Exhibit 10.36
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Participation Agreement
Dated as of May 23, 2003
Among
Bank of America, N.A., as Lessee,
First States Investors 3500, LLC, as Owner Participant,
U.S. Bank National Association,
a national banking association (as successor to State Street Bank
and Trust Company of Connecticut, National Association), not in its
individual capacity, but solely as Owner Trustee under the
Amended and Restated Trust Agreement (1997-D)
dated as of May 23, 2003,
and Lessor, and Xxxxxxx X. Xxxxxxx as Co-Trustee and Lessor
First States Group, L.P., as Recourse Guarantor,
and
Xxxxx Fargo Bank Northwest, National Association,
as Indenture Trustee and Pass Through Trustee
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Xxxxxx Xxxxxxxxx Xxxxxxx xx xxx
Xxxxxxxxxxxx Xxxxxx Xxxxxx
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Table of Contents
Section Heading Page
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Article I Definitions.............................................................1
Article II Lease...................................................................1
Section 2.1. Agreement to Lease......................................................1
Section 2.2. Participation and Purchase..............................................1
Section 2.3. Closing.................................................................2
Section 2.4. Postponement of Closing Date............................................2
Section 2.5. Return of Funds.........................................................2
Article III Conditions Precedent to Closing.........................................3
Section 3.1. Participation Conditions................................................3
Section 3.2. Lessee's Conditions.....................................................8
Article IV Representations and Warranties..........................................9
Section 4.1. Representations and Warranties of Lessee................................9
Section 4.2. Representations and Warranties of the Owner Participant................10
Section 4.3. Representations and Warranties of Indenture Trustee and Pass
Through Trustee.....................................................15
Section 4.4. Representations and Warranties of Trust Company........................16
Section 4.5. Representations and Warranties of the Recourse Guarantor...............17
Section 4.6. Representations and Warranties of the Lessor...........................19
Article V Covenants of Lessee....................................................21
Section 5.1. Merger, etc............................................................21
Section 5.2. Delivery of Documents..................................................22
Section 5.3. Additional Reports of Lessee...........................................23
Section 5.4. Further Assurance......................................................23
Section 5.5. Indenture..............................................................24
Section 5.6. Enforcement of Certain Warranties......................................26
Section 5.7. Change of Name or Location.............................................26
Section 5.8. Investigation by Governmental Authorities..............................27
Section 5.9. No Acquisition of Notes or Certificates................................27
Section 5.10. Redemption Premium Payable by Lessee...................................27
Section 5.11. Annual Rent Roll.......................................................27
Section 5.12. Amendments to Lease....................................................27
Section 5.13. Trustee Fees...........................................................27
Article VI Other Covenants and Agreements.........................................28
Section 6.1. Cooperation with Lessee................................................28
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Section 6.2. Closing Conditions.....................................................28
Section 6.3. No Bankruptcy Petition.................................................28
Section 6.4. Lessor Liens...........................................................28
Section 6.5. Further Assurances of Owner Participant................................30
Section 6.6. Prepayment.............................................................30
Section 6.7. Indebtedness...........................................................31
Section 6.8. Limit on Activities....................................................31
Section 6.9. No Subsidiaries........................................................31
Section 6.10. No Voluntary Bankruptcy................................................31
Section 6.11. Change of Name or Location.............................................31
Section 6.12. New Series of Certificates.............................................31
Section 6.13. Performance of Lease...................................................31
Section 6.14. Quiet Enjoyment........................................................32
Section 6.15. Redemption Premium Payable by Lessor...................................32
Section 6.16. Termination of Other Operative Documents...............................32
Section 6.17. Security Documents; Amendments.........................................32
Section 6.18. Lien Release...........................................................33
Section 6.19. Foreclosure Rights.....................................................33
Section 6.20. Lease Covenants........................................................33
Section 6.21. Subleases..............................................................34
Section 6.22. Certain Limitations in Reorganization..................................34
Section 6.23. Trust Issues...........................................................34
Section 6.24. Granting of Easements..................................................35
Section 6.26. Owner for Federal Tax Purposes.........................................36
Section 6.27. Special Purpose Company................................................36
Xxxxxxx 0.00. Xxxxxx Xxxxxx Person...................................................36
Section 6.29. Agreements of the Recourse Guarantor...................................36
Section 6.30. Further Assurances of Indenture Trustee................................38
Section 6.31. Change of Situs........................................................38
Section 6.32. Single Purpose Entity, Separateness....................................39
Section 6.33. Further Assurances; NAIC Filings.......................................42
Section 6.34. Insurance..............................................................43
Section 6.35. Operating Reserve......................................................43
Article VII Transfer of Interest...................................................45
Section 7.1. Restrictions on Transfer...............................................45
Section 7.2. Effect of Transfer.....................................................45
Section 7.3. Competitors of the Lessee..............................................45
Section 7.4. Transfer by Lessor or Owner Participant................................45
Section 7.5. Default................................................................48
Article VIII Indemnification........................................................48
Section 8.1. General Indemnification................................................48
Section 8.2. General Tax Indemnification............................................53
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Article IX Purchase Rights........................................................62
Section 9.1. Rights of First Offer..................................................62
Section 9.2. Purchase and Transfer of Offered Asset.................................63
Section 9.3. Purchase Options.......................................................64
Article X Debt Assumption; Refinancing...........................................65
Section 10.1. Assumption of Indebtedness.............................................65
Section 10.2. Refinancing............................................................66
Article XI Financing of Alterations...............................................67
Section 11.1. Financing of Alterations...............................................67
Article XII Miscellaneous..........................................................70
Section 12.1. Survival of Agreements.................................................70
Section 12.2. Concerning the Trust Company and the Co-Trustee........................70
Section 12.3. Notices................................................................70
Section 12.4. Counterparts...........................................................70
Section 12.5. Amendments.............................................................70
Section 12.6. Headings, etc..........................................................71
Section 12.7. Parties in Interest....................................................71
Section 12.8. Governing Law..........................................................71
Section 12.9. [Reserved].............................................................71
Section 12.10. Severability...........................................................71
Section 12.11. Jurisdiction...........................................................71
Section 12.12. Priority; Attornment...................................................72
Attachments to Participation Agreement:
Schedule I -- Description of Filings and Filing Locations
Exhibit A -- Description of Existing Subleases
Exhibit B -- Schedule of Original Lessor's Cost for the Properties
Exhibit C -- Schedule of Subleases with Non-Disturbance and Attornment
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Participation Agreement dated as of May 23, 2003 among Bank of America,
N.A., a national banking association, as lessee (the "Lessee"), U.S. Bank
National Association, a national banking association (as successor to State
Street Bank and Trust Company of Connecticut, National Association), not in its
individual capacity, but solely as Owner Trustee under the Amended and Restated
Trust Agreement (1997-D) dated as of May 23, 2003 (the "Owner Trustee"), Xxxxxxx
X. Xxxxxxx, an individual, not in his individual capacity, except as expressly
provided herein, but solely as Co-Trustee under the Amended and Restated Trust
Agreement (1997-D) dated as of May , 2003 ("Co-Trustee"; the Owner Trustee as
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the lessor of the Properties in states other than the Co-Trustee States and the
Co-Trustee as the lessor of the Properties in the Co-Trustee States, separately
or together, as applicable, as lessor (the "Lessor")); First States Investors
3500, LLC, a Delaware limited liability company, as Owner Participant (the
"Owner Participant"), First States Group, L.P., a Delaware limited partnership,
as recourse guarantor (the "Recourse Guarantor"), and Xxxxx Fargo Bank
Northwest, National Association, a national banking association, not in its
individual capacity, except as expressly provided herein, but solely as
Indenture Trustee and Pass Through Trustee (in its capacity as indenture
trustee, the "Indenture Trustee," and in its capacity as pass through trustee,
the "Pass Through Trustee").
In consideration of the mutual agreements herein contained and other good
and valuable consideration, receipt of which is hereby acknowledged, the parties
hereto hereby agree as follows:
Article I
Definitions
Unless the context shall otherwise require, capitalized terms used herein
shall have the meanings assigned thereto in Appendix A to the Lease Agreement,
dated as of the date hereof, between Lessor and Lessee, for all purposes hereof.
Article II
Lease
Section 2.1. Agreement to Lease. Subject to the terms and conditions of this
Agreement, on the Closing Date the Lessor, as owner of each of the Properties,
agrees to amend and restate the Original Leases pursuant to which the respective
lessors each leased an undivided interest in certain Properties to the Lessee,
into one Lease pursuant to which the Lessor will lease its entire fee interest
in the Properties to the Lessee pursuant to the terms and conditions of the
Lease.
Section 2.2. Participation and Purchase. (a) The Lessor desires to borrow
funds and, to secure the repayment of such borrowing, the Lessor will mortgage
the Properties as collateral security for such borrowings, and pledge and assign
the rental payments due and payable under the Lease. In order to provide for the
financing, the Lessor will authorize the issue and sale of
the Notes. Subject to the terms and conditions of this Agreement, the Pass
Through Trust shall assist in the financing contemplated hereby by purchasing on
the Closing Date the Note from the Lessor for an amount in immediately available
funds equal to $200,000,000.
(b) The amount specified above for the Pass Through Trustee shall be
transferred by the Pass Through Trustee to the account of the Indenture Trustee,
ABA #000-000-000, A/C 051-0922115, Re: AFR Lease-Backed CTL, Series 2003-A
Closing Account, in immediately available funds in U.S. dollars, not later than
11:00 a.m., New York City time, on the scheduled Closing Date. Such amounts to
be paid on the Closing Date shall be held by the Indenture Trustee, not as part
of the Estate, until released in writing by the Pass Through Trustee against
delivery of the Notes by the Lessor and delivery of the Title Policies.
Section 2.3. Closing. At least three Business Days prior to the Closing Date,
the Owner Participant shall deliver to each of the Participants, the Lessee and
the Indenture Trustee written notice setting forth the Closing Date. All
documents and instruments required to be delivered on the Closing Date pursuant
to this Agreement shall be delivered at the offices of Xxxxxxx and Xxxxxx, 000
Xxxx Xxxxxx Xxxxxx, Xxxxxxx, XX 00000 or at such other location as may be
determined by the Participants and the Lessee.
Section 2.4. Postponement of Closing Date. The Owner Participant may, by
telephonic, telegraphic or telex notice (to be confirmed promptly in writing),
postpone the Closing Date to another Business Day; provided, however, that in no
event shall the Closing Date be postponed beyond May , 2003.
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Section 2.5. Return of Funds. If the financing of the Properties for any
reason do not occur on the scheduled Closing Date, any funds made available by a
Participant pursuant to Section 2.2(a) hereof and transferred to the Indenture
Trustee pursuant to Section 2.2(b) hereof shall be held in trust and be returned
by the Indenture Trustee (together with any interest earned thereon) to the
party which transferred such funds to an account designated in writing by such
party for that purpose and the Lessor shall reimburse each Participant for the
loss of use of the funds made available by it pursuant to Section 2.2(a) hereof
if such funds are not returned to the Participants by 2:00 p.m., New York City
time, on such scheduled Closing Date (except, with respect to a Participant, to
the extent any failure of delivery was caused by a default by such Participant)
by paying on the date such funds are returned the excess of (x) interest, at the
Interest Rate, calculated for the actual number of days from and including the
scheduled Closing Date to but excluding the earlier of the actual Closing Date
or the Business Day on which the funds are returned to such Participant over (y)
any interest, if any, actually earned on such funds during such period and
actually paid to or retained by such Participant. Funds received after 2:00
p.m., New York City time, on any Business Day shall be deemed to be returned on
the next succeeding Business Day. In the event that this Agreement shall have
not been executed or delivered by the Lessor at or prior to the opening of
business on the scheduled Closing Date, the Lessor shall provide to the
Participants a funding indemnity letter which shall set forth substantially the
terms of this Section 2.5. In the event of any such delayed Closing Date, any
funds held overnight by the Indenture Trustee shall be invested overnight by the
Indenture Trustee in Permitted Investments as directed in writing by the Lessor
and at the risk and expense of the Lessor.
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Article III
Conditions Precedent to Closing
Section 3.1. Participation Conditions. The obligations of the Lessor, the
Pass Through Trustee and the Indenture Trustee to carry out their respective
obligations under Article II of this Agreement to be performed on the Closing
Date and the obligations of the Purchasers to purchase the Pass Through
Certificates pursuant to the Certificate Purchase Agreement shall be subject to
the fulfillment to the satisfaction of, or waiver by, such parties (acting
directly or through their respective counsel) on or prior to the Closing Date of
the following conditions precedent, provided that such obligations of a party
shall not be subject to any conditions contained in this Article III which are
required to be performed by such party or its Affiliates:
(a) Performance. Each party to any Operative Document shall have
performed and complied with all agreements and conditions contained herein
and in any other Operative Document to which it is a party required to be
performed or complied with by it on or prior to the Closing Date.
(b) Litigation. No action or proceeding shall have been instituted or
threatened nor shall any Governmental Action or proceeding be threatened
before any court or Governmental Authority, nor shall any order, judgment
or decree have been issued or proposed to be issued by any court or
Governmental Authority, to set aside, restrain, enjoin or prevent the
performance of this Agreement or any transaction contemplated hereby or by
any other Operative Document.
(c) Consents and Approvals. All consents, approvals and Governmental
Actions required to be taken, given or obtained, as the case may be, by or
from any Governmental Authority, or by or from any trustee or holder of any
indebtedness or obligation of the Lessor, that are necessary or, in the
reasonable opinion of the Participants or their counsel, advisable in
connection with the execution, delivery and performance of the Operative
Documents by all other parties hereto, shall have been taken, given or
obtained, as the case may be, shall be in full force and effect and the
time for appeal with respect to any thereof shall have expired (or, if an
appeal shall have been taken, the same shall have been dismissed) and shall
not be subject to any pending proceedings or appeals (administrative,
judicial or otherwise).
(d) Authorization, Execution and Delivery of Documents. Each of the
Operative Documents shall have been duly authorized, executed and delivered
by each of the other parties thereto, shall be in form and substance
satisfactory to the Participants and the Indenture Trustee and a
counterpart of each thereof (other than the Note, which shall be executed
and delivered by the Lessor, authenticated by the Indenture Trustee and
delivered solely to the Pass Through Trustee, and other than the Tax
Indemnification Agreement, which has already been executed and delivered to
the Owner Participant and is in full force and effect) shall have been
delivered to the Purchasers, the Owner Participant, the Indenture Trustee
and the Pass Through Trustee. Each of the Operative Documents shall be in
full force and effect as to all parties thereto and, both before and
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after giving effect to the transactions contemplated by the Operative
Documents on the Closing Date, no Lease Default, Lease Event of Default,
Default or Event of Default shall have occurred or be continuing.
(e) Legality, etc. No change shall have occurred after December 31,
2002 in Applicable Laws and Regulations that, in the opinion of counsel to
the Participants or the Indenture Trustee, would make it illegal or
economically burdensome for any such party to participate in any of the
transactions contemplated by the Operative Documents; and no such change
shall prohibit the consummation of any transaction contemplated by the
Operative Documents. The execution, delivery and performance of the
Operative Documents and the consummation of the transactions contemplated
therein shall not violate or conflict with any Applicable Laws and
Regulations as evidenced by the opinions delivered pursuant to paragraph
(j).
(f) No Event of Loss, etc. No material Casualty, Event of Loss, Event
of Taking or Condemnation shall have occurred. No action shall be pending
or threatened by a Governmental Authority or other Person to initiate a
material Condemnation or an Event of Taking.
(g) Filings and Recordings. (i) The Indenture and the Maryland
Security Documents shall have been executed, delivered, acknowledged and
recorded in the proper recording offices and (ii) UCC financing statements
shall have been executed and delivered by the Lessor in favor of the
Indenture Trustee, for the benefit of the Holders, and by the Lessee in
favor of the Lessor, and such financing statements shall have been properly
recorded and filed for record in all places necessary or desirable in order
to perfect the interest of the Indenture Trustee in the Estate, for the
benefit of the Holders, and to protect the Lessor's interest in the
Properties. All other recordings and filings necessary to create, perfect,
preserve and protect (A) the Lessor's title to and interest in the
Properties, (B) a first priority lien on and security title to all real
estate interests and a first priority perfected security interest in all
fixtures and personal property included in the Estate, in each case, in
favor of the Indenture Trustee, for the benefit of the Holders, and subject
in each case only to Permitted Liens, and (C) the rights and interests of
Lessor and Pass Through Trustee, for the benefit of the Certificateholders,
under the Operative Documents shall have been made. All recordings and
filings to be made pursuant to this subparagraph (g) are set forth in
Schedule I hereto. Notwithstanding the foregoing, the conditions precedent
described in this subparagraph (g) relating to recording and filing shall
be satisfied by the unconditional delivery at Closing of the Title Policies
described in Section 3.1(p) hereof.
(h) Representations and Warranties. Each representation and warranty
of the parties hereto or to any other Operative Document contained herein
or in any other Operative Document (other than the Tax Indemnification
Agreement) shall be true and correct in all material respects as though
made on and as of the Closing Date, except to the extent that such
representations and warranties relate solely to an earlier date (in which
case such representations and warranties were true and correct on and as of
such earlier date).
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(i) Closing Date. The Closing Date shall occur on or prior to May ,
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2003.
(j) Opinions of Counsel. The following opinions, each dated the
Closing Date, and in form and substance reasonably acceptable to the
parties to whom they are addressed, shall have been delivered and addressed
to the Purchasers, the Lessee, the Lessor, the Owner Participant, the
Recourse Guarantor, the Indenture Trustee and the Pass Through Trustee:
(i) the opinion of Xxxxxx, Xxxxx & Xxxxxxx LLP, special counsel
for the Owner Participant;
(ii) the opinions of (a) Xxxxxx, Xxxxxx and Xxxxxxx, special
South Carolina counsel to the Lessor, (b) the Xxxxxxx Law Firm LLC,
special Georgia counsel to the Lessor, (c) Xxxxxx Xxxxxxx Xxxxxxxxx &
Rice, special North Carolina counsel to the Lessor and (d) Xxxxxx
Xxxxx & Xxxxxxx LLP, special Maryland, Washington DC, Virginia and
Florida counsel to the Lessor;
(iii) the opinion of Xxxxxx, Xxxxx & Xxxxxxx LLP, special counsel
for the Owner Participant and the Recourse Guarantor;
(iv) the opinion of Ray, Xxxxxxx & Xxxxxxx, special counsel for
the Indenture Trustee and Pass Through Trustee;
(v) a substantive non-consolidation opinion of Xxxxxx, Xxxxx &
Bockius LLP, special counsel to the Lessor (the "Non-Consolidation
Opinion");
(vi) the opinion of Xxxxxxx & Xxxxxxx LLP, special counsel for
the Lessor; and
(vii) the opinion of (a) in-house counsel to the Lessee and (b)
Xxxxx & Overy, special counsel to the Lessee.
(k) Survey. The Lessee shall have delivered, or shall have caused to
be delivered, to the Participants and the Indenture Trustee, at the
Lessor's expense, accurate, as built "ALTA/ASCM Land Title Surveys" of the
Land and Improvements for each of the Properties and metes and bounds
descriptions of the Land meeting the accuracy requirements of Urban
Surveys, as defined therein, which surveys (i) shall include all minimum
standard detail requirements for Urban ALTA/ASCM Land Title Surveys (1999
Edition) and items 2 through 4, 6 through 8, 10 and 11(a) listed on Table A
thereof and (ii) shall be satisfactory to the Title Insurance Company, the
Indenture Trustee and the Participants. Each survey shall be certified by
the applicable surveyor to the Lessor, Indenture Trustee, Pass Through
Trustee and the Title Insurance Company, and shall show no state of facts
unsatisfactory to the Participants and the Indenture Trustee, and shall be
prepared within 90 days of the Closing Date by a surveyor licensed to
perform surveys in the relevant state reasonably acceptable to the
Participants and the Indenture Trustee.
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(l) Officer Certificates. The Participants and the Indenture Trustee
shall have received an Officer's Certificate of each of the Lessee, Lessor,
the Owner Participant, Recourse Guarantor, Indenture Trustee and Pass
Through Trustee stating that (A) each and every representation and warranty
of the applicable party contained in the Operative Documents (other than in
the Tax Indemnification Agreement) to which it is a party is true and
correct in all material respects on and as of the Closing Date as though
made on and as of the Closing Date, except to the extent that such
representations and warranties relate solely to an earlier date (in which
case such representations and warranties were true and correct on and as of
such earlier date); (B) each Operative Document to which it is a party is
in full force and effect with respect to it; (C) it has duly performed and
complied with all covenants, agreements and conditions contained herein or
in any Operative Document to which it is a party required to be performed
or complied with by it on or prior to the Closing Date; and (D) in the case
of the Lessor and the Owner Participant, no Default or Event of Default
attributable to it has occurred and is continuing.
(m) Resolutions and Incumbency Certificate, etc. The Participants and
the Indenture Trustee shall have received (x) a certificate of the
Secretary or an Assistant Secretary of each of the Lessee, the Lessor, the
Owner Participant, the Recourse Guarantor, the Indenture Trustee and the
Pass Through Trustee attaching copies and certifying as to (i) the Board of
Directors resolution or (A) in the case of Owner Participant, the
resolution of the Board of Directions of the Managing Member or (B) in the
case of Recourse Guarantor, the resolution of the Board of Directors of
Recourse Guarantor's General Partner, duly authorizing the execution,
delivery and performance by it of each Operative Document to which it is or
will be a party, (ii) its certificate of incorporation, certified as of a
recent date by the Secretary of State in the jurisdiction of its
incorporation or, in the case of the Owner Trustee, Indenture Trustee and
the Pass Through Trustee, a certificate of good standing from the Office of
the Comptroller of the Currency, or, in the case of Owner Participant, its
certificate of formation or, in the case of Recourse Guarantor, its limited
partnership certificate, (iii) its by-laws, except in the case of (A) Owner
Participant, in which case, its operating agreement or (B) Recourse
Guarantor, in which case, its limited partnership agreement, and (iv) the
incumbency and signature of persons authorized to execute and deliver such
documents on its behalf and (y) good standing certificates with respect to
each of the Lessee, Lessor and the Recourse Guarantor from the appropriate
officer of its state of organization as to its good standing in such state.
(n) Appraisal. The Indenture Trustee and the Participants shall have
received an Appraisal report which shall cover the fair market value,
useful life and such other matters relating to each of the Properties as
they reasonably require.
(o) No Material Adverse Change. There shall not have occurred any
material adverse change in the consolidated financial condition of the
Lessee from that set forth in the consolidated balance sheet of Lessee as
of December 31, 2002 together with the related consolidated statements of
income for the 12 months then ended.
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(p) Title and Title Insurance. The Indenture Trustee shall have
received from the Title Insurance Company lender's policies of title
insurance (ALTA Loan Policy-1992 Form) (the "Title Policies") acceptable in
form and substance to Indenture Trustee and the Participants insuring that
Lessor has good, marketable and indefeasible title to the Properties and
insuring the creation under the Indenture or Maryland Security Documents,
as the case may be, in favor of the Indenture Trustee, for the benefit of
the Holders, of a valid first priority lien on and security title in and to
the Properties, subject only to Permitted Liens, in an aggregate amount
equal to the principal amount of the Notes issued pursuant to the Indenture
with such endorsements as shall be reasonably requested by the Indenture
Trustee.
(q) Tax Certificate. The Lessor shall have received a "nonforeign"
person certificate from the Lessee pursuant to Treas.
Reg.(S) 1.1445-2(b)(2).
(r) Environmental and Physical Condition Survey. The Participants, the
Lessor and the Indenture Trustee shall have received (i) a report in scope,
form and substance satisfactory to them in all respects regarding the
environmental condition of the Properties and any potential environmental
liability or material cost that may be imposed on owners or operators of
the Properties, (ii) a 50-year (or such longer period as is mandated by
local state laws) title search and a phase I environmental report for each
Property, which report shall be satisfactory to the Participants, the
Lessor and the Indenture Trustee and copies of all existing phase I, phase
II or phase III environmental reports regarding the Properties that are in
the Lessee's or Lessor's possession, which shall be satisfactory to the
Indenture Trustee, the Participants and the Lessor and (iii) a physical
condition survey with respect to the Properties in form and substance
reasonably satisfactory to the parties hereto.
(s) Payment of Transaction Costs. The Owner Participant shall have
paid or caused to be paid all Transaction Costs.
(t) Proceedings, Opinions and Documents. All opinions, certificates
and other instruments to be delivered to the Indenture Trustee, the Lessor
and the Participants pursuant hereto and all proceedings in connection with
the transactions contemplated by this Agreement shall be satisfactory in
form and substance to the Indenture Trustee and the Participants. The
Participants and the Indenture Trustee shall have received copies of all
instruments and other evidence as they may reasonably request, in form and
substance satisfactory to them, with respect to such transactions and the
taking of all corporate proceedings in connection therewith.
(u) Payment of Taxes, etc. All Taxes, charges, fees and costs, if any,
due and payable in connection with the execution, delivery, recording,
filing and performance of the Operative Documents and the documents and
instruments enumerated and described in Schedule I, or in connection with
the issuance and sale of the Notes or in connection with the consummation
of any other transactions contemplated hereby and by the other Operative
Documents to occur on the Closing Date shall have been paid in full by the
Lessee to the extent the Lessee is liable for such Taxes, charges, fees and
costs pursuant
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to the express terms of this Agreement. All other Taxes, charges, fees and
costs, if any, due and payable in connection with the execution, delivery,
recording, filing and performance of the Operative Documents and the
documents and instruments enumerated and described in Schedule I, or in
connection with the issuance and sale of the Notes or in connection with
the consummation of any other transactions contemplated hereby and by the
other Operative Documents to occur on the Closing Date shall have been paid
in full by the Lessor.
(v) Certificate Proceeds. The Pass Through Certificates shall have
been sold for aggregate proceeds of not less than $200,000,000.
(w) Residual Value Insurance. The Pass Through Trustee and the
Indenture Trustee shall have received a copy of the residual value
insurance policy (the "Residual Value Insurance") issued by R.V.I. America
Insurance Company (the "Residual Value Insurer") which insures, subject to
the terms stated in such policy, the amount scheduled to be due on the
Notes at maturity.
(x) Lease. Each of the Pass Through Trustee and Indenture Trustee
shall have received a true, correct and complete copy of the Lease
certified by a Responsible Officer of the Lessor.
(y) Assignment of Warranties. The Assignment of Warranties shall be in
full force and effect.
(z) Lessee Estoppel. Lessee shall have executed and delivered a
statement in writing certifying, among other things, that the Lease is
unmodified and in full force and effect (or if there have been
modifications, that the same, as modified, is in full force and effect and
stating the modifications) and the date to which each obligation
constituting the Rent has been paid, and stating whether or not to the best
knowledge of Lessee (a) there is a continuing Lease Default or Lease Event
of Default and, if so, specifying each such Lease Default and Lease Event
of Default, or (b) there shall have occurred any event which, with the
giving of notice or passage of time or both, would become such a Lease
Default or Lease Event of Default of which the signer may have knowledge.
