1
Exhibit 10.15
EXECUTION COPY
PARTICIPATION AGREEMENT
dated as of December 29, 2000
among
APEX TRAILER LEASING & RENTALS, L.P.,
as Lessee
WABASH NATIONAL CORPORATION,
as Guarantor
WABASH STATUTORY TRUST - 2000,
as Lessor
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity,
except as provided herein, but solely as Trustee
FLEET CAPITAL CORPORATION,
as Tranche A Lender
FLEET CAPITAL CORPORATION,
as Tranche B Lender
FLEET CAPITAL CORPORATION,
as Owner Participant
FLEET CAPITAL CORPORATION
as Collateral Agent
and
FLEET CAPITAL CORPORATION,
as Administrative Agent
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS; INTERPRETATION ................................................... 2
SECTION 1.1. Definitions; Interpretation ....................................... 2
ARTICLE II CLOSING DATES; CONDITIONS ................................................... 2
SECTION 2.1. Closing Dates ..................................................... 2
SECTION 2.2. Initial Closing Date Conditions ................................... 3
SECTION 2.3. Closing Conditions for Each Closing Date .......................... 5
ARTICLE III FUNDING OF ADVANCES; NOTES .................................................. 8
SECTION 3.1. Advances .......................................................... 8
SECTION 3.2. Owner Participant's Commitment .................................... 9
SECTION 3.3. Loan Commitment ................................................... 9
SECTION 3.4. Procedures for Advances ........................................... 9
SECTION 3.5. Repayment of Loans, Notes and Evidence of Debt .................... 10
ARTICLE IV EQUITY RETURN; INTEREST; FEES ................................................ 10
SECTION 4.1. Calculation of Basic Rent ......................................... 10
SECTION 4.2. Interest on Loans ................................................. 11
SECTION 4.3. Equity Return ..................................................... 11
SECTION 4.4. Computation of Interest and Equity Return ......................... 12
SECTION 4.5. Payment of Unused Commitment Fees ................................. 12
ARTICLE V THE NOTES ..................................................................... 12
SECTION 5.1. Form of Notes ..................................................... 12
SECTION 5.2. Terms of Notes .................................................... 12
SECTION 5.3. Taxes; Withholding ................................................ 13
SECTION 5.4. Payments from Trust Estate Only ................................... 14
SECTION 5.5. Method of Payment ................................................. 14
SECTION 5.6. Application of Payments ........................................... 15
SECTION 5.7. Registration. Transfer and Exchange of Notes ...................... 15
SECTION 5.8. Mutilated, Destroyed, Lost or Stolen Notes ........................ 16
SECTION 5.9. Payment of Expenses on Transfer ................................... 16
SECTION 5.10. The New Notes .................................................... 16
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TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 5.11. Prepayments ...................................................... 17
ARTICLE VI COVENANTS .................................................................... 19
SECTION 6.1. Covenants of Obligors ............................................. 19
SECTION 6.2. Covenants of Owner Participant .................................... 22
SECTION 6.3. Covenants of Collateral Agent ..................................... 22
SECTION 6.4. Covenants of Trust Company ........................................ 22
SECTION 6.5. Covenant of Lessor ................................................ 22
ARTICLE VII GENERAL INDEMNITY ........................................................... 22
SECTION 7.1. Indemnity ......................................................... 22
ARTICLE VIII GENERAL TAX INDEMNITY; OTHER INDEMNITIES .................................. 26
SECTION 8.1. Indemnity ......................................................... 26
SECTION 8.2. Indemnity Payments in Addition to Lease Obligations ............... 30
SECTION 8.3. Eurodollar Rate Lending Unlawful .................................. 30
SECTION 8.4. Deposits Unavailable .............................................. 30
SECTION 8.5. Increased Costs, Etc .............................................. 31
SECTION 8.6. Funding Losses .................................................... 32
SECTION 8.7. Capital Adequacy .................................................. 32
ARTICLE IX REPRESENTATIONS AND WARRANTIES ............................................... 33
SECTION 9.1. Representations and Warranties of the Obligors .................... 33
SECTION 9.2. Representations and Warranties of Lessor .......................... 39
SECTION 9.3. Representations and Warranties of the Trustee and the Trust Company 40
ARTICLE X PAYMENT OF CERTAIN EXPENSES ................................................... 42
SECTION 10.1. Payment of Costs and Expenses .................................... 42
SECTION 10.2. Brokers' Fees and Stamp Taxes .................................... 43
SECTION 10.3. Related Obligations .............................................. 43
ARTICLE XI TRANSFERS OF PARTICIPANTS' INTERESTS ......................................... 43
SECTION 11.1. Assignments by Participants ...................................... 43
SECTION 11.2. Participants ..................................................... 44
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PAGE
SECTION 11.3. Pledge Under Regulation A ........................................ 45
ARTICLE XII THE ADMINISTRATIVE AGENT ................................................... 45
SECTION 12.1. Appointment ...................................................... 45
SECTION 12.2. Delegation of Duties ............................................. 45
SECTION 12.3. Exculpatory Provisions ........................................... 45
SECTION 12.4. Reliance by Administrative Agent ................................. 46
SECTION 12.5. Notice of Default ................................................ 46
SECTION 12.6. Non-Reliance on Administrative Agent and Other Participants ...... 47
SECTION 12.7. Indemnification .................................................. 47
SECTION 12.8. Administrative Agent in Its Individual Capacity .................. 48
SECTION 12.9. Successor Administrative Agent ................................... 48
ARTICLE XIII MISCELLANEOUS ............................................................. 48
SECTION 13.1. Survival of Agreements ........................................... 48
SECTION 13.2. No Broker, etc ................................................... 49
SECTION 13.3. Notices .......................................................... 49
SECTION 13.4. Counterparts ..................................................... 49
SECTION 13.5. Amendments ....................................................... 49
SECTION 13.6. Headings, etc .................................................... 51
SECTION 13.7. Parties in Interest .............................................. 51
SECTION 13.8. GOVERNING LAW .................................................... 51
SECTION 13.9. Severability ..................................................... 51
SECTION 13.10. Liability Limited ............................................... 51
SECTION 13.11. Further Assurances .............................................. 52
SECTION 13.12. SUBMISSION TO JURISDICTION ...................................... 52
SECTION 13.13. Setoff .......................................................... 53
SECTION 13.14. WAIVER OF JURY TRIAL ............................................ 53
SECTION 13.15. Cooperation in Minimizing Certain Taxes ......................... 53
SECTION 13.16. Intent .......................................................... 53
SECTION 13.17. Amounts Due Under Lease ......................................... 54
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SCHEDULES
APPENDIX A Definitions
SCHEDULE I Notice Information, Wire Instructions, and Funding Offices
SCHEDULE II Commitments
EXHIBITS
EXHIBIT A-1 Form of Advance Request
EXHIBIT B-1 Form of Tranche A Notes
EXHIBIT B-2 Form of Tranche B Notes
EXHIBIT C Security Interest Filing Jurisdictions
EXHIBIT D Assignment of Notes
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT (this "Participation Agreement"), dated as
of December 29, 2000, is entered into by and among APEX TRAILER LEASING &
RENTALS, L.P., a Delaware limited partnership, as the Lessee (in such capacity,
together with its permitted successors, the "Lessee"); WABASH NATIONAL
CORPORATION, a Delaware corporation, as guarantor (the "Guarantor"); WABASH
STATUTORY TRUST - 2000, a Connecticut statutory trust, as Lessor (together with
its permitted successors and assigns, the "Lessor"); STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, not in its individual capacity,
except as set forth herein, but solely as Trustee (the "Trustee" and in its
individual capacity, the "Trust Company"); FLEET CAPITAL CORPORATION, a Rhode
Island corporation, as the Tranche A Lender ("Fleet Capital", together with its
permitted successors and assigns, the "Tranche A Lender"); FLEET CAPITAL, as the
Tranche B Lender (together with its permitted successors and assigns, the
"Tranche B Lender", and together with the Tranche A Lender, the "Lenders");
FLEET CAPITAL, as the Owner Participant (in such capacity, the "Owner
Participant", together with any successors and permitted assigns, the "Owner
Participants", and together with the Lenders, the "Participants"); FLEET
CAPITAL, as administrative agent for the Lenders (together with its permitted
successors and assigns in such capacity, the "Administrative Agent"); and FLEET
CAPITAL as collateral agent for the Lenders (together with its permitted
successors and assigns in such capacity, the "Collateral Agent").
WITNESSETH:
WHEREAS, Owner Participant and Trustee have entered into the Trust
Agreement, whereby, among other things, Owner Participant appointed Trustee as
Lessor of the trust created thereby;
WHEREAS, subject to the terms and conditions set forth herein, the
parties hereto propose to effect a sale and lease of certain Units on each
Closing Date by taking the following actions:
(i) Lessee proposes:
(a) that it or an affiliated entity will sell such Unit
directly to Lessor; and
(b) to enter into with Lessor the Lease and a Lease Supplement
subjecting such Units to the Lease; and
(ii) Owner Participant proposes to make the Equity Investment to Lessor
for each Unit purchased by Lessor on such Closing Date;
(iii) Subject to the terms and conditions set forth in Article II and
on the basis of the representations and warranties contained herein, each Lender
proposes to make a secured loan to Lessor in an aggregate principal amount equal
to the respective Lender's Commitment for Units
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purchased and leased on such Closing Date against receipt of Notes in an
aggregate principal amount equal to such amount;
(iv) Collateral Agent proposes to enter into a Security Agreement
Supplement with Lessor subjecting such Units to be purchased and leased by
Lessor on such Closing Date;
(v) Lessor proposes:
(a) to issue Notes under this Participation Agreement to the
Lenders as evidence of the making of secured loans by such Lenders to Lessor in
an aggregate principal amount equal to such Lenders' Commitment for each such
Units purchased by Lessor on such Closing Date;
(b) to purchase such Units from the Lessee and the other
sellers thereof and to pay the Equipment Cost for such Units;
(c) to enter into with Lessee the Lease (if not previously
entered into) and a Lease Supplement subjecting such Units to the Lease;
(d) to execute and deliver a Security Agreement Supplement
subjecting the Units to be purchased by Lessor on such Closing Date to the Lien
of the Security Agreement; and
(e) to execute and deliver each of the other Operative
Documents to which it is a party.
WHEREAS, the parties hereto desire to set forth herein the terms and
conditions agreed upon with respect to the above-described transactions.
NOW THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties hereto intending to be legally bound
agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
SECTION 1.1. Definitions; Interpretation. Unless the context shall
otherwise require, capitalized terms used and not defined herein shall have the
meanings assigned thereto in Appendix A hereto for all purposes hereof (as such
Appendix A may be amended, supplemented, amended and restated or otherwise
modified from time to time, "Appendix A"); and the rules of interpretation set
forth in Appendix A shall apply to this Participation Agreement.
ARTICLE II
CLOSING DATES; CONDITIONS
SECTION 2.1. Closing Dates.
(a) Subject to the terms and conditions set forth in this Article II,
the transactions described hereinabove (each, a "Closing") shall occur at the
offices of Day, ▇▇▇▇▇ & ▇▇▇▇▇▇
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LLP, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ at 11:00 a.m. on (i) December
29, 2000 (the "Initial Closing Date"), and (ii) subject to the provisions of
Article III, such other closing dates as Lessee shall request; or in each case
such other date agreed to by the parties to this Participation Agreement
(together with the Initial Closing Date, each a "Closing Date").
(b) On the Initial Closing Date, the Tranche A Lender shall make a
Tranche A Loan to Lessor in the amount of $25,940,019 evidenced by the Tranche A
Note, and the Tranche B Lender shall make a Tranche B Loan to the Lessor in the
amount of $3,883,236 evidenced by the Tranche B Note.
(c) On the Initial Closing Date, the Owner Participant shall make an
Equity Investment in the amount of $1,242,636, evidenced by the Trust
Certificate.
SECTION 2.2. Initial Closing Date Conditions.
(a) Agreements. The following documents (together with all schedules,
exhibits and attachments thereto, the "Operative Documents") shall have been
duly authorized, executed and delivered by the parties thereto and shall be in
form and substance satisfactory to the Participants.
(i) Participation Agreement.
(ii) Lease and Lease Supplement.
(iii) Guaranty.
(iv) Security Agreement and Security Agreement Supplement.
(v) Trust Agreement,
(vi) Tranche A Note,
(vii) Tranche B Note,
(viii) Trust Certificate,
(ix) Security Interest Filings,
(x) Bills of Sale,
(xi) Syndication Agreement,
(xii) Limited Power of Attorney.
(b) Trust Documents of Lessor. Each Participant, shall have received
copies of the certificate of trust of Lessor certified to be true and complete
as of a recent date by the appropriate governmental authority of the State of
Connecticut and a copy of the certificate of the Secretary of State of the State
of Connecticut as to the existence of the Lessor.
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(c) Opinions. The following opinions shall be received by the parties
indicated thereto, dated as of the Initial Closing Date, in form and substance
reasonably satisfactory to the such parties:
(i) Opinion of Day, ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special counsel to the
Participants, addressed to each Participant.
(ii) Opinion of ▇▇▇▇▇, Mucker & ▇▇▇▇▇▇, Special Counsel to
the, Lessee and Guarantor, addressed to each Participant, the Administrative
Agent, and the Lessor.
(iii) Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP Counsel to the Trustee and
Trust Company, addressed to each Participant, and the Administrative Agent.
(d) Corporate Documents. The corporate (or partnership) or charter
documents, including incumbency certificates, authorizations and good standing
certificates (where applicable) for the following entities shall have been
received by the Participants:
(i) Lessee.
(ii) Guarantor.
(iii) Collateral Agent.
(iv) Trust Company.
(e) Authorized Officer's Certificates. Each Participant shall have
received an Authorized Officer's Certificate of each of the Lessee and the
Guarantor, in each case in a form satisfactory to the Participants, dated as of
the Closing Date, stating that (a) each and every representation and warranty of
such Obligor contained in each Operative Document to which it is a party is true
and correct in all respects on and as of the Closing Date; (b) no Unmatured
Lease Default, or Lease Event of Default has occurred and is continuing under
any Operative Document to which such Obligor is a party with respect to it; (c)
each Operative Document to which such Obligor is a party is in full force and
effect with respect to it; and (d) such Obligor has duly performed and complied
with all conditions contained herein or in any other Operative Document required
to be performed or complied with by it on or prior to the Closing Date.
(f) Evidence of Insurance. Each Participant shall have received
evidence reasonably satisfactory to them that the insurance maintained, or
arranged on behalf of the Lessor, satisfies the requirements set forth in
Section 10.1 of the Lease, setting forth the respective coverage, limits of
liability, carrier, policy number and period of coverage.
(g) Delivery of Financial Statements. Each Participant shall have
received copies of the financial statements described in Section 6.1(e) of the
Participation Agreement.
(h) Advance Request. The Lessee shall have delivered an Advance Request
to the Lessor and to the Administrative Agent in accordance with Section 3.4(a)
of this Participation Agreement.
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(i) Litigation. On the Closing Date, there shall not be any actions,
suits or proceedings pending or, to the knowledge of the Lessee or the
Guarantor, threatened, with respect to the Lessee, the Guarantor, the Equipment,
the Operative Documents, or the transactions contemplated by the Operative
Documents: (i) to set aside, restrain, enjoin or prevent the full performance of
this Participation Agreement, the other Operative Documents or the transactions
contemplated hereby or thereby or (ii) that question or challenge the validity
of the Operative Documents or the rights or remedies of the Lessor or the other
Participants with respect to any Obligor, the Equipment or other Collateral
Estate under the Operative Documents.
(j) Taxes. All taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of the Operative
Documents shall have been paid or provisions for such payment shall have been
made by the Lessee to the reasonable satisfaction of the Administrative Agent,
the Owner Participants and the Lenders.
(k) Representations and Warranties. On the Initial Closing Date, the
representations and warranties of the Lessee, the Guarantor, the Lessor and the
Trustee set forth in the Operative Documents (or in certificates delivered
pursuant thereto) executed by any thereof shall be true and correct in all
respects as though made on and as of such date, except to the extent such
representations or warranties relate solely to an earlier date, in which case
such representations and warranties shall have been true and correct in all
respects on and as of such earlier date.
(l) No Default. No Unmatured Lease Default or Lease Event of Default
shall have occurred and be continuing on the Initial Closing Date unless such
Unmatured Lease Default, or Lease Event of Default, as the case may be, shall
have been waived in accordance with the Operative Documents.
(m) Closing Fee. Lessee shall have paid to Placement Agent, the closing
fee described in the Syndication Agreement.
SECTION 2.3. Closing Conditions for Each Closing Date. The obligation
of each Participant to perform its agreements on each Closing Date (including
the Initial Closing Date) with respect to any Equipment shall be subject to the
fulfillment to the reasonable satisfaction of, or the waiver in writing by, such
Participant of the following conditions precedent on or prior to such Closing
Date (except that the obligation of any party hereto shall not be subject to
such party's own performance or compliance):
(a) Closing Proceedings. All proceedings taken in connection with such
Closing Date and all documents and instruments to be delivered thereon or
relating thereto shall be reasonably satisfactory to such Participant and its
counsel, and such Participant and its counsel shall have received copies of such
documents as such Participant or its counsel may reasonably request in
connection therewith, all in form and substance reasonably satisfactory to such
Participant and its counsel.
(b) Bring-down Certificates. Each party who received an incumbency
certificate pursuant to Section 2.2 (d) hereof shall each have received a
similar certificate dated such Closing Date.
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(c) Advance Request. The Participants, Administrative Agent and Lessor
shall each have received an Advance Request in accordance with Section 3.4(a)
hereof with respect to such Closing Date, and except with respect to the initial
Closing Date, not less than ten (10) Business Days prior to the Closing Date.
(d) Execution of Agreements. On or before such Closing Date, the Lease
Supplement and the Security Agreement Supplement relating to such Equipment
shall have been duly executed and delivered by the parties thereto and such
agreements and the other Operative Documents shall be in full force and effect
and no default shall exist in the performance by any party of any of its
obligations under the Operative Documents.
(e) Recordation and Filing. On or before such Closing Date, (i) the
Lessee shall have delivered to the Administrative Agent all Security Interest
Filings necessary or reasonably requested by the applicable secured party to
perfect the interests of the Lessor and Collateral Agent in the Equipment and
all Collateral Estate with respect thereto in accordance with the Security
Agreement and (ii) the Lease Supplement and Security Agreement Supplement
relating to such Equipment (or appropriate memoranda thereof) and another
filings shall have been filed, recorded and deposited in conformity with all
Applicable Laws.
(f) Opinions of Counsel. Each Participant, Lessor and the
Administrative Agent shall have received the favorable written opinions, in form
and scope satisfactory to the Participants of counsel to the Lessor, Lessee and
Guarantor confirming the matters set forth in the opinions such firm delivered
pursuant to Section 2.2(c) hereof, as they relate to the documents delivered on
such Closing Date.
(g) Bills of Sale. There shall have been delivered to Lessor a ▇▇▇▇ of
Sale for such Units signed by Lessee and, subject to the Limited Power of
Attorney, endorsed certificates of title for that portion of the Equipment
consisting of motor vehicles for which certificates of title have been issued,
transferring to Lessor title to such Units and warranting to Lessor that Lessee
had legal title thereto and good and lawful right to sell the same and that as
of such Closing Date (immediately prior to the transfer of title to Lessor)
title thereto was free and clear of all Liens arising from, through or under
Lessee.
(h) Representations and Warranties. The representations and warranties
of each of the parties contained in this Participation Agreement and in any of
the other Operative Documents shall be true and correct in all material respects
on such Closing Date with the same effect as though made on and as of such
Closing Date, and an officer's certificate, dated the Closing Date, of each of
such parties (other than the Participants) to that effect shall have been
delivered to such Participant (it being understood that in the case of the
Participants, the purchase of the Note or Trust Certificate to be purchased by
it pursuant hereto shall be deemed to constitute a confirmation by it that its
representations and warranties contained herein are true and correct in all
material respects on such Closing Date).
(i) No Default. No Unmatured Lease Default, Lease Event of Default,
Unmatured Security Agreement Default or Security Agreement Event of Default
shall exist as of such Closing Date.
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(j) No Event of Loss. No Event of Loss or event which with the passage
of time would constitute a Event or Loss shall have occurred with respect to
such Units.
(k) Taxes. All Taxes payable on or prior to such Closing Date in
connection with (i) the execution, delivery, recording or filing of any of the
Operative Documents, (ii) the issuance and sale of the Notes to be purchased on
such Closing Date, (iii) the Equity Investment to be made by Owner Participant
on such Closing Date, and (iv) the Units shall have been paid in full. All sales
taxes and duties related to the transactions contemplated by the Operative
Documents have been paid or otherwise provided for by Lessee.
(l) Delivery of Notes. Lessor shall have issued and sold to the Lenders
their respective Tranche A Notes or Tranche B Notes, as the case may be, to be
purchased by such Lenders pursuant to this Participation Agreement on such
Closing Date.
(m) Governmental Actions. All Governmental Actions of third parties
(including Governmental Authorities) required in connection with the execution,
delivery and performance of the Operative Documents by the parties thereto shall
have been received and shall be in full force and effect on such Closing Date.
(n) No Proceedings. No Governmental Action shall have been instituted
nor shall any Governmental Action be threatened before any Governmental
Authority, nor shall any order, judgment or decree have been issued or proposed
to be issued by any Governmental Authority at the time of such Closing Date, to
set aside, restrain, enjoin or prevent the completion and consummation of this
Participation Agreement or the transactions contemplated hereby.
(o) Funding of Commitments. Each of the parties hereto shall have made
the Advances and executed and delivered the documents and instruments that such
party is required to execute or deliver on or prior to such Closing Date.
(p) Purchase Permitted by Applicable Law, etc. On each Closing Date,
each Participant's purchase of its Notes shall be permitted by Applicable Laws
(including, without limitation, Regulation T, U or X of the Board of Governors
of the Federal Reserve System) and shall not subject the Participants to any
tax, penalty, liability or other onerous condition under or pursuant to any
Applicable Law. If requested by any Participant, it shall have received an
Officer's Certificate by Lessee certifying as to such matters of fact as it may
reasonably specify to enable it to determine whether such purchase is so
permitted.
(q) Additional Collateral; Letter of Credit. (i) In addition to the
Units of Equipment that are the subject of an Advance, as additional security
for the benefit of the Lenders, on each Closing Date at the time of an Advance,
subject to Clause (ii) below, Lessee shall transfer to Lessor additional
collateral acceptable to the Participants ("Additional Collateral") with a net
book value equal to at least 25% of the Equipment Cost with respect to the
Advance to be made on such Closing Date. Such Additional Collateral (i) shall
not be eligible for an Advance, (ii) shall be pledged and assigned to the
Collateral Agent pursuant to the Operative Documents, and (iii) shall be
considered "Equipment" for all purposes (other than an Advance) under the
Operative Documents, but shall not be included in the "Total Equipment Cost". On
the initial Closing Date and thereafter so long as the Tranche A Notes have not
been syndicated pursuant to
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the Syndication Agreement, in lieu of the Additional Collateral, Lessee shall
maintain to Collateral Agent, the Letter of Credit.
(r) Transaction Expenses. All Transaction Expenses and Commitment Fees
shall have been paid.
(s) Equipment Approval. Lessor shall have approved all of the Equipment
set forth in the Advance Request provided pursuant to Section 3.4(a) hereof.
ARTICLE III
FUNDING OF ADVANCES; NOTES
SECTION 3.1. Advances.
(a) Subject to the conditions and terms hereof, the Lessor shall take
the following actions at the written request of the Lessee from time to time
during the Initial Lease Term:
(i) on the Initial Closing Date, the Lessor shall make an
Advance (using funds provided by the Owner Participant and the Lenders)
hereunder to the Lessee in the amount of $31,065,891, the proceeds of
which shall be paid to Lessee for the purpose of paying Equipment Costs
as specified in the Advance Request; and
(ii) on each Closing Date during the Initial Lease Term, the
Lessor shall make Advances (out of funds provided by the Owner
Participants and the Lenders) to the Lessee or to such payees
designated in writing by the Lessee for the purpose of paying (or
reimbursing the Lessee for) Equipment Costs.
(b) Limitation on Advances. Notwithstanding any other provision hereof,
(i) the Lessor shall not be obligated to make any Advance if, after giving
effect thereto, (x) the aggregate outstanding amounts of the Tranche A Loans
would exceed the aggregate Tranche A Loan Commitments, the aggregate outstanding
amounts of the Tranche B Loans would exceed the aggregate Tranche B Loan
Commitments, or the aggregate outstanding amount of the Equity Investment would
exceed the aggregate Owner Participants' Commitments, (y) the Total Equipment
Cost would exceed the Aggregate Commitment Amount or (z) the net book value of
the Additional Collateral shall be less than 25% of the Total Equipment Cost,
(ii) no Advance shall be made (x) after the Commitment Termination Date or (y)
with respect to Additional Collateral.
(c) Acknowledgment of Advances. Each of the Lessee, the Lessor and the
Guarantor hereby acknowledges and agrees, for the benefit of each Participant,
that: (i) each Advance made hereunder is made for the benefit of, and at the
request of, the Lessee, (ii) the entire amount of each Advance made hereunder is
allocable to the Equipment and shall constitute part of the Equipment Cost and
(iii) the Lessee shall pay in full on the Termination Date all of its
obligations under the Lease and under all of the other Operative Documents,
which obligations are intended to equal the aggregate outstanding amount of
Advances made (or deemed made) hereunder, subject to the limitations on recourse
set forth in Article XVII of the Lease.
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SECTION 3.2. Owner Participant's Commitment. Subject to the conditions
and terms hereof, each Owner Participant shall make available to the Lessee
(through the Lessor) at the request of the Lessee from time to time during the
Initial Lease Term on any Closing Date an amount (each, an "Equity Investment")
in immediately available funds equal to such Owner Participant's Applicable
Equity Percentage of the amount of the Advance being funded on such Closing
Date. Notwithstanding any other provision hereof, no Owner Participant shall be
obligated to make available any Equity Investment if, after giving effect to the
proposed Equity Investment, the aggregate outstanding Equity Investment of such
Owner Participant shall exceed such Owner Participant's Commitment.
SECTION 3.3. Loan Commitment.
(a) Subject to the conditions and terms hereof, each Tranche A Lender
shall make a Loan to the Lessor at the request of the Lessee, from time to time
during the Initial Lease Term on any Closing Date (including, without
limitation, on the Initial Closing Date) in a principal amount in immediately
available funds equal to such Tranche A Lender's Applicable Loan Percentage of
the amount of the Advance being funded on such Closing Date; provided that no
Tranche A Lender shall be obligated to make any Tranche A Loan on a Closing Date
if, after giving effect to such Tranche A Loan, the aggregate outstanding amount
of the Equity Investment (including any Equity Investment to be made on such
Closing Date) would be less than four percent (4%) of the sum of all Loans and
Equity Investment outstanding at such time. Notwithstanding any other provision
hereof, no Tranche A Lender shall be obligated to make any Tranche A Loan if,
after giving effect to the proposed Tranche A Loan, the aggregate outstanding
amount of the Tranche A Loans made by such Tranche A Lender would exceed such
Tranche A Lender's Loan Commitment.
(b) Subject to the conditions and terms hereof, each Tranche B Lender
shall make a Loan to the Lessor at the request of the Lessee, from time to time
during the Initial Lease Term on any Closing Date (including, without
limitation, on the Initial Closing Date) in a principal amount in immediately
available funds equal to such Tranche B Lender's Applicable Loan Percentage of
the amount of the Advance being funded on such Closing Date; provided that no
Tranche B Lender shall be obligated to make any Tranche B Loan on a Closing Date
if, after giving effect to such Tranche B Loan, the aggregate outstanding amount
of the Equity Investment (including any Equity Investment to be made on such
Closing Date) would be less than four percent (4%) of the sum of all Loans and
Equity Investment outstanding at such time. Notwithstanding any other provision
hereof, no Tranche B Lender shall be obligated to make any Tranche B Loan if,
after giving effect to the proposed Tranche B Loan, the aggregate outstanding
amount of the Tranche B Loans made by such Tranche B Lender would exceed such
Tranche B Lender's Loan Commitment.
SECTION 3.4. Procedures for Advances.
(a) General Procedures. With respect to each Advance made on a Closing
Date, the Lessee shall give the Administrative Agent an Advance Request
substantially in the form of Exhibit A-1 hereto (an "Advance Request") which
Advance Request (except for the Advance Request with respect to the initial
Closing Date) shall be delivered to the Administrative Agent, not later than
12:00 noon, New York time, ten (10) Business Days prior to the proposed Closing
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Date, specifying: (i) the proposed Closing Date, (ii) the amount of Advance
requested, (iii) the proposed use of the proceeds of such Advance and (iv) a
detailed list describing each Unit of Equipment to be financed on such Closing
Date, provided that with respect to the Advance Request relating to the initial
Closing Date, such Advance Request shall be delivered no later than the initial
Closing Date. The Administrative Agent shall calculate the amounts of the Equity
Investment, Tranche A Loans and Tranche B Loans required to fund the requested
Advance. Each Advance Request delivered by the Lessee shall be irrevocable and
binding on the Obligors.
(b) Amount of Advance; Closing Dates. Each Advance shall be in an
amount not less than $10,000,000 per Advance. There shall be no more than one
Advance in any calendar quarter during the Initial Lease Term.
(c) Use of Proceeds of Advances. Except as the parties may otherwise
agree in writing, Advances shall be made solely to provide the Lessee with funds
with which to pay or reimburse itself for Equipment Costs.
SECTION 3.5. Repayment of Loans, Notes and Evidence of Debt.
The Lessor's obligation to repay (i) the Tranche A Loans shall be
evidenced by the Tranche A Notes and (ii) the Tranche B Loans shall be evidenced
by the Tranche B Notes. The Lessor shall repay all such Loans to the
Administrative Agent for the benefit of the Lenders, together with all accrued
and unpaid interest thereon, at the times and in the manner set forth in the
Notes and this Participation Agreement. The Lessor shall pay and prepay the
Notes in accordance with Article V hereof and such payments and prepayments
shall be applied to the Loans in the manner set forth in Article III of the
Security Agreement.
ARTICLE IV
EQUITY RETURN; INTEREST; FEES
SECTION 4.1. Calculation of Basic Rent.
(a) Basic Rent shall be payable from time to time on each Payment Date
in an amount equal to the sum of (a) all interest then due on the Loans, as
calculated in accordance with Section 4.2 together with principal amortization
as set forth in Schedule A to each such Note and (b) all Equity Return then due
on the Equity Investment, as calculated in accordance with Section 4.3.
(b) In calculating such interest and Equity Return, the Tranche A
Loans, the Tranche B Loans and Equity Investment made in connection with the
Advances shall bear interest and Equity Return, as the case may be, using an
Adjusted Eurodollar Rate plus the Applicable Margin. If any Loan and/or Equity
Investment is to bear interest or Equity Return by reference to the Adjusted
Eurodollar Rate and the Administrative Agent is unable to obtain an Adjusted
Eurodollar Rate for the Interest Period, the Owner Participant and the Lenders
shall make available Equity Investment and Loans, as the case may be, as Base
Rate Loans/Equity Investment. Such Equity Investment and Loans shall be
maintained as Base Rate Loans/Equity Investment until the date on which the
Administrative Agent shall be able to obtain an Adjusted
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Eurodollar Rate for such Equity Investment and the Loans for such Interest
Period, at which time such Base Rate Loans/Equity Investment shall convert to
Eurodollar Loans/Equity Investment.
SECTION 4.2. Interest on Loans.
(a) Each Tranche A Loan shall accrue interest during each Interest
Period at a rate per annum equal to the then applicable Interest Rate for such
Type of Loan. Each Tranche B Loan shall accrue interest during each Interest
Period at a rate per annum equal to the then applicable Interest Rate for such
Type of Loan. Subject to Section 4.1(b), all Loans shall be made and continued,
subject to Sections 8.3 and 8.4, as Eurodollar Loans/Equity Investment.
(b) If all or a portion of (i) the principal amount of any Loan, (ii)
any interest payable on any Loan or (iii) any other amount payable to the
Lenders hereunder (whether in respect of interest, fees or other amounts) shall
not be paid when due (whether at the stated maturity thereof, by acceleration or
otherwise), then such overdue amount shall bear interest, payable on demand, at
a rate per annum which is equal to the Overdue Rate (or if no rate is
applicable, whether in respect of interest, fees or other amounts, then the sum
of (x) 2.00% plus (y) the Base Rate). Without duplication of the foregoing, upon
the occurrence and during the continuance of any Lease Event of Default, the
principal of and, to the extent permitted by law, interest on the Loans and any
other amounts owing hereunder or under the other Operative Documents shall bear
interest, payable on demand, at a per annum rate of 2% greater than the rate
which would otherwise be applicable (or if no rate is applicable, whether in
respect of interest, fees or other amounts, then at the Base Rate plus a margin
of 2% per annum).
(c) The Administrative Agent shall from time to time promptly provide
notice to the Lessee of any change in the Interest Rate applicable to all or any
of the Loans.
SECTION 4.3. Equity Return.
(a) The amount of the Equity Investment outstanding from time to time
shall accrue yield ("Equity Return") at a rate per annum equal to the Equity
Return Rate. Subject to Sections 4.1(b), 8.3 and 8.4, all Equity Investment
shall be made and continued as Eurodollar Loans/Equity Investment.
(b) If all or a portion of (i) any Equity Investment, (ii) any Equity
Return payable on any Equity Investment or (iii) any other amount payable to the
Owner Participants hereunder (whether in respect of interest, fees or other
amounts) shall not be paid when due (whether at the stated maturity thereof, by
acceleration or otherwise), then such overdue amount shall bear interest,
payable on demand, at a rate per annum which is equal to the Overdue Rate (or if
no rate is applicable, whether in respect of interest, fees or other amounts,
then the sum of (x) 2.00% plus (y) the Base Rate). Without duplication of the
foregoing, upon the occurrence and during the continuance of any Lease Event of
Default, the Equity Investment and, to the extent permitted by law, Equity
Return on Equity Investment and interest on any other amounts owing hereunder or
under the other Operative Documents shall bear interest, payable on demand, at a
per annum rate of 2% greater than the rate which would otherwise be applicable
(or if no rate is applicable, whether in respect of interest, fees or other
amounts, then at the Base Rate plus a margin of 2% per annum).
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SECTION 4.4. Computation of Interest and Equity Return. Interest on the
Loans and Equity Return on the Equity Investment shall be calculated on the
basis of a 360-day year for the actual days elapsed at all times that the
Interest Rate and Equity Return Rate are determined by reference to the Adjusted
Eurodollar Rate and, at all other times, on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. Each determination of the
Interest Rate or Equity Return Rate by the Administrative Agent pursuant to any
provision of this Participation Agreement or any other Operative Document shall
be binding on the Obligors and the Participants in the absence of manifest
error.
SECTION 4.5. Payment of Unused Commitment Fees. The Lessee agrees to
pay to the Owner Participants and Lenders, during the Initial Lease Term for the
period commencing on the second Closing Date and continuing through the
Commitment Termination Date, a commitment fee (collectively, the "Unused
Commitment Fees") at a per annum rate equal to 25 basis points times the sum of
the average daily unused portion of the Owner Participant's Commitments and Loan
Commitments, respectively, for such Owner Participant and Lender, which fees
shall be payable to each Owner Participant and Lender pro rata in accordance
with its Owner Participant's Commitment or Loan Commitment, as the case may be.
The Unused Commitment Fees shall be payable by the Lessee in arrears on each
Payment Date occurring after the second Closing Date and ending on the
Commitment Termination Date. The Unused Commitment Fees shall be computed on the
basis of the actual number of days (including the first day but excluding the
last day) occurring during the period for which such Unused Commitment Fees are
payable over a year of 360 days.
ARTICLE V
THE NOTES
SECTION 5.1. Form of Notes. The Tranche A Notes and Tranche B notes
shall each be substantially in the forms of Exhibits B-1 and B-2, respectively,
hereto.
SECTION 5.2. Terms of Notes.
