possession of the
Mill I Property and collect the rents, issues and profits of the Mill I
Property, and exercise such other powers as the court may grant until the
confirmation of sale, and may order the rents, issues and profits, when so
collected, to be held and applied as provided under subclause (iv) hereof,
unless the court directs otherwise.
(iv) (a) to grant, bargain, sell, release and convey the Mill I
Property at public auction or venue and on such sale, to execute and deliver to
the purchaser or purchasers, their heirs, successors and assigns, good, ample
and sufficient deed or deeds of conveyance in law, pursuant to the statute in
such case made and provided and to apply the proceeds of such sale in the manner
hereinafter provided.
(b) Lessee agrees to the provisions of (S)846.103, Wis. Stats., and
as the same may be amended or renumbered from time to time, permitting Lessor,
upon an express allegation in a complaint, filed in a mortgage foreclosure
action, waiving the
41
right to judgment for deficiency, to hold the foreclosure sale of real estate
three months after a foreclosure judgment is entered. Lessor is also entitled to
all other or additional remedies permitted by law to mortgagees existing on the
date this Lease is signed and/or existing at the time of default.
(c) Upon a foreclosure sale of the Mill I Property or any part
thereof, the proceeds of such sale shall be applied in the following order:
(x) to the payment of all costs of the suit or foreclosure,
including reasonable attorney's fees and the cost of title evidence;
(y) to the payment of all other expenses of Lessor; and
(z) then in accordance with the Interparty Agreement.
21. 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.
22. 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, Major
Environmental Event, Environmental Default, Environmental Trigger or Event of
Default has occurred and is continuing.
23. Surrender. (a) If upon the expiration or termination of the
---------
Term (or the Extended Term, as the case may be) or the termination of Lessee's
possession of the Mill I Property, Lessee or its designee has not purchased the
Mill I Property as provided hereunder, the Lessee shall surrender (i) the Mill I
Parcel to the Lessor in the condition in which the Mill I Parcel was upon the
commencement of the Term hereof (together with all easements, rights of way or
other rights as Lessor may require to assure unrestricted access to the Mill I
Parcel), (ii) Mill I in the operating condition, efficiency, utility and with
the remaining useful life, it had upon the commencement of the Term, except as
repaired, rebuilt, renovated, altered, added to or built as permitted or
required hereby and except for ordinary wear and tear, and (iii) the Mill I
Improvements and the Mill I Alterations in good operating
42
condition, in substantially the condition the same were in when constructed or
installed on the Mill I Parcel, except for ordinary wear and tear. To the extent
that the Mill I Property is not in compliance with the above upon such
expiration or termination (except as a consequence of a Casualty or
Condemnation, as to which paragraph 12 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.
(b) The Lessee shall also surrender the Mill I Property to the Lessor
free and clear of all Liens, easements, consents and restrictive covenants and
agreements affecting the Mill I Property (other than (i) rights reserved to or
vested in any municipality or public authority, by the terms of any franchise,
grant, license, Permit or provision of Law, to purchase, condemn, appropriate or
recapture, or designate a purchaser of the Mill I Property, (ii) rights reserved
to or vested in any municipality or public authority to control or regulate the
use of the Mill I Property or to use the Mill I Property in any manner, (iii)
easements, rights-of-way, servitudes, restrictions, encroachments and other
minor defects, encumbrances and irregularities in title to the Mill I Property
which do not, individually or in the aggregate, materially and adversely affect
the value, condition, marketability or operation of the Mill I Property or the
Lessor's ownership thereof, (iv) the Ground Leases and the Mortgages, (v) Liens
existing on the Financing Closing Date and set forth in the Title Policy, and
(vi) Lessor Liens.