Section 3.2. Lessee's Conditions. The obligation of the Lessee to lease the
Properties from the Lessor are subject to the fulfillment on the Closing Date to
the satisfaction of or waiver by the Lessee of the following conditions
precedent, provided that such obligations of Lessee shall not be subject to any
conditions contained in this Section 3.2 which are required to be performed by
the Lessee:
(a) General Condition. The conditions (any such condition which is
required to be satisfactory to, and any document which is required to be
delivered to, the Lessor or its counsel shall, for purposes of this Section
3.2(a), be required to be satisfactory to or delivered to the Lessee or its
counsel, as the case may be) set forth in Sections 3.1(a)-(j), (l), (m),
(t) and (v) hereof shall have been satisfied.
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(b) Legality. No change shall have occurred after December 31, 2002 in
Applicable Laws and Regulations that would make it illegal or economically
burdensome for the Lessee or any of its Affiliates to participate in any of
the transactions contemplated by the Operative Documents.
(c) Side Letter. The Owner Participant and the Lessee shall have
entered into a side letter agreement relating to the form of Partial
Occupancy Lease, FMV Lease and AFR Sublease.
Article IV
Representations and Warranties
Section 4.1. Representations and Warranties of Lessee. Effective as of the
Closing Date, the Lessee represents and warrants to each of the other parties
hereto that:
(a) the execution, delivery and performance of the Operative Documents
to which the Lessee is a party has been duly authorized by all necessary
corporate action, and, when executed and delivered, the Operative Documents
to which the Lessee is a party will constitute legal, valid and binding
obligations of Lessee enforceable against Lessee in accordance with their
respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization and similar laws
affecting creditors generally and by general principles of equity;
(b) the Lessee is a national banking association duly organized,
validly existing and in good standing under the laws of the United States
of America, the Lessee has full corporate power and authority to execute
and deliver, and to perform its obligations under, the Operative Documents
to which it is a party, and the Lessee is duly qualified to do business in
each state in which a Property is located;
(c) the execution and delivery by the Lessee of the Operative
Documents to which it is a party and performance by it of its obligations
thereunder: (i) are within its powers and authority; (ii) do not and will
not violate any Applicable Laws and Regulations (as any of the same may be
applicable or applied to the Lessee) and do not and will not conflict with,
or result in any breach of any of the terms, conditions or provisions of,
or constitute a default under, its corporate charter or by-laws or any
material indenture, mortgage, conditional sale, loan or credit agreement or
other instrument or agreement to which it is a party or by which it or any
of its property or assets are bound or result in the imposition of any Lien
on it or any of its property or assets; provided that no representation is
made as to securities laws or the offering or sale of the Notes or the
Certificates; and (iii) do not require the consent or approval of the
Lessee's stockholders or the holders of indebtedness of the Lessee;
-9-
(d) no Event of Loss, Event of Taking, Condemnation or material
Casualty has occurred and, to the Lessee's Actual Knowledge, no Event of
Taking or material Condemnation is threatened, in each case with respect to
the Properties;
(e) the name of the Lessee is "Bank of America, N.A." The location of
the Lessee for the purpose of filing any financing or continuation
statement under Article 9 of the UCC is North Carolina. The principal place
of business of the Lessee and the offices where it keeps its records
concerning the Properties and the transactions contemplated hereby are
located at:
Bank of America, X.X.
XxxxxXxxxxxx Xxxxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Real Estate Services, NC-01-06-11; and
(f) 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;
(g) the persons listed in the definition of "Lessee's Actual
Knowledge" include all asset managers of the Properties and in-house
counsel of the Lessee with responsibility for one or more Properties; and
(h) the Lessee satisfies the Rating Test and may self-insure in
accordance with the terms of Article 11 of the Lease.
Section 4.2. Representations and Warranties of the Owner Participant.
Effective as of the Closing Date hereunder, the Owner Participant represents and
warrants to each of the other parties hereto as follows:
(a) the execution, delivery and performance of the Operative Documents
to which it is a party have been duly authorized by the Owner Participant,
and, when executed and delivered, the Operative Documents to which it is a
party will constitute legal, valid and binding obligations of it,
enforceable against it in accordance with their respective terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization and similar laws affecting creditors generally and by
general principles of equity;
(b) it has received all necessary governmental approvals and
authorizations that presently are required for it to execute, deliver and
to perform its obligations under the Operative Documents to which it is a
party; provided that no representation or warranty is made as to any
Applicable Laws or Regulations to the extent the Owner Participant may be
subject thereto as a result of the activities of the Lessee or any
construction, maintenance, use or repair of the Properties;
-10-
(c) it is a limited liability company duly organized, validly existing
and in good standing under the laws of the jurisdiction of organization, it
is duly qualified to conduct business in each jurisdiction in which a
Property is located to the extent required under Applicable Laws and
Regulations and it has full power and authority to enter into and perform
its obligations under the Operative Documents to which it is a party;
(d) there are no proceedings or actions pending or, to its knowledge,
threatened against or affecting it in any court or before any Governmental
Authority which, if adversely determined, would materially and adversely
affect it or would question the right, power and authority of it to perform
its obligations under the Operative Documents to which it is a party;
(e) there is no event that with the giving of notice, passage of time
or both would constitute an Event of Default attributable to it;
(f) the execution and delivery by it of the Operative Documents to
which it is a party and performance by it of all of its obligations
thereunder do not and will not violate any Applicable Laws and Regulations
(as any of the same may be applicable or applied to it); provided that no
representation or warranty is made as to any Applicable Laws or Regulations
to the extent the Owner Participant may be subject thereto as a result of
the activities of the Lessee or any construction, maintenance, use or
repair of the Properties, and do not and will not conflict with, or result
in any breach of any of the terms, conditions or provisions of, or
constitute a default under, its operating agreement or any material
indenture, mortgage, conditional sale, loan or credit agreement or other
instrument or agreement to which it is a party or by which it or any of its
property or assets are bound or result in the imposition of any Lien on the
Properties or the Trust Estate; provided, that no representation or
warranty is made in this Section 4.2 with respect to ERISA other than as
set forth in Section 4.2(h);
(g) it has not retained, employed or authorized any broker, finder or
accounting, financial engineering, appraisal, or other third party advisor
whose fees are not Transaction Costs to act on its behalf in connection
with the consummation of the transactions contemplated by the Operative
Documents;
(h) it is not entering into the Operative Documents to which it is a
party or any other transaction contemplated hereby or thereby, directly or
indirectly, in connection with any arrangement in any way involving any
employee benefit plan or related trust with respect to which it in its
individual capacity or any of the other parties hereto or any of their
affiliates, is a party-in-interest, all within the meaning of ERISA and the
Internal Revenue Code of 1986, as amended. The execution and delivery of
the Operative Documents and the issuance and sale of the Notes hereunder
will not involve any transaction that is subject to the prohibitions of
section 406 of ERISA or in connection with which a tax could be imposed
pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by
the Owner Participant in the immediately preceding sentence is made in
reliance upon and subject to the accuracy of each Purchaser's
representation in
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Section 3.1 of the Certificate Purchase Agreement as to the sources of the
funds to be used to pay the purchase price of the Certificates to be
purchased by such Purchaser;
(i) the Properties and the Trust Estate are free and clear of all
Lessor Liens attributable to it and Remainderman Liens;
(j) it has acquired its beneficial interest in the Trust and the Trust
Estate for its own account for investment and not with a present view to
any distribution (as such term is used in Section 2(11) of the Securities
Act) thereof, and if in the future it should decide to dispose of its
interest in the Trust and the Trust Estate, 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; provided,
however, subject to the provisions of Article VII hereof and the Trust
Agreement, the disposition of the Owner Participant's interest in the Trust
or the Trust Estate shall be at all times in the Owner Participant's
control. Except as contemplated by the Operative Documents, it has not
directly or indirectly offered any interest in the Properties, the Trust
Estate, the Lease, the Note, the Lessor or any similar securities of the
Lessee or the Lessor for sale to, or solicited any offer to acquire any of
the same from, any Person, nor has it authorized any Person to act on its
behalf to take any such action;
(k) it is a "United States Person" as defined in Section 7701(a)(30)
of the Code;
(l) it 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;
(m) it has no Subsidiaries;
(n) it owns 100% of the Beneficial Interest of the Lessor;
(o) it is a single purpose entity organized for the purpose of owning
the beneficial interest in the Estate as set forth in the Operative
Documents;
(p) it has no indebtedness, guaranties, liabilities or other
obligations;
(q) no written statement furnished by the Owner Participant or any
person, agent or other entity authorized or employed by the Owner
Participant as financial advisor, agent, broker, dealer or otherwise in
connection with the offering or sale of the Notes or the Certificates and
furnished by the Owner Participant or any such person, agent or other
entity in connection with the negotiation of the transactions contemplated
by the Operative Documents, contain any untrue statement of a material fact
or omit a material fact necessary to make the statements contained therein
or herein not materially misleading. There is no fact peculiar to the Owner
Participant or the Lessor which the Owner Participant or such person, agent
or other entity has not disclosed in writing which materially affects
adversely nor, so far as the Owner Participant can now foresee, will
-12-
materially affect adversely the properties, business, prospects, profits or
condition (financial or otherwise) of the Owner Participant or the Lessor
or the ability of the Owner Participant or the Lessor to perform its
obligations under the Operative Documents to which it is a party or the
Notes or the Certificates;
(r) it is not in violation of any law, ordinance, governmental rule or
regulation to which it is subject nor, to its knowledge, is the Lessor or
the Lessee in violation of any such laws, ordinances, rules or regulations
relating to the Property to which it is subject, including in each case
without limitation, the Occupational Safety and Health Act of 1970, as
amended, ERISA and all Environmental Law, the violation of which would
materially and adversely affect the properties, business, prospects,
profits or condition (financial or otherwise) of the Owner Participant or
the Lessor;
(s) it is solvent, has capital not unreasonably small in relation to
its business or any contemplated or undertaken transaction and has assets
having a value both at fair valuation and at present fair salable value
greater than the amount required to pay the Owner Participant's debts as
they become due and greater than the amount that will be required to pay
the Owner Participant's probable liability on its existing debts as they
become absolute and matured. The Owner Participant does not intend to
incur, nor does it believe that it will incur, debts beyond its ability to
pay such debts as they become due. The Owner Participant will not be
rendered insolvent by the execution, delivery and performance of its
obligations under the Operative Documents. The Owner Participant does not
intend to hinder, delay or defraud its creditors by or through the
execution, delivery or performance of its obligations under the Operative
Documents;
(t) neither it, directly or indirectly, nor any agent on its behalf
has offered or will offer the Notes, the Certificates or any Security (as
defined in Section 2(1) of the Securities Act of 1933, as amended) to, or
has solicited or will solicit an offer to acquire the Notes, the
Certificates or any similar Security from, or has otherwise approached or
will approach or negotiate in respect of the Notes, the Certificates or any
similar Security with, any person or entity other than the Pass Through
Trustee and not more than 19 institutional investors (not including the
Purchasers), each of whom was offered the Notes and/or Certificates, as
applicable, at private sale for investment and the Owner Participant
represents and warrants that neither the Owner Participant, directly or
indirectly, nor any agent on its behalf has offered or will offer the
Notes, the Certificates or any similar Security to, or has solicited or
will solicit an offer to acquire the Notes, the Certificates or any similar
Security from, any person or entity so as to bring the issuance and sale of
the Notes or the Certificates within the provisions of Section 5 of the
Securities Act of 1933, as amended;
(u) the Properties have not suffered damage or destruction which
renders them inoperable or unusable and, under applicable zoning, use,
environmental protection and other laws, ordinances, rules and regulations,
the Properties may be used in the ordinary course of the Lessee's business
pursuant to the Lease. Without limiting the foregoing, no portion of any
real property constituting a portion of the Properties is located in an
"area of special flood hazard," as that term is defined in the regulations
of the Federal Insurance
-13-
Administration, Department of Housing and Urban Development, under the
National Flood Insurance Act of 1968, as amended (24 CFR (S) 1909.1);
(v) except for the balloon payment of principal in the amount of
$50,000,000 due on the Notes at maturity that is covered by the Residual
Value Insurance policy which is in full force and effect on the date
hereof, the aggregate amount of the fixed rental installments payable under
the Lease will, on each date for the payment thereof set forth in the
Lease, be sufficient, if paid when due, to make payment of the interest and
principal due on the Notes on the scheduled due date on or immediately
following such rent payment date;
(w) neither the issuance and sale of the Notes nor the use of the
proceeds thereof will violate the Trading with the Enemy Act, as amended,
or any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or the
Anti-Terrorism Order or any enabling legislation or executive order
relating to any of the same. Without limiting the generality of the
foregoing, neither the Owner Participant nor any of its Affiliates (a) is
or will become a blocked person described in Section 1 of the
Anti-Terrorism Order or (b) engages or will engage in any dealings or
transactions or be otherwise associated with any such blocked person. For
purposes hereof, "Anti-Terrorism Order" means Executive Order No. 13,224,
66 Fed. Reg. 49,079 (2001), issued by the President of the United States
(Executive Order Blocking Property and Prohibiting Transactions with
Persons who Commit, threaten to Commit or Support Terrorism);
(x) all filings and other actions necessary to protect the rights of
the Lessor under the Lease and to perfect the security interest of the
Indenture Trustee under the Indenture in the Estate as against creditors of
and purchasers from Lessor, will have been made on or prior to the Closing
Date and the Indenture will on the Closing Date create a valid and
perfected lien and security interest in the Estate and Properties, subject
to any Permitted Liens;
(y) all sales, use, transfer and mortgage recording taxes due and
payable on the Closing Date in connection with the Properties, the issuance
of the Notes and the other transactions contemplated by the Operative
Documents shall have been paid by or on behalf of the Owner Participant,
and all filing, reporting or other requirements with respect to such taxes
shall have been satisfied by the Owner Participant;
(z) on the Closing Date, the Residual Value Insurance is in full force
and effect and all premiums due on or prior to the Closing Date in
connection with such insurance have been paid in full;
(aa) on January 9, 2003, the Owner Participant paid an amount equal to
$298,128,717.32 to purchase the Properties;
(bb) assuming that the Lessee makes all payments of Basic Rent as and
when required under the Lease, the scheduled outstanding principal amount
of the Outstanding
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Notes as of any Anniversary will be an amount which permits the Lien of the
Security Documents to be released pursuant to the clause (i) of the second
paragraph of Section 11.01 of the Indenture (after taking into account the
Lessor's Cost of all Properties previously released from the Lien of the
Security Documents) with respect to Properties having an aggregate Lessor's
Cost (expressed as a percentage of Total Original Lessor's Cost) equal to
the Total Joint Maximum Cumulative Percentage for such Anniversary; and
(cc) the Original Lessor's Cost with respect to each Property is set
forth opposite the "Property Description" for such Property as described on
Exhibit B hereto.
Section 4.3. Representations and Warranties of Indenture Trustee and Pass
Through Trustee. Effective as of the Closing Date, the Indenture Trustee and the
Pass Through Trustee in their individual capacities and as Indenture Trustee and
Pass Through Trustee, respectively, represent and warrant to the Purchasers and
each of the other parties hereto, that:
(a) the execution, delivery and performance of the Operative Documents
to which it is a party have been duly authorized, and, when executed and
delivered, the Operative Documents to which it is a party will constitute
legal, valid and binding obligations of it, enforceable against it in
accordance with their respective terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization and similar
laws affecting creditors generally and by general principles of equity;
(b) it has received all necessary United States federal governmental
approvals and authorizations pertaining to its banking or trust powers that
presently are required to perform its obligations under the Operative
Documents to which it is a party;
(c) it is a national banking association, duly organized, validly
existing and in good standing under the laws of the United States of
America, and it has full power and authority to carry on its business in
all material respects as now conducted and as contemplated to be conducted
by the Operative Documents;
(d) there are no proceedings or actions pending or, to its knowledge,
threatened against or affecting it in any court or before any Governmental
Authority which, if adversely determined, would materially and adversely
affect it or the power and authority of it to perform its obligations under
the Operative Documents to which it is a party;
(e) the execution and delivery by it of the Operative Documents to
which it is a party and performance by it of all of its obligations
thereunder: (i) are within its corporate powers and authority; and (ii) do
not and will not violate any United States federal Applicable Laws and
Regulations governing its banking or trust powers (as any of the same may
be applicable or applied to it) and do not and will not conflict with, or
result in any breach of any of the terms, conditions or provisions of, or
constitute a default under, its charter or by-laws or any indenture,
mortgage, conditional sale, loan or credit
-15-
agreement or other instrument or agreement to which it is a party or by
which it or any of its property or assets are bound or result in the
imposition of any Lien on it or any of its property or assets; and
(f) it has the minimum combined capital and surplus required by
Section 310(a)(2) of the Trust Indenture Act.
Section 4.4. Representations and Warranties of Trust Company. Effective as of
the Closing Date, the Trust Company represents and warrants in its individual
capacity to each of the other parties hereto as follows:
(a) the execution, delivery and performance of the Operative Documents
to which it or the Co-Trustee is a party in its individual capacity have
been duly authorized by, and, when executed and delivered, the Operative
Documents to which it or the Co-Trustee is a party in its individual
capacity will constitute legal, valid and binding obligations of it or the
Co-Trustee, enforceable against it or the Co-Trustee in accordance with
their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization and similar laws
affecting creditors generally and by general principles of equity;
(b) it and the Co-Trustee have received all necessary governmental
approvals and authorizations that presently are required under any
Connecticut or United States federal Applicable Laws and Regulations
governing its banking or trust powers to perform its obligations under the
Operative Documents to which it or the Co-Trustee is a party in its
individual capacity;
(c) it is a national banking association, duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, and it has full power, authority and legal right to carry on
its business in all material respects as now conducted and as contemplated
to be conducted by the Operative Documents;
(d) there are no proceedings or actions pending or, to its knowledge,
threatened against or affecting it in any court or before any Governmental
Authority which, if adversely determined, would materially and adversely
affect it or its right, power and authority to perform its obligations
under the Operative Documents to which it is a party in its individual
capacity;
(e) there is no event that with the giving of notice, passage of time
or both would constitute an Event of Default attributable to it or the
Co-Trustee in their individual capacities;
(f) the execution and delivery by it or the Co-Trustee of the
Operative Documents to which it or the Co-Trustee is a party in its
individual capacity and the performance by it or the Co-Trustee of all of
the provisions thereof (i) are within its rights, powers and authority and
(ii) do not and will not violate any Connecticut or United States federal
Applicable Laws and Regulations governing its banking or trust powers (as
-16-
any of the same may be applicable or applied to it) and do not and will not
conflict with, or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under, its charter or by-laws or any
indenture, mortgage, conditional sale, loan or credit agreement or other
instrument or agreement to which it is a party or by which it or any of its
property or assets are bound or result in the imposition of any Lien on it
or any portion of the Estate assets;
(g) the Trust Estate is free and clear of all Lessor Liens
attributable to it or the Co-Trustee;
(h) it maintains an office for administration of the Trust Estate in
Hartford, Connecticut;
(i) there are no proceedings or actions pending or, to the Trust
Company's knowledge, threatened against or affecting the Co-Trustee in any
court or before any Governmental Authority which, if adversely determined,
would materially and adversely affect the Co-Trustee or his right to
perform his obligations under the Operative Documents to which he is a
party;
(j) there is no event that with the giving of notice, passage of time
or both would constitute an Event of Default attributable to the
Co-Trustee;
(k) the execution, delivery and performance of the Operative Documents
to which the Co-Trustee is a party will not conflict with or breach any
contract or agreement to which the Co-Trustee is a party; and
(l) the place of business of the Co-Trustee is located in Hartford,
Connecticut.
Section 4.5. Representations and Warranties of the Recourse Guarantor.
Effective as of the Closing Date hereunder, the Recourse Guarantor represents
and warrants to the Purchasers and each of the other parties hereto as follows:
(a) the execution, delivery and performance of the Operative Documents
to which it is a party have been duly authorized by the Recourse Guarantor,
and, when executed and delivered, the Operative Documents to which it is a
party will constitute legal, valid and binding obligations of it,
enforceable against it in accordance with their respective terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization and similar laws affecting creditors generally and by
general principles of equity;
(b) it has received all necessary governmental approvals and
authorizations that presently are required for it to execute, deliver and
to perform its obligations under the Operative Documents to which it is a
party; provided that no representation or warranty is made as to any
Applicable Laws or Regulations to the extent the Recourse Guarantor may be
subject thereto as a result of the activities of the Lessee or any
construction, maintenance, use or repair of the Properties;
-17-
(c) it is a limited partnership duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization, it
is duly qualified to conduct business in each jurisdiction in which a
Property is located to the extent required under Applicable Laws and
Regulations and it has full power and authority to enter into and perform
its obligations under the Operative Documents to which it is a party;
(d) there are no proceedings or actions pending or, to its knowledge,
threatened against or affecting it in any court or before any Governmental
Authority which, if adversely determined, would materially and adversely
affect it or would question the right, power and authority of it to perform
its obligations under the Operative Documents to which it is a party;
(e) there is no event that with the giving of notice, passage of time
or both would constitute an Event of Default attributable to it;
(f) the execution and delivery by it of the Operative Documents to
which it is a party and performance by it of all of its obligations
thereunder do not and will not violate any Applicable Laws and Regulations
(as any of the same may be applicable or applied to it); provided that no
representation or warranty is made as to any Applicable Laws or Regulations
to the extent the Recourse Guarantor may be subject thereto as a result of
the activities of the Lessee or any construction, maintenance, use or
repair of the Properties, and do not and will not conflict with, or result
in any breach of any of the terms, conditions or provisions of, or
constitute a default under, its corporate charter or by-laws or any
material indenture, mortgage, conditional sale, loan or credit agreement or
other instrument or agreement to which it is a party or by which it or any
of its property or assets are bound or result in the imposition of any Lien
on the Properties or the Estate;
(g) it has not retained, employed or authorized any broker, finder or
accounting, financial engineering, appraisal, or other third party advisor
whose fees are not Transaction Costs to act on its behalf in connection
with the consummation of the transactions contemplated by the Operative
Documents;
(h) the Recourse Guarantor is not entering into the Operative
Documents to which it is a party or any other transaction contemplated
hereby or thereby, directly or indirectly, in connection with any
arrangement in any way involving any employee benefit plan or related trust
with respect to which it in its individual capacity or any of the other
parties hereto or any of their affiliates, is a party-in-interest, all
within the meaning of ERISA and the Internal Revenue Code of 1986, as
amended. The execution and delivery of the Operative Documents and the
issuance and sale of the Notes hereunder will not involve any transaction
that is subject to the prohibitions of section 406 of ERISA or in
connection with which a tax could be imposed pursuant to section
4975(c)(1)(A)-(D) of the Code. The representation by the Recourse Guarantor
in the immediately preceding sentence is made in reliance upon and subject
to the accuracy of each Purchaser's representation in Section 3.1 of the
Certificate Purchase Agreement as to the sources of the funds to be used to
pay the purchase price of the Certificates to be purchased by such
Purchaser;
-18-
(i) the Properties and the Estate are free and clear of all Lessor
Liens attributable to it;
(j) it is a "United States Person" as defined in Section 7701(a)(30)
of the Code;
(k) it 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;
(l) it has a tangible net worth, as determined in accordance with
GAAP, of at least $75,000,000;
(m) it owns (directly or indirectly) 100% of the Beneficial Interest
of the Lessor; and
(n) assuming that the Lessee makes all payments of Basic Rent as and
when required under the Lease, the scheduled outstanding principal amount
of the Outstanding Notes as of any Anniversary will be an amount which
permits the Lien of the Security Documents to be released pursuant to the
clause (i) of the second paragraph of Section 11.01 of the Indenture (after
taking into account the Lessor's Cost of all Properties previously released
from the Lien of the Security Documents) with respect to Properties having
an aggregate Lessor's Cost (expressed as a percentage of Total Original
Lessor's Cost) equal to the Total Joint Maximum Cumulative Percentage for
such Anniversary.
Section 4.6. Representations and Warranties of the Lessor. Effective as of
the Closing Date hereunder, the Lessor represents and warrants to the Purchasers
and each of the other parties hereto as follows:
(a) the execution, delivery and performance of the Operative Documents
to which it is a party and the sale of the Notes have been duly authorized,
and, when executed and delivered, the Notes and other Operative Documents
to which it is a party will constitute legal, valid and binding obligations
of it, enforceable against it in accordance with their respective terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization and similar laws affecting creditors generally
and by general principles of equity;
(b) it has received all necessary governmental approvals and
authorizations that presently are required for it to sell the Notes and
execute, deliver and perform its obligations under the Operative Documents
to which it is a party;
(c) [reserved];
(d) there are no proceedings or actions pending or, to its knowledge,
threatened against or affecting it in any court or before any Governmental
Authority;
-19-
(e) the sale of the Notes and the execution and delivery by it of the
Notes and all other Operative Documents to which it is a party and
performance by it of all of its obligations thereunder (i) are within its
rights, powers and authority and (ii) do not and will not violate any
Applicable Laws and Regulations (as any of the same may be applicable or
applied to it) and do not and will not conflict with, or result in any
breach of any of the terms, conditions or provisions of, or constitute a
default under, its corporate charter or laws or any material indenture,
mortgage, conditional sale, loan or credit agreement or other instrument or
agreement to which it is a party or by which it or any of its property or
assets are bound or result in the imposition of any Lien on it or any of
its property or assets except the Lien of the Security Documents or any
other Lien permitted by the Operative Documents;
(f) there is no event that with the giving of notice, passage of time
or both would constitute an Event of Default attributable to it;
(g) it maintains an office for administration of the Trust Estate in
Hartford, Connecticut;
(h) the Trust Estate is free and clear of all Lessor Liens
attributable to it;
(i) the Trust is a validly formed common law trust under the laws of
the State of Connecticut;
(j) it has not retained, employed or authorized any broker, finder or
accounting, financial engineering, appraisal, or other third party advisor
whose fees are not Transaction Costs to act on its behalf in connection
with the consummation of the transactions contemplated by the Operative
Documents;
(k) it has acquired its beneficial interest in the Trust and the Trust
Estate for its own account for investment and not with a present view to
any distribution (as such term is used in Section 2(11) of the Securities
Act) thereof, and if in the future it should decide to dispose of its
interest in the Trust and the Trust Estate, 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; provided,
however, subject to the provisions of Article VII hereof and the Trust
Agreement, the disposition of the Owner Participant's interest in the Trust
or the Trust Estate shall be at all times in the Owner Participant's
control. Except as contemplated by the Operative Documents, it has not
directly or indirectly offered any interest in the Properties, the Trust
Estate, the Lease, the Note, the Lessor or any similar securities of the
Lessee or the Lessor for sale to, or solicited any offer to acquire any of
the same from, any Person, nor has it authorized any Person to act on its
behalf to take any such action;
(l) it is a "United States Person" as defined in Section 7701(a)(30)
of the Code; and
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(m) the name of the Lessor for purposes of filing any financing or
continuation statement under Article 9 of the UCC is "AFRT 1997-D Trust".