(a) The Tranche A Notes shall be issued in one or more series
("Series") in an aggregate principal amount of $91,850,000 each such series
corresponding to a Closing Date and designated with a letter for the Series and
a number for the number of the Note in such Series (e.g. "A-1"). Each Tranche A
Note shall have a stated maturity of the Maturity Date. On each Closing Date,
subject to satisfaction of the conditions precedent in Article II of the
Participation Agreement, one or more Tranche A Notes (as may be specified by the
Tranche A Lender) shall be issued to and registered in the name of the
institution (or its nominee) named on Schedule II to the Participation Agreement
and identified therein as the Tranche A Lender in the aggregate principal amount
set forth therein. The Tranche B Notes shall be issued in one or more series in
an aggregate principal amount of $13,750,000 each such series corresponding to a
Closing Date and designated with a letter for the Series and a number for the
number of the Note in such Series (e.g. "B-1"). Each Tranche B Note shall have a
stated maturity of the Maturity Date. On each Closing Date, subject to
satisfaction of the conditions precedent in Article II of the Participation
Agreement, one or more Tranche B Notes (as the case may be specified by the
Tranche B Lender) shall be issued to and registered in the name of the
institution (or its
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nominee) named on Schedule II to the Participation Agreement and identified
therein as the Tranche B Lender in the aggregate principal amount set forth
therein.
(b) The principal amount of each Note shall be due and payable in
installments, payable on Payment Dates, as set forth on Schedule A attached to
each thereof, provided, however, that, in all cases, the monthly installments of
Basic Rent due pursuant to the Lease with respect to the Equipment shall be
sufficient to pay the monthly installments of principal and interest due on the
Notes issued in respect of the Equipment (provided, further, however, that the
final principal payment for each Note shall in any and all events equal the then
outstanding principal balance thereof).
(c) Each Note shall bear interest at the applicable Interest Rate on
the unpaid principal amount thereof from time to time outstanding from and
including the date thereof until such principal is paid in full, all as set
forth in Article IV hereof. Accrued interest on each Note shall be payable in
arrears on each Payment Date and on the date such Note is paid in full provided,
however, that in the event that an Advance is made on a date other than a
Payment Date, accrued interest on the Note with respect thereto shall be payable
in arrears on the second succeeding Payment Date following the date of such
Advance, rather than the first Payment Date following the date of such Advance.
Notwithstanding the foregoing, each Note shall bear interest at the Overdue Rate
on any principal thereof and, to the extent permitted by applicable law, on any
interest or other amounts due thereunder, not paid when due (whether at stated
maturity, by acceleration or otherwise), payable on demand by the Lender
thereof.
(d) The Notes shall be executed on behalf of Lessor by one of its
Authorized Officers.
SECTION 5.3. Taxes; Withholding.
(a) Subject to the directions contained in clause (b) of this Section
2.04(b), Administrative Agent agrees, to the extent required by applicable law,
to withhold from each payment due hereunder or under any Note, United States
withholding taxes at the appropriate rate, and, on a timely basis, to deposit
such amounts with an authorized depository and make such reports, filings and
other reports in connection therewith, and in the manner, required under
applicable law. Upon any such withholding, Administrative Agent shall forthwith
notify the affected Lender, Lessor and Lessee of such withholding.
Administrative Agent shall promptly furnish to each Lender (but in no event
later than the date thirty (30) days after the due date thereof, a U.S. Treasury
Form 1042S (or similar forms as at any relevant time in effect), if applicable,
indicating payment in full of any Taxes withheld from any payments by
Administrative Agent to such Persons together with all such other information
and documents reasonably requested by the affected Lender and necessary or
appropriate to enable such Lender to substantiate a claim for credit or
deduction with respect thereto for income tax purposes of the country where such
Lender is located.
(b) If any Person that is a "United States person" and that is entitled
to be paid any amount by Administrative Agent pursuant to this Indenture (i) is
an exempt recipient, or (ii) is not an exempt recipient and has furnished a
properly completed and currently effective U.S. Treasury Form W-9 (or such
successor U.S. Treasury Form as may be required by the United
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States Treasury Department to avoid withholding of United States federal income
tax), no amount shall be withheld by Administrative Agent in respect of United
States federal income tax.
(c) If any Person that is a Non-U.S. Person and that is entitled to be
paid any amount by Administrative Agent pursuant to this Indenture (i) has
furnished to Administrative Agent a properly completed and currently effective
U.S. Treasury Form 4224, in duplicate, or Form W8ECI (or such successor U.S.
Treasury Form as may be required by the United States Treasury Department to
avoid withholding of United States federal income tax) during the calendar year,
in which and prior to the date on which, such amount is to be paid and (ii) has
not notified Administrative Agent of the inaccuracy or expiration of such U.S.
Treasury Form, no portion of that amount shall be withheld by Administrative
Agent in respect of United States federal income tax.
(d) Notwithstanding the provisions of paragraph (c) of this Section
5.3, if any Person that is a Non-U.S. Person and that is entitled to be paid any
amount by Administrative Agent pursuant to this Participation Agreement (i) has
furnished to Administrative Agent a properly completed and currently effective
U.S. Treasury Form 1001 or Form W-8BEN (or such successor U.S. Treasury Form as
may be required by the United States Treasury Department to reduce or eliminate
the amount of United States federal income tax otherwise required to be held
from such amount) and (ii) has not notified Administrative Agent of the
inaccuracy or expiration of such U.S. Treasury Form, only the reduced portion,
if any, of that amount required by applicable law or treaty shall be withheld by
Administrative Agent in respect of United States federal income tax.
SECTION 5.4. Payments from Trust Estate Only. Except as expressly
provided herein or in the Security Agreement, all payments to be made by Lessor
under the Notes shall be made only from the income and the proceeds from the
Trust Estate and only to the extent that Lessor shall have sufficient income or
proceeds from the Trust Estate to enable Lessor to make payments in accordance
with the terms hereof. Each Lender, by its acceptance of such Note, agrees that
it will look solely to the income and proceeds from the Trust Estate to the
extent available for distribution to it as herein provided and that none of
Owner Participant, Lessor nor Administrative Agent is personally liable to it
for any amounts payable or any liability under the Security Agreement or such
Note, except as expressly provided herein or in the Security Agreement.
SECTION 5.5. Method of Payment. Principal and interest and other
amounts due hereunder or under the Notes shall be payable in immediately
available funds on the due date thereof, to Administrative Agent at Fleet
National Bank, ABA # ▇▇▇▇▇▇▇▇▇, Account Name: Fleet Capital Leasing, Account #
015552776700101, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Reference: Wabash Statutory
Trust-2000 (or such other account at such other financial institution as
Administrative Agent may so specify from time to time to Lessor and Lessee) and
Administrative Agent shall remit all such amounts so received by it to such
address and in such manner (by wire transfer of immediately available funds if
not otherwise specified) as set forth in Schedule II to this Participation
Agreement (or as each Lender shall at any time otherwise specify in writing to
Administrative Agent). If the payment was received prior to 12:00 P.M. Boston
time by Administrative Agent on any Business Day, Administrative Agent shall
make
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such payment on such Business Day; otherwise, Administrative Agent shall make
payment promptly, but not later than 12:00 noon Boston time on the next
succeeding Business Day. If any sum payable hereunder to any Lender falls due on
a day which is not a Business Day, then such sum shall be payable on the next
Business Day and (so long as payment is timely made on such next Business Day)
no interest shall accrue on the amount of such payment from and after the
scheduled date of payment to such next Business Day. Prior to the due
presentment for registration of transfer of any Note, Lessor, Administrative
Agent and Lessee may deem and treat the Person in whose name any Note is
registered on the Note Register as the absolute owner and holder of such Note
for the purpose of receiving payment of all amounts payable with respect to such
Note and for all other purposes and neither Lessor, Administrative Agent nor
Lessee shall be affected by any notice to the contrary.
SECTION 5.6. Application of Payments. Each payment of principal and
interest or other amounts due on each Note shall be applied, in accordance with
the provisions of Article III of the Security Agreement.
SECTION 5.7. Registration. Transfer and Exchange of Notes.
Administrative Agent agrees with Lessor that Administrative Agent shall keep a
register (herein sometimes referred to as the "Note Register") in which
provisions shall be made for the registration of Notes and the registration of
transfers of Notes. The Note Register shall be kept at the Corporate Trust
Office of Administrative Agent, and Administrative Agent is hereby appointed
"Note Registrar" for the purpose of registering Notes and transfers of Notes as
herein provided. Upon surrender for registration of transfer of any Note at the
Corporate Trust Office, Lessor shall execute, and Administrative Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of a like aggregate principal amount and of
the same series and the Notes so surrendered shall be canceled. At the option of
any Lender, Notes held by such holder may be exchanged for other Notes of the
same series of any authorized denominations, of like aggregate principal amount,
upon surrender of the Notes to be exchanged at the Corporate Trust Office. Each
new Note delivered upon transfer or exchange shall be in a principal amount of
at least $500,000 (or such lesser amount as shall equal the entire outstanding
principal amount of all Notes held by any Lender) and dated the date of the
surrendered Note. Whenever any Notes are so surrendered for exchange, Lessor
shall execute, and Administrative Agent shall authenticate and deliver, the
Notes which the Lender making the exchange is entitled to receive. All Notes
issued upon any registration of transfer or exchange of Notes shall be the valid
obligations of Lessor evidencing the same respective obligations, and entitled
to the same security and benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange. Every Note presented or
surrendered for registration of transfer or exchange, shall (if so required by
Administrative Agent) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to Administrative Agent duly
executed by the holder thereof or his attorney duly authorized in writing.
Administrative Agent shall make a notation on each new Note of the amount of all
payments of principal previously made on the old Note or Notes with respect to
which such new Note is issued and the date to which interest on such old Note or
Notes has been paid. Lessor shall not be required to exchange any surrendered
Notes as above provided during the three calendar day period preceding the due
date of any payment on such Note.
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SECTION 5.8. Mutilated, Destroyed, Lost or Stolen Notes. If any Note
shall become mutilated, destroyed, lost or stolen, Lessor shall, upon the
written request of the affected Lender, execute and Administrative Agent shall
authenticate and deliver, in replacement thereof, a new Note of the same series
in the same principal amount, dated the date of the Note being replaced and
issued under this Indenture. If the Note being replaced has become mutilated,
such Note shall be surrendered to Administrative Agent, a photocopy thereof
shall be furnished to Lessor by Administrative Agent and such Note shall be
canceled by Administrative Agent. If the Note being replaced has been destroyed,
lost or stolen, the affected Lender shall furnish to Lessor, Lessee and
Administrative Agent such security or indemnity as may be required by them to
hold Lessor, Lessee and Administrative Agent harmless and evidence satisfactory
to Lessor, Lessee and Administrative Agent of the destruction, loss or theft of
such Note and of the ownership thereof, provided, however, that if any Lender,
any Affiliate of Lender, or any other institutional investor, or a nominee of
any thereof is the owner of any such lost, stolen, destroyed, or mutilated Note,
then the affidavit of the president, vice president, treasurer or assistant
treasurer of such holder setting forth the fact of loss, theft, destruction or
mutilation and of its ownership of the Note at the time of such loss, theft,
destruction or mutilation shall be accepted as satisfactory evidence thereof and
no security or indemnity shall be required as a condition to execution and
delivery of a new Note other than the written agreement of such holder to
indemnify Lessor and Administrative Agent for any claims or actions against and
resulting from the issuance of such new Note.
SECTION 5.9. Payment of Expenses on Transfer. Upon the issuance of a
new Note or Notes pursuant to Section 5.7 or 5.8 hereof, Lessor and/or
Administrative Agent may require from the party requesting such new Note or
Notes, without any right of reimbursement under any Operative Document, payment
of a reasonable sum to reimburse Lessor and/or Administrative Agent for, or to
provide funds for, the payment of any tax or other governmental charge in
connection therewith by Lessor or Administrative Agent.
SECTION 5.10. The New Notes.
(a) Each new Note (herein, in this Section 5.10, called a "New Note")
issued pursuant to Sections 5.7 and 5.8 hereof in exchange for or in
substitution or in lieu of an outstanding Note (herein, in this Section 5.10,
called an "Old Note") shall be dated the date of such Old Note. Administrative
Agent shall ▇▇▇▇ on each New Note (i) the date to which principal and interest
have been paid on such Old Note, (ii) all payments and prepayments of principal
previously made on such Old Note which are allocable to such New Note, and (iii)
the amount of each installment payment payable on any such New Note. Each
installment payment payable on such New Note on any date shall bear the same
proportion to the installment payment payable on such Old Note on such date as
the original principal amount of such New Note bears to the original principal
amount of such Old Note. Interest shall be deemed to have been paid on such New
Note to the date on which interest shall have been paid on such Old Note, and
all payments and prepayments of principal marked on such New Note, as provided
in clause (ii) above, shall be deemed to have been made thereon.
(b) All New Notes issued in exchange for or in substitution or in lieu
of Old Notes shall be valid obligations of Lessor evidencing the same aggregate
amount of debt as the Old
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Notes and shall be entitled to the benefits and security of this Indenture to
the same extent as the Old Notes.
(c) Upon the issuance of any Note pursuant to this Participation
Agreement, Administrative Agent shall prepare two copies of an amortization
schedule with respect to such Note setting forth the amount of the installment
payments to be made on such Note after the date of issuance thereof and the
unpaid principal balance of such Note after each such installment payment.
Administrative Agent shall deliver, or send by first-class mail, postage
prepaid, one copy of the applicable schedule to each Lender.
SECTION 5.11. Prepayments. Notes shall not be subject to prepayment
except as provided in this Section 5.11, as follows:
(a) Voluntary Prepayments. The Lessee shall have the right to prepay an
amount equal to the outstanding amount of the Notes and Equity Investment in
whole at any time pursuant to the exercise of purchase option permitted under
Article XVII of the Lease at a price equal to the outstanding amount of the
Notes and Equity Investment, together with accrued and unpaid interest and
Equity Return and (until the third anniversary of the commencement of the
Initial Lease Term) a premium in an amount as set forth in the Syndication
Agreement; provided, however, that the Lessee shall also pay all Break Costs in
connection with any such prepayment and all other amounts due and payable under
and pursuant to the Operative Documents.
(b) Mandatory Prepayments.
(i) If at any time the sum of the aggregate amount of
outstanding Loans and Equity Investment shall exceed the Aggregate
Commitment Amount, the Lessee shall immediately make payment on the
Notes or Equity Investment in an amount sufficient to eliminate such
excess. Such payments shall be applied to Base Rate Loans/Equity
Investment, then to Eurodollar Loans/Equity Investment, and with
respect to each Type of Loans in direct order of their Interest Period
maturities (if applicable).
(ii) The Tranche A Notes, Tranche B Notes of the series issued
on a Closing Date, together with the related Equity Investment for any
Unit shall be prepaid in whole or in part, together with accrued
interest and Equity Return thereon to the date of prepayment upon the
occurrence of an Event of Loss with respect to such Unit of Equipment
(a "Casualty Unit") (unless pursuant to Section 10.2 of the Lease, a
new Unit shall have been substituted for such Casualty Unit), on the
date specified for payment of Termination Value with respect to such
Event of Loss in Section 10.3 of the Lease, in an aggregate amount
equal to the sum of (A) an amount equal, as to principal thereof, to
the product obtained by multiplying the aggregate unpaid principal
amount of the Tranche A Notes and Tranche B Notes of such series
outstanding, together with the related Equity Investment as of such
date by a fraction, the numerator of which shall be the Termination
Value of such Casualty Unit and the denominator of which shall be the
aggregate Termination Value of all Units of Equipment that were
included in the Trust Estate immediately prior to such payment date
assuming such Event of Loss had not occurred, (B) the aggregate amount
of interest and Equity Return accrued and unpaid to such date on the
principal amounts of the Tranche A Notes and Tranche B Notes and Equity
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Investment being prepaid and (C) all other amounts due and payable to
the Lenders and Owner Participant hereunder or pursuant to any of the
Operative Documents with respect to such Unit or Units.
(iii) If Lessee shall exercise its option under Article XVII
of the Lease to purchase all but not less than all of the Equipment on
the Expiration Date, then on such date, the Notes and the Equity
Investment, together with accrued and unpaid interest and Equity Return
and all other amounts due and owing the Participants under the
Operative Documents, shall be paid.
(iv) If the "Syndication Period" (as defined in the
Syndication Agreement) shall terminate for any reason set forth in
Section 1(b) of the Syndication Agreement, other than clause (iii) of
Section 1(b), then on the date of such termination, the Notes and the
Equity Investment, together with accrued and unpaid interest and Equity
Return, shall be paid.
(c) Prepayments Generally.
(i) In the event of any prepayment of less than the entire
principal amount of Notes then outstanding pursuant to Section 5.11(b),
(X) Lessor shall deposit, in immediately available funds in the account
of Administrative Agent at the place and by the time and otherwise in
the manner provided in Section 5.5 hereof, the respective amounts set
forth in Section 5.11(b), (Y) Lessor will allocate the principal amount
so to be prepaid among all outstanding Tranche A Notes, Tranche B Notes
and Equity Investment pro rata according to the respective unpaid
principal amounts of the Notes and Equity Investment and (Z) the amount
required to be paid pursuant to Section 5.2 hereof in respect of the
Tranche A Notes and Tranche B Notes shall be reduced on each Payment
Date subsequent to the date of such prepayment by an amount equal to
the product of (A) the principal amount of Tranche A Notes and Tranche
B Notes which would be due and payable on each Payment Date had such
prepayment not been made and (B) a fraction, the numerator of which
shall be the aggregate principal amount of the Tranche A Notes and
Tranche B Notes so prepaid and the denominator of which shall be the
entire principal amount of the Tranche A Notes and Tranche B Notes
outstanding immediately prior to such prepayment.
(ii) No prepayment of any Notes or any purchase by Lessor of
any Notes may be made except to the extent and in the manner expressly
permitted by Article V of this Participation Agreement.
(iii) In the case of any prepayment of the Notes, notice
thereof in writing to the Lenders to be prepaid shall be sent by Lessee
by United States certified mail, postage prepaid, and received by each
Lender and Administrative Agent at its address set forth in the Note
Register, at least ten (10) days prior to the date fixed for
prepayment. Such notice shall specify the date fixed for prepayment,
the provision hereof under which such prepayment is being effected and
that on the date fixed for prepayment there will become due and payable
upon each Note or portion thereof so to be prepaid, at the place where
the principal of the Notes to be prepaid is payable, the specified
amount of principal
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thereof, together with the accrued interest to such date, and all other
amounts due to the Lenders under the Operative Documents as is payable
thereon, and after such date interest thereon shall cease to accrue.
(iv) On the date of any partial prepayment of any Note,
Administrative Agent shall prepare two (2) copies of an amortization
schedule with respect to such Note setting forth the amount of the
installment payments to be made on such Note after the date of such
partial prepayment and the unpaid principal balance of such Note after
each such installment payment. Administrative Agent shall deliver, or
send by first-class mail, postage prepaid, one such copy of the
applicable schedule to each Lender.
ARTICLE VI
COVENANTS
SECTION 6.1. Covenants of Obligors. Each Obligor covenants and agrees
with Owner Participant, each Lender, Lessor and Collateral Agent that during the
Term:
(a) (i) Each Obligor shall at all times maintain its corporate
existence except as permitted by paragraph (ii) hereof. Each Obligor
shall do or cause to be done all things necessary to preserve and keep
in full force and effect its full corporate power and authority to
perform its obligations under each Operative Document to which it is or
will be a party;
(ii) Guarantor shall not (A) consolidate with or merge with or
into any other Person (a "Merger") or (B) transfer, directly or
indirectly, by sale, exchange, lease or other disposition, or pledge or
otherwise encumber, or become the subject of, or engage in a leveraged
buy-out (or any other form of corporate reorganization, consolidation
or combination), in any single transaction or series of transactions to
one or more Persons (a "Transfer"), all or substantially all of its
assets without the consent of Owner Participant and, if the Lien of the
Security Agreement shall not have been discharged pursuant to the terms
thereof, Collateral Agent and the Lenders, unless:
(1) the Person that results from such Merger, if such
Person is not Guarantor, or the Person to which such Transfer
is made has assumed in writing all obligations of Guarantor,
including the due and punctual performance and observance of
each covenant and condition of this Participation Agreement
and the other Operative Documents to be performed or observed
by Lessee which assumption shall be in form and substance
reasonably satisfactory to the Participants;
(2) immediately after giving effect to such Merger or
Transfer, no Unmatured Lease Default or Lease Event of Default
shall have occurred and be continuing; and
(3) the entity that results from such Merger or the
entity to which such Transfer is made is a Solvent corporation
that is organized under the laws of a state of the United
States or the District of Columbia.
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(b) Each Obligor shall furnish to Owner Participant, Lessor and (until
the Lien of the Security Agreement shall have been discharged pursuant to the
terms thereof) Collateral Agent, notice on or before the 30th day prior to any
relocation of its chief executive office or any change in its name.
(c) Each Obligor shall, at its own expense (except where the expense
thereof is expressly required to be paid by another party hereto), promptly and
duly execute and deliver such further documents and assurances and take such
further action as any party to this Participation Agreement may from time to
time reasonably request in order to more effectively carry out the intent and
purpose of this Participation Agreement and the other Operative Documents and to
establish and protect the rights and remedies created or intended to be created
in favor of any such Person hereunder and under the other Operative Documents.
(d) Upon reasonable prior notice to Lessee or Guarantor, as the case
may be, such Obligor agrees to permit Owner Participant or any Lender (or such
Persons as or Owner Participant or any Lender may designate), at their
respective sole cost, expense and risk, at any time during normal business hours
to discuss (subject to reasonable confidentiality arrangements and customary
exceptions) such Obligor's financial condition and business affairs (subject to
any restrictions on selective disclosure or disclosure of non-public information
under the Securities Exchange Act of 1934 and related laws, after giving effect
to any confidentiality arrangements accepted by such Person) and the status of
the Equipment with appropriate officers of such Obligor, all at such times and
as often as Owner Participant or any Lender may reasonably request, provided
that during the continuance of an Unmatured Lease Default under Section 13.1
(a), (b), (i), or (g) of the Lease or any Lease Event of Default, such meetings
shall be at Lessee's cost and expense.
(e) During the term of the Lease, Guarantor will furnish to the
Participants, Lessor and Collateral Agent the following:
(i) as soon as available and in any event within 60 days after
the end of each quarterly period, except the last, of each fiscal year,
a copy of Guarantor's filing with the Securities and Exchange
Commission for such quarterly period on Form 10Q, or if such filing is
not made with the Securities and Exchange Commission, the consolidated
balance sheet of Guarantor and its consolidated Subsidiaries as at the
end of such period, together with the related consolidated statement of
income of Guarantor and its Subsidiaries for the period beginning on
the first day of such fiscal year and ending on the last day of such
quarterly period, setting forth in each case in comparative form the
figures for the corresponding periods of the previous fiscal year, all
in reasonable detail and certified by the chief financial officer or
corporate controller of Guarantor as being complete and correct,
prepared in accordance with generally accepted accounting principles
and fairly presenting Guarantor's financial condition and results of
operations;
(ii) as soon as available and in any event within 120 days
after the last day of each fiscal year, a copy of Guarantor's filing
with the Securities and Exchange Commission for such annual period on
Form 10K, or if such filing is not made with the Securities and
Exchange Commission, the consolidated balance sheet, and related
consolidated statements of income, retained income and cash flows, of
Guarantor and its
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consolidated subsidiaries for such fiscal year, prepared and certified
by Guarantor's nationally recognized external auditors setting forth in
each case in comparative form the figures for the previous fiscal year,
all in reasonable detail, and certified by the chief financial officer
or corporate controller of Guarantor as being complete and correct,
prepared in accordance with generally accepted accounting principles
and fairly presenting Guarantor's financial condition and results of
operations;
(iii) within the period provided in subparagraph (ii) above, a
certificate, signed by Authorized Officer of Guarantor, to the effect
that the signer thereof is familiar with the terms and provisions of
the Lease and Guaranty and that at the date of said certificate the
signer is not aware, after due inquiry, of any default in compliance by
Lessee or Guarantor with any of the covenants, terms or provisions of
the Lease and each other Operative Document to which either is a party,
or if the signer is aware of any such default, he shall disclose in
such certificate the nature thereof and the nature of the action Lessee
is taking or proposes to take with respect thereto;
(iv) such additional information as any Participant may
reasonably request concerning the business or financial condition of
Lessee or relating to the Equipment; and
(v) written notice specifying any condition which constitutes
a Unmatured Lease Default or Lease Event of Default, and the nature and
status thereof, promptly after any Authorized Officer of Lessee or
Guarantor, as the case may be, acquires actual knowledge thereof.
(f) Minimum Consolidated Tangible Net Worth. Guarantor shall at all
times maintain Consolidated Tangible Net Worth at an amount not less than the
sum of (i) $250,000,000 plus (ii) 25% of Consolidated Net Income computed on a
cumulative basis for each of the elapsed fiscal quarters ending after December
31, 2000 plus (iii) 50% of the amount of net proceeds to Guarantor of any public
or private offering of equity securities of Guarantor after the date hereof
(other than pursuant to Guarantor's employee stock plans); provided that
notwithstanding that Consolidated Net Income for any such elapsed fiscal quarter
may be a deficit figure, no reduction as a result thereof shall be made with
respect to the sum to be maintained pursuant hereto.
(g) Maximum Leverage Ratio. Guarantor shall not permit the ratio
("Leverage Ratio") of its Consolidated Funded Debt to Consolidated Total
Capitalization at any time to exceed 0.60 to 1.
(h) Modifications to Covenants. If any of Guarantor's credit agreements
which contain covenants similar to the covenants set forth in Sections 6.1(f)
and (g) hereof are amended such that such corresponding covenants in such credit
agreements become more restrictive than the covenant set forth in Sections
6.1(f) and (g) hereof, Lessee shall promptly notify each of the parties hereto
of such amendment and hereby agrees that it shall promptly enter into an
amendment of this Participation Agreement at the request of Required Lenders,
satisfactory in all respect to the parties hereto (other than Lessee), which
amendment shall amend Sections 6.1(f) and (g) and any other applicable
provisions so that such provisions are as restrictive as the corresponding
provisions in such credit agreements.
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SECTION 6.2. Covenants of Owner Participant. Owner Participant
covenants and agrees with Lessee, each Lender, Lessor and Collateral Agent as
follows:
(a) No Termination of Trust. During the Term, without the prior written
consent of Lessee and (unless the Lien of the Security Agreement shall have been
discharged pursuant to the terms thereof) Lenders and Collateral Agent, Owner
Participant shall not terminate the Trust Agreement or the trust created
pursuant thereto.
(b) Removal of Liens. Owner Participant will not directly or indirectly
create, incur, assume or suffer to exist any Lessor Liens attributable to it on
the Equipment, the Trust Estate or the Collateral Estate and, subject to a
Permitted Contest, it will, at its own cost and expense, promptly take such
action as may be necessary to discharge fully any such Lessor Liens.
SECTION 6.3. Covenants of Collateral Agent. Collateral Agent covenants
and agrees with Lessee, the Lenders, Owner Participant and Lessor that (a) it
will not directly or indirectly create, incur, assume or suffer to exist any
Liens on the Equipment, the Trust Estate or the Collateral Estate that result
from any act, failure to act or claim against Collateral Agent and not related
to the transactions contemplated by this Participation Agreement or any of the
other Operative Documents, (b) it will, at its own cost and expense, promptly
take such action in its individual capacity as may be necessary to discharge
fully any such Liens on the Collateral Estate, and (c) it will not sell,
transfer or otherwise dispose of all or any part of the Trust Estate where such
sale, transfer or disposition would violate the Lease or the Security Agreement.
SECTION 6.4. Covenants of Trust Company. Trust Company covenants and
agrees with Lessee, the Note Purchaser, Owner Participant and Collateral Agent
that (a) it will not directly or indirectly create, incur, assume or suffer to
exist any Lessor Liens attributable to it on the Equipment, the Trust Estate or
the Collateral Estate, (b) it will, in its individual capacity and at its own
cost and expense, promptly take such action in its individual capacity as may be
necessary to discharge fully such Lessor Liens arising by, through or under it
in its individual capacity on the Trust Estate, and (c) during the Term, it will
not sell, transfer, assign or otherwise dispose of all or any part of the Trust
Estate except to a successor trust company acting as trustee under the Trust
Agreement.
SECTION 6.5. Covenant of Lessor. Lessor shall furnish to Lessee and
(until the Lien of the Security Agreement shall have been discharged pursuant to
the terms thereof) Collateral Agent and each Lender, notice on or before the
30th day prior to any name change or relocation of its chief executive office or
principal place of business or regarding the books and records relating to the
Equipment or the Trust Estate.
ARTICLE VII
GENERAL INDEMNITY
SECTION 7.1. Indemnity.
(a) Indemnified Claims. Lessee hereby agrees to assume liability for,
and does hereby agree to defend, indemnify, protect, save and keep harmless on
an After-Tax Basis each Indemnitee from and against any and all liabilities,
obligations, losses, damages, penalties, claims (including claims by any
employee of Lessee or any of its contractors), actions, suits and
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related costs, claims and disbursements, including reasonable legal fees and
claims and costs of investigation, of whatsoever kind and nature (for purposes
of this Section collectively called "Claims"), imposed on, asserted against or
incurred by any Indemnitee, in any way based on, relating to or arising out of:
(i) this Participation Agreement, the Lease (including any
Lease Supplement) or any other Operative Document, or the transactions
contemplated thereby (including any misrepresentation or breach of
warranty or covenant by Lessee contained herein or therein or in any
other document or certificate delivered by Lessee pursuant hereto) or
any waivers, modifications, supplemental, or amendments thereto, or the
enforcement thereof against Lessee;
(ii) the Equipment or any Unit or part thereof, or the
selection, rejection, location, construction, design, manufacture,
financing, acceptance, rejection, installation, ownership, purchase,
delivery, non-delivery, lease, sub-leasing, transportation, possession,
use, operation, condition substitution, sale, return or disposition of
the Equipment or any Unit or part thereof (including, without
limitation, latent and other defects, whether or not discoverable by
the Indemnitee or Lessee, and any claim for patent, trademark or
copyright infringement and any claim arising under any strict liability
doctrine in tort);
(iii) any Environmental Claims in connection with, or alleged
to be in connection with (whether or not in compliance with the terms
of the Lease) the operation, use, possession, storage, abandonment or
return of any Unit of Equipment, and any Environmental Claims
(including Environmental Claims related to real property) in connection
with, or alleged to be in connection with (whether or not in compliance
with the terms of the Lease) the treatment, recycling, use, storage,
transportation, disposal, presence, discharge, spillage, release or
escape of any commodity loaded, stored or transported in any Unit prior
to its return empty to Lessor in accordance with and in the condition
required by the Lease;
(iv) the offer, sale, delivery, resale or holding of the Notes
or interests in the Trust Estate as contemplated by and pursuant to the
terms of the Participation Agreement;
(v) any violation of law, rule, regulation or order by the
Lessee or any of Person in connection with the use or operation of the
any Unit; or
(vi) the acquisition or holding of any Notes being deemed to
result in a "prohibited transaction" under ERISA or the Code.
(b) Lessee's Claims Excluded. The following are excluded from Lessee's
agreement to indemnify under this Section 7.1:
(i) Claims with respect to any Unit to the extent attributable
to acts or events occurring after (A) in the case of the exercise by
Lessee of any purchase option with respect to such Unit, or the
occurrence of a Event of Loss with respect to such Unit, the payment of
all amounts due in connection with any such event and the discharge of
the
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Security Agreement or (B) in all other cases with respect to any Unit,
the later to occur of (x) the earlier to occur of the termination of
the Lease and the expiration of the Lease Term, (y) the return of such
Unit to the Lessor in accordance with the terms of Articles XII and XIV
of the Lease or (z) the discharge of the Lien of the Security
Agreement;
(ii) any Taxes (other than amounts in respect of Taxes
necessary to hold such Indemnitee harmless on an After-Tax Basis and
other than with respect to claims arising from a violation of ERISA),
it being agreed that the indemnity for Taxes is in Section 8.1;
(iii) with respect to a particular Indemnitee, claims only to
the extent resulting from the willful misconduct or gross negligence of
such Indemnitee (other than gross negligence or willful misconduct
imputed as a matter of law to such Indemnitee solely by reason of its
interest in the Equipment) the inaccuracy of any representation made by
such Indemnitee in the Operative Documents or any certificate delivered
in connection therewith or the breach by such Indemnitee of its express
obligations under the Operative Documents (other than any breach
imputed as a matter of law to such Indemnitee solely by reason of its
interest in the Equipment or as a result of Lessee's acts);
(iv) with respect to a particular Indemnitee, any Claim to the
extent attributable to the offer, sale, disposition or transfer
(voluntary or involuntary) by or on behalf of such Indemnitee of any
interest in the Equipment, any Operative Document, the Trust Estate or
the Notes or any similar security, other than a transfer by such
Indemnitee of its interests in any Unit in connection with Article XI
of the Lease or a transfer to the Lessee pursuant to Article XVII of
the Lease or a transfer pursuant to Article XIII or XIV of the Lease
arising by reason of Lease Event of Default;
(v) any cost, fee or expense expressly payable by a Person
other than Obligor pursuant to the Lease or any other Operative
Document;
(vi) with respect to a particular Indemnitee, Claims resulting
from any prohibited transaction, within the meaning of ERISA or section
4975(c)(l) of the Code, other than, in case of the Owner Participant
and a Note Purchaser, arising from the purchase and holding by the
Owner Participant or a Note Purchaser, as the case may be, of its
respective interest in the Trust Estate or the Notes in accordance with
its representations and covenants under the Operative Documents; and
(vii) as to any Indemnitee that is a Lender, Claims resulting
from any breach of a fiduciary duty under ERISA by such Indemnitee.
(c) Procedure. The Lessee shall notify each Indemnified Party of any
claim or liability that is, or is likely to result in, a Claim indemnifiable
under this section of which it has actual knowledge. If any Indemnitee shall
have knowledge of any Claim, it shall give prompt written notice thereof to
Lessee; provided, however, that the failure of such Indemnitee to give such
notice shall relieve Lessee of its obligations hereunder only if and to the
extent such failure precludes a contest by Lessee hereunder. Lessee may, at its
election and at its expense, in good faith and by appropriate legal proceedings,
contest or defend an asserted claim or liability for which it is indemnifying
under this Section 7.1 so long as, in the reasonable opinion of the
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Indemnitee, such defense is being diligently conducted by Persons reasonably
satisfactory to the affected Indemnified Parties; provided, however, that Lessee
shall have no such right (i) unless the Lessee shall deliver to the relevant
Indemnified Party a written acknowledgment of the Lessee's obligation to
indemnify such Indemnified Party with respect to such Claim, or (ii) if any
Unmatured Lease Default or Lease Event of Default shall have occurred and be
continuing; or (iii) if such Claim involves a possible imposition of any
criminal liability or penalty or civil penalty on such Indemnified Party or (iv)
if such proceedings 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 Equipment,
the Trust Estate or any part of any thereof unless the Lessee shall have
provided security for the Lessee's obligations under this Section with respect
to such Claim reasonably satisfactory to the relevant Indemnified Parties with
respect to such risk. Settlement of any dispute or Claim or action in the name
of an Indemnitee shall not be finalized without such Indemnitee's prior written
consent, which consent shall not be unreasonably withheld. The Lessee will
provide the Indemnified Party with such information not within the control of
such Indemnified Party, as is in the Lessee's control or is reasonably available
to Lessee, which such Indemnified Party may reasonably request and shall
otherwise cooperate with such Indemnified Party so as to enable such Indemnified
Party to fulfill its obligations under this Section 7.1. Where the Lessee, or
the insurers under a policy of insurance maintained by the Lessee, undertakes
the defense of an Indemnified Party with respect to a claim, no additional legal
fees or other expenses of such Indemnified Party in connection with the defense
of such Claim shall be indemnified hereunder unless: (A) such fees or expenses
were incurred at the request of the Lessee or (B) in the written opinion of
independent counsel to such Indemnified Party an actual or potential conflict of
interest exists where it is advisable for such Indemnified Party to be
represented by separate counsel. In any of the above cases, the reasonable fees
and expenses of such separate counsel shall be borne by the Lessee.
Subject to the requirements of any policy of insurance an Indemnified
Party may participate at its own expense in any judicial proceeding controlled
by the Lessee pursuant to the preceding provisions.
