UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 15, 2004
ITT INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Indiana 1-5672 13-5158950
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
4 West Red Oak Lane
White Plains, New York 10604
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (914) 641-2000
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (See General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Not Applicable
(Former name or former address, if changed since last report)
ITEM 1.01. Entry into a Material Definitive Agreement
On December 15, 2004, ITT Industries, Inc. (ITT) entered into a financing
arrangement with Rexus L.L.C (Rexus), and Air Bail S.A.S. and RBS Lombard, Inc.
as the investors. Pursuant to a participation agreement among ITT, Rexus and the
investors and a master lease agreement and certain lease supplements between
Rexus, as lessor, and ITT, as lessee, ITT transferred certain real property
owned by ITT to Rexus, an entity wholly owned by the investors, for a total
consideration of $120 million, and Rexus leased such properties back to ITT. The
proceeds will be used for general corporate purposes. The leases have a term of
ten years and the total amount payable by ITT under all of the leases, including
the interest component of the lease payments, is approximately $160 million. The
properties involved in the sale-leaseback transaction include facilities owned
by ITT in Fort Wayne, Indiana, Cheektowaga, New York, Colorado Springs,
Colorado, Archbold, Ohio, Morton Grove, Illinois, and Chicago, Illinois.
The parties intend that for (i) financial accounting purposes with
respect to ITT, (ii) United States federal and all United States state and
local income tax purposes and (iii) United States state real estate and
commercial law and bankruptcy purposes, (1) the lease arrangement will be
treated as a financing arrangement, (2) Rexus will be deemed a lender making a
loan to ITT which loan is secured by the properties, and (3) ITT will be
treated as the owner of the properties and will be entitled to all tax benefits
ordinarily available to an owner of properties similar to the properties for
such tax purposes. Lease payments during the term of the leases will be paid
yearly in arrears in amounts sufficient to satisfy ITT's obligations under the
master lease. ITT will also pay supplemental rent from time to time to cover
administrative costs of the lessor and other amounts that may be due the lessor
or the investors. ITT will remain responsible for operating, repairing,
insuring and maintaining the leased properties, the payment of taxes due on the
properties, and all costs, expenses and liabilities incurred in connection with
the properties.
ITT's obligations under the leases are unconditional and absolute, without
set-off, counterclaim or recoupment rights, and are secured by a collateral
assignment of its leasehold interests as well as by a lien on its facility in
Clifton, New Jersey which was not included in the sale-leaseback arrangements
described above.
The participation agreement includes covenants of ITT that are usual and
customary for agreements of this type, including covenants requiring the
provision of financial reports to the lessor, maintaining insurance on each of
the properties, and limitations on mergers and sales of assets, liens and
further sale and leaseback transactions. The participation agreement also
requires that ITT will not permit its ratio of consolidated earnings to
consolidated interest expense to be less than 3.75 to 1.0.
In the event of a default by ITT under the master lease, the lessor may, among
other things, declare the entire remaining amounts under the leases due and
payable, terminate the master lease and expel ITT from the properties.
At the end of the lease term, ITT retains the right to repurchase all (but not
less than all) of the leased properties from the lessor for total consideration
of one dollar.
Copies of the participation agreement, master lease and lease supplements are
attached as Exhibits 10.1 through 10.10 and are incorporated herein by
reference. The foregoing summaries of the terms of the participation agreement,
master lease and supplemental leases do not purport to be complete and are
qualified in their entirety by reference to each of the participation agreement,
master lease and the supplemental leases.
2
ITEM 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
The information set forth above in Item 1.01 regarding ITT's entry into a
participation agreement, master lease and related lease supplements, each dated
as of December 15, 2004, is hereby incorporated into Item 2.03(a) by reference.
ITEM 9.01. Financial Statements and Exhibits
(c) Exhibits
10.1 Participation Agreement, dated as of December 15, 2004, by and among ITT
Industries, Inc., Rexus L.L.C., Air Bail S.A.S. and RBS Lombard, Inc.
10.2 Master Lease and Deed of Trust, Deed to Secure Debt and Mortgage, dated as
of December 15, 2004, between ITT Industries, Inc. and Rexus L.L.C.
10.3 Mortgage, Security Agreement and Financing Statement (including Fixture
Filing), and Supplement and Short Form/Memorandum of Lease, dated as of
December 15, 2004, between ITT Industries, Inc. and Rexus L.L.C. (with
respect to property located in Fort Wayne, Indiana)
10.4 Mortgage, Security Agreement and Financing Statement (including Fixture
Filing), dated as of December 15, 2004, between ITT Industries, Inc. and
Rexus L.L.C. (with respect to property located in Cheektowaga, New York)
10.5 Lease Supplement and Short Form/Memorandum of Lease, dated as of December
15, 2004, between ITT Industries, Inc. and Rexus L.L.C. (with respect to
property located in Cheektowaga, New York)
10.6 Mortgage, Security Agreement and Financing Statement (including Fixture
Filing), and Supplement and Short Form/Memorandum of Lease, dated as of
December 15, 2004, between ITT Industries, Inc. and Rexus L.L.C. (with
respect to property located in Colorado Springs, Colorado)
10.7 Open-End Mortgage, Security Agreement and Financing Statement (including
Fixture Filing), and Supplement and Short Form/Memorandum of Lease, dated
as of December 15, 2004, between ITT Industries, Inc. and Rexus L.L.C.
(with respect to property located in Archbold, Ohio)
10.8 Mortgage, Security Agreement and Financing Statement (including Fixture
Filing), and Supplement and Short Form/Memorandum of Lease, dated as of
December 15, 2004, between ITT Industries, Inc. and Rexus L.L.C. (with
respect to property located in Morton Grove, Illinois)
10.9 Mortgage, Security Agreement and Financing Statement (including Fixture
Filing), and Supplement and Short Form/Memorandum of Lease, dated as of
December 15, 2004, between ITT Industries, Inc. and Rexus L.L.C. (with
respect to property located in Chicago Illinois)
10.10 Mortgage, Security Agreement and Financing Statement (including Fixture
Filing), dated as of December 15, 2004, between ITT Industries, Inc. and
Rexus L.L.C. (with
3
respect to property located in Clifton, New Jersey)
4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ITT INDUSTRIES, INC.
By: /s/ Kathleen S. Stolar
-----------------------------
Kathleen S. Stolar
Its: Vice President, Secretary
and Associate General Counsel
Date: December 20, 2004
5
[EXECUTION COPY]
================================================================================
PARTICIPATION AGREEMENT
Dated as of December 15, 2004
among
ITT INDUSTRIES, INC.,
as Lessee,
REXUS L.L.C.,
as Lessor,
and
AIR BAIL S.A.S.
and
RBS LOMBARD, INC.,
as Investors,
- --------------------------------------------------------------------------------
AIR BAIL S.A.S.,
Arranger
================================================================================
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS; INTERPRETATION....................................................... 1
ARTICLE II DOCUMENTATION DATE................................................................ 1
Section 2.1. Documentation Date.......................................................... 1
ARTICLE III PURCHASE OF PROPERTIES BY LESSOR.................................................. 4
Section 3.1. Purchase and Lease.......................................................... 4
Section 3.2. Lessor Commitment........................................................... 4
Section 3.3. Investors' Commitments...................................................... 4
Section 3.4. Procedures for Acquisition Date............................................. 4
ARTICLE IV OVERDUE AMOUNTS; RENT PAYMENTS; FEES.............................................. 5
Section 4.1. Overdue Amounts; Application of Rent Payments, etc.......................... 5
Section 4.2. Structuring Fee............................................................. 5
Section 4.3. Place and Manner of Payments................................................ 5
Section 4.4. Sharing of Payments......................................................... 6
ARTICLE V AMOUNTS DUE UNDER THE LEASE....................................................... 6
Section 5.1. Amounts Due Under the Lease................................................. 6
ARTICLE VI Conditions TO ACQUISITION DATE OR REPLACEMENT DATE................................ 7
Section 6.1. Acquisition Date or Replacement Date........................................ 7
ARTICLE VII APPLICATIONS OF PAYMENTS.......................................................... 10
Section 7.1. Basic Rent.................................................................. 10
Section 7.2. Purchase Payments by the Lessee; Reallocation of Property Costs............. 10
Section 7.3. Supplemental Rent........................................................... 11
Section 7.4. Application of Payments after Lease Event of Default........................ 11
Section 7.5. Casualty and Condemnation Amounts........................................... 12
Section 7.6. Other Payments.............................................................. 12
Section 7.7. Payments to Account......................................................... 12
ARTICLE VIII REPRESENTATIONS................................................................... 13
Section 8.1. Representations of the Lessee............................................... 13
Section 8.2. Representations on the Acquisition Date and each Replacement Date........... 17
Section 8.3. Warranties and Representations of the Lessor................................ 17
Section 8.4. Representations of each Investor............................................ 18
ARTICLE IX PAYMENT OF CERTAIN EXPENSES....................................................... 18
Section 9.1. Transaction Expenses and Other Fees and Expenses............................ 18
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TABLE OF CONTENTS
(continued)
PAGE
Section 9.2. Brokers' Fees and Stamp Taxes............................................... 19
Section 9.3. Lessor LLC Agreement and Related Obligations................................ 19
ARTICLE X OTHER COVENANTS AND AGREEMENTS.................................................... 19
Section 10.1. Affirmative Covenants of the Lessee......................................... 19
Section 10.2. Negative Covenants.......................................................... 22
Section 10.3. Covenants of the Lessor..................................................... 25
Section 10.4. Release of Property......................................................... 25
ARTICLE XI CERTAIN AGREEMENTS................................................................ 26
Section 11.1. Certain Restrictions on Access.............................................. 26
Section 11.2. Permitted Tax Disclosure.................................................... 26
ARTICLE XII TRANSFERS OF INVESTORS' AND LESSOR'S INTERESTS.................................... 26
Section 12.1. Assignments................................................................. 26
Section 12.2. Participations.............................................................. 27
Section 12.3. Withholding Taxes; Pledge Under Regulation A................................ 27
ARTICLE XIII INDEMNIFICATION................................................................... 28
Section 13.1. General Indemnification..................................................... 28
Section 13.2. Environmental Indemnity..................................................... 30
Section 13.3. Proceedings in Respect of Claims............................................ 31
Section 13.4. General Tax Indemnity....................................................... 32
Section 13.5. Title Representation and Indemnity.......................................... 34
Section 13.6. Withholding Taxes, etc...................................................... 35
Section 13.7. Increased Costs, etc........................................................ 37
Section 13.8. Funding Losses; Break Costs................................................. 38
Section 13.9. Capital Adequacy............................................................ 38
Section 13.10. Indemnity Payments in Addition to Lease Obligations......................... 39
Section 13.11. Payment of Amounts Due under this Article XIII.............................. 39
Section 13.12. Survival.................................................................... 39
ARTICLE XIV MISCELLANEOUS..................................................................... 39
Section 14.1. Survival of Agreements...................................................... 39
Section 14.2. No Broker, Etc.............................................................. 39
Section 14.3. Notices..................................................................... 39
Section 14.4. Counterparts................................................................ 40
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TABLE OF CONTENTS
(continued)
PAGE
Section 14.5. Amendments, Etc............................................................. 40
Section 14.6. Headings, Etc............................................................... 40
Section 14.7. Parties in Interest......................................................... 40
Section 14.8. GOVERNING LAW............................................................... 40
Section 14.9. Severability................................................................ 40
Section 14.10. Liability Limited........................................................... 41
Section 14.11. Further Assurances.......................................................... 41
Section 14.12. SUBMISSION TO JURISDICTION.................................................. 41
Section 14.13. Setoff...................................................................... 41
Section 14.14. Successors and Assigns...................................................... 42
Section 14.15. WAIVER OF JURY TRIAL........................................................ 42
Section 14.16. NO ORAL AGREEMENTS.......................................................... 42
Section 14.17. No Investor Responsible for Other Investors................................. 42
Schedule I -- Commitments
Schedule II -- Notice Information, Wire Instructions and Funding Offices
Schedule III -- Description of Properties, Go Dark Values and Original
Property Costs
Schedule 10.2(b) Description of Liens on Principal Properties
Exhibit A -- Form of Legal Opinion of In-House Counsel to Lessee
Exhibit B -- Form of Acquisition Date Notice
Exhibit C -- Form of Local Counsel Opinion
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PARTICIPATION AGREEMENT
This PARTICIPATION AGREEMENT (as amended, supplemented, amended and
restated or otherwise modified from time to time, this "Participation
Agreement"), dated as of December 15, 2004, is entered into by and among ITT
INDUSTRIES, INC., an Indiana corporation, as Lessee (the "Lessee"); REXUS
L.L.C., a Delaware limited liability company, as Lessor (the "Lessor"); and AIR
BAIL S.A.S., a French corporation duly registered as a Societe par Actions
Simplifiee ("Air Bail"), and RBS LOMBARD, INC., a New York corporation ("RBS"
and, collectively with Air Bail, the "Investors"), as Investors.
WITNESSETH:
WHEREAS, subject to the terms and conditions hereof, on the Acquisition
Date the Lessor will purchase from the Lessee or its Subsidiaries the real
properties described on Schedule III hereto under the heading "Leased
Properties";
WHEREAS, the Lessor desires to lease each Leased Property to the Lessee,
and the Lessee desires to lease each Leased Property from the Lessor;
WHEREAS, each Investor is willing to make a capital contribution to the
Lessor for the purpose of permitting the Lessor to acquire the Properties and
pay certain Transaction Expenses in connection therewith;
WHEREAS, to secure the obligations of the Lessee under the Lease and the
other Operative Documents, the Lessee will grant to the Lessor a first priority
Lien on each Property (including each Mortgaged Property);
NOW THEREFORE, in consideration of the mutual agreements contained in this
Participation Agreement and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Unless the context shall otherwise require, capitalized terms used and not
defined herein shall have the meanings assigned thereto in Appendix A to the
Master Lease dated as of the date hereof, between the Lessee and the Lessor, for
all purposes hereof (as such Appendix A may be amended, supplemented, amended
and restated or otherwise modified from time to time, "Appendix A to the Master
Lease"); and the rules of interpretation set forth in Appendix A to the Master
Lease shall apply to this Participation Agreement.
ARTICLE II
DOCUMENTATION DATE
Section 2.1. Documentation Date. The Documentation Date (the
"Documentation Date") shall be deemed to have occurred and all rights and
obligations of the parties to the Operative Documents
Participation Agreement
(each subject to any conditions specified therein) shall be in effect, upon
satisfaction or waiver of each of the following conditions precedent:
(a) Participation Agreement. This Participation Agreement shall have
been duly authorized, executed and delivered by the parties hereto.
(b) Master Lease. The Master Lease shall have been duly authorized,
executed and delivered by the parties thereto.
(c) Lessor LLC Agreement. The Lessor LLC Agreement shall have been
duly authorized, executed and delivered by the parties thereto.
(d) Lessor Administration Agreement. The Lessor Administration
Agreement shall have been duly authorized, executed and delivered by the
parties thereto.
(e) Corporate Documents; Certificates. The Lessee shall have
delivered, or shall have caused to be delivered, to the Lessor and each
Investor the following:
(i) Incumbency Certificate. An incumbency certificate,
executed by the Secretary or Assistant Secretary of the Lessee,
which shall identify by name and title and bear the signature of the
officers of the Lessee authorized to sign the Operative Documents to
which the Lessee is or shall be a party, upon which certificate the
Lessor, and the Investors shall be entitled to rely until informed
of any change in writing by the Lessee.
(ii) Articles of Incorporation. Copies of its articles of
incorporation, certified to be true and complete as of a recent date
by the appropriate governmental authority of the jurisdiction of its
incorporation or existence.
(iii) Resolutions. A certificate executed by the Lessee
certifying that the execution and delivery of each Operative
Document to which the Lessee is or is to be a party and the
effectuation of the transactions contemplated therein have been duly
authorized.
(iv) Bylaws. A copy of the Lessee's bylaws certified by its
secretary or assistant secretary as of the Documentation Date to be
true and correct and in full force and effect as of such date.
(v) Good Standing. A copy of a certificate of good standing
for the Lessee, certified as of a recent date by the Secretary of
State of the State of Indiana.
(f) Lessor Organizational Documents; Certificates. The Lessor shall
have delivered, or shall have caused to be delivered to each of the other
parties hereto the following:
(i) Certificate of the Lessor. A certificate, executed by the
Lessor certifying that the execution and delivery of each of the
Operative Documents to which the Lessor is a party has been
authorized pursuant to Section 8.02 of the Lessor LLC Agreement.
(ii) Certificate of Formation. Copies of the Lessor's
Certificate of Formation, certified as of a recent date by the
Secretary of State of the State of Delaware.
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Participation Agreement
(iii) Good Standing. A certificate of good standing for the
Lessor, certified as of a recent date by the Secretary of State of
the State of Delaware.
(g) Opinions of Counsel. An opinion of counsel for the Lessee (which
may be the Lessee's internal counsel) addressed to the Lessor and each of
the Investors, covering the matters set forth in Exhibit A and such other
matters as the Lessor or any Investor may reasonably request.
(h) Representations and Warranties; Lessee Officer's Certificate. On
the Documentation Date, the representations and warranties of each of the
parties hereto contained in Sections 8.1, 8.2, 8.3 and 8.4 shall be true
and correct as though made on and as of such date, except to the extent
such representations or warranties relate solely to an earlier date, in
which case such representations and warranties shall have been true and
correct on and as of such earlier date, and the Lessee shall have
delivered an officer's certificate to such effect with respect to its
representations and warranties.
(i) No Lease Default. No Lease Default or Lease Event of Default
shall have occurred and be continuing on the Documentation Date.
(j) Governmental Approvals. All Governmental Actions required by any
Applicable Law for the purpose of authorizing the Lessee, the Lessor and
each Investor to enter into the Operative Documents shall have been
obtained or made and be in full force and effect.
(k) Litigation. No action or proceeding shall have been instituted
or threatened, nor shall any governmental action be instituted or
threatened before any Governmental Authority, nor shall any order,
judgment or decree have been issued or proposed to be issued by any
Governmental Authority, (x) to set aside, restrain, enjoin or prevent the
performance of this Participation Agreement or any transaction
contemplated hereby or by any other Operative Document or (y) that, in the
reasonable opinion of the Lessor, could be expected to have a Material
Adverse Effect or have a material adverse effect on the rights and
remedies of the Lessor or any Investor under the Operative Documents, the
ability of the Lessee to perform its obligations under the Operative
Documents or the Fair Market Sales Value, utility, condition or residual
value of any real property described on Schedule III hereto.
(l) Applicable Law. In the reasonable opinion of the Lessor, no
change shall have occurred or been proposed in Applicable Law affecting
the Lessee, the Lessor, any Investor, the Lessor Administrator or any
Property that would make it uneconomic or illegal for any party to any
Operative Document to participate in any of the transactions contemplated
by the Operative Documents or otherwise would prohibit the consummation of
any transaction contemplated by the Operative Documents or expand the
duties, obligations and risks of the Lessor or any Investor.
(m) Withholding Tax Forms. The Lessor shall have delivered (or
caused to be delivered) to the Lessee a properly completed and signed U.S.
Internal Revenue Service ("IRS") form W-9.
All documents and instruments required to be delivered pursuant to this
Section 2.1 shall be delivered at the offices of Jones Day in London, England or
at such other location as may be determined by the Lessor and in such quantities
as shall be reasonably requested.
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Participation Agreement
ARTICLE III
PURCHASE OF PROPERTIES BY LESSOR
Section 3.1. Purchase and Lease. Subject to the conditions and terms
hereof, on the Acquisition Date the Lessor shall take the following actions with
respect to each Property described under the heading "Leased Properties" on
Schedule III hereto at the written request of the Lessee:
(a) the Lessor shall pay the Original Property Cost for each such
Property to the Seller thereof as the purchase price therefor;
(b) the Lessor shall acquire each such Property from the Seller
thereof; and
(c) the Lessor shall lease each such Property to the Lessee under
the Master Lease and the respective Lease Supplements.
Notwithstanding any other provision hereof, (i) no Property Cost shall be paid
by the Lessor with respect to any Property after the Acquisition Date, (ii) the
Lessor shall not be obligated to pay any Property Cost with respect to any
Property if, after giving effect thereto, the Aggregate Property Cost would
exceed the Lessor Commitment Amount, and (iii) the Acquisition Date shall not
occur after December 30, 2004.
Section 3.2. Lessor Commitment. Subject to the conditions and terms
hereof, on the Acquisition Date the Lessor shall acquire each Property described
under the heading "Leased Properties" on Schedule III hereto by paying to the
Seller in immediately available funds an amount equal to the Original Property
Cost for such Property. Notwithstanding any other provision hereof, the Lessor
shall not be obligated to pay any Original Property Cost if, after giving effect
to such payment, the Aggregate Property Cost would exceed the Lessor Commitment
Amount.
Section 3.3. Investors' Commitments. Subject to the conditions and terms
hereof, on the Acquisition Date each Investor shall make a capital contribution
to the Lessor in an amount equal to such Investor's Commitment Percentage of the
aggregate Original Property Costs of the Properties being acquired on the
Acquisition Date. Notwithstanding any other provision hereof, no Investor shall
be obligated to make any capital contribution to the Lessor if, after giving
effect to the proposed capital contribution, the aggregate outstanding amount of
such Investor's capital contributions would exceed such Investor's Commitment
Percentage of the Lessor Commitment Amount.
Section 3.4. Procedures for Acquisition Date. (a) The Lessee shall give
the Lessor prior written notice pursuant to an Acquisition Date Notice
substantially in the form of Exhibit B (the "Acquisition Date Notice"), which
Acquisition Date Notice shall be delivered not later than 10:00 a.m. (New York
time), three (3) Business Days prior to the proposed Acquisition Date. The
Acquisition Date Notice shall set forth (i) the proposed Acquisition Date, (ii)
the Property or Properties to be acquired by the Lessor, (iii) the Seller of
each Property being acquired, (iv) a certification by the Lessee that all
conditions to be satisfied by the Lessee set forth in the Operative Documents to
which the Lessee is a party with respect to the payment by the Lessor of the
applicable Property Cost have been fully and completely satisfied to the extent
required to be satisfied by the Lessee, and (v) wire transfer instructions for
the disbursement of the proceeds of such Original Property Cost to the Lessee or
to such other Persons specified in the Acquisition Date Notice. Subject to
timely delivery of the Acquisition Date Notice and the other terms and
conditions of the Operative Documents, each Investor shall make its Commitment
Percentage of the requested Original Property Cost available to the Lessor at
the Account by 2:00 p.m., (New York time), on the requested Acquisition Date,
and the Lessor shall make such amounts available to the Persons and accounts as
the Lessee shall have indicated in the Acquisition Date Notice.
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Participation Agreement
(a) Except as the Lessor may otherwise agree in writing, amounts paid by
the Lessor on the Acquisition Date shall be used solely to pay the purchase
price for each Property or to pay or reimburse the Lessee for Transaction
Expenses, as the case may be.
(b) The Lessor shall, immediately upon its receipt of the Acquisition Date
Notice from the Lessee, deliver a copy of the Acquisition Date Notice to each
Investor.
(c) The Go Dark Value and Original Property Cost (including allocated
Transaction Expenses) for each Leased Property acquired on the Acquisition Date
and each Mortgaged Property upon which a Lien is granted to the Lessor on the
Acquisition Date shall be as set forth on Schedule III hereto.
ARTICLE IV
OVERDUE AMOUNTS; RENT PAYMENTS; FEES
Section 4.1. Overdue Amounts; Application of Rent Payments, etc. (a) If
all or any portion of the Aggregate Property Cost, any Accrual Rent, Fixed Rent,
Supplemental Rent or any other amount payable hereunder shall not be paid when
due (whether at stated maturity, acceleration thereof or otherwise), such
overdue amount shall bear interest at a rate per annum which is equal to the
Overdue Rate.
(a) All Basic Rent and Supplemental Rent paid by the Lessee under the
Lease from time to time shall be applied as set forth in Article VII.
(b) If not repaid sooner, the Aggregate Property Cost shall be repaid in
full on the Scheduled Lease Termination Date.
Section 4.2. Structuring Fee. The Lessee agrees to pay to the Arranger on
the Acquisition Date the Structuring Fee in accordance with the Arrangement
Letter.
Section 4.3. Place and Manner of Payments. Except as otherwise
specifically provided herein, all payments by the Lessee hereunder, under the
Master Lease or under any other Operative Document shall be made to the Lessor
(or, in the case of Supplemental Rent owing under Article XIII, directly to the
Person entitled thereto), in Dollars in immediately available funds, without
offset, deduction, counterclaim or withholding of any kind (except as provided
in Section 12.3(a)), to the Account in New York, New York not later than 10:00
a.m. (New York time) on the date when due. Payments received after such time
shall be deemed to have been received on the next succeeding Business Day. The
Lessee shall, at the time it makes any payment under any Operative Document,
specify to the Lessor the Basic Rent, Property Cost, Termination Price,
Termination Base Amount, Fees, Supplemental Rent or other amounts payable by the
Lessee hereunder to which such payment is to be applied (and in the event that
it fails so to specify, or if such application would be inconsistent with the
terms hereof, the Lessor shall apply such payment in such manner as the Lessor
may determine to be appropriate in respect of obligations owing by Lessee
subject to the terms of Article VII). Whenever any payment hereunder shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next Business Day (subject to accrual of interest and
fees for the period of such extension); provided that if the next Business Day
falls in the next calendar year, payment shall instead be due on the preceding
Business Day.
Section 4.4. Sharing of Payments. The Investors agree among themselves
that, in the event that the Lessor or any Investor shall obtain payment in
respect of any obligation owing to the Lessor or to
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Participation Agreement
such Investor under the Operative Documents through the exercise of a right of
setoff, banker's lien or counterclaim, or pursuant to a secured claim under
Section 506 of the Bankruptcy Code or other security or interest arising from,
or in lieu of, such secured claim, received by such Investor under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by any
other means, in excess of its pro rata share of such payment as provided for in
this Participation Agreement and the Lessor LLC Agreement, such Investor shall
promptly purchase from the other Investor a participation in such amounts, and
make such other adjustments from time to time, as shall be equitable to the end
that all Investors share such payment in accordance with their respective
ratable shares as provided for in the Lessor LLC Agreement. The Investors
further agree among themselves that if payment to an Investor obtained by such
Investor through the exercise of a right of setoff, banker's lien, counterclaim
or other event as aforesaid shall be rescinded or must otherwise be restored,
each Investor which shall have shared the benefit of such payment shall, by
repurchase of a participation theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Investor whose payment shall have been rescinded or otherwise restored.
The Lessee agrees that any Investor so purchasing such a participation may, to
the fullest extent permitted by law, exercise all rights of payment, including
setoff, banker's lien or counterclaim, with respect to such participation as
fully as if such Investor were a holder of such obligation in the amount of such
participation. Except as otherwise expressly provided herein, if any Investor
shall fail to remit to any other Investor an amount payable by such party to
such other Investor pursuant to the Operative Documents on the date when such
amount is due, such payments shall be made together with interest thereon for
each date from the date such amount is due until the date such amount is paid to
the Lessor at a rate per annum equal to the Overnight LIBOR. If under any
applicable bankruptcy, insolvency or other similar law, any Investor receives a
secured claim in lieu of a setoff to which this Section 4.4 applies, such
Investor shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the Investors under
this Section 4.4 to share in the benefits of any recovery on such secured claim.
ARTICLE V
AMOUNTS DUE UNDER THE LEASE
Section 5.1. Amounts Due Under the Lease. Anything herein or elsewhere to
the contrary notwithstanding, it is the intention of the Lessee, the Lessor and
the Investors that: (i) the amount and timing of installments of Basic Rent due
and payable from time to time from the Lessee under the Lease shall be equal to
the sum of (x) the aggregate payments due and payable as Accrual Rent on each
Scheduled Payment Date and (y) the aggregate payments due and payable as Fixed
Rent on each Scheduled Payment Date; (ii) if the Lessee elects to purchase or
becomes obligated to purchase all of the Properties under the Lease or elects
the Return Option, the Lease Balance with respect thereto and all other
obligations of the Lessee owing to the Lessor and the Investors shall be due and
payable in full by the Lessee on the date set forth in the Lease; (iii) upon a
Lease Event of Default resulting in an acceleration of the Lessee's obligation
to purchase the Lessor's interest in each Property under the Lease, the amounts
then due and payable by the Lessee under the Lease shall include all amounts
necessary to pay in full the Lease Balance plus all other amounts then due from
the Lessee under the Operative Documents (and the Lessee agrees that, in any
such event, it will pay such amounts regardless of whether the Lease is then in
effect); and (v) if the Lessee elects to terminate or is required to purchase or
terminate any Property pursuant to Section 15.1 or 19.1 of the Master Lease, the
amounts then due and payable by the Lessee shall include all amounts necessary
to pay the Termination Base Amount or Termination Price (as applicable) of such
Property together with all Rent allocable thereto.
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Participation Agreement
ARTICLE VI
CONDITIONS TO ACQUISITION DATE OR REPLACEMENT DATE
Section 6.1. Acquisition Date or Replacement Date. The closing date with
respect to the Lessor's acquisition of the real properties described under the
heading "Leased Properties" on Schedule III hereto shall occur on a Business Day
on or after the Documentation Date on which all the conditions precedent thereto
set forth in this Section 6.1 shall have been satisfied or waived by the
applicable parties as set forth herein (such date, the "Acquisition Date"). The
obligation of the Lessor to acquire the real properties described under the
heading "Leased Properties" on Schedule III hereto and to pay the Property Costs
therefor and the obligation of each Investor to make any related capital
contribution to the Lessor on the Acquisition Date, are subject to satisfaction
or waiver of the conditions precedent set forth in Section 2.1 and the following
conditions precedent, and the obligation of the Lessor to acquire any
Replacement Property and terminate the Lease with respect to any Terminated
Property in connection therewith, is subject to the satisfaction or waiver of
the following conditions precedent:
(a) Acquisition Date Notice. In the case of the Acquisition Date,
the Lessor shall have received a fully executed counterpart of the
Acquisition Date Notice in accordance with Section 3.4. Each of the
delivery of the Acquisition Date Notice and the acceptance of the Original
Property Costs shall constitute a representation and warranty by the
Lessee that on the Acquisition Date (both immediately before and after
giving effect to the payment of the Property Cost and the application of
the proceeds thereof), the statements made in Section 8.2 are true and
correct.
(b) [INTENTIONALLY OMITTED]
(c) Environmental Audit. At least ten (10) Business Days prior to
the Acquisition Date or Replacement Date (as applicable), the Lessor shall
have received an Environmental Audit performed by an environmental
consultant reasonably acceptable to the Lessor and either addressed to the
Lessor and each Investor or accompanied by a letter allowing such Persons
to rely thereon with respect to each Subject Property and in form and
substance reasonably satisfactory to the Lessor and stating that the
applicable assessment has revealed no evidence of Recognized Environmental
Conditions in connection with the site except for specified matters, which
matters the Lessor and the Lessee reasonably agree are not material. If
such Environmental Audit reveals the need for additional review or
testing, the Lessee shall have provided such additional assessments as are
recommended by such consultant.
(d) Property Survey. With respect to each Replacement Date, the
Lessee shall have delivered to each of the Lessor and each Investor on or
prior to such Replacement Date an ALTA/ASCM (Urban) Survey of each Subject
Property in form and substance acceptable to such Persons.
(e) Title Abstracts. On or prior to the Acquisition Date or
Replacement Date (as applicable), the Lessee shall have delivered to the
Lessor a complete title report for each Subject Property (each, a "Title
Abstract") that shall be dated down to the Acquisition Date or such
Replacement Date (as applicable) and shall identify and include copies of
all liens, mortgages, encumbrances, easements, covenants, leases,
agreements and other items affecting the Subject Property, include a legal
description, a tax lot and tax block for the Subject Property and provide
evidence that all real estate and other taxes with regard to the Subject
Property are current and fully paid. Such Title Abstract must be in all
respects acceptable to the Lessor and provide evidence reasonably
satisfactory that, immediately prior to the conveyance of the Subject
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Participation Agreement
Property to the Lessor by the Seller, the Seller had fee simple title to
the Subject Property subject only to matters approved by the Lessor in its
reasonable discretion. Title insurance will not be required and the Lessor
will rely upon the Lessee's title indemnity set forth in Section 13.5.
(f) Evidence of Insurance. The Lessor shall have received evidence
that the insurance maintained by the Lessee with respect to the Subject
Property satisfies the requirements set forth in Article XIII of the
Master Lease, setting forth the respective coverage, limits of liability,
carrier, policy number and period of coverage.
(g) Representations and Warranties. On the Acquisition Date or
Replacement Date (as applicable), the representations and warranties of
the Lessee set forth in Section 8.2 shall be true and correct; provided
that a failure of any representation or warranty of the Lessee to be true
and correct on the Acquisition Date or Replacement Date (as applicable)
shall not be a condition precedent to the Lessee's performance of its
obligations under the Operative Documents.
(h) Responsible Officer's Certificate. The Lessor and each Investor
shall have received a Responsible Officer's Certificate of the Lessee,
addressed to the Lessor and each Investor and dated the Acquisition Date
or Replacement Date (as applicable), stating that (w) to such Responsible
Officer's knowledge after reasonable inquiry, the representations and
warranties of the Lessee contained in Section 8.2 are true and correct on
and as of the Acquisition Date or such Replacement Date (as applicable);
(x) to such Responsible Officer's knowledge after reasonable inquiry, no
Lease Default or Lease Event of Default has occurred and is continuing;
(y) to such Responsible Officer's knowledge after reasonable inquiry, each
Operative Document to which the Lessee is a party is in full force and
effect with respect to it; and (z) to such Responsible Officer's knowledge
after reasonable inquiry, the Lessee has duly performed and complied with
all conditions contained herein or in any other Operative Document
required to be performed and complied with by it on or prior to the
Acquisition Date or Replacement Date, as the case may be.
(i) Government Approvals. All necessary Governmental Actions
required by any Applicable Law (including pursuant to any Environmental
Laws) as of the Acquisition Date or Replacement Date for the purpose of
authorizing the Lessor to acquire the applicable Leased Property (or, in
the case of a Mortgaged Property, to acquire the Lien on such Property)
shall have been obtained or made and be in full force and effect,
including, in the case of the Clifton Property, in accordance with the
requirements of ISRA if ISRA is applicable. The Lessee shall take all
actions, at its sole cost and expense, to obtain a written determination
issued by the NJDEP authorizing the Transactions to occur with respect to
the Clifton Property, including, without limitation, a Remediation In
Progress Waiver under N.J.S.A. 13:I K-11.5 and N.J.A.C. 7:26B-5.4;
provided, that the Lessee shall provide to the Lessor a copy of any
submission to the NJDEP of any application or any other document intended
to secure a written determination from the NJDEP.
(j) Deed. With respect to each Subject Property that is a Leased
Property, the Lessor shall have received, at least three (3) Business Days
prior to the Acquisition Date or Replacement Date (as applicable), a copy
of the proposed Deed with respect to such Subject Property, and on or
prior to the Acquisition Date or Replacement Date (as applicable), such
Deed duly executed conveying fee simple title to such Property to the
Lessor, containing customary seller's warranties in the applicable
jurisdiction and subject only to Permitted Property Liens, together with
any transfer and recordation tax forms necessary or appropriate to record
the same. The legal description, tax lot designation and zoning of the
Land relating to each Subject Property shall be reasonably acceptable to
the Lessor.
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Participation Agreement
(k) Fees and Transaction Expenses. All Fees then due and payable
pursuant to Section 4.2 shall have been paid. All Transaction Expenses due
and payable by the Lessee to the Arranger, the Lessor and the Investors
for which invoices shall have been received by the Lessee shall have been
paid. Jones Day, as special counsel for Air Bail S.A.S., shall have
received, to the extent then invoiced, payment in full in cash of all
Transaction Expenses payable to such counsel pursuant to Section 9.1.
(l) Lease Supplement; Lessor Mortgage. On or prior to the
Acquisition Date or Replacement Date (as applicable), the Lessee shall
have delivered to the Lessor (x) in the case of a Subject Property that is
a Leased Property, the original counterpart of the Lease Supplement
executed by the Lessee and the Lessor with respect to the Subject Property
and (y) in the case of a Subject Property that is a Mortgaged Property, a
Lessor Mortgage covering such Subject Property and in form and substance
reasonably satisfactory to the Lessor.
(m) Financing Statements. On or prior to the Acquisition Date or
Replacement Date (as applicable), the Lessee shall have delivered all UCC
financing statements relating to the Subject Property as the Lessor may
reasonably request in order to protect the interests of the Lessor under
the Lease relating to the Subject Property to the extent the Master Lease
constitutes a security agreement.
(n) Recordation of Lessor Mortgage; Lessor Financing Statements. The
Lessor shall have received (x) evidence reasonably satisfactory to it that
each of (i) the applicable Lease Supplement and any other instrument
constituting a Lessor Mortgage and (ii) the Financing Statements relating
to the Subject Property has been, or is being, recorded or filed in a
manner sufficient to properly perfect its interests therein.
(o) UCC Search Results. The Lessor shall have received copies of
file search reports from the Uniform Commercial Code filing officer (i) in
the jurisdiction in which each Subject Property is located, (ii) in the
jurisdiction in which the chief executive office of the Lessee is located
and (iii) in the State of Indiana, setting forth the results of such
Uniform Commercial Code file searches.
(p) No Lease Default. There shall not have occurred and be
continuing any Lease Default or Lease Event of Default and no Lease
Default or Lease Event of Default will have occurred after giving effect
to the acquisition of the Subject Property (or, in the case of a Mortgaged
Property, the granting of a Lien on such Property to the Lessor).
(q) Opinion of Counsel and of Local Counsel to the Lessee. The
Lessor and each Investor shall have received (i) an opinion of counsel
qualified with respect to the laws of the jurisdiction in which the
Subject Property is situated, addressed to the Lessor and each Investor,
substantially in the form of Exhibit C (or in such other form that is
acceptable to the Lessor and each Investor) and (ii) if requested by the
Lessor, opinions from such other counsel and covering such issues as the
Lessor may reasonably request.
(r) Good Standing Certificates. The Lessee shall have delivered to
the Lessor and each Investor a certificate of good standing (or its
equivalent) to the effect that it is qualified to do business in the
jurisdiction where the Subject Property is located.
(s) [INTENTIONALLY OMITTED]
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Participation Agreement
(t) Available Commitments. After giving effect to the applicable
payment of Property Cost on the Acquisition Date, the requirements set
forth in Sections 3.2 and 3.3 with respect to commitment limits shall not
be violated.
(u) Additional Matters. On the Acquisition Date or Replacement Date
(as applicable), the Lessor and each Investor shall have received such
additional documents and instruments related to the acquisition, financing
and mortgage (as applicable) of the Subject Property as any of them shall
reasonably request in order to establish the rights and interests of the
Lessor and the Investors intended to be created under the Operative
Documents in respect of the Subject Property.
All documents and instruments required to be delivered pursuant to this Section
6.1 shall be delivered at the offices of Jones Day in London, England, or at
such other location as may be determined by the Lessor and the Lessee and in
such quantities as shall be reasonably requested, and the Lessor and each
Investor hereby agree that delivery of any document or instrument to such
offices or other location shall constitute delivery to the Lessor and each
Investor for all purposes of the Operative Documents.
ARTICLE VII
APPLICATIONS OF PAYMENTS
Section 7.1. Basic Rent. Each payment of (x) Basic Rent and (y)
Supplemental Rent representing payment of interest on overdue installments of
Basic Rent received by the Lessor shall be applied first, to payment of accrued
and unpaid interest at the Overdue Rate then owing on any Basic Rent or
Supplemental Rent not paid when due, second to payment of accrued and unpaid
Accrual Rent then due and owing and third, to the Fixed Rent then due and owing.
Section 7.2. Purchase Payments by the Lessee; Reallocation of Property
Costs. Any payment received by the Lessor as a result of:
(a) the purchase of any Property in accordance with Section 18.1 or
18.2 of the Master Lease, or
(b) compliance with the obligation to purchase all of the Properties
in accordance with Section 16.2(g) of the Master Lease, or
(c) the payment of the Termination Base Amount, Termination Price or
other purchase price with respect to any Property in accordance with
Section 15.1 or 19.1 of the Master Lease,
shall be applied by the Lessor first to payment of accrued and unpaid Accrual
Rent then due and owing, second to any Fixed Rent then due and owing, third, to
the payment of the Termination Indemnity Amount (if any) payable in connection
with such payment, fourth to the payment of the Property Cost of the applicable
Property (if such Property is a Leased Property), fifth to the payment of the
Property Cost of each other Property that is a Leased Property, on a pro rata
basis (based on the Original Property Cost of each such Leased Property), and
sixth any excess remaining thereafter shall be distributed in accordance with
Section 7.4(a).
Upon any payment of the Termination Price or Termination Base Amount with
respect to any Property, the Property Costs of the Leased Properties subject to
the Master Lease after giving effect to
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Participation Agreement
such termination shall be reallocated on a pro rata basis (based on the Go Dark
Value of each such Leased Property) so that, immediately after giving effect to
such reallocation, the Aggregate Property Cost equals an amount equal to (x) the
Aggregate Property Cost immediately prior to such payment of Termination Price
or Termination Base Amount minus (y) the Termination Base Amount included in
such Termination Price (in the case of a payment of Termination Price) or such
Termination Base Amount (in the case of a payment of Termination Base Amount).
Section 7.3. Supplemental Rent. All payments of Supplemental Rent received
by the Lessor (excluding any amounts payable pursuant to the preceding
provisions of this Article VII or Section 7.4 below) shall be distributed
promptly by the Lessor upon receipt thereof to the Persons entitled thereto
pursuant to the Operative Documents.
Section 7.4. Application of Payments after Lease Event of Default. (a)
During the continuance of a Lease Event of Default and subject to clause (b)
below, all amounts of Rent and all other amounts (including proceeds from any
sale of the Properties) received by the Lessor shall be applied by the Lessor in
the following order of priority:
first, so much of such payment or amount as shall be required to pay
or reimburse the Lessor and the Lessor Administrator for any tax, fees,
expense, indemnification or other loss incurred by the Lessor or the
Lessor Administrator (to the extent incurred in connection with any duties
as the Lessor or the Lessor Administrator), shall be distributed to the
Lessor and the Lessor Administrator without priority of one over the other
in accordance with the amount of such payment or payments payable to each
such Person;
second, so much of such payments or amounts as shall be required to
pay to the Lessor and the Lessor Administrator the amounts payable to them
pursuant to any expense reimbursement or indemnification provisions of the
Operative Documents shall be distributed to the Lessor and the Lessor
Administrator without priority of one over the other in accordance with
the amount of such payment or payments payable to each such Person;
third, so much of such payments or amounts as shall be required to
pay to the Investors the amounts payable to them pursuant to any expense
reimbursement or indemnification provisions of the Operative Documents
shall be distributed to the Investors without priority of one over the
other in accordance with the amount of such payment or payments payable to
each such Person;
fourth, to accrued and unpaid interest at the Overdue Rate then
owing on any Basic Rent or Supplemental Rent not paid when due;
fifth, for application to pay in full all accrued and unpaid Accrual
Rent then owing;
sixth, for application to pay in full the Termination Indemnity
Amount (if any) for each Property;
seventh, for application to pay in full the Aggregate Property Cost;
eighth, to the Lessor for any other amounts payable to it under the
Operative Documents, including all Supplemental Rent then owing to the
Lessor;
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Participation Agreement
ninth, to the Investors for any other amounts payable to them under
the Operative Documents, including all other Supplemental Rent not covered
by any other clause in this paragraph (a) then owing pro rata based on the
amounts payable; and
tenth, the balance, if any, of such payment or amounts remaining
thereafter shall be promptly distributed to, or as directed by, the
Persons entitled thereto by Applicable Law.
