EXHIBIT 4.3
COUNTERPART NO. __ OF __ SERIALLY NUMBERED MANUALLY EXECUTED COUNTERPARTS. TO
THE EXTENT THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM
COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE CREATED THROUGH
THE TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER THAN COUNTERPART NO. 1.
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LEASE INTENDED AS SECURITY
Dated as of December 3, 1999
among
LEVI ▇▇▇▇▇▇▇ & CO.
as Lessee
FIRST SECURITY BANK, NATIONAL ASSOCIATION
as Agent
and
THE PERSONS LISTED ON SCHEDULE I HERETO
as Lessors
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TABLE OF CONTENTS
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PAGE
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ARTICLE I DEFINITIONS.............................................................................. 2
ARTICLE II GRANT OF SECURITY INTEREST AND LEASE; GENERAL PROVISIONS................................. 14
Section 2.1 Funding; Payment of Funded Amount................................................. 14
Section 2.2 Application of Funds; Lease of Collateral......................................... 14
Section 2.3 Time and Place of Funding Date.................................................... 15
Section 2.4 Nature of Transaction............................................................. 15
Section 2.5 Intentionally Omitted............................................................. 15
Section 2.6 NO WARRANTY....................................................................... 15
Section 2.7 Legal and Tax Representation...................................................... 16
Section 2.8 Computations...................................................................... 16
Section 2.9 Capital Rent...................................................................... 16
Section 2.10 Conditions for Subsequent Tranche Fundings........................................ 16
ARTICLE III CONDITIONS TO FUNDING DATE............................................................... 17
Section 3.1 Conditions to the Tranche I Funding .............................................. 17
Section 3.2 Conditions to Each Subsequent Tranche Funding..................................... 19
Section 3.3 Other Documents................................................................... 22
ARTICLE IV TERM, RENT AND PAYMENT................................................................... 22
Section 4.1 Term.............................................................................. 22
Section 4.2 Rent Payments..................................................................... 22
Section 4.3 Place and ▇▇▇▇▇▇ of Payment....................................................... 22
Section 4.4 Net Lease......................................................................... 23
Section 4.5 Overdue Amounts................................................................... 23
Section 4.6 No Termination or Abatement....................................................... 23
ARTICLE V POSSESSION, ASSIGNMENT, USE AND MAINTENANCE OF COLLATERAL................................ 24
Section 5.1 Possession and Use of Collateral; Compliance with Laws............................ 24
Section 5.2 Subleases and Assignments......................................................... 24
Section 5.3 Maintenance....................................................................... 26
Section 5.4 Alterations, Modifications, etc................................................... 26
Section 5.5 Liens............................................................................. 27
Section 5.6 Identifying Numbers; Legend; Changes; Inspection.................................. 28
ARTICLE VI RISK OF LOSS; INSURANCE.................................................................. 28
i
Section 6.1 Casualty and Replacement.......................................................... 28
Section 6.2 Insurance Coverages............................................................... 31
Section 6.3 Insurance Certificates............................................................ 32
ARTICLE VII INDEMNIFICATION......................................................................... 32
Section 7.1 General Indemnification........................................................... 32
Section 7.2 General Tax Indemnity............................................................. 33
Section 7.3 After-Tax Basis................................................................... 35
ARTICLE VIII EVENTS OF DEFAULT; REMEDIES............................................................. 36
Section 8.1 Events of Default................................................................. 36
Section 8.2 Remedies.......................................................................... 38
Section 8.3 Sale of Collateral................................................................ 39
Section 8.4 Application of Proceeds........................................................... 39
Section 8.5 Right to Perform Obligations...................................................... 39
Section 8.6 Power of Attorney................................................................. 40
Section 8.7 Remedies Cumulative; Consents..................................................... 40
ARTICLE IX AGENT................................................................................... 40
Section 9.1 Appointment of Agent; ▇▇▇▇▇▇ and Authorization to Take Certain Actions............ 40
Section 9.2 Reliance.......................................................................... 41
Section 9.3 Action Upon Instructions Generally................................................ 42
Section 9.4 Indemnification................................................................... 42
Section 9.5 Independent Credit Investigation.................................................. 43
Section 9.6 Refusal to Act.................................................................... 43
Section 9.7 Resignation or Removal of Agent; Appointment of Successor......................... 44
Section 9.8 Separate Agent.................................................................... 44
Section 9.9 Termination of Agency............................................................. 44
Section 9.10 Compensation of Agency............................................................ 45
Section 9.11 Limitations....................................................................... 45
ARTICLE X DISTRIBUTIONS TO LESSORS................................................................ 45
Section 10.1 Prorata Distribution.............................................................. 45
Section 10.2 Timing of Distribution............................................................ 46
ARTICLE XI LEASE TERMINATION....................................................................... 46
Section 11.1 Release of Collateral............................................................. 46
Section 11.2 Early Termination Right for All of the Collateral................................. 46
Section 11.3 Early Payment and Termination Rights for Less Than All of the Collateral.......... 46
Section 11.4 Right to Sell A Unit.............................................................. 47
ii
ARTICLE XII REPRESENTATIONS AND WARRANTIES.......................................................... 47
Section 12.1 Representations and Warranties of Lessee.......................................... 47
Section 12.2 Representations and Warranties of Lessors......................................... 53
Section 12.3 Representations and Warranties of Agent........................................... 53
ARTICLE XIII COVENANTS............................................................................... 54
Section 13.1 Covenants of Lessee............................................................... 54
Section 13.2 Covenants of Agent................................................................ 57
Section 13.3 Covenants of Lessors.............................................................. 58
ARTICLE XIV REGISTRATION, TRANSFER, EXCHANGE,REPLACEMENT AND ASSIGNMENT OF CERTIFICATES............. 58
Section 14.1 Certificates Represent Lessor Interests........................................... 58
Section 14.2 Lost, Stolen or Damaged Certificates.............................................. 59
Section 14.3 Lessor Assignments................................................................ 59
ARTICLE XV OWNERSHIP AND GRANT OF SECURITY INTEREST................................................ 60
Section 15.1 Grant of Security Interest........................................................ 60
Section 15.2 Retention of Proceeds............................................................. 60
ARTICLE XVI MISCELLANEOUS........................................................................... 61
Section 16.1 Payment of Transaction Costs and Other Costs...................................... 61
Section 16.2 Effect of Waiver.................................................................. 61
Section 16.3 Survival of Covenants............................................................. 61
Section 16.4 Applicable Law.................................................................... 62
Section 16.5 Effect and Modification........................................................... 62
Section 16.6 Notices........................................................................... 62
Section 16.7 Consideration for Consents to Waivers and Amendments.............................. 62
Section 16.8 Counterparts...................................................................... 63
Section 16.9 Severability...................................................................... 63
Section 16.10 Successors and Assigns............................................................ 63
Section 16.11 No Third-Party Beneficiaries...................................................... 63
Section 16.12 Brokers........................................................................... 63
Section 16.13 Captions; Table of Contents....................................................... 63
Section 16.14 ▇▇▇▇▇▇▇▇▇ and Exhibits............................................................ 63
Section 16.15 Submission to Jurisdiction........................................................ 63
Section 16.16 Jury Trial........................................................................ 64
Section 16.17 Confidentiality................................................................... 64
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TABLE OF CONTENTS
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CONTINUED
PAGE
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Schedule I List of Agent and Lessors; Addresses for Notices and Payments
Schedule II Description of Equipment
Schedule III Payment Schedules
Schedule 2.10 Pro Forma Amortization Schedule
Schedule 12.1(b) Recordings, Filings and Governmental Permits
Schedule 12.1 (k) List of Patents, Patent Rights, Trademarks, Service Marks, Trade Names,
Copyrights, Licenses and other Intellectual Property Rights
Exhibit A Form of Funding Date Certificate
Exhibit B Form of Opinion of Counsel to Lessee
Exhibit C Form of Certificate
Exhibit D Form of Officer's Certificate of Lessee
Exhibit E Form of Secretary's Certificate Of Lessee
iv
LEASE INTENDED AS SECURITY
--------------------------
This LEASE INTENDED AS SECURITY (as amended and supplemented from time to
time, this "Lease") is entered into as of December 3, 1999 among: ▇▇▇▇ ▇▇▇▇▇▇▇ &
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CO., a Delaware corporation ("Lessee"), with its principal office at 1155
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Battery ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; FIRST SECURITY BANK, NATIONAL
ASSOCIATION, a national banking association ("Agent"), not in its individual
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capacity (except as specifically set forth herein) but solely in its capacity as
Agent hereunder; and the Persons listed from time to time in Schedule I hereto
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as lessors, as such Schedule may from time to time be amended (each individually
a "Lessor" and collectively the "Lessors"; provided that no such reference shall
------ ------- --------
be deemed to refer to any Person who is not a holder of a Certificate at the
date of determination).
R E C I T A L S:
- - - - - - - -
WHEREAS, the parties intend that this transaction constitutes a lease from
Lessors to Lessee while preserving ownership in the Collateral to Lessee, and
the transaction shall be characterized as a secured financial transaction for
Federal and state tax, bankruptcy, commercial law and UCC purposes; and
WHEREAS, (i) on the applicable Funding Date, each Lessor acquiring a
Certificate on such Funding Date shall transfer to Agent such Lessor's Funding
to be made on such Funding Date in accordance with the provisions and conditions
of this Lease; (ii) on the Tranche I Funding Date, Lessee will grant to Agent,
for the benefit of all Lessors, a security interest in the items of personal
property described on Schedule II hereto (such items, together with any
-----------
replacements that may be hereafter substituted for any thereof and subject to
this Lease from time to time, being referred to collectively as the "Equipment")
---------
and the other Collateral (as hereinafter defined); and (iii) on each applicable
Funding Date, Agent shall advance the Funded Amount funded on such Funding Date
to Lessee in accordance with the provisions and conditions of this Lease; and
WHEREAS, upon the granting of the security interest in the Equipment and
the other Collateral on or prior to the Tranche I Funding Date, each Lessor
shall hold an undivided interest in such security interest equal to such
Lessor's Investment Percentage (as such Investment Percentage may be increased
as a result of Subsequent Tranche Fundings by such Lessor), which undivided
interest shall be represented by a Certificate or Certificates registered in
such Lessor's name, pursuant to Section 14.1 hereof, upon the terms and
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conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual terms and conditions herein
contained, the parties hereto agree as follows:
ARTICLE I
1
DEFINITIONS
In this Lease and each other Operative Document, unless the context
otherwise requires:
(a) any term defined below by reference to another instrument or document
shall continue to have the meaning ascribed thereto whether or not such other
instrument or document remains in effect;
(b) words importing the singular include the plural and vice versa;
(c) words importing a gender include any gender;
(d) a reference to a part, clause, section, article, exhibit or schedule is
a reference to a part, clause, section and article of, and exhibit and schedule
to, such Operative Document;
(e) a reference to any statute, regulation, proclamation, ordinance or law
includes all statutes, regulations, proclamations, ordinances or laws amending,
supplementing, supplanting, varying, consolidating or replacing them, and a
reference to a statute includes all regulations, proclamations and ordinances
issued or otherwise applicable under that statute;
(f) a reference to a document includes any amendment or supplement to, or
replacement or novation of, that document;
(g) a reference to a party to a document includes that party's successors
and permitted assigns; and
(h) a reference to "including" means including without limiting the
generality of any description preceding such term, and for purposes hereof the
rule of ejusdem generis shall not be applicable to limit a general statement
------- -------
followed by or referable to an enumeration of specific matters to matters
similar to those specifically mentioned.
Further, each of the parties to the Operative Documents and their counsel
have reviewed and revised the Operative Documents, or requested revisions
thereto, and the usual rule of construction that any ambiguities are to be
resolved against the drafting party shall be inapplicable in construing and
interpreting the Operative Documents.
"Accrual Rent" shall mean, with respect to each Rent Period, an amount
------------
equal to interest accrued on the Lease Balance outstanding during such period at
the Interest Rate.
"Administrative Charge" means at any time with respect to the Lease Balance
---------------------
being prepaid in whole or in part pursuant to Sections 11.2, 11.3 or 11.4, or
------------- ---- ----
otherwise or being declared or becoming due and payable pursuant to Section 8.2,
-----------
the amount (but not less than zero) obtained by subtracting (X) the aggregate
amount of the Lease Balance prepaid or paid or being declared or
2
becoming due and payable on such date (as the case may be), from (Y) the sum of
the Present Values of (A) the amount of the Lease Balance being so prepaid or
paid or being declared or becoming due and payable (assuming that the Payment
Obligation is satisfied by Lessee at the end of the Term and the payment of such
portion of the Lease Balance as scheduled on Schedule III and each Payment
Schedule) plus (B) the Accrual Rent which would have been payable on the
----
portion of the Lease Balance being prepaid or paid or being declared or becoming
due and payable (assuming that the Payment Obligation is satisfied by Lessee at
the end of the Term, that the Lease Balance will be paid as specified in the
foregoing clause (A), and that all installments of Accrual Rent with respect
thereto will be paid when due in accordance with Schedule III and each Payment
Schedule). "Present Value", for any amount, shall be computed on a quarterly
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basis at a discount rate equal to the sum of 1.00% plus the Treasury Yield. The
"Treasury Yield" shall be determined by reference to the most recent Federal
--------------
Reserve Statistical Release H.15 (519) or any comparable successor publication
which has become available not more than two days prior to the date of
prepayment or payment or the date as of which such amount becomes or is declared
due and payable, as the case may be (or, if such Statistical Release is no
longer published, any publicly available source of similar market data
acceptable to the Required Lessors), and shall be the most recent yield on
actively traded United States Treasury securities adjusted to a constant
maturity equal to the then remaining weighted average life to maturity, rounded
to the nearest month, of the remaining rental obligations under this Lease. If
no maturity exactly corresponding to such rounded weighted average life to
maturity for such obligation shall appear therein, yields for the two most
closely corresponding published maturities shall be calculated pursuant to the
foregoing sentence and the Treasury Yield shall be interpolated from such yields
on a straight-line basis (rounding, in the case of relevant periods, to the
nearest month). If such rates shall not have been so published, the Treasury
Yield shall be calculated on the basis of the arithmetic mean of the arithmetic
means of the secondary market ask rates, as of approximately 3:30 P.M., New York
City time, on such calculation days, for the actively traded U.S. Treasury
security or securities with a maturity or maturities most closely corresponding
to such rounded weighted average life to maturity as reported by three primary
United States Government securities dealers in New York City of national
standing selected in good faith by Agent.
"Affiliate" of any Person shall mean any other Person directly or
---------
indirectly controlling, controlled by or under common control with such Person.
For purposes of this definition, the term "control" (including the correlative
-------
meanings of the terms "controlling," "controlled by" and "under common control
----------- ------------- --------------------
with"), as used with respect to any Person, shall mean the possession, directly
----
or indirectly, of the power to direct or cause the direction of the management
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise, provided (but without limiting the foregoing) that no
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pledge of voting securities of any Person without the current right to exercise
voting rights with respect thereto shall by itself be deemed to constitute
control over such Person.
"Agent" shall have the meaning provided in the introductory paragraph of
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this Lease, and wherever Agent is used herein, such reference shall mean "Agent,
on behalf of the Lessors," unless specifically stated otherwise.
3
"Applicable Administrative Charge" shall mean, as of any date of
--------------------------------
determination in respect of any event, any Administrative Charge determined to
be due and owing in respect of such event.
"Applicable Laws" shall mean all existing and future applicable laws
---------------
(including Environmental Laws), rules, regulations, statutes, treaties, codes,
ordinances, permits, certificates, orders and licenses of, and interpretations
by, any Authority, and applicable judgments, decrees, injunctions, writs, orders
or like action of any court, arbitrator or other administrative, judicial or
quasi-judicial tribunal or agency of competent jurisdiction (including those
pertaining to health, safety or the environment), to which Lessee or any Unit is
subject.
"Appraisal" shall mean an appraisal of the Collateral from an Appraiser
---------
received pursuant to the terms of this Lease.
"Appraised Value" shall mean, (i) with respect to the Collateral as of any
---------------
date of determination, the Fair Market Value of the Collateral as set forth in
the Appraisal therefor as of the Tranche I Funding Date, and (ii) with respect
to any Unit as of any date of determination, the Fair Market Value of such Unit
as set forth in the Appraisal therefor as of the Tranche I Funding Date.
"Appraiser" shall mean (a) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP with respect to the
---------
Collateral as of any Funding Date and (b) with respect to any replacements for
the Collateral pursuant to Section 6.1, such other Person as may be selected by
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the Required Lessors.
"Authority" shall mean any applicable foreign, federal, state, county,
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municipal or other government or governmental, quasi-governmental or regulatory
authority, agency, board, body, commission, instrumentality, court or tribunal,
or any political subdivision of any thereof, or arbitrator or panel of
arbitrators.
"Available Investment Percentage" shall mean, as of any Funding Date, a
-------------------------------
percentage equal to 100% minus the aggregate Investment Percentages of all
Lessors as of the day immediately preceding such Funding Date.
"Basic Rent" shall have the meaning provided in Section 4.2.
---------- -----------
"Board of Directors" shall mean, with respect to a corporation, either the
------------------
board of directors or any duly authorized committee of that board of directors
which, pursuant to the by-laws of such corporation, has the same authority as
that board of directors as to the matter at issue.
"Business Day" shall mean any day on which Federal and state chartered
------------
banks in the State of New York City, New York, San Francisco, California and
Salt Lake City, Utah are open for commercial banking business.
4
"Capital Rent" shall mean, for each Payment Date during the Term, that
------------
portion of the installment of Basic Rent payable on such Payment Date designated
as Capital Rent on Schedule III and each Payment Schedule.
"Casualty" shall mean any of the following events in respect of any Unit:
--------
(a) the loss of such Unit or the loss of use thereof due to theft,
disappearance, destruction or damage beyond economic repair from any cause
whatsoever, or the rendering of such Unit permanently unfit for normal use for
any reason whatsoever (other than obsolescence); (b) any damage to such Unit
which results in an insurance settlement with respect to such Unit on the basis
of a total loss or a constructive or compromised total loss; (c) the permanent
condemnation, confiscation or seizure of, or requisition of title to or use of,
such Unit; or (d) as a result of any Applicable Laws or other action by any
Authority, the use of such Unit in the normal course of Lessee's business shall
have been prohibited, directly or indirectly, for a period equal to the lesser
of (i) 180 consecutive days and (ii) the remaining Term.
"Casualty Amount" shall mean, with respect to any Unit as of any date
---------------
specified for payment thereof, a portion of the Lease Balance equal to the
product obtained by multiplying the entire outstanding Lease Balance by the Unit
Value Fraction of such Unit, plus all Accrual Rent accrued on such portion of
----
the Lease Balance to the date of payment.
"Casualty Proceeds" shall have the meaning specified in Section 6.1(d).
----------------- --------------
"Casualty Recoveries" shall have the meaning provided in Section 6.1(c).
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"Certificate" shall have the meaning provided in Section 14.1.
----------- ------------
"Claims" shall mean liabilities, obligations, damages, losses, demands,
------
penalties, fines, claims, actions, suits, judgments, settlements, utility
charges, costs, fees, expenses and disbursements (including, without limitation,
reasonable legal fees (including allocated time charges of internal counsel) and
reasonable expenses and costs of investigation which, in the case of counsel or
investigators retained by an Indemnitee, shall be reasonable) of any kind and
nature whatsoever.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
----
"Collateral" shall mean all of ▇▇▇▇▇▇'s right, title and interest in and to
----------
each of the following, however arising and whether now existing or hereafter
acquired or arising:
(a) the Equipment (including all Parts thereof, accessions thereto
and replacements and substitutions therefor);
(b) all contracts necessary to operate and maintain the Equipment;
5
(c) any rights to a rebate, offset or other assignment, warranty or
service under a purchase order, invoice or purchase agreement with any
manufacturer of any of the Equipment;
(d) all books, manuals, logs, records, writings, data bases,
information and other property relating to, used or useful in connection
with, evidencing, embodying, incorporating or referring to, any of the
foregoing;
(e) the rights of Lessee to use all software that is used at any time
during the Term in connection with the operation of the Equipment at the
locations where the Equipment is situated, provided that to the extent any
such software is used by Lessee other than in connection with the
Equipment, then in the event Agent exercises any remedy set forth in
Article VIII, Lessee shall be entitled to use that portion of such software
------------
that Lessee uses other than in connection with the Equipment, at no cost to
Lessee; and
(f) all of Lessee's right, title and interest in any Subleases, and
all products, accessions, rents, issues, profits, returns, income and
proceeds of and from any and all of the foregoing Collateral (including
proceeds which constitute property of the types described in clauses (a),
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(b), (c), (d) and (e) above and, to the extent not otherwise included, all
- - - -
payments under insurance (whether or not Lessor is the loss payee thereof),
or any indemnity, warranty or guaranty, payable by reason of loss or damage
to or otherwise with respect to any of the foregoing Collateral).
"Collateral Value" shall mean the lesser of eighty percent (80%) of the
----------------
Appraised Value of the Collateral as of the Tranche I Funding Date, and One
Hundred Fifteen Million Six Hundred Forty-Eight Thousand Dollars ($115,648,000).
"Commitment" shall mean, as to any Lessor, such Lessor's obligation to make
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amounts available in consideration of such Lessor's interest in the Collateral,
in an aggregate amount not to exceed at any one time outstanding the amount set
forth opposite such Lessor's name on Schedule III, as such Schedule may be
------------
amended from time to time to reflect Subsequent Tranche Fundings.
"Competitor" shall mean a Person that directly, or indirectly through any
----------
Affiliates, engages in businesses similar to those engaged in by Lessee and its
Affiliates as of the Tranche I Funding Date, as reasonably determined by ▇▇▇▇▇▇.
"Deposit Account" shall have the meaning specified in Section 6.1(d).
--------------- --------------
"Depreciated Collateral Value" shall mean, as of any Payment Date, the
----------------------------
depreciated Collateral Value as set forth opposite such Payment Date on Schedule
--------
III hereto, provided that if any Unit has been released from the scope of this
--- --------
Lease and the Security Interest pursuant to any of Sections 6.1(a), 11.3 or
--------------- ----
11.4, the Depreciated Collateral Value shall be reduced by subtracting the
----
6
product of the Unit Value Fraction of the released Unit and the Depreciated
Collateral Value as of the date of determination.
"Employee Benefit Plan" shall mean an employee benefit plan (within the
---------------------
meaning of Section 3(3) of ERISA, including any Multiemployer Plan), or any
"plan" as defined in Section 4975(e) (1) of the Code and as interpreted by the
Internal Revenue Service and the Department of Labor in rules, regulations,
releases or bulletins in effect at the time of any determination under the
Operative Documents.
"Environmental Laws" shall mean and include the Resource Conservation and
------------------
Recovery Act of 1976, the Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA), the Hazardous Materials Transportation Act of 1975, the
Toxic Substances Control Act, the Clean Air Act, the Federal Insecticide,
Fungicide and Rodenticide Act and all similar federal, state and local
environmental laws, ordinances, rules, orders, statutes, decrees, judgments,
injunctions, codes and regulations, and any other federal, state or local laws,
ordinances, rules, codes and regulations, and any other federal, state or local
laws, ordinances, rules, codes and regulations relating to the environment,
human health or natural resources or the regulation or control of or imposing
liability or standards of conduct concerning human health, the environment,
Hazardous Materials or the clean-up or other remediation of a Unit.
"Equipment" shall have the meaning provided in the Recitals.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
------
amended.
"ERISA Affiliate" shall mean each entity required to be aggregated with
---------------
Lessee pursuant to the requirement of Section 414(b) or 414(c) of the Code.
"Event of Default" shall have the meaning provided in Section 8.1.
---------------- -----------
"Fair Market Value" shall mean, with respect to any Unit as of any date,
-----------------
the retail price which a purchaser would pay to purchase such Unit in an arm's-
length transaction between a willing buyer and a willing seller, neither of them
being under any compulsion to buy or sell. In making any determination of Fair
Market Value, the Appraiser may assume such Unit has been maintained in
accordance with the requirements of this Lease and that such Unit is in the
condition in which it is required to be hereunder as of the date for which such
determination is made. The Appraiser shall use such reasonable methods of
appraisal as are chosen by Agent upon instructions from the Required Lessors.
"Funded Amount" shall mean, with respect to any Lessor, the amount advanced
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by such Lessor on each Funding Date on which such Lessor advances funds, or with
respect to any Funding Date, the aggregate amount advanced by all Lessors on
such Funding Date.
7
"Funding" shall mean the advance of funds by the Lessors pursuant to
-------
Section 2.1 on the Tranche I Funding Date or any Subsequent Tranche Funding
-----------
Date, as applicable.
"Funding Date" shall mean the Tranche I Funding Date or any Subsequent
------------
Tranche Funding Date, as applicable.
"Funding Date Certificate" shall have the meaning provided in Section 3.1.
------------------------ -----------
"GAAP" shall mean generally accepted accounting principles in the United
----
States as in effect from time to time, applied on a consistent basis both as to
classification of items and amounts.
"Governmental Action" shall mean all applicable permits, authorizations,
-------------------
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, decrees, licenses, exemptions, publications, filings, notices to and
declarations of or with, or required by, any Authority, or required by any
Applicable Laws.
"Hazardous Material" shall mean any substance, waste or material which is
------------------
toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous by listing characteristic or definition under
any Environmental Law, including petroleum, crude oil or any fraction thereof,
petroleum derivatives, by-products and other hydrocarbons, and is or becomes
regulated by any Authority, including any agency, department, commission, board
or instrumentality of the United States, any State or any political subdivision
thereof, and also including asbestos, asbestos containing materials, urea
formaldehyde foam insulation, polychlorinated biphenyls ("PCBs") and radon gas.
----
"Incipient Default" shall mean any condition, event or act, which with
-----------------
notice or lapse of time or both, would become an Event of Default.
"Indemnitee" shall mean each Lessor, Agent (in its individual capacity) and
----------
their respective Affiliates, successors, permitted assigns, permitted
transferees, contractors, employees, officers, directors, shareholders,
partners, participants, representatives and agents; provided, however, that in
-------- -------
no event shall Lessee be an Indemnitee.
"Insurance Requirements" means all terms and conditions of any insurance
----------------------
policy required by this Lease to be maintained by ▇▇▇▇▇▇, and all requirements
of the issuer of any such policy.
"Interest Rate" shall mean, with respect to the Tranche I Funding, a fixed
-------------
interest rate equal to the yield on the U.S. Treasury Security whose maturity
date most closely approximates the weighted average life of the Lease as of the
Funding Date, plus 290 basis points, which shall be set 2 Business Days before
the Tranche I Funding Date, and with respect to any Subsequent Tranche Funding,
such interest rate as Lessee and such Subsequent Tranche Lessors shall agree.