(d) Payment, Survival. Any amount payable to an Indemnified Party
pursuant to this Section shall be paid within thirty (30) days after receipt of
a written demand therefor from such Indemnified Party accompanied by a written
statement describing in reasonable detail the Claims which are the subject of
and basis for such indemnity and the computation of the amount so payable.
Nothing in the foregoing sentence shall imply any excuse of the Lessee's
obligations under this section to protect, defend, assume liability for, save
and keep harmless the Indemnified Parties for the Claims herein provided. All
the indemnities contained in this Section 6.1 shall continue in full force and
effect, notwithstanding the expiration or other termination of the Lease, with
respect to events occurring prior to return of the Units to Lessor pursuant to
the Lease and are expressly made for the benefit of, and shall be enforceable
by, each Indemnitee.
(e) Waiver of Certain Claims. Lessee hereby waives and releases any
Claim now or hereafter existing against any Indemnitee arising out of death or
personal injury to personnel of Lessee, loss or damage to property of Lessee, or
the loss of use of any property of Lessee, which may result from or arise out of
the condition, use or operation of the Equipment during the Lease Term,
including without limitation any latent or patent defect whether or not
discoverable.
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(f) Conflicting Provisions. The general indemnification provisions of
this Section 7.1 are not intended to waive or supersede any specific provisions
of, or any rights, obligations or remedies of Lessee under the Lease, this
Participation Agreement or any other Operative Document.
SECTION 7.2. No Impairment. Notwithstanding anything herein to the
contrary, the actions or omissions of any Indemnitee not constituting gross
negligence or willful misconduct shall not, in any way, impair the right of any
other Indemnitee to indemnification under this Article.
ARTICLE VIII
GENERAL TAX INDEMNITY; OTHER INDEMNITIES
SECTION 8.1. Indemnity.
(a) Indemnity. Lessee agrees to pay, and indemnify and hold harmless
each Indemnitee from, all license and registration fees and all taxes,
assessments, rates, excises, permit fees, inspection fees, levies, imposts,
duties, charges or withholdings of any nature whatsoever, including, sales,
gross receipts, transfer, property, stamp, use, value-added, general and other
taxes, together with any penalties, fines or interest thereon imposed against
any Indemnitee, Lessee, the Equipment or any Unit or part thereof or interest
therein by any federal, state or local government or taxing authority in the
United States or by any foreign country or subdivision thereof, or by any
international organization, upon or with respect to the Equipment or any Unit or
part thereof, or the construction, manufacture, financing, acceptance,
installation, ownership, purchase, delivery, lease, sub-leasing, rental,
transportation, possession, use, operation, improvement, modification,
substitution, replacement, maintenance, condition substitution, sale, return or
disposition of the Equipment or any Unit or part thereof or interest therein or
upon the rentals or upon, or with respect to the Lease, the Rent or other sums
payable by Lessee under the Operative Documents or with respect to the other
Operative Documents, any payment made pursuant to any such agreement, or the
property, the income or other proceeds received with respect to any item of
Equipment or otherwise on or with respect to the transactions contemplated by
the Operative Documents (all such fees, taxes, assessments, rates, excises,
levies, imposts, duties, charges and withholdings, and all penalties, additions
to tax and interest imposed in connection therewith being hereinafter called
"Taxes"); provided, however, that the foregoing indemnity shall not apply to:
(i) Taxes measured by net income (including any minimum or
alternative minimum income taxes and any income taxes on or measured by
items of tax preference), capital or net worth, and withholding in
respect of any thereof, other than Taxes in the nature of or in lieu of
sales, property, license, use or rental taxes and other than to the
extent imposed by any foreign government or taxing authority as a
result of (A) the operation, presence or registration in such
jurisdiction of such Units, (B) the presence in such jurisdiction of a
permanent establishment or fixed place of business of Lessee or any
affiliate of Lessee, (C) the residence, nationality or place of
management and control of Lessee or any affiliate of Lessee, (D) the
payment from such jurisdiction by any Lessee or any affiliate of Lessee
of any amount due by Lessee under any of the Operative
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Documents or (E) any combination of factors (A) - (D) above
(hereinafter referred to as "Income Taxes");
(ii) Taxes imposed on an Indemnitee resulting from a voluntary
sale, assignment, transfer or other disposition by such Indemnitee of
any Unit of Equipment, the Trust Estate or interest therein or any
interest in any trust holding such Equipment except if a Lease Event of
Default shall have occurred and be continuing or due to the performance
of an act under Articles VII, X, XII, XVI and XVII of the Lease or an
act otherwise required by any Operative Document;
(iii) Taxes imposed on an Indemnitee resulting from an
involuntary sale, assignment, transfer or other disposition by such
Indemnitee of any Unit of Equipment, the Trust Estate or interest
therein or any interest in any trust holding such Equipment if such
involuntary sale, assignment, transfer or other disposition shall occur
as a result of the bankruptcy or dissolution of such Indemnitee, except
if a Lease Event of Default shall have occurred and be continuing and
such bankruptcy or dissolution is attributable to such Lease Event of
Default;
(iv) Taxes in respect of any period after the expiration or
early termination of this Lease so long as Lessee shall have discharged
all its obligations under this Lease;
(v) Taxes that have been included in the cost of the Equipment
and paid to the appropriate taxing authority;
(vi) Taxes in the nature of interest, penalties, fines or
additions to tax resulting from the failure of an Indemnitee to timely
provide notification of a Claim pursuant to Section 8.1(e) hereof,
provided, however, that the failure of such Indemnitee to give such
notice shall relieve Lessee of its obligations hereunder only if and to
the extent such failure precludes a contest by Lessee hereunder; and
(vii) Taxes with respect to Claims arising under ERISA or
section 4975 of the Code, it being agreed that indemnity for such
Claims is in Section 7.1.
(b) Reports. In the event any reports with regard to Taxes (other than
Income Taxes) are required to be made with respect to the Equipment or any Unit
thereof, Lessee will, where permitted to do so under applicable rules or
regulations, make and timely file such reports in such a manner as to show the
interest of Lessor and any other Indemnitee therein as shall be reasonably
satisfactory to each thereof or, where not so permitted, will, as soon as Lessee
has knowledge thereof, notify Lessor and any other Indemnitee of such
requirement and will assist in preparation of such reports by Lessor or any
other Indemnitee in such manner as shall be reasonably satisfactory to each
thereof. Unless otherwise required by law, Lessee shall be responsible for
reporting the Equipment for ad valorem property tax purposes in the applicable
states or localities and, unless otherwise required by law, no Indemnitee shall
include the Equipment in any ad valorem or other similar tax returns filed by it
in such states or localities.
(c) After-Tax Basis. Lessee further agrees that, with respect to any
payment or indemnity to an Indemnitee under this Article VIII, and
notwithstanding the proviso in Section 8.1(a), Lessee's indemnity obligations
shall include any amount necessary to hold such
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Indemnitee harmless on an After-Tax Basis from all Taxes required to be paid by
such Indemnitee with respect to such payment or indemnity (including any
payments under this Section 8.1(c)). Payment shall be made by Lessee in
immediately available funds no later than one (1) Business Day prior to the date
on which the Indemnitee must transfer funds to pay such Taxes.
(d) Payment; Survival. All amounts payable by Lessee pursuant to this
Section 8.1 shall be payable directly to the Indemnitee except to the extent
paid to a governmental agency or taxing authority. All the indemnities contained
in this Section 8.1 and the obligation, if any, of Lessee to make payments to
each Indemnitee pursuant to this Section 8.1, shall continue in full force and
effect, notwithstanding the expiration or other termination of the Lease in
whole or in part, as to matters arising prior to the return of the Units of
Equipment to Lessor in accordance with the Lease until all such obligations of
Lessee and each Indemnitee have been met and such liabilities have been paid in
full and are expressly made for the benefit of, and shall be enforceable by,
each Indemnitee. Lessee's obligations under this Section 8.1 shall be that of
primary obligor irrespective of whether the Indemnitee shall also be indemnified
with respect to the same matter under some other agreement by another Person.
(e) Contest. If any claim is made against any Indemnitee, by
commencement of proceedings against the Indemnitee or otherwise, for any Taxes
as to which Lessee has an indemnity obligation pursuant to this Section 8.1,
such Indemnitee shall promptly notify Lessee of such claim in writing; provided,
however, the failure to give such notice shall relieve Lessee of its obligations
hereunder only if such failure precludes a contest by Lessee hereunder. Lessee
may, at its sole cost and expense, in good faith and by appropriate legal
proceedings, contest or defend an asserted claim or liability for which it is
indemnifying under this Section 8.1 (and has acknowledged liability in writing
to the relevant Indemnified Parties) so long as in the reasonable opinion of the
Indemnified Person, such defense is being diligently conducted by Persons
reasonably satisfactory to the affected Indemnitees; provided, however, if there
has been a material adverse change in the business, assets, operations,
prospects or condition (financial or otherwise) of Lessee, Lessee may only
conduct such contest upon providing a letter of credit, bond or other security
satisfactory in all respects to Lessor to cover the potential Taxes involved in
such contest; and provided further, however, that Lessee may not conduct any
contest or defense (i) involving Taxes not indemnified by Lessee hereunder or
(ii) if such Indemnitee or Owner Participant shall have reasonably determined
that the conduct of such contest or defense will result in any material danger
of sale, forfeiture or loss of, or the creation of any Lien (except if Lessee
shall have adequately bonded such Lien or otherwise made provision to protect
the interests of such Indemnitee and Owner Participant in a manner reasonably
satisfactory to them) on the Equipment or any Unit of Equipment or may otherwise
interfere with timely payments of Rent.
(f) Verification. At the Lessee's request, the amount of any indemnity
payment by the Lessee or any payment by an Indemnitee to the Lessee pursuant to
this Section 8.1 shall be verified and certified by an independent public
accounting firm mutually acceptable to the Lessee and such Indemnitee. The costs
of such verification shall be borne by the Lessee unless such verification shall
result in an adjustment in the Lessee's favor of the lesser of (i) $50,000 or
(ii) 20 percent of the payment as computed by such Indemnitee, in which case
such fee shall be paid by such Indemnitee. In no event shall the Lessee have the
right to review such Indemnitee's
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tax returns or receive any other confidential information from such Indemnitee
in connection with such verification. Any information provided to such
accountants by any Person shall be and remain the exclusive property of such
Person and shall be deemed by the parties to be (and the accountants will
confirm in writing that they will treat such information as) the private,
proprietary and confidential property of such Person, and no Person other than
such Person and the accountants shall be entitled thereto and all such materials
shall be returned to such Person. Such accounting firm shall be requested to
make its determination within 30 days of the Lessee's request for verifications
and the computations of the accounting firm shall be final, binding and
conclusive upon the Lessee and such Indemnitee. The parties agree that the sole
responsibility of the independent public accounting firm shall be to verify the
amount of a payment pursuant to the Lease and that matters of interpretation of
the Lease are not within the scope of the independent accounting firm's
responsibilities.
(g) Tax Ownership. Each Indemnitee represents and warrants that it will
not, prior to the termination of the Lease, claim ownership of (or any tax
benefits, including depreciation, predicated upon ownership of) the Equipment
for any income tax purposes, it being understood that the Lessee is and will
remain the owner of the Equipment for such income tax purposes until the
termination of the Lease. If, notwithstanding the income tax intentions of the
parties as set forth herein, any Indemnitee actually receives any income tax
deductions, reductions in income tax or other income tax benefit as a result of
any claim for, or recharacterization requiring such party to take, any tax
benefits attributable to ownership of the Equipment for income tax purposes, and
provided that no Lease Event of Default in continuing, such Indemnitee shall pay
to the Lessee, together with an amount equal to any reduced Taxes payable by
such Indemnitee as a result of such payment, the amount of such income tax
savings actually realized by such Indemnitee (less the amount of any increase in
income tax that is currently payable as a result of such claim or
recharacterization), provided that the Lessee shall agree to reimburse such
Indemnitee for any subsequent increase in such Indemnitee's income taxes
resulting from such claim or recharacterization not taken into account in the
payment made to the Lessee, up to the net amount paid to the Lessee by each
Indemnitee. The parties agree that this Section 8.1(g) is intended to require a
payment to the Lessee if and only if each Indemnitee shall have actually
received an unanticipated tax savings with respect to the Equipment that would
not have been received if each Indemnitee had advanced funds to the Lessee in
the form of a loan secured by the Equipment in an amount equal to the Equipment
Cost. Nothing in this Section 8.1 shall be construed to require any Indemnitee
to take any affirmative action to realize any Tax savings or Tax benefit if in
its reasonable judgment such action may have an adverse effect on such
Indemnitee (including such action or Tax position being or being viewed as
inconsistent with any other action or Tax position claimed by such Indemnitee
for the relevant period or periods).
(h) Delivery of Forms. On or before the date hereof or, if later, the
date on which it acquires the rights and obligations of an Indemnitee pursuant
to the Operative Documents, each Indemnitee which is not a United States person
(within the meaning of Section 7701(a)(30) of the Internal Revenue Code of 1986)
will deliver to the Guarantor and the Administrative Agent a fully completed and
duly executed copy of the appropriate United States Internal Revenue Service
Form W-8 confirming that such Indemnitee is entitled under Section 1442 of the
Internal Revenue Code or any other applicable provision thereof or under any
applicable tax treaty or convention to receive payments under the Operative
Documents without deduction or withholding of United States federal income tax.
So long as the Commitments are outstanding
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and until the obligations of the Obligors under the Operative Documents have
been paid and performed in full, each Indemnitee shall also deliver a further
copy of such Form W-8 or any successor forms thereto to the Guarantor upon the
expiration, if any, of the form previously delivered by such Indemnitee
hereunder, unless any change in law or regulation of the United States or any
taxing authority thereof has occurred prior to the date on which such delivery
would otherwise be required which renders such form inapplicable or which would
prevent such Indemnitee from completing and delivering such form.
Notwithstanding anything to the contrary in the Operative Documents, the Lessee
and the Obligors shall not be required to gross-up any payment for withholding
taxes imposed on any Indemnitee which has failed to comply with its obligations
under this Section 8.1(h) if such compliance would have avoided such withholding
taxes and the Lessee and the Obligors shall be entitled to withhold from any
payments to such Indemnitee under this Agreement any such withholding taxes.
SECTION 8.2. Indemnity Payments in Addition to Lease Obligations. The
Lessee acknowledges and agrees that the Lessee's obligations to make indemnity
payments under this Article VIII are separate from, in addition to, and do not
reduce, the Lessee's obligation to pay under the Lease that portion of the
Equipment Cost constituting the Maximum Lessee Risk Amount.
SECTION 8.3. Eurodollar Rate Lending Unlawful. Notwithstanding any
other provision herein, if the adoption of or any change in any Applicable Law
or in the interpretation or application thereof occurring after the Closing Date
shall make it unlawful for a Participant to make or maintain Eurodollar
Loan(s)/Equity Investment(s) as contemplated by the Operative Documents (i) such
Participant shall promptly give written notice of such circumstances to the
Lessee and the other Participants (which notice shall be withdrawn whenever such
circumstances no longer exist), (ii) the commitment of such Lenders or Owner
Participant, as the case may be, hereunder to make Eurodollar Loan(s)/Equity
Investment(s) shall forthwith be canceled and, until such time as it shall no
longer be unlawful for such Participant to make or maintain Eurodollar
Loan(s)/Equity Investment(s), such Participant shall then have a commitment only
to make a Base Rate Loan/Equity Investment when a Eurodollar Loan/Equity
Investment is requested and (c) such Participant's Loans and Equity Investment
then outstanding as Eurodollar Loan(s)/Equity Investment(s), if any, shall be
converted automatically to Base Rate Loan(s)/Equity Investment(s) on the
respective last days of then current Interest Periods with respect to such Loans
and Equity Investment or within such earlier period as required by law. If any
such conversion of Eurodollar Loan(s)/Equity Investment(s) occurs on a day which
is not the last day of then current Interest Period with respect thereto, the
Lessee shall pay to such Participant such amounts, if any, as may be required
pursuant to Section 8.6. In any such case, interest and principal (if any) shall
be payable contemporaneously with the related Eurodollar Loan(s)/Equity
Investment(s) of the other applicable Participants.
SECTION 8.4. Deposits Unavailable. If any of the Participants shall
have determined that:
(a) Dollar deposits in the relevant amount and for the relevant
Interest Period are not available to such Participant in its relevant market; or
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(b) by reason of circumstances affecting such Participant's relevant
market, adequate means do not exist for ascertaining the interest rate or Yield,
as the case may be, applicable to such Participant's Loans or Equity Investment,
then, upon notice from such Participant to the Lessee and the other
Participants (i) the obligations of the Participants to make Loans or Equity
Investment, as the case may be, shall be suspended and (ii) each outstanding
Loan or Equity Investment, as the case may be, shall begin to bear interest or
accrue Yield at the Base Rate on the last day of the then current Interest
Period applicable thereto.
SECTION 8.5. Increased Costs, Etc.
(a) If the adoption of or any change in any Applicable Law or in the
interpretation or application thereof applicable to any Indemnitee, or
compliance by any Indemnitee with any request or directive (whether or not
having the force of law) from any central bank or other Governmental Authority,
in each case made subsequent to the Initial Closing Date (or, if later, the date
on which such Indemnitee becomes an Indemnitee):
(i) shall subject such Indemnitee to any Tax (other than
withholding taxes) of any kind whatsoever with respect to any
Eurodollar Loan(s)/Equity Investment(s), made or purchased by it or its
obligation to make Eurodollar Loan(s)/Equity Investment(s) or maintain
its commitment to make (or purchase) undivided interests in Eurodollar
Loan(s)/Equity Investment, or change the basis of taxation of payments
to such Indemnitee in respect thereof (except for excluded Taxes and
changes in taxes measured by or imposed upon the overall gross or net
income, franchise or other taxes (imposed in lieu of such net income
tax), of such Indemnitee or its applicable lending office, branch, or
any affiliate thereof); or
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of, Loans,
Equity Investment, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Indemnitee which is not
otherwise included in the determination of the Adjusted Eurodollar Rate
hereunder; or
(iii) shall impose on such Indemnitee any other condition
(excluding any Tax of any kind) whatsoever in connection with the
Operative Documents;
and the result of any of the foregoing is to increase the cost to such
Indemnitee of making or maintaining Eurodollar Loan(s)/Equity Investment(s) or
to reduce any amount receivable hereunder in respect thereof, then, in any such
case, upon notice to the Lessee from such Indemnitee, the Lessee shall pay to
such Indemnitee any additional amounts necessary to compensate such Indemnitee
for such increased cost or reduced amount receivable. All payments required by
this Section 8.5(a) shall be made by the Lessee within ten (10) Business Days
after demand by the affected Indemnitee. Notwithstanding anything to the
contrary contained herein, Lessee shall not be obligated to compensate any
Indemnitee for any amounts pursuant to this Section 8.5 attributable to a period
of time more than 90 days prior to the giving of notice by such Indemnitee of
its intention to seek compensation under this Section 8.5. If any
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Indemnitee becomes entitled to claim any additional amounts pursuant to this
subsection, it shall provide prompt notice thereof to the Lessee, certifying (x)
that one of the events described in this clause (a) has occurred and describing
in reasonable detail the nature of such event, (y) as to the increased cost or
reduced amount resulting from such event and (z) as to the additional amount
demanded by such Indemnitee and a reasonably detailed explanation of the
calculation thereof. Such a certificate as to any additional amounts payable
pursuant to this clause submitted by any Indemnitee to the Lessee shall be
conclusive in the absence of manifest error. In determining any such amount,
such Indemnitee may use any method of averaging and attribution that it (in its
sole and absolute discretion) shall deem applicable. This covenant shall survive
the termination of this Participation Agreement and the payment of the Loans and
Equity Investment.
(b) Each Indemnitee shall use its reasonable efforts to reduce or
eliminate any claim for compensation pursuant to this Section 8.5, including,
without limitation, a change within the United States in the office of such
Indemnitee at which its obligations related to this Participation Agreement are
maintained if such change will avoid the need for, or reduce the amount of, such
compensation and will not, in the reasonable judgment of such Indemnitee, be
otherwise disadvantageous to it.
SECTION 8.6. Funding Losses. During the Term of the Lease and
thereafter, the Lessee agrees to indemnify each Indemnitee and to hold each
Indemnitee harmless from any loss or expense which such Indemnitee may sustain
or incur (other than through such Person's own gross negligence or willful
misconduct) as a consequence of (i) default by the Lessee in making a borrowing
of, conversion into or continuation of Loans or Equity Investment which are
Eurodollar Loan(s)/Equity Investment(s) after the Lessee has delivered an
Advance Request in accordance with the provisions of this Participation
Agreement, (ii) default by the Lessee in making any prepayment of a Loan or
Equity Investment which is a Eurodollar Loan/Equity Investment after the Lessee
has given a notice thereof in accordance with the provisions of this
Participation Agreement or (iii) the making of a prepayment of Loans or Equity
Investment which are Eurodollar Loan(s)/Equity Investment(s) on a day which is
not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (x) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
the applicable Interest Period (or, in the case of a failure to borrow, convert
or continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loan or Equity
Investment which is a Eurodollar Loan/Equity Investment provided for herein
(excluding, however, the Applicable Margin included therein, if any) over (y)
the amount of interest (as reasonably determined by such Indemnitee) which would
have accrued to such Indemnitee on such amount by placing such amount on deposit
for a comparable period with leading banks in the interbank eurodollar market.
This covenant shall survive the termination of this Participation Agreement or
any other Operative Document and the payment of the Loans, Equity Investment and
all other amounts payable under the Operative Documents.
SECTION 8.7. Capital Adequacy.
(a) If the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by
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any Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Indemnitee with
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, in each
case made subsequent to the Initial Closing Date (or, if later, the date on
which such Indemnitee becomes an Indemnitee pursuant to this Participation
Agreement) has or will have the effect of reducing the rate of return on either
Indemnitee's or its parent company's capital by an amount such Indemnitee deems
to be material, as a consequence of its commitments or obligations hereunder to
a level below that which such Indemnitee or its parent company could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Indemnitee's or its parent company's policies with respect to
capital adequacy), then, upon notice from such Indemnitee, the Lessee shall pay
to such Indemnitee such additional amount or amounts as will compensate such
Indemnitee and its parent company for such reduction (it being understood that
such parent company shall not be reimbursed to the extent its subsidiary
Indemnitee is reimbursed by the Lessee in connection with the same or a similar
law, rule, regulation, change, request or directive applicable to such
Indemnitee). All payments required by this Section 8.7 shall be made by the
Lessee within 10 Business Days after demand by the affected Indemnitee.
Notwithstanding anything to the contrary contained herein, Lessee shall not be
obligated to compensate any Indemnitee for any amounts pursuant to this Section
8.7 attributable to a period of time more than 90 days prior to the giving of
notice by such Indemnitee of its intention to seek compensation under this
Section 8.7. If any Indemnitee becomes entitled to claim any additional amounts
pursuant to this clause, it shall provide prompt notice thereof to the Lessee
certifying (x) that one of the events described in this clause (a) has occurred
and describing in reasonable detail the nature of such event, (y) as to the
increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Indemnitee and a reasonably detailed
explanation of the calculation thereof (including the method by which such
Indemnitee allocated such amounts to the Lessee). Such a certificate as to any
additional amounts payable pursuant to this clause submitted by such Indemnitee
to the Lessee shall be conclusive in the absence of manifest error; provided,
however, that the method by which such Indemnitee allocated such amount to the
Lessee must have been applied in good faith and must have been a method
generally used by such Indemnitee for such purpose. This covenant shall survive
the termination of this Participation Agreement or any other Operative Document
and the payment of the Loans, Equity Investment and all other amounts payable
under the Operative Documents.
(b) Each Indemnitee shall use its commercially reasonable efforts to
reduce or eliminate any claim for compensation pursuant to this Section 8.7,
including, without limitation, a change in the office of such Indemnitee at
which its obligations related to the Operative Documents are maintained if such
change will avoid the need for, or reduce the amount of, such compensation and
will not, in the reasonable judgment of such Indemnitee, be otherwise
disadvantageous to it.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES
SECTION 9.1. Representations and Warranties of the Obligors. Each of
the Guarantor, and the Lessee represents and warrants to each Participant that
as of the Initial Closing Date:
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(a) Corporate or Partnership Existence and Standing. Each of the
Guarantor and Lessee is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization and is in good standing and
has all requisite authority to conduct its business in each jurisdiction in
which its business is conducted, except where failure to have such good standing
or authority would not have a Material Adverse Effect.
(b) Authorization and Validity. Each of the Guarantor and the Lessee
has the power and authority to execute and deliver the Operative Documents to
which it is or will be a party and to perform its obligations thereunder. The
execution and delivery by the Guarantor and the Lessee of the Operative
Documents to which it is or will be a party and the performance of its
obligations thereunder have been duly authorized by proper proceedings, and the
Operative Documents constitute legal, valid and binding obligations of the
Guarantor and the Lessee, enforceable against such Persons in accordance with
their terms, except as enforceability may be limited by bankruptcy, insolvency
or similar laws affecting the enforcement of creditors' rights generally.
(c) No Conflict; Government Consent. The execution, delivery and
performance by each of the Guarantor and the Lessee of the Operative Documents
to which it is or will be a party will not violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on it, or conflict
with any organizational document or Material Agreement of it, or require any
government approval except where such violation, conflict or lack of approval
would not have a Material Adverse Effect or result in the creation or imposition
of any Lien in, of or on the Property of it or any of its Subsidiaries pursuant
to the terms of any such Material Agreement.
(d) Financial Statements. The September 30, 2000 consolidated financial
statements of the Guarantor and its Subsidiaries were prepared in accordance
with GAAP in effect on the date such statements were prepared and fairly present
the consolidated financial condition and operations of the Guarantor and its
Subsidiaries at such date and the consolidated results of their operations for
the period then ended.
(e) Material Adverse Change. As of the Initial Closing Date there has
been no change since September 30, 2000 in the business, Property, financial
condition or results of operations of the Guarantor and its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect other than
certain restructuring charges to be taken in the fourth calendar quarter of 2000
up to $50,000,000 on a pre-tax basis.
(f) Taxes. The Guarantor and its Subsidiaries have filed all United
States federal tax returns and all other tax returns or reports which are
required to be filed and have paid all taxes due pursuant to said returns or
pursuant to any assessment received by the Guarantor or any of its Subsidiaries,
except such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided. No tax liens have been filed and no claims
are being asserted with respect to any such taxes which could reasonably be
expected to have a Material Adverse Effect. The charges, accruals and reserves
on the books of the Guarantor and its Subsidiaries in respect of any taxes or
other governmental charges are adequate in all material respects. The Guarantor
knows of no pending investigation of the Guarantor or any of its
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Subsidiaries by any taxing authority, nor of any pending but unassessed tax
liability which, in either case, could reasonably be expected to have a Material
Adverse Effect.
(g) Litigation and Contingent Obligations. Except as disclosed in the
Guarantor's most recent Form 10-K or 10-Q, or Form 8-K filed subsequent to its
most recent Form 10-K or 10-Q filed with the SEC, there is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of an officer of the Guarantor, threatened against or affecting
the Guarantor or any of its Subsidiaries (including, without limitation, any
such action involving Environmental Laws) which, in either case, could
reasonably be expected to have a Material Adverse Effect.
(h) ERISA. The Unfunded Liabilities of all Single Employer Plans do not
in the aggregate exceed $100,000,000. Neither the Guarantor nor any other member
of the Controlled Group has incurred, or is reasonably expected to incur, any
withdrawal liability to Multiemployer Plans in excess of $100,000,000 in the
aggregate. Except for such matters as would not singly or in the aggregate have
or reasonably be expected to have a Material Adverse Effect, each Single
Employer Plan complies in all material respects with all applicable requirements
of law and regulations, no Reportable Event has occurred with respect to any
Single Employer Plan, neither the Guarantor nor any other members of the
Controlled Group has withdrawn from any Multiemployer Plan with respect to which
it has any unsatisfied liability or initiated steps to do so, and no steps have
been taken to reorganize or terminate any Single Employer Plan.
(i) Regulation U. Margin stock (as defined in Regulation U) constitutes
less than 25% of those assets of the Guarantor and its Subsidiaries which are
subject to any limitation on sale, pledge, or other restriction hereunder. The
Guarantor is not engaged principally, and does not as one of its important
activities engage, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulations U or X of
the Board of Governors of the Federal Reserve System), and no part of the
proceeds of any extension of credit under this Agreement will be used to
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock other than the purchase
of margin stock from time to time in connection with transactions (i) authorized
by the board of directors of the Guarantor, (ii) either (a) authorized by the
board of directors or other governing body of the Person which stock is being
acquired or (b) involving less than 5% of the stock of any Person and (iii)
which would not cause the Guarantor to fail to be in compliance with the
following sentence. Neither the Guarantor nor any Person acting on its behalf
has taken or will take any action which could reasonably be expected to cause
this Agreement or any of the Notes to violate any of said Regulations U or X, or
any other regulation of the Board of Governors of the Federal Reserve System or
to violate the Securities Exchange Act of 1934, in each case as now in effect or
as the same may hereafter be in effect.
(j) Environmental Matters. The Guarantor, each of its Subsidiaries, and
their respective Properties are in compliance with all Environmental Laws except
where the failure to be in compliance could not reasonably be expected to have a
Material Adverse Effect and neither the Guarantor nor any of its Subsidiaries is
subject to any liability or obligation for remedial action thereunder or in
connection therewith which could reasonably be expected to have a Material
Adverse Effect. There are no Hazardous Materials located on or under any of the
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Property of the Guarantor or any of its Subsidiaries (other than petroleum
products which are located thereon in the ordinary course of business and in a
manner which does not constitute a violation of applicable Environmental Law)
which could reasonably be expected to have a Material Adverse Effect. Neither
the Guarantor nor any of its Subsidiaries has caused or permitted any Hazardous
Material to be disposed of on or under or released from any of its Properties
which disposal or release could reasonably be expected to have a Material
Adverse Effect.
(k) Investment Company Act. None of the Guarantor nor any Principal
Subsidiary thereof is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
(l) Public Utility Holding Company Act. Each of the Guarantor and each
of its Principal Subsidiaries is not subject to, or is exempt from, regulation
as a "holding company", a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company", in each case as such terms are defined in
PUHCA.
(m) Full Disclosure. All information heretofore furnished by the
Guarantor and the Lessee to the Administrative Agent or any Participant for
purposes of or in connection with this Participation Agreement or any of the
other Operative Documents or any transaction contemplated hereby or thereby,
taken as a whole is, and all such information hereafter furnished by the
Guarantor and the Lessee to the Administrative Agent or any Participant, taken
as a whole, will be, true and accurate in all material respects on the date as
of which such information is stated or certified.
(n) Use of Equipment. The Equipment and the contemplated use thereof by
the Lessee and its agents, assignees, employees, lessees, licensees and tenants
will comply in all material respects with all Applicable Law (including, without
limitation, Environmental Laws) and all Insurance Requirements, except for such
Applicable Law as the Lessee shall be contesting in good faith by appropriate
proceedings that do not involve (i) any material risk of (a) foreclosure, sale,
forfeiture or loss of, or imposition of any material Lien on, the Equipment or
any part thereof, (b) the impairment of the ownership, use, operation or
maintenance of the Equipment or any part thereof or (c) any civil liability
being incurred by any Participant or the Administrative Agent or (ii) any risk
of criminal liability being incurred by any Participant or the Administrative
Agent.
(o) No Proceedings with Respect to Equipment. There is no action, suit
or proceeding (including any proceeding with respect to a condemnation or under
any Environmental Law) pending or, to the best of its knowledge, threatened with
respect to the Guarantor, the Lessee or any Unit which adversely affects the
use, operation, title to or value of such Unit.
(p) Licenses, Approvals, Necessary Permits, etc. All licenses,
approvals, authorizations, consents, permits including proof and dedication,
applicable to the Lessee required for: (x) the acquisition of the Equipment and
(y) the operation of the Equipment, have, in each case, either been obtained
from the appropriate Governmental Authorities having jurisdiction or from
private parties, as the case may be, or will be obtained from the appropriate
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Governmental Authorities having jurisdiction or from private parties, as the
case may be, prior to commencing any such construction, use or operation for
which such license, approval, authorization, consent or permit is required.
(q) Perfection of Liens; Transfer of Title. The Security Agreement
creates a valid and enforceable Lien on the Collateral Estate in favor of the
Collateral Agent, for the ratable benefit of the Lenders, and, upon the filing
of the Security Interest Filings in the offices set forth on Exhibit C hereto
and each other office specified in an Advance Request, and the filing of
applications for new certificates of title as set forth herein, the Collateral
Agent will have a first priority perfected Lien on the Collateral Estate. No
filing, recording, registration or notice to any Governmental Authority will be
necessary to establish, perfect and give record notice of the Lien on the
Collateral Estate in favor of the Collateral Agent, as applicable, in each case,
except for the filing of the Security Interest Filings described in the
preceding sentence. There are no fees payable to any Governmental Authority with
respect to the filing and recordation described in this clause (q), except for
those fees which the Lessee has described hereinabove. Each ▇▇▇▇ of Sale
transfers to Lessor valid title to the Equipment described on the schedule
attached thereto free and clear of any all encumbrances, liens, charges or
defects. With respect to all Units of Equipment with respect to which
certificates of title have been issued, such certificates of title shall be
amended in accordance with Applicable Law to show Lessee as the owner of such
Equipment and to show Collateral Agent as lienholder thereof specifically as
follows:
"Fleet Capital Corporation, as Collateral
Agent for the Lenders, as assignee of
Wabash Statutory Trust-▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President"
No filing or recordation must be made, no notice must be given, and no other
action must be taken with respect to any state or local jurisdiction or any
person in order to preserve to Lessor the rights transferred by the ▇▇▇▇ of
Sale.
(r) Patents, Trademarks. There are no patents, patent rights,
trademarks, service marks, trade names, copyrights, licenses or other
intellectual property rights with respect to the Equipment that are necessary
for the operation of the Equipment, except to the extent that the Lessee has, or
can obtain in the ordinary course of business as and when needed, rights in
respect thereof without payment of royalties or other licensing payments (other
than those made in the ordinary course of business) which rights may be freely
leased, licensed or otherwise provided to, or obtained by, the Lessor or any
successor owner, lessee, user or operator of the Equipment or any part thereof.
(s) Subjection to Government Regulation. None of the Administrative
Agent or any Participant will become subject to ongoing regulation of its
operations by any other Governmental Authority solely by reason of entering into
the Operative Documents or the consummation or performance of the transactions
contemplated thereby, except for regulation
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the applicability of which depends upon the existence of facts in addition to
the ownership of, or the holding of any interest in, the Equipment.
(t) Insolvency. None of the Guarantor or the Lessee is entering into
the Operative Documents with the actual intent to hinder, delay or defraud its
current or future creditors, nor does the Guarantor or the Lessee intend to or
believe that it will incur, as a result of entering into this Participation
Agreement and the transactions contemplated hereby, debts beyond its ability to
repay. Neither the Guarantor nor the Lessee is as of the date of this
Participation Agreement "insolvent" as that term is defined in 11 U.S.C. Section
101(34), nor will the consummation of the transactions contemplated by this
Participation Agreement render any Obligor insolvent (giving effect to the fair
valuation of its assets) or result in any Obligor having unreasonably small
capital for the conduct of its business.
(u) No Transfer Taxes. No sales, use, excise, transfer or other tax,
fee or imposition shall result from the sale, transfer, lease, sublease or
purchase of any portion of the Equipment and other Equipment, except such taxes,
fees or impositions that will have been paid in full on or prior to the each
Closing Date related thereto or which are covered under the indemnity provided
by the Lessee herein.
(v) No Casualty. No fire or other casualty with respect to the
Equipment or any Unit has occurred which fire or other casualty has materially
and adversely affected the use, value, operation or useful life of the Equipment
or any Unit and no Event of Loss has occurred with respect to any Unit.
(w) Insurance. The Lessee or the Guarantor has obtained or arranged on
behalf of the Lessor, insurance coverage covering the Equipment which meets the
requirements of the Lease, and such coverage is in full force and effect. The
Guarantor carries insurance with reputable insurers or maintains a program of
self-insurance in respect of its material assets, in such manner, in such
amounts and against such risks as is customarily maintained by other Persons of
similar size engaged in similar business.