(c) The Lessee shall also surrender the Mill I Property in a condition
such that it is in compliance with all applicable Environmental Laws then
enacted or then proposed by any governmental agency (irrespective of whether the
deadline for such compliance would otherwise expire after the end of the Term or
the Extended Term, as applicable). Nothing contained in this paragraph 23 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 Impositions against the
Mill I Property, subject, however, to the right of the Lessee to contest the
same pursuant to the provisions of paragraphs 11 and 18. 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 Applicable Permits for the Mill I Property to such Persons.
43
(d) The Lessee, at its sole cost and expense, shall remove from the
Mill I Property on or prior to such expiration or termination, all property
situated thereon which is not owned by the Lessor and shall repair any damage
caused by such removal and shall restore the Mill I Property to the condition
and working order (or reasonable equivalent thereof) in which it existed
immediately prior to the installation 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 Mill I Property including,
without limitation, 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 from the Mill I Property
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 Mill I Property to the condition and working order (or
reasonable equivalent thereof) in which it existed immediately prior to the
installation of such property, ordinary wear and tear excepted, shall be borne
by the Lessee.
(e) The Lessee shall comply with the conditions set forth in paragraph
27(b) of this Lease in addition to those set forth in this paragraph 23.
(f) The obligations of the Lessee under this paragraph 23 shall
survive the expiration or any termination of the Term (or the Extended Term, as
the case may be) of this Lease (whether by operation of Law or otherwise) for
all matters described in this paragraph 23 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.
24. Severability; Binding Effect; Governing Law; Non-Recourse. (a)
---------------------------------------------------------
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
44
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.
(b) All provisions contained in this Lease shall be binding upon,
inure to the 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 paragraph l7 hereof, the
Lessee may not assign its rights hereunder or any interest herein without the
prior written consent of the Lessor. Subject to the provisions of Section 2(c)
of this Lease and the other Operative Documents, the Lessor may assign all or
any part of the Mill I 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
paragraph 24 shall be null and void.
(c) THIS LEASE SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF WISCONSIN WITHOUT REGARD TO CONFLICTS OF LAWS
PROVISIONS.
(d) 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.
(e) No recourse shall be had against the Lessor, the Agent, the
Collateral Agent, the Equity Investor or any Note Holder or their respective
successors, assigns, directors, officers, partners, employees, agents or
shareholders, 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 Mill I Property; provided, however, that nothing
-------- -------
contained in this Lease shall be taken to prevent enforcement 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 and nothing shall prevent
45
enforcement against any other Person to which any part thereof shall have been
transferred, or obligations undertaken or assumed in writing by such Person.
25. Headings and Table of Contents. The table of contents and the
------------------------------
headings of the various paragraphs and schedules of this Lease are for
convenience only and shall not affect the meaning of the terms and conditions of
this Lease.
26. 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 account and at the cost and expense of the Lessee,
and may enter upon the Mill I 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 paragraph 2(b). All
sums so paid by the Lessor and all costs and expenses (including, without
limitation, 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.
27. Lessee's Options Upon Expiration. (a) In addition to its rights
--------------------------------
under paragraphs l2 and 14 hereof, Lessee shall elect either to (i) by written
notice given at least three (3) months prior to the Expiration Date (or later if
permitted or required under paragraph 27(d)) deliver an Offer to Purchase the
Mill I Property in its entirety and purchase the Mill I Property on the
Expiration Date upon payment of an amount equal to the Offer Purchase Price, in
which case the transfer of the Mill I Property shall be governed by the terms of
paragraphs 14 and 15 (and in which case, this Lease (with the exception of any
provision hereof or under the other Operative Documents under which the Lessee
indemnifies the Lessor or others from liability in connection with this Lease,
or otherwise specifies that such provision survives termination hereof or under
the other Operative Documents) shall terminate on the Closing Date); (ii) so
long as no Default, Event of Default or Major Environmental Event has occurred
and is continuing by written notice given at least twelve (12) months prior to
the Expiration Date, and subject to the satisfaction of the conditions set forth
in paragraphs 27(b) and 27(c) hereof, terminate this Lease, abandon the Mill I
Property as of the Expiration Date and
46
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 Series A Portion of the Adjusted
Capitalized Cost of the Mill I Property (the "Residual Guaranty"); or (iii) by
-----------------
written notice given at least three (3) months prior to the Expiration Date, and
subject to the conditions set forth in paragraph 27(d), extend this Lease for
the Extended Term.