The location of the Lessor for the purpose of filing any financing or
continuation statement under Article 9 of the UCC is Ohio. The
organizational identification number of the Lessor required for any filing
under Article 9 of the UCC is .
-------
Article V
Covenants of Lessee
Section 5.1. Merger, etc. Nothing contained in the Operative Documents shall
prevent any change of name of the Lessee, any consolidation of the Lessee with,
or merger of the Lessee into, any other corporation or other entity (whether or
not affiliated with the Lessee), or successive changes of name, consolidations
or mergers to which the Lessee or its successor or successors shall be a party
or parties, or shall prevent any sale or conveyance of the property of the
Lessee as an entirety or substantially as an entirety to any other corporation
or entity (whether or not affiliated with the Lessee) authorized to acquire and
operate the same; provided, however, and the Lessee hereby covenants and agrees,
that upon any such consolidation, merger, sale or conveyance, the due and
punctual performance of all of the obligations of the Lessee under the Operative
Documents to which it is a party shall be assumed in writing by the corporation
or other entity formed by such consolidation, or into which the Lessee shall
have been merged, or which shall have acquired such property; such transaction
shall not cause a Lease Event of Default to occur and the Lessee will, if
requested by Lessor, the Pass Through Trustee or Indenture Trustee, deliver to
the Lessor, the Pass Through Trustee and the Indenture Trustee an opinion of
Xxxxx & Xxxxx, inside counsel to the successor entity or any other counsel
reasonably acceptable to the Lessor (which may be delivered after the
consummation of the transaction) stating that such successor corporation is duly
organized under the laws of the state or other jurisdiction of its organization,
that such assumption agreement is duly authorized, executed and delivered and is
enforceable in accordance with its terms and that no violation of law applicable
to or binding on such successor corporation will result from such successor
corporation's being party to such assumption agreement and Operative Documents
(subject to customary exceptions and qualifications). Upon any such
consolidation or merger, or any sale, conveyance, transfer or lease of
substantially all the assets of the Lessee in accordance with this Section 5.1,
(x) the successor corporation or other entity formed by such consolidation or
into which the Lessee shall be merged or the Person to which such sale,
conveyance, transfer or lease shall be made shall succeed to, and be substituted
for, and may exercise every right and power of, the Lessee under the Lease, any
FMV Lease, any Bank Branch Lease and the other Operative Documents to which the
Lessee is a party and (y) the Lessee or, if applicable, the successor entity
will remain primarily liable for all of its obligations under the Operative
Documents to which it is a party.
Nothing contained in the Operative Documents shall prevent the Lessee from
merging into itself any other corporation or entity (whether or not affiliated
with the Lessee) or acquiring by purchase or otherwise all or any part of the
property of any other corporation or other entity (whether or not affiliated
with the Lessee).
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Section 5.2. Delivery of Documents. The Lessee will deliver to the
Participants and the Indenture Trustee:
(a) Financial Statements. If Lessee is no longer subject to the
periodic reporting requirements pursuant to the rules and regulations
promulgated under the Securities Exchange Act during the Basic Term, any
FMV Lease Term or any Renewal Term, within 60 days after the end of each of
the first three quarterly fiscal periods in each fiscal year of the Lessee,
a consolidated balance sheet of the Lessee and its consolidated
Subsidiaries prepared by it as of the close of such period, together with
the related consolidated statements of income for such period. Such
financial statements shall be prepared in the form required by the SEC for
the Lessee and, if there is no such requirement then applicable to the
Lessee, in the form required by bank regulators for the Lessee or in
compliance with generally accepted accounting principles.
(b) Annual Certificate and Financials. Within 120 days after the close
of each of its fiscal years, (x) its certificate, signed by one of its
Responsible Officers and addressed to the Indenture Trustee and the
Participants, to the effect that the signatory thereto has reviewed, or
caused to be reviewed, under his or her supervision, this Agreement and the
Lease and any FMV Lease and such review has not disclosed the existence
during such accounting period, nor does the signer have Actual Knowledge
(including written notice received by the Lessee in accordance with the
provisions of the relevant Operative Document) of the existence as of the
date of such certificate, of any condition or event which constitutes a
Lease Event of Default or Lease Default, or, if any such condition or event
existed or exists, specifying the nature and period of existence thereof
and what action the Lessee has taken or is taking or proposes to take with
respect thereto and (y) a consolidated balance sheet of the Lessee and its
consolidated Subsidiaries prepared by it as of the close of such fiscal
year, together with the related consolidated statements of income for such
fiscal year, as certified by the Lessee's independent public accountants.
(c) Other Reports. Promptly after the filing thereof, copies of all
Form 10-Ks, 10-Qs and 8-Ks, if any (without exhibits unless requested by a
Participant), which the Lessee files with the SEC or any successor
authority pursuant to the rules and regulations promulgated under the
Securities Exchange Act.
(d) Requested Information. With reasonable promptness, (x) after
request thereof by a Participant, the quarterly "Call Reports" prepared by
the Lessee and (y) such other data and information relating to the
Properties leased to the Lessee as from time to time may be reasonably
available to it and reasonably requested by a Participant.
(e) Notice of Default. Promptly after it has Actual Knowledge that any
Lease Default or Lease Event of Default has occurred, a notice of such
Lease Default or Lease Event of Default describing the same in reasonable
detail and, together with such notice or as soon thereafter as possible, a
description of the action that it has taken or proposes to take with
respect thereto.
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Section 5.3. Additional Reports of Lessee.
(a) Exchange Act Reports. The Lessee shall provide to the Pass Through
Trustee, within 30 days after the Lessee is required to file the same with
the SEC, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
SEC may from time to time by rules and regulations prescribe) which the
Lessee may be required to file with the SEC pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act; or, if the Lessee is not
required to file information, documents or reports pursuant to either of
said Sections, then it shall provide to the Pass Through Trustee and the
SEC, in accordance with rules and regulations prescribed from time to time
by the SEC, such of the supplementary and periodic information, documents
and reports which may be required pursuant to Section 13 of the Securities
Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules
and regulations.
(b) OCC Reports. The Lessee shall provide to the Pass Through Trustee,
within 30 days after the Lessee is required to file the same with the
Office of the Comptroller of the Currency ("OCC") copies of the
public-available portions of each Consolidated Report of Condition and
Income for a Bank with Domestic and Foreign Offices (each a "Call Report")
which the Lessee files with the OCC. Additionally, the Lessee shall provide
to the Pass Through Trustee, within 30 days after the Lessee is required to
file the same with the OCC, copies of the annual reports and of the
information, documents, and other reports (or copies of such portions of
any of the foregoing as OCC may from time to time by rules and regulations
prescribe) which the Lessee may be required to file with the OCC pursuant
to Section 13(d) or Section 15(d) of the Securities Exchange Act as adopted
by the OCC; or if the Lessee is not required to file information, documents
or reports pursuant to either of such Sections, then it shall provide to
the Pass Through Trustee and the OCC, in accordance with rules and
regulations prescribed from time to time by the OCC, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Securities Exchange Act in respect
of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations.
(c) Requested Information; FDICIA Capitalization Status. With
reasonable promptness after the request therefor by the Pass Through
Trustee, the Lessee shall provide the Pass Through Trustee with (x) an
Officer's Certificate attesting to the Lessee's capitalization status under
the "prompt corrective action" regulations adopted by the OCC pursuant to
the Federal Deposit Insurance Corporation Improvement Act of 1991 as of the
date of the most recent Call Report filed with the OCC and (y) such other
information relating to the Properties leased to the Lessee as from time to
time may be reasonably available to the Lessee.
Section 5.4. Further Assurance. The Lessee, at its own cost and expense, will
cause to be promptly and duly taken, executed, acknowledged and delivered all
such further acts,
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documents and assurances as the Lessor, the Indenture Trustee or the Pass
Through Trustee reasonably may request from time to time in order to carry out
more effectively the intent and purposes of this Agreement and the other
Operative Documents and the Overall Transaction; provided that the Lessee shall
have no obligation to take any action with respect to the Trust Agreement, the
Debt Documents or the Residual Value Insurance policy unless it has received
satisfactory assurances to it that it will be reimbursed for all of its costs
and expenses.
Section 5.5. Indenture. (a) The Lessee acknowledges receipt of a copy of the
Security Documents. In order to secure the indebtedness evidenced by the Notes
and the other obligations referred to in and secured by the Security Documents,
the Lessor has provided in the Security Documents, among other things, for the
creation in favor of the Indenture Trustee (for the benefit of the Holders) of a
first mortgage lien and first priority security interest in and assignment of
the Estate and for the assignment by the Lessor to the Indenture Trustee of all
right, title and interest of the Lessor in and to the Lease and other Operative
Documents, to the extent provided in the Security Documents.
(b) The Lessee agrees and consents:
(i) to the assignment to the Indenture Trustee pursuant to the
Security Documents of the Lease and all Rents and other amounts
payable by the Lessee thereunder and (except for Excepted Payments and
as otherwise provided in the Security Documents) all rights of the
Lessor thereunder;
(ii) that, without limiting any other provision of the Operative
Documents that expressly vests the same in the Indenture Trustee for
the benefit of the Holders, the Indenture Trustee shall have the right
to exercise all rights of the Lessor under the Lease (including
without limitation, the right to consent to the taking of any action,
the making of any determination or election or the granting of any
waiver, in each case by the Lessor thereunder) and the right to
receive notices given or required to be given to the Lessor thereunder
except, in each case, for Excepted Rights and as otherwise provided in
the Security Documents;
(iii) that all rents and other moneys (other than Excepted
Payments) due and to become due and payable by the Lessee under the
Lease have been assigned by the Lessor pursuant to the Security
Documents and that, pursuant to such assignment, will be duly and
promptly paid to the Indenture Trustee when due by the Lessee without
notice, demand, counterclaim, setoff, deduction or defense, and
without abatement, suspension, deferment, diminution or reduction for
any reason whatsoever (including, without limitation, the
circumstances described in Section 3.5 of the Lease); provided that if
as a result of the occurrence of any event described in Section
7.01(f) or 7.01(g) of the Indenture, (x) the Lease is rejected
pursuant to Section 365(h) of the Bankruptcy Code or any similar
Applicable Law and the Lessee is required to cease its possession of
any Property, so long as the Lessee has complied with Section 5.5(e)
hereof, the Lessee's obligation to pay Rent under and otherwise
perform the Lease with respect to such Property shall terminate (but
shall be reinstated upon a subsequent affirmation or reinstatement of
the Lease with respect to such Property and of the Lessee's subsequent
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right to possession thereof, whether or not the Lessee shall reacquire
possession of such Property) or (y) the Lessee shall be ordered by the
bankruptcy court or trustee in bankruptcy to pay any Rent under the
Lease to a Person other than the Indenture Trustee, any such payment
of Rent made to such Person shall be deemed to satisfy the Lessee's
obligation to pay such Rent to the Indenture Trustee;
(iv) subject to the Security Documents, including without
limitation, Article XVIII of the Indenture and the Lessor's rights in
respect of Excepted Rights, that any notice, consent, election,
determination, waiver or other action given or taken as to the Lessee
by the Indenture Trustee as assignee of the Lessor's rights under the
Lease shall have the same force and effect as a notice, consent,
election, determination, waiver or other action given or taken by the
Lessor under the Lease and that in the event of an inconsistent
notice, consent, election, determination, waiver or other action given
or taken from or by the Lessor and from or by the Indenture Trustee,
the notice, consent, election, determination, waiver or other action
given or taken from or by the Indenture Trustee shall control;
(v) that the Indenture Trustee shall not, by reason of the
Security Documents or any other Operative Document, be subject to any
obligation, duty or liability under the Lease, except (x) as provided
in Section 8.17 of the Indenture, (y) that when the Indenture Trustee
is exercising rights under the Lease it shall do so in accordance with
the terms and conditions thereof and (z) if the Indenture Trustee has
foreclosed on the Lessor (or exercised a comparable remedy) and
acquired the position of the Lessor under the Lease;
(vi) [Reserved]; and
(vii) to all of the terms and conditions of the Security
Documents.
(c) At any time and from time to time during the Basic Term, the
Lessee will promptly, but in no event later than thirty (30) days after
request by the Indenture Trustee, execute, acknowledge and deliver to the
Indenture Trustee or to any prospective purchaser of the Note (if such
prospective purchaser has signed a commitment or a letter of intent to
purchase the Note), a certificate to the effect stated in Section 21.12 of
the Lease, provided that no such certificate may be requested unless the
Indenture Trustee (or the party for whom the request is made) has a good
faith reason for such request.
(d) Lessee agrees that any financing entered into in connection with
the financing of Alterations pursuant to Article XI will contain the
provisions described in Section 4.10 of the Indenture. Subject to Article
XV of the Indenture, each of the Indenture Trustee and the Pass Through
Trustee agrees to permit, and to make such amendments to the Operative
Documents as the Lessee may reasonably request to effectuate, the financing
of Alterations described in Article XI, provided such requested amendments
are consistent with the provisions of Article XI and of Section 4.10 of the
Indenture.
(e) The Lessee agrees that in the event that a voluntary or
involuntary case is commenced by or against the Lessor under the Bankruptcy
Code and as a result thereof the Lease
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or any other Operative Document to which the Lessor is a party is rejected,
it shall not, without the consent of the Indenture Trustee (given pursuant
to the terms of the Security Documents) acquiesce (within the meaning of
Section 365(h) of the Bankruptcy Code) to such rejection, and Lessee hereby
assigns to the Indenture Trustee any right it may have pursuant to Section
365(h) of the Bankruptcy Code to treat any such rejection as a termination
of the Lease or any other such Operative Document. The Indenture Trustee
hereby agrees that it shall not exercise any right it may have as assignee
to acquiesce to any such rejection.
Section 5.6. Enforcement of Certain Warranties. (a) Subject to Section 5.6(b)
hereof, the Lessee hereby assigns and sets over to, and the Lessor hereby
accepts the assignment of, all of the Lessee's right, title and interest (but
excluding any responsibilities, duties or liabilities of the Lessee thereunder)
in, to and under, any and all warranties of any builders, contractors or vendors
who sold to the Lessee any Property or portion thereof or performed any work on
or supplied any materials, fixtures or equipment to any Property or portion
thereof (excluding from such assignment any such warranties and claims in
respect of any property title to which is vested in the Lessee), to the extent
assignable by the Lessee.
(b) Unless a Lease Event of Default shall have occurred and be continuing,
the Lessor authorizes the Lessee (directly or through agents), at the Lessee's
expense, to assert, during the Lease Term or any FMV Lease Term, all of the
Lessor's rights (if any) under any such warranty that the Lessee or the Lessor
may have (including those assigned by the Assignment of Warranties), and the
Lessor agrees to cooperate, at the Lessee's expense, with the Lessee and its
agents in asserting such rights subject to the terms of the applicable warranty.
Any amount recovered by the Lessee under any such warranty shall be paid to the
Lessee and applied first to the repair, restoration or replacement of the
portion of the Property, as applicable, by virtue of which such amount was
recovered and the balance, if any, shall be retained by the Lessee; provided
that this sentence shall not limit the Lessee's obligations under Article 9 of
the Lease or the FMV Lease, as applicable.
(c) Notwithstanding the foregoing provisions of this Section 5.6, so long
as a Special Default or a Lease Event of Default shall have occurred and be
continuing, any amount that would otherwise be retained by the Lessee pursuant
to Section 5.6(b) hereof shall be paid to the Indenture Trustee (or, if the Lien
of the Security Documents has been satisfied and discharged, the Lessor) as
security for the obligations of the Lessee under the Lease and held in
accordance with Section 21.16 of the Lease and, at such time thereafter as no
Special Default or Lease Event of Default shall be continuing, such amount shall
be paid promptly to the Lessee.
Section 5.7. Change of Name or Location. At the request of Lessor, the Owner
Participant, the Pass Through Trustee or Indenture Trustee, the Lessee shall
inform Lessor, the Owner Participant, the Pass Through Trustee and Indenture
Trustee of any change in the Lessee's name, its state of incorporation, its
organizational identification number required for filing any financing statement
under Article 9 of the UCC or the address of its chief executive office,
principal place of business or place where it maintains its business records
relating to the Properties.
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Section 5.8. Investigation by Governmental Authorities. The Lessee shall
deliver to the Lessor, the Owner Participant, the Pass Through Trustee and the
Indenture Trustee promptly after becoming aware of or receiving notice of the
intent by a Governmental Authority to (x) take an action which would constitute
a Condemnation, (y) investigate a Property for a material violation of any
Applicable Laws and Regulations relating to such Property, including any
Environmental Law, under which liability may be imposed upon the Lessor, the
Owner Participant, the Indenture Trustee or the Pass Through Trustee, or (z)
investigate any Property (other than routine fire, life-safety and similar
inspections) for any violation of Applicable Laws and Regulations under which
criminal liability may be imposed upon the Lessor, the Owner Participant, the
Indenture Trustee or the Pass Through Trustee.
Section 5.9. No Acquisition of Notes or Certificates. Except with respect to
Notes assumed pursuant to Section 10.1 hereof, and except as expressly permitted
under Section 6.19 hereof, the Lessee will not, and will not permit any of its
Affiliates (including any Person related to the Lessee within the meaning of
Section 318 of the Code and within the meaning of Rule 144A under the Securities
Act) to acquire, directly or indirectly by purchase or otherwise, any interest
in any Note or Certificate.
Section 5.10. Redemption Premium Payable by Lessee. The Lessee agrees that,
in each case under the Indenture in which a payment of Redemption Premium shall
be owing by the Lessee, the Lessee will calculate such amount and inform the
Owner Trustee, the Owner Participant, the Indenture Trustee and the Pass Through
Trustee of what such amount shall be.
Section 5.11. Annual Rent Roll. The Lessee shall deliver to Lessor and the
Indenture Trustee, within 75 days after request therefor by Lessor or the
Indenture Trustee (any such request by the Indenture Trustee to be made in
accordance with the terms of the Indenture), rent rolls for the Properties
containing a list of all subleases of such Properties, including the names of
sublessees, space leased, terms of subleases, rental rates and other matters
customarily contained in rent rolls of commercial income-producing property;
provided that such requests may not be made more often than once every year in
the aggregate, except that while a Lease Event of Default is continuing and, as
to a Property, during the 360 days before such Property is to be returned to the
Lessor, (i) such request may be made not more often than once every 90 days and
(ii) the rent rolls so provided by the Lessee shall contain the information
required by this Section 5.11 and shall be certified by a Responsible Officer of
the Lessee.
Section 5.12. Amendments to Lease. The Lessee agrees and consents that (a)
Sections 6.1 and 6.2 of the Lease shall not be changed, amended, altered or
modified without the prior written consent of the Residual Value Insurer and (b)
the Lease shall not be changed, amended, altered or modified without the prior
written consent of the Indenture Trustee; provided that the written consent of
the Indenture Trustee shall not be required if Section 4.1 of the Lease or
Sections 15.01 and 18.05 of the Indenture provide otherwise, subject to Excepted
Rights.
Section 5.13. Trustee Fees. The Owner Participant agrees to pay the ongoing,
and initial, reasonable fees and expenses of the Lessor, the Co-Trustee, the
Indenture Trustee, the Special Servicer, the Deed of Trust State Trustees and
the Pass Through Trustee and any co-trustees and
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agents of any of the foregoing appointed in accordance with the terms of the
Trust Agreement or the Indenture, as the case may be.
Article VI
Other Covenants and Agreements
Section 6.1. Cooperation with Lessee. The parties hereto shall (except when a
Lease Event of Default is continuing), to the extent reasonably requested by the
Lessee (but without assuming additional liabilities on account thereof), at the
Lessee's expense, cooperate to (x) enable the Lessee to perform (i) its
covenants contained in Section 5.4 hereof including, without limitation, at any
time and from time to time, upon the request of the Lessee, to promptly and duly
execute and deliver any and all such further instruments, documents and
financing statements (and continuation statements related thereto) as the Lessee
may request in order to perform such covenants and (ii) its obligations under
Article 13 of the Lease to effect amendments to the Lease and create separate
leases upon the conditions set forth in such Article 13, (y) mitigate any
amounts payable by the Lessee under Article VIII hereof and (z) file or record
any documents with any Governmental Authority required by Applicable Laws and
Regulations.
Section 6.2. Closing Conditions. Each party hereto shall use reasonable
efforts to perform and comply with all agreements and conditions contained
herein and in any other Operative Document to which it is a party required to be
performed or complied with by it on or prior to the Closing Date or which is a
condition to the occurrence of the Closing Date.
Section 6.3. No Bankruptcy Petition. Each of the Lessee, Lessor and the Owner
Participant covenants and agrees that prior to the date which is one year and
one day after the payment in full of all the Notes it will not institute
against, or join any other Person in instituting against, the Lessor or the
Owner Participant any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any federal or state
bankruptcy or similar law; provided that this sentence shall not restrict in any
way the Indenture Trustee's exercise of remedies under the Security Documents.
This Section 6.3 shall survive the termination of this Agreement.
Section 6.4. Lessor Liens. The Trust Company covenants and agrees that during
the Lease Term or any FMV Lease Term it will not create or permit to exist at
any time any Lessor Liens attributable to it and will, at its own cost and
expense, promptly, and in any event, within thirty (30) days after the creation
of any such Lessor Lien, take such action as may be necessary duly to discharge,
or to cause to be discharged, all such Lessor Liens; provided, however, that the
Trust Company shall not be required to so discharge any such Lessor Lien
attributable to it while the same is being contested in good faith by
appropriate proceedings diligently prosecuted so long as such proceedings shall
not involve any material danger of the sale, forfeiture or loss of, and shall
not interfere with the use or disposition of, any part of a Property or FMV
Property or title thereto or any interest therein, including, without
limitation, the Lien of the Security Documents or the payment of Rent, and so
long as the Trust Company has set aside adequate
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cash (or cash equivalent) reserves or other reasonable security in respect of
any such Lien attributable to it. The Trust Company will indemnify and hold
harmless the Lessee, the Indenture Trustee, the Pass Through Trustee and the
Certificate Owners for any losses or expenses incurred as a result of its breach
of this Section 6.4.
(b) The Indenture Trustee, in its individual capacity, covenants and agrees
during the Lease Term or any FMV Lease Term it will not create or permit to
exist at any time any Indenture Trustee's Liens attributable to it and will, at
its own cost and expense, promptly, and in any event, within (30) days after the
creation of such Indenture Trustee's Lien, take such action as may be necessary
duly to discharge, or to cause to be discharged, all such Indenture Trustee's
Liens; provided that the Indenture Trustee shall not be required to so discharge
any such Indenture Trustee's Lien while the same is being contested in good
faith by appropriate proceedings diligently prosecuted so long as such
proceedings do not involve any material danger of the sale, forfeiture or loss
of, and shall not interfere with the use or disposition of, any part of a
Property or FMV Property or title thereto or any interest therein, including,
without limitation the Lien of the Security Documents or the payment of Rent,
and so long as the Indenture Trustee has set aside adequate cash (or cash
equivalent) reserves or other reasonable security in respect of any such Lien.
The Indenture Trustee in its individual capacity further will indemnify and hold
harmless each of the other parties hereto from and against any loss,
out-of-pocket cost and expenses (including reasonable legal fees and expenses)
incurred, in each case, as a result of the imposition or enforcement of any such
Indenture Trustee's Lien.
(c) The Pass Through Trustee, in its individual capacity, covenants and
agrees during the Lease Term or any FMV Lease Term it will not create or permit
to exist at any time any Lien on all or any portion of the Properties arising as
a result of (i) claims against the Pass Through Trustee not related to its
interest in the Properties or (ii) acts of the Pass Through Trustee not
contemplated by, or failure of the Pass Through Trustee to take any action it is
expressly required to perform by, the Operative Documents (unless such failure
shall have been consented to by the Lessee, the Lessor and the Holders of
Certificates evidencing Fractional Undivided Interests (as defined in the
Certificate Purchase Agreement) aggregating not less than a majority in interest
in the Trust or is a result of the occurrence or continuance of an Event of
Default) and that the Pass Through Trustee will, at its own cost and expense,
promptly, and in any event, within (30) days after the creation of such Lien,
take such action as may be necessary duly to discharge, or to cause to be
discharged, all such Liens; provided that the Pass Through Trustee shall not be
required to so discharge any such Lien while the same is being contested in good
faith by appropriate proceedings diligently prosecuted so long as such
proceedings do not involve any material danger of the sale, forfeiture or loss
of, and shall not interfere with the use or disposition of, any part of a
Property or FMV Property or title thereto or any interest therein, including,
without limitation the Lien of the Security Documents or the payment of Rent,
and so long as the Pass Through Trustee has set aside adequate cash (or cash
equivalent) reserves or other reasonable security in respect of any such Lien.
The Pass Through Trustee further agrees to indemnify and hold harmless each of
the other parties hereto from and against any loss, out-of-pocket cost and
expenses (including reasonable legal fees and expenses) incurred, in each case,
as a result of the imposition or enforcement of any such Lien.
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(d) The Owner Participant covenants and agrees that during the Lease Term
or any FMV Lease Term it will not create or permit to exist at any time any
Remainderman Liens or Lessor Liens attributable to it and will, at its own cost
and expense, promptly, and in any event, within thirty (30) days after the
creation of any such Remainderman Lien or Lessor Lien, take such action as may
be necessary duly to discharge, or to cause to be discharged, all such
Remainderman Liens or Lessor Liens; provided, however, that the Owner
Participant shall not be required to so discharge any such Remainderman Lien or
Lessor Lien attributable to it while the same is being contested in good faith
by appropriate proceedings diligently prosecuted so long as such proceedings
shall not involve any material danger of the sale, forfeiture or loss of, and
shall not interfere with the use or disposition of, any part of a Property or
FMV Property or title thereto or any interest therein, including, without
limitation, the Lien of the Security Documents or the payment of Rent, and so
long as the Owner Participant has set aside adequate cash (or cash equivalent)
reserves or other reasonable security in respect of any such Lien. The Owner
Participant will indemnify and hold harmless the Lessee, the Indenture Trustee,
the Pass Through Trustee and the Certificate Owners for any losses or expenses
incurred as a result of its breach of this Section 6.4.
Section 6.5. Further Assurances of Owner Participant. The Owner Participant,
at its own cost and expense, will cause all financing statements, fixture
filings and other documents, including, without limitation all continuation
statements (other than the Lease, any FMV Lease and any memorandum thereof), to
be recorded or filed at such places and times and in such manner, and will take
all such other actions or cause such actions to be taken, as are required by
Section 4.05 of the Indenture if it receives a request therefor or as may be
necessary or as may be reasonably requested by the Indenture Trustee in order to
establish, preserve and protect the title of the Lessor to the Properties and
the Lease and the Indenture Trustee's first priority perfected lien on, security
title to and security interest in the Estate. The Owner Participant and the
Lessor hereby irrevocably appoints the Indenture Trustee, or any agent
designated by the Indenture Trustee, their true and lawful attorney-in-fact,
which power is coupled with an interest and with full power of substitution, to
execute, acknowledge and deliver financing and/or continuation statements in the
name of Owner Participant and the Lessor if either Person fails or refuses to do
so. The Lessor specifically consents to any financing statements and/or
continuation statements or other filings related to the Indenture being made
electronically, to the extent permitted by law.