(x) Liens. The Equipment is free and clear of all Liens other than
Permitted Equipment Liens.
(y) Consent to Transactions. Each of the Lessee and the Guarantor
consent to (i) assignments by Lessor to the Collateral Agent of the Lease and
the Guaranty contained in the Security Agreement and (ii) the other transactions
contemplated hereby and by the Operative Documents.
(z) Location of Principal Place of Business and Chief Executive Office.
The principal place of business and chief executive office of Lessee is at the
following address:
Apex Trailer Leasing & Rentals, L.P.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Lessee keeps or will keep its company records concerning the Equipment and the
Operative Documents at such chief executive office or, after thirty (30) days
prior written notice to Administrative Agent, as such other office specified in
such notice.
SECTION 9.2. Representations and Warranties of Lessor. Lessor
represents and warrants to each of the other parties hereto as of the Initial
Closing Date as follows:
(a) Due Organization, etc. Lessor is a duly organized and validly
existing "Statutory Trust" as such term is defined in Section 34-501(2) of the
Statutory Trust Act (as such term is defined in the Trust Agreement) under the
laws of the State of Connecticut, is in good standing under the laws of the
State of Connecticut and has the power and authority to carry on its business as
now conducted and to enter into and perform its obligations under this
Participation Agreement, each Operative Document to which it is a party and each
other agreement, instrument and document executed and delivered prior to the
Closing Date in connection with, or as contemplated by, each such Operative
Document.
(b) Authorization; No Conflict. The execution, delivery and performance
of each Operative Document to which it is a party has been duly authorized by
all necessary action on its part and neither the execution and delivery thereof
by Lessor, nor the consummation of the transactions contemplated thereby by
Lessor, nor compliance by it with any of the terms and provisions thereof (i)
requires or will require any approval (which approval has not been obtained) of
any party or approval or consent of any trustee or holders of any indebtedness
or obligations of Lessor, (ii) contravenes or will contravene any Applicable Law
applicable to or binding on it as of the date hereof, (iii) does or will
contravene or result in any breach of or constitute any default under, or result
in the creation of any Lessor Lien upon any of the Equipment, the Trust
Agreement, any indenture, mortgage, chattel mortgage, deed of trust, conditional
sales contract, bank loan or credit agreement or other agreement or instrument
to which it or its properties may be bound or (iv) does or will require any
action by any Authority.
(c) Enforceability, etc. Each Operative Document to which it is a party
has been duly executed and delivered by it and constitutes, or upon execution
and delivery will constitute, a legal, valid and binding obligation enforceable
against it in accordance with the terms thereof (except as may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and general principles of equity).
(d) Litigation. No litigation, investigation or proceedings of or
before any arbitrator or Governmental Authority is pending or, to its knowledge,
threatened by or against Lessor (a) with respect to any of the Operative
Documents or any of the transactions contemplated hereby or thereby, or (b)
which could reasonably be expected to have a Material Adverse Effect with
respect to the Lessor.
(e) Assignment. Lessor has not assigned or transferred any of its
right, title or interest in or under the Lease, any Operative Document or any of
the Equipment, except in accordance with the Operative Documents.
(f) No Default. No Security Agreement Default or Security Agreement
Event of Default attributable to it has occurred and is continuing.
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(g) Principal Place of Business. Lessor's principal place of business,
chief executive office and office where the documents, accounts and records
relating to the transactions contemplated by this Agreement and each other
Operative Document are kept are located at ▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ and Trust
Company of Connecticut, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Square, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Corporate Trust Department.
(h) Lessor Liens. The Equipment is free and clear of all Lessor Liens
attributable to Lessor.
(i) Activities. Since the date of its formation, the Lessor has not
engaged in any activity other than that contemplated by the Trust Agreement or
any other Operative Document or entered into any commitment or incurred any
Debt, other than pursuant to the Operative Documents to which it is a party.
(j) Assets and Subsidiaries. The Lessor has no assets other than the
Trust Estate and has no subsidiaries.
(k) Investment Company Act; Public Utility Holding Company Act. Lessor
is not (i) an "investment company" or a company "controlled" by an "investment
company, " within the meaning of the Investment Company Act of 1940, as amended,
(ii) a "holding company," a "public utility company" or a "subsidiary company"
of a "holding company" within the meaning of PUHCA, or (iii) subject to any
other Applicable Law which purports to restrict or regulate its ability to
borrow money.
SECTION 9.3. Representations and Warranties of the Trustee and the
Trust Company. The Trust Company (only with respect to representations and
warranties relating to the Trust Company) and the Trustee hereby severally
represent and warrant that, as of the Initial Closing Date:
(a) Due Incorporation; etc. The Trust Company is a national banking
association duly organized, validly existing and in good standing under the laws
of the United States of America, has the corporate power and authority, as the
Trustee and/or in its individual capacity to the extent expressly provided
herein or in the Trust Agreement, to enter into and perform its obligations
under the Trust Agreement, this Participation Agreement and each of the other
Operative Documents to which it is or will be a party.
(b) Due Authorization, Enforceability, etc.
(1) (i) The Trust Agreement has been duly authorized, executed
and delivered by the Trust Company, and (ii) assuming the due
authorization, execution and delivery of the Trust Agreement by the
Owner Participants party thereto, the Trust Agreement constitutes the
legal, valid and binding obligation of the Trust Company, enforceable
against it in its individual capacity or as Trustee, as the case may
be, in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
arrangement, moratorium or other laws relating to or affecting the
rights of creditors generally and by general principles of equity.
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(2) (i) This Participation Agreement has been duly authorized,
executed and delivered by the Trustee and the Trust Company, and (ii)
assuming the due authorization, execution and delivery of this
Participation Agreement by each party hereto other than the Trustee and
the Trust Company, this Participation Agreement constitutes a legal,
valid and binding obligation of the Trustee and the Trust Company,
enforceable against the Trust Company or the Trustee, as the case may
be, in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
arrangement, moratorium or other laws relating to or affecting the
rights of creditors generally and by general principles of equity.
(3) (i) Each of the Operative Documents to which the Trust
Company or the Trustee is or will be a party has been or when executed
and delivered will be duly authorized, executed and delivered by the
Trust Company or the Trustee, and (ii) assuming the due authorization,
execution and delivery of each of the Operative Documents by each party
thereto other than the Trust Company or the Trustee, each of the
Operative Documents to which the Trust Company or the Trustee is or
will be a party constitutes or when executed and delivered will
constitute a legal, valid and binding obligation of the Trust Company
or the Trustee, as the case may be, enforceable against the Trust
Company or the Trustee in accordance with its terms, except as the same
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, arrangement, moratorium or other laws relating to or
affecting the rights of creditors generally and by general principles
of equity.
(c) Non-Contravention. The execution and delivery by the Trust Company,
in its individual capacity or as Trustee, as the case may be, of the Trust
Agreement, this Participation Agreement and the other Operative Documents to
which it is or will be a party, the consummation by the Trust Company, in its
individual capacity or as Trustee, as the case may be, of the transactions
contemplated hereby and thereby, and the compliance by the Trust Company, in its
individual capacity or as Trustee, as the case may be, with the terms and
provisions hereof and thereof, do not and will not (i) contravene any Applicable
Law of the State of Connecticut or the United States governing the banking or
trust powers of the Trust Company, the Trust Agreement or the organizational
documents of the Trust Company, or (ii) contravene the provisions of, or
constitute a default by the Trust Company under, or result in the creation of
any Lessor's Lien attributable to it in its individual capacity and unrelated to
the transactions contemplated by the Operative Documents upon the Trust Estate
under any indenture, mortgage or other material contract, agreement or
instrument to which the Trust Company is a party or by which the Trust Company
or its property is bound.
(d) Governmental Actions. Assuming the representations and warranties
of Lessee contained in Sections 9.1 are true, no authorization or approval or
other action by, and no notice to or filing or registration with, any
Governmental Authority of the State of Connecticut or the United States
governing the banking or trust powers of the Trust Company is required for the
due execution, delivery or performance by the Trust Company or the Trustee, as
the case may be, of the Trust Agreement, this Participation Agreement or the
other Operative Documents to which
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the Trust Company or the Trustee is or will be a party, other than any such
authorization or approval or other action or notice or filing as has been duly
obtained, taken or given.
(e) Litigation. There is no pending or, to the actual knowledge of the
Trust Company, threatened, action, suit, investigation or proceeding against the
Trust Company either in its individual capacity or as the Trustee, as the case
may be, before any Governmental Authority of the State of Connecticut or the
United States governing its banking and trust powers which, if determined
adversely to it, would materially adversely affect the ability of the Trust
Company, in its individual capacity or as Trustee, as the case may be, to
perform its obligations under the Trust Agreement, this Participation Agreement
or the other Operative Documents to which it is or will be a party or would
materially adversely affect the Equipment or any interest therein or which would
question the validity or enforceability of any Operative Document to which the
Trust Company, in its individual capacity or as the Trustee, is or will be a
party.
(f) Liens. The Trust Estate is free of any Lessor Liens attributable to
the Trust Company or the Trustee.
ARTICLE X
PAYMENT OF CERTAIN EXPENSES
SECTION 10.1. Payment of Costs and Expenses.
(a) The Lessee shall pay, or cause to be paid, from time to time all
Transaction Expenses in respect of each Closing Date from the proceeds of
Advances or otherwise.
(b) The Lessee shall pay or cause to be paid when due (i) the fees
described in Section 4.5 and in the Syndication Agreement, (ii) all reasonable
out-of-pocket expenses of the Trustee, the Administrative Agent and the
Participants (including reasonable attorneys' fees and legal expenses of one
special counsel representing the Administrative Agent, the Lessor, and the
Lenders, under this Participation Agreement and the other Operative Documents),
(iii) all costs and expenses (including reasonable attorneys' fees and legal
expenses) incurred by the Administrative Agent, the Trustee, or any Participant
in entering into any future amendments or supplements with respect to any of the
Operative Documents, whether or not such amendments or supplements are
ultimately entered into, or giving of waivers of consents hereto or thereto,
(iv) all costs and expenses (including reasonable attorneys' fees and legal
expenses) incurred by the Administrative Agent, the Trustee or any Participant
in connection with any purchase or sale of any part of the Equipment by the
Lessee or the Lessor, respectively, or any other Person pursuant to the Lease,
(v) all costs and expenses (including reasonable attorneys' fees and legal
expenses) incurred by the Administrative Agent, the Trustee or any Participant
in connection with any substitution, exchange, purchase or sale of any Equipment
by the Lessee or the Lessor, respectively, or any other Person pursuant to the
Lease, and (vi) all costs and expenses (including reasonable attorneys' fees and
legal expenses) incurred by any of the other parties hereto in respect of (x)
the enforcement of any of their rights or remedies against the Lessee, or the
Guarantor under any of the Operative Documents or (y) the negotiation of any
restructuring or "work-out" with the Lessee, or the Guarantor, whether or not
consummated, of any obligations of the Lessee, or the Guarantor under the
Operative Documents.
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SECTION 10.2. Brokers' Fees and Stamp Taxes. The Lessee shall pay
during the Term of the Lease any brokers' fees and any and all stamp, transfer
and other similar taxes, fees and excises, if any, including any interest and
penalties, which are payable in connection with the transactions contemplated by
this Participation Agreement and the other Operative Documents.
SECTION 10.3. Related Obligations. The Lessee shall pay, without
duplication of any other obligation of the Lessee to pay any such amount under
the Operative Documents, before the due date thereof, all costs, expenses and
other amounts (other than principal and interest on the Loans which are payable
to the extent otherwise required by the Operative Documents) required to be paid
by the Lessor under the Operative Documents in respect of or attributable to the
Loans or Equity Investment made in respect thereof.
ARTICLE XI
TRANSFERS OF PARTICIPANTS' INTERESTS
SECTION 11.1. Assignments by Participants.
(a) Assignment by the Lenders. Any Tranche A Lender or Tranche B Lender
may, without the consent of any Obligor, sell, assign or transfer all or part of
its rights and obligations under, this Participation Agreement and the other
Operative Documents to (x) any other Tranche A Lender or Tranche B Lender, as
applicable, or (y) any Affiliate of any Tranche A Lender or Tranche B Lender, as
applicable, that is a Qualified Financial Institution, or (z) any other
Qualified Financial Institution. The parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Note Register, an assignment in substantially the form of
Exhibit E (an "Assignment of Notes"), together with a processing and recordation
fee of $3,000.
Upon its receipt of an Assignment of Notes executed by an assigning
Lender and by an assignee who is a Qualified Financial Institution, together
with the applicable processing and recordation fee, the Administrative Agent
shall (i) accept such Assignment of Notes, (ii) record the information contained
therein in the Note Register, (iii) give prompt notice thereof to the Lessee and
the Lessor, and (iv) within five (5) Business Days after its receipt of such
notice, the Lessor, at its own expense, shall execute and deliver to the
assignee in exchange for the surrendered Tranche A Notes and Tranche B Notes a
new Tranche A Note and Tranche B Note, respectively, to the order of such
assignee in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Tranche A Notes and Tranche B Notes, which shall be
dated the effective date of such Assignment of Notes.
The Administrative Agent shall maintain at its address a copy of each
Assignment of Notes delivered to and accepted by it in the Note Register. The
entries in the Note Register shall be conclusive and binding for all purposes,
absent manifest error, and the Lessee, the Lessor, the Administrative Agent and
the Lenders shall treat each Person whose name is recorded in the Note Register
as a Tranche A Lender and/or a Tranche B Lender hereunder for all purposes of
this Participation Agreement. The Note Register shall be available for
inspection by the Lessee, the Lessor, the Lenders, the Administrative Agent, or
the Collateral Agent at any reasonable time and from time to time upon
reasonable prior notice.
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(b) Assignments by the Owner Participants. Each Owner Participant may
sell, assign or transfer all or part of its rights and obligations pursuant to
the Trust Certificates, this Participation Agreement and the other Operative
Documents to which it is a party to a Qualified Financial Institution or an
Affiliate of a Qualified Financial Institution (but only if such Affiliate
satisfies the requirements of clauses (a), (d) and (e) of the definition of
"Qualified Financial Institution").
(c) Effectiveness of Assignments. Upon delivery to the Lessee, the
Lessor and the Administrative Agent of an assignment and assumption agreement
pursuant to which the obligations and rights being assigned are accepted and
assumed subject to the terms hereof, which agreement shall be in form and
substance reasonably satisfactory to the Lessee and the Administrative Agent (an
"Assignment Agreement"), and the receipt of any applicable consents required
hereunder in connection therewith, from and after the effective date specified
in each Assignment Agreement, the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment Agreement, have
the rights and obligations of a Participant under this Participation Agreement
and the other Operative Documents, and the assigning Participant shall, to the
extent of the interest assigned by such Assignment Agreement release and be
released from its rights and obligations under this Participation Agreement and
the other Operative Documents.
(d) Disclosure of Information. Any Lender or Owner Participant may, in
connection with any assignment or participation or proposed assignment of
participation pursuant to this Section 11.1, disclose to the assignee or
participant or proposed assignee or participant, any information relating to the
Lessee, or the Guarantor furnished to such Person (as the case may be) by or on
behalf of the Lessee, or the Guarantor; provided, that prior to any such
disclosure of any confidential information relating to the Lessee, or the
Guarantor, the assignee or participant or proposed assignee or participant shall
agree in writing with the Lessee, Guarantor and the Administrative Agent to
preserve the confidentiality of any confidential information relating to the
Lessee, or the Guarantor, or the transactions contemplated by this Participation
Agreement (including, without limitation, the general structure of this
transaction) received by it from such assignee or participant (as the case may
be). Notwithstanding the foregoing, any Lender or Owner Participant may disclose
any confidential information relating to the Lessee, or the Guarantor as may be
required by an order of any court or administrative agency or by any statute,
rule, regulation or order of any governmental authority or pursuant to the
request of any regulatory or other governmental authority (but in such case such
Lender or Owner Participant shall make commercially reasonable efforts to give
the Lessee at least one (1) Business Day's notice before making such
disclosure), or to any auditors, advisors or counsel of such Lender or Owner
Participants or the Lessor and otherwise as may be agreed to by Lessee.
SECTION 11.2. Participants. The Participants may, at any time, sell to
one or more financial institutions (each, a "Sub-Participant") participating
interests in all or a portion of its rights and obligations under this
Participation Agreement, its Notes or its Equity Investments; provided, however,
that (a) no participation contemplated in this Section 11.2 shall relieve the
applicable Participant from any of its obligations hereunder or under the other
Operative Documents; (b) the Participant shall remain solely responsible for the
performance of its obligations hereunder and under the other Operative
Documents; (c) the Obligors and the other parties hereto shall continue to deal
solely and directly with the Participant in connection with
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their respective obligations hereunder and under the other Operative Documents;
(d) no Sub-Participant (unless such Sub-Participant is also a Participant) shall
be entitled to require the Participant to take or refrain from taking any action
hereunder or under the other Operative Documents, except that such Participant
may agree with any Sub-Participant that such Participant will not, without the
Sub-Participant's consent, take any actions of the type described in Section
13.5(b)(vi) or agree to any amendment, waiver or modification that would (x)
reduce the principal amount of any Loan or Equity Investments, or the Interest
Rate or Equity Return Rate applicable to or fees payable in respect of, such
Loan or Equity Investments participated in by such Sub-Participant or (y) extend
the Maturity Date; and (e) the Lessee shall not be required to pay any amount
under this Participation Agreement that is greater than the amount which it
would have been required to pay had no participating interest been sold.
SECTION 11.3. Pledge Under Regulation A. Anything in this Article XI to
the contrary notwithstanding, each Participant may without the consent of the
Lessee assign and pledge all or any portion of its Notes or Equity Investment,
as applicable, held by it to any Federal Reserve Bank or to the United States
Treasury as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by the
Federal Reserve System and/or the Federal Reserve Bank or otherwise.
ARTICLE XII
THE ADMINISTRATIVE AGENT
SECTION 12.1. Appointment. Each Participant hereby irrevocably
designates and appoints the Administrative Agent as the agent of such
Participant under this Participation Agreement and the other Operative
Documents, and each such Participant irrevocably authorizes the Administrative
Agent, in such capacity, to take such action on its behalf under the provisions
of this Participation Agreement and the other Operative Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Participation Agreement and the other
Operative Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Participation Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein and in the other
Operative Documents, or any fiduciary relationship with any Participant or any
other party to the Operative Documents, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Participation Agreement or any other Operative Document or otherwise exist
against the Administrative Agent.
SECTION 12.2. Delegation of Duties. The Administrative Agent may
execute any of its duties under this Participation Agreement and the other
Operative Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of its agents or attorneys-in-fact selected by it with reasonable
care.
SECTION 12.3. Exculpatory Provisions. Neither the Administrative Agent
(in its capacity as such) nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (a) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Participation Agreement or any other Operative Document, except for its or
such Person's own willful misconduct or gross negligence (or negligence in the
handling of funds) or (b) responsible in any manner to any of the Participants
or any other party to the Operative Documents for any recitals, statements,
representations or warranties made by any Obligor or the Lessor or any officer
of any Obligor or the Lessor contained in this Participation Agreement or any
other Operative
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Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Participation Agreement or any other Operative Document,
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Participation Agreement or any other Operative Document or
for any failure of any Obligor or the Lessor to perform its obligations
hereunder or thereunder. The Administrative Agent shall not be under any
obligation to any Participant or any other party to the Operative Documents to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Participation Agreement or any
other Operative Document, or to inspect the properties, books or records of any
Obligor or the Lessor.
SECTION 12.4. Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any Note, writing, resolution, notice, consent, certificate, affidavit, letter,
facsimile message, statement, order or other document or other written
communication believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Obligors),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been delivered to the Administrative Agent in
accordance with Section 11.1(c). The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Participation
Agreement or any other Operative Document unless it shall first receive the
advice or concurrence of the Required Participants, or it shall first be
indemnified to its satisfaction by the applicable Participants against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Participation Agreement and the other Operative Documents in accordance with a
request of the Required Participants, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Participants and
all future holders of the applicable Notes or Certificates.
SECTION 12.5. Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Unmatured CAA
Default, Unmatured Lease Default, CAA Event of Default or Lease Event of Default
unless the Administrative Agent has received notice from a Participant or the
Lessor referring to this Participation Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall promptly give notice thereof to the Participants, the Lessor and the
Lessee. Subject to the Excepted Rights, the Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be directed by
the Required Participants; provided, however, that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with
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respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Participants.
SECTION 12.6. Non-Reliance on Administrative Agent and Other
Participants. Each Participant expressly acknowledges that neither the
Administrative Agent nor the Lease Arranger, nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates, has
made any representations or warranties to it and that no act by the
Administrative Agent or the Lease Arranger hereinafter taken, including any
review of the affairs of any Obligor or the Lessor, shall be deemed to
constitute any representation or warranty by the Administrative Agent or the
Lease Arranger to any Participant. Each Participant represents to the
Administrative Agent and the Lease Arranger that it has, independently and
without reliance upon the Administrative Agent, the Lease Arranger or any other
Participant, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Obligors and the Lessor and made its own decision to enter into this
Participation Agreement. Each Participant also represents that it will,
independently and without reliance upon the Administrative Agent, the Lease
Arranger or any other Participant, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Participation Agreement and the other Operative Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Obligors and the Lessor. Except for notices, reports and other documents
expressly required to be furnished to the Participants by the Administrative
Agent hereunder, neither the Administrative Agent nor the Lease Arranger shall
have any duty or responsibility to provide any Participant with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Obligors or the
Lessor which may come into the possession of the Administrative Agent, the Lease
Arranger or any of their respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
SECTION 12.7. Indemnification. Other than with respect to
indemnification provided to the Administrative Agent in accordance with Section
12.4, the Administrative Agent agrees that any claim for indemnification by any
Participant which may arise hereunder or under any other Operative Document
shall be limited to such amounts that such Participant receives from the
Obligors with respect to such claim.
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SECTION 12.8. Administrative Agent in Its Individual Capacity. Each
Participant acknowledges that Fleet Capital Corporation is acting as
Administrative Agent hereunder. Fleet Capital Corporation and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Obligors, the Lessor
and their respective Affiliates as though it was not the Administrative Agent
hereunder and under the other Operative Documents and without notice to or
consent of the Participants. Each Participant acknowledges that, pursuant to
such activities, Fleet Capital Corporation or its Affiliates may receive
information regarding the Obligors, the Lessor or their respective Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Obligors, the Lessor or such Affiliates) and acknowledges that such
Persons shall be under no obligation to provide such information to them.
SECTION 12.9. Successor Administrative Agent. The Administrative Agent
may resign at any time by giving written notice thereof to the Participants and
the Lessee and may be removed at any time with or without cause by the Required
Participants. Upon any such resignation or removal, the Required Participants
shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Participants, and shall have accepted such appointment, within thirty (30) days
after the retiring Administrative Agent's giving of notice of resignation or the
Required Participants' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Participants, appoint a
successor Administrative Agent, which shall be a Qualified Financial Institution
or be otherwise acceptable to the Lessee and the Required Participants. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations under this Participation
Agreement. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Article XII shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement. So long as no Unmatured Lease
Default or Lease Event of Default shall have occurred and be continuing, then no
successor Administrative Agent shall be appointed under this Section 12.9
without the prior written consent of the Lessee, which consent shall not be
unreasonably withheld or delayed.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. Survival of Agreements. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Documents, and the parties' obligations under any and all thereof,
shall survive the execution and delivery of this Participation Agreement, the
transfer of any or all of the Equipment to the Lessor, any disposition of any
interest of the Lessor or any Participant in the Equipment and the payment of
the Notes and Equity Investment and any disposition thereof and shall be and
continue in effect notwithstanding any investigation made by any party and the
fact that any party may waive compliance with any of the other terms, provisions
or conditions of any of the Operative
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54
Documents. Except as otherwise expressly set forth herein or in the other
Operative Documents, the indemnities of the parties provided for in the
Operative Documents shall survive the expiration or termination of any thereof
for a period not to exceed one year after the later of (x) the Expiration Date
and (y) the payment in full in cash of the entire Equipment Cost.
SECTION 13.2. No Broker, etc. Each of the parties hereto represents to
the others that it has not retained or employed any broker, finder or financial
adviser to act on its behalf in connection with this Participation Agreement or
the transactions contemplated herein or in the other Operative Documents, nor
has it authorized any broker, finder or financial adviser retained or employed
by any other Person so to act. Any party who is in breach of this representation
shall indemnify and hold the other parties harmless from and against any
liability arising out of such breach of this representation.
SECTION 13.3. Notices. Unless otherwise specifically provided herein,
all notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to any
Person shall be given in writing by United States mail, by nationally recognized
courier service and any such notice shall become effective five (5) Business
Days after being deposited in the mails, certified or registered return receipt
requested with appropriate postage prepaid or one Business Day after delivery to
a nationally recognized courier service specifying overnight delivery and shall
be directed to the address of such Person as indicated on Schedule II. From time
to time any party may designate a new address for purposes of notice hereunder
by written notice to each of the other parties hereto in accordance with this
Section.
SECTION 13.4. Counterparts. This Participation Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 13.5. Amendments.
(a) The provisions of this Participation Agreement may from time to
time be amended, modified or waived, provided, however, that such amendment,
modification or waiver is in writing and consented to by the Lenders, the Owner
Participants, the Lessor, and the Lessee.
(b) Neither any Operative Document nor any of the terms thereof may be
terminated (except upon payment in full of the Equipment Cost and accrued Basic
Rent and all other amounts due and owing by the Obligors under the Operative
Documents, or effective exercise and consummation of the Lessee's return of the
Equipment in accordance with Article XVII of the Lease and payment in full of
all amounts due in accordance therewith), amended, supplemented, waived or
modified without the written agreement or consent of the Required Participants
(regardless of whether the Lenders and the Owner Participants are parties
thereto); provided, however, that:
(i) no such termination, amendment, supplement, waiver or
modification shall without written agreement or consent of each
Participant (a) modify any of the provisions of this Section 13.5,
change the definition of "Required Participants" or
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modify or waive any requirement under any Operative Document that any
particular action be taken by all Participants or (b) extend the
Maturity Date or Expiration Date;
(ii) no such termination, amendment, supplement, waiver or
modification shall without written agreement or consent of the Lenders
modify or waive any requirement under any Operative Document that any
particular action be taken by the Lenders, no such termination,
amendment, supplement, waiver or modification shall without written
agreement or consent of the Owner Participants modify or waive any
requirement under any Operative Document that any particular action be
taken by or consented to by the Owner Participants and no such
termination, amendment, supplement, waiver or modification shall
without written agreement or consent of the Lessor modify or waive any
requirement under any Operative Document that any particular action be
taken by or consented to by the Lessor;
(iii) no such termination, amendment, supplement, waiver or
modification shall without written agreement or consent of each
Participant amend, modify, waive or supplement any of the provisions of
Article V of this Participation Agreement and Article III of the
Security Agreement;
(iv) no such termination, amendment, supplement, waiver or
modification shall without written agreement or consent of each
affected Participant reduce, modify, amend or waive any Commitment
Fees, other fees or indemnities in favor of any Participant, including
without limitation amounts payable pursuant to Articles VII and VIII
(except that any Person may consent to any reduction, modification,
amendment or waiver of any Commitment Fee or other fee or indemnity
payable to it);
(v) no such termination, amendment, supplement, waiver or
modification shall without written agreement or consent of each
affected Participant (a) modify, postpone, reduce or forgive, in whole
or in part, any payment of Rent (other than pursuant to the terms of
any Operative Document), any Loan or Equity Investment, the Equipment
Cost, Maximum Lessee Risk Amount, Termination Value, amounts due
pursuant to Article VII of the Lease, interest or Equity Return or,
subject to clause (iv) above, any other amount payable under the Lease,
or this Participation Agreement or (b) modify the definition or method
of calculation of Rent (other than pursuant to the terms of any
Operative Document), Loans or Equity Investment, Equipment Cost,
Maximum Lessee Risk Amount, Commitment Fees or any other definition
which would affect the amounts to be advanced or which are payable
under the Operative Documents;
(vi) no such termination, amendment, supplement, waiver or
modification shall without written agreement or consent of each
Participant (a) release the Lessee from its Obligations under the
Operative Documents or permit any assignment of the Lease by the Lessee
releasing the Lessee from its Obligations under the Operative Documents
or changing the absolute and unconditional character of such
obligations, in each case, except as expressly permitted by the
Operative Documents, (b) release the Guarantor from its obligations
under the Guaranty or (d) except as expressly permitted or required
under the Operative Documents, release the Equipment from the Lien of
the Security Agreement or release or terminate any Security Interest
Filings covering the Equipment;
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(vii) no such termination, amendment, supplement, waiver or
modification shall, without the written agreement or consent of the
Lessor and Owner Participant, be made to the definitions of "Excluded
Amounts" or "Excepted Rights";
(viii) no such termination, amendment, supplement, waiver or
modification that would increase the obligations of the Lessee
thereunder or deprive the Lessee of any of its rights thereunder or
alter the rights of the Lessee to its detriment shall be effective
against the Lessee without the written agreement or consent of the
Lessee;
(ix) no such termination, amendment, supplement, waiver or
modification shall be made to any provision of Article XII without the
written agreement or consent of the Administrative Agent;
notwithstanding the foregoing, so long as no Event of Default shall have
occurred and be continuing, no such termination, amendment, supplement, waiver
or modification shall be made to the Lease, the Guaranty or this Agreement which
would have a material adverse effect on the interests of the Lessor or of any
Owner Participant in and to the Collateral Estate without the prior written
agreement or consent of the Lessor and Owner Participants;
SECTION 13.6. Headings, etc. The Table of Contents and headings of the
various Articles and Sections of this Participation Agreement are for
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof.
SECTION 13.7. Parties in Interest. Except as expressly provided herein,
none of the provisions of this Participation Agreement is intended for the
benefit of any Person except the parties hereto. The Lessee shall not assign or
transfer any of its rights or obligations under the Operative Documents except
in accordance with the terms and conditions thereof.
SECTION 13.8. GOVERNING LAW. THIS PARTICIPATION AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY THE LAW OF THE COMMONWEALTH OF MASSACHUSETTS (EXCLUDING
ANY CONFLICT-OF-LAW OR CHOICE-OF-LAW RULES WHICH MIGHT LEAD TO THE APPLICATION
OF THE INTERNAL LAWS OF ANY OTHER JURISDICTION) AS TO ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE.
SECTION 13.9. Severability. Any provision of this Participation
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 13.10. Liability Limited.
(a) The parties hereto agree that except as specifically set forth
herein or in any other Operative Document, the Trustee shall have no personal
liability whatsoever to any other Participant, the Lessee, the Guarantor or
their respective successors and assigns for any claim or obligation based on or
in respect hereof or any of the other Operative Documents (including, without
limitation, the repayment of the Loans) or arising in any way from the
transactions
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57
contemplated hereby or thereby and recourse, if any, shall be solely had against
the Trust Estate (it being acknowledged and agreed by each party hereto that all
such personal liability of the Trustee is expressly waived and released as a
condition of, and as consideration for, the execution and delivery of the
Operative Documents by the Trustee); provided, however, that the Trustee shall
be liable in its individual capacity (a) for its own willful misconduct or gross
negligence, (b) breach of any of its representations, warranties or covenants
under the Operative Documents, or (c) for any Tax based on or measured by any
fees, commission or compensation received by it for acting as the Trustee as
contemplated by the Operative Documents. It is understood and agreed that the
Trustee shall have no personal liability under any of the Operative Documents as
a result of acting pursuant to and consistent with any of the Operative
Documents.
(b) No Participant shall have any obligation to the other Participant
or to the Lessee, or the Guarantor with respect to transactions contemplated by
the Operative Documents, except those obligations of such Participant expressly
set forth in the Operative Documents or except as set forth in the instruments
delivered in connection therewith, and no Participant shall be liable for
performance by any other party hereto of such other party's obligations under
the Operative Documents except as otherwise so set forth.
SECTION 13.11. Further Assurances. The parties hereto shall promptly
cause to be taken, executed, acknowledged or delivered, at the sole expense of
the Lessee, all such further acts, conveyances, documents and assurances as the
other parties may from time to time reasonably request in order to carry out and
preserve the security interests and liens (and the priority thereof) intended to
be created pursuant to this Participation Agreement, the other Operative
Documents, and the transactions thereunder (including, without limitation, the
preparation, execution and filing of any and all Uniform Commercial Code
financing statements and other filings or registrations which the parties hereto
may from time to time request to be filed or effected); provided, however, that
the Lessee shall not be required to pay expenses pursuant to this Section to the
extent arising from a breach or alleged breach by the Lenders or the Owner
Participants of any agreement entered into in connection with the assignment or
participation of any Loan or Equity Investment. The Lessee, at its own expense
and without need of any prior request from any other party, shall take such
action as may be necessary (including any action specified in the preceding
sentence), or as so requested, in order to maintain and protect all security
interests provided for hereunder or under any other Operative Document.
SECTION 13.12. SUBMISSION TO JURISDICTION. THE LESSEE HEREBY SUBMITS TO
THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF THE COMMONWEALTH OF MASSACHUSETTS FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS PARTICIPATION AGREEMENT OR ANY OF
THE OTHER OPERATIVE DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE
LESSEE IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT 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.
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SECTION 13.13. Setoff. Each Participant, the Administrative Agent and
the Collateral Agent shall, upon the occurrence of any Lease Event of Default,
have the right to appropriate and, apply to the payment of the Lessee's
obligations under the Lease as security for the payment of such obligations, any
and all balances, credits, deposits, accounts or moneys of the Lessee then or
thereafter maintained with such Participant, the Administrative Agent or the
Collateral Agent. The rights of the Participants, Administrative Agent and
Collateral Agent under this Section are in addition to other rights and remedies
(including other rights of setoff under applicable law or otherwise) which such
Person may have.
SECTION 13.14. WAIVER OF JURY TRIAL. THE PARTIES HERETO VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS PARTICIPATION AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
ANY OF THE PARTIES HERETO. THE PARTIES HERETO HEREBY AGREE THAT THEY WILL NOT
SEEK TO CONSOLIDATE ANY SUCH LITIGATION WITH ANY OTHER LITIGATION IN WHICH A
JURY TRIAL HAS NOT OR CANNOT BE WAIVED. THE PROVISIONS OF THIS SECTION 13.14
HAVE BEEN FULLY NEGOTIATED BY THE PARTIES HERETO AND SHALL BE SUBJECT TO NO
EXCEPTIONS. EACH OBLIGOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER OPERATIVE DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR EACH OF THE LESSOR AND THE LENDERS ENTERING INTO THIS
PARTICIPATION AGREEMENT AND EACH SUCH OTHER OPERATIVE DOCUMENT.
SECTION 13.15. Cooperation in Minimizing Certain Taxes. The Lessor, the
Administrative Agent and the Owner Participants hereby agree to take such
actions as Lessee may reasonably request from time to time to minimize any sales
or related taxes with respect to the Equipment, including, to the extent
commercially reasonable, obtaining resale certificates from applicable taxing
authorities. The Lessor shall execute and deliver powers of attorney granting
the Lessee the power to file state sales and related tax returns and forms
relating to the Equipment. None of the Lessor, the Administrative Agent or the
Owner Participants shall be obligated to incur any out-of-pocket expenses in
connection with the matters described in this Section 13.15. Nothing contained
in this Section 13.15 shall negate, limit or supersede the provisions of Section
8.1; provided that none of such Persons shall be required to take any action
that, in such Person's sole discretion, would be adverse to it.
SECTION 13.16. Intent. It is the intent of the parties that: (a) the
Lease constitutes an operating lease from the Lessor to the Lessee for purposes
of the Lessee's financial reporting, (b) the Lease and other transactions
contemplated hereby will result in the Lessee being recognized as the owner of
the Equipment for Federal and state income tax and bankruptcy purposes, (c) the
Security Agreement grants to the Lessor a Lien on all of the Lessee's interest
in the Equipment, which Lien shall, upon the recording of the Financing
Statements, create a valid first priority security interest in and Lien in favor
of the Lessor on all of the right, title and interest of the Lessee in the
Equipment securing the payment of all Obligations, subject only to
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Permitted Equipment Liens, (d) each Participant shall be treated for Federal and
state income tax purposes and bankruptcy purposes as having lent directly to the
Lessee amounts provided by each to fund each Advance, and (e) the obligations of
the Lessee to pay Basic Rent and any part of the Equipment Cost shall be treated
as payments of interest and principal, respectively, for Federal and state
income tax and bankruptcy purposes. Each of the parties hereto 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 preparation or filing of any income
tax return, including an amended income tax return, to the extent that such
action or such failure to take action would be inconsistent with the intention
of the parties expressed in this Section 13.16.