(b) All payments received and amounts realized by the Lessor in connection
with any Casualty or Condemnation during the continuance of a Lease Event of
Default shall be applied by the Lessor as follows:
(i) in the event that the Lessor elects pursuant to Section 14.2(a)
of the Master Lease to pay all or a portion of such amounts to the Lessee
for the repair of damage caused by such Casualty or Condemnation in
accordance with Section 14.2 of the Master Lease, then such amounts shall
be distributed to the Lessee in accordance with Section 14.2 of the Master
Lease, and
(ii) in the event that the Lessor elects pursuant to Section 14.2(a)
of the Master Lease to apply all or a portion of such amounts to the
purchase price of the related Property, then such amounts shall be
distributed in accordance with clause (a) of this Section 7.4.
Section 7.5. Casualty and Condemnation Amounts. Subject to Section 7.4(b),
any amounts payable to the Lessor as a result of a Casualty or Condemnation
pursuant to Section 14.2 of the Master Lease shall be distributed as follows:
(a) all amounts payable to the Lessee in accordance with Section
14.2(a) or 14.2(f) of the Master Lease shall be distributed to the Lessee,
and
(b) all amounts that are to be applied to the purchase price of the
related Property in accordance with Section 14.2(a) and Article XV of the
Master Lease shall be applied by the Lessor in accordance with Section
7.2.
Section 7.6. Other Payments. (a) Except as otherwise provided in clause
(b) below, any payment received by the Lessor for which no provision as to the
application thereof is made in the Operative Documents or elsewhere in this
Article VII (including any balance remaining after the application in full of
amounts to satisfy any expressed provision) shall be distributed in accordance
with the Lessor LLC Agreement.
(a) All payments received and amounts realized by the Lessor under the
Master Lease or otherwise with respect to the Properties to the extent received
or realized at any time after the indefeasible payment in full of the Lease
Balance and any other amounts due and owing to the Lessor or the Investors under
or in connection with the Operative Documents, shall be distributed forthwith by
the Lessor in the order of priority set forth in Section 7.4(a).
(b) Any payment received by the Lessor for which provisions as to the
application thereof is made in an Operative Document but not elsewhere in this
Article VII shall be distributed forthwith by the Lessor to the Person and for
the purpose for which such payment was made in accordance with the terms of such
Operative Document.
Section 7.7. Payments to Account. All payments made to the Lessor pursuant
to the Operative Documents shall be made to the Account.
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Participation Agreement
ARTICLE VIII
REPRESENTATIONS
Section 8.1. Representations of the Lessee. The Lessee hereby represents
and warrants to the Lessor, each Investor and the Arranger that:
(a) Organization; Powers. Each of the Lessee and each of the
Subsidiaries (i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (ii)
has all requisite power and authority to own its property and assets and
to carry on its business as now conducted and as proposed to be conducted,
(iii) is qualified to do business in every jurisdiction where such
qualification is required, except where the failure so to qualify would
not result in a Material Adverse Effect, and (iv) in the case of the
Lessee, has the corporate power and authority to execute, deliver and
perform its obligations under the Operative Documents to which it is a
party and to incur the Obligations hereunder and thereunder.
(b) Authorization. The execution, delivery and performance by the
Lessee of each Operative Document to which it is or will be a party and
the incurrence of the Obligations thereunder (collectively, the
"Transactions") (i) have been or, upon execution and delivery thereof,
will be duly authorized by all requisite corporate action and (ii) will
not (x) violate (A) any provision of any law, statute, rule or regulation
(including the Margin Regulations) or of the certificate of incorporation
or other constitutive documents or by-laws of the Lessee, (B) any order of
any Governmental Authority or (C) any provision of any indenture,
agreement or other instrument to which the Lessee is a party or by which
it or any of its property is or may be bound, (y) be in conflict with,
result in a breach of or constitute (alone or with notice or lapse of time
or both) a default under any such indenture, agreement or other instrument
or (z) result in the creation or imposition of any lien upon any property
or assets of the Lessee.
(c) Enforceability. This Participation Agreement and each other
Operative Document to which the Lessee is a party constitutes a legal,
valid and binding obligation of the Lessee enforceable in accordance with
its terms.
(d) Governmental Approvals. No action, consent or approval of,
registration or filing with or other action by any Governmental Authority,
other than those which have been taken, given or made, as the case may be,
is or will be required with respect to the Lessee in connection with the
Transactions.
(e) Financial Statements.
(i) The Lessee's consolidated balance sheet and consolidated
statements of income, cash flows and changes in shareholders' equity
as of and for the year ended December 31, 2003, and the Lessee's
consolidated condensed income statements, consolidated condensed
balance sheets and consolidated condensed statement of cash flows
for the nine months ended September 30, 2004, in each case as posted
(or hyperlinked) on the Lessee's internet home page located at
www.itt.com on the Closing Date, present fairly, in all material
respects, the consolidated combined financial condition and the
results of operations of the Lessee and the Subsidiaries as of such
dates and for such periods in accordance with GAAP.
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Participation Agreement
(ii) As of the Documentation Date and as of the Acquisition
Date, there has been no material adverse change in the consolidated
financial condition of the Lessee and the Lessee Subsidiaries taken
as a whole from the financial condition reported in the financial
statements referenced in paragraph (i) of this Section 8.1(e).
(f) Litigation; Compliance with Laws.
(i) As of the Documentation Date, there are no actions,
proceedings or investigations filed or (to the knowledge of the
Lessees) threatened or affecting the Lessee or any Subsidiary in any
court or before any Governmental Authority or arbitration board or
tribunal which question the validity or legality of this
Participation Agreement, the Master Lease or any other Operative
Document, the Transactions or any action taken or to be taken
pursuant to this Participation Agreement, the Lease or any other
Operative Document and no order or judgment has been issued or
entered restraining or enjoining the Lessee or any Subsidiary from
the execution, delivery or performance of this Participation
Agreement, the Lease or any other Operative Document nor is there
any other action, proceeding or investigation filed or (to the
knowledge of the Lessee or any Subsidiary) threatened against the
Lessee or any Subsidiary in any court or before any Governmental
Authority or arbitration board or tribunal which would be reasonably
likely to result in a Material Adverse Effect or materially restrict
the ability of the Lessee to comply with its obligations under the
Operative Documents to which it is a party.
(ii) Neither the Lessee nor any Subsidiary is in violation of
any law, rule or regulation (including any law, rule or regulation
relating to the protection of the environment or to employee health
or safety), or in default with respect to any judgment, writ,
injunction or decree of any Governmental Authority, where such
violation or default would be reasonably likely to result in a
Material Adverse Effect.
(iii) No exchange control law or regulation materially
restricts the Lessee from complying with its obligations in respect
of the Obligations or otherwise under the Operative Documents.
(g) Federal Reserve Regulations. (i) Neither the Lessee nor any
Subsidiary that will receive proceeds of any Property Costs paid hereunder
is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying
Margin Stock.
(ii) No part of the proceeds of any Original Property Costs paid by
the Lessor will be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or carry Margin Stock
or to refund indebtedness originally incurred for such purpose, or for any
other purpose which entails a violation of, or which is inconsistent with,
the provisions of the Margin Regulations.
(h) Investment Company Act; Public Utility Holding Company Act. The
Lessee is not (i) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940 (the "1940 Act") or
(ii) a "holding company" as defined in, or subject to regulation under,
the Public Utility Holding Company Act of 1935.
(i) Full Disclosure; No Material Misstatements. None of the
representations or warranties made by the Lessee in connection with this
Participation Agreement as of the date
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Participation Agreement
such representations and warranties are made or deemed made, and no
report, financial statement or other information furnished by or on behalf
of the Lessee to the Lessor, any Investor or the Arranger pursuant to or
in connection with this Participation Agreement or the other Operative
Documents, contains or will contain any material misstatement of fact or
omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were or will be made, not misleading.
(j) Taxes. Each of the Lessee and each of the material Subsidiaries
have filed or caused to be filed all federal, state and local tax returns
which are required to be filed by them, and have paid or caused to be paid
all Taxes shown to be due and payable on such returns or on any
assessments received by any of them, other than any Taxes or assessments
the validity of which is being contested in good faith by appropriate
proceedings, and with respect to which appropriate accounting reserves
have to the extent required by GAAP been set aside. No liens for Taxes
have been imposed on or with respect to any Property.
(k) Employee Pension Benefit Plans. The present aggregate value of
accumulated benefit obligations of all unfunded and underfunded pension
plans of the Lessee and its Subsidiaries (based on those assumptions used
for disclosure in corporate financial statements in accordance with GAAP)
did not, as of December 31, 2003, exceed by more than $645,000,000 the
value of the assets of all such plans. Of such $645,000,000, $185,000,000
is primarily attributable to employee pension plans in countries where the
funding of such obligations is not required or customary and $101,000,000
relates primarily to domestic pension plans where funding is not permitted
under current tax regulations. In these cases the Lessee has recorded book
reserves to meet the obligations. Trust assets totaling approximately
$23,100,000 have been established to provide for certain of the foregoing
domestic pension benefits, however, because of restrictions relating to
bankruptcy or insolvency, such funds are not included in the funded amount
of plans for purposes of GAAP.
(l) Information Delivered to Appraiser. All information heretofore
furnished by the Lessee in writing to the Lessor, the Investors, the
Arranger and any appraiser of any Property in connection with an Appraisal
with respect to the intended use and operation of the Properties for
purposes of or in connection with this Participation Agreement and the
other Operative Documents or any transaction contemplated hereby or
thereby is, and all such information hereafter furnished by the Lessee in
writing to any such Person or to any such appraiser will be, complete and
correct in all material respects taken as a whole.
(m) Name, Location, Etc. As of the Documentation Date, the Lessee's
(i) exact name as such name appears in its certificate of formation is ITT
Industries, Inc., (ii) jurisdiction of organization is the State of
Indiana and (iii) chief executive office and principal place of business
are located at 4 West Red Oak Lane, White Plains, NY 10604.
(n) Liens. The Lessor Mortgage with respect to the Subject Property
creates, or upon its execution will create, a valid security interest in
and mortgage lien on the Subject Property purported to be covered thereby
in favor of the Lessor, and upon recordation of such Lessor Mortgage and
the Lessor Financing Statements relating to the Subject Property, such
security interest and mortgage lien will constitute first priority
perfected security interests and mortgage liens, prior to all Liens other
than Permitted Property Liens and no Property shall be encumbered by any
Liens not identified in Title Abstracts approved in writing by the Lessor.
(o) Offer of Securities, etc. Neither the Lessee nor any Person
authorized to act on their behalf has, directly or indirectly, (i) offered
any interest in the Properties (or, if such sale or
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Participation Agreement
offer would be integrated with the sale or offer of such interest in the
Properties, any other interest similar thereto) for sale to any Person or
(ii) solicited from any Person any offer to acquire any interest in the
Properties (or any such other interest), in either case in violation of
the Securities Act.
(p) Compliance with Law and Insurance Requirements. The contemplated
use of each Subject Property by the Lessee and its agents, assignees,
employees, lessees, sublessees, licensees, tenants and subtenants shall be
in material compliance with all Applicable Law (including all zoning and
land use laws and Environmental Laws) and Insurance Requirements, except
for such Applicable Law as it shall be contesting in good faith by
appropriate proceedings. There is no action, suit or proceeding (including
any proceeding in condemnation or eminent domain or under any
Environmental Law) pending or, to Lessee's actual knowledge, threatened
with respect to it, or the Subject Property that materially adversely
affects the title to, or the use, operation or value of, the Subject
Property.
(q) Utilities, etc. All utilities required to adequately service the
applicable Improvements for each Subject Property in accordance with its
intended use will be available pursuant to adequate permits (including any
that may be required under applicable Environmental Laws). No Casualty has
had a Material Adverse Effect or a material adverse effect on the rights
and remedies of the Lessor or any Investor under the Operative Documents,
the ability of the Lessee to perform its obligations under the Operative
Documents or the Fair Market Sales Value, utility, condition or residual
value of any Subject Property. Each Subject Property has available all
material services of public facilities and other utilities necessary for
use and operation of such Property for its intended purpose, including
adequate water and electricity. All utilities serving the Subject Property
are located in, and access to such Property is provided by, either public
rights-of-way abutting such Property or Appurtenant Rights. All material
licenses, approvals, authorizations, consents, permits (including
building, demolition and Environmental Permits, licenses, approvals,
authorizations and consents), easements and rights-of-way, including proof
and dedication, required for (x) the use, treatment, storage, transport,
disposal or disposition of any Hazardous Material on, at, under or from
the Subject Property during the construction of the Improvements thereon,
and (y) construction of Modifications (if any) on each Subject Property
have been obtained from the appropriate Governmental Authorities having
jurisdiction or from private parties, as the case may be. The Lessee has
obtained all appropriate Governmental Action, and has and will keep in
full force and effect, all material operating permits, in each case to the
extent necessary to allow for each Subject Property to be operated in
accordance with its intended use.
(r) Deed. The Deed for each Subject Property that is or is to be a
Leased Property is sufficient to convey to the Lessor good and marketable
title to such Property (subject to any Permitted Property Liens).
(s) Insurance. The Lessee will, on or before the Acquisition Date,
have obtained insurance coverage covering the Subject Property that meets
the requirements set forth in Article XIII of the Master Lease, and such
coverage shall be in full force and effect.
(t) Flood Hazard Areas. Except as otherwise identified on the
applicable survey, plat or map with respect to the Subject Property
delivered pursuant to Section 6.1(d), no portion of the Subject Property
will be located within an area identified as a special flood hazardous
area by the Federal Emergency Management Agency.
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Participation Agreement
(u) Title. The representations and warranties of the Lessee set
forth in Section 13.5(a) are true and correct.
Section 8.2. Representations on the Acquisition Date and each Replacement
Date. The Lessee represents and warrants to the other parties hereto as of the
Acquisition Date and as of each Replacement Date as follows:
(a) Representations and Warranties. The Lessee's representations and
warranties set forth in Section 8.1 are true and correct on and as of the
Acquisition Date or applicable Replacement Date, as the case may be,
except to the extent such representations or warranties relate solely to
an earlier date, in which case such representations and warranties shall
have been true and correct on and as of such earlier date.
(b) No Lease Default, etc. The Lessee is in compliance with its
obligations under the Operative Documents and there exists no Lease
Default or Lease Event of Default. No Lease Default or Lease Event of
Default will occur as a result of, or after giving effect to, (i) in the
case of a Subject Property that is a Mortgaged Property, the granting of
the Liens under the Lessor Mortgages on the Acquisition Date or
Replacement Date (as applicable) or (ii) in the case of a Subject Property
that is a Leased Property, the purchase of such Leased Property on the
Acquisition Date or the replacement of the applicable Property on the
Replacement Date, as the case may be.
(c) Liens. The Lessee has not permitted any Liens to be placed
against any Property other than Permitted Property Liens.
(d) Advance. The applicable conditions precedent to the closing date
for the applicable acquisition or replacement of Property set forth in
Article VI have been satisfied (to the extent required to be satisfied by
the Lessee).
Section 8.3. Warranties and Representations of the Lessor. The Lessor
hereby represents and warrants to the Lessee that:
(a) The Lessor is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of
Delaware and has all requisite limited liability company power and
authority to execute and deliver, and to perform its obligations under,
the Operative Documents to which it is a party.
(b) The Operative Documents to which it is, or will be, a party have
been duly authorized by all requisite limited liability company action,
have been duly executed and delivered by the Lessor, and constitute, and
each other Operative Document to which Lessor is a party when executed and
delivered by Lessor will constitute, the valid and binding obligations of
the Lessor enforceable against the Lessor in accordance with the
respective terms thereof, except as such enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
(ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(c) Neither the execution and delivery of the Operative Documents,
the consummation of the transactions contemplated thereby nor the
fulfillment of or compliance with the provisions thereof will require
consent, approval, authorization, filing, registration or
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Participation Agreement
qualification under or conflict with or violate any Applicable Law that
applies to the Lessor or any of its property, except as contemplated by
the Operative Documents.
(d) The Lessor is not and will not be funding the Property Costs
hereunder, and is not performing its obligations under the Operative
Documents, with the assets of an "employee benefit plan" (as defined in
Section 3(3) of ERISA) which is subject to Title I of ERISA, or "plan" (as
defined in Section 4975(e)(1) of the Code).
(e) The Lessor is participating in the Transactions for its own
account and not with a view toward redistribution; provided that
disposition of its rights hereunder shall remain in its control and the
foregoing shall not affect the ability of the Lessor to assign, transfer
or sell participations in its rights in accordance with the Operative
Documents.
(f) Lessor Liens. There are no Lessor Liens on any Property or any
part thereof, and the execution, delivery and performance by the Lessor of
the Operative Documents to which it is or will be a party will not subject
any Property or any part thereof to any Lessor Liens.
Section 8.4. Representations of each Investor. Each Investor represents
and warrants to the other parties hereto that:
(a) Source of Funds. Such Investor is not and will not be making its
capital contributions to the Lessor under the Lessor LLC Agreement, and is
not performing its obligations under the Operative Documents, with the
assets of an "employee benefit plan" (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA, or "plan" (as defined in Section
4975(e)(1) of the Code).
(b) Status. Such Investor is an Affiliate of a commercial bank,
branch or agency of a foreign bank or other similar financial institution.
(c) Acquisition for Investment. Each Investor is participating in
the Transactions for its own account and not with a view toward
redistribution; provided that disposition of its rights hereunder shall
remain in its control and the foregoing shall not affect the ability of
any Investor to assign or sell participations in its rights in accordance
with the Operative Documents.
(d) Lessor Liens. There are no Lessor Liens attributable to such
Investor on any Property or any part thereof, and the execution, delivery
and performance by such Investor of the Operative Documents to which it is
or will be a party will not subject any Property or any part thereof to
any Lessor Liens attributable to such Investor.
ARTICLE IX
PAYMENT OF CERTAIN EXPENSES
The Lessee agrees, for the benefit of the Arranger, the Lessor and each
Investor, that:
Section 9.1. Transaction Expenses and Other Fees and Expenses. (a) The
Lessee shall pay, or cause to be paid, from time to time all Transaction
Expenses in respect of the transactions on the Documentation Date, the
Acquisition Date, each Termination Date and each Replacement Date.
(b) The Lessee shall pay or cause to be paid when due the Fees.
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Participation Agreement
(c) The Lessee shall pay or cause to be paid, on demand, (i) all
reasonable out-of-pocket expenses of the Lessor, the Lessor Administrator, each
Investor and the Arranger (including reasonable attorneys' fees and legal
expenses) incurred in connection with this Participation Agreement, the other
Operative Documents and the transactions contemplated hereby and thereby, (ii)
all costs and expenses (including reasonable attorneys' fees and legal expenses)
incurred by the Lessor, the Lessor Administrator, each Investor and the Arranger
in connection with any future amendments, supplements or waivers with respect to
any of the Operative Documents, whether or not such amendments, supplements or
waivers are ultimately entered into or given, (iii) all costs and expenses
(including reasonable attorneys' fees and legal expenses) incurred by the
Lessor, the Lessor Administrator, each Investor and the Arranger in connection
with any purchase, termination or replacement of any Property by the Lessee or
any other Person pursuant to the Master Lease and (iv) all costs and expenses
(including reasonable attorneys' fees and legal expenses) incurred by the
Lessor, the Lessor Administrator, any Investor or the Arranger in respect of (A)
the enforcement or protection of any of their rights or remedies against the
Lessee under any of the Operative Documents or (B) the negotiation of any
restructuring or "work-out" with the Lessee, whether or not consummated, of any
Obligations of the Lessee.
Section 9.2. Brokers' Fees and Stamp Taxes. The Lessee shall pay or cause
to be paid any brokers' fees and any and all stamp, transfer and other similar
taxes, fees and excise, if any, including any interest and penalties, which are
payable in connection with the transactions contemplated by this Participation
Agreement and the other Operative Documents.
Section 9.3. Lessor LLC Agreement and Related Obligations. The Lessee
shall pay, without duplication of any other obligation of the Lessee to pay any
such amount under the Operative Documents, before the due date thereof, all
costs, expenses and other amounts required to be paid by the Lessor under the
Lessor LLC Agreement or the Lessor Administration Agreement, or for which the
Lessor is responsible under the Lessor LLC Agreement or the Lessor
Administration Agreement, including (i) all direct costs and expenses related to
the activities of the Lessor (other than the fees and expenses of counsel
retained by each Shareholder with respect to the preparation and negotiation of
the Lessor LLC Agreement), including the fees and expenses of The Corporation
Trust Company, (ii) the nonrefundable administration fee payable to the Lessor
Administrator during the period commencing on the Acquisition Date and ending on
the Expiration Date in the amount of $10,000 per annum (payable annually in
advance) and (iii) the fees, costs and expenses of the U.S. Auditor (as defined
in the Lessor LLC Agreement) in connection with the preparation of records,
books and accounts for the Lessor. All amounts payable by the Lessee pursuant to
this Section 9.3 shall be paid directly to the Account.
ARTICLE X
OTHER COVENANTS AND AGREEMENTS
Section 10.1. Affirmative Covenants of the Lessee. The Lessee hereby
covenants and agrees with the Lessor, each Investor and the Arranger that so
long as this Participation Agreement shall remain in effect or any portion of
the Lease Balance or any other amounts payable hereunder or under the other
Operative Documents shall be unpaid, unless the Lessor shall otherwise consent
in writing, it will, and will cause each of the Lessee Subsidiaries to:
(a) Existence. Do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, rights
and franchises, except as expressly permitted under Section 10.2(a);
provided, however, that nothing in this Section shall prevent the
abandonment or termination of the existence, rights or franchises of any
Subsidiary or any rights
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Participation Agreement
or franchises of the Lessee if such abandonment or termination is in the
best interests of the Lessee and is not disadvantageous in any material
respect to the Lessor or the Investors.
(b) Business and Properties. Comply in all material respects with
all applicable laws, rules, regulations and orders of any Governmental
Authority (including any of the foregoing relating to the protection of
the environment or to employee health and safety), whether now in effect
or hereafter enacted; and at all times maintain and preserve all property
material to the conduct of its business and keep such property in good
repair, working order and condition and from time to time make, or cause
to be made, all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith may be properly conducted at all times.
(c) Financial Statements, Reports, etc.
(i) Furnish to the Lessor (whether submitted in hard copy or
by making publicly available), within 120 days after the end of each
fiscal year, its consolidated balance sheet and the related
consolidated statements of income and cash flows showing its
consolidated financial condition as of the close of such fiscal year
and the consolidated results of its operations during such year, all
audited by Deloitte & Touche or other independent certified public
accountants of recognized national standing selected by the Lessee
and accompanied by an opinion of such accountants to the effect that
such consolidated financial statements fairly present its financial
condition and results of operations on a consolidated basis in
accordance with GAAP (it being agreed that the requirements of this
paragraph may be satisfied by the delivery pursuant to paragraph
(iv) below of an annual report on Form 10-K containing the
foregoing);
(ii) Furnish to the Lessor (whether submitted in hard copy or
by making publicly available), within 90 days after the end of each
of the first three fiscal quarters of each fiscal year, its
consolidated balance sheet and related consolidated statements of
income, cash flow and stockholders' equity, showing its consolidated
financial condition as of the close of such fiscal quarter and the
consolidated results of its operations during such fiscal quarter
and the then elapsed portion of the fiscal year, all certified by
one of its Financial Officers as fairly presenting its financial
condition and results of operations on a consolidated basis in
accordance with GAAP, subject to normal year-end audit adjustments
(it being agreed that the requirements of this paragraph may be
satisfied by the delivery pursuant to paragraph (iv) below of a
quarterly report on Form 10-Q containing the foregoing);
(iii) Furnish to the Lessor, within 120 days after the end of
each fiscal year and within 90 days after the end of each of the
first three fiscal quarters of each fiscal year, a certificate of a
Financial Officer certifying that, to the best of such Financial
Officer's knowledge, no Lease Event of Default or Lease Default has
occurred or, if such a Lease Event of Default or Lease Default has
occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect
thereto;
(iv) Furnish to the Lessor (whether submitted in hard copy or
by making publicly available), promptly after the same become
publicly available, copies of all reports on forms 10-K, 10-Q and
8-K filed by it with the SEC, or any Governmental Authority
succeeding to any of or all the functions of the SEC, or, in the
case of the Lessee, copies of all reports distributed to its
shareholders, as the case may be;
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Participation Agreement
(v) Furnish to the Lessor, promptly, from time to time, such
other information as the Lessor or any Investor shall reasonably
request; and
(vi) Furnish to the Lessor, within 120 days after the end of
each fiscal year and within 90 days after the end of each of the
first three fiscal quarters of each fiscal year, calculations of the
financial test referred to in Section 10.2(d).
The requirements of clauses (i), (ii) and (iv) above may be satisfied by
the posting of such documents on the Lessee's internet homepage located at
www.itt.com or the SEC's homepage on the internet; provided, that such
documents are in a format that is downloadable and printable.
(d) Insurance. Without limitation of the Lessee's obligations under
Article XIII of the Master Lease, keep its insurable properties adequately
insured at all times by financially sound and reputable insurers, and
maintain such other insurance, to such extent and against such risks,
including fire and other risks insured against by extended coverage, as is
customary with companies similarly situated and in the same or similar
businesses (it being understood that the Lessee and its Subsidiaries may
self-insure to the extent customary with companies similarly situated and
in the same or similar businesses).
(e) Obligations and Taxes. Pay and discharge promptly when due all
taxes, assessments and governmental charges imposed upon it or upon its
income or profits or in respect of its property, as well as all other
material liabilities, in each case before the same shall become delinquent
or in default and before penalties accrue thereon, unless and to the
extent that the same are being contested in good faith by appropriate
proceedings and adequate reserves with respect thereto shall, to the
extent required by GAAP, have been set aside.
(f) Litigation and Other Notices. Give to the Lessor and each
Investor prompt written notice of the following:
(i) the filing or commencement of, or any written threat or
written notice of intention of any person to file or commence, any
action, suit or proceeding which could reasonably be expected to
result in a Material Adverse Effect; and
(ii) any change in any of the Ratings.
(g) Maintaining Records; Access to Properties and Inspections.
Maintain financial records in accordance with GAAP and, upon reasonable
notice, at all reasonable times, permit any authorized representative
designated by the Lessor to visit and inspect the properties of the Lessee
and of any material Lessee Subsidiary and to discuss the affairs, finances
and condition of the Lessee and any material Lessee Subsidiary with a
Financial Officer of the Lessee and such other officers as the Lessee
shall deem appropriate.
(h) Use of Proceeds. Use the proceeds of the Property Costs paid by
the Lessor only for purposes not inconsistent with the Lessee's
representation set forth in Sections 8.1(b) and 8.1(g)(ii).
(i) Notice of Defaults. Promptly and in any event within fifteen
(15) days after the occurrence of each Lease Default or Lease Event of
Default continuing on the date of such statement, deliver to the Lessor
and each Investor a statement of a Responsible Officer of the Lessee
specifying the nature and extent of such Lease Default or Lease Event of
Default and the action (if any) that is proposed to be taken with respect
thereto.
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Participation Agreement
(j) Visitation and Inspection of the Properties. At any reasonable
time and from time to time, the Lessee shall permit the Lessor, any
Investor and any agents or representatives thereof to visit and inspect
the Properties upon reasonable notice to the Lessee (except that no such
notice will be required to be given during the existence and continuance
of a Lease Event of Default); provided, however, that (x) no such visit or
inspection shall include any "cleared areas" that require United States
government security clearances unless the applicable agent or
representative conducting the inspection has received such required
security clearances and (y) any visit or inspection by an individual that
is not a U.S. citizen or permanent resident will require notification of
the Lessee's security office and will be limited to plant-approved public
tour areas (the restrictions described in this proviso, collectively, the
"DOD Restrictions"). Any visit to a Property pursuant to this Section
10.1(j) shall be at the sole risk and expense of the visiting party unless
a Lease Event of Default has occurred and is continuing, in which case any
such visit shall be at the sole expense of the Lessee.
(k) Compliance with ISRA. If ISRA is applicable, the Lessee shall
take all actions, at its sole cost and expense, to maintain Compliance
with ISRA with respect to the Clifton Property. "Compliance with ISRA"
shall mean performance by the Lessee of any requirements imposed under
ISRA as a result of the Transactions. The ISRA process shall be deemed
completed upon the receipt by the Lessee of an NFA Letter, as defined by
N.J.S.A. 13:I K-9(e); with respect to the ISRA proceeding related to the
Transactions, and full satisfaction of any and all conditions or
requirements established by NJDEP in such NFA Letter.
(l) Title Abstract for Clifton Property; Title Insurance for
Properties.
(i) The Lessee will furnish to the Lessor, not later than
ninety (90) days after the Closing Date, a new Title Abstract for
the Clifton Property, which Title Abstract shall be dated down to a
date after the Closing Date and shall identify no Liens (including
any easements, covenants, leases, agreements or other items), claims
or lawsuits affecting the Clifton Property other than Permitted
Property Liens.
(ii) If the Lessee's senior unsecured debt rating falls below
"BBB - " (in the case of S&P) or below "Baa3" (in the case of
Moody's), or if either Moody's or S&P shall cease to provide a
rating for the Lessee's senior unsecured debt, then, in any such
case, the Lessee shall (x) notify the Lessor of such downgrade or
such cessation immediately and in any event no later than five (5)
Business Days after the occurrence thereof and (y) upon the request
of the Lessor, obtain a Title Insurance Policy within fifteen (15)
Business Days after such request with respect to each Property
specified by the Lessor that is then subject to the Master Lease (as
a Leased Property or as a Mortgaged Property) and had a Go Dark
Value in excess of $7,000,000. Each Title Insurance Policy required
under this Section 10.1(l)(ii) shall be in an amount not less than
the then outstanding Termination Base Amount of each applicable
Property.
Section 10.2. Negative Covenants. The Lessee covenants and agrees with the
Lessor and each Investor that so long as this Participation Agreement shall
remain in effect or any portion of the Lease Balance or any other amounts
payable hereunder or under the other Operative Documents shall be unpaid, unless
the Lessor shall otherwise consent in writing, it will not, and will not cause
or permit any of the Lessee Subsidiaries to:
(a) Consolidations, Mergers, and Sales of Assets. Consolidate or merge
with or into any other person or sell, lease or transfer all or substantially
all of its property and assets, or agree to do any of the foregoing, unless (i)
no Lease Default or Lease Event of Default has occurred and is continuing or
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Participation Agreement
would have occurred immediately after giving effect thereto, and (ii) in the
case of a consolidation or merger involving the Lessee and in which the Lessee
is not the surviving corporation or, in the case where the Lessee sells, leases
or transfers all or substantially all of its property and assets, the surviving
corporation or person purchasing, leasing or receiving such property and assets
is organized in the United States of America or a state thereof and agrees to be
bound by the terms and provisions applicable to the Lessee hereunder.
(b) Limitations on Liens. Without limitation of the Lessee's agreements
set forth in Section 11.1 of the Master Lease, create, suffer to be created, or
assume (directly or indirectly) any mortgage, pledge or other lien upon any
Principal Property, or permit any Restricted Subsidiary to create, suffer to be
created, or assume (directly or indirectly) any mortgage, pledge or other lien
upon any Principal Property; provided, however, that this covenant shall not
apply to any of the following:
(i) any mortgage, pledge or other lien on any Principal Property
hereafter acquired, constructed or improved by the Lessee or any
Restricted Subsidiary which is created or assumed to secure or provide for
the payment of any part of the purchase price of such property or the cost
of such construction or improvement, or any mortgage, pledge or other lien
on any Principal Property existing at the time of acquisition thereof;
provided, however, that the mortgage, pledge or other lien shall not
extend to any Principal Property theretofore owned by the Lessee or any
Restricted Subsidiary;
(ii) any mortgage, pledge or other lien on any Principal Property
existing on the date of this Participation Agreement as described in
Schedule 10.2(b);
(iii) any mortgage, pledge or other lien existing upon any property
of a company which is merged with or into or is consolidated into, or
substantially all the assets or shares of capital stock of which are
acquired by, the Lessee or a Restricted Subsidiary, at the time of such
merger, consolidation or acquisition; provided that such mortgage, pledge
or other lien does not extend to any other Principal Property, other than
improvements to the property subject to such mortgage, pledge or other
lien;
(iv) any pledge or deposit to secure payment of workers'
compensation or insurance premiums, or in connection with tenders, bids,
contracts (other than contracts for the payment of money) or leases;
(v) any pledge of, or other lien upon, any assets as security for
the payment of any tax, assessment or other similar charge by any
Governmental Authority or public body, or as security required by law or
governmental regulation as a condition to the transaction of any business
or the exercise of any privilege or right;
(vi) any pledge or lien necessary to secure a stay of any legal or
equitable process in a proceeding to enforce a liability or obligation
contested in good faith by the Lessee or a Restricted Subsidiary or
required in connection with the institution by the Lessee or a Restricted
Subsidiary of any legal or equitable proceeding to enforce a right or to
obtain a remedy claimed in good faith by the Lessee or a Restricted
Subsidiary, or required in connection with any order or decree in any such
proceeding or in connection with any contest of any tax or other
governmental charge; or the making of any deposit with or the giving of
any form of security to any governmental agency or any body created or
approved by law or governmental regulation in order to entitle the Lessee
or a Restricted Subsidiary to maintain self-insurance or to participate in
any fund in connection with workers' compensation, unemployment insurance,
old age pensions or
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Participation Agreement
other social security or to share in any provisions or other benefits
provided for companies participating in any such arrangement or for
liability on insurance of credits or other risks;
(vii) any mechanics', carriers', workmen's, repairmen's, or other
like liens, if arising in the ordinary course of business, in respect of
obligations which are not overdue or liability for which is being
contested in good faith by appropriate proceedings;
(viii) any lien or encumbrance on property in favor of the United
States of America, or of any agency, department or other instrumentality
thereof, to secure partial, progress or advance payments pursuant to the
provisions of any contract;
(ix) any mortgage, pledge or other lien securing any indebtedness
incurred in any manner to finance or recover the cost to the Lessee or any
Restricted Subsidiary of any physical property, real or personal, which
prior to or simultaneously with the creation of such indebtedness shall
have been leased by the Lessee or a Restricted Subsidiary to the United
States of America or a department or agency thereof at an aggregate
rental, payable during that portion of the initial term of such lease
(without giving effect to any options of renewal or extension) which shall
be unexpired at the date of the creation of such indebtedness, sufficient
(taken together with any amounts required to be paid by the lessee to the
lessor upon any termination of such lease) to pay in full at the stated
maturity date or dates thereof the principal of and the interest on such
indebtedness;
(x) any mortgage, pledge or other lien securing indebtedness of a
Restricted Subsidiary to the Lessee or a Restricted Subsidiary, provided
in the case of any sale or other disposition of such indebtedness by the
Lessee or such Restricted Subsidiary, such sale or other disposition shall
be deemed to constitute the creation of another mortgage, pledge or other
lien not permitted by this clause (x);
(xi) any mortgage, pledge or other lien affecting property of the
Lessee or any Restricted Subsidiary securing indebtedness of the United
States of America or a State thereof (or any instrumentality or agency of
either thereof) issued in connection with a pollution control or abatement
program required in the opinion of the Lessee to meet environmental
criteria with respect to manufacturing or processing operations of the
Lessee or any Restricted Subsidiary and the proceeds of which indebtedness
have financed the cost of acquisition of such program;
(xii) the renewal, extension, replacement or refunding of any
mortgage, pledge, lien, deposit, charge or other encumbrance permitted by
the foregoing provisions of this covenant upon the same property therefore
subject thereto, or the renewal, extension, replacement or refunding of
the amount secured thereby, provided that in each case such amount
outstanding at that time shall not be increased;
(xiii) any other mortgage, pledge or other lien, provided that
immediately after the creation or assumption of such mortgage, pledge or
other lien, the total of (x) the aggregate principal amount of
indebtedness of the Lessee and all Restricted Subsidiaries secured by all
mortgages, pledges and other liens created or assumed under the provisions
of this clause (xiii), plus (y) the aggregate amount of Capitalized
Lease-Back Obligations of the Lessee and Restricted Subsidiaries under the
entire unexpired terms of all leases entered into in connection with sale
and lease-back transactions which would have been precluded by the
provisions of Section 10.2(c) but for the satisfaction of the condition
set forth in clause (ii) thereof, shall not exceed an amount equal to 5%
of Consolidated Net Tangible Assets; or
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Participation Agreement
(xiv) any security interest or lien related to cash
collateralization of L/C Exposures (as defined in the Existing Credit
Agreement) pursuant to Article VI of the Existing Credit Agreement.
The lease of any property by the Lessee or a Restricted Subsidiary and rental
obligations with respect thereto (whether or not arising out of a sale and
lease-back of properties and whether or not in accordance with GAAP such
property is carried as an asset and such rental obligations are carried as
indebtedness on the Lessee's or a Restricted Subsidiary's balance sheet) shall
not in any event be deemed to be the creation of a mortgage, pledge or other
lien.
(c) Limitations on Sale and Leaseback Transactions. In the case of the
Lessee or any Restricted Subsidiary, enter into any arrangement with any person
providing for the leasing by the Lessee or any Restricted Subsidiary of any
Principal Property (except for temporary leases for a term of not more than
three years and except for leases between the Lessee and a Restricted Subsidiary
or between Restricted Subsidiaries), which property has been or is to be sold or
transferred by the Lessee or such Restricted Subsidiary to such person more than
120 days after the acquisition thereof or the completion of construction and
commencement of full operation thereof, unless either (i) the Lessee shall apply
an amount equal to the greater of the Fair Value of such property or the net
proceeds of such sale, within 120 days of the effective date of any such
arrangement, to the retirement (other than any mandatory retirement or by way of
payment at maturity) of Indebtedness or to the acquisition, construction,
development or improvement of properties, facilities or equipment used for
operating purposes which are, or upon such acquisition, construction,
development or improvement will be, a Principal Property or a part thereof; or
(ii) at the time of entering into such arrangement, such Principal Property
could have been subjected to a mortgage, pledge or other lien securing
indebtedness of the Lessee or a Restricted Subsidiary in a principal amount
equal to the Capitalized Lease-Back Obligations with respect to such Principal
Property under paragraph (xiii) of Section 10.2(b).
(d) Consolidated EBITDA to Consolidated Interest Expense. Permit the ratio
of (i) Consolidated EBITDA to (ii) Consolidated Interest Expense, each as
calculated for any period of the four prior consecutive fiscal quarters, to be
less than 3.75 to 1.0.
Section 10.3. Covenants of the Lessor. Each of the Lessor and each
Investor hereby severally agrees that, until payment in full of the Lease
Balance or such other time as the Master Lease shall have terminated with
respect to all of the Properties:
(a) it will not create, incur, assume or suffer to exist any Lessor
Lien attributable to it upon any Property, or upon the Master Lease, the
Lease Supplements or any other Operative Document; and
(b) it will, at its own cost and expense, promptly take such action
as may be necessary duly to discharge, or to cause to be discharged, all
Lessor Liens on the Properties and its rights under the Operative
Documents attributable to it; provided that such Person may contest any
such Lessor Lien in good faith and by appropriate proceedings so long as
such contest shall not involve (x) any enjoinment of, or interference
with, the Lessee's use, possession or operation of any Property, (y) any
risk of criminal liability being imposed on the Lessee or (z) any material
risk of foreclosure, forfeiture or loss of any Property or any material
part thereof.
Section 10.4. Release of Property. If the Lessee shall at any time (i)
purchase any affected Property pursuant to Section 15.1 of the Master Lease,
(ii) exercise its Termination Option with respect to any Property, (iii)
exercise its Replacement Option with respect to any Property or (iv) purchase
(or cause to be purchased) all of the Leased Properties in accordance with the
Master Lease, and in each case, the
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Participation Agreement
Lessee satisfies each of the obligations and conditions set forth in the Master
Lease for the release of a Property therefrom, then, upon payment by the Lessee
of all amounts required to be paid by the Lessee in connection therewith and the
application of such payments pursuant to Article VII, including all amounts due
and owing pursuant to Article XIII of this Participation Agreement, the
applicable purchased Property, Terminated Property or replaced Property (as the
case may be) shall be released from the Liens created by the Operative Documents
(including any Liens created by the Lease Supplement or other Lessor Mortgage
covering such Property), and the Lessor and each Investor shall, at the sole
cost and expense of the Lessee, execute and deliver such instruments as the
Lessee may reasonably request to effectuate and evidence such releases.
ARTICLE XI
CERTAIN AGREEMENTS
Section 11.1. Certain Restrictions on Access. The Lessor and each Investor
specifically acknowledge that (a) certain portions of the Properties may be
subject to (i) United States government export control regulations and (ii) the
National Industrial Security Policy Operating Manual procedures and (b)
notwithstanding any legal right of the Lessor and the Investors, access to the
Properties shall be limited as set forth in Section 10.1(j).
Section 11.2. Permitted Tax Disclosure. Notwithstanding anything herein to
the contrary, any party to this Participation Agreement (and any employee,
representative or other agent of any party to this Participation Agreement) may
disclose to any and all persons, without limitation of any kind: (a) the United
States federal income tax treatment and United States federal income tax
structure of the transactions contemplated by the Operative Documents and any
facts that may be relevant to understanding the United States federal or state
income tax treatment of such transactions ("tax treatment"); and (b) all
materials of any kind (including opinions or other tax analyses) that are
provided to such party (or any employee, representative or other agent of such
party) relating to such tax treatment and tax structure. However, such
information relating to the tax treatment or tax structure is required to be
kept confidential to the extent necessary to comply with any applicable federal
or state securities laws.
ARTICLE XII
TRANSFERS OF INVESTORS' AND LESSOR'S INTERESTS
Section 12.1. Assignments. (a) Each Investor may, without the prior
written consent of the Lessee, assign or otherwise transfer all or a portion of
its Lessor Interest to one or more transferees in accordance with Article X of
the Lessor LLC Agreement; provided that the name and address of the transferee
shall be provided to the Lessee at the time of the transfer for recordation in
its books and records. Upon the effectiveness of any such assignment or other
transfer, the transferee of such Lessor Interest shall become an "Investor" for
all purposes of the Operative Documents and, to the extent of such transfer, the
assigning Investor shall be relieved of its obligations hereunder to the extent
of the Lessor Interest being assigned or otherwise transferred.
