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FUNDING, CONSTRUCTION AGENCY, OPEN END MORTGAGE
AND LEASE AGREEMENT
THIS DOCUMENT SECURES FUTURE ADVANCES
dated as of February 14, 1997
to be effective as of February ___, 1997
between
1997-1 VALLEY STREAM TRUST,
Lessor and mortgagee
and
IKON OFFICE SOLUTIONS, INC.
(f/k/a Alco Standard Corporation)
as Lessee and mortgagor
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Construction Program for an Office Facility
in Xxxxxxx County, Pennsylvania
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THIS LEASE HAS BEEN EXECUTED IN SEVERAL COUNTERPARTS. 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 HEREOF OTHER THAN THE "ORIGINAL EXECUTED
COUNTERPART NO. 1", WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE
RECEIPT THEREFOR EXECUTED BY LESSOR ON OR FOLLOWING THE SIGNATURE PAGE THEREOF.
SEE SECTION 2.9 FOR THE NATURE OF THIS TRANSACTION AND INTENTION OF THE PARTIES.
THIS COUNTERPART IS [NOT] THE ORIGINAL EXECUTED COUNTERPART NO. 1.
FUNDING, CONSTRUCTION AGENCY, OPEN END MORTGAGE
AND LEASE AGREEMENT
This FUNDING, CONSTRUCTION AGENCY, OPEN END MORTGAGE AND LEASE AGREEMENT
(as amended and supplemented from time to time, this "Lease") entered into as of
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February 14, 1997, to be effective as of February ___, 1997, between 1997-1
VALLEY STREAM TRUST, a Delaware business trust, as lessor ("Lessor") and as
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mortgagee, and IKON OFFICE SOLUTIONS, INC. (f/k/a Alco Standard Corporation), an
Ohio corporation, as lessee ("Lessee") and as mortgagor.
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RECITALS
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A. On the Initial Advance Date, (i) Seller will transfer to Lessor
Seller's fee simple title in and to the land described on Schedule II attached
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hereto (the "Land"), the office building consisting of approximately 115,000
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square feet and other buildings, structures, fixtures and improvements
(excluding any trade fixtures) located thereon (the "Facility"), the Appurtenant
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Rights and the Personal Property (the Land, the Facility, the Appurtenant Rights
and the Personal Property, together with the Permits in favor of or acquired on
behalf of Lessor, being referred to herein collectively as the "Leased
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Property"), (ii) Lessor shall advance funds to pay or reimburse the Construction
Agent for the Acquisition Costs, (iii) Lessor shall also advance funds to Lessee
for the purpose of Lessee paying the Transaction Costs and (iv) Lessor shall
lease to Lessee the Leased Property.
B. Subject to the terms and conditions hereof, on each Construction
Advance Date, Lessor shall advance funds to Lessee to reimburse Lessee for costs
incurred by Lessee on Lessor's behalf to construct the Financed Improvements.
NOW, THEREFORE, in consideration of the mutual terms and conditions herein
contained and intending to be legally bound hereby, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS.
In this Lease and each other Operative Document, unless the context
otherwise requires:
(a) any term defined below by reference to another instrument or document
shall continue to have the meaning ascribed thereto whether or not such other
instrument or document remains in effect;
(b) words importing the singular, where appropriate, include the plural
and vice versa;
(c) words importing a gender include any gender;
(d) a reference in any Operative Document to a part, clause, section,
exhibit or schedule without further description is a reference to a part, clause
and section of, and exhibit and schedule to, such Operative Document;
(e) a reference to any statute, regulation, proclamation, ordinance or law
includes all statutes, regulations, proclamations, ordinances or laws amending,
supplementing, supplanting, varying, consolidating or replacing it, and a
reference to a statute includes all regulations, proclamations and ordinances
issued or otherwise applicable under that statute;
(f) a reference to a document includes, unless the context thereof
otherwise requires, any amendment or supplement to, or replacement or novation
of, that document;
(g) a reference to a party to a document includes that party's successors
and permitted assigns; and
(h) a reference to "including" means including without limiting the
generality of any description preceding such term and for purposes hereof a
general statement followed by or referable to an enumeration of specific matters
shall not be limited to matters similar to those specifically mentioned.
Further, each of the parties to the Operative Documents and their counsel
have reviewed and revised the Operative Documents, or requested revisions
thereto, and the usual rule of construction that any ambiguities are to be
resolved against the drafting party shall be inapplicable in construing and
interpreting the Operative Documents.
"Acquisition Costs" shall mean the cost of the acquisition of the Leased
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Property.
"Advance" shall mean each advance of a Certificate Purchaser Amount by a
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Certificate Purchaser.
"Advance Date" shall mean the Initial Advance Date and each Construction
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Advance Date.
"Advance Date Notice" shall mean the Initial Advance Date Notice and each
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Construction Advance Date Notice.
"Affiliate" of any Person shall mean any other Person directly or
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indirectly controlling, controlled by or under common control with such Person.
For purposes of this definition, the
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term "control" (including the correlative meanings of the terms "controlling,"
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"controlled by" and "under common control with"), as used with respect to any
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Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management policies of such Person, whether
through the ownership of voting securities or by contract or otherwise, provided
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(but without limiting the foregoing) that no pledge of voting securities of any
Person without the current right to exercise voting rights with respect thereto
shall by itself be deemed to constitute control over such Person.
"Alterations" shall have the meaning provided in Section 5.2(a).
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"Alternate Base Rate" shall mean, for any period, an interest rate per
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annum equal to the sum of (i) the Federal Funds Effective Rate most recently
determined by Certificate Trustee plus .50% and (ii) the Applicable Margin. If
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the aforesaid rate changes from time to time after the Documentation Date, the
Alternate Base Rate shall be automatically increased or decreased, if
appropriate and as the case may be, without notice to Lessee or Lessor, as of
the effective time of each change, provided that Certificate Trustee shall
endeavor to notify Lessee of any such change but shall have no liability for any
failure to do so.
"Applicable Facility Fee Rate" shall mean, with respect to each
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determination of the Facility Fee, the percentage in the column below marked
"Facility Fee Rate" opposite the senior long-term debt rating of Lessee from S&P
and Xxxxx'x on the determination date:
Level Ratings LIBO Facility Applicable
Spread Fee Rate Margin
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1 A+ or better from S&P 13.0 6.5 19.5
A1 or better from Xxxxx'x basis basis basis
points points points
2 A from S&P 14.0 7.0 21.0
A2 from Xxxxx'x basis basis basis
points points points
3 A- from S&P 14.5 8.0 22.5
A3 from Xxxxx'x basis basis basis
points points points
4 BBB+ or lower from S&P 18.5 9.0 27.5
Baa1 or lower from basis basis basis
Xxxxx'x points points points
If the ratings established by S&P and Xxxxx'x fall within different levels, the
Applicable Facility Fee Rate shall be based on the higher of the two ratings.
If the ratings of either S&P or
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Xxxxx'x changes, the Applicable Facility Fee Rate shall adjust, and such
adjustment shall be effective with respect to the first LIBO Calculation Period
commencing after such change in rating is first publicly announced.
"Applicable Law" shall mean all existing and future applicable laws
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(including Environmental Laws), rules, regulations, statutes, treaties, codes,
ordinances, permits, certificates, orders and licenses of, and interpretations
by, any Authority, and applicable judgments, decrees, injunctions, writs, orders
or like action of any court, arbitrator or other administrative, judicial or
quasi-judicial tribunal or agency of competent jurisdiction (including those
pertaining to health, safety or the environment) affecting Lessee or any of the
Leased Property.
"Applicable Margin" shall mean, with respect to each determination of the
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Yield Rate, the percentage in the column below marked "Applicable Margin"
opposite the senior long-term debt rating of Lessee from S&P and Xxxxx'x on the
determination date:
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Level Ratings LIBO Facility Applicable
Spread Fee Rate Margin
--------------------------------- ------ -------- ----------
1 A+ or better from S&P 13.0 6.5 19.5
A1 or better from Xxxxx'x basis basis basis
points points points
2 A from S&P 14.0 7.0 21.0
A2 from Xxxxx'x basis basis basis
points points points
3 A- from S&P 14.5 8.0 22.5
A3 from Xxxxx'x basis basis basis
points points points
4 BBB+ or lower from S&P 18.5 9.0 27.5
Baa1 or lower from basis basis basis
Xxxxx'x points points points
If the ratings established by S&P and Xxxxx'x fall within different levels, the
Applicable Margin shall be based on the higher of the two ratings. If the
ratings of either S&P or Xxxxx'x changes, the Applicable Margin shall adjust,
and such adjustment shall be effective with respect to the first LIBO
Calculation Period commencing after such change in rating is first publicly
announced.
"Applicable Percentage" shall mean (a) for the Basic Term, 80%, and (b) for
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each Renewal Term, the percentage calculated on or about the date of the
commencement of such Renewal Term in order that such Renewal Term will be
reported as an operating lease for financial accounting purposes.
"Applicable Percentage Amount" shall mean, as of any date of determination,
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the product obtained by multiplying the sum of the aggregate original
Certificate Purchaser Amounts of both classes of the Certificates by the
Applicable Percentage.
"Appraisal" shall mean the appraisal of the Leased Property from the
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Appraiser received pursuant to Sections 3.1(c) and 9.4 of this Lease.
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"Appraiser" shall mean Xxxxxx Xxxxxx Xxxxxxxxxxx & Co. or such other Person
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as may be selected by the Required Certificate Purchasers.
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"Appurtenant Rights" shall mean (i) all agreements, easements, rights of
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way or use, rights of ingress or egress, privileges, appurtenances, tenements,
hereditaments and other rights and benefits at any time belonging or pertaining
to the Land or the Facility, including, without limitation, the use of any
streets, ways, alleys, vaults or strips of land adjoining, abutting, adjacent or
contiguous to the Land and (ii) all permits, licenses and rights, whether or not
of record, appurtenant to the Land.
"Architect" shall mean The Xxxxxxxxx Company or another registered
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architect or certified professional engineer for the Construction Agent or
Lessee (which, unless otherwise expressly provided, may be an employee of
Lessee).
"Architect's Agreement" shall mean the agreement dated October 1, 1996
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between IKON Office Solutions Holding Company (f/k/a IKON Office Solutions,
Inc.), a Delaware corporation, and the Architect for the design of the Financed
Improvements.
"Arrangement Fee" shall mean the fee payable to the Arranger by Lessee
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pursuant to a letter agreement dated January 14, 1997.
"Arranger" shall mean BA Leasing & Capital Corporation.
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"Assignment of Purchase Agreement" shall mean an assignment of all of the
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rights of IKON Office Solutions Holding Company (f/k/a IKON Office Solutions,
Inc.), a Delaware corporation, under the Purchase Agreement to Lessor, which
assignment shall be in form and substance satisfactory to Lessor and the
Certificate Purchasers.
"Authority" shall mean any applicable foreign, Federal, state, county,
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municipal or other government, quasi-government or regulatory authority, agency,
board, body, commission, instrumentality, court or tribunal, or any political
subdivision of any thereof, or arbitrator or panel of arbitrators.
"Authorized Officer" shall mean any officer in the Corporate Trust
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Administration Department of the Certificate Trustee, including any Vice
President, Assistant Vice President, Secretary, Assistant Secretary or any other
officer of the Certificate Trustee customarily performing functions similar to
those performed by any of the above designated officers and also, with respect
to a particular matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
"Available Commitments" means an amount equal to the excess, if any, of (a)
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the amount of the Total Commitments over (b) the aggregate original amount of
the Certificate Purchaser Amounts.
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"Bank" shall mean Wilmington Trust Company, a Delaware banking corporation.
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"Bankruptcy Code" shall mean the Bankruptcy Reform Act of 1978.
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"Basic Rent" shall mean an amount payable on each Payment Date during the
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Basic Term and each Renewal Term equal to the aggregate Yield Amount payable on
such Payment Date on the Certificates.
"Basic Term" shall have the meaning provided in Section 4.2.
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"Basic Term Expiration Date" shall have the meaning provided in Section
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4.2.
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"Xxxx of Sale" shall mean the xxxx of sale from Seller to Lessor with
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respect to the Personal Property, substantially in the form of Exhibit A hereto.
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"Board of Directors" shall mean, with respect to a corporation, either the
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board of directors or any duly authorized committee of that board of directors
which, pursuant to the by-laws of such corporation, has the same authority as
that board of directors as to the matter at issue.
"Business Day" shall mean (i) for all purposes other than as covered by
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clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
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in the City of San Francisco and the City of Wilmington, Delaware a legal
holiday or a day on which banking institutions are authorized by law or other
government action to close and (ii) with respect to all notices and
determinations in connection with an Advance Date Notice and payments of Rent,
any day which is a Business Day described in clause (i) above and which is also
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(a) any day except a day which, in London, shall be a legal holiday or a day on
which banking institutions are authorized by law or other government action to
close and (b) a day for trading by and between banks in deposits of U.S. Dollars
in the interbank market.
"Casualty" shall mean an event of damage or casualty pertaining to any
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portion or all of the Leased Property which does not constitute an Event of
Loss.
"Certificates" shall mean those certain Class A Certificates and Class B
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Certificates issued to the Certificate Purchasers pursuant to the Trust
Agreement, substantially in the form of Exhibit A and Exhibit B thereto,
respectively, and any and all Certificates issued in replacement or exchange
therefor.
"Certificate Purchaser" shall have the meaning provided in the preamble to
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the Trust Agreement.
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"Certificate Purchaser Amount" shall mean, with respect to any Certificate
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as of any date of determination, the aggregate unpaid face amount of such
Certificate.
"Certificate Purchaser Commitment" shall mean, as to any Certificate
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Purchaser, its obligation to make amounts available to Lessor from time to time
in an aggregate amount not to exceed the amount set forth opposite such
Certificate Purchaser's name on Schedule I to the Trust Agreement.
"Certificate Purchaser Percentage" shall mean, as to any Certificate
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Purchaser, at a particular time, the percentage of the aggregate Total
Commitments in effect at such time represented by the amount of such Certificate
Purchaser's Certificate Purchaser Commitment, or if there are no Certificate
Purchaser Commitments then in effect, the percentage of the aggregate
Certificate Purchaser Amounts represented by such Certificate Purchaser's
Certificates.
"Certificate Register" shall have the meaning provided in Section 2.8 of
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the Trust Agreement.
"Certificate Trustee" shall mean Wilmington Trust Company, a Delaware
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banking corporation, not in its individual capacity but solely as trustee under
the Trust Agreement.
"Claims" shall mean liabilities, obligations, damages, losses, demands,
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penalties, interest, fines, claims, actions, suits, judgments, settlements,
utility charges, costs, fees, expenses and disbursements (including legal fees
(including allocated time charges of internal counsel) and expenses and costs of
investigation which, in the case of counsel or investigators retained by an
Indemnitee, shall be reasonable) whether any of the foregoing be founded or
unfounded, of any kind and nature whatsoever.
"Class A Certificate" shall have the meaning set forth in the Trust
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Agreement.
"Class B Certificate" shall have the meaning set forth in the Trust
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Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or any
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successor thereto.
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"Condemnation" shall mean any condemnation, requisition, confiscation,
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seizure or other taking or sale of the use, occupancy or title to any portion of
the Leased Property in, by or on account of any actual or threatened eminent
domain proceeding or other action by any Authority or other Person under the
power of eminent domain or otherwise or any transfer in lieu of or in
anticipation thereof, which in any case does not constitute an Event of Taking.
A Condemnation shall be deemed to have "occurred" on the earliest of the dates
that use, occupancy or title is taken.
"Consolidated Net Worth" shall be determined in accordance with GAAP and
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shall mean the sum (as reflected in the consolidated balance sheet of Lessee and
its Consolidated Subsidiaries) of (i) the stated dollar amount of outstanding
capital stock plus (ii) the stated dollar amount of additional paid in capital,
if any, plus (iii) the amount of surplus and retained earnings minus (iv) the
cost of treasury shares and the excess of redemption value over the stated value
of preferred stock of Lessee and its Consolidated Subsidiaries.
"Consolidated Subsidiaries" shall mean all Subsidiaries.
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"Consolidated Total Assets" shall mean the total assets of Lessee and its
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Consolidated Subsidiaries computed on a consolidated basis in accordance with
GAAP.
"Construction Advance" shall mean each Advance for all or a portion of the
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Construction Costs.
"Construction Advance Date" shall mean each date on which Construction
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Costs are advanced.
"Construction Advance Date Notice" shall have the meaning provided in
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Section 2.5 hereof.
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"Construction Agent" shall have the meaning provided in Section 2.4(a).
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"Construction Certificate" shall have the meaning provided in Section
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3.2(e).
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"Construction Completion Date" shall mean the earlier of (a) the date
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Substantial Completion is first achieved and (b) the later of (i) the Scheduled
Construction Termination Date and (ii) if a Force Majeure Event occurs which
results in a delay in Substantial Completion, one month after the Scheduled
Construction Termination Date.
"Construction Contract" shall mean the general construction contract for
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the construction of the Financed Improvements between Lessee and the General
Contractor.
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"Construction Costs" shall mean all capital expenditures, including hard
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and Soft Costs incurred in connection with the construction of the Financed
Improvements.
"Controlling Person" shall have the meaning provided in Section 8.1(m).
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"Corporate Trust Administration Department" shall mean the principal
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corporate trust office of Certificate Trustee, located in Wilmington, Delaware
or at such other office at which the corporate trust business of Certificate
Trustee shall be administered which Certificate Trustee shall have specified by
notice in writing to Lessee, Lessor and each Certificate Purchaser.
"Credit Agreement" shall mean that certain Credit Agreement, dated as of
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December 16, 1996, as amended, supplemented or otherwise modified from time to
time, among Lessee, certain of its Subsidiaries, various financial institutions
and CoreStates Bank, N.A., as agent.
"Debt" shall mean (i) Funded Debt and (ii) any portions of notes payable
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and capital lease obligations which are classified as current liabilities.
"Deed" shall mean a general warranty deed from Seller in the form of
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Exhibit B hereto.
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"Default" shall mean any condition, event or act, which with notice or
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lapse of time or both, would become an Event of Default.
"Documentation Date" shall have the meaning provided in Section 2.1(a).
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"Employee Benefit Plan" shall have the meaning provided in Section 10.1(c).
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"Environmental Audit" shall mean a Phase One environmental site assessment
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(the scope and performance of which meets or exceeds ASTM Standard Practice
E1527-93 Standard Practice for Environmental Site Assessments: Phase One
Environmental Site Assessment Process ("ASTM Standard")) of the Leased Property
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on or before the Initial Advance Date or of the Leased Property to be sold
pursuant to the Sale Option and any additional environmental assessments
requested by the Required Certificate Purchasers in good faith.
"Environmental Certificate" shall have the meaning provided in Section
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3.1(g).
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"Environmental Engineer" shall mean Professional Service Industries or such
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other environmental consulting firm as Construction Agent may from time to time
select, subject to the approval of the Required Certificate Purchasers.
"Environmental Indemnity" shall mean the Environmental Indemnity dated as
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of the effective date hereof by Lessee.
"Environmental Laws" shall mean and include the Resource Conservation and
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Recovery Act of 1976, (RCRA) 42 U.S.C. (S)(S) 6901-6987, as amended by the
Hazardous and Solid Waste Amendments of 1984, the Comprehensive Environmental
Response, Compensation and Liability Act, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. (S)(S) 9601-9657, (CERCLA), the
Hazardous Materials Transportation Act of 1975, 49 U.S.C. (S)(S) 1801-1812, the
Toxic Substances Control Act, 15 U.S.C. (S)(S) 2601-2671, the Clean Air Act, 42
U.S.C. (S)(S) 7401 et seq., the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. (S)(S) 136 et seq., the Clean Water Act, 33 U.S.C. (S)(S) 1251 et
seq., and all similar Federal, state and local environmental laws, ordinances,
rules, orders, statutes, decrees, judgments, injunctions, codes and regulations,
and any other Federal, state or local laws, ordinances, rules, codes and
regulations relating to the environment, human health or natural resources or
the regulation or control of or imposing liability or standards of conduct
concerning the environment, human health, Hazardous Material or the clean-up,
remediation or response in connection with any of the Leased Property.
"Environmental Permits" shall mean all permits, licenses, authorizations,
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registrations, certificates and approvals of Authorities required by
Environmental Laws.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
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amended, or any successor thereto.
"ERISA Affiliate" shall have the meaning provided in Section 10.1(c).
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"ERISA Plan" shall mean an "employee benefit plan" as defined in Section
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3(3) of ERISA which is subject to Title I of ERISA, or a "plan" covered by
Section 4975 of the Code.
"Event of Default" shall have the meaning provided in Section 8.1.
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"Event of Loss" shall mean (x) the actual or constructive substantial loss
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of the Facility or damage to the Facility to an extent rendering repair
impractical or uneconomical, in any case as reasonably determined in good faith
by the Board of Directors of Lessee, such determination to be made promptly
after the occurrence of such event and to be evidenced by an Officer's
Certificate of Lessee delivered to Certificate Trustee and each Certificate
Purchaser, (y) damage to the Facility which results in an insurance settlement
on the basis of a total loss or constructive total loss (including title
insurance proceeds) in respect of a total loss of the Facility, or (z) an Event
of Taking.
"Event of Taking" shall mean (A) taking of title to the Leased Property or
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(B) any condemnation (other than a requisition of temporary use) or requisition
of use for a period scheduled to last beyond the end of the Lease Term (or which
in fact is continuing on the Lease Termination Date even if not scheduled to
last beyond the Lease Term), in either case resulting in (i) the loss of use or
possession of substantially all of the Leased Property or (ii) the loss of use
or possession of a material portion of the Leased Property, in either of clause
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(i) or clause (ii), as reasonably determined in good faith by the Board of
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Directors of Lessee, such determination to be made promptly after the occurrence
of such event and to be evidenced by an Officer's Certificate of Lessee
delivered to Certificate Trustee and each Certificate Purchaser.
"Excluded Amounts" shall mean:
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(a) all indemnity payments and expenses to which Lessor, Certificate
Trustee, Bank or any Certificate Purchaser (or the respective successors,
assigns, agents, officers, directors or employees of any such Person) is
entitled pursuant to the Operative Documents;
(b) any amounts payable under any Operative Document to reimburse
Lessor, Certificate Trustee, Bank or any Certificate Purchaser (including the
reasonable expenses of Lessor, Certificate Trustee, Bank and any Certificate
Purchaser incurred in connection with any such payment) for performing any of
the obligations of Lessee under and as permitted by any Operative Document;
(c) any insurance proceeds (or payments with respect to risks self-
insured or policy deductibles) under liability policies payable to Lessor,
Certificate Trustee, Bank or any Certificate Purchaser (or the respective
successors, assigns, agents, officers, directors or employees of any such
Person);
(d) any insurance proceeds under policies maintained by Lessor,
Certificate Trustee, Bank or any Certificate Purchaser
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and not required to be maintained by Lessee under this Lease;
(e) any amounts payable to Lessor, Certificate Trustee, Bank or any
Certificate Purchaser pursuant to Section 3.1(k) or Section 8.2(iii)(C),
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whether or not such amounts are or can be characterized as Supplemental Rent;
and
(f) any payments of interest on payments referred to in clauses (a)
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through (e) above.
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"Excluded Debt" shall have the meaning provided in Section 11.1(f).
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"Facility" shall have the meaning provided in the Recitals.
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"Facility Fee" shall have the meaning set forth in Section 2.14 hereof.
------------ ------------
"Facility Period" shall have the meaning set forth in Section 2.14 hereof.
--------------- ------------
"Fair Market Value" shall mean, with respect to the Leased Property or any
-----------------
portion thereof, the retail price a purchaser would pay to purchase the Leased
Property or such portion in an arm's-length transaction between a willing buyer
and a willing seller, neither of them being under any compulsion to buy or sell.
In making any determination of Fair Market Value, the Appraiser may assume the
Leased Property or such portion has been maintained in accordance with the
requirements of this Lease and that the Leased Property or such portion is in
the condition in which it is required to be hereunder as of the date for which
such determination is made (unless such fair market value is being determined
for purposes of Section 9.4, in which case the foregoing assumptions shall not
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be made and the Appraiser shall determine the actual condition of the Leased
Property or such portion). Appraiser shall use such reasonable methods of
appraisal as are chosen by Lessor upon instructions from the Required
Certificate Purchasers.
"Federal Funds Effective Rate" shall mean, for any day, an interest rate
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per annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day,
the average of quotations for such day on such transaction received by the
Certificate Trustee from three Federal funds brokers of recognized standing
selected by the Certificate Trustee.
"Final Maturity Date" shall have the meaning provided in Section 2.1(a) of
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the Trust Agreement
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"Final Rent Payment Date" shall have the meaning provided in
-----------------------
Section 8.2(iii)(B)(1).
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"Financed Improvements" shall mean the improvements to the Facility to be
---------------------
constructed as described in the Plans and Specifications.
"Finance Leasing Subsidiaries" shall mean IKON Capital, Inc., a Delaware
----------------------------
corporation, IKON Capital Inc., a Canadian corporation, IKON Capital, PLC, an
English company, and their respective successor corporations, and such
additional Subsidiaries whose primary business is the leasing of products
distributed by Lessee and its Subsidiaries.
"Force Majeure Event" shall mean any event (the existence of which was not
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known and would not reasonably have been expected to be discovered through the
exercise of commercially reasonable due diligence by the Lessee or the
Construction Agent, taking into account the contemplated use of the Land and the
construction of the Financed Improvements, prior to the Initial Advance Date)
beyond the control of the Lessee and the Construction Agent, including, but not
limited to, strikes, lockouts, adverse soil conditions, acts of God, adverse
weather conditions, inability to obtain labor or materials, government
activities, civil commotion and enemy action; but excluding any event, cause or
condition that results from the Construction Agent's financial condition or
failure to pay or any event, cause or condition which could have been avoided or
which could be remedied through the exercise of commercially reasonable efforts
or the commercially reasonable expenditure of funds.
"Funded Debt" shall mean any obligation payable more than one year from the
-----------
date of the creation thereof which under GAAP is shown on the consolidated
balance sheet as a liability (excluding reserves for deferred income taxes and
other reserves to the extent that such reserves do not constitute obligations
for borrowed money) and including, without limitation, the portion of any such
obligation properly classified as a current liability and capitalized leases.
"Funding" shall have the meaning provided in Section 2.3(a).
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"GAAP" shall mean generally accepted accounting principles applied on a
----
consistent basis.
"General Contractor" shall mean Structuretone, Inc.
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"Government Action" shall mean all applicable permits, authorizations,
-----------------
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, decrees, licenses, exemptions, publications, filings, notices to and
declarations of
-14-
or with, or required by, any Authority, or required by any Applicable Law.
"Guaranty" shall mean the Guaranty from Lessee to the Certificate
--------
Purchasers dated as of the effective date hereof.
"Hazardous Material" shall mean any substance, waste or material which is
------------------
toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous by listing characteristic or definition under
any Environmental Law, including petroleum, crude oil or any fraction thereof,
petroleum derivatives, by-products and other hydrocarbons, asbestos, asbestos
containing materials, urea formaldehyde foam insulation, polychlorinated
biphenyls (PCBs) and radon gas, and is or becomes regulated by any Authority,
including any agency, department, commission, board or instrumentality of the
United States, any state or any political subdivision thereof.
"Indemnitee" shall mean each Certificate Purchaser, Certificate Trustee,
----------
Bank and Lessor, any additional, separate or co-trustee appointed in accordance
with the terms of the Trust Agreement, and the respective Affiliates,
successors, permitted assigns, permitted transferees, invitees, contractors,
servants, employees, officers, directors, shareholders, partners, participants,
representatives and agents of each of the foregoing Persons; provided, however,
-------- -------
that in no event shall Lessee be an Indemnitee.
"Initial Advance Date" shall have the meaning provided in Section 2.2.
-------------------- -----------
"Initial Advance Date Notice" shall have the meaning provided in Section
--------------------------- -------
2.5 hereof.
---
"Initial LIBO Calculation Period" shall mean the period from the
-------------------------------
Documentation Date until the last Business Day of the calendar month in which
the Documentation Date occurs.
"Insolvency Event" shall mean, with respect to any Person, any event
----------------
pursuant to which such Person makes an assignment for the benefit of creditors,
files a case or petition in bankruptcy, petitions or applies to any tribunal for
the appointment of a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or other similar official) for it or for a substantial part of its
property, commences any case or proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect, consents or acquiesces in
the filing of any such petition, application, proceeding or appointment of or
taking possession by the custodian, receiver, liquidator, assignee, trustee or
sequestrator (or other similar official) of such Person or any substantial part
of its property,
-15-
or admits its inability to pay its debts generally as they become due, or
authorizes any of the foregoing to be done or taken on behalf of such Person.
"Insurance Requirements" shall mean all terms and conditions of any
----------------------
insurance policy required to be maintained pursuant to this Lease or by the
issuer of any such policy.
"Land" shall have the meaning provided in the Recitals.
----
"Lease" shall have the meaning provided in the introductory paragraph.
-----
"Lease Balance" shall mean, as of any date of determination, the sum total
-------------
of the aggregate unpaid Certificate Purchaser Amounts.
"Lease Commencement Date" shall mean the Initial Advance Date.
-----------------------
"Leased Property" shall have the meaning provided in the Recitals.
---------------
"Lease Term" shall have the meaning provided in Section 4.2.
---------- -----------
"Lease Termination Date" shall mean the expiration of the Lease Term or the
----------------------
earlier of (a) the termination of Lessee's right to possession as set forth at
Section 8 in connection with an Event of Default or (b) in connection with an
---------
early termination as set forth at Section 6.1 or Section 9.6.
----------- -----------
"Lessee" shall have the meaning provided in the introductory paragraph.
------
"Lessor" shall have the meaning provided in the introductory paragraph.
------
"Lessor Liens" shall mean Liens on or against the Lease, the Leased
------------
Property, the Trust Estate or any payment of Rent (a) which result from any act
of, or any Claim against, Bank, Lessor, any Certificate Trustee or any
Certificate Purchaser in any case unrelated to the Overall Transaction, or (b)
which result from any Tax owed by any such Person, except for any Tax required
to be paid by Lessee under the Operative Documents, including any Tax for which
Lessee is obligated to indemnify such Person.
"Lessor's Policy" shall have the meaning provided in Section 3.1(f).
--------------- --------------
"LIBO Calculation Period" shall mean (a) the Initial LIBO Calculation
-----------------------
Period, (b) thereafter, each one month period beginning on the last Business Day
of a calendar month, with each
-16-
such period ending on (but excluding) the last Business Day of the next
succeeding calendar month, and (c) each three month period beginning on and
after the Construction Completion Date, with each such three-month period ending
on (but excluding) the last Business Day of the last calendar month of such
three-month period; provided, however, that no LIBO Calculation Period during
-------- -------
the Basic Term or any Renewal Term may end later than the Lease Termination
Date.
"LIBO Rate" shall mean, with respect to the Lease Balance or any portion
---------
thereof, (a) for the Initial LIBO Calculation Period, 5.70% per annum, and (b)
for any LIBO Calculation Period thereafter:
(i) The interest rate for deposits in U.S. Dollars for a period equal
to that of the LIBO Calculation Period(s) as of 11:00 a.m., London time, on
the second Business Day preceding such LIBO Calculation Period (the
"Interest Setting Date") which appears on the Telerate Page 3750 as of
---------------------
11:00 a.m. (London time) on such date or if such page on such service
ceases to display such information, such other page as may replace it on
that service for the purpose of display of such information (the
"Telerate Rate"). If such rate does not appear on the Telerate, then the
-------------
rate will be determined in accordance with clause (ii) below.
-----------
(ii) If the Certificate Trustee is unable to determine the Telerate
Rate, then on the Interest Setting Date, the Certificate Trustee will
determine the arithmetic mean (rounded if necessary to the nearest
1/16 of 1%) of the interest rate for a period equal to that of the LIBO
Calculation Period to which such Interest Setting Date relates quoted on
Reuters Screen page "LIBO" or (a) if such page on such service ceases to
display such information, such other page as may replace it on that service
for the purpose of displaying such information or (b) if that service
ceases to display such information, such page as displays such information
on such service (or, if more than one, that one approved by the Certificate
Trustee as may replace the Reuters Screen) as of 11:00 a.m. (London time)
on that Interest Setting Date (the rate quoted as aforesaid being the
"LIBOR Screen Rate").
-----------------
If the Certificate Trustee is to make a determination pursuant to this paragraph
and one or more of the LIBO Screen Rates required for such determination shall
be unavailable, the determination shall be made on the basis of those rates
which are available and if no LIBO Screen Rate is then available, the LIBO Rate
shall be determined on the basis of the rate of interest per annum at which
deposits in U.S. Dollars are offered by the Certificate Trustee to leading banks
in the London interbank market at 11:00 a.m. (London time) on the Interest
Setting Date for a period equal to that of
-17-
the LIBO Calculation Period to which such Interest Setting Date applies.
"Lien" shall mean any lien, mortgage, deed of trust, encumbrance, pledge,
----
charge, lease, easement, servitude, right of others or security interest of any
kind, including any thereof arising under any conditional sale or other title
retention agreement.
"Material Adverse Effect" shall mean, with respect to Lessee, any change or
-----------------------
changes, effect or effects or condition or conditions that individually or in
the aggregate are or are likely to be materially adverse to (i) the assets,
business, operations, income or condition (financial or otherwise) of Lessee and
its Subsidiaries on a consolidated basis, (ii) the Overall Transaction, (iii)
the ability of Lessee to perform its material obligations under the Operative
Documents to which it is a party, or (iv) the validity or enforceability of any
of the Operative Documents or any rights or remedies under any thereof.
"Memorandum of Lease" shall mean the Memorandum of Lease; Open End Mortgage
-------------------
substantially in the form of Exhibit C.
---------
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
-------
"Mortgage" shall mean the mortgage from Lessee to the Certificate Trustee
--------
of the Leased Property effective as of the effective date hereof.
"Multiemployer Plan" shall have the meaning provided in Section 10.1(c).
------------------ ---------------
"Net Condemnation Proceeds" shall mean all payments received from any
-------------------------
Authority relating to an Event of Taking after deducting costs incurred by
Lessee, Certificate Trustee or any Certificate Purchaser in respect of receipt
thereof.
"Non-Renewing Certificate Purchaser" shall have the meaning provided in
----------------------------------
Section 4.3(b).
--------------
"Officer's Certificate" of a Person shall mean a certificate signed by the
---------------------
Chairman of the Board of Directors or the President or any Executive Vice
President or any Senior Vice President or any other Vice President of such
Person signing with the Treasurer or any Assistant Treasurer or the Controller
or any Assistant Controller, Cashier, Assistant Cashier or the Secretary or any
Assistant Secretary of such Person, or by any Vice President who is also
Controller, Treasurer or Cashier signing alone.
"Operative Documents" shall mean this Lease, the Memorandum of Lease, the
-------------------
Certificates, the Trust Agreement, the Guaranty, the Environmental Indemnity and
the Mortgage.
-18-
"Overall Transaction" shall mean all the transactions and activities
-------------------
referred to in or contemplated by the Operative Documents.
"Overdue Rate" shall mean the lesser of (a) the highest interest rate
------------
permitted by Applicable Law, and (b) an interest rate per annum equal to the
Yield Rate plus 2% per annum.
----
"Payment Dates" shall mean the last day of each Rent Period.
-------------
"Payment Schedule" shall have the meaning provided in Section 2.3 of the
----------------
Trust Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
"Pension Plan" shall have the meaning provided in Section 10.1(c).
------------ ---------------
"Peril" shall have the meaning provided in Section 6.7(b).
----- --------------
"Permits" shall have the meaning provided in Section 10.1(i).
------- ---------------
"Permitted Contest" shall mean actions taken by a Person to contest in good
-----------------
faith, by appropriate proceedings initiated timely and diligently prosecuted,
the legality, validity or applicability to any of the Leased Property or any
interest therein of any Person of: (a) any law, regulation, rule, judgment,
order, or other legal provision or judicial or administrative requirements; (b)
any term or condition of, or any revocation or amendment of, or other proceeding
relating to, any authorization or other consent, approval or other action by any
Authority; or (c) any Lien or Tax; provided that the initiation and prosecution
--------
of such contest would not: (i) result in, or materially increase the risk of,
the imposition of any criminal liability on any Indemnitee; (ii) materially and
adversely affect the Liens created by the Operative Documents or the right,
title or interest of Lessor in or to any of the Leased Property, or the right of
Lessor or any Certificate Purchaser to receive payment of all or any portion of
Certificate Purchaser Amount or Yield Amount of any Certificate, Rent, Lease
Balance or any other amount payable under the Operative Documents; (iii) permit,
or pose a material risk of, the sale or forfeiture of, or foreclosure on, the
Leased Property or any portion thereof; or (iv) materially and adversely affect
the fair market value, utility or remaining useful life of the Leased Property
or any interest therein or the continued economic operation thereof; and
provided, further, that in any event adequate reserves in accordance with GAAP
-------- -------
are maintained by such Person against any adverse determination of such contest.
