Exhibit 10.2.d
Amended and Restated Lease
Dated as of October 12, 2001
between
Kansas City Power & Light Company,
as the Lessee
and
Xxxxx Fargo Bank Northwest, National Association,
a national banking association,
as Lessor
____________________________
Kansas City Power & Light Company Project 2001 Lease Financing
____________________________
This Lease is encumbered by a lien in favor of Xxxxx Fargo Bank
Nevada, National Association, as Administrative Agent for the
benefit of the Participants. This Lease has been executed in
several counterparts. To the extent, if any, that this Lease
constitutes chattel paper (as such term is defined in the Uniform
Commercial Code as in effect in any applicable jurisdiction), no
lien on this Lease may be created through the transfer or
possession of any counterpart other than the original counterpart
containing the receipt therefor executed by the Administrative
Agent on or following the signature page hereof.
THIS COUNTERPART IS [NOT] THE ORIGINAL COUNTERPART.
TABLE OF CONTENTS
Section Heading Page
Article I Definitions; Interpretation; Amendment
and Restatement 1
Section 1.1. Definitions; Interpretation 1
Section 1.2. Amendment and Restatement 2
Article II Lease of Leased Property; Lease Term 2
Section 2.1. Acceptance and Lease of the Leased
Property 2
Section 2.2. Acceptance, Testing and Initial Use
Procedures 2
Section 2.3. Term 3
Section 2.4. Title. 3
Section 2.5. Contract Matters 3
Section 2.6. [Intentionally Deleted] 3
Section 2.7. Ground Leases 3
Article III Payment of Rent 4
Section 3.1. Rent 4
Section 3.2. Payment of Basic Rent 4
Section 3.3. Supplemental Rent 4
Section 3.4. Method of Payment 5
Article IV Quiet Enjoyment; Right to Inspect 5
Section 4.1. Non-Interference. 5
Section 4.2. Inspection and Reports 5
Article V Net Lease, Etc. 6
Section 5.1. Net Lease, Etc 6
Section 5.2. No Termination or Abatement. 7
Article VI Assignments, Subleases and Delegations 8
Article VII Lessee Acknowledgments 9
Section 7.1. Condition of the Leased Property 9
Section 7.2. Risk of Loss 9
Section 7.3. Certain Duties and Responsibilities of
Lessor. 9
Article VIII Possession and Use of the Property, Etc. 10
Section 8.1. Possession and Use of the Leased
Property. 10
-i-
Section 8.2. Compliance with Requirements of Law
and Insurance Requirements 10
Article IX Maintenance and Repair; Reports 11
Section 9.1. Maintenance and Repair 11
Section 9.2. Maintenance and Repair Reports 11
Article X Modification, Etc. 11
Section 10.1.Improvements and Modification 11
Section 10.2.Title to Modifications. 13
Article XI Covenants with Respect to Liens and
Easements 14
Section 11.1.Covenants with Respect to Liens. 14
Section 11.2.Lessee's Grants and Releases of
Easements; Lessor's Waivers 14
Article XII Permitted Contests 15
Section 12.1.Permitted Contests in Respect of Liens
and Applicable Laws. 15
Article XIII Insurance 16
Section 13.1.Required Coverages. 16
Section 00.0.Xxxxxxxxx Coverage 17
Section 00.0.Xxxxxxxx of Insurance Certificates 17
Section 00.0.Xxxxxxxxx by Lessor, Administrative
Agent or any Participant 17
Article XIV Casualty and Condemnation 18
Section 14.1.Casualty and Condemnation. 18
Section 14.2.Environmental Matters 19
Section 14.3.Notice of Environmental Matters 19
Article XV Termination of Lease 20
Section 15.1.Termination upon Certain Events. 20
Section 15.2.Termination Procedures. 20
Article XVI Events of Default 20
Section 00.0.Xxxxxx of Default 20
Section 16.2.Remedies. 22
Section 16.3.Waiver of Certain Rights 26
Section 16.4.Grant of Security Interest. 26
Section 16.5.Determinations of Certain Events of
Default 26
Section 16.6.Lessor Sale 26
-ii-
Article XVII Lessor's Right to Cure 27
Section 17.1.The Lessor's Right to Cure the
Lessee's Defaults 27
Article XVIII Purchase Provisions 27
Section 18.1.Early Termination Option 27
Article XIX End of Term Options 28
Section 19.1.End of Term Options 28
Section 19.2.Election of Options 29
Section 19.3.Renewal Options. 29
Article XX Sale Option 29
Section 00.0.Xxxx Option Procedures. 29
Section 20.2.Certain Obligations Continue 32
Section 20.3.Failure to Sell Leased Property 32
Article XXI Procedures Relating to Purchase or Sale
Option 34
Section 21.1.Provisions Relating to Conveyance of
the Leased Property Upon Purchase by
the Lessee, Sales or Certain Other
Events. 34
Article XXII Acceptance of Surrender 36
Section 22.1.Acceptance of Surrender. 36
Article XXIII No Merger of Title 36
Section 00.0.Xx Merger of Title 36
Article XXIV Intent of the Parties 36
Section 24.1.Nature of Transaction 36
Section 24.2.Lessee Grant of Mortgage and Security
Interest 38
Article XXV Miscellaneous 39
Section 25.1.Survival; Severability; Etc 39
Section 25.2.Amendments and Modifications 39
Section 00.0.Xx Waiver 39
Section 25.4.Notices 39
Section 25.5.Successors and Assigns. 40
Section 25.6.Headings and Table of Contents 40
Section 25.7.Counterparts. 40
Section 25.8.Governing Law 40
Section 25.9.Original Lease 40
Section 25.10.Limitations on Recourse 40
-iii-
Section 25.11.Transfer of Leased Property 41
Section 25.12.Effective Date 41
Signature 1
Exhibits
Exhibit A - Form of Memorandum of Lease
Exhibit B - Description of Leased Property
-iv-
AMENDED AND RESTATED LEASE
This Amended and Restated Lease dated as of October 12, 2001
(as amended, supplemented, or otherwise modified from time to
time, this "LEASE"), between Xxxxx Fargo Bank Northwest, National
Association, a national banking association, as Lessor
("LESSOR"), and Kansas City Power & Light Company, a Missouri
corporation ("LESSEE").
WITNESSETH:
A. The parties are now entering into the Operative Documents
in order to provide financing for the Leased Property.
X. Xxxxxx and Lessee have previously entered into that
certain Lease dated as of April 27, 2001 (the "ORIGINAL LEASE")
and by entering into this Lease desire to amend and restate the
Original Lease in its entirety.
C. During the Commitment Period, Lessor, using Advances
funded by the Participants, will reimburse Lessee or pay directly
to the Persons entitled thereto the Project Costs. Pursuant to
the Project Supervisory Agreement being entered into between
Lessor and Lessee, as Supervisory Agent, Supervisory Agent will
supervise (i) the purchase and Shipment of the Equipment under
the Equipment Contracts and (ii) the assembly and installation of
the Equipment and the construction of the Financed Improvements
pursuant to the Project Agreements.
D. Pursuant to this Lease, Lessor will lease the Leased
Property, inclusive of Lessor's leasehold interest in the Leased
Property, to Lessee and Lessee will lease the Leased Property
from Lessor.
Now, Therefore, in consideration of the foregoing, and of
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION; AMENDMENT AND RESTATEMENT
SECTION 1.1. DEFINITIONS; INTERPRETATION. For all purposes
hereof, the capitalized terms used herein and not otherwise
defined shall have the meanings assigned thereto in Appendix 1 to
that certain Amended and Restated Participation Agreement dated
as of even date herewith, among Kansas City Power & Light
Company, as Lessee and Supervisory Agent; Xxxxx Fargo Bank
Northwest, National Association, not in its individual capacity,
except as expressly stated therein, but solely as Certificate
Trustee and Lessor; Xxxxx Fargo Bank Nevada, National
Association, not in its individual capacity except as expressly
stated therein, but solely as Administrative Agent; the financial
institutions named on Schedule I thereto, as Certificate Holders;
the financial institutions listed on Schedule II thereto as
Liquidity Banks; Hatteras Funding Corporation, as CP Lender;
Jupiter Securitization Corporation, as CP Lender; Bank of
America, N.A., as Administrator and Liquidity Agent for Hatteras
Funding Corporation; and Bank One, NA, as Administrator and
Liquidity Agent for Jupiter Securitization Corporation (as the
same may be further amended, supplemented or otherwise modified
from time to time pursuant thereto, the "PARTICIPATION
AGREEMENT"); and the rules of interpretation set forth in
Appendix 1 to the Participation Agreement shall apply to this
Lease. All obligations imposed on the "Lessee" in this Lease
shall be full recourse liabilities of Lessee.
SECTION 1.2. AMENDMENT AND RESTATEMENT. This Lease amends and
restates in its entirety the Original Lease and, upon
effectiveness of this Lease, the terms and provisions of the
Original Lease shall be superseded and governed hereby. Each of
the parties to the Original Lease consents to this amendment and
restatement pursuant to Section 25.2 thereof.
ARTICLE II
LEASE OF LEASED PROPERTY; LEASE TERM
SECTION 2.1. ACCEPTANCE AND LEASE OF THE LEASED PROPERTY.
(a) Lessor, subject to the satisfaction or waiver of the
conditions set forth in Article VI of the Participation
Agreement, hereby agrees to enter into the Ground Lease for the
Site and to provide funds for the purchase and construction of
the Equipment and the Financed Improvements.
(b) Beginning on the Base Term Commencement Date, Lessor
hereby leases all of Lessor's interest in the Leased Property to
Lessee hereunder, and Lessee hereby leases pursuant to the terms
hereof the Leased Property from Lessor for the Term.
SECTION 2.2. ACCEPTANCE, TESTING AND INITIAL USE PROCEDURES.
Lessor hereby authorizes Lessee, as the authorized representative
of Lessor, to accept delivery of the Leased Property, including
without limitation the Equipment and the Financed Improvements to
be constructed on the Site[s], upon the Base Term Commencement
Date. Lessee hereby agrees that, subject to Section 2.3(b),
delivery at the Site and payment from Advances for any portion of
the Financed Improvements shall, without further act, constitute
the irrevocable acceptance by Lessee of all such Financed
Improvements for all purposes of this Lease and the other
Operative Documents on the terms set forth herein and therein and
shall constitute Lessee's agreement to lease the Leased Property
pursuant to the terms hereof during the Term. Notwithstanding
anything herein to the contrary, the acceptance of the Financed
Improvements for purposes of this Lease shall not constitute and
shall not be deemed to be acceptance thereof under any Project
Agreement. Pursuant to the Project Supervisory Agreement, the
Lessee will test the Units, and, to the extent the Units are
capable of use prior to the Base Term Commencement Date, the
Lessee is granted a license and is authorized to use the Units in
the ordinary course of its business. The Lessee agrees that the
testing and use prior to the Base Term Commencement Date of the
Units will be subject to the terms of Articles VIII and IX hereof
and may not occur unless the insurance required by Article XIII
is fully effective and applicable in respect of such Units,
except to the extent that equivalent coverage is provided under
the insurance obtained by the Supervisory Agent pursuant to the
Project Supervisory Agreement and in full force and effect.
SECTION 2.3. TERM. (a) Unless earlier terminated, the term of
this Lease shall consist of (i) a base term (the "BASE TERM")
commencing on and including the Base Term
Commencement Date and ending on but not including the fifth
anniversary of the Second Document Closing Date, and, (ii) if
exercised and approved pursuant to each of the terms and
conditions of Section 4.7 of the Participation Agreement and
exercised pursuant to the terms of this Lease, including
Article XIX hereof, each Lease Renewal Term (the Base Term
and the Lease Renewal Terms, if any, being collectively referred
to as, the "TERM").
(b) Prior to the Base Term Commencement Date, the Leased
Property shall be subject to the provisions of this Lease as it
is acquired, constructed or equipped as the case may be, but only
to the extent and subject to the limitations set forth in
Section 2.6(b)(viii) of the Project Supervisory Agreement.
SECTION 2.4. TITLE. The Leased Property is leased to the Lessee
without any representation or warranty, express or implied (other
than with respect to the absence of Lessor Liens), by the Lessor
and subject to the rights of parties in possession, the existing
state of title with respect thereto and all Applicable Laws and
any violations thereof. The Lessee shall in no event have any
recourse against the Lessor for any defect in or exception to
title to the Leased Property or any Unit other than resulting
from Lessor Liens created by Lessor or a breach by the Lessor of
its obligations under Article XXI.
SECTION 2.5. CONTRACT MATTERS. Lessor hereby transfers to
Lessee and assigns without warranty of any kind, during the Term,
effective upon the Base Term Commencement Date and so long as no
Event of Default exists, any warranties made by the Manufacturers
with respect to the Equipment and each General Contractor or any
other Person under the Project Agreements with respect to the
Financed Improvements but excluding in each case Liquidated
Damages, which will be applied pursuant to Section 5.3(c)(iv) of
the Participation Agreement. If necessary, the Lessor will join
in any proceedings to enforce any such warranties or permit them
or any part thereof to be brought in its name if and so long as
(i) no Event of Default exists and (ii) the Lessee agrees in
writing to pay, and pays, all related expenses. Lessee hereby
acknowledges, and agrees to comply with and be bound by, the
limitations of liability of and protection of each Manufacturer,
each General Contractor and each other Person against liability
as and to the extent provided in the Equipment Contracts and each
Project Agreement. Lessee hereby further agrees to comply with
and be bound by the provisions of the Equipment Contracts
regarding the protection of proprietary information as and to the
extent provided in said contracts.
SECTION 2.6. [INTENTIONALLY DELETED].
SECTION 2.7. GROUND LEASES. (a) This Lease is and shall be at
all times subject to all of the terms, covenants and conditions
of the Ground Leases and shall in all respects be limited to the
estate granted to Lessor by Ground Lessor pursuant to the Ground
Leases. Excluding only the obligations with regard to the
payment of basic rental under the Ground Leases, Lessee assumes
and agrees to be bound by the terms of and to perform all of the
obligations and duties of Lessor under the Ground Leases. Lessee
shall not commit or permit to be committed any act or omission
which shall violate any terms, covenants or conditions of the
Ground Leases. Lessee agrees that it shall promptly forward to
Lessor any and all notices or other communications received by
Lessee from the Ground Lessor under the Ground Leases.
(b) Where any approval or consent shall be required of Lessor
pursuant to the provisions of this Lease, any other Operative
Document, or the Ground Leases, Lessor may, without limitation,
condition its approval or consent upon the obtaining of approval
or consent of the Ground Lessor, at Lessee's sole cost and
expense, where such consent or approval is, or may in the
reasonable opinion of Lessor be, required under the Ground
Leases. To the extent that the terms of the Ground Leases are
more restrictive than the terms of the Lease, the terms of the
Ground Leases shall be deemed incorporated herein as applicable.
(c) Lessor shall not agree to an amendment to or other
modification to the Ground Lease without the prior written
consent of Lessee, which consent Lessee may withhold in its sole
and absolute discretion.
ARTICLE III
PAYMENT OF RENT
SECTION 3.1. RENT. (a) During the Term, the Lessee shall pay
Basic Rent on each Payment Date, on the date required under
Section 20.1(i) in connection with the Lessee's exercise of the
Sale Option and on any date on which this Lease shall terminate
with respect to the Leased Property.