Section 6.6. Prepayment. So long as no Lease Event of Default shall have
occurred and be continuing, each of the Lessor and the Owner Participant
severally covenants and agrees that it shall not, and shall not permit its
Affiliates or cause or permit any of its respective Affiliates to cause any
employee benefit plan (as defined in Section 3(3) of ERISA) or plan (as defined
in Section 4975(e)(1) of the Code) as to which it or its respective Affiliates
is a fiduciary (as defined in Section 3(21) of ERISA or Section 4975(e)(3) of
the Code) to prepay, purchase, redeem or refinance any Note or Pass Through
Certificate, or any interest therein, without the prior written consent of the
Lessee other than in the event of a purchase of Notes by the Lessor pursuant to
Section 20.01 of the Indenture or a prepayment in connection with an election to
prepay an Allocable Portion of the Notes in lieu of allowing the Lessee to
exercise a purchase option under Section 9.3(iii) hereof or to retain a Property
pursuant to Section 6.2 or Article 14 of the Lease. The Lessor further agrees
not to give the notice required pursuant to Section 2.06 of the Indenture prior
to receiving written instructions from the Lessee to do so; provided, however,
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such written instructions shall not be required in connection with any
prepayment or purchase of the Notes pursuant to Section 20.01 of the Indenture,
Section 9.3(iii) hereof or (when the Lessor retains the Property being
terminated) Section 6.2 or Article 14 of the Lease.
Section 6.7. Indebtedness. The Lessor shall not contract for, create, incur
or assume any indebtedness or liabilities or become liable in respect of any
guaranty other than pursuant to or under the Operative Documents.
Section 6.8. Limit on Activities. The Lessor shall not enter into any
business or other activity other than (A) the business of owning the Properties
or its interests therein, the leasing of the Properties to Lessee and the
exercise of rights under and the performance of obligations under the Operative
Documents, (B) the making of Permitted Investments, (C) activities incidental to
any of the foregoing including the performance of activities necessary to
maintain its status as a grantor trust and (D) the paying of expenses incurred
in the ordinary course of business otherwise permitted under this paragraph.
Section 6.9. No Subsidiaries. Each of the Lessor and the Owner Participant
shall not form, or cause to be formed, any Subsidiaries and shall not amend or
modify the special purpose provisions of its organizational documents or the
Trust Agreement without the prior express written consent of the Indenture
Trustee and Participants.
Section 6.10. No Voluntary Bankruptcy. The Lessor shall not (A) commence any
case, proceeding or other action under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, arrangement, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seek appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial benefit of its creditors; and the Lessor shall not take any action
in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in this paragraph.
Section 6.11. Change of Name or Location. The Lessor shall give prompt, and
in any event within 60 days of the event, notice to the Lessee and the Indenture
Trustee of any change in the Lessor's name, state of organization,
organizational identification number required for filing any financing statement
under Article 9 of the UCC or the address of its chief executive office,
principal place of business or place where it maintains its records concerning
the accounts or contract rights relating to the Overall Transaction.
Section 6.12. New Series of Certificates. No additional series of
Certificates may be issued under the Pass Through Trust Agreement.
Section 6.13. Performance of Lease. The Lessor shall satisfy, or cause the
Lessee to satisfy, each of the obligations of the Lessee under the Lease,
including without limitation, the obligation to (A) maintain insurance on the
Properties, (B) maintain and upkeep the Properties, and (C) pay real estate
taxes and assessments associated with owning and operating the Properties.
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Section 6.14. Quiet Enjoyment. Each party hereto (other than the Lessee)
agrees to not disturb (and agrees to not permit any Person claiming by, through
or under such party to disturb) either the Lessee's, or any permitted
sublessee's, quiet use and possession of any Property so long as no Lease Event
of Default has occurred and is continuing; provided that none of the Owner
Participant or the Lessor shall have responsibility for the acts of the
Indenture Trustee or the Pass Through Trustee or anyone claiming by, through or
under the Indenture Trustee or the Pass Through Trustee and neither the
Indenture Trustee nor the Pass Through Trustee shall have any responsibility for
the acts of any of the Owner Participant, Lessor or Owner Trustee, or anyone
claiming by, through, or under the Owner Participant, Lessor or Owner Trustee;
and provided further that this Section 6.14 will not be deemed violated by the
Indenture Trustee if while an Event of Default is continuing it is required to
name the Lessee or anyone claiming by, through or under Lessee in a lawsuit in
order to pursue remedies under the Security Documents. In the event of a
conflict between this Section 6.14 and Section 12.12, Section 12.12 shall
control.
Section 6.15. Redemption Premium Payable by Lessor. Each of the Lessor and
the Owner Participant agrees that, in each case under the Indenture in which a
payment of Redemption Premium shall be owing by the Lessor, the Lessor and the
Owner Participant will calculate such amount and inform the Lessee, the
Indenture Trustee and the Pass Through Trustee of what such amount shall be.
Section 6.16. Termination of Other Operative Documents. The Lessee, the Owner
Participant and the Lessor each agree that each of (i) that certain
Participation Agreement (1997-C) dated as of June 4, 1997 among the Lessee (as
successor to Nations Bank, N.A.), the Lessor (as successor to each of the
lessors identified therein) and LaSalle National Bank, as Indenture Trustee and
as Pass Through Trustee and (ii) that certain Participation Agreement (1997 D)
dated as of June 4, 1997 among the Lessee (as successor to Nations Bank, N.A.),
the Lessor (as successor to each of the lessors identified therein) and LaSalle
National Bank, as Indenture Trustee and as Pass Through Trustee, is terminated
as of the date hereof and neither the Lessee nor the Lessor shall have any
further rights or obligations thereunder other than any rights or obligations
which accrued prior to the date hereof.
Section 6.17. Security Documents; Amendments. Lessor agrees to comply with
all of the terms of the Security Documents applicable to it. Notwithstanding
anything herein to the contrary, Indenture Trustee and Lessor hereby agree for
the benefit of the Lessee that, without the consent of the Lessee, they will
not, so long as no Lease Event of Default shall have occurred and be continuing,
make any amendment to the Indenture, the Maryland Security Documents or the
Notes that will affect the principal amount of, premium, if any, on or interest
on the Notes or the time or times when any payments under the Notes become due
or otherwise amend, modify or supplement the Indenture or the Maryland Security
Documents in any manner that would adversely affect the Lessee, provided that
whether or not a Lease Event of Default shall have occurred and be continuing no
such action shall be taken with respect to any provisions of the Notes, the
Maryland Security Documents or the Indenture which would increase or accelerate
the obligations of the Lessee under the Operative Documents, or decrease its
rights. Indenture Trustee and Lessor further agree that any such amendment or
modification of the Indenture, the Maryland Security Documents or the Notes
without Lessee's consent in violation of the previous
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sentence shall be void and ineffective as against Lessee. Indenture Trustee and
Lessor agree promptly to furnish to Lessee copies of any supplement, amendment,
waiver or modification of any of the Operative Documents to which Lessee is not
a party.
Section 6.18. Lien Release. Upon satisfaction of all the applicable
conditions in the Indenture, the Maryland Security Documents, the Lease and this
Agreement and a certification in writing to such effect by either the Lessee or
the Lessor, at the Owner Participant's cost and expense, Indenture Trustee shall
release promptly the Lien of the Security Documents on any property which the
Lease requires to be transferred free and clear of the Lien of the Security
Documents and, simultaneously with any such release, the Indenture Trustee shall
also release the Lien of the Security Documents relating to any such property.
Section 6.19. Foreclosure Rights. The Indenture Trustee agrees to give, or to
cause an agent acting on its behalf to give, the Lessee notice of the Indenture
Trustee's, or such agent's, intent to foreclose or exercise a comparable remedy
against the Estate pursuant to the Security Documents, or a portion thereof,
solely as a result of an Event of Default not arising as a result of a Lease
Event of Default, at least 25 days prior to the exercise of such foreclosure or
remedy. In the case of such an Event of Default, the Lessee will be permitted to
bid at any foreclosure sale, or to bid at any private sale, for the Estate or
the portion being foreclosed and the Indenture Trustee will sell or cause its
agent to sell to the Lessee if it is the highest bidder. If prior to the
expiration of such 25-day period the Lessee notifies the Indenture Trustee or
its agent that the Lessee desires to purchase (which purchase shall be for the
Required Payment (as defined in Section 20.01 of the Indenture) but without
Redemption Premium) or assume all of the Notes and if such notice states that
(x) Lessee agrees to so purchase or assume on a date set forth therein not later
than 25 days after such notice and (y) Lessee agrees that the Lessee will
consummate the purchase on such date or assume the obligations under all of the
Notes in accordance with Section 10.1 hereof, the Indenture Trustee or its agent
shall forbear and shall cause any such agent to forbear exercising such
foreclosure or remedy until such date thereby scheduled. If the purchase does
not occur by such date or the Lessee fails on such date to satisfy the
conditions set forth in Section 10.1 hereof to assume all of the Notes, the
Indenture Trustee or its agent may proceed to exercise remedies under the
Security Documents (free of any obligation arising under Section 9.1 hereof as
to any sale by the Indenture Trustee or its agent, it being understood that
future owners of interests in the Properties will be bound by Section 9.1). If
all of the Notes are so assumed, the Lessee shall cure any Events of Default
still continuing to the extent curable (it being understood that (a) Events of
Default resulting from a failure to make payments in accordance with the Notes
or the Indenture must be cured by the Lessee, (b) the Lessee must cure Events of
Default arising from non-monetary performance obligations under the Notes, the
Maryland Security Documents or Indenture within the grace period applicable
thereto under the Lease, as if such grace period began on the date of such
assumption, and (c) the Lessee need not cure Events of Default which, by their
nature, are not possible for the Lessee to cure).
Section 6.20. Lease Covenants. The Owner Participant agrees to perform each
of its obligations under, and to cause the Lessor to perform each of its
obligations under the Lease. The Owner Participant will, if necessary, transfer
funds to the Lessor to enable the Lessor to perform its payment obligations
under the Operative Documents.
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Section 6.21. Subleases. The Indenture Trustee agrees to be bound by, and to
perform its obligations under Section 16.1 of the Lease.
Section 6.22. Certain Limitations in Reorganization. The Pass Through Trustee
and the Indenture Trustee agree that, (a) if (i) the Owner Participant becomes a
debtor subject to the reorganization provisions of the Bankruptcy Code or any
successor provision or any other applicable bankruptcy or insolvency statutes,
and (ii) pursuant to such reorganization provision, the Owner Participant is
held to have recourse liability to the Indenture Trustee or the Holder of the
Notes directly or indirectly on account of any amount payable as principal,
interest or premium on the Notes then (b) if any such Holder or the Indenture
Trustee actually receives any Excess Amount which reflects any payment by the
Owner Participant on account of (ii) above, then such Holder or the Indenture
Trustee, as the case may be, shall promptly refund to the Owner Participant such
Excess Amount. For purposes of this Section 6.22, "Excess Amount" means the
amount by which the portion of such payment by the Owner Participant on account
of clause (ii) above received by such Holder or the Indenture Trustee exceeds
the amount which would have been received by such Holder or the Indenture
Trustee if the Owner Participant had not become subject to the recourse
liability referred to in (ii) above. Nothing contained in this Section shall
prevent any Holder of the Notes or the Indenture Trustee from enforcing any
individual obligation (and retaining the proceeds thereof) of the Owner
Participant under this Agreement or any other Operative Document to the extent
herein or therein provided, for which the Owner Participant has agreed by the
terms of this Agreement or such other Operative Document to accept individual
responsibility, including, without limitation, any claim for fraud or
misappropriation of funds.
Section 6.23. Trust Issues. (a) The Owner Participant agrees that it shall
not, without providing to the Indenture Trustee and the Lessee at least 20 days'
prior written notice (enclosing a copy of the proposed amendment) thereof,
amend, waive compliance with, revoke or supplement the Trust Agreement.
(b) The Owner Participant agrees that it shall not: (1) amend, supplement
or otherwise modify the Trust Agreement in any manner which would have an
adverse effect upon the rights of the Indenture Trustee, the Pass Through
Trustee, the Holder of the Notes or the Lessee; provided, however, that the
prior written consent of the Lessee and the Indenture Trustee (given in
accordance with the terms of the Indenture, and only so long as the Lien of the
Security Documents has not been released) shall be required to amend, supplement
or otherwise modify Sections 4.1(a) and (d), 5.1, 5.2, 5.5, 8.1, 9.1(a) and (c),
9.2, 10.1, 11.1, 11.2 and 11.4 of the Trust Agreement; or (2) revoke or
otherwise terminate the Trust Agreement or the Trust other than as provided in
Section 11.1 of the Trust Agreement.
(c) Notwithstanding the foregoing, the consent of the Lessee is not
required as to any of the matters set forth in Section 6.23(b)(2) after
expiration or termination of the Lease Term or if at the time consent would
otherwise be required a Lease Event of Default has occurred and is continuing,
the Lessor is pursuing remedies in respect of the Lease Event of Default and the
revocation or other termination of the Trust Estate or the Trust Agreement is
necessary or useful in connection with the exercise of such remedies.
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(d) The Owner Participant shall use its reasonable endeavors to remove at
Owner Participant's expense and upon Lessee's written request, in accordance
with the terms of the Trust Agreement, the Trust Company then serving as Owner
Trustee so long as there are no unindemnified adverse tax consequences to Owner
Participant, if: (1) the Trust Company shall transfer, create or permit to exist
a Lessor's Lien over or otherwise deal with the Trust Estate or any interest
therein other than as permitted by or pursuant to the terms and conditions of
this Participation Agreement and the other Operative Documents; (2) the Trust
Company shall breach any other material covenant in the Operative Documents; or
(3) the Trust Company becomes insolvent or is generally unable to pay its debts
as they become due or is the subject of any voluntary or involuntary case under
the Bankruptcy Code for its reorganization or liquidation.
(e) Subject to Section 6.23(f), the Owner Participant shall pay the fees
and expenses (including reasonable counsel fees) of the Lessee and all other
Indemnitees (which fees and expenses will not be subject to indemnification by
the Lessee under the Operative Documents) in connection with any voluntary
transfer by the Lessor of the Trust Estate or any interest therein or the
Operative Documents that shall have been directed or caused by the Owner
Participant.
(f) Notwithstanding Section 6.23(e) hereof, the Lessee shall pay and the
Owner Participant shall not be responsible for such fees and expenses in the
event that such transfer: (1) shall be required by the Operative Documents
(unless as a result of the exercise of remedies by the Indenture Trustee as a
result of an Event of Default (other than an Event of Default described in
Section 7.01(d) of the Indenture) (other than the Debt Documents, the Trust
Agreement or the Residual Value Insurance Policy) or requested by the Lessee; or
(2) shall occur following any failure by the Trust Company to comply with its
material obligations under any Operative Document or bankruptcy of the Trust
Company; or (3) shall be made while a Lease Event of Default has occurred and is
continuing and after the Owner Participant has given the Lessee 30 days' advance
notice of its desire to make such transfer.
(g) The Owner Participant shall not instruct the Lessor to take any action
that is prohibited by this Participation Agreement or any other Operative
Document.
(h) The Owner Participant shall, if requested by the Lessee, the Pass
Through Trustee or the Indenture Trustee, instruct the Lessor (at the expense of
the Lessee to the extent such expense is indemnifiable under Section 8.1) to
take any action that the Lessor shall be required to take under the Operative
Documents except those actions that are solely for the benefit of the Owner
Participant.
(i) When the Owner Participant is deciding whether to direct the Lessor to
grant or withhold a consent that may be requested of the Lessor in respect of
any Operative Documents, the Owner Participant shall make such decision pursuant
to the same standard as is imposed on the Lessor (such as "reasonably", "in its
sole discretion" or otherwise).
Section 6.24. Granting of Easements. The Indenture Trustee agrees to and
acknowledges the terms of Section 21.12 of the Lease and agrees to provide its
prompt consent with regard to any actions taken by the Lessee and the Lessor
that conform to the terms of such Section 21.12. The Indenture Trustee shall
subordinate the Lien and security title of the Security Documents to
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any easements, rights-of-way or other interests granted pursuant to, and release
from the Lien and security title of the Security Documents any portions of the
Property dedicated or transferred in accordance with, and take such other steps
to effectuate the intent of, Section 21.12 of the Lease upon receipt by the
Indenture Trustee of a request from the Lessee to such effect and satisfaction
of conditions specified in 21.12. The Lessee shall bear the costs and expenses
associated with effecting the terms of this Section 6.24.
Section 6.25. [Reserved.]
Section 6.26. Owner for Federal Tax Purposes. It is hereby agreed among the
parties hereto that it is the intent of the parties that for federal income tax
purposes the Owner Participant is the owner of the Properties and the Lessee is
the lessee of the Properties.
Section 6.27. Special Purpose Company. The parties hereto acknowledge that
the Owner Participant is a special purpose company with limited assets and the
parties hereto hereby waive and renounce any right, claim or cause of action
they have at any time, based on a theory of "piercing the corporate veil,"
"substantive consolidation" or any other theory, against any shareholder,
partner, member, officer, director, employee, agent or representative of the
Owner Participant arising as a result of the Owner Participant's obligations
under this Agreement or any other Operative Document; provided, however, nothing
contained herein shall be deemed to waive any claim of an actual fraud hereunder
or under any Operative Document to which the Owner Participant is a party or
construed as a limitation of the obligations of the Recourse Guarantor under the
Recourse Guaranty.
Section 6.28. United States Person. The Owner Participant will remain
throughout the Lease Term and any FMV Lease Term a "United States Person" as
defined in Section 7701(a)(30) of the Code.
Section 6.29. Agreements of the Recourse Guarantor. The Recourse Guarantor
covenants and agrees it:
(a) shall at all times maintain its existence, except as permitted by
paragraph (b) hereof. The Recourse Guarantor shall do or cause to be done
all things necessary to preserve and keep in full force and effect its full
power and authority to perform its obligations under each Operative
Document to which it is or will be a party;
(b) shall not (1) consolidate with or merge with or into any other
entity (a "Guarantor Merger") or (2) transfer, directly or indirectly, by
sale, exchange, lease or other disposition in any single transaction or
series of transactions to one or more Persons (a "Guarantor Transfer"), all
or substantially all of its assets without the consent of Lessor and, if
the Lien of the Security Documents shall not have been discharged pursuant
to Section 11.01 of the Indenture, Indenture Trustee, unless: (A) the
entity that results from such Guarantor Merger, if such entity is not the
Recourse Guarantor, or the Person to which such Guarantor Transfer is made
has assumed in writing all obligations of the Recourse Guarantor, including
the due and punctual performance and observance of each covenant and
condition of the Recourse Guaranty and the other Operative
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Documents to be performed or observed by the Recourse Guarantor; (B)
immediately after giving effect to such Guarantor Merger or Guarantor
Transfer, no Lease Default or Lease Event of Default shall have occurred
and be continuing; (C) the Recourse Guarantor shall confirm in writing that
the Recourse Guaranty remains in full force and effect with respect to the
obligations of the surviving Person from such Guarantor Merger or Guarantor
Transfer; and (D) after consummation of the Guarantor Merger or Guarantor
Transfer, the successor shall have a tangible net worth, as determined in
accordance with GAAP, of not less than that of the Recourse Guarantor
immediately prior to such merger or transfer;
(c) shall furnish to the Participants and the Indenture Trustee the
following:
(i) copies of (1) consolidated balance sheets of the Recourse
Guarantor and its consolidated Subsidiaries prepared as of the close
of their fiscal year, together with the related consolidated
statements of income for such period (except for the consolidated
balance sheet) in comparative form the figures for the previous fiscal
year, all in reasonable detail and prepared in accordance with GAAP
and certified by any Responsible Officer of the Recourse Guarantor,
(2) any published interim accounts and (3) any other relevant and
material announcements which the Recourse Guarantor sends to its
shareholders, or bondholders, or to the holders of any debenture or
loan stock of the Recourse Guarantor, in each case at the time of
issue thereof; provided that each annual audited consolidated balance
sheet and consolidated statement of income shall be delivered to the
Participants, Indenture Trustee and Pass Through Trustee no later than
150 days after the end of the fiscal year of the Recourse Guarantor
and each set of published interim accounts shall be delivered to the
Participants, Indenture Trustee and Pass Through Trustee no later than
120 days after the end of the period to which such interim accounts
relate;
(ii) written notice specifying any condition which constitutes a
Lease Event of Default, and the nature and status thereof, promptly
after any Responsible Officer of Recourse Guarantor acquiring Actual
Knowledge thereof; and
(iii) at the same time as it is required to deliver the
statements required in clause (c)(i) herein, a Responsible Officer's
Certificate of the Recourse Guarantor specifying that no Lease Event
of Default has occurred and is continuing.
(d) shall at all times maintain a tangible net worth, determined in
accordance with GAAP, of at least $75,000,000.
(e) shall be obligated to (i) acquire, or cause one of its Affiliates
to acquire, the Lessor's interest in any Property and enter into a FMV
Lease as and when contemplated by Section 3.1(d) of the Lease, (ii)
acquire, or cause one of its Affiliates to acquire, the Lessor's interest
in any Property and enter into a Partial Occupancy Lease as
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and when contemplated by Section 6.1(d) or (f) of the Lease, (iii) enter
into, or cause one of its Affiliates to enter into, an AFR Sublease as and
when contemplated by Section 6.1(f) of the Lease; provided that if the
Recourse Guarantor causes one of its Affiliates to take any of the actions
described in (i), (ii) or (iii), the Recourse Guarantor shall enter into a
guaranty of the obligations of such Affiliate in form and substance
reasonably satisfactory to the Lessee and (iv) except as otherwise provided
in this Section 6.29(e), acquire title and possession to, or cause any
party other than Lessor to acquire title and possession to, any Property
terminated from the Lease and removed from the Lien of the Security
Documents pursuant to the terms therein.
Section 6.30. Further Assurances of Indenture Trustee. (a) Indenture Trustee
shall monitor the effectiveness of all financing statements, fixture filings and
other documents, including, without limitation all continuation statements,
related to the Indenture which are necessary to establish, preserve and protect
the title of Lessor to the Properties and the Lease and the Indenture Trustee's
first priority perfected lien on, security title to and security interest in the
Estate (collectively, the "Filings") and Indenture Trustee shall timely file or
record or cause Lessor to timely file or record all such Filings. Any such
Filings may be made electronically, to the extent permitted by law.
(b) The Indenture Trustee agrees that it will not permit any Property to be
released from the Lien of the Security Documents without the prior written
consent of the Lessee.
Section 6.31. Change of Situs. The Owner Participant agrees that if, at any
time, the Trust Estate or the Owner Trustee becomes subject to any Taxes for
which it is indemnified pursuant to Section 8.2 hereof and if, as a consequence
thereof, the Lessee should request that the situs of the Trust be moved to
another state in the United States from the state in which it is then located,
the Owner Participant can waive such indemnities or, subject to satisfaction of
the conditions set forth below, the situs of the Trust shall be moved, and the
Owner Participant will take whatever action may be reasonably requested to
accomplish such removal; provided further, however, that no such change in situs
shall be required unless (i) the Lessee shall provide such additional tax
indemnification as the Owner Participant may reasonably request for new risks
arising from such change, (ii) the rights and obligations under the Operative
Documents of the Owner Participant shall not be altered as a result of the
taking of such action and such action shall not, in the reasonable opinion of
the Owner Participant, have an adverse effect (for which the Owner Participant
is not otherwise indemnified under the Operative Documents) on the Owner
Participant; (iii) the Lien of the Security Documents and the priority of such
Lien on the Estate shall not be adversely affected by such action and such
action would not result in a Default or an Event of Default; (iv) no Lease Event
of Default or Special Default has occurred and is continuing and such action
will not result in a Lease Default or Lease Event of Default; (v) the Owner
Trustee, the Owner Participant, the Pass Through Trustee and the Indenture
Trustee shall have received an opinion or opinions of counsel in scope, form and
substance reasonably satisfactory to such Persons to the effect that (A) the
Trust, as thus removed, shall remain a validly established Trust, (B) any
amendments to the Trust Agreement necessitated by such removal shall have been
duly authorized, executed and delivered by the parties thereto and shall
constitute the valid and binding obligations of such parties, enforceable in
accordance with their terms (subject to customary qualifications, conditions,
assumptions and limitations), and
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(C) such removal has not adversely affected the Lien of the Security Documents
on the Estate and the priority of such Lien thereon, and such opinion or
opinions substantially cover the matters set forth in the opinion of the Owner
Trustee's counsel delivered on the Closing Date; and (vi) the Lessee shall agree
to indemnify and hold harmless the Owner Participant, the Owner Trustee, the
Holders, the Certificateholders, the Indenture Trustee on an After-Tax Basis
against any and all reasonable expenses incurred by the Owner Participant, the
Owner Trustee, the Pass Through Trustee, and the Indenture Trustee in connection
with such change of situs.
Section 6.32. Single Purpose Entity, Separateness. The Owner Participant
hereby represents and warrants to, and covenants with, the Indenture Trustee and
the Holders that as of the date hereof and until such time as the indebtedness
secured hereunder shall be paid in full:
(a) The Owner Participant does not own and will not own any asset or
property other than (i) the Beneficial Interest in the Lessor, and (ii)
incidental personal property necessary for the ownership or operation of
the Beneficial Interest in the Lessor.
(b) To the extent its office, if any, is located in the offices of any
of its Affiliates, the Owner Participant will pay fair market rent for its
office space located therein and its fair share of any overhead costs with
respect thereto.
(c) The Owner Participant will not engage in any business other than
the ownership of the Beneficial Interest in the Lessor, and the Owner
Participant will conduct and operate its business as presently conducted
and operated.
(d) The Owner Participant will not enter into any contract or
agreement with any Affiliate of the Owner Participant, any constituent
party of the Owner Participant, any guarantor or any Affiliate of any
constituent party or guarantor, except upon terms and conditions that are
intrinsically fair and substantially similar to those that would be
available on an arms-length basis with third parties other than any such
party.
(e) The Owner Participant has not incurred and will not incur any
indebtedness, secured or unsecured, direct or indirect, absolute or
contingent (including guaranteeing any obligation), other than (i)
unsecured trade debt or accounts payable customarily payable within thirty
(30) days.
(f) The Owner Participant has not made and will not make any loans or
advances to any third party (including any Affiliate or constituent party,
any guarantor or any Affiliate of any constituent party or guarantor),
shall not pledge its assets for the benefit of any other entity and shall
not acquire obligations or securities of its members or its Affiliates.
(g) The Owner Participant is and will remain solvent and the Owner
Participant will pay its debts and liabilities (including, as applicable,
shared personnel and overhead expenses) from its assets as the same shall
become due subject, however, to the Owner Participant's rights to contest
provided in the Operative Documents.
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(h) The Owner Participant has done or caused to be done and will do
all things necessary to observe organizational formalities and preserve its
existence.