Specifically, without limiting the generality of the foregoing, the
parties hereto intend and agree that in the event of any insolvency or
receivership proceedings or a petition under the United States bankruptcy laws
or any other applicable insolvency laws or statute of the United States of
America or any State or Commonwealth thereof affecting the Lessee, the Guarantor
or any Participant or any collection actions, the transactions evidenced by the
Operative Documents shall be regarded as loans made by the Participants to the
Lessee.
SECTION 13.17. Amounts Due Under Lease. Anything else herein or
elsewhere to the contrary notwithstanding, it is the intention of the Lessee,
the Lessor, the Owner Participants and the Lenders that: (i) the amount and
timing of installments of Basic Rent due and payable from time to time from the
Lessee under the Lease shall be equal to the aggregate payments due and payable
as interest on the Loans and Equity Return on the Equity Investment on each
Payment Date; (ii) if the Lessee elects or becomes obligated to purchase the
Equipment under the Lease, then the Loans, the Equity Investment, all accrued
and unpaid interest, Equity Return and fees thereon and all other obligations of
the Lessee owing to the Owner Participants and the Lenders shall be due and
payable in full by the Lessee as provided in the or the Lease; and (iii) if the
Lessee properly elects to return all of the Equipment under Article XVII of the
Lease, the Lessee shall only be required to pay to the Lessor the proceeds of
the sale of the Equipment, the Maximum Lessee Risk Amount and any amounts due
pursuant to Articles VII and VIII hereof and Article XVII of the Lease.
[Remainder of page intentionally left blank;
signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
APEX TRAILER LEASING & RENTALS, L.P.,
as Lessee
By: Wabash National Corporation,
General Partner
By:
----------------------------
Name:
Title:
WABASH NATIONAL CORPORATION,
as Guarantor
By:
-------------------------------------
Name:
Title:
WABASH STATUTORY TRUST - 2000
By: STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, not in its
individual capacity but solely
in its capacity as trustee
By:
-------------------------------------
Name:
Title:
-▇▇-
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, not in
its individual capacity, except as
provided herein, but solely as Trustee
By:
-------------------------------------
Name:
Title:
FLEET CAPITAL CORPORATION,
as Tranche A Lender
By:
-------------------------------------
Name:
Title:
FLEET CAPITAL CORPORATION,
as Tranche B Lender
By:
-------------------------------------
Name:
Title:
FLEET CAPITAL CORPORATION,
as Owner Participant
By:
-------------------------------------
Name:
Title:
FLEET CAPITAL CORPORATION,
as Administrative Agent
By:
-------------------------------------
Name:
Title:
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62
FLEET CAPITAL CORPORATION,
as Collateral Agent
By:
-------------------------------------
Name:
Title:
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63
SCHEDULE I
TO PARTICIPATION AGREEMENT
NOTICE INFORMATION, WIRE INSTRUCTIONS AND FUNDING OFFICES
LESSEE:
Apex Trailer Leasing & Rental, L.P.
Attn: ▇▇▇▇ Old
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
P.O. Box 1608
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
Wire Transfer Instructions:
Bank One, Chicago, IL
ABA #▇▇▇▇▇▇▇▇▇
Account #56-90021
For the account of Wabash National Corporation
REF: Wabash Statutory Trust - 2000
ADMINISTRATIVE AGENT:
Fleet Capital Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
Wire Transfer Instructions:
Fleet Capital Corporation
ABA #: ▇▇▇▇▇▇▇▇▇
Account Name: Fleet Capital Leasing
Account #: 01552 776700101
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
REF: Wabash Statutory Trust - 2000
64
LESSOR:
Wabash Statutory Trust - 2000
c/o State Street Bank and Trust Company of Connecticut,
National Association,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Attn: Corporate Trust Department
Wire Transfer Instructions:
State Street Bank and Trust Company
ABA#: ▇▇▇-▇▇▇-▇▇▇
Account #: ▇▇▇▇-▇▇▇-▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Ref: APEX/Wabash Statutory Trust - 2000
TRANCHE A LENDER:
Fleet Capital Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
Bank: Fleet Capital Corporation
ABA Number: ▇▇▇▇▇▇▇▇▇
Account Name: Fleet Capital Leasing
Account Number: 01552 776700101
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Ref: Wabash Statutory Trust - 2000
TRANCHE B LENDER:
Fleet Capital Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
Wire Transfer Instructions:
Bank: Fleet Capital Corporation
ABA Number: ▇▇▇▇▇▇▇▇▇
Account Name: Fleet Capital Leasing
Account Number: 01552 776700101
Ref: Wabash Statutory Trust - 2000
Schedule I
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65
OWNER PARTICIPANT:
Fleet Capital Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇ Senior Vice President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions
Bank: Fleet Capital Corporation
ABA Number: ▇▇▇▇▇▇▇▇▇
Account Name: Fleet Capital Leasing
Account Number: 01552 776700101
Ref: Wabash Statutory Trust - 2000
COLLATERAL AGENT:
Fleet Capital Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
Wire Transfer Instructions
Bank: Fleet Capital Corporation
ABA Number: ▇▇▇▇▇▇▇▇▇
Account Name: Fleet Capital Leasing
Account Number: 01552 776700101
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Ref: Wabash Statutory Trust - 2000
Schedule I
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66
SCHEDULE II
TO PARTICIPATION AGREEMENT
COMMITMENTS
PARTICIPANT TRANCHE A LOAN COMMITMENT TRANCHE B LOAN COMMITMENT OWNER PARTICIPANT'S COMMITMENT
Fleet Capital Corporation 25,940,019 3,883,236 1,242,636
Tranche A Lenders' Percentage: 83.5%
Tranche B Lenders' Percentage: 12.5%
Equity Percentage: 4%
67
EXHIBIT A-1
FORM OF ADVANCE REQUEST
TO: WABASH STATUTORY TRUST - 2000,
as Lessor
Re: Lease Financing for Apex Trailer Leasing & Rentals, LP
This Advance Request is delivered to you pursuant to Section 3.4(a) of
the Participation Agreement dated as of December 29, 2000 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Participation Agreement"), among APEX TRAILER LEASING & RENTALS, LP, as Lessee,
WABASH NATIONAL CORPORATION, as Guarantor, WABASH STATUTORY TRUST - 2000, as
Lessor, STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL
ASSOCIATION, not in its individual capacity, except as provided therein, but
solely as Trustee, FLEET CAPITAL CORPORATION as Tranche A Lender, Tranche B
Lender, Owner Participant, Collateral Agent and Administrative Agent.
Capitalized terms used but not otherwise defined herein have the
respective meanings specified in Appendix A to the Participation Agreement.
The Lessee hereby notifies you that the Lessee requests the making of
an Advance in the amount of $__________ (the "Advance Amount") on ____________,
2000 (the "Proposed Closing Date").
In connection with the requested Advance, the Lessee hereby represents,
warrants and certifies to you as follows:
(a) The Advance Amount represents the Equipment Cost of the
Equipment to be financed on the Proposed Closing Date.
(b) Set forth on Schedule A hereto is a detailed list
describing (i) each Unit of Equipment to be financed or constituting
Additional Collateral, if any, on the Proposed Closing Date and (ii)
the Letter of Credit, if any, to be provided on the Proposed Closing
Date.
(c) No item for which payment is to be made from the proposed
Advance has heretofore been paid or reimbursed to the Lessee from the
proceeds of any prior Advance.
(d) On the Proposed Closing Date (both immediately before and
after giving effect to the making of such Advance and the application
of the proceeds thereof), the representations and warranties of the
Lessee contained in the Participation Agreement and in each of the
other Operative Documents are true and correct.
Exhibit A-1
68
(e) On the Proposed Closing Date, no Lease Event of Default
has occurred and is continuing and no Unmatured Lease Default of which
the Lessee has knowledge and that has not been previously disclosed to
the Participants has occurred and is continuing. No Unmatured Lease
Default or Lease Event of Default will occur as a result of, or after
giving effect to, the Advance requested hereby.
(f) The Advance requested hereby will comply with the
limitations on Advances set forth in Section 3.1(b) of the
Participation Agreement.
(g) All of the conditions precedent set forth in Article II of
the Participation Agreement applicable to the Advance requested hereby
have been satisfied or waived.
(h) The Lessee has delivered to the Administrative Agent all
Security Interest Filings relating to the Equipment necessary or
desirable to perfect the interests of the Lessor, the Administrative
Agent, the Collateral Agent and the Participants under the Security
Agreement, and Schedule C attached hereto represents a complete list of
the jurisdictions in which Security Interest Filings have been made up
until the date of this notice.
Please wire transfer the proceeds of the Advance to the
accounts specified on Schedule B attached hereto or as otherwise
notified by the Lessee in written notice to the Administrative Agent.
[Signature page follows]
Exhibit A-1
-2-
69
The Lessee has caused this Advance Request to be executed and delivered
by its duly Authorized Officer as of this _____ day of ___________, 2000.
APEX TRAILER LEASING & RENTALS, L.P.
By: __________________, its general partner
By:________________________________________
Name:
Title:
Exhibit A-1
-3-
70
SCHEDULE A
TO ADVANCE REQUEST
Detailed List of Each Unit of Equipment to be financed on Proposed Closing Date:
Schedule A
71
SCHEDULE B
TO ADVANCE REQUEST
PAYMENT INSTRUCTIONS
Bank One, Chicago, IL
ABA #▇▇▇▇▇▇▇▇▇
Account #56-90021
For the account of Wabash National Corporation
Ref: Wabash Statutory Trust-2000
Schedule B
72
SCHEDULE C
TO ADVANCE REQUEST
JURISDICTIONS OF SECURITY INTEREST FILINGS
Secretary of State of Missouri
Secretary of State of Connecticut
Secretary of State of Indiana
Secretary of State of Missouri
Schedule C
73
EXHIBIT B-1
Series [A-1]
TRANCHE A NOTE
U.S. $________________ December ___, 2000
FOR VALUE RECEIVED, the undersigned WABASH STATUTORY TRUST - 2000, a
Connecticut statutory trust (the "Lessor"), promises to pay to the order of
_______________________ ("Tranche A Lender") pursuant to that certain
Participation Agreement dated as of December ___, 2000 among Lessor, WABASH
NATIONAL CORPORATION, a Delaware corporation, STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, not in its individual capacity but
solely as Trustee, FLEET CAPITAL CORPORATION, a Delaware corporation, in its
capacity as Collateral Agent ("Collateral Agent"), Fleet, in its capacity as
Tranche B Lender, Fleet, in its capacity as Owner Participant, Fleet, in its
capacity as Administrative Agent ("Administrative Agent") (as amended, modified
or supplemented from time to time, the "Participation Agreement") on the
Maturity Date the principal sum of _________________ U.S. DOLLARS (U.S.$
________) or, if less, the aggregate unpaid principal amount of all Tranche A
Loans made by Tranche A Lenders pursuant to the Participation Agreement.
Lessor also promises to pay interest on the unpaid principal amount
hereof from time to time outstanding from the date hereof until the Maturity
Date (whether by acceleration or otherwise) and, after the Maturity Date, until
paid, at the rates per annum and on the dates specified in the Participation
Agreement and to make payments of principal in arrears, on the Payment Dates and
in the amount set forth on the amortization schedule attached hereto as Exhibit
A.
Payments of both principal and interest are to be made without setoff
or counterclaim in lawful money of the United States of America in same day or
immediately available funds to the account of Administrative Agent specified in
Schedule I to the Participation Agreement (or to such other account as
Administrative Agent may from time to time designate in a written notice to
Lessor).
This Tranche A Note is one of the Tranche A Notes referred to in, and
evidences Tranche A Loans made under, the Participation Agreement, to which
reference is made for a description of the security for this Tranche A Note and
for a statement of the terms and conditions on which Lessor is permitted and
required to make prepayments and repayments of principal of the indebtedness
evidenced by this Tranche A Note and on which such indebtedness may be declared
to be or automatically become immediately due and payable and is subject,
without limitation, to the restrictions on recourse set forth in Section 13.10
of the Participation Agreement.
74
Administrative Agent is authorized to endorse the schedule attached
hereto in accordance with the provisions of the Participation Agreement.
Capitalized terms used but not otherwise defined herein have the
respective meanings specified in Appendix A to the Participation Agreement.
All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.
All payments of principal amount, interest and other amounts hereunder
to be made by Lessor shall be made only from the income and proceeds from the
Trust Estate and only to the extent that Lessor shall have sufficient income or
proceeds from the Trust Estate to make such payments in accordance with the
terms of Article V of the Trust Agreement. Any judgment against Lessor with
respect to amounts due under this Tranche A Note shall be enforceable against
Lessor only to the extent of the interest of Lessor in the Trust Estate and any
such judgment shall not be enforceable by execution or be a Lien on any of the
assets of Lessor or the Trustee other than the interest of Lessor in the Trust
Estate.
THIS TRANCHE A NOTE HAS BEEN DELIVERED IN BOSTON, MASSACHUSETTS AND
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE COMMONWEALTH OF MASSACHUSETTS.
WABASH STATUTORY TRUST - 2000
By: STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, not in its
individual capacity but solely in its
capacity as Trustee
By: _______________________________________
Name:
Title:
-2-
75
EXHIBIT A
[Amortization Schedule]
76
TRANCHE A NOTE
Amount of Loan Made Amount of Principal Repaid Unpaid Principal Balance
---------------------- -------------------------- ------------------------
Adjusted Interest Adjusted Adjusted
Eurodollar Period (If Eurodollar Eurodollar Notation
Date Base Rate Rate Applicable) Base Rate Rate Base Rate Rate Total Made By
77
EXHIBIT B-2
Series [A-1]
TRANCHE B NOTE
U.S. $________________ December ___, 2000
FOR VALUE RECEIVED, the undersigned WABASH STATUTORY TRUST - 2000, a
Connecticut statutory trust (the "Lessor"), promises to pay to the order of
_______________________ ("Tranche B Lender") pursuant to that certain
Participation Agreement dated as of December ___, 2000 among Lessor, WABASH
NATIONAL CORPORATION, a Delaware corporation, STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, not in its individual capacity but
solely as Trustee, FLEET CAPITAL CORPORATION, a Delaware corporation, in its
capacity as Collateral Agent ("Collateral Agent"), Fleet, in its capacity as
Tranche A Lender, Fleet, in its capacity as Owner Participant, Fleet, in its
capacity as Administrative Agent ("Administrative Agent") (as amended, modified
or supplemented from time to time, the "Participation Agreement") on the
Maturity Date the principal sum of _________________ U.S. DOLLARS (U.S.$
________) or, if less, the aggregate unpaid principal amount of all Tranche B
Loans made by Tranche B Lenders pursuant to the Participation Agreement.
Lessor also promises to pay interest on the unpaid principal amount
hereof from time to time outstanding from the date hereof until the Maturity
Date (whether by acceleration or otherwise) and, after the Maturity Date, until
paid, at the rates per annum and on the dates specified in the Participation
Agreement and to make payments of principal arrears, on the Payment Dates and in
the amount set forth on the amortization schedule attached hereto as Exhibit A.
Payments of both principal and interest are to be made without setoff
or counterclaim in lawful money of the United States of America in same day or
immediately available funds to the account of Administrative Agent specified in
Schedule I to the Participation Agreement (or to such other account as
Administrative Agent may from time to time designate in a written notice to
Lessor).
This Tranche B Note is one of the Tranche B Notes referred to in, and
evidences Tranche B Loans made under, the Participation Agreement, to which
reference is made for a description of the security for this Tranche B Note and
for a statement of the terms and conditions on which Lessor is permitted and
required to make prepayments and repayments of principal of the indebtedness
evidenced by this Tranche B Note and on which such indebtedness may be declared
to be or automatically become immediately
78
due and payable and is subject, without limitation, to the restrictions on
recourse set forth in Section 13.10 of the Participation Agreement.
Administrative Agent is authorized to endorse the schedule attached
hereto in accordance with the provisions of the Participation Agreement.
Capitalized terms used but not otherwise defined herein have the
respective meanings specified in Appendix A to the Participation Agreement.
All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.
All payments of principal amount, interest and other amounts hereunder
to be made by Lessor shall be made only from the income and proceeds from the
Trust Estate and only to the extent that Lessor shall have sufficient income or
proceeds from the Trust Estate to make such payments in accordance with the
terms of Article V of the Trust Agreement. Any judgment against Lessor with
respect to amounts due under this Tranche B Note shall be enforceable against
Lessor only to the extent of the interest of Lessor in the Trust Estate and any
such judgment shall not be enforceable by execution or be a Lien on any of the
assets of Lessor or the Trustee other than the interest of Lessor in the Trust
Estate.
THIS TRANCHE B NOTE HAS BEEN DELIVERED IN BOSTON, MASSACHUSETTS AND
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE COMMONWEALTH OF MASSACHUSETTS.
WABASH STATUTORY TRUST - 2000
By: STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION, not in its
individual capacity but solely in its
capacity as Trustee
By: ___________________________________________
Name:
Title:
-2-
79
EXHIBIT A
[Amortization Schedule]
80
TRANCHE B NOTE
Amount of Loan Made Amount of Principal Repaid Unpaid Principal Balance
---------------------- -------------------------- ------------------------
Adjusted Interest Adjusted Adjusted
Eurodollar Period (If Eurodollar Eurodollar Notation
Date Base Rate Rate Applicable) Base Rate Rate Base Rate Rate Total Made By
81
EXHIBIT C
SECURITY INTEREST FILING JURISDICTIONS
Secretary of State of Missouri
Secretary of State of Indiana
Secretary of State of Connecticut
Secretary of State of Delaware
Exhibit C
82
EXHIBIT D
FORM OF ASSIGNMENT OF NOTES
ASSIGNMENT OF NOTES
Dated __________, _____
Reference is made to the Participation Agreement dated as of December
29, 2000 (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "Participation Agreement"), among APEX TRAILER LEASING &
RENTALS, LP, as Lessee, WABASH NATIONAL CORPORATION, as Guarantor, WABASH
STATUTORY TRUST - 2000, as Lessor, STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, not in its individual capacity, except as
provided therein, but solely as Trustee, FLEET CAPITAL CORPORATION as Tranche A
Lender, Tranche B Lender, Owner Participant, Collateral Agent and Administrative
Agent. Capitalized terms used herein and not otherwise defined shall have the
meaning ascribed thereto in Appendix A to the Participation Agreement.
________________ (the "Assignor") and _______ (the "Assignee") agree as
follows:
1. The Assignor hereby sells and assigns, without recourse, to
the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
without recourse, a portion of the Assignor's rights and obligations under the
Participation Agreement and the other Operative Documents as of the Effective
Date (as defined below) which portion represents the principal amount of the
Tranche A Notes and Tranche B Notes specified on Schedule 1 and the
corresponding rights and obligations of the Assignor under the Participation
Agreement and the other Operative Documents (the "Assigned Interest"). After
giving effect to such sale and assignment, the principal amount of the
Assignee's Tranche A Notes and Tranche B Notes and the amount of the Assignee's
undrawn Tranche A Loan Commitment and Tranche B Loan Commitment will be as set
forth in Section 2 of Schedule 1. The effective date of this sale and assignment
shall be the date specified in Section 3 of Schedule 1 hereto (the "Effective
Date").
2. On the Effective Date, the Assignee will pay to the
Assignor, in immediately available funds, at such address and account as the
Assignor shall advise the Assignee, $_________, and the sale and assignment
contemplated hereby shall thereupon become effective. From and after the
Effective Date, the Assignor agrees that the Assignee shall be entitled, to the
extent provided in the Participation Agreement, to all rights, powers and
privileges of the Assignor under the Participation Agreement, the Tranche A
Notes and Tranche B Notes and the other Operative Documents to the extent of the
Assigned Interest, including without limitation (i) the right to receive all
payments in respect of the Assigned Interest for the period from and after the
Effective Date, whether on account of principal, interest, fees, indemnities in
respect of claims arising after the Effective Date, increased costs, additional
amounts or otherwise; (ii) the right to vote and to instruct the Administrative
Agent, the Lessor, or the Collateral Agent under the Operative Documents based
on the Assigned Interest; and (iii)
Exhibit D
83
the right to receive notices, requests, demands and other communications. The
Assignor agrees that it will promptly remit to the Assignee any amount received
by it in respect of the Assigned Interest (whether from the Lessor, the
Administrative Agent, the Collateral Agent or otherwise) in the same funds in
which such amount is received by the Assignor.
3. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest and the collateral therefor are, at the time of this
assignment, free and clear of any adverse claim created by or arising as a
result of any claim against the Assignor and is not subject to any assignment or
transfer; (ii) makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with the Participation Agreement or the other Operative Documents or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Participation Agreement, the other Operative Documents or any other
instrument or document furnished pursuant thereto; (iii) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Lessee or the Guarantor, or the performance or observance by
the Lessee or the Guarantor of any of its obligations under the Participation
Agreement, the other Operative Documents or any other instrument or document
furnished pursuant thereto; and (iv) attaches its Tranche A Notes and Tranche B
Notes and requests that the Lessor issue new Tranche A Notes and Tranche B Notes
in accordance with the terms of the Participation Agreement.
4. The Assignee (i) confirms that it is a Qualified Financial
Institution, and it has received a copy of the Participation Agreement and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment of Notes; (ii) agrees
that it will, independently and without reliance upon the Administrative Agent,
the Lessor, the Assignor or any other Purchaser and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Participation
Agreement, the Tranche A Notes and Tranche B Notes and the other Operative
Documents; (iii) appoints or authorizes the Administrative Agent to take such
actions as agent on its behalf and to exercise such powers under the
Participation Agreement and the other Operative Documents as are delegated to
the Administrative Agent by the terms thereof, together with such powers as are
incidental thereto; (iv) agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Participation Agreement,
the Tranche A Notes and Tranche B Notes and the other Operative Documents are
required to be performed by it as a holder of Tranche A Notes and Tranche B
Notes; (v) specifies as its purchasing offices (and address for notices) the
offices set forth beneath its name on the signature pages hereof; and (vi)
attaches the forms prescribed by the Internal Revenue Service of the United
States of America certifying as to the Assignee's status for purposes of
determining exemption from United States withholding taxes with respect to all
payments to be made to the Assignee under the Participation Agreement (and the
other Operative Documents) or such other documents as are necessary to indicate
that all such payments are subject to such rates at a rate reduced by an
applicable tax treaty.
5. Following the execution of this Assignment of Notes, it
will be delivered to the Administrative Agent for acceptance and recording by
the Administrative Agent. Upon such acceptance and recording, as of the
Effective Date, (i) the Lessor shall issue new Tranche A Notes and Tranche B
Notes pursuant to Section 5.7 of the Participation Agreement, (ii) the
Exhibit D
-2-
84
Assignee shall be a party to the Participation Agreement and, to the extent
provided in this Assignment of Notes, have the rights and obligations of a
holder of Notes thereunder and the other Operative Documents and (iii) the
Assignor shall, to the extent provided in this Assignment of Notes, relinquish
its rights and be released from its obligations under the Participation
Agreement, the Tranche A Notes and Tranche B Notes and the other Operative
Documents.
6. Upon such acceptance, recording and consent, from and after the Effective
Date, the Administrative Agent shall make all payments under the Operative
Documents in respect of the Assigned Interest (including, without limitation,
all payments of principal or interest) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under the Operative
Documents for periods prior to the Effective Date directly between themselves.
7. THIS ASSIGNMENT OF NOTES SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF ____________________________ WITHOUT GIVING EFFECT
TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
Exhibit D
-3-
85
IN WITNESS WHEREOF, the parties hereto have caused this Assignment of
Notes to be executed by their respective officers thereunto duly authorized, as
of the date first above written.
[NAME OF ASSIGNOR],
By: _____________________________________
Name:
Title:
[LENDING OFFICE (and address for notices):
Address: ]
[NAME OF ASSIGNEE],
By: _____________________________________
Name:
Title:
Accepted this _______ day of
_________________, ____.
FLEET CAPITAL CORPORATION, as
Administrative Agent under
the Participation Agreement
By: ____________________________________
Name:
Title:
Exhibit D
-4-
86
Schedule 1
to
Assignment of Notes
Dated ___________________, ___
Section 1
(a) Total Principal Amount of Assignor's Outstanding Tranche A Notes
and Tranche B Notes prior to the Effective Date:
$_________________
(b) Amount of Assigned Interest with respect to Tranche A Notes and
Tranche B Notes: $_________________
(c) Principal Amount of Tranche A Notes and Tranche B Notes Retained by
the Assignor: $_________________
(d) Assignor's undrawn Tranche A Loan Commitment after giving effect to
this Assignment of Notes $_________________
(e) Assignor's undrawn Tranche B Loan Commitment after giving effect to
this Assignment of Notes $_________________
Section 2
(a) Total Principal Amount of Assignee's Outstanding Tranche A Notes and
Tranche B Notes after giving effect to this Assignment of Notes:
$_________________
(b) Assignee's undrawn Tranche A Loan Commitment $_________________
(c) Assignee's undrawn Tranche B Loan Commitment $_________________
Section 3
Effective Date: ________, 20__
87
EXECUTION COPY
THIS LEASE HAS BEEN ASSIGNED BY LESSOR TO FLEET CAPITAL CORPORATION, AS
COLLATERAL AGENT PURSUANT TO THAT SECURITY AGREEMENT, DATED AS OF DECEMBER 29,
2000, FOR THE BENEFIT OF THE TRANCHE A LENDER AND THE TRANCHE B LENDER REFERRED
TO THEREIN. TO THE EXTENT, IF ANY, THAT THIS LEASE CONSTITUTES CHATTEL PAPER (AS
SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE IN ANY APPLICABLE
JURISDICTION), NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE
TRANSFER OR POSSESSION OF ANY COUNTERPART HEREOF OTHER THAN COUNTERPART NO. 1.
Equipment Lease
Between
WABASH STATUTORY TRUST - 2000,
as Lessor
and
APEX TRAILER LEASING & RENTALS, L.P.,
as Lessee
Dated as of December 29, 2000
This is Counterpart No. ______
88
TABLE OF CONTENTS
ARTICLE I LEASE AND DELIVERY OF EQUIPMENT; TERM 1
Section 1.1. Intent to Lease and Hire 1
Section 1.2. Lease Supplement 1
Section 1.3. Initial Term 2
Section 1.4. Renewal Terms 2
Section 1.5. Right, Title and Interest 2
Section 1.6. Delivery; Inspection And Acceptance By Lessee 2
ARTICLE II RENT 3
Section 2.1. Rent 3
Section 2.2. Payment of Rent 3
Section 2.3. Supplemental Rent 3
Section 2.4. Method of Payment 3
ARTICLE III NET LEASE 4
ARTICLE IV OWNERSHIP AND MARKING OF EQUIPMENT 5
Section 4.1. Retention of Title 5
Section 4.2. Duty to Number and ▇▇▇▇ Equipment 5
Section 4.3. Prohibition Against Certain Designations 6
ARTICLE V DISCLAIMER OF WARRANTIES; QUIET ENJOYMENT 6
Section 5.1. Disclaimer of Warranties; Warranty Assignments 6
Section 5.2. Quiet Enjoyment 7
ARTICLE VI SUBSTITUTION AND EXCHANGE OF UNITS OF EQUIPMENT 7
ARTICLE VII RULES, LAWS AND REGULATIONS 10
ARTICLE VIII USE AND MAINTENANCE OF EQUIPMENT 10
Section 8.1. Use and Maintenance of Equipment 10
Section 8.2. Additions and Improvements 12
ARTICLE IX LIENS ON THE EQUIPMENT 12
Section 9.1. Liens on the Equipment 12
Section 9.2. Security Interest Filings; Certificates of Title; Lien Notations 13
ARTICLE X INSURANCE; PAYMENT FOR EVENT OF LOSS 14
Section 10.1. Insurance Requirements 14
89
TABLE OF CONTENTS
(CONTINUED)
Page
Section 10.2. Casualty 15
Section 10.3. Substitution or Payment of Termination Value upon an Event of Loss 16
Section 10.4. Rent Termination 16
Section 10.5. Disposition of Equipment 17
Section 10.6. Termination Value 17
Section 10.7. Risk of Loss 17
Section 10.8. Eminent Domain 17
ARTICLE XI INSPECTION; REPORT 17
ARTICLE XII RETURN OF THE EQUIPMENT UPON EXPIRATION OF TERM 18
Section 12.1. Return Conditions 18
Section 12.2. Inspection of Equipment 20
Section 12.3. Specific Performance 20
ARTICLE XIII LEASE DEFAULT 20
Section 13.1. Events of Default 20
Section 13.2. Remedies 22
Section 13.3. Waivers 25
Section 13.4. Notice of Lease Event of Default 26
ARTICLE XIV RETURN OF EQUIPMENT UPON DEFAULT 26
Section 14.1. Lessee's Duty to Return 26
Section 14.2. Lessor Appointed Lessee's Agent 27
ARTICLE XV ASSIGNMENT BY LESSOR 27
ARTICLE XVI ASSIGNMENTS BY LESSEE; USE AND POSSESSION 27
Section 16.1. Lessee's Rights to the Equipment & Sublease 27
Section 16.2. Additional Provisions Regarding Subleases 28
ARTICLE XVII EARLY TERMINATION OPTION; END OF TERM OPTIONS 29
Section 17.1. Early Termination Option for all of the Equipment 29
Section 17.2. End of Term Options 30
Section 17.3. Lessee Marketing Obligations 30
-ii-
90
TABLE OF CONTENTS
(CONTINUED)
Page
ARTICLE XVIII MISCELLANEOUS 33
Section 18.1. Payments to Lessor 33
Section 18.2. Right of Lessor to Perform 33
Section 18.3. Covenant of Quiet Enjoyment 34
Section 18.4. Estoppel Certificates 34
Section 18.5. No Merger 34
Section 18.6. Third-party Beneficiaries 34
Section 18.7. Execution in Counterparts 35
Section 18.8. Currency 35
Section 18.9. Notices 35
Section 18.10. Grant of Security Interest 35
Section 18.11. Headings, etc. 36
Section 18.12. GOVERNING LAW 36
Section 18.13. Severability 36
Section 18.14. Liability Limited 36
Section 18.15. Further Assurances 37
Section 18.16. SUBMISSION TO JURISDICTION 37
Section 18.17. WAIVER OF JURY TRIAL 37
Section 18.18. Nature of Transaction 38
EXHIBIT A -- Form of Lease Supplement
EXHIBIT B -- Form of Sublease
-iii-
91
EQUIPMENT LEASE
EQUIPMENT LEASE, dated as of December 29, 2000 (this "Lease"), between
WABASH STATUTORY TRUST - 2000, a Connecticut statutory trust, as Lessor
("Lessor"), and APEX TRAILER LEASING & RENTALS, L.P., a Delaware limited
partnership, as Lessee ("Lessee").
RECITALS:
WHEREAS, subject to the terms and conditions set forth herein and in
that certain Participation Agreement, dated as of December 29, 2000, among
Lessee, Lessor, Wabash National Corporation, as Guarantor, State Street Bank and
Trust Company of Connecticut, National Association, as Trustee, Fleet Capital
Corporation, as Owner Participant, Tranche A Lender and Tranche B Lender and
Fleet Capital Corporation, as Administrative Agent and Collateral Agent (as
amended, modified, restated or supplemented from time to time, the
"Participation Agreement"), Lessor wishes to purchase the Units of Equipment
from Lessee and to lease such Units of Equipment to Lessee and Lessee wishes to
lease the Units of Equipment from Lessor on the Initial Closing Date and each
subsequent Closing Date.
WHEREAS, capitalized terms used in this Lease and not otherwise defined
herein shall have the respective meanings indicated in Appendix A attached to
the Participation Agreement. Where any provision in this Lease refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
NOW THEREFORE, in consideration of the foregoing, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
LEASE AND DELIVERY OF EQUIPMENT; TERM
Section 1.1. Intent to Lease and Hire. Upon the purchase of each Unit
of Equipment by Lessor from Lessee and the other sellers thereof pursuant to and
subject to the terms and conditions of the Participation Agreement, Lessor
hereby agrees that it shall, commencing on the first day of the Initial Lease
Term, lease and demise to Lessee such Unit to Lessee and Lessee hereby agrees
that it shall lease and let such Unit from Lessor for the Term of this Lease, on
and subject to the terms and conditions set forth herein and in the applicable
Lease Supplement.
Section 1.2. Lease Supplement. Lessee hereby agrees that Lessee's
execution and delivery of a Lease Supplement, in the form attached hereto as
Exhibit A, with respect to any Unit shall conclusively establish that, as
between Lessor and Lessee, but without limiting or otherwise affecting Lessee's
or Lessor's rights, if any, against any manufacturer of such Unit, such Unit is
acceptable to and irrevocably accepted by Lessee under this Lease and shall be
evidence that such Unit has been subjected to this Lease pursuant to the terms
hereof, notwithstanding any defect with respect to design, manufacture,
condition or in any other
92
respect, and that such Unit (i) is in good order and condition and conforms to
the specifications applicable thereto and to all Applicable Laws, and (ii) to
Lessee's knowledge, is in compliance with all manufacturing specifications and
warranties. By its execution and delivery of any Lease Supplement, Lessee
represents and warrants to Lessor and each Participant that it has inspected the
Equipment to which such Lease Supplement relates and that it has no knowledge of
any defect in any Unit covered thereby. Lessor hereby appoints Lessee as its
agent for acceptance of each of the Units of Equipment. Lessor shall not be
liable to Lessee for any failure or delay in obtaining any Unit of Equipment or
making delivery thereof.
Section 1.3. Initial Term. The base term of this Lease for each Unit
(the "Initial Lease Term") shall begin on the Initial Closing Date or Closing
Date applicable to such Unit as specified in the Lease Supplement applicable to
such Unit (respectively, the "Term Commencement Date") and shall terminate with
respect to such Unit on June 30, 2002 (the "Initial Lease Term Expiration
Date"), subject to earlier termination pursuant to Articles X, XIII and XVII.
Subject and pursuant to the terms of Section 1.4, Lessee may elect one or more
Renewal Terms at the end of the Initial Lease Term or any expiring Renewal Term
with respect to all Units of Equipment then subject to this Lease. The
Termination Value payable during the Initial Lease Term in respect of any Unit
of Equipment suffering an Event of Loss shall be as determined on Schedule I to
the applicable Lease Supplement.
Section 1.4. Renewal Terms. So long as no Unmatured Lease Default or
Lease Event of Default shall have occurred and be continuing, Lessee may, as
provided in Section 17.2 hereof, renew this Lease as to all, but not less than
all of the Units for one or more consecutive one year renewal terms (each
one-year term, a "Renewal Term"), provided, however, that (i) Lessee only may
elect one Renewal Term at a time and (ii) notwithstanding anything to the
contrary contained herein, Lessee only shall be entitled to elect a total of
four (4) Renewal Terms. Such Renewal Term shall commence upon the day following
the Initial Lease Term Expiration Date or upon the day following the expiration
of the immediately preceding Renewal Term, as the case may be. The Termination
Value payable during the Renewal Term in respect of any Unit of Equipment
suffering an Event of Loss shall be in an amount as determined on Schedule I to
the applicable Lease Supplements.
Section 1.5. Right, Title and Interest. The Equipment is leased to the
Lessee without any representation or warranty, express or implied, by the Lessor
and subject to the rights of parties in possession, the existing state of
Lessor's right, title and interest (including, without limitation, all Liens
other than Lessor Liens) and all Applicable Law. The Lessee shall in no event
have any recourse against the Lessor for any defect in or exception to Lessor's
right, title and interest to the Equipment other than resulting from Lessor
Liens attributable to the Lessor.