"Permitted Exceptions" shall mean the exceptions set forth in
--------------------
-19-
Lessor's Policy.
"Permitted Investments" shall mean (i) full faith and credit obligations of
---------------------
the United States of America, or obligations fully guaranteed as to interest and
principal by the full faith and credit of the United States of America, maturing
in not more than one year from the date such investment is made; (ii)
certificates of deposit having a final maturity of not more than one year after
the date of issuance thereof of a Certificate Purchaser, Bank or of any other
commercial bank incorporated under the laws of the United States of America or
any state thereof or the District of Columbia, which bank is a member of the
Federal Reserve System and has a combined capital and surplus of not less than
$500,000,000 and with a senior unsecured debt credit rating of at least "A" by
Xxxxx'x Investors Service, Inc. and "A" by Standard & Poor's Ratings Group;
(iii) commercial paper of any Certificate Purchaser or any Affiliate thereof
having a remaining term until maturity of not more than 180 days from the date
such investment is made; (iv) commercial paper of companies, banks, trust
companies or national banking associations (in each case excluding Lessee and
its Affiliates) incorporated or doing business under the laws of the United
States or one of the states thereof, in each case having a remaining term until
maturity of not more than 180 days from the date such investment is made and
rated at least P-1 by Xxxxx'x Investors Service, Inc. or at least A-1 by
Standard & Poor's Ratings Group; and (v) repurchase agreements maturing within
one year with any financial institution having combined capital and surplus of
not less than $500,000,000 with any of the obligations described in clauses (i)
-----------
through (iv) as collateral so long as title to the underlying obligations pass
----
to Lessor and such underlying securities shall be segregated in a custodial or
trust account for the benefit of Lessor.
"Permitted Liens" shall mean (i) the respective rights and interests of
---------------
Lessee, the Certificate Purchasers and Certificate Trustee, as provided in the
Operative Documents; (ii) materialmen's, mechanics', workers', artisan's,
repairmen's, employees' or other like Liens securing payment of the price of
goods or services rendered in the ordinary course of business for amounts the
payment of which is not overdue or is being contested pursuant to a Permitted
Contest; (iii) Lessor Liens; (iv) Liens for current Taxes which are not
delinquent or the validity of which is being contested pursuant to a Permitted
Contest; and (v) Permitted Exceptions.
"Person" shall mean an individual, corporation, partnership, joint venture,
------
limited liability company, limited liability partnership, association, joint-
stock company, trust, unincorporated organization or Authority.
"Personal Property" shall mean the property to be conveyed to Lessor
-----------------
pursuant to the Xxxx of Sale.
-20-
"Plans and Specifications" means the plans and specifications for the
------------------------
construction of the Financed Improvements, as more particularly described on
Schedule III hereto, as the same may be revised and supplemented from time to
------------
time in accordance with the terms hereof.
"Proceeds" shall have the meaning provided in Section 9.1(c).
-------- --------------
"Protective Covenants" shall mean the Protective Covenants For Great Valley
--------------------
Corporate Center dated January 29, 1985 recorded in Misc. Deed Book 674 page
355.
"Purchase Agreement" shall have the meaning provided in Section 10.1(r).
------------------ ---------------
"Purchase Option" shall have the meaning provided in Section 9.1(b).
--------------- --------------
"Purchase Option Exercise Amount" shall mean, as of any date of
-------------------------------
determination, the sum of (a) the Lease Balance as of the date of purchase, plus
----
(b) all accrued but unpaid Rent, plus (c) all other sums then due and payable
----
under the Operative Documents, including any breakage costs pursuant to Section
-------
7.7, by Lessee or any of its Affiliates.
---
"Regulated Activity" shall mean the use, Release, generation, treatment,
------------------
storage, recycling, transportation or disposal of Hazardous Material to the
extent such activities are regulated by any Authority.
"Regulations" shall mean the income tax regulations promulgated from time
-----------
to time under and pursuant to the Code.
"Release" shall mean the release, deposit, disposal or leak of any
-------
Hazardous Material into or upon or under any land or water or air, or otherwise
into the environment, including by means of burial, disposal, discharge,
emission, injection, spillage, leakage, seepage, leaching, dumping, pumping,
pouring, escaping, emptying, placement and the like.
"Renewal Option" shall have the meaning provided in Section 9.1(a).
-------------- --------------
"Renewal Request" shall have the meaning provided in Section 4.3(b).
--------------- --------------
"Renewal Term" shall have the meaning provided in Section 4.3.
------------ -----------
"Rent" shall mean Basic Rent and Supplemental Rent, collectively.
----
-21-
"Rent Period" shall mean each LIBO Calculation Period.
-----------
"Replacement Certificate Purchaser" shall have the meaning provided in
---------------------------------
Section 4.3(b).
--------------
"Required Certificate Purchasers" shall mean, as of the date of the
-------------------------------
determination, Certificate Purchasers having unpaid Certificate Purchaser
Amounts equal to more than 66 and 2/3% of the aggregate unpaid Certificate
Purchaser Amounts.
"S&P" shall mean Standard & Poor's Ratings Group.
---
"Sale Option" shall have the meaning provided in Section 9.1(c).
----------- --------------
"Sale Recourse Amount" shall have the meaning provided in Section 9.1(c).
-------------------- --------------
"Scheduled Construction Termination Date" shall mean the last Business Day
---------------------------------------
of the ninth calendar month after the Initial Advance Date.
"SEC" shall mean the United States Securities and Exchange Commission.
---
"Securities Act" shall mean the Securities Act of 1933.
--------------
"Securities Exchange Act" shall mean the Securities Exchange Act of 1934.
-----------------------
"Seller" shall mean Commonwealth Bank.
------
"Soft Costs" shall mean all Construction Costs that are incurred by the
----------
Construction Agent for the production of the Plans and Specifications,
architectural and engineering fees, legal fees, permit and license fees and
other such similar costs.
"Subsidiary" shall mean, with respect to any Person, any corporation or
----------
other entity of which such Person directly or indirectly owns or controls at
least a majority of the outstanding stock or other ownership interests having
general voting power, including without limitation the right, under ordinary
circumstances, to vote for the election of a majority of the board of directors
of such corporation or other entity or other Persons performing similar
functions.
"Substantial Completion" means such time as the construction of the
----------------------
Financed Improvements shall have been substantially completed in accordance with
the Plans and Specifications and all Applicable Law, and the Leased Property
(including the Financed Improvements) shall be ready for occupancy and
operation, as
-22-
evidenced by the issuance by the appropriate Authority of certificates of
occupancy for all portions of the Facility contemplated by the Plans and
Specifications, all in form and substance reasonably satisfactory to Lessor and
the Certificate Purchasers.
"Supplemental Rent" shall mean any and all amounts, liabilities and
-----------------
obligations other than Basic Rent which Lessee assumes or agrees or is otherwise
obligated to pay under this Lease or any other Operative Document (whether or
not designated as Supplemental Rent) to Lessor, any Certificate Purchaser or any
other Person, including, without limitation, amounts owing under Section 7.1(b)
of the Trust Agreement, breakage costs pursuant to Section 7.7 and indemnities
-----------
and damages for breach of any covenants, representations, warranties or
agreements.
"Surviving Entity" shall have the meaning provided in Section 11.1(b).
---------------- ---------------
"Taxes" and "Tax" shall mean any and all fees (including documentation,
----- ---
recording, license and registration fees), taxes (including income (whether net,
gross or adjusted gross), gross receipts, sales, rental, use, turnover, value-
added, property, excise and stamp taxes), levies, imposts, duties, charges,
assessments or withholdings of any nature whatsoever, together with any
penalties, fines or interest thereon or additions thereto.
"Title Insurance Company" shall mean Chicago Title Insurance Company.
-----------------------
"Total Commitments" shall mean the aggregate amount of all Certificate
-----------------
Purchaser Commitments.
"Transaction Costs" shall mean all costs and expenses in connection with
-----------------
the preparation, execution and delivery of the Operative Documents and the
Overall Transaction, including: (1) the reasonable fees, expenses and
disbursements of special documentation counsel to the Certificate Purchasers;
(2) the allocated costs of internal counsel to the Certificate Purchasers; (3)
the reasonable fees and expenses of local counsel; (4) costs of title insurance
(including leasehold title insurance and all required endorsements); (5) the
initial and ongoing fees and reasonable expenses of Lessor and its special
counsel; (6) all fees and reasonable expenses payable in connection with the
Appraisal; (7) all recording and filing fees incurred in connection with the
filing of the Memorandum of Lease, all financing statements and any other
documents, including fees and expenses of the Title Insurance Company; (8) all
costs and expenses of each company engaged to survey the Leased Property; and
(9) the Arrangement Fee.
-23-
"Trust" shall mean the 1997-1 Valley Stream Trust, as established pursuant
-----
to the Trust Agreement.
"Trust Agreement" shall mean the Trust Agreement dated as of the effective
---------------
date hereof between Bank, as Certificate Trustee, and the Certificate
Purchasers, substantially in the form of Exhibit D.
---------
"Trust Estate" shall mean all estate, right, title and interest of Lessor
------------
in, to and under the Trust Agreement, the Lease and all of the other Operative
Documents, including (i) all amounts (other than Excluded Amounts) of Rent and
other payments due or to become due of any kind for or with respect to the
Leased Property or payable under any of the foregoing, (ii) any or all payments
or proceeds received by Lessor after the termination of the Lease with respect
to the Leased Property as the result of the sale, lease or other disposition
thereof, and (iii) proceeds of the investments in the Certificates, together
with any other moneys, proceeds or property at any time received by Lessor under
or in connection with the Operative Documents.
"UCC" shall mean the Uniform Commercial Code of Pennsylvania or any other
---
applicable jurisdiction.
"Unfunded Pension Liabilities" shall have the meaning provided in Section
---------------------------- -------
10.1(c).
-------
"Unrecognized Retiree Welfare Liability" shall have the meaning provided in
--------------------------------------
Section 10.1(c).
---------------
"U.S. Dollars" means lawful currency of the United States of America.
------------
"Yield" shall have the meaning provided in the Trust Agreement.
-----
"Yield Amount" shall mean, for any LIBO Calculation Period, an amount equal
------------
to the sum of (A) Yield on the Class A Certificates and (B) Yield on the Class B
Certificates.
"Yield Rate" shall mean, for any LIBO Calculation Period, the LIBO Rate
----------
plus the Applicable Margin.
SECTION 2. DISBURSEMENT DATE, ADVANCE DATES; FUNDINGS AND LEASE;
GENERAL PROVISIONS.
SECTION 2.1. Documentation Date. The documentation date (the
------------------
"Documentation Date") shall occur on the earliest date on which all of the
-------------------
following conditions precedent shall have been satisfied:
-24-
(a) Lease. This Lease, the Guaranty and the Trust Agreement
-----
shall have been duly authorized, executed and delivered by the parties
hereto and thereto and shall be in full force and effect.
(b) Certain Transaction Costs. Counsel for each of Lessor,
-------------------------
Lessee and the Certificate Purchasers shall have received, to the extent
then invoiced, payment in full in cash of all Transaction Costs payable
to such counsel pursuant to this Lease.
SECTION 2.2. Initial Advance Date. The initial Advance Date (the
--------------------
"Initial Advance Date") shall occur on the earliest date on or before February
---------------------
28, 1997 on which all the conditions precedent thereto set forth in Section 3.1
-----------
shall have been satisfied or waived by the applicable parties as set forth
therein, and provided that the Arranger shall have received the Arrangement Fee;
provided, however, that if the Initial Advance Date does not occur prior to
-------- -------
February 28, 1997, then this Lease shall automatically terminate, Lessee shall
pay in full all Transaction Costs not theretofore paid, and each other Operative
Document then executed shall terminate. Lessee, Lessor and the Certificate
Purchasers shall confirm in writing the occurrence of the Initial Advance Date.
SECTION 2.3. Fundings. (a) Fundings by Certificate Purchasers. Subject
-------- ----------------------------------
to the terms and conditions hereinafter set forth, and in reliance on the
representations and warranties of each of the parties hereto contained herein or
made pursuant hereto, upon receipt of an Advance Date Notice, on the applicable
Advance Date each Certificate Purchaser shall acquire an interest in the Trust
Estate by making available to the Certificate Trustee, in accordance with
Section 2.1(b) of the Trust Agreement, an amount in immediately available funds
on such Advance Date equal to such Certificate Purchaser's Certificate Purchaser
Percentage of the aggregate amount of the requested Advance (a "Funding"), and
-------
in the aggregate not more than its Certificate Purchaser Commitment. Each such
amount made available shall be evidenced by a notation on the grid annexed to
the Certificate issued to the related Certificate Purchaser. Each holder of a
Certificate shall be entitled to receive the Yield on the Certificate Purchaser
Amount set forth in its Certificates payable on each Payment Date.
(b) Limitations on Disbursements. The aggregate amount disbursed
----------------------------
by the Certificate Purchasers hereunder shall not exceed (i) in the case of
Acquisition Costs, the lesser of (A) $12,000,000 or (B) the actual Acquisition
Costs, as supported by the Appraisal, (ii) in the case of Construction Costs and
Transaction Costs, the lesser of (A) $6,000,000 or (B) the excess of (x) the as-
built Fair Market Value of the Leased Property, including the Financed
Improvements, over (y) $12,000,000, and
-25-
(iii) in the case of Soft Costs to be funded prior to the initial Construction
Advance Date, $500,000.
(c) Certificates. Each Certificate shall accrue Yield at the
------------
Yield Rate on the Certificate Purchaser Amount thereof, payable as more fully
set forth in the Trust Agreement.
(d) Obligations Several. The obligations of the parties to any
-------------------
of the Operative Documents under each such Operative Document shall be several
and not joint; and no party shall be liable or responsible for the acts or
defaults of any other party under any Operative Document.
(e) Advances to Lessee. Upon the agreement of all Certificate
------------------
Purchasers, any advance required to be made to Lessee through Lessor pursuant to
any Operative Document may be made directly to Lessee by the Certificate
Purchasers in lieu of the corresponding advance required to be made by the
Certificate Purchasers to Lessee through Lessor pursuant to any Operative
Document. Such advance by the Certificate Purchasers to Lessee shall be deemed
to constitute (i) the required Advance from the Certificate Purchasers to
Lessor, and (ii) the corresponding advance by Lessor to Lessee.
(f) Required Dates. There may not be more than one Advance Date
--------------
in any calendar month and not more than three Construction Advance Dates, in the
aggregate. Each Advance Date specified in an Advance Date Notice shall occur on
the last Business Day of a LIBO Calculation Period.
(g) Final Advance Date. Notwithstanding anything in this Lease
------------------
to the contrary, neither Lessor nor any Certificate Purchaser shall be obligated
to make any Fundings pursuant to this Lease or the Trust Agreement after 5:00
p.m. New York City time on the Construction Completion Date, and no Advance Date
may occur following such date.
SECTION 2.4. Application of Funds; Purchase and Lease of Leased Property.
-----------------------------------------------------------
(a) Subject to the terms and conditions of this Lease, on the Initial Advance
Date, Certificate Trustee shall purchase from Seller the Leased Property and pay
certain Transaction Costs and may reimburse the Construction Agent for
Construction Costs, in each case from funds made available by the Certificate
Purchasers pursuant to Section 2.3(a), whereupon Lessor shall lease to Lessee
--------------
the Leased Property and Lessee shall accept delivery of and lease from Lessor
the Leased Property pursuant to this Lease. Effective on the Initial Advance
Date, Lessee is hereby appointed as Lessor's agent to construct the Financed
Improvements on the terms and conditions set forth herein (Lessee being referred
to in such capacity as the "Construction Agent"). On the Initial Advance Date
------------------
and on each Construction Advance Date, upon the satisfaction of the terms and
conditions of
-26-
this Lease, Certificate Trustee shall make an Advance from funds made available
by the Certificate Purchasers pursuant to Section 2.3(a) in the amount specified
--------------
in the applicable Construction Advance Date Notice to reimburse Lessee for
Construction Costs incurred by and invoiced to Lessee in its capacity as
Construction Agent.
(b) The proceeds of all amounts paid by the Certificate
Purchasers shall be used solely for the following purposes in amounts not to
exceed those set forth in Section 2.3 (b): (i) the payment of Acquisition Costs
---------------
on the Initial Advance Date; (ii) the payment of Transaction Costs; and (iii)
the payment of Construction Costs.
SECTION 2.5. Advance Date Notices and Closings. At least five (5)
---------------------------------
Business Days prior to each Advance Date, Lessee shall deliver to Certificate
Trustee and each Certificate Purchaser an irrevocable written notice (in the
case of the Initial Advance Date, the "Initial Advance Date Notice" and in the
---------------------------
case of a Construction Advance Date, the "Construction Advance Date Notice")
--------------------------------
substantially in the form of Exhibit E, setting forth:
---------
(i) the proposed Advance Date;
(ii) in the case of Acquisition Costs, a description of such Acquisition
Costs and the amount thereof
(iii) in the case of Transaction Costs, a description of such Transaction
Costs and the amount thereof;
(iv) in the case of Construction Costs, a description of the work so
funded, the identity of the provider thereof and the amount thereof; and
(v) wire transfer instructions for the disbursement of funds.
All documents and instruments required to be delivered on each Advance Date
pursuant to this Lease shall be delivered at the offices of Xxxxx, Xxxxx &
Xxxxx, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000. On the scheduled Advance Date,
and subject to the terms and conditions of this Lease, and upon receipt of funds
by Certificate Trustee from the Certificate Purchasers sufficient therefor,
Certificate Trustee shall make the requested Advance.
Each Funding and Advance Date shall occur on a Business Day on or after the
date hereof, it being understood that there may be a Funding without an Advance
Date closing if Lessee has postponed the Advance Date pursuant to Section 2.6,
-----------
so long as such Advance Date occurs not later than the third Business Day
following the Funding in respect thereof.
-27-
SECTION 2.6. Postponement of Advance Date. If any Certificate Purchaser
----------------------------
shall make the Funding requested pursuant to any Advance Date Notice and the
relevant Advance Date shall not occur on the date specified in such Advance Date
Notice, Lessee shall pay Certificate Trustee, as Supplemental Rent, for the
benefit of such Certificate Purchaser, interest on the amount funded by each
Certificate Purchaser at the Yield Rate, less any interest earned on behalf of
the Certificate Purchasers by investing such funded amounts in Permitted
Investments; provided, that this provision shall not be construed to require
--------
Certificate Trustee to invest such funds. Such interest shall be due and
payable by Lessee upon the occurrence of such postponed Advance Date, and such
payment shall be an additional condition precedent to such Advance Date;
provided, however, that no additional Advance Date Notice shall be required to
-------- -------
be given if an Advance Date is postponed and thereafter timely consummated; and
provided, further, that if such Advance Date shall not have occurred by the
-------- -------
third (3rd) Business Day following the Funding in respect thereof, then all such
interest shall be due and payable on such date, and Lessor shall refund to each
Certificate Purchaser all amounts funded by such Certificate Purchaser and all
accrued interest allocable to such Certificate Purchaser.
SECTION 2.7. Certificate Purchasers' Instructions to Lessor. Each
----------------------------------------------
Certificate Purchaser agrees that the making of its money available pursuant to
Section 2.3 shall constitute, without further act, authorization and direction
-----------
by such Certificate Purchaser to Lessor to take the actions specified in Section
1.1 of the Trust Agreement.
SECTION 2.8. Payments to Certificate Purchasers. The parties to this
----------------------------------
Lease hereby agree that any payment required to be made to the Certificate
Purchasers by Lessor pursuant to any Operative Document shall be made directly
to the Certificate Purchasers by Lessee in lieu of the corresponding payment
required to be made by Lessee to Lessor pursuant to any Operative Document. Such
payment by Lessee to the Certificate Purchasers shall be deemed to constitute
(a) the required payment from Lessee to Lessor, and (b) the corresponding
payment by Lessor to the Certificate Purchasers.
SECTION 2.9. Nature of Transaction. (a) It is the intent of the parties
---------------------
that: (i) the transaction contemplated hereby constitutes an operating lease
from Lessor to Lessee for purposes of Lessee's financial reporting only, (ii)
the transaction contemplated hereby establishes an ownership interest in the
Leased Property in Lessee for Federal and state income tax and bankruptcy
purposes, (iii) this Lease grants a Lien in the Leased Property to Lessor and
(iv) the obligations of Lessee to pay deemed principal portion and deemed
interest portion of Rent shall be treated as payments of principal and interest,
respectively,
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for income tax purposes. Except as specifically provided for herein, Lessor
shall be deemed to have a first prior, perfected security interest in and Lien
on the Leased Property, free and clear of all Liens other than Permitted Liens,
as security for the obligations of Lessee under the Operative Documents (it
being understood and agreed that Lessee does hereby grant a security interest
and Lien, and convey, transfer, assign, mortgage and warrant to Lessor and its
successors and assigns, for the benefit of the Certificate Purchasers and
Lessor, all right, title and interest of Lessee in the Leased Property and any
proceeds or products thereof, to have and hold the same as security for the
payment and performance of the obligations of Lessee under the Operative
Documents). Except as otherwise provided by law or in connection with a
settlement, compromise or adjudication made under the provisions of Section
-------
7.2(b), each of the parties to this Lease agrees that it will not, nor will it
------
permit any Affiliate to at any time, take any action or fail to take any action
with respect to the filing of any income tax return, including an amended income
tax return, inconsistent with the intention of the parties expressed in this
Section 2.9.
-----------
(b) If a court of competent jurisdiction rules that this instrument
constitutes a mortgage, deed of trust or other secured financing as is the
intent of the parties pursuant to Section 2.9(a), this instrument shall be
--------------
deemed to be an Open-End Mortgage as defined in 42 Pa. C.S.A. (S) 8143(f) and,
as such, is entitled to the benefits of Senate Xxxx 693, 1989 session of the
General Assembly of Pennsylvania (the "Act") as codified at 42 Pa. C.S.A. (S)
---
8143 et seq. The parties to this instrument intend that, in addition to any
-- ---
other debt or obligations secured hereby, this instrument shall secure unpaid
balances of advances made pursuant to the Operative Documents after this
instrument is left for record with the Recorder's Office of the County where the
Leased Property is located, whether such advances are made pursuant to an
obligation of Lessor or otherwise. The maximum principal amount of unpaid
indebtedness secured by this instrument is FORTY MILLION DOLLARS ($40,000,000)
plus interest thereon, which indebtedness may consist of present and future
loans made under the Operative Documents, fees payable pursuant thereto,
advances made with respect to the Leased Property for the payment of, among
other things, taxes, assessments, maintenance charges, insurance premiums and
the like, and costs and expenses, including but not limited to attorney's fees,
incurred for the protection of the Leased Property or the lien and security of
this instrument or by reason of an Event of Default.
SECTION 2.10. Waivers. The Leased Property is leased by Lessor to Lessee
-------
"AS IS" in its present or then condition, as the case may be, subject to (a) any
rights of any parties in possession thereof, (b) the state of the title thereto
existing at the time Lessor acquired its interest in the Leased Property, (c)
any state of facts which an accurate survey or physical inspection
-29-
might show (including any survey delivered on the Initial Advance Date or the
Construction Completion Date), (d) all Applicable Law, and (e) any violations of
Applicable Law which may exist at the commencement of the Lease Term. Lessee has
examined the Leased Property and (insofar as Lessor is concerned) has found the
same to be satisfactory. NEITHER LESSOR NOR ANY CERTIFICATE PURCHASER HAS MADE
OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE TO
THE LEASED PROPERTY OR TO THE VALUE, MERCHANTABILITY, HABITABILITY, CONDITION,
OR FITNESS FOR USE OF THE LEASED PROPERTY, OR ANY PORTION THEREOF, OR ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE
LEASED PROPERTY, OR ANY PORTION THEREOF, AND NEITHER LESSOR NOR ANY CERTIFICATE
PURCHASER SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR
THE FAILURE OF THE LEASED PROPERTY, OR ANY PORTION THEREOF, TO COMPLY WITH ANY
APPLICABLE LAW, except that Lessor hereby represents and warrants that the
Leased Property is and shall be free of Lessor Liens (such Lessor representation
and warranty being made by (x) Bank with respect to any Lessor Liens
attributable to Bank, and (y) Certificate Trustee with respect to any Lessor
Liens attributable to Certificate Trustee). Lessee has been afforded full
opportunity to inspect the Leased Property, is satisfied with the results of its
inspections and is entering into this Lease solely on the basis of the results
of its own inspections, and all risks incident to the matters discussed in the
preceding sentence, as between Lessor and Certificate Purchasers, on the one
hand, and Lessee, on the other, are to be borne by Lessee. The provisions of
this Section 2.10 have been negotiated, and, except to the extent otherwise
------------
expressly stated, the foregoing provisions are intended to be a complete
exclusion and negation of any representations or warranties by any of Lessor,
Bank or the Certificate Purchasers, express or implied, with respect to the
Leased Property (or any interest therein), that may arise pursuant to any law
now or hereafter in effect or otherwise.
SECTION 2.11. Legal and Tax Representation. Lessee acknowledges and
----------------------------
agrees that neither Lessor nor any Certificate Purchaser has made any
representation or warranty concerning the tax, accounting or legal
characteristics of this Lease or any of the other Operative Documents, and that
Lessee has obtained and relied on such tax, accounting and legal advice
regarding this Lease and the other Operative Documents as it deems appropriate.
Each of Lessor and each Certificate Purchaser acknowledges and agrees that it
has obtained and relied on the Operative Documents and the various items
delivered in connection therewith, and on such tax, accounting and legal advice
regarding this Lease and the other Operative Documents as it deems appropriate.
-30-
SECTION 2.12. Computations.
------------
(a) Determination of the Rates. All computations of accrued
--------------------------
amounts pursuant to the Operative Documents shall be made on the basis of the
actual number of days (including the first day but excluding the last day)
elapsed during the period for which the computation is being made over a year
comprised of 360 days; provided, however, that the Alternate Base Rate shall be
-------- -------
computed on the basis of the actual number of days elapsed during the period for
which the computation is being made over a year comprised of 365 or 366 days.
(b) Conclusive Determinations. Each determination of the Yield
-------------------------
Amount pursuant to any provision of this Lease or any of the other Operative
Documents shall be conclusive and binding on Lessor, Lessee and the Certificate
Purchasers in the absence of manifest error.
SECTION 2.13. Certificates; Notations. Upon the consummation of each
-----------------------
Advance, each Certificate Purchaser shall make a notation on the grid attached
to such Certificate Purchaser's Certificate(s) indicating the Certificate
Purchaser Amount advanced by such Certificate Purchaser on such Advance Date.
Each Certificate Purchaser is hereby authorized to record the date and amount of
each Advance made by such Certificate Purchaser, each continuation thereof, the
date and amount of each payment or repayment of Certificate Purchaser Amount
thereof and the length of each Rent Period with respect thereto, on the grid
annexed to and constituting a part of each Certificate held by such Certificate
Purchaser, and any such recordation shall constitute prima facie evidence of the
accuracy of the information so recorded, provided, that the failure to make any
--------
such recordation or any error in such recordation shall not affect the
obligation of Certificate Trustee under such instrument or the corresponding
obligation of Lessee to pay Rent.
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SECTION 2.14. Facility Fee. Lessee shall pay to Lessor a fully-earned,
------------
non-refundable facility fee (the "Facility Fee") equal to the Applicable
------------
Facility Fee Rate on an amount equal to the daily unused portion of the
aggregate Certificate Purchaser Commitments during the period (the "Facility
--------
Period") commencing on the Documentation Date and ending on the earlier of (a)
------
the date all Certificate Purchaser Commitments have been advanced pursuant to
the terms of this Lease and (b) the Construction Completion Date, payable in
arrears in quarterly installments on the last Business Day of each March, June,
September and December during the Facility Period and on the last Business Day
of the Facility Period, which Facility Fee shall be calculated by Lessor. Upon
receipt, Lessor will promptly deliver to the Certificate Purchasers their pro
rata portions of such Facility Fee in accordance with their respective
Certificate Purchaser Commitments.
SECTION 3. CONDITIONS PRECEDENT.
SECTION 3.1. Conditions to Initial Advance Date. The effectiveness of
----------------------------------
this Lease and the other Operative Documents, and the obligation of Lessor and
each Certificate Purchaser to perform its respective obligations on the Initial
Advance Date, shall be subject to the occurrence of the Documentation Date and
the fulfillment to the satisfaction of (including, with respect to writings,
such writings being in form and substance reasonably satisfactory to the
addressee or beneficiary thereof), or the waiver in writing by Lessor and each
Certificate Purchaser of, the conditions precedent set forth in this Section 3.1
-----------
(in addition to any other applicable requirements of Section 3.2) on or before
-----------
the Initial Advance Date (except that the obligation of any party hereto shall
not be subject to the performance or compliance of such party or of any of such
party's Affiliates).
(a) Notices. Lessee shall have delivered an Initial Advance Date
-------
Notice conforming with the requirements of Section 2.5 in respect of the
-----------
proposed Initial Advance Date.
(b) Operative Documents. On or before the Initial Advance Date,
-------------------
Lessor and each Certificate Purchaser shall have received a fully executed
counterpart of:
(1) this Lease, provided, however, that only Lessor shall receive
-------- -------
the original counterpart marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED
COUNTERPART NO. 1";
(2) the Memorandum of Lease;
(3) the Mortgage;
(4) the Environmental Indemnity;
-32-
(5) the Guaranty;
(6) the Trust Agreement; and
(7) the Assignment of Purchase Agreement.
Each Certificate Purchaser shall have received the original, duly executed Class
A Certificate and Class B Certificate, each registered in such Certificate
Purchaser's name and validly issued pursuant to the Trust Agreement. Each of the
Operative Documents shall have been duly authorized, executed and delivered by
each of the parties thereto, shall be in form and substance satisfactory to each
Certificate Purchaser and shall be in full force and effect.
(c) Initial Appraisal. Not less than two (2) Business Days prior to
-----------------
the Initial Advance Date, each Certificate Purchaser shall have received an
Appraisal, in form and substance reasonably satisfactory to it, containing
reasonably formed opinions of the Appraiser, which will establish (by the use of
reasonable and customary appraisal methods satisfactory to the Certificate
Purchasers) that, as of the Initial Advance Date, the Leased Property will have
a Fair Market Value of not less than $13,000,000. The Appraisal will also
establish the "as-built" Fair Market Value (assuming the completion of the
Financed Improvements) of the Leased Property as of the Construction Completion
Date and the Basic Term. The Appraisal will be prepared in accordance with the
Financial Institutions Reform Recovery and Enforcement Act of 1989.
(d) Deed, Xxxx of Sale, Assignments and FIRPTA Affidavit. On the
----------------------------------------------------
Initial Advance Date, Lessee shall have caused Seller to deliver to Lessor (i)
the Deed, the Xxxx of Sale and non-recourse assignments of all intangible
property used or useful in connection with the Leased Property and all existing
assignable licenses, guaranties, permits and warranties issued in connection
with the construction, improvement, alteration or repair of the Land or Facility
and in connection with the purchase or repair of any Personal Property (together
with the original of each such guaranty and warranty in Lessee's possession) and
(ii) a FIRPTA Affidavit in customary form.
(e) Filings and Recordings. All filings or recordings enumerated and
----------------------
described in Exhibit F, as well as all other filings and recordings necessary or
---------
advisable, including precautionary financing statements, in the reasonably
formed opinion of the Certificate Purchasers, to perfect the right, title and
interest of Lessor intended to be created by the Operative Documents shall have
been made, or shall have been arranged to be made promptly thereafter, in the
appropriate places or offices, including any recordings and filings necessary to
create, perfect,
-33-
preserve and protect Lessor's first prior perfected security interest in and
lien on the Leased Property, subject, in both cases, to Permitted Liens and the
rights of Lessee under the Lease. All recording and filing fees and taxes with
respect to any recordings or filings made pursuant to this Section 3.1(e) shall
--------------
have been paid in full, and any tax forms shall have been executed and
delivered, and satisfactory evidence thereof shall have been delivered to the
Certificate Purchasers, or arrangements for such payment shall have been made to
the reasonable satisfaction of the Certificate Purchasers.
(f) Title Insurance. Lessor shall have received from the Title Insurance
---------------
Company its ALTA 1992 owner's policy of title insurance, reasonably acceptable
in form and substance to counsel to the Certificate Purchasers (the "Lessor's
--------
Policy") (or a final hand-marked original thereof signed by the Title Insurance
------
Company containing all of the provisions to be included in such policy by the
Title Insurance Company, in which case Lessor shall receive a clean, final
original of such policy within ten (10) Business Days of the Initial Advance
Date), insuring that Lessor has good and marketable fee simple title to the
Leased Property being purchased by Lessor on the Initial Advance Date, subject
to the Lease and such other exceptions to title as are reasonably acceptable to
the Certificate Purchasers, together with complete, legible copies of all
encumbrances, maps and surveys of record. Lessor's Policy shall (i) be dated as
of the applicable Initial Advance Date, (ii) be in an amount of not less than
$18,000,000.00, (iii) delete all standard exceptions, any broker's lien
exception and any manager's lien exception, (iv) contain affirmative
endorsements as to mechanics' liens, comprehensive coverage for owners,
encroachments, rights of access and survey matters and such other endorsements
requested by counsel to the Certificate Purchasers to the extent available in
the Commonwealth of Pennsylvania, (v) contain a recharacterization endorsement
appropriate for a transaction of this type in form acceptable to the Certificate
Purchasers and (vi) contain such other endorsements reasonably requested by the
Certificate Purchasers.
(g) Environmental Certificate and Audit. Not less than five (5) Business
-----------------------------------
Days prior to the Initial Advance Date, Lessor and each Certificate Purchaser
shall have received an original counterpart Environmental Certificate
substantially in the form of Exhibit G (an "Environmental Certificate") with
--------- -------------------------
respect to the Land, and the Environmental Audit for the Land shall have been
delivered to and approved by the Certificate Purchasers in their sole but
reasonable discretion, together with a letter from the Environmental Engineer
authorizing the reliance on such Environmental Audit by Lessor and each
Certificate Purchaser.
(h) Survey. Not less than two (2) Business Days prior to the Initial
------
Advance Date, Lessee shall have delivered, or shall
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have caused to be delivered, to Lessor and each Certificate Purchaser an ALTA
1992 Class A (Urban) survey of the Land in a form reasonably satisfactory to the
Title Insurance Company and the Certificate Purchasers, prepared by a licensed
surveyor and meeting the Minimum Standard Detail Requirements for ALTA/ASCM Land
Title Surveys as adopted by the American Land Title Association/American Society
and American Congress on Surveying and Mapping in 1992 and showing no state of
facts unsatisfactory to Certificate Purchasers, which survey shall be certified
to Lessor, the title company and the Certificate Purchasers. The survey shall
also certify that no portion of the Leased Property lies within a flood hazard
area or contains wetlands.
(i) Plans and Specifications and Architect's Agreement;
---------------------------------------------------
Assignment. The Certificate Purchasers shall have received a copy of the Plans
----------
and Specifications (in the form existing on the Initial Advance Date) and the
Architect's Agreement, it being understood and agreed that Lessee does hereby
collaterally assign and pledge its rights and interests under such Plans and
Specifications and the Architect's Agreement to Lessor to secure Lessee's
payment and performance under the Operative Documents.
(j) Consents and Approvals. All Government Actions and other
----------------------
approvals and consents required to be taken, given or obtained, as the case may
be, by or from any Authority or another Person, or by or from any trustee or
holder of any indebtedness or obligation of Lessee, that are necessary or, in
the reasonable opinion of the Certificate Purchasers, advisable in connection
with the execution, delivery and performance of the Operative Documents by all
parties hereto, shall have been taken, given or obtained, as the case may be,
shall be in full force and effect and the time for appeal with respect to any
thereof shall have expired (or, if an appeal shall have been taken, the same
shall have been dismissed) and shall not be subject to any pending proceedings
or appeals (administrative, judicial or otherwise) and shall be in form and
substance satisfactory to the Certificate Purchasers.
(k) Transaction Costs; Fees. On or before the Initial Advance
-----------------------
Date, the Transaction Costs shall have been paid in full by Lessee from the
proceeds of the Advance or, at the election of Lessee, by Lessee, to the extent
then invoiced; provided, however, that if Lessee has not received written
invoices therefor prior to such date, such Transaction Costs shall be paid on
the next Advance Date or, if there are no remaining Advance Dates, within ten
Business Days after Lessee has received written invoices therefor. Such payments
shall be made by wire transfer of immediately available funds to the accounts
specified by the parties receiving such payments.