(b) Upon the election of the Lessee to terminate this Lease pursuant
to paragraph 27(a)(ii) hereof, 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 (other than the
documentation contemplated under clause (b)(ii)(F) which must be delivered five
days prior to the Expiration Date) (collectively, the "Return Conditions"):
-----------------
(i) an environmental audit of the Mill I Property, performed by
environmental consultants selected by the Lessor, satisfactory in scope and
content to the Agent, the Lessor, the Collateral Agent, each Equity Investor and
each Note Holder, each in its sole discretion.
(ii) a report of the Appraiser and/or the Independent Engineer,
satisfactory in scope and content to the Lessor, the Collateral Agent, the
Agent, the Equity Investors and the Note Holders, each in their sole discretion,
to the effect that (A) the Mill I Improvements, if any, have been completed; (B)
the Mill I Property has been constructed or maintained in accordance with the
terms and conditions of the Lease and the other Operative Documents and the
requirements of all Legal Requirements, Applicable Permits and prudent industry
standards for pulp and paper xxxxx in Wisconsin; (C) the Lessee shall not be
rebuilding or restoring or required to rebuild or restore the Mill I Property or
any part thereof pursuant to paragraph 12(c) of this Lease; (D) the Mill I
Property meets or exceeds the performance tests specified on Exhibit A hereto
(the "Performance Tests") taking into account any modifications to the
------------------
Performance Tests necessitated by the Mill I Improvements (as determined by the
Independent Engineer) which will insure that, at a minimum, the Mill I Property
(including the Mill I Improvements, if any,) can operate at the required
capacity, efficiency, utility and reliability required to meet the terms of any
existing contracts involving the Mill I Property (including the Mill I
Improvements) on the Expiration Date (or date of such other termination of the
Lease); (E) all mechanical, electrical, security, plumbing, fire safety,
telecommunications, structural and other building systems in the Mill I Property
are operating properly in accordance with standards and specifications for such
systems not less than those in effect on the date hereof, subject to the
provisions of paragraph 23 hereof (and such other standards and specifications
as may be required by applicable Legal Requirements); and (F) no Condemnation or
Casualty has occurred which has not been remedied in accordance with the terms
of the Operative Documents;
(iii) delivery of a services agreement to the Lessor (in form and
substance satisfactory to the Agent, the Lessor, the Equity Investors and the
Note Holders each in their sole and absolute discretion), containing among other
things, evidence that the Lessee has made arrangements satisfactory to the Agent
in its sole and absolute discretion for the provision of all services necessary
to
47
maintain, own, operate or sell the Mill I Property (including obtaining all
necessary intellectual property, surveys, permits, rights of way, manuals and
contracts specifically associated with the Mill I Property and required for the
operation of the Mill I Property as then being operated);
(iv) an endorsement to the previously delivered ALTA extended
coverage owner's title insurance policy issued by the Title Company, marked
"premium paid" and increasing the coverage of such policy to an aggregate amount
equal to the lesser of (i) the maximum insurable amount or (ii) the Adjusted
Capitalized Cost of the Mill I Property, subject only to Permitted Encumbrances
and otherwise in form and substance satisfactory to the Note Holders, the Equity
Investors, the Lessor and Special Counsel, to be delivered to the Note Holders,
the Equity Investors, the Lessor and Special Counsel, together with copies of
all documents relating to the Permitted Encumbrances referred to therein,
showing record title of the Lessor in the (leasehold estate in and to the) Mill
I Property, and in and to Mill I, the Mill I Improvements and the Mill I
Alterations;
(v) all Fixed Rent and Additional Rent shall have been paid in
full through such expiration or termination of the Term (or the Extended Term,
as applicable);
(vi) the Lessee shall remove, or cause the removal of, at the
Lessee's sole expense, any inventory, fixtures, machinery, equipment or other
property belonging to the Lessee or third parties in compliance with paragraph
10(b) and 23(d) of this Lease; and
(vii) if directed to do so by the Lessor, the Lessee (at its
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 Mill I Property under this Lease and to confirm the Lessor's ownership of
the Mill I Property.