Section 1.6. Delivery; Inspection And Acceptance By Lessee. Upon
delivery of each Unit of Equipment, Lessee shall inspect and accept the
Equipment and shall execute and deliver to Lessor a Lease Supplement containing
a complete description of the Unit of Equipment accepted; whereupon, as between
Lessor and Lessee, the same shall be deemed to have been finally accepted by
Lessee pursuant to this Lease. All expenses incurred in connection with Lessor's
purchase of the Equipment (including shipment, delivery and installation) shall
be the responsibility of Lessee and shall be paid upon demand. If Lessee shall,
for reasonable cause,
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refuse to accept delivery of any Unit of Equipment, Lessee will be assigned all
rights and shall assume all obligations of Lessor as purchaser of the Equipment.
ARTICLE II
RENT
Section 2.1. Rent.
(a) During the Initial Lease Term and each Renewal Term with respect to
each Unit of Equipment, Lessee shall, on each Payment Date, pay to Lessor Basic
Rent for such Unit of Equipment, all as set forth in the Participation
Agreement.
(b) Lessee's inability or failure to take possession of all or any
portion of a Unit of Equipment upon the entering into of the initial Lease
Supplement for such Equipment shall not delay or otherwise affect Lessee's
obligation to pay Rent for such Equipment in accordance with the terms of this
Lease.
Section 2.2. Payment of Rent. Rent shall be paid absolutely net to each
Person entitled thereto, so that this Lease shall yield to such Person the full
amount thereof, without setoff, deduction or reduction.
Section 2.3. Supplemental Rent. Lessee shall pay to Lessor or any other
Person entitled thereto any and all Supplemental Rent promptly as the same shall
become due and payable, and if Lessee fails to pay any Supplemental Rent, Lessor
and such other Persons shall have all rights, powers and remedies provided for
herein or by law or equity or otherwise. Lessee shall pay to Lessor, as
Supplemental Rent, among other things, on demand, to the extent permitted by
Applicable Law, interest at the applicable Overdue Rate on any installment of
Basic Rent with respect to any Unit of Equipment 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 demanded by Lessor for the period from the due date or
the date of any such demand, as the case may be, until the same shall be paid.
The expiration or other termination of Lessee's obligations to pay Basic Rent
hereunder shall not limit or modify the obligations of Lessee with respect to
Supplemental Rent. Unless expressly provided otherwise in this Lease, in the
event of any failure on the part of Lessee to pay and discharge any Supplemental
Rent as and when due, Lessee shall also promptly pay and discharge any fine,
penalty, interest or cost which may be assessed or added under any agreement to
which Lessee is a party or which is authorized in writing by Lessee with a third
party for nonpayment or late payment of such Supplemental Rent, all of which
shall also constitute Supplemental Rent.
Section 2.4. Method of Payment. Notwithstanding anything to the
contrary in any of the Operative Documents, each payment of Rent, or other
amounts payable by Lessee to Lessor under this Lease or any other Operative
Document (other than payments of Supplemental Rent that are Excluded Amounts)
shall be made by Lessee to the Administrative Agent as agent of Lessor under the
Participation Agreement (or, if all Loans and all other amounts owing to the
Lenders under the Operative Documents have been paid in full and all Commitments
of the Lenders have been permanently terminated, to the Owner Participant) prior
to 11:00 A.M., eastern standard time, to the account specified in Section 5.5 of
the Participation Agreement, in
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immediately available funds consisting of lawful currency of the United States
of America on the date when such payment shall be due. Payments received after
11:00 A.M., eastern standard time on the date due shall, for the purpose of
Section 13.1(a), hereof be deemed received on such day; provided, however, that
for the purposes of the second sentence of Section 2.3 hereof, such payments
shall be deemed received on the next succeeding Business Day and subject to
interest at the Overdue Rate as provided in such Section 2.3. In the event the
Lessee makes a Rent payment on a day other than a Payment Date (if otherwise
required), Lessee shall pay any Break Costs associated with such payment. All
payments of Supplemental Rent payable directly to the Trustee, which are
Excluded Amounts, shall be made to the Trustee to the account specified in
Section 18.1 hereof.
ARTICLE III
NET LEASE
This Lease is a net lease and Lessee acknowledges and agrees that
Lessee's obligations hereunder shall be absolute and unconditional under any and
all circumstances and shall be paid without notice or demand and without any
abatement, reduction, suspension, diminution, deferral, setoff, defense,
counterclaim or recoupment whatsoever, including, without limitation, any
abatement, reduction, suspension, diminution, deferral, setoff, defense,
counterclaim or recoupment due or alleged to be due to, or by reason of, any
past, present or future claims which Lessee may have against Lessor, Owner
Participant, any assignee, Administrative Agent, Collateral Agent, any vendor or
manufacturer of the Equipment or any part or Unit thereof, any Lender or any
other Person, either under this Lease or otherwise, for any reason whatsoever,
nor, except as otherwise expressly provided herein, shall this Lease terminate,
or the obligations of Lessee be otherwise affected for any reason whatsoever,
including any defect in or damage to or loss of possession or loss of use or
destruction of the Equipment or any part or Unit thereof, the condition, design,
operation or fitness for use thereof, any Liens or rights of others with respect
to the Equipment or any part or Unit thereof, any prohibition or interruption of
or other restriction against Lessee's use, operation or possession of the
Equipment or any part or Unit thereof, or any interference with such use,
operation or possession by any Person or entity (including confiscation,
requisition or other taking by any Governmental Authority, any Person acting
under Governmental Authority or otherwise, or action of any public or private
Person, or for any other reason whatsoever), the invalidity or unenforceability
or lack of due authorization of this Lease, or any other Operative Document, any
defect in the title to, compliance with plans or specifications for condition,
design or fitness for use of all or any of the Equipment, any insolvency of or
any bankruptcy, reorganization or other proceeding against Lessee, Lessor or any
other Person, or for any other cause whether similar or dissimilar to the
foregoing, any present or future law to the contrary notwithstanding, it being
the intention and agreement of the parties hereto, and the basis of the bargain,
that (to the extent permitted by Applicable Law) Rent and other amounts payable
by Lessee hereunder shall continue to be payable in full in all events in the
manner and at the times herein provided unless and until the obligation to pay
the same shall be terminated pursuant to the express provisions of this Lease.
To the extent permitted by Applicable Law, Lessee hereby waives any and all
rights which it may now have or which at any time hereafter may be conferred
upon it, by statute or otherwise, to terminate, cancel or quit this Lease or
surrender any Unit of Equipment except in accordance with the express terms
hereof. Each Rent or other payment made by Lessee hereunder shall be final and
Lessee shall not seek to recover all or any part of such payment (except for any
excess payment made in error) from
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Lessor, Owner Participant, Administrative Agent, Collateral Agent, or any Lender
for any reason whatsoever.
Without limiting the generality of the foregoing, Lessee covenants that
it will remain obligated under this Lease in accordance with its terms, and will
not take any action to terminate (except in accordance with the express
provisions hereof), rescind or avoid this Lease for any reason, notwithstanding
any insolvency, bankruptcy, reorganization or other proceeding affecting Lessor
or Owner Participant, or any property of Lessor or Owner Participant, or any
action which may be taken by any receiver, trustee or liquidation (or other
similar official) or by any court.
Nothing in this Article III or in any other provision of this Lease
shall preclude any separate, independent claim (not by way of abatement or
reduction of any amount at any time payable by Lessee hereunder) by Lessee for
the breach of any representation, covenant, undertaking or agreement made herein
and in any other Operative Document for the benefit of Lessee by Lessor, Owner
Participant or any other Person.
ARTICLE IV
OWNERSHIP AND MARKING OF EQUIPMENT
Section 4.1. Retention of Title. Lessor, as between Lessor and Lessee,
shall and hereby does retain full legal title to the Equipment notwithstanding
the delivery thereof to and possession and use thereof by Lessee.
Section 4.2. Duty to Number and ▇▇▇▇ Equipment. Lessee will cause each
Unit of Equipment to be kept marked with its reporting marks and numbered with
one of its unit numbers as set forth in Annex A to each Lease Supplement, and
will, from and after each Closing Date, keep and maintain plainly, distinctly,
permanently and conspicuously such other markings as from time to time may be
required by law in order to protect the title of Lessor to such Unit of
Equipment and its rights under this Lease. Lessee will replace promptly any such
unit numbers or reporting marks that may be removed, defaced, obliterated or
destroyed. Lessee will not change the reporting marks or unit number of any Unit
of Equipment unless and until a statement of new reporting marks and unit
numbers to be substituted therefor shall have been delivered to Collateral Agent
and Lessor and filed, recorded or deposited in all applicable public offices.
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Section 4.3. Prohibition Against Certain Designations. Except as above
provided, Lessee will not allow the name of any Person to be placed on any Unit
of Equipment as a designation that might be interpreted as a claim of ownership;
provided, however, that Lessee may cause the Equipment to be lettered with the
names or initials or other insignia customarily used by Lessee or its affiliates
or a Sublessee on similar equipment used by Lessee or its Affiliates or a
Sublessee of the same or a similar type for convenience of identification of
Lessee or its affiliates or a Sublessee to use the Equipment under this Lease.
ARTICLE V
DISCLAIMER OF WARRANTIES; QUIET ENJOYMENT
Section 5.1. Disclaimer of Warranties; Warranty Assignments.
(a) LESSEE ACKNOWLEDGES AND AGREES THAT (I) THE EQUIPMENT AND EACH UNIT
THEREOF IS OF A SIZE, DESIGN, CAPACITY AND MANUFACTURE SELECTED BY AND
ACCEPTABLE TO LESSEE, (II) LESSEE IS SATISFIED THAT THE EQUIPMENT AND EACH UNIT
THEREOF IS SUITABLE FOR ITS PURPOSES, (III) NEITHER LESSOR NOR ANY PARTICIPANT
IS A MANUFACTURER OR A DEALER IN PROPERTY OF SUCH KIND, (IV) THE EQUIPMENT AND
EACH UNIT THEREOF IS LEASED HEREUNDER SUBJECT TO ALL APPLICABLE LAWS AND
GOVERNMENTAL REGULATIONS NOW IN EFFECT OR HEREAFTER ADOPTED AND THE STATE AND
CONDITION OF EVERY PART THEREOF WHEN THE SAME FIRST BECAME SUBJECT TO THIS LEASE
WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND BY LESSOR OR ANY PARTICIPANT, AND
(V) AS BETWEEN LESSOR, ANY PARTICIPANT AND LESSEE, LESSEE LEASES THE EQUIPMENT
AND EACH ITEM THEREOF, ON AN "AS-IS, WHERE-IS" BASIS WITHOUT WARRANTY OR
REPRESENTATION EITHER EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER,
INCLUDING, WITHOUT LIMITATION, WARRANTIES OR REPRESENTATIONS REGARDING THE
TITLE, CONDITION, FITNESS FOR A PARTICULAR PURPOSE DESIGN, DESCRIPTION,
OPERATION OR MERCHANTABILITY THEREOF, IT BEING AGREED THAT ALL SUCH RISKS, AS
BETWEEN LESSOR, ANY PARTICIPANT AND LESSEE, ARE TO BE BORNE BY LESSEE. The
provisions of this Section have been negotiated by Lessor and Lessee and are
intended to be a complete exclusion and negation of any representations or
warranties of Lessor or Owner Participant, express or implied, with respect to
the Equipment or any Unit thereof that may arise pursuant to any law now or
hereafter in effect, or otherwise.
(b) Unless a Lease Event of Default shall have occurred and be
continuing and (except for any Lease Event of Default arising under Section
13.1(g) hereof) Lessor shall have thereafter sent written notice to Lessee
revoking the authority granted by this sentence, and so long as the Equipment
shall be subject to this Lease and Lessee shall be entitled to possession of the
Equipment hereunder, Lessor authorizes Lessee, at Lessee's expense, to assert
for Lessor's account, all rights and powers of Lessor under any manufacturer's,
vendor's or dealer's warranty on the Equipment or any part thereof; provided,
however, that Lessee shall indemnify, protect, save, defend and hold harmless
Lessor from and against any and all claims, and all costs, expenses, damages,
losses and liabilities incurred or suffered by Lessor in connection therewith,
as a result of, or incident to, any action by Lessee pursuant to the foregoing
authorization, and that Lessee shall provide Lessor with prior written notice of
any action Lessee proposes to take
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on Lessor's behalf pursuant to the foregoing authorization. Any payments made by
any such vendor or manufacturer pursuant to such warranty for any Unit of
Equipment shall be payable to Lessee so long as no Unmatured Lease Default or
Lease Event of Default shall have occurred and be continuing and after the
occurrence and during the continuance of an Unmatured Lease Default or a Lease
Event of Default shall be paid to the Collateral Agent so long as the Lien of
the Security Agreement shall not have been discharged and, thereafter, shall be
paid to Lessor. Such payment is to be used to repair or replace damaged
components in accordance with Article X hereof, if feasible, and if not used,
such amount shall be paid promptly to Lessor, provided, that, so long as the
Lien of the Security Agreement shall not have been discharged, such amount shall
be paid promptly to Collateral Agent.
(c) Lessor shall have no responsibility or liability to Lessee or any
other Person with respect to any of the following: (i) any liability, loss or
damage caused or alleged to be caused directly or indirectly by any Unit of
Equipment or by any inadequacy thereof or deficiency or defect therein or by any
other circumstances in connection therewith; (ii) the use, operation or
performance of any Unit of Equipment or any risks relating thereto; (iii) loss
of business or anticipated profits or consequential damages; or (iv) the
delivery, operation, servicing, maintenance, repair, improvement or replacement
of any Unit of Equipment. Lessee's delivery of a Lease Supplement shall be
conclusive evidence as between Lessee, any Lender, Owner Participant and Lessor
that all Units of Equipment described therein are in all the foregoing respects
satisfactory to Lessee, and Lessee will not assert any claim of any nature
whatsoever against Lessor or any Participant based on any of the foregoing
matters.
Section 5.2. Quiet Enjoyment. So long as no Lease Event of Default
shall have occurred and be continuing, and subject to Lessor's rights under
Article XI hereof, Lessor agrees that, following the execution and delivery of
each Lease Supplement, Lessee shall be entitled to the quiet use and enjoyment
of the Equipment subject to such Lease Supplement in accordance with this Lease
and such Lease Supplement. Such right of quiet enjoyment is independent of, and
shall not affect Lessor's rights otherwise to initiate legal action to enforce
the obligations of Lessee under this Lease.
ARTICLE VI
SUBSTITUTION AND EXCHANGE OF
UNITS OF EQUIPMENT
(a) Subject to the provisions of subsection (d) hereof, and so long as
no Unmatured Lease Default or Lease Event of Default shall have occurred and be
continuing, Lessee may (i) subject to the conditions hereof, sell a Unit or
group of Units of Equipment (such group, a "Pool") during each calendar quarter
provided that on the last day of such calendar quarter Lessee shall, in
accordance with this Article VI, substitute new equipment for the Units of
Equipment that have been sold and (ii) substitute or exchange any Unit or Pool
of Equipment for another Unit or Pool of Equipment that is substantially similar
to the Unit or Pool of Equipment to be replaced in accordance with the terms of
this Article VI (such new Unit or Pool of Equipment, collectively referred to as
"Replacement Units"). If the Lessee shall elect or be required to substitute or
exchange any Unit or Pool of Equipment pursuant to the preceding sentence, the
Lessee shall, except as otherwise provided herein, on the last day of each
calendar quarter, at its sole cost and expense, deliver to the Lessor without
cost to the Lessor full warranty
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bills of sale for the Replacement Units specifically identifying such
Replacement Units (accompanied by a certificate of the Lessee, signed by a
Responsible Officer of the Lessee, stating that such Replacement Units comply
with the requirements of this Article VI), which Replacement Units meet (or will
meet when the substitution or exchange is completed) the following conditions:
(1) they shall be free and clear of all Liens other
than Permitted Equipment Liens and would in all other respects
comply with the requirements of this Lease;
(2) each Replacement Unit or Pool of Replacement
Units shall have a utility, expected residual value and
remaining useful life at least equal to the Unit or Pool of
Equipment, as the case may be, to be replaced and be in as
good condition and operating order as such Unit or Pool of
Equipment, assuming that such Unit or Pool of Equipment had
been maintained in accordance with this Lease provided,
however, that the number of Replacement Units shall not exceed
150% of the number of Units being replaced;
(3) the Replacement Unit or Pool of Replacement
Units, as the case may be, shall have a Fair Market Sales
Value and net book value at least equal to the then current
Fair Market Sales Value and net book value of the Unit or Pool
of Equipment that is being replaced and Lessor shall have the
right to verify such values prior to the proposed
substitution;
(4) title to all Replacement Units has vested in the
Lessor pursuant to documentation reasonably acceptable to the
Lessor;
(5) the Lessee shall execute and make all Security
Interest Filings necessary or desirable to protect the
interests of the Lessor, the other Participants, the
Administrative Agent and the Collateral Agent in the
Replacement Units concurrently with consummating such
substitution or exchange;
(6) the Lessee and the Lessor shall enter into a
Lease Supplement subjecting such Replacement Units to the
Lease; and
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(7) the Lessee shall have furnished to Owner
Participant and each Lender (so long as the Lien of the
Security Agreement shall not have been discharged) an opinion
of counsel to the effect that (A) the Bills of Sale and Lease
Supplement have been duly authorized, executed, and delivered
and constitute legal, valid and binding obligations of the
Lessee (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the rights of creditors generally
and by general principles of equity), (B) the Bills of Sale
are effective to transfer, and do transfer, title to the
Replacement Units to the Lessor, and (C) all filings,
recordings and other action necessary or appropriate to
perfect and protect the Lessor's and Collateral Agent's (so
long as the Lien of the Security Agreement shall not have been
discharged) respective interests in the Replacement Units,
including without limitation the Security Interest Filings,
have been accomplished.
Notwithstanding anything to the contrary contained herein, if,
during any calendar quarter, Lessee shall sell Units of
Equipment, the aggregate Equipment Cost of which exceeds
$1,000,000 (and for which Replacement Units have not been
substituted), Lessee shall promptly notify Lessor and shall be
required to substitute Replacement Units for the Units which
have been sold within ten (10) days following the last sale of
Units (which together with such Units previously sold equal
$1,000,000 or more) rather than on the last day of the
applicable calendar quarter, as provided above; provided
further, however, that if, during any calendar quarter, Lessee
contemplates a sale of Units, the aggregate Equipment Cost of
which, when added to the aggregate Equipment Cost of all other
Units previously sold during such calendar quarter (and for
which Replacement Units have not been substituted), would
exceed $2,000,000, Lessee shall provide Lessor not less than
ten (10) days prior notice of such sale and Lessee shall not
consummate such sale unless, on the date of such sale, Lessee
provides Replacement Units to Lessor in accordance with this
Article VI.
(b) Upon transfer of the Replacement Units to Lessor and compliance
with the requirements of paragraph (a): (i) each Replacement Unit shall become
the property of the Lessor; (ii) the Lessor will be subrogated to all claims of
the Lessee, if any, against third parties to the extent the same relate to
physical damage to or loss of such Replacement Units and (iii) the substituted
or exchanged property shall no longer be subject to this Lease, and the Lessor
shall release any security interests, including, without limitation, the filing
of any UCC termination statements or any other termination documentation with
respect to any Security Interest Filing made in respect of such Replacement
Units and Lessor shall promptly convey the replaced Unit to Lessee without
recourse, representation or warranty as to any matter whatsoever except as to
the absence of all Lessor's Liens. For all purposes hereof, the Replacement
Units shall, after such transfer, (A) be part of the Equipment leased hereunder,
be subject to the relevant Lease Supplement and all other Operative Documents as
Units of Equipment, and (B) be deemed to be the Units of Equipment that were
replaced. No such substitution or exchange shall result in any change in Basic
Rent.
(c) The Lessee shall pay, on an After-Tax Basis, all costs and expenses
(including reasonable attorneys' fees and disbursements) incurred by the Lessor,
the Administrative Agent,
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the Collateral Agent and the Participants, and all taxes, fees and other
governmental charges payable in connection with the substitution or exchange,
whether or not such substitution or exchange is consummated and with respect to
any documentation required to evidence such substitution or exchange in
accordance with the terms hereof.
(d) Except as provided in subsection (a) above, at least ten (10)
Business Days prior to the last day of each calendar quarter, Lessee shall
provide written notice to Lessor of each substitution event that Lessee intends
to complete on the last day of such calendar quarter. In the event that,
pursuant to subsection (a) above, Lessee has substituted Equipment more than
once per each quarterly period, which quarterly periods shall begin on January
1, 2001, Lessee shall pay to Lessor an administrative fee in the amount of
$2,500 for each separate substitution event (excluding the first substitution)
during such quarterly period. Notwithstanding anything to the contrary contained
in this Article VI, in no event shall Lessee be allowed to complete a
substitution of Units of Equipment during a calendar quarter if the Equipment
Cost of the Units of Equipment with respect to which a substitution is
contemplated, when added to the Equipment Cost of all other Units of Equipment
that already have been substituted during such calendar quarter and the
immediately preceding three (3) calendar quarters exceeds, or will exceed after
giving effect to the contemplated substitution, 25% of the Equipment Cost of all
Units subject to the Lease during such annual period.
ARTICLE VII
RULES, LAWS AND REGULATIONS
Lessee agrees to comply with all Applicable Laws of any Governmental
Authority (including all Environmental Laws) with respect to the inspection,
use, maintenance, operation and overhaul of each Unit of Equipment subject to
this Lease, including, without limitation, procuring and maintaining in effect
all licenses, registrations, certificates, permits, approvals or consents
required by any Authority . Subject to the provisions of Sections 8.1, in case
any equipment or appliance is required to be altered, added, replaced or
modified on any Unit of Equipment in order to comply with such Applicable Laws,
Lessee agrees to make such alterations, additions, replacements and/or
modifications at its own expense and title thereto shall immediately be vested
in Lessor.
ARTICLE VIII
USE AND MAINTENANCE OF EQUIPMENT
Section 8.1. Use and Maintenance of Equipment.
(a) Lessee shall (i) use the Equipment solely in conduct of its
business, for the purpose for which the Equipment was designed, in a careful and
proper manner (and shall not permanently discontinue use of the Equipment) and
(ii) operate, maintain, service and repair the Equipment, and maintain all
records and other materials relating thereto in accordance and consistent with
(1) all maintenance and operating manuals or service agreements, including
Supply Contracts, whenever furnished or entered into, including any subsequent
amendments or replacements thereof, issued by the manufacturers of the
Equipment; (2) the requirements of all insurance policies; (3) any purchase or
sales agreement relating to such Equipment so as to preserve all of Lessee's and
Lessor's rights thereunder, including all rights to any warranties,
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indemnities or other rights or remedies, (4) all Applicable Laws and (5) the
prudent practice of other similar companies in the same business as Lessee, but
in any event, to no lesser standard than that employed by Lessee for comparable
equipment to be in good repair and operating condition and in at least the same
condition as when delivered to Lessee hereunder, except for ordinary wear and
tear resulting despite Lessee's full compliance with the terms hereof. Lessee
(x) shall at all times, maintain records indicating the principal place of
garage of each Unit of Equipment subject to this Lease and shall provide copies
of such records to Lessor upon three (3) Business Days notice from Lessor and
(y) shall not attach or incorporate the Equipment to or in any other item of or
a part of such other item of equipment.
(b) Lessee, within a reasonable time, will replace any parts of the
Equipment which become worn out, lost, destroyed, damaged beyond repair or
otherwise permanently rendered unfit for use, with new or reconditioned
replacement parts which are free and clear of all Liens, encumbrances or rights
of others and have a value, utility and remaining useful life at lease equal to
the parts replaced. Title to all such parts, improvements and additions to the
Equipment immediately shall vest in Lessor, without cost or expense to Lessor or
any further action by any Equipment and subject to the terms of this Lease as if
originally leased hereunder. Except to the extent the same are replaced in
accordance with this Article VIII, Lessee shall not detach or otherwise remove
any parts originally or from time to time attached to the Equipment, if such
parts are essential to the operation of the Equipment or cannot be detached from
the Equipment without materially interfering with the operation of the Equipment
or adversely affecting the value, utility and remaining useful life which the
Equipment would have had without the addition thereof. Lessee shall not make any
material alterations to the Equipment that would adversely affect the value,
utility or remaining useful life of such Equipment without the prior written
consent of Lessor.
(c) Lessee shall not operate or locate any Unit of Equipment, or suffer
any Unit of Equipment to be operated or located, in any area excluded from
coverage by any insurance policy required by the terms of Section 10.1 hereof.
Lessee shall at no time assign, or permit any sublessee to assign, any Unit of
Equipment for the transport or storage of any Hazardous Materials. Lessee shall
promptly, and in all events within ten (10) Business Days after the occurrence
of such event, notify Lessor, Owner Participant and any Lender of any breach by
Lessee or any sublessee of the covenants or restrictions set forth in the
immediately preceding sentence of this paragraph. Not later than thirty (30)
day's after receipt of such notice, Lessor shall be entitled to declare an Event
of Loss with respect to any Unit subject to such breach, in which event Lessee
shall comply with the requirements of Article X hereof. Lessee agrees that it
will not discriminate against any Unit of Equipment (as compared to other
similar equipment owned or leased by Lessee) with respect to its use, operation
or maintenance in contemplation of the expiration or termination of this Lease.
(d) Lessee shall also maintain all records, logs and other materials
required by the Department of Transportation or any other Governmental Authority
having jurisdiction over the Equipment or Lessee to be maintained in respect of
the Equipment.
(e) At all times during the Term of this Lease, the Equipment will be
and remain in the possession and control of Lessee, subject to the terms of
Article XVI hereof. Lessee shall not operate the Equipment or permit the
Equipment to be operated or located outside of the
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contiguous forty-eight states of the United States, Alaska and Canada; provided,
however, that Lessee shall be allowed incidental operation of the Equipment in
Mexico, provided, further, that at no time shall Lessee allow Units of Equipment
representing more than 3% of the Total Equipment Cost to be located or operated
in Mexico. Lessee shall not use, and will not permit any other Person to use any
Equipment or allow the same to be used, for any unlawful purpose. Lessee shall
use and operate the Equipment or cause it to be used and operated only by
personnel authorized by Lessee (subject to Article XVI hereof), and Lessee shall
use every reasonable precaution to prevent loss or damage to each Unit of
Equipment from fire and other hazards.
Section 8.2. Additions and Improvements. Any parts installed or
replacements made by Lessee upon any Unit of Equipment pursuant to additions,
improvements or pursuant to Lessee's obligation to maintain and keep the
Equipment in good order, condition and repair under this Article VIII shall in
either case be considered accessions to such Unit of Equipment and title thereto
immediately shall be vested in Lessor without cost or expense to Lessor. Lessee
shall make no other additions or improvements to any Unit of Equipment unless
the same are readily removable without causing damage to such Unit of Equipment,
and provided that such additions, modifications and improvements do not diminish
the condition, Fair Market Sales Value, utility, remaining useful life or
expected residual value of such Unit of Equipment. Title to any such readily
removable additions or improvements shall remain with Lessee. If Lessee shall at
its cost cause such readily removable additions or improvements to be made to
any Unit of Equipment, then, prior to the return of such Unit of Equipment to
Lessor hereunder of the delivery of such Unit to a third party purchaser of such
Unit, Lessee shall notify Lessor whether it intends to remove such readily
removable additions and improvements and, thereafter, Lessee shall remove the
same at its own expense without causing any damage to such Unit of Equipment;
provided, however, that Lessor may, by delivery of written notice to Lessee
prior to any such removal, elect to purchase any such readily removable
additions for a price equal to the Fair Market Sales Value thereof. In the event
that such removal causes damage to the applicable Unit of Equipment, Lessee
shall promptly repair any such damage prior to the return of the Unit of
Equipment to the Lessor or to such third-party purchaser. Title to any readily
removable addition or improvement which has not been so removed by Lessee from
any Unit of Equipment when such Unit is returned to Lessor pursuant to this
Lease or delivered to a third party purchaser of such Unit shall thereupon be
vested in Lessor or such purchaser.
ARTICLE IX
LIENS ON THE EQUIPMENT
Section 9.1. Liens on the Equipment. Lessee represents and warrants to
Lessor that at the time a Unit of Equipment is accepted by it under this Lease,
such unit will be free and clear of all Liens except (i) Lessor's Liens and (ii)
Permitted Equipment Liens. Lessee will not directly or indirectly create, incur,
assume or suffer to exist any Lien on or with respect to any Unit of the
Equipment, title thereto or any interest therein except (i) Lessor's Liens and
(ii) Permitted Equipment Liens. Lessee shall promptly, at its own expense, take
such action as may be necessary to duly discharge any such Lien (and any claim
which if unpaid might constitute or become such a Lien) not excepted above if
the same shall arise at any time with respect to any Unit of the Equipment.
Lessee shall notify Lessor upon becoming aware of any tax or other Lien (other
than any Lien excepted above) that shall attach to the Equipment or any Unit
thereof.
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Section 9.2. Security Interest Filings; Certificates of Title; Lien
Notations.
Lessee shall perform the following actions to ensure that Collateral
Agent shall have a first priority perfected Lien on all Equipment subject to
this Lease:
(i) On or prior to the Closing Date for any Unit or
replacement pursuant to Article VI, Lessee shall cause all Security Interest
Filings to be filed in all appropriate filing offices.
(ii) Within fourteen (14) days of the initial Closing Date,
Lessee shall cause to be completed and filed with all necessary Governmental
Authorities applications for new certificates of title with respect to each Unit
of Equipment subjected to this Lease on such initial Closing Date, which new
certificates of title shall show Lessee as the owner of such Units of Equipment
and shall show Collateral Agent as lienholder thereof specifically as follows:
"Fleet Capital Corporation, as Collateral Agent for the Lenders,
as assignee of Wabash Statutory Trust-▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President"
Upon such filings, Lessee shall certify in writing to Collateral Agent that such
filings have been made. Within thirty (30) days of the initial Closing Date,
Lessee shall, subject to the Limited Power of Attorney, possess all of the new
certificates of title, provided, however, that so long as Lessee shall be
diligently proceeding to obtain such new certificates of title from such
Governmental Authorities, Lessee shall not be required to possess such
certificates of title until sixty (60) days following the initial Closing Date.
Upon receipt of such new certificates of title, Lessee shall certify in writing
to Collateral Agent that it possesses such new certificates of title.
(iii) On or prior to the Closing Date for any Unit (other than
the initial Closing Date) or replacement pursuant to Article VI, Lessee shall
cause to be completed and filed with all necessary Governmental Authorities
applications for new certificates of title with respect to each Unit of
Equipment subjected to this Lease on such Closing Date, which new certificates
of title shall comply with clause (ii) above. Upon such filings, Lessee shall
certify in writing to Collateral Agent that such filings have been made. Within
thirty (30) days of such Closing Date, Lessee shall, subject to the Limited
Power of Attorney, possess all of the new certificates of title, provided,
however, that so long as Lessee shall be diligently proceeding to obtain such
new certificates of title from such Governmental Authorities, Lessee shall not
be required to possess such certificates of title until sixty (60) days
following such Closing Date. Upon receipt of such new certificates of title,
Lessee shall certify in writing to Collateral Agent that it possesses such new
certificates of title.
(iv) Lessee will, from time to time, do and perform any other
act and will execute, acknowledge, deliver, file, register and record (and will
refile, reregister or re-record whenever required) any and all further
instruments, required by law or reasonably requested by Lessor or Owner
Participant, for the purpose of protecting Lessor's title to any Unit of
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Equipment to the satisfaction of Lessor's or Owner Participant's counsel or for
the purpose of carrying out the intention of this Lease (including any such
filings and recordings as shall be necessary to evidence any change in the name
of Lessee or any merger or consolidation thereof (and, at Lessor's expense, any
such filings and recordings as shall be necessary to evidence any change in the
name of Lessor or a successor trustee under the Trust Agreement)). Lessee will
pay all costs, charges and expenses incident to any such re-recording or
redepositing of any such instruments or incident to the taking of such action.
ARTICLE X
INSURANCE; PAYMENT FOR EVENT OF LOSS
Section 10.1. Insurance Requirements.
(a) Lessee will at all times after delivery and acceptance of each Unit
of Equipment, at its own expense, carry and maintain or cause to be carried and
maintained (i) all-risk physical damage insurance with extended coverage in an
amount not less than the greater of (x) the full replacement cost and (y) the
Termination Value of all Units then subject to the Lease and (ii) public
liability insurance, including but not limited to third-party personal injury,
death and property damage (including contractual liability insurance), in
amounts not less than $5,000,000 in the aggregate and $1,000,000 per occurrence,
and with no deductible, in each case against such risks and in such amounts as
is customarily maintained by Lessee in respect of other equipment owned or
leased by Lessee similar to the Equipment, and from financially sound and
reputable insurance companies of recognized national standing having a credit
rating of at least Best A-/IX, and in any event such coverage shall be in
accordance with customary standards and practices in the industry in which
Lessee operates. Notwithstanding the foregoing, Lessee may self-insure with
respect to all risk physical damage insurance.
(b) Such insurance policies shall: (i) name and insure Lessor, Trust
Company, Owner Participant, Collateral Agent, Administrative Agent and each
Lender as additional insureds (each an "Additional Insured") under the
comprehensive liability insurance and, insure Collateral Agent as loss payee
under the physical damage insurance, with the understanding that any obligation
imposed on Lessee, including the liability to pay premiums, shall be the sole
obligation of Lessee and not that of Lessor, (ii) provide that the insurer waive
its right of subrogation, set-off or counterclaim or any other deduction,
whether by attachment or otherwise against each Additional Insured, (iii)
provide that all such insurance is without right of contribution from any other
insurance which might otherwise be maintained by any Additional Insured, (iv)
provide therein or by endorsement that thirty (30) days prior written notice of
cancellation or modification in a manner materially adverse to any Additional
Insured shall be given to each Additional Insured, as the case may be, and ten
(10) days prior written notice of cancellation for nonpayment shall be given to
each Additional Insured, (v) provide that there is no recourse against each
Additional Insured for payment of premium, commissions, direct calls,
assessments or advances, and (vi) provide that the interests of each Additional
insured shall not be invalidated by any action or inaction of Lessee or any
other Person. Prior to each Closing Date and annually thereafter at each policy
anniversary date, Lessee shall furnish each Additional Insured with certificates
or other satisfactory evidence of maintenance of the insurance so required and
shall furnish certificates evidencing renewals thereof as soon as practicable
but in no event later than five (5) Business Days prior to such renewal. Lessee
shall
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furnish written notice to Lessor, Owner Participant, Collateral Agent,
Administrative Agent and each Lender of any notice of cancellation, material
modification, termination or lapse for non-payment of premiums with respect to
any of the liability insurance provided pursuant to this Section within five (5)
Business Days after the earlier of (x) the date upon which Lessee receives such
notice from the insurance company providing such insurance and (y) the date upon
which Lessee has actual knowledge of any such cancellation, material
modification, termination or lapse for non-payment of premiums.
(c) Nothing in this Section 10.1 shall prohibit any Additional Insured
from obtaining insurance for its own account at its cost, and any proceeds
payable thereunder shall be as provided in the insurance policy relating
thereto; provided, however, that no such insurance may be obtained that would
limit or otherwise adversely affect the coverage of any insurance to be obtained
or maintained by Lessee pursuant to this Section 10.1.
(d) If Lessee shall fail to maintain insurance as herein provided in
Section 10.1, Lessor may at its option provide such insurance and, in such
event, Lessee shall upon demand from time to time reimburse Lessor for the cost
thereof together with interest from the date of payment thereof at the Overdue
Rate, on the amount of the cost to Lessor of such insurance which Lessee shall
have failed to maintain. If after Lessor has provided such insurance, Lessee
then obtains the coverage provided for in Section 10.1 which was replaced by the
insurance provided by Lessor, and Lessee provides Lessor with evidence of such
coverage reasonably satisfactory to Lessor, Lessor shall cancel the insurance it
has provided pursuant to the first sentence of this Section 10.1(d). In such
event, Lessee shall reimburse Lessor for all costs to Lessor of cancellation,
including without limitation any short rate penalty, together with interest from
the date of Lessor's payment thereof at the Overdue Rate.
Section 10.2. Casualty.