(l) Opinions of Counsel. On or before the Initial
-------------------
-35-
Advance Date, Lessor, the Certificate Purchasers and their respective counsel
shall have received (i) the opinion of Xxxxxxx X. Xxxxx, Xx., Esq., General
Counsel to Lessee, substantially in the form of Exhibit H; (ii) the opinion of
---------
Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, as special local counsel, substantially in
the form of Exhibit I; and (iii) the opinion of Xxxxxxxx, Xxxxxx & Finger,
---------
special counsel to Certificate Trustee, each in form and scope mutually
satisfactory to Lessor and the Certificate Purchasers. By its execution hereof,
Lessee expressly instructs its counsel to execute and deliver the opinions
referred to in clauses (i) and (ii) above to the Persons designated in the
----------- ----
preceding sentence.
(m) Corporate Status and Proceedings. Lessor and each
--------------------------------
Certificate Purchaser shall have received:
(i) on or before the Initial Advance Date, certificates of
existence and good standing with respect to Lessee from the Secretary of
State of the State of Ohio, and evidence of Lessee's qualification to do
business in Pennsylvania, each dated no earlier than the fifteenth (15th)
day before the Initial Advance Date;
(ii) on or before the Initial Advance Date, an Officer's
Certificate of Lessee substantially in the form of Exhibit J, dated the
---------
Initial Advance Date, with respect to Lessee's governing documents and
resolutions, representations and warranties, absence of defaults and the
effectiveness of, and the compliance by Lessee with, the Operative
Documents; and
(iii) on or before the Initial Advance Date, a certificate of
the Secretary or an Assistant Secretary of Lessee setting forth the name
of the officer or officers of Lessee authorized to sign on behalf of
Lessee this Lease and the other Operative Documents and other documents
and certificates to be delivered by Lessee hereunder, together with the
true signatures of such officer or officers, upon which certificate each
Certificate Purchaser may rely conclusively until they shall have received
a further certificate of the Secretary or an Assistant Secretary of Lessee
amending the prior certificate and submitting the signatures of the
appropriate officers named in such certificate.
(n) Payment of Impositions. All Taxes payable on or before
----------------------
the Initial Advance Date in connection with the execution, delivery, recording
or filing of any of the Operative Documents, the filing of any of the financing
statements and any other documents, and the consummation of any other
transactions contemplated hereby or by any of the other Operative Documents,
shall have been paid in full by Lessee, or arrangements for such payment shall
have been made to the reasonable satisfaction of the
-36-
Certificate Purchasers.
(o) Insurance. On or before the Initial Advance Date, Lessor and each
---------
Certificate Purchaser shall have received a current certificate by or on behalf
of the underwriters confirming that insurance complying with Section 6.7 is in
-----------
full force and effect, and there shall be no past due premiums in respect of any
such insurance.
(p) Representations and Warranties; Absence of Material Adverse
-----------------------------------------------------------
Effect and Default. Each representation and warranty of Lessee contained herein
------------------
or in any other Operative Document shall be true and correct as though made on
and as of such Initial Advance Date, except that any such representation or
warranty which is expressly made only as of a specified date need be true only
as of such date. Since September 30, 1996, no Material Adverse Effect shall have
occurred. No Default or Event of Default shall exist.
(q) Litigation. No action or proceeding shall have been instituted or
----------
threatened nor shall any government action be instituted or threatened before
any Authority, nor shall any order, judgment or decree have been issued or
proposed to be issued by any Authority, to set aside, restrain, enjoin or
prevent the performance of this Lease or any transaction contemplated hereby or
by any other Operative Document or which is likely, in the reasonable opinion of
the Required Certificate Purchasers, to have a Material Adverse Effect.
(r) No Event of Loss. No Casualty and no Event of Loss shall have
----------------
occurred in respect of the Leased Property. No action shall be pending or
threatened by an Authority to initiate a Condemnation or an Event of Taking in
respect of the Leased Property.
(s) Legality, etc. In the opinion of each Certificate Purchaser or
-------------
its counsel, the Overall Transaction does not and shall not violate any
Applicable Law and does not and will not subject Lessor or any Certificate
Purchaser to any materially adverse regulatory prohibitions or constraints, and
no change of law has occurred or been proposed that would make it uneconomic or
illegal for any party to any Operative Document to participate in any of the
transactions contemplated by the Operative Documents or otherwise would prohibit
the consummation of any transaction contemplated by the Operative Documents or
materially expand the duties, obligations and risks of such Certificate
Purchaser.
(t) Officer's Certificate of Lessor and Bank. All Certificate
----------------------------------------
Purchasers shall have received an Officer's Certificate of Lessor in the form of
Exhibit K-1 hereto and an Officer's Certificate of Certificate Trustee in the
-----------
form of Exhibit K-2 hereto, each dated as of the Initial Advance Date and
-----------
-37-
stating that (A) it has duly performed and complied with all agreements and
conditions herein and in any other Operative Document required to be performed
or complied with by it on or prior to such Advance Date and (B) each Operative
Document to which it is a party is in full force and effect with respect to it.
On the Initial Advance Date, each Certificate Purchaser shall have also received
(1) an Officer's Certificate of Bank in the form of Exhibit L hereto, dated such
---------
Initial Advance Date, stating that each and every representation and warranty of
Bank contained in the Operative Documents to which it is a party is true and
correct on and as of such Advance Date as though made on and as of such Initial
Advance Date, except to the extent such representations and warranties relate
solely to an earlier date, in which case such representations and warranties
shall have been true and correct as of such earlier date, and (2) a certificate
of the Secretary or Assistant Secretary of Bank, dated the Initial Advance Date,
with respect to Bank's governing documents, resolutions and incumbent officers
and (3) a good standing certificate from the appropriate Authority as to Bank's
good standing.
(u) Performance. Each party to any Operative Document shall have
-----------
performed and complied with all agreements and conditions contained herein and
in any other Operative Document to which it is a party required to be performed
or complied with by it on or prior to the applicable Advance Date. Without
limiting the foregoing, each Certificate Purchaser shall have funded the full
amount to be funded by such Certificate Purchaser on the Initial Advance Date,
as described in Section 2.3.
-----------
(v) Proceedings Satisfactory, etc. All proceedings taken in connection
-----------------------------
with the applicable Advance Date and all documents relating thereto shall be
reasonably satisfactory to Lessor, each Certificate Purchaser and their
respective counsel, and each such Person shall have received copies of such
documents as they may reasonably request in connection therewith, all in form
and substance reasonably satisfactory to each such Person.
(w) Architect's Statement of Professional Opinion. The Certificate
---------------------------------------------
Trustee and the Certificate Purchasers shall have received a statement of
professional opinion from the Architect, in form and scope reasonably
satisfactory to the Certificate Trustee and the Certificate Purchasers,
certifying that (i) the Financed Improvements as constructed in accordance with
the Plans and Specifications and the contemplated use thereof by Lessee will
comply with all Applicable Law (including all zoning and land use laws and
Environmental Laws) and (ii) the Plans and Specifications have been prepared in
accordance with Applicable Law (including applicable Environmental Laws and
building, planning, zoning and fire codes) and upon completion of the Financed
Improvements in accordance with such Plans and Specifications, such Financed
Improvements will not encroach in any manner onto any adjoining
-38-
SECTION 4.2. Lease Term. Unless earlier terminated, the term of this
----------
Lease shall consist of (a) a basic term (the "Basic Term"), commencing on and
----------
including the Initial Advance Date and ending on (but including) the fifth
anniversary of the Initial Advance Date (the "Basic Term Expiration Date"), and
--------------------------
(b) up to two (2) successive five-year Renewal Terms, if exercised (the Basic
Term and the Renewal Terms being collectively called the "Lease Term"), each
----------
commencing upon the expiration of the Basic Term or the prior Renewal Term, as
the case may be, and ending on (but including) the fifth anniversary of such
commencement date.
SECTION 4.3. Lease Renewal. (a) Lessee may elect to renew this Lease for
-------------
up to two (2) successive five-year renewal terms (each, a "Renewal Term") as
------------
provided for in Section 9.1(a) and in accordance with Section 4.3(b) below.
-------------- --------------
(b) So long as no Default or Event of Default shall have occurred
and be continuing at the time Lessee delivers the Renewal Request and at the
commencement of the Renewal Term, Lessee is entitled, coincident with its
determination during the Base Term or the first Renewal Term, as applicable, to
renew the Lease for a Renewal Term, to request that the Arranger solicit bids
from the Certificate Purchasers to extend the Lease for the Renewal Term (such
request by Lessee is herein called the "Renewal Request"). If Lessee makes such
---------------
request, upon receipt of notice of said request the Arranger shall solicit from
each of the Certificate Purchasers a bid setting forth the terms and conditions
upon which each Certificate Purchaser would agree to extend the Lease for the
requested Renewal Term; provided, that no Certificate Purchaser shall be
--------
required to submit a bid to the Arranger. Within sixty (60) days of solicitation
by the Arranger, each Certificate Purchaser electing to submit a bid shall
transmit the terms and conditions of its bid to the Arranger, which shall send
copies of the bid proposals to Lessee. Any Certificate Purchaser failing to
submit a bid within sixty (60) days of solicitation shall be deemed to have
rejected the Arranger's solicitation. Within thirty (30) days of its receipt of
the bid proposals, Lessee shall inform the Arranger of the bids that are
acceptable to it, if any; provided, that Lessee may, in its sole discretion,
--------
accept or reject any or all bids to extend the Lease for the Renewal Term. If,
with respect to any bid, Lessee shall fail to inform the Arranger within said
30-day period that it has accepted such bid, then Lessee shall be deemed to have
rejected such bid. If any Certificate Purchaser rejects (or is deemed to have
rejected) the Arranger's solicitation to extend the Lease for the Renewal Term,
or if Lessee rejects (or is deemed to have rejected) the bid of any Certificate
Purchaser to extend the Lease for the Renewal Term (such Certificate Purchaser,
in either case, is herein called a "Non-Renewing Certificate Purchaser"), then
----------------------------------
within ten (10) Business Days after the expiration of the aforementioned 30-day
period, Lessee shall be required to take one of the following actions:
(i) Lessee may elect to cancel its Renewal Request, in which event
Lessee shall not have any right to extend the Lease for the Renewal
Term. Lessee shall make such election by written notice delivered to
the Arranger not later than the end of such ten (10) Business Day
period. If Lessee desires then to elect the Sale Option, Lessee
shall make such election in its notice cancelling its Renewal
Request delivered pursuant to the preceding sentence, and failing
such election of the Sale Option,
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land to the best of the Architect's knowledge based on information received
(except as permitted by express written easements or as insured by appropriate
title insurance). The Plans and Specifications and a complete breakdown of the
estimated costs (prepared by others) of constructing the Financed Improvements
in accordance with such Plans and Specifications, together with evidence of all
matters described in the Architect's statement of professional opinion described
in this Section 3.1(w), shall have been reviewed and approved by the Certificate
--------------
Purchasers.
(x) Vacant Facility. Lessee shall deliver an Officer's Certificate to
---------------
Lessor certifying that, other than Inacom Business Centers, Inc., Seller and all
tenants of the Facility and the Land have vacated the Facility and the Land
prior to the Initial Advance Date and the Facility and the Land are free and
clear of all claims or rights of occupancy in favor of any party other than
Lessee, Lessor and Inacom Business Centers, Inc.
SECTION 3.2. Conditions to Construction Advance Dates for Construction
---------------------------------------------------------
Costs. The obligation of Lessor and each Certificate Purchaser to perform its
-----
obligations on each Advance Date for the payment of Construction Costs shall be
subject to the fulfillment to the satisfaction of (including, with respect to
writings, such writings being in form and substance reasonably satisfactory to
the addressee or beneficiary thereof), or the waiver in writing by, Lessor and
each Certificate Purchaser of the conditions precedent set forth in this Section
-------
3.2 on or before such Advance Date (except that the obligation of any party
---
hereto shall not be subject to the performance or compliance of such party or of
any of such party's Affiliates).
(a) Construction Advance Date Notice. Lessee shall have delivered a
--------------------------------
Construction Advance Date Notice conforming with the requirements of Section 2.5
-----------
in respect of the proposed Advance Date.
(b) Commitment Amount. After giving effect to the applicable Advance, the
-----------------
aggregate amount of all Advances shall not exceed the aggregate of the Total
Commitments.
(c) Cost of Completion. The Certificate Purchasers shall have received a
------------------
certificate from Lessee, in form and scope reasonably satisfactory to each of
them, certifying that after giving effect to the applicable Advance, the
estimated as yet unpaid cost of completing the construction of the Financed
Improvements in accordance with the Plans and Specifications will not exceed the
Available Commitments, and all such construction of the Financed Improvements is
capable of attaining Substantial Completion by the Construction Completion Date.
If, at any time or from time to time, there is unavailable sufficient Available
Commitments to fully pay for the completion of the Financed Improvements,
Lessee, as Construction Agent, shall contribute its
-39-
own funds to pay the costs of such completion prior to making any further
request for any Advance to pay for such completion until the remaining Available
Commitments are sufficient to fully pay for the completion of the Financed
Improvements without further contribution from Lessee.
(d) Title Policy Endorsement. Lessor and the Certificate Purchasers shall
------------------------
have received on the date of such Advance an endorsement (as of a date not more
than 30 days prior to the date of such Advance) to Lessor's Policy (i)
indicating that since the date of the preceding Advance there has been no change
in the state of title (except changes approved by the Certificate Purchasers),
(ii) updating the title policy to the date of such Advance, and (iii) increasing
the coverage of the title policy by an amount equal to such Advance if the title
policy does not by its own terms provide for such an increase.
(e) Lessee Certification. Lessee shall have furnished Lessor and the
--------------------
Certificate Purchasers with a certification ("Construction Certificate") of
------------------------
Lessee to the effect that:
(i) The representations and warranties of Lessee set forth in Section 10.1
------------
and in any other Operative Document are true and correct as of such Advance
Date except that any such representation or warranty which is expressly made
only as of a specified date need be true only as of such date. Since
September 30, 1996, no Material Adverse Effect shall have occurred. No
Default or Event of Default shall exist. All amounts owing to third parties
for the construction of the Financed Improvements have been paid in full.
(ii) No changes or modifications were made to the Plans and Specifications
after the Initial Advance Date that materially and adversely affect the
value, utility or economic useful life of the Leased Property.
(f) Plans and Specifications and Construction Contract. The Certificate
--------------------------------------------------
Purchasers shall have received a copy of the final Plans and Specifications and
the executed Construction Contract, it being understood and agreed that Lessee
does hereby collaterally assign and pledge its rights and interests under the
Plans and Specifications and the Construction Contract to Lessor to secure
Lessee's payment and performance under the Operative Documents.
(g) Legality, etc. In the opinion of each Certificate Purchaser or its
-------------
counsel, the Overall Transaction shall not violate any Applicable Law and does
not and will not subject Lessor or any Certificate Purchaser to any materially
adverse regulatory prohibitions or constraints, and no change of law has
occurred or been proposed that would make it uneconomic or illegal for any party
to any Operative Document to participate in any of
-40-
the transactions contemplated by the Operative Documents or otherwise would
prohibit the consummation of any transaction contemplated by the Operative
Documents or materially expand the duties, obligations and risks of such
Certificate Purchaser.
(h) Performance. Each Certificate Purchaser shall have funded the full
-----------
amount to be funded by such Certificate Purchaser on the applicable Advance
Date, as described in Section 2.3.
-----------
(i) Compliance with Restrictive Covenants. Prior to the first
-------------------------------------
Construction Advance, Lessee shall have furnished Lessor and the Certificate
Purchasers with evidence satisfactory to Lessor and the Certificate Purchasers
that (1) the final Plans and Specifications have been submitted and approved (or
deemed approved in accordance with the terms of the Protective Covenants) by the
Great Valley Owners Association in accordance with the provisions of the
Protective Covenants, including, without limitation, Sections III and IV
thereof, (2) the construction contemplated by such final approved Plans and
Specifications will not violate the Protective Covenants, including, without
limitation, Sections III and IV thereof, and (3) the construction contemplated
by such final approved Plans and Specifications will not violate the provisions
of the Easement and Restrictive Covenant Agreement dated September 1, 1978
recorded in Misc. Deed Book 417 page 436, together with a title endorsement
satisfactory to Lessor and Certificate Purchasers with respect to each such
agreement to the extent such endorsement has not previously been delivered.
SECTION 3.3. Conditions to Final Construction Advance. The obligation of
----------------------------------------
Lessor and each Certificate Purchaser for the payment of the final Construction
Advance shall be subject to the fulfillment to the reasonable satisfaction of
(including, with respect to writings, such writings being in form and substance
reasonably satisfactory to the addressee or beneficiary thereof), or the waiver
in writing by, Lessor and each Certificate Purchaser of the conditions precedent
set forth in this Section 3.3 (in addition to the requirements of Section 3.2)
----------- -----------
on or before the date of the final Construction Advance (except that the
obligation of any party hereto shall not be subject to the performance or
compliance of such party or of any of such party's Affiliates).
(a) Architect's Certificate and Construction Agent's Certificate.
------------------------------------------------------------
Construction Agent and Architect shall each have furnished to Lessor and all
Certificate Purchasers a certificate (substantially in the form of Exhibit M)
---------
dated on or before the date of the final Construction Advance and stating that
(i) the construction of the Financed Improvements has attained Substantial
Completion in accordance with the Plans and Specifications and all Applicable
Law, (ii) the Leased Property, as so completed, complies in all material
respects with all Applicable Law, (iii)
-41-
all licenses, permits and approvals of any Authority affecting the Leased
Property, including, without limitation, any required certificate of occupancy,
have been obtained from the necessary Authorities and approved by Lessor and the
Certificate Purchasers and (iv) attached thereto is a true and correct copy of
the "as built" Plans and Specifications for the Financed Improvements.
(b) Construction Completion. The construction of the Financed
-----------------------
Improvements shall have attained Substantial Completion in accordance with the
Plans and Specifications and all Applicable Law, and the Leased Property, as so
modified by the construction of the Financed Improvements, shall be ready for
occupancy and operation. All fixtures and other property contemplated under the
Plans and Specifications to be incorporated into or installed in such Leased
Property shall have been incorporated or installed free and clear of all Liens
except for Permitted Liens and shall have become subject to Lessor's first prior
perfected security interest in the Leased Property.
(c) As Built Survey. Construction Agent shall have furnished to Lessor
---------------
and each Certificate Purchaser an "as built" survey meeting the requirements of
Section 3.1(h).
--------------
SECTION 4. LEASE TERM, RENT AND PAYMENT.
SECTION 4.1. Lease of Leased Property. On the Initial Advance Date,
------------------------
subject to satisfaction and waiver of the conditions set forth in Section 3.1,
-----------
Lessor hereby agrees to accept delivery of the Leased Property, and to
simultaneously lease to Lessee for the Lease Term, Lessor's interest in the
Leased Property, together with the Financed Improvements and any other
improvements which thereafter may be constructed thereon pursuant to the terms
of this Lease. Lessee hereby agrees, for the express benefit of Lessor, to
lease from Lessor for the Lease Term, commencing on the Initial Advance Date,
Lessor's interest in such Leased Property as contemplated by this Lease,
together with Lessor's interest in the Financed Improvements and any other
improvements which may thereafter be constructed by Lessee as provided for in
this Lease.
SECTION 4.2. Lease Term. Unless earlier terminated, the term of this
----------
Lease shall consist of (a) a basic term (the "Basic Term"), commencing on and
----------
including the Initial Advance Date and ending on (but including) the fifth
anniversary of the Initial Advance Date (the "Basic Term Expiration Date"), and
--------------------------
(b) up to two (2) successive five-year Renewal Terms, if exercised (the Basic
Term and the Renewal Terms being collectively called the "Lease Term"), each
----------
commencing upon the expiration of the Basic Term or the prior Renewal Term, as
the case may be, and ending on (but including) the fifth anniversary of such
commencement date.
SECTION 4.3. Lease Renewal. (a) Lessee may elect to renew
-------------
-42-
this Lease for up to two (2) successive five-year renewal terms (each, a
"Renewal Term") as provided for in Section 9.1(a) and in accordance with Section
------------ -------------- -------
4.3(b) below.
------
(b) So long as no Default or Event of Default shall have occurred and be
continuing at the time Lessee delivers the Renewal Request and at the
commencement of the Renewal Term, Lessee is entitled, coincident with its
determination during the Base Term or the first Renewal Term, as applicable, to
renew the Lease for a Renewal Term, to request that the Arranger solicit bids
from the Certificate Purchasers to extend the Lease for the Renewal Term (such
request by Lessee is herein called the "Renewal Request"). If Lessee makes such
---------------
request, upon receipt of notice of said request the Arranger shall solicit from
each of the Certificate Purchase*rs a bid setting forth the terms and conditions
upon which each Certificate Purchaser would agree to extend the Lease for the
requested Renewal Term; provided, that no Certificate Purchaser shall be
--------
required to submit a bid to the Arranger. Within sixty (60) days of solicitation
by the Arranger, each Certificate Purchaser electing to submit a bid shall
transmit the terms and conditions of its bid to the Arranger, which shall send
copies of the bid proposals to Lessee. Any Certificate Purchaser failing to
submit a bid within sixty (60) days of solicitation shall be deemed to have
rejected the Arranger's solicitation. Within thirty (30) days of its receipt of
the bid proposals, Lessee shall inform the Arranger of the bids that are
acceptable to it, if any; provided, that Lessee may, in its sole discretion,
--------
accept or reject any or all bids to extend the Lease for the Renewal Term. If,
with respect to any bid, Lessee shall fail to inform the Arranger within said
30-day period that it has accepted such bid, then Lessee shall be deemed to have
rejected such bid. If any Certificate Purchaser rejects (or is deemed to have
rejected) the Arranger's solicitation to extend the Lease for the Renewal Term,
or if Lessee rejects (or is deemed to have rejected) the bid of any Certificate
Purchaser to extend the Lease for the Renewal Term (such Certificate Purchaser,
in either case, is herein called a "Non-Renewing Certificate Purchaser"), then
----------------------------------
within ten (10) Business Days after the expiration of the aforementioned 30-day
period, Lessee shall be required to take one of the following actions:
(i) Lessee may elect to cancel its Renewal Request, in which event Lessee
shall not have any right to extend the Lease for the Renewal Term.
Lessee shall make such election by written notice delivered to the
Arranger not later than the end of such ten (10) Business Day period.
If Lessee desires then to elect the Sale Option, Lessee shall make such
election in its notice cancelling its Renewal Request delivered
pursuant to the preceding sentence, and failing such election of the
Sale Option, Lessee shall be deemed to have irrevocably waived such
Sale Option and elected the
-43-
Purchase Option.
(ii) Lessee may elect to replace any Non-Renewing Certificate Purchaser
with another Person which will constitute a replacement Certificate
Purchaser (a "Replacement Certificate Purchaser") upon expiration of
---------------------------------
the Basic Term or First Renewal Term, as applicable. Lessee shall make
such election by written notice delivered to the Arranger not later
than the end of such ten (10) Business Day period, which notice shall
identify the Replacement Certificate Purchaser. The date of expiration
of the Basic Term or First Renewal Term, as applicable, shall be
treated as the Final Maturity Date with respect to the Non-Renewing
Certificate Purchaser, and on such date Lessee shall cause the
Replacement Certificate Purchaser to purchase all of the Certificates
then held by the Non-Renewing Certificate Purchaser for cash at a
price equal to the aggregate outstanding Certificate Purchaser Amount
and Yield then outstanding on the Certificates then held by the Non-
Renewing Certificate Purchaser. If Lessee fails (for any reason,
including a default by the Replacement Certificate Purchaser) to cause
the Replacement Certificate Purchaser to pay any such amounts when due
pursuant to the preceding sentence, the Lease shall not be renewed for
the requested Renewal Term, Lessee shall not be entitled to any
Renewal Term, and such date of expiration of the Base Term or First
Renewal Term, as applicable, shall be deemed the Final Maturity Date
with respect to all Certificate Purchasers. Each Replacement
Certificate Purchaser shall be subject to each of the terms and
conditions of this Lease and each of the other Operative Documents
imposed upon Certificate Purchasers, and shall make the
representations, warranties and covenants and perform its obligations
required hereunder and thereunder. Specifically, without limitation, a
Person shall not become a Replacement Certificate Purchaser unless it
shall deliver to the Arranger prior to acquiring any Certificates its
written certificate providing the representations and warranties set
forth in Section 10.2.
------------
If Lessee shall fail to duly elect either of the options under clauses (i) and
-----------
(ii) above within the applicable ten (10) Business Day period, Lessee shall be
----
deemed to have made its election under clause (i) above.
----------
If at any time after Lessee shall have made a Renewal Request and prior to
the commencement of the requested Renewal Term, an Event of Default shall have
occurred, then Lessee's rights under
-44-
this Section 4.3(b) shall automatically terminate and Lessee shall not be
--------------
entitled to the requested Renewal Term.
Any provision in this Section 4.3(b) to the contrary notwithstanding, if
--------------
Lessee accepts bids to renew the Lease for a Renewal Term, then all renewing and
replacement Certificate Purchasers must extend the Lease upon the same terms and
conditions; and if the foregoing condition shall not be satisfied, Lessee shall
not be entitled to the requested Renewal Term.
Lessee hereby agrees to pay all costs and expenses (including reasonable
legal fees and expenses) incurred by the Arranger, the then existing Certificate
Purchasers (including any Non-Renewing Certificate Purchasers) and any
Replacement Certificate Purchasers in connection with the provisions of this
Section 4.3(b); provided, however, that Lessee shall not be responsible for any
--------------
legal fees and expenses of more than one counsel to the Arranger and the
Certificate Purchasers or for any fees not specifically made part of the
arrangements agreed to by the Certificate Purchasers and Lessee.
Lessee shall have the right to consult with the Certificate Purchasers in
connection with all Renewal Requests.
SECTION 4.4. Rent Payments. On each Payment Date during the Lease Term,
-------------
Lessee shall pay to Lessor, for the benefit of the Certificate Purchasers, Basic
Rent for the Leased Property. All payments to Lessor or a Certificate Purchaser
shall be made in accordance with its payment instructions set forth on Schedule
--------
I.
-
SECTION 4.5. Supplemental Rent. Lessee shall pay to Lessor, or the
-----------------
Person entitled thereto, any and all Supplemental Rent (including without
limitation amounts determined to be owing pursuant to Section 7.1 of the Trust
Agreement) promptly as the same shall become due and payable. Lessor shall use
reasonable efforts to deliver to Lessee a statement setting forth the items for
which Supplemental Rent is payable, but in no event shall Lessor's failure to
deliver such a statement derogate from Lessee's obligations to make timely
payment of Supplemental Rent. If Lessee fails to pay any Supplemental Rent,
Lessor shall have all rights, powers and remedies provided herein or by law or
in equity or otherwise in the case of nonpayment of Basic Rent. Lessee shall
pay to Lessor as Supplemental Rent, among other things, promptly on demand, to
the extent permitted by Applicable Law, interest at the applicable Overdue Rate
on any installment of Basic Rent not paid when due for the period for which the
same shall be overdue, and on any payment of Supplemental Rent not paid when due
or after demand by Lessor for the period from the due date or the date of any
such demand, as the case may be, until the same shall be paid. The expiration or
other termination of Lessee's obligation to pay Basic Rent hereunder shall not
limit or modify the obligations of Lessee with respect to Supplemental
-45-
Rent. Unless expressly provided otherwise in this Lease, in the event of any
failure on the part of Lessee to pay and discharge any Supplemental Rent as and
when due, Lessee shall also promptly pay and discharge any fine, penalty,
interest or costs which may be assessed or added under any agreement between
Lessee or any Affiliate and any third party for nonpayment or late payment of
such Supplemental Rent, all of which shall also constitute Supplemental Rent.
SECTION 4.6. Place and Manner of Payment. Rent and all other sums due to
---------------------------
Lessor or any Certificate Purchaser hereunder shall be paid in immediately
available funds, and if payable to Lessor or to a Certificate Purchaser, at the
office of Lessor or such Certificate Purchaser specified on Schedule I, or at
----------
such other office of Lessor or any Certificate Purchaser as such Person may from
time to time specify to Lessee in a notice pursuant to this Lease. All such
payments shall be made so as to be received by Lessor or a Certificate
Purchaser, as applicable, not later than 11:00 a.m., New York City time, on the
date due; funds received after such time shall for all purposes under the
Operative Documents be deemed to have been made, and received by such Person, on
the next succeeding Business Day. Any payments received by Lessor not later
than 11:00 a.m., New York City time, shall be paid by Lessor to the Certificate
Purchasers in immediately available funds no later than 2:00 p.m., New York City
time, on the same day, and any payments received by Lessor from or on behalf of
Lessee after 11:00 a.m., New York City time, shall be paid to the Certificate
Purchasers as soon after receipt as practicable, but not later than 2:00 p.m.,
New York City time, on the next succeeding Business Day.
SECTION 4.7. Utility Charges. Lessee shall pay or cause to be paid all
---------------
charges for electricity, power, gas, oil, water, telephone, sanitary sewer
service and all other rents and utilities used in or on the Leased Property
during the Lease Term. Lessee shall be entitled to receive any credit or refund
with respect to any utility charge paid by Lessee and received by Lessor on
account thereof, net of the costs and expenses reasonably incurred by Lessor in
obtaining such credit or refund, and, upon receipt by Lessor, such credit or
refund shall be promptly paid over to Lessee. All charges for utilities imposed
with respect to the Leased Property for a billing period during which this Lease
expires or terminates shall be adjusted and prorated on a daily basis between
Lessor and Lessee, and each party shall pay or reimburse the other for each
party's pro rata share thereof.
SECTION 4.8. Enjoyment. Subject to the rights of Lessor contained in the
---------
Operative Documents, Lessor shall not take any affirmative action to interfere
with Lessee's rights regarding the Leased Property for the Lease Term. Lessee's
sole remedy for breach of this Section 4.8 shall be to xxx for damages for the
-----------
-46-
breach hereof, or xxx for specific performance hereof, and such breach shall not
affect Lessor's rights to initiate legal action and otherwise enforce the
obligations of Lessee under this Lease.
SECTION 4.9. Net Lease. This Lease shall constitute a net lease. Any
---------
present or future law to the contrary notwithstanding, this Lease shall not
terminate, nor shall Lessee be entitled to any abatement, suspension, deferment,
reduction, setoff, counterclaim, or defense with respect to the Rent, nor shall
the obligations of Lessee hereunder be affected (except as expressly herein
permitted and by performance of the obligations in connection therewith) by
reason of: (i) any defect in the condition, merchantability, design,
construction, quality or fitness for use of the Leased Property or any part
thereof, or the failure of the Leased Property to comply with all Applicable
Law, including any inability to occupy or use the Leased Property by reason of
such non-compliance; (ii) any damage to, removal, abandonment, salvage, loss,
contamination of or Release from, scrapping or destruction of or any requisition
or taking of the Leased Property or any part thereof; (iii) any restriction,
prevention or curtailment of or interference with any use of the Leased Property
or any part thereof, including eviction; (iv) any defect in title to or rights
to the Leased Property or any Lien on such title or rights or on the Leased
Property (other than Lessor Liens); (v) any change, waiver, extension,
indulgence or other action or omission or breach in respect of any obligation or
liability of or by Lessor or any Certificate Purchaser; (vi) to the maximum
extent permitted by law, any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like case or
proceeding relating to Lessee, Lessor, any Certificate Purchaser or any other
Person, or any action taken with respect to this Lease by any trustee or
receiver of Lessee, Lessor, any Certificate Purchaser or any other Person, or by
any court, in any such proceeding; (vii) any claim that Lessee has or might have
against any Person, including Lessor, any vendor, manufacturer, contractor of or
for the Leased Property or any Certificate Purchaser; (viii) any failure on the
part of Lessor to perform or comply with any of the terms of this Lease, of any
other Operative Document or of any other agreement; (ix) any invalidity,
unenforceability, illegality or disaffirmance of this Lease or any other
Operative Document or any provision hereof or thereof; (x) the impossibility or
illegality of performance by Lessee, Lessor or both; (xi) any action by any
court, administrative agency or other Government Authority; (xii) any
restriction, prevention or curtailment of or interference with the construction
on or any use of the Leased Property or any part thereof, including, without
limitation, with regard to the Financed Improvements; or (xiii) any other cause
or circumstances whether similar or dissimilar to the foregoing and whether or
not Lessee shall have notice or knowledge of any of the foregoing. The parties
intend that the obligations of Lessee hereunder shall be covenants and
agreements that are separate and independent from
-47-
any obligations of Lessor or any Certificate Purchaser hereunder or under any
other Operative Documents and the obligations of Lessee shall continue
unaffected unless such obligations shall have been modified or terminated in
accordance with an express provision of this Lease.
SECTION 4.10. No Termination or Abatement. Lessee shall remain obligated
---------------------------
under this Lease in accordance with its terms and, consistent with the intention
of the parties expressed in Sections 2.9 and 13.1, shall not take any action to
------------ ----
terminate, rescind or avoid this Lease, notwithstanding any action for
bankruptcy, insolvency, reorganization, liquidation, dissolution, or other
proceeding affecting Lessor or any Certificate Purchaser, or any action with
respect to this Lease which may be taken by any custodian, receiver, liquidator,
assignee, trustee or sequestrator (or other similar official) of such Person.
Lessee hereby waives all right (i) to terminate or surrender this Lease (except
as provided herein) or (ii) to avail itself of any abatement, suspension,
deferment, reduction, setoff, counterclaim or defense with respect to any Rent.
Lessee shall remain obligated under this Lease in accordance with its terms, and
Lessee hereby waives any and all rights now or hereafter conferred by statute or
otherwise to modify or to avoid strict compliance with its obligations under
this Lease. Notwithstanding any such statute or otherwise, Lessee shall be bound
by all of the terms and conditions contained in this Lease.
-48-
SECTION 5. MAINTENANCE AND REPAIR; ALTERATIONS AND
ADDITIONS; LIENS; ASSIGNMENT AND SUBLETTING; EASEMENTS.
SECTION 5.1. Maintenance and Repair; Compliance With Law. Lessee, at its
-------------------------------------------
own expense, shall at all times (a) maintain the Leased Property in good and
safe repair and condition, free from nuisance and in the condition required on
the Construction Completion Date, subject to ordinary wear and tear, and as a
first-class office building; (b) except to the extent Section 5.5 shall apply,
-----------
maintain, manage and monitor the Leased Property in accordance with all
Applicable Law, whether or not such maintenance requires structural
modifications, noncompliance with which (i) would have a material adverse effect
on Lessee's right to use the Leased Property, (ii) would cause any of the
results enumerated in Section 5.2(b) hereof, (iii) would materially adversely
--------------
affect the fair market value, utility, remaining economic useful life or
residual value of the Leased Property, or (iv) would adversely affect Lessor's
interest in the Leased Property; (c) comply with the standards imposed by any
insurance policies required to be maintained hereunder which are in effect at
any time with respect to the Leased Property or any portion thereof; (d)
maintain, manage and monitor the Leased Property in accordance with all
applicable contracts, including service contracts and insurance contracts; (e)
conduct all scheduled maintenance of the Leased Property in conformity with
prudent maintenance and repair guidelines and without discriminating in favor of
similar other property owned or leased by Lessee; (f) cause the Leased Property
to continue to have at all times the capacity and functional ability to be used
for, on a continuing basis (subject to normal interruption in the ordinary
course of business for maintenance, inspection and repair) and in commercial
operation, the purposes for which it was specifically designed; (g) make all
necessary or appropriate repairs, replacements and renewals of the Leased
Property or any portion thereof which may be required to keep the Leased
Property in the condition required by the preceding clauses (a) through (f),
----------- ---
whether interior or exterior, structural or nonstructural, ordinary or
extraordinary, foreseen or unforeseen, and including, without limitation,
repairs, replacements and renewals that would constitute capital expenditures
under GAAP if incurred by an owner of property; and (h) procure, maintain and
comply in all material respects with all material licenses, permits, orders,
approvals, consents and other authorizations required for the construction, use,
maintenance and operation, repair and restoration of the Leased Property. Lessee
waives any right that it may now have or hereafter acquire to (x) require Lessor
to maintain, repair, replace, alter, remove or rebuild all or any part of the
Leased Property or (y) make repairs at the expense of Lessor pursuant to any
Applicable Law or other agreements.
-49-
SECTION 5.2. Alterations. (a) At Lessee's own cost and expense, (i)
-----------
Lessee shall make alterations, renovations, improvements and additions to any
portion of the Leased Property and substitutions and replacements therefor
(collectively, but excluding any portion of the Financed Improvements,
"Alterations") so long as such Alterations are (A) made to repair or maintain
------------
the Leased Property in the condition required by Section 5.1; (B) necessary in
-----------
order for the Leased Property to be in compliance with Applicable Law; or (C)
necessary or advisable to restore the Leased Property to its condition existing
prior to a Casualty or Condemnation; and (ii) so long as no Event of Default or
Default exists, Lessee may undertake Alterations on the Leased Property so long
as such Alterations comply with Applicable Law and with Section 5.1 and
-----------
subsection (b) of this Section 5.2.