(b) The Lessor may, with the prior written consent of the Lessee (which
consent shall not be unreasonably withheld or delayed), assign all of its rights
and obligations hereunder to any Person pursuant to an assignment agreement in
form and substance reasonably satisfactory to the Lessee; provided that the name
and address of such Person shall be provided to the Lessee at the time of the
transfer for recordation in its books and records. Any assignment hereunder
shall be effective on the
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Participation Agreement
effective date of the applicable assignment agreement. The Lessor shall make
such filings and give such notices as shall be necessary to evidence such
assignment in all public offices where filings have been made under the
Operative Documents, and the Lessee shall cooperate with the Lessor in effecting
such filings and notices. Upon the effectiveness of any such assignment, the
assignee shall become the "Lessor" for all purposes of the Operative Documents
and the assignor shall be relieved of its obligations hereunder. The Lessee
shall not be responsible for any costs or expenses incurred in connection with
an assignment of all or any of the Lessor's rights and obligations pursuant to
this Section 12.1, and the Lessor (or its assignee) shall pay all such costs and
expenses, including (x) any and all Taxes and fees incurred in recording,
registering or filing any document or instrument, or giving any notices in
connection with any such assignment and (y) all reasonable costs and expenses
(including legal expenses) incurred by the Lessee in connection with such
assignment. In connection with any assignment pursuant to this Section 12.1(b),
the Lessee will, promptly upon the request of the Lessor, execute and deliver an
acknowledgment of such assignment and the succession of the transferee to all
rights and obligations of the transferor Lessor under the Operative Documents in
such form as the transferee may reasonably request.
Section 12.2. Participations. Each Investor may sell, transfer, grant or
assign participations in all or any part of such Investor's interests and
obligations hereunder; provided that (i) such selling Investor shall remain an
"Investor", for all purposes under the Operative Documents (such selling
Investor's obligations under the Operative Documents remaining unchanged) and
the sub-participant shall not constitute an Investor, (ii) no such
sub-participant shall have, or be granted, rights to approve any amendment or
waiver relating to the Operative Documents except to the extent any such
amendment or waiver would (A) reduce the principal of or rate of interest on or
fees in respect of any investment in which the sub-participant is participating,
(B) postpone the date fixed for any payment of principal (including extension of
the Expiration Date or the date of any mandatory prepayment), interest or fees
in which the sub-participant is participating, or (C) release all or
substantially all of the collateral or guarantees (except as expressly provided
in the Operative Documents) supporting any of the investment in which the
sub-participant is participating, (iii) sub-sub-participations by the
sub-participant (except to an Affiliate, parent company or Affiliate of a parent
company of the sub-participant) shall be prohibited and (iv) written notice of
each such participation is given to the Lessee and the name and address of the
sub-participant shall be provided to the Lessee at the time of the participation
for recordation in its books and records. In the case of any such participation,
the sub-participant shall not have any rights under the Operative Documents (the
sub-participant's rights against the selling Investor in respect of such
participation to be those set forth in the participation agreement with such
Investor creating such participation) and all amounts payable by the Lessee
hereunder shall be determined as if such Investor had not sold such
participation; provided, however, that such sub-participant shall be entitled to
receive additional amounts under Sections 13.7, 13.8 and 13.9 on the same basis
as if it were an Investor (but only to the extent that the Investor would have
been entitled to receive such additional amounts with respect to the interest
participated had it not sold such participation). The Lessee shall not be
responsible for any costs or expenses incurred by any Investor in connection
with a sale, transfer, grant or assignment of participations pursuant to this
Section 12.2.
Section 12.3. Withholding Taxes; Pledge Under Regulation A. (a)If the
assignee of any Investor pursuant to Section 12.1 or the subparticipant of any
Investor pursuant to Section 12.2 is (i) not a citizen or resident of the United
States of America, (ii) not a corporation, partnership or other entity created
or organized in or under the laws of the United States of America (or any
jurisdiction thereof), or (iii) not an estate or trust that is subject to
federal income taxation regardless of the source of its income (each, a
"Non-U.S. Transferee"), then such Non-U.S. Transferee shall deliver upon the
request of the Lessee (or cause to be delivered) to each of the Lessor and the
Lessee one of the following properly completed and signed U.S. tax forms: (i) an
IRS form W-8ECI (or successor applicable form) or (ii) an IRS form W-8BEN (or
successor applicable form) certifying its foreign status and, if applicable,
claiming
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Participation Agreement
an exemption under a U.S. tax treaty for all income payable to such Non-U.S.
Transferee under the Operative Documents. If a Non-U.S. Transferee fails, upon
request by the Lessee, to deliver one of the above valid forms, the Lessee may
(notwithstanding Section 13.6) withhold the applicable amount of U.S. income tax
on payments it makes to (or to the Lessor on behalf of) the Non-U.S. Transferee,
and the Non-U.S. Transferee shall not be entitled to indemnification under
Section 13.4 for the U.S. withholding taxes so imposed. If the assignee of any
Investor pursuant to Section 12.1 or the subparticipant of any Investor pursuant
to Section 12.2 is not a Non-U.S. Transferee (each, a "U.S. Transferee"), then
such U.S. Transferee shall deliver (or cause to be delivered) to each of the
Lessor and the Lessee a properly completed and signed U.S. tax form W-9.
(a) The Lessor and each Investor may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Article
XII, disclose to such assignee or participant or proposed assignee or
participant, any information relating to the Lessee or the transactions under
the Operative Documents, subject to appropriate confidentiality requirements
relating to such information.
(b) Anything in this Article XII to the contrary notwithstanding, any
Investor may without the consent of Lessee or the Lessor, assign and pledge all
or any portion of its investment in the transactions contemplated hereby to any
Federal Reserve Bank, the United States Treasury or to any other financial
institution as collateral security pursuant to Regulation A of the F.R.S. Board
and any operating circular issued by the Federal Reserve System and/or the
Federal Reserve Bank or otherwise; provided, any payment by the Lessee for the
benefit of the assigning or pledging Investor shall be deemed to satisfy the
Lessee's obligations with respect thereto.
ARTICLE XIII
INDEMNIFICATION
Section 13.1. General Indemnification. (a) The Lessee agrees to assume
liability for, and to indemnify, protect, defend, save and keep harmless each
Indemnitee, on an After Tax Basis, from and against any and all Claims that may
be imposed on, incurred by or asserted against such Indemnitee (whether because
of action or omission by such Indemnitee or otherwise, except as set forth in
Section 13.1(b) below), whether or not such Indemnitee shall also be indemnified
as to any such Claim by any other Person and whether or not such Claim arises or
accrues prior to the Documentation Date or after the Expiration Date, in any way
relating to or arising out of the transactions contemplated by this
Participation Agreement and the other Operative Documents, including:
(i) any of the Operative Documents and any amendment, modification
or waiver in respect thereof;
(ii) the Properties or any part thereof or interest therein;
(iii) the purchase, design, construction, preparation, installation,
inspection, delivery, nondelivery, acceptance, rejection, ownership,
management, possession, operation, rental, lease, sublease, repossession,
maintenance, repair, alteration, modification, addition or substitution,
storage, transfer of title, redelivery, use, financing, refinancing,
disposition, operation, condition, sale (including any sale pursuant to
Section 16.2(e) or 16.2(g) of the Master Lease or any sale, purchase or
termination pursuant to Article XV, XVIII or XIX of the Master Lease),
return or other disposition of all or any part or any interest in the
Properties or the imposition of any Lien thereon, including: (1) Claims or
penalties arising from any violation of law or in tort (on the basis of
strict liability or otherwise), (2) latent or other defects, whether or
not discoverable, (3)
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Participation Agreement
any Claim based upon a violation or alleged violation of the terms of any
restriction, easement, condition or covenant or other matter affecting
title to any Property, (4) the making of any Modifications in violation of
any standards imposed by any insurance policies required to be maintained
by Lessee or Lessee pursuant to the Lease which are in effect at any time
with respect to any Property or any part thereof, (5) any Claim for
patent, trademark or copyright infringement with respect to any Property,
and (6) Claims arising from any public improvements with respect to any
Property resulting in any change or special assessments being levied
against any Property or any plans to widen, modify or realign any street
or highway adjacent to any Property, or any Claim for utility "tap-in"
fees;
(iv) the breach or, to the extent a Claim actually arises as a
result thereof, the alleged breach, by the Lessee of any covenant,
representation or warranty made by it in any Operative Document or any
certificate required to be delivered by it by any Operative Document;
(v) the retaining or employment of any broker, finder or financial
advisor (other than the Arranger) by the Lessee to act on its behalf in
connection with this Participation Agreement or any other Operative
Document;
(vi) the existence of any Lien on or with respect to any Property,
any Improvements, any Basic Rent or Supplemental Rent, title thereto, or
any interest therein including any Liens which arise out of the
possession, use, occupancy, construction, repair or rebuilding of any
Property or by reason of labor or materials furnished or claimed to have
been furnished to the Lessee, or any of its contractors or agents or by
reason of the financing of any personalty or equipment purchased or leased
by the Lessee or Modifications constructed by the Lessee;
(vii) any ground lease, sublease or any other lease or arrangement
(including any structure involving a local tax abatement structure or
acquisition of equity interests in entities which directly or indirectly
own a Property) pursuant to which the Lessor acquires its interest in any
Property; and
(viii) any failure by the Lessee to pay all amounts of Rent as and
when the same become due, including any Claims incurred by the Lessor in
connection with any draw made by it on an overdraft facility for the
purpose of paying amounts owing to any other Person.
(b) Notwithstanding the terms of clause (a) of this Section 13.1, the
Lessee shall not be required to indemnify any Indemnitee under this Section 13.1
for any Claim to the extent arising or resulting from (1) the willful misconduct
or gross negligence of such Indemnitee (it being understood that the Lessee
shall be required to indemnify an Indemnitee even if the ordinary (but not
gross) negligence of such Indemnitee caused or contributed to such Claim), (2) a
breach by such Indemnitee of any agreement entered into in connection with the
assignment or participation of any interest of such Indemnitee under the
Operative Documents, (3) acts or events occurring in respect of any Property in
the period after the Lessee shall have returned such Property to the Lessor in
full compliance with all requirements of the Master Lease to the extent not
resulting from any act or event otherwise covered by this indemnity that
occurred during the period that the Lessee leased such Property, (4) the failure
of such Indemnitee to comply with laws applicable to banks or their affiliates
generally or the failure of such Indemnitee to file any notice, report, filing
or other document required by any Governmental Authority regulating banks or
their affiliates in connection with such Indemnitee's execution of, and
participation in the transactions contemplated by, the Operative Documents, (5)
Taxes or Impositions (it being understood and agreed by the parties hereto that
all Claims relating to Taxes or Impositions shall be governed solely by the
provisions of Section 13.4) or (6) as to the Lessor, the failure of the Lessor
to distribute in accordance with this Participation Agreement and the Lessor LLC
Agreement (as applicable) any amounts received
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Participation Agreement
and distributable by it thereunder so long as such amounts were received in
accordance with the Operative Documents. It is expressly understood and agreed
that the indemnity provided for herein shall survive the expiration or
termination of and shall be separate and independent from any remedy under the
Lease or any other Operative Document.
Section 13.2. Environmental Indemnity. Without limitation of the other
provisions of this Article XIII, the Lessee hereby agrees (at all times, whether
or not the Lease Term shall have commenced) to indemnify, hold harmless and
defend each Indemnitee from and against any and all Claims (including
Governmental Authority Claims and third party Claims for personal injury or real
or personal property damage), losses (including, to the extent the Termination
Base Amount therefor has not been fully paid, any loss of value of the Property
related thereto), damages (including any consequential damages), liabilities,
fines, penalties, charges, administrative and judicial proceedings (including
informal proceedings) and orders, judgments, Remedial Action, requirements,
enforcement actions of any kind, and all reasonable and documented costs and
expenses incurred in connection therewith (including reasonable and documented
attorneys' and/or paralegals' fees and expenses), including all costs incurred
in connection with any investigation or monitoring of site conditions or any
clean-up, remedial, removal or restoration work by any federal, state or local
Governmental Authority, in any way relating to or arising in whole or in part,
out of (or alleged to in any way relate to or arise in whole or in part out of):
(a) the presence on or under any Property of any Hazardous
Materials, or any Releases of any Hazardous Materials on, under, from or
onto any Property;
(b) any activity, including construction, carried on or undertaken
on or off any Property, and whether by the Lessee or any predecessor in
title or any employees, agents, contractors or subcontractors of the
Lessee or any predecessor in title, or any other Persons (including such
Indemnitee), in connection with the handling, treatment, removal, storage,
decontamination, clean-up, transport or disposal of any Hazardous
Materials that at any time are located or present on or under or that at
any time migrate, flow, percolate, diffuse or in any way move onto or
under any Property;
(c) loss of or damage to any property or the environment (including
clean-up costs, response costs, remediation and removal costs, costs of
corrective action, costs of financial assurance, fines and penalties and
natural resource damages), or death or injury to any Person, and all
expenses associated with the protection of wildlife, aquatic species,
vegetation, flora and fauna, and any mitigative action required by or
under Environmental Laws arising from any Property or related thereto;
(d) any Claim concerning lack of compliance with Environmental Laws
at any Property, or any act or omission causing an Environmental Violation
that requires remediation or would allow any Governmental Authority to
record a Lien on the land records of any Property; or
(e) any residual contamination on or under any Land, or affecting
any natural resources, and to any contamination of any property or natural
resources arising in connection with the generation, use, handling,
storage, transport or disposal of any such Hazardous Materials on or
relating to any Land, and irrespective of whether any of such activities
were or will be undertaken in accordance with applicable laws,
regulations, codes and ordinances,
provided, however, that the Lessee shall not be required to indemnify any
Indemnitee under this Section 13.2 for (i) any Claim to the extent resulting
from the willful misconduct or gross negligence of such Indemnitee (it being
understood that the Lessee shall be required to indemnify an Indemnitee even if
the ordinary (but not gross) negligence of such Indemnitee caused or contributed
to such Claim) or
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Participation Agreement
(ii) any Claim to the extent attributable solely to acts, circumstances or
events occurring in the period after the Lessee shall have returned all of the
Leased Properties to the Lessor in full compliance with the provisions of the
Operative Documents to the extent not resulting from any act or event otherwise
covered by this indemnity that occurred during the period that the Lessee leased
the Leased Properties. It is expressly understood and agreed that the indemnity
provided for herein shall survive the expiration or termination of and shall be
separate and independent from any remedy under the Lease or any other Operative
Document.
Section 13.3. Proceedings in Respect of Claims. In case any action, suit
or proceeding shall be brought against any Indemnitee in respect of Claims
indemnifiable under Sections 13.1 or 13.2, such Indemnitee shall promptly notify
the Lessee of the commencement thereof, and the Lessee shall be entitled, at the
Lessee's expense, to participate in, and, to the extent that the Lessee desires
to, assume and control the defense thereof; provided, however, that if the
Lessee shall have exercised its rights to control the defense of such Claim to
the exclusion of the applicable Indemnitee, the Lessee shall have acknowledged
in writing its obligation to fully indemnify such Indemnitee in respect of such
action, suit or proceeding, and the Lessee shall keep such Indemnitee fully
apprised of the status of such action, suit or proceeding and shall provide such
Indemnitee with all information with respect to such action, suit or proceeding
as such Indemnitee shall reasonably request, and provided, further, that the
Lessee shall not be entitled to assume and control the defense of any such
action, suit or proceeding if and to the extent that, (A) in the reasonable
opinion of such Indemnitee's counsel, (x) such action, suit or proceeding
involves any risk of imposition of criminal liability or will involve a material
risk of the sale, forfeiture or loss of, or the creation of any Lien (other than
a Permitted Property Lien) on the Properties or any part thereof or any
interference with the payment of Rent unless, in the case of civil liability
only, the Lessee shall have posted a bond or other security reasonably
satisfactory to the relevant Indemnitees in respect of such risk or (y) the
control of such action, suit or proceeding would involve an actual or potential
conflict of interest, (B) such proceeding involves Claims not fully indemnified
by the Lessee that the Lessee and the Indemnitee have been unable to sever from
the indemnified claim(s), or (C) a Lease Event of Default has occurred and is
continuing. The Indemnitee will join in the Lessee's efforts to sever such
action. In the event that an Indemnitee has assumed control of any such
proceeding, it shall keep the Lessee fully apprised of the status of such
action, suit or proceeding and shall provide the Lessee with all information
with respect to such action, suit or proceeding as the Lessee may reasonably
request. The Indemnitee may participate at its own expense and with its own
counsel in any proceeding conducted by the Lessee in accordance with the
foregoing. The Lessee shall not enter into any settlement or other compromise
with respect to any Claim which is entitled to be indemnified under Section 13.1
or 13.2 without prior written consent of the Indemnitee, which consent shall not
be unreasonably withheld in the case of a money settlement not involving an
admission of liability of such Indemnitee.
Each Indemnitee shall at the expense of the Lessee supply the Lessee with
such information and documents reasonably requested by the Lessee as are
necessary or advisable for the Lessee to participate in any action, suit or
proceeding to the extent permitted by Section 13.1 or 13.2. Unless a Lease Event
of Default shall have occurred and be continuing, no Indemnitee shall enter into
any settlement or other compromise with respect to any Claim that is entitled to
be indemnified under Section 13.1 or 13.2 without the prior written consent of
the Lessee, unless such Indemnitee waives its rights to be indemnified under
Section 13.1 or 13.2, as the case may be, with respect to such Claim.
Upon payment in full of any Claim by the Lessee pursuant to Section 13.1
or 13.2 to or on behalf of an Indemnitee, the Lessee, without any further
action, shall be subrogated to any and all claims that such Indemnitee may have
relating thereto (other than claims in respect of insurance policies maintained
by such Indemnitee at its own expense), and such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be necessary to preserve
any such claims and otherwise cooperate with the Lessee and
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Participation Agreement
give such further assurances as are necessary or advisable to enable the Lessee
vigorously to pursue such claims.
Any amount payable to an Indemnitee pursuant to Section 13.1 or 13.2 shall
be paid to such Indemnitee promptly upon receipt of a written demand therefor
from such Indemnitee, accompanied by a written statement describing in
reasonable detail the basis for such indemnity and the computation of the amount
so payable.
Section 13.4. General Tax Indemnity.
(a) Indemnification. Without limitation of the rights of any Tax
Indemnitee under any other indemnification provision of this Article XIII, the
Lessee shall pay and assume liability for, and does hereby agree to indemnify,
protect and defend each Property and all Tax Indemnitees, and hold them harmless
against, all Impositions on an After Tax Basis. The determination of all
Impositions to be paid or indemnified against by the Lessee on an After Tax
Basis shall be made (in good faith) by the Tax Indemnitee. Such determination
shall state with reasonable clarity and detail the basis for such determination
and shall, absent manifest error, be final and conclusive and binding on the
Lessee.
(b) Contests. If any claim shall be made against any Tax Indemnitee or if
any proceeding shall be commenced against any Tax Indemnitee (including a
written notice of such proceeding) for any Imposition as to which the Lessee may
have an indemnity obligation pursuant to this Section 13.4, or if any Tax
Indemnitee shall determine that any Imposition to which the Lessee may have an
indemnity obligation pursuant to this Section 13.4 may be payable, such Tax
Indemnitee shall promptly (and in any event, within thirty (30) days) notify the
Lessee in writing (provided that failure to so notify the Lessee within thirty
(30) days shall not alter such Tax Indemnitee's rights under this Section 13.4
except to the extent such failure precludes the ability to conduct a contest of
the applicable Impositions) and, so long as no Lease Default or Lease Event of
Default has occurred and is continuing, shall not take any action with respect
to such claim, proceeding or Imposition without the written consent of the
Lessee (such consent not to be unreasonably withheld or unreasonably delayed)
for thirty (30) days after the receipt of such notice by the Lessee; provided,
however, that in the case of any such claim or proceeding, if such Tax
Indemnitee shall be required by Applicable Law to take action prior to the end
of such thirty (30) day period, such Tax Indemnitee shall, in such notice to the
Lessee, so inform the Lessee and such Tax Indemnitee shall not take any action
with respect to such claim, proceeding or Imposition without the consent of the
Lessee (such consent not to be unreasonably withheld or unreasonably delayed)
for 10 days after the receipt of such notice by the Lessee unless such Tax
Indemnitee shall be required by Applicable Law to take action prior to the end
of such ten (10) day period, provided, further, however, that the failure of the
Tax Indemnitee to give notice referred to in this sentence shall not diminish
Lessee's obligations hereunder except to the extent that such failure precludes
Lessee from contesting such claim.
The Lessee shall be entitled for a period of thirty (30) days from receipt
of such notice from such Tax Indemnitee (or such shorter period as such Tax
Indemnitee has notified the Lessee is required by Applicable Law for such Tax
Indemnitee to commence such contest), to request in writing that such Tax
Indemnitee contest the Imposition, at the Lessee's sole expense. If (x) such
contest can be pursued in the name of the Lessee and independently from any
other proceeding involving a Tax liability of such Tax Indemnitee for which the
Lessee has not agreed to indemnify such Tax Indemnitee, (y) such contest must be
pursued in the name of such Tax Indemnitee, but can be pursued independently
from any other proceeding involving a Tax liability of such Tax Indemnitee for
which the Lessee has not agreed to indemnify such Tax Indemnitee or (z) such Tax
Indemnitee so requests, then the Lessee shall be permitted to control the
contest of such claim, provided that in the case of any such contest, if such
Tax Indemnitee reasonably determines that such contest by the Lessee could have
an adverse impact on the business or operations of such Tax Indemnitee and
provides a written explanation to the Lessee of such
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Participation Agreement
determination, such Tax Indemnitee may elect to control or reassert control of
the contest. In all other claims relating to Impositions requested to be
contested by the Lessee, such Tax Indemnitee shall control the contest of such
claim, acting through counsel reasonably acceptable to the Lessee.
Notwithstanding anything to the contrary contained herein, in no event shall the
Lessee be permitted to pursue or continue any contest (or such Tax Indemnitee be
required to pursue or continue any contest) of any Imposition or claim thereof
through any action, suit or proceeding (A) if such Tax Indemnitee provides the
Lessee with a legal opinion of independent counsel reasonably acceptable to the
Lessee that such action, suit or proceeding involves a risk of imposition of
criminal liability or could involve a material risk of the sale, forfeiture or
loss of, or the creation of any Lien (other than a Permitted Property Lien) on
any Property or any part thereof or any interference with the payment of Rent
unless, with respect to civil liability only, the Lessee shall have posted a
bond or other security reasonably satisfactory to the relevant Tax Indemnitee in
respect of such risk, (B) if any Lease Default or Lease Event of Default has
occurred and is continuing, (C) unless the Lessee shall have agreed to pay and
shall pay to such Tax Indemnitee on demand and on an After-Tax Basis all
reasonable out-of-pocket costs, losses and expenses that such Tax Indemnitee may
incur in connection with contesting such Imposition or claim thereof, including
all reasonable legal, accounting and investigatory fees and disbursements as
well as the Impositions which are the subject of such contest to the extent the
contest is unsuccessful, or (D) if such contest shall involve the payment of a
Tax prior to the contest, unless the Lessee shall provide to such Tax Indemnitee
an interest-free advance in an amount equal to, on an After Tax Basis, the
Imposition that the Tax Indemnitee is so required to pay or (E) unless prior to
commencing any contest the Lessee shall have acknowledged its liability for the
Imposition (if and to the extent that the Tax Indemnitee or Lessee, as the case
may be, shall not prevail in the contest in respect of the Imposition). In
addition, for Tax Indemnitee controlled contests and claims contested in the
name of a Tax Indemnitee, no contest of any Imposition shall be required unless:
(A) the amount of the potential indemnity (taking into account all similar or
logically related claims that have been or are likely to be raised in any audit
involving any or all of such Tax Indemnitees for which the Lessee may be liable
to pay an indemnity under this Section 13.4(b)) exceeds $100,000 and (B) if
requested by such Tax Indemnitee, the Lessee shall have provided to such Tax
Indemnitee at the Lessee's sole expense, an opinion of independent counsel
selected by the Lessee and reasonably acceptable to the Tax Indemnitee that a
reasonable basis exists to contest such Imposition (or, in the case of an appeal
from an adverse judicial determination, that there is substantial authority for
a reversal or favorable modification of such decision of such appeal). In no
event shall a Tax Indemnitee be required to appeal an adverse judicial
determination to the United States Supreme Court. In addition, a Tax Indemnitee
shall not be required to contest any claim in its name (or that of an Affiliate)
if the subject matter thereof shall be of a continuing nature and shall have
previously been decided adversely by a court of competent jurisdiction pursuant
to the contest provisions of this Section 13.4(b), unless there shall have been
a change in law and the Tax Indemnitee shall have received, at the Lessee's
expense, an opinion of independent tax counsel selected by the Lessee and
reasonably acceptable to the Tax Indemnitee stating that, as a result of such
change in law, it is more likely than not that the Tax Indemnitee will prevail
in such contest.
The party conducting the contest of an Imposition shall consult in good
faith with the other party and its counsel with respect to such contest (or
claim for refund) but the decisions regarding what actions are to be taken with
respect to such contest shall be made by the controlling party in its sole
judgment. In addition, the party controlling the contest shall keep the
non-controlling party reasonably informed as to the progress of the contest, and
shall provide the noncontrolling party with a copy of (or appropriate excerpts
from) any reports or claims issued by the relevant Governmental Authority to the
controlling party thereof, relating to such contest.
Each Tax Indemnitee shall, at the Lessee's sole expense, supply the Lessee
with such information and documents reasonably requested by the Lessee as are
necessary or advisable for the Lessee to participate in any action, suit or
proceeding to the extent permitted by this Section 13.4(b), provided,
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Participation Agreement
however, that such Tax Indemnitee shall not be required to provide to the Lessee
copies of (i) any information, documentation or materials that it reasonably
deems to be confidential or proprietary or (ii) its tax returns or any other
information, documentation or materials in respect of such Tax Indemnitee's
financial position. Notwithstanding anything in this Section 13.4(b) to the
contrary, so long as no Lease Event of Default shall have occurred and be
continuing, no Tax Indemnitee shall enter into any settlement or other
compromise or fail to appeal an adverse determination with respect to any claim
for which it is entitled to be indemnified under this Section 13.4 (and with
respect to which contest is required under this Section 13.4(b)) without the
prior written consent of the Lessee (which shall not be unreasonably withheld or
delayed), unless such Tax Indemnitee waives its right to be indemnified under
this Section 13.4 with respect to such claim pursuant to the next paragraph.
Notwithstanding anything contained herein to the contrary, a Tax
Indemnitee will not be required to contest or continue to contest (and the
Lessee shall not be permitted to contest or continue to contest) a claim with
respect to any Imposition and shall be permitted to settle or commence any such
claim without the consent of Lessee if such Tax Indemnitee shall waive its right
to indemnification under this Section 13.4 with respect to such claim (and any
claim with respect to such year or any other taxable year the contest of which
is materially adversely affected as a result of such waiver).
(c) Payments. Any Imposition indemnifiable under this Section 13.4 shall
be paid when due directly to the applicable taxing authority if such direct
payment is practicable and permitted. If direct payment to the applicable taxing
authority is not permitted or is otherwise not made, any amount payable to a Tax
Indemnitee pursuant to this Section 13.4 shall be paid to the relevant Tax
Indemnitee within twenty (20) days after receipt of a written demand therefor
from such Tax Indemnitee, which demand shall be accompanied by a written
statement describing in reasonable detail the amount so payable, but in no event
shall the Lessee be required to pay such reimbursement prior to fifteen (15)
days before the date that the relevant Taxes are due. Any payments made pursuant
to this Section 13.4 shall be made directly to such Tax Indemnitee entitled
thereto or the Lessee, as the case may be, in immediately available funds at
such bank or to such account as specified by the payee in written directions to
the payor, or, if no such direction shall have been given, by check of the payor
payable to the order of the payee by certified mail, postage prepaid at its
address as set forth in Schedule II hereto. Upon the request of any Tax
Indemnitee with respect to Imposition that the Lessee is required to pay, the
Lessee shall furnish to such Tax Indemnitee the original or a certified copy of
a receipt for the Lessee's payment of such Tax or such other evidence of payment
as is reasonably acceptable to such Tax Indemnitee.
(d) Reports. In the case of any report, return or statement required to be
filed by the Lessor with respect to any Impositions that are subject to
indemnification under this Section 13.4, the Lessee shall promptly notify the
Lessor of such requirement and, at the Lessee's sole expense (i) if the Lessee
is permitted by Applicable Law, timely file such report, return or statement in
its own name and send a copy of such report, return or statement to the Lessor,
or (ii) if such report, return or statement is required to be in the name of or
filed by the Lessor, or the Lessor otherwise requests that such report, return
or statement be filed in the name of or by the Lessor, the Lessee shall prepare
and finish such report, return or statement in such manner as shall be
satisfactory to the Lessor and shall send the same to the Lessor for filing no
later than fifteen (15) days prior to the due date therefor. In any case in
which any Tax Indemnitee will file any such report, return or statement with
respect to any Impositions that are subject to indemnification under this
Section 13.4, the Lessee shall, upon written request of such Tax Indemnitee,
provide such Tax Indemnitee with such information as is reasonably necessary to
allow such Tax Indemnitee to file such report, return or statement.
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Section 13.5. Title Representation and Indemnity.
(a) The Lessee represents and warrants to the Lessor, each Investor and
the Arranger that: (i) the Seller of each Leased Property is the sole fee owner
thereof and the Lessee is the sole fee owner of each Mortgaged Property, (ii)
none of the Properties are encumbered or affected by any Liens, including any
mortgages or encumbrances, or any easements, covenants, leases, agreements,
restrictions, purchase options, rights of first offer (other than the right of
first offer with respect to the Clifton Property that is described on Schedule
10.2(b) hereto), reversionary rights or other interests, other than Permitted
Property Liens, (iii) all appurtenances to each Property, including any and all
easements, access and other rights appropriate for use and occupancy of such
Property for commercial and other purposes are also owned by the Seller thereof
free and clear of any third-party rights or claims, (iv) there are no mechanics,
tax, judgment or other Liens affecting any of the Properties and all real estate
and other Taxes with regard to each Property are current and fully paid and (v)
there has not been any work performed or materials supplied to any Property
prior to the date hereof which has not been fully paid for and which could give
rise to the filing of any mechanic's liens against any Property. With regard to
third-party leases, the Lessee also represents and warrants to the Lessor that
any leases still appearing in the public records relative to any of the
Properties have expired or been terminated and that the tenants named therein
have no further rights with respect to the applicable Property or Properties.
(b) In furtherance of the representations and warranties set forth in
clause (a) above and in lieu of title insurance, the Lessee hereby indemnifies
and holds the Lessor, the Investors and the Arranger harmless from any and all
losses, costs and expenses and any diminution in the value of the Lessor's
interest in the Properties that might result from (x) any of the foregoing
representations and warranties being incorrect or inaccurate, either now or in
the future, or (y) any of the following: (i) the invalidity or unenforceability
of the lien of any Lessor Mortgage, (ii) any lack of priority of the Lien of any
Lessor Mortgage over any other Lien encumbering any Property, (iii) any
violation, variation, encroachment or adverse circumstance that would have been
disclosed by an accurate Survey, including any discrepancy which would have been
disclosed with respect to the legal description of any Leased Property attached
to Exhibit A of the Lease Supplement therefor, or (iv) the existence of any Lien
on any Property, including any Permitted Property Lien (other than a Permitted
Property Lien of the type described in clause (i), clause (vii) or clause (viii)
of the definition thereof), it being understood that the Lessee's liability with
respect to the indemnification set forth in this Section 13.5(b) is absolute,
joint and several and shall include both intentional and unintentional
misrepresentations and breaches. In addition to the foregoing, the Lessee agrees
that the representations embodied in Section 13.5(a) are continuing in nature,
and the Lessee covenants and agrees that it shall not cause, permit or allow any
act to occur or any document to be executed which is or may be at variance with
the representations and warranties set forth in Section 13.5(a). In addition,
the Lessee agrees that the indemnification embodied in this Section 13.5(b)
shall also apply to any breach of the foregoing covenant.
Section 13.6. Withholding Taxes, etc.
(a) Payments Free of Taxes.
(i) All payments made by the Lessee under this Participation
Agreement, the Master Lease and the other Operative Documents shall be
made free and clear of, and without deduction or withholding for or on
account of, any present or future income (but excluding those Taxes
described in clauses (i) and (ii) of the definition of Impositions),
excise, stamp, transfer or franchise taxes and other taxes, fees, duties,
withholdings or other charges of any nature whatsoever (including interest
and penalties) now or hereafter imposed (the "Withholding Taxes") by any
Governmental Authority or taxing authority domestic or foreign (the
"Taxing Authority"), whether or not such Withholding Taxes were correctly
or legally asserted. If any
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Participation Agreement
Withholding Taxes are required to be withheld or deducted from any amounts
payable to, or for the benefit of, any Tax Indemnitee or any Affiliate
thereof under this Participation Agreement or the other Operative
Documents, the amounts so payable to such Tax Indemnitee shall be
increased to the extent necessary to yield on an After Tax Basis such
amounts payable under this Participation Agreement and the other Operative
Documents at the rates or in the amounts specified in this Participation
Agreement and the other Operative Documents. Whenever any Withholding
Taxes are payable by the Lessee with respect to any payment to or for the
account of a particular Tax Indemnitee, as promptly as possible
thereafter, the Lessee shall send to such Tax Indemnitee a certified copy
of an original official receipt received by the Lessee showing payment
thereof. If the Lessee fails to pay any Withholding Taxes when due to the
appropriate taxing authority or fails to remit to the Tax Indemnitee
required receipts or other required documentary evidence, the Lessee shall
indemnify the Tax Indemnitee for any obligations that may become payable
by the Tax Indemnitee as a result of any such failure.
(ii) All payments made by the Lessor under this Participation
Agreement and the other Operative Documents to any other Tax Indemnitee
shall be made net of any deduction or withholding for Withholding Taxes.
If any Withholding Taxes are required to be withheld or deducted from any
amounts payable by the Lessor to, or for the benefit of, any other Tax
Indemnitee under this Participation Agreement or any other Operative
Document, then the Lessee shall indemnify and pay such Tax Indemnitee on
an After Tax Basis an amount necessary to yield such Tax Indemnitee (after
payment of all Withholding Taxes) such amounts payable under this
Participation Agreement and the other Operative Documents at the rates or
in the amounts specified in this Participation Agreement and the other
Operative Documents.
(iii) Moreover, if any Taxes (the "Indirect Withholding Taxes") in
the nature of Withholding Taxes are directly asserted by any Taxing
Authority against any of the Lessor or any Investor with respect to any
payment received by such Person, such Person may pay such Taxes and the
Lessee will pay directly to such Person (which payment shall constitute
Supplemental Rent hereunder), within fifteen (15) Business Days after
receipt of a written demand therefor accompanied by a written statement
describing in reasonable detail the amount so payable from the Lessor or
such Investor (as applicable) such additional amounts (including any
interest, reasonable costs or expenses and any penalties incurred in
connection therewith) as are necessary in order that on a fully After Tax
Basis the net amount received by such Person after the payment of such
Indirect Withholding Taxes (including any Taxes on such additional amount)
shall equal the amount such Person would have received had such Indirect
Withholding Taxes not been asserted plus interest on such additional
amounts at a rate per annum of Overnight LIBOR plus 77 basis points (or,
in the case of any such additional amounts outstanding after the
expiration of such fifteen (15) Business Day period, a rate per annum
equal to the Overdue Rate), calculated (on the basis of actual days
elapsed in a year of 360 days) from the date of payment of such Indirect
Withholding Taxes by the Lessor or such Investor (as applicable) to the
date of payment of such additional amounts by the Lessee. If the Lessee
fails to pay any such Indirect Withholding Taxes as and when due to the
appropriate Taxing Authority or fails to remit to the Lessor for the
benefit of the Lessor or such Investor (as applicable), the required
receipts or other required documentary evidence, then the Lessee shall
indemnify the Lessor or such Investor (as applicable), on an After Tax
Basis, for any incremental Taxes (whether or not constituting Withholding
Taxes), interest, penalties and reasonable expenses that may become
payable by the Lessor or such Investor (as applicable) as a result of any
such failure.
(iv) Notwithstanding the foregoing provisions of this Section
13.6(a), if the applicable Tax Indemnitee is a direct or indirect
transferee or assignee of an original Tax Indemnitee, then Lessee shall be
obligated to indemnify such Tax Indemnitee for Withholding
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Participation Agreement
Taxes and Indirect Withholding Taxes only to the extent that based on the
Applicable Law in effect on the date such Withholding Tax or Indirect
Withholding Tax is imposed or becomes payable, the amount of such Tax does
not exceed the amount of such Tax that would have been imposed against or
payable by such original Tax Indemnitee.
(v) The obligations of the Lessee under this Section 13.6(a) shall
survive the termination of this Participation Agreement and the other
Operative Documents and the payment of the Lease Balance and all other
amounts payable under the Operative Documents.
(b) Withholding Exemption Certificates. On or prior to the Acquisition
Date, or if such date does not occur within thirty (30) days after the date of
this Participation Agreement, by the end of such 30-day period, each Investor
that is not organized under the laws of the United States of America or a state
or political subdivision thereof shall deliver to the Lessor and the Lessee two
duly completed copies of (i) an IRS form W-8ECI (or successor applicable form)
or (ii) an IRS form W-8BEN(or successor applicable form) certifying its foreign
status and, if applicable, claiming an exemption under a U.S. tax treaty. Each
such Investor further agrees (i) promptly to notify the Lessee and the Lessor of
any change of circumstances that would prevent such Investor from receiving
payments hereunder without any deduction or withholding or with reduced
deduction or withholding of such taxes as indicated on the most recent such
certificate or other form previously delivered by such Investor and (ii) if such
Investor has not so notified the Lessee and the Lessor of any change of
circumstances which would prevent such Investor from receiving payments
hereunder without any deduction or withholding or with reduced deduction or
withholding of taxes as indicated on the most recent such certificate or other
form previously delivered by such Investor, then on or before the date that any
certificate or other form delivered by such Investor under this Section 13.6(b)
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent such certificate or form previously delivered by such
Investor, to deliver to the Lessee and the Lessor a new certificate or form,
certifying that such Investor is entitled to receive payments under the
Operative Documents without deduction or withholding or with reduced deduction
or withholding of such taxes. If any Investor fails to provide to the Lessee or
the Lessor pursuant to this Section 13.6(b) (or, in the case of any Person that
becomes an Investor through an assignment by another Investor, pursuant to
Section 12.1) any certificates or other evidence required by such provision to
establish that such Investor is, at the time it becomes an Investor hereunder,
entitled to receive payments under the Operative Documents without deduction or
withholding or with reduced deduction or withholding of any United States
federal income taxes, such Investor shall not be entitled to any indemnification
under Section 13.6(a) for any withholding taxes to the extent imposed on such
Investor primarily as a result of such failure.
(c) Tax Returns. Nothing contained in this Section 13.6 shall require the
Lessor or any Investor (or any other Person) to make available any of its Tax
returns (or any other information relating to its Taxes, which it deems to be
confidential).
Section 13.7. Increased Costs, etc. If the adoption of or any change in
any Applicable Law or in the interpretation or application thereof applicable to
any Affected Party, or compliance by any Affected Party with any request or
directive (whether or not having the force of law) from any central bank or
other Governmental Authority, in each case made subsequent to the Documentation
Date (or, if later, the date on which such Affected Party becomes an Affected
Party):
(i) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, or
deposits or other liabilities in or for the account of loans or other
extensions of credit by, or any other acquisition of funds by, any office
of such Affected Party; or
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Participation Agreement
(ii) shall impose on such Affected Party any other condition
(excluding any Tax of any kind) whatsoever in connection with the
Operative Documents;
and the result of any of the foregoing is to increase the cost to such Affected
Party of making, continuing or maintaining its investment in the Transactions,
or to reduce any amount receivable hereunder in respect thereof, then, in any
such case, upon notice to the Lessee from such Affected Party, through the
Lessor in accordance herewith, the Lessee shall pay such Affected Party any
additional amounts necessary to compensate such Affected Party for such
increased cost or reduced amount receivable; provided, however, that the Lessee
shall not be obligated to pay any Affected Party that is a direct or indirect
transferee or assignee of an original Affected Party any such additional amounts
in excess of the amounts, if any, that would have been payable to the original
Affected Party after giving effect to such adoption, change or compliance. All
payments required by this Section 13.7 shall be made by the Lessee within five
(5) Business Days after demand by the applicable Affected Party. If any Affected
Party becomes entitled to claim any additional amounts pursuant to this
subsection, it shall provide prompt notice thereof to the Lessee, through the
Lessor, certifying (x) that one of the events described in this Section 13.7 has
occurred and describing in reasonable detail the nature of such event, (y) as to
the increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Affected Party and a reasonably detailed
explanation of the calculation thereof (including the method by which such
Affected Party allocated such amounts to the Lessee). Such a certificate as to
any additional amounts payable pursuant to this clause submitted by such
Affected Party, through the Lessor, to the Lessee shall be conclusive and
binding for all purposes, absent manifest error.
Section 13.8. Funding Losses; Break Costs. (a) The Lessee agrees to
indemnify each Indemnitee and to hold each Indemnitee harmless from any Break
Costs that such Indemnitee may sustain or incur (other than through such
Person's own gross negligence or willful misconduct) as a consequence of (i)
failure by the Lessor to pay the Property Cost for any Property on the date
specified in the Acquisition Date Notice as the Acquisition Date therefor, (ii)
default by the Lessee in paying any Property Cost or Aggregate Property Cost
after the Lessee has given a notice thereof in accordance with the provisions of
the Master Lease, (iii) the Lessee paying Basic Rent on a day that is not a
Scheduled Payment Date or (iv) the Lessee paying any Property Cost, Aggregate
Property Cost, Termination Base Amount or Termination Price.
(b) The Lessee shall, upon receipt from the Lessor or any Investor of a
statement of the amount of any loss, cost or expense constituting Break Costs
prepared in good faith and in reasonable detail (which statement shall be
binding absent manifest error), pay the amount of such Break Costs to the
requesting Person.
Section 13.9. Capital Adequacy. If the adoption of any applicable law,
rule or regulation regarding capital adequacy, or any change therein, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Affected Party with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, in each case made
subsequent to the Documentation Date has or will have the effect of reducing the
rate of return on any Affected Party's or its parent company's capital, as a
consequence of its commitments or obligations hereunder to a level below that
which such Affected Party or its parent company could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Affected Party's or its parent company's policies with respect to capital
adequacy), then, upon notice from such Affected Party, the Lessee shall pay to
such Affected Party such additional amount or amounts as will compensate such
Affected Party and its parent company for such reduction (it being understood
that such parent company shall not be reimbursed to the extent its subsidiary
Affected Party is reimbursed by the Lessee in connection with the same or a
similar law, rule, regulation, change,
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Participation Agreement
request or directive applicable to such Affected Party). All payments required
by this Section 13.9 shall be made by the Lessee within five (5) Business Days
after demand by the Affected Party. If any Affected Party becomes entitled to
claim any additional amounts pursuant to this Section 13.9, it shall provide
prompt written notice thereof to the Lessee certifying (x) that one of the
events described in this Section 13.9 has occurred and describing in reasonable
detail the nature of such event, (y) as to the increased cost or reduced amount
resulting from such event and (z) as to the additional amount demanded by such
Affected Party and a reasonably detailed explanation of the calculation thereof.
Such a certificate as to any additional amounts payable pursuant to this Section
13.9 submitted by such Affected Party, through the Lessor, to the Lessee shall
be conclusive in the absence of manifest error.