(a) In the case of a Casualty affecting any Unit of Equipment that is
not an Event of Loss, any insurance proceeds shall be applied in accordance with
this Section 10.2(a). If the loss (or losses from a single incident or cause)
covered by said physical damage insurance is less than $500,000, the proceeds of
such insurance shall be payable to Lessee provided that no Unmatured Lease
Default or Lease Event of Default shall have occurred and be continuing and,
after the occurrence and continuance of an Unmatured Lease Default or a Lease
Event of Default, such proceeds shall be paid to Collateral Agent so long as the
Lien of the Security Agreement shall not have been discharged and thereafter
shall be paid to Lessor. If such loss equals or exceeds $500,000, the proceeds
of such insurance shall be payable to Collateral Agent or, if the Lien of the
Security Agreement shall have been discharged, Lessor; provided that Collateral
Agent or Lessor, as the case may be, shall, so long as no Unmatured Lease
Default or Lease Event of Default has occurred or is then continuing (i) remit
all such insurance proceeds to Lessee at such time as Lessee either (A) provides
Lessor evidence that the damage has been repaired and the Equipment has been
restored to good working order and condition or (B) has paid to Lessor or
Collateral Agent, as the case may be, the amounts otherwise due to Lessor or
Collateral Agent, as the case may be, on loss of such Equipment or has effected
substitution for such Equipment pursuant to Section 10.3 hereof or (ii) upon
receipt of an invoice from the Person making such repair and evidence that the
damage has been repaired and the Equipment has been restored to good working
order and condition, pay that portion of the insurance proceeds to such Person
in
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satisfaction of such invoice and remit the remainder of all such insurance
proceeds to Lessee. Any balance remaining after compliance with this Section
10.2(a) with respect to such loss or damage shall be retained by Lessor, and
after the occurrence and during the continuance of an Unmatured Lease Default or
a Lease Event of Default such payments shall be paid to Collateral Agent so long
as the Lien of the Security Agreement shall not have been discharged and
thereafter shall be paid to Lessor.
(b) If an Unmatured Lease Default or Lease Event of Default has
occurred and is continuing, any amounts which otherwise would be payable to
Lessee hereunder shall be retained by Lessor (or Collateral Agent, so long as
the Lien of the Security Agreement is outstanding) for application in
satisfaction of Lessee's obligations hereunder upon the exercise of remedies
pursuant to Section 13.2, unless prior thereto, the Unmatured Lease Default or
Lease Event of Default is cured or waived.
Section 10.3. Substitution or Payment of Termination Value upon an
Event of Loss. If an Event of Loss occurs with respect to a Unit or Units of
Equipment during the Term, Lessee shall, within thirty (30) days after Lessee
receives notice of (or otherwise obtains knowledge of) the occurrence of such
Event of Loss, inform Lessor, Owner Participant and Collateral Agent in regard
thereto and of its election to perform one of the following options (it being
agreed that if Lessee shall not have given notice of such election within thirty
(30) days after Lessee receives notice of (or otherwise obtains knowledge of)
such occurrence or if a Unmatured Lease Default or a Lease Event of Default
shall then have occurred and be continuing, Lessee shall be obligated to perform
the option set forth in the following subparagraph a(i);
(i) substitute Replacement Units for such Unit or Units of
Equipment in accordance with the provisions of Article VI hereof;
provided however, that if Lessee shall not perform its obligation to
effect such replacement under this subparagraph (a)(i) during the
period of time provided in Article VI hereof, then on the next
succeeding Payment Date after the end of such period, Lessee shall pay
to Lessor or, so long as the Lien of the Security Agreement shall not
have been discharged, Collateral Agent or, in the case of Supplemental
Rent, to the Person entitled thereto, (A) the Termination Value for
such Unit (computed as of such Payment Date by multiplying the
Equipment Cost with respect to such Unit, as set forth on Annex A to
the applicable Lease Supplement, with the applicable Termination Value
Percentage set forth on Schedule I to such Lease Supplement opposite
such Payment Date), plus (B) the Basic Rent and any Supplemental Rent
due for such Unit of Equipment on such Payment Date, plus (C) all
accrued and unpaid Basic Rent and any Supplemental Rent owing for such
Unit of Equipment through any prior Payment Date; or
(ii) on the Payment Date next following such notice of such
Event of Loss, Lessee shall pay (A) the Termination Value for such Unit
(computed as of such Payment Date), plus (B) the Basic Rent and any
Supplemental Rent due for such Unit of Equipment on such Payment Date,
plus (C) all accrued and unpaid Basic Rent and any Supplemental Rent
owing for such Unit of Equipment through any prior Payment Date.
Section 10.4. Rent Termination. Upon (but not until) payment of all
sums required to be paid pursuant to Section 10.3 hereof in respect of any Unit
or Units of Equipment with respect to
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which an Event of Loss has occurred, the obligation to pay Rent for such Unit or
Units of Equipment shall terminate, but Lessee shall continue to pay Rent for
all other Units of Equipment.
Section 10.5. Disposition of Equipment. Upon payment of the Termination
Value as provided in Section 10.3 hereof, title to the Unit or Units of
Equipment suffering an Event of Loss shall vest in Lessee, as evidenced by a
▇▇▇▇ of sale from Lessor transferring such Unit or Units to Lessee on an "as is,
where is" basis without representation or warranty, express or implied, except
as to the absence of Lessor Liens. Any proceeds up to the Termination Value
payable in respect of an Event of Loss shall be applied to Lessee's obligation
to pay such Termination Value or, if Lessee has previously paid such Termination
Value, to reimburse Lessee for such payment. Any proceeds in excess of the
Termination Value payable in respect of an Event of Loss shall be allocated and
paid to Lessee.
Section 10.6. Termination Value. The Termination Value of each Unit of
Equipment shall be an amount determined as of the date the Termination Value is
to be paid as provided in this Article X (and not the date of the Event of
Loss).
Section 10.7. Risk of Loss. Lessee shall bear and hereby assumes the
risk of loss, damage, theft, destruction, confiscation or requisition, partial
or complete, of or with respect to each Unit of Equipment from and after the
Closing Date with respect to such Units and continuing until the expiration of
the Term and, except as hereinabove in this Article X provided, shall not be
released from its obligations hereunder in the event of any Event of Loss, with
respect to any Unit of Equipment from and after the date hereof and continuing
until payment of the Termination Value and all Rent and other sums due on and
prior to the date of payment of such Termination Value in respect of such Unit
of Equipment has been made. So long as no Lease Event of Default has occurred
and is continuing, Lessee shall be entitled to make all claims and proofs of
loss, damage theft, taking, destruction, confiscation or requisition, partial or
complete, with respect to each Unit of Equipment and take all other steps
necessary to collect the proceeds thereof.
Section 10.8. Eminent Domain. If during the Term of this Lease the use
of any Unit of Equipment is subject to a Condemnation which has not yet become
an Event of Loss or for a stated period which does not constitute an Event of
Loss, Lessee's obligation to pay all installments of Rent and other sums shall
continue for the duration of such Condemnation unless and until the same shall
become an Event of Loss. So long as no Unmatured Lease Default or Lease Event of
Default shall have occurred and be continuing, Lessee shall be entitled to
receive and retain for its own account all sums payable for any such period by
such Governmental Authority as compensation for such Condemnation.
ARTICLE XI
INSPECTION; REPORT
(a) Lessor, Collateral Agent, any Lender and Owner Participant each
shall have the right, but not the obligation, during normal business hours, at
their respective sole cost and expense, except as provided below, by their
respective authorized representatives to (i) inspect the Equipment; (ii) audit
Lessee's books and records with respect thereto; (iii) perform title
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verifications and (iv) take extracts of books and records pertaining to the
Equipment. Lessee shall make available to Lessor, Collateral Agent, any Lender
and Owner Participant the Equipment and Lessee's books and records with respect
thereto, with such frequency as shall be reasonable; provided, however, that (a)
such inspections and audits shall not interfere with Lessee's normal operation
of the Units, and (b) any person exercising the right of inspection under this
section will comply with reasonable rules and restrictions regarding access to
property on which the Equipment may be located. Lessee shall pay the actual
costs and expenses of one such audit of Lessee's books and records per each
calendar quarter beginning with the first calendar quarter provided that Lessor
shall have the right to perform such audits more frequently than once per
quarter. During the continuance of a Unmatured Lease Default related to the
Equipment or any Lease Event of Default, such inspections and audits shall be at
Lessee's sole cost and expense, provided, further that if certain Units of
Equipment are subject to any Sublease, Lessee shall inform Lessor, Owner
Participant, Collateral Agent and each Lender of the location of such Units of
Equipment and to whom it is sublet and shall use reasonable efforts to permit
Lessor and each Participant to inspect the same.
(b) Within 10 Business Days of the end of each calendar quarter, Lessee
shall provide to Lessor and Collateral Agent, a report indicating the sale and
substitution activity of Units for the prior calendar quarter in a form
satisfactory in form and scope to Lessor and Collateral Agent which may be
embodied in the notice required to be delivered pursuant to Article VI(d)
hereof.
ARTICLE XII
RETURN OF THE EQUIPMENT UPON EXPIRATION OF TERM
Section 12.1. Return Conditions. (a) Upon the expiration or earlier
termination of the Term of this Lease, Lessee shall, unless Lessee has paid
Termination Value and other amounts with respect thereto pursuant to Section
17.2(c) of or has timely exercised its purchase option with respect thereto
pursuant to Section 17.1 hereof, at its own expense, return all Units of
Equipment to Lessor. Upon the return of such Equipment, Lessee shall at its own
cost and expense have taken all necessary action to assure that each Unit of
Equipment shall: (i) be in the same condition as when delivered to Lessee
hereunder, ordinary wear and tear resulting from proper use thereof excepted,
(ii) be in such operating condition as is capable of the Unit performing at its
originally intended use, (iii) have been used, operated, serviced and repaired
in accordance with, and otherwise complying with, Article VIII hereof, (iv) be
free and clear of all Liens whatsoever except Permitted Equipment Liens; (v)
meet the standards (including all safety and environmental standards) then in
effect for equipment of the same type and age as the Equipment, (vi) have
attached or affixed thereto, all parts to which Lessor has title hereunder and
have removed therefrom all parts and property to which Lessee has title thereto
(unless Lessor has exercised its option to purchase the same pursuant to the
terms hereof), (vii) be capable of performing the functions for which it was
designed, with necessary certifications - in full force and effect, (viii) at
Lessor's election, either (x) be returned empty but suitable for transporting
the commodity last carried or (y) be cleaned in such manner as to be suitable
for human entry and inspection, (ix) be in compliance with all Applicable Laws,
(x) be free of any marks, special paint or insignia, other than those required
by Section 4.2 hereof and (xi) in any event be in a condition in compliance with
all provisions of this Lease and any requirements specified for such Unit in the
Lease Supplement applicable to such Unit.
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(b) In addition to and not in limitation of the foregoing, that portion
each Unit of Equipment comprised of any trailer or refrigeration unit shall be
in "good and efficient working order" and shall comply with the following
requirements:
(i) General Condition. All equipment originally furnished with
any Unit of Equipment, or the substantial equivalent thereof, shall be
installed and intact, without alterations or modifications other than
as recommended by the manufacturer and approved in writing by the
Lessor. All decals, numbers and other customer identification shall be
removed from each unit by Lessee or Lessee's agent in a manner
satisfactory to the Lessor. Lessee shall pay any reasonable costs if
Lessor effects such removal after surrender. The cost of physical
damage repairs shall not exceed $50 for any Unit of Equipment.
(ii) Bodies. Lessee shall repair to the manufacturer's
specifications, any holes or perforations to walls, interior liner,
insulation materials, door seals and floors.
(iii) Refrigeration Equipment. Refrigeration units shall be in
good working order, the compressor shall operate to factory specified
capacities and BTU ratings, diesel engine oil pressure shall register a
minimum of 40lbs. The refrigeration unit engine will pull its rated
load at factory specified RPM without excessive exhaust or oil leakage
and there shall be no oil in the cooling system nor water in the oil.
The foregoing items shall be tested and checked by an authorized dealer
of the manufacturer of the refrigeration unit.
(iv) Tires and Brakes. Brake drums or rotors shall not be
cracked and brake linings shall have an average of 50% remaining wear
with no less than 35% on any one lining. Tires shall be of matched
generic type and tread design, will have an average of 50% remaining
tread with no less than 35% remaining on any one tire.
(v) Documents and Records. Upon surrender Lessee shall submit
to Lessor, with each Unit of Equipment, maintenance and repair records,
mileage records, diagrams, records, logs and other similar documents
and all inspection, modification and overhaul records, or copies of all
of the foregoing, in the Lessee's possession or the possession of any
third-party maintenance organization. Lessee shall also submit
registration certificates, clear certificates of title, current Federal
highway use tax payment receipts and each Unit of Equipment shall have
current Federal Highway Inspection documentation status records at time
of return.
Lessee shall return the Equipment by delivering it to such place within
the continental United States as Lessor shall specify.
(c) Upon the request of Lessor, and at Lessor's sole expense, Lessee
shall cooperate with Lessor in obtaining the valid and effective issuance, or,
as the case may be, transfer or amendment of all governmental action necessary
or, in the reasonable opinion of Lessor, desirable for the ownership of any Unit
of Equipment by Lessor or any transferee, sublessee or assignee thereof.
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Section 12.2. Inspection of Equipment. If Lessee shall return the
Equipment to Lessor pursuant to Section 17.2(b), during the last ninety (90)
days of the Term of this Lease, Lessee shall, at the request of Lessor, make
reasonable arrangements for the inspection of the Units. Lessor and Lessee each
agree, if requested by the other, that a representative thereof will perform
jointly with the other an inspection of the Equipment, or an appropriate
representative sampling thereof, to insure compliance with the provisions of
Section 12.1 at such time and location and following such inspection standards
as shall be mutually agreeable to Lessor and Lessee. If pursuant to such
inspection any Unit of Equipment is deemed not in the condition required by
Section 12.1, Lessee, at its expense and risk, shall within thirty (30) days
thereafter make such repairs and perform such work as shall be necessary to
place such Unit of Equipment in the condition required by Section 12.1. Lessee
will provide Lessor with notice when such Unit of Equipment has been repaired so
as to be in the condition required by Section 12.1. Upon such redelivery of an
Unit of Equipment, Lessee agrees to provide to Lessor originals or true,
correct, complete and legible copies of all manuals, drawings, diagrams,
records, logs and other materials and inspection, modification, overhaul and
maintenance records applicable thereto and then in the possession of Lessee.
Section 12.3. Specific Performance. The assembling, delivery in the
required condition, storage, insurance and transporting of the Equipment as
herein before provided are of the essence of this Lease, and upon application to
any court of equity having jurisdiction thereover, Lessor shall be entitled to a
decree against Lessee requiring specific performance of the covenants of Lessee
to so assemble, deliver in the required condition, store, insure and transport
the Equipment.
ARTICLE XIII
LEASE DEFAULT
Section 13.1. Events of Default. Any of the following events shall
constitute a Lease Event of Default hereunder:
(a) Lessee shall fail to make payment of (i) any Basic Rent within five
(5) days of the date due or (ii) any Early Termination Payment, Termination
Value, or Maximum Lessee Risk Amount on the date due therefor; or
(b) Lessee shall fail to make payment of any Supplemental Rent (other
than any Supplemental Rent referred to in clause (a) of this Section 13.1) due
and payable within five (5) days after receipt of written notice thereof; or
(c) Lessee shall fail to observe or perform any of its obligations
under Section 17.3 after giving notice of its election to return the Equipment
pursuant to Section 17.2; or any insurance required to be maintained pursuant to
Article X of this Lease shall fail to be in full force and effect; or
(d) Guarantor shall default under any of its obligations under the
Guaranty or fail to assume or perform any term, covenant or condition of the
Guaranty; or
(e) any Obligor shall fail to observe or perform any term, covenant or
condition applicable to it under any Operative Document to which it is party
(other than those described in
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the foregoing clause (a), (b), (c) or (d) of this Section 13.1, which defaults
shall be subject to cure periods only as set forth in such clauses) and, in each
such case, such failure shall remain unremedied for thirty (30) days after the
earlier of (x) written notice thereof and (y) the date on which the applicable
Obligor shall have knowledge thereof; provided, however, that if such failure is
capable of cure and the applicable Obligor shall have commenced to cure such
failure within such thirty-day period, then such cure period shall be extended
from thirty (30) days to ninety (90) days so long as the applicable Obligor is
at all times during such extended period diligently taking action reasonably
satisfactory to the Lessor and Lenders to cure or remedy such failure; or
(f) any representation or warranty made or deemed made by any Obligor
herein or in any Operative Document or which is contained in any certificate,
document or financial or other statement furnished at any time under or in
connection with any Operative Document shall prove to have been incorrect, false
or misleading in any material respect on or as of the date made or deemed made
and either (i) the fact or condition which made such representation of warranty
incorrect, false or misleading is not curable or remediable or (ii) the fact or
condition which made such representation of warranty incorrect, false or
misleading shall not have been cured or remediated within thirty (30) days after
the earlier of (x) written notice thereof and (y) the date on which the
applicable Obligor shall have knowledge thereof; or
(g) (i) any Obligor shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or any Obligor shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against any
Obligor any case, proceeding or other action of a nature referred to in clause
(i) above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or unbonded
for a period of sixty (60) days; or (iii) there shall be commenced against any
Obligor any case, proceeding other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within sixty (60) days from the entry thereof; or (iv) any
Obligor shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i), (ii)
or (iii) above; or (v) any Obligor shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they become due; or
(h) any Operative Document or any Lien granted under any Operative
Document shall, taken as a whole, terminate, cease to be effective against, or
cease to be the legal, valid, binding and enforceable obligation of any Obligor;
or
(i) any Lien (other than a Permitted Equipment Lien) shall be filed,
levied or otherwise attached against any Unit of Equipment, and such Lien shall
not be removed, bonded or satisfied within ten (10) days of Lessee's knowledge
thereof,
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(j) by order of a competent court or governmental authority, Lessee
shall suspend all or substantially all of its commercial operations for thirty
(30) days or more, or Lessee shall voluntarily suspend all or substantially all
of its commercial operations;
(k) any Obligor shall directly or indirectly contest the effectiveness,
validity, binding nature of enforceability of any Operative Document or any Lien
granted under any Operative Document; or
(l) the termination of any necessary permit or any other license or
permit which termination materially affects Lessee's ability to meet its
financial or performance obligations under the Operative Documents; or
(m) any judgments or orders for the payment of money in excess of
$1,000,000 shall be rendered against Lessee or Guarantor, and either such
judgement is not discharged within sixty (60) days following the rendering
thereof or there shall be any period during which a stay of enforcement of such
judgment or order, by reason of an appeal or a bond pending appeal, shall not be
in effect; or
(n) all or a material part of the Equipment is destroyed or suffers an
actual or constructive loss or material damage in connection with any Casualty
or Condemnation, and in any such case, the Equipment ceases to be operational
for a period beyond the Expiration Date or beyond the later of (i) one hundred
eighty (180) days after the receipt of any insurance awards or condemnation
proceeds in connection with such Casualty or Condemnation and (ii) three hundred
sixty (360) days after the occurrence of such Casualty or Condemnation, unless,
in any such case, Lessee shall have submitted to the Lessor a plan of
restoration or repair of the Equipment and the Lessor, in its sole discretion
(after consultation with the other Participants) shall have consented to such
plan of restoration or repair.
Section 13.2. Remedies. Upon the occurrence of any Lease Event of
Default of the type described in clause (g) of Section 13.1, all Commitments
shall automatically terminate and the Termination Value for all Equipment then
outstanding, together with all accrued Basic Rent, Supplemental Rent and fees
and other obligations of Lessee accrued under the Operative Documents, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by Lessee. Upon the
occurrence of any Lease Event of Default other than a Lease Event of Default of
the type described in clause (g) of Section 13.1, and at any time thereafter
during the continuance of such event, the Lessor may, and at the request of the
Required Participants shall, by notice to Lessee, take either or both of the
following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Total Equipment Cost then outstanding to be due and payable in whole
(or in part in which case any portion of the Total Equipment Cost not so
declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the Total Equipment Cost (or the portion thereof so
declared to be due and payable), together with all accrued Basic Rent,
Supplement Rent and all fees and other obligations of Lessee accrued under the
Operative Documents, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by Lessee. In addition, upon the occurrence of any Lease Event of
Default and at any time thereafter so long as such Lease Event of Default is
continuing, the Lessor may, and at
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the request of the Required Participants shall, do one or more of the following
as the Lessor or the Required Participants in its (or their) sole discretion
shall determine, without limiting any other right or remedy the Lessor may have
on account of such Lease Event of Default:
(a) The Lessor may, by notice to Lessee, rescind or terminate this
Lease as to any Unit of the Equipment or all of the Equipment as of the date
specified in such notice; provided, however (i) no reletting, reentry or taking
of possession of the Equipment (or any Unit thereof) by the Lessor will be
construed as an election on the Lessor's part to terminate this Lease unless a
written notice of such intention is given to Lessee, (ii) notwithstanding any
reletting, reentry or taking of possession, the Lessor may at any time
thereafter elect to terminate this Lease for a continuing Lease Event of Default
and (iii) no act or thing done by the Lessor or any of its agents,
representatives or employees and no agreement accepting a surrender of any Unit
of the Equipment shall be valid unless the same be made in writing and executed
by the Lessor;
(b) The Lessor may (i) demand that Lessee, and Lessee shall upon the
written demand of the Lessor, return the Equipment promptly to the Lessor in the
manner and condition required by, and otherwise in accordance with all of the
provisions of, Articles VIII, IX and XII hereof as if the Equipment were being
returned at the end of the Initial Lease Term, and the Lessor shall not be
liable for the reimbursement of Lessee for any costs and expenses incurred by
Lessee in connection therewith and (ii) without prejudice to any other remedy
which the Lessor may have for possession of the Equipment, and to the extent and
in the manner permitted by Applicable Law, enter upon the Equipment and take
immediate possession of (to the exclusion of Lessee) the Equipment or any part
thereof and expel or remove Lessee and any other Person who may be occupying the
Equipment, by summary proceedings or otherwise, all without liability to Lessee
for or by reason of such entry or taking of possession, whether for the
restoration of damage to property caused by such taking or otherwise and, in
addition to the Lessor's other damages, Lessee shall be responsible for all
costs and expenses incurred by the Administrative Agent, the Collateral Agent,
the Lessor, the Owner Participant and/or the Lenders in connection with any
reletting, including, without limitation, reasonable brokers' fees and all costs
of any alterations or repairs made by the Administrative Agent, the Lessor or
any Lender;
(c) As more fully set forth in the Security Agreement, the Lessor may
sell all or any Unit of the Equipment at public or private sale, as the Lessor
may determine;
(d) The Lessor may, at its option, elect not to terminate this Lease
and continue to collect all Basic Rent, Supplemental Rent, and all other amounts
due to the Lessor (together with all costs of collection) and enforce Lessee's
obligations under this Lease as and when the same become due, or are to be
performed, and at the option of the Lessor, upon any abandonment of the
Equipment by Lessee or re-entry of same by the Lessor, the Lessor may enforce,
by suit or otherwise, all other covenants and conditions hereof to be performed
or complied with by Lessee hereunder and to exercise all other remedies
permitted by Applicable Law;
(e) Unless the Equipment has been sold in its entirety, the Lessor may,
whether or not the Lessor shall have exercised or shall thereafter at any time
exercise any of its rights under clause (b), (c) or (d) of this Section 13.2
with respect to the Equipment or any Unit thereof, demand, by written notice to
Lessee specifying a date (a "Termination Date") not earlier than five (5)
Business Days after the date of such notice, that Lessee purchase the Equipment
or a
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Unit or Units of Equipment on such Termination Date for a price equal to the
Termination Value of such Unit or Units plus all accrued and unpaid Basic Rent
and all other amounts due and owing under the Operative Documents with respect
to such Unit or Units;
(f) The Lessor may exercise any other right or remedy that may be
available to it under Applicable Law, including any and all rights or remedies
under the Security Agreement Documents, or proceed by appropriate court action
(legal or equitable) to enforce the terms hereof or to recover damages for the
breach hereof. Separate suits may be brought to collect any such damages for any
period(s), and such suits shall not in any manner prejudice the Lessor's right
to collect any such damages for any subsequent period(s), or the Lessor may
defer any such suit until after the expiration of the Initial Lease Term, in
which event such suit shall be deemed not to have accrued until the expiration
of the Initial Lease Term;
(g) The Lessor may retain and apply against the Total Equipment Cost
and all other amounts due and owing by Lessee under the Operative Documents all
sums which the Lessor would, absent such Lease Event of Default, be required to
pay to, or turn over to, Lessee pursuant to the terms of this Lease and upon
payment in full of the Total Equipment Cost plus all accrued and unpaid Basic
Rent and all other amounts due and owing under the Operative Documents from such
sums, the Equipment shall be conveyed to Lessee;
(h) If a Lease Event of Default shall have occurred and be continuing,
the Lessor, to the extent permitted by Applicable Law, as a matter of right and
with notice to Lessee, shall have the right to apply to any court having
jurisdiction to appoint a receiver or receivers of the Equipment, and Lessee
hereby irrevocably consents to any such appointment. Any such receiver(s) shall
have all of the usual powers and duties of receivers in like or similar cases
and all of the powers and duties of the Lessor in case of entry, and shall
continue as such and exercise such powers until the date of confirmation of the
sale of the Equipment, unless such receivership is sooner terminated;
(i) To the maximum extent permitted by law, Lessee hereby waives the
benefit of any appraisement, valuation, stay, extension, reinstatement and
redemption laws now or hereafter in force and all rights of marshaling in the
event of any sale of the Equipment, or any interest therein;
(j) The Lessor shall be entitled to enforce payment of the indebtedness
and performance of the obligations secured hereby and to exercise all rights and
powers under this instrument or under any of the other Operative Documents or
other agreement or any laws now or hereafter in force, notwithstanding some or
all of the obligations secured hereby may now or hereafter be otherwise secured,
whether by mortgage, security agreement, pledge, lien, assignment or otherwise.
Neither the acceptance of this instrument nor its enforcement, shall prejudice
or in any manner affect the Lessor's right to realize upon or enforce any other
security now or hereafter held by the Lessor, it being agreed that the Lessor
shall be entitled to enforce this instrument and any other security now or
hereafter held by the Lessor in such order and manner as the Lessor may
determine in its absolute discretion. No remedy herein conferred upon or
reserved to the Lessor is intended to be exclusive of any other remedy herein or
by law provided or permitted, but each shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute. Every
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power or remedy given by any of the Operative Documents to the Lessor or to
which it may otherwise be entitled, may be exercised, concurrently or
independently, from time to time and as often as may be deemed expedient by the
Lessor. In no event shall the Lessor, in the exercise of the remedies provided
in this instrument (including, without limitation, in connection with the
assignment of rents to Lessor, or the appointment of a receiver and the entry of
such receiver onto all or any part of the Equipment), be deemed a "mortgagee in
possession", and the Lessor shall not in any way be made liable for any act,
either of commission or omission, in connection with the exercise of such
remedies.
Lessee acknowledges and agrees that upon the declaration of a Lease
Event of Default the amount due and owing by it to the Lessor hereunder shall be
the Total Equipment Cost plus all other amounts then owing under the Operative
Documents (including all accrued and unpaid Contingent Payments) and that, to
the maximum extent permitted by law, Lessee waives any right to contest the
Total Equipment Cost plus such other amounts as the liquidated sum due upon
acceleration of this instrument.
If, pursuant to the exercise by the Lessor of its remedies pursuant to
this Section 13.2, the Total Equipment Cost, all accrued and unpaid Basic Rent
and all other amounts due and owing from Lessee under this Lease and the other
Operative Documents have been paid in full, then the Lessor shall remit to
Lessee any excess amounts received by the Lessor and, at the sole cost and
expense of Lessee, return the Equipment to Lessee. The obligation to deliver
such excess to Lessee shall survive this Lease.
Lessee shall be liable, except as otherwise provided above, for any and
all unpaid Rent due hereunder before or during the exercise of any of the
foregoing remedies and for all reasonable legal fees and other costs and
expenses incurred by reason of the occurrence of any Unmatured Lease Default or
Lease Event of Default or the exercise of Lessor's remedies with respect
thereto, including the repayment in full of any costs and expenses of
investigation and of repairing or modifying any Unit of Equipment in order to
cause it to be in compliance with all maintenance and regulatory standards
imposed by this Lease.
No receipt of money by Lessor from Lessee after a termination of this
Lease by Lessor shall reinstate, continue or extend this Lease or affect any
notice theretofore given to Lessee or operate as a waiver of the right of Lessor
to enforce the payment of Basic Rent, Supplemental Rent, and any other amounts
due from Lessee hereunder, it being agreed that after the commencement of suit
for possession of the Equipment, or after final order or judgment for the
possession of the Equipment, Lessor may demand, receive and collect any moneys
due or thereafter falling due without in any manner affecting such suit, order
judgment, all such moneys collected being deemed payments on account of the use
and possession of the Equipment or, at the election of Lessor, on account of
Lessee's liability hereunder.
Lessor, without further notice, may, but shall be under no obligation
to, retake such Units of Equipment wherever found, without Lessor incurring any
liability by reason of such retaking, whether for the restoration of damage to
property caused by such retaking or otherwise.
Section 13.3. Waivers. Lessee waives the following, to the fullest
extent permitted by law: (a) any notice of re-entry or the institution of legal
proceedings to obtain re-entry or
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possession; (b) any right of redemption, re-entry or repossession except as
expressly provided herein; (c) the benefit of any laws now or hereafter in force
exempting property from liability for rent or for debt or limiting the Lessor
with respect to the election of remedies; and (d) any other rights which might
otherwise limit or modify any of the Lessor's rights or remedies under this
Article XIII, provided, however, in no event shall Lessor be entitled to recover
damages in duplication of damages previously recovered by Lessor. Lessee hereby
waives any and all existing or future claims of any right to assert any offset
against the Rent payments due hereunder, and agrees to make the Rent payments
regardless of any offset or claim which may be asserted by Lessee or on its
behalf in connection with the lease of the Equipment. Except as otherwise
provided in this Lease, Lessee, to the full extent effective under Applicable
Law, hereby waives all statutory or other legal requirements for any notice of
any kind, any other requirements with respect to the enforcement of Lessor's
rights under this Lease and any and all rights of redemption. No delay or
omission to exercise any right, power or remedy accruing to Lessor upon any
breach or Unmatured Lease Default by Lessee under this Lease shall impair any
such right, power or remedy of Lessor, nor shall any such delay or omission be
construed as a waiver of any breach or Unmatured Lease Default, or of any
similar breach or Unmatured Lease Default thereafter occurring. No waiver by
Lessor of any Lease Event of Default shall in any way be or be construed to be,
a waiver of any future or subsequent Lease Event of Default. The failure of
Lessor to insist upon the strict performance of any provision or to exercise any
option, right, power or remedy contained in this Lease shall not be construed as
a waiver or relinquishment thereof for the future. Receipt by Lessor of any
Basic Rent or Supplemental Rent or any other sum payable hereunder with
knowledge of the breach of any provision contained in this Lease shall not
constitute a waiver of such breach, and no waiver by Lessor of any provision of
this Lease shall be deemed to have been made unless made under signature of an
authorized representative of Lessor, provided, that any breach or Unmatured
Lease Default once so waived in writing, shall not be deemed to be continuing
for any purposed of this Lease.
Section 13.4. Notice of Lease Event of Default. Lessee also agrees to
furnish to Lessor, Owner Participant, Collateral Agent and each Lender, promptly
upon becoming aware of any condition which constituted or constitutes a
Unmatured Lease Default or a Lease Event of Default under this Lease, written
notice specifying such condition and the nature and status thereof.
ARTICLE XIV
RETURN OF EQUIPMENT UPON DEFAULT
Section 14.1. Lessee's Duty to Return. If Lessor shall terminate this
Lease pursuant to Article XIII hereof, Lessee shall forthwith deliver possession
of the Equipment to Lessor. For the purpose of delivering possession of any Unit
of Equipment to Lessor as above required, Lessee shall at its own cost, expense
and risk (except as hereinafter stated):
(a) forthwith deliver such Unit to places in the continental United
States as Lessor shall reasonably designate in accordance with Article XII
hereof; or
(b) permit Lessor to store such Units of Equipment for one year on the
premises of Lessee without charge for insurance, rent or storage, and during
such period of storage Lessee
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shall continue to maintain all insurance required by Section 10.1 hereof and
maintain the Units of Equipment as provided hereby and thereafter deliver such
Units as provided in clause (a).
Section 14.2. Lessor Appointed Lessee's Agent. Without in any way
limiting the obligation of Lessee under the foregoing provisions of this Article
XIV, Lessee hereby irrevocably appoints Lessor as the agent and attorney-in-fact
of Lessee, with full power and authority (which power is coupled with an
interest), at any time during the continuance of a Lease Event of Default while
Lessee is obligated to deliver possession of any Units of Equipment to Lessor
and is not doing so in a commercially reasonable manner, to demand and take
possession of such Unit in the name and on behalf of Lessee from whosoever shall
be at the time in possession of such Unit.
ARTICLE XV
ASSIGNMENT BY LESSOR
For the purpose of providing funds for financing the purchase of the
Equipment, Lessee acknowledges and agrees that (i) Lessor has assigned,
transferred, conveyed, sold and/or encumbered this Lease, the Equipment and the
Rent payments (other than Excluded Amounts) hereunder to Collateral Agent,
subject to the terms and conditions of the Security Agreement, (ii) that Lessee
shall pay directly to Collateral Agent all Rent payments (other than Excluded
Amounts) and other sums due or to become due under this Lease and (iii) that the
Equipment leased hereunder has been mortgaged by Lessor under the Security
Agreement in favor of Collateral Agent, and that, subject to the terms and
conditions of the Security Agreement, Collateral Agent shall be entitled to
exercise the rights and privileges of Lessor hereunder. The rights of Collateral
Agent under the Security Agreement and the rights of any Person under any
further such assignment, transfer or conveyance shall be subject to Lessee's
right to possess and use the Equipment so long as no Lease Event of Default has
occurred and is continuing.
ARTICLE XVI
ASSIGNMENTS BY LESSEE; USE AND POSSESSION
Section 16.1. Lessee's Rights to the Equipment & Sublease. So long as
no Lease Event of Default shall have occurred and be continuing, Lessee shall be
entitled to the possession and use of the Equipment in accordance with the terms
of the Lease. Without the prior written consent of Lessor and Collateral Agent,
Lessee shall not assign, transfer or encumber its leasehold interest under this
Lease in respect of any Unit of Equipment, except as permitted in this Article
XVI. LESSEE ALSO SHALL NOT, WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR (SUCH
CONSENT NOT TO BE UNREASONABLY WITHHELD OR DELAYED) ENTER INTO ANY SUBLEASE WITH
RESPECT TO, PART WITH THE POSSESSION OR CONTROL OF, OR SUFFER OR ALLOW TO PASS
OUT OF ITS POSSESSION OR CONTROL, ANY UNIT OF EQUIPMENT. No sale, assignment or
sublease, whether authorized in this Section or in violation of the terms
hereof, shall relieve Lessee of its obligations, and Lessee shall remain
primarily liable hereunder. Any unpermitted sale, assignment, transfer,
encumbrance, delegation or sublease by Lessee shall be void ab initio.
Notwithstanding the foregoing, Lessee may, subject to the following terms and
conditions, sublease the Equipment to unrelated third parties (each such party a
"Sublessee") only in the ordinary course of business as Lessee normally leases
such Equipment, pursuant to the terms and
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provisions hereof and pursuant to written subleases satisfying the conditions
hereof (hereinafter referred to as a "Sublease" and, collectively, the
"Subleases").