(b) The Lessee's inability or failure to take possession of
all or any portion of the Leased Property when accepted or deemed
accepted hereunder, whether or not attributable to any act or
omission of the Lessee or any act or omission of the Lessor,
shall not delay or otherwise affect the Lessee's obligation to
pay Rent in accordance with the terms of this Lease.
SECTION 3.2. PAYMENT OF BASIC RENT. Basic Rent shall be paid
absolutely net to the Lessor, so that this Lease shall yield to
the Lessor the full amount thereof, without setoff, deduction or
reduction.
SECTION 3.3. SUPPLEMENTAL RENT. The Lessee shall pay to the
Lessor or the Person entitled thereto any and all Supplemental
Rent promptly as the same shall become due and payable, and if
the Lessee fails to pay any Supplemental Rent, the Lessor shall
have all rights, powers and remedies provided for herein or by
law or equity or otherwise in the case of nonpayment of Basic
Rent. Lessee hereby reaffirms that its obligation to pay
Supplemental Rent shall include the payment of any and all
Contingent Rent. The Lessee shall pay to the Lessor, as
Supplemental Rent, among other things, on demand, to the extent
permitted by Applicable Laws, interest at the applicable Overdue
Rate on any installment of Basic Rent not paid when due for the
period for which the same shall be overdue and on any payment of
Supplemental Rent payable to the Lessor or any Indemnitee not
paid when due for the period from the due date until the same
shall be paid. The expiration or other termination of the
Lessee's obligations to pay Basic Rent hereunder shall not limit
or modify the obligations of the Lessee with respect to
Supplemental Rent. Unless expressly provided otherwise in this
Lease, in the event of any failure on the part of the Lessee to
pay and discharge any Supplemental Rent as and when due, the
Lessee shall also promptly pay and discharge any fine, penalty,
interest or cost which may be assessed or added under any
agreement with a third party for nonpayment or late payment of
such Supplemental Rent, all of which shall also constitute
Supplemental Rent.
SECTION 3.4. METHOD OF PAYMENT. Each payment of Rent shall be
made by the Lessee to the Administrative Agent prior to 2:00
p.m., New York City time to the account of the Administrative
Agent designated on Schedule III to the Participation Agreement
(or in the case of Excepted Payments directly to the Person
entitled thereto) in funds consisting of lawful currency of the
United States of America which shall be immediately available on
the scheduled date when such payment shall be due, unless such
scheduled date shall not be a Business Day, in which case such
payment shall be made on the next succeeding Business Day unless
the result of such extension would be to carry into another
calendar month, in which case such payment shall be made on the
immediately preceding Business Day. Payments received after 2:00
p.m. New York City time on the date due shall for the purpose of
Section 16.1 hereof be deemed received on such day; PROVIDED,
HOWEVER, that for the purposes of the second sentence of Section
3.3 hereof, such payments shall be deemed received on the next
succeeding Business Day and subject to interest at the Overdue
Rate as provided in such Section 3.3.
ARTICLE IV
QUIET ENJOYMENT; RIGHT TO INSPECT
SECTION 4.1. NON-INTERFERENCE. Subject to Section 4.2 hereof
and subject to Lessor's cure rights, as provided for in Section
17.1, Lessor covenants that it will not interfere or authorize
any person to interfere in Lessee's use or possession of the
Leased Property during the Term pursuant to the terms of this
Lease, the Lessee being granted the right to peaceful possession,
use and quiet enjoyment of the Leased Property, so long as no
Event of Default has occurred and is continuing, it being agreed
that Lessee's remedies for breach of the foregoing covenant shall
be limited to a claim for damages or the commencement of
proceedings to enjoin such breach or seek specific performance of
the covenant, as applicable. Such right is independent of and
shall not affect Lessee's obligations hereunder and under the
other Operative Documents or Lessor's rights otherwise to
initiate legal action to enforce the obligations of Lessee under
this Lease. The foregoing covenant shall not require Lessor to
take any action contrary to, or which would permit Lessee to use
the Leased Property for a use not permitted under the provisions
of this Lease.
SECTION 4.2. INSPECTION AND REPORTS. (a) Upon five (5) Business
Days' prior notice (or two (2) Business Day's prior notice during
the existence of an Event of Default) to Lessee, Lessor or its
authorized representatives (the "INSPECTING PARTIES") at any time
during the Term may inspect (a) the Leased Property and (b) the
books and records of Lessee relating to the Leased Property and
make copies and abstracts therefrom and may discuss the affairs,
finances and accounts with respect to the Leased Property with
Lessee's officers, Lessee's independent public accountants (and,
by this provision, Lessee authorizes and directs its independent
public accountants to discuss such matters with the Inspecting
Parties; PROVIDED, HOWEVER, that so long as no Event of Default
shall have occurred and be continuing, the Lessor and its
authorized representatives shall only be entitled to make one
inspection in any twelve (12) month period; PROVIDED, FURTHER,
that such limitation shall not be applicable during the period
following the exercise and continuance of the Sale Option by the
Lessee. All such inspections shall be during Lessee's normal
business hours, shall be subject to Lessee's customary safety and
security provisions and shall be at the expense and risk of the
Inspecting Parties, except that, if an Event of Default or
Default has occurred and is continuing, Lessee shall reimburse
the Inspecting Parties for the reasonable costs of such
inspections and such inspection shall be at Lessee's
expense. No inspection shall unreasonably interfere with
Lessee's operations. None of the Inspecting Parties shall have
any duty to make any such inspection or inquiry. None of the
Inspecting Parties shall incur any liability or obligation by
reason of making any such inspection or inquiry unless and to
the extent such Inspecting Party causes damage to the Leased
Property or any property of Lessee or any other Person during
the course of such inspection.
(b) To the extent permissible under Applicable Laws, during
the Term Lessee shall prepare and file in timely fashion, or,
where Lessor shall be required to file, Lessee shall prepare and
make available to Lessor within a reasonable time prior to the
date for filing and Lessor shall file, any reports with respect
to the condition or operation of the Leased Property that shall
be required to be filed with any Governmental Authority.
ARTICLE V
NET LEASE, ETC.
SECTION 5.1. NET LEASE, ETC. This Lease shall constitute
a net lease and Lessee's obligations hereunder to pay Rent shall
be absolute and unconditional under any and all circumstances.
Any present or future law to the contrary notwithstanding, this
Lease shall not terminate, nor shall the Lessee be entitled to
any abatement, suspension, deferment, reduction, setoff,
counterclaim, or defense (except prior payment in full of all
Obligations then due and payable) with respect to the Rent
(except as expressly provided herein at Section 12.1 to the
extent a Permitted Contest thereunder relates to the payment of
Supplemental Rent to a Person other than Administrative Agent,
Lessor or any Participant), nor shall the obligations of the
Lessee hereunder be affected (except as expressly herein
permitted and by performance of the obligations in connection
therewith) by reason of: (i) any defect in the condition,
merchantability, design, construction, quality or fitness for use
of the Leased Property or any part thereof, or the failure of the
Leased Property to comply with all Applicable Laws, including any
inability to use the Leased Property by reason of such non-
compliance; (ii) any damage to, removal, abandonment, salvage,
loss, contamination of, or Release from, scrapping or destruction
of or any requisition or taking of the Leased Property or any
part thereof; (iii) any restriction, prevention or curtailment of
or interference with any use of the Leased Property or any part
thereof; (iv) any defect in title to or rights to the Leased
Property or any Lien on such title or rights or on the Leased
Property (PROVIDED, that the foregoing shall not relieve any
Person from its responsibility to remove Lessor Liens
attributable to it); (v) any change, waiver, extension,
indulgence or other action or omission or breach in respect of
any obligation or liability of or by the Lessor, the
Administrative Agent or any Participant; (vi) to the fullest
extent permitted by Applicable Laws, any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation
or other like proceedings relating to the Lessee, the Lessor, the
Administrative Agent, any Participant or any other Person, or any
action taken with respect to this Lease by any trustee or
receiver of the Lessee, the Lessor, the Administrative Agent, any
Participant or any other Person, or by any court, in any such
proceeding; (vii) any claim that the Lessee has or might have
against any Person, including without limitation any Participant,
or any vendor, manufacturer, contractor of or for the Leased
Property, including any Manufacturer or General Contractor;
(viii) any failure on the part of the Lessor to perform or comply
with any of the terms of this Lease, of any other Operative
Document or of any other agreement; (ix) any invalidity or
unenforceability or illegality or disaffirmance of this Lease
against or by the Lessee
or any provision hereof or any of the other Operative Documents
or any provision of any thereof; (x) the impossibility or
illegality of performance by the Lessee, the Lessor or both;
(xi) any action by any court, administrative agency or other
Governmental Authority; (xii) any restriction, prevention or
curtailment of or interference with the Construction on
or use of the Leased Property or any part thereof;
(xiii) the failure of Lessee or any of its Affiliates to
achieve any accounting or tax benefits or the characterization of
the transaction intended by the parties as set forth at Section
24.1 hereof and Section 5.1 of the Participation Agreement; or
(xiv) any other cause or circumstances whether similar or
dissimilar to the foregoing and whether or not the Lessee shall
have notice or knowledge of any of the foregoing. The Lessee's
agreement in the preceding sentence shall not affect or waive any
claim, action or right the Lessee may have against any Person.
The parties intend that the obligations of the Lessee hereunder
shall be covenants and agreements that are separate and
independent from any obligations of the Lessor hereunder or under
any other Operative Documents and the obligations of the Lessee
shall continue unaffected unless such obligations shall have been
modified or terminated in accordance with an express provision of
this Lease.
SECTION 5.2. NO TERMINATION OR ABATEMENT. The Lessee shall
remain obligated under this Lease in accordance with its terms
and the terms of the other Operative Documents and shall not take
any action to terminate, rescind or avoid this Lease (except as
pursuant to the terms of this Lease and the other Operative
Documents) to the fullest extent permitted by Applicable Laws,
notwithstanding any action for bankruptcy, insolvency,
reorganization, liquidation, dissolution, or other proceeding
affecting the Lessor, the Administrative Agent or any
Participant, or any action with respect to this Lease which may
be taken by any trustee, receiver or liquidator of the Lessor,
the Administrative Agent or any Participant or by any court with
respect to the Lessor, the Administrative Agent or any
Participant. The Lessee hereby waives, to the extent permitted
by Applicable Law, all right to terminate or surrender this Lease
(except as provided herein) or to avail itself of any abatement,
suspension, deferment, reduction, setoff, counterclaim or defense
(other than prior payment in full of all Obligations then due and
payable) with respect to any Rent (except as expressly permitted
in this Lease at Section 12.1 to the extent a Permitted Contest
thereunder relates to the payment of Supplemental Rent to a
Person other than Administrative Agent, Lessor or any
Participant). The Lessee shall remain obligated under this Lease
in accordance with its terms and the terms of the other Operative
Documents and the Lessee hereby waives, to the extent permitted
by Applicable Law, any and all rights now or hereafter conferred
by statute or otherwise to modify or to avoid strict compliance
with its obligations under this Lease. Notwithstanding any such
statute or otherwise, the Lessee shall be bound by all of the
terms and conditions contained in this Lease.
ARTICLE VI
ASSIGNMENTS, SUBLEASES AND DELEGATIONS
Except for subleases permitted by this Article VI, Lessee
may not assign, mortgage, pledge or otherwise transfer to any
Person, including an Affiliate of Lessee, at any time, in whole
or in part, any of its right, title or interest in, or
obligations to or under this Lease and any other Operative
Document or to any portion of the Leased Property (except a
purchase or sale of the Leased Property as permitted hereby and
by the Project Supervisory Agreement), in any case
without the prior written consent of the Lessor and each
Participant not to be unreasonably withheld, and any such
assignment, mortgage or pledge shall be void.
Except for the leasehold interest granted to Lessor pursuant
to the Ground Lease and as expressly permitted in this Article
VI, Lessee may not, unless the consent of Lessor is granted,
sublease, in whole or in part, any of its right, title or
interest in, to or under this Lease or any portion of the Leased
Property to any Person except that, notwithstanding the
foregoing, following the Base Term Commencement Date, Lessee may,
so long as no Event of Default exists, enter into subleases to an
Affiliate of Lessee. With respect to any sublease permitted
under this Article VI, Lessee shall not sublease any portion of
the Leased Property to, or permit the sublease of any portion of
the Leased Property by, any Person who shall then be engaged in
any proceedings for relief under any bankruptcy or insolvency law
or laws relating to the relief of debtors. Any Leased Property
subleased pursuant to this Article VI must be used and operated
in place at the Site, subject to the terms and conditions of this
Lease.
No sublease hereunder will (a) discharge or diminish any of
Lessee's obligations to Lessor hereunder or to any other Person
under any other Operative Document, and Lessee shall remain
directly and primarily liable under the Lease with respect to all
of the Leased Property or (b) extend beyond the last day of the
Term. Each sublease permitted hereby shall be made and shall
expressly provide that it is subject and subordinate to this
Lease and the rights of Lessor hereunder, and shall expressly
provide for the surrender of the Leased Property subleased by the
applicable sublessee at the election of Lessor after an Event of
Default.
Lessee shall give Lessor prompt written notice of any
sublease permitted under this Article VI, and Lessee shall,
within fifteen (15) days after execution of any sublease, deliver
to the Administrative Agent a fully executed copy of such
sublease.
ARTICLE VII
LESSEE ACKNOWLEDGMENTS
SECTION 7.1. CONDITION OF THE LEASED PROPERTY. The Lessee
acknowledges and agrees that although the Lessor will own and
hold title to the Leased Property, the Lessee, acting as agent,
is solely responsible under the terms of the Project Supervisory
Agreement (i) subject to the terms of the Equipment Contracts,
for the design, development, budgeting and manufacture of the
Equipment, (ii) for the design, development, budgeting and
construction of the financed improvements, and (iii) any
alterations or modifications and all activities conducted in
connection therewith. the Lessee further acknowledges and agrees
that it is leasing the property "as is" without representation,
warranty or covenant (express or implied) by the Lessor, the
Administrative Agent or the Participants and in each case subject
to (a) the existing state of title (excluding lessor liens),
(b) the rights of any parties in possession thereof, (c) any
state of facts which an accurate survey or a physical inspection
might show, and (d) violations of requirements of law with
respect to the leased Property, Lessee or its operations on or
with respect to the Leased Property which may exist on the date
hereof or on the acquisition date for the Leased Property. None
of the Lessor, any Agent or any of the Participants has made or
shall be deemed to have made any representation,
warranty or covenant (express or implied except as expressly
provided in the Operative Documents) or shall be deemed to
have any liability whatsoever as to the title (other than for
lessor liens), value, habitability, use, condition, design,
operation, or fitness for use of the Leased Property (or any
part thereof), or any other representation, warranty or
covenant whatsoever, express or implied, with respect to
the Leased Property (or any part thereof) and none of the
Lessor, the Administrative Agent or the Participants shall be
liable for any latent, hidden, or patent defect therein (other
than for Lessor Liens) or the failure of the Leased Property,
or any part thereof, to comply with any applicable laws. All
risks incident to the matters discussed in the preceding
sentence, as between Lessor, the Administrative
Agent and the Participants, on the one hand, and Lessee, on the
other, are to be borne by Lessee. The provisions of this Section
7.1 have been negotiated, and, except to the extent otherwise
expressly stated, the foregoing provisions are intended to be a
complete exclusion and negation of any representations or
warranties by any of Lessor, the Administrative Agent or the
Participants, express or implied, with respect to the Leased
Property (or any interest therein), that may arise pursuant to
any law now or hereafter in effect or otherwise.