(c) Upon the Lessee's election to terminate this Lease pursuant
to and in compliance with paragraph 27(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 Mill
------------------
I 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
Equity Investors and each Note Holder shall have the right, but not the
obligation, to seek bids for the Mill I Property during the Remarketing Period
or at any time thereafter. On the Expiration Date or at any time thereafter,
provided that all conditions of this paragraph 27 have been met, the Collateral
Agent may (but is not obligated to) sell the Mill I Property for cash to the
bidder, if any, who shall have submitted the highest bid during the Remarketing
Period or any time thereafter on an as-is basis and without recourse or
warranty, subject to the provisions of Section 3.01 of the Interparty Agreement.
The Lessor shall be entitled to keep the proceeds of such sale after payment of
Closing Costs (the "Net Sale Proceeds"), and Lessee shall have no further claim
-----------------
thereto except to the extent such Net Sale
48
Proceeds exceed the outstanding obligations of the Lessee under the Operative
Documents.
(d) So long as no Default, Event of Default or Major Environmental
Event exists, the Lessee may request (in its sole discretion), by written notice
given to the Agent at least 3 months prior to the Expiration Date an extension
of this Lease for one additional period of up to five years (the "Extended
--------
Term"). The Lessor and the Lessee shall determine the Applicable Rate for the
----
Extended Term, consistent with the terms outlined below in this paragraph 27(d),
and the Lessee shall undertake to enter into all amendments and supplements to
the Operative Documents and such other agreements as the Lessor in its sole
discretion determines to be necessary and appropriate in connection therewith
including, without limitation, delivery to Agent of an appraisal of the Mill I
Property (satisfactory in form and substance to the Agent in its sole
discretion). 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. Fixed Rent during the
Extended Term shall be paid monthly in arrears, and include an annual amount
(payable annually in arrears) to be applied (i) to the outstanding principal
amount of the Notes, and (ii) to the outstanding stated amount of the Equity
Investment, such annual amount to be based on an amortization schedule
(determined by reference to the appraisal described in this paragraph 27(d) and
agreed to by the Note Holders and the Equity Investors in their sole
discretion).
(e) The Applicable Rate, the principal amount of the commitments to be
agreed upon by each Note Holder and each Equity Investor and Commitment Fees
payable during the Extended Term shall be determined as follows:
(i) Within ten (10) days after receipt of Lessee's request to
extend this Lease pursuant to this paragraph 27(d), the Agent shall, in
accordance with provisions of the letter agreement of even date herewith (the
"Extension Letter") among the Lessee and each APA Purchaser, the manager under
----------------
the Management Agreement, CNAI, the Equity Investor, the Lessor and the
Collateral Agent, consult with each party to the Extension Letter to determine
(A) the amount of the Applicable Rate, the Fixed Rent and the Commitment Fees,
if any, for the Extended Term at which the Note Holders, the Equity Investors
and other applicable Persons are willing to continue their respective interests
for the Extended Term (the "Proposed Extension Rates"), or (B) whether any such
------------------------
Person is unwilling to continue its interest during the Extended Term; and the
Agent shall promptly thereafter notify the Lessee thereof.
(ii) If the Agent notifies the Lessee of the Proposed Extension
Rates, the Lessee shall, within five Business Days after such notice, notify the
Agent whether the Lessee is willing to accept the Proposed Extension Rates for
the Extended Term and, if not, at what Applicable Rate, Fixed Rent and
Commitment Fees the Lessee is willing to accept for the Extended Term (the
"Lessee's Extension Rates"); provided, however, that in the event that the
------------------------ -------- -------
Equity Investor and the Lessor are the same person, the
49
Lessee agrees that any extension of this Lease agreed to by the Lessee with
either the Equity Investor or the Lessor shall also include such other Person.