(i) Intentionally Omitted.
(j) The Owner Participant will maintain books, accounting records and
other corporate documents and records, financial statements, bank accounts
and payroll accounts separate from those of its Affiliates, any constituent
party and any other person. If required by law to file tax returns, the
Owner Participant will file its own tax returns and characterize itself as
a separate entity (except to the extent it is treated as a disregarded
entity solely for tax purposes) from any Affiliate or other person in each
and every report, tax return (if required by applicable law) or financial
statement. The Owner Participant shall maintain its books, records,
resolutions and agreements as official records.
(k) The Owner Participant will separately manage the Owner
Participant's liabilities from those of any Affiliate and pay from its
assets (to the extent available) all of its own obligations, indebtedness
and liabilities, including all administrative expenses and compensation to
employees, consultants or agents, and all operating expenses, except that
the Owner Participant's members or beneficial owners may pay the
organizational expenses of the Owner Participant.
(l) The Owner Participant will not become involved in the day-to-day
management of any other Person.
(m) The Owner Participant will be, and at all times will hold itself
out to the public as, a legal entity separate and distinct from any other
entity (including any of its managers, members, any Affiliate of the Owner
Participant, any constituent party of the Owner Participant, any guarantor
or any Affiliate of any constituent party or guarantor), and shall conduct
business in its own name and through its own authorized directors,
officers, managers, employees and agents, and shall maintain and utilize
separate stationery, invoices and checks. The Owner Participant shall
correct any known misunderstanding regarding its status as a separate
entity and shall not identify itself as a division or part of its members
or Affiliates or any of its Affiliates as a division or part of the Owner
Participant.
(n) The Owner Participant will maintain adequate capital for the
normal obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations.
(o) The Owner Participant will not commingle the funds and other
assets of the Owner Participant with those of any Affiliate or constituent
party, any guarantor, or any Affiliate of any constituent party or
guarantor, or any other person.
(p) The Owner Participant has and will maintain its assets in such a
manner that it will not be costly or difficult to segregate, ascertain or
identify its individual assets
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from those of any Affiliate or constituent party, any guarantor, or any
Affiliate of any constituent party or guarantor, or any other Person.
(q) The Owner Participant does not and will not hold itself out to be
responsible for the debts or obligations of any other Person.
(r) The Owner Participant will not dissolve or terminate or materially
amend the terms of its trust agreement, certificate of incorporation,
partnership agreement or operating agreement or other agreement pursuant to
which the Owner Participant is organized.
(s) The Owner Participant will not enter into any transaction of
merger or consolidation, or liquidate or dissolve (or suffer any
liquidation or dissolution), or acquire by purchase or otherwise all or
substantially all the business or assets of, or any stock or other evidence
of beneficial ownership of, any entity.
(t) If the Owner Participant is a business trust, at least one
trustee, or if the Owner Participant is a limited liability company, at
least one member, director or manager, or if the Owner Participant is a
corporation, at least one director or if the Owner Participant is a limited
partnership, at least one general partner (such trustee, member, manager,
director or general partner being herein referred to as the "SPC Member")
shall be (i) a limited liability company or corporation (A) which at all
times has a manager, member or director who qualifies as an Independent
Director (as defined in Section 6.32(u)) and (B)(1) whose sole asset is its
interest in the Owner Participant or (2) that owns, whether directly or
indirectly, no more than 1% of the legal or beneficial interest in the
Owner Participant, or (ii) a natural person who qualifies as an Independent
Director (as defined in Section 6.32(u)), and such SPC Member will at all
times cause the Owner Participant to comply with each of the
representations, warranties, and covenants contained in this Section 6.32.
(u) "Independent Director" means an individual who is not, and during
the preceding five (5) years has never been, and is not while serving as
the Independent Director (and is not, and during the preceding five (5)
years never been, an Affiliate of): (i) a direct or indirect legal or
beneficial owner of any stock, limited liability company, partnership,
membership or other equity interest in any of the Owner Participant, an
Owner (defined in this Section 6.32(u)) or any of their respective
Affiliates (defined in this Section 6.32(u)); (ii) a lawyer for or
substantial creditor, customer or supplier of any of the Owner Participant,
an Owner or any of their respective Affiliates (provided that a person who
derives and reasonably expects to derive in the future no more than 5% of
his or her annual after-tax income from services rendered as an Independent
Director, or for acting in a similar capacity, for Affiliates of the Owner
Participant shall not be disqualified as an Independent Director); (iii) an
employee, officer, director (other than during his tenure as an Independent
Director for the Owner Participant or for one or more Affiliates), member,
manager (other than as an Independent Manager for the Owner Participant or
for one or more Affiliates), trustee (other than as independent trustee for
one or more Affiliates), beneficiary or contractor of the Owner
Participant, an Owner or
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any of their respective Affiliates; (iv) a person who controls (whether
directly, indirectly or otherwise), the Owner Participant, an Owner or any
of their respective Affiliates (other than acting as an Independent
Director or in any similar capacity) or any substantial supplier, customer
or creditor, or an officer, director (other than during his tenure as an
Independent Director for the Owner Participant or for one or more
Affiliates), beneficiary, trustee (other than as independent trustee for
the Owner Participant or for one or more Affiliates), manager, (other than
as an Independent Manager for the Owner Participant or for one or more
Affiliates) member or contractor of the Owner Participant, Owner or any of
their respective Affiliates (other than acting as an Independent Director
or in any similar capacity); and (v) a spouse, parent, sibling or child of
any Person described in clauses (i) through (iv) above.
As used in this Section 6.32, "Affiliate" shall have the same meaning
as defined in (S) 101 of the Bankruptcy Code and shall include all
"insiders", as such term is defined in (S) 101 of the Bankruptcy Code, with
respect to the Owner Participant, except that the percentage of direct or
indirect legal or beneficial interest required to be held by the relevant
entity shall be ten percent (10%), not twenty percent (20%).
As used in this Section 6.32, "Owner" means the members, partners,
shareholders or beneficiaries of the Owner Participant and each of their
successors in interest as members, partners, shareholders or beneficiaries
of the Owner Participant.
As used in this Section 6.32, "Person" shall mean a natural person,
corporation, limited partnership, general partnership, business trust,
limited liability company or other form of association.
(v) The Owner Participant shall not cause or permit the board of
directors or board of managers, as applicable, of the Owner Participant or
the SPC Member, as applicable, to take any action which, under the terms of
any certificate of incorporation, by-laws, voting trust agreement with
respect to any common stock or other economic ownership interest, or
limited liability company agreement requires the vote of the board of
directors or board of managers, as applicable, of the Owner Participant or
the general partners of the Owner Participant or the SPC Member, as
applicable, unless at the time of such action there shall be at least one
member who is an Independent Director.
Section 6.33. Further Assurances; NAIC Filings. The Owner Participant hereby
represents and warrants to, and covenants with, the Indenture Trustee and the
Holders that as of the date hereof and until such time as the indebtedness
secured hereunder shall be paid in full, the Owner Participant will take all
such actions and otherwise cooperate with any request made by the Certificate
Holders or their special counsel which is necessary to ensure that the subject
transaction shall be eligible for "Schedule D" reporting on such Certificate
Holder's NAIC Annual Statement and, if the NAIC determines that the Certificate
Holder's investment in the Certificates is not eligible for such "Schedule D"
reporting, the Owner Participant will take such actions and otherwise cooperate
with any request made by the Certificate Holders or their counsel which is
reasonably necessary to obtain such eligibility; provided, however, that the
Certificate Holders acknowledge and agree that the Owner Participant shall not
be required to
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make any change or amendments (x) to the Lease or the Participation Agreement or
(y) which would have a material adverse monetary effect on the Owner Participant
or materially increase the obligations of the Owner Participant under the
Operative Documents. Without limiting the generality of the foregoing, in the
event that the NAIC shall determine that any Appraisal delivered on or prior to
the closing pursuant to Section 3.1(n) of the Participation Agreement and
submitted by a Certificate Holder in connection with any filing or registration
of the subject transaction with the NAIC does not satisfy the applicable NAIC
guidelines or shall otherwise be in form or substance not satisfactory to the
NAIC, the Owner Participant shall, within ninety (90) days of such
determination, deliver to the NAIC and the Certificate Holder a new appraisal
for the applicable Property or Properties which shall satisfy the applicable
NAIC guidelines and shall be in form and substance satisfactory to the NAIC so
that each Certificate Holder may be eligible for "Schedule D" reporting on such
Certificate Holder's NAIC Annual Statement. Any cost or expense incurred by any
Certificate Holder pursuant to this Section 6.33 in connection with any filing,
action or other matter reasonably necessary to ensure that the subject
transaction shall be eligible for "Schedule D" reporting on such Certificate
Holder's NAIC Annual Statement shall be borne by Owner Participant.
Notwithstanding anything to the contrary contained herein or in any other
Operative Document, in the event that the aggregate appraised value of the
Properties, as supported by an appraisal(s) for each Property, shall be less
than the outstanding principal amount of the Outstanding Notes, the Owner
Participant shall immediately effect a voluntary prepayment of the Outstanding
Notes in accordance with the terms of Section 2.05(b) of the Indenture such
that, after giving effect to such prepayment, the appraised value of the
Properties equals or exceeds the outstanding principal amount of the Outstanding
Notes.
Section 6.34. Insurance. The Owner Participant will cause the Lessor to
comply with Section 4.11 of the Indenture.
Section 6.35. Operating Reserve. (a) In the event that the Lessor and/or the
Owner Participant receives notice from the Lessee that it intends to release a
Property from the Lease pursuant to the terms thereof on the next upcoming
Anniversary Date, the Owner Participant will determine within twenty (20) days
of receipt of such notice whether such Property will be permitted to be released
from the Lien of the Indenture pursuant to Section 11.01 thereof. If the Owner
Participant determines that such Property will not be permitted to be released
from the Lien of the Indenture pursuant to said Section 11.01, the Owner
Participant will give written notice to the Indenture Trustee and the Lessee of
such event within ten (10) days of such determination. If said Property is not
permitted to be released from the Lien of the Indenture under Section 11.01
thereof, the Owner Participant hereby agrees to assume to perform, or cause the
Lessor to perform, the obligations of the Lessee under the Lease (as if the
Lease remains in full force and effect with respect to such Property) and all
other Operative Documents with respect to such Property (other than the
obligation to pay Basic Rent) from and after the date such Property is released
from the Lease and until the aggregate principal amount of the Secured Notes
have been paid in full.
Within thirty (30) days of such determination that said Property is not
permitted to be released from the Lien of the Indenture on the upcoming
Anniversary Date, the Lessor shall determine the aggregate amount of the costs
and expenses associated with performing the obligations assumed by it under the
Lease and all other Operative Documents with respect to
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such Property from and after the time that such Property is released from the
Lease and through the scheduled maturity date of the Secured Notes (the "Assumed
Operating Costs"), which Assumed Operating Costs must be consented to by the
Indenture Trustee, which consent shall not be unreasonably withheld. The Owner
Participant will provide a detailed description of such Assumed Operating Costs
to the Indenture Trustee. The Owner Participant agrees that it will deposit with
the Indenture Trustee an amount equal to 110% of such Assumed Operating Costs on
or prior to the next Rent Payment Date (the "Operating Reserve"). If the Owner
Participant and the Indenture Trustee have not agreed as to the amount of such
Assumed Operating Costs prior to thirty (30) days before the next Rent Payment
Date, the Indenture Trustee shall estimate the amount of the Assumed Operating
Costs and deduct such amount from Basic Rent on the next Rent Payment Date. If
at any time the Assumed Operating Costs are not sufficient to pay for all of the
obligations assumed by the Owner Participant with respect to such Property as
set forth in this Section 6.35, the Owner Participant agrees to deposit with the
Indenture Trustee an amount sufficient to satisfy the revised Assumed Operating
Costs within five (5) Business Days of a request by the Indenture Trustee.
(b) Subject to the requirements below, amounts deposited in the Operating
Reserve shall be disbursed to the appropriate party upon the Owner Participant's
request to pay for (or reimburse the Owner Participant for) the costs and
expenses incurred by or on behalf of the Owner Participant relating to the
performance of the obligations assumed by the Owner Participant with respect to
any Property pursuant to this Section 6.35. If the Owner Participant desires
that the Indenture Trustee pay such amounts directly, the Owner Participant
shall provide the Indenture Trustee with all applicable invoices, payment
instructions and documentation related thereto and upon its receipt and approval
of such items, the Indenture Trustee shall disburse funds from the Operating
Reserve to satisfy such items. If the Owner Participant has paid such amounts
itself and desires to be reimbursed for such amounts from amounts deposited in
the Operating Reserve, the Owner Participant shall cause to be delivered to the
Indenture Trustee the Owner Participant's written certification that all
invoices and other expenses for which the release is being requested have been
paid, that all such obligations have been satisfied and that all necessary
releases or waivers of any lien, if any, securing payment for such has been
obtained together with a copy of (i) the applicable invoices, (ii) the cancelled
checks, receipts or other appropriate evidence of such payment and (iii) any
such release or waiver document with respect thereto. Upon the Indenture
Trustee's receipt and approval of the items described in the preceding sentence
it shall disburse such amounts to the Owner Participant from the Operating
Reserve. Notwithstanding anything to the contrary contained herein, if the Owner
Participant does not satisfy any obligation assumed by it pursuant to this
Section 6.35 in a reasonable and timely manner, the Indenture Trustee shall have
the right to apply any portion of the Operating Reserve for such purpose as
determined reasonably necessary, proper or advisable by the Indenture Trustee.
Section 6.36. Title Insurance Policies. The Owner Participant agrees to
deliver to the Indenture Trustee within 45 days of the Closing Date pro forma
lender's policies of title insurance (ALTA Loan Policy-1992 Form) in form and
substance satisfactory to special counsel to the Certificateholders.
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Article VII
Transfer of Interest
Section 7.1. Restrictions on Transfer. Prior to the end of the Lease Term or
the end of any FMV Lease Term, if later with respect to any Property, without
the prior written consent of the Lessee, the Pass Through Trustee (given in
accordance with the terms of the Pass Through Trust Agreement) and the Indenture
Trustee (given in accordance with the terms of the Indenture), which consent
shall be requested by written notice to the Lessee, the Pass Through Trustee and
the Indenture Trustee no less than 30 days prior to the expected date of
transfer and shall not be unreasonably withheld or unreasonably delayed in the
case of the transfer of all of the Beneficial Interest in the Lessor subject to
compliance with the requirements of Section 7.4 hereof, neither the Lessor nor
the Owner Participant shall, directly or indirectly, consummate a transfer of
any Property or Beneficial Interest in the Lessor, except as and to the extent
permitted by, and in accordance with the terms and conditions of, the applicable
provisions of this Article VII, Article IX, the Lease and any FMV Lease.
Section 7.2. Effect of Transfer. From and after any Transfer effected in
accordance with this Article VII, the Transferor (as defined in Section 7.4(b)
hereof) shall be released, to the extent of such Transfer, from its liability
hereunder and under the other Operative Documents to which it is a party in
respect of obligations to be performed on or after the date of such transfer.
Upon and to the extent of any transfer by the Transferor as provided below, the
Transferee shall be deemed the "Owner Participant" for all purposes of such
documents. Notwithstanding any transfer of all of the Owner Participant's
interest as provided in this Article VII, the Owner Participant shall be
entitled to all benefits accrued and all rights vested prior to such transfer
including, without limitation, rights to indemnification under any Operative
Document. Any purported transfer of any interest in any Property or any Transfer
made in contravention of this Article VII shall be null and void and of no force
and effect.
Section 7.3. Competitors of the Lessee. From time to time the Transferor may
identify by written notice in accordance with Section 7.1 hereof potential
purchasers to the Lessee for the purpose of determining whether or not such
potential purchaser would be a Competitor. The Lessee agrees to make such a
determination, in good faith, no later than ten (10) Business Days after receipt
of a written request (which request shall specify the consequences of a failure
to respond on a timely basis) and Lessee's failure to respond within such period
shall constitute agreement that the potential purchaser is not a Competitor. The
Lessee's determination that a potential purchaser is not a Competitor shall not
relieve the Transferor of its obligations under this Article VII to the extent
that the potential purchaser or its Affiliates becomes (as a result of a change
in circumstances occurring since such determination) a Competitor subsequent to
the Lessee's initial determination but prior to the consummation of any transfer
contemplated by this Article VII.
Section 7.4. Transfer by Lessor or Owner Participant. (a) The Lessor may not
transfer any interest in any Property or the Estate or the Operative Documents
(except to a successor trustee pursuant to the terms of the Trust Agreement)
except for transfers (1) to the Lessee required by the Operative Documents,
including as required by Section 3.1(d) of the Lease, or
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(2) to the Recourse Guarantor or any Affiliate thereof as required by Sections
3.1 or 6.1 of the Lease, provided that the Lessor shall not transfer any
interest in any Property if the Lien of the Indenture is prohibited from being
released by Section 11.01 of the Indenture. The Owner Participant may not
transfer any of its Beneficial Interest (as defined below) in the Lessor except
for transfers permitted by this Section 7.4. When the Owner Participant has
transferred its Beneficial Interest in the Lessor to another Person as permitted
by this Section 7.4, such transferee shall be bound by the Owner Participant's
obligations under the Operative Documents.
(b) At any time after the Basic Term Commencement Date and prior to the end
of the Lease Term, the Owner Participant may (subject to the Lessee's rights
under the Operative Documents) effect a Transfer of all, but not less than all,
of its Beneficial Interest in the Lessor, provided that such Transfer satisfies
the requirements of Section 7.4(c) herein.
For purposes herein, the following items shall have the definitions set
forth below or otherwise set forth in this Article VII as so indicated
"Beneficial Interest" shall mean beneficial ownership interest in the
Trust Estate which evidences the right to the economic or financial
benefits or burdens of Lessor's business.
"Transfer" shall mean (i) any transfer (whether voluntary or
involuntary) in one or a series of transactions in which all of the
Beneficial Interest in Lessor is transferred to a Person who is not, as of
the date of such transfer, the existing holder of all of the Beneficial
Interest in Lessor, or (ii) any transfer of the "management and control"
(as defined below) in the existing holder of the Beneficial Interest in
Lessor, including, without limitation, any transfer of the "management and
control" by Recourse Guarantor of the Owner Participant (such transfer
shall be a "Transfer" of the Lessor). The term "management and control" as
used herein shall mean (A) if referring to a limited liability company that
is member-managed, then any managing member interest, (B) if referring to a
partnership (whether general or limited), then any general partner
interest, and (C) if referring to any other type of entity, then fifty-one
percent (51%) or more of the economic interest in such entity.
"Transferee" shall mean the Person to whom all of the Beneficial
Interest in Lessor is being transferred, or, in the case of a Transfer as
described in section (ii) of the definition of "Transfer" above, the holder
of the Beneficial Interest in Lessor following such Transfer.
"Transferor" shall mean the Person owning any Beneficial Interest in
Lessor which is the subject of a Transfer.
(c) Any Transfer shall be subject to the satisfaction of the following
conditions on or prior to the effective date of such Transfer:
(i) no such Transfer shall violate any provision of, or create a
relationship which would be in violation of, any Applicable Laws and
Regulations or disqualify or
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render ineligible the Lessee from holding any license, franchise or permit
issued by, or from submitting a bid to or conducting any business with, any
Governmental Authority or impose any material limitation on Lessee in
connection therewith;
(ii) the Transferee shall deliver to the Lessor, Indenture Trustee and
Lessee a copy of the agreement pursuant to which the Transferee assumes all
of the Transferor's obligations under the Operative Documents to which it
is a party, such agreement shall be in form and substance reasonably
satisfactory to the Lessor, Lessee and Indenture Trustee;
(iii) no Event of Default is then continuing under the Indenture or
under any of the other Operative Documents (and Indenture Trustee shall
have received a certificate from Transferor certifying such facts, and a
certificate from Transferee representing that, to its knowledge, no Event
of Default or Lease Event of Default shall be continuing immediately
following such Transfer);
(iv) Indenture Trustee and Lessee each has received evidence
reasonably satisfactory to it that all required approvals, if any, under
the governing documents of Lessor to effectuate such Transfer shall have
been obtained or are not needed;
(v) Indenture Trustee and Lessee shall have received a "down date"
substantive non-consolidation opinion with respect to the Transferee and
its principals indicating the change in the Beneficial Interest of Lessor
will not affect the opinions stated in the non-consolidation opinion
delivered to Indenture Trustee and Lessee at the Closing, or a new
substantive non-consolidation opinion with respect to the Transferee or its
beneficial owner, substantively similar to the form of the substantive
non-consolidation opinion or in form and substance otherwise acceptable to
Indenture Trustee and Lessee;
(vi) such Transferee and the proposed Recourse Guarantor shall have
executed and delivered to Lessor, Indenture Trustee and Lessee a Recourse
Guaranty in a form substantively identical to that executed by the
Transferor at the Closing; provided, however, the Lessor, Indenture Trustee
and Lessee shall also have received an acceptable net worth statement of
the proposed Recourse Guarantor indicating that the proposed Recourse
Guarantor satisfies the new worth requirements of Section 6.29(d) hereof;
(vii) Indenture Trustee and Lessee shall have received evidence that
the proposed Recourse Guarantor and Transferee are each in good standing in
its state of formation and are each duly qualified and in good standing in
the each state in which such qualification is required in order for such
party to fulfill its obligations in connection with the Operative
Documents;
(viii) Lessor, Indenture Trustee and Lessee shall have received an
opinion as to the authorization, execution and delivery of the Transferee
and Transferor (to the extent Transferor executes any operative documents
in connection with the transfer) of the transfer documents, and an opinion
as to the enforceability of the Recourse Guaranty
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referred to in subparagraph (iv) and that such transfer does not violate
Applicable Laws and Regulations;
(ix) the prior written consent of the Residual Value Insurer;
(x) the Transferor shall have delivered to the other parties hereto an
Officer's Certificate to the effect that the conditions to the proposed
transfer prescribed by this Article VII to be met by the Transferor, have
been satisfied and the Transferor shall have delivered;
(xi) the Transferor must be an entity organized under the laws of the
United States (or any state thereof);
(xii) Transferee shall execute and deliver to Indenture Trustee and
Lessee a certificate that, as of the date of closing of the Transfer,
Transferee is in compliance with the special purpose provisions of Section
6.32 hereof; and
(xiii) Transferor or Transferee shall pay or cause to be paid to
Lessor, Indenture Trustee and Lessee, concurrently with the closing of such
Transfer, any and all out of pocket costs and expenses, including, without
limitation the reasonable attorneys fees and disbursements, incurred by
Indenture Trustee and Lessee in connection with the review, approval and
documentation of the matters relating to such transfer approved by
Indenture Trustee and Lessee hereunder.
(d) Transaction Fee; Counsel Fee. It shall be a condition of any Transfer
that Transferor shall pay Indenture Trustee, in addition to the amounts
described above, a fee of $10,000 per Property in connection with any Transfer
(as applicable, the "Transaction Fee"). Transferor will pay or cause to be paid
the reasonable fees and expenses of special counsel to the owners of the Pass
Through Certificates in connection with such Transfer.
Section 7.5. Default. While a Lease Event of Default is continuing, the
Lessee may not enforce Sections 7.4(c)(iv) and (x).
Article VIII
Indemnification
Section 8.1. General Indemnification. Lessee agrees, whether or not any of
the transactions contemplated hereby shall be consummated, to assume liability
for, and to indemnify, protect, defend, save and keep harmless each Indemnitee,
on an After-Tax Basis, from and against, any and all Claims that may be imposed
on, incurred by or asserted against 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 date of this
Agreement, in any way relating to or arising out of (a) the Properties or any
part thereof, and the design, construction, inspection, purchase, ownership,
acquisition, acceptance, rejection,
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delivery, nondelivery, possession, transportation, lease, sublease, mortgaging,
granting of a security interest in, preparation, installation, condition,
transfer of title, rental, use, nonuse, occupancy, operation, management,
storage, maintenance, modification, alteration, repair, rebuilding, assembly,
sale, return, abandonment or other application or disposition of all or any part
of the Properties, including without limitation (i) claims or penalties arising
from any violation of law or liability in tort (strict or otherwise), (ii) loss
of or damage to any property or death or injury to any Person, (iii) latent,
patent, hidden or other defects, whether or not discoverable, and (iv) any claim
for patent, trademark or copyright infringement, (b) the Operative Documents or
any of them (other than the Trust Agreement, the Debt Documents and the Residual
Value Insurance policy) and the Overall Transaction (other than to the extent
related to the Trust Agreement, the Debt Documents and the Residual Value
Insurance policy) or any modification, waiver, amendment or supplement thereto
required by the terms of the Operative Documents (other than the Trust
Agreement, the Debt Documents and the Residual Value Insurance policy) or
requested by the Lessee or any breach or violation thereof by the Lessee,
payments made pursuant to any thereof or the enforcement by any Indemnitee of
any of its rights under the Operative Documents against the Lessee, (c) the
non-compliance with Applicable Laws and Regulations (including without
limitation because of the existence of the Permitted Liens) of any Property, (d)
whether or not such Claim arises or accrues prior to the date of this Agreement,
any Claim or Environmental Damages relating to or arising out of or in
connection with any matter relating to the Properties, including, without
limitation, the Lessee's breach of its representations, warranties, covenants
and obligations in this Agreement, the Lease, any FMV Lease or any other
Operative Documents, prior to or during the Lease Term or the FMV Lease Term, as
the case may be, at, on or under the Properties, (e) an inaccuracy of any
representation or a breach of any warranty or covenant made by the Lessee in
this Agreement or another Operative Document or (f) any Redemption Premium due
as a result of the termination of the Lease; provided, however, that Lessee
shall not be required to indemnify any Indemnitee under this Section 8.1 for any
of the following:
(1) any Claim to the extent attributable to loss or liability arising
from acts or events with respect to a Property which occur after such
Property has been returned to Lessor after termination or expiration of the
Lease or FMV Lease (if later) with respect to such Property (I) unless such
Property was returned to Lessor as a result of the exercise of remedies as
a result of a Lease Event of Default, in which case such indemnity shall
continue as long as such Lease Event of Default is continuing and (II)
except to the extent such loss or liability arose because of (A) a breach
by the Lessee of the Lease or an FMV Lease, including covenants which
expressly provide for performance by Lessee after termination or expiration
of the Lease or FMV Lease (if later) and including the return provisions of
Article 12 of the Lease or of an FMV Lease, as the case may be, or (B) any
personal injury which occurred prior to such return (it being agreed that a
Bank Branch Property or any Property subject to a Partial Occupancy Lease
shall be deemed to be returned to Lessor for purposes of this Article VIII
when such Bank Branch Lease or Partial Occupancy Lease, as the case may be,
commences),
(2) any Claim to the extent resulting from the willful misconduct or
gross negligence of such Indemnitee or its Indemnitee Group,
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(3) any Transaction Cost or any other expense expressly provided under
any of the Operative Documents to be paid or borne by a party other than
the Lessee,
(4) any Claim to the extent resulting from a transfer by such
Indemnitee or its Indemnitee Group of all or part of its interest in the
Lease, an FMV Lease, the other Operative Documents or a Property or any
interest therein (including without limitation any expenses of the
character referred to in Section 7.4(c)(xii) or Section 7.4(d)(x) hereof,)
other than (x) while a Lease Event of Default shall have occurred and be
continuing or (y) a transfer required by the Operative Documents,
(5) any Claim to the extent resulting from a breach or violation by
such Indemnitee or its Indemnitee Group of any of its representations,
warranties or covenants in any of the Operative Documents or from a
violation of Applicable Laws and Regulations by such Indemnitee or its
Indemnitee Group (including, without limitation, any such breach,
misrepresentation relating to, or violation of, ERISA or any related
provisions of the Code), unless such breach, misrepresentation or violation
is the result of a misrepresentation or breach by the Lessee or any other
party to an Operative Document (other than such Indemnitee or any member of
its Indemnitee Group) of any of their respective obligations under any
Operative Document to which it is a party or as it relates to any violation
of Applicable Laws and Regulations, if such violation is attributable to
the business or activities of the Lessee or the nature, design,
engineering, use, repair, construction or location of any of the
Properties,
(6) any Claims in respect of Taxes, other than a payment necessary to
make payments under this Section 8.1 on an After-Tax Basis,
(7) any Claim to the extent resulting from any amendment to any
Operative Document which is not required by the terms of the Operative
Documents, expressly consented to by the Lessee or made at the request of
the Lessee,
(8) any Claim for losses by an Indemnitee or its Indemnitee Group (x)
based on its inability to invest in another transaction or use for any
other purpose the funds invested in connection with the transactions
contemplated hereby or (y) for which a payment of Stipulated Loss Value
paid by the Lessee in accordance with the terms of the Operative Documents
is intended, as calculated, to compensate such Indemnitee, provided that
this clause (8) shall only be construed to limit Lessee's obligations under
this Section 8.1 and not otherwise to limit any damages which any
Indemnitee may be entitled to recover under Applicable Laws and Regulations
for any breach of any of the Operative Documents,
(9) any Claim to the extent arising as a result of any Event of
Default or Default which is not also a Lease Event of Default or Lease
Default,
(10) any Claim to the extent arising from any failure on the part of
the Indenture Trustee, the Pass Through Trustee or Lessor to distribute
funds in accordance with the Operative Documents, provided that the Lessee
shall have made payment of such
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funds to the Indenture Trustee or Lessor, as the case may be, to the extent
and in the manner required under the Operative Documents,
(11) overhead expenses incurred by an Indemnitee,
(12) with respect to the Indenture Trustee, any failure of the
Indenture Trustee to be properly qualified (or to have properly appointed a
co-trustee) for such roles in the jurisdictions where the Properties are
located, or
(13) any Claim to the extent arising out of the Trust Agreement, the
Debt Documents or the Residual Value Insurance policy, except for the
obligation of the Lessee to pay Redemption Premium as a result of the
termination of the Lease, provided that this Clause (13) shall not affect
the rights of the Residual Value Insurer as an assignee of the rights of
any Indemnitee if there shall have been any such assignment.