"Investment Percentage" shall mean, as to any Tranche I Lessor, such
---------------------
Tranche I Lessor's Funded Amount on the Tranche I Funding Date divided by the
Collateral Value as of the Tranche
8
I Funding Date, and as to any Subsequent Tranche Lessor, such Subsequent Tranche
Lessor's Funded Amount on the applicable Subsequent Tranche Funding Date divided
by the Depreciated Collateral Value as of the applicable Subsequent Tranche
Funding Date, in each case stated as a percentage, rounded to the nearest
0.001%.
"Lease" shall have the meaning provided in the introductory paragraph of
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this Lease.
"Lease Balance" shall mean, as of any date of determination, (i) with
-------------
respect to all Lessors, the aggregate of the Funded Amounts on all Funding Dates
less all payments of Capital Rent and payments thereof pursuant to Sections 6.1,
------------
8.2, 11.2, 11.3 and 11.4 theretofore paid by ▇▇▇▇▇▇, and (ii) with respect to
--- ---- ---- ----
any individual Lessor, such Lessor's aggregate Funded Amount, less all payments
of Capital Rent and payments thereof pursuant to Sections 6.1, 8.2, 11.2, 11.3
------------ --- ---- ----
and 11.4 theretofore paid by Lessee multiplied by such Lessor's Percentage
----
Interest at the time the particular payment is made.
"Lessee" shall have the meaning provided in the introductory paragraph of
------
this Lease.
"Lessor" shall have the meaning provided in the introductory paragraph of
------
this Lease.
"Lessor Liens" shall mean Liens on or against any Unit (a) which result
------------
from any act of, or any Claim against, Agent or any Lessor unrelated to the
transactions contemplated by the Operative Documents or (b) which result from
any Tax owed by any such Person, except any Tax for which Lessee is obligated to
indemnify.
"Lien" shall mean any lien, mortgage, deed of trust, encumbrance, pledge,
----
charge, lease, easement, servitude, right of others or security interest of any
kind, including any thereof arising under any conditional sale or other title
retention agreement.
"Material Adverse Effect" shall mean any change or changes, effect or
-----------------------
effects or condition or conditions that individually or in the aggregate are or
could reasonably be expected to be materially adverse to (i) the transactions
contemplated by the Operative Documents, (ii) the ability of Lessee to perform
its obligations under the Operative Documents or (iii) the validity or
enforceability of any of the Operative Documents or any rights or remedies under
any thereof.
"Maximum Commitment Amount" shall mean $115,648,000.
-------------------------
"Multiemployer Plan" shall have the meaning assigned to the term
------------------
"multiemployer plan" in Section 3(37) of ERISA.
"Officer's Certificate" of a Person means a certificate signed by a
---------------------
Responsible Officer of such Person.
9
"Operative Documents" shall mean this Lease (including all Annexes,
-------------------
Exhibits and Schedules hereto), the Certificates, and such other documents
regarding the transactions contemplated hereby as the Lessors may reasonably
require.
"Part" shall have the meaning provided in Section 5.4.
---- -----------
"Payment Date" shall mean the last day of each Rent Period.
------------
"Payment Obligation" shall have the meaning specified in Section 11.1.
------------------ ------------
"Payment Schedule" shall mean a schedule with respect to each Lessor making
----------------
a Funding on each Funding Date showing as of each Payment Date the Accrual
Rent, the Capital Rent and the Lease Balance (assuming all Rent payments are
made as scheduled).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
----
succeeding to any or all of its functions under ERISA.
"Pension Plan" shall mean, with respect to any Person, a "pension plan" as
------------
such term is defined in Section 3(2) of ERISA which is subject to Title IV of
ERISA and to which such Person may have any liability or contingent liability,
including, but not limited to, liability by reason of having been a substantial
employer within the meaning of Section 4063 of ERISA at any time during the
preceding five years, or by reason or being deemed to be a contributing sponsor
under Section 4069 of ERISA.
"Percentage Interest" shall mean, with respect to any Lessor, that Lessor's
-------------------
Investment Percentage divided by the aggregate of Investment Percentages of all
Lessors as of the date of determination.
"Permitted Contest" shall mean actions taken by a Person to contest in good
-----------------
faith, by appropriate proceedings initiated timely and diligently prosecuted,
the legality, validity or applicability to any Unit or any interest therein of
any Person of: (a) any law, regulation, rule, judgment, order, or other legal
provision or judicial or administrative requirements; (b) any term or condition
of, or any revocation or amendment of, or other proceeding relating to, any
authorization or other consent, approval or other action by any Authority; or
(c) any Lien or Tax; provided that the initiation and prosecution of such
--------
contest would not: (i) result in, or materially increase the risk of, the
imposition of any criminal liability on any Indemnitee; (ii) materially and
adversely affect the Liens created by the Operative Documents or the right,
title or interest of Agent, on behalf of all Lessors, in or to any of the
Collateral or the right of Agent, on behalf of all Lessors, to receive payment
of all or any portion of any payment of Rent, Lease Balance, Administrative
Charge or any other amount payable under the Operative Documents; (iii) permit,
or pose a material risk of, the sale or forfeiture of, or foreclosure on, any
Unit; or (iv) have a Material Adverse Effect on the Fair Market Value, utility
or remaining useful life of any Unit or any interest therein or the continued
economic operation thereof; and provided further that in any event adequate
-------- -------
reserves in accordance with GAAP are maintained against any adverse
determination of such contest.
"Permitted Liens" shall mean (i) any rights in favor of Agent, on behalf of
---------------
all Lessors, pursuant to this Lease; (ii) materialmen's, mechanics', workers',
artisan's, repairmen's, employees' or other like Liens securing payment of the
price of goods or services rendered in the ordinary course of business for
amounts the payment of which is not overdue or is being contested pursuant to a
Permitted Contest; (iii) any Lessor Lien; and (iv) Liens for current Taxes which
are not delinquent or the validity of which is being contested pursuant to a
Permitted Contest.
"Permitted Modification" shall have the meaning specified in Section 5.4.
---------------------- -----------
"Person" shall mean an individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, limited liability company,
unincorporated organization or Authority.
"Plan" shall mean an "employee benefit plan" as defined in section 3(3) of
----
ERISA.
"Prohibited Transaction" shall mean a transaction that is prohibited under
----------------------
Code Section 4975 or ERISA Section 406 and not exempt under Code Section 4975 or
ERISA Section 408.
"Release" shall mean the release, deposit, disposal or leak of any
-------
Hazardous Material into or upon or under any land or water or air, or otherwise
into the environment, including, without limitation, by means of burial,
disposal, discharge, emission, injection, spillage, leakage, seepage, leaching,
dumping, pumping, pouring, escaping, emptying, placement and the like.
"Rent" shall mean Basic Rent and Supplemental Rent, collectively.
----
"Rent Period" shall mean a period beginning on the Tranche I Funding Date
-----------
and ending on the date which numerically corresponds to the date which is one
day prior to the date three months after the Tranche I Funding Date, and each
consecutive three-month period thereafter; provided, however, that (a) if such
-------- -------
Rent Period would otherwise end on a day which is not a Business Day, then such
Rent Period shall be extended to the next following Business Day, and (b) no
Rent Period may end later than the last day of the Term. The initial Rent Period
for each Subsequent Tranche Funding shall begin on each such Subsequent Tranche
Funding Date and shall end at the end of the then current Rent Period.
Thereafter, the Rent Periods for Subsequent Tranche Fundings shall correspond to
the Rent Periods for the Tranche I Funding.
"Reportable Event" shall mean a "reportable event" described in Section
----------------
4043(b) of ERISA and the regulations thereunder.
"Required Lessors" shall mean, as of the date of determination, holders of
----------------
Certificates representing more than 66-2/3% of the Investment Percentages of all
Lessors as of the date of determination.
11
"Responsible Officer" shall mean the Chairman or Vice Chairman of the Board
-------------------
of Directors, the Chairman or Vice Chairman of the Executive Committee of the
Board of Directors, the President, any Senior Vice President, Executive Vice
President or Vice President, the Secretary, any Assistant Secretary, the
Treasurer, or any Assistant Treasurer or Trust Officer
"Sale" shall mean the sale by Lessee of a Unit as a consequence of Lessee's
----
reorganization of its distribution operations to a party who shall not be an
Affiliate of Lessee, or any Person with whom Lessee or any such Affiliate has an
understanding or arrangement regarding the future use, possession or ownership
of such Unit, in an arm's length transaction for a price substantially equal to
the Fair Market Value of such Unit.
"Schedule III" shall mean the Schedule III attached hereto, as supplemented
------------
on each Subsequent Tranche Funding Date, which shall contain, as of the date of
determination, a Payment Schedule for each Lessor.
"SEC" shall mean the United States Securities and Exchange Commission.
---
"Securities Act" shall mean the Securities Act of 1933.
--------------
"Securities Exchange Act" shall mean the Securities Exchange Act of 1934.
-----------------------
"Security Interest" shall have the meaning defined in Section 15.1.
----------------- ------------
"Service Provider" shall mean a company, which is not an Affiliate of
----------------
Lessee, which operates and manages one or more Units for Lessee pursuant to a
contract with Lessee.
"Site" shall mean each of Lessee's three distribution facilities located at
----
(i) Hebron, Kentucky, (ii) Canton, Mississippi and (iii) Henderson, Nevada.
"Sublease" shall have the meaning provided in Section 5.2.
-------- -----------
"Subsequent Tranche Funding" shall mean any Funding made on any Subsequent
--------------------------
Tranche Funding Date.
"Subsequent Tranche Funding Date" shall mean any Business Day on which (i)
-------------------------------
all of the conditions set forth in Section 2.10 and Article III with respect to
------------ -----------
any Subsequent Tranche Funding have been satisfied or waived as determined in
the sole discretion of the applicable Subsequent Tranche Lessors and (ii) the
Funded Amount transferred to Agent by the Subsequent Tranche Lessors with
respect to such Subsequent Tranche Funding is advanced to Lessee by Agent from
funds Agent has received from such Subsequent Tranche Lessors in accordance with
this Lease.
12
"Subsequent Tranche Lessor" shall mean a Lessor who provides a Funding
-------------------------
pursuant to the terms and provisions of this Lease to Agent on a Subsequent
Tranche Funding Date, and any assignees of such Lessors.
"Subsidiary" shall mean, with respect to any Person, any corporation or
----------
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such Person.
"Supplemental Rent" shall mean any and all amounts, liabilities and
-----------------
obligations other than Basic Rent which Lessee assumes or agrees or is otherwise
obligated to pay under this Lease or any other Operative Document (whether or
not designated as Supplemental Rent) to Agent, any Lessor or any other Person,
including, without limitation, any Administrative Charge, indemnities and
damages for breach of any covenants, representations, warranties or agreements.
"Taxes" and "Tax" shall mean any and all fees (including, without
----- ---
limitation, documentation, recording, license and registration fees), taxes
(including, without limitation, income (whether net, gross or adjusted gross),
gross receipts, sales, rental, use, turnover, value-added, property, excise and
stamp taxes), levies, imposts, duties, charges, assessments or withholdings of
any nature whatsoever, together with any penalties, fines or interest thereon or
additions thereto.
"Term" shall have the meaning provided in Section 4.1.
---- -----------
"Termination Date" shall mean the date on which the Term ends pursuant to
----------------
(a) Article VIII in connection with an Event of Default, (b) Section 11.2 in
------------ ------------
connection with an early termination, (c) Section 11.1 in connection with the
------------
expiration of the Term, or (d) with respect to an individual Unit, Section 11.3
------------
or Section 11.4 in connection with partial prepayments.
------------
"Tranche I Funding" shall mean the Funding made on the Tranche I Funding
-----------------
Date.
"Tranche I Funding Date" shall mean the date on which all of the conditions
----------------------
set forth in Article III with respect to the Tranche I Funding have been
-----------
satisfied or waived in writing and the Tranche I Funding is advanced to Lessee
by Agent from funds Agent has received from the Tranche I Lessors in accordance
with this Lease.
"Tranche I Lessors" shall mean those Lessors who provide Funding to Agent
-----------------
pursuant to the terms and provisions of this Lease on the Tranche I Funding
Date, and any assignees of such Lessors.
"Transaction Costs" shall mean
-----------------
(i) the actual fees and expenses of (a) ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ and (b)
any local or special counsel incurred by Agent in connection with the
negotiation, preparation, execution and delivery of the term sheet, the
commitment letters, the Operative Documents,
13
and the transactions contemplated thereby incurred by Agent through the
Funding Date (subject to the provisions of Section 3.1(f);
--------------
(ii) the fees and expenses of the Appraiser;
(iii) the reasonable fees, costs and expenses of Agent; and
(iv) all costs of searching and perfecting a first priority security
interest in the Collateral.
"UCC" shall mean the Uniform Commercial Code of New York or any other
---
applicable jurisdiction.
"Unit" shall mean all of the Collateral located at a Site constituting an
----
integrated automated distribution warehouse storage and stock selection system,
consisting of, but not being limited to, conveyor systems, sorting equipment,
rotating storage structure units, inspection and work stations, and bulk storage
rack systems, all for the purpose of receiving, sorting, packaging and shipping
Lessee's products to its customers.
"Unit Value Fraction" shall mean, with respect to any Unit, a fraction the
-------------------
numerator of which is the Appraised Value of such Unit and the denominator of
which is the Appraised Value of all of the Collateral then subject to this
Lease, including such Unit.
"Welfare Plan" shall mean, with respect to any Person, a "welfare plan" as
------------
such term is defined in Section 3(1) of ERISA to which such Person or any ERISA
Affiliate to such Person may have any liability or contingent liability.
ARTICLE II
GRANT OF SECURITY INTEREST AND LEASE; GENERAL PROVISIONS
Section II.1 Funding; Payment of Funded Amount.
---------------------------------
(a) On each Funding Date hereunder, subject to the terms and
conditions hereinafter set forth, and in reliance on the representations
and warranties contained herein or made pursuant hereto, upon receipt of
the Funding Date Certificate with respect to such Funding Date, each Lessor
making a Funding on such Funding Date shall transfer to Agent on such
Funding Date an amount equal to such Lessor's Commitment as set forth on
Schedule III to this Lease with respect to such Funding Date, as
supplemented from time to time in accordance with the provisions of this
Lease.
(b) Remittances pursuant to this Section 2.1 shall be made in
-----------
immediately available funds by wire transfer to the account of Agent set
forth below (or as otherwise
14
specified by Agent to each Lessor not less than three Business Days prior
to the date of the Funding) and must be received by Agent by 2:00 p.m., New
York time, on the Funding Date:
Bank: First Security Bank, National Association
Corporate Trust Services
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
ABA Routing #: ▇▇▇-▇▇▇▇-▇▇
Account #: 051-0922115
Re: ▇▇▇▇ ▇▇▇▇▇▇▇ Acct. #36088
Section II.2 Application of Funds; Lease of Collateral. On the Tranche I
-----------------------------------------
Funding Date and any Subsequent Tranche Funding Date, upon (a) receipt by Agent
of all amounts to be paid on the applicable Funding Date by the Lessors pursuant
to Section 2.1, and (b) satisfaction or waiver of each of the conditions set
-----------
forth in Section 3.1 for the Tranche I Funding Date or Section 3.2 for a
----------- -----------
Subsequent Tranche Funding Date, and in consideration for the grant of the
Security Interest by Lessee to Agent pursuant to Section 15.1, Agent, on behalf
------------
of the Lessors, shall advance, from the funds made available by the Lessors to
Agent on each Funding Date pursuant to Section 2.1, an amount equal to the
-----------
Funded Amount funded on such Funding Date in immediately available funds
remitted by wire transfer or direct credit to the account specified by Lessee in
the Funding Date Certificate.
Section II.3 Time and Place of Funding Date. Each Funding shall take
------------------------------
place on the Funding Date set forth in the Funding Date Certificate, commencing
at 2:00 p.m., New York time, subject to the following:
(i) the Tranche I Funding and Tranche I Funding Date shall occur on
a Business Day on or after the date hereof and not later than December 7,
1999 unless mutually extended by the Tranche I Lessors and Lessee;
(ii) Subsequent Tranche Fundings and Subsequent Tranche Funding Dates
shall each occur on a Business Day as agreed by the Subsequent Tranche
Lessors funding on such Subsequent Tranche Funding Date and Lessee; and
(iii) in no event shall the aggregate amount advanced by the Lessors
exceed the Maximum Commitment Amount, nor shall the aggregate amount
advanced by any Lessor exceed such Lessor's Commitment, nor shall any
Lessor be obligated to advance any portion of its Lease Balance which has
been repaid by Lessee.
Section II.4 Nature of Transaction. It is the intent of the parties that:
---------------------
(a) Lessee retains beneficial ownership of the Collateral and the transaction
will be characterized as a secured financial transaction for Federal and state
tax, bankruptcy, commercial law and UCC purposes, (b) this Lease
15
grants a first priority security interest in the Equipment and the other
Collateral to Agent, for the benefit of the Lessors, and (c) the obligations of
Lessee to pay Capital Rent and Accrual Rent shall be treated as payments of
principal and interest, respectively. Each of the parties to this Lease agrees
that it will not, nor will any Affiliate at any time take any action or fail to
take any action with respect to the filing of any tax return, including an
amended tax return, inconsistent with the intention of the parties expressed in
this Section 2.4.
-----------
Section II.5 Intentionally Omitted.
---------------------
Section II.6 NO WARRANTY. LESSEE HEREBY AGREES THAT THE COLLATERAL IS
-----------
LEASED HEREUNDER IN ITS "AS IS," PRESENT CONDITION SUBJECT TO (i) ANY RIGHTS OF
ANY PARTIES IN POSSESSION THEREOF, (ii) THE STATE OF TITLE THERETO EXISTING AT
THE TIME SUCH COLLATERAL IS SUBJECTED TO THIS LEASE, (iii) ANY STATE OF FACTS
WHICH AN ACCURATE PHYSICAL INSPECTION MIGHT SHOW, AND LESSEE CONFIRMS THAT ITS
EXECUTION AND DELIVERY OF THE FUNDING DATE CERTIFICATE SHALL CONSTITUTE ITS
CERTIFICATION THAT IT HAS INSPECTED AND ACCEPTS, AS BETWEEN LESSORS AND LESSEE,
EACH UNIT WHICH IS THE SUBJECT MATTER HEREOF, (iv) ALL APPLICABLE LAWS, AND (v)
ANY VIOLATIONS OF APPLICABLE LAWS WHICH MAY EXIST AT THE COMMENCEMENT OF THE
TERM. LESSEE ACKNOWLEDGES AND AGREES THAT (a) EACH UNIT IS OF A SIZE, DESIGN,
CAPACITY AND MANUFACTURE SELECTED BY LESSEE, (b) LESSEE IS SATISFIED THAT THE
SAME IS SUITABLE FOR ITS PURPOSES, (c) NEITHER ANY LESSOR NOR AGENT IS A
MANUFACTURER THEREOF OR A DEALER IN PROPERTY OF SUCH KIND, (d) NEITHER ANY
LESSOR NOR AGENT SHALL BE LIABLE FOR ANY LATENT, HIDDEN OR PATENT DEFECT IN ANY
UNIT, OR THE FAILURE OF ANY UNIT TO COMPLY WITH APPLICABLE LAWS (ENVIRONMENTAL
OR OTHERWISE) AND/OR INSURANCE REQUIREMENTS, AND (e) NEITHER ANY LESSOR NOR
AGENT HAS MADE, OR DOES OR WILL MAKE, (y) ANY REPRESENTATION OR WARRANTY OR
COVENANT, WITH RESPECT TO THE TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, CONDITION, QUALITY, DESCRIPTION, DURABILITY OR SUITABILITY OF ANY SUCH
UNIT IN ANY RESPECT OR IN CONNECTION WITH OR FOR THE PURPOSES AND USES OF LESSEE
OR (z) ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY UNIT, IT BEING AGREED THAT ALL RISKS WITH RESPECT TO THE
FOREGOING SHALL BE BORNE BY ▇▇▇▇▇▇.
Section II.7 Legal and Tax Representation. Lessee acknowledges and agrees
----------------------------
that neither any Lessor nor Agent has made any representations and warranties
concerning the tax, accounting or legal characteristics of this Lease and that
▇▇▇▇▇▇ has obtained and relied on such tax, accounting and legal advice
regarding this Lease and the other Operative Documents as it deems appropriate.
Section II.8 Computations. All computations of accrued amounts pursuant
------------
to the Operative Documents shall be made on the basis of a 360-day year of
twelve 30-day months.
16
Section II.9 Capital Rent. Capital Rent under this Lease for each
------------
Subsequent Tranche Lessor shall be no greater than an amount sufficient to
reduce the portion of the Lease Balance attributable to any such Subsequent
Tranche Funding to an amount equal to 50% of the amount of such Subsequent
Tranche Funding as of the expiration of the Term.
Section II.10 Conditions for Subsequent Tranche Fundings. No consent of
------------------------------------------
any Tranche I Lessor or any prior Subsequent Tranche Lessor shall be required
for any Subsequent Tranche Funding. The Payment Schedules of the Subsequent
Tranche Lessors advancing funds on any Subsequent Tranche Funding Date shall not
provide for amortizations of such Subsequent Tranche Lessors' Lease Balances
which are greater than that set forth on the pro-forma amortization schedule
attached hereto as Schedule 2.10, provided that any such Subsequent Tranche
------------- --------
Lessor's interest in the Collateral shall equal its Investment Percentage,
provided, further, that the aggregate of all Funded Amounts that may be funded
-------- -------
on a particular Subsequent Tranche Funding Date shall not exceed the product of
the Available Investment Percentage multiplied by the Depreciated Collateral
Value as of such Subsequent Tranche Funding Date.
ARTICLE III
CONDITIONS TO FUNDING DATE
Section III.1 Conditions to the Tranche I Funding. The obligation of
-----------------------------------
each Tranche I Lessor to make a Funding on the Tranche I Funding Date hereunder
and of Agent to advance such amounts to Lessee shall be subject to the
fulfillment to the satisfaction of (including, with respect to writings, such
writings being in form and substance reasonably satisfactory to each Tranche I
Lessor), or the waiver in writing by each Tranche I Lessor of, the conditions
precedent set forth in this Section 3.1 on or prior to the Tranche I Funding
-----------
Date (except that the obligation of any party hereto shall not be subject to the
performance or compliance of such party or of any of such party's Affiliates).
(a) Funding Date Certificate; Invoices. Lessee shall have delivered
----------------------------------
to Agent and each Tranche I Lessor, not later than 12:00 noon, New York
time, on a date mutually agreed upon by the parties not later than the
second (2nd) Business Day prior to the proposed Tranche I Funding Date, (i)
an irrevocable written notice substantially in the form of Exhibit A (a
---------
"Funding Date Certificate"), setting forth (A) the proposed Tranche I
-------------------------
Funding Date and (B) wire transfer or debit and credit instructions for the
disbursement of funds, and which will state that the Collateral is leased
in its "as is" present condition for all purposes of this Lease, whereupon
the Collateral shall immediately become subject to and be governed by all
the provisions of this Lease, and (ii) a Payment Schedule for each Tranche
I Lessor.
(b) Appraisal. Agent and each Tranche I Lessor shall have received an
---------
Appraisal to the satisfaction of the Tranche I Lessors opining (by use of
appraisal methods satisfactory to all of the Tranche I Lessors) (i) that
the Fair Market Value of the Collateral as of the Tranche I Funding Date is
not less than $144,560,000, and (ii) that the Fair Market Value
17
of the Collateral at the end of the Term is reasonably expected to be at
least equal to fifty percent (50%) of the Fair Market Value of the
Collateral as of the Tranche I Funding Date.
(c) Lease. Agent and each Tranche I Lessor shall have received a
-----
fully executed counterpart of this Lease; provided, however, only Agent
-------- -------
shall receive the original counterpart marked "Counterpart No. 1 - Agent's
Original Copy."
(d) Search Reports. Agent shall have received, and delivered to each
--------------
Tranche I Lessor on request, reports acceptable to counsel to the Tranche I
Lessors as to Lessee and the Collateral from each appropriate state and
county filing or recording office, each dated as close to the Tranche I
Funding Date as practicable, in respect of a search of the applicable UCC
files and any indices of Liens maintained by such offices (including, if
applicable, indices of judgment, revenue and tax liens), which search
reports shall evidence ▇▇▇▇▇▇'s ownership of the Collateral as of the
Tranche I Funding Date free and clear of all Liens.
(e) Financing Statements. Agent shall have received from Lessee duly
--------------------
executed UCC financing statements or amendments thereto identifying Lessee
as debtor and Agent as secured party for the benefit of the Tranche I
Lessors, and describing this Lease as a secured transaction, and such
financing statements shall have been filed in each applicable jurisdiction.
(f) Transaction Costs; Fees. Lessee shall have paid to Agent, for the
-----------------------
benefit of Agent and the Tranche I Lessors, any Transaction Costs invoiced
in reasonable detail and not previously paid. Such payment shall be made
by wire transfer or debit and credit of immediately available funds to the
account specified for Agent on Schedule I. On or prior to the Tranche I
----------
Funding Date, Lessee shall have paid to BA Leasing & Capital Corporation
(in its individual capacity, "BALCAP") the arrangement fee provided for in
------
that certain letter agreement dated July 16, 1999, between Lessee and
BALCAP.
(g) Opinions of Counsel. Each Tranche I Lessor, Agent and their
-------------------
respective counsel shall have received the opinions of (a) ▇▇▇▇▇▇▇ ▇▇▇▇
LLP, counsel to ▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq., General Counsel to Lessee,
and (b) ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.S.C., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & Stennis,
P.A., and ▇▇▇▇▇ ▇▇▇▇▇▇, which are the Kentucky, Mississippi and Nevada
counsel, respectively, to Lessee, which opinions collectively shall address
the matters set forth in Exhibit B-1. By its execution hereof, Lessee
-----------
expressly instructs each such counsel to execute and deliver such opinions
to the Persons designated in the preceding sentence.
(h) Corporate Status and Proceedings. Agent shall have received:
--------------------------------
(i) certificates of existence and good standing with respect to
▇▇▇▇▇▇ from the Secretary of State of the State of its incorporation,
dated no earlier than the 15th day prior to the Tranche I Funding
Date;
18
(ii) an Officer's Certificate of Lessee substantially in the
form of Exhibit D, dated the Tranche I Funding Date, with respect to
---------
representations and warranties and Events of Default or Incipient
Defaults; and
(iii) a Certificate of the Secretary or Assistant Secretary of
Lessee substantially in the form of Exhibit E, dated the Tranche I
---------
Funding Date, with respect to ▇▇▇▇▇▇'s governing documents,
resolutions and incumbent officers.