(iii) If any party to the Extension Letter notifies the Agent
that it is unwilling to extend this Lease in accordance with clause (i)(B) above
or if the Lessee notifies the Agent that it is unwilling to accept the Proposed
Extension Rates and advises the Agent of the Lessee's Extension Rates as set
forth above, the Agent shall use reasonable efforts to locate replacement
lenders, investors and other Persons as necessary to extend this Lease for the
Extended Term on Lessee's Extension Rates.
(iv) If the Lessee fails to give the Agent the notice described
in clause (ii) of this paragraph 27(e), or, if within one month after Lessee's
request to extend this Lease pursuant to paragraph 27(d), the Agent has been
unable to locate replacement lenders, investors or other Persons as necessary to
extend this Lease for the Extended Term on Lessee's Extension Rates, the Agent
shall notify the Lessee and the Lessee, within five Business Days after such
notice shall give the Agent notice of either (x) the Lessee's agreement to
extend this Lease for the Extended Term at the Proposed Extension Rates, if any,
or (y) in all other cases, the Lessee's election pursuant to paragraph 27(a)(i)
hereof; provided, that if the Lessee fails to give the Agent such notice, the
Lessee shall be deemed to have given notice of its election pursuant to
paragraph 27(a)(i) hereof.
(e) If Lessee is unable to satisfy one or more of the conditions set
forth in paragraphs 27(b) and 27(c) hereof, or fails to elect either (i) or (ii)
under paragraph 27(a) hereof, the Lessee shall be deemed to have elected to
proceed under paragraph 27(a)(i) hereof, in which case Lessee shall purchase the
Mill I Property pursuant to and in accordance with said paragraph 27(a)(i).
28. Protective Expenditures. At any time after the expiration or
-----------------------
other termination of this Lease, if the Lessee has not purchased the Mill I
Property pursuant to the terms of this Lease, any Note Holder, any Equity
Investor or the Lessor shall have the right to pay, or to fund the Collateral
Agent's payment of, (i) real estate Taxes due and owing with respect to the Mill
I Property or (ii) insurance premiums required to maintain the coverage required
during the Term of this Lease pursuant to Section 5.01(o) of the Participation
Agreement (each a "Protective Expenditure"). Reimbursement of Protective
----------------------
Expenditures made by any Note Holder, any Equity Investor or the Lessor in
accordance with this paragraph 28 shall be made upon a sale of the Mill I
Property pursuant to the provisions set forth in the Interparty Agreement.
29. Limitations on Amounts Payable. Notwithstanding anything to the
------------------------------
contrary contained in this Lease or any of the other Operative Documents, the
amounts which the Lessee is obliged to pay, as Fixed Rent pursuant to this Lease
and the other Operative Documents, and the amounts which Lessor, Agent, the
Equity Investors and the Note Holders are entitled to receive as Fixed Rent
pursuant to this Lease and other Operative
50
Documents, are subject to limitations pursuant to Section 8.17 of the
Participation Agreement.
30. No Merger of Title. There shall be no merger of this Lease nor
------------------
of the leasehold estate created by this Lease with the ownership of the Mill I
Parcel, Mill I, the Mill I Improvements or the Mill I Alterations by reason of
the fact that the same Person may acquire, own or hold, directly or indirectly,
this Lease or the leasehold estate created by this Lease or any interest in this
Lease or interest in the fee or leasehold ownership of the Mill I Parcel, Mill
I, the Mill I Improvements or the Mill I Alterations and no such merger shall
occur unless and until all Persons having any interest in (x) the leasehold
estate created by this Lease and (y) the ownership of the Mill I Parcel, Mill I,
the Mill I Improvements or the Mill I Alterations, or any part thereof shall
join in a written instrument effecting such merger and shall duly record the
same.