SECTION 7.2. RISK OF LOSS. During the Term and subject to the
limitations set forth in Section 3.2(c) of the Project
Supervisory Agreement, as between Lessee and Lessor, the risk of
loss of or decrease in the enjoyment and beneficial use of the
Leased Property as a result of the damage or destruction thereof
by fire, the elements, casualties, thefts, riots, wars or
otherwise is assumed by the Lessee, and the Lessor shall in no
event be answerable or accountable therefor.
SECTION 7.3. CERTAIN DUTIES AND RESPONSIBILITIES OF LESSOR.
Lessor undertakes to perform such duties and only such duties as
are specifically set forth herein and in the other Operative
Documents, and no implied covenants or obligations shall be read
into this Lease against Lessor, and Lessor agrees that it shall
not, nor shall it have a duty to, manage, control, use, sell,
maintain, insure, register, lease, operate, modify, dispose of or
otherwise deal with the Leased Property or any other part of the
Trust Estate in any manner whatsoever, except as required by the
terms of the Operative Documents and as otherwise provided
herein.
ARTICLE VIII
POSSESSION AND USE OF THE PROPERTY, ETC.
SECTION 8.1. POSSESSION AND USE OF THE LEASED PROPERTY. Lessee
agrees that the Leased Property will be used solely in the
conduct of its business at the Site. At all times during the
Term, the Leased Property shall remain in the possession and
control of Lessee or a sublessee or assignee permitted hereunder;
PROVIDED, HOWEVER that portions of the Equipment may be moved
from the Site for maintenance, repair or replacement provided any
such maintenance, repair or replacement is promptly undertaken
and diligently completed and such Equipment is returned to the
Site as promptly as reasonably practicable thereafter. Lessee
warrants that the Leased Property will at all times be used and
operated under and in compliance in all material respects with
the terms of the Equipment Contracts and any other contracts or
agreements applicable to the use or operation of the Leased
Property or any portion thereof to which Lessee is a party or by
which Lessee is
bound, or to the extent contemplated by the
Operative Documents or, as a result of any action or omission of
Lessee, to which Lessor is a party or by which Lessor is bound
and in a manner consistent with the standards applied by the
Lessee for Lessee's or its Affiliates' other power generation
facilities. Lessee shall not use the Leased Property or any part
thereof for any purpose or in any manner that would materially
adversely affect the Fair Market Value, utility, remaining useful
life or residual value of the Leased Property, ordinary wear and
tear excepted. Lessee assumes and agrees to pay all fees,
charges, costs, assessments, impositions, utilities and other
amounts which relate to or arise during the Term in connection
with use of the Leased Property. All such charges for utilities
imposed with respect to the Leased Property for a billing period
during which this Lease expires or terminates (except when Lessee
purchases the Leased Property in accordance with the terms of
this Lease, in which case Lessee shall be solely responsible for
all such charges) shall be adjusted and prorated on a daily basis
between Lessee and any purchaser of the Leased Property, and each
party shall pay or reimburse the other for each party's PRO RATA
share thereof; PROVIDED, that in no event shall Lessor have any
liability therefor.
SECTION 8.2. COMPLIANCE WITH REQUIREMENTS OF LAW AND INSURANCE
REQUIREMENTS. Subject to the terms of Article XII relating to
permitted contests, the Lessee, at its sole cost and expense,
shall comply in all material respects with all Applicable Laws
(including all Environmental Laws), Insurance Requirements and
manufacturer's operating standards and guidelines relating to the
Leased Property, including the use, construction and operation
thereof whether or not compliance therewith shall require
structural or extraordinary changes in the Leased Property or
interfere with the use and enjoyment of the Leased Property, and
procure, maintain and comply in all material respects with all
licenses, permits, orders, approvals, consents and other
authorizations required for the use, operation, maintenance,
repair and restoration of the Leased Property.
ARTICLE IX
MAINTENANCE AND REPAIR; REPORTS
SECTION 9.1. MAINTENANCE AND REPAIR. On and after the Base Term
Commencement Date, Lessee, at its own expense, shall at all times
and in all material respects (a) maintain the Leased Property in
good operating condition, subject to ordinary wear and tear, and
in at least as good as the condition of similar property owned or
leased by Lessee or its Affiliates and in good repair and
condition; (b) maintain the Leased Property in accordance with
Prudent Industry Practice and, in any event, in accordance with
all Applicable Laws and Industry Standards affecting the Leased
Property; (c) maintain the Leased Property in compliance with the
Insurance Requirements and, to the extent necessary to preserve
the validity of the manufacturer warranties, all manufacturer's
suggested maintenance standards which are in effect and to the
extent applicable at any time with respect to the Leased Property
or any part thereof; (d) make all necessary or appropriate
repairs, replacements, restorations and renewals of the Leased
Property or any part thereof which may be required to keep the
Leased Property in the condition required by the preceding
clauses (a) through (c), structural or nonstructural, ordinary or
extraordinary, foreseen or unforeseen, and including, without
limitation, repairs, replacements, restorations and renewals; and
(e) procure, maintain and comply with all material licenses,
permits, orders, approvals, consents and other authorizations
required for the maintenance, use and operation, in the ordinary
course of the Lessee's business, of the Leased Property. Lessee
waives any right that it may now have or hereafter acquire to
(x) require Lessor to maintain, repair, replace,
restore, alter, remove or rebuild all or any part of the
Leased Property or (y) make repairs at the expense of
Lessor pursuant to any Applicable Laws or other agreements.
SECTION 9.2. MAINTENANCE AND REPAIR REPORTS. On and after the
Base Term Commencement Date, Lessee shall keep maintenance and
repair reports in sufficient detail, at least on the same basis
as records are kept for similar properties owned or leased by
Lessee or any of its Affiliates (other than reporting
requirements which are applicable only to a regulated utility),
to indicate the nature and date of major work done at or to the
Leased Property. Such reports shall be kept on file by Lessee,
and shall be made available to Lessor upon reasonable request.
Lessee shall give written notice to Lessor of any Event of Loss
promptly after Lessee has knowledge thereof.
ARTICLE X
MODIFICATION, ETC.
SECTION 10.1. IMPROVEMENTS AND MODIFICATIONS. (a) In addition to
Lessee's obligations as Supervisory Agent under the Project
Supervisory Agreement, on and after the Base Term Commencement
Date, (i) Lessee, at Lessee's own cost and expense, shall make
alterations, renovations, improvements and additions to the
Leased Property or any part thereof and substitutions and
replacements therefor (collectively, "MODIFICATIONS") which are
(A) necessary to repair or maintain the Leased Property in the
condition required by Section 9.1; (B) necessary in order for the
Leased Property to be in compliance with Applicable Laws in all
material respects; or (C) necessary or advisable to restore the
Leased Property to its condition existing prior to a Casualty or
Condemnation to the extent required pursuant to Article XIV; and
(ii) so long as no Event of Default or Default has occurred and
is continuing, Lessee, at Lessee's own cost and expense, may
undertake Modifications to the Leased Property so long as such
Modifications comply in all material respects with Applicable
Laws and with Section 9.1 and subsection (b) of this
Section 10.1.
(b) The making of any Modifications must be in compliance
with the following requirements:
(i) No such Modifications with a cost exceeding
$10,000,000, other than scheduled maintenance to the
Equipment required by the Manufacturers' operating standards
and guidelines or reasonably anticipated repairs or
replacements, shall be made or undertaken except upon not
less than thirty days' prior written notice to Lessor.
(ii) No Modifications shall be undertaken (x) in
violation in any material respect of the terms of any
restriction, easement, condition, covenant or other similar
matter affecting title to or binding on the Leased Property
or (y) until Lessee shall have procured and paid for, so far
as the same may be required from time to time, all material
permits and authorizations to such Modifications of all
Governmental Authorities having jurisdiction. Lessor, at
Lessee's expense, shall join in the application for any such
permit or authorization and execute and deliver any document
in connection therewith, whenever such joinder is necessary
or advisable.
(iii) The Modifications shall be completed in a good and
workmanlike manner and in compliance in all material
respects with all Applicable Laws then in effect and the
standards imposed by any insurance policies required to be
maintained hereunder or the manufacturer in order to
maintain all warranties, and all Modifications must be
located solely on the Site.
(iv) All Modifications shall, when completed, be of
such a character as to not materially adversely affect the
Fair Market Value, utility, remaining economic useful life
or residual value of the Leased Property from the Fair
Market Value, utility, remaining economic useful life or
residual value thereof immediately prior to the making
thereof or, in the case of Modifications being made by
virtue of a Casualty or Condemnation, immediately prior to
the occurrence of such Casualty or Condemnation. If any
such Modification has a cost exceeding $15,000,000 and if
requested by the Required Participants, Lessor may obtain a
report from the Independent Engineer or, at the option of
the Required Participants, engage an appraiser of nationally
recognized standing, at Lessee's sole cost and expense, to
determine (by appraisal or other methods satisfactory to the
Required Participants) the projected Fair Market Value of
the Leased Property following completion of the
Modifications relating thereto.
(v) Lessee shall have made adequate arrangements for
payment of the cost of all Modifications when due so that
the Leased Property shall at all times be free of Liens for
labor and materials supplied or claimed to have been
supplied to the Leased Property, other than Permitted Liens.
(c) Notwithstanding the foregoing, following the Base Term
Commencement Date, Lessee, at its sole cost and expense, may make
emergency expenditures for Modifications that otherwise comply
with the requirements of this Section 10.1, even if such
Modifications are not scheduled or reasonably anticipated or the
cost thereof exceed the amounts set forth above, if any, provided
Lessee has promptly given Lessor notice promptly following the
earlier of such expenditure or Modification (which notice shall
describe the amount and type of such expenditures, the
Modifications made or to be made, and certifying that such
Modifications otherwise comply with the requirements of this
Section 10.1). The term "EMERGENCY EXPENDITURES" means
expenditures necessary to prevent damage or injury to (or loss
of) the Leased Property or any portion thereof or to prevent
exposing any person or entity to damage or injury or to prevent
any other act or omission which would, in the good faith judgment
of Lessee expose Lessee, Lessor, Administrative Agent or any of
the Participants to an unreasonable or unwarranted risk of loss,
damage, or injury or to comply with Applicable Law.
SECTION 10.2. TITLE TO MODIFICATIONS. Title to the following
described Modifications shall, without further act, vest in
Lessor and shall be deemed to constitute a part of the Leased
Property and be subject to this Lease:
(a) any Modifications commenced prior to the Base Term
Commencement Date for the Financed Improvements or which are
otherwise Funded by the Participants;
(b) Modifications that are in replacement of or in
substitution for a portion of any item of Leased Property;
(c) Modifications that are required to be made
pursuant to the terms of Section 10.1(a)(i) hereof; or
(d) Modifications that are Nonseverable.
Lessee, at Lessor's request, shall execute and deliver any
deeds, bills of sale, assignments or other documents of
conveyance reasonably necessary to evidence the vesting of title
in and to such Modifications to Lessor.
If such Modifications are not within any of the categories
set forth in clauses (a) through (d) of this Section 10.2, then
title to such Modifications shall vest in Lessee and such
Modifications shall not be deemed to be Modifications which are
part of the Leased Property.
All Modifications to which Lessee shall have title may, so
long as removal thereof shall not result in the violation of any
Applicable Laws, shall not adversely affect the Lessee's ability
to comply with its obligations under this Lease or any other
Operative Document, and no Event of Default or Default is
continuing, be removed at any time by Lessee. Lessee agrees to
notify Lessor in writing at least 30 days before it removes any
such Modifications which individually or in the aggregate had an
original cost exceeding $5,000,000, and Lessee shall at its
expense repair any damage to the Leased Property caused by the
removal of such Modifications. Lessor (or the purchaser of the
Leased Property) may purchase from Lessee any such Modifications
(if not already owned by Lessor) that Lessee intends to remove
from the Leased Property prior to the return of the Leased
Property to Lessor or sale of the Leased Property, which purchase
shall be at the Fair Market Value of such Modifications as
determined by the Appraiser at the time of such purchase. Title
to any such Modifications shall vest in Lessor (or the purchaser
of the applicable Leased Property) if not removed from the Leased
Property by Lessee prior to the return of the Leased Property to
Lessor or sale of the Leased Property.
ARTICLE XI
COVENANTS WITH RESPECT TO LIENS AND EASEMENTS
SECTION 11.1. COVENANTS WITH RESPECT TO LIENS. (a) During the
Term and subject to Section 12.1 hereof, Lessee will not directly
or indirectly create, incur, assume or suffer to exist any Lien
(other than Permitted Liens) on or with respect to any portion of
the Leased Property, Lessor's title thereto, or any interest
therein. Lessee, at its own expense, will promptly pay, satisfy
and otherwise take such actions as may be necessary to keep the
Leased Property free and clear of, and duly to discharge,
eliminate or bond in a manner reasonably satisfactory to Lessor
and the Administrative Agent, any such Lien (other than Permitted
Liens) if the same shall arise at any time.
(b) Nothing contained in this Lease shall be construed as
constituting the consent or request of the Lessor, expressed or
implied, to or for the performance by any contractor, mechanic,
laborer, materialman, supplier or vendor of any labor or services
or for the furnishing
of any materials for any construction, alteration, addition,
repair, restoration or demolition of or to the Leased Property
or any part thereof. notice is hereby given that none of the
Lessor, Administrative Agent or the Participants is or shall
be liable for any labor, services or materials furnished
or to be furnished to the Lessee, or to anyone holding
the Leased Property or any part thereof through or under the
Lessee, and that no mechanic's or other liens for any such labor,
services or materials shall attach to or affect the interest of
the Lessor, the Administrative Agent or any Participant in and to
the Leased Property.