-------------- -----------
(b) The making of any Alterations must be in compliance with the following
requirements:
(1) No such Alterations with a cost exceeding $1,000,000 shall be made or
undertaken except upon not less than ten (10) Business Days' prior written
notice to Lessor; provided, however, that in the event an Alteration must be
-------- -------
performed immediately to protect any Person or property, Lessee shall give
Lessor such notice as is practicable and in any event shall notify Lessor
promptly upon the commencement of such Alteration.
(2) Lessee shall not make any Alterations in violation of the terms of any
restriction, easement, condition or covenant or other matter affecting title
to the Leased Property.
(3) No Alterations shall be undertaken until Lessee shall have procured
and paid for, so far as the same may be required from time to time, all
permits and authorizations relating to such Alterations of all municipal and
other Authorities having jurisdiction over the Leased Property; and Lessor,
at Lessee's expense, shall join in the application for any such permit or
authorization and execute and deliver any document in connection therewith,
whenever such joinder is necessary or advisable.
(4) The Alterations shall be expeditiously completed in a good and
workmanlike manner and in compliance with all Applicable Law then in effect
and the standards imposed by any insurance policies required to be maintained
hereunder.
(5) All Alterations shall, when completed, be of such a character as to
not materially adversely affect the fair market value, utility, remaining
economic useful life or residual value of the Leased Property from its fair
market
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value, utility, remaining economic useful life or residual value
immediately prior to the making thereof or, in the case of Alterations being
made by virtue of a Casualty or Condemnation, immediately prior to the
occurrence of such Casualty or Condemnation; and if the cost of such
Alterations is in excess of the amount set forth in subsection (1) above and
if requested by the Required Certificate Purchasers, Lessor shall engage an
appraiser of nationally recognized standing, at Lessee's expense, to
determine (by appraisal methods reasonably satisfactory to the Required
Certificate Purchasers) the projected fair market value of the Leased
Property following the completion of Alterations relating thereto.
(6) Lessee shall have made adequate arrangements for payment of the cost
of all Alterations when due so that the Leased Property shall at all times be
free of Liens for labor and materials supplied or claimed to have been
supplied to the Leased Property, other than Permitted Liens; provided, that
--------
Lessee shall have the right to contest the amount claimed by any such
supplier of labor or materials in accordance with the applicable provisions
of Section 5.5.
-----------
(7) The Alterations must be located solely on the Land.
SECTION 5.3. Title to Alterations. Title to Alterations shall without
--------------------
further act vest in Lessor and shall be deemed to constitute a part of the
Leased Property and be subject to this Lease, including the Lien hereof, in the
following cases:
(a) such Alterations constitute all or any portion of the Leased Property
or shall be in replacement of or in substitution for a portion of the Leased
Property;
(b) such Alterations shall be required to be made pursuant to the terms of
Section 5.1 or Section 5.2(a)(i) hereof;
----------- -----------------
(c) such Alterations shall not be readily severable from the Land;
(d) the removal of such Alterations would adversely affect the fair market
value of the Leased Property; or
(e) an Event of Default shall have occurred.
Lessee, at Lessor's request, shall execute and deliver any deeds, bills of
sale, assignments or other documents of conveyance reasonably necessary to
evidence the vesting of title in and to such Alterations to Lessor.
If such Alterations are not within any of the
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categories set forth in clauses (a) through (d) of this Section 5.3 and no Event
----------- --- -----------
of Default has occurred, then title to such Alterations shall vest in Lessee and
such Alterations shall not be deemed to be Alterations which are part of the
Leased Property.
All Alterations to which Lessee shall have title may, so long as removal
thereof shall not result in the violation of any Applicable Law and no Event of
Default or Default exists, be removed at any time by Lessee. Any such
Alterations shall be removed by Lessee at its expense if Lessor shall so request
prior to the return of the Leased Property to Lessor or sale of the Leased
Property in accordance with the provisions of this Lease, and Lessee shall at
its expense repair any damage to the Leased Property caused by the removal of
such Alterations. Lessor (or the purchaser of the Leased Property) may purchase
from Lessee Alterations (if not already owned by Lessor) which Lessee notifies
Lessor that Lessee intends to remove from the Leased Property prior to the
return of the Leased Property to Lessor or the sale of the Leased Property,
which purchase shall be at the Fair Market Value of such Alterations. Title to
any Alterations to which Lessee shall have title shall vest in Lessor (or the
purchaser of the Leased Property) if not removed from the Leased Property by
Lessee prior to the return of the Leased Property to Lessor or the sale of the
Leased Property.
SECTION 5.4. Maintenance and Repair Reports. Lessee shall keep
------------------------------
maintenance and repair reports in sufficient detail consistent with its
customary practice, and as customary for owners of commercial real estate, to
indicate the nature and date of major work done. Such reports shall be kept on
file by Lessee at its offices during the Lease Term and shall be made available
to Lessor upon reasonable request. Promptly after Lessee has knowledge thereof,
Lessee shall give notice to Lessor of any Condemnation or Casualty of which the
cost to restore or repair, or the value of any damage suffered, is reasonably
expected by Lessee to exceed $1,000,000.
SECTION 5.5. Permitted Contests. If, to the extent and for so long as
------------------
(a) a test, challenge, appeal or proceeding for review of any Applicable Law or
any Government Action relating to any portion of the Leased Property or to the
operation or maintenance of any portion of the Leased Property shall be
prosecuted diligently and in good faith in appropriate proceedings by Lessee or
(b) compliance with such Applicable Law or such Government Action shall have
been excused or exempted by a valid nonconforming use permit, waiver, extension
or forbearance, Lessee shall not be required to comply with such Applicable Law
or such Government Action but only if and so long as any such test, challenge,
appeal, proceeding or noncompliance shall constitute in the opinion of the
Required Certificate Purchasers a Permitted Contest.
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Lessor will not be required to join in any proceedings pursuant to this
Section 5.5 unless a provision of any Applicable Law requires, or, in the good
-----------
faith opinion of Lessee, it is helpful to Lessee, that such proceedings be
brought by or in the name of Lessor; and in such event Lessor will join in the
proceedings or permit them or any part thereof to be brought in its name if and
so long as no Event of Default or Default exists and Lessee pays all related
expenses and indemnifies Lessor and the Certificate Purchasers to the
satisfaction of the respective Indemnitees.
SECTION 5.6. Use. The Leased Property shall be used only as a first-
---
class office building and for related ancillary purposes consistent with
Lessee's business purposes. Lessee shall not use the Leased Property or any
part thereof for any purpose or in any manner that would materially adversely
affect the Fair Market Value, utility, remaining useful life or residual value
of the Leased Property, would create a materially increased risk of
environmental liability or would violate or conflict with, or constitute or
result in a violation or default under, (a) any Applicable Law, whether now or
hereafter existing, except as permitted pursuant to Section 5.5 (b) any
-----------
insurance policies required by Section 6.7, or (c) any Operative Document.
-----------
Lessee shall pay, or cause to be paid, all charges and costs required in
connection with the use of the Leased Property as contemplated by this Lease.
Lessee shall not commit or permit any waste of the Leased Property or any part
thereof or take any act or fail to take any act which would cause or permit a
nuisance to exist or occur upon the Leased Property.
SECTION 5.7. Liens. (a) Lessee will not directly or indirectly create,
-----
incur, assume or suffer to exist any Lien (other than Permitted Liens and Liens
which are the subject of a Permitted Contest) on or with respect to (x) any
portion of the Leased Property, Lessor's title thereto, or any interest therein,
or (y) this Lease or any of Lessor's or any Certificate Purchaser's interests
hereunder. Lessee, at its own expense, will promptly pay, satisfy and otherwise
take such actions as may be necessary to keep this Lease and the Leased Property
free and clear of, and duly to discharge or eliminate or bond in a manner
reasonably satisfactory to Lessor and the Required Certificate Purchasers, any
Lien if the same shall arise at any time. Lessee will notify Lessor and
Certificate Purchasers in writing promptly upon becoming aware of any Tax or
other Lien that shall attach to the Leased Property, and of the full particulars
thereof.
(b) Nothing contained in this Lease shall be construed as constituting the
consent or request of Lessor, expressed or implied, to or for the performance by
any contractor, mechanic, laborer, materialman, supplier or vendor of any labor
or services or for the furnishing of any materials for any construction,
alteration, addition, repair or demolition of or to the Leased
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Property or any part thereof. NOTICE IS HEREBY GIVEN THAT NEITHER LESSOR, THE
CERTIFICATE TRUSTEE NOR THE CERTIFICATE PURCHASERS IS OR SHALL BE LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO
ANYONE HOLDING THE LEASED PROPERTY OR ANY PART THEREOF THROUGH OR UNDER LESSEE,
AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS
SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR, THE CERTIFICATE PURCHASERS OR
THE CERTIFICATE TRUSTEE IN AND TO THE LEASED PROPERTY.
SECTION 5.8. Inspection. Upon the request of Lessor or the Required
----------
Certificate Purchasers, Lessee shall at reasonable times and upon reasonable
notice make the Leased Property available to Lessor or any Certificate Purchaser
or their respective agents for inspection and shall also make Lessee's records
pertaining to the Leased Property available for inspection, provided, that from
--------
and after the occurrence of an Event of Default, all costs and expenses of
Lessor or any Certificate Purchaser in connection with such inspection shall be
borne by Lessee.
SECTION 5.9. Assignment and Subletting. Lessee may not assign, mortgage
-------------------------
or pledge, in whole or in part, any of its rights, title or interest in, to or
under this Lease or any portion of the Leased Property to any Person, including
an Affiliate of Lessee, at any time. Any such assignment, mortgage or pledge
shall be void. Except as expressly provided in this Section 5.9, Lessee may not,
-----------
without the prior written consent of Lessor (which may be granted or withheld in
the sole discretion of Lessor) sublease, in whole or in part, any of its right,
title or interest to or under this Lease or any portion of the Leased Property
to any other Person (other than to a Subsidiary of Lessee upon at least ten
Business Days' notice to Lessor), or permit the Leased Property or any portion
thereof to be used or occupied by any other person at any time, and any such
sublease, use or occupancy shall be void. Lessee may enter into a sublease of
space in the Facility provided that the aggregate amount of such subleased space
does not exceed 25% of the aggregate space in the Facility, and provided that
(i) no Event of Default shall have occurred and be continuing, (ii) the proposed
subtenant shall have a financial standing, be of a character, be engaged in a
business, and propose to use the Leased Property in a manner in keeping with the
standards set forth in this Lease, (iii) the character of the business to be
conducted or the proposed use of the Facility by the proposed subtenant shall
not violate any provision or restrictions relating to the use or occupancy of
the Leased Property, (iv) the subletting shall be in writing and expressly
subject to all of the terms, covenants, conditions and obligations on Lessee's
part to be observed and performed under this Lease and the further condition and
restriction that the sublease shall not be assigned, encumbered or otherwise
transferred or the subleased premises further sublet by the subtenant in whole
or in part, or any part thereof suffered or permitted by the subtenant to be
used
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or occupied by others, without the prior written consent of Lessor in each
instance, which may be withheld in Lessor's sole discretion, (v) the
sublease shall expressly provide that it shall terminate no later than one (1)
day before the Lease Termination Date unless Lessee shall purchase the Leased
Property pursuant to Section 9.1(b), (vi) at no time shall there be more than
--------------
four (4) occupants, including Lessee, in the Facility, and (vii) Lessee shall
deliver notice of any proposed sublease to Lessor at least thirty (30) days
prior to the commencement date thereof. No sublease or other relinquishment of
possession of the Leased Property shall in any way discharge or diminish any of
Lessee's obligations to Lessor hereunder and Lessee shall remain directly and
primarily liable under this Lease with respect to all of the Leased Property.
Any sublease of the Leased Property shall expressly be made subject and
subordinate to this Lease and to the rights of Lessor hereunder and the liens
created hereby, and shall expressly provide for the surrender of the Leased
Property by any sublessee after an Event of Default.
SECTION 5.10. Easements. At the request of Lessee, Lessor shall, from
---------
time to time during the Lease Term and upon at least thirty (30) days' prior
written notice from Lessee, and receipt of the materials specified in the next
succeeding sentence, consent to and join in any (i) grant of easements,
licenses, rights of way, party wall rights and other rights in the nature of
easements, with or without consideration, (ii) release or termination of
easements, licenses, rights of way, party wall rights or other rights in the
nature of easements which are for the benefit of the Land or any portion
thereof, with or without consideration, (iii) dedication or transfer of portions
of the Land, not improved with a building, for road, highway or other public
purposes, with or without consideration, (iv) execution of petitions to have any
portion of the Land annexed to any municipal corporation or utility district,
(v) execution of agreements for the use and maintenance of common areas, for
reciprocal rights of parking, ingress and egress and amendments to any covenants
and restrictions affecting the Land or any portion thereof, with or without
consideration, (vi) request to any Authority for platting or subdivision or
replatting or resubdivision approval with respect to the Land or any portion
thereof or any parcel of land of which the Land or any portion thereof forms a
part or a request for any variance from zoning, (vii) creation of a governmental
special benefit district for public improvements and collection of special
assessments in connection therewith, in lump sum or installments, and (viii)
execution and delivery of any instrument appropriate to confirm or effect such
grant, release, dedication, transfer request or such other matter, document or
proceeding. Lessor's obligations pursuant to the preceding sentence shall be
subject to the requirements that:
(a) any such action shall be at the sole cost and expense of Lessee, and
Lessee shall pay all reasonable out-of-
-55-
pocket costs of Lessor and the Certificate Purchasers in connection therewith
(including, without limitation, the reasonable fees of attorneys (including
allocated costs of internal counsel of Arranger; provided, that Lessee shall not
be responsible for any legal fees and expenses of more than one counsel to
Arranger and the Certificate Purchasers and the allocated internal costs of
internal counsel of Arranger), architects, engineers, planners, appraisers and
other professionals retained by Lessor or the Certificate Purchasers in
connection with any such action);
(b) Lessee shall have delivered to Lessor a certificate of an Authorized
Officer of Lessee stating that:
(1) such action will not cause the Leased Property or any portion
thereof to fail to comply in any respect with the provisions of the Lease
or any other Operative Documents and in any material respect with all
Applicable Law (including, without limitation, all applicable zoning,
planning, building and subdivision ordinances, all applicable restrictive
covenants and all applicable architectural approval requirements);
(2) all governmental consents or approvals required prior to such
action have been obtained, and all filings required prior to such action
have been made;
(3) such action will not result in any material down-zoning of the
Land or any portion thereof or a material reduction in the maximum density
or development rights available to the Land under all Applicable Law;
(4) this Lease and Lessee's obligations hereunder shall continue in
full force and effect, without abatement, suspension, deferment,
diminution, reduction, counterclaim, setoff, defense or deduction;
(5) such action will not materially reduce the Fair Market Value,
utility, remaining economic useful life or residual value of the Leased
Property or Lessor's interest therein; and
(6) such action will not impose or create any liability or obligation
on Lessor;
(c) all consideration received in connection with such action shall be
paid to Lessee; and
(d) no Event of Default shall have occurred and be continuing.
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SECTION 6. RISK OF LOSS; INSURANCE.
SECTION 6.1. Event of Loss; Condemnation or Casualty.
---------------------------------------
(a) If an Event of Loss shall occur, Lessee shall give Lessor and
each Certificate Purchaser prompt written notice of such occurrence and the date
thereof and Lessee shall purchase the Leased Property from Lessor on the next
succeeding Payment Date after the date such Event of Loss shall have occurred
(but in no event earlier than the first to occur of Lessee's receipt of
insurance or condemnation proceeds from such Event of Loss or 90 days from the
occurrence of such Event of Loss) at a purchase price equal to the sum of (i)
the Lease Balance, plus (ii) all accrued but unpaid Rent, plus (iii) all other
sums due and payable by Lessee to Lessor or any Certificate Purchaser under any
of the Operative Documents. In the case of an Event of Taking which is deemed to
have occurred because of a requisition which is not scheduled to last beyond the
Lease Termination Date but which in fact is continuing on the Lease Termination
Date, the foregoing purchase price shall be paid on the Lease Termination Date.
(b) Upon payment in full of all amounts payable pursuant to Section
-------
6.1(a), (i) the Lease Term shall end with respect to the Leased Property and
------
(ii) the obligations of Lessee hereunder with respect to the Leased Property
(other than any obligations expressed herein as surviving termination of this
Lease) shall terminate as of the date of such payment.
SECTION 6.2. Application of Payments Relating to an Event of Loss. All
----------------------------------------------------
Net Condemnation Proceeds and property insurance proceeds received at any time
by Lessee from any Authority or other Person with respect to any Event of Loss
shall be promptly remitted to Lessor and, upon the purchase of the Leased
Property by Lessee pursuant to Section 6.1(a), applied against the purchase
------- ------
price payable by Lessee pursuant to Section 6.1(a), and, unless a Default or
------- ------
an Event of Default exists and subject to Section 13.2, any such Net
------------
Condemnation Proceeds and property insurance proceeds remaining thereafter shall
be paid over to, or retained by, Lessee, or paid as Lessee may direct.
SECTION 6.3. Application of Certain Payments Relating to a Condemnation.
----------------------------------------------------------
In case of a requisition for temporary use of all or a portion of the Leased
Property which is not an Event of Taking, this Lease shall remain in full force
and effect, without any abatement or reduction of Rent, and the proceeds
received from any Authority relating to a Condemnation for the affected portion
of the Leased Property shall, so long as no Default or Event of Default exists
and subject to Section 13.2, be paid to Lessee for use by Lessee to the extent
------------
applicable to repair and restore the Leased Property to the condition required
by Section 5.1. Notwithstanding anything herein to the contrary, any portion of
-----------
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such proceeds that is awarded with respect to the time period after the
expiration or termination of the Lease Term (unless Lessee shall have exercised
an option to purchase the Leased Property and consummated such purchase) shall
be paid to Lessor; provided, that if Lessee has paid (i) the Lease Balance, plus
--------
(ii) all accrued but unpaid Rent, plus (iii) all other sums due and payable by
Lessee to Lessor or any Certificate Purchaser under any of the Operative
Documents, such proceeds (or the portion of such proceeds in excess of the
portion thereof applied as set forth above) shall be paid over to Lessee.
SECTION 6.4. Casualty. Upon any Casualty with respect to any portion of
--------
the Leased Property the cost of repair of which would exceed $2,000,000 Lessee
shall immediately give to Lessor written notice thereof. As soon as practicable
after a Casualty, but in any event prior to the Lease Termination Date, Lessee
shall promptly commence and diligently proceed in a commercially reasonable
manner to repair and rebuild the affected portions of the Leased Property
suffering such Casualty (or cause such affected portions to be repaired and
rebuilt) to the condition required to be maintained by Section 5.1 hereof;
-----------
provided, that the value and functional capability of such item as restored is
--------
at least equivalent to the value and functional capability of such item as in
effect immediately prior to the occurrence of such Casualty. Any insurance
proceeds in excess of $2,000,000 received with respect to any Casualty shall be
paid over to or retained by Lessor until, subject to Section 13.2, Lessee
------------
repairs and rebuilds (or causes to be repaired and rebuilt) the affected
portions of the applicable Leased Property in accordance with the conditions set
forth in this Section 6.4; provided that such proceeds shall be distributed to
----------- --------
Lessee (subject to Section 13.2) from time to time in reimbursement for funds
------------
expended by Lessee in repairing and rebuilding the Facility.
SECTION 6.5. Negotiations. If any part of the Leased Property becomes
------------
subject to condemnation or requisition proceedings, Lessee shall give notice
thereof to Lessor promptly after Lessee has knowledge thereof and, to the extent
permitted by any Applicable Law, Lessee shall control the negotiations with the
relevant Authority unless a Default or Event of Default exists, in which case
Lessor shall control such negotiations; provided, that in any event Lessor may
--------
participate at Lessor's expense (or if a Default or Event of Default exists, at
Lessee's expense) in such negotiations; and provided in all cases, that no
--------
settlement will be made without Lessor's prior written consent, not to be
unreasonably withheld. Lessee shall give to Lessor such information, and copies
of such documents, which relate to such proceedings, or which relate to the
settlement of amounts due under insurance policies required by Section 6.7, and
-----------
are in the possession of Lessee, as are reasonably requested by Lessor. If the
proceedings relate to an Event of Taking, Lessee shall act diligently in
connection therewith.
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SECTION 6.6. No Rent Abatement. Rent shall not xxxxx hereunder by reason
-----------------
of any Casualty, any Event of Loss, any Event of Taking or any Condemnation of
any portion of the Leased Property, and Lessee shall continue to perform and
fulfill all of Lessee's obligations, covenants and agreements hereunder
notwithstanding such Casualty, Event of Loss, Event of Taking or Condemnation
until the Lease Termination Date.
SECTION 6.7. Required Coverages. Lessee will keep insured all property
------------------
of a character usually insured by prudent corporations engaged in the same or
similar business similarly situated against loss or damage of the kinds and in
the amounts customarily insured against by such corporations (including
customary deductibles and self-insured retention), and carry such other
insurance as is usually carried by such corporations, provided that in any event
--------
Lessee will maintain:
(a) Comprehensive General Liability Insurance. Combined single limit
-----------------------------------------
insurance against claims for bodily injury, death or third-party property damage
occurring on, in or about the Leased Property in an amount at least equal to
$10,000,000 per occurrence, with a minimum combined single limit of $10,000,000.
(b) Property Insurance. Insurance against loss or damage covering
------------------
the Leased Property or any portion thereof by reason of any Peril (as defined
below) in an amount (subject to such deductibles and/or self-insurance in such
minimum amounts as is carried by prudent corporations owning and/or operating
similar properties) equal to the actual replacement cost of the Leased Property;
provided, however, that at no time shall the amount of such coverage, on a
-------- -------
replacement cost basis, be less than the then outstanding Lease Balance. The
term "Peril" shall mean, collectively, fire, lightning, flood, windstorm, hail,
-----
explosion, riot and civil commotion, vandalism and malicious mischief, damage
from aircraft, vehicles and smoke and all other perils covered by the "all risk
endorsement" then in use in the Commonwealth of Pennsylvania.
(c) Workers' Compensation Insurance. Lessee shall, in the
-------------------------------
construction of the Financed Improvements or Alterations and the operation of
the Leased Property, comply with the applicable workers' compensation laws of
the Commonwealth of Pennsylvania.
(d) Builder's Risk Insurance. During the construction of the
------------------------
Financed Improvements, any other improvements or any Alteration, Lessee shall
also maintain builders' all-risk insurance in an amount equal to the greater of
the replacement value of the applicable improvements and any Alterations and the
aggregate cost for the construction of same.
(e) Other Insurance. Such other insurance, including
---------------
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worker's compensation and business interruption insurance, in each case as is
generally carried by owners of similar properties in such amounts and against
such risks as are then customary for properties similar in use.
Such insurance shall be written by reputable insurance companies that are
financially sound and solvent and otherwise reasonably appropriate considering
the amount and type of insurance being provided by such companies. Any
insurance company selected by Lessee shall be rated in A.M. Best's Insurance
Guide or any successor thereto (or if there be none, an organization having a
similar national reputation) and shall have a general policyholder rating of "A"
(or comparable rating for a rating by an organization other than A.M. Best) and
a financial rating of at least "VII" (or comparable rating for a rating by an
organization other than A.M. Best) or be otherwise acceptable to the Required
Certificate Purchasers. In the case of liability insurance maintained by
Lessee, it shall name Lessor (both in its individual capacity and as Certificate
Trustee) and each Certificate Purchaser as additional insureds and, in the case
of property insurance maintained by Lessee, it shall name Lessor as mortgagee
and loss payee subject to the terms of Section 6.4. Each policy referred to in
-----------
this Section 6.7 shall provide that: (i) it will not be cancelled, materially
-----------
modified or its limits reduced, or allowed to lapse without renewal, except
after not less than thirty (30) days' prior written notice to Lessor and each
Certificate Purchaser; (ii) in the case of general liability insurance, the
interests of Lessor or any Certificate Purchaser shall not be invalidated by any
act or negligence of or breach of warranty or representation by Lessee or any
Person having an interest in the Leased Property; (iii) such insurance is
primary with respect to any other insurance carried by or available to Lessor or
any Certificate Purchaser; (iv) the insurer shall waive any right of
subrogation, setoff, counterclaim, or other deduction, whether by attachment or
otherwise, against Lessor and the Certificate Purchasers; and (v) in the case of
general liability insurance, such policy shall contain a cross-liability clause
providing for coverage of Lessor and the Certificate Purchasers as if there were
a separate policy insuring each of them; however, such clause (v) shall in no
----------
way increase the per-occurrence limit set forth in Section 6.7(a) above. Lessor
--------------
and Certificate Purchasers shall not be liable for the payment of any premiums.
Lessee will notify Lessor and the Certificate Purchasers promptly of any policy
cancellation, reduction in policy limits, modification or amendment.
SECTION 6.8. Delivery of Insurance Certificates. On or before the
----------------------------------
Initial Advance Date and thereafter on each subsequent Advance Date, Lessee
shall deliver to Lessor certificates of insurance satisfactory to Lessor and the
Certificate Purchasers evidencing the existence of all insurance required to be
maintained hereunder and setting forth the respective coverages,
-60-
limits of liability, carrier, policy number and period of coverage. Thereafter,
throughout the Lease Term, at the time each of Lessee's insurance policies is
renewed (but in no event less frequently than once each year), Lessee shall
deliver to Lessor certificates of insurance evidencing that all insurance
required by Section 6.7 to be maintained by Lessee with respect to the Leased
-----------
Property is in effect.
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SECTION 7. INDEMNITIES.
-62-
SECTION 7.1. General Indemnification. Lessee agrees, whether or not any
-----------------------
of the transactions contemplated hereby shall be consummated, to assume
liability for, and to indemnify, protect, defend, save and keep harmless on an
after-tax basis (in accordance with Section 7.5) each Indemnitee from and
-----------
against any and all Claims that may be imposed on, incurred by or asserted
against such Indemnitee (whether because of action or omission, negligent or
otherwise, by such Indemnitee or otherwise), whether or not such Indemnitee
shall also be indemnified as to any such Claim by any other Person and whether
or not such Claim arises or accrues prior to the Initial Advance Date or after
the Lease Termination Date, in any way relating to or arising out of (a) any of
the Operative Documents or any of the transactions contemplated thereby or any
investigation, litigation or proceeding in connection therewith, and any
amendment, modification or waiver in respect thereof; or (b) the Leased Property
or any part thereof or interest therein; or (c) the acquisition, mortgaging,
design, construction, preparation, installation, inspection, delivery, non-
delivery, acceptance, rejection, purchase, ownership, possession, rental, lease,
sublease, repossession, maintenance, repair, alteration, modification, addition
or substitution, storage, transfer of title, redelivery, use, financing,
refinancing, operation, condition, sale (including, without limitation, any sale
pursuant to Section 8.2 or Section 9.1), return or other disposition of all or
----------- -----------
any part of any interest in the Leased Property or the imposition of any Lien
(or incurrence of any liability to refund or pay over any amount as a result of
any Lien) thereon, including, without limitation: (i) Claims or penalties
arising from any violation of Applicable Law or in tort (strict liability or
otherwise), (ii) loss of or damage to the environment (including, without
limitation, investigation costs, clean-up costs, response costs, remediation and
removal costs, costs of corrective action, costs of financial assurance, and all
other damages, costs, fees and expenses, fines and penalties, including natural
resource damages), or death or injury to any Person, and all expenses associated
with the protection of wildlife, aquatic species, vegetation, flora and fauna,
and any mitigative action required by or under Environmental Laws, (iii) latent
or other defects, whether or not discoverable by Lessee or any Indemnitee, (iv)
any Claims resulting from the existence or Release of any Hazardous Materials at
or from the Leased Property and (v) any Claim for patent, trademark, trade name
or copyright infringement, provided, that the matters in this clause (c) shall
-------- ----------
be without duplication of any matter for which indemnification is provided
pursuant to the Environmental Indemnity; (d) the offer, issuance, sale or
delivery of the Certificates; (e) the breach or alleged breach by Lessee of any
representation or warranty made by it or deemed made by it in any Operative
Document; (f) the transactions contemplated hereby or by any other Operative
Document in respect of any Prohibited Transaction; or (g) any other agreement
entered into or assumed by Lessee in connection with the Leased Property
(including, in each
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case, matters based on or arising from the negligence of any Indemnitee).
Lessee shall not be required to indemnify under this Section 7.1 for (1) as
-----------
to an Indemnitee, any Claim to the extent resulting from the willful misconduct
or gross negligence of such Indemnitee or to the extent resulting from the
breach of representations, warranties or covenants of such Indemnitee
(including, in the case of clause (f) of this Section 7.1, the representation of
---------- -----------
such Certificate Purchaser set forth in Section 10.2(a) and the covenant of such
---------------
Certificate Purchaser set forth in Section 11.6(a)(iii)), (2) any Claims in
--------------------
respect of Taxes (such Claims to be subject to Section 7.2), other than a
-----------
payment necessary to make payments under this Section 7.1 on an after-tax basis,
-----------
provided, that this clause (2) does not apply to any taxes or penalties included
-------- ----------
in Claims against which the Indemnitee is provided an indemnification under
clause (f) of this Section 7.1, (3) as to an Indemnitee, any Claim resulting
---------- -----------
from Lessor Liens which such Indemnitee is responsible for discharging under the
Operative Documents and (4) as to any Indemnitee, any Claim which the Indemnitor
is unable to legally contest as a result of the failure of the Indemnitee to
deliver in a timely manner notice to the Indemnitor of such Claim or proposed
Claim, and (i) such failure directly results in Indemnitor's inability to
contest such Claim and (ii) Indemnitor does not independently have knowledge of
the Claim.
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SECTION 7.2. General Tax Indemnity.
---------------------
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(a) Tax Indemnity. Lessee shall pay, defend and, on written demand,
-------------
indemnify and hold harmless on an after-tax basis (in accordance with Section
-------
7.5) each Indemnitee from and against, any and all Taxes, howsoever imposed, on
---
or with respect to any Indemnitee, the Leased Property or any portion thereof,
any Operative Document or Lessee or any sublessee or user of the Leased Property
by any Authority in connection with or in any way relating to (i) the
acquisition, mortgaging, design, construction, preparation, installation,
inspection, delivery, non-delivery, acceptance, rejection, purchase, ownership,
possession, rental, lease, sublease, repossession, maintenance, repair,
alteration, modification, addition or substitution, storage, transfer of title,
redelivery, use, financing, refinancing, operation, condition, sale (including,
without limitation, any sale pursuant to Section 8.2 or Section 9.1), return or
----------- -----------
other disposition of all or any part of any interest in the Leased Property or
the imposition of any Lien (or incurrence of any liability to refund or pay over
any amount as a result of any Lien) thereon, (ii) Basic Rent or Supplemental
Rent or the receipts or earnings arising from or received with respect to the
Leased Property or any part thereof, or any interest therein or any applications
or dispositions thereof, (iii) any other amount paid or payable pursuant to the
Certificates or any other Operative Documents, the property or the income or
other proceeds with respect to the property held in the Trust Estate, (iv) the
Leased Property or any part thereof or any interest therein, (v) all or any of
the Operative Documents, any other documents contemplated thereby and any
amendments and supplements thereto, and (vi) otherwise with respect to or in
connection with the Overall Transaction; provided, however, that the
-------- -------
indemnification obligation of this Section 7.2(a) shall not apply to (A) Taxes
--------------
which are based upon or measured by the Indemnitee's net income or alternative
minimum taxable income, or which are expressly in substitution for, or relieve
Indemnitee from, any actual Tax based upon or measured by Indemnitee's net
income; (B) Taxes characterized under local law as franchise, net worth, or
shareholder's capital (excluding, however, any value-added, license, property or
similar Taxes); and (C) if no Event of Default exists, Taxes based upon the
voluntary transfer, assignment or disposition by Lessor or any Certificate
Purchaser of any interest in any of the Leased Property (other than transfers
pursuant to the exercise of the Sale Option or Purchase Option, a transfer to
Lessee or otherwise pursuant to the Lease). Notwithstanding the proviso of the
preceding sentence, Lessee shall pay or reimburse, and indemnify and hold
harmless, any Indemnitee (A) from any Tax to the extent such Tax would not have
been imposed if on the Initial Advance Date Lessor had advanced funds directly
to Lessee in the form of a loan secured by the Leased Property in an amount
equal to the aggregate amounts advanced on the Advance Dates with the debt
service for such loan equal to the rents payable pursuant to the Lease and a
principal balance due at the end of the Lease Term in the amount of the Lease
Balance remaining at the end of the Lease Term; and (B)
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which is not incorporated under the laws of the United States, or a state
thereof, and which has complied with Section 7.3, from any deduction or
-----------
withholding of any United States Federal income tax.
(b) Contests. Lessee shall pay on or before the time or times prescribed
--------
by law any Taxes (except any Taxes excluded by the proviso to Section 7.2(a));
--------------
provided, however, that Lessee shall be under no obligation to pay any such Tax
-------- -------
so long as the payment of such Tax is not delinquent or is being contested by a
Permitted Contest. If any claim or claims is or are made against any Indemnitee
for any Tax which is subject to indemnification as provided in Section 7.2(a),
--------------
Indemnitee shall, as soon as practicable, but in no event more than twenty (20)
days after receipt of formal written notice of the Tax or proposed Tax, notify
Lessee; provided that the failure to give such notice shall not limit Lessee's
--------
obligations under Section 7.2(a), unless (i) the failure to provide such notice
--------------
directly results in Lessee's inability to contest such Tax and (ii) Lessee does
not independently have knowledge of the Tax or proposed Tax; and if, in the
reasonable opinion of Lessee and (in the case of any Tax which may reasonably be
expected to exceed $100,000 in the aggregate) tax counsel acceptable to the
Indemnitee, there exists a basis to contest such Tax which satisfies the
requirements of ABA Formal Opinion 85-352 (and if the provisos of the definition
--------
of "Permitted Contest" continue to be satisfied and so long as no Event of
Default exists), Lessee at its expense may, to the extent permitted by
Applicable Law, contest such Tax, and subsequently may appeal any adverse
determination, in the appropriate administrative and legal forums, and Lessor
hereby authorizes Lessee to contest, by a Permitted Contest, any real estate
taxes or assessments in the name of Lessor so long as Lessee shall keep Lessor
apprised of the status of such proceedings; provided that in all other
--------
circumstances so long as no Event of Default exists, upon notice from Lessee to
such Indemnitee that there exists a basis to contest any such Tax which
satisfies the requirements of ABA Formal Opinion 85-352 (as supported by an
opinion of tax counsel to Lessee acceptable to the Indemnitee), the Indemnitee,
at Lessee's expense, shall contest any such Tax. Lessee shall pay all expenses
incurred by the Indemnitee in contesting any such Tax (including, without
limitation, all reasonable attorneys' and accountants' fees, including the
allocated costs of internal counsel), upon demand by the Indemnitee. Lessee
shall have the right to participate in the conduct of any proceedings controlled
by the Indemnitee to the extent that such participation by such Person does not
interfere with the Indemnitee's control of such contest and Lessee shall in all
events be kept informed, to the extent practicable, of material developments
relative to such proceedings. The Indemnitee shall have the right to participate
in the conduct of any proceedings controlled by Lessee and the Indemnitee shall
in all events be kept informed, to the extent practicable, of material
developments relative to such proceedings. The Indemnitees agree that a
contested claim for
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which Lessee would be required to make a reimbursement payment hereunder will
not be settled or compromised without Lessee's prior written consent (which
consent shall neither be unreasonably delayed nor withheld), unless the provisos
--------
of the definition of "Permitted Contest" would not continue to be satisfied and
so long as no Event of Default exists. Indemnitee shall endeavor to settle or
compromise any such contested claim in accordance with written instructions
received from Lessee, provided, that: (x) Lessee, on or before the date the
--------
Indemnitee executes a settlement or compromise, pays the contested Tax to the
extent agreed upon or makes an indemnification payment to the Indemnitee in an
amount acceptable to the Indemnitee; and (y) the settlement or compromise does
not, in the reasonable opinion of the Indemnitee, materially adversely affect
the right of Lessor to receive Rent or the Lease Balance or any other payment
pursuant to the Operative Documents, or involve a material risk of sale,
forfeiture or loss of the Leased Property, any part thereof or any interest
therein or any matter described in the provisos to the definition of "Permitted
--------
Contest". The failure of an Indemnitee to timely contest a claim against it for
any Tax which is subject to indemnification under Section 7.2(a) and for which
--------------
it has an obligation to Lessee to contest under this Section 7.2(b) in the
--------------
manner required by Applicable Law where Lessee has timely requested that such
Indemnitee contest such claim shall relieve Lessee of its obligations to such
Indemnitee under Section 7.2(a) with respect to such claim to the extent such
--------------
failure results in the loss of an effective contest. If Applicable Law requires
the payment of a contested Tax as a condition to, or regardless of, its being
contested, and Lessee chooses to contest such Tax or to direct the Indemnitee to
contest such Tax in accordance with this Section, then Lessee shall provide the
Indemnitee with the funds to pay such Tax, such provision of funds to be deemed
a non-interest bearing loan by Lessee to the Indemnitee to be repaid by any
recovery of such Tax from such contest and any remaining unpaid amount not
recovered to offset Lessee's obligation to indemnify the Indemnitee for such
Tax. Lessee shall indemnify the Indemnitee on an after-tax basis (in accordance
with Section 7.5) for and against any adverse tax consequences of such interest-
-----------
free loan. If the Indemnitee receives a refund (or like adjustment) in respect
of any Tax (including any payments made pursuant to Section 7.5) for which the
-----------
Indemnitee has been reimbursed by Lessee, the Indemnitee shall immediately remit
the amount of such refund (or like adjustment) on an after-tax basis (in
accordance with Section 7.5) to Lessee, net of all costs and expenses incurred
-----------
by such Indemnitee.