Section 13.10. Indemnity Payments in Addition to Lease Obligations. The
Lessee acknowledges and agrees that the Lessee's obligations to make indemnity
payments under this Article XIII are separate from, in addition to, and do not
reduce, the Lessee's obligations to pay any amounts owing from time to time
under the Lease.
Section 13.11. Payment of Amounts Due under this Article XIII. All amounts
payable by the Lessee pursuant to this Article XIII shall be paid by the Lessee
directly to the Lessor, the Lessor Administrator, the applicable Investor or the
Arranger (as applicable), upon demand from such Person therefor, in immediately
available funds consisting of lawful currency of the United States of America
together with interest on such amounts at a rate per annum of Overnight LIBOR
plus 77 basis points from the date of demand until the same shall be paid (or,
in the case of any such amounts outstanding ten (10) Business Days after the
date of such demand, a rate per annum equal to the Overdue Rate).
Section 13.12. Survival. The obligations of the Lessee under this Article
XIII shall survive the termination of this Participation Agreement and the other
Operative Documents and the payment of the Lease Balance and all other amounts
payable under the Operative Documents, and shall be separate and independent
from any remedy under the Lease or any other Operative Document.
ARTICLE XIV
MISCELLANEOUS
Section 14.1. Survival of Agreements. All covenants, agreements,
representations and warranties made by the Lessee in the Operative Documents and
in the certificates or other instruments prepared or delivered in connection
therewith shall be considered to have been relied upon by the Lessor, the
Investors and the Arranger and shall survive the execution and delivery of this
Participation Agreement, the payment by the Lessor of the Property Costs and the
transfer of the Leased Properties to the Lessor regardless of any investigation
made by any Indemnitee or on its behalf, and shall continue in full force and
effect as long as any portion of the Lease Balance is outstanding and unpaid.
The provisions of Article IX and Article XIII shall remain operative and in full
force and effect regardless of the occurrence of the Expiration Date, the
consummation of the transactions contemplated by the Operative Documents, the
payment of the Lease Balance, the invalidity or unenforceability of any term or
provision of any Operative Document or any investigation made by or on behalf of
any Indemnitee.
Section 14.2. No Broker, Etc. Each of the parties hereto represents to the
others that it has not retained or employed any broker, finder or financial
adviser (other than the Arranger) to act on its behalf in connection with this
Participation Agreement or the transactions contemplated herein or in the other
Operative Documents nor has it authorized any broker, finder or financial
adviser retained or employed by any other Person so to act. In the event that
any party retains any other broker, finder or financial advisor, such party will
promptly notify the other parties in writing of such broker, finder or financial
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Participation Agreement
advisor. Any party which is in breach of this representation shall indemnify and
hold the other parties harmless from and against any liability arising out of
such breach of this representation.
Section 14.3. Notices. Unless otherwise specifically provided herein, all
notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to any
Person shall be given in writing by United States mail, by nationally recognized
courier service, by hand, by facsimile or, in the case of any such notices,
consents, directions, approvals, instructions or other communications given to
the Lessee or (if followed by hard copy) RBS Lombard, Inc., by electronic mail,
shall be directed to the address, facsimile number or electronic mail address of
such Person as indicated on Schedule II and shall become effective (i) if
delivered by United States mail, five (5) Business Days after being deposited in
the mail, certified or registered with appropriate postage prepaid, (ii) if
delivered by a nationally recognized courier service, upon delivery to the
intended recipient, (iii) if delivered by hand, when received, (iv) if delivered
by facsimile, when transmitted (upon electronic confirmation thereof) or (v) in
the case of the Lessee and RBS Lombard, Inc., if delivered by electronic mail,
when transmitted to an electronic mail address, provided that any facsimile or
electronic mail transmitted after 5:00 P.M. (recipient time) shall be deemed to
have been received on the next Business Day. From time to time any party may
designate a new address or facsimile number or electronic mail address for
purposes of notice hereunder by written notice to each of the other parties
hereto in accordance with this Section.
Section 14.4. Counterparts. This Participation Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 14.5. Amendments, Etc. Neither any Operative Document nor any of
the terms thereof may be terminated (except as expressly required under the
terms of any Operative Document or upon payment in full of the Lease Balance),
amended, supplemented, waived or modified without the written agreement or
consent of the Lessee and the Lessor; provided, however, that the Lessee's
consent shall not be required with respect to any termination, amendment,
supplement, waiver or modification of the Lessor Administration Agreement or the
Lessor LLC Agreement other than (x) any such amendment, supplement, waiver or
modification that increases the costs, expenses or other amounts required to be
paid by the Lessee (provided that the Lessee's consent to any such amendment,
supplement, waiver or modification shall not be unreasonably withheld) or (y)
any amendment or other modification to the Lessor LLC Agreement that expands the
scope of the Lessor's permitted activities beyond those activities relating to
the transactions contemplated by the Operative Documents or permits the Lessor
to dissolve prior to the Expiration Date or earlier termination of the Master
Lease with respect to all of the Properties.
Section 14.6. Headings, Etc. The Table of Contents and headings of the
various Articles and Sections of this Participation Agreement are for
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof.
Section 14.7. Parties in Interest. Except as expressly provided herein,
none of the provisions of this Participation Agreement is intended for the
benefit of any Person except the parties hereto. No party hereto shall assign or
transfer any of its rights or obligations under the Operative Documents except
in accordance with the terms and conditions thereof.
Section 14.8. GOVERNING LAW. THIS PARTICIPATION AGREEMENT AND THE OTHER
OPERATIVE DOCUMENTS (EXCEPT AS OTHERWISE PROVIDED IN ANY OPERATIVE DOCUMENT) AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICTS OF LAW
- 40 -
Participation Agreement
PRINCIPLES, EXCEPT TITLE 14 OF ARTICLE 5 OF THE NEW YORK GENERAL OBLIGATIONS
LAW.
Section 14.9. Severability. Any provision of this Participation Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 14.10. Liability Limited. (a) Notwithstanding any provision to the
contrary in any Operative Document, the obligations and agreements of the Lessor
hereunder and under the other Operative Documents and any other certificate,
instrument or document executed in connection herewith or therewith, and any
other document supplemental hereto or thereto, shall be nonrecourse to the
Lessor and its shareholders, members, officers, agents and employees, and none
of the Lessor and its shareholders, officers, agents and employees shall have
any personal liability or accountability whatsoever under or in respect of any
Operative Document or any transaction contemplated thereby, recourse being
limited to the Lessor's interest in the Properties (including the proceeds
thereof) and the Rent payable under the Operative Documents; provided, however,
that the Lessor shall be liable (a) for its own willful misconduct or gross
negligence, (b) breach of any of its representations or warranties under the
Operative Documents, (c) any Lessor Liens attributable to it, or (d) breach of
its obligations under Section 3.2 after the satisfaction of all conditions to
such obligations. It is understood and agreed that, except as provided in the
preceding sentence: (i) the Lessor shall have no personal liability under any of
the Operative Documents; (ii) all obligations of the Lessor to the Investors are
solely nonrecourse obligations except to the extent that the Lessor has received
payment from others; and (iii) all such personal liability of the Lessor is
expressly waived and released as a condition of, and as consideration for, the
execution and delivery of the Operative Documents by the Lessor.
(b) No Investor shall have any obligation to any other Investor or to the
Lessee with respect to transactions contemplated by the Operative Documents
except those obligations of such Investor expressly set forth in the Operative
Documents or except as set forth in the instruments delivered in connection
therewith, and no Investor shall be liable for performance by any other party
hereto of such other party's obligations under the Operative Documents except as
otherwise so set forth.
Section 14.11. Further Assurances. The parties hereto shall promptly cause
to be taken, executed, acknowledged or delivered, at the sole expense of the
Lessee, all such further acts, conveyances, documents and assurances as the
other parties may from time to time reasonably request in order to carry out and
preserve the security interests and liens (and the priority thereof) intended to
be created pursuant to this Participation Agreement, the other Operative
Documents, and the transactions thereunder (including the preparation, execution
and filing of any and all Uniform Commercial Code financing statements and other
filings or registrations which the parties hereto may from time to time request
to be filed or effected). The Lessee, at its own expense and upon prior request
from any other party, shall take such action as specified in such request, to
the extent such action is reasonably necessary (including any action specified
in the preceding sentence) in order to maintain and protect all security
interests provided for hereunder or under any other Operative Document.
Section 14.12. SUBMISSION TO JURISDICTION. EACH PARTY HERETO HEREBY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING
OUT OF OR RELATING TO THIS PARTICIPATION AGREEMENT OR ANY OF THE OTHER OPERATIVE
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT
- 41 -
Participation Agreement
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
Section 14.13. Setoff. Each Investor and the Lessor shall, upon the
occurrence of any Lease Event of Default, have the right to appropriate and,
subject to Section 7.4, apply to the payment of the Obligations as security for
the payment of such Obligations, any and all balances, credits, deposits,
accounts or moneys of the Lessee then or thereafter maintained with any Investor
or the Lessor. The rights of the Investors and the Lessor under this Section are
in addition to other rights and remedies (including other rights of setoff under
applicable law or otherwise) which such Person may have.
Section 14.14. Successors and Assigns. All the terms and provisions of
this Participation Agreement shall inure to the benefit of the parties hereto
and their respective successors and permitted assigns; provided, that the Lessee
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Lessor and each Investor, and any
attempted assignment or transfer by the Lessee without such consents shall be
null and void.
Section 14.15. WAIVER OF JURY TRIAL. EACH PARTY HERETO VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
PARTICIPATION AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
ANY OF THE PARTIES HERETO. EACH PARTY HERETO HEREBY AGREES THAT IT WILL NOT SEEK
TO CONSOLIDATE ANY SUCH LITIGATION WITH ANY OTHER LITIGATION IN WHICH A JURY
TRIAL HAS NOT OR CANNOT BE WAIVED. THE PROVISIONS OF THIS SECTION 14.14 HAVE
BEEN FULLY NEGOTIATED BY THE PARTIES HERETO AND SHALL BE SUBJECT TO NO
EXCEPTIONS. THE LESSEE ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER OPERATIVE DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR EACH OF THE LESSOR AND THE INVESTORS ENTERING INTO THIS
PARTICIPATION AGREEMENT AND EACH SUCH OTHER OPERATIVE DOCUMENT.
Section 14.16. NO ORAL AGREEMENTS. THIS PARTICIPATION AGREEMENT AND THE
OTHER OPERATIVE DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING AMONG
THE PARTIES HERETO AND SUPERSEDE ALL OTHER AGREEMENTS AND UNDERSTANDINGS BETWEEN
SUCH PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF. THIS
PARTICIPATION AGREEMENT AND THE OTHER OPERATIVE DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 14.17. No Investor Responsible for Other Investors. The
obligations of each of the Lessor and each Investor under this Participation
Agreement and the other Operative Documents are several and not joint; and, in
the event of a failure by any such Person to perform any of its obligations
hereunder or under any other Operative Document, neither the Lessor nor any
Investor (other than such defaulting Lessor or Investor, as the case may be)
shall have any liability as a consequence thereof.
- 42 -
Participation Agreement
[Remainder of Page Intentionally Left Blank]
- 43 -
IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
ITT INDUSTRIES, INC., as Lessee
By /s/ Donald Foley
-------------------------------------------
Name: Donald Foley
Title: Senior Vice President, Treasurer and
Director of Tax
PARTICIPATION AGREEMENT
REXUS L.L.C., as Lessor
By /s/ Larry Bowman
-------------------------------------------
Name: Larry Bowman
Title: President
PARTICIPATION AGREEMENT
AIR BAIL S.A.S.,
as an Investor
By /s/ Stephane Guet
-------------------------------------------
Name: Stephane Guet
Title: Attorney in Fact
PARTICIPATION AGREEMENT
RBS LOMBARD, INC.,
as an Investor
By /s/ J.S. Godier
-------------------------------------------
Name: J.S. Godier
Title: Executive Vice President
PARTICIPATION AGREEMENT
Schedule I
to Participation Agreement
Commitments
COMMITMENT
INVESTOR COMMITMENT PERCENTAGE
Air Bail S.A.S. $ 85,000,000 70.833333%
RBS Lombard, Inc. $ 35,000,000 29.166667%
TOTAL $ 120,000,000 100.000000%
Schedule II
to Participation Agreement
Notice Information, Wire Instructions and Funding Offices
LESSEE
ITT INDUSTRIES, INC.
4 West Red Oak Lane
White Plains, NY 10604
Attention: Donald Foley, Treasurer
Facsimile No.: 914-696-2972
Telephone No.: 914-641-2147
email: donald.foley@itt.com
with a copy to:
Red Oak Corporate Park
4 West Red Oak Lane
White Plains, NY 10604
Attention: Keith Richey, International Tax Counsel
Facsimile No.: 914-696-2968
Telephone No.: 914-641-2142
e-mail: keith.richey@itt.com
Wire Transfer Instructions:
[omitted]
LESSOR:
REXUS L.L.C.
c/o Societe Generale (Canada), as Lessor Administrator
1501 McGill College
Bureau 1800
Montreal, QC, H3A 3MB
Canada
Attention: Manager, Treasury & Loan Servicing Group / Debbie Toth
Facsimile No.: 514-841-6250
Telephone No.: 514-841-6000
with a copy to:
Rexus L.L.C.
Societe Generale, New York Branch
1221 Avenue of the Americas
New York, NY 10020
Attention: President
Facsimile No.: 212-278-7720
Telephone No.: 212-278-6446
Wire Transfer Instructions:
[omitted]
INVESTORS:
AIR BAIL S.A.S.
Notices:
17, Cours Valmy
92800 Puteaux
France
Facsimile: 33 1 42 14 98 54
Telephone: 33 1 42 14 84 08
Attention: OPER/DFI/FIN/AFI
with a copy to:
Jones Day
222 East 41st Street
New York, New York 10017-6702
Facsimile: 212-755-7306
Telephone: 212-326-3745
Attention: Stacey Lefont
- 2 -
Wire Transfer Instructions:
[omitted]
Funding Office:
17, Cours Valmy
92800 Puteaux
France
RBS LOMBARD, INC.
Notices:
Virginia Purchia / Steven Imbriaco
NY Lending Operations
The Royal Bank of Scotland plc, New York Branch
101 Park Avenue, 12th Floor
New York, NY 10178
Facsimile No.: 212-401-4842
Telephone No.: 212-401-1437 / 1405
e-mail: virginia.purchia@rbos.com
with a copy to:
Vice President, Portfolio Manager
RBS Lombard, Inc.
101 Park Avenue, 21st Floor
New York, NY 10178
Facsimile No.: 212-401-3404
Telephone No.: 212-401-3471
e-mail: rory.mullan@rbos.com
Wire Transfer Instructions:
[omitted]
Funding Office:
101 Park Avenue
New York, NY 10178
- 2 -
Schedule III
to Participation Agreement
Description of Properties, Go Dark Values and Original Property Costs
ORIGINAL
STREET GO DARK PROPERTY
CITY STATE ADDRESS VALUE COST
- ---------------- ---------- --------------------- ------------ --------------
LEASED PROPERTIES
Fort Wayne Indiana 1919 W. Cook Road $ 11,650,485 $ 28,571,429
Cheektowaga New York 175 Standard Parkway $ 2,718,447 $ 6,666,667
Colorado Springs Colorado 4410 & 4450 $ 18,407,767 $ 45,142,857
E. Fountain Boulevard
Archbold Ohio 701 E. Lugbill Road $ 3,339,806 $ 8,190,476
Morton Grove Illinois 8200 North Austin Ave $ 10,873,786 $ 26,666,666
Chicago Illinois 3500 North Spaulding $ 1,941,748 $ 4,761,905
MORTGAGED PROPERTIES
Clifton New Jersey 100 Kingsland Road $ 31,067,961 Not Applicable
------------ --------------
TOTAL: $80,000,0000 $ 120,000,000
- 3 -
Schedule 10.2(b)
to Participation Agreement
Description of Liens on Principal Properties
Principal Property Description of Liens
- ------------------ -------------------------------
Clifton Property Rights of Related Retail
Clifton, L.P., a Delaware
limited partnership, under that
certain Right of First Offer
Agreement, dated as of May 6,
1999, between the Lessee and
Related Retail Clifton, L.P., a
Delaware limited partnership
- 4 -
[EXECUTION COPY]
================================================================================
MASTER LEASE AND DEED OF TRUST,
DEED TO SECURE DEBT AND
MORTGAGE
Dated as of December 15, 2004
between
itt industries, inc.,
as Lessee
and
REXUS L.L.C.,
as Lessor
-----------------------------------------------
To the extent, if any, that this Master Lease and Deed of Trust, Deed to
Secure Debt and Mortgage constitutes chattel paper (as such term is defined in
the Uniform Commercial Code as in effect in any applicable jurisdiction), no
lien on this Master Lease and Deed of Trust, Deed to Secure Debt and Mortgage
may be created through the transfer or possession of any counterpart other than
the original counterpart containing the receipt therefor executed by the Lessor
on or following the signature page hereof.
This counterpart is not the original counterpart.
================================================================================
ARTICLE I DEFINITIONS................................................. 1
Section 1.1. Definitions; Interpretation.............................. 1
ARTICLE II MASTER LEASE................................................ 2
Section 2.1. Acceptance and Lease of Leased Properties................ 2
Section 2.2. Acceptance Procedure..................................... 2
Section 2.3. Lease Term............................................... 2
Section 2.4. Title.................................................... 2
ARTICLE III PAYMENT OF RENT............................................. 2
Section 3.1. Rent..................................................... 2
Section 3.2. Payment of Rent.......................................... 3
Section 3.3. Supplemental Rent........................................ 3
Section 3.4. Method of Payment........................................ 3
Section 3.5. Calculation of Accrual Rent.............................. 3
ARTICLE IV QUIET ENJOYMENT; RIGHT TO INSPECT........................... 4
Section 4.1. Quiet Enjoyment.......................................... 4
Section 4.2. Right to Inspect......................................... 4
ARTICLE V NET LEASE, ETC.............................................. 4
Section 5.1. Net Lease................................................ 4
Section 5.2. No Termination or Abatement.............................. 5
ARTICLE VI SUBLEASES AND ASSIGNMENTS................................... 5
Section 6.1. General.................................................. 5
Section 6.2. Leasing and Subleasing................................... 5
ARTICLE VII LESSEE ACKNOWLEDGMENTS...................................... 6
Section 7.1. Condition of the Property................................ 6
Section 7.2. Risk of Loss............................................. 6
ARTICLE VIII POSSESSION AND USE OF EACH PROPERTY, ETC.................... 6
Section 8.1. Utility Charges.......................................... 6
Section 8.2. Possession and Use of each Property; No Waste............ 6
Section 8.3. Compliance with Applicable Laws and
Insurance Requirements................................ 7
ARTICLE IX MAINTENANCE AND REPAIR; RETURN.............................. 7
Section 9.1. Maintenance and Repair................................... 7
Section 9.2. No Maintenance Obligations of Lessor..................... 7
Section 9.3. Condition Upon Return.................................... 7
ARTICLE X MODIFICATIONS, ETC.......................................... 7
Section 10.1. Modifications, Substitutions and Replacement............. 7
Master Lease
Section 10.2. Notice to the Lessor..................................... 8
ARTICLE XI DISCHARGE OF LIENS; EASEMENTS............................... 8
Section 11.1. Discharge of Liens....................................... 8
Section 11.2. Grants and Releases of Easements; Lessor Waivers......... 9
ARTICLE XII PERMITTED CONTESTS.......................................... 10
Section 12.1. Permitted Contests....................................... 10
ARTICLE XIII INSURANCE................................................... 10
Section 13.1. General.................................................. 10
Section 13.2. Insurance Coverage....................................... 11
ARTICLE XIV CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS............ 12
Section 14.1. Risk of Loss, Damage or Destruction...................... 12
Section 14.2. Casualty and Condemnation................................ 13
Section 14.3. Remediation of Environmental Violations.................. 14
Section 14.4. Notice of Environmental Violations....................... 15
ARTICLE XV PARTIAL Termination of Lease AT LESSOR'S OPTION............. 15
Section 15.1. Partial Termination Upon Certain Events.................. 15
Section 15.2. Partial Termination Procedures........................... 15
ARTICLE XVI LEASE EVENTS OF DEFAULT..................................... 16
Section 16.1. Lease Events of Default.................................. 16
Section 16.2. Remedies................................................. 18
Section 16.3. Waiver of Certain Rights................................. 21
Section 16.4. Mortgage/Deed of Trust Remedies.......................... 21
ARTICLE XVII LESSOR'S RIGHT TO CURE; LESSOR'S
OBLIGATION TO FORWARD NOTICES.......... 22
Section 17.1. The Lessor's Right to Cure the Lessee's Lease Defaults... 22
Section 17.2. Lessor's Obligation to Forward Notices................... 22
ARTICLE XVIII PURCHASE BY LESSEE.......................................... 22
Section 18.1. Purchase Option on Expiration Date....................... 22
Section 18.2. Acceleration of Purchase Obligation...................... 23
ARTICLE XIX TERMINATION OR REPLACEMENT FOR OBSOLESCENCE,
EVENT OF LOSS, ETC....................................... 23
Section 19.1. Right of Termination..................................... 23
Section 19.2. Replacement.............................................. 24
ARTICLE XX RETURN OPTION; RETURN PROVISIONs............................ 26
Section 20.1. Option to Return......................................... 26
- 2 -
Master Lease
Section 20.2. Return................................................... 27
ARTICLE XXI PROCEDURES RELATING TO CONVEYANCE TO LESSEE................. 28
Section 21.1. Provisions Relating to the Conveyance of
Properties to the Lessee upon Certain Events........... 28
ARTICLE XXII ESTOPPEL CERTIFICATES....................................... 29
Section 22.1. Estoppel Certificates.................................... 29
ARTICLE XXIII ACCEPTANCE OF SURRENDER..................................... 29
Section 23.1. Acceptance of Surrender.................................. 29
ARTICLE XXIV NO MERGER OF TITLE.......................................... 29
Section 24.1. No Merger of Title....................................... 29
ARTICLE XXV INTENT OF THE PARTIES....................................... 30
Section 25.1. Ownership of the Property................................ 30
ARTICLE XXVI MISCELLANEOUS............................................... 30
Section 26.1. Severability............................................. 30
Section 26.2. Amendments and Modifications............................. 31
Section 26.3. No Waiver................................................ 31
Section 26.4. Notices.................................................. 31
Section 26.5. Successors and Assigns................................... 31
Section 26.6. Headings and Table of Contents........................... 31
Section 26.7. Counterparts............................................. 31
Section 26.8. GOVERNING LAW............................................ 31
Section 26.9. Original Lease........................................... 31
Section 26.10. Time of Essence.......................................... 31
Section 26.11. Liability Limited........................................ 31
APPENDIX A -- Definitions
SCHEDULE I -- Fixed Rent Schedule
EXHIBIT A -- Form of Lease Supplement
- 3 -
MASTER LEASE AND DEED OF TRUST, DEED TO SECURE DEBT AND MORTGAGE
THIS MASTER LEASE AND DEED OF TRUST, DEED TO SECURE DEBT AND MORTGAGE (as
amended, supplemented, amended and restated or otherwise modified from time to
time, this "Master Lease"), dated as of December 15, 2004, among ITT INDUSTRIES,
INC., an Indiana corporation (the "Lessee"), as Lessee and whose principal
offices are located at 4 West Red Oak Lane, White Plains, New York 10604, and
REXUS L.L.C., a Delaware limited liability company (the "Lessor"), as Lessor and
whose principal offices are located at c/o Societe Generale (Canada), as Lessor
Administrator, 1501 McGill College, Bureau 1800, Montreal, Quebec, Canada H3A
3MB.
W I T N E S S E T H:
WHEREAS, pursuant to a Participation Agreement dated as of the date hereof
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "Participation Agreement"), among ITT Industries, Inc., as the
Lessee, Rexus L.L.C., as the Lessor, and Air Bail S.A.S. and RBS Lombard, Inc.,
as Investors, the Investors and the Lessor have agreed to finance the
acquisition of the Leased Properties (including the payment of certain
Transaction Expenses in connection therewith);
WHEREAS, subject to the terms and conditions set forth in the
Participation Agreement, on the Acquisition Date the Lessor will purchase from
the Lessee or its Subsidiaries the real properties described on Schedule III to
the Participation Agreement under the heading "Leased Properties";
WHEREAS, the Lessor desires to lease to the Lessee, and the Lessee desires
to lease from the Lessor, the Leased Properties described in the Lease
Supplements;
WHEREAS, to secure the obligations of the Lessee under this Master Lease
and the other Operative Documents, the Lessee will grant to the Lessor a first
priority Lien on each Property (including each Mortgaged Property); and
WHEREAS, each Property will be subject to the terms of this Master Lease
and the Lease Supplement or Lessor Mortgage (as applicable) applicable thereto;
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
Section 1.1. Definitions; Interpretation . Capitalized terms used but not
otherwise defined in this Master Lease have the respective meanings specified in
Appendix A hereto; and the rules of interpretation set forth in Appendix A
hereto shall apply to this Master Lease.
Master Lease
ARTICLE II
MASTER LEASE
Section 2.1. Acceptance and Lease of Leased Properties. Subject to the
conditions set forth in the Participation Agreement, including the satisfaction
or waiver of the conditions set forth in Article VI thereof, the Lessor hereby
agrees to accept, pursuant to the terms of the Participation Agreement, (a)
delivery on the Acquisition Date of each real property described on Schedule III
to the Participation Agreement under the heading "Leased Properties" and all
Improvements located thereon and (b) delivery on each Replacement Date of each
Replacement Property and all Improvements thereon, and simultaneously to demise
and lease to the Lessee hereunder and under the Lease Supplements for the Lease
Term, the Lessor's interest in such Property or Properties (including any
Improvements which thereafter may be constructed on such Property in accordance
with this Master Lease), and the Lessee hereby agrees, expressly for the direct
benefit of the Lessor, to lease from the Lessor for the Lease Term the interest
of the Lessor in such Leased Properties together with any Improvements which
thereafter may be constructed on such Leased Properties in accordance with this
Master Lease.
Section 2.2. Acceptance Procedure. The Lessee hereby agrees that the
execution and delivery by it of a Lease Supplement on or as of the Acquisition
Date or a Replacement Date shall, without further act, constitute the
irrevocable acceptance by the Lessee of the Leased Property described in such
Lease Supplement for all purposes of this Master Lease and the other Operative
Documents on the terms set forth herein and therein, and that such Leased
Property, together with any Improvements constructed on the Property pursuant to
this Master Lease, shall be deemed to be included in the leasehold estate of
this Master Lease and shall be subject to the terms and conditions of this
Master Lease as of the Acquisition Date or such Replacement Date, as the case
may be.
Section 2.3. Lease Term. The Lease Term of this Master Lease for each
Leased Property shall commence on (and include) the Acquisition Date of such
Property (or, in the case of a Replacement Property, the Replacement Date for
such Property) and end on (but exclude) the Expiration Date.
Section 2.4. Title. Each Leased Property is leased to the Lessee without
any representation or warranty, express or implied, by the Lessor and subject to
the rights of parties in possession, the existing state of title (including all
Liens other than Lessor Liens) and all Applicable Law. The Lessee shall not in
any event have any recourse against the Lessor for any defect in or exception to
title to any Property or leasehold interest therein other than resulting from
Lessor Liens attributable to the Lessor.
Section 2.5. Mortgaged Properties Also Subject to this Master Lease. Each
of the Lessee and the Lessor hereby agrees that each Mortgaged Property shall be
subject to the terms of this Master Lease for the period commencing on (and
including) the Acquisition Date or Replacement Date for such Property and ending
on (but excluding) the date on which such Property is released from the Lien of
the applicable Lessor Mortgage in accordance with the terms of the Operative
Documents.
ARTICLE III
PAYMENT OF RENT
Section 3.1. Rent. (a) Accrual Rent shall accrue each day during the Lease
Term on the Aggregate Property Cost outstanding on such day. During the Lease
Term, the Lessee shall pay Basic Rent to the Lessor on each Scheduled Payment
Date, on any other date required under Section 20.1 in connection with the
Lessee's exercise of the Return Option, on any other date on which this Master
Lease or any other Operative Document requires such payment and, with respect to
any Leased Property, on any
-2-
Master Lease
other date on which this Master Lease shall terminate with respect to such
Leased Property or with respect to any Mortgaged Property.
(b) Neither the Lessee's inability or failure to take possession of all or
any portion of any Leased Property when delivered by the Lessor, nor the
inability or failure of the Lessor to deliver all or any portion of any Leased
Property to the Lessee on or before the Acquisition Date, whether or not
attributable to any act or omission of the Lessee or any act or omission of the
Lessor, or for any other reason whatsoever, shall delay or otherwise affect such
Lessee's obligation to pay Rent for such Leased Property in accordance with the
terms of this Master Lease.
Section 3.2. Payment of Rent. Rent shall be paid absolutely net to each
Person entitled thereto, so that this Master Lease shall yield to such Person
the full amount thereof, without setoff, deduction or reduction.
Section 3.3. Supplemental Rent. The Lessee shall pay (x) to the Lessor or
(y) in the case of any Supplemental Rent owing to any other Person, directly to
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 and such other Persons 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. The Lessee shall pay to the Lessor, as Supplemental
Rent, among other things, on demand, to the extent permitted by Applicable Law,
interest at the applicable Overdue Rate on any Basic Rent or Supplemental Rent
not paid when due for the period from the due date thereof until the same shall
be paid (provided, that any amounts payable by the Lessee pursuant to Article
XIII of the Participation Agreement shall accrue interest as set forth in
Section 13.11 of the Participation Agreement). 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 Master Lease or in the Participation
Agreement, 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, to the extent incurred as a result of such failure on the
part of the Lessee, any fine, penalty, interest or cost which may be assessed or
added against the Lessor or any Investor by a third party for nonpayment or late
payment of such Supplemental Rent, all of which shall also constitute
Supplemental Rent. Notwithstanding anything in this Section 3.3 to the contrary,
if the Lessee incurs any fine, penalty, interest or cost for nonpayment or late
payment of any tax assessment, levy, duty, or other bill received in connection
with any of the Leased Properties as a result of the Lessor's failure to provide
notice to the Lessee of such tax assessment, levy, duty or other bill within the
time period required by Section 17.2, an amount equal to such fine, penalty,
interest or cost shall be deducted first from any Supplemental Rent then due and
owing and second from any Accrual Rent then due and owing.
Section 3.4. Method of Payment. Each payment of Rent payable by the Lessee
to the Lessor under this Lease or any other Operative Document shall be made by
the Lessee to the Lessor prior to 10:00 a.m., New York City time to the Account
in immediately available funds consisting of lawful currency of the United
States of America on the date when such payment shall be due. Payments received
after 10:00 a.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, such payments shall be
deemed received on the next succeeding Business Day and shall accrue interest at
the Overdue Rate as provided in such Section 3.3.
Section 3.5. Calculation of Accrual Rent. The "Accrual Rent" payable on
any Scheduled Payment Date means an amount equal to (w) the Aggregate Property
Cost outstanding on the immediately preceding Scheduled Payment Date, after
giving effect to all payments made on such preceding Scheduled Payment Date (or,
in the case of the initial Scheduled Payment Date, the Aggregate Property
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Cost outstanding on the Acquisition Date) minus all payments of Termination Base
Amount made during the Rent Period ending on such Scheduled Payment Date
multiplied by (x) the Applicable Rate multiplied by (y) the number of days then
elapsed since the Scheduled Payment Date immediately preceding such date
multiplied by (z) 1/360.
ARTICLE IV
QUIET ENJOYMENT; RIGHT TO INSPECT
Section 4.1. Quiet Enjoyment. Subject to the terms of each of the
Operative Documents, the Lessee shall peaceably and quietly have, hold and enjoy
each Property for the Lease Term, free of any claim or other action by the
Lessor or anyone claiming by, through or under the Lessor with respect to any
matters arising from and after the Acquisition Date. Such right of quiet
enjoyment is independent of, and shall not affect the rights of the Lessor or
any assignee thereof otherwise to initiate legal action to enforce, the
obligations of the Lessee under this Master Lease.
Section 4.2. Right to Inspect. During the Lease Term, the Lessee shall
permit the Lessor, the Investors and their agent and representatives to inspect
the Properties in accordance with Section 10.1(j) of the Participation
Agreement.
ARTICLE V
NET LEASE, ETC.
Section 5.1. Net Lease. This Master Lease shall constitute a net lease.
Any present or future law to the contrary notwithstanding, this Master Lease
shall not terminate, nor shall the Lessee be entitled to any abatement,
suspension, deferment, reduction, setoff, counterclaim, or defense with respect
to the Rent, 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 any
Property or any part thereof, or the failure of any Property to comply with all
Applicable Law, including any inability to occupy or use any 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 any Property or any part thereof; (iii) any restriction, prevention
or curtailment of or interference with the construction on or any use of any
Property or any part thereof including eviction; (iv) any defect in title of or
rights to any Property or any Lien on such title or rights or on any Property
(other than Lessor Liens); (v) any change, waiver, extension, indulgence or
other action or omission or breach in respect of any obligation or liability of
or by the Lessor, any Investor or the Arranger; (vi) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceedings relating to the Lessee, any Lessee Subsidiary, the Lessor, any
Investor, the Arranger or any other Person, or any action taken with respect to
this Master Lease by any trustee or receiver of the Lessee, any Lessee
Subsidiary, the Lessor, any Investor, the Arranger 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 the Lessor, any Investor, the Arranger or any
Seller, vendor, manufacturer, contractor of or for any Property; (viii) any
failure on the part of the Lessor to perform or comply with any of the terms of
this Master Lease (other than performance by the Lessor of its obligations set
forth in Section 2.1 hereof), of any other Operative Document or of any other
agreement; (ix) any invalidity or unenforceability or illegality or
disaffirmance of this Master 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 of them; (xi) any action by any court, administrative agency or other
Governmental Authority; or (xii) any other cause or circumstances whether
similar or
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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 this Section 5.1
shall not affect any claim, action or right the Lessee may have against the
Lessor or any Investor. 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 Master Lease.
Section 5.2. No Termination or Abatement. The Lessee shall remain
obligated under this Master Lease in accordance with its terms and shall not
take any action to terminate, rescind or avoid this Master Lease (except as
provided herein), notwithstanding any action for bankruptcy, insolvency,
reorganization, liquidation, dissolution, or other proceeding affecting the
Lessor or any Investor, or any action with respect to this Master Lease which
may be taken by any trustee, receiver or liquidator of the Lessor or any
Investor or by any court with respect to the Lessor or any Investor. The Lessee
hereby waives, to the extent permitted by Applicable Law, all right (i) to
terminate or surrender this Master Lease (except as provided herein) or (ii) to
avail itself of any abatement, suspension, deferment, reduction, setoff,
counterclaim or defense with respect to any Rent except as otherwise provided in
the last sentence of Section 3.3. The Lessee shall remain obligated under this
Master Lease in accordance with its terms 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 Master Lease. Notwithstanding any such statute or
otherwise, the Lessee shall be bound by all of the terms and conditions
contained in this Master Lease, each Lease Supplement and each Lessor Mortgage.
ARTICLE VI
SUBLEASES AND ASSIGNMENTS
Section 6.1. General. THE LESSEE SHALL NOT, WITHOUT THE PRIOR WRITTEN
CONSENT OF THE LESSOR (SUCH CONSENT TO BE GIVEN OR WITHHELD IN THE SOLE
DISCRETION OF THE LESSOR), TRANSFER, ASSIGN OR ENCUMBER THIS MASTER LEASE OR ANY
LEASE SUPPLEMENT OR ANY OF ITS RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER,
SUBLEASE ANY LEASED PROPERTY OR ANY PART THEREOF OR LEASE ANY MORTGAGED PROPERTY
OR ANY PART THEREOF EXCEPT, IN EACH CASE, AS PERMITTED BY SECTION 6.2, AND ANY
SUCH TRANSFER, ASSIGNMENT, ENCUMBRANCE, SUBLEASE OR LEASE THAT IS NOT PERMITTED
BY SECTION 6.2 AND MADE WITHOUT SUCH WRITTEN CONSENT THERETO SHALL BE NULL AND
VOID.
Section 6.2. Leasing and Subleasing. The Lessee may lease or sublease (as
applicable) any Property or any portion thereof to any Person; provided,
however, that: (a) no lease, sublease or other relinquishment of possession of
any Property shall in any way discharge or diminish any of the Lessee's
obligations to the Lessor hereunder and the Lessee shall remain directly and
primarily liable under this Master Lease and the Lease Supplement; (b) each
lease or sublease of a Property shall expressly be made subject to and
subordinate to this Master Lease, any applicable Lease Supplement and any Lessor
Mortgage and to the rights of the Lessor hereunder and thereunder; (c) each
lease or sublease (as applicable) of a Property shall expressly provide for the
surrender of the Property or portion thereof by the applicable sublessee at the
election of the Lessor after the occurrence of a Lease Event of Default; (d)
unless the Lessor otherwise consents in writing (such consent to be given or
withheld in the sole discretion of the Lessor), each lease or sublease (as
applicable) shall expressly provide for termination prior to the Expiration
Date; (e) the use or uses under any lease or sublease (as applicable) shall be
such that they shall not impair the value or utility of such Property or violate
any Applicable Law or Insurance
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Requirement; and (f) the Lessee shall not lease or sublease (as applicable) any
Property or any portion thereof to any Person (i) that is named as a "specially
designated national and blocked person" on the most current list published by
the United States Department of the Treasury's Office of Foreign Assets Control
at its official website or any replacement website or other replacement official
publication of such list or (ii) that is listed in the annex to, or otherwise
subject to the provisions of, Executive Order No. 13224 on Terrorist Financing,
effective September 24, 2001. The Lessee shall, upon the request of the Lessor
from time to time, furnish to the Lessor a list of all leases and subleases
affecting the Properties, specifying the name and address of each applicable
lessee or sublessee, the identity of the Property affected, the current term and
expiration date of the applicable lessee or sublease and the terms of any
renewal options under the applicable lease or sublease.
ARTICLE VII
LESSEE ACKNOWLEDGMENTS
Section 7.1. Condition of the Property. THE LESSEE ACKNOWLEDGES AND AGREES
THAT ALTHOUGH THE LESSOR WILL OWN AND HOLD TITLE TO THE IMPROVEMENTS RELATING TO
EACH LEASED PROPERTY, THE LESSEE IS SOLELY RESPONSIBLE FOR THE DESIGN,
DEVELOPMENT, BUDGETING AND CONSTRUCTION OF THE IMPROVEMENTS AND ANY ALTERATIONS
OR MODIFICATIONS. THE LESSEE FURTHER ACKNOWLEDGES AND AGREES THAT IT IS LEASING
EACH LEASED PROPERTY "AS IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT
(EXPRESS OR IMPLIED) BY THE LESSOR OR ANY INVESTOR 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 PHYSICAL INSPECTION MIGHT SHOW AND (D) VIOLATIONS OF APPLICABLE LAW WHICH MAY
EXIST ON THE DATE HEREOF OR ON THE ACQUISITION DATE. NEITHER THE LESSOR NOR ANY
INVESTOR HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY
OR COVENANT (EXPRESS OR IMPLIED) OR SHALL BE DEEMED TO HAVE ANY LIABILITY
WHATSOEVER AS TO THE TITLE (OTHER THAN FOR LESSOR LIENS ATTRIBUTABLE TO THE
LESSOR), VALUE, SUITABILITY, USE, CONDITION, DESIGN, OPERATION, OR FITNESS FOR
USE OF ANY LEASED PROPERTY (OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION,
WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY LEASED
PROPERTY (OR ANY PART THEREOF) AND NEITHER THE LESSOR NOR ANY INVESTOR NOR THE
ARRANGER SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN (OTHER
THAN FOR LESSOR LIENS ATTRIBUTABLE TO THE LESSOR OR SUCH INVESTOR) OR THE
FAILURE OF ANY LEASED PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY
APPLICABLE LAW.
Section 7.2. Risk of Loss. During the Lease Term the risk of loss of or
decrease in the enjoyment and beneficial use of each 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 not in any
event be answerable or accountable therefor.
ARTICLE VIII
POSSESSION AND USE OF EACH PROPERTY, ETC.
Section 8.1. Utility Charges. The Lessee shall pay or cause to be paid all
charges for electricity, power, gas, oil, water, telephone, sanitary sewer
service and all other rents and utilities used in or on each Property during the
Lease Term. The Lessee shall be entitled to receive any credit or refund
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with respect to any utility charge paid by the Lessee and the amount of any
credit or refund received by the Lessor on account of any utility charges paid
by the Lessee, net of the costs and expenses reasonably incurred by the Lessor
in obtaining such credit or refund, shall be promptly paid over to the Lessee.
Section 8.2. Possession and Use of each Property; No Waste. The Lessee
covenants that each Property will be used solely for the intended purpose
thereof and applying standards of use no lower than the standards applied by the
Lessee and its Affiliates for other comparable properties owned or leased by the
Lessee or its Affiliates. The Lessee shall pay, or cause to be paid, all charges
and costs required in connection with the use of the Properties as contemplated
by this Master Lease and each Lease Supplement. The Lessee shall not commit or
permit any waste of any Property or any part thereof.
Section 8.3. Compliance with Applicable Laws and Insurance Requirements.
Subject to the terms of Article XII relating to permitted contests, the Lessee,
at its sole cost and expense, shall (a) comply in all material respects with all
Applicable Laws (including all Environmental Laws) and Insurance Requirements
relating to each Property, including the use, construction, operation,
maintenance, repair and restoration thereof and the return thereof pursuant to
Article XX, whether or not such compliance shall require structural or
extraordinary changes in the Improvements or interfere with the use and
enjoyment of each Property, and (b) procure, maintain and comply with all
licenses, permits (including Environmental Permits), orders, approvals, consents
and other authorizations required for the construction, use, maintenance and
operation of each Property and for the use, operation, maintenance, repair and
restoration of the Improvements.
ARTICLE IX
MAINTENANCE AND REPAIR; RETURN
Section 9.1. Maintenance and Repair. The Lessee, at its sole cost and
expense, shall maintain each Property in good condition (ordinary wear and tear
excepted) and make all necessary repairs thereto, of every kind and nature
whatsoever, whether ordinary or extraordinary or foreseen or unforeseen, in each
case as required by all Applicable Law and Insurance Requirements and in no
event applying standards of maintenance and repair lower than the standards
applied by the Lessee in the operation and maintenance and repair of other
comparable properties owned or leased by the Lessee or its Affiliates.
Section 9.2. No Maintenance Obligations of Lessor. The Lessor shall not
under any circumstances be required to build any improvements on any Property,
make any repairs, replacements, alterations or renewals of any nature or
description to any Property, make any expenditure whatsoever in connection with
this Master Lease or the Lease Supplements (other than for Property Costs paid
by the Lessor with respect to the Leased Properties in accordance with and
pursuant to the terms of the Participation Agreement) or maintain any Property
in any way. The Lessee waives any right to (i) require the Lessor to maintain,
repair, or rebuild all or any part of any Property or (ii) make repairs at the
expense of the Lessor pursuant to any Applicable Law, Insurance Requirement,
contract, agreement, or covenant, condition or restriction in effect at any time
during the Lease Term.