(i) Consents and Approvals. All necessary consents, approvals and
----------------------
authorizations of, and declarations, registrations and filings with,
Authorities and nongovernmental Persons including, without limitation, the
agents and lenders under ▇▇▇▇▇▇'s existing credit facilities, required to
consummate the transactions contemplated by this Lease shall have been
obtained or made by Lessee and shall be in full force and effect.
(j) Payment of Impositions. All Taxes payable on or prior to the
----------------------
Tranche I Funding Date in connection with the execution, delivery,
recording or filing of any of the Operative Documents, in connection with
the filing of any of the financing statements and any other documents, and
in connection with the consummation of any other transactions contemplated
hereby or by any of the other Operative Documents, shall have been paid in
full by Lessee.
(k) Insurance Certificates. Agent shall have received (and each
-----------------------
Tranche I Lessor shall have received a copy thereof from Agent) a current
certificate from Lessee to the effect that insurance complying with Section
-------
6.2 of this Lease is in full force and effect as of the Tranche I Funding
---
Date, and there shall be no past due premiums in respect of any such
insurance.
(l) Absence of Material Adverse Effect. Since August 29, 1999, no
----------------------------------
Material Adverse Effect shall have occurred.
(m) No Casualty. No Casualty shall have occurred with respect to any
-----------
Unit in which the Security Interest has been granted as of the Tranche I
Funding Date.
(n) Representations and Warranties True; Absence of Defaults. Each of
--------------------------------------------------------
the representations and warranties made by or on behalf of Lessee under the
Operative Documents shall be true on and as of the Tranche I Funding Date,
and there shall exist no Incipient Default or Event of Default.
(o) Certificates. Each Tranche I Lessor shall have received from
------------
Lessee a Certificate duly executed by Lessee and registered in such Tranche
I Lessor's name evidencing such Tranche I Lessor's right to receive Accrual
Rent, Capital Rent and the Lease Balance set forth on such Lessor's Payment
Schedule, and Supplemental Rent, in each case
19
as provided in this Lease, or, in the event of a foreclosure on any or all
of the Collateral, in accordance with Section 8.4(c).
--------------
(p) Opinion of Counsel to Agent. The Tranche I Lessors shall have
---------------------------
received a satisfactory opinion of counsel to Agent.
(q) Proceedings Satisfactory, etc. All proceedings taken in
------------------------------
connection with the Tranche I Funding Date and all documents relating
thereto shall be reasonably satisfactory to each Tranche I Lessor and their
respective counsel, and each such Person shall have received copies of such
documents as they may reasonably request in connection therewith, all in
form and substance reasonably satisfactory to each such Person.
Section III.2 Conditions to Each Subsequent Tranche Funding. The
---------------------------------------------
obligation of each Subsequent Tranche Lessor to make its Funding on the
applicable Subsequent Tranche Funding Date hereunder and of Agent to advance
such amounts to Lessee shall be subject to the fulfillment to the satisfaction
of (including, with respect to writings, such writings being in form and
substance reasonably satisfactory to each Subsequent Tranche Lessor), or the
waiver in writing by each Subsequent Tranche Lessor of, the conditions precedent
set forth in this Section 3.2 on or prior to the applicable Subsequent Tranche
-----------
Funding Date (except that the obligation of any party hereto shall not be
subject to the performance or compliance of such party or of any of such party's
Affiliates).
(a) Funding Date Certificate; Invoices. Lessee shall have delivered
----------------------------------
to Agent and each Subsequent Tranche Lessor, not later than 12:00 noon, New
York time, on a date mutually agreed upon by the parties not later than the
second (2nd) Business Day prior to the proposed Subsequent Tranche Funding
Date, a Funding Date Certificate with respect to such Subsequent Tranche
Funding Date, setting forth (i) the proposed Subsequent Tranche Funding
Date and (ii) wire transfer or debit and credit instructions for the
disbursement of funds.
(b) Appraisal. Each Subsequent Tranche Lessor shall have received a
---------
copy of and approved the Appraisal described in Section 3.1(b).
--------------
(c) Supplement to Lease. Agent, acting on behalf of each Lessor,
-------------------
Lessee, and each Subsequent Tranche Lessor making a Funding on such
Subsequent Funding Date shall execute and deliver to each Lessor a fully
executed counterpart of a supplement to this Lease dated as of such
Subsequent Tranche Funding Date which shall add such Subsequent Tranche
Lessors as Lessors hereunder and set forth their respective Commitments.
Each such supplement to this Lease shall become effective upon execution
and delivery thereof by Agent, Lessee and each such Subsequent Tranche
Lessor and shall include a Payment Schedule for each Subsequent Tranche
Lessor making a Funding on such Subsequent Tranche Funding Date, which
additional Payment Schedules shall supplement Schedule III. Agent shall
receive the original counterparts marked "Counterpart No. 1 - Agent's
Original Copy" of each such supplement.
20
(d) Search Reports. Agent shall have delivered to each such
--------------
Subsequent Tranche Lessor copies of the reports described in Section
-------
3.1(d), dated down to such Subsequent Tranche Funding Date, which reports
------
shall be acceptable to each such Subsequent Tranche Lessor, and Agent shall
deliver copies of the date-downs to each other Lessor on request.
(e) Opinions of Counsel. Each Subsequent Tranche Lessor and Agent,
-------------------
and their respective counsels, shall have received copies of the opinions
described in Section 3.1(g), dated down as necessary or appropriate as of
--------------
such Subsequent Tranche Funding Date, together with letters from the
counsels for Lessee listed in Section 3.1(g), stating that each such
--------------
Subsequent Tranche Lessor and Agent, and their respective counsels, are
entitled to rely on such opinion letters, or date downs thereof, as of such
Subsequent Tranche Funding Date. By its execution hereof, ▇▇▇▇▇▇ expressly
instructs each such counsel to execute and deliver such opinions to the
Persons designated in the preceding sentence.
(f) Corporate Status and Proceedings. Agent shall have received:
--------------------------------
(i) certificates of existence and good standing with respect
to ▇▇▇▇▇▇ from the Secretary of State of the State of its
incorporation, dated no earlier than the 15th day prior to such
Subsequent Tranche Funding Date;
(ii) an Officer's Certificate of Lessee substantially in the
form of Exhibit D, dated such Subsequent Tranche Funding Date, with
---------
respect to representations and warranties and absence of defaults; and
(iii) a Certificate of the Secretary or Assistant Secretary of
Lessee substantially in the form of Exhibit E, dated such Subsequent
---------
Tranche Funding Date, with respect to ▇▇▇▇▇▇'s governing documents,
resolutions and incumbent officers.
(g) Consents and Approvals. All necessary consents, approvals and
----------------------
authorizations of, and declarations, registrations and filings with,
Authorities and nongovernmental Persons, including, without limitation, the
agents and lenders under ▇▇▇▇▇▇'s existing credit facilities, required to
consummate the transactions contemplated by this Lease shall have been
obtained or made by Lessee and shall be in full force and effect as of such
Subsequent Tranche Funding Date.
(h) Payment of Impositions. All Taxes payable on or prior to such
----------------------
Subsequent Tranche Funding Date in connection with the execution, delivery,
recording or filing of any of the Operative Documents, in connection with
the filing of any of the financing statements and any other documents, and
in connection with the consummation of any other transactions contemplated
hereby or by any of the other Operative Documents, shall have been paid in
full by Lessee.
21
(i) Insurance Certificates. Each Subsequent Tranche Lessor
----------------------
shall have received from Agent a copy of a current certificate from Lessee
to the effect that insurance complying with Section 6.2 of this Lease is in
-----------
full force and effect as of such Subsequent Tranche Funding Date, and there
shall be no past due premiums in respect of any such insurance.
(j) Absence of Material Adverse Effect. Since August 29, 1999,
----------------------------------
no Material Adverse Effect shall have occurred.
(k) No Casualty. No Casualty shall have occurred with respect to
-----------
any Unit in which the Security Interest has been granted as of such
Subsequent Tranche Funding Date.
(l) Representations and Warranties True; Absence of Defaults.
--------------------------------------------------------
Each of the representations and warranties made by or on behalf of Lessee
under the Operative Documents shall be true on and as of such Subsequent
Tranche Funding Date, and there shall exist no Incipient Default or Event
of Default on or as of such date.
(m) Certificates. Each Subsequent Tranche Lessor shall have
------------
received from Lessee a Certificate duly executed by Lessee and registered
in such Subsequent Tranche Lessor's name evidencing such Subsequent Tranche
Lessor's right to receive Accrual Rent, Capital Rent and the Lease Balance
set forth on such Lessor's Payment Schedule in each case as provided in
this Lease, or, in the event of a foreclosure on any or all of the
Collateral, in accordance with Section 8.4(c).
--------------
(n) Opinion of Counsel to Agent. Each Subsequent Tranche Lessor
---------------------------
shall have received a copy of the opinion of counsel to Agent described in
Section 3.1(p), dated down as necessary or appropriate as of such
--------------
Subsequent Tranche Funding Date, together with a letter from the counsel
for Agent, stating that each such Subsequent Tranche Lessor and their
respective counsel are entitled to rely on such opinion letter, or date
down thereof, as of such Subsequent Tranche Funding Date.
(o) Proceedings Satisfactory, etc. All proceedings taken in
------------------------------
connection with such Subsequent Tranche Funding Date and all documents
relating thereto shall be reasonably satisfactory to each Subsequent
Tranche Lessor and their respective counsel, and each such Person shall
have received copies of such documents as they may reasonably request in
connection therewith, all in form and substance reasonably satisfactory to
each such Person.
Section III.3 Other Documents. On or prior to any Funding Date, all other
---------------
Operative Documents shall have been executed by ▇▇▇▇▇▇ and delivered to the
appropriate recipients thereof, including, without limitation, amendments to the
credit agreements of Lessee necessary to authorize this Lease.
ARTICLE IV
22
TERM, RENT AND PAYMENT
Section IV.1 Term. Unless earlier terminated, the term of this Lease
----
shall commence on and include the Tranche I Funding Date and, regardless of a
Lessor's Funding Date, end on, but not include, the fifth anniversary thereof
(the "Term").
----
Section IV.2 Rent Payments. On each Payment Date during the Term, Lessee
-------------
shall pay to Agent, for the benefit of the Lessors, payments of rent as set
forth opposite the applicable Payment Date on the Lessors' Payment Schedules
("Basic Rent"). Scheduled installments of Basic Rent may be adjusted pursuant
------------
to Sections 6.1(a), 11.3 and 11.4.
--------------- ---- ----
Section IV.3 Place and Manner of Payment. Rent and all other sums due to
---------------------------
Agent or any Lessor hereunder shall be paid in immediately available funds and
if payable to Agent or to a Lessor, at the office of Agent or such Lessor
specified on Schedule I, or at such other office of Agent or any Lessor as such
----------
Person may from time to time specify to Lessee in a notice pursuant to this
Lease. All such payments shall be received by Agent or Lessor, as applicable,
not later than 11:00 a.m., New York time, on the date due; funds received after
such time shall for all purposes under the Operative Documents be deemed to have
been received by Agent on the next succeeding Business Day. Any payments
received by Agent not later than 11:00 a.m., New York time, shall be sent by
Agent to the Lessors in immediately available funds no later than 1 p.m., New
York time, on the same day, and any payments received by Agent from or on behalf
of Lessee after 11:00 a.m., New York time, shall be sent to Lessors as soon
after receipt as practicable, but not later than noon, New York time, on the
next succeeding Business Day.
Section IV.4 Net Lease. This Lease is a net lease and ▇▇▇▇▇▇'s obligation
---------
to pay all Rent payable hereunder shall be absolute and unconditional under any
and all circumstances and, without limiting the generality of the foregoing,
Lessee shall not be entitled to any abatement or reduction of Rent or any setoff
against Rent, Administrative Charge, indemnity or other amount, whether arising
by reason of any past, present or future claims of any nature by Lessee against
Agent or any Lessor, or otherwise. Except as otherwise expressly provided
herein, this Lease shall not terminate, nor shall the obligations of Lessee be
otherwise affected: (a) by reason of any defect in the condition,
merchantability, design, construction, quality or fitness for use of, damage to,
or loss of possession or use, obsolescence or destruction, of any or all of the
Collateral, however caused; or (b) by the taking or requisitioning of any or all
of the Collateral by condemnation or otherwise; or (c) by the invalidity or
unenforceability or lack of due authorization by Agent, any Lessor or Lessee or
other infirmity of this Lease or any other Operative Document; or (d) by the
attachment of any Lien of any third party to any Unit; or (e) by any prohibition
or restriction of or interference with ▇▇▇▇▇▇'s use of any or all of the
Collateral by any Person; or (f) by the insolvency of or the commencement by or
against Agent or any Lessor of any bankruptcy, reorganization or similar
proceeding; or (g) by any other cause, whether similar or dissimilar to the
foregoing, any present or future law to the contrary notwithstanding. It is the
intention of the parties that all Rent payable by Lessee hereunder shall be
payable in all events in the manner and at the times herein provided unless
▇▇▇▇▇▇'s obligations in respect thereof have been terminated or modified
pursuant to the express
23
provisions of this Lease or any amendment hereto. To the extent permitted by
Applicable Law, Lessee hereby waives any and all rights which it may now have or
which may at any time be conferred upon it, by statute or otherwise, to
terminate, cancel, quit or surrender this Lease, in whole or in part, except
strictly in accordance with the express terms hereof. Each rental, indemnity or
other payment made by Lessee hereunder shall be final, and Lessee shall not seek
to recover (except as expressly provided in this Lease) all or any part of such
payment from Agent or any Lessor for any reason whatsoever. Without affecting
▇▇▇▇▇▇'s obligation to pay Rent, payable hereunder, Lessee may seek damages for
a breach by Agent or any Lessor of its obligations under this Lease.
Section IV.5 Overdue Amounts. Lessee shall pay to Agent, for the benefit
---------------
of Lessors, on demand, interest at the rate per annum which is 2% above the
Interest Rate on any overdue amount of Rent, Lease Balance, Administrative
Charge, Casualty Amount or any other payment due under this Lease and (to the
extent permitted by Applicable Laws) such interest shall accrue from the date
due (not taking into account any grace period) until payment is made.
Section IV.6 No Termination or Abatement. Lessee shall remain obligated
---------------------------
under this Lease in accordance with its terms and, consistent with the intention
of the parties expressed in Sections 2.4 and 15.1, shall not take any action to
-------- --- ----
terminate, rescind or avoid this Lease, notwithstanding any action for
bankruptcy, insolvency, reorganization, liquidation, dissolution, or other
proceeding affecting Agent or any Lessor, or any action with respect to this
Lease which may be taken by any custodian, receiver, liquidator, assignee,
trustee or sequestrator (or other similar official) of such Person. Lessee
hereby waives all right (i) to terminate or surrender this Lease (except as
provided herein) or (ii) to avail itself of any abatement, suspension,
deferment, reduction, setoff, counterclaim or defense with respect to any Rent.
Lessee shall remain obligated under this Lease in accordance with its terms, and
Lessee hereby waives any and all rights now or hereafter conferred by statute or
otherwise to modify or to avoid strict compliance with its obligations under
this Lease. Notwithstanding any such statute or otherwise, Lessee shall be
bound by all of the terms and conditions contained in this Lease.
24
ARTICLE V
POSSESSION, ASSIGNMENT, USE AND MAINTENANCE OF COLLATERAL
Section V.1 Possession and Use of Collateral; Compliance with Laws.
------------------------------------------------------
Lessee agrees that the Collateral will be used and operated in material
compliance with any and all Applicable Laws and/or Insurance Requirements.
Lessee shall procure and maintain in effect all licenses, registrations,
certificates, permits, approvals and consents required by Applicable Laws or by
any Authority in connection with the ownership, use and operation of each Unit
and the other Collateral. Lessee shall not (a) use, operate, maintain or store
any Unit or any portion thereof in violation of Section 5.3 or any Insurance
-----------
Requirement; (b) sublease, assign or otherwise permit the use of any Unit except
as may be permitted by Section 5.2; (c) except as set forth in Section 5.2 or
----------- -----------
11.4, sell, assign or transfer any of its rights hereunder or in any Unit or any
----
part of the Collateral, or directly or indirectly create, incur or suffer to
exist any Lien on any of its rights hereunder or in any Unit or any part of the
Collateral, except for Permitted Liens; or (d) except in connection with any
maintenance or repair thereof in accordance with Sections 5.3 and 5.4 hereof,
------------ ---
permit any Unit to be located at any location other than the location of such
Unit as of the Tranche I Funding Date and as set forth opposite such Unit on
Schedule I to the Funding Date Certificate for the Tranche I Funding. ▇▇▇▇▇▇
will defend the transfer of the Security Interest against the claims or demands
of all Persons. Lessee shall not use any Collateral, or permit any Collateral
to be used, for the transportation or storage of Hazardous Material, except for
Hazardous Materials usual and incidental to operation and maintenance of such
Collateral, which shall be stored, used and disposed of in material compliance
with all Applicable Laws.
Section V.2 Subleases and Assignments. LESSEE SHALL NOT, WITHOUT THE
-------------------------
PRIOR WRITTEN CONSENT OF THE REQUIRED LESSORS, WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD, SUBLEASE OR OTHERWISE RELINQUISH POSSESSION OF ANY UNIT,
OR ASSIGN, TRANSFER OR ENCUMBER ITS RIGHTS, INTERESTS OR OBLIGATIONS HEREUNDER,
AND ANY ATTEMPTED SUBLEASE, RELINQUISHMENT, ASSIGNMENT, TRANSFER OR ENCUMBERING
BY LESSEE SHALL BE NULL AND VOID, except as provided in this Section 5.2. Each
-----------
sublease entered into in accordance with this Section 5.2 shall be referred to
-----------
as a "Sublease", and each Person which is the other party to a Sublease shall be
--------
referred to as a "Sublessee". So long as no Incipient Default or Event of
---------
Default shall have occurred and be continuing, Lessee may sublease, without the
prior written consent of the Lessors or Agent, one or more Units to (i) a
wholly-owned Subsidiary of Lessee or (ii) a Service Provider; provided, that any
--------
Sublease entered into pursuant to this Section 5.2 must satisfy each of the
-----------
following conditions:
(a) such Sublease shall (i) automatically expire upon the termination
of this Lease, (ii) be expressly subordinate and subject to this Lease and
the Liens created hereunder, and (iii) expressly require the Collateral
subject thereto to be returned as directed by the Agent or the Required
Lessors upon notice to the Sublessee that an Event of Default shall have
occurred and be continuing;
25
(b) such Sublease shall be in writing and shall expressly prohibit any
further assignment, sublease or transfer;
(c) such Sublease shall not contain a bargain purchase option in favor
of the Sublessee or any other provision pursuant to which the Sublessee may
obtain record or beneficial title to any Unit or any Part leased thereunder
from Lessee;
(d) such Sublease shall prohibit the Sublessee from making any
alterations or modifications to any Unit that would violate this Lease;
(e) such Sublease shall require the Sublessee to maintain each Unit
subleased thereunder in accordance with Section 5.3 and the first sentence
-----------
in Section 5.4;
-----------
(f) all of ▇▇▇▇▇▇'s rights, title and interest in, to and under such
Sublease shall be pledged by Lessee to Agent, for the benefit of Lessors,
as collateral for Lessee's obligations under the Operative Documents, and
such pledge shall be perfected by delivery of an executed original
counterpart upon the execution and delivery thereof, marked as the sole
original execution counterpart for UCC purposes, to the Agent, and Lessee
shall, at its own cost and expense, do any further act and execute,
acknowledge, deliver, file, register and record any further documents which
the Lessors may reasonably request in order to create, perfect, preserve
and protect Agent's Lien, for the benefit of the Lessors, in such Sublease;
(g) Lessee shall not, without Agent's prior written consent, permit or
consent to any renewal or extension of a Sublease at any time when Lessee
has knowledge that an Incipient Default or Event of Default has occurred
and is continuing;
(h) No Unit or Part shall be removed from the location at which it was
located on the Tranche I Funding Date, except as permitted pursuant to
Sections 5.3, 5.4, 6.1, 11.3 and 11.4; and
------------ --- --- ---- ----
(i) Lessee shall notify Agent in writing not less than 30 days prior
to entering into any Sublease, which notice shall include a description of
the Unit or Collateral to be leased thereunder.
The liability of Lessee with respect to this Lease and each of the other
Operative Documents shall not be altered or affected in any way by the existence
of any Sublease.
Section V.3 Maintenance. At all times during the Term, Lessee shall, at
-----------
its own cost and expense, keep, repair, maintain, manage, monitor and preserve
each Unit and Part in at least as good order and operating condition, repair and
appearance as of the date hereof, ordinary wear and tear excepted, so as to
preserve its remaining economic useful life, utility and residual value, and in
material conformance with (i) such maintenance and repair standards and
procedures as are set forth in the manufacturer's manuals or service contracts
pertaining to the Unit or Part, (ii) such standards
26
or procedures as may be required to enforce warranty claims against each vendor
and manufacturer of each Unit or Part, (iii) customary industry standards as
would be used by prudent Competitors of Lessee so as to keep the Unit or Part in
first-class condition, (iv) all Applicable Laws and Insurance Requirements, and
in the event that Applicable Laws require any alteration, replacement or
addition of or to any Part on any Unit, Lessee will conform therewith at its own
expense, and (v) at least in conformity with ▇▇▇▇▇▇'s standard practices for
properties of a similar nature. Notwithstanding any other restriction in this
Lease, Lessee may remove any Part from any Site for purposes of complying with
its obligations in this Section 5.3, provided that Lessee shall use all
----------- --------
commercial diligence in carrying out such obligations and effect the prompt
return of the Part to the Site, and Lessee shall take all necessary steps to
ensure that the Unit from which such Part was removed will be able to be
operated as contemplated by this Lease during the period of time during which
such Part is not at the Site.
In no event shall Lessee discriminate as to the use or maintenance of any Unit
(including the periodicity of maintenance or record keeping in respect of such
Unit) as compared to the highest standards of Lessee (or any of its Affiliates)
with respect to equipment of a similar nature which Lessee (or any Affiliates)
owns or leases. Lessee shall prepare and deliver to Agent within a reasonable
time prior to the required date of filing (and, to the extent permissible, file
on behalf of Agent and Lessors) any and all reports to be filed by Agent or any
Lessor with any Authority by reason of the transaction described herein. Agent
and each Lessor shall inform ▇▇▇▇▇▇ of any request for such reports received by
it. Lessee shall maintain or cause to be maintained, and shall permit the Agent
and Lessors to inspect, all records, logs and other materials required by any
Authority having jurisdiction over the Collateral or Lessee, to be maintained in
respect of each Unit. Lessee hereby waives any right now or hereafter conferred
by law to make repairs on the Collateral at the expense of Agent or any Lessor.
Section V.4 Alterations, Modifications, etc. In case any Unit or any
--------------------------------
material component thereof (each component, a "Part"), is required to be
----
altered, added to, replaced or modified in order to comply with any Applicable
Laws or to comply with Sections 5.1 or 5.3 hereof (a "Required Alteration"),
------------ --- -------------------
Lessee shall make such Required Alteration at its own expense. In addition, in
case any portion of a Unit or Part is required to be altered, added to, replaced
or modified in order to comply with any Applicable Laws or to comply with
Sections 5.1 or 5.3 hereof, but such alteration, addition, replacement or
------------ ---
modification does not constitute a Required Alteration, Lessee shall make such
alteration, addition, replacement or modification at its own expense, without,
however, being required to provide a certificate pursuant to the third to last
sentence of this Section 5.4. Lessee shall have the right to make any
-----------
modification, alteration or improvement to any Part (herein referred to as a
"Permitted Modification"), provided that any Parts installed or replacements
----------------------- --------
made by Lessee upon any Unit (including, without limitation, Permitted
Modifications) shall be considered accessions to such Unit and a security
interest therein shall be immediately and automatically vested in Agent, for the
benefit of Lessors. All replacement Parts shall be free and clear of all Liens
(other than Permitted Liens) and shall be in as good an operating condition as,
and shall have a value, utility and remaining economic useful life at least
equal to, the Parts replaced, assuming such replaced Parts and the relevant
Collateral were immediately prior to such replacement or the event
27
or events necessitating such replacement in the condition and repair required to
be maintained by the terms hereof. Notwithstanding any other restriction in this
Lease, Lessee may remove any Part from any Site for purposes of making a
Required Alteration or a Permitted Modification, provided that Lessee shall use
--------
all commercial diligence in making such Required Alterations or Permitted
Modifications and effect the prompt return of the Part to the Site, and Lessee
shall take all necessary steps to ensure that the Unit from which such Part was
removed will be able to be operated as contemplated by this Lease during the
period of time during which such Part is not at the Site. Any Part at any time
removed from any Unit shall remain subject to the interests of Agent and Lessors
under the Operative Documents, no matter where located, until such time as such
Part shall be replaced by a Part which has been incorporated or installed in or
attached to such Unit and which meets the requirements for a replacement Part
specified above. No later than 45 days after the end of each fiscal quarter of
Lessee in which Lessee makes a Required Alteration or a Permitted Modification,
Lessee shall deliver to Agent, for the benefit of Lessors, a certificate
evidencing the granting by Lessee to Agent, for the benefit of Lessors, of a
security interest in all replacement Parts not previously subjected to this
Lease and such other documents (including UCC-1's) in respect of such Part or
Parts as the Required Lessors may reasonably request in order to confirm that a
security interest in such Part or Parts has passed to Agent, for the benefit of
Lessors, as hereinabove provided. All replacements pursuant to this Section 5.4
-----------
shall be purchased by Lessee with its own funds. There shall be no obligation
on the part of the Agent or any Lessor to pay for or otherwise finance any such
replacement.