SECTION 11.2. LESSEE'S GRANTS AND RELEASES OF EASEMENTS; LESSOR'S
WAIVERS. Following the Base Term Commencement Date and
PROVIDED that no Default or Event of Default shall have occurred
and be continuing, and subject to the provisions of Articles VII,
IX and X and Section 8.2, and without the requirement of any
further instrument or action of the Lessor, the Lessor hereby
consents in each instance to the following actions by the Lessee
in the name and stead of the Lessor and as the true and lawful
attorney-in-fact of the Lessor with full power and authority to
execute documents on behalf of the Lessor for the following
purposes, but at the Lessee's sole cost and expense: (a) the
granting of, or entry into agreements in connection with,
easements, licenses, rights-of-way, building and use restrictions
and covenants and other rights and privileges in the nature of
easements or similar interests and burdens reasonably necessary
or desirable for the use, repair, maintenance or protection of
the Leased Property as herein provided; (b) the release of
existing easements or other rights in the nature of easements
which are for the benefit of, or burden to, the Leased Property;
(c) the execution of amendments to, or waivers or releases of,
any easements, licenses or covenants and restrictions affecting
the Site; and (d) the exercise of all rights under any
redevelopment agreement or document contemplated thereby
affecting the Site; provided, however, that in each case (i) such
grant, release, dedication, transfer, amendment, agreement or
other action does not materially impair the value, utility,
residual value or remaining useful life of the Leased Property,
(ii) such grant, release, dedication, transfer, amendment,
agreement or other action in the Lessee's judgment is reasonably
necessary in connection with the use, maintenance, alteration or
improvement of the Leased Property, (iii) such grant, release,
dedication, transfer, amendment, agreement or other action will
not cause the Leased Property or any portion thereof to fail to
comply with the provisions of this Lease or any other Operative
Documents and in all material respects, Applicable Laws
(including, without limitation, all applicable zoning, planning,
building and subdivision ordinances, all applicable restrictive
covenants and all applicable architectural approval
requirements); (iv) all governmental consents or approvals
required prior to such grant, release, dedication, transfer,
amendment, agreement or other action have been obtained, and all
filings required prior to such action have been made; (v) the
Lessee shall remain obligated under this Lease and under any
instrument executed by the Lessee consenting to the assignment of
the Lessor's interest in this Lease as security for indebtedness,
in each such case in accordance with their terms, as though such
grant, release, dedication, transfer, amendment, agreement or
other action had not been effected; and (vi) the Lessee shall
timely pay and perform any obligations of the Lessor under such
grant, release, dedication, transfer, amendment, agreement or
other action. Without limiting the effectiveness of the
foregoing, PROVIDED, that no Default or Event of Default shall
have occurred and be continuing, the Lessor shall, upon the
request of the Lessee, and at the Lessee's sole cost and expense,
execute and deliver any instruments necessary or appropriate to
confirm any such grant, release, dedication, transfer, amendment,
agreement or other action to any Person permitted under this
Section.
ARTICLE XII
PERMITTED CONTESTS
SECTION 12.1. PERMITTED CONTESTS IN RESPECT OF LIENS AND
APPLICABLE LAWS. If, to the extent and for so long as a test,
challenge, appeal or proceeding for review of a Lien or any
Applicable Laws relating to the Leased Property or any part
thereof or the obligation to comply therewith shall be prosecuted
diligently and in good faith in appropriate proceedings by the
Lessee, during the Term, Lessee shall not be required to pay or
discharge such Lien or comply with such Applicable Laws but only
if and so long as any such test, challenge, appeal, proceeding,
waiver, extension, forbearance or noncompliance shall not, in the
reasonable opinion of the Lessor and the Administrative Agent
involve (A) any risk of criminal liability being imposed on the
Lessor, any Agent, any Participant or any item of Leased Property
or (B) any material risk of (1) the foreclosure, forfeiture or
loss of the Leased Property, or any material part thereof, (2)
the nonpayment of Rent, (3) any sale of, or the creation of any
Lien (other than a Permitted Lien) on, any material part of the
Leased Property (PROVIDED, HOWEVER, nothing herein shall be
deemed to reduce or diminish Lessee's obligations at Section
11.1), (4) civil or criminal liability being imposed on the
Lessor, the Administrative Agent, any Participant or any material
part of the Leased Property for which the Lessee is not obligated
to indemnify such parties under the Operative Documents, or
(5) enjoinment of, or interference with, the use, possession or
disposition of the Leased Property in any material respect.
The Lessor shall, at the written request of the Lessee and
at the Lessee's sole cost and expense, execute and deliver to the
Lessee such authorizations and other documents as may be
reasonably required in such test, challenge, appeal or
proceeding. The Lessor will not be required to join in any
proceedings pursuant to this Section 12.1 unless a provision of
any Applicable Laws requires that such proceedings be brought by
or in the name of the Lessor; and in that event the Lessor will
join in the proceedings or permit them or any part thereof to be
brought in its name if and so long as (i) the Lessee has not
elected the Sale Option and (ii) the Lessee agrees in writing to
pay, and pays, all related expenses and agrees in writing to
indemnify the Lessor, the Administrative Agent and the
Participants, in form and substance reasonably satisfactory to
each of the respective Indemnitees, in respect of any claim
relating thereto.
ARTICLE XIII
INSURANCE
SECTION 13.1. REQUIRED COVERAGES. To the extent required below,
during the Term, Lessee will provide or cause to be provided
insurance with respect to the Leased Property of a character
consistent with Lessee's insurance programs for similar equipment
owned or leased by Lessee or its Affiliates and in keeping with
Prudent Industry Practice; PROVIDED, that in any event Lessee
will maintain at all times:
(a) GENERAL LIABILITY INSURANCE. Combined single
limit insurance against claims for third-party bodily
injury, including death, and third-party property damage
occurring as a result of the ownership, use, maintenance or
operation of the Leased Property in an amount at least equal
to $50,000,000 per claim made. Such coverage may be subject
to deductibles or self-insured retentions up to an amount
that is consistent with Lessee's insurance programs for
similar property owned or leased by Lessee or its Affiliates
and in keeping with Prudent Industry Practice.
(b) PROPERTY INSURANCE. Insurance against loss of or
damage to the Leased Property or any portion thereof by
reason of any peril in an amount consistent with Lessee's
insurance program for similar equipment owned or leased by
Lessee, in keeping with Prudent Industry Practice (subject
to such deductibles and/or self-insurance in such minimum
amounts as is consistent with Lessee's insurance program for
similar property owned or leased by Lessee or its
Affiliates, in keeping with Prudent Industry Practice;
PROVIDED, HOWEVER, that at no time shall the amount of such
coverage be less than the replacement cost of the Leased
Property.
(c) OTHER INSURANCE. Lessee shall at all times
maintain, or cause to be maintained, such other insurance as
is required by Applicable Law governing the Lessee or the
Leased Property. Additionally, Lessee shall provide such
other coverages as Lessee, Lessor and Administrative Agent
may mutually agree.
SECTION 13.2. INSURANCE COVERAGE. The insurance coverage
required in Section 13.1 shall be written by reputable insurance
companies that are financially sound and solvent and otherwise
reasonably appropriate considering the amount and type of
insurance being provided by such companies. Any insurance
company selected by Lessee shall be rated in A.M. Best's
Insurance Guide or any successor thereto (or if there be none, an
organization having a similar national reputation) and shall have
a general policyholder rating of "A" (or comparable rating for a
rating by an organization other than A.M. Best) and a financial
rating of at least "X" (or comparable rating for a rating by an
organization other than A.M. Best) or be otherwise acceptable to
the Required Participants. In the case of liability insurance
maintained by Lessee, it shall name Lessor (both in its
individual capacity and as Lessor), the Administrative Agent and
each of the Participants, as additional insureds and, in the case
of property insurance maintained by Lessee, it shall name
Administrative Agent, as mortgagee and sole loss payee. Each
policy referred to in Section 13.1 shall provide that: (i) it
will not be canceled, materially modified or its limits reduced,
or allowed to lapse without renewal, except after not less than
30 days' prior written notice to Lessor and Administrative Agent;
(ii) the interests of Lessor, the Administrative Agent and any
Participant shall not be invalidated by any act or negligence of
or breach of warranty or representation by Lessee or any other
Person having an interest in the Leased Property; (iii) such
insurance is primary with respect to any other insurance carried
by or available to Lessor, the Administrative Agent or any
Participant; (iv) the insurer shall waive any right of
subrogation, setoff, counterclaim, or other deduction, whether by
attachment or otherwise, against Lessor; and (v) such policy
shall contain a cross-liability clause providing for coverage of
Lessor, the Administrative Agent and each Participant, as if
separate policies had been issued to each of them. Lessee will
notify Lessor and Administrative Agent promptly of any policy
cancellation, reduction in policy limits, modification or
amendment.
SECTION 13.3. DELIVERY OF INSURANCE CERTIFICATES. On the Base
Term Commencement Date, Lessee shall deliver to Administrative
Agent certificates of insurance satisfactory to Administrative
Agent evidencing the existence of all insurance required to be
maintained hereunder and setting forth the respective coverages,
limits of liability, carrier, policy number and period of
coverage. Thereafter, upon written request by Lessor following
an Event of Default, Lessee shall deliver to Administrative Agent
certificates of insurance evidencing that all insurance required
by Sections 13.1 and 13.2 to be maintained by Lessee is in
effect.
SECTION 13.4. INSURANCE BY LESSOR, ADMINISTRATIVE AGENT OR ANY
PARTICIPANT. Each of Lessor, the Administrative Agent or any
Participant may at its own expense carry insurance with respect
to its interest in the Leased Property, and any insurance
payments received from policies maintained by Lessor, the
Administrative Agent or any Participant shall be retained by
Lessor, the Administrative Agent or such Participant, as the case
may be, without reducing or otherwise affecting Lessee's
obligations hereunder.
ARTICLE XIV
CASUALTY AND CONDEMNATION
SECTION 14.1. CASUALTY AND CONDEMNATION. (a) Subject to the
provisions of this Article XIV, if all or any portion of the
Leased Property suffers a Casualty (other than a Significant
Casualty as to which a Termination Notice has been given), Lessee
shall control the negotiations with the relevant insurer unless
an Event of Default exists and any insurance proceeds payable
with respect to such Casualty shall be paid directly to the
Lessee, or if received by the Lessor, the Administrative Agent or
the Lenders, shall be paid over to the Lessee and shall be used
by Lessee solely for the reconstruction, restoration and repair
of such Leased Property, and if the use of, access to, occupancy
of or title to the Leased Property or any part thereof is the
subject of a Condemnation (other than a Significant Condemnation
as to which a Termination Notice has been given), then any award
or compensation relating thereto shall be paid to the Lessee and
shall be used by Lessee solely for the restoration of the Leased
Property. Notwithstanding the foregoing, if any Event of
Default, or Default in respect of payment obligations of the
Lessee, shall have occurred and be continuing, such award,
compensation or insurance proceeds shall be paid directly to the
Administrative Agent or, if received by the Lessee, shall be held
in trust for the Participants and shall be paid over by the
Lessee to the Administrative Agent. All amounts held by the
Lessor or the Administrative Agent on account of any award,
compensation or insurance proceeds either paid directly to the
Lessor or the Administrative Agent or turned over to the Lessor
or the Administrative Agent, in each case after the occurrence
and during the continuance of an Event of Default shall at the
option of the Lessor (at the direction of the Required
Participants) either be (A) paid to the Lessee for the repair of
damage caused by such Casualty or Condemnation in accordance with
this clause (a), or (B) applied to the Lease Balance and any
other amounts owed by Lessee under the Operative Documents in
accordance with Article XVI.
(b) In the event any part of the Leased Property becomes
subject to condemnation or requisition proceedings during the
Term, Lessee shall give notice thereof to Lessor promptly after
Lessee has knowledge thereof and, to the extent permitted by
Applicable Laws, Lessee shall control the negotiations with the
relevant Governmental Authority unless an Event of Default
exists; PROVIDED, that in any event, Lessor may participate at
Lessor's expense (or if an Event of Default exists Lessor may
control or participate at Lessee's expense) in such negotiations;
and PROVIDED in all cases, that no settlement will be made
without Lessor's prior written consent (which consent shall not
be unreasonably withheld or delayed). Lessee shall give to
Lessor such information, and copies of such documents, which
relate to such proceedings, or which relate to the settlement of
amounts due under insurance policies required by Article XIII,
and are in the possession of Lessee, as are reasonably requested
by Lessor. If the proceedings relate to a Significant
Condemnation, Lessee shall act diligently in connection
therewith. Nothing contained in this Section 14.1(b) shall
diminish Lessor's rights with respect to condemnation awards and
property insurance proceeds under Articles XIII or XIV.
(c) In no event shall a Casualty or Condemnation affect the
Lessee's obligations to pay Rent pursuant to Section 3.1 or to
perform its obligations and pay any amounts due on the Expiration
Date or pursuant to Articles XVIII and XXI.
(d) If, pursuant to this Article XIV, this Lease shall
continue in full force and effect following a Casualty or
Condemnation, the Lessee shall, at its sole cost and expense
(and, without limitation, if any award, compensation or insurance
payment is not sufficient to restore the Leased Property in
accordance with this clause (d), Lessee shall pay the shortfall),
promptly and diligently repair any damage to the Leased Property
caused by such Casualty or Condemnation in conformity with the
requirements of Sections 9.1 and 10.1 so as to restore the Leased
Property to at least the same condition and value as existed
immediately prior to such Casualty or Condemnation. In such
event, title to the Leased Property shall remain with the Lessor
subject to the terms of this Lease. Upon completion of such
restoration, the Lessee shall furnish to Lessor a Responsible
Officer's Certificate confirming that such restoration has been
completed pursuant to this Lease.
SECTION 14.2. ENVIRONMENTAL MATTERS. Subject to Section 12.1
hereof, at Lessee's sole cost and expense, Lessee shall in a
reasonably prompt and diligent manner undertake any response,
clean up, remedial or other action to remove, clean up or
remediate any Environmental Violation to the extent required by
Applicable Laws with respect to the Leased Property.
SECTION 14.3. NOTICE OF ENVIRONMENTAL MATTERS. Lessee shall
promptly provide to Lessor written notice of any pending or
threatened claim, action or proceeding of which it has received
written notice involving any Environmental Violation or any
Release on, at, under or from Leased Property, which violation or
Release could reasonably be expected to require in excess of
$5,000,000 in remediation costs, or which could result in the
imposition of criminal penalties upon Lessor, any Agent or any
Participant (any such claim, action or proceeding, a "MATERIAL
ENVIRONMENTAL MATTER"). All such notices shall describe in
reasonable detail the nature of the Material Environmental Matter
and Lessee's proposed response thereto. In addition, Lessee
shall provide to Lessor, within ten (10) Business Days of
receipt, copies of all material written communications with any
Governmental Authority relating to any such Material
Environmental Matter. Lessee shall also promptly provide such
detailed reports of any such Material Environmental Matter as may
reasonably be requested by Lessor or the Administrative Agent.
Upon completion of remedial action of such Material Environmental
Matter by Lessee, Lessee shall cause to be prepared by an
environmental consultant reasonably acceptable to Lessor and
Administrative Agent a report describing the Material
Environmental Matter and the actions taken by Lessee (or its
agents) in response to such Material Environmental Matter, and a
statement by the consultant that the Material Environmental
Matter has been remedied in compliance in all material respects
with applicable Environmental Law. Each such Material
Environmental Matter shall be remedied prior to the Expiration
Date unless the Leased Property has been or will be purchased by
Lessee in accordance with Article XV or Article XVIII. Nothing
in this Article XIV shall reduce or limit Lessee's obligations
elsewhere in this Lease or under the Participation Agreement.