Lessee shall be entitled to credit against any payments due under this
Section 8.1 any insurance recoveries received by the Indemnitee in respect of
the related Claim under or from insurance paid for by the Lessee or assigned to
such Indemnitee by the Lessee.
If the Lessee shall obtain knowledge of any Claim indemnified against under
this Section 8.1, the Lessee shall give prompt notice thereof to the appropriate
Principal Indemnitee or Principal Indemnitees, and if any Indemnitee shall
obtain any such knowledge, the related Principal Indemnitee shall give prompt
notice thereof to Lessee, provided that failure to so notify Lessee shall not
release Lessee from any of its obligations to indemnify hereunder except if such
failure shall have precluded Lessee from contesting such Claim or such failure
shall result in an increased Claim, but only to the extent of such increase.
With respect to any amount that Lessee is requested by a Principal Indemnitee to
pay by reason of this Section 8.1, such Principal Indemnitee shall, if so
requested by the Lessee, at the Lessee's expense, and prior to any payment,
submit such additional information to the Lessee as the Lessee may reasonably
request and which is reasonably available to such Principal Indemnitee or its
Indemnitee Group to substantiate properly the requested payment.
In case any action, suit or proceeding shall be brought against any
Indemnitee, the related Principal Indemnitee shall notify Lessee of the
commencement thereof, and Lessee or its insurer shall be entitled, at Lessee's
expense, acting through counsel reasonably acceptable to such Principal
Indemnitee, to participate in, and, to the extent that the Lessee or its insurer
desires to, assume and control the defense thereof; provided, however, that the
Lessee shall not be entitled to assume and control the defense of any such
action, suit or proceeding if, and only for so long as, (i) a Lease Event of
Default or (ii) a Lease Default under Section 18(e) of the Lease or any FMV
Lease has occurred and is continuing; and provided further that if and to the
extent such action, suit or proceeding includes a claim that the Indemnitee is
guilty of criminal misconduct or involves the Lessee in a material conflict of
interest as determined in accordance with then prevailing standards of
professional conduct, or the Lessee has not acknowledged in writing to such
Indemnitee that the Lessee is obligated to indemnify such Indemnitee with
respect to such Claim under this Section 8.1, the Principal Indemnitee may at
its election engage a second legal counsel to represent such Indemnitee in such
action, suit or proceeding and the reasonable fees
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and expenses of which will be paid by the Lessee if such counsel is reasonably
acceptable to the Lessee and the Lessee retains control of such action, suit or
proceeding; provided that the Principal Indemnitee shall assume control of all
matters relating to the Principal Indemnitee and its Indemnitee Group. The
Principal Indemnitee may participate in a reasonable manner at its own expense
and with its own counsel in any proceeding conducted by the Lessee in accordance
with the foregoing.
Each Principal Indemnitee shall at Lessee's expense supply Lessee with such
information and documents reasonably requested by the Lessee as are necessary or
advisable for the Lessee to participate in any action, suit or proceeding to the
extent permitted by this Section 8.1. Unless a Lease Event of Default shall have
occurred and be continuing, no Indemnitee shall enter into any settlement or
other compromise with respect to any Claim which is entitled to be indemnified
under this Section 8.1 without the prior written consent of the Lessee, which
consent shall not be unreasonably withheld, unless such Indemnitee waives its
right to be indemnified under this Section 8.1 with respect to such Claim.
Upon payment in full of any Claim by the Lessee pursuant to this Section
8.1 to or on behalf of an Indemnitee, the Lessee, without any further action,
shall be subrogated to any and all claims that such Indemnitee may have relating
thereto (other than claims in respect of insurance policies maintained by such
Indemnitee at its own expense), and the related Principal Indemnitee shall at
the Lessee's expense cause such Indemnitee to execute such instruments of
assignment and conveyance, evidence of claims and payment and such other
documents, instruments and agreements as may be necessary to preserve any such
claims and otherwise cooperate with Lessee and give such further assurances as
are necessary or advisable to enable Lessee vigorously to pursue such claims.
Lessee shall not enter into any settlement or other compromise with respect to
any Claim against any Indemnitee without the prior written consent of the
related Principal Indemnitee unless the Lessee has acknowledged in a writing
satisfactory to such Principal Indemnitee such Indemnitee's right to full
indemnification hereunder with respect to such Claim.
Any amount payable to an Indemnitee pursuant to this Section 8.1 shall be
paid to such Indemnitee promptly upon receipt of a written demand therefor from
the related Principal Indemnitee, accompanied by a written statement describing
the basis for such indemnity and the computation of the amount so payable and,
if requested by the Lessee, such determination shall be verified by a nationally
recognized independent accounting firm mutually acceptable to Lessee and the
Principal Indemnitee at the Lessee's expense.
Nothing in this Section 8.1 shall be construed as a guaranty by the Lessee
of any residual value in the Properties or as a guaranty of the Notes. The
indemnities contained in this Article VIII shall survive the expiration or
earlier termination of the Lease or any FMV Lease, as applicable, and any
assumption of the Notes by the Lessee in accordance with Section 10.1 hereof.
All Indemnitees are hereby made third party beneficiaries of this Section
8.1, subject in all cases to such parties' agreeing in writing to their
obligations under this Section 8.1. If an Indemnitee is not a party to this
Agreement, the Lessee may require such Indemnitee to agree in
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writing, in a form reasonably acceptable to the Lessee, to the terms of this
Article VIII prior to making any payment to such Indemnitee under this Article
VIII.
Should an Indemnitee receive any refund, in whole or in part, with respect
to any Claim paid by the Lessee hereunder, it shall promptly pay the amount
refunded (but not an amount in excess of the amount the Lessee or any of its
insurers has paid in respect of such Claim) over to the Lessee unless a Special
Default or a Lease Event of Default shall have occurred and be continuing in
which case the amount refunded shall be held by the related Principal Indemnitee
as security for the obligations of the Lessee under the Operative Documents.
Section 8.2. General Tax Indemnification.
(a) General Taxes. Except as provided in Section 8.2(b), the Lessee agrees
to indemnify each Tax Indemnitee (as defined in Section 8.2(i)) against, and
hold each Tax Indemnitee harmless from and pay, any and all present or future
liabilities, losses, expenses and costs of any kind whatsoever that are Taxes
imposed by the United States or any taxing jurisdiction or authority of or in
the United States (or any foreign taxing authority or jurisdiction to the extent
such foreign taxing authority or jurisdiction imposes such Taxes as a result of
the location or actions of the Lessee) against or payable by any Tax Indemnitee
or the Lessee or withheld from any payment under the Operative Documents, or
imposed against the Properties or any part thereof or any of the Operative
Documents in connection with or relating to or on or with respect to (i) this
Agreement or any of the other Operative Documents or any amendment, supplement,
waiver or consent thereto or the execution, delivery or performance of any
thereof; (ii) all or any part of the Properties or any interest therein; (iii)
the manufacture, financing, refinancing, construction, purchase, acceptance,
possession, rejection, ownership, delivery, nondelivery, importation,
exportation, transport, use, non-use, operation, leasing, subleasing, hire,
condition, addition, alteration, substitution, maintenance, modification,
repair, sale, abandonment, redelivery, location, rebuilding, assigning,
repossession, recording, return, transfer of title or other application or
disposition of the Properties or interest therein; (iv) the payment or receipt
of Rent or other amounts, receipts, income or earnings arising from the
Properties or interest therein or with respect to the Lease or any other
Operative Document or otherwise in connection with the Overall Transaction; or
(v) otherwise with respect to or in connection with the Overall Transaction.
(b) Notwithstanding anything to the contrary contained herein, the Lessee
will have no obligation under this Section 8.2 with respect to Taxes excluded
under any one or more of the following clauses of this Section 8.2(b), whether
or not such Taxes fail to be excluded under any of the other clauses of this
Section 8.2(b):
(i) Taxes (other than sales, use, property, transfer, recording and
similar Taxes) on or based upon or measured by gross or net receipts or
gross or net income (including without limitation Taxes in the nature of
minimum taxes, tax preference items, and alternative minimum taxes),
capital or net worth or capital stock or which are franchise Taxes or
excise or doing business Taxes or which are excess profits Taxes,
accumulated earnings Taxes, capital gains Taxes, succession or estate
Taxes, or personal holding company Taxes, it being understood and agreed
that this clause (i) excludes from
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the Lessee's indemnity obligations the Atlanta, Georgia business and
occupational license tax, the South Carolina business license tax on
holding, investment, and development companies, and the Arlington County
Virginia business license tax, and that this clause (i) does not exclude
from the Lessee's indemnity obligations the Florida real property rental
tax;
(ii) Taxes imposed on or against or with respect to a Tax Indemnitee
to the extent such Taxes would not have been imposed if such Tax Indemnitee
or any of its Affiliates had not engaged in activities or had a presence
(including, without limitation, being incorporated or otherwise situated or
organized therein) in the jurisdiction imposing such Taxes which activities
or presence are unrelated to the transactions contemplated by the Operative
Documents;
(iii) Taxes imposed on or against or with respect to a Tax Indemnitee
as a result of any voluntary or involuntary sale, assignment, transfer or
other disposition (a "Disposition") by such Tax Indemnitee or any of its
Affiliates of all or any portion of or in (including an undivided interest
in) the Properties, the Land, the Improvements, the Estate, the Lease, any
FMV Lease, any Bank Branch Lease, or any other interest created under the
Operative Documents, or any Tax Indemnitee, other than any Disposition (A)
in pursuance of remedies while a Lease Event of Default has occurred and is
continuing, (B) pursuant to the Lessee's or any sublessee's exercise of any
rights or obligations under the Operative Documents or (C) in connection
with the Closing of the Overall Transaction on the Closing Date;
(iv) Taxes (including without limitation withholding taxes) imposed on
or against or with respect to a Tax Indemnitee imposed as a result of such
Tax Indemnitee or any of its Affiliates failing to be a United States
person within the meaning of Section 7701(a)(30) of the Code;
(v) Taxes imposed on or against or with respect to a Tax Indemnitee as
a result of the gross negligence or willful misconduct of such Tax
Indemnitee or any of its Affiliates;
(vi) Taxes imposed with respect to the Land or any Property (or any
undivided interest therein) or payments attributable to the Land or any
Property (or any undivided interest therein) that are imposed with respect
to any period after (but not simultaneously with) the earlier of (A) the
termination of the Lease and, if applicable, any FMV Lease with respect to
such Land or Property (or undivided interest therein), or (B) such Land or
Property (or undivided interest therein) becoming subject to a Bank Branch
Lease, provided that this clause (vi) shall not apply to Taxes that result
from the failure of the Lessee to return such Land or Property (or
undivided interest therein) in accordance with the return conditions in the
Lease or any FMV Lease or that are imposed with respect to any payment by
or on behalf of the Lessee made after the earlier of the events described
in subclauses (A) or (B) of this clause (vi);
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(vii) Taxes imposed on or against or with respect to a Tax Indemnitee
that are interest, penalties or additions to tax that are imposed as a
result of the failure of such Tax Indemnitee or any of its Affiliates to
file any return or other Filing properly and timely unless such failure is
caused by the failure of the Lessee or any Affiliate to fulfill its
obligations, if any, under Section 8.2(f) hereof with respect to such
return or Filing;
(viii) So long as the Lessor is receiving all Basic Rent without
reduction on account of contested Taxes, any Tax that is being contested in
good faith in accordance with the provisions of Section 8.2(e) hereof
during the pendency of such contest;
(ix) Taxes imposed on or against or with respect to a Tax Indemnitee
resulting from or that would not have been imposed but for the existence of
Liens attributable to such Tax Indemnitee or any of its Affiliates (other
than the Lien of the Security Documents);
(x) Any Taxes imposed on or against any Debt Party or any affiliate
thereof or on, against or with respect to any Debt Document or the Residual
Value Insurance policy (and any claim for indemnification or reimbursement
with respect to any such Taxes);
(xi) Taxes imposed on or against or with respect to a Tax Indemnitee
that would not have been imposed but for an amendment, supplement,
modification, consent or waiver to any Operative Document by such Tax
Indemnitee or any of its Affiliates, unless either required by the express
terms of any Operative Document or initiated or requested by or consented
to by the Lessee in writing;
(xii) Taxes imposed pursuant to Section 3406 of the Code;
(xiii) Taxes imposed on or against or with respect to a Tax Indemnitee
to the extent that (but in the case of a Certificateholder, only to the
extent that on the date of transfer) the amount of such Taxes is greater
than the amount of Taxes that would have been imposed (or, if less, that
would have been subject to indemnification under this Section 8.2) if such
Tax Indemnitee or any of its Affiliates were not a successor or assignee of
one of the original Tax Indemnitees; provided, however, that this exclusion
(xiii) shall not apply to any successor or assignee that acquires its
interest as a result of a Lease Event of Default or while a Lease Event of
Default has occurred and is continuing;
(xiv) Taxes imposed on or against or with respect to a Tax Indemnitee
that would not have been imposed but for any failure of such Tax Indemnitee
or any of its Affiliates to comply with (x) certification, information,
documentation, reporting or other similar requirements (each being a
"Requirement") concerning the nationality, residence, identity or
connection with the jurisdiction imposing such Taxes, if such compliance is
so timely requested by the Lessee in writing and such compliance is
required by statute or by regulation of the jurisdiction imposing such
Taxes as a precondition to relief or exemption from such Taxes and such Tax
Indemnitee (or its Affiliate) was eligible to comply with such Requirement
or (y) any other Requirements under the tax laws or regulations of the
jurisdiction imposing such Taxes that would establish entitlement to
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otherwise applicable relief or exemption from such Taxes if such Tax
Indemnitee was so timely requested by the Lessee in writing and was
eligible to comply with such Requirement; provided, that a Tax Indemnitee
shall not be required to comply with a Requirement if such Tax Indemnitee
reasonably believes that such compliance may result in any unindemnified
adverse consequences to such Tax Indemnitee or any of its Affiliates or any
material adverse consequences (whether or not indemnified) to such Tax
Indemnitee or any of its Affiliates;
(xv) Taxes imposed on or against or with respect to the Trust or the
Owner Trustee;
(xvi) Taxes imposed on or against or with respect to a Tax Indemnitee
to the extent such Taxes would have been imposed on such Tax Indemnitee in
the absence of the transactions contemplated by the Operative Documents;
(xvii) Taxes imposed under Section 4975 of the Code, as amended from
time to time or under any successor or analogous provisions, or under Part
4 or Part 5 of Subtitle B of Title I of ERISA, or under any successor or
analogous provisions;
(xviii) Taxes which are included in Lessor's Cost;
(xix) Taxes imposed on or against or with respect to any Lender Tax
Indemnitee;
(xx) Taxes in the nature of an intangibles or similar Tax that are
imposed as a result of the failure of the Lease or any FMV Lease to be a
"true lease, "unless such failure is the result of an event or circumstance
described in Section 4(a) of the Tax Indemnification Agreement for which
the Lessee is liable to pay an indemnity after application of the
exclusions in Section 5 of the Tax Indemnification Agreement; provided that
this exclusion (xx) shall not apply to (1) any such Taxes arising in
connection with the Closing of the Overall Transaction, (2) any such Taxes
relating specifically to a particular Property (as opposed to the Lessor),
(3) Lessor and any such Taxes directly arising due to and in pursuance of
remedies while a Lease Event of Default has occurred and is continuing, and
(4) any such Taxes on, based on, or in the nature of transfer Taxes
continuing; and
(xxi) Taxes that are the subject of the Tax Indemnification Agreement
(whether or not indemnified thereunder).
provided, however, that the exclusions set forth in this Section 8.2(b) shall
not be interpreted to limit the calculation of indemnity payments under Section
8.2(d) hereof. It is the intent of the parties hereto that the indemnities
provided in this Section 8.2 and the Tax Indemnification Agreement not be
duplicative such that if the Lessee has paid an indemnity under one such section
or agreement, it shall not be required to pay the same indemnity under the other
such section or agreement.
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(c) Reimbursement. If the Lessee shall have paid any amount to or for the
benefit of any Tax Indemnitee pursuant to this Agreement with respect to or on
account of Taxes not subject to indemnification pursuant to the provisions of
this Agreement, then such Tax Indemnitee shall pay to the Lessee within 30 days
of written notice of such payment by the Lessee the amount so paid by the
Lessee, plus interest on such amount for the period from the date of payment by
the Lessee of such additional amount to the date Lessee actually receives
payment of such sum at the Federal Funds Rate as applicable from time to time
during such period.
(d) Calculation of General Tax Indemnity Payments. Any payment or indemnity
to or for the benefit of any Tax Indemnitee with respect to any Tax which is
subject to indemnification under Section 8.2(a) hereof shall be an amount
sufficient to restore the Tax Indemnitee to the same position it would have been
in had such Taxes not been incurred or imposed. Such computations shall (A)
reflect the current net savings actually available to such Tax Indemnitee or any
Affiliate thereof resulting from the credit or deduction of such indemnified Tax
or the event or circumstance giving rise thereto and (B) include, after taking
into account the savings described in clause (A), the amount necessary to hold
such Tax Indemnitee harmless on an After-Tax Basis. If, by reason of any payment
made to or for the account of a Tax Indemnitee by the Lessee pursuant to this
Section 8.2 or with respect to any other payment made on an After-Tax Basis, or
if by reason of the event or circumstance giving rise to any such payment, such
Tax Indemnitee or any Affiliate thereof actually realizes a net tax benefit,
savings, deduction or credit not previously taken into account in computing such
payment, such Tax Indemnitee shall promptly pay to the Lessee an amount equal to
the sum of (I) the actual net reduction in Taxes, if any, realized by such Tax
Indemnitee or any Affiliate thereof which is attributable to such net tax
benefits, savings, deductions or credits and (II) the actual net reduction in
any Taxes realized by such Tax Indemnitee or any Affiliate thereof as the result
of any payment made by such Tax Indemnitee pursuant to this sentence; provided,
however, that (A) no Tax Indemnitee shall be obligated to make any payment
pursuant to clause (I) of this Section 8.2(d) to the extent that the amount of
such payment would exceed (x) the amount of all prior payments paid by the
Lessee to such Tax Indemnitee pursuant to this Section 8.2 without regard to any
additional amount paid to allow such payments to be made on an After-Tax Basis,
less (y) the amount of all prior payments pursuant to this Section 8.2(d) and
described in clause (I) by such Tax Indemnitee to the Lessee, but any such
excess shall reduce pro tanto any amount that the Lessee is subsequently
obligated to pay pursuant to this Section 8.2 and (B) no Tax Indemnitee shall be
obligated to make any payment to the Lessee pursuant to this sentence for so
long as a Special Default or Lease Event of Default shall have occurred and be
continuing (but any amounts required to be so paid shall be paid promptly
following the cure of any such Special Default or Lease Event of Default). Each
Tax Indemnitee agrees to use its reasonable efforts, and further agrees to take
such actions as the Lessee reasonably requests to realize such reduction, tax
benefits or other savings as are available; provided that a Tax Indemnitee shall
not be obligated to make such efforts or take any such action that it reasonably
believes may result in any unindemnified adverse consequences to such Tax
Indemnitee or any of its Affiliates or any material adverse consequences
(whether or not indemnified) to such Tax Indemnitee or any of its Affiliates.
If it is later determined that the Tax Indemnitee was not entitled to a tax
benefit for which the Tax Indemnitee has made a payment to the Lessee hereunder,
the portion of the tax benefit
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that is disallowed, reduced, lost or recaptured shall be treated as Taxes for
which the Lessee must indemnify the Tax Indemnitee, without regard to Section
8.2(b) hereof other than clauses (iv), (v), (vii), (ix), (xi) or (xiv) of
Section 8.2(b).
(e) Contests. If any written claim shall be made against any Tax Indemnitee
or if any proceeding shall be commenced against any Tax Indemnitee (including a
written notice of such proceeding) for any Taxes as to which the Lessee may have
an indemnity obligation pursuant to this Section 8.2, such Tax Indemnitee shall
promptly notify the Lessee in writing and shall not take any action with respect
to such claim or Tax without the consent of Lessee (such consent not to be
unreasonably withheld) for 30 days after the receipt of such notice by Lessee;
provided, however, that, in the case of any such claim or proceeding, if such
Tax Indemnitee shall be required by law or regulation to take action prior to
the end of such 30 day period, such Tax Indemnitee shall, in such notice to
Lessee, so inform Lessee, and such Tax Indemnitee shall not take any action with
respect to such claim or Tax without the consent of Lessee (not to be
unreasonably withheld) before 10 days from the receipt of such notice by Lessee
unless the Tax Indemnitee shall be required by law or regulation to take action
prior to the end of such 10 day period. The failure of a Tax Indemnitee to give
Lessee prompt written notice pursuant to this Section 8.2(e) of any such claim
or to otherwise meet its obligations under this Section 8.2 shall not affect
Lessee's obligation hereunder to the Tax Indemnitee unless such failure
effectively precludes the Lessee from contesting such claim or any related
claim. Provided no Special Default or Lease Event of Default shall have occurred
and be continuing (unless the Lessee has provided reasonably satisfactory
security for its obligations in respect of a contest), if requested by Lessee in
a written request to such Tax Indemnitee within 30 days (or such shorter period
referred to in the proviso to the first sentence in this Section 8.2(e) (but in
any event not less than 10 days)) after its receipt of such notice, such Tax
Indemnitee shall at the expense of Lessee in good faith contest (including,
without limitation, by pursuit of appeals and administrative procedures) (or, if
permitted by Applicable Law (and such Tax Indemnitee determines in good faith
that permitting such contest to be controlled by the Lessee would not materially
adversely affect such Tax Indemnitee, permit the Lessee to contest in its own
name (a "Lessee-Controlled Contest")), the validity, applicability or amount of
such Taxes by (i) resisting payment thereof, (ii) not paying the same except
under protest, if protest shall be necessary and proper or (iii) if payment
shall be made, using reasonable efforts to obtain a refund thereof in
appropriate administrative and/or judicial proceedings; provided, however, that
in no event shall such Tax Indemnitee be required to contest or permit Lessee to
contest any claim for any Tax unless (u) in the case of the Lessee-Controlled
Contest, the Lessee shall have provided the relevant Tax Indemnitee with a
written acknowledgment of its obligation to indemnify the Tax Indemnitee to the
extent the contest is not successful, (v) Lessee shall have agreed in writing to
pay such Tax Indemnitee and shall pay on an After-Tax Basis as incurred all
reasonable costs and expenses that such Tax Indemnitee shall incur in connection
with contesting such claim (including, without limitation, all reasonable costs,
expenses, legal and accounting fees and disbursements); (w) such Tax Indemnitee
and the Lessor (if it is not the Tax Indemnitee) shall have reasonably
determined that the action to be taken will not result in any material danger of
sale, forfeiture or loss of, or the creation of any Lien (except if Lessee shall
have adequately bonded such Lien or otherwise made provision to protect the
interests of such Tax Indemnitee and the Lessor in a manner reasonably
satisfactory to such Tax Indemnitee and the Lessor) on any Property or any
interest therein and that there is no risk of criminal liability that may be
imposed with respect to
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such Tax Indemnitee; (x) if such contest shall require the payment of the claim,
Lessee shall advance the amount thereof plus (to the extent indemnified under
Section 8.2(a) hereof) interest, penalties and additions to tax with respect
thereto to such Tax Indemnitee on an interest free basis (with no additional net
after-tax cost to such Tax Indemnitee but taking into account any net tax
savings associated with such advance); (y) if the contest is not the
Lessee-Controlled Contest, then if requested in writing by the Tax Indemnitee,
the Tax Indemnitee shall have been provided with an opinion of independent tax
counsel selected by the Tax Indemnitee and reasonably acceptable to the Lessee,
which opinion shall be furnished at Lessee's sole cost and expense, to the
effect that there is a reasonable basis for contesting such claim; and (z) if
the contest is not the Lessee-Controlled Contest, the amount of such claim
exceeds $37,500. Upon a final determination of such contest or the receipt of a
refund by the Tax Indemnitee with respect to contested liability as to which an
advance has been made, the Tax Indemnitee shall (without duplicating any payment
required under the other paragraphs of this Section 8.2(e)) offset such
interest-free advance previously made with respect to the contested liability
against the full amount then due to the Tax Indemnitee, if any, pursuant to the
provisions of this Section 8.2, and either (1) the Lessee shall pay to the Tax
Indemnitee, within 30 days thereafter, the excess, if any, of such full amount
then due over such interest-free advance, or (2) the Tax Indemnitee shall repay
to the Lessee, within 30 days thereafter, (A) any excess of such interest-free
loans over such full amount then due plus (B) any further net savings of income
taxes actually realized by the Tax Indemnitee as a result of any such payment;
provided that this sentence shall not require any duplication of payments
required under other paragraphs of this Section 8.2(e)). In the event Lessee has
complied with the foregoing, the Tax Indemnitee shall not be entitled to settle,
compromise or pay such Tax so long as the defense is being conducted in good
faith.