Section V.5 Liens. Lessee will not directly or indirectly create, incur,
-----
assume or suffer to exist any Lien (other than Permitted Liens) on or with
respect to (i) any Unit or any Part thereof or any other Collateral, Agent's or
any Lessor's interest therein, or any other interest therein, or (ii) this Lease
or any of Agent's or any ▇▇▇▇▇▇'s interests hereunder. Lessee, at its own
expense, will, within sixty (60) days, unless challenged in a Permitted Contest,
pay, satisfy and otherwise take such actions as may be necessary to keep this
Lease and the Collateral free and clear of, and to duly discharge or eliminate
or bond in a manner satisfactory to Agent and the Required Lessors, any such
Lien not excepted above if the same shall arise at any time. Lessee will notify
Agent in writing promptly upon becoming aware of any Tax or other Lien (other
than any Lien excepted above) that shall attach to the Collateral or any Unit,
and of the full particulars thereof. Without limiting the foregoing, Lessee
shall not assign or pledge any of its rights under any Sublease to any Person
other than Agent, for the benefit of Lessors. Without limiting the foregoing,
Lessee covenants and agrees that it will keep each Unit free and clear of any
Liens of the owner or owners of any interest in the real estate on which such
Unit may from time to time be located and any purchaser of, or present or future
creditor obtaining a lien on, such real estate, and will obtain and deliver,
promptly after delivery or change in the location of any Unit, such waivers
(including, without limitation, waivers from mortgagees and landlords) of any of
the foregoing in recordable form reasonably satisfactory to Agent and each
Lessor as are necessary to so maintain such Unit free and clear as aforesaid.
Section V.6 Identifying Numbers; Legend; Changes; Inspection. To the
------------------------------------------------
extent reasonably practicable, as agreed upon by Agent and Lessee, Lessee will
cause each Unit or Part to be kept numbered with the identification number as
shall be set forth on Schedule II, and Lessee will at all
28
times keep and maintain, plainly, distinctly, permanently and conspicuously
marked on each Unit or Part in letters not less than one inch in height, the
words "SUBJECT TO A SECURITY INTEREST IN FAVOR OF FIRST SECURITY BANK, NATIONAL
ASSOCIATION, AS AGENT FOR THE LESSORS UNDER A LEASE INTENDED AS SECURITY DATED
AS OF DECEMBER 3, 1999" or other appropriate words designated by Agent or the
Required Lessors, with appropriate changes thereof and additions thereto as from
time to time may be required by law in order to protect Agent's security
interest, for the benefit of the Lessors, in such Unit. Lessee will replace
promptly any such words which may be removed, defaced, obliterated or destroyed.
Lessee will not change the identification number of any Unit or Part, unless and
until (i) a statement of new number or numbers to be substituted therefor shall
have been delivered to Agent and filed, recorded and deposited by the Lessee in
all public offices where this Lease or any document or instrument required to
perfect the liens intended to be created hereunder shall have been filed,
recorded and deposited or any financing statement has been filed in respect
thereof and (ii) Lessee shall have furnished Agent an opinion of counsel
addressed to Agent and the Lessors in form and substance reasonably satisfactory
to Agent and the Required Lessors to the effect that filing, recordation and
deposit of such statement will protect the right and security interest of Agent,
on behalf of the Lessors, in such Unit or Part, and that no other filing,
recording, deposit or giving of notice with or to any other Federal, state or
local government or agency thereof is necessary to protect such right and
security interest. The Collateral may be lettered with the names or initials or
other insignia customarily used by the Lessee or its permitted Sublessee but
Lessee will not allow the name of any other Person to be placed on any Unit or
Part, as designation that might be interpreted as a claim of ownership. Upon the
request of Agent or the Required Lessors, Lessee shall make the Collateral
available to Agent or any Lessor, its agents, or its assignees for inspection at
reasonable times and at reasonable locations and upon reasonable notice and
shall also make Lessee's records pertaining to the Collateral available for
inspection, provided that from and after the occurrence of an Event of Default,
--------
all costs and expenses of the Agent or any Lessor in connection with such
inspection shall be borne by Lessee.
ARTICLE VI
RISK OF LOSS; INSURANCE
Section VI.1 Casualty and Replacement.
------------------------
(a) Casualty. Upon the occurrence of a Casualty prior to or during
--------
the Term, Lessee shall give Agent prompt written notice thereof (a
"Casualty Notice") and Lessee shall pay to Agent, for the benefit of the
---------------
Lessors, the Casualty Amount of the Unit suffering such Casualty, which
payment shall be made upon the earliest to occur of (i) Lessee receiving
insurance proceeds, (ii) 90 days after such Casualty and (iii) the
expiration or earlier termination of this Lease (the "Casualty Settlement
-------------------
Date"), provided that if any such payment would result in there being only
---- --------
one Unit subject to this Lease, Lessee shall be obligated to repay to Agent
the entire outstanding Lease Balance after such payment plus all accrued
and unpaid Accrual Rent and other amounts due under the Operative
Documents,
29
such full repayment to be made no later than the Casualty Settlement Date,
and upon the indefeasible payment of such full repayment, this Lease and
the Security Interest shall be terminated and released. Lessee shall
continue to make all payments of Rent due under this Lease until and
including the Casualty Settlement Date. Upon payment on such Casualty
Settlement Date of the Casualty Amount in respect of any Unit suffering a
Casualty, the remaining scheduled payments of Basic Rent, if any, as well
as the amount of the Lease Balance remaining following the payment of the
final installment of Basic Rent at the end of the Term shall each be
reduced, for each Lessor, by an amount equal to the product of the
scheduled amount of such Basic Rent payment or such remaining Lease
Balance, for each Lessor, as the case may be (determined in each case prior
to the receipt of such Casualty Amount), multiplied by the Unit Value
Fraction of the Unit suffering such Casualty.
(b) Repair of a Unit. If a Unit or any portion thereof suffers a
----------------
condemnation, loss or other damage as a result of any occurrence which does
not result in a Casualty, Lessee shall give Agent prompt written notice
thereof and shall, not more than 90 days after the date of such notice, or
such longer period as reasonably required to repair or replace such Unit,
so long as Lessee has diligently commenced and is diligently pursuing such
repair or replacement, repair or replace the portion of such Unit which has
suffered such condemnation, loss or other damage, with replacement Parts
meeting the suitability standards hereinafter set forth, provided that
Lessee shall not be required to give such notice if the damage to the Unit
is not material. Notwithstanding the preceding sentence, if the
condemnation, loss or other damage will, in Lessee's reasonable judgment,
cost more than $5,000,000 to repair or replace, Lessee shall immediately
provide notice of such condemnation, loss or other damage to Agent, and if
such repair or replacement is not completed in accordance with this Lease
within 120 days after the date of such notice and Lessee has not deposited
Casualty Proceeds in the Deposit Account pursuant to Section 6.1(d) with
--------------
respect to such condemnation, loss or damage, Lessee shall deposit into the
Deposit Account funds in the amount of such estimated cost of repair and
replacement. To be suitable as a replacement Part, an item must be the
same or substantially similar general type, value, function and utility as
the Part suffering the damage, and be free and clear of any Liens other
than Permitted Liens. Lessee shall cause such instruments and documents
(including UCC-1 Financing Statements) as may be required by the Required
Lessors to be executed and delivered to Agent and the Lessors in order to
subject such replacement Part(s) to this Lease and to perfect the lien of
this Lease on such replacement Part(s), and upon such execution and
delivery and the receipt by Agent of (i) evidence reasonably satisfactory
to the Required Lessors of Lessee's compliance with the insurance
provisions of Section 6.2 with respect to such replacement Part(s), and
-----------
(ii) an opinion of counsel to Lessee in form and substance reasonably
satisfactory to Agent and the Lessors opining, among other things, to the
effect that all appropriate filings, recordings and other acts have been
taken to protect the right and the Security Interest of Agent, on behalf of
the Lessors, in such replacement Part(s) and that no other filing,
recording, deposit, or giving of notice with or to any Authority is
necessary to protect such right and the Security Interest in such
replacement Part(s), such replacement Part(s) shall be deemed part of the
applicable Unit for all purposes hereof.
30
(c) Use of Proceeds. If Agent has received the amount payable with
---------------
respect to the Casualty and all other amounts due hereunder, and no Event
of Default shall have occurred and be continuing, Lessee shall be entitled
to receive from Agent the proceeds of any recovery in respect of a Unit
which has suffered a Casualty from insurance or otherwise ("Casualty
--------
Recoveries"), and Agent, subject to the rights of any insurer insuring the
----------
Collateral as provided herein and the indefeasible payment of the amount
payable with respect to the Casualty, shall execute and deliver to Lessee,
or to its assignee or nominee, any such documents as may be reasonably
required to release the Unit from the terms of this Lease, in such form as
may reasonably be requested by Lessee without warranty of any kind,
provided that if any Casualty Proceeds with respect to loss or damage
--------
arising out of a single event is less than $5,000,000 and no Event of
---
Default or uncured Incipient Default shall have occurred and be continuing,
Agent shall deliver such Casualty Proceeds to Lessee and except for the
last sentence of this Section 6.1(c), the provisions of Sections 6.1(c) and
-------------- ---------------
6.1(d) shall not apply thereto. All fees, costs and expenses relating to a
------
substitution as described herein shall be borne by ▇▇▇▇▇▇. Except as
otherwise provided in this Section 6.1, Lessee shall not be released from
-----------
its obligations hereunder in the event of, and shall bear the risk of, any
Casualty or other loss or damage to any Unit or Part prior to or during the
Term and thereafter until all of Lessee's obligations hereunder are fully
performed. Any payments (including, without limitation, insurance proceeds)
received at any time by Agent or Lessee from any Authority or other party
with respect to any loss or damage to any Unit not constituting a Casualty
will, provided no Event of Default shall have occurred and be continuing,
be applied directly in payment of repairs or for replacement of property in
accordance with the provisions of Section 6.1(b), if not already paid by
--------------
Lessee, or if already paid by Lessee and no Event of Default shall have
occurred and be continuing, shall be applied to reimburse Lessee for such
payment, and any balance remaining after compliance with said Section with
respect to such loss or damage shall be retained by ▇▇▇▇▇▇.
(d) Deposit of Funds. Subject to Section 6.1(c), all Casualty
---------------- --------------
Recoveries or other payments (including, without limitation, insurance
proceeds) received at any time by Agent or Lessee from any Authority or
other party with respect to any Casualty or other loss or damage to a Unit
(collectively, "Casualty Proceeds") shall be deposited into a deposit
-----------------
account established by Agent for the benefit of the Lessors (the "Deposit
-------
Account"). Any Casualty Proceeds in the Deposit Account shall be remitted
-------
promptly to Lessee after, with respect to a Casualty or other condemnation,
loss or damage, ▇▇▇▇▇▇'s compliance with the requirements of clause (a) or
----------
clause (b), as applicable, of this Section 6.1, provided that no Casualty
---------- -----------
Proceeds shall be remitted if at the time remittance would otherwise be
proper there shall have occurred and be continuing an Event of Default or
an Incipient Default.
(e) Assumption of Risk. LESSEE HEREBY ASSUMES ALL RISK OF LOSS,
------------------
DAMAGE, THEFT, TAKING, DESTRUCTION, CONFISCATION, REQUISITION,
COMMANDEERING, TAKING BY EMINENT DOMAIN OR CONDEMNATION, PARTIAL OR
COMPLETE, OF OR TO EACH UNIT,
31
HOWEVER CAUSED OR OCCASIONED, SUCH RISK TO BE BORNE BY LESSEE WITH RESPECT
TO EACH UNIT DURING THE TERM. ▇▇▇▇▇▇ AGREES THAT NO OCCURRENCE SPECIFIED IN
THE PRECEDING SENTENCE SHALL IMPAIR, IN WHOLE OR IN PART, ANY OBLIGATION OF
LESSEE UNDER THIS LEASE, INCLUDING, WITHOUT LIMITATION, THE OBLIGATION TO
PAY RENT .
Section VI.2 Insurance Coverages. Lessee shall at all times, at its
-------------------
expense, cause to be carried and maintained with financially sound and reputable
insurers, insurance against loss or damage to the Collateral, of the kinds and
in the amounts customarily maintained by similar Persons engaged in similar
operations in similar jurisdictions and carry such other insurance as is usually
carried by such Persons, provided that in any event Lessee will maintain:
--------
(a) Casualty Insurance -- "all risk" insurance against risks of
------------------
physical loss or damage with respect to the Collateral with deductibles and
in such minimum amounts as are consistent with industry standards;
provided, however, that at no time shall the amount of coverage, on a
-------- -------
replacement cost basis, be less than (x) the outstanding Lease Balance plus
(y) an amount equal to the aggregate amount of Accrual Rent to be accrued
under this Lease for 90 days following the date of determination;
(b) Public Liability Insurance -- combined single limit insurance
--------------------------
against claims for bodily injury, death or property damage in amounts at
least equal to $10,000,000 per occurrence and $10,000,000 in the aggregate,
with such deductibles as are carried by similarly situated companies
operating similar facilities and equipment; and
(c) Other Insurance -- such other insurance, including comprehensive
---------------
motor vehicle, worker's compensation and business interruption insurance,
in each case as generally carried by owners of equipment similar to the
Collateral and properties in each jurisdiction where the Collateral is
located, in such amounts and against such risks as are then customary for
equipment and property similar in use.
Such insurance shall be written by reputable insurance companies reasonably
acceptable to the Required Lessors, that are financially sound and solvent,
rated in Best's Insurance Guide or any successor thereto (or if there be none,
an organization having a similar national reputation) with a general
policyholder rating of "A" and a financial rating of at least "X" or otherwise
acceptable to the Required Lessors. All such insurance shall name Agent and the
Lessors as additional insureds or as loss-payees, as their respective interests
may appear, and as sole loss payees to the extent such claims relate to the
Collateral. Each policy referred to in this Section 6.2 shall provide that (i)
-----------
it will not be canceled or its limits reduced, or allowed to lapse without
renewal, except after not less than 30 days' written notice to Agent, (ii) the
interests of Agent and the Lessors shall not be invalidated by any act or
negligence of, or breach of representation or warranty by, Lessee or any Person
having an interest in any Unit, (iii) such insurance is primary with respect to
any other insurance carried by or available to Agent and/or any Lessor, (iv) the
insurer shall waive any right of subrogation, setoff,
32
counterclaim, or other deduction, whether by attachment or otherwise, against
Agent and the Lessors, (v) the insurer shall waive any right to claim any
premiums or commission against Agent or any Lessor, and (vi) such policy shall
contain a cross-liability clause providing for coverage of Agent and each Lessor
as if separate policies had been issued to each of them. Lessee will notify
Agent in writing promptly of any changes in the coverages required in Section
-------
6.2(a) which results in a (x) policy cancellation, (y) reduction in the policy
------
limits, or (z) material reduction in such coverages. Lessee shall, in any event,
bear all risk of loss with respect to the Collateral.
Section VI.3 Insurance Certificates. Prior to each Funding Date, and
----------------------
thereafter not less than 3 days prior to the expiration dates of the expiring
policies theretofore delivered pursuant to Section 6.2, Lessee shall deliver to
-----------
Agent certificates issued by the insurer(s) for the insurance maintained
pursuant to Section 6.2; provided, however, that if the delivery of any
----------- -------- -------
certificate is delayed, Lessee shall not be deemed to be in violation of the
obligation to deliver such certificate if, within such 3 day period, Lessee
delivers an executed binder with respect thereto and thereafter delivers the
certificate upon receipt thereof. Upon the request of Agent or the Required
Lessors, Lessee will furnish to Agent a certificate of an independent insurance
broker of recognized standing evidencing the maintenance of all insurance
required hereunder.
ARTICLE VII
INDEMNIFICATION
Section VII.1 General Indemnification. Whether or not the transactions
-----------------------
contemplated hereby are consummated, to the fullest extent permitted by
Applicable Laws, Lessee hereby
(x) waives and releases any Claims now or hereafter existing against any
Indemnitee on account of, and
(y) assumes liability for and shall indemnify, protect, defend, save and
keep harmless each Indemnitee on an after-tax basis (in accordance with
Section 7.3) from and against,
-----------
any and all Claims of every kind and nature whatsoever that may be imposed on,
incurred by, or asserted against any Indemnitee, which are not directly and
primarily caused by the gross negligence of or willful misconduct of or breach
of this Lease by the Indemnitee (provided that the indemnification provided
under this Section 7.1 shall specifically include matters based on or arising
-----------
from the negligence of any Indemnitee), whether or not such Indemnitee shall
also be indemnified as to any such Claim by any other Person and whether or not
such Claim arises or accrues prior to the Tranche I Funding Date or after the
Termination Date, and which relates in any way to or arises in any way out of:
(a) any of the Operative Documents or any of the transactions
contemplated thereby or any investigation, litigation or proceeding in
connection therewith, and any amendment, modification or waiver in respect
thereof;
33
(b) the Collateral, any Unit or any Part thereof or interest therein;
(c) the acquisition, mortgaging, design, manufacture, re-manufacture,
construction, preparation, installation, inspection, delivery, non-
delivery, acceptance, rejection, purchase, ownership, possession, rental,
lease, sublease, repossession, maintenance, repair, alteration,
modification, addition or substitution, storage, titling or retitling,
transfer of title, registration or re-registration, redelivery, use,
operation, condition, financing, refinancing, sale or other disposition of
the Collateral or any Unit or Part thereof or the imposition of any Lien
(or incurring of any liability to refund or pay over any amount as a result
of any Lien) on any of the Collateral, including, without limitation, (i)
Claims or penalties arising from any violation of Applicable Laws or in
tort (strict liability or otherwise), (ii) loss of or damage to the
environment (including, without limitation, investigation costs, cleanup
costs, response costs, remediation and removal costs, costs of corrective
action, costs of financial assurance, and all other damages, costs, fees
and expenses, fines and penalties, including natural resource damages), or
death or injury to any Person, and any mitigative action required by or
under Environmental Laws, (iii) latent or other defects, whether or not
discoverable, and (iv) any Claim for patent, trademark or copyright
infringement;
(d) the sale or other disposition of any of the Collateral,
including, without limitation, any disposition as a result of the exercise
of remedies;
(e) the offer, issuance, sale or delivery of the Certificates;
(f) the breach or alleged breach by ▇▇▇▇▇▇ of any representation or
warranty made by it or deemed made by it in any Operative Document;
(g) the transactions contemplated hereby or by any other Operative
Document in respect of the application of Parts 4 and 5 of Subtitle B of
Title I of ERISA and any prohibited transaction described in Section
4975(c) of the Code;
(h) any Claims related to the Release from any Unit of any substance
into the environment, including (without limitation) Claims arising out of
the use of any Unit for the transportation or storage of any Hazardous
Material;
(i) any failure on the part of Lessee to perform or comply with any
of the terms of any Operative Document; or
(j) any other agreement entered into or assumed by Lessee in
connection with any Unit.
It is expressly understood and agreed that this Section 7.1 shall not apply to
-----------
Claims in respect of:
34
(A) Taxes (such Claims being subject to Section 7.2), except with
----------- ------
respect to (1) taxes or penalties included in Claims described in clause
------
(g) above, and (2) any payment necessary to make payments under this
---
Section 7.1 in accordance with Section 7.3; and
----------- -----------
(B) as to an Indemnitee, Lessor Liens which such Indemnitee is
responsible for discharging under the Operative Documents.
Section VII.2 General Tax Indemnity. (a) Lessee shall pay, defend and
---------------------
indemnify and hold each Indemnitee harmless on an after-tax basis (in accordance
with Section 7.3) from any and all Federal, state, local and foreign Taxes
-----------
imposed on or with respect to or in connection with any Indemnitee, the
Collateral or any portion thereof, any Operative Document, Lessee or any
Sublessee or user of any Unit, howsoever imposed, whether levied or imposed upon
or asserted against any Indemnitee, any Unit, or any Part thereof, by any taxing
Authority (including any Federal, state or local government or taxing Authority
in the United States and any taxing Authority or governmental subdivision of a
foreign country), upon or with respect to:
(i) the acquisition, mortgaging, design, manufacture,
re-manufacture, construction, preparation, installation, inspection, delivery,
non-delivery, acceptance, rejection, purchase, ownership, possession, rental,
lease, sublease, repossession, maintenance, repair, alteration, modification,
addition or substitution, storage, titling or retitling, transfer of title,
registration or re-registration, redelivery, use, operation, condition,
financing, refinancing, sale, return or other application or disposition of the
Collateral or any Unit or Part thereof or the imposition of any Lien (or
incurrence of any liability to refund or pay over any amount as a result of any
Lien) thereon,
(ii) Basic Rent or Supplemental Rent or the receipts or earnings
arising from or received with respect to the Collateral or any Unit or any
Part thereof, or any interest therein or any applications or dispositions
thereof,
(iii) any other amount paid or payable pursuant to this Lease, the
Certificates or any other Operative Documents,
(iv) the Collateral or any Unit or any Part thereof or any interest
therein,
(v) all or any of the Operative Documents, any other documents
contemplated thereby and any amendments and supplements thereto, and
(vi) otherwise with respect to or in connection with the
transactions contemplated by the Operative Documents;
provided, however, that the indemnification obligation of this Section 7.2(a)
-------- ------- --------------
shall not apply to (1) Taxes which are based upon or measured by the
Indemnitee's net income or which are expressly in
35
substitution for, or relieve Indemnitee from, any actual Tax based upon or
measured by Indemnitee's net income (other than any such Taxes imposed by means
of withholding); (2) Taxes characterized under local law as franchise, net
worth, shareholder's capital, payroll or employment taxes (excluding, however,
any value-added, license, property or similar Taxes); and (3) if no Event of
Default exists, Taxes based upon the voluntary transfer, assignment or
disposition by Agent or any Lessor of any interest in any of the Collateral.
Notwithstanding the proviso of the preceding sentence of this Section 7.2(a),
--------------
Lessee shall pay or reimburse, and indemnify and hold harmless, any Indemnitee
which is not incorporated under the laws of the United States or a state thereof
and which has complied with Section 7.2(c)(i)(x) or would be able to comply with
--------------------
Section 7.2(c)(ii) but for a change in an applicable treaty, federal law or
------------------
federal regulation since the applicable Funding Date.
All of the indemnities contained in this Section 7.2 shall continue in full
-----------
force and effect notwithstanding the expiration or earlier termination of this
Lease in whole or in part, including the termination of this Lease with respect
to any Unit or all of the Collateral, and are expressly made for the benefit of,
and shall be enforceable by, each Indemnitee.
(b) Lessee will promptly notify Agent of all reports or returns
required to be made with respect to any Tax with respect to which ▇▇▇▇▇▇ is
required to indemnify hereunder, and will, if permitted by Applicable Laws, file
the same. If Lessee is not permitted to so file, Lessee shall prepare such
reports or returns for signature by Agent or the applicable Lessor and shall
forward the same, together with immediately available funds for payment of any
Tax due, to Agent, at least ten (10) days in advance of the date such payment is
to be made. Upon written request, Lessee shall furnish Agent with copies of all
paid receipts or other appropriate evidence of payment for all Taxes paid by
Lessee pursuant to this Section 7.2.
-----------
(c) (i) At least five (5) Business Days prior to the first date on
which any payment is due under this Lease for the account of any Lessor not
incorporated under the laws of the United States or a state thereof, such Lessor
agrees that it will have delivered to each of Lessee and Agent two duly
completed copies of United States Internal Revenue Service Form 1001 or 4224,
certifying in either case that such Lessor is entitled to receive payments under
the Operative Documents (x) without deduction or withholding of any United
States Federal income Taxes, or (y) at a reduced rate, if applicable. (ii) Each
Lessor which so delivers a Form 1001 or 4224 further undertakes to deliver to
each of Lessee and Agent two additional copies of such form (or a successor
form) on or before the date that such form expires (currently, three successive
calendar years for Form 1001 and one calendar year for Form 4224) or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent forms so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by Lessee or Agent, in each case
certifying that such Lessor is entitled to receive payments under the Operative
Documents without deduction or withholding of any United States Federal income
Taxes, unless an event (including any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lessor from duly completing and delivering any such form with respect to it and
such Lessor advises Lessee
36
and Agent that it is not capable of receiving payments without any withholding
of United States Federal income Tax.
Section VII.3 After-Tax Basis. If an Indemnitee shall not be entitled to
---------------
a corresponding and equal deduction with respect to any payment or Tax which
Lessee is required to pay or reimburse under any other provision of this Article
-------
VII (each such payment or reimbursement under this Article VII, an "original
--- -----------
payment") and which original payment constitutes income to such Indemnitee, then
Lessee shall pay to such Indemnitee on demand the amount of such original
payment on an after-tax basis such that, after subtracting all Taxes imposed on
such Indemnitee with respect to such original payment by Lessee (including any
Taxes otherwise excluded from the indemnification provided under Section 7.2 and
-----------
assuming for this purpose that such Indemnitee was subject to taxation at the
highest Federal, state or local marginal rates applicable to widely held
corporations for the year in which such income is taxable), such payments shall
be equal to the original payment to be received (net of any credits, deductions
or other tax benefits then actually recognized that arise from the payment by
such Indemnitee of any amount, including taxes, for which the payment to be
received is made).