ARTICLE XV
TERMINATION OF LEASE
SECTION 15.1. TERMINATION UPON CERTAIN EVENTS. (a) If an Event
of Loss or Significant Environmental Event occurs during the Term
with respect to the Leased Property, then Lessee, upon Lessee
making a reasonable judgment that such Event or Loss or
Significant Environmental Event has occurred, may elect to
terminate the Lease by giving written notice (a "TERMINATION
NOTICE") to the Lessor, but in any event no later than one
hundred twenty (120) days following the occurrence of such Event
of Loss or Significant Environmental Event that, as a consequence
of such Event of Loss or Significant Environmental Event, the
Lease is to be terminated on the Payment Date specified in
Section 15.1(b). If Lessee fails to elect to terminate the Lease
as provided in this Section 15.1(a), Lessee shall be deemed to
have elected to restore, rebuild or remediate the Leased Property
pursuant to Section 14.1(d) or Section 14.3, as applicable and
Lessee shall undertake and diligently pursue such restoration,
rebuilding or remediation which in all cases shall be completed
prior to the Expiration Date.
(b) Following Lessee's delivery of the Termination Notice,
the Lessee shall be obligated to purchase the Lessor's interest
in all, but not less than all, of the Leased Property on or prior
to the next occurring Payment Date (but in no event any later
than thirty (30) days from the date the Lessee delivers the
applicable Termination Notice) by paying the Lessor an amount
equal to the Purchase Amount.
SECTION 15.2. TERMINATION PROCEDURES. On the date of the payment
by the Lessee of the Purchase Amount in accordance with Section
15.1(b) (such date, the "TERMINATION DATE"), this Lease shall
terminate and, concurrent with the Lessor's receipt of such
payment:
(i) the Lessor and Lessee shall comply with the
provisions of Sections 21.1(i) through 21.1(iii) and Section
21.1(v); and
(ii) Lessor shall convey to the Lessee any net proceeds
(that is, after deducting all reasonable costs and expenses
incurred by the Lessor, Administrative Agent or any
Participant(s) incident to collecting any such proceeds of
Casualty or Condemnation, including, without limitation,
reasonable fees and expenses for counsel) with respect to
the Casualty or Condemnation giving rise to the termination
of this Lease theretofore received by the Lessor or, at the
request of the Lessee, to the extent actually received and
if acceptable to Lessor in its sole judgment, Lessor shall
apply such amounts against sums due hereunder.
ARTICLE XVI
EVENTS OF DEFAULT
SECTION 16.1. EVENTS OF DEFAULT. The occurrence of any one or
more of the following events (whether such event shall be
voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body) shall
constitute a "Lease Event of Default":
(a) the occurrence of a Payment Default; or
(b) the Lessee shall fail to make payment of any
Supplemental Rent (other than Supplemental Rent referred to
in clause (a) of this Section 16.1) due and payable within
five (5) Business Days after such amounts are due and
payable; or
(c) the Lessee shall fail to maintain insurance as
required by Article XIII of this Lease; or
(d) The Lessee shall fail to observe or perform any
term, covenant or condition of the Lessee under this Lease
or any other Operative Document (other than those described
in any other clause of this Section 16.1) and such failure
shall remain uncured for a period of thirty (30) days after
the earlier of (i) receipt by a Responsible Officer of
Lessee of written notice thereof or (ii) knowledge by a
Responsible Officer of Lessee of such event; PROVIDED,
HOWEVER, that if such failure is capable of cure but (A)
cannot be cured by payment of money and (B) cannot be cured
by diligent efforts within such thirty (30)-day period, but
such diligent efforts shall be properly commenced within
such thirty (30)-day cure period and the Lessee is
diligently pursuing, and shall continue to pursue
diligently, remedy of such failure, the cure period shall be
extended for an additional 90 days, but in no event beyond
the Expiration Date; or
(e) Any representation or warranty made or deemed made
by or on behalf of Lessee (or any of its officers) in
connection with any Operative Document to which Lessee is a
party, or any certificate delivered in connection with any
Operative Document, shall prove to have been incorrect in
any material respect when made or deemed made; or
(f) Lessee shall fail to perform any term, covenant or
agreement contained in Section 9.1(a) (other than failure to
be in good standing solely due to a failure to pay franchise
taxes), (d)(i), (e), (f), (g), (i), (j), (k), (l), (m), (p)
or (q) of the Participation Agreement; or
(g) (i) (A) Failure of Lessee or any Significant
Subsidiary to pay any amount when due after the expiration
of any applicable grace period under any agreement under
which Indebtedness aggregating in excess of $25,000,000 has
been issued ("MATERIAL INDEBTEDNESS"); or (B) the default by
Lessee or any Significant Subsidiary in the performance of
any term, provision or condition contained in any agreement
under which
any such Material Indebtedness was created or is
governed, or any other event shall occur or condition exist,
the effect of which default or event is to cause such
Material Indebtedness to become due prior to its stated
maturity; or
(ii) Lessee or any Significant Subsidiary shall fail
within 30 days to pay, bond or otherwise discharge (i) any
judgment or order for the payment of money in excess of
$25,000,000 (either singly or in the aggregate with other
such judgments) or (ii) any non-monetary final judgment that
has, or could reasonably be expected to have, a Material
Adverse Effect, in either case, which is not stayed on
appeal or otherwise being appropriately contested in good
faith; or
(iii) Any ERISA Termination Event shall have occurred
with respect to a Plan which could reasonably be expected to
result in a Material Change, and, 30 days after notice
thereof shall have been given to the Lessee by the
Administrative Agent or any Participant, such ERISA
Termination Event shall still exist; or
(h) Any authorization or approval or other action by
any governmental authority or regulatory body required for
the execution, delivery or performance of the Participation
Agreement or any other Operative Document by Lessee shall
fail to have been obtained or be terminated, revoked or
rescinded or shall otherwise no longer be in full force and
effect and such occurrence shall affect the enforceability
of the Operative Documents against the Lessee adversely; or
(i) (A) The occurrence of an Insolvency Event; or
(B) Lessee or any Significant Subsidiary shall not pay, or
shall admit in writing its inability to pay, its debts
generally as they become due; or
(j) Lessee shall fail to sell the Leased Property in
accordance with and satisfy each of the terms, covenants,
conditions and agreements set forth at Articles XX and XXI
in connection with and following its exercise of the Sale
Option, including each of Lessee's obligations at Sections
20.1 and 21.1; or
(k) Any Operative Document or the security interest
and lien granted under this Lease (except in accordance with
its terms), in whole or in part, terminates, ceases to be
effective or ceases to be the legal, valid and binding
enforceable obligation of Lessee on account of, or as a
result of, directly or indirectly, any act or omission of
Lessee, or Lessee, directly or indirectly, contests in any
manner in any court the effectiveness, validity, binding
nature or enforceability thereof; or the security interest
and lien securing Lessee's obligations under the Operative
Documents, in whole or in part, ceases to be a perfected
first priority security interest and lien (subject only to
Permitted Liens); or
(l) Lessee shall fail to be a Wholly-Owned Subsidiary
of the Holding Company; or
(m) A Change of Control occurs and, in the case of a
Change of Control described in clause (a) of the definition
thereof, the Lessee shall not have exercised its Early
Termination Option within 30 days thereof.
SECTION 16.2. REMEDIES. Upon the occurrence of any Event of
Default and at any time thereafter, the Lessor may, with the
consent of the Required Participants, and shall, upon the request
of the Required Participants, so long as such Event of Default is
continuing, do one or more of the following (as modified and
supplemented by the remedies set forth in the Memorandum of
Lease), without limiting any other right or remedy the Lessor may
have on account of such Event of Default, but subject to the
rights of the Lessee to purchase the Leased Property pursuant to
the terms and within the time periods as set forth in Section
18.1:
(a) By notice to the Lessee, rescind or terminate this
Lease as to any or all of the Leased Property as of the date
specified in such notice; however, no reletting, or taking
of possession of the Leased Property (or any portion
thereof) by the Lessor will be construed as an election on
the Lessor's part to terminate this Lease unless a written
notice of such intention is given to the Lessee,
notwithstanding any reletting, or taking of possession, the
Lessor may at any time thereafter elect to terminate this
Lease for a continuing Event of Default and no act or thing
done by the Lessor or any of its agents, representatives or
employees and no agreement accepting a surrender of the
Leased Property shall be valid unless the same be made in
writing and executed by the Lessor;
(b) Demand that the Lessee, and the Lessee shall upon
the written demand of the Lessor, return the Leased Property
promptly to the Lessor in the manner and condition required
by, and otherwise in accordance with all of the provisions
of the Participation Agreement and Article IX and Sections
8.2 and 14.2 hereof, and Lessee shall comply with the
requirements at Section 15.2 to the extent requested by
Lessor, as if the Leased Property were being returned at the
end of the Term, and the Lessor shall not be liable for the
reimbursement of the Lessee for any costs and expenses
incurred by the Lessee in connection therewith and without
prejudice to any other remedy which the Lessor may have for
possession of the Leased Property, and to the extent and in
the manner permitted by Applicable Laws, enter upon the Site
and take immediate possession of (to the exclusion of the
Lessee) the Leased Property or any part thereof and expel or
remove the Lessee, by summary proceedings or otherwise, all
without liability to the Lessee for or by reason of such
entry or taking of possession (PROVIDED, HOWEVER, Lessor
shall remain liable for actual damages caused by its gross
negligence or willful misconduct), whether for the
restoration of damage to property caused by such taking or
otherwise and, in addition to the Lessor's other damages,
the Lessee shall be responsible for all costs and expenses
(which costs and expenses shall be reasonable if within the
control of Lessor) incurred by the Lessor and the
Participants in connection with any reletting, including,
without limitation, reasonable brokers' fees and all costs
of any alterations or repairs made by the Lessor;
(c) Sell all or any part of the Leased Property at
public or private sale, as the Lessor may determine, free
and clear of any rights of the Lessee with respect thereto
(except to the extent required below if the Lessor shall
elect to exercise its rights
thereunder and except that the proceeds of sale shall be
accounted for as provided in Section 5.3(f) of the
Participation Agreement as hereinafter set forth) in which
event the Lessee's obligation to pay Basic Rent hereunder
for periods commencing after the date of such sale shall be
terminated;
(d) Elect not to terminate this Lease with respect to
the Leased Property and continue to collect all Basic Rent,
Supplemental Rent and all other amounts due the Lessor
(together with all costs of collection) and enforce the
Lessee's obligations under this Lease as and when the same
become due, or are to be performed, and, upon any
abandonment of the Leased Property by the Lessee, elect not
to terminate this Lease and make the necessary repairs (and
the Lessee shall pay the reasonable costs of such repairs)
in order to relet the Leased Property, and relet the Leased
Property or any part thereof (in place, if so elected by
Lessor) for such term or terms (which may be for a term
extending beyond the Term of this Lease) and at such rental
or rentals and upon such other terms and conditions as the
Lessor in its reasonable discretion may deem advisable; and
upon each such reletting all rentals actually received by
the Lessor from such reletting shall be applied to the
Lessee's obligations hereunder and the other Operative
Documents in such order, proportion and priority as the
Lessor may elect in the Lessor's sole and absolute
discretion. If such rentals received from such reletting
during any period are less than the Rent with respect to the
Leased Property to be paid during that period by the Lessee
hereunder, the Lessee shall pay any deficiency, as
calculated by the Lessor, to the Lessor on the next Payment
Date;
(e) Demand, by written notice to the Lessee, that the
Lessee pay to the Lessor within twenty (20) days after
receipt of such notice an amount equal to (i) except in the
circumstances described in clause (ii) below, the Permitted
Lease Balance or (ii) in the case of a Lease Event of
Default under Section 16.1(g)(i)(B) if Participants and
their Affiliates either collectively or individually have
the ability to control (by vote or otherwise) whether such
Material Indebtedness will become due prior to its stated
maturity, and in the case of an Event of Default under
Section 16.1(g)(i)(B), the Sale Option Recourse Amount, and
if the Permitted Lease Balance is equal to the Lease
Balance, the Lessor shall convey the Leased Property to the
Lessee in accordance with Article XXI. The Lessee
acknowledges and agrees that upon the declaration of a Lease
Event of Default, to the maximum extent permitted by
Applicable Law, and subject to Lessor's obligations under
the final paragraph of this Section 16.2, the Lessee waives
any right to contest that the payment of the amount
described in the preceding sentence constitutes the correct
liquidated recourse sum due upon acceleration of this
instrument;
(f) Exercise any other right or remedy that may be
available to it under Applicable Laws, or proceed by
appropriate court action (legal or equitable) to enforce the
terms hereof or to recover damages for the breach hereof.
Separate suits may be brought to collect any such damages
for any period(s), and such suits shall not in any manner
prejudice the Lessor's right to collect any such damages for
any subsequent period(s), or the Lessor may defer any such
suit until after the expiration of the Term, in which event
such suit shall be deemed not to have accrued until the
expiration of the Term;
(g) Retain and apply against the Lease Balance, in
accordance with Section 5.3 of the Participation Agreement,
all sums which the Lessor would, absent such Event of
Default, be required to pay to, or turn over to, the Lessee
pursuant to the terms of this Lease;
(h) If an Event of Default shall have occurred and be
continuing, the Lessor, as a matter of right and with notice
to the Lessee, shall have the right to apply to any court
having jurisdiction to appoint a receiver or receivers of
the Leased Property, and the Lessee hereby irrevocably
consents to any such appointment. Any such receiver(s) shall
have all of the usual powers and duties of receivers in like
or similar cases and all of the powers and duties of the
Lessor in case of entry onto the Site, and shall continue as
such and exercise such powers until the date of confirmation
of the sale of the Leased Property unless such receivership
is sooner terminated; or
(i) Upon the occurrence of the Lease Event of Default
with respect to Lessee described in Section 16.1(i), whether
or not another Lease Event of Default described in one or
more other clauses of Section 16.1 shall have been or
thereafter is declared, this Lease shall terminate
immediately without notice and Lessee shall immediately pay
to Administrative Agent, on behalf of Lessor, as and for
liquidated damages and without limitation on any other
remedies provided for herein, an amount equal to the
Permitted Lease Balance.
To the maximum extent permitted by Applicable Law, the
Lessee hereby waives (x) the benefit of any appraisement,
valuation, stay, extension, reinstatement and redemption laws now
or hereafter in force and all rights of marshaling in the event
of any sale of the Leased Property or any interest therein and
(y) any rights now or in the future conferred by statute or
otherwise which may require the Lessor to sell, lease or
otherwise use the Leased Property in mitigation of the Lessor's
damages or which may otherwise limit or modify any remedy of
damages.
The Lessor shall be entitled to enforce payment and
performance of the obligations secured hereby and to exercise all
rights and powers under this instrument or under any of the other
Operative Documents or other agreement or any laws now or
hereafter in force, notwithstanding some or all of the
obligations secured hereby may now or hereafter be otherwise
secured, whether by mortgage, security agreement, pledge, lien,
assignment or otherwise. Neither the acceptance of this
instrument nor its enforcement, shall prejudice or in any manner
affect the Lessor's right to realize upon or enforce any other
security now or hereafter held by the Lessor, it being agreed
that the Lessor shall be entitled to enforce this instrument and
any other security now or hereafter held by the Lessor in such
order and manner as the Lessor may determine in its absolute
discretion. No remedy herein conferred upon or reserved to the
Lessor is intended to be exclusive of any other remedy herein or
by law provided or permitted, but each shall be cumulative and
shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute. Every
power or remedy given by any of the Operative Documents to the
Lessor or to which it may otherwise be entitled, may be
exercised, concurrently or independently, from time to time and
as often as may be deemed expedient by the Lessor. Without
limiting the foregoing, but subject to the limitation at Section
16.5, if applicable, each of the powers, rights and remedies as
set forth or otherwise permitted pursuant
to this Article XVI are independent of the provisions of Article
XIII of the Participation Agreement.