Notwithstanding anything contained in this Section 8.2, a Tax Indemnitee
shall not be required to contest any claim or permit Lessee to contest any claim
and may settle any contest without the consent of Lessee if such Tax Indemnitee
(A) shall waive its right to indemnity under this Section 8.2 with respect to
such claim for such Tax (and any claim made by any taxing authority with respect
to other taxable periods that is based, in whole or in part, upon the resolution
of such claim, the contest of which is effectively precluded by the resolution
of such claim) and (B) shall pay to Lessee any amount previously paid or
advanced by Lessee pursuant to this Section 8.2 with respect to such claim for
such Tax or the contest of such Tax (other than amounts described in clause (v)
of the preceding paragraph).
If any Tax Indemnitee or any Affiliate thereof shall receive a refund of,
or receive a credit for (or would have received such a refund or credit but for
a counterclaim or other claim not indemnified by Lessee hereunder (a "deemed
refund or credit")), all or any part of any Taxes indemnified, paid, reimbursed
or advanced by Lessee with respect to any contest under this Section 8.2(e),
such Tax Indemnitee shall pay to Lessee within 30 days of such receipt (or, in
the case of a deemed refund or credit, within 30 days of the resolution of such
contest), an amount equal to the lesser of (xx) the amount of such refund or
credit or deemed refund or credit plus any net tax benefit (taking into account
any Taxes incurred by such Tax Indemnitee by reason of the receipt or accrual of
such refund or credit or deemed refund or credit) actually realized by such Tax
Indemnitee as a result of any payment by such Tax Indemnitee made pursuant to
this sentence (including this clause (xx)) and (yy) such tax payment,
reimbursement or advance by Lessee to such Tax Indemnitee plus any other payment
in respect of such contest (other than the
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costs and expenses described in clause (v) of the first paragraph of this
Section 8.2(e)) by Lessee to such Tax Indemnitee theretofore made pursuant to
this Section 8.2 with respect to such contest, it being intended that such Tax
Indemnitee shall retain a net tax benefit pursuant to this Section 8.2 only if
Lessee shall first have been reimbursed for any payments (other than the costs
and expenses described in clause (v) of the first paragraph of this Section
8.2(e)) in respect of such contest by it to such Tax Indemnitee pursuant to this
Section 8.2; provided, however, that such Tax Indemnitee shall not be obligated
to make any payment to Lessee pursuant to this sentence so long as a Special
Default or Lease Event of Default shall have occurred and be continuing (but any
amounts required to be so paid shall be paid promptly following the cure of any
such Special Default or Lease Event of Default). If, in addition to such refund
or credit or deemed refund or credit, as the case may be, such Tax Indemnitee or
any Affiliate thereof shall receive (or would have received but for a
counterclaim or other claim not indemnified by the Lessee hereunder) an amount
representing interest on the amount of such refund or credit or deemed refund or
credit, as the case may be, such Tax Indemnitee shall pay to Lessee within 30
days of such receipt or, in the case of a deemed refund or credit, within 30
days of the resolution of such contest, that proportion of such interest that
shall be fairly attributable to Taxes paid, reimbursed or advanced by the Lessee
prior to the receipt of such refund or credit or deemed refund or credit.
If it is later determined that the Tax Indemnitee was not entitled to a
refund or credit for which Lessee has made a payment to a Tax Indemnitee
hereunder, the portion of the refund or credit that is disallowed, reduced, lost
or recaptured shall be treated as Taxes for which the Lessee must indemnify the
Tax Indemnitee, unless such disallowance, reduction, loss or recapture results
from an event or circumstance described in one or more of clauses (iv), (v),
(vii), (ix), (xi), or (xiv) of Section 8.2(b) hereof.
Any Taxes indemnified hereunder shall be paid by the Lessee, to the extent
allowed, directly to the appropriate taxing authority on or before the time, and
in the manner, prescribed by applicable laws. Lessee shall provide the
appropriate Tax Indemnitee with such proof of payment of such Tax as is
reasonably requested by such Tax Indemnitee. Any other amount payable to a Tax
Indemnitee pursuant to this Section 8.2 shall be paid within 10 days after
receipt of a written demand therefor from such Tax Indemnitee accompanied by a
written statement describing in reasonable detail the amount so payable, but not
prior to two Business Days before the date such Tax is due. Any payments made
pursuant to this Section 8.2 shall be made directly to the Tax Indemnitee
entitled thereto or Lessee, as the case may be, in immediately payable funds at
such bank or to such account as specified by the payee in written directions to
the payor, or, if no such direction shall have been given, by check of the payor
payable to the order of the payee and mailed to the payee by certified mail,
postage prepaid at its address as set forth in this Agreement. Any amount
payable under this Section 8.2 that is not paid when due shall bear interest at
the Overdue Rate.
(f) Reports. If any report, certification, form, return or statement (a
"Filing") is required to be filed with respect to any Tax that is subject to
indemnification under this Section 8.2, Lessee shall promptly notify the
appropriate Tax Indemnitee (and the Tax Indemnitee shall promptly notify Lessee
in writing if a Responsible Officer of such Tax Indemnitee is actually aware of
the Filing, it being understood and agreed that no Tax Indemnitee
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shall have any obligation to determine whether any Filing is necessary) of such
requirement in writing and, if permitted by applicable laws to do so, Lessee
shall timely file such Filing with respect to such Tax (except for any such
Filing that a Tax Indemnitee has notified Lessee in writing that such Tax
Indemnitee intends to file) and will (if ownership of all or any part of the
Properties is required to be shown on such Filing) show the ownership of the
Properties in the name of the Lessor and send a copy of such Filing to the
Lessor and (if the Lessor is not the Tax Indemnitee) the appropriate Tax
Indemnitee; provided, however, that such Tax Indemnitee shall have furnished
Lessee, at Lessee's request in writing and expense, with such information, not
within the control of (or otherwise reasonably available to) Lessee, as is in
such Tax Indemnitee's control or is reasonably available to such Tax Indemnitee
and necessary to file such Filing. If Lessee is not permitted by applicable laws
to file any such Filing, Lessee will promptly notify the appropriate Tax
Indemnitee of such requirement in writing and prepare and deliver to the
appropriate Tax Indemnitee a proposed form of such Filing within a reasonable
time, and in all events at least 10 days prior to the time such Filing is
required to be filed, unless such Tax Indemnitee has notified Lessee that it
reasonably requires such Filing to be received before such time.
Lessee shall furnish such information as a Tax Indemnitee may reasonably
require to comply with the requirements of any taxing jurisdiction, provided
such information is reasonably available to and within the control of Lessee.
(g) Verification. At Lessee's request, the amount of any indemnity payment
by Lessee pursuant to this Section 8.2 or any payment by a Tax Indemnitee to
Lessee pursuant to this Section 8.2 shall be verified by a nationally recognized
independent United States or international accounting firm selected by Lessee
and reasonably acceptable to such Tax Indemnitee who shall be asked to verify,
after consulting with the Tax Indemnitee, whether the Tax Indemnitee's
computations are correct and to report its conclusions to both the Lessee and
the Tax Indemnitee. Each Tax Indemnitee and Lessee hereby agrees to provide the
accountants with all information and materials as shall be reasonably necessary
or desirable in connection therewith. The fee of such accounting firm shall be
paid by Lessee unless such verification discloses an error greater than the
lesser of (a) $25,000 or (b) 10% of the amount determined by such accounting
firm, in which case such fees shall be paid by the Tax Indemnitee. Any
information provided to such accountants by any person shall be and remain the
exclusive property of such person and shall be deemed by the parties to be (and
the accountants will confirm in writing that they will treat such information
as) the private, proprietary and confidential property of such person, and no
person other than such person and the accountants shall be entitled thereto, and
all such materials shall be returned to such person. Such accounting firm shall
be requested to make its determination within 30 days. In the event such
accounting firm shall determine that such computations are incorrect, then such
firm shall determine what it believes to be the correct computations. The
computations of the accounting firm shall be final, binding and conclusive upon
Lessee and such Tax Indemnitee, and Lessee shall have no right to inspect the
books, records, tax returns or other documents (including working papers) of or
relating to such Tax Indemnitee or Affiliate to verify such computations or for
any other purpose.
(h) Forms, etc. Each Tax Indemnitee agrees to furnish to Lessee from time
to time, at the written request and expense of Lessee, such duly executed and
properly completed forms or
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Filings as may be necessary or appropriate in order to claim any reduction of or
exemption from any withholding or other Tax imposed by any taxing authority in
respect of the Overall Transaction, which reduction or exemption, in the
reasonable determination of such Tax Indemnitee, is or may be available to such
Tax Indemnitee; provided, however, that no Tax Indemnitee shall have any
obligation to comply with any request or take any other action pursuant to this
Section 8.2(h) if in order to comply with such request or take such action the
Tax Indemnitee would be required to make any inaccurate statement or divulge
confidential information, or would suffer any unindemnified adverse consequences
or any material adverse consequences (whether or not indemnified).
(i) Tax Indemnitee Defined. For the purposes of this Agreement and the
Operative Documents, "Tax Indemnitee" means each Indemnitee, other than any Debt
Party, but shall also include each member of the combined or consolidated group
of corporations or affiliated group of corporations of which such Tax Indemnitee
is a member.
(j) Non-Parties. If any Tax Indemnitee is not a party to this Agreement,
Lessee may require the Tax Indemnitee to agree in writing, in a form reasonably
acceptable to the Lessee, to the terms of this Section 8.2, before making any
payment to such Tax Indemnitee under this Section 8.2.
(k) Certain Withholding Taxes. The Indenture Trustee shall withhold any
Taxes required to be withheld under Applicable Law in respect of any payments
made by it in connection with the Overall Transaction. Each of the
Certificateholders and the Pass Through Trust and the Pass Through Trustee agree
to provide forms, Filings and information to the Indenture Trustee as are
reasonably requested by the Indenture Trustee and necessary to perform its
duties under this Section 8.2 or under the Indenture.
(l) Certain Tax Rate Assumptions. For purposes of this Agreement and the
other Operative Documents, in any case where the tax rate of the Lessor is
relevant to determine the tax savings it will enjoy as a result of any payment
to be made by the Lessor, it shall be assumed that the Lessor is subject to tax
at the rate described in the proviso to the definition of After-Tax Basis.
Article IX
Purchase Rights
Section 9.1. Rights of First Offer. If, during the Lease Term or the FMV
Lease Term, the Owner Participant or the Lessor desires to sell or assign its
rights in all of the Trust Estate or the Estate, the Operative Documents, the
Properties (the "Lessor Offered Assets") (other than to an Affiliate of the
Offeror) or the Recourse Guarantor desires to sell or assign its ownership
interest in the Lessor (together with the Lessor Offered Assets, the "Offered
Assets") (other than to an Affiliate of the Recourse Guarantor, the Lessor, the
Owner Participant or the Recourse Guarantor, as the case may be, being
hereinafter referred to as the "Offeror") shall, as a condition to such sale or
assignment, first offer the Offered Assets to the Lessee (unless at such
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time a Lease Event of Default or a Special Default is continuing) (the
"Offeree") at a price and on such other terms and conditions as the Offeror
would accept from another Person. This Article IX shall not be construed as
allowing any transfers which are in violation of Article VII hereof. The Offeree
may, within 60 days of receipt of such offer, elect to purchase the Offered
Assets or any part thereof on the terms offered Offeror by so notifying the
Offeror within such 60 day period, whereupon the Offeree shall be bound to
purchase from the Offeror and the Offeror shall be bound to sell to the Offeree,
such Offered Assets (or portion thereof) on such terms. If the Offeree does not
accept such offer, the Offeror may, subject to Article VII hereof, sell or
assign its rights in the Offered Assets to another Person for a period of up to
9 months from the end of such 60 day period (x) on terms and conditions which
are no less favorable (taken as a whole) to the Offeror than the terms and
conditions the Offeror offered to the Offeree and (y) at a net price no less
than 95% of that offered to the Offeree. If the Offeree does not accept such
offer and the Offeror during such 9-month period, desires to sell or assign its
rights in the Offered Assets to another Person on terms and conditions less
favorable (taken as a whole) to Offeror than those offered to the Offeree or at
a net price less than 95% of that offered to the Offeree, then the Offeror shall
give the Offeree written notice of such proposed sale or assignment, and the
Offeree shall have the right, within 30 days of such notice, to offer to
purchase the Offeror's rights in the Offered Assets on the same terms and
conditions as are offered to such other Person. If the Offeree does not make
such offer within such 30-day period, the Offeror may thereafter complete the
proposed sale or assignment of its rights in the Offered Assets to such other
Person without any further obligations to the Offeree under this Section 9.1 as
to the Offered Assets so sold or assigned (but without releasing the purchaser
from its obligations under this Section 9.1). If the Offeror does not consummate
such sale within 9 months then, if the Offeror still desires to sell the Offered
Assets, it must repeat the process set forth in this Section 9.1.
The Offeror may offer the Offered Assets in a transaction subject to the
preceding paragraph only on an all-cash basis (without seller financing or any
other financing arranged by the Offeror or its Affiliates, unless the Lessee
agrees that any such financing is comparable to an all-cash offer).
Notwithstanding the preceding two paragraphs, if the Lessee has the right
to purchase the Lessor's interest with respect to a Property, the Lessee may
instead elect to purchase the Lessor's interest in such Property for the same
price, as modified by the next sentence. On the date of purchase from the
Lessor, (i) the Lessee shall add to the purchase price the Allocable Portion of
the Notes for such Property unless the Lessee is assuming such Allocable Portion
pursuant to Section 10.1 hereof, (ii) the Lessor shall use any such additional
funds to prepay such Allocable Portion, (iii) such Property shall be released
from the Lien of the Security Documents and (iv) the Lease shall be terminated
as to such Property.
Section 9.2. Purchase and Transfer of Offered Asset. If the Offeree shall
have exercised its right provided in Section 9.1 to purchase the Offered Assets
(or a Property), the Offeree shall pay for and purchase the Offered Assets (or
the Property), and the Offeror shall sell the Offered Assets (or the
Properties), on the terms required by Section 9.1 hereof.
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Section 9.3. Purchase Options. In the event (i) any Applicable Laws and
Regulations change after the Closing Date and require a Nonseverable Alteration
to any Property which could be reasonably expected to cost in excess of 10% of
the Lessor's Cost of such Property over the Lease Term or FMV Lease Term, (ii)
Lessee has paid Tax or other indemnities, or becomes reasonably likely to be
obligated to pay Tax or other indemnities in the future which are not caused by
or controlled by Lessee and triggered for the purpose of effecting this purchase
option and could be avoided if the Lease or FMV Lease were terminated as to the
affected Properties, and the aggregate of all such indemnities not otherwise
waived by the Indemnitees is in excess of 2% of the Lessor's Cost of the
affected Properties or (iii) the Lessee has been prevented from constructing an
Addition or Alteration for the reasons described in Section 9.2(c) of the Lease,
the Lessee may (if no Lease Event of Default or Special Default is continuing,
and subject to Section 9.2(c) of the Lease) purchase all of the affected
Properties from the Lessor by (I) sending to such parties a notice of such
election within 360 days of such change in Applicable Laws and Regulations, or
the Lessee becoming aware of any such future indemnity obligation, in the case
of clauses (i) and (ii) above, or (II) sending the notice contemplated by
Section 9.2(c) of the Lease, in the case of clause (iii) above, which notice (in
the case of clause (I) or (II)) shall specify a purchase date which shall be a
Stipulated Loss Value Date (for purposes of this Section 9.3, the "Purchase
Date") not less than 10 days (45 days in the case of clause (iii) above) or more
than 180 days after such notice. On the Purchase Date the Lessee shall pay to
the Lessor the sum of (x) all Rent then due under the Operative Documents plus
(y) the Redemption Premium, if any, then due under the Notes as a result of
being partially or wholly prepaid in connection with this Section 9.3 plus (z)
the greater of (A) the Stipulated Loss Value for such Properties calculated as
of the Purchase Date and (B) the Fair Market Sales Value of such Properties. If
the Fair Market Sales Value cannot be determined by the Purchase Date, the
purchase of the Property shall be postponed until the Fair Market Sales Value is
determined or, at the option of the Lessee, the excess of the purchase price
maintained by the Lessor to be the Fair Market Sales Value of the Property over
that maintained by the Lessee to be the Fair Market Sales Value of the Property
shall be escrowed in a manner satisfactory to the Lessee and the Lessor, and the
amount payable on the Purchase Date by the Lessee pursuant to clause (z) above
shall be the amount so maintained by the Lessee (but in no event less than the
amount described in clause (A) of such clause (z)), with any shortfall being
paid to Lessor upon completion of the Appraisal Procedure. Any interest earned
on the escrow deposit shall be paid to such parties in the same proportion as
the escrow deposit is paid to such parties. The exercise of the Lessee's
purchase option pursuant to clause (ii) of this paragraph shall not decrease the
indemnity obligations of the Lessee as to events or conditions occurring or
arising before the Lessee's purchase is consummated. Upon payment of all amounts
due on the Purchase Date, (i) Lessor shall sell to the Lessee, without recourse
or warranty, except as to the absence of Lessor Liens, such Properties, (ii)
such Properties shall be released from the Lien of the Security Documents and
(iii) the Lease shall be terminated as to such Property.
All expenses incurred by the parties hereto under this Section 9.3,
including sales and transfer taxes, shall be paid by the Lessee.
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Article X
Debt Assumption; Refinancing
Section 10.1. Assumption of Indebtedness. Notwithstanding anything to the
contrary in Section 9.1 or 9.3 hereof, in the event the Lessee purchases one or
more Properties pursuant to either such Section, or if Lessee elects to assume
the outstanding Notes in accordance with Section 6.19 herein, the Lessee, in the
case of a Section 9.1 or 9.3 assumption, may elect to assume on a full recourse
basis the Allocable Portion of the outstanding Notes (it being understood that
the Lessee may not assume the Allocable Portion of the Notes relating to one or
more Properties with respect to which the Lessee has exercised its rights under
clause (iii) of Section 9.3 herein), or, in the case of a Section 6.19
assumption, must assume on a full recourse basis all of the Notes, in either
case by so notifying the Lessor, the Pass Through Trustee and the Indenture
Trustee at least 30 days (5 days in the case of a Section 6.19 assumption) prior
to such purchase or assumption. Such assumption shall not be deemed a re-grant
of a Lien by the Lessee to the Indenture Trustee, but a purchase in which the
pre-existing Lien continues as to such Property to secure the new indenture
between the Lessee and the Indenture Trustee. Such notice shall be accompanied
by the forms of assumption documents the Lessee agrees to execute and deliver on
the date of such purchase which shall provide to the Indenture Trustee
substantially the same protections with respect to the operation, use and
maintenance of such Properties as are afforded by the Lease; provided that the
new indenture between the Lessee and the Indenture Trustee and the Security
Documents shall not be cross-collateralized or cross-defaulted. Such assumption
shall be subject to the following additional conditions: (i) the Indenture
Trustee and the Pass Through Trustee for itself and for the benefit of the
Certificateholders shall have received such opinions of counsel (including,
without limitation, an opinion of a nationally recognized independent tax
counsel reasonably acceptable to the Indenture Trustee and the Pass Through
Trustee) to the effect that no gain or loss for U.S. Federal income tax purposes
will result from such assumption for which such Certificateholder is not fully
indemnified, to its reasonable satisfaction, by Lessee; provided, however, that
for purposes of such opinion it shall be assumed that each Certificateholder is
a domestic corporation, bank or insurance company), certificates and other
documents as it may reasonably request, each in form and substance reasonably
satisfactory to the Indenture Trustee and the Pass Through Trustee, (ii) the
Indenture Trustee for itself and for the benefit of the Holders shall have
received a title insurance policy or endorsement to its Title Policy to the
effect that the Indenture Trustee continues to have a first priority mortgage
and security interest in the Estate, (iii) Lessee shall be obligated to pay all
reasonable costs and expenses of the parties hereto, including the reasonable
fees and expenses of counsel for the Indenture Trustee and the Pass Through
Trustee (or, at the election of the Indenture Trustee and the Pass Through
Trustee, in lieu of the reasonable legal fees and expenses of counsel for the
Indenture Trustee and the Pass Through Trustee, the reasonable legal fees and
expenses for one counsel for the Certificateholders) incurred in connection with
such assumption, whether or not consummated and (iv) if Allocable Portions of
the Notes are assumed on more than one occasion pursuant to this Section 10.1,
all new notes shall be issued pursuant to the same indenture and all related
Properties shall secure all such notes.
In the event of any assumption of Notes or an Allocable Portion thereof
pursuant to Section 10.1(a), the amount payable by the Lessee to the Lessor
under Article IX hereof shall be
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reduced by the amount of the outstanding principal of the Allocable Portion of
the Notes being so assumed on the date of the assumption or exchange, after
payment of any Basic Rent due on such date. The Lessor, the Indenture Trustee
and the Pass Through Trustee agree to cooperate, at the Lessee's request and
expense, with any such assumption by the Lessee.
Section 10.2. Refinancing. Subject to the conditions set forth below, upon
the request of the Lessor, the Lessee shall cooperate with the Lessor's efforts
to arrange for one or more loans, on terms satisfactory to the Lessor, in an
aggregate amount which (except as set forth below) shall not exceed, and the
proceeds of which shall be used to prepay, in accordance with the provisions of
the Indenture, the then outstanding principal amount of the Notes (a
"Refinancing"). The Owner Participant shall pay (or cause to be paid out of the
proceeds of a Refinancing), on an After-Tax Basis, all reasonable expenses of
the Lessor, the Lessee, the Pass Through Trustee and the Indenture Trustee
associated with a Refinancing.
The parties hereto agree that they will cooperate, at Owner Participant's
expense, in any Refinancing pursuant to this Section 10.2 and enter into such
additional agreements and such supplements or amendments to or consents or
waivers under each of the Operative Documents as may be reasonably requested by
the Lessor to effect a Refinancing, subject to the satisfaction of the following
conditions:
(i) each of the documents relating to any Refinancing shall be in form
and substance reasonably satisfactory to the Lessee and the Owner
Participant; provided that to the extent the terms of a Refinancing are no
less favorable to Lessee than the terms of the Indenture and the Notes and
do not require any amendment to the Lease, such terms shall be deemed so
satisfactory;
(ii) payment in full of the unpaid principal amount of, and Redemption
Premium, if any, and accrued and unpaid interest on the Notes and of all
other amounts then due and owing with respect thereto pursuant to the
Operative Documents;
(iii) all necessary authorizations, approvals, consents and recordings
shall have been obtained or accomplished; and
(iv) the Lessor shall give the parties hereto at least 30 days' prior
written notice of a Refinancing pursuant to this Section 10.2, which notice
shall set forth to the extent practicable the proposed terms and conditions
of such Refinancing, including the desired date therefor. The Lessor will
promptly provide notice to such Persons of any changes in such proposed
terms and conditions, and in any event, will provide to such Persons final
terms and conditions of such Refinancing not later than three Business Days
prior to the execution and delivery of the documents contemplated
hereunder.
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Article XI
Financing of Alterations
Section 11.1. Financing of Alterations.
(a) Owner Participant. The Owner Participant agrees to consider in its sole
discretion providing an equity financing in respect of any Nonseverable
Alterations proposed by the Lessee and not in violation of the Lease or the
relevant FMV Lease. In addition, although not in the case of an FMV Lease, the
Lessor will permit, at the Lessee's expense, the issuance of Additional Notes in
order to finance any such Alteration as contemplated by Section 11.1(b) hereof;
provided that, as a condition to such issuance, the Owner Participant shall have
received (A) from independent counsel selected by the Owner Participant and
reasonably acceptable to the Lessee, an opinion reasonably satisfactory to the
Owner Participant to the effect that the issuance of the Additional Notes will
not result in any adverse federal income tax consequences to the Owner
Participant or (B) in lieu of such opinion, an indemnity reasonably acceptable
to the Lessor from the Lessee with respect to any such adverse tax consequences
specified in writing by the Lessor to the Lessee; provided, further, the Owner
Participant need not accept any material additional indemnity as described in
this paragraph unless (A) the Lessee satisfies the Rating Test and (B) the Owner
Participant receives an opinion from counsel selected by the Lessee and
reasonably acceptable to Owner Participant that there is at least "more likely
than not" authority for the federal income tax position which the Lessee
requests the Owner Participant to assume. The parties hereto agree to cooperate
fully, at the Lessee's expense, with any such financing or issuance.
(b) Additional Notes. (i) The Lessee may, in accordance with the terms of
Section 4.10 of the Indenture, at any time and from time to time, so long as no
Special Default or Lease Event of Default has occurred and is continuing at the
time the Additional Notes are issued and subject to the conditions and
restrictions contained in this Section 11.1, request the Lessor, upon not less
than 20 Business Days' prior written notice to the Lessor and the Indenture
Trustee, to execute and deliver documentation (including, without limitation, a
commitment agreement, a supplement to the Indenture (or, if the Indenture has
been discharged, a new indenture or comparable document which provides the
Lessor and Owner Participant no less rights, and imposes on the Lessor and Owner
Participant no greater obligations, than the Indenture (a "New Indenture")
setting forth the terms of the financing and promissory notes) prepared by the
Lessee or the purchaser of the Additional Notes and reasonably acceptable to the
Lessor and the Indenture Trustee providing for the creation of notes under the
Indenture or the New Indenture ("Additional Notes") in connection with any
financing of Nonseverable Alterations (the "Additional Note Documentation");
provided, that Additional Notes shall not be issued (A) more than once during
any twelve-month period or (B) to finance the costs necessary to restore or
rebuild a Property following a Casualty, Condemnation or Event of Loss, it being
understood that this clause (B) shall not prohibit the issuance of Additional
Notes to finance Alterations to a Property done at the same time as such
restoration and rebuilding; provided, further, that the issuance of such
Additional Notes will not result in the occurrence of a Default or an Event of
Default and will comply with the Indenture if then in effect. Accompanying such
notice shall be drafts of the Additional Note Documentation, and the Lessee
shall send to the parties hereto each
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subsequent draft thereof at the same time it is circulated to Persons other than
the Lessee and its counsel. The Lessor shall thereafter execute and deliver the
Additional Note Documentation on the specified date and the Indenture Trustee
(or the indenture trustee, if any, under the New Indenture) shall authenticate
the requested Additional Notes on and subject to the terms and conditions
hereof; provided further that there shall exist no Lease Event of Default as of
the date of either the execution of the Additional Note Documentation or the
issuance and authentication of such Additional Notes. The Additional Note
Documentation shall set forth:
(1) the principal amount of the Additional Notes, which shall not
exceed an amount equal to the increase in the Fair Market Sales Value of
the related Property (as determined by an appraiser reasonably acceptable
to Owner Participant and the Lessee) resulting from such Alterations, and
the principal amount of the Allocable Portion of the Notes plus such
Additional Notes shall not exceed 90% of the Fair Market Sales Value of the
related Property on the date of such issuance of such Additional Notes (as
determined by such appraiser) taking into account such Alteration;
(2) the terms of such Additional Notes (which, except for the terms of
payment and except for Section 4.10 of the Indenture, shall, if the
Indenture is then in effect, be of substantially the same effect as the
terms of the Notes issued on the Closing Date);
(3) the date of maturity of such Additional Notes which shall not
extend beyond the end of the Lease Term or be sooner than the maturity date
of the Notes;
(4) the date from which, and the date or dates on which, interest is
payable;
(5) the terms for the repayment of the principal amount of such
Additional Notes;
(6) the terms, if any, as to prepayment of such Additional Notes at
the option of the Lessor and as to the premium, if any, payable on any
prepayment of such Additional Notes (which shall be at least as favorable
to the Lessor as the prepayment provisions of the Notes); and
(7) any other terms and agreements in respect thereof necessary to
specify the terms and conditions on which such Additional Notes shall be
issued.