Section 9.3. Condition Upon Return. The Lessee shall, upon the expiration
or earlier termination of this Master Lease with respect to each Leased Property
(other than as a result of the Lessee's purchase of such Property from the
Lessor as provided herein), vacate and surrender such Property to the Lessor in
the condition such Property is required to be maintained in accordance with the
Operative Documents.
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ARTICLE X
MODIFICATIONS, ETC.
Section 10.1. Modifications, Substitutions and Replacement. During the
Lease Term, the Lessee, at its sole cost and expense, (x) shall make or cause to
be made all alterations, renovations, improvements and additions to each
Property or any part thereof (collectively, "Modifications") that are required
to be made pursuant to Applicable Law or Insurance Requirements (a "Required
Modification") and (y) may at any time make Modifications to any Property or any
part thereof; provided, however, that:
(a) except for any Required Modification, no Modification shall be
made if it would materially and adversely affect the marketability, Fair
Market Sales Value, utility or residual value of such Property or any part
thereof;
(b) the Modification shall be done in a good and workmanlike manner;
(c) the Modification shall comply with all Insurance Requirements
and shall comply in all material respects with all Applicable Law
applicable to the Modification, including the obtaining of any necessary
permits;
(d) subject to the terms of Article XII relating to permitted
contests, the Lessee shall pay all costs and expenses and shall discharge
(or cause to be insured or bonded over) within sixty (60) days after the
same shall be filed (or otherwise become effective) any Liens arising with
respect to the Modification;
(e) such Modifications shall comply with Sections 8.3 and 9.1; and
(f) The Lessee shall be required to obtain the prior written
approval (which approval shall not be unreasonably withheld) of the Lessor
with respect to any Modifications that shall cost in excess of $3,000,000
in the aggregate if a building permit is required in connection therewith.
All Modifications shall remain part of the realty. Title to all
Modifications made with respect to any Leased Property shall immediately vest in
the Lessor and be subject to this Master Lease and the Lease Supplement for the
applicable Property; provided, however, that Modifications that (x) are not
Required Modifications, (y) were not financed or otherwise paid for by the
Lessor, and (z) can be removed without causing (A) material damage to any
Property, (B) any diminution in the Fair Market Sales Value of any Property or
the remaining useful life of the Property, or (C) any impairment in the utility
or residual value of any Property, shall be the property of the Lessee or other
third party and may be removed by the Lessee during the Lease Term and shall not
be subject to this Master Lease or any Lease Supplement. The Lessee may place
upon any Property any trade fixtures, machinery, equipment, inventory or other
property belonging to the Lessee or third parties and may remove the same,
subject, however, to the terms of Section 9.1; provided, however, that such
trade fixtures, machinery, equipment, inventory or other property can be removed
without causing damage to the Property, reduction of the Fair Market Sales Value
of the Property or any diminution in the remaining useful life of the Property
or any impairment in the utility or residual value of the Property.
Section 10.2. Notice to the Lessor. If the Lessee reasonably expects the
cost of any Modification to exceed the greater of $1,000,000 in the aggregate
and five percent (5%) of the Termination Base Amount of the relevant Property,
the Lessee shall deliver to the Lessor a brief written narrative of the work to
be performed in connection with such Modification prior to making such
Modification.
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ARTICLE XI
DISCHARGE OF LIENS; EASEMENTS
Section 11.1. Discharge of Liens. (a) The Lessee agrees that except as
otherwise provided herein and subject to the terms of Article XII relating to
permitted contests, the Lessee shall not directly or indirectly create or allow
to remain, and shall promptly (and in any event within sixty (60) days after
notice thereof is received by the Lessee from any Person) discharge at its sole
cost and expense, any Lien (other than any Lessor Lien), defect, attachment,
levy, title retention agreement or claim upon any Property or any Lien,
attachment, levy or claim with respect to any Basic Rent, Supplemental Rent or
amounts held by the Lessor pursuant to this Master Lease as collateral security
for the Lessee's obligations or pending performance by the Lessee, other than
Permitted Property Liens.
(a) Nothing contained in this Master Lease shall be construed as
constituting the consent or request of the Lessor or any Investor, expressed or
implied, to or for the performance by any contractor, mechanic, laborer,
materialman, supplier or vendor of any labor or services or for the furnishing
of any materials for any construction, alteration, addition, repair or
demolition of or to any Property or any part thereof. NOTICE IS HEREBY GIVEN
THAT NEITHER THE LESSOR NOR ANY INVESTOR IS OR SHALL BE LIABLE FOR ANY LABOR,
SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO THE LESSEE, OR TO ANYONE
HOLDING ANY 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 OR ANY INVESTOR IN AND TO ANY
PROPERTY.
Section 11.2. Grants and Releases of Easements; Lessor Waivers. So long as
no Lease Event of Default shall have occurred and be continuing and subject to
the provisions of Sections 8.2, 8.3, 9.1, 10.1 and 11.1 hereof, the Lessor
hereby consents in each instance to the following actions by the Lessee at the
Lessee's sole cost and expense (but, in the case of Leased Properties, in the
name and stead of the Lessor): (a) the granting of easements, licenses,
rights-of-way and other rights and privileges in the nature of easements
reasonably necessary or desirable for the use, repair, or maintenance of any
Property or burdening any Property as herein provided; (b) the release of
existing easements or other rights in the nature of easements which are for the
benefit of any Property; (c) if required by applicable Governmental Authority in
connection with the making of any Modification permitted under this Master
Lease, the dedication or transfer of unimproved portions of any Property for
road, highway or other public purposes; (d) the execution of amendments to any
covenants and restrictions affecting any Property; and (e) the execution or
release of any similar agreement; provided, however, that in each case (i) the
Lessee provides no less than thirty (30) days prior written notice thereof to
the Lessor, (ii) such grant, release, dedication, transfer or amendment does not
materially impair the Fair Market Sales Value, utility, condition, residual
value or remaining useful life of any Property (iii) such grant, release,
dedication, transfer or amendment is, in the Lessee's judgment, reasonably
necessary in connection with the use, maintenance, alteration or improvement of
any Property, (iv) such grant, release, dedication, transfer or amendment will
not cause any Property or any portion thereof to fail to comply with the
provisions of this Master Lease or any other Operative Document to which the
Lessee is a party or fail to comply in any material respect with any Applicable
Law (including all applicable zoning, planning, building and subdivision
ordinances, all applicable restrictive covenants and all applicable
architectural approval requirements), (v) all governmental consents or approvals
required prior to such grant, release, dedication, transfer, annexation or
amendment have been obtained, and all filings required prior to such action have
been made, (vi) the Lessee shall remain obligated under this Master Lease and
each of the Lease Supplements in accordance with their respective terms, as
though such grant, release, dedication, transfer or amendment had not been
effected, (vii) the Lessee shall pay and perform any obligations of the Lessor
under such grant, release, dedication, transfer or amendment and (viii) such
grant, release, dedication,
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transfer or amendment would not result in the Lessor or the Lessee being
required to offer to sell the Clifton Property or any portion thereof to the
holder of the right of first offer relating to the Clifton Property. Without
limiting the effectiveness of the foregoing, provided that no Lease Event of
Default shall have occurred and be continuing, the Lessor shall, upon the
request of 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, annexation or amendment to any Person permitted
under this Section 11.2, including landlord waivers with respect to any of the
foregoing.
ARTICLE XII
PERMITTED CONTESTS
Section 12.1. Permitted Contests. Except to the extent otherwise provided
in Section 13.4(b) of the Participation Agreement regarding Impositions and
other Taxes, if, to the extent and for so long as (a) a test, challenge, appeal
or proceeding for review of any Applicable Law or any Lien, encumbrance, levy,
attachment or encroachment relating to any Property shall be prosecuted
diligently and in good faith in appropriate proceedings by the Lessee, or (b)
compliance with such Applicable Law shall have been excused or exempted by a
valid nonconforming use, variance permit, waiver, extension or forbearance,
Lessee shall not be required to comply with such Applicable Law or remove or
discharge such Lien, encumbrance, levy, attachment or encroachment 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)
involve (A) any risk of criminal liability being imposed on the Lessor, any
Investor or the Arranger for failure to comply therewith or (B) any material
risk of (1) foreclosure, forfeiture or loss of any Property, or any material
part thereof, or (2) the nonpayment of Rent or (C) any substantial risk of (1)
the creation of any Lien (other than a Permitted Property Lien) on any part of
any Property, (2) civil liability being imposed on the Lessor, any Investor, the
Arranger or any Property unless, in the case of any risk of such civil liability
being imposed on a Property, the Lessee shall have otherwise bonded or secured
such amounts in a manner satisfactory to the Lessor, or (3) enjoinment of, or
interference with, the use, possession or disposition of any Property in any
material respect.
The Lessor shall not be required to join in any proceedings pursuant to
this Section 12.1 unless a provision of any Applicable Law requires or, in the
good faith opinion of the Lessee, it is advisable for the prosecution of such
contest, that such proceedings be brought by or in the name of such party; 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) no Lease Default shall
have occurred and be continuing, and (ii) the Lessee pays all related expenses
and indemnifies the Lessor with respect to such proceedings.
ARTICLE XIII
INSURANCE
Section 13.1. General. During the Lease Term the Lessee shall, at its sole
cost and expense, maintain insurance as set forth in this Section 13.1.
(a) Public Liability Insurance. For so long as any Property is subject to
the provisions of this Master Lease, the Lessee shall procure and carry, at the
Lessee's sole cost and expense, commercial general liability/umbrella insurance
for claims for injuries or death sustained by third-party persons and
third-party property damage and such other public liability coverages as are
ordinarily procured by the Lessee and its Affiliates that own or operate similar
properties, but in any case shall provide liability coverage of at least
$5,000,000 per occurrence. Such insurance shall be on terms that are consistent
with prudent industry standards for a company the size of the Lessee.
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(b) Worker's Compensation. The Lessee shall comply with all applicable
workers' compensation laws.
(c) Hazard and Other Insurance. The Lessee shall keep, or cause to be
kept, each Property insured against loss or damage by fire, windstorm and other
risks on terms and in amounts that are consistent with prudent industry
standards for a company the size of the Lessee, but in any case shall provide
coverage for each Property in an amount not less than the lesser of the
Termination Base Amount or the replacement cost thereof; provided that the
Lessee shall also obtain (i) with respect to any Property located at a site that
shall have been assigned to a seismic zone of 3 or 4 under the Uniform Building
Code published from time to time by the International Conference of Building
Officials (or any successor code published by such entity or any successor
entity), coverage for earthquakes, and (ii) with respect to any Property located
within an area identified as a special flood hazardous area by the Federal
Emergency Management Agency, coverage for floods. The settlement of any loss or
occurrence shall be negotiated by the Lessee; provided the Lessor shall have the
right to approve (which approval shall not be unreasonably withheld) any
settlement involving proceeds greater than $2,000,000 that apply to a Property
and provided, further, that if any Lease Event of Default shall have occurred
and be continuing, any such settlement shall, unless the Lessor otherwise
agrees, be negotiated by the Lessor. All insurance proceeds that apply to a
Property payable with respect to any Casualty shall be paid to the Lessee or the
Lessor as provided in Section 14.2.
(d) Pollution Liability Coverage. For so long as any Property is subject
to the provisions of this Master Lease, the Lessee shall procure and carry, at
the Lessee's sole cost and expense, pollution liability coverage for the
Properties with a liability limit of no less than $5,000,000 per occurrence and
$10,000,000 in the aggregate for a term expiring no earlier than the Scheduled
Lease Termination Date and with no retroactive date, insuring third party bodily
injury, property damage and clean-up costs. The pollution liability coverage
shall include losses arising out of existing conditions at the Properties as
well as conditions that arise during the Lease Term. If coverage is on a "claims
made" rather than an "occurrence" basis, the insurance must be maintained for at
least five (5) years after the Lease Expiration Date.
(e) Deductibles. The insurance required to be obtained by the Lessee under
this Section 13.1 may be subject to such deductible amounts and self-insured
retentions as is consistent with prudent industry standards for a company the
size of the Lessee; provided that such deductible amounts and self-insured
retentions shall not exceed (i) $1,000,000 per occurrence with respect to the
insurance required by Sections 13.1(a) and 13.1(b), (ii) $500,000 per occurrence
with respect to the insurance required by Section 13.1(c) (provided, that higher
deductibles will be permitted with respect to earthquake and wind coverage under
Section 13.1(c) so long as such deductibles do not exceed 5% of the replacement
cost of the applicable Property) or (iii) $5,000,000 per occurrence with respect
to the insurance required by Section 13.1(d).
Section 13.2. Insurance Coverage. The Lessee shall cause the insurance
required to be maintained by the Lessee under this Article XIII to comply with
the provisions of this Section 13.2.
(a) Coverage and Endorsements. All insurance required to be maintained
pursuant to Section 13.1 shall provide in the policy or by special endorsement
as follows:
(i) in the case of insurance required to be maintained under
Sections 13.1(a) and 13.1(d), the Lessor, the Lessor Administrator and
each Investor are included as additional insureds as their interests may
appear;
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Master Lease
(ii) in the case of insurance required to be maintained under
Section 13.1(c), the Lessor is named as loss payee and each such insurance
policy shall include a standard mortgage loss payee endorsement in favor
of the Lessor;
(iii) such insurance shall not be cancelled nor shall the coverage
thereunder be materially reduced except upon no less than thirty (30)
days' advance written notice by the insurer to the Lessor thereof;
(iv) the insurer thereunder waives all rights of subrogation against
the Lessor, the Lessor Administrator and each Investor and waives any
right of set-off and counterclaim and any other right to deduction whether
by attachment or otherwise;
(v) the insurance in favor of the Lessor and the Investors and their
respective rights under and interests in such policies shall not be
invalidated or reduced by any act or omission (including breach of
warranty) or negligence of the Lessee or any other Person having any
interest in the Property; and
(vi) such insurance shall be primary and noncontributable and shall
apply to any loss or claim before any contribution of any other insurance
carried by or on behalf of the Lessor or any Investor.
(b) Insurance Providers. All such insurance shall be written by reputable
insurance companies that are financially sound and solvent and otherwise
reasonably appropriate considering the amount and type of insurance being
provided by such companies. Any insurance company selected by the Lessee to
provide property damage insurance shall have a rating from A.M. Best Company of
at least "A-" for financial strength and at least Class X for financial size (or
comparable ratings by a nationally or internationally recognized rating group of
comparable stature).
(c) Payment of Premiums. The Lessee shall pay as they become due all
premiums for the insurance required by Section 13.1 and Section 13.2, and shall
renew or replace each policy prior to the expiration date thereof.
(d) Initial Delivery of Insurance Certificates. With respect to each
Property, the Lessee shall furnish the Lessor with certificates showing the
insurance required under Section 13.1 to be in effect with respect to such
Property on or prior to the Acquisition Date or Replacement Date (as applicable)
for such Property. With respect to the insurance coverage described in Section
13.1(d), the Lessee shall furnish the Lessor with a copy of the insurance
provider's acknowledgment that the Properties are covered by such insurance.
(e) Annual Delivery of Insurance Certificates; Delivery of Insurance
Certificates upon Renewal of Policies. The Lessee shall, at the time each of the
Lessee's insurance policies is renewed (but in no event less frequently than
once each year) and upon reasonable request of the Investors, deliver to the
Lessor and the Investors certificates of insurance evidencing that all insurance
required by this Article XIII is being maintained by the Lessee and is in
effect.
ARTICLE XIV
CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS
Section 14.1. Risk of Loss, Damage or Destruction. (a) At all times that
any Property is subject to the provisions of this Master Lease, the Lessee bears
all risk of loss, damage, theft, taking,
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destruction, confiscation, requisition or commandeering, partial or complete, of
or to such Property or any part thereof, however caused or occasioned. The
Lessee agrees that no occurrence specified in the preceding sentence shall
affect, in whole or in part, any obligation of the Lessee under this Master
Lease, including the obligation to pay Rent. Without limiting the generality of
the foregoing, in the event that during the Lease Term the use of any Property
is requisitioned or taken by any Governmental Authority under the power of
eminent domain or otherwise for a period which does not constitute an Event of
Loss, all of Lessee's obligations under the Operative Documents, including the
Lessee's obligation to pay all installments of Basic Rent, shall continue for
the duration of such requisitioning or taking.
(b) If any Event of Loss occurs and such Event of Loss does not constitute
a Lease Event of Default under Section 16.1(p), then the Lessee shall exercise
its Replacement Option or its Termination Option, in each case with respect to
the affected Property, and shall consummate such replacement or termination no
later than sixty (60) days following the occurrence of such Event of Loss.
Section 14.2. Casualty and Condemnation. (a) Insurance Proceeds and
Condemnation Awards. Subject to the provisions of this Article XIV, (x) if all
or a portion of any Property is damaged or destroyed in whole or in part by a
Casualty while such Property is subject to the provisions of this Master Lease,
any insurance proceeds payable with respect to such Casualty shall be paid
directly to the Lessee, or if received by the Lessor, shall be paid over to the
Lessee for the reconstruction, refurbishment and repair of the affected
Property, and (y) if the use, access, occupancy, easement rights or title to any
Property or any part thereof is the subject of a Condemnation while such
Property is subject to the provisions of this Master Lease, then any award or
compensation relating thereto shall be paid to the Lessee; provided, however,
that, in each case, if (A) any Lease Default or Lease Event of Default shall
have occurred and be continuing or (B) the Lessee shall not have Ratings of
"BBB-" or better by S&P and "Baa3" or better by Moody's, then such award,
compensation or insurance proceeds shall be paid directly to the Lessor or, if
received by the Lessee, shall be held in trust for the Lessor and shall be paid
over by the Lessee to the Lessor, and the Lessor shall hold such amounts in a
segregated account and, upon presentation by the Lessee of paid invoices or
other evidence reasonably satisfactory to the Lessor as to the Lessee's prior
payment of reasonable costs required for repair of the applicable Property, the
Lessor shall pay such amounts over to the Lessee to reimburse the Lessee for the
reasonable cost of repair and restoration of the applicable Property (provided
that, so long as no Lease Default or Lease Event of Default shall have occurred
and be continuing, any such insurance proceeds, awards or compensation shall be
paid to the Lessee in an amount, in the aggregate with all such proceeds, awards
and compensation relating to the applicable Property, not to exceed the lesser
of $5,000,000 and 25% of the Termination Base Amount of the affected Property
(with any excess over such lesser amount to be paid over to the Lessor in
accordance with the foregoing proviso); provided, further, however, that in the
case of (x) a Lease Default or Lease Event of Default, (y) the delivery by the
Lessor of a Partial Termination Notice with respect to such Property or (z) the
Lessee's election (if applicable) of its Termination Option with respect to such
Property, then such amounts shall, in the Lessor's discretion, be applied toward
the payment of the Termination Price or Termination Base Amount (as applicable)
of the affected Property and related amounts in accordance with Section 16.2,
15.1 or 19.1 (as applicable).
(b) Participation in Proceedings. The Lessee may appear in any proceeding
or action to negotiate, prosecute, adjust or appeal any claim for any award,
compensation or insurance payment on account of any Casualty or Condemnation
with respect to any Property and shall pay all expenses thereof. At the Lessee's
reasonable request, and at the Lessee's sole cost and expense, the Lessor shall
participate in any such proceeding, action, negotiation, prosecution or
adjustment. The Lessor and the Lessee agree that this Master Lease shall control
the rights of the Lessor and the Lessee in and to any such award, compensation
or insurance payment.
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(c) Notices of Casualty or Condemnation. The Lessee shall, within fifteen
(15) Business Days after obtaining knowledge of the occurrence of (x) any
Casualty with respect to any Property for which the reasonable anticipated cost
of restoration equals or exceeds $2,000,000, (y) an actual, pending or
threatened Condemnation of any Property or any material interest therein or (z)
any Casualty or Condemnation affecting a Property that could reasonably be
expected to result in a Termination Event, notify the Lessor in writing of such
occurrence. If the Lessor receives any notice of a Condemnation affecting any
Property directly from any Governmental Authority, the Lessor will promptly (and
in no event later than fifteen (15) Business Days) forward such notice to the
Lessee.
(d) Repair. If this Master Lease shall continue in full force and effect
with respect to any Property following a Casualty or Condemnation affecting such
Property, then the Lessee shall, at its sole cost and expense, promptly and
diligently repair any damage to such Property caused by such Casualty or
Condemnation in conformity with the requirements of Sections 8.2, 8.3, 9.1, 10.1
and 11.1 so as to restore such Property to at least the same or substantially
similar (assuming no Lease Default or Lease Event of Default was then
continuing) condition, operation, function and value as existed immediately
prior to such Casualty or Condemnation with such Modifications as the Lessee may
elect in accordance with Section 10.1. In such event, title to any such Property
that is a Leased Property shall remain with the Lessor subject to the terms of
this Master Lease. Upon completion of such restoration, the Lessee shall furnish
to the Lessor a Responsible Officer's Certificate of the Lessee confirming that
such restoration has been completed pursuant to this Master Lease.
(e) Obligations Continue. In no event shall a Casualty or Condemnation
affect the Lessee's obligations to pay Rent pursuant to Section 3.1 hereof or to
perform its obligations and pay any amounts due on the Expiration Date or
pursuant to Articles XVIII and XX hereof.
(f) Excess Casualty/Condemnation Proceeds. Upon the earliest of (x) the
date on which all damage to a Property caused by a Casualty or Condemnation
shall have been repaired in accordance with Section 14.2(d), (y) the date on
which the Termination Base Amount or Termination Price (as applicable) of the
affected Property and all other amounts due and payable under Section 15.1 or
19.1, as applicable, shall have been paid to the Lessor, and (z) the date on
which the affected Property shall have been replaced with a Replacement Property
under Section 19.2, any Net Proceeds received by the Lessor or any Investor in
respect of such Casualty or Condemnation, to the extent remaining after any
application of such Net Proceeds to the repair or restoration of the applicable
Property or to the payment of the Termination Base Amount or Termination Price
(as applicable) for such Property and such other amounts, as the case may be
(any such Net Proceeds remaining after such application, "Excess
Casualty/Condemnation Proceeds"), shall be promptly paid to the Lessee.
Section 14.3. Remediation of Environmental Violations. If any
Environmental Violation exists or occurs with respect to any Property and either
(x) such Environmental Violation shall not constitute a Termination Event or (y)
such Environmental Violation shall constitute a Termination Event but the Lessee
shall not have exercised its Termination Option or Replacement Option within the
thirty (30)-day period following the date on which the Lessee shall have
knowledge of the occurrence of such Environmental Violation (or, if the Lessee
shall have so exercised its Termination Option or Replacement Option but shall
not have consummated such Termination Option or Replacement Option in accordance
with the terms of this Master Lease), then the Lessee shall, at the Lessee's
sole cost and expense, diligently commence and prosecute to completion with all
deliberate speed any response, clean up, Remedial Action or other action
necessary to remove, clean up or remediate any such Environmental Violation in
accordance with the terms of Section 8.3. The Lessee shall, upon completion of
Remedial Action by the Lessee, cause to be prepared by a reputable environmental
consultant of the sort typically hired by sophisticated parties, a report
describing the Environmental Violation and the actions taken by the Lessee (or
its agents) in response to such Environmental Violation, and a statement by the
consultant
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Master Lease
that the Environmental Violation has been remedied in compliance in all material
respects with applicable Environmental Laws. Nothing in this Article XIV shall
reduce or limit the Lessee's obligations under Article XIII of the Participation
Agreement.
Section 14.4. Notice of Environmental Violations. (a) The Lessee shall,
within twenty (20) Business Days after obtaining knowledge of the existence of
an Environmental Violation with respect to any Property, notify the Lessor in
writing of such Environmental Violation.
(a) Promptly, but in any event within twenty (20) Business Days from the
date the Lessee has actual knowledge thereof, the Lessee shall provide to the
Lessor written notice of any notice of any pending or threatened claim, action
or proceeding involving any Environmental Laws, any Release or Remedial Action
on or in connection with any Property. All such notices shall describe in
reasonable detail the nature of the claim, action or proceeding and the Lessee's
proposed response thereto. In addition, the Lessee shall provide to the Lessor,
within twenty (20) Business Days of receipt, copies of all written
communications with the Governmental Authority relating to any Environmental
Violation in connection with any Property. The Lessee shall also promptly
provide such detailed reports of any such material environmental claims as may
reasonably be requested by the Lessor or any Investor. In the event that the
Lessor receives written notice of any pending or threatened claim, action or
proceeding involving any Environmental Laws, any Release or Remedial Action on
or in connection with any Property, the Lessor shall promptly give notice
thereof to the Lessee.
ARTICLE XV
PARTIAL TERMINATION OF LEASE AT LESSOR'S OPTION
Section 15.1. Partial Termination Upon Certain Events. If, with respect to
any Property: (a) an Event of Loss occurs or (b) an Environmental Violation
occurs or is discovered and the cost of remediation of which the Lessee
determines in its reasonable good faith judgment could reasonably be expected to
exceed the lesser of $5,000,000 and twenty percent (20%) of the Termination Base
Amount of such Property; and the Lessor shall have given prior written notice (a
"Partial Termination Notice") to the Lessee that, as a consequence of such
event, this Master Lease is to be terminated with respect to such Property, then
the Lessee shall be obligated, on the date specified by the Lessor (which date
shall be a Business Day no earlier than sixty (60) days after delivery of the
applicable Partial Termination Notice but in any event not later than the
Expiration Date), to (1) in the case of an affected Leased Property, purchase
the affected Property and pay to the Lessor, as the purchase price thereof, or
(2) in the case of an affected Mortgaged Property, cause the release of such
Property from the Lien of the Lessor Mortgage applicable thereto and pay to the
Lessor, in exchange for such release, an amount equal to the sum of (x) the
Termination Base Amount of the affected Property on such date plus (y) all
accrued and unpaid Accrual Rent allocable to an amount of Property Cost equal to
such Termination Base Amount, plus (z) without duplication all Basic Rent and
Supplemental Rent, including Break Costs, due and owing on such date (after
giving effect to such purchase), and the Lessor shall, as set forth in Section
15.2, on such date of payment transfer to the Lessee all of the interest of the
Lessor in the affected Property (in the case of a Leased Property) and release
any Lessor Mortgage encumbering Property; provided, however, that the Lessee
shall not be obligated to purchase the affected Property if the Lessee delivers
a Replacement Notice within ten (10) days after receiving the Partial
Termination Notice and completes the replacement in accordance with Section 19.2
within sixty (60) days after receiving the Partial Termination Notice.
Section 15.2. Partial Termination Procedures. On the date of the payment
by the Lessee of all amounts required to be paid under Section 15.1 in
accordance with the procedures set forth in Section 15.1 (such date, the
"Partial Termination Date"), the Lease Supplement relating to the affected
Property shall terminate (or if the relevant Property is a Mortgaged Property,
the Lessor Mortgage relating
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Master Lease
to such Mortgage shall be released) and this Master Lease shall terminate with
respect to such affected Property, and the Lessor shall, at the Lessee's sole
cost and expense, take the following actions in respect of the applicable
affected Property upon the Lessor's receipt of all amounts due with respect to
such affected Property and all other amounts then due in accordance with Section
15.1:
(a) if the relevant Property is a Leased Property, the Lessor shall
execute and deliver to the Lessee (or to the Lessee's designee) at the
Lessee's sole cost and expense: (x) a quitclaim deed with respect to the
affected Property, containing representations and warranties of grantor
regarding the absence of Lessor Liens (but no other representations or
warranties), and (y) an assignment of the entire interest of the Lessor in
such affected Property (which shall include an assignment of all of the
right, title and interest of the Lessor in and to any Excess
Casualty/Condemnation Proceeds), in each case in recordable form and
otherwise in conformity with local custom to the extent consistent with
the foregoing scope of the Lessor's representations and warranties and
free and clear of the Lien of the Lessor Mortgage and any Lessor Liens;
(b) if the relevant Property is a Leased Property, such affected
Property shall be conveyed to the Lessee (or to the Lessee's designee) "AS
IS" and in its then present physical condition;
(c) the Lessor shall convey to the Lessee any Excess
Casualty/Condemnation Proceeds with respect to the affected Property;
(d) if the relevant Property is a Leased Property, the Lessor shall
execute and deliver to the Lessee (or its designee) and, if requested by
the Lessee, the Lessee's title insurance company, an affidavit as to the
absence of Lessor Liens; and
(e) (i) the Lessee and the Lessor shall execute and deliver to each
other a statement of termination of this Master Lease with respect to such
affected Property and, if the relevant Property is a Leased Property, a
termination of the Lease Supplement covering such affected Property, and
(ii) the Lessor shall execute such terminations, releases or other
instruments as the Lessee may reasonable request to evidence the release
of any Lessor Mortgage encumbering such Property.
ARTICLE XVI
LEASE EVENTS OF DEFAULT
Section 16.1. Lease 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) any representation or warranty made or deemed made by the Lessee
in or in connection with the execution and delivery of this Master Lease
or the other Operative Documents or the transactions contemplated hereby
or thereby (including any representation or warranty contained in any
certificate, document or financial or other statement furnished at any
time under or in connection with any Operative Document) shall prove to
have been false or misleading in any material respect when so made, deemed
made or furnished;
(b) any default shall be made in the payment of any Basic Rent,
Property Cost, Aggregate Property Cost, Termination Price, Termination
Base Amount or Lease Balance when
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Master Lease
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise;
(c) the Lessee shall fail to pay any Fee or Supplemental Rent (other
than an amount referred to in paragraph (b) above) when due under the
Operative Documents and such failure shall be continuing on the tenth
(10th) Business Day following the date on which the Lessee receives
written notice that such amount is due and payable;
(d) any default shall be made in the due observance or performance
of any covenant, condition or agreement contained in Section 10.1(a),
10.1(e), 10.2(a), 10.2(b), 10.2(c) or 10.2(d) of the Participation
Agreement and, in the case of any default under Section 10.2(b) of the
Participation Agreement, such default shall continue for thirty (30) days;
(e) any default shall be made in the due observance or performance
of any covenant, condition or agreement contained herein or in any other
Operative Document (other than those specified in paragraph (b), (c) or
(d) above or paragraph (l) below) and (i) in the case of any such
covenant, condition or agreement contained in clauses (a) through (i) of
Section 10.1 of the Participation Agreement or contained in Section 10.2
of the Participation Agreement, such default shall continue unremedied for
a period of thirty (30) days after notice thereof from the Lessor or any
Investor to the Lessee and (ii) in the case of any other such covenant,
condition or agreement, such default shall continue unremedied for a
period of thirty (30) days after notice thereof from the Lessor or any
Investor to the Lessee or, if such default cannot reasonably be remedied
within such thirty (30) day period, the Lessee shall have failed to remedy
such default prior to the period ending on the 120th day following such
notice to the Lessee or shall have failed to diligently pursue such remedy
during such period;
(f) the Lessee or any Lessee Subsidiary shall (i) fail to pay any
principal or interest, regardless of amount, due in respect of any
Indebtedness in a principal amount in excess of $20,000,000, beyond the
period of grace, if any, provided in the agreement or instrument under
which such Indebtedness was created, or (ii) fail to observe or perform
any other term, covenant, condition or agreement contained in any
agreement or instrument evidencing or governing any such Indebtedness, or
any other event shall occur or condition shall exist, beyond the period of
grace, if any, provided in such agreement or instrument, if the effect of
any failure referred to in this clause (ii) is to cause, or to permit the
holder or holders of such Indebtedness or a trustee on its or their behalf
(with or without the giving of notice) to cause, such Indebtedness to
become due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of the Lessee, or of a substantial part of the property
or assets of the Lessee or any Lessee Subsidiary with assets having gross
book value in excess of $25,000,000, under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other Federal or
state bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for the Lessee or for a substantial part of the
property or assets of the Lessee or any Lessee Subsidiary with assets
having gross book value in excess of $25,000,000 or (iii) the winding up
or liquidation of the Lessee; and such proceeding or petition shall
continue undismissed for sixty (60) days or an order or decree approving
or ordering any of the foregoing shall be entered;
(h) the Lessee or any Lessee Subsidiary with assets having a gross
book value in excess of $25,000,000 shall (i) voluntarily commence any
proceeding or file any petition seeking
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Master Lease
relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal or state bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or fail
to contest in a timely and appropriate manner, any proceeding or the
filing of any petition described in paragraph (g) above, (iii) apply for
or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Lessee or for a
substantial part of the property or assets of the Lessee, (iv) file an
answer admitting the material allegations of a petition filed against it
in any such proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (vii) take any action for
the purpose of effecting any of the foregoing;
(i) one or more final judgments shall be entered by any court
against the Lessee or any of the Lessee Subsidiaries for the payment of
money in an aggregate amount in excess of $100,000,000 and such judgment
or judgments shall not have been paid, covered by insurance, discharged or
stayed for a period of sixty (60) days, or a warrant of attachment or
execution or similar process shall have been issued or levied against
property of the Lessee or any of the Subsidiaries to enforce any such
judgment or judgments;
(j) an ERISA Event shall have occurred that, in the opinion of the
Lessor, when taken together with all other such ERISA Events, could
reasonably be expected to result in a Material Adverse Effect;
(k) a Change in Control shall occur;
(l) any insurance required to be maintained by the Lessee pursuant
to Article XIII of this Master Lease shall fail to be in effect or any
default shall be made in the due observance or performance of any
covenant, condition or agreement contained in Article VI or Section
11.1(a);
(m) any Operative Document to which the Lessee is a party or any
Lien granted by the Lessee under any Operative Document shall, in whole or
in material part, terminate, cease to be effective against, or (other than
as expressly provided therein) cease to be the legal, valid, binding and
enforceable obligation of the Lessee other than as permitted under, or
pursuant to the terms of, or in connection with a transaction permitted
by, any Operative Document;
(n) the Lessee shall directly or indirectly contest the
effectiveness, validity, binding nature or enforceability of any Operative
Document or any Lien granted under any Operative Document;
(o) any contract, permit or license in connection with any Property
(including any in connection with the use, occupancy, zoning or operation
of any Property) shall cease to be in full force and effect and such
cessation, in the aggregate with any such cessation affecting any other
Property, shall have had, or could reasonably be expected to have, a
Material Adverse Effect or a material adverse effect on the Fair Market
Sales Value, condition, utility, remaining useful life or residual value
of any Property; or
(p) any Casualty or Condemnation affecting any Property shall have
occurred and the aggregate Termination Base Amounts of all Properties then
unaffected by any Casualty or Condemnation shall be less than 30% of the
Aggregate Original Property Cost.
Section 16.2. Remedies. Upon the occurrence of any Lease Event of Default
and at any time thereafter, the Lessor may, so long as such Lease Event of
Default is continuing, do one or more of the
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following (and in such order) as the Lessor in its sole discretion shall
determine, without limiting any other right or remedy the Lessor may have on
account of such Lease Event of Default (including the obligation of the Lessee
to purchase all of the Properties as set forth in Section 18.2):
(a) The Lessor may declare the entire outstanding Lease Balance to
be immediately due and payable, whereupon the Lease Balance shall become
forthwith due and payable, without presentment, demand, protest or any
notice of any kind, all of which are hereby expressly waived by the
Lessee; provided, however, that upon the occurrence of an Event of Default
described in clause (g) or (h) of Section 16.1, (A) the obligation of the
Lessor to acquire any Leased Property on the Acquisition Date shall
automatically terminate and (B) the Lease Balance shall automatically
become and be due and payable, without presentment, demand, protest or any
notice of any kind, all of which are hereby expressly waived by the
Lessee;
(b) The Lessor may make demand upon the Lessee for the amounts due
under the Operative Documents;
(c) The Lessor may, by notice to the Lessee, rescind or terminate
this Master Lease as of the date specified in such notice; however, (i) no
reletting, reentry or taking of possession of any Leased Property (or any
portion thereof) by the Lessor (or its agents) will be construed as an
election on the Lessor's part to terminate this Master Lease unless a
written notice of such intention is given to the Lessee, (ii)
notwithstanding any reletting, reentry or taking of possession, the Lessor
may at any time thereafter elect to terminate this Master Lease for a
continuing Lease Event of Default, and (iii) no act or thing done by the
Lessor or any of its agents, representatives or employees and no agreement
accepting a surrender of any Leased Property shall be valid unless the
same be made in writing and executed by the Lessor;
(d) The Lessor may (i) demand that the Lessee, and the Lessee shall
upon the written demand of the Lessor, return all of the Leased Properties
promptly to the Lessor in the manner and condition required by, and
otherwise in accordance with all of the provisions of this Lease
(including Sections 8.2, 8.3, 9.1, 10.1 and 11.1 hereof) as if the
Properties were being returned on the Scheduled Lease Termination Date,
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
(ii) without prejudice to any other remedy that the Lessor may have for
possession of the Properties, and to the extent and in the manner
permitted by Applicable Law and any applicable DOD Restrictions, enter
upon any Leased Property and take immediate possession of (to the
exclusion of the Lessee) the Leased Properties or any part thereof and
expel or remove the Lessee and any other Person who may be occupying any
Leased Property, by summary proceedings or otherwise, all without
liability to the Lessor for or by reason of such entry or taking of
possession, whether for the restoration of damage to any property caused
by such taking or otherwise and, in addition to the other damages of the
Lessor, the Lessee shall be responsible for all costs and expenses
incurred by the Lessor, the Investors and/or the Arranger in connection
with any reletting, including reasonable brokers' fees and all costs of
any alterations or repairs required to be made by the Lessor so that the
Properties achieve the standard of condition required by this Master
Lease;
(e) As more fully set forth in Section 16.4 hereof, in each Lease
Supplement (and consistent with the intent of the parties as detailed in
Article XXV hereof) and in each Lessor Mortgage, the Lessor may exercise
all remedies available to a mortgagee, secured party, beneficiary or
trustee under law or equity, including, to the extent permitted by law,
the right to sell all or any part of the Properties at public or private
sale, as the Lessor may determine;
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(f) The Lessor may, at its option, elect not to terminate this
Master Lease and continue to collect all Basic Rent, Supplemental Rent,
and all other amounts due to the Lessor (together with all costs of
collection) and enforce the Lessee's obligations under this Master Lease
as and when the same become due, or are to be performed, and at the option
of the Lessor, upon any abandonment of any Leased Property by the Lessee
or re-entry of same by the Lessor, the Lessor may, in its sole and
absolute discretion, elect not to terminate this Master Lease and may make
the necessary repairs in order to relet any Leased Property, and relet
such Leased Property or any part thereof for such term or terms (which may
be for a long term extending beyond the Lease Term of this Master 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 in the manner
provided in Section 7.4 of the Participation Agreement. If such rentals
received from such reletting during any period are less than the Rent 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
Scheduled Payment Date;
(g) Unless all of the Leased Properties have been sold in their
entirety, the Lessor may, whether or not the Lessor shall have exercised
or shall thereafter at any time exercise any of its rights under clause
(d), (e) or (f) of this Section 16.2 with respect to any or all of the
Properties or any portions thereof, demand, by written notice to the
Lessee specifying a date not earlier than twenty (20) days after the date
of such notice, that the Lessee purchase, on the date specified in such
notice, all of the unsold Properties in accordance with the provisions of
Article XXI and Section 18.2 for an amount equal to the then outstanding
Lease Balance;
(h) The Lessor may exercise any other right or remedy that may be
available to it under Applicable Law, 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 rights to collect any such damages for any
subsequent period(s), or the Lessor may defer any such suit until after
the Expiration Date, in which event such suit shall be deemed not to have
accrued until the Expiration Date;
(i) The Lessor may retain and apply against the Lease Balance all
sums which the Lessor would, absent such Lease Event of Default, be
required to pay to, or turn over to, the Lessee pursuant to the terms of
this Master Lease (including any amounts held by the Lessor pursuant to
Section 14.2); or
(j) The Lessor, to the extent permitted by Applicable Law, 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 any part of each Property, and the Lessee hereby irrevocably consents
to any such appointment. Any such receivers shall have all of the usual
powers and duties of receivers in like or similar cases and all of the
powers and duties of the Lessor in case of entry, and shall continue as
such and exercise such powers until the date of confirmation of the sale
of the applicable Property unless such receivership is sooner terminated.
The Lessor shall be entitled to enforce payment of the indebtedness and
performance of the Obligations secured hereby and to exercise all rights and
powers under this instrument or under any of the other Operative Documents or
other agreement or any laws now or hereafter in force, notwithstanding some or
all of the Obligations secured hereby may now or hereafter be otherwise secured,
whether by mortgage, security agreement, pledge, lien, assignment or otherwise.
Neither the acceptance of this instrument nor its enforcement shall prejudice or
in any manner affect the Lessor's right to realize upon or
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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 the Lessor may otherwise be
entitled, may be exercised, concurrently or independently, from time to time and
as often as may be deemed expedient by the Lessor. In no event shall the Lessor,
in the exercise of the remedies provided in this instrument (including in
connection with the assignment of rents to the Lessor, or the appointment of a
receiver and the entry of such receiver onto all or any part of the Properties),
be deemed a "mortgagee in possession," and the Lessor shall not in any way be
made liable for any act, either of commission or omission, in connection with
the exercise of such remedies.
If, pursuant to the exercise by the Lessor of its remedies pursuant to
this Section 16.2, the Lease Balance and all other amounts due and owing from
the Lessee under this Master Lease and the other Operative Documents have been
paid in full, then the Lessor shall remit to the Lessee any excess amounts
received by the Lessor.
If requested by the Lessor in connection with the exercise of its remedies
pursuant to this Section 16.2, subject to the good faith mutual agreement of the
Lessor and the Lessee, the Lessee hereby agrees to enter into an operating
agreement with respect to the Properties having a term no longer than one year
and in connection therewith to serve as the operator of the Properties; provided
that such agreement shall be on market terms established in good faith and
reasonably acceptable to the Lessor and the Lessee.
Section 16.3. Waiver of Certain Rights. (a) To the maximum extent
permitted by law, the Lessee hereby waives the benefit of any appraisement,
valuation, stay, extension, reinstatement and redemption laws now or hereafter
in force and all rights of marshalling in the event of any sale of any Property
or any interest therein, (b) if this Master Lease shall be terminated pursuant
to Section 16.2, the Lessee waives, to the fullest extent permitted by law, (i)
any notice of re-entry or the institution of legal proceedings to obtain
re-entry or possession; (ii) any right of redemption, re-entry or repossession;
(iii) 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 (iv) any other rights that might otherwise limit or
modify any of the Lessor's rights or remedies under this Article XVI.