The proceeds derived from any sale of Leased Property and
other amounts recovered pursuant to the foregoing remedies after
an Event of Default shall be distributed pursuant to Section
5.3(f) of the Participation Agreement. The amount realized by
the Lessor upon a sale of a Leased Property shall be net of
Lessor's sale expenses and other expenses reasonably and
customarily incurred by the Lessor in connection with the Lessor
holding and owning such Leased Property until such time as the
Leased Property is sold. Notwithstanding anything herein to the
contrary, and except for Lessee's obligation to pay
Nonconformance Amounts, there shall not be any personal recourse
against the Lessee (and Lessor shall have recourse only against
the Leased Property) pursuant to this Section 16.2 for any amount
in excess of the Permitted Lease Balance.
SECTION 16.3. WAIVER OF CERTAIN RIGHTS. If this Lease shall be
terminated pursuant to Section 16.2, the Lessee waives, to the
fullest extent permitted by law, (a) any notice of legal
proceedings to obtain possession; (b) any right of redemption or
repossession; (c) the benefit of any laws now or hereafter in
force exempting property from liability for rent or for debt or
limiting the Lessor with respect to the election of remedies; and
(d) any other rights which might otherwise limit or modify any of
the Lessor's rights or remedies under this Article XVI.
SECTION 16.4. GRANT OF SECURITY INTEREST. The Lessee hereby
grants, transfers and pledges a lien and a security interest to
Lessor, for the benefit of the Participants, in all of its right,
title and interest in the Leased Property and the other
Collateral and hereby assigns to Lessor all of its right, title
and interest in and to the Collateral, in each case, to secure
payment and performance of its Obligations hereunder and under
the other Operative Documents. This Lease shall constitute a
security agreement within the meaning of the Uniform Commercial
Code of the state where the Leased Property and other Collateral
is located ("UCC"), and if an Event of Default has occurred and
is continuing, (i) Lessor shall, in addition to all other rights
available at law or equity, have all of the rights provided to a
secured party under Article 9 of the UCC and (ii) Lessor shall
have the power and authority, to the extent provided by law,
after proper notice and lapse of such time as may be required by
law, to sell the Leased Property and the other Collateral (or any
portion thereof), either as a whole, or in separate lots or
parcels or items and in such order as Lessor may elect all as
provided for herein. The proceeds derived from the exercise of
the foregoing rights shall be applied as set forth in the last
paragraph of Section 16.2.
SECTION 16.5. DETERMINATIONS OF CERTAIN EVENTS OF DEFAULT. Lessor
acknowledges that, in making a determination that an Event of
Default has occurred under Section 16.1(d), (e), (f), (g), (h) or
(j), to the extent Lessor exercises discretion in making such
determination, it shall exercise such discretion in a
commercially reasonable manner.
SECTION 16.6. LESSOR SALE. If Lessor has not sold the Leased
Property within two (2) years after receipt of the Permitted
Lease Balance or, in the case of a Lease Event of Default under
Section 16.1(g)(i)(B), if the Participants and their Affiliates
either collectively or individually have the ability to control
(by vote or otherwise) whether such Material Indebtedness will
become due prior to its stated maturity, the Sale Option Recourse
Amount, including pursuant to
Section 16.2(i), Lessor will appoint a qualified independent
sales agent to sell the Leased Property pursuant to the
first bona fide offer received from creditworthy offeror
and for an all cash purchase price at the then fair market
value of the Leased Property to the extent the conditions
therefor are satisfied. Any proceeds resulting from the
operation of this Section 16.6 net of the costs and expenses
of such sale and costs incurred to maintain the leased property
will be applied in accordance with Section 5.3(f) of the
Participation Agreement. Notwithstanding the foregoing in no
event shall Lessor have any liability to Lessee for failure to
sell the Leased Property pursuant to the foregoing criteria in
this Section 16.6 unless such failure is due to the gross
negligence or willful misconduct of the Lessor.
ARTICLE XVII
LESSOR'S RIGHT TO CURE
SECTION 17.1. THE LESSOR'S RIGHT TO CURE THE LESSEE'S DEFAULTS.
The Lessor, without waiving or releasing any obligation or Event
of Default, may (but shall be under no obligation to), upon five
(5) Business Days' prior notice to the Lessee, remedy any Event
of Default for the account and at the sole cost and expense of
the Lessee, including the failure by the Lessee to maintain the
insurance required by Article XIII, and may, to the fullest
extent permitted by law, and notwithstanding any right of quiet
enjoyment in favor of the Lessee, enter upon the Leased Property
and the Site, for such purpose and take all such action thereon
as may be reasonably necessary or appropriate therefor. No such
entry shall be deemed an eviction of Lessee. All reasonable out-
of-pocket costs and expenses so incurred (including fees and
expenses of counsel), together with interest thereon at the
Overdue Rate from the date on which such sums or expenses are
paid by the Lessor, shall be paid by the Lessee to the Lessor on
demand as Supplemental Rent.
ARTICLE XVIII
PURCHASE PROVISIONS
SECTION 18.1. EARLY TERMINATION OPTION. Subject to the
conditions contained herein, on (a) any Payment Date during the
Term provided Lessee has not elected the Sale Option or (b) on
any Business Day during the occurrence of an Event of Default of
the types described in clause (ii) of the next sentence, Lessee
may, at its option, purchase all, but not less than all, of the
Leased Property (the "EARLY TERMINATION OPTION") at a price equal
to the Purchase Amount. Lessee's right to purchase all of the
Leased Property pursuant to this Section 18.1 shall terminate
automatically and without notice upon (i) the occurrence of an
Event of Default arising as a result of an Insolvency Event, or
(ii) upon the occurrence of any other Event of Default, unless in
the case of an Event of Default described in this clause (ii)
Lessee delivers a written notice of its election to exercise this
option to purchase not less than three (3) days prior to the date
of the purchase and consummates the purchase within ten (10)
Business Days following (x) delivery of a notice of an Event of
Default by Lessee pursuant to Section 9.1(d)(i) of the
Participation Agreement, or (y) Lessee's receipt of a written
Purchase Acceleration Notice. "Purchase Acceleration Notice"
shall mean a notice from Lessor or Administrative Agent to Lessee
that an Event of Default has occurred. Lessee acknowledges that
the Purchase Acceleration Notice shall apply solely to this
Section 18.1 and will not affect the validity of any Event of
Default or the
Lessor's remedies at Section 16.2. In order to exercise its
option to purchase the Leased Property pursuant to this
Section 18.1 and except as provided for in the clause (ii)
of the second sentence of this Section 18.1, Lessee shall give to
Lessor and the Administrators not less than thirty (30) days'
prior written notice of such election to exercise, which election
shall be irrevocable when made. If the Lessee exercises its
option pursuant to this Section 18.1 then, upon the Lessor's
receipt of all amounts due in connection therewith, the Lessor
shall transfer to the Lessee all of the Lessor's right, title and
interest in and to the Leased Property in accordance with the
procedures set forth in Section 21.1, such transfer to be
effective as of the date specified in the Purchase Notice. The
Lessor agrees that it shall cooperate with the Lessee in
effecting any transfer to a designee of the Lessee pursuant to
this Section 18.1.
ARTICLE XIX
END OF TERM OPTIONS
SECTION 19.1. END OF TERM OPTIONS. Before the Expiration Date,
Lessee shall, by delivery of written notice to Lessor and
Administrative Agent (given in accordance with clause (a) or (b)
below), exercise the option provided in paragraph (a)(i) or
(a)(ii) or the option provided in paragraph (b):
(a) No later than 180 days nor more than 365 days
prior to the Expiration Date of the Term, Lessee shall, by
delivery of written notice to Lessor and the Administrative
Agent, exercise one of the following two options:
(i) Commit to renew this Lease with respect to
the Leased Property for an additional Lease Renewal
Term of one to four years (the "RENEWAL OPTION") on the
terms and conditions set forth herein and in the other
Operative Documents; PROVIDED, HOWEVER, that such
Renewal Option shall be available at the end of the
Base Term (or the Base Term as previously so renewed)
only if the conditions to the Extension Option set
forth in Section 4.7 of the Participation Agreement are
satisfied; and PROVIDED, FURTHER, that the Renewal
Option shall not be exercisable for a total of more
than two (2) Lease Renewal Terms; or
(ii) Commit to purchase for cash for the Purchase
Amount all, but not less than all, of the Leased
Property on the last day of the Term (the "PURCHASE
OPTION"); and if Lessee shall have elected to purchase
the Leased Property, Lessor shall, upon the payment to
Lessor of the Purchase Amount then due and payable by
Lessee under the Operative Documents, transfer all of
Lessor's right, title and interest in and to the Leased
Property pursuant to Section 21.1; or
(b) No later than 270 days nor more than 365 days
prior to the Expiration Date of the Term, Lessee shall, by
delivery of written notice to Lessor and the Administrative
Agent, commit to sell on behalf of Lessor for cash to a
single purchaser not in any way affiliated with Lessee or
any of its Affiliates all, but not less than all, of the
Leased Property on the last day of the Term (the "SALE
OPTION"). Lessee's right to sell the Leased Property
pursuant to the Sale Option shall be conditioned upon and
subject to the fulfillment by Lessee of each of the terms
and conditions set forth in Article
XX. In addition, all subleases with respect to the Leased
Property shall have been terminated prior to Lessor's
receipt of Lessee's election of the Sale Option. Lessee
shall not enter into any additional subleases or renew any
subleases with respect to the Leased Property following
Lessee's election of the Sale Option. Following Lessee's
election of the Sale Option, Lessee shall not remove
any Modifications or commence any voluntary Modifications
under Section 10.1(a)(ii) without the consent of the Required
Participants.
SECTION 19.2. ELECTION OF OPTIONS. Unless Lessee shall have (a)
affirmatively elected the Sale Option within the time period
provided for in Section 19.1(b) and (b) satisfied each of the
requirements in Articles XX and XXI, Lessee shall be deemed to
have elected the Renewal Option. To the extent that the Renewal
Option is not available for any reason (including because of the
Participants' refusal to consent to an Extension Option Request),
unless Lessee shall have (a) affirmatively elected the Sale
Option within the time period provided for in Section 19.1(b) and
(b) satisfied each of the requirements in clause (ii) of Section
20.1(d), Lessee shall be deemed to have elected the Purchase
Option. In addition, the Sale Option shall automatically be
revoked if there exists a Default, Event of Default, Significant
Environmental Event, Significant Casualty or Significant
Condemnation at any time after the Sale Option is properly
elected or Lessee fails to comply with each of the other terms
and conditions set forth at Articles XX and XXI and Lessee shall
be deemed to have elected the Purchase Option. Lessee may not
elect the Sale Option if there exists on the date the election is
made a Default, an Event of Default, Significant Environmental
Event, Significant Casualty or Significant Condemnation. Any
election by Lessee pursuant to Section 19.1 shall be irrevocable
at the time made.
SECTION 19.3. RENEWAL OPTIONS. The exercise of any Renewal
Option by Lessee shall be subject to satisfaction of the
following conditions:
(i) on the Expiration Date then in effect no Event of
Default or Default shall have occurred and be continuing,
and on the date Lessee gives notice of its exercise of the
Renewal Option, no Event of Default or Default shall have
occurred and be continuing; and
(ii) Lessee shall not have exercised the Sale Option or
the Purchase Option.
Lessee's exercise of a Renewal Option shall be deemed to be a
representation by Lessee that on both the Expiration Date then in
effect and the date Lessee gives notice of its exercise of the
Renewal Option, no Event of Default or Default shall have
occurred and be continuing.
ARTICLE XX
SALE OPTION
SECTION 20.1. SALE OPTION PROCEDURES. The Lessee's effective
exercise and consummation of the Sale Option with respect to the
Leased Property shall be subject to the due and timely
fulfillment of each of the following provisions as to the Leased
Property as of the dates set forth below.
(a) The Lessee shall have given to the Lessor and the
Administrative Agent written notice of the Lessee's exercise of
the Sale Option in accordance with Section 19.1.
(b) Prior to the Expiration Date, Lessee shall furnish to
Lessor, the Administrative Agent, the Participants and, if the
Leased Property is to be sold on the Expiration Date, the
independent purchaser hereunder a reasonably current Phase I
Environmental Site Assessment of the Leased Property dated no
earlier than forty-five (45) days prior to the Expiration Date
and addressed to each such party. Such Phase I Environmental
Site Assessment shall be prepared by an environmental consultant
selected by Lessor in Lessor's reasonable discretion and shall
conclude that the Leased Property is free of Environmental
Violations. If the Leased Property is sold during the Extended
Remarketing period pursuant to Section 20.3, such Environmental
Site Assessment shall be updated to a date not later than forty-
five (45) days prior to the date of such sale and shall be
subject to the reevaluation of the Participants and, if
applicable, the independent purchaser, on the same basis as
provided for in the previous sentence. If any such Phase I
Environmental Site Assessment indicates any Environmental
Violations, Lessee shall take such remedial action as shall be
necessary to correct the same, and Lessee shall cause to be
delivered prior to the Expiration Date for the Leased Property a
Phase II environmental site assessment by such environmental
consultant and a written statement by such environmental
consultant indicating that all such exceptions have been remedied
in compliance with Applicable Laws.
(c) No Event of Default or Default shall exist on or at any
time following the date of the exercise of the Sale Option.
(d) Upon surrender of the Leased Property, (i) the Leased
Property shall be in the condition required by Section 9.1, (ii)
the Lessee shall have paid for and completed or caused to be
completed all Modifications required by Section 10.1 and all
Modifications commenced prior to the Expiration Date, and Lessee
shall have caused to be completed prior to the Expiration Date
the repair and rebuilding of the affected portions of the Leased
Property suffering a Casualty or Condemnation, (iii) there shall
be no deferred maintenance in respect of the Leased Property, and
(iv) Lessee shall have remediated any Environmental Violation in
accordance with the terms of this Lease.
(e) The Lessee shall, as nonexclusive agent for the Lessor,
use reasonable commercial efforts to obtain the highest cash
purchase price for the Leased Property. The Lessee will be
responsible for hiring brokers and making the Leased Property
available for inspection by prospective purchasers, and all
marketing of the Leased Property shall be at Lessee's expense.
The Lessee shall, upon reasonable notice during normal business
hours (subject to Lessee's customary security and safety
measures) upon request, permit inspection of the Leased Property
and any Leased Property Records by the Lessor, any Participant
and any potential purchasers, and shall otherwise do all things
reasonably necessary to sell and deliver possession of the Leased
Property to any purchaser.
(f) The Lessee shall use reasonable commercial efforts to
procure bids from one or more bona fide prospective purchasers to
purchase the Leased Property. No such purchaser shall be the
Lessee or any Subsidiary or Affiliate of the Lessee.