(c) Payments. Except as otherwise permitted under Section 7.2(b), any Tax
-------- --------------
indemnifiable under Section 7.2(a) shall be paid directly when due to the
--------------
applicable taxing authority if direct payment is practicable and permitted. If
direct payment to the applicable taxing authority is not permitted or is
otherwise not made, any amount payable to an Indemnitee pursuant to Section
-------
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7.2(a) shall be paid within thirty (30) days after receipt of a written demand
------
therefor from such Indemnitee accompanied by a written statement describing in
reasonable detail the amount so payable. Any payments made pursuant to Section
-------
7.2(a) directly to the Indemnitee entitled thereto or Lessee, as the case may
------
be, shall be made in immediately available funds at such bank or to such account
as specified by the payee in written directions to the payor, or, if no such
direction shall have been given, by check of the payor payable to the order of
the payee by certified mail, postage prepaid at its address as set forth in this
Lease. Upon the request of any Indemnitee with respect to a Tax that Lessee is
required to pay, Lessee shall furnish to such Indemnitee the original or a
certified copy of a receipt for Lessee's payment of such Tax or such other
evidence of payment as is reasonably acceptable to such Indemnitee.
(d) Reports. If any report, return or statement is required to be
-------
filed with respect to any Taxes that are subject to indemnification under
Section 7.2(a), Lessee shall, if Lessee is permitted by Applicable Law, timely
--------------
prepare and file such report, return or statement; provided, however, that if
-------- -------
Lessee is not permitted by Applicable Law to file any such report, Lessee will
promptly so notify the appropriate Indemnitee, in which case the Indemnitee will
file any such report after preparation thereof by Lessee. Lessee will deliver
any such return, together with immediately available funds for payment of any
Tax due, to such Indemnitee at least ten (10) days in advance of the date such
return or payment is due.
SECTION 7.3. Withholding Tax Exemption. At least five (5) Business Days
-------------------------
prior to the first date on which any payment is due under any Certificate for
the account of any Certificate Purchaser not incorporated under the laws of the
United States or a state thereof, such Certificate Purchaser agrees that it will
have delivered to each of Lessee and Certificate Trustee two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224, certifying
in either case that such Certificate Purchaser is entitled to receive payments
under the Operative Documents without deduction or withholding of any United
States Federal income taxes. Each Certificate Purchaser which so delivers a Form
1001 or 4224 further undertakes to deliver to each of Lessee and Certificate
Trustee two additional copies of such form (or a successor form) on or before
the date that such form expires (currently, three successive calendar years for
Form 1001 and one calendar year for Form 4224) or becomes obsolete or after the
occurrence of any event requiring a change in the most recent forms so delivered
by it, and such amendments thereto or extensions or renewals thereof as may be
reasonably requested by Lessee or Certificate Trustee, in each case certifying
that such Certificate Purchaser is entitled to receive payments under the
Operative Documents without deduction or withholding of any United States
Federal income taxes, unless an event (including any change
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in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Certificate Purchaser from duly completing and
delivering any such form with respect to it and such Certificate Purchaser
advises Lessee and Certificate Trustee that it is not capable of receiving
payments without any withholding of United States Federal income tax.
SECTION 7.4. Excessive Use Indemnity. If at the end of the Lease Term:
-----------------------
(a) Lessee elects the Sale Option; and (b) after paying to Lessor all amounts
due under Section 9.1, including Proceeds and the aggregate Sale Recourse
-----------
Amount, Lessor does not have sufficient funds to reduce the Lease Balance to
zero, then Lessee shall promptly pay over to Lessor the shortfall unless Lessee
delivers a report from an independent appraiser in form and substance reasonably
satisfactory to the Required Certificate Purchasers which establishes that the
decline in value in the Leased Property from the aggregate amount anticipated
for such date in the Appraiser's report delivered with respect to the Leased
Property on or about the Initial Advance Date was not due to the excessive use
of the Facility or the Leased Property, failure to maintain the Facility or the
Leased Property, modifications or restorations which reduce the value of the
Facility or the Leased Property, any adverse change in the environmental
condition of the Facility or the Leased Property, any easements created on the
Leased Property after the Initial Advance Date which reduce the value of the
Facility or the Leased Property, or any defect or exception to title of the
Facility or the Leased Property or any other cause or condition within the power
of Lessee to control or affect, differing from ordinary wear and tear.
SECTION 7.5. After-Tax Basis. If an Indemnitee shall not be entitled to
---------------
a corresponding and equal deduction or deductions with respect to any payment or
Tax which Lessee is required to pay or reimburse under any other provision of
this Section 7 (each such payment or reimbursement under this Section 7, an
--------- ---------
"original payment") and which original payment constitutes income to such
Indemnitee, then Lessee shall pay to such Indemnitee on demand the amount of
such original payment on a grossed-up basis such that, after subtracting all
Taxes imposed on such Indemnitee with respect to such original payment by Lessee
(including any Taxes otherwise excluded by Section 7.2(b) and assuming for this
--------------
purpose that such Indemnitee was subject to taxation at the highest Federal,
state and local marginal rates applicable to widely held corporations for the
year in which such income is taxable), such payments shall be equal to the
original payment to be received or paid (net of any credits, deductions or other
tax benefits then actually recognized that arise from the payment by such
Indemnitee of any amount, including taxes, for which the payment to be received
is made).
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SECTION 7.6. Proceedings in Respect of Claims. With respect to any
--------------------------------
amount that Lessee is requested by an Indemnitee to pay by reason of Section
-------
7.1, such Indemnitee shall, if so requested by Lessee and prior to any payment,
---
submit such additional information to Lessee as Lessee may reasonably request
and which is in the possession of such Indemnitee (or to which Indemnitee can
reasonably gain access without any cost to it) to substantiate properly the
requested payment.
In case any action, suit or proceeding shall be brought against any
Indemnitee, such Indemnitee shall timely notify Lessee of the commencement
thereof, and Lessee shall be entitled, at its expense, to participate in, and,
to the extent that Lessee desires to, assume and control the defense thereof;
provided, however, that Lessee shall have acknowledged in writing its obligation
-------- -------
to fully indemnify such Indemnitee in respect of such action, suit or proceeding
and Lessee shall keep such Indemnitee fully apprised of the status of such
action, suit or proceeding and shall provide such Indemnitee with all
information with respect to such action, suit or proceeding as such Indemnitee
shall reasonably request; and provided, further, that Lessee shall not be
-------- -------
entitled to assume and control the defense of any such action, suit or
proceeding if and to the extent that, (A) in the reasonable opinion of such
Indemnitee, (x) such action, suit or proceeding involves any risk of imposition
of criminal liability or any material risk of imposition of material civil
liability on such Indemnitee or will involve a material risk of the sale,
forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien)
on the Leased Property or any part thereof unless, in the case of civil
liability, Lessee shall have posted a bond or other security satisfactory to the
relevant Indemnitees in respect to such risk or (y) the control of such action,
suit or proceeding would involve an actual or potential conflict of interest,
(B) such proceeding involves Claims not fully indemnified by Lessee which Lessee
and the Indemnitee have been unable to sever from the indemnified Claim(s), or
(C) an Event of Default under the Lease has occurred and is continuing. The
Indemnitee may participate in a reasonable manner at its own expense and with
its own counsel in any proceeding conducted by Lessee in accordance with the
foregoing. Lessee shall not enter into any settlement or other compromise with
respect to any Claim which is entitled to be indemnified under Section 7.1
-----------
without the prior written consent of the Indemnitee which consent shall not be
unreasonably withheld or delayed in the case of a money settlement not involving
an admission of liability of such Indemnitee.
Each Indemnitee shall supply Lessee with all such information and documents
reasonably requested by Lessee as are necessary or advisable for Lessee to
participate in any action, suit or proceeding to the extent permitted by Section
-------
7.1 and Lessee shall reimburse the Indemnitee for the reasonable out-of-pocket
---
expenses
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of supplying such information and documents. Unless a Lease Event of Default
shall have occurred and be continuing, no Indemnitee shall enter into any
settlement or other compromise with respect to any Claim which is entitled to be
indemnified under Section 7.1 without the prior written consent of Lessee, which
-----------
consent shall not be unreasonably withheld, unless such Indemnitee waives its
right to be indemnified under Section 7.1 with respect to such Claim, does not
-----------
admit any criminal liability or civil liability on behalf of Lessee in
connection with such Claim, and uses reasonable efforts to advise Lessee on the
status of proceedings from time to time during the pendency of such Claim.
Upon payment in full of any Claim by Lessee pursuant to Section 7.1 to or
-----------
on behalf of an Indemnitee, Lessee, without any further action, shall be
subrogated to any and all claims that such Indemnitee may have relating thereto
(other than claims in respect of insurance policies maintained by such
Indemnitee at its own expense), and such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be necessary to preserve
any such claims and otherwise cooperate with Lessee and give such further
assurances as are necessary or advisable to enable Lessee vigorously to pursue
such claims.
Subject to Lessee's right to contest any such amount pursuant to the
provisions of Section 7.2(b), any amount payable to an Indemnitee pursuant to
--------------
Section 7.1 shall be paid to such Indemnitee promptly upon receipt of a written
-----------
demand therefor from such Indemnitee, accompanied by a written statement
describing in reasonable detail the basis for such indemnity and the computation
of the amount so payable.
SECTION 7.7. Funding Losses. For every LIBO Calculation Period, Lessee
--------------
shall reimburse each Certificate Purchaser for any loss, funding cost, loss of
earnings or expense incurred (including any loss, funding cost, loss of earnings
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Certificate Purchaser to make, continue or maintain
any portion of its investment hereunder or any of the other Operative Documents
on a LIBO Rate basis) as a result of (i) failure to prepay an amount for which
notice has previously been delivered, (ii) failure of any Advance Date to occur
on the date specified therefor in the applicable Advance Date Notice or (iii)
any payment of all or any portion of the Lease Balance for any reason on a date
other than a Payment Date. The applicable Certificate Purchaser shall promptly
notify Lessee in writing of the amount of any claim under this Section 7.7, the
-----------
reason or reasons therefor and the additional amount required fully to
compensate such Certificate Purchaser for such loss or expense. Such written
notice (which shall include calculations in reasonable detail) shall, in the
absence of manifest error, be conclusive and binding on Lessee.
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SECTION 7.8. Increased Cost.
--------------
(a) If there occurs a change in, or in the interpretation or
reinterpretation of, or a change in the application of, Regulation D of the
Board of Governors of the Federal Reserve System, as the same may be amended or
supplemented from time to time, or a change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase-in of, or a change in
the application of, any other requirement of law or regulation applicable to any
Certificate Purchaser, including, without limitation, the United States or any
state, county or political subdivision thereof, or any order, decree, request,
guideline, decision or directive (whether or not having the force of law) after
the date hereof from any central bank, regulator, court, monetary authority or
other governmental authority which:
(1) does or shall subject such Certificate Purchaser to any tax of
any kind whatsoever with respect to this Lease or any Advance or its
investment in the Trust, or change the basis of taxation of payments to
such Certificate Purchaser of principal, interest or other amount payable
hereunder (except for changes in the rate of tax on general income and
similar taxes on the overall net income of such Certificate Purchaser in
any jurisdiction); or
(2) does or shall impose, modify or hold applicable or change any
reserve, special deposit, Federal Deposit Insurance Corporation premium,
compulsory loan or similar requirement against assets held by, or deposits
or other liabilities in or for the account of, advances or loans by, or
other credit extended by, or any other acquisition of funds by, any office
of such Certificate Purchaser which are not otherwise included in the
determination of the LIBO Rate hereunder; or
(3) does or shall impose on such Certificate Purchaser any other
condition;
and the result of any of the foregoing is to increase the cost to such
Certificate Purchaser of making, renewing, converting or maintaining Advances,
or to reduce any amount receivable in respect of such Advances or its investment
in the Trust then, in any such case, Lessee shall promptly pay to such
Certificate Purchaser such additional amount which will compensate the
Certificate Purchaser for such additional cost or reduced amount receivable
which the Certificate Purchaser deems to be material as determined by the
Certificate Purchaser with respect to this Lease or the Advances hereunder or
its investment in the Trust.
(b) If a change described in subsection (a) above shall occur and
--------------
any Certificate Purchaser shall determine that
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compliance by such Certificate Purchaser with the affected law, governmental
rule, regulation or order of any jurisdiction applicable to such Certificate
Purchaser (including, without limitation, the United States or any state, county
or political subdivision thereof) regarding capital adequacy of banks or bank
holding companies, or any introduction, interpretation, reinterpretation,
effectiveness, phase-in, change in application or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Certificate
Purchaser with such request or directive regarding capital adequacy (whether or
not having the force of law and whether or not failure to comply therewith would
be unlawful) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on such Certificate
Purchaser's capital as a consequence of such Certificate Purchaser's obligations
hereunder to a level below that which such Certificate Purchaser could have
achieved but for such compliance (taking into consideration such Certificate
Purchaser's policies with respect to capital adequacy immediately before such
compliance and assuming that such Certificate Purchaser's capital was fully
utilized prior to such compliance) by an amount deemed by such Certificate
Purchaser to be material, then, upon demand, Lessee shall immediately pay to
such Certificate Purchasers as are so affected such additional amounts as shall
be sufficient to compensate such Certificate Purchasers for such reduced return,
together with interest on each such amount from four (4) Business Days after the
date demanded until payment in full thereof at the Overdue Rate. In determining
such amount, such Certificate Purchaser may use any reasonable averaging and
attribution methods. No liability or cost pursuant to this Section 7.8(b) shall
--------------
be incurred by Lessee prior to, or relating to any period before, the date that
Lessee receives a demand from a Certificate Purchaser under this Section 7.8(b).
--------------
(c) If a Certificate Purchaser becomes entitled to claim any additional
amounts pursuant to this Section 7.8, it shall promptly notify Lessee thereof.
-----------
A certificate as to any additional amounts payable to the foregoing submitted by
a Certificate Purchaser to Lessee shall be conclusive absent manifest error.
For purposes of the application of this Section 7.8, and in calculating the
amount necessary to compensate such Certificate Purchaser for any imposition of
or increase in capital requirements or taxes hereunder, such Certificate
Purchaser shall determine the applicability of this provision and calculate the
amount payable to it hereunder in a manner consistent with the manner in which
it shall apply and calculate similar compensation payable to it by other
borrowers having provisions in their credit agreements comparable to this
Section 7.8.
-----------
(d) If any Certificate Purchaser shall have exercised its rights under
this Section 7.8 and Lessee shall have paid all
-----------
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amounts owed to such Certificate Purchaser hereunder, then Lessee shall have the
right, at its own expense, to notify Certificate Trustee to require such
Certificate Purchaser, as of the end of any LIBO Calculation Period, to (i)
terminate its Certificate Purchaser Commitment or (ii) transfer and assign
without recourse (in accordance with and subject to the restrictions contained
in Section 11.6) all or a portion of its Certificate(s) to another financial
-------------
institution which shall assume the obligations thereunder; provided, that (A) no
--------
such termination or assignment shall conflict with any law, rule, regulation or
order of any Authority and (B) the Lessee or the assignee, as the case may be,
shall pay to the affected Certificate Purchaser in immediately available funds
on the date of such termination or assignment the principal of and Yield accrued
to the date of payment on the Certificate Purchaser Amount and all other amounts
accrued for its account or owed to it under the Operative Documents.
SECTION 7.9. LIBO Rate Illegal, Unavailable or Impracticable.
-----------------------------------------------
(a) If any Certificate Purchaser shall reasonably determine in good
faith (which determination shall, upon written notice thereof to Lessee, be
conclusive and binding on Lessee) that
(i) any requirement of law, regulation, order or decree of any
jurisdiction applicable to any Certificate Purchaser (including the United
States or any state, county or political subdivision thereof (or any
change therein or in the interpretation or application thereof) makes it
unlawful, or the central bank or other Authority asserts that it is
unlawful, for such Certificate Purchaser to make, continue or maintain any
amount of such Certificate Purchaser's investment in the Trust on a LIBO
Rate basis;
(ii) deposits in U.S. Dollars (in the applicable amounts) are not
being offered to such Certificate Purchaser or Lessor in the relevant
market for the applicable LIBO Calculation Period under this Lease, or
that by reason of circumstances affecting the interbank eurodollar market
adequate and reasonable means do not exist for ascertaining the applicable
LIBO Rate; or
(iii) the LIBO Rate will not adequately and fairly reflect the cost
to such Certificate Purchaser of maintaining or funding its investments in
the Trust for the applicable LIBO Calculation Period, or that the making
or funding of such Certificate Purchaser's investment or Advances on a
LIBO Rate basis has become impracticable as a result of an event occurring
after the date of this Lease which in the opinion of such Certificate
Purchaser materially changes such investment,
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then, in the circumstances described in clause (i) or clause (ii), the
---------- -----------
obligations of such Certificate Purchaser to make, continue or maintain any such
investment or loan on a LIBO Rate basis shall, upon such determination,
forthwith be suspended until such Certificate Purchaser shall notify Lessee that
such circumstances no longer exist (which notice shall be delivered promptly
after such Certificate Purchaser has actual knowledge that such circumstances no
longer exist), and the Yield Rate shall automatically be determined as provided
for under the Operative Documents by reference to the Alternate Base Rate
beginning on the next immediately succeeding Payment Date with respect thereto
or sooner, if required by such law, assertion or determination or, in the
circumstances covered by clause (iii), following notice to Lessee, which notice
------------
sets forth in detail the reasons for the giving of such notice, and following
the consent of Lessee, which consent shall not be unreasonably withheld, the
obligations of such Certificate Purchaser to make, continue or maintain any such
investment or loan on a LIBO Rate basis shall, following such consent, forthwith
be suspended until such Certificate Purchaser shall notify Lessee that such
circumstances no longer exist, and the Yield Rate shall be determined as
provided for under the Operative Documents by reference to the Alternate Base
Rate beginning on the next immediately succeeding payment date or otherwise as
the parties may agree.
(b) If any Certificate Purchaser shall have exercised its rights under
this Section 7.9 and Lessee shall have paid all amounts owed to such Certificate
-----------
Purchaser hereunder, then Lessee shall have the right, at its own expense, to
notify Certificate Trustee to require such Certificate Purchaser, as of the end
of any LIBO Calculation Period, to (i) terminate its Certificate Purchaser
Commitment or (ii) transfer and assign without recourse (in accordance with and
subject to the restrictions contained in Section 11.6) all or a portion of its
------------
Certificate(s) to another financial institution which shall assume the
obligations thereunder; provided, that (A) no such termination or assignment
--------
shall conflict with any law, rule, regulation or order of any Authority and (B)
the Lessee or the assignee, as the case may be, shall pay to the affected
Certificate Purchaser in immediately available funds on the date of such
termination or assignment the principal of and Yield accrued to the date of
payment on the Certificate Purchaser Amount and all other amounts accrued for
its account or owed to it under the Operative Documents.
SECTION 7.10. Indemnity Payments in Addition to Lease Obligations.
---------------------------------------------------
Lessee acknowledges and agrees that Lessee's obligations to make indemnity
payments under this Section 7 are separate from, in addition to, and do not
---------
reduce, Lessee's obligation to pay under the Lease the Lease Balance.
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SECTION 8. EVENTS OF DEFAULT; REMEDIES.
SECTION 8.1. Events of Default. The following shall constitute events of
-----------------
default of Lessee (each an "Event of Default") hereunder:
----------------
(a) Lessee shall fail to make payment of (i) any Rent when due and
such failure shall continue for a period of five (5) days, or (ii) any Purchase
Option Exercise Amount or Lease Balance;
(b) Lessee shall fail to make any payment of any other amount payable
under this Lease or any other Operative Document when due and payable and such
failure shall continue for a period of ten (10) days after such amount becomes
due and payable;
(c) Lessee shall fail to maintain insurance as required by
subsections (a), (b), (c) and (d) of Section 6.7 of this Lease;
--------------- --- --- --- -----------
(d) any statement, certificate, report, representation or warranty
made or furnished by Lessee in this Lease or in compliance with the provisions
hereof is incorrect, incomplete or misleading in any material respect when made,
deemed made or reaffirmed, as the case may be;
(e) Lessee defaults in the performance or observance of any term,
covenant, condition or agreement on its part to be performed or observed under
Section 5.9, Section 9, or Section 11.1(b);
----------- --------- ---------------
(f) Lessee defaults in the performance or observance of any other
term, covenant, condition or agreement on its part to be performed or observed
hereunder or under any other Operative Document (and not constituting an Event
of Default under any other clause of this Section 8.1), and such default
-----------
continues unremedied for a period of thirty (30) days after the earlier to occur
of (i) written notice thereof by Lessor or any Certificate Purchaser to Lessee,
or (ii) any officer of Lessee has knowledge thereof; provided, however, that if
such failure is capable of cure but cannot be cured by payment of money or
cannot be cured by diligent efforts within such 30-day period but such diligent
efforts shall be properly commenced within the cure period and Lessee is
diligently pursuing, and shall continue to pursue diligently, remedy of such
failure, the cure period shall be extended for an additional period of time as
may be necessary to cure not to exceed an additional thirty (30) days or the
Lease Termination Date.
(g) (i) Lessee and/or any Affiliate generally fails to pay, or admits
in writing its inability to pay, its debts as they
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become due, or voluntarily commences any case or proceeding or files any
petition under any bankruptcy, insolvency or similar law or seeking dissolution,
liquidation or reorganization or the appointment of a receiver, agent,
custodian, liquidator, trustee or any similar Person for itself or a substantial
portion of its property, assets or business or to effect a plan or other
arrangement with its creditors, or files any answer admitting the jurisdiction
of the court and the material allegations of any involuntary petition filed
against it in any bankruptcy, insolvency or similar case or proceeding, or is
adjudicated bankrupt or insolvent, or makes a general assignment for the benefit
of creditors, or consents to, or acquiesces in the appointment of, a receiver,
agent, custodian, liquidator, trustee or any similar Person for itself or a
substantial portion of its property, assets or business, or (ii) corporate
action is taken by Lessee for the purpose of effectuating, authorizing or
furthering any of the foregoing or (iii) Lessee and/or any Affiliate has an
order for relief entered against it in any proceeding under the Bankruptcy Code;
(h) involuntary proceedings or an involuntary petition are commenced or
filed against Lessee and/or any Affiliate under any bankruptcy, insolvency or
similar law or seeking the dissolution, liquidation or reorganization of Lessee
and/or any Affiliate or the appointment of a receiver, agent, custodian,
liquidator, trustee or other similar Person for Lessee and/or any Affiliate or
of a substantial part of the property, assets or business of Lessee and/or any
Affiliate, or any writ, judgment, warrant of attachment, execution or similar
process is issued or levied against a substantial part of the property, assets
or business of Lessee and/or any Affiliate, and such proceedings or petition are
not dismissed or stayed, or such writ, judgment, warrant of attachment,
execution or similar process is not released, vacated or fully bonded, within
sixty (60) days after commencement, filing or levy, as the case may be;
(i) if (1) any Employee Benefit Plan shall cease to have "qualified"
---------
status under Section 401(a) of the Code, (2) the minimum funding standards
applicable to any Employee Benefit Plan under Section 412 of the Code or Section
302 of ERISA shall not be complied with, (3) any excise tax or tax lien shall be
incurred in connection with any Employee Benefit Plan and the administration
thereof, (4) any claim shall be incurred with respect to any Employee Benefit
Plan other than in the ordinary operation of such plan, (5) any "prohibited
----------
transaction" as defined by Section 4975 of the Code or Section 406 of ERISA
-----------
shall have occurred, (6) any liability (other than for the payment of required
premiums) shall be incurred to the PBGC, (7) any withdrawal liability shall be
incurred with respect to a Multiemployer Plan, (8) any liability shall be
incurred in connection with a failure to make timely reports and filings with
respect to Employee Benefit Plans, or (9) any other thing shall have occurred
with respect to any Employee
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Benefit Plan, the result of which (in any one of the foregoing clauses (1)
-----------
through (8), any combination of said clauses or otherwise) is that Lessee or
---
any Subsidiary, in the reasonable judgment of the Required Certificate
Purchasers, has or is likely to incur liabilities (whether the liability is
direct or indirect, current or deferred, fixed or contingent) of $10,000,000 or
more;
(j) any Operative Document or the security interest and lien granted under
this Lease (except in accordance with its terms), in whole or in material part,
terminates, ceases to be effective or ceases to be the legally valid, binding
and enforceable obligation of Lessee, or Lessee or any of its Affiliates,
directly or indirectly, contests in any manner in any court the effectiveness,
validity, binding nature or enforceability thereof; or the security interest and
lien securing Lessee's obligations under the Operative Documents, in whole or in
part, ceases to be a perfected first priority security interest and lien;
(k) an event of default shall occur with respect to any obligation(s) of
Lessee and/or any Subsidiary in excess of $15,000,000, individually or in the
aggregate (as principal or guarantor or other surety), to any person for
borrowed money;
(l) a judgment or judgments for the payment of money are entered by a
court or courts of competent jurisdiction against Lessee or any of its
Affiliates or any attachments against any of their assets or property shall
exist, and such judgment, judgments or attachments remain undischarged or
unstayed or unpaid or undismissed or unbonded for a period (during which
execution shall not be effectively stayed) of thirty (30) days; provided, that
--------
the aggregate of all such judgments and attachments exceeds $10,000,000 the
extent such judgments are not covered by valid and collectible insurance from
solvent, unaffiliated insurers);
(m) if (1) any person or group within the meaning of (S)13(d)(3) of the
Securities Exchange Act and the rules and regulations promulgated thereunder
shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of
the Securities Exchange Act), directly or indirectly, of securities of Lessee
(or other securities convertible into such securities) representing twenty
percent (20%) of the combined voting power of all securities of Lessee entitled
to vote in the election of directors, other than securities having such power
only by reason of the happening of a contingency (hereinafter called a
"Controlling Person"); or (2) a majority of the Board of Directors of Lessee
------------------
shall cease for any reason to consist of (A) individuals who on the date of this
Lease were serving as directors of Lessee and (B) individuals who subsequently
become members of the Board of Directors if such individuals' nomination for
election or election to the Board of Directors is recommended or approved by a
majority of the Board of Directors of Lessee. For purposes of
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clause (1) above, a person or group shall not be a Controlling Person if such
----------
person or group holds voting power in good faith and not for the purpose of
circumventing this Section 8.1(m) as an agent, bank, broker, nominee, trustee,
--------------
or holder of revocable proxies given in response to a solicitation pursuant to
the Securities Exchange Act, for one or more beneficial owners who do not
individually, or, if they are a group acting in concert, as a group have the
voting power specified in clause (1);
----------
(n) the construction of the Financed Improvements does not attain
Substantial Completion on or before the Construction Completion Date; and
(o) there shall be any tenant or occupant of any part of the Land
or the Facility (other than Lessee or any permitted subtenant pursuant to
Section 5.9); provided that the occupancy of a portion of the Facility by
----------- --------
Inacom Business Centers, Inc. shall not be an Event of Default provided Inacom
Business Centers, Inc. vacates the Facility on or before March 31, 1997.
SECTION 8.2. Remedies. Upon the occurrence of an Event of Default, at
--------
Lessor's option and without limiting Lessor in the exercise of any other right
or remedy Lessor may have on account of such default (including, without
limitation, the obligation of Lessee to purchase the Leased Property as set
forth below), and without any further demand or notice, Lessor may cause the
following to occur:
(i) By notice to Lessee, Lessor may terminate Lessee's right to
possession of the Leased Property. A notice given in connection with
unlawful detainer proceedings specifying a time within which to cure a
default shall terminate Lessee's right to possession if Lessee fails to
cure the default within the time specified in the notice.
(ii) Upon termination of Lessee's right to possession and without
further demand or notice, Lessee shall surrender possession and vacate the
Leased Property and deliver possession thereof, and Lessor may re-enter the
Leased Property and remove any Persons in possession thereof.
(iii) Lessor may terminate this Lease and declare the aggregate
outstanding Lease Balance to be immediately due and payable, and Lessor
shall be entitled to (x) recover from Lessee the following amounts and (y)
take the following actions:
(A) Lessee shall pay all accrued and unpaid Rent hereunder
(including, without limitation, Basic Rent and Supplemental Rent)
through the Final Rent Payment Date;
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(B) Lessor may elect either of the following:
(1) Lessor may demand, by written notice to Lessee
specifying a Payment Date (the "Final Rent Payment Date") not
-----------------------
earlier than ten (10) days after the date of such notice, that
Lessee pay to Lessor, and Lessee shall pay to Lessor, on the
Final Rent Payment Date (in lieu of Basic Rent due after the
Final Rent Payment Date), an amount equal to the sum of (A) the
Lease Balance computed as of the Final Rent Payment Date, plus
(B) all accrued and unpaid Rent due and unpaid to and including
the Final Rent Payment Date, and upon payment of such amount, and
the amount of all other sums due and payable by Lessee under this
Lease and the other Operative Documents (and interest at the
Overdue Rate on the amounts payable under this clause (B)(1) from
-------------
the Final Rent Payment Date to the date of actual payment),
Lessor shall transfer by special warranty deed to Lessee all of
Lessor's right, title and interest in and to the Leased Property
without recourse or warranty, but free and clear of Lessor Liens;
or
(2) Lessor may sell its interest in the Leased Property, in
which event Lessee shall pay to Lessor an amount equal to the
excess, if any, of (x) all amounts due Lessor under clause (B)(1)
-------------
above over (y) the net sale proceeds received by Lessor from the
foregoing sale (provided, that in calculating such net sale
proceeds, all expenses and taxes incurred by Lessor or any of the
Certificate Purchasers in connection with such sale, including,
without limitation, legal fees, shall be deducted from such sales
proceeds);
(C) Any other amount reasonably necessary to compensate Lessor
for all the detriment proximately caused by Lessee's failure to
perform Lessee's obligation under this Lease or which in the ordinary
course of things would be likely to result therefrom, including, but
not limited to, the costs and expenses (including without limitation,
reasonable attorneys' fees, advertising costs and brokers'
commissions) of recovering possession of the Leased Property, removing
Persons or property therefrom, placing the Leased Property in good
order, condition, and repair, preparing and altering the Leased
Property for reletting, and all other costs and expenses of reletting;
and
(D) Such other reasonable amounts in addition to
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or in lieu of the foregoing as may be permitted from time to time by
Applicable Law.
(iv) Lessor may enforce the Lien given hereunder pursuant to Section
13.1 hereof, the UCC or any other law.
(v) If Lessee has breached this Lease, this Lease shall continue in
effect for so long as Lessor does not terminate this Lease, and Lessor may
enforce all of Lessor's rights and remedies under this Lease, including the
right to recover the Rent hereunder (including, without limitation, Basic
Rent and Supplemental Rent) as it becomes due under this Lease. Lessee's
right to possession shall not be deemed to have been terminated by Lessor
except pursuant to clause (i) or clause (iii) above. The following do not
---------- ------------
constitute a termination of this Lease:
(A) Acts of maintenance or preservation or efforts to relet the
Leased Property;
(B) The appointment of a receiver upon the initiative of Lessor
to protect Lessor's interest under this Lease;
(C) Withholding of consent to an assignment or subletting, or
terminating a subletting or assignment by Lessee.
(vi) If Lessor elects to continue this Lease in full force and effect
following the termination of Lessee's right of possession, Lessor, to the
maximum extent permitted by Applicable Law, may enforce all its rights and
remedies under this Lease, including, but not limited to, the right to
recover Rent hereunder as it becomes due. During the continuance of an
Event of Default or following the termination of Lessee's right to
possession, Lessor may enter the Leased Property in accordance with
Applicable Law without terminating this Lease and sublet all or any part of
the Leased Property for Lessee's account to any Person, for such term
(which may be a period beyond the remaining Lease Term), at such rents and
on such other terms and conditions as are commercially reasonable. In the
event of any such subletting, rents received by Lessor from such subletting
shall be applied (A) first, to the payment of the costs incurred by Lessor
in maintaining, preserving, altering and preparing the Leased Property for
subletting and other costs of subletting, including, but not limited to,
brokers' commissions and attorneys' fee; (B) second, to the payment of Rent
hereunder then due and payable; (C) third, to the payment of future Rent
hereunder as the same may become due and payable hereunder; (D) fourth, to
the payment of all other obligations of Lessee hereunder, and (E) fifth,
the
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balance, if any, shall be paid to Lessee upon (but not before) expiration
of the Lease Term. If the rents received by Lessor from such subletting,
after application as provided above, are insufficient in any period to pay
the Rent due and payable hereunder for such period, Lessee shall pay such
deficiency to Lessor upon demand. Notwithstanding any such subletting for
Lessee's account without termination, Lessor may at any time thereafter, by
written notice to Lessee, elect to terminate this Lease.
(vii) Lessor may, with or without entering upon and taking possession
of the Leased Property, (A) direct, or cause Lessee to direct, all tenants
or other obligors under all leases to pay all rents directly to Lessor, (B)
collect all rents as the same become due and payable, (C) take such action
as Lessor shall deem necessary or desirable in order to enforce the
provisions of any lease and (D) amend, modify, extend, enter into or
terminate any lease or waive performance by any tenant or other obligor
thereunder of any provision thereof, in the name of Lessee or otherwise.
(viii) Lessor may exercise any other right or remedy that may be
available to it under Applicable Law or in equity, or proceed by
appropriate court action (legal or equitable) to enforce the terms or to
recover damages for the breach hereof. Separate suits may be brought to
collect any such damages for any Rent installment period(s), and such suits
shall not in any manner prejudice Lessor's right to collect any such
damages for any subsequent Rent installment period(s), or Lessor may defer
any such suit until after the expiration of the Basic Term or any Renewal
Term, in which event such suit shall be deemed not to have accrued until
the expiration of the Basic Term or such Renewal Term.
(ix) Lessor may retain and apply against Lessor's damages all sums
which Lessor would, absent such Event of Default, be required to pay to, or
turn over to, Lessee pursuant to the terms of this Lease.
SECTION 8.3. Proceeds of Sale; Deficiency. All payments received and
----------------------------
amounts held or realized by Lessor at any time when an Event of Default shall
exist and after the Lease Balance shall have been accelerated pursuant to
Section 8 as well as all payments or amounts then held or thereafter received
---------
by Lessor (except for rents received by Lessor from subletting pursuant to
Section 8.2(vi), which shall be distributed as set forth therein) and the
---------------
proceeds of sale pursuant to this Section 8.3, shall be distributed forthwith
-----------
upon receipt by Lessor in accordance with Article III of the Trust Agreement.
SECTION 8.4. Grant and Foreclosure on Lessee's Estate. Without limiting
----------------------------------------
any other remedies set forth in this Lease, if a
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court of competent jurisdiction rules that this Lease constitutes a mortgage or
other secured financing as is the intent of the parties, the following shall
apply:
(i) Lessor and Lessee agree that upon the occurrence of an Event of
Default, Lessor may proceed by a suit or suits in equity or at law, whether for
a foreclosure hereunder or against Lessee on a recourse basis for the Lease
Balance and all other amounts due from Lessee hereunder, or for the specific
performance of any covenant or agreement herein contained or in aid of the
execution of any power herein granted, or for the appointment of a receiver
pending any foreclosure hereunder or for the enforcement of any other
appropriate legal or equitable remedy, and at any foreclosure sale Lessor may
become the purchaser, and in such case for the purpose of making settlement for
or payment of the purchase price, shall be entitled to offset any claims for the
indebtedness hereunder and under the Operative Documents in order that they may
be credited as paid on the purchase price;
(ii) This instrument will be deemed given to secure not only existing
indebtedness, but also future advances, whether such advances are obligatory or
to be made at the option of Lessor or the Certificate Purchasers or otherwise,
to the same extent as if such future advances were made on the date of execution
of this instrument. To the fullest extent permitted by law, the Lien of this
instrument shall be valid as to all such indebtedness, including all future
advances, from the time this instrument is recorded. Notwithstanding anything
in this instrument to the contrary, the maximum principal amount of indebtedness
secured by this instrument at any one time shall not exceed Forty Million and
No/100 Dollars ($40,000,000), plus all costs of enforcement and collection of
this instrument, the Certificates and the other Operative Documents, plus the
total amount of any advances made pursuant thereto to protect the collateral and
the security interest and Lien created hereby, together with interest on all of
the foregoing as provided in the Operative Documents.