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section VIII.1 Events of Default. The following shall constitute events of
-----------------
default (each an "Event of Default") hereunder:
----------------
(a) any payment of Rent, Lease Balance, Administrative Charge or any
other payment payable by Lessee hereunder or under any other Operative
Document (including, without limitation, any amount payable pursuant to
Article VII) shall not be paid when due, and such payment shall be overdue
-----------
for a period of 3 Business Days;
(b) Any representation or warranty of Lessee contained herein or in
any document furnished to any Lessor or Agent in connection herewith is
incorrect, incomplete or misleading in any material respect when made,
deemed made or reaffirmed, as the case may be;
(c) Lessee shall default in the performance or observance of any
term, covenant, condition or agreement on its part to be performed or
observed under Section 5.1(b), Section 5.1(c), Section 6.2 or Article XI;
-------------- -------------- ----------- ----------
(d) Lessee shall default in any material respect in the performance
or observance of any other term, covenant, condition or agreement on its
part to be performed or observed hereunder or under any other Operative
Document (and not constituting an Event of Default under any other clause
of this Section 8.1), and such default shall continue unremedied or
-----------
unwaived for a period of 30 days after written notice thereof by Agent to
Lessee;
37
(e) Lessee shall generally fail to pay, or admit in writing its
inability to pay, its debts as they become due, or shall voluntarily
commence any case or proceeding or file any petition under any bankruptcy,
insolvency or similar law or seeking dissolution, liquidation or
reorganization or the appointment of a receiver, agent, custodian,
liquidator or similar Person for itself or a substantial portion of its
property, assets or business or to effect a plan or other arrangement with
its creditors, or shall file any answer admitting the jurisdiction of the
court and the material allegations of any involuntary petition filed
against it in any bankruptcy, insolvency or similar case or proceeding, or
shall be adjudicated bankrupt, or shall make a general assignment for the
benefit of creditors, or shall consent to, or acquiesce in the appointment
of, a receiver, agent, custodian, liquidator or similar Person for itself
or a substantial portion of its property, assets or business, or action
shall be taken by Lessee for the purpose of effectuating, authorizing or
furthering any of the foregoing;
(f) involuntary proceedings or an involuntary petition shall be
commenced or filed against Lessee under any bankruptcy, insolvency or
similar law or seeking the dissolution, liquidation or reorganization of
Lessee or the appointment of a receiver, agent, custodian, liquidator or
similar Person for Lessee or of a substantial part of the property, assets
or business of Lessee, or any writ, judgment, warrant of attachment,
execution or similar process shall be issued or levied against a
substantial part of the property, assets or business of Lessee, and such
proceedings or petition shall not be dismissed or stayed, or such writ,
judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded, within 60 days after commencement,
filing or levy, as the case may be; or
(g) there shall have occurred any event of default in any payment
obligation with respect to any amount or amounts of indebtedness owing by
or guaranteed by Lessee which is not cured within 10 days after notice from
Agent and as a result of which the creditor accelerates the maturity of
indebtedness having a principal amount in excess of $25,000,000
(individually or in the aggregate) prior to its expressed or stated
maturity or the beneficiary of any such guarantee of indebtedness having a
principal amount in excess of $25,000,000 (individually or in the
aggregate) makes demand for payment thereunder;
(h) any Reportable Event shall occur with respect to, or proceedings
shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Pension Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee
is, in the reasonable opinion of the Required Lessors, likely to result in
the termination of the Pension Plan for purposes of Title IV of ERISA; or
the Pension Benefit Guaranty Corporation shall institute proceedings to
terminate any Pension Plan or to appoint a trustee to administer any
Pension Plan; or a trustee shall be appointed by an appropriate United
States district court to administer any Pension Plan; or Lessee or any
ERISA Affiliate shall fail to pay to any Pension Plan any contribution
which it is obligated to pay under the terms of such Plan or any agreement
or which is required to meet statutory
38
minimum funding standards and which Lessee or any ERISA Affiliate does not
have sufficient unencumbered assets to pay in full such liability or
deficiency by the payment due date thereof;
(i) any Operative Document or the Security Interest granted under
this Lease shall (except in accordance with its terms), in whole or in
material part, terminate, cease to be effective or cease to be the legally
valid, binding and enforceable obligation of Lessee, or Lessee or any of
its Affiliates shall, directly or indirectly, contest in any manner in any
court the effectiveness, validity, binding nature or enforceability
thereof; or the Lien securing Lessee's obligations under the Operative
Documents shall, in whole or in part, cease to be a perfected first
priority security interest; and
(j) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against Lessee or
any of its Subsidiaries and such judgment or judgments remain undischarged,
unbonded or unstayed for a period (during which execution shall not be
effectively stayed) of 30 days; provided, that the aggregate of all such
--------
judgments exceeds $25,000,000.
Section VIII.2 Remedies. If any Event of Default exists, Agent, on behalf
--------
of Lessors, shall have the rights, options and remedies of a secured party under
the UCC, and, to the extent of a secured party under the UCC (regardless of
whether the UCC or a law similar thereto has been enacted in a jurisdiction
wherein the rights or remedies are asserted) and without limiting the foregoing,
Agent, on behalf of Lessors, also may exercise in any order one or more or all
of the following remedies (it being understood that no remedy herein conferred
is intended to be exclusive of any other remedy or remedies, but each and every
remedy shall be cumulative and shall be in addition to every other remedy given
herein or now or hereafter existing at law or in equity or by statute): (i)
terminate this Lease by notice in writing to Lessee, but Lessee shall remain
liable as hereinafter provided; (ii) declare the entire outstanding Lease
Balance to be due and payable, together with accrued unpaid Accrual Rent, any
Applicable Administrative Charge, and any other amounts payable under the
Operative Documents; (iii) enforce or cause the enforcement of the Lien given
hereunder pursuant to the UCC or any other law; (iv) enter upon the premises
where any of the Collateral may be and take possession of all or any of such
Collateral; and (v) proceed by appropriate court action or actions either at law
or in equity, to enforce or cause the performance by Lessee of the applicable
covenants of this Lease or to recover damages for the breach thereof.
Notwithstanding the foregoing,
(a) if any Event of Default described in Section 8.1(a) shall have
--------------
occurred and be continuing, the Required Lessors may, by notice to Lessee,
and if the Required Lessors do not provide such a notice within 90 days
after such Event of Default shall have occurred, the Agent shall, upon
written notice from any Lessor, declare the then outstanding Lease Balance
to be due and payable together with all Accrual Rent, any Applicable
Administrative Charge, and any other amounts due and payable under the
Operative Documents; and
39
(b) if any Event of Default described in Section 8.1(e) or 8.1(f)
-------------- ------
shall have occurred and be continuing, then the entire outstanding Lease
Balance, any Applicable Administrative Charge, and all accrued Accrual Rent
and other amounts payable under the Operative Documents shall automatically
and immediately become due and payable, without presentment, demand,
notice, declaration, protest or other requirements of any kind, all of
which are hereby expressly waived.
Upon the indefeasible payment of all sums due from Lessee hereunder, including
the then outstanding Lease Balance due and payable, all Accrual Rent, any
Applicable Administrative Charge, and any other amounts due and payable under
the Operative Documents including all costs and expenses incurred by Agent or
Lessors in enforcing their rights hereunder and any loss or damage arising by
reason of ▇▇▇▇▇▇'s breach hereof or default hereunder, Agent, on behalf of the
Lessors, shall execute and deliver to Lessee such documents as may be reasonably
required to release the Collateral from the terms and scope of this Lease
(without representations or warranties, except that the Collateral is free and
clear of Lessor Liens), at Lessee's sole cost and expense.
Section VIII.3 Sale of Collateral. To the extent of a secured party under
------------------
the UCC, and in addition to the remedies set forth in Section 8.2, if any Event
-----------
of Default shall occur, Agent may, but is not required to, take possession of
and sell the Collateral in one or more sales. Any Lessor and Agent may purchase
all or any part of the Collateral at such sale. Lessee acknowledges that sales
for cash or on credit to a wholesaler, retailer or user of such Collateral, or
at public or private auction, are all commercially reasonable. Any notice
required by law of intended disposition by Agent shall be deemed reasonably and
properly given if given at least 10 days before such disposition.
Section VIII.4 Application of Proceeds. The proceeds of such sale or
-----------------------
exercise of other remedies shall be applied in the following order:
(a) First, to the payment of costs and expenses of each Lessor and
-----
Agent in exercising remedies, including expenses of foreclosure or suit, if
any, and of any sale, and of all other proper fees, expenses, liabilities
and advances (including reasonable legal expenses and attorneys' fees) of
each Lessor and Agent and of all taxes, assessments or liens superior to
the lien of these presents, except any taxes, assessments or superior lien
subject to which any sale of Collateral may have been made;
(b) Second, to the other amounts, except those specified in clause
------ ------
(c) below, which under the terms of this Lease have accrued;
---
(c) Third, to Lessors in accordance with Section 10.1 to the extent
----- ------------
of each Lessor's aggregate outstanding Lease Balance, plus any due but
unpaid Administrative Charge or Accrual Rent due each Lessor, plus any
unpaid interest accruing to each Lessor because of the late payment of the
Lease Balance or any Administrative Charge to the date of distribution, but
subject to the limitation in Section 10.1; and
------------
40
(d) Fourth, to the payment of the surplus, if any, to whomsoever may
------
be lawfully entitled to receive the same (including Lessee), or, if no
other Person is lawfully entitled to such surplus, to ▇▇▇▇▇▇.
If there is a deficiency in any amounts due hereunder after Agent has
exercised remedies in accordance with this Lease, Lessee will promptly pay the
same to Agent.
Section VIII.5 Right to Perform Obligations. If Lessee fails to perform
----------------------------
any of its agreements contained herein, then following an Event of Default and
during the continuance thereof, Agent may perform or cause the performance of
such agreement, and the fees and expenses incurred by Agent in connection with
such performance together with interest thereon shall be payable by Lessee upon
demand. Interest on fees and expenses so incurred by Agent shall accrue as
provided in Section 4.5 from the date such expense is incurred until paid in
-----------
full.
Section VIII.6 Power of Attorney. Lessee unconditionally and irrevocably
-----------------
appoints Agent as its true and lawful attorney-in-fact, with full power of
substitution, to the extent permitted by Applicable Law, in its name and stead
and on its behalf, for the purpose of effectuating any sale, assignment,
transfer or delivery hereunder, if an Event of Default occurs, whether pursuant
to foreclosure or power of sale or otherwise, and in connection therewith to
execute and deliver all such deeds, bills of sale, assignments, releases
(including releases of this Lease on the records of any Authority) and other
proper instruments as Agent may reasonably consider necessary or appropriate.
Lessee ratifies and confirms all that such attorney or any substitute shall
lawfully do so by virtue hereof. If requested by Agent or any purchaser, Lessee
shall ratify and confirm any such lawful sale, assignment, transfer or delivery
by executing and delivering to Agent or such purchaser all deeds, bills of sale,
assignments, releases and other proper instruments to effect such ratification
and confirmation as may be designated in any such request.
Section VIII.7 Remedies Cumulative; Consents. To the extent of a secured
-----------------------------
party under the UCC and as permitted by, and subject to the mandatory
requirements of, Applicable Law, each and every right, power and remedy herein
specifically given to Agent or any Lessor or otherwise in this Lease shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised from time to time and as often and
in such order as may be deemed expedient by Agent or the Lessors, and the
exercise or the beginning of the exercise of any power or remedy shall not be
construed to be a waiver of the right to exercise at the same time or thereafter
any right, power or remedy. Agent's or the Lessors' consent to any request made
by Lessee shall not be deemed to constitute or preclude the necessity for
obtaining Agent's or the Lessors' consent, in the future, to all similar
requests. To the extent permitted by Applicable Law, Lessee hereby waives any
rights now or hereafter conferred by statute or otherwise that may require Agent
or the Lessors to sell, lease or otherwise use the Collateral, any Unit or any
Part thereof in mitigation of Agent's or the Lessors'
41
damages upon the occurrence of an Event of Default or that may otherwise limit
or modify any of Agent's or the Lessors' rights or remedies under this Article
-------
VIII.
----
ARTICLE IX
AGENT
Section IX.1 Appointment of Agent; Powers and Authorization to Take
------------------------------------------------------
Certain Actions.
---------------
(a) Each Lessor irrevocably appoints and authorizes Agent to act as
its agent hereunder, with such powers as are specifically delegated to Agent by
the terms hereof, together with such other powers as are reasonably incidental
thereto. Each Lessor authorizes and directs Agent to, and Agent agrees for the
benefit of the Lessors, that, on each Funding Date it will accept the documents
described in Article III of this Lease. Agent accepts the agency hereby created
-----------
applicable to it and agrees to receive all payments and proceeds pursuant to the
Operative Documents to which it is a party and disburse such payments or
proceeds in accordance with the Operative Documents to which it is a party.
Agent shall have no duties or responsibilities except those expressly set forth
in this Lease. Agent shall not be responsible to any Lessor (or to any other
Person) (i) for any recitals, statements, representations or warranties of any
party contained in this Lease, or in any certificate or other document referred
to or provided for in, or received by any of them under, the Operative
Documents, other than the representations and warranties made by Agent in
Section 12.3, or (ii) for the value, validity, effectiveness, genuineness,
------------
enforceability or sufficiency of the Collateral or the title thereto (subject to
Agent's duties and obligations under Section 13.2) or any other document
------------
referred to or provided for herein or (iii) for any failure by any Lessee,
Lessor or any other third party (other than Agent) to perform any of its
obligations under any Operative Document. Agent may employ agents, trustees or
attorneys-in-fact, may vest any of them with any property, title, right or power
deemed necessary for the purposes of such appointment and shall not be
responsible for the gross negligence or misconduct on the part of any of them
selected by it with reasonable care. Neither Agent nor any of its directors,
officers, employees or agents shall be liable or responsible for any action
taken or omitted to be taken by it or them hereunder, or in connection herewith,
except for (x) its or their own gross negligence or willful misconduct (y) any
inaccuracy of any representation or warranty given by Agent pursuant to Section
-------
12.3, or (z) any breach of any covenant of Agent set forth in Section 13.2.
---- ------------
(b) Agent shall not have any duty or obligation to manage, control,
use, operate, store, lease, sell, dispose of or otherwise deal with any Unit,
any other Collateral or this Lease, or to otherwise take or refrain from taking
any action under, or in connection with, this Lease or any related document to
which Agent is a party, except as expressly provided by the terms hereof, and no
implied duties of any kind shall be read into any Operative Document against
Agent. The permissive right of Agent to take actions enumerated in this Lease
or any other Operative Document to which it is a party shall never be construed
as a duty, unless Agent is instructed or directed to exercise, perform or
enforce one or more rights by the Required Lessors. Subject to Section 9.1(c)
--------------
below, no provision of the Operative Documents shall require Agent to expend or
risk its own funds
42
or otherwise incur any financial liability in the performance of any of its
duties and obligations under the Operative Documents, or in the exercise of any
of its rights or powers thereunder. It is understood and agreed that the duties
of Agent are ministerial in nature.
(c) Except as specifically provided herein, Agent is acting hereunder
solely as agent and, except as specifically provided herein, is not responsible
to any party hereto in its individual capacity, except with respect to any claim
arising from Agent's gross negligence or willful misconduct, any breach of a
representation, warranty or covenant made in its individual capacity pursuant to
Section 12.3 or Section 13.2 or, in the case of Agent's handling of funds,
------------ ------------
failure to act with the same care as Agent uses in handling its own funds.
(d) Agent may accept deposits from, lend money to and otherwise deal
with Lessee or any of its Affiliates with the same rights as it would have if it
were not the named Agent ▇▇▇▇▇▇▇▇▇.
Section IX.2 Reliance. Agent may conclusively rely upon, shall be fully
--------
protected in acting or refraining from acting upon, and shall not be bound or
obligated to make any investigation into the facts or matters stated in, any
certificate, notice or other communication (including any communication by
telephone, telecopy, telex, telegram or cable) reasonably believed by it to be
genuine and correct and to have been made, signed, presented, or sent by or on
behalf of the proper Person or Persons. Agent may consult with legal counsel,
independent accountants, and other experts selected by Agent with due care and
may act or refrain from acting in good faith and in accordance with any advice
or opinion of such legal counsel, independent accountants, and other experts
(including any expert selected by Agent to aid Agent in any calculations
required in connection with its duties under the Operative Documents). Agent
may conclusively rely, as to the truth of the statements and the correctness of
the opinions, upon any certificates and opinions furnished to Agent which are
issued pursuant to and in accordance with the provisions of this Lease and which
conform to the requirements of this Lease.
Section IX.3 Action Upon Instructions Generally. Subject to Sections 9.4
---------------------------------- -------- ---
and 9.6, upon written instructions of the Required Lessors, Agent shall, on
---
behalf of the Lessors, give such notice or direction, exercise such right,
remedy or power hereunder or in respect of any of the Collateral, and give such
consent or enter into such amendment to any document to which it is a party as
Agent as may be specified in such instructions. Agent shall promptly deliver to
each Lessor a copy of each notice, report and certificate received by Agent
pursuant to the Operative Documents. Agent shall have no obligation to
investigate or determine whether there has been an Event of Default or an
Incipient Default. Agent shall not be deemed to have notice or knowledge of an
Event of Default or Incipient Default unless a Responsible Officer of Agent is
notified in writing of such Event of Default or Incipient Default, provided that
--------
Agent shall be deemed to have been notified in writing of any failure of Lessee
to pay Rent in the amounts and at the times set forth in Section 4.3. If Agent
-----------
receives notice of an Event of Default, Agent shall give prompt notice thereof,
at Lessee's expense, to each Lessor. Subject to Sections 9.4, 9.6 and 16.5,
-------- --- --- ----
Agent shall take action or refrain from taking action with respect to such Event
of Default as directed by the Required Lessors; provided that,
--------
43
unless and until Agent receives such directions, Agent may refrain from taking
any action, or may act in its discretion, with respect to such Event of Default.
Prior to the date the Lease Balance shall have become due and payable by
acceleration pursuant to Section 8.2, the Required Lessors may deliver written
-----------
instructions to Agent to waive, and Agent shall waive pursuant thereto, any
Event of Default and its consequences; provided that in the absence of written
--------
instructions from all Lessors, Agent shall not waive any (i) Event of Default
described in Section 8.1(a) or (ii) covenant or provision which, under Section
-------------- ---- -------
16.5, cannot be modified or amended without the consent of all Lessors. As to
----
any matters not expressly provided for by this Lease or any other provision of
the Operative Documents, Agent shall in all cases be fully protected in acting,
or in refraining from acting, hereunder in accordance with instructions signed
by the Required Lessors and such instructions of the Required Lessors and any
action taken or failure to act pursuant thereto shall be binding on each Lessor.
Section IX.4 Indemnification. Each Lessor shall reimburse and hold Agent
---------------
harmless, ratably in accordance with its Percentage Interest at the time the
indemnification is required to be given (but only to the extent that any such
indemnified amounts have not in fact been paid to Agent by, or on behalf of,
Lessee in accordance with Section 7.1 or any other provision of the Operative
-----------
Documents) from any and all claims, losses, damages, obligations, penalties,
liabilities, demands, suits, judgments, or causes of action, and all legal
proceedings, and any reasonable costs or expenses in connection therewith,
including allocated charges, costs and expenses of internal counsel of Agent and
all other reasonable attorneys' fees and expenses incurred by Agent in any way
relating to or arising in any manner out of (i) any Operative Document to which
it is a party, the enforcement hereof or thereof or the consummation of the
transactions contemplated thereby, or (ii) instructions from the Required
Lessors (including, without limitation, the costs and expenses that Lessee is
obligated to and does not pay hereunder, but excluding normal administrative
costs and expenses incident to the performance by Agent of its agency duties
hereunder other than materially increased administrative costs and expenses
incurred as a result of an Event of Default), provided that no Lessor shall be
--------
liable for any of the foregoing to the extent they arise from (a) the gross
negligence or willful misconduct of Agent, (b) the inaccuracy of any
representation or warranty or breach of any covenant given by Agent in Section
-------
12.3 or Section 13.2, (c) in the case of Agent's handling of funds or the
---- ------------
Collateral, the failure to act with the same care as Agent uses in handling its
own funds, or (d) any taxes, fees or other charges payable by Agent based on or
measured by any fees, commissions or compensation received by it for acting as
Agent in connection with the transactions contemplated by the Operative
Documents.
Section IX.5 Independent Credit Investigation. Each Lessor by entering
--------------------------------
into this Lease agrees that it has, independently and without reliance on Agent
or any other Lessor and based on such documents and information as it has deemed
appropriate, made its own credit analysis of Lessee and its own decision to
enter into this Lease and each of the other Operative Documents to which it is a
party and that it will, independently and without reliance upon Agent or any
other Lessor and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking action under this Lease and any related documents to which it is a party.
Agent shall not be required to keep itself informed as to the
44
performance or observance by Lessee of any other document referred to (directly
or indirectly) or provided for herein or to inspect the properties or books of
Lessee. Except for notices or statements which Agent is expressly required to
give under this Lease and for notices, reports and other documents and
information expressly required to be furnished to Agent alone (and not also to
each Lessor, it being understood that Agent shall forward copies of same to each
Lessor) hereunder or under any other Operative Document, Agent shall not have
any duty or responsibility to provide any Lessor with copies of notices or with
any credit or other information concerning the affairs, financial condition or
business of Lessee (or any of its Affiliates) that may come into the possession
of Agent or any of its Affiliates.
Section IX.6 Refusal to Act. Except for notices and actions expressly
--------------
required of Agent hereunder and except for the performance of its covenants in
Section 13.2, Agent shall in all cases be fully justified in failing or refusing
------------
to act unless (a) it is indemnified to its reasonable satisfaction by Lessors
against any and all liability and reasonable expense which may be incurred by it
by reason of taking or continuing to take any such action (provided that such
--------
indemnity shall not be required to extend to liability or expense arising from
any matter described in clauses (a) through (d) of Section 9.4, it being
----------- --- -----------
understood that no action taken by Agent in accordance with the instructions of
the Required Lessors shall be deemed to constitute any such matter) and (b) it
is reasonably satisfied that such action is not contrary to any Operative
Document to which it is a party or to any applicable law.
Section IX.7 Resignation or Removal of Agent; Appointment of Successor.
---------------------------------------------------------
Subject to the appointment and acceptance of a successor Agent as provided
below, Agent may resign at any time by giving notice thereof to each Lessor and
Lessee or may be removed at any time by written notice from the Required
Lessors. Upon any such resignation or removal, the Required Lessors at the time
of the resignation or removal shall have the right to promptly appoint a
successor Agent which shall be a financial institution having a combined capital
and surplus of not less than $100,000,000. If, within 30 calendar days after
the retiring Agent's giving of notice of resignation or receipt of a written
notice of removal, a successor Agent is not so appointed and does not accept
such appointment, then the retiring or removed Agent may appoint a successor
Agent and transfer to such successor Agent all rights and obligations of the
retiring Agent. Such successor Agent shall be a financial institution having
combined capital and surplus of not less than $100,000,000. Upon the acceptance
of such appointment as Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Agent and the retiring or
removed Agent shall be discharged from its duties and obligations as Agent
thereafter arising hereunder and under any related document. If the retiring
Agent does not appoint a successor, any Lessor shall be entitled to apply to a
court of competent jurisdiction for such appointment, and such court may
thereupon appoint a successor Agent(s) to act until such time, if any, as a
successor Agent(s) shall have been appointed as above provided.
Section IX.8 Separate Agent. The Required Lessors may, and if they fail
--------------
to do so at any time when they are so required, Agent may, for the purpose of
meeting any legal requirements of any jurisdiction to which any Unit or
Collateral may be subject, appoint one or more individuals or corporations
either to act as co-agent jointly with Agent or to act as separate agent of all
or any part of the Collateral, and vest in such individuals or
45
corporations, in such capacity, such title to such Collateral or any part
thereof, and such rights or duties, as Agent may consider necessary or
desirable. Agent shall not be required to qualify to do business in any
jurisdiction where it is not now so qualified. Agent shall execute, acknowledge
and deliver all such instruments as may be required by any such co-agent or
separate agent more fully confirming such title, rights or duties to such co-
agent or separate agent. Upon the acceptance in writing of such appointment by
any such co-agent or separate agent, it, she or he shall be vested with such
interest in the Collateral or any part thereof, and with such rights and duties,
not inconsistent with the provisions of the Operative Documents, as shall be
specified in the instrument of appointment, jointly with Agent (except insofar
as local law makes it necessary for any such co-agent or separate agent to act
alone), subject to all terms of the Operative Documents. Any co-agent or
separate agent, to the fullest extent permitted by legal requirements of the
relevant jurisdiction, at any time, by an instrument in writing, shall
constitute Agent its attorney-in-fact and agent, with full power and authority
to do all acts and things and to exercise all discretion on its behalf and in
its name. If any co-agent or separate agent shall die, become incapable of
acting, resign or be removed, the interest in the Collateral and all rights and
duties of such co-agent or separate agent shall, so far as permitted by law,
vest in and be exercised by Agent, without the appointment of a successor to
such co-agent or separate agent.
Section IX.9 Termination of Agency. The agency created hereby shall
---------------------
terminate upon the final disposition by Agent of all Collateral at any time
subject hereto and the final distribution by Agent of all monies or other
property or proceeds received pursuant to the Operative Documents to which it is
a party in accordance with their terms, provided that at such time Lessee shall
--------
have complied fully with all the terms hereof.
Section IX.10 Compensation of Agency. Lessee shall pay Agent its
----------------------
reasonable fees, costs and expenses for the performance of Agent's obligations
hereunder as set forth in the letter agreement dated December 2, 1999.
Section IX.11 Limitations. It is expressly understood and agreed by and
-----------
among the parties hereto that, except as otherwise provided herein or in the
other Operative Documents: (a) this Lease and the other Operative Documents to
which Agent is a party are executed by Agent, not in its individual capacity
(except with respect to the representations and covenants of Agent in Sections
--------
12.3 and 13.2), but solely as Agent under the Operative Documents to which it is
---- ----
a party in the exercise of the power and authority conferred and vested in it as
such Agent; (b) each and all of the undertakings and agreements herein made on
the part of Agent are each and every one of them made and intended not as
personal undertakings and agreements by Agent, or for the purpose or with the
intention of binding Agent personally, but are made and intended for the purpose
of binding only the Collateral unless expressly provided otherwise; (c) actions
to be taken by Agent pursuant to its duties and obligations under the Operative
Documents may, in certain circumstances, be taken by Agent only upon specific
direction of the Lessors; (d) nothing contained in the Operative Documents shall
be construed as creating any liability on Agent, individually or personally, or
any incorporator or any past, present or future subscriber to the capital stock
of, or stockholder, officer or director,
46
employee or agent of, Agent to perform any covenants either express or implied
contained herein, all such liability, if any, being expressly waived by the
other parties hereto and by any Person claiming by, through or under them; and
(e) so far as Agent, individually or personally, is concerned, the other parties
hereto and any Person claiming by, through or under them shall look solely to
the Collateral and Lessee for the performance of any obligation under any of the
instruments referred to herein; provided, however, that nothing in this Section
-------- ------- -------
9.11 shall be construed to limit in scope or substance the general corporate
----
liability of Agent in respect of its gross negligence or willful misconduct or a
breach of those representations, warranties and covenants of Agent in its
individual capacity set forth herein (including, without limitation, Sections
--------
12.3 and 13.2) or in any of the other agreements contemplated hereby.
---- ----
ARTICLE X
DISTRIBUTIONS TO LESSORS
All amounts of money received or realized by Agent pursuant to this Lease
which are to be distributed to any Lessor (as distinguished from Lessee or any
other Person) shall be distributed as follows:
Section X.1 Prorata Distribution. All distributions by Agent of amounts
--------------------
payable to Lessors pursuant to this Lease and the other Operative Documents
(including amounts distributable pursuant to Section 8.4(c)) shall be made to
--------------
the Lessors in accordance with the amounts due each such Lessor as set forth on
such Lessor's Payment Schedule, without preference or priority of any Lessor
over another, and in case moneys are insufficient to pay in full the whole
amount due, owing or unpaid to Lessors, then application shall be made first to
-----
any unpaid expenses and indemnification claims of Agent and all Lessors, second
------
pro rata to accrued interest due each Lessor pursuant to Section 4.5, third pro
----------- -----
rata to any unpaid Administrative Charge due each Lessor, fourth pro rata to all
------
Accrual Rent, fifth to each Lessor in accordance with its Percentage Interest up
-----
to its remaining Lease Balance, and sixth, to the person or persons legally
-----
entitled thereto.
Section X.2 Timing of Distributions. The amounts payable by Agent to
-----------------------
Lessors pursuant to this Lease will be payable upon Agent's receipt of such
amounts pursuant to this Lease as provided in Section 4.3, in immediately
-----------
available funds.