31. 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.
32. Remaining Moneys. Except as otherwise provided for herein or in
----------------
the Interparty Agreement, any and all moneys remaining, and all residual
interests in the Mill I 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
Equity Investment and all payments of other sums due to the parties entitled
thereto under the Operative Documents, have been made in accordance with the
Operative Documents, shall be paid and assigned to the Lessee.
33. Replace and Supersede. This Lease replaces and supersedes in all
---------------------
respects the Original Mill I Lease, which Original Mill I Lease shall, from and
after the date hereof, be of no further force or effect.
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:
CREDIT SUISSE LEASING
92A, L.P.
By:
CREDIT SUISSE FIRST BOSTON,
its general partner
By: /s/ Xxxxxxx X. O'Day
------------------------
Name: Xxxxxxx X. O'Day
Title: Associate
By: /s/ Xxxx X. Xxxxxxxx
------------------------
Name: Xxxx X. Xxxxxxxx
Title: Associate
00
XXXXX XX XXX XXXX )
: ss.:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this 31st day of
January, 1997, by Xxxxxxx O'Day, as Associate of CREDIT SUISSE FIRST BOSTON, the
general partner of CREDIT SUISSE LEASING 92A, L.P., a Delaware limited
partnership, in his capacity as Associate of such general partner and on behalf
of said limited partnership. He is personally known to me or has produced
___________________ as identification.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal at my office in New York, New York the day and year last above
written.
(SEAL)
/s/ Xxxxxx X. Xxxxxxx
-------------------------------
Printed Name: Xxxxxx X. Xxxxxxx
Notary Public in and for said State
Commissioned in New York County
My Commission Expires:
August 31, 0000
XXXXX XX XXX XXXX )
: ss.:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this 31st day of
January, 1997, by Xxxx X. Xxxxxxxx as Associate of CREDIT SUISSE FIRST BOSTON,
the general partner of CREDIT SUISSE LEASING 92A, L.P., a Delaware limited
partnership, in his capacity as Associate of such general partner and on behalf
of said limited partnership. He is personally known to me or has produced
___________________ as identification.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal at my office in New York, New York the day and year last above
written.
(SEAL)
/s/ Xxxxxx X. Xxxxxxx
-------------------------------
Printed Name: Xxxxxx X. Xxxxxxx
Notary Public in and for said State
Commissioned in New York County
My Commission Expires:
August 31, 1997
LESSEE:
TENNECO PACKAGING INC.
Attest:/s/ Xxxxx X. Xxxxxxx By:/s/ Xxxxx X. Xxxx
-------------------- -----------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxx X. Xxxx
Title: Assistant Secretary Title: Vice President
[Seal]
Agreed to and Accepted:
CITIBANK, N.A., as Agent
By:/s/ Xxxxxxx X. Xxxxxx
----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
STATE OF New York )
: ss.:
COUNTY OF New York )
On this 31st day of January, 1997, before me personally appeared Xxxxx
X. Xxxx, to me personally known, who being by me duly sworn, did say that
[he/she] is the Vice President of TENNECO PACKAGING, INC., a Delaware
corporation, and that the seal affixed to the foregoing instrument is the
corporate seal of said general partner and that said instrument was signed and
sealed on behalf of said general partner by authority of its Board of Directors,
and said Vice President acknowledged said instrument to be the free act and deed
of said general partner.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal at my office in Westchester County the day and year last above
written.
/s/ Xxxxx Xxxxxxx
------------------------------
P r i n t e d
Name: Xxxxx Xxxxxxx
-----------------
Notary Public in and for said State
Commissioned in Westchester County
My Commission Expires:
May 31, 1997
-1-
SCHEDULE A
----------
Description of the Mill I Parcel
--------------------------------
LAND IN THE CITY OF ________, ________ COUNTY, ________, legally described as
follows:
A-1
SCHEDULE B
----------
Fixed Rent and Additional Rent Schedule
---------------------------------------
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).