(iii) Without in any way limiting or restricting any of Lessor's
rights, remedies, powers and authorities under this instrument, and in addition
to all of such rights, remedies, powers, and authorities, Lessor shall also have
and may exercise any and all rights, remedies, powers and authorities which the
holder of a mortgage is permitted to have or exercise under the provisions of
Pennsylvania Procedural Rules 1141 to 1148, both inclusive (herein, as amended
and as it may hereafter be amended from time to time, called the "Act"). Without
---
limiting the generality of the foregoing, all expenses incurred by Lessor to the
extent reimbursable under any provision of the Act, whether incurred before or
after any decree or judgment of foreclosure, and whether or not enumerated in
any other provision of this instrument, shall be added to the indebtedness
secured by this instrument and by the judgment of foreclosure.
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(iv) Lessee, on behalf of itself and all Persons now or hereafter
interested in the Leased Property, voluntarily and knowingly hereby:
acknowledges that the transaction of which this Lease is a part is a transaction
which does not include either agricultural real estate (as defined in the Act),
or residential real estate (as defined in the Act); waives to the fullest extent
permitted by applicable law any and all rights to reinstatement or redemption
and any and all other rights under all present and future appraisement,
homestead, moratorium, valuation, exemption, stay, extension, and redemption
statutes, laws or equities now or hereafter existing, and hereby further waives
the pleading of any statute of limitations as a defense to any and all
indebtedness secured by this instrument, and Lessee agrees that no defense,
claim or right based on any thereof will be asserted, or may be enforced, in any
action enforcing or relating to this instrument. Without limiting the generality
of the preceding sentence, Lessee, on its own behalf and on behalf of each and
every Person acquiring any interest in or title to the Leased Property
subsequent to the date of this instrument, hereby irrevocably waives any and all
rights of reinstatement or redemption from sale under any order, judgment or
decree of foreclosure of this instrument or under any power contained herein or
under any sale pursuant to any statute, order, judgment or decree of foreclosure
of any court.
SECTION 8.5. Remedies Cumulative; No Waiver; Consents. To the extent
----------------------------------------
permitted by, and subject to the mandatory requirements of, Applicable Law, each
and every right, power and remedy herein specifically given to Lessor or
otherwise in this Lease shall be cumulative and shall be in addition to every
other right, power and remedy herein specifically given or now or hereafter
existing at law, in equity or by statute, and each and every right, power and
remedy whether specifically herein given or otherwise existing may be exercised
from time to time and as often and in such order as may be deemed expedient by
Lessor, and the exercise or the beginning of the exercise of any power or remedy
shall not be construed to be a waiver of the right to exercise at the same time
or thereafter any right, power or remedy. No delay or omission by Lessor in the
exercise of any right, power or remedy or in the pursuit of any remedy shall
impair any such right, power or remedy or be construed to be a waiver of any
default on the part of Lessee or be an acquiescence therein. Lessor's consent to
any request made by Lessee shall not be deemed to constitute or preclude the
necessity for obtaining Lessor's consent, in the future, to all similar
requests. No express or implied waiver by Lessor of any Event of Default shall
in any way be, or be construed to be, a waiver of any future or subsequent
Default or Event of Default. To the extent permitted by Applicable Law, Lessee
hereby waives any rights now or hereafter conferred by statute or otherwise that
may require Lessor to sell, lease or otherwise use the Leased Property or any
part thereof in
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mitigation of Lessor's damages upon the occurrence of an Event of Default or
that may otherwise limit or modify any of Lessor's rights or remedies under
this Section 8.
---------
SECTION 8.6. Power of Attorney. Lessee unconditionally and irrevocably
-----------------
appoints Lessor as its true and lawful attorney-in-fact, with full power of
substitution, to the extent permitted by Applicable Law, in its name and stead
and on its behalf, for the purpose of effectuating any sale, assignment,
transfer or delivery hereunder, if an Event of Default occurs, whether pursuant
to foreclosure or power of sale or otherwise, and in connection therewith to
execute and deliver all such deeds, bills of sale, assignments, releases
(including releases of this Lease on the records of any Authority) and other
proper instruments as Lessor may reasonably consider necessary or appropriate.
Lessee ratifies and confirms all that such attorney or any substitute shall
lawfully do by virtue hereof. If requested by Lessor or any purchaser, Lessee
shall ratify and confirm any such lawful sale, assignment, transfer or delivery
by executing and delivering to Lessor or such purchaser all deeds, bills of
sale, assignments, releases and other proper instruments to effect such
ratification and confirmation as may be designated in any such request.
SECTION 9. LEASE TERMINATION.
SECTION 9.1. End of Term Options. At least 270 days before the last day
-------------------
of the Basic Term or the first Renewal Term, if effective, Lessee shall, by
delivery of written notice to Lessor and the Certificate Purchasers, exercise
one of the following options:
(a) subject to Section 4.3(b), renew this Lease with respect to all,
--------------
but not less than all, of the Leased Property then subject hereto for an
additional five-year Renewal Term (the "Renewal Option") on the terms and
--------------
conditions set forth herein and in the other Operative Documents, including
Lessee's obligation to pay Rent, including Basic Rent, during the Renewal Term
on each Payment Date occurring during such Renewal Term; however, such Renewal
-------
Option shall not be available at the end of the second Renewal Term; or
--
(b) purchase for cash for the Purchase Option Exercise Amount all,
but not less than all, of the Leased Property then subject to this Lease on the
last day of the Basic Term or Renewal Term, as applicable (the "Purchase
--------
Option"); and if Lessee shall have elected to purchase the Leased Property,
------
Lessor shall, upon the payment to Lessor of the Purchase Option Exercise Amount
then due and payable by Lessee under the Operative Documents, transfer by
special warranty deed all of Lessor's right, title and interest in and to the
Leased Property to Lessee or its designee, without recourse or warranty (except
as to the absence of Lessor Liens and
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such other matters contained in the special warranty deed); or
--
(c) subject to the satisfaction of the conditions set forth in
Section 9.5 and if no Default or Event of Default exists on or prior to the
-----------
Lease Termination Date, sell on behalf of Lessor for cash to a purchaser not in
any way affiliated with Lessee all, but not less than all, of the Leased
Property then subject to this Lease on the last day of the Basic Term or Renewal
Term, as applicable (the "Sale Option"). Simultaneously with a sale pursuant to
-----------
the Sale Option, Lessee shall pay to Lessor (i) all accrued and unpaid Rent, if
any, plus all other amounts, fees and expenses then due and payable under the
Operative Documents (other than the Lease Balance) and (ii) as Supplemental
Rent, from the gross proceeds of the sale of the Leased Property, without
deductions or expense reimbursements (the "Proceeds"), the aggregate outstanding
--------
Lease Balance as of the Lease Termination Date. If the Proceeds exceed the
aggregate outstanding Lease Balance and such other amounts are paid, Lessee will
retain the portion of the Proceeds in excess thereof. If the Proceeds are less
than the aggregate outstanding Lease Balance, Lessee will pay or will cause to
be paid to Lessor, as Supplemental Rent, on the Lease Termination Date, in
addition to the Proceeds and the other amounts referred to in clause (i) above,
----------
the Sale Recourse Amount, it being understood, however, that the amount payable
pursuant to this Section 9.1(c) shall in no event be construed to limit any
--------------
other obligation of Lessee under the Operative Documents, including, without
limitation, pursuant to Section 6, Section 7.7, Section 9.5 and Section 14.1.
--------- ----------- ----------- -------------
The "Sale Recourse Amount" shall be the lesser of (i) the Applicable Percentage
Amount and (ii) the excess of the aggregate outstanding Lease Balance over
Proceeds. The obligation of Lessee to pay the amounts provided in this Section
-------
9.1(c) shall be a recourse obligation of Lessee and shall be payable on the
------
Lease Termination Date.
SECTION 9.2. Election of Options. To the extent that the Renewal Option
-------------------
is available, unless Lessee shall have affirmatively elected in accordance
herewith the Purchase Option or the Sale Option, Lessee shall be deemed to have
elected the Renewal Option. To the extent that the Renewal Option is not
available, unless Lessee shall have affirmatively elected the Sale Option,
Lessee shall be deemed to have elected the Purchase Option. Lessee's
election of the Purchase Option shall be irrevocable at the time made. In
addition, Lessee may not elect the Sale Option if there exists on the date the
election is made a Default or an Event of Default and the Sale Option shall
automatically be revoked if there exists a Default or Event of Default at any
time after the Sale Option is properly elected and Lessor shall be entitled to
exercise all rights and remedies provided in Section 8.
---------
SECTION 9.3. Sale Option Procedures. If Lessee elects the Sale Option,
----------------------
Lessee shall use its best efforts as nonexclusive
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agent for Lessor to obtain the highest all cash purchase price for the purchase
of the Leased Property, and if Lessee receives any bid, Lessee shall within five
(5) Business Days after receipt thereof, and at least twenty (20) Business Days
prior to the Lease Termination Date, certify to Lessor in writing the amount and
terms of such bid, the name and address of the party or parties (who shall not
be Lessee or any Affiliate of Lessee or any Person with whom Lessee has an
understanding or arrangement regarding the future use of the Leased Property by
Lessee or any Affiliate or Subsidiary thereof, but who may be Lessor, any
Certificate Purchaser, any Affiliate thereof, or any Person contacted by
Certificate Purchaser) submitting such bid. Lessee shall bear its own expenses
and pay, as Supplemental Rent, the expenses of Lessor and each Certificate
Purchaser in connection with any such bidding and sale process pursuant to this
Section 9.3 as well as all costs and expenses incurred by any party (including a
-----------
buyer or potential buyer) to place the Leased Property in the condition required
by Section 5.1 and costs of repair and alterations for improvements desired by
-----------
such buyer. None of the foregoing costs or expenses shall be deducted from
Proceeds. After Lessee shall have certified to Lessor all bids received, any
Certificate Purchaser, any Affiliate thereof, or any Person contacted by any
Certificate Purchaser may submit a further bid or bids to Lessee not later than
five (5) Business Days prior to the Lease Termination Date. On or before the
Lease Termination Date, so long as no Event of Default or Default exists: (i)
Lessee shall transfer all of Lessee's right, title and interest in the Leased
Property, or cause the Leased Property to be so transferred, to the bidder(s),
if any, which shall have submitted the highest bid therefor at least twenty (20)
(or in the case of a Certificate Purchaser, any Affiliate thereof or Person
contacted by a Certificate Purchaser, five (5)) Business Days prior to such
Lease Termination Date, in the condition required and otherwise in accordance
with all of the terms of this Lease; (ii) subject to the prior or current
payment by Lessee of all amounts due under clause (iii) of this sentence, Lessor
------------
shall transfer by special warranty deed (without recourse or warranty, except as
to the absence of Lessor Liens and such other matters contained in the special
warranty deed) Lessor's right, title and interest in and to the Leased Property
for cash to such bidders; and (iii) Lessee shall simultaneously pay to Lessor
all of the amounts contemplated in Section 9.1(c). All costs related to such
--------------
sale and delivery, including the cost of sales agents, removal of the
improvements, delivery of documents, filing and documentary transfer fees, title
insurance, certification and testing of the Leased Property, legal costs, costs
of notices, any advertisement or other similar costs, or other information and
of any parts, configurations, repairs or modifications desired by a buyer or
prospective buyer shall be borne entirely by Lessee, without regard to whether
such costs were incurred by Lessor, Lessee or any potentially qualified buyer,
and shall in no event be paid from any of the Proceeds. Neither Lessor nor any
Certificate Purchaser shall have any
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responsibility for procuring any purchaser.
SECTION 9.4. Appraisals. If Lessee exercises the Sale Option and any
----------
Certificate Purchaser reasonably expects that the Proceeds from the sale of the
Leased Property will be less than 30% of the outstanding Lease Balance at the
Lease Termination Date, Lessor (upon direction from any Certificate Purchaser)
shall engage the Appraiser, at Lessee's expense, to determine (by appraisal
methods satisfactory to the Required Certificate Purchasers) the Fair Market
Value of the Leased Property then subject to this Lease as of the Lease
Termination Date. In addition, if the Appraiser concludes that the Fair Market
Value of such Leased Property as of the Lease Termination Date was in excess of
the aggregate Proceeds from the sale of Leased Property, Lessee shall promptly
pay to Lessor, as Supplemental Rent, such excess, which together with such
Proceeds and the Sale Recourse Amount so paid to Lessor shall not exceed the
Lease Balance determined immediately before the application of the foregoing
amounts.
SECTION 9.5. Return of Leased Property. Unless the Leased Property shall
-------------------------
have been transferred to Lessee pursuant to Section 9.1(b), Lessee shall, on the
--------------
Lease Termination Date and at its own expense, transfer the Leased Property to
the independent purchaser thereof pursuant to Section 9.3, free and clear of all
-----------
Liens other than Permitted Exceptions and Lessor Liens, in the condition
required by Section 5 and in any event in as good a condition as it was on the
---------
Initial Advance Date and on the date of Substantial Completion of the Financed
Improvements to the Facility (as modified by the Financed Improvements and any
other Alterations permitted by this Lease), ordinary wear and tear excepted, and
in compliance with all Applicable Law (determined immediately prior to such
transfer; and in any event without (x) any asbestos installed or maintained in
any part of the Leased Property, (y) any polychlorinated biphenyls (PCBs) in, on
or used, stored or located at the Leased Property, and (z) any other Hazardous
Materials). Lessee shall cooperate with the independent purchaser of the Leased
Property in order to facilitate the ownership and operation by such purchaser of
the Leased Property after the Lease Termination Date, including providing all
books, reports and records regarding the maintenance, repair and ownership of
the Leased Property and all know-how, data and technical information relating
thereto, granting or assigning all licenses necessary for the operation and
maintenance of the Leased Property and cooperating in seeking and obtaining all
necessary Government Action. Lessee also shall have paid the total cost for the
completion of the Financed Improvements and of all Alterations commenced prior
to the Lease Termination Date, and the construction of the Financed Improvements
and all Alterations shall have been completed prior to such date. Lessee shall
have completed all restoration and repair work in compliance with Section 6.4
-----------
and Section 5.1 prior to the Lease Termination Date.
-----------
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The obligations of Lessee under this Section 9.5 shall survive the expiration or
-----------
termination of this Lease. Unless Lessee shall have exercised or been deemed to
have exercised its option to purchase the Leased Property, not less than 270
days prior to the Lease Termination Date, Lessor shall at Lessee's expense be
entitled to perform such investigation, including obtaining reports of engineers
and other experts as to the condition and state of repair and maintenance
required by this Section 9.5 and as to the compliance with Environmental Laws of
-----------
the Leased Property, as it deems appropriate. Lessee, at its sole cost and
expense, shall cause the repair or other remediation of any discrepancies
between the actual condition of the Leased Property and the condition required
under this Lease, such repair or remediation to be completed not later than the
Lease Termination Date.
SECTION 9.6. Early Termination. On any Payment Date after the eighth
-----------------
(8th) scheduled Payment Date, Lessee may, upon at least sixty (60) days' prior
written notice to Lessor and the Certificate Purchasers, purchase all of the
Leased Property by paying to Lessor on such Payment Date the aggregate
outstanding Lease Balance, together with all accrued unpaid Rent to the date of
repayment and all other amounts then due and payable under the Operative
Documents. Upon receipt of such amounts, Lessor shall transfer by special
warranty deed all of Lessor's right, title and interest in and to the Leased
Property to Lessee or its designee, without recourse or warranty (except as to
the absence of Lessor Liens and such other matters contained in the special
warranty deed).
SECTION 10. REPRESENTATIONS AND WARRANTIES.
SECTION 10.1. Representations and Warranties of Lessee. As of the date
----------------------------------------
hereof, the Lease Commencement Date and each Advance Date, Lessee makes the
representations and warranties set forth in this Section 10.1 to Lessor, Bank
------------
and each Certificate Purchaser.
(a) General Matters. Lessee hereby represents and warrants that:
---------------
(i) Lessee is a corporation duly organized, validly existing and in
good standing under the laws of Ohio, and is qualified to do business in,
and is in good standing in, Pennsylvania and each other state or other
jurisdiction in which the nature of its business or activities makes such
qualification necessary.
(ii) Lessee has the corporate power and authority to conduct its
business as presently conducted and as presently proposed to be conducted,
to own or hold under lease its properties, to execute, deliver and perform
this Lease and each other Operative Document and each other agreement,
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instrument and document to be executed and delivered by it in connection
therewith, and to lease the Leased Property from Lessor under this Lease,
and no such transaction will violate any Applicable Law.
(iii) the leasing of the Leased Property by Lessee from Lessor under
this Lease, the execution and delivery of each Operative Document and other
related instruments, documents and agreements, and the compliance by Lessee
with the terms hereof and thereof, and the payments and performance by
Lessee of all of its obligations hereunder and thereunder (A) have been
duly and legally authorized by proper corporate proceedings (including any
necessary shareholder action) on its part; (B) are not in contravention of,
and will not result in a violation or breach of, any of the terms of
Lessee's corporate charter or by-laws; (C) do not and will not violate or
constitute a breach of any material provision of Applicable Law, and do not
and will not violate, conflict with or constitute (with or without notice
or lapse of time or both) a default under any indenture, agreement, lease
or other instrument to which Lessee is a party or by or under which Lessee
or any of Lessee's property is bound or affected; (D) do not and will not
result in the creation or imposition of any Lien upon any of Lessee's
property or assets; and (E) do not and will not require any Government
Action by any Authority, except for (x) the filings and recordings listed
on Exhibit F to perfect the rights of Lessor intended to be created by the
---------
Operative Documents, and (y) those Government Actions required with respect
to Lessee or any of its Affiliates listed on Exhibit N, each of which have
---------
been duly effected and are, or on the Initial Advance Date will be, in full
force and effect; and Lessee is not in default under or in violation of its
charter or by-laws.
(iv) this Lease and the other Operative Documents have been, or when
delivered in accordance with the terms hereof and thereof will have been,
executed by the duly authorized officer or officers of Lessee and delivered
to Lessor and the Certificate Purchasers and constitute, or will
constitute, the legal, valid and binding obligations of Lessee, enforceable
against Lessee in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally and
by general principles of equity.
(v) neither the execution and delivery of any Operative Document by
Lessee, nor the payment and performance by Lessee of its obligations
hereunder and thereunder, requires the consent or approval of, the giving
of notice to, or the registration, filing or recording with, or the taking
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of any other action in respect of, any Authority or any other Person other
than as the same may be required herein.
(vi) neither Lessee nor any of its Affiliates has granted, nor will
they grant, any Lien on any of the Leased Property or this Lease, to any
Person other than Lessor, and no Lien, other than the Lien granted to
Lessor hereunder (and any Lien hereafter granted by Lessor) and Permitted
Liens, has attached to any of the Leased Property or this Lease, or in any
manner has affected adversely Lessor's rights and security interest
therein.
(vii) except as described in Exhibit O hereof, there is no action,
---------
proceeding or investigation pending or, to the best of Lessee's knowledge,
threatened which questions the validity of the Operative Documents to
which Lessee is a party or any action taken or to be taken pursuant to the
Operative Documents to which Lessee is a party or with respect to the
Leased Property or any present or intended future use thereof, which
violations and instances of non-compliance described in Exhibit O could
---------
not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, and Lessee is not aware of any circumstances
which could give rise to the commencement of any such action, proceeding
or investigation, or issuance of any notice, complaint or order, and there
is no action, proceeding, notice, complaint, order of violation or non-
compliance, or investigation pending or, to the best of Lessee's
knowledge, threatened against or affecting Lessee in any court or before
any regulatory commission, board or other administrative Authority which,
if decided adversely to Lessee, would have a Material Adverse Effect.
(viii) Lessee has heretofore furnished to the Certificate Purchasers
(a) consolidated balance sheets of Lessee and its Subsidiaries as at
September 30, 1996 and September 30, 1995 and the related consolidated
statements of income and retained earnings, with a report thereon by Ernst
& Young, independent certified public accountants, stating in comparative
form the amounts for the corresponding dates and periods for the previous
fiscal year. Such balance sheets and such statements of income and
retained earnings fairly present the consolidated financial condition of
Lessee and its Consolidated Subsidiaries as of the dates thereof and the
results of their operations for the periods then ended, and (b) the pro
forma consolidated balance sheets of Lessee and its Subsidiaries as of
September 30, 1996 and the related statements of income and retained
earnings, assuming the spin-off of Unisource Worldwide, Inc. to the
shareholders of Lessee as of such date.
All such financial statements were prepared in
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accordance with GAAP. Since September 30, 1996, there has not been any
Material Adverse Effect with respect to the financial condition, business
or operations of Lessee and its Subsidiaries.
(ix) Lessee is not an "investment company," or a company
"controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
(x) Lessee is not subject to regulation as a "holding company," an
"affiliate" of a "holding company," or a "subsidiary company" of a
"holding company," within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
(xi) Lessee has not offered any interest in this Lease, the Rent,
the Leased Property or any security similar thereto for sale to, or
solicited offers to buy any thereof from, or otherwise approached or
negotiated with respect thereto with, any prospective purchaser other than
Lessor.
(xii) neither Lessee nor anyone authorized to act on its behalf has,
directly or indirectly, in violation of Section 5 of the Securities Act or
any state securities laws, offered or sold any interest in the
Certificates, the Leased Property or this Lease, or in any security or
lease the offering of which, for purposes of the Securities Act or any
state securities laws, would be deemed to be part of the same offering as
the offering of the aforementioned items, or solicited any offer to
acquire any of the aforementioned items.
(xiii) Lessee and each Affiliate is in compliance in all material
respects with all applicable laws and regulations, Federal, state and
local, the violation of which would have a material adverse effect on
Lessee and its Affiliates taken as a whole; Lessee and each Affiliate each
possess all the material franchises, permits and licenses necessary or
required in the conduct of its business, and the same are valid, binding
and enforceable.
(b) Perfection of Lien and Security Interest. Upon the filing of an
----------------------------------------
appropriate UCC financing statement with the Secretary of State of the
Commonwealth of Pennsylvania and the recording of an appropriate UCC Financing
Statement and the Memorandum of Lease with the office of the Recorder of Deeds
of Xxxxxxx County, Pennsylvania, Lessor will have an enforceable, perfected
first priority security interest and Lien of record in the Leased Property as
against all Persons, including Lessee and its creditors.
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(c) ERISA. Each Employee Benefit Plan of Lessee and any ERISA
-----
Affiliate is in compliance with ERISA and the Code, where applicable, in all
material respects. As of the date hereof, (i) the amount of all Unfunded Pension
Liabilities under the Pension Plans, (ii) the amount of the aggregate
Unrecognized Retiree Welfare Liability under all applicable Employee Benefit
Plans, and (iii) the aggregate potential annual withdrawal liability payments,
as determined in accordance with Title IV of ERISA, of Lessee and any ERISA
Affiliate with respect to all Pension Plans which are Multiemployer Plans, are,
in the aggregate, no more than $5,000,000. Lessee and each ERISA Affiliate have
complied with the requirements of ERISA Section 515 with respect to each Pension
Plan which is a Multiemployer Plan. Lessee and/or any ERISA Affiliate has, as of
the date hereof, made all contributions or payments to or under each such
Pension Plan required by law or the terms of such Pension Plan or any contract
or agreement. No material liability on a consolidated basis to the PBGC has been
incurred, or is expected, by Lessee or any ERISA Affiliate. Based upon and
assuming that the representation of each Certificate Purchaser in Section
10.2(a) is accurate, none of the transactions contemplated in the Operative
Documents will constitute or result in a nonexempt prohibited transaction under
Section 4975 of the Code or Section 406(a) of ERISA.
For purposes of ERISA matters under this Lease, "Employee Benefit Plan"
---------------------
means any employee benefit plan within the meaning of ERISA Section 3(3)
maintained, sponsored or contributed to by the Lessee or any ERISA Affiliate;
"ERISA Affiliate" means any entity that is a member of any group of
----------------
organizations within the meaning of Code Sections 414(b), (c), (m) or (o) of
which Lessee is a member; "Multiemployer Plan" means a pension plan that is a
------------------
multiemployer plan as defined in ERISA Section 4001(a)(3); "Pension Plan" means
------------
any Employee Benefit Plan, including a Multiemployer Plan, the funding
requirements of which (under ERISA Section 302 or Code Section 412) are or, at
any time within the six years immediately preceding the time in question, were
in whole or in part, the responsibility of Lessee or any ERISA Affiliate;
"Unfunded Pension Liabilities" means, with respect to any Pension Plan at any
-----------------------------
time, the amount determined by taking the accumulated benefit obligation, as
disclosed in accordance with FAS number 87, over the fair market value of
Pension Plan assets; and "Unrecognized Retiree Welfare Liability" means, with
--------------------------------------
respect to any Employee Benefit Plan that provides post-retirement benefits
other than pension benefits, the amount of the transition obligation, as
determined in accordance with FAS number 106, as of the most recent valuation
date that has not been recognized as an expense on the income statement of
Lessee and its Subsidiaries.
(d) Taxes. Lessee and each Affiliate have filed all required tax
-----
returns or have filed for extensions of time for the filing thereof, and have
paid all applicable taxes, governmental
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charges, assessments and similar obligations, including United States Federal,
state and local taxes, other than taxes, governmental charges and similar
obligations not yet due or which may be paid hereafter without material penalty;
to the extent (if any) that such taxes are not due and payable, Lessee has
established reserves that are adequate for the payment thereof in accordance
with GAAP; the Internal Revenue Service has completed audits of tax returns
filed through September 30, 1992; and neither Lessee nor any Affiliate has
knowledge of any material deficiency or additional assessment against it in
connection with any applicable taxes not provided for in the financial
statements referred to in Section 10.1(a)(viii) hereof.
---------------------
(e) Rights in Respect of the Leased Property. Lessee is not a party
----------------------------------------
to any contract or agreement with respect to the sale by Lessee of any interest
in any of the Leased Property other than pursuant to this Lease.
(f) Defaults, Casualties, etc. No Default, Event of Default, Event
-------------------------
of Loss or Casualty exists; there is no action pending or, to the best of
Lessee's knowledge, threatened by any Authority to initiate an Event of Taking;
no condition exists that constitutes, or with the giving of notice or lapse of
time or both would constitute, an event of default by Lessee under any material
indenture, mortgage, chattel mortgage, deed of trust, lease, conditional sales
contract, loan, credit arrangement or other material agreement or instrument to
which it is a party or by which it or any of its properties may be bound which
individually or in the aggregate with all such events of default could
reasonably be expected to have a Material Adverse Effect.
(g) Chief Executive Office of Lessee. The principal place of
--------------------------------
business and chief executive office, as such terms are used in Section 9-103(3)
of the UCC, of Lessee are each located at 000 Xxxxxxxxx Xxxx, Xxxxx,
Xxxxxxxxxxxx 00000; provided that upon notice to Lessor and each Certificate
--------
Purchaser delivered in accordance with Section 14.5 hereof, Lessee may relocate
------------
such principal place of business and chief executive office to the Facility,
having an address at 00 Xxxxxx Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxxxxxx.
(h) Compliance With Law. The Land and the Facility and the current
-------------------
use and operation thereof and thereon do not, and the Financed Improvements when
completed will not, violate any provision of Applicable Law in any material
respect, including any thereof relating to occupational safety and health or
Environmental Laws. The Leased Property and the use thereof by Lessee and its
agents, assignees, employees, invitees, lessees, licensees and tenants complies
in all material respects with Applicable Law (including, without limitation, all
zoning, land use laws and Environmental Laws) and Insurance Requirements. The
Facility does not, and the Financed Improvements will not,
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encroach in any manner onto any adjoining land (except as permitted by express
written easements or as insured by appropriate title insurance). The Plans and
Specifications have been prepared in accordance with Applicable Law (including,
without limitation, applicable Environmental Laws and building, planning,
zoning, subdivision and fire codes, laws, rules and regulations). There are no
underground storage tanks at the Leased Property, and Lessee shall not cause or
permit any underground storage tanks to be constructed or located at the Leased
Property.
(i) Licenses, Registrations and Permits. All material licenses,
-----------------------------------
approvals, authorizations, consents, permits (including building, demolition and
environmental permits, licenses, approvals, authorizations and consents),
easements and rights-of-way, including proof and dedication, required for (i)
the use, treatment, storage, transport, disposal or disposition of any Hazardous
Material on, at, under or from the Land and all improvements located on the
Land, (ii) the lawful use and operation of the Land and all Leased Property
(including a certificate or certificates of occupancy for the Leased Property or
other legally equivalent permission to occupy the Leased Property); (iii)
construction of the Financed Improvements in accordance with the Plans and
Specifications therefor and the terms of this Lease; and (iv) the lawful
intended use and operation of all presently intended utilities, driveways, roads
and other means of egress and ingress to and from the same have been (or will
before the time required by Applicable Law be) obtained from the appropriate
Authorities having jurisdiction or from private parties, as the case may be
(collectively, the "Permits"), and are (or will be, upon being obtained) in full
-------
force and effect, and Lessee has no actual knowledge of any pending modification
or cancellation (or, with respect to those not yet obtained, any likely
unavailability) of any of the same. Lessee has delivered to Certificate Trustee
and each Certificate Purchaser true, correct and complete copies of all Permits
issued prior to the date that this representation is made or remade, as the case
may be. Lessee, as Construction Agent, and its contractors have assigned to
Lessor all of their respective interests in all such Permits, whether heretofore
or hereafter issued. The present condition and use of the Leased Property
conforms in all material respects with all conditions or requirements of all
existing Permits and approvals issued with respect to the Leased Property, and
the present use of the Leased Property and Lessee's future intended use of the
Leased Property under the Lease does not and will not, in any material respect,
violate any Applicable Law. The use of the Leased Property does not (and the
intended use of the Leased Property by Lessee under this Lease will not) depend
on any variance, special exception or other approval, permit, license or consent
of any Authority that has not been obtained for its continuing legal use; all
required building and use related permits, approvals, licenses and consents
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material to the construction, use and operation of the Leased Property will have
been issued and be in full force and effect on or prior to the date such
permits, approvals, licenses and consents are or become necessary.
(j) Federal Reserve Regulations. Neither Lessee nor any Affiliate
---------------------------
of Lessee will, directly or indirectly, use any of the proceeds of the Advances
or the issuance of the Certificates for the purpose of purchasing or carrying
any "margin security" or "margin stock" within the meaning of Regulation G, T, U
or X of the Board of Governors of the Federal Reserve System, respectively, or
for the purpose of reducing or retiring any indebtedness originally incurred to
purchase or carry a margin security or margin stock or for any other purpose
which might cause any of the transactions contemplated by this Lease or any
other Operative Document to constitute a "purpose credit" within the meaning of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve System,
or for the purpose of purchasing or carrying any security, and neither Lessee
nor any Affiliate of Lessee has taken or will otherwise take or permit any
action by Lessee or any of its Affiliates in connection with any of the
transactions contemplated by any of the Operative Documents that would involve a
violation of Regulation G, T, U or X, or any other regulation of the Board of
Governors of the Federal Reserve System. Except for Partners Securities Company,
neither Lessee nor any of its Affiliates is or will be engaged principally or as
one of its important activities in the business of extending credit for the
purpose of purchasing or carrying or trading in any margin stocks or margin
securities (within the meaning of Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System).
(k) Disclosure. The representations and statements made by or on
----------
behalf of Lessee and its Affiliates (or any Person authorized or employed by any
such Person as agent or otherwise) to Lessor or any Certificate Purchaser in
connection with the negotiation of the Operative Documents and the Overall
Transaction do not and will not contain any untrue statement of a material fact
or omit to state a material fact or any fact necessary to make the statements
herein or therein, in light of the circumstances under which they were made,
misleading. No written information, exhibit, report or financial statement
furnished by Lessee or any Affiliate to the Certificate Purchasers in connection
with this Lease or the Operative Documents contains or will contain any material
misstatement of fact or omit to state a material fact or any fact necessary to
make the statements contained therein not materially misleading. There is no
particular fact of which Lessee or any of its Affiliates has knowledge that has
not been disclosed by Lessee or any of its Affiliates (or by any Person
authorized or employed by Lessee or any of its Affiliates as agent or otherwise)
in writing to Lessor and all of the Certificate Purchasers that, as far as
Lessee or
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any of its Affiliates can reasonably foresee, is reasonably likely to have a
Material Adverse Effect.
(l) Appraisal Data. The information provided by Lessee and its
--------------
Affiliates to the Appraiser and forming the basis for the conclusions set forth
in each Appraisal, taken as a whole, was true and correct in all material
respects and did not omit any information known and available to Lessee
necessary to make the information provided not materially misleading.
(m) Subjection to Government Regulation.
-----------------------------------
(i) Lessee is not subject to regulation under the Federal Power Act,
the Interstate Commerce Act (as any of the preceding acts have been
amended) or any other law which regulates the incurring by Lessee of
indebtedness or the entering into the transactions described herein,
including laws relating to common contract carriers or the sale of
electricity, gas, steam, water or other public utility services.
(ii) No Certificate Purchaser will become (A) solely by reason of
entering into the Operative Documents or consummation of the Overall
Transaction (other than upon exercise of remedies under the Lease or upon
the expiration thereof) subject to ongoing regulation of its operations by
any Authority having jurisdiction solely by reason of Lessee's business
activities or the nature of the Leased Property; or (B) except for
regulation the applicability of which depends upon the existence of facts
in addition to the ownership of, or the holding of any interest in, the
Leased Property or any interest therein upon the exercise of remedies
under this Lease or upon the expiration thereof, subject to ongoing
regulation of its operations by any Authority having jurisdiction solely
by reason of Lessee's business activities or the nature of the Leased
Property.
(n) Solvency. The consummation by Lessee of the Overall Transaction
--------
does not and will not render Lessee insolvent, nor were the Operative Documents
entered into in contemplation of Lessee's insolvency; the value of the assets
and properties of Lessee at fair valuation and at their then present fair
salable value is, and after such transactions will be, greater than Lessee's
total liabilities, including contingent liabilities, as they become due; the
property remaining in the hands of Lessee is not and will not be an unreasonably
small amount of capital.
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(o) Utility Services.
----------------
(i) The Leased Property has available all material services of
public facilities and other utilities necessary for use and operation of
the Facility thereon for its primary intended purposes, including, without
limitation, adequate water, gas and electrical supply, storm and sanitary
sewerage facilities, telephone, other required public utilities and means
of access between the Facility and public highways for pedestrians and
motor vehicles. All utilities serving the Leased Property, or proposed to
serve the Leased Property in accordance with the Plans and Specifications
are located in, and vehicular access to the Facility on such Property is
provided by, either public rights-of-way abutting the Leased Property or
by Appurtenant Rights.
(ii) Upon Substantial Completion of the Financed Improvements in
accordance with the Plans and Specifications, (A) there will be no
material defects to the Facility, including, without limitation, the
plumbing, heating, air conditioning and electrical systems thereof and (B)
all water, sewer, electric, gas, telephone and drainage facilities and all
other utilities required to adequately service the Facility for its
intended use will be available pursuant to adequate Permits (including any
that may be required under applicable Environmental Laws).
(p) Title. Neither Lessee nor any of its Affiliates has taken or
-----
caused to be taken any action which would have an adverse effect on Lessor's
title to the Leased Property from that indicated in Lessor's Policy.
(q) Zoning. The Leased Property complies in all material respects
------
with all applicable zoning and subdivision laws, ordinances, regulations and
restrictive covenants, and all requirements thereof necessary for the use,
occupancy and operation of the Leased Property have been satisfied and the
current use and intended use under this Lease of the Leased Property is a
conforming use.
(r) Attached hereto as Exhibit Q is a true, correct and complete
---------
copy of the Agreement of Sale dated December 11, 1996 between Seller and Lessee
with respect to Lessee's acquisition of the Leased Property, and all amendments
and modifications thereto, if any (collectively, the "Purchase Agreement"). The
------------------
Purchase Agreement is presently in full force and effect. There are no
understandings, contracts, agreements or commitments of any kind whatsoever with
respect to the Purchase Agreement except as expressly provided in the Purchase
Agreement.
SECTION 10.2. Representations and Warranties of each
---------------------------------------
-99-
Certificate Purchaser. Each Certificate Purchaser, by its acceptance of this
---------------------
Lease, represents and warrants, severally and only as to itself, to each other
Certificate Purchaser, Bank, Lessee and Lessor as follows:
(a) ERISA. Either (i) it is not and will not be purchasing its
----- ------
Certificate with the assets of an ERISA Plan, or (ii) the acquisition and
--
holding of any of its Certificates with the assets of one or more ERISA Plans
will not result in a nonexempt prohibited transaction as defined by Section 4975
of the Code or Section 406(a) of ERISA.