On the date hereof, each of Lessee's Subleases are in the form attached
hereto as Exhibit B. Prior to the second Closing Date, each new Sublease entered
into after the second Closing Date shall (a) be for a term not extending beyond
the Term hereof, (b) prohibit sub-subleasing, or the loss of possession or
control of the Equipment in any way, other than in the manner contemplated by
this Section, by the Sublessee, (c) expressly provide that the rights of any
Sublessee who receives possession by reason of a Sublease shall be subject and
subordinate to each and every term, condition and provision of this Lease,
including Lessor's right of repossession pursuant to Articles XIII and XIV of
this Lease and to terminate such Sublease upon such repossession, (d) provide
that such Sublease is freely assignable by Lessee, and (e) prohibit Sublessee
from carrying Hazardous Materials on any Unit of Equipment. No Sublease shall in
any way discharge or diminish any of Lessee's obligations hereunder, and Lessee
shall remain primarily liable hereunder for the performance of all the terms,
conditions and provisions of this Lease to the same extent as if such Sublease
had not occurred. Upon entering into any Sublease with a term exceeding twelve
months, Lessee shall deliver to Lessor, at Lessor's request, a copy thereof and,
at Lessor's request, assign such Sublease to Lessor as security for Lessee's
obligations hereunder. Upon Lessor's request, Lessee shall provide to Lessor a
report indicating: (i) the status of any Sublease account which is more than
thirty (30) days delinquent, (ii) the location of the principal garage of each
Unit of the Equipment, and (iii) the Sublessee of each Unit of the Equipment.
Lessor shall have the right at any time and from time to time to conduct a
complete field inspection of all of the Equipment, whether the Equipment is
located on Lessee's premises or on the premises of any Sublessee to whom Lessee
has leased any or all of the Equipment hereunder.
Section 16.2. Additional Provisions Regarding Subleases.
(a) Notwithstanding the provisions of any Sublease, Lessee hereby
acknowledges that it is now and continues to be obligated and bound by all of
the provisions of this Lease, including but not limited to the provisions
relating to the obligation to pay Rent, notwithstanding any delegation of duties
or other term of the Sublease. Any such delegation shall be effective only as
between Lessee and Sublessee. Lessee further acknowledges that it is not
authorized to dispose of the Equipment (except by sublease in accordance with
the terms of Section 16.1 or by sale or substitution in accordance with Article
VI hereof).
(b) Notwithstanding the assignment granted by Lessee to Lessor pursuant
to Section 18.10 hereof, Lessee shall cause Sublessee to pay Lessee all rental
and other sums payable under the Subleases until Lessor delivers to Lessee
notice of an Unmatured Lease Default or Lease Event of Default under this Lease.
Upon giving such notice to Lessee, Lessor may notify Sublessee (or, if requested
by Lessor, Lessee shall notify Sublessee) to pay directly to Lessor all rental
and other sums payable and to become payable under the Subleases. Upon
Sublessee's receipt of such notice, Lessee hereby authorizes and directs
Sublessee to pay Lessor all rental and other sums payable and to become payable
under the Subleases; provided, however, that so long as no Unmatured Lease
Default or Lease Event of Default has then occurred, Lessor shall retain only
such of the rentals herein assigned as are required from time to time to
discharge Lessee's obligations under this Lease and shall remit any excess to
Lessee. If any remittance is
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received by lessee relating to such Subleases, such remittances immediately will
be delivered to Lessor bearing the endorsement "Pay to the order of Wabash
Statutory Trust - 2000. If the remittance is in a form which precludes an
endorsement, Lessee shall hold all such funds in trust for Lessor and
immediately pay the amount of the remittance to Lessor. Lessee hereby appoints
Lessor its attorney-in-fact to negotiate any remittance which is received by
Lessor from Sublessee after a Lease Event of Default and made payable to Lessee.
Notwithstanding the foregoing, if Lessee receives the proceeds of any insurance
maintained by a Sublessee as a result of a Casualty suffered by subleased
Equipment, Lessee immediately will remit such insurance proceeds to Lessor.
(c) Lessee agrees that at any time and from time to time, upon the
written request of Lessor, Lessee will promptly and duly execute deliver or
cause to be duly executed and delivered any and all further instruments and
documents as Lessor may deem desirable to perfect its security interest in the
Subleases, Inventory and Accounts Receivable. Lessee shall deliver to Lessor the
original certificates of title with respect to the Equipment, subject to the
provisions of the Limited Power of Attorney; and shall retain possession of all
original executed copies of the Subleases (provided, however, that upon a Lease
Event of Default, Lessor may require Lessee to deliver to Lessor the original
executed Subleases).
(d) Upon Lessor's request, Lessee shall provide to Lessor a report
indicating: (i) the status of any Sublease account which is more that thirty
(30) days delinquent, (ii) the location of the principal garage of each Unit of
the Equipment, and (iii) the Sublessee of each of the Equipment. Lessor shall
have the right at any time and from time to time to conduct a complete field
inspection of all of the Equipment, whether the Equipment is located on Lessee's
premises or on the premises of any Sublessee to whom Lessee has leased any or
all of the Equipment hereunder.
ARTICLE XVII
EARLY TERMINATION OPTION; END OF TERM OPTIONS
Section 17.1. Early Termination Option for all of the Equipment.
(a) At any time during the Term of this Lease, and so long as no Lease
Event of Default shall have occurred and be continuing hereunder, Lessee shall
have the option to terminate this Lease with respect to all but not less than
all of the Equipment. To exercise such option, Lessee shall give Lessor an
irrevocable written notice of Lessee's intention to terminate this Lease, which
notice shall (i) state that Lessee desires to terminate this Lease as to the
Equipment and refer specifically to this Section 17.1, and (ii) specify the date
for such termination (which shall be the Payment Date not less than forty (40)
nor more than seventy-one (71) days after the date of such notice, but in no
event after the Expiration Date, (such date, the "Early Termination Date"). Upon
such election and satisfaction of the terms and conditions set forth in this
Section 17.1, this Lease shall terminate on the Early Termination Date.
Notwithstanding the foregoing, in the event Lessee shall fail to perform its
obligations in strict conformance with this Section 17.1, this Lease and each of
the obligations and duties of Lessee shall continue as if such notice shall
never have been delivered unless otherwise agreed to by Lessor and Lessee shall
be responsible for all costs and expenses incurred by Lessor, Owner Participant,
Collateral Agent, Administrative Agent and any Lenders in connection therewith.
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(b) For purposes of this Section 17.1, "Early Termination Payment"
means an amount equal to (i) the Termination Value of all but not less than all
of the Equipment computed as of the Early Termination Date, plus (ii) all Basic
Rent then due and owing with respect to the Equipment, plus (iii) all other Rent
due for the Equipment on the Early Termination Date, plus (iv) all accrued and
unpaid Rent owing for periods prior to the Early Termination Date, plus (v) any
Break Costs associated with such early termination.
(c) Upon payment in full of the Early Termination Payment and
satisfaction of all other conditions set forth herein in connection with a
termination of this Lease with respect to the Equipment pursuant to this Section
17.1, Lessor shall convey to Lessee or its designee its title thereto pursuant
to one or more instruments reasonably satisfactory to the parties thereto but
subject to the following sentence. Lessor's sale of the Equipment hereunder
shall be on an as-is, where-is basis, without any recourse to, or representation
or warranty by, Lessor except as to its ownership thereof and the absence of any
Lien placed on the Equipment by or through Lessor, Owner Participant, any Lender
or any successor thereto. Lessee shall pay, or reimburse Lessor for the payment
of, all applicable Taxes imposed as a result of such sale, and all fees, costs
and expenses of such sale incurred by Lessor, and any other amounts for which,
if not paid, Lessor will be liable or which, if not paid, would constitute a
Lien on the Equipment and such obligation shall survive the termination of this
Lease.
Section 17.2. End of Term Options. At the end of the Initial Lease Term
and each Renewal Term, as the case may be, Lessee shall have the option to
either (a) renew this Lease pursuant to Section 1.4 hereof (except at the end of
the fourth Renewal Term), (b) return all but not less than all of the Equipment
in accordance with Article XII hereof, in which case, Lessee shall be obligated
to market the Equipment in accordance with the provisions of Section 17.3 hereof
or (c) purchase all but not less than all of the Equipment for a purchase price
equal to the Termination Value of all Equipment and the Basic Rate due and
payable for the Equipment on the last day of the Term of this Lease and all
Supplemental Rent due on such date. Lessee shall notify Lessor of its election
in writing at least 180 days prior to the expiration of the Initial Lease Term
or Renewal Term, as the case may be. In the event that Lessee fails to deliver a
notice to Lessor pursuant to this Section 17.2, Lessee shall be deemed (i)
during the Initial Lease Term and the first three (3) Renewal Terms, to have
elected to renew this Lease and (ii) during the fourth Renewal Term, to have
elected to purchase all but not less than all of the Equipment pursuant to
Section 17.2(c) hereof on the last day of the Initial Lease Term or Renewal
Term, as the case may be.
Section 17.3. Lessee Marketing Obligations. (a) In the event that
Lessee shall have elected to return the Equipment, provided that no Lease Event
of Default has occurred and is continuing and provided that Lessor has not
otherwise notified Lessee, Lessee, subject to the terms and conditions hereof
and in consultation with Lessor, shall be obligated to market the Equipment
during the Marketing Period, provided, however, that the marketing obligations
shall terminate upon a sale of the Equipment in accordance with Section 17.3(b).
During the Marketing Period, Lessee, as agent for Lessor, at its own cost and
expense, shall use diligent efforts, either by itself or through a nationally
recognized firm of semi-trailer inventory marketers reasonably satisfactory to
Lessor (the "Marketing Agent"), to solicit bona fide bids for the Equipment from
prospective purchasers who are financially capable of purchasing the Equipment
for cash on an as-is, where-is basis, without recourse or warranty. Upon the
request
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of Lessor and at Lessee's sole cost and expense, Lessee shall provide Lessor
with a written report describing in reasonable detail Lessee's efforts during
the Marketing Period to obtain bona fide bids for the purchase of the Equipment,
including, without limitation, a list of all brokers retained and Persons
approached for the purpose of soliciting bids to purchase the Equipment. All
bids received by Lessor or Lessee prior to the end of the Marketing Period shall
be certified by Lessor or Lessee, as the case may be, in writing, stating the
name and address of the bidder and the amount of such bid. During the Marketing
Period, Lessor shall have the right, but not the obligation, to solicit bona
fide bids for the Equipment from prospective purchasers simultaneous with
Lessee's obligations to market the Equipment hereunder.
(b) Marketing Sales. Not later than the expiration of the Marketing
Period and not earlier than the expiration of the Lease and with the prior
written consent of Lessor, Lessee, as agent for Lessor, shall sell the Equipment
to the cash bidder submitting the highest bid. Lessor's obligation to sell the
Equipment is subject to the following: (i) Lessor shall have actually received
(x) the proceeds from the sale of the Equipment in immediately available funds,
which funds shall be applied in accordance with the provisions of Section
17.3(c) hereof; and (y) the deficiency payment, if any, which is payable under
Section 17.3(c) hereof; (ii) Lessee shall have the right to match the amount of
such bid, acquire ownership of the Equipment and compel the release of this
Lease and the Lease Supplement by paying to Lessor the amount of such bid plus
such deficiency, if any, in immediately available funds, which shall be applied
in accordance with the provisions of Section 17.3(c) hereof; and (iii) Lessor
shall not be obligated to agree to any proposed sale of the Equipment or to
terminate this Lease or the Lease Supplement if the Net Proceeds of Sale for the
Equipment will be less than the Maximum Lessor Risk Amount applicable to the
Equipment at such time and in such case Lessor shall have the right to require
Lessee to return the Equipment in accordance with Article XII hereof provided,
however, that any election by Lessor to withhold such consent shall not reduce
or alleviate Lessee's obligation to pay the Maximum Lessee Risk Amount pursuant
to Section 17.3(c) hereof.
(c) Marketing Period Adjustment. (i) This Section 17.3(c)(i) shall
apply only to a sale of the Equipment to a third party or Lessee during the
Marketing Period pursuant to Section 17.3(b) hereof. If the Net Proceeds of Sale
for the Equipment are less than the Termination Value, Lessee shall, at the time
of such sale, pay to Lessor in immediately available funds an amount equal to
the deficiency between such Net Proceeds of Sale and Termination Value as an
adjustment to the Rent payable under this Lease, provided, however, that if no
Unmatured Lease Default or Lease Event of Default shall have occurred and be
continuing hereunder, the amount of the deficiency payable by Lessee with
respect to the Equipment shall not exceed the Maximum Lessee Risk Amount. If the
Net Proceeds of Sale for the Equipment equal or exceed Termination Value, Lessor
shall pay the amount of any such excess to Lessee solely from any such proceeds.
(ii) If, upon the expiration of the Marketing Period, a sale
of the Equipment to a third party or to Lessee pursuant to Section
17.3(b) hereof has not been consummated or Lessee has not made all
payments to Lessor required pursuant to Section 17.3(c)(i) hereof, then
Lessee shall, on the last day of the Marketing Period, pay to Lessor,
in immediately available funds, as an adjustment to the Rent payable
under this Lease the following amounts: the sum of (A) either (x) if on
the last day of the Marketing Period no Unmatured Lease Default or
Lease Event of Default shall have occurred and be
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continuing hereunder, an amount equal to the Maximum Lessee Risk
Amount, or (y) if on the last day of the Marketing Period an Unmatured
Lease, Default or Lease Event of Default shall have occurred and be
continuing hereunder, the Termination Value of the Equipment and (B)
the Basic Rent due and payable for the Equipment on the last day of the
Marketing Period and all Supplemental Rent. In the event Lessee shall
pay the amounts set forth in (A)(x) and (B), if Lessor shall
subsequently sell the Equipment to a third party after the expiration
of the Marketing Period, Lessor shall remit to Lessee the excess of the
Net Proceeds of Sale over all amounts owed the Lenders and the Owner
Participant under the Operative Documents. Lessee shall remain liable
for the payment of, and upon the consummation by Lessor of the sale of
the Equipment after the expiration of the Marketing Period, Lessee
shall pay, or reimburse Lessor for or Lessor shall deduct from any
amounts remitted to Lessee, all applicable Taxes imposed as a result of
such sale, all fees, costs and expenses, including without limitation,
all applicable asset management expenses, sale expenses and interest
carrying costs of such sale incurred by Lessor, and any other amounts
for which, if not paid, Lessor will be liable or which, if not paid,
would constitute a Lien on the Equipment, and such obligation shall
survive the termination of this Lease.
(d) Payments and Obligations During Marketing Period. During the
Marketing Period, Lessee covenants and agrees that Lessee shall continue to
observe all of its obligations under this Lease, including its obligation to pay
Rent.
(e) Termination Provisions. If no sale of the Equipment has been
effected during the Marketing Period, then:
(i) Lessee shall, forthwith provide to the Lessor or its
designee all records and all other information, documentation and
manuals relating to the maintenance, storage and insurance of the
Equipment delivered to it, Guarantor or the Marketing Agent by Lessee
or otherwise developed during the Marketing Period (including, without
limitation, names and addresses of all service providers utilized
during the Marketing Period, and the terms and conditions, and
documentation, relating thereto);
(ii) Lessee shall, or shall cause the Marketing Agent, if any,
to thereafter consult in good faith with Lessor or its designees as to
offerees of the Equipment contacted, amounts offered for the Equipment
and for other non-proprietary marketing information developed over the
Marketing Period in connection with the attempted disposition of the
Equipment;
(iii) Lessee, Guarantor and any Marketing Agent shall
forthwith relinquish all control over, and deliver to Lessor or its
designees, the Equipment and all books and records relating thereto and
cease all marketing efforts with respect to the Equipment; and
(iv) Lessee shall forthwith pay all accrued and unpaid sums
required to be paid under Section 17.3(d) hereof to the extent arising
and accrued during the Marketing Period.
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Upon satisfaction of the obligations set forth in clauses (i) through
(iv) above, Lessee shall have no further obligations hereunder, except those
which by their terms survive the termination of this Lease.
(f) Miscellaneous Marketing Matters.
(i) Further Assurances. Upon, or at any time after, the
termination of the Marketing Period, Lessee shall perform such acts as
shall be reasonably requested of it by Lessor in order to carry out the
provisions of Section 17.3(d) hereof.
(ii) Certain Indemnities. During the Marketing Period, Lessee
shall continue to indemnify and hold harmless the Indemnitees as
provided in Articles VII and VIII of the Participation Agreement and
such indemnities shall survive the expiration or earlier termination of
this Lease and of the Term and the Marketing Period.
(iii) Marketing Agent. All reasonable fees and expenses of any
Marketing Agent shall be borne by Lessee and the Marketing Agent shall
have no claim or Lien on the Equipment or any Unit thereof with respect
thereto.
ARTICLE XVIII
MISCELLANEOUS
Section 18.1. Payments to Lessor.
All payments to be made to Lessor under the Operative Documents by wire
transfer of immediately available funds shall be made to:
State Street Bank and Trust Company
ABA #: ▇▇▇-▇▇▇-▇▇▇
Account #: ▇▇▇▇-▇▇▇-▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Ref: APEX/Wabash Statutory Trust-2000
All payments to be made to Collateral Agent under the Operative Documents by
wire transfer of immediately available funds shall be made to:
Fleet National Bank
ABA #: ▇▇▇▇▇▇▇▇▇
Account Name: Fleet Capital Leasing
Account #: 015552 776700101
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Ref: Wabash Statutory Trust-2000
Section 18.2. Right of Lessor to Perform. If Lessee shall fail to
comply with any of its covenants herein contained, Lessor may, but shall not be
obligated to, make advances to perform the same and to take all such action as
may be necessary to obtain such performance. Any payment so made by Lessor and
all costs and expenses (including, reasonable attorneys' fees and expenses)
incurred in connection therewith shall be payable by Lessee to Lessor upon
demand as
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Supplemental Rent hereunder, with interest thereon at the Overdue Rate. No such
action shall be deemed a repossession of any of the Equipment, and no such
advance, performance or other act shall be deemed to relieve Lessee from any
default hereunder.
Section 18.3. Covenant of Quiet Enjoyment. During the Term and so long
as no Unmatured Lease Default or Lease Event of Default shall have occurred and
be continuing, Lessor covenants and agrees that Lessee shall have the right to
uninterrupted use and enjoyment of each Unit subject hereto on the terms and
conditions provided herein without any interference from Lessor or Owner
Participant or those claiming through or against Lessor (other than claims of
mechanics, suppliers, materialmen and laborers for work or services performed or
materials furnished in connection with the Equipment or any Unit thereof arising
out of the right of Lessor to perform for Lessee as set forth in Section 18.2
hereof), including, but not limited to, any assignee or lender or mortgagee of
Lessor or Owner Participant. For purposes of this Section 18.3, the delivery of
notices of default or nonperformance delivered to Lessee under and pursuant to
Section 13.1 shall not be deemed to constitute a violation of this Section 18.3.
Section 18.4. Estoppel Certificates. Each party hereto agrees that at
any time and from time to time during the term of this Lease, it will promptly,
but in no event later than 21 days after request by the other party hereto,
execute, acknowledge and deliver to such other party or to any prospective
purchaser, assignee or mortgagee designated by such other party, a certificate
stating, to the best of such party's knowledge, (a) that this Lease is
unmodified and in full force and effect (or if there have been any
modifications, that this Lease is in full force and effect as modified, and
setting forth any modifications); (b) the date to which Basic Rent, Supplemental
Rent and other sums payable hereunder have been paid; (c) whether or not there
is an existing Unmatured Lease Default by Lessee in the payment of Basic Rent or
any other sum of money due or required to be paid hereunder, and whether or not
there is any other existing Unmatured Lease Default by Lessee with respect to
which a notice of default has been served or of which the signer has actual
knowledge, and, if there is any such Unmatured Lease Default, specifying the
nature and extent thereof; and (d) whether or not there are any setoffs,
defenses or counterclaims against enforcement of the obligations to be performed
hereunder existing in favor of the party executing such certificate.
Section 18.5. No Merger. Lessee agrees that there shall be no merger of
this Lease or of any sublease under this Lease or of any leasehold or
subleasehold estate hereby or thereby created with the ownership interest in the
Equipment or any part thereof by reason of the fact that the same person, firm,
corporation or other entity may acquire or own or hold, directly or indirectly,
(a) this Lease or any sublease or any leasehold or subleasehold estate created
hereby or thereby or any interest in this Lease or any such sublease or in any
such leasehold or subleasehold estate and (b) (i) the ownership interest in the
Equipment or any part thereof or (ii) the beneficial interest in the Equipment.
This Lease shall not be terminated for any cause except as expressly provided
herein and any instrument of transfer shall so provide.
Section 18.6. Third-party Beneficiaries. Nothing in this Lease shall be
deemed to create any right in any Person not a party hereto (other than Owner
Participant, Collateral Agent, Administrative Agent and each Lender and the
permitted successors and assigns of any such Person and any party hereto) and
this instrument shall not be construed in any respect to be a contract in whole
or in part for the benefit of a third party except as aforesaid.
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Section 18.7. Execution in Counterparts. This Lease, and any lease
supplemental hereto, may be executed in several counterparts, each of which so
executed shall be deemed to be an original and in each case such counterparts
shall constitute but one and the same instrument. To the extent, if any, that
this Lease and the Lease Supplements shall constitute chattel paper (within the
meaning of any applicable Uniform Commercial Code provision), no security
interest in this Lease and the Lease Supplements may be created through the
transfer or possession of any counterpart other than the original counterpart,
which shall be identified for such purposes as the counterpart containing the
receipt therefor executed by Collateral Agent as mortgagee under the Security
Agreement on the signature pages hereof or thereof.
Section 18.8. Currency. All amounts and moneys referred to in this
Lease shall be construed to mean money which at the time is lawful money of the
United States of America.
Section 18.9. Notices. Unless otherwise specifically provided herein,
all notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to any
Person shall be given in writing by United States mail, by nationally recognized
courier service and any such notice shall become effective five (5) Business
Days after being deposited in the mails, certified or registered return receipt
requested with appropriate postage prepaid or one Business Day after delivery to
a nationally recognized courier service specifying overnight delivery and shall
be directed to the address of such Person as indicated on Schedule I to the
Participation Agreement. From time to time any party may designate a new address
for purposes of notice hereunder by written notice to each of the other parties
hereto in accordance with this Section.
Section 18.10. Grant of Security Interest. Lessee shall be the owner of
the Equipment on the certificates of title with respect thereto. The Equipment
shall be subject to this Lease. As security for its obligations under this
Lease, Lessee does hereby grant to Lessor a first priority security interest in,
and assigns, sets over and transfers to Lessor, its successors and assigns, all
of its right, title and interest in, to, under and with respect to: (i) the
Equipment, including any Replacement Units, (ii) all books and records relating
to the Equipment; (iii) all property that may, from time to time, be subjected
to this Lease and the Lien hereof by a Lease Supplement or otherwise; (iv) any
and all Subleases and all extensions and renewals thereof; (v) all rent and any
and all other sums of whatever nature due, now or hereafter, under or pursuant
to the Subleases (including without limitation, the price paid pursuant to the
exercise by any Sublessee of any purchase option contained in any Sublease) or
in connection with the Equipment; (vi) to the extent the Equipment covered by
this Lease may constitute or be deemed to be Lessee's inventory ("Inventory"),
such Inventory, which shall mean all Equipment offered or furnished under any
contract of service or intended for lease, any and all additions, attachments,
accessories, rentals, accounts and contracts with respect to the Equipment which
may now exist of hereafter arise, together with all rights thereunder and all
rental and other payments and purchase options due and to become due thereunder,
any and all proceeds payable for such property, all insurance, bonds and/or
other proceeds of the property and all returned or repossessed Equipment now or
at any time or times hereafter in possession of or under the control of Lessee
or Lessor; (vii) all accounts receivable now owned by Lessee or hereafter
acquired or owned by Lessee, solely to the extent that such accounts arise or
result from any lease or other disposition of any of the Equipment or the
Inventory, including, but not limited to, any Sublease or any right of Lessee to
payment for Equipment leased whether or not evidenced
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by an instrument or chattel paper, and whether or not such right has been earned
by performance (such accounts, "Accounts Receivable"); (viii) all proceeds of
any insurance maintained with respect to any of the foregoing, all proceeds of
any condemnation, expropriation or requisition payable with respect to any of
the foregoing and all proceeds payable or received with respect to an Event of
Loss, and (ix) all other products and proceeds of the foregoing. Lessor shall
continue to retain the security interests granted herein in all of the
foregoing, as security for the prompt payment when due of Rent and all other
sums due and owing to Lessor pursuant to the terms of this Lease and the
performance and observance by Lessee of all the agreements, covenants and
provisions herein, until Lessee shall have made such payments and shall have
duly performed and observed all such agreements and covenants and provisions
then required hereunder. Notwithstanding anything to the contrary contained
herein, Lessor shall not exercise the rights granted to it hereunder unless and
until an Unmatured Lease Default or Lease Event of Default has occurred and is
continuing.
Section 18.11. Headings, etc. The Table of Contents and headings of the
various Articles and Sections of this Participation Agreement are for
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof.
Section 18.12. GOVERNING LAW. THIS LEASE SHALL IN ALL RESPECTS BE
GOVERNED BY THE LAW OF THE COMMONWEALTH OF MASSACHUSETTS (EXCLUDING ANY
CONFLICT-OF-LAW OR CHOICE-OF-LAW RULES WHICH MIGHT LEAD TO THE APPLICATION OF
THE INTERNAL LAWS OF ANY OTHER JURISDICTION) AS TO ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE.
Section 18.13. Severability. Any provision of this Lease that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 18.14. Liability Limited.
(a) The parties hereto agree that except as specifically set forth
herein or in any other Operate Document, the Trustee shall have no personal
liability whatsoever to any other Participant, the Lessee, the Guarantor or
their respective successors and assigns for any claim or obligation based on or
in respect hereof or any of the other Operative Documents (including, without
limitation, the repayment of the Loans) or arising in any way from the
transactions contemplated hereby or thereby and recourse, if any, shall be
solely had against the Trust Estate (it being acknowledged and agreed by each
party hereto that all such personal liability of the Trustee is expressly waived
and released as a condition of, and as consideration for, the execution and
delivery of the Operative Documents by the Trustee); provided, however, that the
Trustee shall be liable in its individual capacity (a) for its own willful
misconduct or gross negligence, (b) breach of any of its representations,
warranties or covenants under the Operative Documents, or (c) for any Tax based
on or measured by any fees, commission or compensation received by it for acting
as the Trustee as contemplated by the Operative Documents. It is understood and
agreed that the Trustee shall have no personal liability under any of the
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Operative Documents as a result of acting pursuant to and consistent with any of
the Operative Documents.
Section 18.15. Further Assurances. The parties hereto shall promptly
cause to be taken, executed, acknowledged or delivered, at the sole expense of
the Lessee, all such further acts, conveyances, documents and assurances as the
other parties may from time to time reasonably request in order to carry out and
preserve the security interests and liens (and the priority thereof) intended to
be created pursuant to this Lease, the other Operative Documents, and the
transactions thereunder (including, without limitation, the preparation,
execution and filing of any and all Uniform Commercial Code financing statements
and other filings or registrations which the parties hereto may from time to
time request to be filed or effected); provided, however, that the Lessee shall
not be required to pay expenses pursuant to this Section to the extent arising
from a breach or alleged breach by the Lenders or the Owner Participant of any
agreement entered into in connection with the assignment or participation of any
Loan or Equity Investment. The Lessee, at its own expense and without need of
any prior request from any other party, shall take such action as may be
necessary (including any action specified in the preceding sentence), or as so
requested, in order to maintain and protect all security interests provided for
hereunder or under any other Operative Document.
Section 18.16. SUBMISSION TO JURISDICTION. THE LESSEE HEREBY SUBMITS TO
THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF THE COMMONWEALTH OF MASSACHUSETTS FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS PARTICIPATION AGREEMENT OR ANY OF
THE OTHER OPERATIVE DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE
LESSEE IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT 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 18.17. WAIVER OF JURY TRIAL. THE PARTIES HERETO VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS PARTICIPATION AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
ANY OF THE PARTIES HERETO. THE PARTIES HERETO HEREBY AGREE THAT THEY WILL NOT
SEEK TO CONSOLIDATE ANY SUCH LITIGATION WITH ANY OTHER LITIGATION IN WHICH A
JURY TRIAL HAS NOT OR CANNOT BE WAIVED. THE PROVISIONS OF THIS SECTION 18.16
HAVE BEEN FULLY NEGOTIATED BY THE PARTIES HERETO AND SHALL BE SUBJECT TO NO
EXCEPTIONS. EACH OBLIGOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER OPERATIVE DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR EACH OF THE LESSOR AND THE
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LENDERS ENTERING INTO THIS PARTICIPATION AGREEMENT AND EACH SUCH OTHER OPERATIVE
DOCUMENT.
Section 18.18. Nature of Transaction. Lessee and Lessor intend that the
transactions evidenced by this Lease and the Operative Documents constitute
operating leases pursuant to FASB 13 for accounting purposes. To the extent that
this Lease and the Operative Documents reflect the lease form alone, they do so
for convenience only. For purposes of all income, franchise and other taxes
imposed upon or measured by income, Lessee and Owner Participant intend that
this Lease and the transaction contemplated by the Operative Documents shall be
treated as a loan to Lessee secured by the Equipment, with Lessee as owner of
the Equipment, and that all payments to Lessor hereunder of Basic Rent,
Termination Value, Net Proceeds of Sale or any deficiency pursuant to Section
17.3 shall be treated as payments of principal and interest, as appropriate.
Guarantor and the Owner Participant may only take deductions, credits,
allowances and other reporting positions on their respective returns, reports
and statements which are consistent with such treatment, unless required to do
otherwise by an appropriate taxing authority or pursuant to a clear change in
Applicable Law (an "Inconsistent Position"); provided, however, that if (i) an
appropriate Governmental Authority or a clear change in Applicable Law requires
the Owner Participant or Guarantor to take an Inconsistent Position, such party
shall promptly notify the other party and (ii) Owner Participant is required to
take an Inconsistent Position (or does so pursuant to a notice from the
Guarantor) other than due to a change in Applicable Law, Owner Participant shall
pay to the Guarantor, or Guarantor shall pay to Owner Participant, as the case
may be, such amount or from time to time such amounts, as calculated by Owner
Participant in its sole good faith discretion, as will put Owner Participant in
the same position on an After-Tax Basis as if all of its taxes referred to in
the first sentence of this Section 18.17 were calculated in accordance with the
treatment set forth therein.
[Remainder of page intentionally left blank;
signature pages follow.]
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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the date first set forth above.
LESSOR:
WABASH STATUTORY TRUST-2000, a
Connecticut Statutory Trust
By: State Street Bank and Trust Company
of Connecticut, National Association,
not in its individual capacity but solely as
Trustee
By:______________________________________________
Name:
Title:
LESSEE:
APEX TRAILER LEASING & RENTALS, L.P., a Delaware
limited partnership
By: Wabash National Corporation, a
Delaware corporation, its
general partner
By:______________________________________________
Name:
Title:
130
EXHIBIT A
[Form of Lease Supplement]
LEASE SUPPLEMENT NO. ____
Between
WABASH STATUTORY TRUST - 2000,
as Lessor
and
APEX TRAILER LEASING & RENTALS, L.P.,
as Lessee
Dated as of ____________, 20__
THIS LEASE SUPPLEMENT NO. ___ HAS BEEN MANUALLY EXECUTED IN COUNTERPARTS. TO THE
EXTENT, IF ANY, THAT THIS LEASE SUPPLEMENT NO. ___ 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 SUPPLEMENT NO. __
MAY BE CREATED THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OF THIS
LEASE SUPPLEMENT NO. __ OTHER THAN COUNTERPART NO. 1.
This is Counterpart No. __.
131
LEASE SUPPLEMENT NO. __, dated ____________, 20__, between WABASH
STATUTORY TRUST - 2000, a Connecticut business trust ("Lessor"), and APEX
TRAILER LEASING & RENTALS, L.P., a Delaware limited partnership ("Lessee").
W I T N E S S E T H:
WHEREAS, Lessor and Lessee have heretofore entered into that certain
Equipment Lease, dated as of December 29, 2000 (herein called the "Lease") (all
capitalized terms used herein without definition shall have the meanings
specified in Appendix A to the Participation Agreement dated as of December 29,
2000 by and among Lessee, Guarantor, Lessor, Lenders, Fleet Capital Corporation,
as Owner Participant and Fleet Capital Corporation, as Administrative Agent and
Collateral Agent (as the same may be amended, modified or supplemented from time
to time, the "Participation Agreement")). The Lease provides for the execution
and delivery from time to time of Lease Supplements, each substantially in the
form hereof for the purpose of leasing specific Units of Equipment under the
Lease as and when delivered by Lessor to Lessee in accordance with the terms
thereof;
WHEREAS, the Lease relates to the Units of Equipment described below;
NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration, Lessor and Lessee hereby agree as follows:
2. Lessor has hereby delivered and leased to Lessee under the Lease,
and Lessee has accepted and leased from Lessor under the Lease, as of the date
hereof, the Units of Equipment more particularly identified on Annex A attached
hereto.
3. The aggregate Equipment Cost for the Equipment leased hereunder is
$____________(1)
4. The aggregate amount of Advances attributable to the Equipment
leased hereunder is $________________(1)*
5. The aggregate principal amount of Loans attributable to the
Equipment leased hereunder is $________________.(2)
6. The aggregate amount of Equity Investments attributable to the
Equipment leased hereunder is $_________.(3)
----------
(1) The aggregate Equipment Cost for the Equipment leased hereunder and
the aggregate amount of the Advances attributable to the Equipment leased
hereunder shall be the same amount and shall be determined as set forth in the
definition of the "Equipment Cost".
(2) The aggregate principal amount of the Loans attributable to the
Equipment leased hereunder shall be equal to 96% of the Equipment Cost for the
Equipment leased hereunder.
(3) The aggregate amount of Equity Investments attributable to the
Equipment leased hereunder shall be equal to 4% of the Equipment Cost of the
Equipment leased hereunder.
Lease Supplement No.
132
7. The amount of the Additional Collateral or the amount of the Letter
of Credit is $______________.
8. The Equipment Cost for each Unit of Equipment described on Annex A
shall be the amount set forth opposite such Unit of Equipment on Annex A.(4)
9. The Initial Lease Term for the Equipment leased hereunder shall
commence on the date hereof and, except as otherwise provided in the Lease,
shall end on June 30, 2002.
10. Lessee hereby confirms its agreement to pay Lessor, in accordance
with the terms of Article I of the Lease, Basic Rent and Supplemental Rent for
the Equipment leased hereunder throughout the Initial Lease Term and any Renewal
Term in accordance with Article I of the Lease.
11. The Maximum Lessee Risk Percentage with respect to the Equipment
leased hereunder, as of each Payment Date, is set forth on Schedule I attached
hereto.
12. The Maximum Lessor Risk Percentage with respect to the Equipment
leased hereunder, as of each Payment Date, is set forth on Schedule I attached
hereto.
13. All of the terms and provisions of the Lease are hereby
incorporated by reference in this Lease Supplement to the same extent as if
fully set forth herein.
14. This Lease Supplement may be executed in any number of counterparts
(and each of the parties hereto shall not be required to execute the same
counterpart). Each counterpart of this Lease Supplement, including a signature
page executed by each of the parties hereto, shall be an original counterpart of
this Lease Supplement, but all of such counterparts together shall constitute
one instrument.
15. This Lease Supplement shall in all respects be governed by, and
construed in accordance with, the laws of the State of New York, including all
matters of construction, validity and performance.
----------
(4) The sum of the Equipment Costs for all Units of Equipment described
on Annex A shall equal the Equipment Cost for the Equipment leased hereunder.
-2-
133
IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement
to be duly executed on the day and year first above written.
WABASH STATUTORY TRUST - 2000, Lessor
By: State Street Bank and Trust Company
of Connecticut, National Association, not
in its individual capacity but solely as
Trustee
By:_______________________________________
Name:
Title:
APEX TRAILER LEASING & RENTALS, L.P., Lessee
By:________________________________________________
Name:
Title:
134
ANNEX A
DESCRIPTION OF LEASED EQUIPMENT
Unit of Leased Equipment Unit Markings Principal Garage Equipment Cost
------------------------ ------------- ---------------- --------------
135
Schedule I
Payment Dates
Occurring After Term Termination Value Maximum Lessee Maximum Lessor
Commencement Date Percentage* Risk Percentage* Risk Percentage*
1
2
3
4
5
6
7
8
9
.
.
.
72
*expressed as percentage of Equipment Cost of the Equipment (after payment of
Basic Rent on corresponding Payment Date).
136
Exhibit B
[Attach Form of Sublease]