ARTICLE XI
LEASE TERMINATION
Section XI.1 Release of Collateral. On the last day of the Term, Lessee
---------------------
shall pay (the "Payment Obligation") the Lease Balance as of the last day of the
------------------
Term (the "Release Amount"), plus all accrued and unpaid Accrual Rent and other
--------------
amounts, including, without limitation, Supplemental Rent, due under the
Operative Documents as determined after payment of all Rent due
47
on such date, and upon satisfaction by Lessee of the Payment Obligation, Agent
shall release the Collateral then subject to this Lease from the lien hereof.
Section XI.2 Early Termination Right for All of the Collateral. If no
-------------------------------------------------
Event of Default shall exist, Lessee may, at its option, upon at least 30 days'
advance written notice to Agent, require the Lessors to release all, but not
less than all, of the Collateral subject to this Lease upon payment of (i) all
unpaid Accrual Rent payable on or prior to such day, (ii) the Lease Balance,
(iii) the Applicable Administrative Charge, and (iv) all other fees and expenses
and other amounts then due and payable pursuant to this Lease and the other
Operative Documents. Upon the indefeasible payment of such sums by Lessee in
accordance with the provisions of Section 11.1 or this Section 11.2, the
------------ ------------
obligation of Lessee to pay Rent hereunder shall cease, the Term shall end on
the date of such payment and Agent, on behalf of the Lessors, shall execute and
deliver to Lessee such documents as may be reasonably required to release the
Collateral from the terms and scope of this Lease and the Security Interest
(without representations or warranties, except that the Collateral is free and
clear of Lessor Liens), in such form as may be reasonably requested by ▇▇▇▇▇▇,
all at Lessee's sole cost and expense.
Section XI.3 Early Payment and Termination Rights for Less Than All of the
-------------------------------------------------------------
Collateral. If no Event of Default shall exist, Lessee may, at its option, upon
----------
at least 30 days' advance written notice to Agent, prepay any portion of the
Lease Balance in a minimum amount of $5,000,000, without the release of any of
the Collateral, provided that at the time of such prepayment Lessee pays to
Agent, on a prorated basis with respect to the portion of the Lease Balance
being prepaid, (i) all unpaid Accrual Rent payable on or prior to such day, (ii)
the Applicable Administrative Charge, and (iii) all other fees and expenses and
other amounts then due and payable pursuant to this Lease and the other
Operative Documents, provided that at any time, with the prior written consent
--------
of the Required Lessors with respect to a particular Unit, to be granted or
withheld in their sole and absolute discretion (including, without limitation,
the choice of the Unit to be released), Lessee may pay an amount equal to the
product of the Unit Value Fraction for such Unit and the Lease Balance, plus all
unpaid Accrual Rent applicable to the Lease Balance paid, the Applicable
Administrative Charge, and other fees and expenses payable hereunder and procure
the release of such Unit from the scope of this Lease and the Security Interest,
and in such event, upon the indefeasible payment of such sums by Lessee in
accordance with the provisions of this Section 11.3, then, with respect to the
------------
Unit so released, Agent, on behalf of the Lessors, shall execute and deliver to
Lessee such documents as may be reasonably required to so release such Unit
(without representations or warranties, except that such Unit is free and clear
of Lessor Liens), in such form as may be reasonably requested by ▇▇▇▇▇▇, all at
Lessee's sole cost and expense, provided, further, that Lessee may elect to
-------- -------
remove no more than one Unit from the scope of this Lease and the Security
Interest during the Term.
Section XI.4 Right to Sell A Unit. If no Event of Default shall exist,
--------------------
Lessee may, at its option, upon at least 30 days' advance written notice to
Agent, but only once during the Term, effect a Sale of a Unit and have such Unit
released from this Lease and the Security Interest, upon payment of (i) all
unpaid Accrual Rent payable on or prior to such day, (ii) the Lease Balance
multiplied by
48
the Unit Value Fraction for such Unit, (iii) the Applicable Administrative
Charge, and (iv) all other fees and expenses and other amounts then due and
payable pursuant to this Lease and the other Operative Documents. Upon the
indefeasible payment of such sum by Lessee in accordance with the provisions of
this Section 11.4, the obligation of Lessee to pay Rent hereunder shall be
------------
adjusted as necessary to account for the Sale of such Unit, the Term with
respect to such Unit shall end on the date of such payment, and Agent, on behalf
of the Lessors, shall execute and deliver to Lessee such documents as may be
reasonably required to release such Unit from the terms and scope of this Lease
and the Security Interest (without representations or warranties, except that
such Unit is free and clear of Lessor Liens), in such form as may be reasonably
requested by ▇▇▇▇▇▇, all at ▇▇▇▇▇▇'s sole cost and expense.
ARTICLE XII
REPRESENTATIONS AND WARRANTIES
Section XII.1 Representations and Warranties of Lessee. As of the date
----------------------------------------
hereof and each Funding Date, Lessee makes the representations and warranties
set forth in this Section 12.1 to each of the other parties hereto.
------------
(a) Due Organization, etc. Lessee is a corporation duly organized, validly
----------------------
existing and in good standing under the laws of the State of Delaware; Lessee is
duly qualified as a foreign corporation authorized to do business and is in good
standing in every jurisdiction in which its failure to be so qualified would
have a Material Adverse Effect (including each state or other jurisdiction in
which the Collateral or any thereof will be located); Lessee has full corporate
power and authority to conduct its business as presently and presently proposed
to be conducted, to own or hold under lease its properties, to enter into and
perform its obligations under the Operative Documents to which it is or is to be
a party and each other agreement, instrument and document to be executed and
delivered by it on or before each Funding Date in connection with or as
contemplated by each such Operative Document to which it is or is to be a party;
and the Operative Documents to which Lessee is a party, and to which ▇▇▇▇▇▇ is
to be a party, have been or will be duly executed and delivered by ▇▇▇▇▇▇.
(b) Authorization; No Conflict. The execution and delivery by Lessee of
--------------------------
the Operative Documents to which it is or is to be a party, and the performance
by Lessee of its obligations under such Operative Documents, have been duly
authorized by all necessary corporate action (including any necessary
stockholder action) on its part, and do not and will not: (i) contravene any
Applicable Laws; (ii) violate any provision of its charter or by-laws; (iii)
result in a breach of or constitute a default under any indenture, loan or
credit agreement, or any other agreement or instrument to which Lessee is a
party or by which Lessee or its properties may be bound or affected; (iv) result
in, or require, the creation or imposition of any Lien of any nature upon or
with respect to any of the properties now owned or hereafter acquired by Lessee
(other than the Liens created pursuant to the Operative Documents); or (v)
require any Governmental Action by any Authority or any consent or approval of
any non-governmental Person, except for (A) the filings and recordings listed on
49
Schedule 12.1(b) to perfect the rights of Agent (for the benefit of the Lessors)
----------------
intended to be created by the Operative Documents, and (B) those Governmental
Actions listed on Schedule 12.1(b) required with respect to Lessee or any of its
----------------
Affiliates, each of which have been duly effected and are, or on the Funding
Date will be, in full force and effect.
(c) Enforceability, etc. Each Operative Document to which Lessee is a
--------------------
party constitutes the legal, valid and binding obligation of Lessee, enforceable
against Lessee in accordance with the terms thereof, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
(d) Litigation. There is no action, proceeding or investigation pending or
----------
threatened which questions the validity of the Operative Documents to which
Lessee is a party or any action taken or to be taken pursuant to the Operative
Documents to which Lessee is a party, and there are no actions, proceedings or
investigations pending or threatened which, if adversely determined, would have,
individually or in the aggregate, a Material Adverse Effect.
(e) Title; Liens. Lessee has, and as of each Funding Date will have, good
------------
and marketable title to each Unit, free and clear of all Liens other than
Permitted Liens. Lessee has not granted, nor will it grant, any Lien on any
Unit, any other Collateral or this Lease, to any Person other than Agent or the
Lessors, and no Lien, other than the Security Interest granted to Agent and the
Lessors hereunder (and any Lien hereafter granted by Agent and the Lessors), has
attached to any Unit, any other Collateral or this Lease, or in any manner has
affected adversely Agent's and the Lessors' rights and Security Interest herein.
(f) Perfection of Security Interest. Upon the filing of appropriate UCC
-------------------------------
financing statements with the Secretary of State for each of the states of
Kentucky, Mississippi, Nevada and California, and the county clerks of Franklin
County and ▇▇▇▇▇ County, Kentucky, and fixture filings in ▇▇▇▇▇ County,
Kentucky, Madison County, Mississippi, and ▇▇▇▇▇ County, Nevada, the payment of
any applicable fees and taxes relating to any of the foregoing, and the payment
of the Funded Amount by Agent to the Lessee, Agent will have an enforceable,
perfected first priority security interest of record in the Collateral as
against all Persons including Lessee and its creditors.
(g) ERISA.
-----
(i) Neither Lessee, nor any ERISA Affiliate, presently maintains,
participates in, or contributes to, an Employee Benefit Plan (A) that has
incurred any current liability or any "accumulated funding deficiency",
whether or not waived, as defined in Section 412 of the Code or Section 302
of ERISA, that remains unpaid as of the Funding Date for which Lessee or
any ERISA Affiliate does not have sufficient unencumbered assets to pay in
full such liability or deficiency by the payment due date thereof, (B) with
respect to which, as of the Funding Date, a Reportable Event has occurred
which could reasonably be expected to result in the termination of such
Employee Benefit Plan, (C) which is a Multiemployer Plan for
50
which Lessee or any ERISA Affiliate has received notice that the plan is in
reorganization or insolvent, (D) for which penalties or taxes have been
imposed under Sections 502(i) and 502(l) of ERISA or Section 4975 of the
Code, (E) for which there has been, in the immediately preceding six-year
period, a complete or partial withdrawal from any Multiemployer Plan, or
(F) which is a Welfare Plan that does not reserve to Lessee the right to
modify or terminate such Welfare Plan at any time.
(ii) Assuming the accuracy of the representations of each Lessor and
the Agent contained in Sections 12.2 and 12.3, respectively, the
------------- ----
consummation of the transactions provided for in this Lease and compliance
by Lessee with the provisions hereof and the Certificates issued hereunder
will not involve any Prohibited Transaction.
(h) Taxes. Neither Lessee nor any Subsidiary is delinquent in payment of
-----
any federal, state or local income, property or other tax, except for any
delinquency which is the subject of a Permitted Contest. The Federal income Tax
liabilities of Lessee and each of its Subsidiaries have been determined by the
Internal Revenue Service and paid through the fiscal year ended November 30,
1985. ▇▇▇▇▇▇ believes that adequate provision has been made on its books in
accordance with GAAP for (i) any proposed additional Tax assessments against it,
(ii) any pending material controversy in respect of Federal or state income
Taxes, and (iii) Taxes of Lessee and each Subsidiary for all open years and for
the current fiscal year.
(i) No Transfer Taxes. To the best of Lessee's knowledge, no sales, use,
-----------------
excise, transfer or other Tax shall result from the transfer or creation of any
security interest in any Unit or any Certificate pursuant to Article II, except
----------
such Taxes that have been paid in full on or prior to the Tranche I Funding
Date.
(j) Rights in Respect of the Collateral. Lessee is not a party to any
-----------------------------------
contract or agreement with respect to the sale by Lessee of any interest in the
Collateral or any part thereof other than pursuant to this Lease and the other
Operative Documents.
(k) Patents, Trademarks. Except as set forth on Schedule 12.1(k) attached
------------------- ----------------
hereto, there are no patents, patent rights, trademarks, service marks, trade
names, copyrights, licenses or other intellectual property rights with respect
to the Collateral that are necessary for the operation of the Collateral to
which Lessee does not have rights.
(l) Defaults, Casualties, etc. As of the Funding Date, no Incipient
--------------------------
Default, Event of Default or Casualty has occurred and is continuing and there
is no action pending or, to the best of ▇▇▇▇▇▇'s knowledge, threatened by any
Authority to initiate a Casualty. To the best of Lessee's knowledge, as of the
Funding Date, no condition exists that constitutes, or with the giving of notice
or lapse of time or both would constitute an event of default by Lessee under
any material indenture, mortgage, chattel mortgage, deed of trust, lease,
conditional sales contract, loan or credit arrangement or other material
agreement or instrument to which Lessee is a party or by which it or any of its
properties may be bound.
51
(m) Chief Executive Office of Lessee. The principal place of business and
--------------------------------
chief executive office, as such terms are used in Section 9-103(3) of the UCC,
of Lessee are each located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
(n) Compliance With Law. The Collateral and the current use and operation
-------------------
thereof and thereon do not violate any Applicable Laws, including, without
limitation, any thereof relating to occupational safety and health or
Environmental Laws, which could have a Material Adverse Effect.
(o) Subjection to Government Regulation. Neither Agent nor any Lessor
-----------------------------------
will, solely by reason of entering into the Operative Documents or consummating
the transactions contemplated thereby, (i) become subject to ongoing regulation
of its operations by any Authority (other than upon exercise of remedies under
this Lease); or (ii) become subject to ongoing regulation of its operations by
any Authority upon exercise of remedies under this Lease or upon the expiration
hereof (except for regulation the applicability of which depends upon the
existence of facts in addition to the ownership of, or holding, the Collateral
or any interest therein); or (iii) be required to qualify to do business in any
jurisdiction.
(p) Investment Company Act. Lessee is not an "investment company" or a
----------------------
company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
(q) Public Utility Holding Company. Lessee is not subject to regulation as
------------------------------
a "holding company", an "affiliate" of a "holding company", or a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
(r) Licenses, Registrations and Permits. All material licenses, approvals,
-----------------------------------
authorizations, consents and permits required for the use and operation of each
Unit, including, without limitation, for all software used in connection with
each Unit, have been obtained from the appropriate Authorities having
jurisdiction or from private parties, as the case may be.
(s) Federal Reserve Regulations. Neither Lessee nor any Affiliate of
---------------------------
Lessee will, directly or indirectly, use any of the proceeds of the sale of the
Collateral or the Certificates for the purpose of purchasing or carrying any
"margin security" or "margin stock" within the meaning of Regulation T, U or X
of the Board of Governors of the Federal Reserve System, respectively, or for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry a margin security or margin stock or for any other
purpose which might cause any of the transactions contemplated by this Lease or
any other Operative Document to constitute a "purpose credit" within the meaning
of Regulation T, U or X of the Board of Governors of the Federal Reserve System,
or for the purpose of purchasing or carrying any security, and neither Lessee
nor any Affiliate of Lessee has taken or will otherwise take or permit any
action by Lessee or any of its Affiliates in connection with any of the
transactions contemplated by any of the Operative
52
Documents which would involve violation of Regulation T, U or X, or any other
regulation of the Board of Governors of the Federal Reserve System.
(t) Financial Information.
---------------------
(i) The consolidated balance sheet of Lessee and its Subsidiaries as
of November 29, 1998, and the related consolidated statements of
operations, cash flows and common shareholders' equity for the fiscal year
then ended, reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP, a copy of which has been
delivered to Agent, fairly present, in conformity with GAAP, the
consolidated financial position of Lessee and its Subsidiaries as of such
date and their consolidated results of operations and changes in financial
position for such fiscal year.
(ii) The consolidated balance sheet of Lessee and its Subsidiaries as
of August 29, 1999, and the related consolidated statements of operations
and cash flows for the portion of Lessee's fiscal year ended at the end of
such quarter, a copy of which has been delivered to Agent, fairly present,
in conformity with GAAP, the consolidated financial position of Lessee and
its Subsidiaries as of such date and their consolidated results of
operations and changes in financial position for such fiscal quarter,
subject to normal year-end auditing adjustments.
(iii) Since August 29, 1999, there has been no Material Adverse
Effect.
(u) Disclosure. The information disclosed in writing by Lessee or any of
----------
its Affiliates (or any Person authorized or employed by any such Person as agent
or otherwise) to Agent and the Lessors in connection with the negotiation of the
Operative Documents and the transactions contemplated thereby, when taken as a
whole with all other written disclosures to such parties, do not contain an
untrue statement of a material fact or omit to state a material fact necessary
to make the statements herein or therein not misleading. There is no particular
fact of which Lessee or any of its Affiliates has knowledge that has not been
disclosed by Lessee or any of its Affiliates (or by any Person authorized or
employed by Lessee or any of its Affiliates as agent or otherwise) in writing to
the Lessors that, as far as Lessee or any of its Affiliates can reasonably
foresee, could reasonably be expected to have a Material Adverse Effect.
(v) Appraisal Data. The written information provided by Lessee and its
--------------
Affiliates to the Appraiser and forming the basis for the conclusions set forth
in the Appraisal, taken as a whole, was true and correct in all material
respects and did not omit any information known and available to Lessee
necessary to make the information provided not misleading.
(w) Solvency. The consummation by Lessee of the transactions contemplated
--------
by the Operative Documents did not and will not render Lessee insolvent, nor was
it made in contemplation of ▇▇▇▇▇▇'s insolvency; the value of the assets and
properties of Lessee at fair valuation and at their then present fair salable
value is and, after such transactions, will be greater than Lessee's total
53
liabilities, including contingent liabilities, as they become due; and the
property remaining in the hands of ▇▇▇▇▇▇ was not and will not be an
unreasonably small amount of capital.
(x) Private Offering. Lessee has not offered any interest in this Lease,
----------------
the Rent, the Certificates or the Collateral or any similar security for sale
to, or solicited offers to buy any thereof from, or otherwise directly or
indirectly approached or negotiated with respect thereto with, any prospective
purchaser other than Agent, the Lessors and not more than sixty (60) other
institutional investors, each of which was offered such interest at a private
sale for investment and each of which Lessee had reasonable grounds to believe,
and as to the Agent and the Lessors, after reasonable inquiry does believe, has
such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of such an investment; and, assuming
the truth and accuracy of the representations set forth in Section 12.2(b), the
---------------
issuance, sale and delivery of the Certificates and the interests in this Lease
represented thereby under the circumstances contemplated by this Lease do not
require the registration of such Certificates or interests under the Securities
Act or the qualification of any of the Operative Documents under the Trust
Indenture Act of 1939, as amended.
(y) The Equipment. The development of each Unit is complete and all Units
-------------
meet all applicable specifications therefore, are fully operational, and have
the capacity and functional ability to perform, on a continuing basis (subject
to normal interruption in the ordinary course of business for maintenance,
inspection, service, repair and testing) and in commercial operation, the
functions for which they were specifically designed. Schedule II lists all of
the Equipment.
(z) Software. All of Lessee's rights in the software described in subpart
--------
(e) of the definition of Collateral may be collaterally assigned to Agent and
may be further assigned in connection with any exercise any remedies under this
Lease and may be further assigned by any purchaser of any Unit, all without the
consent of any person party to, or any breach of, any agreement pursuant to
which ▇▇▇▇▇▇'s rights to use such software arise.
Section XII.2 Representations and Warranties of Lessors. Each Lessor
-----------------------------------------
represents and warrants, severally and only as to itself, to each of the other
parties hereto as follows:
(a) ERISA. Either (i) it is not and will not be purchasing any of its
----- ------
interest in the Collateral or the Certificates with the assets of an "employee
benefit plan" (as defined in Section 3(3) of ERISA) which is subject to Title I
of ERISA, or a "plan" (as defined in Section 4975(e)(1) of the Code) or (ii) the
--
acquisition and holding of any Certificate will not result in a Prohibited
Transaction, or (iii) it (A) is an insurance company, (B) is acquiring its
--
Certificate with funds held in an insurance company general account (as defined
in Section V(e) of the proposed Prohibited Transaction Class Exemption published
on August 22, 1994 at 59 Federal Register 43134 (the "Proposed PTCE") and (C) is
-------------
acquiring its Certificate in reliance on the availability of, and its
qualification for, the exemptive relief contemplated in the Proposed PTCE.
54
(b) Investment in Collateral and Certificates. It is acquiring its
-----------------------------------------
interest in the Collateral (as represented by the Certificates) for its own
account for investment, and if in the future it should decide to dispose of its
interest in the Collateral, it understands that it may do so only in compliance
with the Securities Act and the rules and regulations of the SEC thereunder and
any applicable state securities laws. Neither it nor anyone authorized to act
on its behalf has taken or will take any action which would subject the issuance
or sale of any Certificate or any interest in the Collateral or this Lease to
the registration requirements of Section 5 of the Securities Act. No
representation or warranty contained in this Section 12.2(b) shall include or
---------------
cover any action or inaction of Lessee or any Affiliate thereof whether or not
purportedly on behalf of any Lessor or any of their Affiliates. Subject to the
foregoing, and subject to the provisions of Article XIV hereof, it is understood
-----------
among the parties that the disposition of each Lessor's property shall be at all
times within its control.
Section XII.3 Representations and Warranties of Agent. Agent, in its
---------------------------------------
individual capacity, hereby represents and warrants to the other parties as set
forth in this Section 12.3.
------------
(a) Due Organization, etc. Agent is a national banking association duly
----------------------
organized, validly existing and in good standing under the laws of the United
States of America; Agent has full corporate power and authority to enter into
and perform its obligations under the Operative Documents to which it is or is
to be a party and each other agreement, instrument and document to be executed
and delivered by it on or before the Tranche I Funding Date in connection with
or as contemplated by each such Operative Document to which it is or is to be a
party; and the Operative Documents to which Agent is a party, and to which
▇▇▇▇▇▇ is to be a party, have been or will be duly executed and delivered by
Agent.
(b) Authorization; No Conflict. The execution and delivery by Agent of the
--------------------------
Operative Documents to which it is or is to be a party, and the performance by
Agent of its obligations under such Operative Documents, have been duly
authorized by all necessary corporate action (including any necessary
stockholder action) on its part, and do not and will not: (i) contravene any
applicable laws, rules, regulations, orders, injunctions or decrees of any
Authority of the United States of America governing its banking or trust powers
or of the State of Utah where such contravention would be reasonably likely to
materially and adversely affect the ability of Agent, either in its individual
capacity, as Agent, or both, to perform its obligations under any Operative
Documents to which it is or will be a party; (ii) violate any provision of its
charter or by-laws; (iii) result in a breach of or constitute a default under
any indenture, loan or credit agreement, or any other agreement or instrument to
which Agent, either in its individual capacity, as Agent, or both, is a party or
by which it or its properties may be bound or affected, which breaches or
default would be reasonably likely to materially and adversely affect the
ability of Agent, either in its individual capacity, as Agent, or both, to
perform its obligations under any Operative Documents to which it is or will be
a party; or (iv) require any authorizations, consents, approvals, licenses or
formal exemptions from, nor any filings, declarations or registrations with, any
Authority of the United States of America governing its banking or trust powers
or of the State of Utah or any consent or approval of any non-governmental
Person.
55
(c) Enforceability, etc. Each Operative Document to which Agent, either in
-------------------
its individual capacity, as Agent, or both, is a party constitutes the legal,
valid and binding obligation of Agent, either in its individual capacity, as
Agent, or both, enforceable against it in accordance with the terms thereof,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles.
(d) Litigation. There is no action, proceeding or investigation pending or
----------
to the best of Agent's knowledge, after due inquiry, threatened which questions
the validity of the Operative Documents to which Agent, in its individual
capacity, as Agent, or both, is a party, or any action taken or to be taken
pursuant to the Operative Documents to which Agent, in its individual capacity,
as Agent, or both, is a party.
ARTICLE XIII
COVENANTS
Section XIII.1 Covenants of Lessee. Lessee covenants to each of the other
-------------------
parties hereto as follows:
(a) Corporate Existence, etc. Subject to subsection (c) below, Lessee
-------------------------
shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence, rights, powers and franchises and its
power and authority to perform its obligations under the Operative Documents,
including, without limitation, any necessary qualification or licensing in any
foreign jurisdiction where a Unit is located and in any other foreign
jurisdiction where the failure to be so qualified would have a Material Adverse
Effect.
(b) Compliance With Laws. Lessee shall comply with all Applicable Laws
--------------------
(including, without limitation, Environmental Laws), except for such instances
of non-compliance which would not have, individually or in the aggregate, a
Material Adverse Effect.
(c) Mergers, Transfers, etc. Lessee shall not (whether in one transaction
------------------------
or a series of transactions) (x) consolidate with or merge into any other Person
or (y) convey, transfer or lease all or substantially all of its assets to any
other Person, unless either (i) Lessee or a Subsidiary of Lessee is the
surviving entity or (ii) the surviving entity or the transferee assumes all of
the obligations of Lessee hereunder in writing, and, in either case, there is no
Material Adverse Effect.
(d) Change of Name or Location. Lessee shall furnish to Agent written
--------------------------
notice on or before the 30th day prior to any relocation of its chief executive
office or principal place of business, or change of its name.
(e) Financial Information. Lessee shall keep its books and records in
---------------------
accordance with GAAP. ▇▇▇▇▇▇ agrees to furnish Agent (and Agent shall
thereafter promptly furnish to each Lessor), (i) as soon as practicable, and in
any event within 45 days after the end of each fiscal quarter, the
56
related consolidated statements of income and cash flows of Lessee and its
Subsidiaries for such fiscal quarter for the period from the beginning of the
current fiscal year to the end of such fiscal quarter, and a consolidated
balance sheet of Lessee and its Subsidiaries, as at the end of such fiscal
quarter, setting forth in each case in comparative form corresponding
consolidated figures from the corresponding fiscal quarter in the immediately
preceding fiscal year, all in reasonable detail and certified by an authorized
financial officer of Lessee, subject to changes resulting from year-end
adjustments, together with an officer's certificate that no Incipient Default or
Event of Default has occurred and is continuing hereunder; (ii) as soon as
practicable and in any event within 120 days after the end of each fiscal year,
audited consolidated statements of cash flows, income and shareholders' equity
of Lessee and its Subsidiaries for such year and a consolidated balance sheet of
Lessee and its Subsidiaries as at the end of such year, setting forth in each
case in comparative form corresponding consolidated figures from the preceding
annual audit, all in reasonable detail and certified to Agent and each Lessor by
independent certified public accountants of recognized standing selected by
Lessee; (iii) as soon as practicable, copies of all such financial statements,
proxy statements, notices and reports as Lessee shall send to its public
stockholders, if any, and copies of any registration statements (without
exhibits) and any regular or periodic reports which it files with the SEC (or
any Authority succeeding to the function of the SEC); and (iv) with reasonable
promptness, such other data and information with respect to the business,
affairs and conditions of Lessee or its Subsidiaries as from time to time Agent
may request, at the reasonable request of the Required Lessors.