(b) Investment in Certificates. In the case of each Certificate
--------------------------
Purchaser, it is acquiring its Certificate for its own account for investment
and not with a view to any distribution (as such term is used in Section 2(11)
of the Securities Act) thereof, and if in the future it should decide to dispose
of its Certificate, it understands that it may do so only in compliance with the
Securities Act and the rules and regulations of the SEC thereunder and any
applicable state securities laws. Neither it nor anyone authorized to act on
its behalf has taken or will take any action which would subject the issuance of
any Certificate or any interest in the Leased Property, the Trust Estate or this
Lease to the registration requirements of Section 5 of the Securities Act. No
representation or warranty contained in this Section 10.2(b) shall include or
---------------
cover any action or inaction of Lessee or any Affiliate thereof whether or not
purportedly on behalf of any Certificate Purchaser or Lessor or any of their
respective Affiliates. Subject to the foregoing, and subject to the provisions
of Article V of the Trust Agreement and Section 11.6 hereof, it is understood
------------
among the parties that the disposition of such Certificate Purchaser's property
shall be at all times within its control.
(c) Withholding of Income Taxes. If any Certificate Purchaser is
---------------------------
not incorporated under the laws of the United States or a state thereof, such
Certificate Purchaser is entitled to receive payments under the Operative
Documents without deduction or withholding of any United States Federal income
taxes.
SECTION 10.3. Representations and Warranties of Lessor. Lessor represents
----------------------------------------
and warrants to each of the Certificate Purchasers and Lessee as follows:
(a) Organization and Authority. Lessor is duly organized, validly
--------------------------
existing and in good standing under the laws of the jurisdiction of its
organization, and has full power and authority to enter into and perform its
obligations in its individual capacity under this Lease and each other Operative
Document to which it is or will be a party as Lessor.
(b) Authorization. This Lease and each other
-------------
-100-
Operative Document to which Lessor is or will be a party have been or will be
duly authorized, executed and delivered by or on behalf of Lessor.
(c) Non-Contravention. Neither the execution and delivery by
-----------------
Lessor of each Operative Document to which it is or will be a party, nor
compliance with the terms and provisions thereof, contravenes, results in a
violation or breach of, conflicts with or constitutes a default under (with or
without notice or lapse of time or both) any of the terms, conditions or
provisions of (i) the Trust Agreement; (ii) any bond, debenture, note, mortgage,
indenture, agreement, lease or other instrument to which Lessor is now a party
or by or under which it or any of its property is bound or affected; or (iii) or
any of the terms, conditions or provisions of any law, rule, regulation, order,
injunction or decree of any Authority applicable to its business.
(d) No Approvals, etc. The execution and delivery by Lessor of any
------------------
of the Operative Documents to which it is a party does not require the consent
or approval of, or the giving of notice to or registration with, or the taking
of any other action in respect of, any Authority or other body governing its
banking practices.
(e) Litigation. To its knowledge, there is no action, proceeding or
----------
investigation pending or threatened against Lessor which questions the validity
of the Operative Documents, and, to its knowledge, there is no action,
proceeding or investigation pending or threatened which is likely to result,
either in any case or in the aggregate, in any material adverse change in the
ability of Lessor to perform its obligations under the Operative Documents to
which it is a party.
(f) Lessor Liens. The Leased Property is free and clear of all
------------
Lessor Liens attributable to Lessor.
(g) Funding of Acquisition Costs. Lessor has not borrowed, either
----------------------------
from the Certificate Purchasers in connection with the capitalization of the
Lessor or otherwise, any sums to pay all or any portion of the Acquisition Costs
for the Leased Property.
(h) Securities Act. Neither Lessor nor anyone authorized to act on
--------------
its behalf has, directly or indirectly, in violation of Section 5 of the
Securities Act or any state securities laws, offered or sold any interest in the
Certificates, the Leased Property or this Lease, or in any security or lease the
offering of which, for purposes of the Securities Act or any state securities
laws, would be deemed to be part of the same offering as the offering of the
aforementioned items, or solicited any offer to acquire any of the
aforementioned items.
-101-
SECTION 10.4. Representations and Warranties of Bank. Bank hereby
--------------------------------------
represents and warrants to Lessor, Lessee and each Certificate Purchaser as
follows:
(a) Chief Executive Office. Bank's chief executive office and
----------------------
principal place of business and the place where the documents, accounts and
records relating to the Overall Transaction are kept is located in Wilmington,
Delaware.
(b) Organization and Authority. Bank is duly organized, validly
--------------------------
existing and in good standing under the laws of the jurisdiction of its
organization, and has full power and authority to enter into and perform its
obligations (i) in its individual capacity under such of the Operative Documents
to which it is or will be a party in its individual capacity, and (ii) acting as
Certificate Trustee under the Trust Agreement.
(c) Non-Contravention. Neither the execution and delivery by Bank
-----------------
of the Operative Documents to which it is or will be a party, individually or as
Certificate Trustee, nor compliance with the terms and provisions thereof,
contravenes, results in a violation or breach of, conflicts with or constitutes
a default under (with or without notice or lapse of time or both) any of the
terms, conditions or provisions of: (i) the corporate charter or by-laws of
Bank; (ii) any bond, debenture, note, mortgage, indenture, agreement, lease or
other instrument to which Bank is now a party or by or under which it or any of
its property is bound or affected; or (iii) any of the terms, conditions or
provisions of any law, rule, regulation, order, injunction or decree of the
State of Delaware or of the United States of America governing the banking or
trust powers of Bank applicable to it.
(d) Litigation. There is no action, proceeding or investigation
----------
pending or, to the best knowledge of Bank, threatened against it which would be
reasonably likely materially and adversely to affect Bank's ability to perform
its obligations, individually or as Certificate Trustee, under the Operative
Documents to which it is or will be a party.
(e) Lessor Liens. The Leased Property is free and clear of all
------------
Lessor Liens attributable to Bank.
(f) Securities Act. Neither Bank nor anyone authorized to act on
--------------
its behalf has, directly or indirectly, in violation of Section 5 of the
Securities Act or any state securities laws, offered or sold any interest in the
Certificates, the Leased Property or this Lease, or in any security or lease the
offering of which, for purposes of the Securities Act or any state securities
laws, would be deemed to be part of the same offering as the offering of the
aforementioned items, or solicited any offer to acquire any of the
aforementioned items.
-102-
SECTION 10.5. Representations and Warranties of Certificate Trustee.
-----------------------------------------------------
Certificate Trustee represents and warrants to each of the Certificate
Purchasers and Lessee as follows:
(a) Organization and Authority. Certificate Trustee is duly
--------------------------
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, and has full power and authority to enter into
and perform its obligations in its individual capacity under the Trust
Agreement.
(b) Authorization. Each Operative Document to which Certificate
-------------
Trustee is or will be a party have been or will be duly authorized, executed and
delivered by or on behalf of Certificate Trustee.
(c) Non-Contravention. Neither the execution and delivery by (x)
-----------------
Certificate Trustee of the Trust Agreement and (y) Certificate Trustee of each
Operative Document to which it is or will be a party, nor compliance with the
terms and provisions thereof, contravenes, results in a violation or breach of,
conflicts with or constitutes a default under (with or without notice or lapse
of time or both) any of the terms, conditions or provisions of: (i) the
corporate charter or by-laws of Certificate Trustee; (ii) any bond, debenture,
note, mortgage, indenture, agreement, lease or other instrument to which it is
now a party or by or under which it or any of its property is bound or affected;
or (iii) any of the terms, conditions or provisions of any law, rule,
regulation, order, injunction or decree of any Authority applicable to its
banking business.
(d) No Approvals, etc. The execution and delivery by Certificate
------------------
Trustee (assuming the due authorization, execution and delivery of the Trust
Agreement by each Certificate Purchaser) of any of the Operative Documents to
which it is a party does not require the consent or approval of, or the giving
of notice to or registration with, or the taking of any other action in respect
of, any Authority or other body governing its banking practices.
(e) Litigation. To its knowledge, there is no action, proceeding or
----------
investigation pending or threatened against Certificate Trustee which questions
the validity of the Operative Documents, and, to its knowledge, there is no
action, proceeding or investigation pending or threatened which is likely to
result, either in any case or in the aggregate, in any material adverse change
in the ability of Certificate Trustee to perform its obligations under the
Operative Documents to which it is a party.
(f) Lessor Liens. The Leased Property is free and clear of all
------------
Lessor Liens attributable to Certificate Trustee.
(g) Securities Act. Neither Certificate Trustee nor anyone
--------------
authorized to act on its behalf has, directly or
-103-
indirectly, in violation of Section 5 of the Securities Act or any state
securities laws, offered or sold any interest in the Certificates, the Leased
Property or this Lease, or in any security or lease the offering of which, for
purposes of the Securities Act or any state securities laws, would be deemed to
be part of the same offering as the offering of the aforementioned items, or
solicited any offer to acquire any of the aforementioned items.
SECTION 10.6. Representations of Lessee with Respect to Each Advance.
------------------------------------------------------
Lessee represents and warrants to Lessor and each Certificate Purchaser as of
each Advance Date on which an Advance is made as follows:
(a) Representations. No Default or Event of Default by Lessee under
---------------
any Operative Document to which Lessee is a party will occur as a result
of, or after giving effect to, the Advance requested by the Advance Date
Notice on such date.
(b) Improvements. The construction of the Financed Improvements to
------------
date has been performed in a good and workmanlike manner, substantially in
accordance with the Plans and Specifications and in compliance with all
Insurance Requirements and Applicable Law, and will be completed prior to
the occurrence of the Construction Completion Date.
(c) Liens. Lessee has not permitted any Lien to be placed against the
-----
Leased Property or against Lessee's fee ownership interest in the Land
since the recordation of the Mortgage other than Permitted Liens.
(d) Advance. If such Advance is a Construction Advance, the amount of
-------
the Construction Advance requested represents amounts owed by Lessee or
Construction Agent to third parties in respect of Construction Costs
incurred prior to the date of such Construction Advance and for which
Lessee has not previously been reimbursed by an Advance. The conditions
precedent to such Construction Advance and the related Certificate
Purchaser Amount set forth in Article III have been satisfied.
-----------
SECTION 11. COVENANTS.
SECTION 11.1. Covenants of Lessee. Lessee covenants with Lessor and each
-------------------
of the Certificate Purchasers as follows:
(a) Corporate Existence, etc. Subject to Section 11.1(b) and any
------------------------ ---------------
merger permitted thereby pursuant to which Lessee ceases to exist (in which case
this subsection (a) shall apply to the surviving corporation of such merger),
--------------
Lessee shall do or
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cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, rights and powers and franchises and its power
and authority to perform its obligations under the Operative Documents,
including any necessary qualification or licensing in any foreign jurisdiction.
(b) Mergers, etc. Lessee shall not (whether in one transaction or a
------------
series of transactions), without the prior written consent of Lessor and the
Required Certificate Purchasers, sell, transfer or dispose of all or
substantially all of its assets or property, or consolidate or merge with any
other Person, unless (i) Lessee is the surviving or parent corporation of any
merger or other acquisition including Lessee (the "Surviving Entity") and is a
----------------
corporation organized under the laws of the United States or a jurisdiction
thereof, (ii) no Default or Event of Default exists before or as a result of
such transaction, (iii) the tangible net worth of the Surviving Entity is no
less than the tangible net worth of Lessee immediately prior to the transaction
and (iv) immediately after such transaction, Lessor shall have an enforceable,
perfected first priority security interest of record in all Leased Property then
subject hereto, free and clear of all Liens other than Permitted Liens. Lessee
shall not sell, assign, transfer or otherwise dispose of its rights or delegate
its obligations under this Lease to any other Person, except as permitted by
Section 5.9 or this Section 11.1(b).
----------- ---------------
(c) Change of Name or Location. Lessee shall furnish to Lessor and
--------------------------
each Certificate Purchaser notice on or before the thirtieth (30th) day before
any relocation of its chief executive office, principal place of business or the
office where it keeps its records concerning its accounts, the Leased Property,
or change of its name, corporate structure or identity.
(d) Financial Information. Lessee shall keep and maintain, and cause
---------------------
each Subsidiary to keep and maintain, satisfactory and adequate books and
records in accordance with GAAP (including the inclusion of footnotes on the
financial statements hereinafter described). Lessee agrees to furnish to Lessor
and each of the Certificate Purchasers (i) as soon as available and in any event
within sixty (60) days after the end of each of the first, second and third
quarterly accounting periods in each fiscal year of Lessee, copies of a
consolidated balance sheet of Lessee and its Consolidated Subsidiaries as of the
end of such accounting period and of the related consolidated income and
retained earnings statements of Lessee and its Consolidated Subsidiaries for the
elapsed portion of Lessee's fiscal year ended with the last day of such
accounting period, all in reasonable detail and stating in comparative form the
amounts for the corresponding date and period in the previous fiscal year, and
all prepared in accordance with GAAP, subject to year end audit adjustments and
certified by an authorized financial officer of Lessee, together with an
officer's certificate that no Default or
-105-
Event of Default exists hereunder; (ii) as soon as available and in any event
within 120 days after the end of each fiscal year of Lessee, copies of
consolidated balance sheets of Lessee and its Consolidated Subsidiaries as of
the end of such fiscal year and consolidated statements of income and retained
earnings of Lessee and its Consolidated Subsidiaries for such fiscal year, in
reasonable detail and stating in comparative form the figures as of the end of
and for the previous fiscal year prepared in accordance with GAAP and certified
by independent public accountants of recognized standing as may be selected by
Lessee and reasonably satisfactory to the Required Certificate Purchasers; (iii)
concurrently with each of the financial statements furnished pursuant to the
foregoing subsections (i) and (ii), a certificate of the Chairman of the Board,
President, a Vice President (whose duties are in the finance area) or Financial
Officer, stating that in the opinion of the signer, based upon a review made
under their supervision, no Event of Default or Default or Casualty has occurred
and is continuing under any of the Operative Documents, and Lessee has performed
and observed all of, and Lessee is not in default in the performance or
observance of any of, the terms and covenants hereof or, if Lessee shall be in
default or a Casualty shall exist, specifying all such defaults and Casualties,
and the nature thereof, of which the signer of such certificate may have
knowledge; (iv) concurrently with their being filed, mailed or delivered, as
applicable, copies of all proxy statements, financial statements and reports
which Lessee shall send or make available generally to its shareholders, and
copies of all reports on Forms 10-K, 10-Q and 8-K and all other filings and
reports specifically requested by a Certificate Purchaser which Lessee or any
Subsidiary may be required to file with the Securities and Exchange Commission
or any similar or corresponding governmental commission, department or an agency
substituted therefor or with any securities exchange located in the United
States of America; and (v) such other information relating to the business,
affairs and financial condition of Lessee and its Subsidiaries as the
Certificate Purchasers may from time to time reasonably request.
(e) Funded Debt to Total Capitalization Ratio. Lessee will not permit
-----------------------------------------
Funded Debt of Lessee and its Consolidated Subsidiaries to exceed 45% of the sum
of (1) Funded Debt of Lessee and its Consolidated Subsidiaries plus (2) the
consolidated minority interest obligations shown on the consolidated balance
sheet of Lessee and its Consolidated Subsidiaries plus (3) the Consolidated Net
Worth of Lessee and its Consolidated Subsidiaries. For purposes of calculating
such ratio, Finance Leasing Subsidiaries shall be excluded from the definition
of "Consolidated Subsidiaries".
(f) Subsidiaries' Debt. Lessee will not permit any of its
------------------
Subsidiaries directly or indirectly to create, incur, assume, suffer to exist,
guarantee or otherwise become, be or remain
-106-
liable with respect to any Debt (other than Excluded Debt, as defined below) in
an aggregate amount outstanding (as to all Subsidiaries) at any time in excess
of 20% of Consolidated Net Worth plus the amount of Debt outstanding on the date
hereof (other than Excluded Debt outstanding on the date hereof). For the
purposes of this Agreement, "Excluded Debt" shall mean: (i) Debt owing
-------------
exclusively to Lessee or another Subsidiary, (ii) Debt of a Subsidiary
outstanding on the date that Lessee acquires such Subsidiary, (iii) Debt with
respect to property to be used by Lessee or its Subsidiaries, the interest on
which Debt is exempt from Federal income tax pursuant to (S)103 of the Code,
(iv) Debt of any foreign Subsidiary that is not guaranteed by Lessee or any
other Subsidiary, (v) Debt of Finance Leasing Subsidiaries owing to Lessee or
any of its Consolidated Subsidiaries, (vi) Debt of Finance Leasing Subsidiaries
to a person or persons other than Lessee and its Consolidated Subsidiaries
provided that such Debt is not guaranteed by Lessee or any of its Consolidated
Subsidiaries or (vii) Debt under the Credit Agreement.
(g) Sale of Assets. Lessee will not, and will not permit any
--------------
consolidated Subsidiary to, sell, lease or transfer all or substantially all of
its assets unless (i) immediately after giving effect thereto Lessee is in
compliance with the covenants and provisions of this Lease and (ii) such sale,
lease or transfer shall not have any materially adverse effect upon the
financial condition of Lessee and its Subsidiaries taken as a whole or Lessee's
ability to perform its obligations hereunder. Notwithstanding this provision,
any consolidated Subsidiary that is not a Subsidiary Borrower (as defined in the
Credit Agreement) may sell, lease or transfer all or substantially all of its
assets to any other consolidated Subsidiary or to Lessee, and any Subsidiary
Borrower may sell, lease or transfer all or substantially all of its assets to
any other Subsidiary Borrower or to Lessee.
(h) Notice of Defaults. Promptly upon, but in no event later than
------------------
three (3) Business Days after Lessee shall have obtained knowledge thereof,
Lessee shall notify Lessor and each Certificate Purchaser in writing of the
existence of a Default, Event of Default or any other matter (including, without
limitation, the institution of any litigation, the commencement of any
administrative proceedings, the happening of any event or the assertion or
threat of any claim) which has resulted in or might have a Material Adverse
Effect with respect to Lessee, its Subsidiaries or the Leased Property, which
notice shall describe the nature of such Default, Event of Default or other
matter and the action Lessee is taking or proposes to take with respect thereto.
(i) Notice of Proceedings. Promptly upon Lessee's becoming aware of
---------------------
(i) any proposed or pending investigation of Lessee or any of its Subsidiaries
by any Authority, (ii) any court
-107-
or administrative proceeding involving any Person described in the foregoing
clause (i), or (iii) any notice, claim or demand from any Authority which
----------
alleges that any such Person is in violation of any law or has failed to comply
with any order issued pursuant to any Federal, state or local statute regulating
its operation and business, which individually or in the aggregate is reasonably
likely to result in a Material Adverse Effect, Lessee shall notify Lessor and
each Certificate Purchaser specifying its nature and the action Lessee is taking
with respect thereto.
(j) Inspection. Lessor or any Certificate Purchaser may designate any
----------
Person in writing who is an officer, employee or agent of Lessor or such
Certificate Purchaser, as the case may be, to visit and inspect the properties
(including the Land and improvements) of Lessee, and to the extent reasonable
under the circumstances, examine the books of record and accounts of Lessee and
each Subsidiary (including Lessee's records pertaining to the Land and
improvements), and discuss its affairs, finances and accounts with its officers,
and, with notice to Lessee so that it may have an officer present if it so
reasonably requests, the accountants of Lessee, all at such reasonable times as
Lessor or such Certificate Purchaser may reasonably request and, upon such
request, Lessee shall make such properties and such books of record and
accounts, or cause them to be made, available to Lessor or the requesting
Certificate Purchaser, as the case may be, for inspection; provided, however,
-------- -------
that, with respect to the properties of Lessee other than the Leased Property,
and the records of Lessee and each Subsidiary other than those pertaining
thereto, Lessee's obligations hereunder shall arise only while a Default or
Event of Default exists, except that, upon receipt of reasonable notice, Lessee
shall permit Lessor and each Certificate Purchaser to discuss the affairs,
finances and accounts of Lessee with a financial officer of Lessee. So long as
any Default or Event of Default exists, Lessee will pay the reasonable expenses
of Lessor and each Certificate Purchaser incurred in the exercise of the rights
granted pursuant to this Section 11.1(j).
---------------
(k) Rule 144A Information. At any time when Lessee is not subject to
---------------------
Section 13 or Section 15(d) of the Exchange Act, if Lessor or any Certificate
Purchaser requests that Lessee deliver to Lessor or such Certificate Purchaser
information with respect to Lessee that meets the requirements of Rule
144A(d)(4)(i) of the Exchange Act (or any successor provision), then: (x)
promptly following the receipt by Lessee of that request, Lessee shall deliver
such information to Lessor or such requesting Certificate Purchaser, and (y)
such information shall, at the time of such delivery, be as of a date so as to
be entitled to the presumption that such information is "reasonably current"
within the meaning of Rule 144A(d)(4)(i) of the Exchange Act (or any successor
provision).
(l) Reports to Lessor and the Certificate Purchasers.
------------------------------------------------
-108-
Lessee shall, concurrently with any notice, delivery or other communication to
Lessor pursuant to any Operative Document, deliver a copy of such notice,
delivery or other communication to each Certificate Purchaser at its respective
current address.
(m) Further Assurances. Lessee, at its own cost and expense, will
------------------
cause to be promptly and duly taken, executed, acknowledged and delivered all
such further acts, documents and assurances as Lessor or any Certificate
Purchaser may reasonably request from time to time in order to carry out more
effectively the intent and purposes of this Lease and the other Operative
Documents and the Overall Transaction. Lessee, at its own cost and expense, will
cause all financing statements (including precautionary financing statements),
fixture filings and other documents, to be recorded or filed at such places and
times in such manner, and will take all such other actions or cause such actions
to be taken, as may be necessary or as may be reasonably requested by Lessor or
any Certificate Purchaser in order to establish, continue, preserve, protect and
perfect the title of Lessor to the Leased Property and Lessor's rights under
this Lease and the other Operative Documents and to perfect, continue, preserve
and protect the first and prior Lien of Lessor on the Leased Property. To the
extent permitted by Applicable Law, Lessee hereby authorizes any such financing
statement and fixture filings to be filed without the necessity of the signature
of Lessee.
(n) Construction Matters.
--------------------
(i) Lessee shall complete or cause the completion of the design,
identification, acquisition, construction, installation, testing and
placement into service in commercial operation of all items of the Financed
Improvements and shall have satisfied each of the conditions set forth at
Sections 3.2 and 3.3 on or before the Construction Completion Date pursuant
------------ ---
to the Plans and Specifications and in accordance with good industry,
engineering and construction practices. Lessee's obligation under this
Section 11.1(n)(i) shall be absolute and unconditional, notwithstanding any
------------------
excess of the cost of construction of any item of the Financed Improvements
over the amounts to be advanced by Lessor pursuant to Section 2, the
---------
payment of which excess shall be the recourse obligation of Lessee.
(ii) Lessee may execute, without any consent of the Certificate
Purchasers, any change order, modification or addition to the design and
specifications for any item of the Financed Improvements before its
completion, so long as such change order, modification or addition does not
materially and adversely affect the fair market value and utility of such
item and the Facility, as built and installed, in accordance with the
original Plans and Specifications that
-109-
were reviewed by the Appraiser in connection with the initial Appraisal. If
requested by Lessor at the direction of the Required Certificate
Purchasers, Lessee shall engage an appraiser of nationally recognized
standing, at Lessee's expense, to determine, by appraisal methods
satisfactory to the Required Certificate Purchasers, whether any such
change, modification or addition will adversely affect the fair market
value of the Facility.
(o) Environmental Matters. Lessee shall (i) use and operate, and
---------------------
cause its Subsidiaries to use and operate, the Leased Property in compliance in
all material respects with all Environmental Laws, keep all necessary Permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in material compliance therewith, and
handle all Hazardous Material in compliance in all material respects with all
applicable Environmental Laws; (ii) immediately notify Lessor and the
Certificate Purchasers in detail (and provide copies upon receipt, if
applicable) of all actual or alleged failures to comply with or perform, breach,
violation or default under Environmental Laws, and any claims, complaints,
notices or inquiries relating to the condition of the Leased Property or
compliance with Environmental Laws, and of all notices of potential
responsibility for the release or threatened release of Hazardous Material and
of the occurrence or existence of any facts or circumstances which with the
passage of time, the giving of notice or both or otherwise could create such a
breach, violation or default or could occasion the creation of potential
responsibility for releases or threatened releases of Hazardous Material and
promptly commence and diligently pursue the cure and dismissal with prejudice to
the reasonable satisfaction of the Required Certificate Purchasers of any
actions and proceedings relating to compliance with Environmental Laws;
provided, however, that Lessee may contest in good faith by appropriate
-------- -------
proceedings any such actions or proceedings if (A) adequate reserves are kept on
the books of Lessee in accordance with GAAP with respect thereto, (B) no
penalties or criminal sanctions are or may be assessed against Bank, Lessor or
any Certificate Purchaser as a result thereof and (C) no danger of or material
risk to any of the Leased Property arises or may arise as a result thereof; and
(iii) provide such information and certifications which Lessor or any
Certificate Purchaser may reasonably request from time to time to evidence
compliance with this Section 11.1(o).
---------------
(p) Securities. Lessee shall not, nor shall it permit anyone
----------
authorized to act on its behalf to, take any action which would subject the
issuance or sale of the Certificates, any of the Leased Property or the Lease,
or any security or lease the offering of which, for purposes of the Securities
Act or any state securities laws, would be deemed to be part of the same
offering as the offering of the aforementioned items, to the registration
requirements of Section 5 of the Securities Act or any state
-110-
securities laws.
(q) No Disposition of the Leased Property. Lessee shall not sell,
-------------------------------------
contract to sell, assign, lease, transfer, convey or otherwise dispose of, or
permit to be sold, assigned, leased, transferred, conveyed or otherwise disposed
of, the Leased Property or any part thereof.
(r) Delivery of Permits, etc. To the extent not previously delivered
------------------------
to Lessor, upon request of Lessor at any time an Event of Default exists, Lessee
shall forthwith deliver to Lessor all permits for the acquisition, construction,
installation, testing and placement into service of the Leased Property,
together with all of the Plans and Specifications for the Leased Property
(including the Financed Improvements).
(s) Sale, Discount of Receivables; Sale, Leaseback Transactions.
-----------------------------------------------------------
Lessee will not, and will not permit its Consolidated Subsidiaries to, enter
into any Securitization (as defined in the Credit Agreement) which, when added
to the aggregate amount of all Securitizations then outstanding, exceeds the
lesser of 15% of Consolidated Total Assets or $775,000,000. Exclusive of such
Securitizations, Lessee will not, and will not permit its Consolidated
Subsidiaries to, sell or discount receivables with recourse or sell and lease
back fixed assets the aggregate amount of which when added to all liens arising
in connection with a Securitization permitted by Section 7 of the Credit
Agreement (limited in each case to the accounts therein or in any trust or
similar entity utilized to effect such Securitizations and to any equipment
giving rise to such accounts) exceed 10% of Consolidated Net Worth.
(t) Regulations G, T, U and X. Lessee will not, and will not permit
-------------------------
any Subsidiary to, use Advances hereunder in any manner which may cause a
violation of or non-compliance with Regulations G, T, U or X of the Board of
Governors of the Federal Reserve Board.
(u) Force Majeure Event. Lessee shall deliver to Lessor notice of the
-------------------
occurrence of any Force Majeure Event that results or may result in the
extension of the Scheduled Construction Termination Date. If Lessee desires to
extend the Scheduled Construction Termination Date as a result of a Force
Majeure Event, it shall deliver notice thereof to Lessor no less than twenty
(20) days prior to the Scheduled Construction Termination Date.
(v) Qualification. Promptly after the date hereof, Lessee shall do or
-------------
cause to be done all things necessary to qualify Lessor to do business in
Pennsylvania.
(w) Notification of Rating Changes. Lessee shall
------------------------------
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promptly notify Certificate Trustee of any change in the senior long-term debt
rating of Lessee from S&P or Moody's.
SECTION 11.2. Taxes. Lessee will pay and discharge, and cause each
-----
Subsidiary to pay and discharge, all taxes, assessments or other governmental
charges or levies imposed on it or any of its property or assets prior to the
date on which any material penalty for non-payment or late payment is incurred,
unless the same is currently being contested in good faith by appropriate
proceedings and reserves in accordance with GAAP are being maintained.
SECTION 11.3. Compliance with Laws. Lessee will comply and cause each
--------------------
Subsidiary to comply in all respects with all Applicable Law in respect of its
business and operations and the ownership of its properties, except for such
instances of non-compliance which would not have, individually or in the
aggregate, a Material Adverse Effect, including but not limited to: (i) all
rules and regulations of the SEC and (ii) the provisions and requirements of all
franchises, permits and licenses applicable to its business, including, but not
limited to, those required by Environmental Laws. Lessee shall notify the Banks
promptly in detail of any actual or alleged failure to comply with or perform,
breach, violation or default under any such laws or regulations or of the
occurrence or existence of any facts or circumstances which with the passage of
time, the giving of notice or both or otherwise could create such a breach,
violation or default or could occasion the termination of any of such franchises
or grants of authority, if any of the foregoing would have a Material Adverse
Effect on Lessee and its Subsidiaries taken as a whole.
SECTION 11.4. Employee Benefit Plans. Lessee will, and will cause each
----------------------
ERISA Affiliate to, (a) comply in all material respects with the provisions of
ERISA to the extent applicable to any Employee Benefit Plan maintained by it and
cause all Employee Benefit Plans maintained by it to satisfy the conditions
under the Code for tax qualification of all such plans intended to be tax
qualified; and (b) avoid (1) any material accumulated funding deficiency (within
the meaning of ERISA section 302 and Code section 412(a)) (whether or not
waived) (2) any act or omission on the basis of which it or an ERISA Affiliate
might incur a material liability to the PBGC (other than for the payment of
required premiums) or to a trust established under ERISA section 4049; (3) any
transaction with a principal purpose described in ERISA section 4069; and (4)
any act or omission that might result in the assessment by a Multiemployer Plan
of withdrawal liability against Lessee or any ERISA Affiliate, but only to the
extent that the liability arising from a failure to comply with any covenant set
forth in (a) or (b) of this Section 11.4 could reasonably be expected to result
------------
in a liability to Lessee or a Subsidiary or an ERISA Affiliate for any one such
event in excess of $10,000,000.
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SECTION 11.5. Covenants of Lessor and Certificate Purchasers. Each of
----------------------------------------------
Lessor and the Certificate Purchasers covenants as to itself, and not jointly
with any other Person, with Lessee and Lessor and each Certificate Purchaser (as
applicable) as follows:
(a) Cooperation with Lessee. Lessor and each Certificate Purchaser
-----------------------
shall, to the extent reasonably requested by Lessee (but without assuming
additional liability on account thereof), at Lessee's expense, cooperate to
allow Lessee to (a) perform its covenants contained in Section 11.1, including
------------
at any time and from time to time, upon the reasonable request of Lessee,
promptly and duly to execute and deliver any and all such further instruments,
documents and financing statements (and continuation statements related thereto)
as Lessee may request in order to perform such covenants, and (b) further
Lessee's requirements as lessee of the Leased Property, including the filing of
any statement with respect to any tax abatements or other requirements.
(b) Discharge of Liens. Each of the Certificate Purchasers covenants
------------------
as to itself, and not jointly with any other Certificate Purchaser, that it will
not create or permit to exist at any time, and will, at its own cost and
expense, promptly take such action as may be necessary duly to discharge, or to
cause to be discharged, all Lessor Liens attributable to it, and will cause
restitution to be made to the Trust Estate in the amount of any diminution of
the value thereof as a result of its failure to comply with its obligations
under this Section 11.5(b). Lessor will not create or permit to exist at any
---------------
time, and will promptly take such action as may be necessary duly to discharge,
or to cause to be discharged, all Lessor Liens attributable to it, and will
cause restitution to be made to the Trust Estate in the amount of any diminution
of the value thereof as a result of its failure to comply with its obligations
under this Section 11.5(b). Notwithstanding the foregoing, neither Lessor nor
---------------
any of the Certificate Purchasers, as the case may be, shall be required to so
discharge any such Lessor Lien while the same is being contested in good faith
by appropriate proceedings diligently prosecuted so long as such proceedings
shall not involve any meaningful danger of the impairment of any Lien on the
Leased Property in favor of Lessor or of the sale, forfeiture or loss of, and
shall not interfere with the use or disposition of, any portion of the Leased
Property, the Lease or the Trust Estate or title thereto or any interest therein
or the payment of Rent; provided, however, that Lessor and each Certificate
-------- -------
Purchaser shall discharge any such Lessor Lien attributable to it, whether or
not subject to contest as provided above, upon the purchase of the Leased
Property by Lessee pursuant to this Lease.
(c) Trust Agreement. Without prejudice to any right of Certificate
---------------
Trustee under the Trust Agreement to resign as
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Certificate Trustee, or the right of the Certificate Purchasers under the Trust
Agreement to remove Certificate Trustee as Certificate Trustee, each of the
Certificate Purchasers and Lessor hereby agrees with Lessee not to terminate or
revoke the trust created by the Trust Agreement except as permitted by Article
VI of the Trust Agreement before the later of the Lease Termination Date or the
payment in full of the obligations under the Certificates.
(d) Successor Certificate Trustee. Certificate Trustee or any
-----------------------------
successor may resign or be removed by the Certificate Purchasers as Certificate
Trustee, a successor Certificate Trustee may be appointed, and a corporation may
become Certificate Trustee under the Trust Agreement, only in accordance with
the provisions of Section 4.10 of the Trust Agreement.
(e) Indebtedness; Other Business. Lessor shall not contract for,
----------------------------
create, incur or assume any indebtedness, or enter into any business or other
activity, other than pursuant to or under the Operative Documents.
(f) Change of Principal Place of Business. Lessor shall give prompt
-------------------------------------
notice to the Certificate Purchasers and Lessee if Lessor's principal place of
business or chief executive office, or the office where the records concerning
the accounts or contract rights relating to the Leased Property or the Overall
Transaction are kept, shall cease to be located in Wilmington, Delaware or if it
shall change its name, identity or structure.
(g) Depreciation. Before the Lease Termination Date, neither Lessor
------------
nor any Certificate Purchaser shall claim any Federal or state tax attributes or
benefits (including depreciation) relating to the Leased Property unless
required to do so by an appropriate taxing authority or after a clearly
applicable change in Applicable Law or as a protective response to a proposed
adjustment by an Authority; provided, however, that if an appropriate taxing
-------- -------
authority requires Lessor or any Certificate Purchaser to claim any such Federal
or state tax attributes or benefits, such Person shall promptly notify Lessee
thereof and shall permit Lessee to contest such requirement in a manner similar
to the contest rights provided in, and subject to any applicable limitation to a
contest contained in, Section 7.2(b).
--------------
(h) Election of Taxation. Lessor shall not elect to be classified as
--------------------
a business entity taxable as a corporation for United States Federal income tax
purposes under 26 C.F.R. (S) 301.7701-3 nor take or refrain from taking any
other action which would cause it to be so classified.
(i) No Transfers. Notwithstanding anything to the contrary contained
------------
in the Operative Documents, Lessor shall not pledge, hypothecate, convey,
assign, encumber or otherwise
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transfer (by operation of law or otherwise) any interest of Lessor in and to the
Leased Property or this Lease (including any right to receive Rent or other sums
from Lessee), except as expressly contemplated by the Operative Documents, and
any such pledge, hypothecation, conveyance, assignment, encumbrance or other
transfer not expressly authorized in accordance with the Operative Documents
shall be void ab initio and of no force and effect.
-- ------
SECTION 11.6. Restrictions on and Effect of Transfer. (a) No Certificate
--------------------------------------
Purchaser shall assign, convey or otherwise transfer all or any portion of its
right, title or interest in, to or under any of the Operative Documents or any
Certificate, except that without the prior written consent of Lessee, (x) any
bank or similar financial or commercial lending institution may pledge its
Certificate in the ordinary course of its business without the consent of
Lessee, provided, that no transfer upon a foreclosure pursuant to such a pledge
--------
may occur unless the other provisions of this Section 11.6 are complied with,
------------
(y) any Certificate Purchaser may transfer all or any portion of its Certificate
to an Affiliate or to any other existing Certificate Purchaser and (z) any
Certificate Purchaser may transfer any or all of its Certificate upon the
satisfaction of each of the following conditions:
(i) Required Notice and Effective Date. Any Certificate Purchaser
----------------------------------
desiring to effect a transfer of its interest shall give written notice of
each such transfer to Lessee, Certificate Trustee and each other
Certificate Purchaser promptly upon such transfer, setting forth the name
of the transferee, the percentage or interest to be retained by such
Certificate Purchaser, if any, and the date on which such transfer is
proposed to become effective. All reasonable out-of-pocket costs incurred
by Certificate Trustee in connection with any such disposition by a
Certificate Purchaser under this Section 11.6 shall be borne by such
------------
Certificate Purchaser. In the event of a transfer under this Section 11.6,
------------
any expenses incurred by the transferee in connection with its review of
the Operative Documents and its investigation of the Overall Transaction
shall be borne by such transferee or the relevant Certificate Purchaser, as
they may determine, but shall not be considered costs and expenses which
Lessee is obligated to pay or reimburse under Section 14.1.