(g) The Lessee shall submit all bids to the Lessor and the
Participants, and the Lessor will have the right to review the
same and to submit any one or more bids. All bids shall be on an
all-cash basis unless the Lessor and the Required Participants
shall otherwise agree in their sole discretion. The Lessee shall
deliver to the Lessor and the Participants not less than ninety
(90) days prior to the Expiration Date a binding written
unconditional (except as set forth below), irrevocable offer by
such purchaser or purchasers offering the highest all cash bid to
purchase all, but not less than all, of the Leased Property
(unless otherwise agreed to by the Lessor and the Required
Participants). If Lessor in the exercise of its reasonable
judgment believes that the Gross Proceeds to be paid to the
Lessor pursuant to clause (k) below from a proposed bid which the
Lessee desires to accept is less than the lesser of (i) Fair
Market Value or (ii) the Purchase Amount, then Lessor may
condition its Obligation to accept any such bid and sell the
Leased Property upon Lessor's receipt of an Appraisal
demonstrating that such proposed bid is for an amount at least
equal to the lesser of (i) Fair Market Value or (ii) the Purchase
Amount of the Leased Property as established by such Appraisal.
In such case then Lessor shall promptly following the receipt of
such bid, engage an appraiser, reasonably satisfactory to the
Required Participants and Lessee, at Lessee's expense, to
determine (by appraisal methods reasonably satisfactory to the
Required Participants) the Fair Market Value of the Leased
Property as of the Expiration Date. A copy of such appraisal
shall be delivered to each of the Participants not later than
five (5) Business Days prior to the Expiration Date. The
appraiser will be instructed to assume that the Leased Property
is in the condition required by and has been maintained in
accordance with this Lease. Any such appraisal shall be at the
sole cost and expense of Lessee.
(h) In connection with any such sale of the Leased Property,
the Lessee will provide to the purchaser all customary "seller's"
indemnities, representations and warranties regarding title,
absence of Liens (except Lessor Liens and Permitted Liens of the
type described in clauses (a) (excluding Liens relating to the
interest or rights of Lessee), (b), (c) or (g) of the definition
of "PERMITTED LIENS") and the condition of such Leased Property.
The Lessee shall have obtained, at its cost and expense, all
required governmental and regulatory consents and approvals and
shall have made all filings as required by Applicable Laws in
order to carry out and complete the transfer of the Leased
Property. As to the Lessor, any such sale shall be made on an
"as is, where is, with all faults" basis without representation
or warranty by the Lessor, other than the absence of Lessor
Liens. Any agreement as to such sale shall be in form and
substance reasonably satisfactory to the Lessor.
(i) The Lessee shall pay or cause to be paid directly, and
not from the sale proceeds, any prorations, credits, costs and
expenses of or arising from the sale of the Leased Property or
Taxes imposed on the sale of the Leased Property, whether
incurred by the Lessor or the Lessee, including the cost of all
title insurance, surveys, environmental audits, appraisals,
transfer taxes, the Lessor's reasonable attorneys' fees, the
Lessee's attorneys' fees, commissions, escrow fees, recording
fees, and all applicable documentary and other transfer and
document taxes.
(j) Whether or not a sale of the Leased Property is completed
on the Expiration Date, Lessee shall pay to the Lessor on or
prior to the Expiration Date (or in the case of Supplemental
Rent, to the Person entitled thereto) an amount equal to (i) the
Sale Option Recourse Amount plus (ii) all accrued and unpaid Rent
(including Supplemental Rent, if any) and all other amounts
hereunder which have accrued or will accrue prior to or as of the
Expiration Date, in the type of funds specified in Section 3.4
hereof.
(k) If a sale of the Leased Property is consummated on the
Expiration Date, Lessee shall pay directly to Lessor the gross
proceeds (the "GROSS PROCEEDS") of such sale to be applied
pursuant to Section 5.3(c)(iii) of the Participation Agreement.
(l) [Intentionally Deleted].
(m) The Lessee shall, to the extent permitted by Applicable
Laws, assign, and shall cooperate with all reasonable requests of
the Lessor or the purchaser for obtaining any and all licenses,
permits, approvals and consents of any Governmental Authorities
or other Persons that are or will be required to be obtained by
the Lessor or such purchaser in connection with its use,
operation, control or maintenance of the Leased Property in
compliance with Applicable Laws.
If one or more of the foregoing provisions of this Section
20.1 shall not be fulfilled as of the applicable date set forth
in any of clauses (a) through (m) above including Lessee's
obligation at Section 20.1(g) to accept a bid for not less than
the Fair Market Value of the Leased Property, then the Lessor
shall declare by written notice to the Lessee the Sale Option to
be null and void (whether or not it has been theretofore
exercised by the Lessee), in which event Lessee's obligations at
Section 19.2 shall be applicable.
Except as expressly set forth herein, the Lessee shall have
no right, power or authority to bind the Lessor in connection
with any proposed sale of the Leased Property.
SECTION 20.2. CERTAIN OBLIGATIONS CONTINUE. During the period
following Lessee's exercise of the Sale Option and until and
including the Expiration Date, the obligation of the Lessee to
pay Rent with respect to the Leased Property (including the
installment of Rent due on the Expiration Date) shall continue
undiminished. The Lessor shall have the right, but shall be
under no duty, to solicit bids, to inquire into the efforts of
the Lessee to obtain bids or otherwise to take action in
connection with any such sale, other than as expressly provided
in this Article XX.
SECTION 20.3. FAILURE TO SELL LEASED PROPERTY. If Lessee shall
exercise the Sale Option and shall fail to sell the Leased
Property on the Expiration Date in accordance with and subject to
the provisions of Section 20.1, then Lessee and Lessor hereby
agree as follows:
(a) Lessee shall continue to use reasonable commercial
efforts as non-exclusive agent for Lessor to sell the Leased
Property on behalf of Lessor in accordance with this Article
XX for the period (the "EXTENDED REMARKETING PERIOD")
commencing on the Lease Expiration Date and ending on the
earlier of (i) the sale of the Leased Property in accordance
with the provisions of this Article XX or such earlier date
as Lessor has received payment in full of the Lease Balance
and all accrued and unpaid Rent and (ii) the delivery of a
written notice from Lessor to Lessee at any time terminating
the Extended Remarketing Period, which notice shall indicate
that such termination is being made pursuant to this
Section 20.3(a)(ii) and the date such termination shall be
effective,
which date shall be the Expiration Date if such
notice is given prior to the Expiration Date. Without
limiting the foregoing, each of Subsections at Section 20.1
(excluding subsection (j) thereof) shall be applicable to
the Extended Remarketing Period and any sale during such
period. Lessor's appointment of Lessee as Lessor's
nonexclusive agent to use its reasonable commercial efforts
to obtain the highest all-cash price for the purchase of the
Leased Property shall not restrict Lessor's right to market
or lease the Leased Property, to retain one or more sales
agents or brokers at Lessee's sole cost and expense,
provided that an Event of Default has not occurred and is
continuing, subject to Lessee's reasonable approval not to
be unreasonably withheld or the right of any Participant to
submit or cause to be submitted bids for the Leased Property
in the manner contemplated by Section 20.1.
(b) On the Expiration Date, Lessee shall return
possession of the Leased Property to Lessor in the condition
required by this Lease (including each of the requirements
and conditions set forth at Section 20.1(b) and Section
20.1(d)). Thereafter, this Lease shall terminate except as
provided herein, Lessee shall have no further obligation to
pay Basic Rent. Following the Expiration Date, Lessor shall
be free to sell or lease the Leased Property to any party at
such reasonable times and for such amounts as Lessor deems
commercially reasonable and appropriate in order to maximize
Lessor's opportunity to recover the Lease Balance.
Following the Expiration Date, Lessor shall have the right
to enter into leases for the Leased Property at fair market
rentals and otherwise on commercially reasonable terms, and
the net operating cash flow therefrom shall be payable to
Lessor in reduction of the Lease Balance.
(c) Lessor reserves all rights under this Lease and
the other Operative Documents arising out of Lessee's breach
of any provisions of this Lease (including this Article XX),
occurring prior to or on the Expiration Date, including the
right to xxx Lessee for damages.
(d) To the greatest extent permitted by Applicable
Laws and subject to Section 20.3(e) below, Lessee hereby
unconditionally and irrevocably waives, and releases Lessor
from, any right to require Lessor during or following the
Extended Remarketing Period to sell the Leased Property in a
timely manner or for any minimum purchase price or on any
particular terms and conditions, Lessee hereby agreeing that
if Lessee shall elect the Sale Option, its ability to sell
the Leased Property on or prior to the Expiration Date and
to cause any Person to submit a bid to Lessor pursuant to
Section 20.1 shall constitute full and complete protection
of Lessee's interest hereunder.
(e) In addition, if Lessor has not sold the Leased
Property within two (2) years after its termination of the
Extended Remarketing Period, Lessor shall appoint a
qualified independent sales agent to sell the Leased
Property pursuant to the first bona fide offer received by a
creditworthy offeror for an all cash purchase price at the
then Fair Market Value of the Leased Property to the extent
the conditions therefor are satisfied. Gross Proceeds
arising from the sale of the Leased Property shall be
applied in accordance with Section 5.3 of the Participation
Agreement net of any prorations, credits, costs and expenses
of or arising from the sale of the Leased Property or Taxes
imposed on the sale
of the Leased Property, whether incurred by the Lessor or
the Lessee, including the cost of all title insurance,
surveys, environmental audits, appraisals, transfer taxes,
the Lessor's reasonable attorneys' fees, the Lessee's
attorneys' fees, commissions, escrow fees,
recording fees, and all applicable documentary and other
transfer and document taxes. To determine whether an offer
is for the Fair Market Value of the Leased Property, Lessor
may condition its obligation to sell on its receipt of an
appraisal in accordance with Section 20.1(m). Any
determination as to the bona fide nature of an offer or
creditworthiness of the offeror shall be made in the
reasonable judgment of Lessor and Administrative Agent.
ARTICLE XXI
PROCEDURES RELATING TO PURCHASE OR SALE OPTION
SECTION 21.1. PROVISIONS RELATING TO CONVEYANCE OF THE LEASED
PROPERTY UPON PURCHASE BY THE LESSEE, SALES OR CERTAIN OTHER
EVENTS. In connection with any termination of this Lease
pursuant to the terms of Article XV, any purchase of the Leased
Property in accordance with Article XVIII, in connection with the
Lessee's obligations under Section 16.2(e), any other conveyance
or purchase of the Leased Property made pursuant to the terms of
this Lease or the Project Supervisory Agreement, then, upon the
date on which this Lease is to terminate with respect to the
Leased Property and upon tender by the Lessee of the amounts set
forth in Article XV, Sections 16.2(e), 18.1, 18.2 or Article VII
of the Project Supervisory Agreement, as applicable:
(i) the Lessor shall execute and deliver to the Lessee
(or to the Lessee's designee or other purchaser of the
Leased Property) at the Lessee's cost and expense a deed
xxxx of sale and deed with respect to the Leased Property,
in each case in recordable form and otherwise in conformity
with local custom, in respect of the Lessor's interest in
the Leased Property without representation and warranty
except as to the absence of any Lessor Liens attributable to
the Lessor;
(ii) the Leased Property shall be conveyed to the
Lessee "as is, where is" and in its then present physical
condition;
(iii) the Lessor will execute and deliver to Lessee or
its designee or other purchaser an assignment or
assignments, in form reasonably requested by Lessee or other
purchaser of the Leased Property, without warranty of any
kind except as to the absence of Lessor Liens, of Lessor's
rights, if any, under the Equipment Contracts, and the
Project Agreements, including any licenses granted under the
Project Agreements;
(iv) the Lessor shall execute and deliver to Lessee a
statement of termination of this Lease and/or the Project
Supervisory Agreement and shall use its best efforts to
cause the Administrative Agent to execute and deliver
releases of any Liens created by the Operative Documents
attributable to the Administrative Agent, and termination
statements for any financing statements which are then of
record naming the Administrative Agent as the secured party;
and
(v) If the Lessee properly exercises the Sale Option,
then the Lessee shall, upon a sale thereunder, and at its
own cost, transfer or cause to be transferred possession of
the Leased Property to the independent purchaser(s) thereof,
in each case by surrendering the same into the possession of
the Lessor or such purchaser, as the case may be, free and
clear of all Liens other than Permitted Liens of the type
described in clauses (a) (excluding Liens relating to the
rights and interests of Lessee), (b), (c) or (g) of the
definition of "Permitted Liens", in good condition (as
modified by Modifications permitted by this Lease), ordinary
wear and tear excepted, and in compliance in all material
respects with Applicable Laws and the provisions of this
Lease, and the Lessee shall execute and deliver, with
respect to Lessee's interest in the Leased Property, to the
purchaser at the Lessee's cost and expense a xxxx of sale
and deed with respect to the Leased Property, in each case
in recordable form and otherwise in conformity with local
custom, warranting that such Leased Property is free and
clear of all Liens (other than Permitted Liens of the type
described in clauses (a) (relating to the rights and
interests of Lessee), (b), (c) or (g) of the definition of
"Permitted Liens"), together with an assignment, without
warranty of any kind, of Lessee's rights, if any, under the
Equipment Contracts and the Project Agreements; the Lessee
shall execute and deliver to the purchaser and the
purchaser's title insurance company an affidavit as to the
absence of any Liens (other than Permitted Liens), and such
other affidavits and certificates reasonably requested by
any title insurance company insuring title to the Leased
Property, as well as a FIRPTA affidavit, and an instrument
in recordable form declaring this Lease to be terminated on
the date of closing of the sale of the Leased Property; the
Lessor shall execute and deliver to purchaser an assignment
of Lessor's interest in the Ground Lease, without recourse,
representation or warranty. The Lessee shall, on and within
a reasonable time before and up to one year after the
Expiration Date, cooperate reasonably with the Lessor and
the purchaser of the Leased Property in order to facilitate
the purchase and use by such purchaser of the Leased
Property, which cooperation shall include the following, all
of which the Lessee shall do on or before the Expiration
Date or as soon thereafter as is reasonably practicable:
providing all books and records regarding the maintenance,
use and ownership of the Leased Property and all know-how,
data and technical information relating thereto to the
extent such information would typically be provided to a
purchaser of similar property, providing a current copy of
the Plans and Specifications, granting or assigning, to the
extent permitted by Applicable Laws, all licenses necessary
for the operation and maintenance of the Leased Property,
and cooperating reasonably in seeking and obtaining all
necessary Governmental Action. The obligations of the
Lessee under this paragraph shall survive the expiration or
termination of this Lease.
(vi) As a condition to any such transfer of the Leased
Property and Lessor's rights, if any, under the Equipment
Contracts, the Project Agreements and the Ground Lease to
Lessee or any third party transferee, and as a further
condition to Lessee's rights under Article XX, Lessee shall,
and shall cause any such third party transferee to, provide
any documentation, assurances and assumptions required under
and otherwise comply with the terms and conditions of the
Equipment Contracts, the Project Agreements and the Ground
Lease, and otherwise comply with the requirements under the
Equipment Contracts, the Project Agreements and the Ground
Lease for any transfer of the Leased
Property and Lessor's rights under the Equipment Contract,
any Project Agreement and the Ground Lease.