Section 16.4. Mortgage/Deed of Trust Remedies. Without limiting any other
remedies set forth in this Master Lease, and also, without limiting the
generality of Article XXV hereof, the Lessor may proceed by a suit or suits in
equity or at law, whether for a foreclosure hereunder or under the Lease
Supplements, or (to the extent permitted by law) for the sale of each Property,
pursuant to a power of sale, or against the Lessee on a recourse basis for the
Lease Balance, or for the specific performance of any covenant or agreement
contained herein or in aid of the execution of any power granted herein, or for
the appointment of a receiver pending any foreclosure hereunder (or under the
Lease Supplements) or the sale of any Property, or for the enforcement of any
other appropriate legal or equitable remedy. The Lessor shall have all rights
available to a mortgagee (or of a beneficiary under a deed of trust) or a
secured party under the laws of the state where the relevant Property is
located, including all rights granted under the specific statutes referenced in
each Lease Supplement, if any (each such statute, as amended, is hereinafter
referred to as a "Mortgage Foreclosure Act"). In the event that any provisions
of this Master Lease shall be inconsistent with any Mortgage Foreclosure Act,
the provisions of such Mortgage Foreclosure Act shall take precedence over such
provision of this Master Lease, but shall not invalidate or render unenforceable
any other provision of this Master Lease that can be construed in a manner
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consistent with such Mortgage Foreclosure Act. If any provision of this Master
Lease shall grant the Lessor any rights or remedies upon default of the Lessee
that are more limited than the rights that would otherwise be vested in the
Lessor under such Mortgage Foreclosure Act in the absence of such provision, the
Lessor shall be vested with the broader rights granted in such Mortgage
Foreclosure Act to the full extent permitted by law. The Lessee agrees that the
agreements of Lessee herein contained shall be specifically enforceable by
injunction or any other appropriate equitable remedy and that for the purpose of
any suit brought pursuant hereto, the Lessee hereby waives, to the fullest
extent permitted by law, the defense of laches and any applicable statute of
limitations. In the event of foreclosure, the Lessee authorizes and empowers the
Lessor to effect insurance upon the Properties in amounts aforesaid for a period
covering the time of redemption from foreclosure sale provided by law, and if
necessary therefor, to cancel any or all existing insurance policies required to
be maintained under this Master Lease.
ARTICLE XVII
LESSOR'S RIGHT TO CURE; LESSOR'S OBLIGATION TO FORWARD NOTICES
Section 17.1. The Lessor's Right to Cure the Lessee's Lease Defaults. The
Lessor, without waiving or releasing any obligation or Lease Event of Default,
may (but shall be under no obligation to) remedy any Lease 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 (but subject to any applicable DOD
Restrictions), enter upon any Property for such purpose and take all such action
thereon as may be necessary or appropriate therefor. No such entry shall be
deemed an eviction of the 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 as
Supplemental Rent.
Section 17.2. Lessor's Obligation to Forward Notices. The Lessor shall
deliver to the Lessee copies of all notices received by the Lessor from any
Governmental Authority (including all notices of any tax assessment, levy, duty
or other bill from any Governmental Authority) with respect to the Lessee or any
Property promptly but in any event within ten (10) Business Days after the
Lessor's receipt thereof.
ARTICLE XVIII
PURCHASE BY LESSEE
Section 18.1. Purchase Option on Expiration Date. The Lessee shall have
the right at its option to purchase the Lessor's interest in all (but not less
than all) of the Leased Properties on the Scheduled Lease Termination Date in
accordance with this Section 18.1 (the "Purchase Option") by delivering prior
written notice thereof not later than one hundred eighty (180) days prior to the
Scheduled Lease Termination Date to the Lessor and, unless the Lessee shall have
properly exercised the Return Option and shall have fulfilled all of the
requirements of Article XX, the Lessee shall be deemed to have elected to
purchase the Lessor's interest in all of the Leased Properties pursuant to this
Section 18.1. Any such notice or deemed election shall be irrevocable. If the
Lessee shall have elected (or shall have been deemed to have elected) to
purchase all of the Leased Properties under this Section, then, subject to the
terms, conditions and provisions set forth in this Section, and in accordance
with the procedures set forth in Section 21.1, the Lessee (or its designee)
shall purchase from the Lessor, and the Lessor shall convey to the Lessee (or
its designee), on the Scheduled Lease Termination Date all of the interest of
the Lessor in all of the Leased Properties for an amount equal to one dollar
($1); provided that the Lessee shall have paid all accrued and unpaid Basic Rent
and all Supplemental Rent owing on the Scheduled Lease
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Termination Date (including the final payment of Fixed Rent) after giving effect
to such purchase. The Lessee may designate, in a notice given to the Lessor not
less than ten (10) Business Days prior to the closing of such purchase, the
transferee or transferees to whom the conveyance shall be made (if other than to
the Lessee), in which case such conveyance shall (subject to the terms and
conditions set forth herein) be made to such designee; provided, however, that
such designation of a transferee or transferees shall not cause the Lessee to be
released, fully or partially, from any of its obligations under this Master
Lease, including the obligation to pay the Lessor the final Basic Rent payment
on the Scheduled Lease Termination Date.
Section 18.2. Acceleration of Purchase Obligation. The Lessee shall be
obligated to purchase for an amount equal to the Lease Balance all of the
interest of the Lessor in all of the Leased Properties automatically and without
notice upon the occurrence of any Lease Event of Default described in clause (g)
or (h) of Section 16.1. Any purchase under this Section 18.2 shall be in
accordance with the procedures set forth in Section 21.1.
ARTICLE XIX
TERMINATION OR REPLACEMENT FOR OBSOLESCENCE, EVENT OF LOSS, ETC.
Section 19.1. Right of Termination.
(a) Termination Option. The Lessee shall have the right at its option (the
"Termination Option") to terminate the Lease with respect to one or more
Properties (including any Mortgaged Property) if: (i) such Property or
Properties are no longer being used by the Lessee or any of its Affiliates in
its business as a result of such Property or Properties (x) becoming obsolete or
surplus to the Lessee's or such Affiliate's requirements, (y) suffering a
Casualty or Condemnation or (z) suffering a title defect or Environmental
Violation or (ii) the Indemnitees shall have demanded payment from the Lessee of
amounts owing under Article XIII of the Participation Agreement as a result of
events outside of the control of the Lessee, the payment of which, in the
aggregate, cause the implicit rate of return on the Aggregate Property Cost to
increase by more than 0.20% above the implicit rate of return anticipated on the
Acquisition Date or (iii) such Property or Properties are intended to be held
for sale (any event described in clause (iii), a "Sale Termination Event" and
any event described in clause (i), (ii) or (iii), a "Termination Event," and the
applicable Property to which the Termination Event relates, the "Terminated
Property"). To exercise this option the Lessee shall deliver a written notice (a
"Termination Notice") to the Lessor and each Investor specifying a proposed date
of termination for such Property that is no earlier than thirty (30) days after
the date such Termination Notice is delivered (the "Termination Date"). Any such
termination shall be effective on the Termination Date upon the Lessee's
compliance with this Section 19.1; provided that:
(A) in the case of a Termination Event described in clause (i), (1)
the Lessee shall not have the right to exercise its Termination Option at
any time prior to the third (3rd) anniversary of the Acquisition Date
(except in the case of a Termination Option exercised pursuant to clause
(y) of such clause (i), which may be exercised at any time), (2) the
determination that the applicable Property qualifies for termination
pursuant to clause (i) shall be made by the Lessee in good faith, and (3)
the Termination Notice shall contain a certificate executed by the Chief
Financial Officer of the Lessee certifying that the applicable Property
qualifies for termination pursuant to clause (i) of this Section 19.1(a);
(B) in the case of a Termination Event described in clause (ii), (1)
the Lessee shall exercise its Termination Option with respect to all and
not less than all of the Properties
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and (2) the determination that the Properties qualify for termination
pursuant to clause (ii) shall be made jointly by the Lessor and Lessee in
good faith; and
(C) in the case of a Termination Event described in clause (iii),
(1) the Lessee shall not have the right to exercise its Termination Option
prior to the third (3rd) anniversary of the Acquisition Date and (2) the
Termination Notice shall contain a certificate executed by the Chief
Financial Officer of the Lessee certifying that such Property is intended
to be held for sale.
The Lessee will reimburse the Lessor and each Investor for all Break Costs and
all reasonable out-of-pocket costs and expenses (including reasonable legal fees
and expenses) incurred by any thereof in connection with such termination or
proposed termination. On the Termination Date, the Lessee shall pay or cause to
be paid to the Lessor (or in the case of Supplemental Rent, to the Persons
entitled thereto) in funds of the type specified in Section 3.4, an amount equal
to the sum of (x) the Termination Price of the Terminated Property (or, if the
applicable Termination Event is a Sale Termination Event, an amount equal to the
unamortized Termination Base Amount of the Terminated Property plus the
Termination Indemnity Amount for such Property on the applicable Termination
Date) plus (y) all accrued and unpaid Accrual Rent allocable to an amount of
Property Cost equal to the Termination Base Amount to be paid on such
Termination Date plus (z) without duplication, all Basic Rent and Supplemental
Rent (including Break Costs) then due and owing after giving effect to such
termination (including all Supplemental Rent that shall have been demanded
pursuant to Article XIII of the Participation Agreement), in each case
calculated as of the Termination Date, it being understood that until such sums
are paid, there shall be no abatement or reduction of Basic Rent on account of
the applicable Termination Event or otherwise. All payments received by the
Lessor from the Lessee pursuant to this Section 19.1 will be distributed and
applied by the Lessor in accordance with Article VII of the Participation
Agreement.
(b) Transfer of Property. Upon the payment of all sums required to be paid
pursuant to Section 19.1(a) in respect of any Terminated Property or Terminated
Properties, the Lessor shall (x) in the case of Terminated Properties that are
Leased Properties, transfer the applicable Terminated Property or Terminated
Properties to the Lessee or its designee in accordance with the procedures set
forth in Section 21.1 or (y) in the case of any Terminated Property that is a
Mortgaged Property, comply with the procedures set forth in clause s(c) and (e)
of Section 21.1.
(c) Termination of Lease. In the event of any such sale and receipt by the
Lessor of all of the amounts provided in Section 19.1(a) in respect of a
Terminated Property that is a Leased Property and upon compliance by the Lessee
with the other provisions of this Section 19.1, the obligation of Lessee to pay
Basic Rent hereunder for such Terminated Property shall cease and the Lease Term
for the Terminated Property shall end.
Section 19.2. Replacement. Following the occurrence of any Termination
Event described in clause (i) or (iii) of Section 19.1(a), the Lessee shall have
the right at its option (the "Replacement Option") to replace the applicable
Terminated Property in accordance with this Section 19.2.
(a) Requirements. To exercise the Replacement Option the Lessee shall
deliver a written notice (a "Replacement Notice") to the Lessor and each
Investor specifying a proposed date of replacement for such Property that is no
earlier than thirty (30) days after the date such Termination Notice is
delivered (the date of such replacement in accordance with Section 19.2(b)
below, the "Replacement Date"). The Lessee shall comply with the provisions of
clause (b) below applicable to such replacement and shall either (x) if the
applicable Terminated Property is a Leased Property, convey or cause to be
conveyed to the Lessor on the Replacement Date one or more replacement
Properties (each such Property, a "Replacement Property") for the applicable
Terminated Property or Terminated
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Properties, with such Replacement Properties to be leased to the Lessee
hereunder from and after the Replacement Date or (y) if the applicable
Terminated Property is a Mortgaged Property, grant to the Lessor a Lien on a
Replacement Property pursuant to a Lessor Mortgage in form and substance
reasonably satisfactory to the Lessor; provided that, in each case, (1) the
determination that the applicable Property qualifies for replacement as a result
of satisfying the requirements of clause (i) or (iii) of Section 19.1(a) shall
be made by the Lessee in good faith and (2) the Replacement Notice shall contain
a certificate executed by the Chief Financial Officer of the Lessee certifying
that the applicable Property qualifies for replacement as a result of satisfying
the requirements of clause (i) or (iii) of Section 19.1(a); and provided,
further, that the following conditions are satisfied:
(i) each Replacement Property shall be located in the continental
United States,
(ii) each Replacement Property shall be free and clear of all Liens
(other than Permitted Property Liens);
(iii) such Replacement Property or Replacement Properties shall have
a Fair Market Sales Value, in the aggregate, at least equal to unamortized
Termination Base Amount of the applicable Terminated Property;
(iv) in no event shall such Replacement Property or Replacement
Properties have a remaining economic useful life of less than fifteen (15)
years;
(v) there shall be no fewer than three (3) Properties subject to
this Master Lease after giving effect to such replacement;
(vi) each of the conditions set forth in Section 6.1 of the
Participation Agreement shall have been satisfied (except that each
reference to a Subject Property shall be deemed to refer to the
Replacement Property and each reference to the Acquisition Date shall be
deemed to refer to the applicable Replacement Date); and
(vii) the representations and warranties of the Lessee set forth in
Section 8.2 of the Participation Agreement shall be true and correct with
respect to the Lessee and such Replacement Property on and as of the
applicable Replacement Date.
(b) Items to be delivered. Prior to any replacement of any Property and as
a condition to such replacement, the Lessee, at its own expense, will:
(i) furnish to the Lessor each of the items set forth in Section 6.1
of the Participation Agreement in each case with respect to the proposed
Replacement Property and on and as of the Replacement Date (instead of the
Acquisition Date),
(ii) cause a Lease Supplement substantially in the form of Exhibit A
hereto and dated as of the Replacement Date, subjecting such Replacement
Property to this Lease and duly executed by the Lessee, to be delivered to
the Lessor (or, if the applicable Terminated Property is a Mortgaged
Property, cause a Lessor Mortgage covering such Replacement Property and
dated as of the Replacement Date and duly executed by the Lessee to be
delivered to the Lessor),
(iii) upon execution of the Lease Supplement described in clause
(ii) by the Lessee and the Lessor (or, if the applicable Terminated
Property is a Mortgaged Property, upon execution of the Lessor Mortgage
described in clause (ii) by the Lessee), cause such Lease Supplement (or
Lessor Mortgage) to be filed for recordation in the same manner as
provided for
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Master Lease
the original Lease Supplement (or original Lessor Mortgage, as the case
may be) in the Participation Agreement,
(iv) furnish to the Lessor a Responsible Officer's Certificate of
the Lessee certifying that the Replacement Property is free and clear of
all Liens (other than Permitted Property Liens), and
(v) furnish such other documents and evidence as the Lessor, any
Investor or their respective counsel may reasonably request in order to
establish the consummation of the transactions contemplated by this
Section 19.2.
For all purposes hereof, (i) the Replacement Date shall be deemed to occur on
the earliest date on which the Lessee shall have complied with all of the
requirements of this clause (b) with respect to a replacement made in accordance
with clause (a) above, (ii) title to each Replacement Property conveyed in
connection with a Terminated Property that is a Leased Property shall be deemed
to have been transferred to the Lessor as of the Replacement Date and (iii) (x)
in the case of a Terminated Property that is a Leased Property, upon such
passage of title thereto to the Lessor, and (y) in the case of a Terminated
Property that is a Mortgaged Property, upon the recordation of the applicable
Lessor Mortgage as required under Section 6.1(n) of the Participation Agreement,
the Replacement Property shall be deemed a "Property" for all purposes of the
Operative Documents and the original Property shall no longer be deemed to be a
"Property" for purposes of the Operative Documents and, in the case of a
Replacement Property for a Leased Property, the Replacement Property shall be
deemed part of the Properties leased hereunder.
(c) Transfer or Release of Replaced Property. Upon (i) the passage of
title with respect to a Leased Property described in clause (b) above, the
Lessor will transfer to the Lessee all Lessor's right, title and interest in and
to the replaced Property or (ii) the recordation of a Lessor Mortgage with
respect to a Mortgaged Property described in clause (b) above, the Lessor will
release the Lessor Mortgage encumbering the replaced Property, in each case in
accordance with the procedures set forth in Section 21.1. The Lessee shall
promptly pay all reasonable out-of-pocket costs and expenses (including
reasonable legal fees and expenses) incurred by the Lessor, the Lessor
Administrator or any Investor in connection with any replacement pursuant to
this Section 19.2, provided that the Lessee shall be responsible for the legal
fees and expenses of only one set of lawyers for the Investors (in addition to
any local counsel reasonably required by the Lessor or any Investor) unless the
Investors and/or such counsel reasonably determines that such representation
could create a conflict of interest. The Lessee further agrees that, upon
receipt of fully signed counterparts of the Lease Supplement referred to in
clause (ii) of Section 19.2(b), it will, at its sole cost and expense, cause
such documents to be filed or recorded in the manner contemplated by Section
6.1(n) of the Participation Agreement.
ARTICLE XX
RETURN OPTION; RETURN PROVISIONs
Section 20.1. Option to Return. Subject to the fulfillment of each of the
conditions set forth in this Section 20.1 and Section 20.2 (collectively, the
"Return Conditions"), the Lessee shall have the option (the "Return Option") to
return all (but not less than all) of the Leased Properties to the Lessor on the
Expiration Date.
The Lessee's effective exercise and consummation of the Return Option
shall be subject to the due and timely fulfillment of each of the following
provisions and the provisions of Section 20.2 as to each of the Leased
Properties as of the dates set forth below:
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Master Lease
(a) Unless a longer period is called for pursuant to any Applicable
Law, on the date not later than one hundred eighty (180) days prior to the
Scheduled Lease Termination Date, the Lessee shall give to the Lessor
written notice of the Lessee's exercise of the Return Option.
(b) Not later than one hundred and twenty (120) days prior to the
Expiration Date, the Lessee shall deliver to the Lessor an Environmental
Audit for each Property. Such Environmental Audit shall be prepared by an
environmental consultant selected by the Lessor in the Lessor's discretion
and shall contain conclusions satisfactory to the Lessor as to the
environmental status of each Property as to which the Lessor shall be
entitled to rely in accordance with the terms of the scope of services as
set forth in the Environmental Audit prepared by the environmental
consultant. If any such Environmental Audit indicates any exceptions
calling for a Phase Two environmental assessment, the Lessee shall have
also delivered prior to the Expiration Date a Phase Two environmental
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 Law.
(c) The Lessee shall have substantially completed all Modifications,
restoration and rebuilding of the relevant Properties pursuant to Sections
10.1 and 14.1 (as the case may be) and shall have fulfilled all of the
conditions and requirements in connection therewith pursuant to such
Sections. The Lessee shall have also paid the cost of all Modifications
commenced prior to the Expiration Date. The Lessee shall not have been
excused pursuant to Section 12.1 from complying with any Applicable Law
that involved the extension of the ultimate imposition of such Applicable
Law beyond the Expiration Date. Any Permitted Property Liens (other than
Lessor Liens) on any Property that were contested by the Lessee shall have
been removed and the Lessor shall have received evidence satisfactory to
it that all Liens (other than Lessor Liens and uncontested Permitted
Property Liens of the type described in clauses (i), (ii), (vii), (viii)
and (ix) of the definition thereof) shall have been removed.
(d) Not later than sixty (60) days prior to the Expiration Date, the
Lessee shall have cured or caused to be cured all Environmental Violations
affecting any Property and if ISRA is applicable, provide proof that it is
in Compliance with ISRA.
(e) The Lessee shall pay to the Lessor (or in the case of
Supplemental Rent, to the Person entitled thereto) on or prior to the
Expiration Date an amount equal to the outstanding Lease Balance in the
type of funds specified in Section 3.4 hereof.
(f) The Lessee shall return all of the Leased Properties in
accordance with Section 20.2.
Section 20.2. Return. If the Lessee elects its Return Option, the Lessee
shall do each of the following with respect to each Leased Property at its own
cost and expense, on or prior to the Expiration Date:
(a) execute and deliver to the Lessor (or to the Lessor's designee)
(A) a deed (warranting against acts and Liens of the Lessee and its
Affiliates) with respect to its interest in the applicable Property, (B) a
bill of sale with respect to its interest in all personalty and Equipment
(if any) included in the applicable Property and (C) an assignment of the
Lessee's entire interest in the applicable Property (which shall include
an assignment of all of the Lessee's right, title and interest in and to
all awards, compensation and insurance proceeds payable with respect to
the applicable Property in connection with any Casualty or Condemnation
affecting the applicable Property and an assignment of leases of the
applicable Property), in each case in
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recordable form and otherwise in conformity with local custom and free and
clear of any Liens attributable to the Lessee or its Affiliates other than
Permitted Property Liens referenced in clauses (i), (ii), (vii), (viii),
and (ix) of the definition thereof;
(b) execute and deliver to the Lessor and the Lessor's title
insurance company an affidavit as to the absence of any Liens (other than
Permitted Property Liens of the type described in clause (i), (ii), (vii),
(viii) and (ix) of the definition thereof);
(c) execute and deliver to the Lessor a statement of termination of
this Master Lease and each Lease Supplement;
(d) vacate each Leased Property and transfer possession of each
Leased Property to the Lessor or any Person designated by the Lessor by
surrendering the same into the possession of the Lessor or such Person, as
the case may be, in the condition required by this Master Lease and in
compliance with Applicable Law; and
(e) cooperate fully with the Lessor and/or any Person designated by
the Lessor to receive such Leased Property, which cooperation shall
include: (i) if requested by the Lessor, subject to the good faith mutual
agreement of the Lessor and the Lessee, the entering into of an operating
agreement with respect to such Property having a term no longer than one
year and in connection therewith serving as the operator of the such
Property; (provided that such agreement shall be on market terms
established in good faith and reasonably acceptable to the Lessor and the
Lessee), (ii) providing copies of all records regarding the maintenance of
such Property and all non-proprietary data and technical information
relating thereto, (iii) providing a current copy of the applicable Plans
and Specifications for each Property (if any), (iv) granting or assigning
all assignable licenses necessary for the operation and maintenance of
each Property and (v) cooperating reasonably in the seeking and obtaining
of all necessary Governmental Action.
ARTICLE XXI
PROCEDURES RELATING TO CONVEYANCE TO LESSEE
Section 21.1. Provisions Relating to the Conveyance of Properties to the
Lessee upon Certain Events. In connection with (x) the Lessee's exercise of its
Termination Option with respect to any Property pursuant to Section 19.1, (y)
the Lessee's exercise of its Replacement Option with respect to any Terminated
Property to be replaced or (z) the Lessee's purchase of all of the Properties
pursuant to Section 18.1, or in connection with the Lessee's obligations under
Section 16.2(g) or 18.2, then, upon the date on which this Master Lease is to
terminate with respect to the relevant Property and upon tender by the Lessee of
the amounts set forth in Section 19.1, 19.2, 16.2(g), 18.1 or 18.2, as
applicable:
(a) if the relevant Property is a Leased Property, the Lessor shall
execute and deliver to the Lessee (or to the Lessee's designee) at the
Lessee's cost and expense: (x) a quitclaim deed with respect to the
relevant Property, containing representations and warranties of grantor
regarding the absence of Lessor Liens (but no other representations or
warranties), and (y) an assignment of the entire interest of the Lessor in
such Property (which shall include an assignment of all of the right,
title and interest of the Lessor in and to any Excess
Casualty/Condemnation Proceeds), in each case in recordable form and
otherwise in conformity with local custom to the extent consistent with
the foregoing scope of the Lessor's representations and warranties and
free and clear of the Lien of the Lessor Mortgage and any Lessor Liens;
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Master Lease
(b) if the relevant Property is a Leased Property, such Property
shall be conveyed to the Lessee (or to the Lessee's designee) "AS IS" and
in its then present physical condition;
(c) the Lessor shall convey to the Lessee any Excess
Casualty/Condemnation Proceeds with respect to the Property;
(d) if the relevant Property is a Leased Property, the Lessor shall
execute and deliver to the Lessee (or its designee) and, if requested by
the Lessee, the Lessee's title insurance company, an affidavit as to the
absence of Lessor Liens; and
(e) (i) the Lessee and the Lessor shall execute and deliver to each
other a statement of termination of this Master Lease with respect to such
Property and, if such Property is a Leased Property, a statement of
termination of the Lease Supplement covering such Property, and (ii) the
Lessor shall execute such terminations, releases or other instruments as
the Lessee may reasonably request to evidence the release of any Lessor
Mortgage encumbering such Property.
ARTICLE XXII
ESTOPPEL CERTIFICATES
Section 22.1. Estoppel Certificates. At any time and from time to time
upon not less than twenty (20) Business Days' prior request by the Lessor or the
Lessee (the "Requesting Party"), the other party (whichever party shall have
received such request, the "Certifying Party") shall furnish to the Requesting
Party a certificate signed by (i) in the case of the Lessee, a Responsible
Officer of the Lessee and (ii) in the case of the Lessor, the Lessor
Administrator, certifying that this Master Lease is in full force and effect (or
that this Master Lease is in full force and effect as modified and setting forth
the modifications); the dates to which the Basic Rent and Supplemental Rent have
been paid; to the best knowledge of the signer of such certificate, whether or
not the Requesting Party is in default under any of its obligations hereunder
and, if so, the nature of such alleged default; and such other matters under
this Master Lease as the Requesting Party may reasonably request.
Any such certificate furnished pursuant to this Article XXII may be relied
upon by, and any existing or prospective mortgagee, purchaser or lender.
ARTICLE XXIII
ACCEPTANCE OF SURRENDER
Section 23.1. Acceptance of Surrender. No surrender to the Lessor of this
Master Lease or of all or any of the Leased Properties 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 no act by the Lessor or any
representative or agent of Lessor, other than a written acceptance, shall
constitute an acceptance of any such surrender.
ARTICLE XXIV
NO MERGER OF TITLE
Section 24.1. No Merger of Title. There shall be no merger of this Master
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 Master Lease or the leasehold estate created hereby or
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Master Lease
any interest in this Master Lease or such leasehold estate, (b) the fee estate
in any Property, except as may expressly be stated in a written instrument duly
executed and delivered by the Lessor, or (c) a beneficial interest in the
Lessor.
ARTICLE XXV
INTENT OF THE PARTIES
Section 25.1. Ownership of the Property. (a) The parties hereto intend
that for (i) financial accounting purposes with respect to the Lessee, (ii)
United States federal and all United States state and local income tax purposes
and (iii) United States state real estate and commercial law and bankruptcy
purposes,
(A) the Lease will be treated as a financing arrangement,
(B) the Lessor will be deemed a lender making a loan to the Lessee
in an aggregate amount equal to the Aggregate Original Property Cost which
loan is secured by the Properties, and
(C) the Lessee will be treated as the owner of the Leased Properties
described in the Lease Supplements and will be entitled to all tax
benefits ordinarily available to an owner of properties similar to the
Properties for such tax purposes.
Specifically, without limiting the generality of the foregoing, the parties
hereto intend and agree that in the event of any insolvency or receivership
proceedings or a petition under the United States bankruptcy laws or any other
applicable insolvency laws or statute of the United States of America or any
state or commonwealth thereof affecting the Lessee, the Lessor or the Investors
or any collection actions, the transactions evidenced by the Operative Documents
shall be regarded as loans made to the Lessee by the Lessor and the Investors as
unrelated third party lenders of the Lessee. Nevertheless, the Lessee
acknowledges and agrees that none of the Lessor, the Arranger or any Investor
has made any representations or warranties to the Lessee concerning the tax,
accounting or legal characteristics of the Operative Documents and that the
Lessee has obtained and relied upon such tax, accounting and legal advice
concerning the Operative Documents as it deems appropriate. The parties hereto
will not take any position inconsistent with the intentions expressed herein.
(b) It is the intent of the parties hereto that this Lease grants a
security interest and mortgage or deed to secure debt or deed of trust, as the
case may be, in and on each Property to the Lessor for the benefit of the Lessor
to secure the performance of the Lessee under and payment of all amounts under
this Master Lease and the other Operative Documents all as more specifically set
forth in each Lease Supplement.
(c) Tax Ownership. The Lessor represents and warrants to the Lessee that
it will not, prior to the termination of the Lease with respect to a Property,
claim ownership of (or any tax benefits, including depreciation, with respect
to) such Property for any United States income tax purposes (unless required to
do so by a Governmental Authority), it being understood that the Lessee is and
will remain the owner of such Property for such United States income tax
purposes until the termination of the Lease with respect thereto.
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Master Lease
ARTICLE XXVI
MISCELLANEOUS
Section 26.1. Severability. If any term or provision of this Master Lease
or any application thereof shall be declared invalid or unenforceable, the
remainder of this Master Lease and any other application of such term or
provision shall not be affected thereby.
Section 26.2. Amendments and Modifications. Subject to the requirements,
restrictions and conditions set forth in the Participation Agreement, neither
this Master Lease nor any provision hereof may be amended, waived, discharged or
terminated except by an instrument in writing signed by the Lessee and the
Lessor.
Section 26.3. No Waiver. No failure by the Lessor, any Investor 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
Master Lease, and this Master Lease shall continue in full force and effect with
respect to any other then existing or subsequent default.
Section 26.4. 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 14.3 of the Participation Agreement.
Section 26.5. Successors and Assigns. All the terms and provisions of this
Master Lease shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided, that the Lessee may not
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of the Lessor (and any attempted assignment or
transfer by the Lessee without such consent shall be null and void).
Section 26.6. Headings and Table of Contents. The headings and table of
contents in this Master Lease are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.
Section 26.7. Counterparts. This Master 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 26.8. GOVERNING LAW. THIS MASTER LEASE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT TITLE 14 OF
ARTICLE 5 OF THE NEW YORK GENERAL OBLIGATIONS LAW (EXCEPT AS OTHERWISE SET FORTH
IN THE LEASE SUPPLEMENT WITH RESPECT TO THE CREATION AND PERFECTION OF THE LIENS
AND SECURITY INTERESTS IN EACH PROPERTY AND THE RIGHTS AND REMEDIES OF THE
LESSOR WITH RESPECT TO EACH PROPERTY).
Section 26.9. Original Lease. The single executed original of this Master
Lease marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the
signature page thereof and containing the receipt thereof of the Lessor therefor
on or following the signature page thereof shall be the Original Executed
Counterpart of this Master Lease (the "Original Executed Counterpart"). To the
extent that this Master Lease constitutes chattel paper, as such term is defined
in the Uniform Commercial
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Master Lease
Code as in effect in any applicable jurisdiction, no security interest in this
Master Lease may be created through the transfer or possession of any
counterpart other than the Original Executed Counterpart.
Section 26.10. Time of Essence. With respect to each of the Lessee's
obligations under this Master Lease, time is of the essence, and the Lessee
hereby acknowledges and confirms the foregoing.
Section 26.11. Liability Limited. The obligations of the Lessor hereunder
are subject to the limitations set forth in Section 14.10 of the Participation
Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have caused this Master Lease to be duly
executed and delivered as of the date first above written.
ITT INDUSTRIES, INC., as Lessee
By /s/ Donald Foley
---------------------------------
Name: Donald Foley
Title: Senior Vice President, Treasurer and
Director of Tax
MASTER LEASE
REXUS L.L.C., as Lessor
By /s/ Larry Bowman
----------------------------------
Name: Larry Bowman
Title: President
MASTER LEASE
THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART, Receipt of this
original counterpart of the foregoing Master Lease is hereby acknowledged as of
the date hereof.
REXUS L.L.C., as Lessor
By /s/ Larry Bowman
----------------------------------
Name: Larry Bowman
Title: President
MASTER LEASE
SCHEDULE I
TO MASTER LEASE
FIXED RENT
FIXED RENT ACCRUAL RENT BASIC RENT
DATE (*) (1) (2) = (1) + (2)
-------- --- --- -----------
December 31, 2004 0.231213% 0.182810% 0.414023%
December 30, 2005 6.052098% 4.742075% 10.794173%
December 29, 2006 6.339758% 4.454415% 10.794173%
December 31, 2007 6.606862% 4.187311% 10.794173%
December 31, 2008 6.934026% 3.860147% 10.794173%
December 31, 2009 7.275057% 3.519116% 10.794173%
December 31, 2010 7.621795% 3.172378% 10.794173%
December 30, 2011 7.992755% 2.801418% 10.794173%
December 31, 2012 8.352699% 2.441475% 10.794173%
December 31, 2013 8.764104% 2.030070% 10.794173%
December 17, 2014 33.829632% 1.550518% 35.380150%
---------- --------- ----------
Total 100.000000% 32.941733% 132.941733%
---------- --------- ----------
(*) Basic Rent is payable on the exact scheduled date before 10:00 a.m., New
York City time
MASTER LEASE
APPENDIX A
TO MASTER LEASE
A. Interpretation. In each Operative Document, unless a clear contrary
intention appears:
(i) the singular number includes the plural number and vice versa;
(ii) reference to any Person includes such Person's successors and assigns
but, if applicable, only if such successors and assigns are permitted by the
Operative Documents, and reference to a Person in a particular capacity excludes
such Person in any other capacity or individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement, document or instrument (including any
Operative Document) means such agreement, document or instrument as amended or
modified and in effect from time to time in accordance with the terms thereof
and, if applicable, the terms of the other Operative Documents, and reference to
any promissory note includes any promissory note which is an extension or
renewal thereof or a substitute or replacement therefor;
(v) reference to any Applicable Law means such Applicable Law as amended,
modified, codified, replaced or reenacted, in whole or in part, and in effect
from time to time, including rules and regulations promulgated thereunder, and
reference to any section or other provision of any Applicable Law means that
provision of such Applicable Law from time to time in effect and constituting
the substantive amendment, modification, codification, replacement or
reenactment of such section or other provision;
(vi) reference in any Operative Document to any Article, Section,
Appendix, Schedule or Exhibit means such Article or Section thereof or Appendix,
Schedule or Exhibit thereto, and reference in any Section of any Operative
Document to any clause means such clause of such Section;
(vii) "hereunder," "hereof, "hereto" and words of similar import shall be
deemed references to an Operative Document as a whole and not to any particular
Article, Section or other provision thereof;
(viii) "including" (and with correlative meaning "include") means
including without limiting the generality of any description preceding such
term; and
(ix) with respect to any rights and obligations of the parties under the
Operative Documents, all such rights and obligations shall be construed to the
extent permitted by Applicable Law.
B. Computation of Time Periods. Unless otherwise specified in any
Operative Document, for purposes of computation of periods of time under the
Operative Documents, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding."
C. Accounting Terms and Determinations. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided,
however, that for purposes of determining compliance with any covenant set forth
in Section 10.1 or 10.2 of the Participation Agreement, such terms shall be
construed in accordance with GAAP as in effect on the Acquisition Date applied
on a basis consistent with the application used in preparing the Lessee's
audited financial statements referred to in Section 8.1(e)(i) of the
Participation Agreement; provided that, if the Lessee notifies the Lessor that
the Lessee requests an amendment to any
Appendix A
provision hereof to eliminate the effect of any change occurring after the
Acquisition Date in GAAP or in the application thereof on the operation of such
provision (or if the Lessor notifies the Lessee that the Investors request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith; provided further that GAAP as used in the Operative
Documents shall be applied without application of FAS 133.
D. Conflict in Operative Documents. If there is any conflict between any
Operative Documents, such Operative Documents shall be interpreted and
construed, if possible, so as to avoid or minimize such conflict but, to the
extent (and only to the extent) of such conflict, the Participation Agreement
shall prevail and control.
E. Legal Representation of the Parties. The Operative Documents were
negotiated by the parties with the benefit of legal representation and any rule
of construction or interpretation otherwise requiring the Operative Documents to
be construed or interpreted against any party shall not apply to any
construction or interpretation hereof or thereof.
F. Defined Terms. Unless a clear contrary intention appears, terms defined
herein have the respective indicated meanings when used in each Operative
Document.
"1940 Act" is defined in Section 8.1 of the Participation Agreement.
"Account" means the account identified by the Lessor in a writing
delivered to Lessee into which all payments by the Lessee under the Operative
Documents shall be made. The initial Account shall be specified on Schedule II
to the Participation Agreement.
"Accrual Rent" means the portion of Basic Rent that is described in
Section 3.5 of the Master Lease.
"Acquisition Date" is defined in Section 6.1 of the Participation
Agreement.
"Acquisition Date Notice" is defined in Section 3.4 of the Participation
Agreement.
"Affected Party" means the Lessor or any Investor.
"Affiliate" means, when used with respect to a specified person, another
person that directly or indirectly controls or is controlled by or is under
common control with the person specified.
"After Tax Basis" means, with respect to any payment to be received, the
amount of such payment increased so that, after deduction of the amount of all
taxes required to be paid by the recipient (less any tax savings realized and
the present value of any tax savings projected to be realized by the recipient
as a result of the payment of the indemnified amount) with respect to the
receipt by the recipient of such amounts, such increased payment (as so reduced)
is equal to the payment otherwise required to be made.
"Aggregate Original Property Cost" means the sum of the Original Property
Costs for all Leased Properties.
-2-
Appendix A
"Aggregate Property Cost" means, as of any date, the sum of the Property
Costs for all Leased Properties then subject to the Master Lease.
"Allocated Payments" means, with respect to any Leased Property, any
payment (or portion of any payment) applied to the Property Cost of such
Property pursuant to clause fifth of Section 7.2 of the Participation Agreement.
"Applicable Law" means all Federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions affecting any applicable Person, any Property, the
Improvements thereon or the demolition, construction, use or alteration thereof,
whether now or hereafter enacted and in force, including any that require
repairs, modifications or alterations in or to any Property or in any way
limited the use and enjoyment thereof (including all building, zoning and fire
codes and the Americans with Disabilities Act of 1990, 42 U.S.C. Section 1201 et
seq. and any other similar federal, state or local laws or ordinances and the
regulations promulgated thereunder) and any that may relate to environmental
requirements (including all Environmental Laws), and all permits, certificates
of occupancy, licenses, authorizations and regulations relating thereto, and all
covenants, agreements, restrictions and encumbrances contained in any
instruments that are of record affecting any Property, the Appurtenant Rights
and any easements, licenses or other agreements.
"Applicable Rate" means 4.700834% per annum.
"Appraisal" means, with respect to any Replacement Property, an appraisal
of the Fair Market Sales Value of such Replacement Property, which Appraisal
complies in all material respects with all of the provisions of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989, as amended, the rules
and regulations adopted pursuant thereto, and all other Applicable Law, and is
addressed to the Lessor. Each Appraisal shall be prepared by a qualified real
estate appraiser selected by the Lessor and reasonably acceptable to the Lessee.
"Appurtenant Rights" means, with respect to any Land or Property, (i) all
agreements, easements, rights of way or use, rights of ingress or egress,
privileges, appurtenances, tenements, and other rights and benefits at any time
belonging or pertaining to such Land or the Improvements thereon, including the
use of any streets, ways, alleys, vaults or strips of land adjoining, abutting,
adjacent or contiguous to such Land and (ii) all permits, licenses and rights,
whether or not of record, appurtenant to such Land and (iii) all of the Lessee's
right, title and interest in all general intangibles relating to the design,
development, operation, management and use of the applicable Property, all
certificates of occupancy, zoning variances, building, use or other permits,
approvals, authorizations and consents obtained from and all materials prepared
for filing or filed with any Governmental Authority in connection with the
development, use, operation or management of the applicable Property, all
construction, service, engineering, consulting, leasing, architectural and other
similar contracts concerning the design, construction, management, operation,
occupancy and/or use of the applicable Property, all architectural drawings,
plans, specifications, soil tests, feasibility studies, appraisals,
environmental studies, engineering reports and similar materials relating to any
portion of or all of the applicable Property, and all payment and performance
bonds or warranties or guarantees relating to the applicable Property, all to
the extent assignable.
"Arrangement Letter" means the letter agreement dated November 26, 2003
between Air Bail and the Lessee with respect to the engagement of Air Bail as
the arranger in connection with the transactions described therein.
"Arranger" means Air Bail S.A.S., in its capacity as arranger.
-3-
Appendix A
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy" as now or hereafter in effect or any successor thereto.
"Basic Rent" means, as determined on any date, the sum of (a) the amount
of accrued and unpaid Accrual Rent then due and (b) the amount of Fixed Rent due
and unpaid on such date.
"Board" means the Board of Governors of the Federal Reserve System of the
United States.
"Break Costs" means an amount equal to the amount, if any, required to
compensate an Affected Party for all losses, costs and expenses (including any
loss, cost or expense incurred by reason of any funding, hedging or other
contracts entered into by the Affected Party to fund its capital contribution to
the Lessor (in the case of an Investor) or its payment of the Property Costs (in
the case of the Lessor) or by reason of the liquidation or reemployment of
deposits or funds acquired by the Affected Party to fund its obligations under
the Operative Documents, but excluding loss of anticipated profit) it may incur
as a result of (x) the Lessee's payment of Rent other than on a Scheduled
Payment Date (except for Rent not due on a Scheduled Payment Date), (y) any
Property Cost not being paid by the Lessor on the date specified therefor in the
Acquisition Date Notice (other than as a result of a breach by an Investor of
its obligation under Section 4.02(a)(i) of the Lessor LLC Agreement to make
certain capital contributions to the Lessor) or (z) the Lessee's payment of the
Aggregate Property Cost, any Property Cost, any Termination Price or any
Termination Base Amount. A statement as to the amount of such loss, cost or
expense, prepared in good faith and in reasonable detail and submitted by an
Affected Party to the Lessee shall be correct and binding on the Lessee absent
manifest error.
"Business Day" means any day (other than a day which is a Saturday, Sunday
or legal holiday in the State of New York) on which banks are open for business
in New York City.
"Capitalized Lease-Back Obligation" means with respect to a Principal
Property, at any date as of which the same is to be determined, the total net
rental obligations of the Lessee or a Restricted Subsidiary under a lease of
such Principal Property, entered into as part of an arrangement to which the
provisions of Section 5.11 of the Existing Credit Agreement are applicable (or
would have been applicable had such Restricted Subsidiary been a Restricted
Subsidiary at the time it entered into such lease), discounted to the date of
computation at the rate of interest per annum implicit in the lease (determined
in accordance with GAAP). The amount of the net rental obligation for any
calendar year under any lease shall be the sum of the rental and other payments
required to be paid in such calendar year by the lessee thereunder, not
including, however, any amounts required to be paid by such lessee (whether or
not herein designated as rental or additional rental) on account of maintenance
and repairs, insurance, taxes, assessments, water rates and similar charges.
"Casualty" means any damage or destruction of all or any portion of any
Property as a result of a fire, flood, earthquake or other casualty.
"CERCLA" means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 42 U.S.C. Sections 9601 et seq., as amended by the
Superfund Amendments and Reauthorization Act of 1986.
"Certifying Party" is defined in Section 22.1 of the Master Lease.
"Change in Control" shall be deemed to have occurred if (a) any person or
group of persons shall have acquired beneficial ownership of more than 30% of
the outstanding Voting Shares of the Lessee (within the meaning of Section 13(d)
or 14(d) of the Exchange Act and the applicable rules and regulations
thereunder), or (b) during any period of 12 consecutive months, commencing after
the
-4-
Appendix A
Documentation Date, individuals who on the first day of such period were
directors of the Lessee (together with any replacement or additional directors
who were nominated or elected by a majority of directors then in office) cease
to constitute a majority of the Board of Directors of the Lessee.
"Claims" means any and all obligations, liabilities, losses, actions,
suits, judgments, penalties, fines, claims, demands, settlements, costs and
expenses (including reasonable legal fees and expenses) of any nature
whatsoever, but shall not include Taxes or Impositions.
"Clifton Property" means the Property located in Clifton, New Jersey and
described on Schedule III to the Participation Agreement.
"Code" means the Internal Revenue Code of 1986, as the same may be amended
from time to time.
"Commitment Percentage" means, with respect to any Investor, the
percentage set forth opposite such Investor's name under the heading "Commitment
Percentage" on Schedule I to the Participation Agreement, as such Schedule may
be amended, supplemented, amended and restated or otherwise modified from time
to time.
"Compliance with ISRA" is defined in Section 10.1(k) of the Participation
Agreement.