(f) Compliance Certificates. Concurrently with each delivery of financial
-----------------------
statements pursuant to the foregoing subsection (e) (and within the time periods
--------------
specified therein), Lessee shall deliver to Agent an Officer's Certificate
stating that such officer has reviewed the activities of Lessee during such
period and that during such period Lessee has performed and fulfilled each and
every covenant, obligation and condition contained in the Operative Documents,
and no Incipient Default, Event of Default or Casualty exists under any of the
Operative Documents, or if any such condition shall exist, specifying the nature
and status thereof.
(g) Notice of Defaults. Promptly upon, but in no event later than three
------------------
(3) Business Days after a Responsible Officer of Lessee shall have obtained
knowledge thereof, Lessee shall notify Agent in writing of the existence of an
Incipient Default, Event of Default, or any other matter which has resulted in a
Material Adverse Effect, which notice shall describe the nature of such
Incipient Default, Event of Default or other matter and the action Lessee is
taking with respect thereto.
(h) Inspection. Agent or any Lessor may visit and inspect the properties
----------
(including, without limitation, the Collateral) of Lessee, and to the extent
reasonable under the circumstances, examine its books of record and accounts
(including, without limitation, Lessee's records pertaining to the Collateral),
and discuss its affairs, finances and accounts with its officers, and, with
notice to Lessee so that it may have an officer present if it so reasonably
requests, the accountants of Lessee, all at such times as Agent or the
requesting Lessor, as the case may be, may reasonably request. Upon such
request, Lessee shall make such properties and such books of record and accounts
available to Agent or the requesting Lessor, as the case may be, for inspection.
So long as any
57
Incipient Default or Event of Default shall exist hereunder, Lessee will pay the
reasonable expenses of Agent and the Lessors incurred in the exercise of the
rights granted pursuant to this Section 13.1(h).
---------------
(i) ERISA Events. Promptly upon ▇▇▇▇▇▇'s becoming aware of the occurrence
------------
of any matter or matters that are likely to constitute an Event of Default under
Article VIII, Lessee shall notify Agent in writing specifying the nature
------------
thereof, what action Lessee or any ERISA Affiliate is taking or proposes to take
with respect thereto.
(j) Rule 144A Information. At any time when Lessee is not subject to
---------------------
Section 13 or 15(d) of the Securities Exchange Act, if Agent or any Lessor shall
request that Lessee deliver to Agent, information with respect to Lessee that
meets the requirements of Rule 144A(d)(4)(i) of the Securities Exchange Act (or
any successor provision), then: (x) promptly following the receipt by Lessee of
that request, Lessee shall deliver such information to Agent, and (y) such
information shall, at the time of such delivery, be as of a date so as to be
entitled to the presumption that such information is "reasonably current" within
the meaning of Rule 144A(d)(4)(ii) of the Securities Exchange Act (or any
successor provision); provided that Lessee (i) shall not be so obligated to the
--------
extent that any amendment to Rule 144A after the date hereof expands or makes
more onerous the provisions of Rule 144A, and (ii) shall in no event be
obligated to provide more information pursuant to this Section 13.1(j) with
---------------
respect to the nature of its business and the products and services that it
offers than it is providing to its commercial lenders at such time.
(k) Further Assurances. Lessee will, at its expense, promptly and duly do
------------------
any further reasonable act and execute, acknowledge, deliver, file, register and
record any further documents (including, without limitation, amendments to this
Lease and UCC financing statements and continuation statements) as are required
or as Agent or the Required Lessors may from time to time reasonably request in
order to carry out more effectively the intent and purposes of this Lease and to
establish and protect the rights and remedies created or intended to be created
in favor of Agent and the Lessors, including the first priority security
interest in the Collateral of Agent, on behalf of the Lessors. Without limiting
the foregoing, on or prior to December 3, 2004, ▇▇▇▇▇▇ shall have executed and
filed continuation statements with respect to the financing statements
originally filed hereunder, or failing the same, Agent shall file such
continuation statements prior to December 3 in each such year pursuant to the
authority vested in Agent under Section 8.5.
-----------
(l) Environmental Matters. Lessee shall: (i) use and operate the
---------------------
Collateral in material compliance with all Environmental Laws, keep all
necessary permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect, and remain in material compliance
therewith, and handle all Hazardous Material in material compliance with all
applicable Environmental Laws; (ii) promptly notify Agent, and provide copies
upon receipt, of all written claims, complaints, notices or inquiries relating
to the condition or compliance of the Collateral in so far as they relate to
Environmental Laws, and promptly cure and have dismissed with prejudice to the
satisfaction of the Required Lessors any actions and proceedings (except for
those which would not have a Material Adverse Effect) relating to compliance
with Environmental Laws, provided, however, that Lessee may contest in good
-------- -------
faith by Permitted Contest any such actions or
58
proceedings, provided, further that Agent, in its individual capacity and as
-------- -------
Agent, and the Lessors shall have received reasonably sufficient security from
Lessee prior to the institution of any such Permitted Contest by Lessee as any
of them shall have reasonably requested; and (iii) provide such information and
certifications which Agent or any Lessor may reasonably request from time to
time to evidence compliance with this Section 13.1(l).
---------------
(m) Securities. Lessee shall not, nor shall it permit anyone authorized to
----------
act on its behalf to, take any action which would subject the issuance or sale
of the Certificates, any of the Collateral or the Lease, or any security or
lease the offering of which, for purposes of the Securities Act or any state
securities laws, would be deemed to be part of the same offering as the offering
of the aforementioned items, to the registration requirements of Section 5 of
the Securities Act or any state securities laws.
(n) No Disposition of the Collateral. Lessee shall not sell, contract to
--------------------------------
sell, assign, lease, transfer, convey or otherwise dispose of, or permit to be
sold, assigned, leased, transferred, conveyed or otherwise disposed of, the
Collateral or any Part, except for subletting as expressly permitted pursuant to
Section 5.2.
-----------
Section XIII.2 Covenants of Agent. Agent, in its individual capacity,
------------------
covenants with each of the other parties hereto as follows, it being understood
that the sole remedies for the breach of these covenants shall be to sue for
damages or for specific performance and that any such breach shall not modify or
terminate Lessee's obligations under Section 4.4 or any other provision of the
-----------
Operative Documents:
(a) so long as this Lease remains in effect or so long as the obligations
of Lessee arising hereunder have not been fully and finally discharged, Agent,
in its individual capacity, (i) will keep this Lease and all Collateral free and
clear of all Liens arising by, through or under Agent, in its individual
capacity, which are unrelated to the transactions contemplated by this Lease and
shall indemnify, reimburse and hold each Lessor and Lessee harmless from any and
all claims, losses, damages, obligations, penalties, liabilities, demands,
suits, or causes of action and all legal proceedings, and any costs or expenses
in connection therewith, including reasonable legal fees and expenses, of
whatever kind and nature, imposed on, incurred by or asserted against any Lessor
or Lessee in any way relating to, or arising in any manner out of, Agent's
failure to comply with this Section 13.2(a) and (ii) will not, provided that no
---------------
Incipient Default or Event of Default exists, through its own actions, interfere
with ▇▇▇▇▇▇'s (or any permitted Sublessee's or assignee's) rights hereunder with
respect to any Unit during the Term, except as permitted or required by the
terms of this Lease; and
(b) Agent shall apply funds held by it in its capacity as agent hereunder
as required by this Lease and shall otherwise perform all of its duties and
obligations under this Lease and the Operative Documents to which it is a party.
59
Section XIII.3 Covenants of Lessors. Each Lessor, severally and not
--------------------
jointly, covenants to each of the other parties hereto as follows, it being
understood that the sole remedies for the breach of the foregoing covenants
shall be to sue for damages or for specific performance and that any such breach
shall not modify or terminate Lessee's obligations under Section 4.4 or any
-----------
other provision of the Operative Documents:
(a) provided that no Incipient Default or Event of Default exists, it will
not, through its own actions, interfere with ▇▇▇▇▇▇'s (or any permitted
sublessee's or assignee's) rights hereunder with respect to any Unit during the
Term;
(b) it will keep the Collateral free and clear from all Lessor Liens
attributable to it, provided that it may contest any such Lessor Lien pursuant
--------
to a Permitted Contest; and
(c) it will not, alone or in conjunction with one or more other Lessors,
deal directly with ▇▇▇▇▇▇, it being acknowledged that Agent is the only party
representing Lessors which is authorized to deal with Lessee for any purpose in
connection with this Lease, the Collateral or the exercise of any remedies
hereunder.
ARTICLE XIV
REGISTRATION, TRANSFER, EXCHANGE,
REPLACEMENT AND ASSIGNMENT OF CERTIFICATES
Section XIV.1 Certificates Represent Lessor Interests. The interests of
---------------------------------------
each Lessor shall be evidenced by a certificate or certificates in the form of
Exhibit C hereto, with appropriate insertions, and indicating such Lessor's
---------
interest in this Lease (including, without limitation, the right to receive
rental and other payments hereunder) and the Collateral (each such certificate,
and any and all certificates issued in replacement or exchange therefor being a
"Certificate"). In addition to the agency established pursuant to Article IX,
----------- ----------
Agent is hereby appointed the agent of Lessee for the limited purpose of
transfer and exchange of the Certificates, and, as such, ▇▇▇▇▇▇ agrees that
Agent shall be entitled to, and Lessee shall be bound by, the provisions of
Article IX with respect to such agency. Agent shall, as agent for Lessee,
----------
maintain at its office a register for the purpose of registering the Certificate
or Certificates originally issued hereunder and all transfers and exchanges
thereof, which register shall include the address of each holder and the other
information of the type set out in Schedule I with respect to such holder. A
----------
Lessor intending to transfer any or all of its Certificates, or to exchange any
or all of its Certificates for Certificates evidencing a different interest,
shall surrender such Certificate or Certificates to Agent at its office set
forth on Schedule I, together with a written request from such Lessor for the
----------
issuance of a new Certificate or Certificates, specifying the interests to be
evidenced thereby and, in the case of a surrender for registration of transfer,
the name and address of the new Lessor. Promptly upon receipt of such documents
by Agent, ▇▇▇▇▇▇ shall execute and deliver, at no charge to Lessor, a new
Certificate or Certificates in the same form, evidencing the same aggregate
interest and dated the same date or dates as the Certificate or Certificates
surrendered. Agent, at no charge to Lessor, shall make a notation on each
60
new Certificate of the amount of all payments previously made on the old
Certificate or Certificates with respect to which such new Certificate(s)
is(are) issued and the date to which payments with respect to the old
Certificate or Certificates have been paid. Such notations, and Attachment 1 to
each Certificate, shall be prepared by Agent, and shall be conclusive and
binding absent manifest error. Agent and Lessee may deem the owner of each
Certificate reflected in the register as the owner thereof for all purposes.
Agent shall not be responsible for determining if any transferee satisfies the
requirements of Section 14.3.
------------
Section XIV.2 Lost, Stolen or Damaged Certificates. If any Lessor's
------------------------------------
Certificate shall become mutilated, destroyed, lost or stolen, Lessee shall,
upon the written request of the appropriate Lessor, execute and deliver in
replacement thereof, with a copy to Agent, and at no charge to Lessor, a new
Certificate in the same form, evidencing the same interest and dated the same
date as the Certificate so mutilated, destroyed, lost or stolen. If the
Certificate being replaced has become mutilated, such Certificate shall be
surrendered to Agent and a photocopy thereof shall be furnished to Lessee by
Agent. If the Certificate being replaced has been destroyed, lost or stolen,
the Lessor requesting a replacement Certificate shall furnish to Lessee and
Agent such reasonable security or indemnity as may be required by each of them
to save them harmless if the Lessor has not furnished them satisfactory evidence
of the destruction, loss or theft of the Certificate; provided, that if the
--------
Certificate being replaced is registered in the name of an original Lessor then
the affidavit of an authorized officer of such Lessor in form reasonably
satisfactory to Agent, setting forth the fact of destruction, loss or theft and
of ownership of the Certificate at the time thereof, shall be satisfactory
evidence and no security or indemnity shall be required other than the written
agreement of such Person, in form reasonably satisfactory to Agent, to indemnify
and hold harmless Lessee and Agent from all risks resulting from the
authentication and delivery of a substitute Certificate. The Lessor requesting
replacement hereunder shall be responsible for all stamp taxes relating to such
replacement.
Section XIV.3 Lessor Assignments. All or any of the right, title or
------------------
interest and obligations of any Lessor in and to this Lease and the rights,
benefits, advantages and obligations of any Lessor hereunder, including the
rights to receive payment of rental or any other payment hereunder, and the
rights and security interests in and to the Collateral, may be assigned or
transferred by such Lessor at any time by transfer of the Certificate
representing such interest in accordance with the provisions of this Article
-------
XIV; provided that the minimum amount which any Lessor may assign pursuant to
--- --------
this Section is the lesser of $5,000,000 or 100% of the face value of such
Lessor's Certificate; provided, further, that any assignee or transferee (i)
-------- -------
shall be subject to Lessee's written approval, not to be unreasonably withheld,
(ii) shall assume Lessor's obligations under this Lease, and (iii) must
represent and warrant in writing to Agent, the other Lessors and Lessee:
(a) that it is an accredited investor that is a financial institution, with
sufficient knowledge and experience in financial and business matters to enable
it to evaluate the merits and risks of acquiring a Certificate, and has the
requisite power and authority to enter into such assignment or transfer;
61
(b) that the assignment or transfer is exempt from registration
requirements under any and all applicable federal and state statutes, laws,
rules, regulations and orders;
(c) that it is acquiring the Certificates for its own account for
investment purposes and not with a view toward, or for sale in connection with,
any distribution thereof, nor with any present intention of distributing or
selling such Certificate, provided that, subject to the provisions of this Lease
--------
and applicable securities laws, the disposition of the transferee's Certificate
shall at all times remain within the transferee's control;
(d) as set forth in Section 12.2 with respect to such transferee;
------------
(e) that, and also covenants to such Persons that, it will not transfer
the Certificate unless the proposed transferee makes the foregoing
representations and covenants;
(f) that, and also covenants that, it will not take any action that would
by itself subject the transfer of the Certificate to the provisions of Section 5
of the Securities Act; and
(g) that, and also covenants that, it is aware of and will abide by the
provisions of Section 16.17.
-------------
ARTICLE XV
OWNERSHIP AND GRANT OF SECURITY INTEREST
Section XV.1 Grant of Security Interest. Title to the Collateral shall
--------------------------
remain in Lessee. As of the Tranche I Funding Date, Lessee hereby grants to
Agent a first priority perfected security interest for the benefit of Lessors in
the Collateral (the "Security Interest"), and the Security Interest shall be a
-----------------
continuing security interest in all of the Collateral to secure the payment of
all sums due hereunder and under the other Operative Documents to which ▇▇▇▇▇▇
is a party, and the performance of all other obligations hereunder and under the
other Operative Documents to which ▇▇▇▇▇▇ is a party.
Section XV.2 Retention of Proceeds. If Lessee would be entitled to any
---------------------
amount (including any Casualty Recoveries) hereunder except for the existence of
any Event of Default or Incipient Default, Lessee shall deliver any such amounts
to Agent, and Agent shall hold such amounts as part of the Collateral and shall
be entitled to apply such amounts against any amounts due hereunder; provided,
--------
that Agent shall distribute such amounts, to the extent not theretofore applied
in accordance with the other terms of this Lease if and when no Event of Default
or Incipient Default exists.
ARTICLE XVI
MISCELLANEOUS
62
Section XVI.1 Payment of Transaction Costs and Other Costs. If the
--------------------------------------------
transactions contemplated hereby are consummated, Lessee shall pay all
Transaction Costs in accordance with Section 3.1(f), and in the event the
--------------
transactions contemplated hereby do not close, Lessee shall pay such Transaction
Costs promptly upon receipt of invoices therefor. In addition, Lessee shall pay
or reimburse Agent and the Lessors for all other out-of-pocket costs and
expenses (including allocated fees of internal counsel) reasonably incurred in
connection with: (a) entering into, or the giving or withholding of, any future
amendments, supplements, waivers or consents with respect to the Operative
Documents (including without limitation any legal services rendered in
connection with or arising under Section 13.1); (b) any Casualty or termination
------------
of the Lease or any other Operative Document; (c) the negotiation and
documentation of any restructuring or "workout", whether or not consummated, of
any Operative Document; (d) the enforcement of the rights or remedies under the
Operative Documents; (e) further assurances requested pursuant to Section
-------
13.1(k) hereof or any similar provision in other Operative Documents; (f) any
-------
transfer by Agent or a Lessor of any interest in the Operative Documents during
the continuance of and in connection with the exercise of remedies following an
Event of Default; (g) the ongoing fees and expenses of Agent under the Operative
Documents; and (h) any Funding Date.
Section XVI.2 Effect of Waiver. No delay or omission to exercise any
----------------
right, power or remedy accruing to Agent or any Lessor upon any breach or
default of Lessee hereunder shall impair any such right, power or remedy nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein or of or in any similar breach or default thereafter
occurring, nor shall any single or partial exercise of any right, power or
remedy preclude other or further exercise thereof, or the exercise of any other
right, power or remedy, nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of Lessors or Agent of any breach or default under this Lease must be
specifically set forth in writing and must satisfy the requirements set forth in
Section 16.5 with respect to approval by Lessors and Agent.
------------
Section XVI.3 Survival of Covenants. All representations, warranties and
---------------------
covenants of Lessee under Article IV, Article V, Article VII, Article XI,
---------- --------- ----------- ----------
Article XV, Sections 9.4 (with respect to each Lessor), 9.10, 12.1 and 13.1
---------- -------- --- ---- ---- ----
shall survive the expiration or termination of this Lease to the extent arising
prior to any such expiration or termination.
Section XVI.4 Applicable Law. THIS LEASE SHALL BE GOVERNED BY AND
--------------
CONSTRUED UNDER THE LAWS OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW
PRINCIPLES.
Section XVI.5 Effect and Modification. This Lease exclusively and
-----------------------
completely states the rights of Agent, Lessors and Lessee with respect to the
granting of the Security Interest and all other transactions contemplated by
this Lease, and supersedes all prior agreements, oral or written, with respect
thereto, including, without limitation, any confidentiality agreements between
Lessee and any Lessor executed in connection with and contemplation of this
Lease. Except as otherwise
63
provided in Section 3.2(c), no variation, modification, amendment or waiver of
--------------
this Lease or any other Operative Document shall be valid unless in writing and
signed by Agent with the written consent of the Required Lessors and by ▇▇▇▇▇▇.
Except as otherwise provided in Section 3.2(c) and in the next sentence, no
--------------
variation, modification, amendment or waiver of this Lease or any other
Operative Document purporting to (i) postpone, reduce or forgive, in whole or in
part, any payment of Rent, Lease Balance, Administrative Charge, interest or
other amount payable hereunder, or modify the definition (including the
definition of any defined term used in any such definition), or method of
calculation, of any payment of Rent, Lease Balance, Administrative Charge,
interest or other amount payable hereunder, (ii) release any Collateral granted
hereunder (except as expressly provided in Sections 5.4, 6.1(a) or (b), 11.2,
------------ ------ --- ----
11.3, 11.4 and 15.2), or (iii) modify this sentence or the definition of
---- ---- -----
"Required Lessors" shall be valid unless in writing and signed by Agent with the
consent of all Lessors. No variation, modification, amendment or waiver of any
Certificate shall be valid unless in writing and signed by Agent with the
consent of the registered holder of such Certificate. No variation,
modification, amendment, waiver or other change to any of Section 2.9, 2.10,
----------- ----
10.1, or any applicable definitions in this Lease that may negatively impact any
----
of the Lessors shall be valid unless in writing and signed by Agent with the
consent of all of the Lessors.
Section XVI.6 Notices. All demands, notices and other communications
-------
hereunder shall be in writing and shall be deemed to have been duly given when
personally delivered or one Business Day after being sent by overnight delivery
service or three days after being deposited in the mail, certified mail, postage
prepaid, return receipt requested, or when sent by facsimile transmission, if
confirmed by mechanical confirmation and if a copy thereof is promptly
thereafter personally delivered, sent by overnight delivery service or so
deposited in the mail, addressed to: (A) Agent or Lessee at the address set
forth below the signature of such party on the signature page hereof, or at such
other, address as may hereafter be furnished in accordance with this Section
-------
16.6 by either party to the other and (B) each Lessor at its address set forth
----
in Schedule I hereto or in the register maintained pursuant to Section 14.1.
---------- ------------
Except as otherwise provided in Sections 3.1 and 3.2, Lessee's delivery of any
------------ ---
notice or any other deliverable hereunder to Agent shall satisfy any obligation
of Lessee hereunder to deliver the same to any Lessor.
Section XVI.7 Consideration for Consents to Waivers and Amendments.
----------------------------------------------------
Lessee hereby agrees that it will not, and that it will not permit any of its
Affiliates to, offer or give any consideration or benefit of any kind whatsoever
to any Lessor in connection with, in exchange for, or as an inducement to, such
Lessor's consent to any waiver in respect of, any modification or amendment of,
any supplement to, or any other consent or approval under, any Operative
Document unless such consideration or benefit is offered ratably to all Lessors.
Section XVI.8 Counterparts. This Lease has been executed in several
------------
numbered counterparts. Only the counterpart designated as "Counterpart No. 1"
shall evidence a monetary obligation of Lessee or shall be deemed to be an
original or to be chattel paper for purposes of the UCC, and such copy shall be
held by Agent.
64
Section XVI.9 Severability. Whenever possible, each provision of this
------------
Lease shall be interpreted in such manner as to be effective and valid under
Applicable Law; but if any provision of this Lease shall be prohibited by or
invalid under Applicable Law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Lease.
Section XVI.10 Successors and Assigns. This Lease shall be binding upon
----------------------
the parties hereto and their respective successors and assigns and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.
Section XVI.11 No Third-Party Beneficiaries. Nothing in this Lease or the
----------------------------
other Operative Documents shall be deemed to create any right in any Person not
a party hereto or thereto (other than the permitted successors and assigns of
Lessors, Agent and Lessee), and such agreements shall not be construed in any
respect to be a contract in whole or in part for the benefit of any third party
except as aforesaid.
Section XVI.12 Brokers. None of the parties has engaged or authorized any
-------
broker, finder, investment banker or other third party to act on its behalf,
directly or indirectly, as a broker, finder, investment banker, agent or any
other like capacity in connection with this Lease or the transactions
contemplated hereby, except that ▇▇▇▇▇▇ has engaged Bank of America, N. A.
and/or an Affiliate thereof.
Section XVI.13 Captions; Table of Contents. Section captions and the table
---------------------------
of contents used in this Lease (including the Schedules and Exhibits hereto) are
for convenience of reference only and shall not affect the construction of this
Lease.
Section XVI.14 Schedules and Exhibits. The Schedules, Annexes and Exhibits
----------------------
hereto, along with all attachments referenced in any of such items, are
incorporated herein by reference and made a part hereof.
Section XVI.15 Submission to Jurisdiction. Any suit by Agent or any Lessor
--------------------------
to enforce any claim arising out of the Operative Documents may be brought in
any state or Federal court located in New York having subject matter
jurisdiction, and with respect to any such claim, each party to this Lease
hereby irrevocably: (a) submits to the non-exclusive jurisdiction of such
courts; and (b) consents to the service of process out of said courts by mailing
a copy thereof, by registered mail, postage prepaid, return receipt requested,
to such party at its address specified in this Lease, and agrees that such
service, to the fullest extent permitted by law: (i) shall be deemed in every
respect effective service of process upon it in any such suit, action or
proceeding; and (ii) shall be taken and held to be valid personal service upon
and personal delivery to it. Lessee irrevocably waives, to the fullest extent
permitted by law: (A) any claim, or any objection, that it now or hereafter may
have, that venue is not proper with respect to any such suit, action or
proceeding brought in such a court located in New York including, without
limitation, any claim that any such suit, action or proceeding brought in such
court has been brought in an inconvenient forum; and (B) any claim that Lessee
is not subject to personal jurisdiction or service of process in such forum.
65
▇▇▇▇▇▇ agrees that any suit to enforce any claim arising out of the Operative
Documents or any course of conduct or dealing of Agent or any Lessor shall be
brought and maintained in any state or Federal court located in New York.
Nothing in this Section 16.15 shall affect the right of Agent or any Lessor to
-------------
bring any action or proceeding against Lessee or any Unit or other Collateral in
the courts of any other jurisdiction. Agent, each Lessor, and ▇▇▇▇▇▇ each
agrees that a final judgment in any action or proceeding in a state or Federal
court within the United States may be enforced in any other jurisdiction by suit
on the judgment or in any other manner provided by law.
Section XVI.16 Jury Trial. EACH OF ▇▇▇▇▇▇, EACH LESSOR AND AGENT WAIVES
----------
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS UNDER THIS LEASE OR ANY OTHER OPERATIVE DOCUMENT OR UNDER ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
RELATIONSHIP EXISTING IN CONNECTION WITH THIS LEASE OR ANY OTHER OPERATIVE
DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
Section XVI.17 Confidentiality. Each Lessor and the Agent agrees, and
---------------
agrees to cause its Affiliates, to maintain the confidentiality of all
information provided to it by Lessee or any Subsidiary or Affiliate of Lessee,
or by the Agent, on ▇▇▇▇▇▇'s or such Subsidiary's or Affiliate's behalf, or
obtained by a Lessor pursuant to such Lessor's exercise of its rights under this
Lease or any other Operative Document, and neither it nor any of its Affiliates
shall use any such information other than in connection with the enforcement of
this Lease and the other Operative Documents, except to the extent such
information (i) was or becomes generally available to the public other than as a
result of disclosure by the Lessor or the Agent, or (ii) was or becomes
available on a non-confidential basis from a source other than Lessee or its
Subsidiary or Affiliates (but only to the extent applicable to such Subsidiary
or Affiliate), provided that such source is not bound by a confidentiality
agreement with the Lessee or such Subsidiary or Affiliate known to the Lessor or
the Agent; provided, however, that any Lessor or the Agent may disclose such
-------- -------
information (A) at the request or pursuant to any requirement of any Authority
to which the Lessor or the Agent is subject or in connection with an examination
of such Lessor or the Agent by any such authority; (B) pursuant to subpoena or
other court process; provided, however, that, if not prohibited by law, such
-------- -------
Lessor or the Agent shall use its best efforts to provide prompt notice to
Lessee of receipt of such subpoena prior to delivering such information in
response; (C) when required to do so in accordance with the provisions of any
Applicable Law; (D) to the extent reasonably required in connection with any
litigation or proceeding to which the Agent, any Lessor, or their respective
Affiliates may be party; (E) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Operative Document;
(F) to such Lessor's or the Agent's independent auditors and other professional
advisors; and (G) to any assignee (but not to any Competitor), provided that
such Person agrees in writing to keep such information confidential to the same
extent required of the Lessor hereunder.