------------
(ii) Assumption of Obligations. Any transferee pursuant to this
-------------------------
Section 11.6 shall have executed and delivered to Certificate Trustee a
------------
letter in substantially the form of the Investor's Letter attached hereto
as Exhibit P, and thereupon the obligations of the transferring Certificate
---------
Purchaser under the Operative Documents shall be proportionately released
and reduced to the extent of such transfer. Upon any such transfer as above
provided, the transferee shall be deemed to be bound by all obligations
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(whether or not yet accrued) under, and to have become a party to, all
Operative Documents to which its transferor was a party, shall be deemed
the pertinent "Certificate Purchaser" for all purposes of the Operative
Documents and shall be deemed to have made that portion of the payments
pursuant to this Lease previously made or deemed to have been made by the
transferor represented by the interest being conveyed; and each reference
herein and in the other Operative Documents to the pertinent "Certificate
Purchaser" shall thereafter be deemed a reference to the transferee, to the
extent of such transfer, for all purposes. Upon any such transfer, Lessor
shall deliver to each Certificate Purchaser and Lessee new Schedules I to
-----------
this Lease and the Trust Agreement, revised to reflect the relevant
information for such new Certificate Purchaser and the Commitment of such
new Certificate Purchaser (and the revised Commitment of the transferor
Certificate Purchaser if it shall not have transferred its entire
interest).
(iii) Representations and Warranties. Notwithstanding anything to
------------------------------
the contrary set forth above, no Certificate Purchaser may assign, convey
or transfer its interest to any Person, unless such Person shall have
delivered to Certificate Trustee and Lessee a certificate confirming the
accuracy of the representations and warranties set forth in Section 10.2
------------
with respect to such Person as of the date of the assignment.
(iv) Financial Condition of Transferee. No transfer by a Certificate
---------------------------------
Purchaser shall be effective against the other parties to this Lease unless
the transferee is (i) an "accredited investor" which is a bank or other
financial institution with a combined capital, surplus and undivided
profits (or its equivalent) of at least $50,000,000, or (ii) any subsidiary
--
of any such bank or financial institution, provided, that such bank or
--------
financial institution furnishes a guaranty with respect to the transferee's
obligations as a Certificate Purchaser (as the case may be), or (iii) any
--
other entity, provided, the transferee's obligations as a Certificate
--------
Purchaser (as the case may be) are guaranteed by the transferor Certificate
Purchaser.
(v) Amounts. Any transfer of Certificates shall be in a face
-------
principal amount which is (A) equal to or greater than $1,000,000.00, or
(B) the entire amount of the Certificate being transferred.
(vi) Effect. From and after the registration of transfer of its
------
Certificates, the transferring Certificate Purchaser shall be released, to
the extent assumed by the transferee, from its liability and obligations
hereunder and
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under the other Operative Documents relating to the Leased Property to
which such transferor is a party in respect of obligations to be performed
on or after the date of such transfer. Upon any registration of transfer by
a Certificate Purchaser as above provided, any such transferee shall be
deemed a "Certificate Purchaser" (as the case may be) for all purposes of
such documents, and each reference herein to a Certificate Purchaser shall
thereafter be deemed a reference to such transferee for all purposes,
except as the context may otherwise require. Notwithstanding any transfer
as provided in this Section 11.6, the transferor shall be entitled to all
------------
benefits accrued and all rights vested prior to such transfer, including,
without limitation, rights to indemnification under this Lease or any other
Operative Document.
(b) Each Certificate Purchaser may grant participations in its
Certificate(s) to any Person. Each Person who purchases a participation in a
Certificate shall be entitled to the benefits of Sections 7.1, 7.2, 7.5, 7.7,
------------ --- --- ---
7.8 and 7.9 with respect to its participation in such Certificate. No
--- ---
participation contemplated in this Section 11.6(b) shall relieve any Certificate
---------------
Purchaser from its Certificate Purchaser Commitment or its other obligations
hereunder or under any other Operative Documents, and such Certificate Purchaser
shall remain solely responsible for the performance of its Certificate Purchaser
Commitment and such other obligations. Lessee shall continue to deal solely and
directly with the Certificate Purchasers in connection with their rights and
obligations under this Lease and each of the other Operative Documents.
SECTION 11.7. Future Certificate Purchasers. Each Certificate Purchaser,
-----------------------------
by its acceptance of its Certificate or Certificates, shall be deemed to be
bound by and, upon compliance with the requirements of Section 11.6, will be
------------
entitled to all of the benefits of the provisions of this Lease.
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SECTION 11.8. Covenants of Bank. Bank covenants with Lessee and each of
-----------------
the Certificate Purchasers as follows:
(a) No Liens. Bank will not create or permit to exist at any time,
--------
and will, at its own cost and expense, promptly take such action as may be
necessary duly to discharge, or to cause to be discharged, all Lessor Liens
attributable to it solely in its individual capacity, and will cause restitution
to be made to the Trust Estate in the amount of any diminution of the value
thereof as a result of its failure to comply with its obligations under this
Section 11.8(a). Notwithstanding the foregoing, Bank shall not be required so to
---------------
discharge any such Lessor Lien while the same is being contested in good faith
by appropriate proceedings diligently prosecuted so long as such proceedings
shall not involve any meaningful danger of the impairment of any Lien on the
Leased Property in favor of Lessor or of the sale, forfeiture or loss of, and
shall not interfere with the use or disposition of, any portion of the Leased
Property, this Lease or the Trust Estate or title thereto or any interest
therein or the payment of Rent; provided, however, that Bank shall discharge any
-------- -------
such Lessor Lien attributable to it solely in its individual capacity, whether
or not subject to contest as provided above, upon the purchase of the Leased
Property by Lessee pursuant to this Lease.
(b) Application of Funds. Bank shall apply funds held by it
--------------------
hereunder as required by this Lease and the other Operative Documents.
SECTION 12. ASSIGNMENT BY LESSOR.
All or any of the right, title or interest and obligations of Lessor in and
to this Lease and the rights, benefits, advantages and obligations of Lessor
hereunder, including the rights to receive payment of rental or any other
payment hereunder, and the rights, titles and interests in and to the Leased
Property, may be assigned or transferred by Certificate Trustee at any time in
accordance with the provisions set forth in the Trust Agreement.
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SECTION 13. GRANT OF SECURITY INTEREST.
SECTION 13.1. Grant of Security Interest. Lessee hereby assigns, grants,
--------------------------
pledges, mortgages and warrants to Lessor for the benefit of the Certificate
Purchasers a security interest in and Lien against all of Lessee's right, title
and interest, whether now or hereafter existing or acquired, in the Leased
Property and proceeds therefrom, including insurance proceeds, to secure the
payment and performance of all obligations of Lessee now or hereafter existing
under this Lease or any other Operative Document, until such time as Lessee
shall have fulfilled all of its obligations hereunder and under such other
Operative Documents. Upon Lessee's request, Lessor shall at such time as all of
the obligations of Lessee under this Lease or any other Operative Documents have
been indefeasibly paid or performed in full (other than Lessee's contingent
obligations, if any, under Section 7) execute and deliver termination statements
---------
and other appropriate documentation reasonably requested by Lessee, all at
Lessee's expense, to evidence Lessor's release of its Lien against the Leased
Property. If Lessee pays or causes to be paid to Lessor all obligations of
Lessee under this Lease or any other Operative Documents, at the times and in
the manner specified, without deduction, fraud or delay, and Lessee performs and
complies with all the agreements herein and in the other Operative Documents,
then this instrument and the estate herein granted shall cease and become void.
SECTION 13.2. Retention of Proceeds. If Lessee would be entitled to any
---------------------
amount or title to any portion of the Leased Property hereunder but for the
existence of any Event of Default or Default, Lessor shall hold such amount and
such portion of the Leased Property and shall be entitled to apply such amounts
against any amounts due hereunder; provided that Lessor shall distribute such
--------
amount or transfer such portion of the Leased Property in accordance with the
other terms of this Lease if and when no Event of Default or Default exists.
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SECTION 14. MISCELLANEOUS PROVISIONS.
SECTION 14.1. Payment of Transaction Costs and Other Costs. Whether or
--------------------------------------------
not the Overall Transaction is consummated, Lessee shall pay all Transaction
Costs in accordance with Section 3.1(k) and all other fees, expenses and costs
--------------
in accordance with the Operative Documents. If the Overall Transaction does not
close, Lessee shall pay such Transaction Costs and such other costs promptly
upon receipt of invoices therefor. In addition, Lessee shall pay or reimburse
Bank, Lessor and the Certificate Purchasers for all other out-of-pocket costs
and expenses (including allocated fees of internal counsel) reasonably incurred
in connection with: (a) the entering into, or the giving or withholding of, any
future amendments, supplements, waivers or consents with respect to the
Operative Documents; (b) any Casualty or termination of the Lease or any other
Operative Document; (c) the negotiation and documentation of any restructuring
or "workout", whether or not consummated, of any Operative Document; (d) the
enforcement of the rights or remedies under the Operative Documents; (e) further
assurances requested pursuant to Section 11.1(m) or any similar provision in
---------------
other Operative Documents; (f) any transfer by Lessor or any Certificate
Purchaser of any interest in the Operative Documents during the continuance of
an Event of Default; and (g) the ongoing fees and expenses for which Lessee is
obligated under the Operative Documents (including, without limitation, the fees
and expenses of Certificate Trustee).
SECTION 14.2. Survival of Agreements, etc. All representations,
---------------------------
warranties, covenants, indemnities and agreements of the parties provided for in
the Operative Documents, and the obligations of the parties under any and all
thereof, shall survive the execution and delivery and the termination or
expiration of this Lease and any of the other Operative Documents, the transfer
of the interest in the Leased Property to or by Lessor as provided herein or in
any of the other Operative Documents (and shall not be merged into any
conveyance or transfer document), any disposition of any interest of Lessor in
the Leased Property, the purchase and sale of the Certificates, payment therefor
and any disposition thereof, and shall be and continue in effect notwithstanding
any investigation made by any party hereto or to any of the other Operative
Documents and the fact that any such party may waive compliance with any of the
other terms, provisions or conditions of any of the Operative Documents. If any
right or option of Lessee provided in this Lease would, in the absence of the
limitation imposed by this sentence, be invalid or unenforceable as being in
violation of the rule against perpetuities or any other rule of law relating to
the vesting of an interest in or the suspension of the power of alienation of
property, then such right or option shall be exercisable only during the period
which shall end twenty-one (21) years after the
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date of death of the last survivor of the descendants of Xxxxxxxx X. Xxxxxxxxx,
the former President of the United States, Xxxxx Xxxx, the deceased automobile
manufacturer, and Xxxx X. Xxxxxxxxxxx, the founder of the Standard Oil Company,
known to be alive on the date of the execution, acknowledgement and delivery of
this Lease.
SECTION 14.3. Applicable Law. THIS LEASE AND THE RIGHTS AND OBLIGATIONS
--------------
OF THE PARTIES UNDER THIS LEASE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING ALL OTHER
CHOICE OF LAW AND CONFLICTS OF LAW RULES OF SUCH STATE (EXCEPT THAT MATTERS
RELATING TO THE VALIDITY OF THE LIEN CREATED HEREBY AND THE EXERCISE OF REMEDIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA).
SECTION 14.4. Effect and Modification of Lease and Other Operative
----------------------------------------------------
Documents. This Lease exclusively and completely states the rights of Lessor
---------
and Lessee with respect to the leasing during the term of this Lease of the
Leased Property and supersedes all prior agreements, oral or written, with
respect thereto. Neither this Lease nor any of the other Operative Documents
nor any of the terms hereof or thereof may be terminated, amended, supplemented,
waived or modified orally, but only by an instrument in writing signed by the
party against which the enforcement of the termination, amendment, supplement,
waiver or modification shall be sought; and no such termination, amendment,
supplement, waiver or modification shall be effective unless a signed copy
thereof shall have been delivered to Lessor, the Certificate Purchasers and
Lessee. Lessor and Lessee shall not amend, modify or supplement the Lease
without the written consent of the Required Certificate Purchasers; and without
the prior written consent of each Certificate Purchaser, Lessor shall not:
(a) modify any of the provisions of this Section 14.4 or change the
------------
definition of "Required Certificate Purchasers", or modify or waive any
provision of any Operative Document requiring action by all of the Certificate
Purchasers, or release any collateral (except as otherwise specifically provided
in any Operative Document);
(b) reduce the amount or change the time of payment of any
Certificate Purchaser Amount or any Yield Amount owing or payable on any
Certificate, as applicable, or modify any of the provisions of Article III of
the Trust Agreement;
(c) modify, amend, waive or supplement any of the provisions of
Sections 2, 9, 11.1 or 11.6;
---------- - ---- ----
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(d) reduce, modify, amend or waive any indemnities in favor of any
Certificate Purchaser;
(e) reduce the amount or change the time of payment of Rent or the
Lease Balance;
(f) consent to any assignment of the Lease releasing Lessee from its
obligations to pay Rent or the Lease Balance or changing the absolute and
unconditional character of such obligations; or
(g) permit the creation of any interest in or Lien on the Trust
Estate or any part thereof except as contemplated by the Operative Documents, or
deprive any Certificate Purchaser of the benefit of the Lien secured by the
Trust Estate.
SECTION 14.5. Notices. Unless otherwise specified herein, all notices,
-------
requests, demands or other communications to or upon the respective parties
hereto shall be by letter, facsimile (with telephonic confirmation of receipt)
or bank wire and shall be deemed to have been given (i) in the case of notice by
letter addressed as provided on Schedule I delivered (a) by hand or by overnight
----------
courier, the earlier of when delivered to the addressee if delivered on a
Business Day and, if not delivered on a Business Day, the first Business Day
thereafter or (b) by registered or certified mail, postage prepaid, return
receipt requested, on the date of receipt thereof, as evidenced by the return
receipt, and (ii) in the case of notice by facsimile or bank wire, when
transmitted during business hours on a Business Day and, if not transmitted
during business hours on a Business Day, the first Business Day thereafter,
addressed as provided on Schedule I, or to such other address as any of the
----------
parties hereto may designate by ten (10) days' prior written notice. Copies of
all notices given by facsimile or bank wire shall be contemporaneously sent by
overnight courier.
SECTION 14.6. Counterparts. This Lease has been executed in several
------------
counterparts. One counterpart has been prominently marked "THIS COUNTERPART IS
ORIGINAL EXECUTED COUNTERPART NO. 1". Only the counterpart marked "THIS
COUNTERPART IS ORIGINAL EXECUTED COUNTERPART NO. 1" shall evidence a monetary
obligation of Lessee or shall be deemed to be an original or to be chattel paper
for purposes of the UCC, and such copy shall be held by Lessor.
SECTION 14.7. Severability. Whenever possible, each provision of this
------------
Lease shall be interpreted in such manner as to be effective and valid under
Applicable Law; but if any provision of this Lease shall be prohibited by or
invalid under Applicable Law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Lease.
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SECTION 14.8. Successors and Assigns. This Lease shall be binding upon
----------------------
the parties hereto and their respective successors and permitted assigns and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
SECTION 14.9. Parties in Interest. Except as expressly provided herein,
-------------------
none of the provisions of this Lease is intended for the benefit of any Person
except the parties hereto, their successors and permitted assigns; provided,
--------
that each of Lessor and Lessee agrees that the Certificate Purchasers shall
benefit from all of the provisions of this Lease applicable to them.
SECTION 14.10. Brokers. Lessee, each Certificate Purchaser and Lessor
-------
represents to the others that it has not retained or employed any broker, finder
or financial advisor other than Corporate National Realty, Inc. to act on its
behalf in connection with this Lease, nor has it authorized any other broker,
finder or financial adviser retained or employed by any other Person so to act,
nor has it incurred any fees or commissions to which Lessor or any Certificate
Purchaser might be subjected by virtue of their entering into the Overall
Transaction. The sole compensation of Corporate National Realty, Inc. for
acting hereunder is the receipt of the amounts, including reimbursement of
expenses, provided for or described in the Operative Documents. Any Person who
is in breach of this representation shall indemnify and hold the other Persons
harmless from and against any liability arising out of such breach of this
representation.
SECTION 14.11. Limitation of Liability. It is expressly understood and
-----------------------
agreed by the parties hereto that (a) except as otherwise expressly provided
herein, this Lease is executed and delivered by Bank, not individually or
personally but solely as Certificate Trustee of the Trust, as Lessor, in the
exercise of the power and authority conferred and vested in it under the Trust
Agreement; (b) except as otherwise expressly provided herein, each of the
representations, undertakings and agreements herein made on the part of Lessor
is made and intended not as personal representations, undertakings and
agreements by Bank but is made and intended for the purpose for binding only
Lessor; (c) nothing herein contained shall be construed as creating any
liability on Bank, individually or personally (except to the extent specifically
agreed in its individual capacity), to perform any covenant either expressed or
implied contained herein, all such liability, if any, being expressly waived by
the parties hereto, the Certificate Purchasers and by any other Person claiming
by, through or under this Lease; and (d) under no circumstances shall Bank be
personally liable for the payment of any indebtedness or expenses of Lessor or
be liable for the breach or failure of any obligation, representation, warranty
or covenant made or undertaken by Lessor under this Lease or any of the other
Operative Documents.
-123-
SECTION 14.12. Liabilities of the Certificate Purchasers. No Certificate
-----------------------------------------
Purchaser shall have any obligation to any other Certificate Purchaser or to
Lessee or Lessor with respect to the Overall Transaction except those
obligations of such Certificate Purchaser expressly set forth in the Operative
Documents or as set forth in the instruments delivered in connection therewith,
and no Certificate Purchaser shall be liable for performance by any other Person
of such other Person's obligations under the Operative Documents except as
otherwise so set forth.
SECTION 14.13. Reproduction of Documents. This Lease and all other
-------------------------
Operative Documents, all documents constituting Schedules or Exhibits hereto or
thereto, and all documents relating hereto or thereto received by Lessee, Lessor
or any Certificate Purchaser, including: (a) consents, waivers and
modifications that may hereafter be executed; (b) documents received by the
Certificate Purchasers or Lessor in connection with the receipt and/or
acquisition of the Leased Property; and (c) financial statements, certificates,
and other information previously or hereafter furnished to Lessor or any
Certificate Purchaser may be reproduced by the party receiving the same by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. Each of Lessee, Lessor and each Certificate Purchaser
agrees and stipulates that, to the extent permitted by law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such party in the
regular course of business) and that, to the extent permitted by law, any
enlargement, facsimile, or further reproduction of such reproduction shall
likewise be admissible in evidence.
SECTION 14.14. Consideration for Consents to Waivers and Amendments.
----------------------------------------------------
Lessee hereby agrees that it will not, and that it will not permit any of its
Affiliates to, offer or give any consideration or benefit of any kind whatsoever
to any Certificate Purchaser in connection with, in exchange for, or as an
inducement to, such Certificate Purchaser's consent to any waiver in respect of,
any modification or amendment of, any supplement to, or any other consent or
approval under, any Operative Document unless such consideration or benefit is
offered ratably to all Certificate Purchasers.
SECTION 14.15. SUBMISSION TO JURISDICTION. LESSEE, EACH CERTIFICATE
--------------------------
PURCHASER AND THE CERTIFICATE TRUSTEE HEREBY SUBMIT TO THE FULLEST EXTENT
PERMITTED BY LAW TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA AND OF ANY COURT OF THE STATE OF
-124-
NEW YORK OR THE COMMONWEALTH OF PENNSYLVANIA FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THE OPERATIVE DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY. LESSEE, EACH CERTIFICATE PURCHASER AND THE
CERTIFICATE TRUSTEE IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH ANY OF THE FOREGOING MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
SECTION 14.16. Jury Trial. EACH OF LESSEE, LESSOR AND EACH CERTIFICATE
----------
PURCHASER HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS LEASE OR ANY
OTHER OPERATIVE DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION
WITH THIS LEASE OR ANY OTHER OPERATIVE DOCUMENT AND AGREES THAT ANY SUCH ACTION
OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 14.17. No Merger. There shall be no merger of this Lease or of
---------
the leasehold estate created hereby by reason of the fact that the same Person
may acquire, own or hold, directly or indirectly, in whole or in part, (a) this
Lease or the leasehold estate created hereby or any interest in this Lease or
such leasehold estate, (b) the fee or ground leasehold estate in the Leased
Property, except as may expressly be stated in a written instrument duly
executed and delivered by the appropriate Person or (c) a beneficial interest in
Lessor. If the fee simple interest in the Leased Property and the leasehold
interest therein shall be held by the same party, the interest of Lessee in the
Lease shall not terminate or be merged and the Lease shall remain in full force
and effect.
SECTION 14.18. Captions; Table of Contents. Section captions and the
---------------------------
table of contents used in this Lease (including the Schedules, Exhibits and
Annexes hereto) are for convenience of reference only and shall not affect the
construction of this Lease.
SECTION 14.19. Schedules and Exhibits. The Schedules and Exhibits
----------------------
hereto, along with all attachments referenced in any of such items, are
incorporated herein by reference and made a part hereof.
[Signature page follows]
-125-
IN WITNESS WHEREOF, the parties hereto have executed this Lease Agreement as
of the day and year first above written.
[Seal] 1997-1 VALLEY STREAM TRUST
By: Wilmington Trust Company, not in
its individual capacity except as
expressly stated herein but solely
as Certificate Trustee, as Lessor
Attest:
By:
------------------------- ----------------------------------
Name:
--------------------------------
Title:
-------------------------------
[Seal] IKON OFFICE SOLUTIONS, INC.
(f/k/a Alco Standard Corporation),
as Lessee
Attest:
By:
------------------------- ----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Certificate of Residence
------------------------
I hereby certify that the precise and complete post office address of the
within named mortgagee is 1997-1 Valley Stream Trust, c/o Wilmington Trust
Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000-0000, Attention: Corporate Trust Administration.
1997-1 VALLEY STREAM TRUST
By: Wilmington Trust Company, not
in its individual capacity but
solely as Certificate Trustee
Attest:
By:
------------------------- ----------------------------------
Name:
--------------------------------
Title:
-------------------------------
The undersigned Certificate Purchaser hereby (a) acknowledges its receipt of a
copy of this Lease, (b) agrees to accept all of the provisions thereof that are
for its benefit as a Certificate Purchaser, (c) agrees to comply with all of the
obligations set forth therein as its obligations as a Certificate Purchaser, (d)
adopts and ratifies all of the representations, warranties, covenants and other
agreements set forth therein as being made by it, and (e) otherwise agrees to be
bound by all of the terms and provisions thereof as fully as if it were a party
thereto.
Dated: as of February ___, 1997
SECURITY PACIFIC LEASING CORPORATION
By:
------------------------------------
Name: Xxxxxx X. Xxxx XX
Title: Vice President
The undersigned Certificate Purchaser hereby (a) acknowledges its receipt of a
copy of this Lease, (b) agrees to accept all of the provisions thereof that are
for its benefit as a Certificate Purchaser, (c) agrees to comply with all of the
obligations set forth therein as its obligations as a Certificate Purchaser, (d)
adopts and ratifies all of the representations, warranties, covenants and other
agreements set forth therein as being made by it, and (e) otherwise agrees to be
bound by all of the terms and provisions thereof as fully as if it were a party
thereto.
Dated: as of February ___, 1997
SUN TRUST BANKS, INC.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
The undersigned Certificate Purchaser hereby (a) acknowledges its receipt of a
copy of this Lease, (b) agrees to accept all of the provisions thereof that are
for its benefit as a Certificate Purchaser, (c) agrees to comply with all of the
obligations set forth therein as its obligations as a Certificate Purchaser, (d)
adopts and ratifies all of the representations, warranties, covenants and other
agreements set forth therein as being made by it, and (e) otherwise agrees to be
bound by all of the terms and provisions thereof as fully as if it were a party
thereto.
Dated: as of February ___, 1997
TORONTO DOMINION BANK
By:
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Manager, Credit
Administration
STATE OF )
---------- ) ss.:
COUNTY OF )
---------
On the ___ day of February, 1997, before me, the subscriber, a Notary
Public in and for the State and County aforesaid, personally appeared
________________________________, who acknowledged himself to be the
___________________________ of WILMINGTON TRUST COMPANY, a Delaware banking
corporation, not in its individual capacity, but solely as Certificate Trustee
of 1997-1 Valley Stream Trust, as Lessor, and that he, being authorized to do
so, executed the foregoing instrument for the purposes therein contained by
signing the name of the corporation by himself as such officer.
WITNESS my hand and seal the day and year aforesaid.
----------------------------
Notary Public
My commission expires:
--------------
COMMONWEALTH OF )
----------------- ) ss.:
COUNTY OF )
------------------
On the ___ day of February, 1997, before me, the subscriber, a Notary
Public in and for the State and County aforesaid, personally appeared
________________________________, who acknowledged himself to be the
___________________________ of IKON OFFICE SOLUTIONS, INC., an Ohio
corporation, and that he, being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing the name of the
corporation by himself as such officer.
WITNESS my hand and seal the day and year aforesaid.
----------------------------
Notary Public
My commission expires:
--------------
SCHEDULE I TO LEASE AGREEMENT
1. Lessor
------
Address for all communications (except wire transfers):
1997-1 Valley Stream Trust
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Corporate Trust Administration
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address for wire transfers:
Bank: Wilmington Trust Company, Wilmington, Delaware
ABA Routing #: 000000000
Account #: 41429-0
Notify: Corporate Trust Administration, Attn: Xxxx Xxxxxxx
Reference: 1997-1 Valley Stream Trust
2. Lessee
------
Address for all communications (except wire transfers):
IKON Office Solutions, Inc.
Treasury Department
000 Xxxxxxxxx Xxxx
Xxxxx, XX 00000
Attn: X.X. (Xxxx) Xxxxx,
Assistant Treasurer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
3. Certificate Purchasers
----------------------
A. SECURITY PACIFIC LEASING CORPORATION
Address for all communications (except wire transfers):
Security Pacific Leasing Corporation
000 Xxxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address for wire transfers:
Bank: Bank of America NT & SA, San Francisco Main Branch,
San Francisco, CA
ABA Routing #: 121 000 358
Account #: 14995-50439
Notify: Xxxxxxx Xxxxxx
Reference: Security Pacific Leasing Corporation
B. SUN TRUST BANKS, INC.
Address for all communications (except wire transfers):
Sun Trust Banks, Inc.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxxxx,
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address for wire transfers:
Bank: Sun Trust Bank, Atlanta
ABA Routing #: 000000000
Account #: 970100112
Notify: Xxxx Xxxx, Tel:(000)000-0000, Fax:(000)000-0000
Reference: IKON Office Solutions, Inc., Attn: Xxxx Xxxxxxx
C. TORONTO DOMINION BANK
Address for all communications (except wire transfers):
For credit related matters
--------------------------
The Toronto-Dominion Bank
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxx,
Manager-Corporate Finance
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
For administrative matters (rate settings, fundings, payments, etc)
-------------------------------------------------------------------
The Toronto-Dominion Bank
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Manager, Credit Administration
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address for wire transfers:
Bank: Bank of America National Trust and Savings Association,
New York, New York
ABA Routing #: 000000000
Account #: Toronto Dominion Bank, Houston
Notify: 0000-0-00000
Reference: 1997-1 Valley Stream Trust
SCHEDULE II TO LEASE AGREEMENT
Description of the Land
-----------------------
SCHEDULE III TO LEASE AGREEMENT
Plans and Specifications
------------------------
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. DEFINITIONS ................................................ 1
SECTION 2. DISBURSEMENT DATE, ADVANCE DATES; FUNDINGS
AND LEASE; GENERAL PROVISIONS.............................. 24
SECTION 2.1. Documentation Date........................................... 24
SECTION 2.2. Initial Advance Date......................................... 24
SECTION 2.3. Fundings..................................................... 24
SECTION 2.4. Application of Funds; Purchase and Lease
of Leased Property......................................... 25
SECTION 2.5. Advance Date Notices and Closings............................ 26
SECTION 2.6. Postponement of Advance Date................................. 27
SECTION 2.7. Certificate Purchasers' Instructions to Lessor............... 27
SECTION 2.8. Payments to Certificate Purchasers........................... 27
SECTION 2.9. Nature of Transaction........................................ 28
SECTION 2.10. Waivers...................................................... 29
SECTION 2.11. Legal and Tax Representation................................. 29
SECTION 2.12. Computations................................................. 30
SECTION 2.13. Certificates; Notations...................................... 30
SECTION 2.14. Commitment Fee............................................... 30
SECTION 3. CONDITIONS PRECEDENT......................................... 31
SECTION 3.1. Conditions to Initial Advance Date........................... 31
SECTION 3.2. Conditions to Construction Advance Dates
for Construction Costs..................................... 38
SECTION 3.3. Conditions to Final Construction Advance..................... 40
SECTION 4. LEASE TERM, RENT AND PAYMENT................................. 41
SECTION 4.1. Lease of Leased Property..................................... 41
SECTION 4.2. Lease Term................................................... 41
SECTION 4.3. Lease Renewal................................................ 41
SECTION 4.4. Rent Payments................................................ 44
SECTION 4.5. Supplemental Rent............................................ 44
SECTION 4.6. Place and Manner of Payment.................................. 45
SECTION 4.7. Utility Charges.............................................. 45
SECTION 4.8. Enjoyment.................................................... 45
SECTION 4.9. Net Lease.................................................... 45
SECTION 4.10. No Termination or Abatement.................................. 47
SECTION 5. MAINTENANCE AND REPAIR; ALTERATIONS AND
ADDITIONS; LIENS; ASSIGNMENT AND
SUBLETTING; EASEMENTS...................................... 47
SECTION 5.1. Maintenance and Repair; Compliance With Law.................. 47
SECTION 5.2. Alterations.................................................. 48
SECTION 5.3. Title to Alterations......................................... 49
SECTION 5.4. Maintenance and Repair Reports............................... 50
SECTION 5.5. Permitted Contests........................................... 51
SECTION 5.6. Use.......................................................... 51
SECTION 5.7. Liens........................................................ 52
SECTION 5.8. Inspection................................................... 52
i
TABLE OF CONTENTS
-----------------
(cont'd)
Page
----
SECTION 5.9. Assignment and Subletting.................................... 52
SECTION 5.10. Easements.................................................... 53
SECTION 6. RISK OF LOSS; INSURANCE...................................... 55
SECTION 6.1. Event of Loss; Condemnation or Casualty...................... 55
SECTION 6.2. Application of Payments Relating to an
Event of Loss.............................................. 56
SECTION 6.3. Application of Certain Payments Relating
to a Condemnation.......................................... 56
SECTION 6.4. Casualty..................................................... 56
SECTION 6.5. Negotiations................................................. 57
SECTION 6.6. No Rent Abatement............................................ 57
SECTION 6.7. Required Coverages........................................... 57
SECTION 6.8. Delivery of Insurance Certificates........................... 59
SECTION 7. INDEMNITIES ................................................ 59
SECTION 7.1. General Indemnification...................................... 59
SECTION 7.2. General Tax Indemnity........................................ 61
SECTION 7.3. Withholding Tax Exemption.................................... 64
SECTION 7.4. Excessive Use Indemnity...................................... 65
SECTION 7.5. After-Tax Basis.............................................. 65
SECTION 7.6. Proceedings in Respect of Claims............................. 66
SECTION 7.7. Funding Losses............................................... 67
SECTION 7.8. Increased Cost............................................... 68
SECTION 7.9. LIBO Rate Illegal, Unavailable or Impracticable.............. 70
SECTION 7.10. Indemnity Payments in Addition to Lease
Obligations................................................ 72
SECTION 8. EVENTS OF DEFAULT; REMEDIES.................................. 72
SECTION 8.1. Events of Default............................................ 72
SECTION 8.2. Remedies..................................................... 75
SECTION 8.3. Proceeds of Sale; Deficiency................................. 78
SECTION 8.4. Grant and Foreclosure on Lessee's Estate..................... 79
SECTION 8.5. Remedies Cumulative; No Waiver; Consents..................... 80
SECTION 8.6. Power of Attorney............................................ 80
SECTION 9. LEASE TERMINATION............................................ 81
SECTION 9.1. End of Term Options.......................................... 81
SECTION 9.2. Election of Options.......................................... 82
SECTION 9.3. Sale Option Procedures....................................... 83
SECTION 9.4. Appraisals................................................... 84
SECTION 9.5. Return of Leased Property.................................... 84
SECTION 9.6. Early Termination............................................ 85
SECTION 10. REPRESENTATIONS AND WARRANTIES............................... 85
SECTION 10.1. Representations and Warranties of Lessee..................... 85
SECTION 10.2. Representations and Warranties of each
Certificate Purchaser...................................... 95
SECTION 10.3. Representations and Warranties of Lessor..................... 95
SECTION 10.4. Representations and Warranties of Bank....................... 97
ii
TABLE OF CONTENTS
-----------------
(cont'd)
Page
----
SECTION 10.5. Representations and Warranties of
Certificate Trustee..................................... 98
SECTION 10.6. Representations of Lessee with Respect to
Each Advance............................................ 99
SECTION 11. COVENANTS................................................. 100
SECTION 11.1. Covenants of Lessee....................................... 100
SECTION 11.2. Taxes..................................................... 107
SECTION 11.3. Compliance with Laws...................................... 107
SECTION 11.4. Employee Benefit Plans.................................... 108
SECTION 11.5. Covenants of Lessor and Certificate Purchasers............ 108
SECTION 11.6. Restrictions on and Effect of Transfer.................... 110
SECTION 11.7. Future Certificate Purchasers............................. 113
SECTION 11.8. Covenants of Bank......................................... 113
SECTION 12. ASSIGNMENT BY LESSOR...................................... 113
SECTION 13. GRANT OF SECURITY INTEREST................................ 114
SECTION 13.1. Grant of Security Interest................................ 114
SECTION 13.2. Retention of Proceeds..................................... 114
SECTION 14. MISCELLANEOUS PROVISIONS.................................. 114
SECTION 14.1. Payment of Transaction Costs and Other Costs.............. 114
SECTION 14.2. Survival of Agreements, etc............................... 115
SECTION 14.3. Applicable Law............................................ 115
SECTION 14.4. Effect and Modification of Lease and
Other Operative Documents............................... 116
SECTION 14.5. Notices................................................... 117
SECTION 14.6. Counterparts.............................................. 117
SECTION 14.7. Severability.............................................. 117
SECTION 14.8. Successors and Assigns.................................... 117
SECTION 14.9. Parties in Interest....................................... 117
SECTION 14.10. Brokers................................................... 117
SECTION 14.11. Limitation of Liability................................... 118
SECTION 14.12. Liabilities of the Certificate Purchasers................. 118
SECTION 14.13. Reproduction of Documents................................. 118
SECTION 14.14. Consideration for Consents to Waivers and
Amendments.............................................. 119
SECTION 14.15. SUBMISSION TO JURISDICTION................................ 119
SECTION 14.16. Jury Trial................................................ 119
SECTION 14.17. POWER TO CONFESS JUDGMENT................................. 120
SECTION 14.18. POWER TO EXECUTE ON A JUDGMENT WITHOUT HEARING............ 120
SECTION 14.19. No Merger................................................. 120
SECTION 14.20. Captions; Table of Contents............................... 120
SECTION 14.21. Schedules and Exhibits.................................... 120
iii
Schedule I Addresses for Payment and Other Communications to
all Parties
Schedule II Description of the Land
Schedule III Plans and Specifications
Exhibit A Form of Xxxx of Sale
Exhibit B Form of Deed
Exhibit C Form of Memorandum of Lease
Exhibit D Form of Trust Agreement
Exhibit E Form of [Initial] [Completion] Advance Date Notice
Exhibit F Schedule of Filings and Recordings
Exhibit G Form of Environmental Certificate
Exhibit H Form of Opinion of General Counsel to Lessee
Exhibit I Form of Opinion of Local Counsel
Exhibit J Form of Officer's Certificate of Lessee
Exhibit K-1 Form of Officer's Certificate of Lessor
Exhibit K-2 Form of Officer's Certificate of Certificate Trustee
Exhibit L Form of Officer's Certificate of Bank
Exhibit M Form of Architect's Certificate
Exhibit N Schedule of Government Actions
Exhibit O Schedule of Pending Investigations
Exhibit P Form of Investor's Letter
Exhibit Q Purchase Agreement
iv