ARTICLE XXII
ACCEPTANCE OF SURRENDER
SECTION 22.1. ACCEPTANCE OF SURRENDER. No surrender to the Lessor
of this Lease or of the Leased Property or of any part of any
thereof or of any interest therein shall be valid or effective
unless agreed to and accepted in writing by the Lessor and, prior
to the payment or performance of all obligations under the Loan
Agreement and termination of the Commitments, the Lenders, and no
act by the Lessor or the Lenders or any representative or agent
of the Lessor or the Lenders, other than a written acceptance,
shall constitute an acceptance of any such surrender.
ARTICLE XXIII
NO MERGER OF TITLE
SECTION 23.1. NO MERGER OF TITLE. There shall be no merger of
this Lease or of the leasehold estate created hereby by reason of
the fact that the same Person may acquire, own or hold, directly
or indirectly, in whole or in part, (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or
such leasehold estate, (b) title to the Leased Property, except
as may expressly be stated in a written instrument duly executed
and delivered by the appropriate Person or (c) a beneficial
interest in the Lessor.
ARTICLE XXIV
INTENT OF THE PARTIES
SECTION 24.1. NATURE OF TRANSACTION. It is the intention of the
parties that:
(a) the Overall Transaction constitutes an operating
lease from Lessor to Lessee for purposes of Lessee's
financial reporting, including, without limitation, under
Financial Accounting Standards Board Statement No. 13;
(b) for purposes of federal and all state and local
income and transfer taxes, bankruptcy, insolvency,
conservatorships and receiverships (including the
substantive law upon which bankruptcy, conservatorship and
insolvency and receivership proceedings are based) purposes
(i) the Overall Transaction (including the
transactions and activities prior to the Base Term
Commencement Date referred to or contemplated in the
Project Supervisory Agreement) constitutes a financing
by the Participants to Lessee and preserves beneficial
ownership in the Leased Property in Lessee, Lessee will
be entitled to all tax benefits ordinarily available to
owners of property similar to the Leased Property for
tax purposes and the obligations of Lessee to pay Basic
Rent shall be treated as payments of interest to the
Participants, and the payment by Lessee of any amounts
in respect of the Lease Balance shall be treated as
payments of principal to the Participants;
(ii) this Lease provides for a security interest
or a Lien, as the case may be, in the Lessee's interest
in the Leased Property and the other Collateral, in
favor of the Lessor, and for the benefit of the
Participants, to secure Lessee's payment and
performance of the Obligations; and
(iii) the Security Instruments create Liens on and
security interests in the Collateral in favor of the
Administrative Agent for the benefit of all of the
Participants to secure Lessor's payment and performance
of its obligations under the Operative Documents.
Nevertheless, Lessee acknowledges and agrees that none of Lessor,
the Administrative Agent, Arranger or any Participant has made
any representations or warranties to it concerning the tax,
accounting or legal characteristics of the Operative Documents or
any aspect of the Overall Transaction and that Lessee has
obtained and relied upon such tax, accounting and legal advice
concerning the Operative Documents and the Overall Transaction as
it deems appropriate.
(c) Specifically, but without limiting the generality
of subsection (a) of this Section 24.1, the Lessor and the
Lessee intend and agree that for the purpose of securing the
Lessee's obligations for the repayment of the Obligations,
(i) the Lease shall also be deemed to be a security
agreement and financing statement within the meaning of
Article 9 of the Uniform Commercial Code; (ii) the
conveyance provided for hereby shall be deemed to be a grant
by the Lessee to the Lessor, for the benefit of the
Participants, of a Lien (including the Deed of Trust) on and
security interest in all of the Lessee's present and future
right, title and interest in and to the Leased Property,
including but not limited to the Lessee's leasehold estate
therein and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, investments,
securities or other property, whether in the form of cash,
investments, securities or other property to secure such
loans, effective on the date hereof, to have and to hold
such interests in the Leased Property and the other
Collateral unto the Lessor, for the benefit of the
Participants; (iii) to the extent permitted by Applicable
Law, the possession by the Lessor of notes and such other
items of property as constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" for purposes of perfecting
the security interest pursuant to Section 9-305 of the
Uniform Commercial Code; and (iv) to the extent permitted by
Applicable Law, notifications to Persons holding such
property, and acknowledgments, receipts or confirmations
from financial intermediaries, bankers or agents (as
applicable) of the Lessee shall be deemed to have been given
for the purpose of perfecting such security interest under
Applicable Laws. The Lessor and the Lessee shall, to the
extent consistent with the Lease, take such actions and
execute, deliver, file and record such other documents,
financing statements, mortgages and deeds of trust as may be
necessary to ensure that, if the Lease were deemed to create
a security interest in the Leased Property and the other
Collateral in accordance with this Section, such security
interest would be deemed to be a perfected security interest
in the Leased
Property with priority over all Liens, other than Permitted
Liens, under Applicable Laws and will be maintained as
such throughout the Term.
SECTION 24.2. LESSEE GRANT OF MORTGAGE AND SECURITY INTEREST.
(a)For the purposes of the creation and enforcement of this Lease
as a Mortgage and security agreement, Lessee hereby grants,
conveys, assigns, mortgages and transfers lien and security
interest in its rights and interests in the Leased Property and
the other Collateral in favor of the Lessor, and for the benefit
of the Participants, and Lessee hereby irrevocably grants,
bargains, sells, alienates, remises, releases, confirms, conveys,
mortgages and warrants Lessee's interest in and to the Leased
Property and the other Collateral to Lessor and for the benefit
of the Participants, With (to the extent permitted by law) Power
of Sale, to have and to hold to secure all Obligations.
(b) In the event this Lease is deemed a security agreement
and a fixture filing, Lessee is the debtor and Lessor is the
secured party. The mailing addresses of the debtor (Lessee
herein) and of the secured party (Lessor herein) from which
information concerning security interests pursuant to this Lease
may be obtained are as set forth on the first page of this Lease.
A carbon, photographic or other reproduction of this Lease or of
any financing statement related to this Lease shall be sufficient
as a financing statement for any of the purposes referenced in
this Lease.
(c) Upon the occurrence of a Lease Event of Default under the
Lease, Lessor shall have the power and authority, to the extent
provided by law, after proper notice and lapse of such time as
may be required by law, to foreclose and/or sell such interest in
the Leased Property and the Other Collateral at the time and
place of sale fixed by Lessor in such notice of sale, either as a
whole, or in separate lots or parcels or items and in such order
as Lessor may elect, at auction to the highest bidder for cash in
lawful money of the United States payable at the time of sale.
(d) Lessor may bid and become the purchaser of all or any
part of the Leased Property and the Other Collateral at any such
sale, and the amount of Lessor's successful bid may be credited
against the Obligations.
(e) Accordingly, it is acknowledged that (to the extent
permitted by law) a power of sale has been granted in this
instrument; a power of sale may allow lessor to take such
interest in the leased property and the Other Collateral and sell
it, either as a whole or in separate lots or parcels, without
going to court in a foreclosure action upon default by the lessee
under this instrument.
(f) Upon the occurrence and during the continuance of any
Event of Default under the Lease, Lessor, in lieu of or in
addition to exercising any power of sale hereinabove, may proceed
by a suit or suits in equity or at law, whether for a foreclosure
hereunder, or for the sale of such interest in the Leased
Property, for the specific performance of any covenant or
agreement herein contained or in aid of the execution of any
power herein granted, or for the appointment of a receiver
pending any foreclosure hereunder or the sale of such interest in
the Leased Property, or for the enforcement of any other
appropriate legal or equitable remedy.
ARTICLE XXV
MISCELLANEOUS
SECTION 25.1. SURVIVAL; SEVERABILITY; ETC. Anything contained
in this Lease to the contrary notwithstanding, all claims against
and liabilities of the Lessee or the Lessor arising from events
commencing prior to the expiration or earlier termination of this
Lease shall survive such expiration or earlier termination. To
the extent permitted by Applicable Law, if any term or provision
of this Lease or any application thereof shall be declared
invalid or unenforceable, the remainder of this Lease and any
other application of such term or provision shall not be affected
thereby. If any right or option of the Lessee provided in this
Lease, including any right or option described in Articles XIV,
XV, XVIII, XIX or XX, would, in the absence of the limitation
imposed by this sentence, be invalid or unenforceable as being in
violation of the rule against perpetuities or any other rule of
law relating to the vesting of an interest in or the suspension
of the power of alienation of property, then such right or option
shall be exercisable only during the period which shall end
twenty-one (21) years after the date of death of the last
survivor of the descendants of Xxxxxxxx X. Xxxxxxxxx, the former
President of the United States, Xxxxx Xxxx, the deceased
automobile manufacturer, and Xxxx X. Xxxxxxxxxxx, the founder of
the Standard Oil Company, known to be alive on the date of the
execution, acknowledgment and delivery of this Lease.
SECTION 25.2. AMENDMENTS AND MODIFICATIONS. Subject to the
requirements, restrictions and conditions set forth in the
Participation Agreement, neither this Lease nor any provision
hereof may be amended, waived, discharged or terminated except by
an instrument in writing, in recordable form, signed by the
Lessor and the Lessee.
SECTION 25.3. NO WAIVER. No failure by the Lessor or the Lessee
to insist upon the strict performance of any term hereof or to
exercise any right, power or remedy upon a default hereunder, and
no acceptance of full or partial payment of Rent during the
continuance of any such default, shall constitute a waiver of any
such default or of any such term. To the fullest extent permitted
by law, no waiver of any default shall affect or alter this
Lease, and this Lease shall continue in full force and effect
with respect to any other then existing or subsequent default.
SECTION 25.4. NOTICES. All notices, demands, requests, consents,
approvals and other communications hereunder shall be in writing
and directed to the address described in, and deemed received in
accordance with the provisions of, Section 15.3 of the
Participation Agreement.
SECTION 25.5. SUCCESSORS AND ASSIGNS. All the terms and
provisions of this Lease shall inure to the benefit of the
parties hereto and their respective successors and permitted
assigns.
SECTION 25.6. HEADINGS AND TABLE OF CONTENTS. The headings and
table of contents in this Lease are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
SECTION 25.7. COUNTERPARTS. This Lease may be executed in any
number of counterparts, each of which shall be an original, but
all of which shall together constitute one and the same
instrument.
SECTION 25.8. GOVERNING LAW. This Lease shall be governed by,
and construed and interpreted in accordance with, the laws of the
State of New York, without regard to Conflicts of Law principles
(other than Title 14 of Article 5 of the New York General
Obligations Law), except as to matters relating to the creation
of the leasehold estates hereunder and the exercise of rights and
remedies with respect to the Leased Property, which shall be
governed by and construed in accordance with the law of the state
in which the Leased Property is located. Without limiting the
foregoing, in the event that this lease is deemed to constitute a
financing, which is the intention of the parties for this
purpose, the laws of the State of New York, without regard to
conflicts of Laws principles (other than Title 14 of Article 5 of
the New York General Obligations Law), shall govern the creation,
terms and provisions of the indebtedness evidenced hereby and the
creating of the lien granted hereunder, but perfection and
enforcement of said lien shall be governed by and construed in
accordance with the law of the state in which the leased property
is located.
SECTION 25.9. ORIGINAL LEASE. The single executed original of
this Lease marked "This Counterpart Is the Original Executed
Counterpart" on the signature page thereof and containing the
receipt thereof of Administrative Agent, on or following the
signature page thereof shall be the Original Executed Counterpart
of this Lease (the "ORIGINAL EXECUTED COUNTERPART"). To the
extent that this Lease constitutes chattel paper, as such term is
defined in the Uniform Commercial Code, no security interest in
this Lease may be created through the transfer or possession of
any counterpart other than the Original Executed Counterpart.
SECTION 25.10. LIMITATIONS ON RECOURSE. The parties hereto agree
that, except as specifically set forth in the Lease or in any
other Operative Document, Xxxxx Fargo Bank Northwest, National
Association shall have no personal liability whatsoever to the
Lessee or its respective successors and assigns for any claim
based on or in respect of this Lease or any of the other
Operative Documents or arising in any way from the Overall
Transaction; PROVIDED, HOWEVER, that Xxxxx Fargo Bank Northwest,
National Association shall be liable in its individual capacity
(a) for its own willful misconduct or gross negligence (or
negligence in the handling of funds), (b) for any Tax based on,
with respect to or measured by any income, fees, commission,
compensation or other amounts received by it as compensation for
services (including for acting as the Lessor) or otherwise under,
or as contemplated by, the Operative Documents, (c) Lessor Liens
on the Leased Property which are attributable to it, (d) for its
representations and warranties made in its individual capacity in
the Participation Agreement or in any certificate or documents
delivered pursuant thereto, (e) for its failure to perform any of
its covenants and agreements set forth in the Participation
Agreement or any other Operative Document, and (f) as otherwise
expressly provided in the Operative Documents.
SECTION 25.11. TRANSFER OF LEASED PROPERTY. (i) Whenever
pursuant to any provision of this Lease Lessor is required to
transfer the Leased Property to Lessee or to an independent third
party, such transfer shall be made at Lessee's expense by the
transfer by a deed without
covenants or warranties of title, except for matters arising by,
through or under Lessor, of all of Lessor's interest in and to
the Leased Property on an "as is, where is, with all faults"
basis but free and clear of all Lessor Liens and otherwise
without recourse, representation or warranty of any kind, and
together with the due assumption by Lessee (or such third party)
of, and due release of Lessor from, all obligations
relating to the Leased Property or any of the Operative
Documents. In connection with any transfer to an
independent third party, Lessee shall execute and deliver such
customary and reasonable documents, certificates and estoppels as
may reasonably be required to facilitate the transfer of the
Leased Property. Any provision in this Lease or any other
Operative Document to the contrary notwithstanding, Lessor shall
not be obligated to make any such transfer until Lessor and the
Participants have received all Rent and other amounts due and
owing hereunder and under the other Operative Documents including
any Break Costs. At or subsequent to the transfer or return of
the Leased Property, Lessee will provide Lessor with such lien
and title searches as Lessor may reasonably request to
demonstrate to Lessor's satisfaction that the Leased Property is
subject to no Liens for which Lessor would be liable under any
warranties of title.
(ii) Lessee may assign to another Person its right, upon a
purchase by Lessee, to take title to the Leased Property pursuant
to Section 20.1(b); PROVIDED, that (i) Lessee shall exercise any
option, (ii) such assignee shall be bound by the provisions of
Section 20.1(b), (iii) Lessee shall have represented by an
instrument in writing and delivered to Lessor that all necessary
Governmental Actions with respect to such transfer, including the
purchase of the Leased Property by any other Person as
contemplated herein, have been obtained or made, as applicable,
and (iv) no such assignment shall release Lessee from its
obligations under the Operative Documents, and Lessee shall
remain personally liable to Lessor for the payment of all amounts
due under any such Section and this Section 25.11.
SECTION 25.12. EFFECTIVE DATE. The parties hereto agree that,
for purposes of granting the lien hereunder, this Lease shall be
effective on the Second Document Closing Date.
[END OF PAGE]
[SIGNATURE PAGES FOLLOW]
In Witness Whereof, the parties have caused this Lease be
duly executed and delivered as of the date first above written.
Signature
Kansas City Power & Light Company, as Lessee
By:/S/XXXXXX X. XXXXXXXX
Name: Xxxxxx X. Xxxxxxxx
Title: Vice-President - Finance
Chief Financial Officer and
Treasurer