66
[remainder of page intentionally left blank]
67
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
day and year first above written.
LEVI ▇▇▇▇▇▇▇ & CO. FIRST SECURITY BANK
as Lessee as Agent (and in its individual
capacity where specifically indicated):
By:_________________________________
Name:_______________________________ By:__________________________________
Title:______________________________ Name:________________________________
Title:_______________________________
Address:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇:
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ _____________________________________
Attention:___________________________ _____________________________________
Attention:___________________________
_____________________________________
_____________________________________
Facsimile:___-___-____
[SIGNATURES CONTINUED ON NEXT PAGE]
[SIGNATURE PAGE FOR LESSORS]
ORIX USA CORPORATION, ▇▇▇▇▇▇ FINANCIAL LEASING, INC.
a_________________________________, a________________________________,
as Lessor as Lessor
By:_______________________________ By:______________________________
Name:_____________________________ Name:____________________________
Title:____________________________ Title:__________________________
DIME COMMERCIAL CORP., GENERAL ELECTRIC CAPITAL
a_________________________________, BUSINESS ASSET FUNDING
as Lessor CORPORATION,
a________________________________,
By:_______________________________ as Lessor
Name:_____________________________
Title:____________________________ By:______________________________
Name:____________________________
Title:__________________________
SCHEDULE I TO LEASE INTENDED AS SECURITY
DATED AS OF DECEMBER 3, 1999
(▇▇▇▇ ▇▇▇▇▇▇▇ & CO.)
LIST OF AGENT AND LESSORS; ADDRESSES FOR NOTICES AND PAYMENTS
-------------------------------------------------------------
1. Agent
-----
FIRST SECURITY BANK, NATIONAL ASSOCIATION
Address for all communications (except wire transfers):
FIRST SECURITY BANK, NATIONAL ASSOCIATION
Attention: Corporate Trust Services
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile: 801/246-5053
Address for wire transfers:
Account
Information:
ABA
Routing #: ▇▇▇-▇▇▇▇-▇▇
Account #: 051-092215
▇▇▇▇ ▇▇▇▇▇▇▇ Acct. #: 36088
2. Lessors
-------
ORIX USA CORPORATION
Address for all communications (except wire transfers):
Orix USA Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: 213/955-6530
3
Address for wire transfers:
Bank: The Sanwa Bank of California
Los Angeles, California
ABA
Routing #: ▇▇▇▇▇▇▇▇▇
Account #: 5106-0278
Reference: ▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
DIME COMMERCIAL CORP.
Address for all communications (except wire transfers):
Dime Commercial Corp.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: 212/382-8349
Address for wire transfers:
Bank: Federal Reserve Bank of New York
New York, New York
ABA
Routing #: ▇▇▇▇▇▇▇▇▇
Account #: 2062160000 977
Reference: Levi ▇▇▇▇▇▇▇ & Co.
▇▇▇▇▇▇ FINANCIAL LEASING, INC.
Address for all communications (except wire transfers):
▇▇▇▇▇▇ Financial Leasing, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: 415/356-1335
4
Address for wire transfers:
Bank: Bank of America
Chicago, Illinois
ABA
Routing #: ▇▇▇-▇▇▇-▇▇▇
Account #: 8188801273
Reference: ▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
GENERAL ELECTRIC CAPITAL BUSINESS ASSET FUNDING CORPORATION
Address for all communications (except wire transfers):
General Electric Capital Business Asset Funding Corporation
▇▇▇▇▇ ▇.▇. 4th Street, Suite 500
P.O. Box C-97550
Seattle, Washington 98004
Attn: ▇▇▇▇ ▇▇▇▇
Facsimile: 425/450-3584
Address for wire transfers:
Bank: Bankers Trust Company
New York, New York
ABA
Routing #: ▇▇▇▇▇▇▇▇
Account #: ▇▇-▇▇▇-▇▇▇
Reference: ▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
5
SCHEDULE II TO LEASE INTENDED AS SECURITY
DATED AS OF DECEMBER 3, 1999
(▇▇▇▇ ▇▇▇▇▇▇▇ & CO.)
DESCRIPTION OF EQUIPMENT:
-------------------------
The "Equipment" means the personal property and fixtures described on Attachment
---------
1 to this Schedule II, wherever located from time to time, all of which is
currently located at the real property commonly known as (i) the Hebron Customer
Service Center, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ (Route ▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇), ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (ii) the Canton Customer Service Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇ (I-▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇.), ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and (iii) the Sky Harbor Customer
Service Center, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ (just east of I-15, south of Las
Vegas), Henderson, Nevada 89012 (each of which is legally and more particularly
described below), to the extent any such personal property and fixtures comprise
the integrated, automated distribution warehouse storage and stock selection
system, consisting of, but not being limited to, conveyor systems, sorting
equipment, rotating storage structure units, inspection and work stations, and
bulk storage rack systems, used by Lessee to sort, package and ship its products
to its customers, together with any and all replacements or substitutions of
such personal property and fixtures made at any time pursuant to that certain
Lease Intended as Security dated as of December 3, 1999 (the "Lease") among
-----
Lessee, Secured Party (as Agent for the Lessors (as defined therein)), and the
Lessors thereunder, excluding, however, any items set forth on such Attachment 1
---------
which are also set forth on Attachment 2 to this Schedule II.
[legal descriptions to be attached]
1
SCHEDULE III TO LEASE INTENDED AS SECURITY
DATED AS OF DECEMBER 3, 1999
(▇▇▇▇ ▇▇▇▇▇▇▇ & CO.)
PAYMENT SCHEDULES
-----------------
2
SCHEDULE 2.10 TO LEASE INTENDED AS SECURITY
DATED AS OF DECEMBER 3, 1999
(▇▇▇▇ ▇▇▇▇▇▇▇ & CO.)
PRO-FORMA AMORTIZATION SCHEDULE
-------------------------------
SCHEDULE 12.1(b) TO LEASE INTENDED AS SECURITY
DATED AS OF DECEMBER 3, 1999
(▇▇▇▇ ▇▇▇▇▇▇▇ & CO.)
RECORDINGS, FILINGS AND GOVERNMENTAL PERMITS
--------------------------------------------
1. Kentucky
▇. ▇▇▇▇▇ County Clerk
i. financing statement
ii. fixture filing
▇. ▇▇▇▇▇▇▇▇ County Clerk - financing statement
c. Secretary of State - financing statement
2. Mississippi
a. Madison County Clerk - fixture filing
b. Secretary of State - financing statement
3. Nevada
▇. ▇▇▇▇▇ County Recorder - fixture filing
b. Secretary of State - financing statement
4. California - Secretary of State
SCHEDULE 12.1(k) TO LEASE INTENDED AS SECURITY
DATED AS OF DECEMBER 3, 1999
(▇▇▇▇ ▇▇▇▇▇▇▇ & CO.)
LIST OF PATENTS, PATENT RIGHTS, TRADEMARKS, SERVICE MARKS,
----------------------------------------------------------
TRADE NAMES, COPYRIGHTS, LICENSES AND OTHER
-------------------------------------------
INTELLECTUAL PROPERTY RIGHTS
----------------------------
None
EXHIBIT A TO LEASE INTENDED
AS SECURITY DATED AS OF DECEMBER 3, 1999
(▇▇▇▇ ▇▇▇▇▇▇▇ & CO.)
FORM OF FUNDING DATE CERTIFICATE AND
CONDITION OF COLLATERAL CERTIFICATE
-----------------------------------
___________ __, 199_
TO: Agent and the Lessors, pursuant to that certain Lease Intended as
Security (the "Lease"), dated December 3, 1999 among: LEVI
-----
▇▇▇▇▇▇▇ & CO., a Delaware corporation ("Lessee"); the
------
Persons identified on Schedule I thereto as the "Lessors";
-------
and FIRST SECURITY BANK, a national banking association, as
agent ("Agent"; all capitalized terms used herein without
-----
definition shall have the meaning assigned to such terms in
the Lease).
FROM: Lessee
REGARDING: Funding Date and Condition of Collateral
1. The Funding Date was ____________ __, 199_ at [THE OFFICES OF ▇▇▇▇▇, BROWN
& ▇▇▇▇▇, _________________________________________] at 9:00 a.m.
2. The Equipment in which the Security Interest was granted is identified on
Schedule I hereto.
----------
3. The aggregate Funded Amount to be advanced for the Security Interest in the
Collateral identified on Schedule I hereto is [$________________________],
----------
which Funded Amount is to be paid out of Funding.
4. The Collateral is leased by the Lessee for all purposes of the Lease in its
"as is," present condition as set forth in Section 2.6 of the Lease.
5. All of the Collateral is subject to and shall be governed by all of the
provisions of the Lease.
6. The Collateral is in good operating order, repair, condition and appearance
and Lessee has no knowledge of any material defect therein with respect to
design, manufacture, condition (reasonable wear and tear excepted) or in
any other respect.
The Funded Amount shall be sent by wire transfer to Lessee at the account
set forth on Schedule II hereto.
-----------
LEVI ▇▇▇▇▇▇▇ & CO.
By:_______________________________________
Name Printed:_____________________________
Title:____________________________________
1
SCHEDULE I TO EXHIBIT A
TO LEASE INTENDED AS SECURITY
DATED AS OF DECEMBER 3, 1999
(▇▇▇▇ ▇▇▇▇▇▇▇ & CO.)
Description of Equipment:
------------------------
The "Equipment" means the personal property and fixtures described on Attachment
---------
1 to this Schedule II, wherever located from time to time, all of which is
currently located at the real property commonly known as (i) the Hebron Customer
Service Center, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ (Route ▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇), ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (ii) the Canton Customer Service Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇ (I-▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇.), ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and (iii) the Sky Harbor Customer
Service Center, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ (just east of I-15, south of Las
Vegas), Henderson, Nevada 89012 (each of which is legally and more particularly
described below), to the extent any such personal property and fixtures comprise
the integrated, automated distribution warehouse storage and stock selection
system, consisting of, but not being limited to, conveyor systems, sorting
equipment, rotating storage structure units, inspection and work stations, and
bulk storage rack systems, used by Lessee to sort, package and ship its products
to its customers, together with any and all replacements or substitutions of
such personal property and fixtures made at any time pursuant to that certain
Lease Intended as Security dated as of December 3, 1999 (the "Lease") among
-----
Lessee, Secured Party, as Agent for the Lessors (as defined therein), and the
Lessors thereunder, excluding, however, any items set forth on such Attachment 1
---------
which are also set forth on Attachment 2 to this Schedule II.
[legal descriptions to be attached]
1
SCHEDULE II TO EXHIBIT A
TO LEASE INTENDED AS SECURITY
DATED AS OF DECEMBER 3, 1999
(▇▇▇▇ ▇▇▇▇▇▇▇ & CO.)
Wire transfer instructions for payment of Funded Amount:
-------------------------------------------------------
Citibank, N.A.
New York, NY
ABA Routing:▇▇▇▇-▇▇▇▇-▇
Account: 0010-9292
Payee: ▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
EXHIBIT B TO LEASE INTENDED AS SECURITY
DATED AS OF DECEMBER 3, 1999
FORM OF OPINION OF ▇▇▇▇▇▇'S COUNSEL
December 3, 1999
_________________
_________________
_________________
_________________
Re: ▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Lease Intended As Security
Gentlemen:
[I am General Counsel of / we are special counsel to] ▇▇▇▇ ▇▇▇▇▇▇▇ & Co., a
Delaware corporation ("Lessee"). [I / we] have examined and are familiar with
------
originals of or copies identified to [my / our] satisfaction of the Lease
Intended as Security, dated as of December 3, 1999 (the "Lease"), among Lessee,
-----
First Security Bank, a national banking association ("Agent"), not in its
individual capacity except as specifically set forth in the Lease, but solely in
its capacity as Agent therein, the Persons listed in Schedule I thereto, as
lessors (each a "Lessor" and collectively the "Lessors"; provided that no such
------ ------- --------
reference shall be deemed to refer to any Person who is not a holder of a
Certificate at the date of determination, each of the other Operative Documents,
and such other documents and proceedings as [I / we] have considered necessary
for the purpose of rendering this opinion. In addition, [I / we] have examined
and are familiar with such other legal and factual matters as [I / we] have
deemed necessary for the purpose of rendering this opinion. Capitalized terms
used in this opinion and not otherwise defined herein shall have the respective
meanings specified in Article I of the Lease. This opinion is being furnished
to you at the request of Lessee pursuant to Sections 3.1(g) and 3.2(e) of the
Lease.
In rendering this opinion [I / we] have assumed: (a) the genuineness of
the signatures on all documents and instruments (other than the signatures of
officers of Lessee on the Operative Documents to which Lessee is a party), the
authenticity of all documents submitted as originals, and the conformity to
originals of all documents submitted as photostatic or certified copies; and (b)
that the Operative Documents constitute the legal, valid and binding obligations
of the respective parties thereto, if any, other than Lessee.
Based upon and subject to the foregoing, [I am / we are] of the opinion
that:
1
1. Lessee is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has full corporate power
and authority to conduct its business as presently conducted, to own, grant or
hold under lease its properties, to enter into and perform its obligations under
the Operative Documents to which it is a party, and is duly qualified as a
foreign corporation authorized to do business and is in good standing in every
other jurisdiction in which its failure to be so qualified would have a Material
Adverse Effect or prevent the enforcement of contracts to which Lessee is a
party.
2. Lessee has all requisite corporate power and authority to execute,
deliver, and perform its obligations under each Operative Document to which it
is a party.
3. The execution and delivery by ▇▇▇▇▇▇ of, the consummation by Lessee of
the transactions provided for in, and the compliance by Lessee with all of the
provisions of, each Operative Document to which it is a party have been duly
authorized by all necessary corporate action on its part; and neither the
execution and delivery thereof, nor the consummation of the transactions
contemplated thereby (including, without limitation, the granting of the
Security Interest to Agent and the operation of the Equipment), nor compliance
by Lessee with any of the terms and provisions thereof (i) requires any approval
of the stockholders of Lessee, or approval or consent of any trustee or holder
of any of Lessee's indebtedness or obligations; (ii) contravenes or will
contravene any Applicable Laws currently in effect applicable to or binding upon
Lessee or the Collateral; (iii) conflicts with, results in any breach of or
constitutes any default under, or results in the creation of any Lien (other
than the respective rights and interest of Lessee, Lessors or Agent as provided
in the Operative Documents) upon any of Lessee's property under, (A) any
indenture, mortgage, chattel mortgage, deed of trust, lease, conditional sales
contract, loan or credit arrangement or other material agreement or instrument
by which Lessee or any of its respective properties may be bound or by which the
Collateral may be materially adversely affected, (B) Lessee's corporate charter
or (C) Lessee's by-laws; or (iv) requires or will require any Governmental
Action to perfect the right of Lessors and Agent intended to be created by the
Operative Documents.
4. Each Operative Document to which Lessee is a party has been duly
executed and delivered by ▇▇▇▇▇▇ and constitutes its legal, valid and binding
obligation, enforceable against Lessee in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and by general equitable
principles.
5. There is no action, proceeding or investigation pending or, to the
best of [our / my] knowledge, threatened which questions the validity of the
Operative Documents to which Lessee is a party or any action taken or to be
taken pursuant thereto; nor is any action, proceeding or investigation pending
or, to the best of [my / our] knowledge, threatened which is reasonably likely
to result, either in any case or in the aggregate, in a Material Adverse Effect.
2
6. No authorizations, consent, approval, license or formal exemption
from, nor any filing, declaration or registration with, any Authority (other
than approval of the Board of Directors of Lessee which has been obtained prior
to the date hereof) is or will be required in connection with the execution and
delivery by Lessee of the Operative Documents, or the performance by Lessee of
its obligations under such Operative Documents or the ownership, operation and
maintenance of the Collateral as contemplated by the Operative Documents.
7. Lessee is not an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended. The proceeds of the sale of the Collateral and the issuance of the
Certificates, if used in accordance with the terms of the Operative Documents,
will not result in a violation of Regulations T, U or X of the Board of
Governors of the Federal Reserve System.
8. Lessee is not subject to regulation as a "holding company," an
"affiliate" of a "holding company," or a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
9. The registration of the Certificates or the interests of the Lessors
under the Securities Act of 1933, as amended, is not required under the
circumstances contemplated by the Lease, and no qualification of an indenture in
respect of such Certificates or interests under the Trust Indenture Act of 1939,
as amended, is required in connection therewith.
10. The Lease and other Operative Documents create valid security
interests under the UCC in favor of the Agent for the benefit of the Lessors, as
security for payment of each Lessee's obligations under the Lease, in all of
▇▇▇▇▇▇'s right, title and interest in and to the Collateral.
11. Neither Agent nor any Lessor will become (i) solely by reason of
entering into the Lease or the consummation of the transactions contemplated
thereby (other than upon the exercise of remedies under the Lease or upon the
expiration thereof) subject to ongoing regulation of its operations by any
Authority; or (ii) except for regulation the applicability of which depends upon
the existence of facts in addition to the ownership of, or the holding of any
interest in, the Collateral or any interest therein upon the exercise of
remedies under the Lease or upon the expiration thereof, subject to ongoing
regulation of its operations by any Authority.
12. Neither Agent nor any Lessor is required under the laws of the State
of __________ (the "State") to qualify as a foreign corporation, foreign trust
-----
company or otherwise in the State solely as a result of its execution, delivery
and performance of the Lease. Agent is eligible to act as a fiduciary in the
State.
13. Each UCC financing statement is in proper form for filing, and upon
the filing of such financing statements with the offices listed on Schedule A
hereto, the security interest of Agent, on behalf of the Lessors, in all the
Collateral will be perfected to the extent that a security interest
3
in such Collateral may be perfected by so filing, and the description of such
Collateral therein is adequate. No other filing, recordation or registration is
necessary in order to perfect Agent's security interest in such Collateral.
14. Except for statutory filing and recording fees payable in connection
with the registration of the Collateral or the filing of any lien on the
Collateral, no state or local recording tax, transfer tax, stamp tax or other
fee, tax or governmental charge, including, without limitation, sales tax, is
required to be paid by Lessee, Agent, or Lessors to any taxing Authority in
connection with the execution, delivery, filing or recording of any of the
Operative Documents or the transactions contemplated by the Operative Documents,
nor will Lessee, Agent or any Lessor be required to collect or withhold any such
fee, tax or governmental charge.
15. The payment by ▇▇▇▇▇▇ and the receipt by Agent, for the benefit of the
Lessors, of the Basic Rent, Supplemental Rent and all other amounts, fees or
interest due and payable under the Lease and the other Operative Documents and
any transactions described therein, and any interest rate cap fee paid or
payable to the Lessors or their Affiliates, are not usurious under or otherwise
in violation of the laws of the State of ___________.
16. No state or local recording tax, transfer tax, stamp tax or other
similar fee, tax or governmental charge, including, without limitation, sales
tax, is required to be paid to the State of ______________ or any political
subdivision thereof in connection with the execution, delivery, filing or
recording of the Operative Documents, other than statutory filing and recording
fees that are to be paid upon the filing and recording, as applicable, of the
UCC-1 Financing Statement and Fixture Filing filed in connection with the
transactions contemplated by the Operative Documents and transfer taxes that are
to be paid by Lessee upon the transfer of the Collateral on any Funding Date.
17. The express choice of law of the State of New York to govern the Lease
is enforceable and will be recognized by __________ courts.
This opinion is solely for your and your counsel's benefit and may not be
relied upon by, and copies may not be delivered to, any other person without our
prior approval.
Very truly yours,
4
EXHIBIT C TO LEASE INTENDED
AS SECURITY DATED AS OF DECEMBER 3, 1999
(▇▇▇▇ ▇▇▇▇▇▇▇ & CO.)
FORM OF CERTIFICATE
-------------------
THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES OR "BLUE SKY" LAW,
AND MAY NOT BE TRANSFERRED, SOLD OR OFFERED
FOR SALE EXCEPT IN COMPLIANCE WITH THE REGISTRATION
PROVISIONS OF SUCH ACT OR LAWS OR PURSUANT TO AN
AVAILABLE EXEMPTION. THIS CERTIFICATE MAY NOT BE
TRANSFERRED, ASSIGNED, EXCHANGED OR OTHERWISE SOLD OR
CONVEYED EXCEPT IN COMPLIANCE WITH THE TERMS OF
THE LEASE REFERRED TO BELOW.
Commitment: $___________________
Investment Percentage __%
R- ______ Date: ____________ __, 199_
To: _____________________
_____________________
_____________________
_____________________
This Certificate evidences the right of ____________________, a
_______________ ("Lessor"), and its registered assigns pursuant to Section 14.1
------------
of the Lease hereinafter referred to, to receive the amounts of rent and other
distributions described on Attachment 1 attached hereto and made a part hereof,
at the times set forth on Attachment 1, and Supplemental Rent, in the manner
specified in that certain Lease Intended as Security, dated as of December 3,
1999, among ▇▇▇▇ ▇▇▇▇▇▇▇ & CO., a Delaware corporation ("Lessee"), FIRST
SECURITY BANK, a national banking association, as Agent, and certain
institutions listed on Schedule I thereto, as Lessors (as from time to time
amended or supplemented, the "Lease"). This Certificate also evidences that
Lessor is a "Lessor" for all purposes of (and as defined in) the Lease, with all
rights attendant to such
status, including the benefit of the representations, warranties and covenants
of Lessee under the Lease and with all obligations attendant to such status.
The Lessor holding this Certificate shall be entitled to receive a portion
of each payment of Rent, Lease Balance, Administrative Charge, and interest
payable by Lessee pursuant to the Lease as set forth in such Lessor's Payment
Schedule.
Any transfer of this Certificate is subject to the procedures set forth in
Article XIV of the Lease.
-----------
This Certificate is one of the Certificates referred to in, and evidences
obligations of the Lessee under, the Lease, to which reference is made for a
statement of the terms and conditions hereof. Capitalized terms used herein
without definition shall have the meanings provided in the Lease.
THIS CERTIFICATE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PROVISIONS
OF SUCH STATE.
LEVI ▇▇▇▇▇▇▇ & CO.
By:___________________________________________
Title:________________________________________
ATTACHMENT 1
------------
Rental Rental Rental
Payment Payment Payment Lease
Number Date Amount Balance
------ ---- ------- -------
EXHIBIT D TO LEASE INTENDED
AS SECURITY DATED AS OF DECEMBER 3, 1999
(▇▇▇▇ ▇▇▇▇▇▇▇ & CO.)
FORM OF OFFICER'S CERTIFICATE OF LESSEE
---------------------------------------
Pursuant to the Lease Intended as Security, dated as of December 3, 1999 (the
"Lease"), among ▇▇▇▇ ▇▇▇▇▇▇▇ & CO., a Delaware corporation ("Lessee"), FIRST
SECURITY BANK, a national banking association, as Agent, and the several Lessors
listed on Schedule I thereto, I, _______________________, ______________________
of Lessee, do hereby certify as follows (capitalized terms used herein without
definition shall have the meanings ascribed thereto in the Lease):
The representations and warranties of Lessee contained in the Lease are true on
and as of the date hereof with the same effect as if such representations and
warranties had been made on and as of the date hereof; Lessee has performed all
agreements on its part required to be performed under the Lease and the other
Operative Documents on or prior to the date hereof; and there exists on the date
hereof no Incipient Default or Event of Default.
IN WITNESS WHEREOF, I have signed my name this ___ day of December, 1999.
LEVI ▇▇▇▇▇▇▇ & CO.
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
EXHIBIT E TO LEASE INTENDED
AS SECURITY DATED AS OF DECEMBER 3, 1999
(▇▇▇▇ ▇▇▇▇▇▇▇ & CO.)
FORM OF SECRETARY'S CERTIFICATE OF LESSEE
-----------------------------------------
THE UNDERSIGNED ________________________________, [Assistant] Secretary
of ▇▇▇▇ ▇▇▇▇▇▇▇ & Co., a Delaware corporation ("Lessee"), pursuant to that
certain Lease Intended as Security, dated as of December 3, 1999 (the "Lease"),
among Lessee, FIRST SECURITY BANK, a national banking association, as Agent, and
the Persons listed on Schedule I thereto, does hereby certify as follows
(capitalized terms used herein shall have the meanings ascribed thereto in the
Lease):
1. Attached hereto as Exhibit A is a true and complete copy of
▇▇▇▇▇▇'s Certificate of Incorporation as amended and in effect on
the date hereof, certified by the Secretary of State of the State
of Delaware.
2. No proceeding for merger, consolidation, liquidation,
reorganization or dissolution of Lessee or the sale of all or
substantially all of its assets is pending or contemplated.
3. The copy of the By-laws of Lessee, attached hereto as Exhibit B,
is true and complete and such By-laws have been in full force and
effect since __________________ without modification or
amendment.
4. Attached hereto as Exhibit C are true and correct copies of all
resolutions adopted by the Board of Directors and stockholders of
Lessee relating to the Lease and the other Operative Documents,
which resolutions have not been amended or rescinded and are in
full force and effect on the date hereof.
5. The form of Lease (together with all Exhibits thereto), attached
hereto as Exhibit D, is substantially in the form approved by or
pursuant to authorization by the Board of Directors of Lessee.
6. The following persons are on the date hereof duly qualified and
acting officers of ▇▇▇▇▇▇, duly elected or appointed to the
offices set forth beside their respective names and signatures,
and each such person who, as an officer of ▇▇▇▇▇▇, signed the
Lease, the Certificates representing interests in the Lease, any
of the other Operative Documents or any other document delivered
prior hereto or on the date hereof in connection with such
agreements and documents and the transactions contemplated
therein was, at the respective times of such signing and delivery
and is now duly
2
elected or appointed, qualified and acting as such officer, and
the signatures of such persons appearing on such documents are
their genuine signatures:
3
NAME OFFICE SIGNATURE
---- ------ ---------
------------- --------------- ----------------
------------- --------------- ----------------
------------- --------------- ----------------
IN WITNESS WHEREOF, I have signed my name this ___ day of December, 1999.
LEVI ▇▇▇▇▇▇▇ & CO.
By:____________________________________________
Name Printed:__________________________________
Title: [Assistant] Secretary
-------------------------
I, ___________________________, _________________________ of Lessee,
hereby certify that _____________________________ is on the date hereof the duly
elected, qualified and acting [Assistant] Secretary of Lessee, and that the
signature set forth above is such person's true and correct signature.
Dated: December __, 1999.
LEVI ▇▇▇▇▇▇▇ & CO.
By:_______________________________________________
Name Printed:_____________________________________
Title:____________________________________________
3