----------------------------------
I. Fixed Rent
----------
A. The "Adjusted Capitalized Cost" of the Mill I Property as a whole
-------------------------
at any time during the Term (or the Extended Term, as applicable) is
(i) the sum of each of the aggregate unpaid principal amounts of the
A-Notes and the B-Notes (without taking into account any prepayment
pursuant to the last sentence of Section 2.04 of the Loan Agreement)
at such time and the unpaid stated amount of the Equity Investment at
such time times (ii) the Mill I Percentage.
B. "Fixed Securitization Costs" shall mean, without duplication of
--------------------------
any of the following fixed securitization costs and without
duplication of any other fixed costs related to the Operative
Documents or the Securitization Documents payable by the Lessee, the
fee of the Managing Agent pursuant to the Management Agreement or any
related fee letter, the fee of the Servicing Agent pursuant to the
Servicing Agreement or any related fee letter, and the monthly
commitment fee payable to CXC's Credit Enhancer pursuant to the
Securitization Fee Letter.
C. The "Mill I Percentage" means initially the updated appraised
-----------------
fair market value of the Mill I Property divided by the Acquisition
Costs and thereafter the percentage calculated by dividing (i) the
Actual Project Costs actually expended on the Mill I Property (on and
as of the date of such calculation) by (ii) the sum of the Actual
Project Costs actually expended on the Mill I Property (on and as of
the date of such calculation) plus the Actual Project Costs actually
expended on the Mill II Property (on and as of the date of such
calculation).
B-1
D. Fixed Rent during the Term (or the Extended Term, as applicable)
shall be due and payable in arrears on each Payment Date (subject, in
the case of Fixed Securitization Costs, to the rights of Lessee under,
and the limitations on such payments contained in, the Operative
Documents). "Fixed Rent" for each Payment Date during the Term shall
----- ----
be equal to the product of (i) the portion of Adjusted Capitalized
Cost represented by each Instrument multiplied by (ii) the Applicable
-------------
Rate for each Instrument in effect prior to such Payment Date; plus
----
Fixed Securitization Costs.
B-2
II. Additional Rent
---------------
A. In addition to such Additional Rent as may otherwise be payable
under the Lease, Lessee shall pay, without duplication, within five
(5) days after a demand therefor (but subject in all cases to the
rights of Lessee under, and the limitations on such payments contained
in, the Operative Documents) as Additional Rent, without duplication,
all Additional Costs. Promptly after the Lessor receives notice from
any Note Holder, Equity Investor or such other Persons 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 the right of any
Equity Investor, Note Holder or such other Person to recover
Additional Rent for the same.
B. "Additional Costs" shall mean all Break Costs, Funding Costs,
----------------
Reserve Costs, Increased Costs, Charges, Other Taxes, Variable
Securitization Fees, Illegality Costs and other amounts required to be
paid (or indemnified against) by the Lessee pursuant to Article V of
the Participation Agreement.
C. Upon requesting that Lessee pay Additional Rent pursuant to
paragraph II. A. above, the Lessor shall deliver to Lessee a
certificate in reasonable detail executed by the Equity Investors,
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 Equity Investor 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.
B-3
Exhibit A
---------
Performance Tests
-----------------
A-1
STATE OF )
--------------------
: ss.:
COUNTY OF __________)
The foregoing instrument was acknowledged before me this ____ day of
__________, 1997, by _______________, as _____________ of CREDIT SUISSE FIRST
BOSTON, the general partner of CREDIT SUISSE LEASING 92A, L.P., a Delaware
limited partnership, in his capacity as _________________ of such general
partner and on behalf of said limited partnership. He is personally known to me
or has produced ___________________ as identification.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal at my office in _______________________ the day and year last
(SEAL)
above written.
Printed Name:
Notary Public in and for said State
Commissioned in ___________ County
My Commission Expires:
-1-