(ii) At any time or from time to time after the execution and delivery by
the Lessor of Additional Note Documentation in accordance with Section
11.1(b)(i) hereof, the Lessor shall execute and deliver such Additional Notes in
an aggregate principal amount not exceeding the amount permitted by such
Additional Note Documentation upon (I) compliance by the Lessee with this
Section 11.1(b), (II) receipt by the Lessor of an amount in cash equal to 100%
of the aggregate principal amount of such Additional Notes, (III) payment by the
Lessee of all of the reasonable fees and expenses (including, without
limitation, legal fees and expenses) of (A) the Lessor or the Owner Participant
that were incurred in connection with such Alterations and the issuance of the
Additional Notes or any proposed or actual amendment to the Operative
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Documents in connection therewith, and (B) the Indenture Trustee that were
incurred in connection with the issuance of the Additional Notes or any proposed
or actual amendment to the Operative Documents in connection therewith and (IV)
receipt by the Lessor and the Indenture Trustee of the documents referred to
below (in form and substance reasonably satisfactory to the Owner Participant):
(1) a Lease Supplement, duly authorized, executed and delivered by the
Lessee and the Lessor, providing for adjustments in Basic Rent and
Stipulated Loss Value under the Lease required to ensure that payments of
such amounts will be adequate to provide for all payments when due required
under the Notes and the Additional Notes, together with such instruments of
conveyance, assignment and transfer, if any, necessary or reasonably
requested by the Indenture Trustee or its counsel to subject such Lease
Supplement to the Lien of the Security Documents and to perfect such Lien
subject to no Liens other than Permitted Liens, and evidence as to the due
recording or filing of each thereof and of financing or similar statements
with respect thereto;
(2) such instruments of conveyance, assignment and transfer
(including, without limitation, contractors' waivers) duly executed and
delivered by the respective parties thereto, and such evidence of the due
filing thereof or of financing statements with respect thereto, as may be
reasonably requested to convey to the Lessor all property included in such
Alterations, if any, and to subject such property to a Lien of the Security
Documents, subject to no Liens except Permitted Liens;
(3) originals or certified copies of all corporate actions and
governmental approvals and permits necessary for the due and valid issuance
of such Additional Notes, the due and valid authorization, execution,
delivery and performance by the Lessor of the Additional Note
Documentation, and the due and valid authorization, execution, delivery and
performance by the Lessee and the Lessor of the Lease Supplement and the
creation of the Lien thereon referred to above, all of which corporate
actions and governmental approvals and permits shall have been duly
obtained and shall be in full force and effect; together with evidence as
to the due occurrence of such authorization, execution, delivery and
performance;
(4) such modifications, amendments, waivers or supplements to the
Operative Documents, other instruments, certificates, title policy
endorsements and opinions as may be reasonably requested by the Owner
Participant, the Lessee, the Indenture Trustee (or its counsel) or the
prospective Holders of the Additional Notes in order to effectuate the
financing contemplated by this Section 11.1(b); and
(5) a letter from nationally recognized independent public accountants
confirming that the adjustments to Basic Rent and Stipulated Loss Values
are adequate, as contemplated by (1) above.
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Article XII
Miscellaneous
Section 12.1. Survival of Agreements. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Documents, and the parties' obligations under any and all thereof,
shall survive the execution and delivery of this Agreement, any disposition of
any interest of the Lessor in any Property and shall be and continue in effect
notwithstanding any investigation made by any party and the fact that any party
may waive compliance with any of the other terms, provisions and conditions of
any of the Operative Documents. The indemnities of the parties provided for in
the Operative Documents and the parties' obligations under all such indemnities,
shall survive the termination of this Agreement, the Lease and the other
Operative Documents.
Section 12.2. Concerning the Trust Company and the Co-Trustee. The Lessee,
the Owner Participant, the Indenture Trustee and the Lender each acknowledge and
agree that each of the Trust Company and the Co-Trustee is entering into this
Agreement and the other Transaction Documents to which it is a party solely in
its capacity as trustee under the Trust Agreement and not in its individual
capacity (except as expressly stated therein) and in no case shall Trust Company
or the Co-Trustee (or any entity acting as successor trustee under the Trust
Agreement) be personally liable for or on account of any of the statements,
representations, warranties, covenants or obligations stated to be those of
Lessor hereunder, all such liability, if any, being expressly waived by the
parties hereto and any Person claiming by, through, or under any such party;
provided, however, that the Trust Company (or any such successor trustee) shall
be personally liable hereunder for its and the Co-Trustee's own gross negligence
or willful misconduct and for its and the Co-Trustee's breach of its and the
Co-Trustee's covenants, representations and warranties contained herein, to the
extent covenanted or made in its or the Co-Trustee's individual capacity.
Section 12.3. Notices. Unless otherwise specifically provided herein, all
notices, demands, consents, directions, approvals, instructions, requests and
other communications required or permitted by the terms hereof to be given to
any Person shall be given in writing by United States mail, by nationally
recognized courier service, by facsimile or by hand and any such notice shall
become effective upon receipt (it being agreed that a confirmed facsimile shall
be deemed received upon the sender's receipt of such confirmation), and shall be
directed to the Address of such Person. From time to time any party may
designate a new Address for purposes of notice hereunder by notice to each of
the other parties hereto.
Section 12.4. Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
Section 12.5. Amendments. Neither this Agreement nor any of the terms hereof
may be terminated, amended, supplemented, waived or modified orally, but only by
an instrument in writing signed by the party against which the enforcement of
the termination, amendment, supplement, waiver or modification shall be sought;
and no such termination, amendment,
-70-
supplement, waiver or modification shall be effective unless a signed copy
thereof shall have been delivered to the parties hereto.
Section 12.6. Headings, etc. The Table of Contents and headings of the
various Articles and Sections of this Agreement are for convenience of reference
only and shall not modify, define, expand or limit any of the terms or
provisions hereof.
Section 12.7. Parties in Interest. Except as expressly provided herein, none
of the provisions of this Agreement is intended for the benefit of any Person
except the parties hereto, their successors and permitted assigns.
Section 12.8. Governing Law. This Agreement has been delivered in, and shall
in all respects be governed by, and construed in accordance with, the laws of
the State of New York applicable to agreements made and to be performed entirely
within such State, including all matters of construction, validity and
performance.
Section 12.9. [Reserved].
Section 12.10. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 12.11. Jurisdiction. (a) Each of the parties hereto:
(1) hereby irrevocably submits to the non-exclusive jurisdiction of
the Supreme Court of the State of New York, New York County (without
prejudice to the right of any party to remove to the United States Court
for the Southern District of New York) and of the United States District
Court for the Southern District of New York, for the purposes of any suit,
action or other proceeding arising out of this Participation Agreement, the
other Operative Documents, or the subject matter hereof or thereof or any
of the transactions contemplated hereby or thereby brought by any of the
parties hereto or their successors or assigns;
(2) hereby irrevocably agrees that all claims in respect of such
action or proceeding may be heard and determined in such New York State
court or, to the fullest extent permitted by Applicable Law, in such
Federal court; and
(3) to the extent permitted by Applicable Law, hereby irrevocably
waives, and agrees not to assert, by way of motion as a defense, or
otherwise, in any such suit, action or proceeding any claim that it is not
personally subject to the jurisdiction of the above-named courts, that the
suit, action or proceeding is brought in an inconvenient forum, that the
venue of the suit, action or proceeding is improper or that this agreement,
the other Operative Documents, or the subject matter hereof or thereof may
not be enforced in or by such court.
-71-
(b) Each Party hereby waives all right to trial by jury in any action
proceeding or counterclaim arising out of or relating to this Agreement or any
other Operative Document.
Section 12.12. Priority; Attornment. (a) The Lease, and all rights of the
Lessee thereunder are now, and shall at all times continue to be, senior in all
respects to the Security Documents and the Liens thereof, all the terms,
conditions and provisions thereof, all advances made or to be made thereunder,
and to any and all increases, renewals, extensions, modifications,
substitutions, replacements, consolidations, coordinations, spreaders or
replacements thereof.
(b) If no Lease Event of Default has occurred and is continuing and the
Lessee shall have attorned to the Successor Lessor (as such term is defined in
Section 12.12(c) hereof) as described in Section 12.12(c) hereof:
(i) neither the Lessee nor any person claiming through or under Lessee
shall be named or joined as a party defendant in any action, suit or
proceeding which may be instituted by the Indenture Trustee to foreclose
the Security Documents or to collect the debt secured thereby, or which may
otherwise be instituted or taken under or in connection with the Security
Documents or any obligations secured thereby by reason of a Default or
Event of Default unless the Lessee or any Person claiming through or under
the Lessee is deemed a necessary party to such action, suit or proceeding,
in which event the Lessee or any such party may be so named or joined but
such naming or joinder shall not otherwise be in derogation of the rights
of the Lessee set forth in this Agreement or the Lease and the Lease shall,
subject to the terms and provisions thereof, continue in full force and
effect notwithstanding the commencement of any such proceeding; and
(ii) the Lessee shall not be evicted from the Properties, nor shall
the leasehold estate or possession of the Lessee be terminated by reason of
any Default or Event of Default under or foreclosure of the Security
Documents, and the Lessee shall, subject to Section 6.14 hereof, be
entitled to remain in quiet possession and use of the Properties as
provided in the Lease.
(c) If, at any time, the Indenture Trustee, or any Person, or the Indenture
Trustee's or such Person's successors or assigns, or any subsequent successor or
assigns of any thereof (the Indenture Trustee, or any such Person, or any such
successor or assign being hereinafter referred to as the "Successor Lessor"),
shall succeed to the interests of the landlord under the Lease by reason of the
exercise of remedies under the Security Documents, then (i) the Lease shall not
terminate by reason of such succession, (ii) the Lessee shall attorn to and
recognize such Successor Lessor as landlord under the Lease upon the then
existing terms and conditions of the Lease and as hereinafter provided in this
Section 12.12(c) or in Section 12.12(d) hereof, and (iii) such Successor Lessor
shall accept such attornment and recognize the Lessee as the tenant under the
Lease. Upon such attornment and recognition, the Lease shall continue in full
force and effect as, or as if it were, a direct agreement between such Successor
Lessor and the Lessee upon and subject to all of the then existing terms,
conditions and covenants as are set forth in the Lease and the other Operative
Documents, and which shall be applicable after such attornment
-72-
and recognition, except that such Successor Lessor, notwithstanding anything to
the contrary set forth in the Lease or any other Operative Document, shall not
be:
(i) liable for any previous act, omission or negligence of the
landlord under the Lease or for the payment of any monies owing by or on
deposit with the predecessor to the Successor Lessor to the credit of the
Lessee; or
(ii) subject to any counterclaim, defense, offset, credit or deduction
which shall have accrued to the Lessee against the landlord under the Lease
at any time prior to the earlier of delivery of possession to, or time of
succession of, the Successor Lessor; or
(iii) bound by any previous modification or amendment of the Lease
(including any extension of the term thereof not expressly provided for in
any thereof), or by any previous prepayment (other than prepayments
required by the Lease) of more than one month's rent, unless such
modification, amendment or prepayment (x) did not, pursuant to the terms of
the Indenture, require the approval of the Indenture Trustee or (y)
required the approval of the Indenture Trustee and the Lessee had received
such approval, or in the case of any prepayment of more than one month's
rent, such prepayment of rent shall have been paid to the Indenture
Trustee.
The foregoing provisions of this Section 12.12(c) shall inure to the benefit of
and bind the Lessee and the Successor Lessor. The Successor Lessor shall be
liable for all other obligations of the Lessor under the Operative Documents.
(d) The provisions of this Section 12.12 shall be self-operative and no
further instrument shall be necessary to effect the aforementioned attornment
and recognition. Nevertheless, in confirmation thereof, the Lessee and Successor
Lessor shall execute and deliver an appropriate certificate to confirm such
attornment and recognition upon request of the Indenture Trustee, its agent or
the Lessee.
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In Witness Whereof, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.
Bank of America, N.A., as Lessee
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
First States Investors 3500, LLC, a
Delaware limited liability company, as
Owner Participant
By: First States Investors 3500A, LLC, its
Managing Member
By:
------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President and Secretary
First States Group, L.P.
By: First States Group, LLC,
its General Partner
By:
------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice-President-Operations &
Secretary
Xxxxx Fargo Bank Northwest, National
Association, as Indenture Trustee and Pass
Through Trustee
By:
-----------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
U.S. Bank National Association (successor to
State Street Bank and Trust Company of
Connecticut, National Association), not
in its individual capacity, except as
expressly set forth herein, but solely
as Owner Trustee under the Amended and
Restated Trust Agreement (1997-D) dated
as of May 23, 2003, as Grantor
By:
-----------------------------------------
Name
Title:
XXXXXXX XXXXXXX, not in his individual
capacity, but solely as Co-Trustee under
the Trust Agreement (1997-D) as
aforesaid and Lessor in the
Co-Trustee States
By:
-----------------------------------------
Description of Filings and Filing Locations
The Deeds, the Short Form Agreement, the Maryland Short Form Agreement
(with respect to the Maryland Properties only), the Indenture (except with
respect to the Maryland Properties), the Maryland Security Documents (with
respect to the Maryland Properties only), and the UCC-1 Financing Statements
relating to the Properties shall be filed in the following respective locations:
Filing Office for Real
Property Property and Security Filing Offices for
Location Documents (Including Fixture Filing) UCC-1s, -2s
---------------------- --------------------------------------------- ---------------------
St. Petersburg, FL Clerk of Circuit Court UCC Division
Pinellas County, Florida Secretary of State
000 Xxxxx Xxxxxx X.X. Xxx 000
Xxxxxxxxxx, XX 00000 Dover Delaware, 00000
Xxxxxxxxx Xxxxx xx xxx Xxxxxxxx Xxxxx xx Xxxxxx Xxxxxx UCC Division
Atlanta, GA Real Estate Recording Division Secretary of State
000 X. XxXxxxxxx Xxxxxx X.X. Xxx 000
Xxxxxxx, XX 00000 Dover Delaware, 19903
Southside Clerk of the Superior Court of Xxxxxx County UCC Division
Atlanta, GA Real Estate Recording Division Secretary of State
000 Xxxxx Xxxxxx, X.X. X.X. Xxx 000
Xxxxxxx, XX 00000 Dover Delaware, 19903
Columbia, SC Richland County Register of Mesne Conveyances UCC Division
X.X. Xxx 000 Xxxxxxxxx xx Xxxxx
Xxxxxxxx, XX 00000 X.X. Xxx 000
Xxxxx Xxxxxxxx, 00000
Greensboro, NC Xxxxxxxxx Xxx Xxxxx - Courthouse UCC Division
000 X. Xxxxxx Xxxxxx Secretary of State
Xxxxxxxxxx, XX 00000 X.X. Xxx 000
Xxxxx Xxxxxxxx, 00000
0000 Xxxxxxxx Xxxx Xxxxxxxxx Xxxxxx, Xxxxxxxx UCC Division
Arlington, VA 0000 X. Xxxxxxxxxx Xxxx, Xxxxxxxxx xx Xxxxx
Xxxxx 0000 X.X. Xxx 000
Xxxxxxxxx, XX 00000 Dover Delaware, 19903
Schedule I
(to the Participation Agreement)
Filing Office for Real
Property Property and Security Filing Offices for
Location Documents (Including Fixture Filing) UCC-1s, -2s
---------------------- --------------------------------------------- ---------------------
Villa Park Clerk of the Circuit Court of Henrico County UCC Division
Richmond, VA Xxxxxx & Hungary Spring Roads Secretary of State
X.X. Xxx 00000 X.X. Xxx 000
Xxxxxxxx, XX 00000 Dover Delaware, 19903
Bank of America Center Clerk of the Circuit Court of the City of UCC Division
Richmond, VA Richmond Secretary of State
Xxxx Xxxxxxxx Xxxxxx Xxxxxxxx X.X. Xxx 000
400 North Ninth Street Dover Delaware, 19903
Xxxxxxxx, XX 00000
Shockoe Parking Clerk of the Circuit Court of the City of UCC Division
Richmond, VA Richmond Secretary of State
Xxxx Xxxxxxxx Xxxxxx Xxxxxxxx X.X. Xxx 000
400 North Ninth Street Dover Delaware, 19903
Xxxxxxxx, XX 00000
Norfolk Parking Attn: Real Estate Recording UCC Division
Norfolk, VA Norfolk City Clerk of the Circuit Court Secretary of State
000 Xx. Xxxx'x Xxxx. X.X. Xxx 000
Xxxxxxx, XX 00000-0000 Dover Delaware, 19903
Two Commercial Place Attn: Real Estate Recording UCC Division
Norfolk, VA Norfolk City Clerk of the Circuit Court Secretary of State
000 Xx. Xxxx'x Xxxx. X.X. Xxx 000
Xxxxxxx, XX 00000-0000 Dover Delaware, 19903
One Commercial Place Attn: Real Estate Recording UCC Division
Norfolk, VA Norfolk City Clerk of the Circuit Court Secretary of State
000 Xx. Xxxx'x Xxxx. X.X. Xxx 000
Xxxxxxx, XX 00000-0000 Xxxxx Xxxxxxxx, 00000
000 00xx Xxxxxx Xxxxxxxx xx Xxxxxxxx Recorder of Deeds UCC Division
Washington, DC 000 X Xxxxxx, XX Xxxxxxxxx xx Xxxxx
Xxxxxxxxxx, XX 00000 X.X. Xxx 000
Xxxxx Xxxxxxxx, 00000
I-2
Filing Office for Real
Property Property and Security Filing Offices for
Location Documents (Including Fixture Filing) UCC-1s, -2s
---------------------- --------------------------------------------- ---------------------
225 North Xxxxxxx Circuit Court for Baltimore City UCC Division
Baltimore, MD Xxxxxxxx X. Xxxxxxxx, Xx. Courthouse Secretary of State
000 X. Xxxxxxx St., Room 610 X.X. Xxx 000
Xxxxxxxxx, XX 00000 Dover Delaware, 19903
000 Xxxxx Xxxxxxx Xxxxxxx Xxxxx for Baltimore City UCC Division
Baltimore, MD Xxxxxxxx X. Xxxxxxxx, Xx. Courthouse Secretary of State
000 X. Xxxxxxx St., Room 610 X.X. Xxx 000
Xxxxxxxxx, XX 00000 Dover Delaware, 00000
Xxxxx Xxxx Xxxxxxx Xxxxx xxx Xxxxxxxxxx Xxxxxx UCC Division
Silver Springs, MD Xxxxxxxxxx County Judicial Center Secretary of State
00 Xxxxxxxxxx Xxxxxx, Xxxx 000 X.X. Xxx 000
Xxxxxxxxx, XX 00000 Dover Delaware, 19903
I-3
Exhibit A
Description of Existing Subleases
000 X. Xxxxxxx Xxxxxx Xxxxxxxxx XX 3AMEPE00 American Personal Communication
000 X. Xxxxxxx Xxxxxx Xxxxxxxxx XX 3AMEPE00 APC Realty & Equipment Co.
000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx XX 3BLUCO01 Blue Coat Foods, Inc.
000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx XX 3DELDI00 Chef Xxxxxxx
000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx XX 3DESFR00 Designer Fragrances & Cosmetic
000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx MD 0XXXXX00 Xxxxxxxx, Xxxxxxxxxx, Xxxxxxxxx
000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx XX 3FLOCA00 Flower Cart, Inc.
000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx XX 0XXXXX00 XXX - Secret Service
000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx XX 3IDTSO00 IDT Solutions
000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx XX 3NEWMA00 News Mart
000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx MD 3PAUSA00 Xxxx Xxxxxxxx, U. S. Senator
000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx XX 3TOW-C00 Town & Country Mgmt. Company
000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx XX 3TOWII00 Tower II
000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx XX 3UNIWA05 United Way of Central Maryland
000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx XX 3WATMA00 Water Xxxx, Inc.
000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx MD 3WEIGR02 Xxxx Xxxxx LLP
00000 Xxxxx Xxxx Xxxx Xxxxxx Xxxxxx XX 3FENIN00 Fenix International Shipping
00000 Xxxxx Xxxx Xxxx Xxxxxx Xxxxxx XX 3WOMAC00 Woman of Achievement in Md
3401 Columbia Pike Arlington VA 3CAMHU00 Dr. Xxxx Xxxxxxxx
0000 Xxxxxxxx Xxxx Xxxxxxxxx XX 3CELON00 Cellular One
Xxx Xxxxxxxxxx Xxxxx Xxxxxxx XX 0XXXXX00 Xxxxx Company
Xxx Xxxxxxxxxx Xxxxx Xxxxxxx XX 3CAIWI00 Xxxxxxx Xx. Wireless, Inc.
Xxx Xxxxxxxxxx Xxxxx Xxxxxxx XX 0XXXXX00 Xxxxxxxx, Xxxx & Xxxxxx
Xxx Xxxxxxxxxx Xxxxx Xxxxxxx XX 0XXXXX00 The Harbor Club
Xxx Xxxxxxxxxx Xxxxx Xxxxxxx XX 3MET--01 Metrocall, Inc.
Xxx Xxxxxxxxxx Xxxxx Xxxxxxx XX 0XXXXX00 USB/Xxxxx Xxxxxx
Xxx Xxxxxxxxxx Xxxxx Xxxxxxx XX 3WILSA00 Xxxxxx & Savage, P.C.
0000 Xxxx Xxxx Xxxxxx Xxxxxxxx XX 3CLECH00 Clear Channel Communications
0000 Xxxx Xxxx Xxxxxx Xxxxxxxx XX 3MALYE00 Xxxxxxx, Xxxxxx and Xxxx
0000 Xxxx Xxxx Xxxxxx Xxxxxxxx XX 3MET--02 Metrocall, Inc.
0000 Xxxx Xxxx Xxxxxx Xxxxxxxx XX 3METFI00 Metropolitan Fiber Systems
0000 Xxxx Xxxx Xxxxxx Xxxxxxxx XX 3MEZMC00 Mezzullo & XxXxxxxxxx
0000 Xxxx Xxxx Xxxxxx Xxxxxxxx XX 3SANTR01 Xxxxxxxx Xxxxxxx, LLC
Exhibit B
Schedule of Original Lessor's Cost
Original Lessor's
Property Description Location Cost
--------------------------- ------------------ -----------------
Washington Office Washington, DC $ 15,590,499
Xx. Xxxxxxxxxx Xxxxxxxxxx Xx. Xxxxxxxxxx, XX $ 4,296,770
Xxxxxxxxx Xxxxxx Xxxxxxx Xxxx, XX $ 14,798,688
X. Xxxxxxx St. Baltimore, MD $ 10,396,422
Veirs Mill Silver Spring, MD $ 1,598,688
Columbia Control Center Columbia, SC $ 6,198,807
Arlington Main Arlington, VA $ 1,598,589
Northeast Center Tucker, GA $ 21,593,123
Triad Center Greensboro, NC $ 28,496,363
Xxxxxxx St. Baltimore, MD $ 45,788,074
NationsBank Center Norfolk, VA $ 21,289,525
NationsBank Center Richmond, VA $ 50,592,725
Commercial Place Norfolk, VA $ 19,692,844
Villa Park Richmond, VA $ 68,095,628
Shockoe Parking Richmond, VA $ 0
Xxxxxxx Xxxxxxx Xxxxxxx, XX $ 0
$310,026,745
Released Property per Prior
Agreement Atlanta, GA $ 12,996,720
Total Original Lessor's Cost $323,023,465
Exhibit C
2 0000 Xxxxxxxxx Xxxxxxx Xxxxxx XX 3PEAOU00 P'tree Outdoor Adv.& Xxxxxx Adv
5 000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx MD 3ALLTE00 Allegiance Telecom Inc
9 000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx MD 3DELTO00 Deloitte & Touche
11 000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx XX 3ELLTU00 Ellin & Xxxxxx
16 000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx XX 3INTRE02 Internal Revenue Service
18 000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx MD 3LOCMA00 Lockheed Xxxxxx Corporation
22 000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx XX 3REWPL00 Rewards Plus of America Corp.
00 Xxx Xxxxxxxxxx Xxxxx Xxxxxxx XX 3CRAGR00 Xxxxxx Green & Co.
43 One Commercial Place Norfolk VA 3GOOCO00 Xxxxxxx & Company
00 Xxx Xxxxxxxxxx Xxxxx Xxxxxxx XX 3S--L-00 X. X. Xxxxxxx Realty Company
55 0000 Xxxx Xxxx Xxxxxx Xxxxxxxx XX 3ALCLE00 A.L.C. Leasing Co., Inc.
56 0000 Xxxx Xxxx Xxxxxx Xxxxxxxx XX 3AMURE00 Amurcon Realty Company
60 0000 Xxxx Xxxx Xxxxxx Xxxxxxxx XX 3FIRDA00 First Data Investor Services
61 0000 Xxxx Xxxx Xxxxxx Xxxxxxxx XX 3FOREY00 For Eyes Optical Co. Inc.
62 0000 Xxxx Xxxx Xxxxxx Xxxxxxxx XX 3GRERI00 Greater Richmond Transit Co.
63 0000 Xxxx Xxxx Xxxxxx Xxxxxxxx XX 3INCED00 Incredible Edibles, Inc
65 0000 Xxxx Xxxx Xxxxxx Xxxxxxxx XX 3KININ00 Kinkos, Inc.
76 0000 Xxxx Xxxx Xxxxxx Xxxxxxxx XX 3VIRIN00 Virginia Interactive