"Condemnation" means any condemnation, requisition, confiscation, seizure
or other taking or sale of the use, access, occupancy, easement rights or title
to any Property or any part thereof, wholly or partially (temporarily or
permanently), by or on account of any actual or threatened eminent domain
proceeding or other taking of action by any Person having the power of eminent
domain, including an action by a Governmental Authority to change the grade of,
or widen the streets adjacent to, such Property or alter the pedestrian or
vehicular traffic flow to such Property so as to result in change in access to
such Property, or by or on account of an eviction by paramount title or any
transfer made in lieu of any such proceeding or action. A "Condemnation" shall
be deemed to have occurred on the earliest of the dates that use, occupancy or
title vests in the condemning authority.
"Consolidated EBITDA" means, for any period, (a) Consolidated Net Income
for such period, plus (b) provisions for taxes based on income during such
period, plus (c) Consolidated Interest Expense for such period, plus (d) total
depreciation expense for such period, plus (e) total amortization expense for
such period, plus (f) restructuring charges recorded during such period minus
(g) cash expenditures during such period that are applied against restructuring
charges recorded during such period or any prior period, all of the foregoing as
determined on a consolidated basis for the Lessee and the Subsidiaries in
accordance with GAAP; provided there shall be excluded from such calculation the
net gains or losses associated with the sale of any asset not in the ordinary
course of business.
"Consolidated Interest Expense" means, for any period, the gross interest
expense of the Lessee and the Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, for any period, net income or loss of the
Lessee and the Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP.
"Consolidated Net Tangible Assets" means the total of all assets appearing
on a consolidated balance sheet of the Lessee and its Restricted Subsidiaries,
prepared in accordance with GAAP (and as of a date not more than 90 days prior
to the date as of which Consolidated Net Tangible Assets are to be determined),
less the sum of the following items as shown on said consolidated balance sheet:
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Appendix A
(i) the book amount of all segregated intangible assets, including
such items as good will, trademarks, trademark rights, trade names, trade
name rights, copyrights, patents, patent rights and licenses and
unamortized debt discount and expense less unamortized debt premium;
(ii) all depreciation, valuation and other reserves;
(iii) current liabilities;
(iv) any minority interest in the shares of stock (other than
Preferred Stock) and surplus of Restricted Subsidiaries of the Lessee;
(v) the investment of the Lessee and its Restricted Subsidiaries in
any Unrestricted Subsidiary of the Lessee;
(vi) the total indebtedness of the Lessee and its Restricted
Subsidiaries incurred in any manner to finance or recover the cost to the
Lessee or any Restricted Subsidiary of any physical property, real or
personal, which prior to or simultaneously with the creation of such
indebtedness shall have been leased by the Lessee or a Restricted
Subsidiary to the United States of America or a department or agency
thereof at an aggregate rental, payable during that portion of the initial
term of such lease (without giving effect to any options of renewal or
extension) which shall be unexpired at the date of the creation of such
indebtedness, sufficient (taken together with any amounts required to be
paid by the lessee to the lessor upon any termination of such lease) to
pay in full at the stated maturity date or dates thereof the principal of
and the interest on such indebtedness;
(vii) deferred income and deferred liabilities; and
(viii) other items deductible under GAAP.
"Deed" means a limited warranty deed (or its equivalent) with respect to
the real property comprising a Leased Property, in conformity with Applicable
Law and appropriate for recording with the applicable Governmental Authorities,
conveying fee simple title to such real property to the Lessor, subject only to
Permitted Property Liens.
"Documentation Date" is defined in Section 2.1 of the Participation
Agreement.
"DOD Restrictions" is defined in Section 10.1(j) of the Participation
Agreement.
"Dollars" and "$" mean dollars in lawful currency of the United States.
"Environmental Audit" means, with respect to any Property, a Phase I
Environmental Site Assessment (the scope and performance of which meets or
exceeds the then most current ASTM Standard practice E1527 for Environmental
Site Assessments: Phase I Environmental Site Assessment Process or the All
Appropriate Inquiry rule, whichever is in effect at the time the Phase I
Environmental Site Assessment is conducted) of each Property.
"Environmental Laws" means any and all applicable federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
permits, licenses, authorizations, decrees or other legal requirement
regulating, relating to or imposing liability or standards of conduct concerning
protection of human health, the environment, natural resources (including
ambient air, surface water, groundwater, wetlands and surface or subsurface
strata, wildlife, aquatic species and vegetation) and the use, storage,
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Appendix A
recycling, handling, disposal, discharge, transport, treatment or generation of
Hazardous Materials, as now or may at any time be in effect during the Lease
Term, including but not limited to, CERCLA, RCRA, the Clean Air Act, 42 USC
Section 7401 et seq., the Toxic Substances Control Act 15 USC Section 2601 et
seq. and any rules and regulations promulgated thereunder.
"Environmental Permit" means any consent, license, permit, permission,
grant, waiver, order, registration, authorization, approval, exemption or
similar right or privilege issued by any Governmental Authority pursuant to any
Environmental Law.
"Environmental Violation" means, with respect to any Property, any
activity, occurrence or condition that results in a notice of non-compliance
with any Environmental Law from any Governmental Authority.
"Equipment" means any equipment the removal of which could reasonably be
expected to affect the value or utility of any Land or Improvements, taken
together or separately, including heating, electrical, switch gear, power
supply, lighting, plumbing, ventilation, air conditioning and air cooling
systems, refrigerating equipment, generators, locking and unlocking equipment,
communication systems, sprinkler system and fire prevention systems, security
systems and fixtures of all kinds; provided, however, that the term "Equipment"
shall expressly exclude all inventory, furniture and furnishings.
"ERISA" means the Employee Retirement Income Security Act of 1974, as the
same may be amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Lessee, is treated as a single employer
under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder, with respect to a Plan; (b) the
adoption of any amendment to a Plan that would require the provision of security
pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (d) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (e) the incurrence of any liability under Title IV of ERISA
with respect to the termination of any Plan or the withdrawal or partial
withdrawal of the Lessee or any of its ERISA Affiliates from any Plan or
Multiemployer Plan; (f) the receipt by the Lessee or any ERISA Affiliate from
the PBGC or a plan administrator of any notice relating to the intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (g)
the receipt by the Lessee or any ERISA Affiliate of any notice that Withdrawal
Liability is being imposed or a determination that a Multiemployer Plan is, or
is expected to be, insolvent or in reorganization, within the meaning of Title
IV of ERISA; and (h) the occurrence of a "prohibited transaction" with respect
to which the Lessee or any of its Subsidiaries is a "disqualified person"
(within the meaning of Section 4975) of the Code, or with respect to which the
Lessee or any such Subsidiary could otherwise be liable.
"Event of Loss" means any Significant Casualty or any Significant
Condemnation.
"Excess Casualty/Condemnation Proceeds" is defined in Section 14.2(f) of
the Master Lease.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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Appendix A
"Existing Credit Agreement" means the Five-Year Competitive Advance and
Revolving Credit Facility Agreement dated as of November 10, 2000 among the
Lessee, the lenders named therein, The Chase Manhattan Bank, as issuing bank,
and The Chase Manhattan Bank, as administrative agent, as amended, supplemented,
amended and restated or otherwise modified from time to time.
"Expiration Date" means, with respect to the Master Lease, the earlier of
(a) the date the Master Lease shall have been terminated in accordance with the
provisions of the Master Lease and (b) the Scheduled Lease Termination Date.
"Expiration Date Purchase Obligation" means the Lessee's obligation,
pursuant to Section 18.1 of the Master Lease, to purchase all (but not less than
all) of the Leased Properties on the Expiration Date.
"Fair Market Sales Value" means, with respect to any Property, the amount,
which in any event shall not be less than zero, that would be paid in cash in an
arm's-length transaction between an informed and willing purchaser and an
informed and willing seller, neither of whom is under any compulsion to purchase
or sell, respectively, for the ownership of such Property.
"Fair Value", when used with respect to property, means the fair value as
determined in good faith by the board of directors of the Lessee.
"Fees" means the Structuring Fee described in Section 4.2 of the
Participation Agreement.
"Financial Officer" of any corporation means the chief financial officer,
principal accounting officer, treasurer, associate or assistant treasurer or
director of treasury services of such corporation.
"Fixed Rent" means, with respect to a Scheduled Payment Date, an amount
equal to (a) the sum of the Original Property Costs for each Leased Property
then subject to the Master Lease multiplied by (b) the percentage set forth on
Schedule I to the Master Lease under the column heading "Fixed Rent" for such
Scheduled Payment Date.
"Funding Office" means the office of each Investor identified on Schedule
II to the Participation Agreement as its funding office.
"GAAP" means United States generally accepted accounting principles,
applied on a consistent basis.
"Go Dark Value" means (a) with respect to any Leased Property acquired by
the Lessor on the Acquisition Date or any Mortgaged Property upon which a Lien
is granted to the Lessor on the Acquisition Date, the amount set forth on
Schedule III to the Participation Agreement as the "Go Dark Value of such
Property" and (b) with respect to any Replacement Property, an amount equal to
(x) the sum of the Go Dark Values of the applicable Terminated Properties
relating to such Replacement Property multiplied by (y) a fraction, the
numerator of which is the Fair Market Sales Value of such Replacement Property
as set forth in the Property Appraisal thereof and the denominator of which is
the aggregate Fair Market Sales Value of all Replacement Properties (including
such Replacement Property) acquired by or mortgaged to the Lessor on the same
Replacement Date as such Replacement Property and with respect to the same
Terminated Properties, in each case as set forth in the Property Appraisal
thereof.
"Governmental Action" means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgments, written
interpretations, decrees, licenses, exemptions, publications, filings, notices
to and declarations of or with, or required by, any Governmental Authority,
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Appendix A
or required by any Applicable Law, including all Environmental Permits,
operating permits and licenses that are required for the full use, occupancy,
zoning and operation of any Property.
"Governmental Authority" means any Federal, state, local or foreign court
or governmental agency, authority, instrumentality or regulatory body.
"Hazardous Activity" means any activity, process, procedure or undertaking
that directly or indirectly (i) produces, generates or creates any Hazardous
Material; (ii) causes or results in (or threatens to cause or result in) the
Release of any Hazardous Material into the environment (including air, water
vapor, surface water, groundwater, drinking water, land (including surface or
subsurface), plant, aquatic and animal life); (iii) involves the containment or
storage of any Hazardous Material; or (iv) would be regulated as hazardous waste
treatment, storage or disposal within the meaning of any Environmental Law.
"Hazardous Materials" means any hazardous, toxic or dangerous materials,
explosives, substances, contaminants, chemicals, wastes or pollutants that from
time to time are defined by or pursuant to or are regulated under any
Environmental Laws, including asbestos, polychlorinated biphenyls, petroleum,
petroleum derivatives or by-products, other hydrocarbons, urea formaldehyde and
any material, substance, pollutant or waste that is now or hereafter defined,
prohibited, limited or regulated in any way under any Environmental Law.
"Impositions" means any and all liabilities, losses, expenses and costs of
any kind whatsoever for fees, taxes, levies, imposts, duties, charges,
assessments or withholdings of any nature whatsoever (all of the foregoing being
defined as "Taxes") (including: (i) real and personal property taxes, including
personal property taxes on any property covered by the Master Lease that is
classified by Governmental Authorities as personal property, and real estate or
ad valorem taxes in the nature of property taxes; (ii) sales taxes, use taxes
and other similar taxes (including rent taxes and intangibles taxes); (iii) any
excise taxes; (iv) real estate transfer taxes, conveyance taxes, mortgage taxes,
intangible taxes, stamp taxes and documentary recording taxes and fees; (v)
taxes that are or are in the nature of franchise, income, value added, gross
receipts, privilege and doing business taxes, license and registration fees;
(vi) assessments on any Property, including all assessments for public
improvements or benefits (whether or not such improvements are commenced or
completed within the Lease Term); (vii) all filing and reporting fees and
expenses relating thereto, for such Property; and (viii) all interest, additions
to tax and penalties), in each case that at any time may be levied, assessed or
imposed by any U.S. Federal, state or local authority upon or with respect to
(a) any Tax Indemnitee, any Property or any part thereof or interest therein, or
the Lessee or any sublessee or user of any Property; (b) the financing,
refinancing, demolition, construction, substitution, subleasing, assignment,
control, condition, occupancy, servicing, maintenance, repair, ownership,
possession, purchase, rental, lease, activity conducted on, delivery, insuring,
use, operation, improvement, transfer, return or other disposition of any
Property or any part thereof or interest therein; (c) the Property Cost, the
Termination Price or other indebtedness with respect to any Property or any part
thereof or interest therein or transfer thereof; (d) the rentals, receipts or
earnings arising from any Property or any part thereof or interest therein; (e)
the Operative Documents or any payment made or accrued pursuant thereto; (f) the
income or other proceeds received with respect to any Property or any part
thereof or interest therein upon the sale or disposition thereof; (g) any
contract relating to the construction, acquisition or delivery of the
Improvements or any part thereof or interest therein; (h) the issuance of the
Lessor Interests and payments and distributions with respect thereto; or (i)
otherwise in connection with the transactions contemplated by the Operative
Documents.
For the avoidance of doubt, the term "Imposition" also includes any Taxes
that are imposed by the government of France with respect to any period
occurring on or after the fifth anniversary of the
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Appendix A
Documentation Date as a result of a change after the Acquisition Date in the
participation exemption regime applicable under the laws of France.
Notwithstanding anything in the first paragraph of this definition (except
as provided in the final paragraph of this definition) the term "Imposition"
shall not mean or include:
(i) Taxes (other than Taxes that are, or are in the nature of,
withholding, sales, use, rental, value added transfer or property taxes)
that are imposed by the U.S. federal government and that are based upon or
measured by or with respect to the net income (including any minimum
taxes, capital gains taxes, or taxes on, measured by or with respect to or
in the nature of capital, net worth, excess profits, items of tax
preference and capital stock) of any Tax Indemnitee; provided, that this
clause (i) shall not be interpreted to prevent a payment from being made
on an After Tax Basis if such payment is otherwise required to be so made
and provided, further, that Taxes described in this clause (i) shall not
include Taxes that are, or are in the nature of, withholding, sales, use,
rental, value added, transfer or property taxes;
(ii) Taxes (other than Taxes that are, or are in the nature of,
withholding, sales, use, rental, value added, transfer or property taxes)
that are (A) imposed by any U.S. state jurisdiction or any taxing
authority within any U.S. state jurisdiction to the extent that such Tax
Indemnitee is organized or has its Funding Office in such jurisdiction and
(B) based upon or measured by income, except that this clause (ii) shall
not apply to (and thus shall not exclude) any such Taxes imposed on a Tax
Indemnitee by a state or political subdivision thereof where any Property
is located, possessed or used under the Master Lease unless the Tax
Indemnitee was subject to income taxes in such jurisdiction without regard
to the transactions contemplated by the Operative Documents; provided,
that this clause (ii) shall not be interpreted to prevent a payment from
being made on an After Tax Basis if such payment is otherwise required to
be so made;
(iii) Taxes that are imposed by the government of France with
respect to any period occurring prior to the fifth anniversary of the
Documentation Date as a result of a change after the Acquisition Date in
the participation exemption regime applicable under the laws of France;
(iv) any Tax with respect to any Property to the extent, but only to
such extent, it relates to any act, event or omission that occurs, or
relates to a period, after the termination of the Master Lease and the
payment of all Obligations, except that when such termination of the
Master Lease is the result of the exercise of remedies after a Lease Event
of Default, such exclusion shall commence only after the sale of all of
the Lessor's interest in all of the Leased Properties and the foreclosure
by the Lessor on all of the Lessee's interests in the Mortgaged
Properties; provided, that the Taxes described in this clause (iv) shall
not include any Tax or Imposition that relates to any period prior to the
expiration or earlier termination of the last Lease Term to expire or
otherwise terminate;
(v) any interest or penalties imposed on a Tax Indemnitee as a
result of a Tax Indemnitee's failure to file any return or other documents
timely and as prescribed by Applicable Law; provided, that this clause
(iv) shall not apply (A) if such interest or penalties arise as a result
of a position taken (or requested to be taken) by the Lessee in a contest
controlled by the Lessee under Section 13.4(b) of the Participation
Agreement or (B) if such failure is attributable to a failure by the
Lessee to fulfill its obligations under the Participation Agreement and
other Operative Documents;
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Appendix A
(vi) any Taxes imposed upon a Tax Indemnitee with respect to any
voluntary transfer, sale, financing or other voluntary disposition of any
interest in any Property or any part thereof, or any interest therein or
any interest or obligation under the Operative Documents or from any sale,
assignment, transfer or other disposition of any interest in a Tax
Indemnitee or any Affiliate thereof (other than any transfer, sale or
other disposition (A) pursuant to the terms of the Operative Documents in
connection with the exercise by the Lessee of its Termination Option,
Replacement Option or Return Option or any other purchase of any Property
by the Lessee or any release or termination of any Lessor Mortgage by the
Lessor at the request of the Lessee, (B) after the occurrence of a Lease
Event of Default, (C) in connection with a Casualty or Condemnation
affecting any Property or (D) in connection with any sublease (or lease,
in the case of a Mortgaged Property), modification or addition to any
Property by the Lessee);
(vii) any Taxes imposed against or payable by a Tax Indemnitee to
the extent resulting from, or that would not have been imposed but for,
the gross negligence or willful misconduct of such Tax Indemnitee;
(viii) Taxes imposed on or payable by a Tax Indemnitee to the extent
such Taxes solely result from, or would not have been imposed solely but
for, a breach by such Tax Indemnitee of any representations, warranties or
covenants set forth in the Operative Documents (unless such breach is
caused by the Lessee's breach of its representations, warranties or
covenants set forth in the Operative Documents);
(ix) Taxes imposed on a Tax Indemnitee to the extent resulting from
such Tax Indemnitee's failure to comply with the provisions of Section
13.4(b) of the Participation Agreement, which failure precludes the
ability to conduct a contest pursuant to Section 13.4(b) of the
Participation Agreement (unless such failure is caused by the Lessee's
breach of its obligations under the Operative Documents);
(x) Taxes that would have been imposed in the absence of the
transactions contemplated by the Operative Documents;
(xi) Taxes imposed on or with respect to or payable by a Tax
Indemnitee solely resulting from, or that would not have been imposed
solely but for the existence of, any Lessor Lien created by or through
such Tax Indemnitee or an Affiliate thereof, unless caused by acts or
omissions of the Lessee;
(xii) Taxes imposed on or with respect to or payable by a Tax
Indemnitee that would not have been imposed but for an amendment,
supplement, modification, consent or waiver to any Operative Document not
initiated, requested or consented to by the Lessee, unless such amendment,
supplement, modification, consent or waiver (A) arises due to, or in
connection with there having occurred a Lease Event of Default or (B) is
required by the terms of the Operative Documents or is executed in
connection with any amendment to the Operative Documents required by
Applicable Law;
(xiii) any Tax imposed against or payable by a Tax Indemnitee that
is a direct or indirect transferee or assignee of an original Tax
Indemnitee to the extent that, based on the Applicable Law in effect on
the date such Tax is imposed or becomes payable, the amount of such Tax
exceeds the amount of such Tax that would have been imposed against or
payable by such original Tax Indemnitee;
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Appendix A
(xiv) any fines, penalties, interest or costs for nonpayment or late
payment of any Tax resulting from a failure by the Lessor to provide
notice to the Lessee of any tax assessment, levy, duty or other bill
within the time period required by Section 17.2 of the Master Lease; and
(xv) Taxes that are or are in the nature of franchise, income, value
added, gross receipts, privilege or doing business taxes and are imposed
by any taxing jurisdiction where the applicable Tax Indemnitee's
activities other than its participation in the transactions contemplated
by the Participation Agreement, the Master Lease and the Lease Supplements
have created or could create taxable nexus.
Notwithstanding the foregoing, the exclusions from the definition of
Impositions set forth in clauses (i) through (xv) (other than clause (iii))
above shall not apply to any Taxes or any increase in Taxes imposed on a Tax
Indemnitee as the result of any non-superseded determination by the applicable
taxing authority that the transactions contemplated by the Operative Documents
should be treated other than as a financing arrangement tantamount to a loan
secured by the Properties for the relevant jurisdiction's tax purposes.
"Improvements" means all buildings, structures, fixtures, Equipment and
other improvements of every kind existing at any time and from time to time on
or under any parcel of Land to be acquired or leased pursuant to the terms of
the Operative Documents, together with any and all appurtenances to such
buildings, structures or improvements, including sidewalks, utility pipes,
conduits and lines, parking areas and roadways, and including all Modifications
and other additions to or changes in the Improvements at any time; provided
however that the term "Improvements" shall expressly exclude all trade fixtures
purchased or otherwise acquired by the Lessee using funds other than the
proceeds of the Property Costs.
"Indebtedness" of any Person means all indebtedness representing money
borrowed or the deferred purchase price of property (other than trade accounts
payable) or any capitalized lease obligation, which in any case is created,
assumed, incurred or guaranteed in any manner by such corporation or for which
such corporation is responsible or liable (whether by agreement to purchase
indebtedness of, or to supply funds to or invest in, others or otherwise).
"Indemnitee" means the Lessor, the Lessor Administrator, each Investor,
the Arranger, their respective Affiliates and their respective successors,
assigns, directors, shareholders, partners, members, officers, employees and
agents.
"Insurance Requirements" means the terms and conditions of any insurance
policy, and the requirements of the issuer of any such policy, which insurance
policy is required to be maintained by the Lessee under the Master Lease, in
each case the failure to comply with which terms, conditions and/or requirements
would under applicable law or the terms of such insurance policy constitute a
valid defense to the insurer against payment of insurance proceeds thereunder.
"Investors" means, collectively, Air Bail S.A.S., a French corporation
duly registered as a Societe par Actions Simplifiee, and RBS Lombard, Inc., a
New York corporation.
"IRS" is defined in Section 2.1(m) of the Participation Agreement.
"ISRA" means the New Jersey Industrial Site Recovery Act, N.J.S.A. 13:K
and its implementing regulations N.J.A.C. 7:26 B.
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Appendix A
"Land" means each individual fee interest in real property described on
Schedule I to each Lease Supplement or described in a Lessor Mortgage that is
not also a Lease Supplement, together with, in each case, all Appurtenant Rights
attached thereto.
"Lease" means, collectively, the Master Lease and each Lease Supplement.
"Lease Balance" means, as of any date of determination, an amount equal to
the aggregate Termination Prices for all Properties plus all accrued and unpaid
Accrual Rent and all Supplemental Rent then owing (after giving effect to the
consummation of any termination, purchase or other transaction occurring on such
date pursuant to the Operative Documents).
"Lease Default" means any event or condition that, with the lapse of time
or the giving of notice, or both, would constitute a Lease Event of Default.
"Leased Property" means, on any date, each real property then leased by
the Lessor to the Lessee pursuant to the Master Lease, including each parcel of
Land described on a Schedule I to a Lease Supplement and all of the Improvements
at any time located on or under such Land and including, until any such Property
is terminated or replaced in accordance with the Master Lease, each real
property described as a "Leased Property" on Schedule III to the Participation
Agreement.
"Lease Event of Default" is defined in Section 16.1 of the Master Lease.
"Lease Supplement" means each Lease Supplement substantially in the
applicable form set forth in Exhibit A to the Master Lease, executed by the
Lessee, the Lessor and, if appropriate in the applicable jurisdiction, the
trustee described therein, dated the Acquisition Date or a Replacement Date and
covering the Land identified on Schedule I thereto and Improvements thereon, as
the same may be amended, supplemented, amended and restated or otherwise
modified from time to time.
"Lease Term" means, with respect to each Property, the period commencing
on (and including) the Acquisition Date for such Property (or, if such Property
is a Replacement Property, the Replacement Date for such Property) and ending on
(but excluding) the earlier of (x) the date on which such Property has been
returned to the Lessor pursuant to the Lessee's Return Option or transferred to
the Lessee pursuant to the Lessee's Termination Option or Replacement Option, in
each case, strictly in accordance with the Master Lease, and (y) the Expiration
Date.
"Lessee" means ITT Industries, Inc., an Indiana corporation.
"Lessee Subsidiary" means a subsidiary of the Lessee.
"Lessor" means Rexus L.L.C., a Delaware limited liability company.
"Lessor Administration Agreement" means the Lessor Administration
Agreement, dated as of December 15, 2004, between the Lessor and the Lessor
Administrator.
"Lessor Administrator" means Societe Generale (Canada), wholly-owned
(directly or indirectly) by Societe Generale.
"Lessor Commitment Amount" means, on any date, $120,000,000.
"Lessor Financing Statements" means UCC financing statements appropriately
completed and executed for filing in the applicable jurisdiction in order to
protect the Lessor's interests under the Master
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Appendix A
Lease and each Lease Supplement to the extent the Master Lease and the Lease
Supplements are security agreements.
"Lessor Interest" means an "Interest" as defined in the Lessor LLC
Agreement.
"Lessor Lien" means any Lien arising as a result of (a) any claim against
the Lessor or any Investor not resulting from the transactions contemplated by
the Operative Documents, (b) any act or omission of the Lessor or any Investor
that is not required or permitted by the Operative Documents or is in violation
of any of the terms of the Operative Documents or (c) any claim against the
Lessor or any Investor with respect to Taxes or Transaction Expenses against
which the Lessee is not required to indemnify such Person pursuant to Article IX
or XIII of the Participation Agreement.
"Lessor LLC Agreement" means the Limited Liability Company Agreement of
Rexus L.L.C. dated as of December 15, 2004, made and entered into by the
Investors.
"Lessor Mortgage" means, with respect to each Property, the applicable
Lease Supplement for such Property (if such Property is a Leased Property) and
any and all other mortgages, deeds of trust and security instruments in
appropriate recordable form in the relevant jurisdiction sufficient to grant to
the Lessor a first priority Lien on such Property.
"Lien" means, with respect to any property or asset, any mortgage, deed of
trust, lien, pledge, security interest, charge or other encumbrance on, of, or
in such property or asset.
"Margin Regulations" means Regulations T, U and X of the Board as from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Margin Stock" has the meaning given such term under Regulation U of the
F.R.S. Board.
"Master Lease" means the Master Lease and Deed of Trust, Deed to Secure
Debt and Mortgage, dated as of December 15, 2004, between the Lessor and the
Lessee, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time.
"Material Adverse Effect" means a materially adverse effect on the
business, assets, operations or condition, financial or otherwise, of the Lessee
and Lessee Subsidiaries taken as a whole.
"Modifications" is defined in Section 10.1 of the Master Lease.
"Moody's" means Moody's Investors Service, Inc. or any of its successors.
"Mortgaged Property" means, on any date, each real property that is then
subject to a Lessor Mortgage and is not a Leased Property, including, until any
such Property is terminated or replaced in accordance with the Master Lease,
each real property described as a "Mortgaged Property" on Schedule III to the
Participation Agreement.
"Mortgage Foreclosure Act" is defined in Section 16.4 of the Master Lease.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which the Lessee or any ERISA Affiliate (other than one
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Code
Section 414) is making or accruing an obligation to make contributions, or has
within any of the preceding five plan years made or accrued an obligation to
make contributions.
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Appendix A
"Net Proceeds" means the aggregate of all awards, compensation, insurance
proceeds or other amounts received by the Lessor or any Investor in connection
with any Casualty or Condemnation of any Property and all interest earned
thereon, less, to the extent not previously reimbursed by the Lessee, the
expense of claiming and collecting such amounts, including all costs and
expenses in connection therewith for which the Lessor or any Investor is
entitled to be reimbursed pursuant to the Lease.
"NFA Letter" is defined in Section 10.1(k) of the Participation Agreement.
"NJDEP" means the New Jersey Department of Environmental Protection.
"Non-U.S. Transferee" is defined in Section 12.3 of the Participation
Agreement.
"Obligations" means all obligations (monetary or otherwise) of the Lessee
arising under or in connection with any of the Operative Documents.
"Operative Documents" means the following:
(a) the Participation Agreement;
(b) the Master Lease;
(c) each Lease Supplement;
(d) the Lessor LLC Agreement;
(e) the Lessor Administration Agreement;
(f) each Deed;
(g) each Lessor Mortgage;
(h) the Lessor Financing Statements; and
(i) each other document, agreement, certificate or instrument
delivered in connection with any of the foregoing (including any amendment
or other modification to any of the foregoing).
"Original Executed Counterpart" is defined in Section 26.9 of the Master
Lease.
"Original Property Cost" means (a) with respect to any Leased Property
acquired by the Lessor on the Acquisition Date, the amount set forth on Schedule
III to the Participation Agreement as the "Original Property Cost" of such
Property and (b) with respect to any Replacement Property that is or is to be a
Leased Property, an amount equal to (x) the sum of the Original Property Costs
of the applicable Terminated Properties relating to such Replacement Property
multiplied by (y) a fraction, the numerator of which is the Fair Market Sales
Value of such Replacement Property as set forth in the Property Appraisal
thereof and the denominator of which is the aggregate Fair Market Sales Value of
all Replacement Properties (including such Replacement Property) acquired by the
Lessor on the same Replacement Date as such Replacement Property and with
respect to the same Terminated Properties, in each case as set forth in the
Property Appraisal thereof.
-15-
Appendix A
"Overdue Rate" means, for each applicable day, a rate per annum equal to
the Overnight LIBOR for such day plus 200 basis points.
"Overnight LIBOR" means, on any day, the rate appearing on Page 3750 of
the Telerate Service (or on any successor or substitute page of such Service, or
any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Lessor from time to time for purposes of providing quotations
of interest rates applicable to dollar deposits in the London interbank market)
at approximately 11:00 a.m., London time, two Business Days prior to such day,
as the rate for overnight dollar deposits on such day.
"Partial Termination Date" is defined in Section 15.2 of the Master Lease.
"Partial Termination Notice" is defined in Section 15.1 of the Master
Lease.
"Participation Agreement" means the Participation Agreement, dated as of
December 15, 2004, among the Lessee, the Lessor and the Investors, as the same
may be amended, supplemented, amended and restated or otherwise modified from
time to time.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"Permitted Property Liens" means, with respect to any Property, any of the
following:
(i) the respective rights and interests of the parties to the
Operative Documents as provided in the Operative Documents (including any
Lien created pursuant to the Operative Documents);
(ii) the rights of any sublessee under a sublease and, in the case
of a Mortgaged Property, the rights of any lessee under a lease, in each
case to the extent such sublease or lease is permitted by the terms of the
Master Lease;
(iii) Liens for Taxes that either are not yet due or are being
contested in accordance with the provisions of Section 12.1 of the Master
Lease;
(iv) Liens arising by operation of law, materialmen's, mechanics',
workers', repairmen's, employees', carriers', warehousemen's and other
like liens in connection with any Modifications made subsequent to the
Acquisition Date or arising in the ordinary course of business in
connection with actions occurring after the Acquisition Date for amounts
that either are not more than sixty (60) days past due or are being
diligently contested in good faith by appropriate proceedings, so long as
such proceedings satisfy the conditions for the contest proceedings set
forth in Section 12.1 of the Master Lease;
(v) Liens of any of the types referred to in clause (iii) or (iv)
above that have been bonded for not less than the full amount in dispute
(or as to which other security arrangements satisfactory to the Lessor
have been made), which bonding (or arrangements) complies with Applicable
Law and has effectively stayed any execution or enforcement of such Liens;
(vi) Liens arising out of judgments or awards with respect to which
appeals or other proceedings for review are being prosecuted in good faith
and for the payment of which adequate reserves have been provided as
required by GAAP or other appropriate provisions have been made, so long
as such proceedings have the effect of staying the execution of such
judgments or
-16-
Appendix A
awards and satisfy the conditions for contest proceedings set forth in
Section 12.1 of the Master Lease;
(vii) easements, licenses, rights-of-way and other encumbrances on
title to real property permitted pursuant to Section 11.2 of the Master
Lease;
(viii) Lessor Liens;
(ix) Liens created by the Lessee with the consent of the Lessor or
otherwise permitted by the Operative Documents; and
(x) any Liens described on the applicable Lease Supplement that are
consented to by the Lessor in its sole discretion.
"Person" shall mean an individual, partnership, limited liability company,
corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof.
"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 307 of ERISA, and in respect of which the Lessee or any ERISA
Affiliate is (or, if such plans were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Plans and Specifications" means, with respect to each Property, the final
plans and specifications or detailed construction drawings for such Property.
"Preferred Stock" means any capital stock entitled by its terms to a
preference (a) as to dividends or (b) upon a distribution of assets.
"Principal Property" means any single manufacturing or processing facility
owned by the Lessee or any Restricted Subsidiary having a gross book value in
excess of the greater of (i) 5% of Consolidated Net Tangible Assets and (ii)
$40,000,000, except any such facility or portion thereof which the board of
directors of the Lessee by resolution declares is not of material importance to
the total business conducted by the Lessee and its Restricted Subsidiaries as an
entirety.
"Property" means any Leased Property or any Mortgaged Property; and
"Properties" means all Leased Properties and all Mortgaged Properties,
collectively.
"Property Appraisal" means, with respect to any Replacement Property, the
Appraisal thereof delivered pursuant to Section 19.2 of the Master Lease.
"Property Cost" means, with respect to any Leased Property as of any date,
(a) the Original Property Cost for such Property less (b) the aggregate Property
Fixed Rent paid by the Lessee prior to such date for such Leased Property and,
if such Property is a Replacement Property, the aggregate Property Fixed Rent
paid with respect to the Property so replaced (to the extent allocable to such
Leased Property) less (c) any Allocated Payments paid with respect to such
Property.
"Property Fixed Rent" means the portion of Fixed Rent due on any Scheduled
Payment Date that is allocable to any particular Leased Property, with such
allocation to be made by the Lessor based on the ratio of the Property Cost of
such Property to the Aggregate Property Cost (in each case determined prior to
such payment of Fixed Rent on such Scheduled Payment Date).
-17-
Appendix A
"Purchase Option" is defined in Section 18.1 of the Master Lease.
"Rating Agencies" means Moody's and S&P.
"Ratings" means the ratings from time to time established by the Rating
Agencies for senior, unsecured, non-credit-enhanced long-term debt of the
Lessee.
"RCRA" means the Resource Conservation and Recovery Act of 1976, as
amended by the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C. Sections
6901 et seq.
"Recognized Environmental Condition" means the presence or likely presence
of any Hazardous Materials or petroleum products on a property under conditions
that indicate an existing Release, a past Release or a material threat of a
Release of any Hazardous Material or petroleum products into structures on the
property or into the ground, groundwater or surface water of the property.
"Release" means any release, pumping, pouring, emptying, injecting,
escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal,
depositing, dispersal, migration or emission into the indoor or outdoor
environment, including the movement of Hazardous Materials through ambient air,
soil, surface water, groundwater, wetlands, land or subsurface strata.
"Remedial Action" means (a) "remedial action" as such term is defined in
CERCLA, and (b) all other actions required by any Governmental Authority or
voluntarily undertaken to: (i) clean up, remove, treat, abate or in any other
way address any Hazardous Materials in the environment; (ii) prevent the Release
or threat of Release, or minimize the further Release, of any Hazardous
Materials so that it does not migrate or endanger or threaten to endanger public
health, welfare or the environment; or (iii) perform studies and investigations
in connection with, or as a precondition to, any action described in clause (i)
or (ii) above.
"Remediation In Progress Waiver" means the waiver described in Section
6.1(j) of the Participation Agreement.
"Rent" means, collectively, the Basic Rent and the Supplemental Rent, in
each case payable under the Master Lease.
"Rent Period" means each period commencing on (but excluding) a Scheduled
Payment Date (or, in the case of the initial Rent Period, commencing on (and
including) the Acquisition Date) and ending on (and including) the next
succeeding Scheduled Payment Date.
"Replacement Date" is defined in Section 19.2(a) of the Master Lease.
"Replacement Notice" is defined in Section 19.2(a) of the Master Lease.
"Replacement Option" is defined in Section 19.2 of the Master Lease.
"Replacement Property" is defined in Section 19.2(a) of the Master Lease.
"Requesting Party" is defined in Section 22.1 of the Master Lease.
"Required Modification" is defined in Section 10.1 of the Master Lease.
-18-
Appendix A
"Responsible Officer" of any corporation means any executive officer or
the chief financial officer, principal accounting officer or treasurer of such
corporation and any other officer or similar official thereof responsible for
the administration of the obligations of such corporation in respect of the
Operative Documents.
"Responsible Officer's Certificate" means a certificate signed by any
Responsible Officer, which certificate shall certify as true and correct the
subject matter being certified to in such certificate.
"Restricted Subsidiary" means any Lessee Subsidiary other than an
Unrestricted Subsidiary.
"Return Conditions" is defined in Section 20.1 of the Master Lease.
"Return Option" is defined in Section 20.1 of the Master Lease.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any of its successors.
"Sale Termination Event" is defined in clause (iii) of Section 19.1(a) of
the Master Lease.
"Scheduled Lease Termination Date" means December 17, 2014.
"Scheduled Payment Date" means each December 31 of each calendar year and
the Scheduled Lease Termination Date, or if any such day is not a Business Day,
the immediately preceding Business Day.
"SEC" means the Securities and Exchange Commission or any Governmental
Authority succeeding to any of its principal functions.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Seller" means, with respect to any Leased Property, the Lessee or, with
the consent of the Lessor, any other Person transferring such Property to the
Lessor on the Acquisition Date.
"Significant Casualty" with respect to a Property means a Casualty that in
the reasonable, good faith judgment of the Lessor (a) renders such Property
unsuitable for continued use in accordance with its intended use or (b) is so
substantial in nature that restoration of such Property to substantially its
condition as it existed immediately prior to such Casualty would be
impracticable or impossible.
"Significant Condemnation" with respect to a Property means (a) a
Condemnation that involves a taking of the Lessor's entire title to the Land or
Improvements, or (b) a Condemnation that in the reasonable, good faith judgment
of the Lessor (i) renders such Property unsuitable for continued use in
accordance with its intended use or (ii) is so substantial in nature that
restoration of the remaining portion of such Property to substantially its
condition as it existed immediately prior to such Condemnation would be
impracticable or impossible.
"Structuring Fee" means the "Arrangement Fee" payable to the Arranger and
described in the Arrangement Letter.
"Subject Property" is defined in each Lease Supplement and, as used in the
Participation Agreement and the Master Lease, means each applicable Property (x)
being acquired by the Lessor on the
-19-
Appendix A
applicable Acquisition Date or Replacement Date or (y) being mortgaged by the
Lessee to the Lessor on the applicable Acquisition Date or Replacement Date.
"Subsidiary" means, with respect to any person (the "parent"), any
corporation, association or other business entity of which securities or other
ownership interests representing more than 50% of the ordinary voting power are,
at the time as of which any determination is being made, owned or controlled by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.
"Supplemental Rent" means all amounts, liabilities and obligations (other
than Basic Rent) that the Lessee assumes or agrees to pay to the Lessor, any
Investor or the Arranger under any of the Operative Documents, including amounts
for rent, taxes and insurance, Fees, Break Costs, amounts due pursuant to
Article IX or XIII of the Participation Agreement and payments pursuant to
Section 15.2 of the Master Lease or Article XVIII, XIX or XX of the Master
Lease.
"Survey" means an ALTA/ACSM survey of the Subject Property (and all
Improvements thereon) (i) prepared by a surveyor or engineer licensed to perform
surveys in the jurisdiction in which such Subject Property is located, (ii)
dated (or redated) not earlier than six months prior to the date of delivery
thereof, (iii) complying in all respects with the minimum detail requirements of
the American Land Title Association as such requirements are in effect on the
date of preparation of such survey (including all Table A requirements) and (iv)
sufficient for a title company to remove all standard survey exceptions from a
title insurance policy (or commitment) relating to such Subject Property and
issue customary endorsements thereto.
"Tax Indemnitee" means the Lessor, the Lessor Administrator, each
Investor, the Arranger, their respective Affiliates and their respective
successors, assigns, directors, shareholders, partners, members, officers,
employees and agents.
"Taxes" is defined in the definition of Impositions.
"Terminated Property" is defined in Section 19.1(a) of the Master Lease.
"Termination Base Amount" means, with respect to any Property on any date,
an amount equal to (I) (a) 150% multiplied by (b) the Go Dark Value for such
Property multiplied by (c) the Aggregate Property Cost on such date divided by
(II) the Aggregate Original Property Cost on such date; provided, that any
reference in any Operative Document to the "unamortized" Termination Base Amount
of any Property shall mean 150% of the Go Dark Value for such Property.
"Termination Date" is defined in Section 19.1(a) of the Master Lease.
"Termination Event" is defined in Section 19.1(a) of the Master Lease.
"Termination Indemnity Amount" means with respect to any Property on any
date, (a) if such date occurs on or prior to the fifth anniversary of the
Acquisition Date, 1.0% of the Termination Base Amount of such Property and (b)
if such date occurs after the fifth anniversary of the Acquisition Date, 0.5% of
the Termination Base Amount of such Property; provided, however, that the
Termination Indemnity Amount shall be zero in the case of (x) the Lessee's
exercise of its Termination Option with respect to a Property that has suffered
an Event of Loss outside of the control of the Lessee and its Affiliates or (y)
the Lessee's exercise of its Termination Option with respect to all of the
Properties pursuant to clause (ii) of Section 19.1(a) of the Master Lease or (z)
the Lessee's purchase of all of the Properties during the continuance of a Lease
Event of Default described in clause (m), (o) or (p) of
-20-
Appendix A
Section 16.1 of the Lease the occurrence and continuance of which is outside of
the control of the Lessee and its Affiliates.
"Termination Notice" is defined in Section 19.1(a) of the Master Lease.
"Termination Option" is defined in Section 19.1(a) of the Master Lease.
"Termination Price" means, with respect to any Property on any date, the
sum of (a) the Termination Base Amount for such Property on such date plus (b)
the Termination Indemnity Amount (if any) for such Property on such date.
"Title Abstract" is defined in Section 6.1(e) of the Participation
Agreement.
"Title Insurance Policy" means a policy of title insurance issued by a
nationally recognized title insurance company that is rated no lower than "AA-"
(by S&P) and no lower than "Aa3" (by Moody's) and approved by the Lessor (which
approval shall not be unreasonably withheld or delayed), insuring the Lessor's
fee, leasehold or mortgagee interest (as applicable) in the applicable Property
and the first lien priority of (x) in the case of a Leased Property, the Master
Lease, the Lease Supplement and any other applicable Lessor Mortgage applicable
to such Property and (y) in the case of a Mortgaged Property, the Lessor
Mortgage applicable to such Property, and subject to no Liens (including any
easements, covenants, leases, agreements or other items), claims or lawsuits
except as may be approved in writing by the Lessor its sole discretion.
"Transaction Expenses" means all costs and expenses incurred in connection
with the preparation, execution and delivery of the Operative Documents and the
transactions contemplated by the Operative Documents including:
(a) the reasonable fees, out-of-pocket expenses and disbursements of
Jones Day, special counsel for Air Bail S.A.S., in negotiating the terms
of the Operative Documents and the other transaction documents, preparing
for the closings under (including the transactions contemplated to occur
on the Acquisition Date, each Termination Date and each Replacement Date),
and rendering opinions in connection with, the transactions contemplated
thereby and in rendering other services customary for counsel representing
parties to transactions of the types involved in the transactions
contemplated by the Operative Documents;
(b) (i) the reasonable fees, out-of-pocket expenses and
disbursements of special counsel for the Lessee, in negotiating the terms
of the Operative Documents and the other transaction documents, preparing
for the closings under, and rendering opinions in connection with, the
transactions contemplated thereby and in rendering other services in
connection with the transactions contemplated thereby customary for
counsel representing parties to transactions of the types involved in the
transactions contemplated by the Operative Documents, and the reasonable
fees, out-of-pocket expenses and disbursements of special counsel for the
Lessee in connection with the transactions contemplated to occur on each
Acquisition Date; and (ii) the reasonable fees, out-of-pocket expenses and
disbursements of local counsel for the Lessee in each applicable
jurisdiction in negotiating the terms of the Operative Documents and the
other transaction documents, preparing for the closings under, and
rendering opinions in connection with, the transactions contemplated to
occur on each Acquisition Date and in rendering other services in
connection with the transactions contemplated by the Operative Documents
which are customary for counsel representing parties to transactions of
the types involved in the transactions contemplated by the Operative
Documents;
-21-
Appendix A
(c) any and all Taxes and fees incurred in recording, registering or
filing any Operative Document or any other transaction document, any deed,
declaration, mortgage, security agreement, notice or financing statement
with any public office, registry or governmental agency required by the
Operative Documents in connection with the transactions contemplated by
the Operative Documents;
(d) all reasonable out-of-pocket expenses, disbursements and costs
of the Arranger, the Investors, the Lessor and the Lessor Administrator
paid or incurred in connection with the transactions contemplated by the
Operative Documents (including the transactions contemplated to occur on
the Acquisition Date, each Termination Date and each Replacement Date);
(e) all fees, premiums and escrow costs and other expenses relating
to title abstracts and the closings contemplated by the Operative
Documents;
(f) all expenses relating to Environmental Audits required to be
delivered pursuant to Section 6.1(c) of the Participation Agreement or
required to be delivered in connection with the Lessee's exercise of its
Replacement Option;
(g) all fees and other expenses relating to Appraisals delivered to
the Investors prior to the Acquisition Date or required to be delivered in
connection with the Lessee's exercise of its Replacement Option; and
(h) the Fees payable by the Lessee pursuant to the Participation
Agreement.
"Transactions" is defined in Section 8.1(b) of the Participation
Agreement.
"Uniform Commercial Code" and "UCC" means the Uniform Commercial Code as
in effect in any applicable jurisdiction.
"United States" or "U.S." means the United States of America.
"Unrestricted Subsidiary" means (a) any Lessee Subsidiary which has been
designated an Unrestricted Subsidiary by resolution of the board of directors of
the Lessee (which resolution has been communicated in a notice delivered by the
Lessee to the Lessor) as an Unrestricted Subsidiary, other than any such Lessee
Subsidiary as to which such a designation has been rescinded by resolution of
said board of directors and not hereafter, or after some subsequent such
rescission, restored by resolution of said board, or (b) any Lessee Subsidiary
50% or less of the Voting Shares of which is owned directly by the Lessee and/or
one or more Restricted Subsidiaries. A Lessee Subsidiary may not be designated
as (or otherwise permitted to become) an Unrestricted Subsidiary unless,
immediately after such Subsidiary becomes an Unrestricted Subsidiary, such
Lessee Subsidiary would not own any capital stock of, or hold any indebtedness
of, any Restricted Subsidiary. A designation as an Unrestricted Subsidiary may
not be rescinded (or an Unrestricted Subsidiary otherwise permitted to become a
Restricted Subsidiary) unless such Lessee Subsidiary (i) is not a party to any
lease which it would have been prohibited by the Participation Agreement from
entering into had it been a Restricted Subsidiary at the time it entered into
such lease, unless (x) such Lessee Subsidiary had not been a Restricted
Subsidiary prior to its entering into such lease, or (y) the property subject to
such lease shall be owned by the Lessee and/or one or more Lessee Subsidiaries,
or (z) such Lessee Subsidiary would not be prohibited by the Participation
Agreement from entering into such lease immediately after it becomes a
Restricted Subsidiary, and (ii) does not have outstanding upon any of its
property any mortgage, pledge or other lien which it would be prohibited by the
Participation Agreement from creating, suffering to be created, or assuming,
immediately after it becomes a Restricted Subsidiary.
-22-
Appendix A
"U.S. Transferee" is defined in Section 12.3 of the Participation
Agreement.
"Voting Shares" means, as to a particular corporation or other person,
outstanding shares of stock or other equity interests of any class of such
person entitled to vote in the election of directors, or otherwise to
participate in the direction of the management and policies, of such person,
excluding shares or interests entitled so to vote or participate only upon the
happening of some contingency.
"Withdrawal Liability" shall have the meaning given such term under Part I
of Subtitle E of Title IV of ERISA.
-23-
================================================================================
MORTGAGE,
SECURITY AGREEMENT AND FINANCING
STATEMENT (INCLUDING FIXTURE FILING),
AND
SUPPLEMENT
AND
SHORT FORM/MEMORANDUM OF LEASE
Dated as of December 15, 2004
between
REXUS L.L.C.,
as Lessor/Mortgagee
and
ITT INDUSTRIES, INC.,
as Lessee/Mortgagor
LOCATION OF MORTGAGED PROPERTY:
Street Address: 1919 West Cook Road
Fort Wayne, Indiana
County: Allen County, Indiana
Record and Return to:
Jones Day
222 East 41st Street
New York, NY 10017
Attention: Leonard C. Pojednic, Esq.
================================================================================
MORTGAGE, SECURITY AGREEMENT AND
FINANCING STATEMENT (INCLUDING FIXTURE FILING),
AND SUPPLEMENT AND SHORT FORM/MEMORANDUM OF LEASE
THIS MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT (INCLUDING
FIXTURE FILING), AND SUPPLEMENT AND SHORT FORM/MEMORANDUM OF LEASE (this
"Supplement") dated as of December 17, 2004, between REXUS L.L.C., a Delaware
limited liability company with an address at Societe Generale, New York Branch,
1221 Avenue of the Americas, New York, New York 10020 as the lessor/mortgagee
(the "Lessor/Mortgagee"), and ITT INDUSTRIES, INC., an Indiana corporation, with
an address at 4 West Red Oak Lane, White Plains, New York 10604, as
Lessee/Mortgagor (the "Lessee/Mortgagor").
WHEREAS, Lessor/Mortgagee and Lessee/Mortgagor have executed that certain
Master Lease and Deed of Trust, Deed to Secure Debt and Mortgage dated as of
December 14, 2004 (the "Master Lease");
WHEREAS the Lessor/Mortgagee is the owner of the land described on
Schedule I attached hereto (the "Land"), and wishes to lease the Land and lease
all Improvements now thereon or which hereafter may be constructed thereon to
the Lessee/Mortgagor;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Definitions; Interpretation. For purposes of this Supplement,
capitalized terms used herein and not otherwise defined herein or in Schedule IV
hereto shall have the meanings assigned to them in Appendix A to the Master
Lease, and the rules of interpretation set forth in such Appendix A shall apply
to this Supplement.
SECTION 2. The Properties. Effective upon the execution and delivery of
this Supplement by the Lessor/Mortgagee and the Lessee/Mortgagor, the Land, all
Improvements on the Land and all other improvements now on the Land or which
hereafter may be constructed thereon and all Appurtenant Rights with respect
thereto and all Equipment (collectively, the "Subject Property") shall be
subject to the terms and provisions of the Master Lease and the Lessor/Mortgagee
hereby grants, conveys, transfers and assigns to the Lessee/Mortgagor those
interests, rights, titles, estates, powers and privileges provided for in the
Master Lease with respect to the Subject Property.
SECTION 3. Amendments to Master Lease with Respect to Subject Property.
Effective upon the execution and delivery of this Supplement by the
Lessor/Mortgagee and the Lessee/Mortgagor, the following terms and provisions
shall apply to the Master Lease with respect to the Subject Property:
A. Short Form/Memorandum of Lease. The parties hereto set forth the
following information which shall constitute a short form or memorandum of the
Master Lease, as supplemented by this Supplement:
(a) The name and address of the Lessor/Mortgagee as set forth in
the Master Lease is:
Rexus L.L.C.
Societe Generale, New York Branch
1221 Avenue of the Americas
New York, New York 10020
Attention: President
(b) The name and address of the Lessee/Mortgagor as set forth in
the Master Lease is:
ITT Industries, Inc.
4 West Red Oak Lane
White Plains, New York 10604
Attention: _________________
(c) The lease to which this memorandum of lease pertains is the
Master Lease as supplemented by this Supplement and the other
Supplements.
(d) The leased premises are the Subject Property which includes
the Land more particularly described on Schedule I attached
hereto.
(e) The Lessor/Mortgagee acquired title to the Land by deed dated
on or about the date hereof and about to be recorded or filed
for record in the Allen County, Indiana Clerk's office.
(f) The term of the Master Lease shall commence on the date hereof
and shall expire on December 17, 2014 unless earlier
terminated in accordance with the terms of the Master Lease,
as supplemented by this Supplement.
(g) The Master Lease contains certain purchase rights and options
during the Lease Term pursuant to which the Lessee/Mortgagor
or its designee may acquire the Subject Property.
(h) In addition to those terms referred to herein, the Master
Lease contains numerous other terms, covenants and conditions
that affect the Subject Property, and notice is hereby given
that reference should be had to the Master Lease with respect
to the details of such terms, covenants and conditions. A copy
of the Master Lease or of the other agreements referenced
herein or therein may be obtained from any of the parties
hereto at the addresses set forth herein.
- 2 -
B. Ownership of the Subject Property. The parties hereto intend that
for (i) financial accounting purposes with respect to the Lessee/Mortgagor, (ii)
United States federal and all United States state and local income tax purposes
and (iii) United States state real estate and commercial law and bankruptcy
purposes, (1) the Lease will be treated as a financing arrangement, (2) the
Lessor/Mortgagee will be deemed a lender making a loan to the Lessee/Mortgagor
in an aggregate amount equal to the Original Aggregate Property Cost which loan
is secured by the Properties, and (3) the Lessee/Mortgagor will be treated as
the owner of the Properties described in the Lease Supplements and will be
entitled to all tax benefits ordinarily available to an owner of properties
similar to the Properties for such tax purposes. Nevertheless, the
Lessee/Mortgagor acknowledges and agrees that none of the Lessor/Mortgagee, the
Arranger or any Investor has made any representations or warranties to the
Lessee/Mortgagor concerning the tax, accounting or legal characteristics of the
Operative Documents and that the Lessee/Mortgagor has obtained and relied upon
such tax, accounting and legal advice concerning the Operative Documents as it
deems appropriate. The parties hereto will not take any position inconsistent
with the intentions expressed herein. It is the intent of the parties hereto
that this Lease grants a security interest and mortgage or deed to secure debt
or deed of trust, as the case may be, in and on each Property to the
Lessor/Mortgagee for the benefit of the Lessor/Mortgagee to secure the
performance of the Lessee/Mortgagor under and payment of all amounts under this
Master Lease and the other Operative Documents all as more specifically set
forth in each Lease Supplement. Specifically, without limiting the generality of
the foregoing, the parties hereto intend and agree that in the event of any
insolvency or receivership proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency laws or statute of the United
States of America or any state or commonwealth thereof affecting the
Lessee/Mortgagor, the Lessor/Mortgagee or the Investors or any collection
actions, the transactions evidenced by the Operative Documents shall be regarded
as loans made to the Lessee/Mortgagor by the Lessor/Mortgagee and the Investors
as unrelated third party lenders of the Lessee/Mortgagor.
C. Grant of Mortgage Lien and Security Interest: Assignment of Rents.
To secure to the Lessor/Mortgagee the payment and performance of all
Obligations:
(a) Subject to the terms and conditions of the Master Lease as
supplemented by this Supplement (including, without
limitation, the Lessee/Mortgagor's rights hereunder and
thereunder), the Lessee/Mortgagor has caused the
Lessor/Mortgagee to hold title to the Subject Property and
Lessee/Mortgagor does hereby mortgage, grant, bargain, sell,
convey, assign, transfer and set over to the Lessor/Mortgagee,
with power of sale, to the extent permitted by Applicable Law:
(i) all of the Lessee/Mortgagor's right, title and interest
from time to time in the Subject Property of whatever nature
including, without limitation, Lessee/Mortgagor's leasehold
interest under the Master Lease; all condemnation and
insurance proceeds relative to the Subject Property and all
Profits as defined below; and (ii) all of the
Lessee/Mortgagor's right, title and interest in and to all
proceeds of the conversion, whether voluntary or involuntary,
of any of the above-described property into cash or other
liquid claims, including, without limitation, all awards,
payments or proceeds, including interest thereon, and the
right to receive the same,
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which may be made as a result of casualty, any exercise of the
right of eminent domain or deed in lieu thereof, the
alteration of the grade of any street and any injury to or
decrease in the value thereof, the foregoing being referred to
hereinafter as the "Security Property".
TO HAVE AND TO HOLD the Security Property, subject however to
Permitted Property Liens (which shall include the items set
forth on Schedule II), unto the Lessor/Mortgagee, its
successors and assigns forever.
(i) Protective Advances. The Lessor/Mortgagee shall have the
right, but not the obligation, to make protective
advances with respect to the Security Property for the
payment of taxes, assessments, insurance premiums or
costs incurred for the protection of the Security
Property, and such protective advances, together with
interest thereon at the Overdue Rate from the date of
each such advance until it is repaid in full, shall be
secured by this Supplement to the fullest extent and
with the highest priority contemplated by applicable
law.
(ii) Mortgage. The Lessee/Mortgagor and the Lessor/Mortgagee
intend that this Supplement shall secure
Lessee/Mortgagor's obligation to repay the unpaid
balance of advances made by the Lessor/Mortgagee and/or
the holder hereof under the Master Lease and other
Operative Documents to the fullest extent and with the
highest priority contemplated by applicable law. The
obligations secured hereby shall include, without
limitation, all Basic Rent, Accrual Rent and Fixed Rent
as well as all Supplemental Rent due from
Lessee/Mortgagor under the Master Lease. The maximum
amount of advances, exclusive of interest thereon
(whether or not identified as interest and including
specifically all Accrual Rent under the Master Lease),
and exclusive of advances made for the payment of real
estate taxes, assessments, insurance premiums and costs
incurred for the protection of the Security Property,
all of which are also secured by this Supplement, which
may be outstanding at any time is One Hundred Twenty
Million and 00/100 Dollars ($120,000,000.00).
(b) Subject to the terms and conditions of the Master Lease as
supplemented by this Supplement (including, without
limitation, the Lessee/Mortgagor's rights hereunder and
thereunder so long as no Lease Event of Default has occurred
and is continuing), the Lessee/Mortgagor hereby grants to the
Lessor/Mortgagee a security interest in the Lessee/Mortgagor's
interest in that portion of the Security Property (the "UCC
Property") subject to the Uniform Commercial Code of the State
of Indiana (the "UCC"). The Master Lease, as supplemented by
this Supplement, shall also be deemed to be a security
agreement and shall support any financing statement
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showing the Lessor/Mortgagee's interest as a secured party
with respect to any portion of the UCC Property described in
such financing statement. The Lessee/Mortgagor agrees, at its
sole cost and expense, to execute, deliver and file from time
to time such further instruments as may be requested by the
Lessor/Mortgagee to confirm and perfect the lien of the
security interest in the collateral described in this
Supplement.
(c) The Lessee/Mortgagor hereby irrevocably assigns, conveys,
transfers and sets over unto the Lessor/Mortgagee (subject,
however, to the Master Lease and the rights of the
Lessee/Mortgagor thereunder and hereunder) any and all
subleases or other occupancy agreements now existing, or that
may hereafter come into existence with respect to the Subject
Property or any part thereof, including any guaranties of such
sublease or occupancy agreements (collectively, the
"Subleases") and all and every part of the rents, issues and
profits (collectively, the "Profits") that may from time to
time become due and payable on account of the Subleases,
provided, that, unless a Lease Event of Default is continuing,
the Lessee/Mortgagor shall have the right to collect and
retain such Profits. Upon request of the Lessor/Mortgagee, the
Lessee/Mortgagor shall execute and cause to be recorded, at
its expense, supplemental or additional assignments of any
Subleases of the Subject Property. Upon the occurrence and
during the continuance of a Lease Event of Default, the
Lessor/Mortgagee is hereby fully authorized and empowered in
its discretion (in addition to all other powers and rights
herein granted), to apply for and collect and receive all such
Profits and enforce such guaranty or guaranties, and all money
so received under and by virtue of this assignment shall be
applied as further security for the payment and performance of
the Obligations secured hereby.
(d) Notwithstanding that this Supplement is an absolute assignment
of the Profits and the Subleases and not merely the collateral
assignment of, or the grant of a lien or security interest in
the Profits and the Subleases, the Lessor/Mortgagee grants to
the Lessee/Mortgagor a revocable license to collect and
receive the Profits and to retain, use and enjoy such Profits.
Such license shall be automatically revoked upon the
occurrence and during the continuance of any Lease Event of
Default.
D. Remedies.
(a) Upon the occurrence and during the continuance of a Lease
Event of Default, each of which are also events of default
under this Supplement, the Lessor/Mortgagee may exercise any
one or more of the following rights and remedies as it, in its
sole discretion, may deem necessary or appropriate:
(i) collect interest on all past due sums at the Overdue
Rate;
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(ii) terminate the Master Lease and, either in person or by
agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and
without regard to the adequacy of security, enter upon
and take possession of the Security Property, or any
part thereof, in its own name, and do any acts which it
deems necessary or desirable to preserve the value,
marketability or rentability of the Security Property,
or any part thereof or interest therein, to increase the
income therefrom or to protect the security hereof and,
with or without taking possession of the Security
Property, to sue for or otherwise to collect the Profits
thereof, including, without limitation, those past due
and unpaid, and to apply the same, less costs and
expenses of operation and collection, including, without
limitation, reasonable attorneys' fees, upon any
Obligations secured hereby, all in such order as the
Lessor/Mortgagee may determine. The entering upon and
taking possession of the Security Property, and the
collection of such Profits and the application thereof
as aforesaid, shall not cure or waive any Lease Event of
Default or notice of a Lease Event of Default hereunder
or invalidate any act done in response to such Lease
Event of Default and, notwithstanding the continuance in
possession of the Lessor/Mortgagee or the collection,
receipt and application of Profits by the
Lessor/Mortgagee, the Lessor/Mortgagee shall be entitled
to exercise every right provided for herein or by law
upon the occurrence and during the continuance of any
Lease Event of Default, including, without limitation,
the right to exercise the power of sale;
(iii) declare all sums secured hereby immediately due and
payable by delivery to the Lessee/Mortgagor a written
declaration of the occurrence and continuance of a Lease
Event of Default and deliver a notice of non-judicial
foreclosure by power of sale of the Subject Property,
and proceed with such non-judicial foreclosure in
accordance with Applicable Law;
(iv) in lieu of sale pursuant to the power of sale conferred
hereby, foreclose in the manner provided by Applicable
Law for the foreclosure of mortgages on real property;
(v) whether or not a non-judicial or judicial foreclosure
proceeding as described above has been commenced,
declare immediately due and payable without notice or
demand, as otherwise required hereunder or under
Applicable Law, all amounts payable by the
Lessee/Mortgagor hereunder or under the other Operative
Documents which are then unpaid, with all interest and
sums accrued and accelerate payment thereof
notwithstanding contrary terms of payment stated therein
and exercise all rights and remedies available
hereunder, at law, in equity or otherwise;
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(vi) as a matter of right, and upon notice to the
Lessee/Mortgagor or anyone under the Lessee/Mortgagor
and without regard to the adequacy of its security or
the then value of the Security Property or the interest
of the Lessee/Mortgagor therein, apply to any court
having jurisdiction to appoint a receiver or receivers
of the Security Property and the Lessee/Mortgagor hereby
irrevocably consents to such appointment and, to the
extent permitted by Applicable Law, waives notice of any
application therefor. Any such receiver or receivers
shall have all the usual powers and duties of receivers
in like or similar cases and all the powers of the
Lessor/Mortgagee provided for above, and shall continue
as a receiver and exercise all such powers until the
date of confirmation of sale of the Security Property
unless such receivership is sooner terminated by the
Lessor/Mortgagee in its sole discretion.
Upon the occurrence and during the continuance of a Lease
Event of Default, the Lessor/Mortgagee shall be entitled to
enforce payment and performance of any Obligations secured
hereby and to exercise all rights and powers hereunder or any
laws now or hereafter in force notwithstanding that some or
all of said Obligations secured hereby may now or hereafter be
otherwise secured, whether by mortgage, deed of trust, pledge,
lien, assignment or otherwise. Neither the acceptance nor the
enforcement hereof, whether by court action or pursuant to the
power of sale or other powers herein contained, shall
prejudice or in any manner affect the Lessor/Mortgagee's right
to realize upon or enforce any other security now or hereafter
held by the Lessor/Mortgagee, and the Lessor/Mortgagee shall
be entitled to enforce the rights and remedies provided for
herein and any other security now or hereafter held by the
Lessor/Mortgagee in such order and manner as it may in its
absolute discretion determine. No remedy conferred upon or
reserved to the Lessor/Mortgagee is intended to be exclusive
of any other remedy, but each shall be cumulative and shall be
in addition to every other remedy given hereby or now or
hereafter existing at law or in equity or by statute. Every
power or remedy given hereby to the Lessor/Mortgagee or to
which the Lessor/Mortgagee may be otherwise entitled, may be
exercised, concurrently or independently, from time to time
and as often as may be deemed expedient by the
Lessor/Mortgagee, and the Lessor/Mortgagee may pursue
inconsistent remedies.
(b) Upon the occurrence and during the continuance of a Lease
Event of Default, the Lessor/Mortgagee, in addition to and not
in lieu of or in diminution of the rights and remedies
provided above shall have all of the rights and remedies of a
secured party under the UCC, which rights and remedies may be
exercised without application to any court to the extent
permitted by the UCC.
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(c) It is the intent of the parties hereto that the Master Lease
be treated as a secured borrowing as provided in Section 3B
above, and that, upon the occurrence and during the
continuance of a Lease Event of Default, the Lessor/Mortgagee
shall have remedies provided for herein. In the event that,
notwithstanding the intention of the parties, a court of
competent jurisdiction determines that, for the purpose of
remedies, the transaction contemplated by the Master Lease
constitutes a leasing arrangement, the parties hereto
acknowledge and agree that the Lessor/Mortgagee shall have, as
a result of such determination, in addition to the remedies
set forth in this Section 3D(a) above, all of the rights and
remedies of a landlord provided for in Article XVI of the
Master Lease, provided that the parties hereto acknowledge and
agree that it is their intent that the Master Lease be
construed as provided in Section 3B above.
SECTION 4. Lessor/Mortgagee Grant. (a) The Lessor/Mortgagee hereby
unconditionally grants a security interest in and a Lien to the Lessee/Mortgagor
against all of the Lessor/Mortgagee's right, title and interest in and to the
Security Property, which Lien shall be effective only if the Lessor/Mortgagee
shall become the subject of any bankruptcy, insolvency or similar proceeding and
such proceeding shall result in the rejection of the Master Lease. Such Lien
shall secure the satisfaction of the Lessee/Mortgagor's right to damages and
other claims arising out of the rejection of the Master Lease to the extent and
in the manner provided for pursuant to the Operative Documents.
(b) The Lessee/Mortgagor agrees that the conditional Lien created in
paragraph (a) of this Section 4 will terminate upon the termination of the
Master Lease with respect to the Subject Property for any reason other than a
rejection of the Master Lease in connection with a bankruptcy, insolvency or
similar proceeding with respect to the Lessor/Mortgagee. Lessee/Mortgagor
covenants to promptly deliver any releases or reconveyances reasonably required
by Lessor/Mortgagee to evidence such termination of Lien.
(c) The Lien created in paragraph (a) of this Section 4 is junior and
subordinate in all respects to the Liens granted by the Lessee/Mortgagor in
favor of the Lessor/Mortgagee pursuant to this Supplement and the other
Operative Documents.
SECTION 5. Ratification; Incorporation. Except as specifically modified
hereby, the terms and provisions of the Master Lease are hereby ratified and
confirmed and remain in full force and effect. The terms of the Master Lease (as
amended by this Supplement) are by this reference incorporated herein and made a
part hereof.
SECTION 6. Original Supplement. The single executed original of this
Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the
signature page thereof and containing the receipt of the Lessor/Mortgagee
therefor on or following the signature page thereof shall be the original
executed counterpart of this Supplement (the "Original Executed Counterpart").
To the extent that this Supplement constitutes chattel paper, as such term is
defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction, no security interest in this Supplement may be created through the
transfer or possession of any counterpart other than the Original Executed
Counterpart.
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SECTION 7. Applicable Law; Certain Particular Provisions. This Supplement
shall be governed by and construed in accordance with the laws of the
jurisdictions identified in this Section 7 (the "Applicable Law") which shall
for most purposes be the laws of the State of New York; provided, however, that
the provisions of this Supplement relating to the creation, perfection and
enforcement of the lien and security interest created by this Supplement in
respect of the Subject Property and the exercise of each remedy provided hereby,
including the power of foreclosure or power of sale procedures set forth in this
Supplement, shall be governed by and construed in accordance with the internal
law of the State of Indiana, and each of the Lessor/Mortgagee and the
Lessee/Mortgagor agree to submit to jurisdiction and the laying of venue for any
suit on this Supplement in the State of Indiana. The terms and provisions set
forth in Schedule III attached hereto are hereby incorporated by reference as
though fully set forth herein. In the event of any conflict between the terms
and provisions contained in the body of the Master Lease (as amended by this
Supplement) and the terms and provisions set forth in Schedule III, the terms
and provisions set forth in Schedule III shall govern and control.
SECTION 8. No Merger of Title. There shall be no merger of the Master
Lease (as amended by this Supplement) or of the leasehold estate created thereby
by reason of the fact that the same Person may acquire, own or hold, directly or
indirectly, in whole or in part, (a) the Master Lease (as amended by this
Supplement) or the leasehold estate created thereby or any interest in the
Master Lease (as amended by this Supplement) or such leasehold estate, (b) the
fee estate or ground leasehold estate in the Subject Property, except as may
expressly be stated in a written instrument duly executed and delivered by the
Lessor/Mortgagee.
SECTION 9. Satisfaction of the Mortgage, Security Interest and Assignment
of Rents and Subleases. If the Lessee/Mortgagor complies with the provisions of
this Supplement and irrevocably pays and performs (to the reasonable
satisfaction of Lessor/Mortgagee) all of the Obligations secured hereby, in
accordance with the provisions of the Master Lease, as supplemented by this
Supplement and the other Operative Documents and in the manner and at the times
set forth therein, without deduction, fraud or delay, then and from thenceforth
this Supplement and the estate hereby granted and created in favor of the
Lessor/Mortgagee, shall cease and become void, anything hereinbefore contained
to the contrary notwithstanding.
SECTION 10. Maximum Interest Rate. No provision of this Supplement or any
transaction related thereto shall require the payment or permit the collection
of interest or any other amount in excess of the maximum permitted by Applicable
Law. If any excess of interest or any other amount in such respect is herein or
any other Operative Document provided for, the Lessee/Mortgagor shall not be
obligated to pay such excess interest or any other amounts in excess of the
amount permitted by applicable law, and the right to demand the payment of any
such excess shall be and hereby is waived, and this provision shall control any
other provision of this Supplement and the other Operative Documents.
SECTION 11. Security Agreement and Fixture Financing Statement. This
Supplement is both a real property mortgage and a "security agreement" within
the meaning of the UCC. The Subject Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in
nature, of Lessee/Mortgagor in the Subject Property. In Section 3.C (b) above,
Lessee/Mortgagor has granted to Lessor/Mortgagee, as security for the
Obligations, a security interest in the UCC Property to the full extent that the
UCC Property may
- 9 -
be subject to the UCC. The information contained in this Section 11 is provided
in order that this Supplement shall comply with the requirements of the UCC for
mortgages to be effective as financing statement filed as a fixture filing. The
name of the "debtor" is ITT INDUSTRIES, INC.; the name of the "secured party" is
REXUS L.L.C.; the mailing address of the "secured party" from which information
concerning the security interest may be obtained and the mailing address of the
"debtor" are as set forth in Section 12 of this Supplement. The types, or the
items, of collateral covered hereby consist of the UCC Property identified in
Section 3.C which constitute fixtures or personal property. The Lessor/Mortgagee
is the record owner of the Land.
SECTION 12. Notices. For purposes of this instrument all notices shall be
in writing and must be given in the manner provided in Section 14.3 of the
Participation Agreement to the addresses set forth in Schedule V hereto.
SECTION 13. Counterpart Execution. This Supplement may be executed in any
number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one and the same
instrument.
[Signature Blocks on Following Page]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Supplement
to be duly executed by an officer thereunto duly authorized as of the date and
year first above written.
REXUS L.L.C., as Lessor/Mortgagee
By: /s/ Larry Bowman
------------------
Name: Larry Bowman
Title: President
ITT INDUSTRIES, INC., as Lessee/Mortgagor
By: /s/ Donald Foley
----------------
Name: Donald Foley
Title: Senior Vice President, Treasurer and
Director of Tax
Schedule I
Legal Description
PARCEL I:
A parcel of land located in the Northwest One-quarter of Section 15, Township 31
North, Range 12 East, Allen County, Indiana, and more particularly described as
follows, to wit:
COMMENCING at the center of Section 15, Township 31 North, Range 12 East, Allen
County, as now established by an iron pin found in accordance to referenced
monuments set by the Allen County Surveyor's Office; thence North 4 degrees 26
minutes 10 seconds West along the North-South centerline of said Section 15 a
distance of 847.64 feet; thence South 86 degrees 57 minutes West a distance of
334.80 feet to a point on a line referred to in deeds as the West line of the
Carl F. Salomon property and the East line of the Stanley C. Salomon and David
C. Salomon property, said point also being the Point of Beginning.
BEGINNING at the above described point; thence South 86 degrees 57 minutes West
a distance of 535.06 feet to an iron pin set on the West bank of Spy Run Creek;
thence North 50 degrees 48 minutes 14 seconds West along the West line of
Stanley C. and David Salomon property a distance of 192.70 feet to an iron pin
found under a stone on the South side of Spy Run Creek; thence North 4 degrees
14 minutes 14 seconds West along said West line a distance of 1632.10 feet to a
PK nail set on the North line of the Northwest One-quarter of Section 15; thence
North 88 degrees 22 minutes 18 seconds East on said North line a distance of
676.0 feet (deed); thence South 4 degrees 13 minutes 31 seconds East along the
East line of said property a distance of 1744.90 feet to the Point of Beginning,
containing 26.966 acres of land, more or less.
PARCEL II:
A parcel of land located in the Northeast Quarter and the Northwest Quarter of
Section 15, Township 31 North, Range 12 East, Allen County, Indiana, and more
particularly described as follows, to wit:
COMMENCING at the center of Section 15, Township 31 North, Range 12 East, as now
established by an iron pin found in accordance to referenced monuments set by
the Allen County Surveyor's Office; thence North 4 degrees 26 minutes 10 seconds
West along the North-South centerline of said Section 15, a distance of 847.64
feet to the Point of Beginning.
BEGINNING at the above described point; thence South 86 degrees 57 minutes West
a distance of 334.80 feet to a point on a line referred to in deeds as the West
line of the Carl F. Salomon property and the East line of the Stanley C. Salomon
and David C. Salomon property; thence North 4 degrees 13 minutes 31 seconds West
along the previous described deed line a distance of 1744.90 feet to a point on
the North line of the Northwest Quarter of said Section 15; thence North 88
degrees 22 minutes 18 seconds East along said North line a distance of 328.68
feet to the North Quarter corner of said Section 15, as now established by a
P.K. nail found; thence North 85 degrees 47 minutes 37 seconds East along the
North line of the Northeast Quarter of Section 15, a distance of 156.03 feet;
thence South 14 degrees 53 minutes 07 seconds East a
distance of 25.0 feet; thence South 46 degrees 53 minutes 51 seconds East a
distance of 55.59 feet to a point on the West right-of-way line of Lima Road
(State Road #3) I.S.H.C. Project S-419(4)-1959, as marked by a concrete
right-of-way monument; thence South 14 degrees 53 minutes 07 seconds East along
said West right-of-way line a distance of 1711.36 feet; thence South 86 degrees
57 minutes West and parallel to the South line of the Northeast Quarter a
distance of 508.62 feet to the Point of Beginning, containing 27.083 acres of
land, more or less.
EXCEPTING from both Parcels I and II the following described real estate
situated in Allen County, Indiana, to wit:
A part of the Northeast Quarter and the Northwest Quarter of Section 15,
Township 31 North, Range 12 East, Allen County, Indiana, described as follows:
COMMENCING at the center of said Section; thence North 0 degrees 08 minutes 36
seconds West (assumed bearing) 847.64 feet along the East line of said Northwest
Quarter to the South line of the grantor's land; thence North 88 degrees 45
minutes 27 seconds West 869.86 feet along said South line to a Southwest line of
the grantor's land; thence North 46 degrees 31 minutes 22 seconds West 192.74
feet along said Southwest line to the West line of the grantor's land; thence
North 0 degrees 03 minutes 19 seconds East 1582.05 feet along said West line to
the Point of Beginning of this description; thence continuing North 0 degrees 03
minutes 19 seconds East 50.05 feet along said West line to the North line of
said Northwest Quarter; thence South 87 degrees 20 minutes 09 seconds East
1004.68 feet along said North line to the Northeast corner of said Northwest
Quarter; thence South 89 degrees 58 minutes 35 seconds East 156.03 feet along
the North line of said Northeast Quarter to an Eastern line of the grantor's
land; thence South 10 degrees 39 minutes 19 seconds East 25.00 feet along said
Northeastern line to a Northeastern line of the grantor's land; thence South 42
degrees 40 minutes 03 seconds East 55.59 feet along said Northeastern line to
the West boundary of Lima Road (State Road 3) I.S.H.C. Project S-419(4)-1959;
thence South 10 degrees 38 minutes 56 seconds East 17.80 feet along said West
boundary; thence North 66 degrees 28 minutes 44 seconds West 37.51 feet; thence
North 84 degrees 40 minutes 25 seconds West 219.28 feet; thence North 87 degrees
20 minutes 09 seconds West 953.57 feet to the Point of Beginning and containing
1.400 acres, more or less, of which 0.684 acres is existing right-of-way.
EXCEPTING FROM THE ABOVE EXCEPTION FOR BOTH PARCELS I AND II the following
described real estate situated in Allen County, Indiana, to wit:
A part of the Northwest Quarter of Section 15, Township 31 North, Range 12 East,
Allen County, Indiana, described as follows:
COMMENCING at the Northeast corner of said Quarter Section; thence West 1004.68
feet along the North line of said Section to the Northwest corner of 39.42 acre
tract of land described in Deed Record 321, pages 181 and 182; thence South 25.0
feet along the West line of said 39.42 acre tract to the Point of Beginning of
this description, which point is on the South boundary of Cook Road; thence East
199.7 feet along said South boundary; thence Southwesterly 100.1 feet to a point
30.0 feet South of the North line of said Section; thence West 99.7 feet
(parallel with and 30.0 feet South of said North line) to the West line of said
39.42 acre tract; thence North 5.0 feet along said West line to the Point of
Beginning and containing 0.017 acres, more or less.
- 2 -
ALSO EXCEPTING FROM THE ABOVE EXCEPTION FOR BOTH PARCELS I AND II:
A parcel of land located in the Northeast One-Quarter and the Northwest
One-Quarter of Section 15, Township 31 North, range 12 East, Allen County,
Indiana and more particularly described as follows, to-wit:
COMMENCING at the North Quarter corner of Section 15, Township 31 North, Range
12 East, as now established by a P.K. nail found; thence South 88 degrees 22
minutes 18 seconds West on the North line of the Northwest One-Quarter of
Section 15 a distance of 1004.68 feet to a P.K. nail set; thence South 4 degrees
14 minutes 14 seconds East along the West line of the ITT Corporation property
as described in Warranty Deed recorded in the records of the Recorder of Allen
County, Indiana, as Document Number 86-9318, a distance of 25.03 feet to the
Point of Beginning.
BEGINNING at the above described point; thence North 88 degrees 22 minutes 18
seconds East, a distance of 1004.34 feet to a point on the North-South
centerline of Section 15, thence North 85 degrees 47 minutes 37 seconds East a
distance of 161.01 feet; thence South 46 degrees 53 minutes 51 seconds East a
distance of 20.41 feet; thence South 85 degrees 47 minutes 37 seconds West a
distance of 174.99 feet; thence South 88 degrees 22 minutes 18 seconds West a
distance of 1004.19 feet; thence North 4 degrees 14 minutes 14 seconds West a
distance of 15.01 feet to the Point of Beginning, containing 0.41 acres of land,
more or less.
All of the above more modernly described as follows in a Survey by Dickmeyer &
Associates, Kerry D. Dickmeyer, Land Surveyor, recorded April 9, 2004 in
Document Number 204025735:
A parcel of land situated in the Northeast One-quarter and the Northwest
One-quarter of Section 15, Township 31 North, Range 12 East, Allen County,
Indiana, and more particularly described as follows:
COMMENCING at the center of Section 15, Township 31 North, Range 12 East, Allen
County, Indiana, marked by a Harrison monument; thence North 04 degrees 26
minutes 10 seconds West (bearing base on Deed DOC. #86-009318 and DOC.
#86-009319) along the North-South centerline of the said Section 15, a distance
of 847.64 feet to the Point of Beginning as marked by a set five-eighths inch
diameter steel pin with D&A Firm No. 0026 identification cap.
BEGINNING at the above described point; thence South 86 degrees 57 minutes 00
seconds West, a distance of 869.86 feet to a set five-eighths inch diameter
steel pin on the West bank of Spy Run Creek; thence North 51 degrees 34 minutes
50 seconds West (North 50 degrees 48 minutes 14 seconds West - deed), a distance
of 192.50 feet to a stone; thence North 04 degrees 11 minutes 11 seconds West
(North 04 degrees 14 minutes 14 seconds West - deed) a distance of 1581.25 feet
to a set five-eighths inch diameter steel pin on the Southerly line of parcel of
land described in DOC. #200063132 also being the southerly right-of-way line of
Cook Road; thence North 88 degrees 12 minutes 33 seconds East along said
southerly line, a distance of 953.56 feet to a set five-eighths inch diameter
steel pin; thence South 89 degrees 05 minutes 00 seconds East along said
southerly line, a distance of 219.28 feet to a set five-eighths inch diameter
steel pin with D&A Firm No. 0026 identification cap; thence South 70 degrees 15
minutes 43 seconds East along said southerly line, a distance of 37.51 feet to a
set five-eighths
- 3 -
inch diameter steel pin with D&A Firm No. 0026 identification cap; thence South
14 degrees 25 minutes 55 seconds East along said westerly right-of-way line, a
distance of 429.03 feet to a four inch by four inch concrete right-of-way marker
found; thence South 14 degrees 58 minutes 08 seconds East, a distance of 667.09
feet to a four inch by four inch concrete right-of-way marker found; thence
South 15 degrees 07 minutes 53 seconds East along said westerly right-of-way
line a distance of 597.71 feet to a found five-eighths inch diameter steel pin;
thence South 86 degrees 57 minutes 00 seconds West, a distance of 508.75 feet to
the point of beginning, containing 52.58 acres, more or less.
- 4 -
Schedule II
Additional Permitted Property Liens
NONE
Schedule III
Local Law Provisions
- 2 -
Schedule IV
Defined Terms
"Appurtenant Rights" means, with respect to the Land and the Subject
Property, (i) all agreements, easements, rights of way or use, rights of ingress
or egress, privileges, appurtenances, tenements, and other rights and benefits
at any time belonging or pertaining to the Land and the Subject Property,
including the use of any streets, ways, alleys, vaults or strips of land
adjoining, abutting, adjacent or contiguous to the Land and (ii) all permits,
licenses and rights, whether or not of record, appurtenant to the Land and (iii)
all of the Lessee/Mortgagor's right, title and interest in all general
intangibles relating to the design, development, operation, management and use
of the Subject Property, all certificates of occupancy, zoning variances,
building, use or other permits, approvals, authorizations and consents obtained
from and all materials prepared for filing or filed with any Governmental
Authority in connection with the development, use, operation or management of
the Subject Property, all construction, service, engineering, consulting,
leasing, architectural and other similar contracts concerning the design,
construction, management, operation, occupancy and/or use of the Subject
Property, all architectural drawings, plans, specifications, soil tests,
feasibility studies, appraisals, environmental studies, engineering reports and
similar materials relating to any portion of or all of the Subject Property, and
all payment and performance bonds or warranties or guarantees relating to the
Subject Property, all to the extent assignable.
"Equipment" means any equipment the removal of which could reasonably be
expected to affect the value or utility of the Land or the Subject Property,
taken together or separately, including heating, electrical, switch gear, power
supply, lighting, plumbing, ventilation, air conditioning and air cooling
systems, refrigerating equipment, generators, locking and unlocking equipment,
communication systems, sprinkler system and fire prevention systems, security
systems and fixtures of all kinds; provided, however, that the term "Equipment"
shall expressly exclude all inventory, furniture and furnishings.
- 3 -
Schedule V
Notice Information
LESSEE/MORTGAGOR
ITT INDUSTRIES, INC.
4 West Red Oak Lane
White Plains, New York 10604
Attention: Donald Foley, Treasurer
with a copy to:
Red Oak Corporate Park
4 West Red Oak Lane
White Plains, New York 10604
Attention: Keith Richey, International Tax Counsel
LESSOR/MORTGAGEE
REXUS L.L.C.
Societe Generale, New York Branch
1221 Avenue of the Americas
New York, New York 10020
Attention: President
- 4 -
================================================================================
MORTGAGE,
SECURITY AGREEMENT AND FINANCING
STATEMENT (INCLUDING FIXTURE FILING)
Dated as of December 15, 2004
between
REXUS L.L.C.,
as Mortgagee
and
ITT INDUSTRIES, INC.,
as Mortgagor
LOCATION OF MORTGAGED PROPERTY:
Street Address: 175 Standard Parkway
Cheektowaga, New York 14227
County: Erie
Block: 1
Lot: 28
Record and Return to:
Jones Day
222 East 41st Street
New York, NY 10017
Attention: Leonard C. Pojednic, Esq.
================================================================================
MORTGAGE, SECURITY AGREEMENT AND
FINANCING STATEMENT (INCLUDING FIXTURE FILING)
THIS MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT (INCLUDING
FIXTURE FILING), dated as of December 15, 2004 (this "Mortgage"), between REXUS
L.L.C., a Delaware limited liability company with an address at Societe
Generale, (Canada), as Lessor Administrator, 1501 McGill College, Bureau 1800,
Montreal, Quebec, H3A 3MB, Canada, as the Mortgagee (the "Mortgagee"), and ITT
INDUSTRIES, INC., an Indiana corporation, with an address at 4 West Red Oak
Lane, White Plains, New York 10604, as Mortgagor (the "Mortgagor"). For purposes
of this Mortgage, capitalized terms used herein and not otherwise defined herein
or in Schedule IV hereto shall have the meanings assigned to them in Appendix A
to the Master Lease (as defined below), and the rules of interpretation set
forth in such Appendix A shall apply to this Mortgage.
WHEREAS, pursuant to a Participation Agreement, dated as of the date
hereof (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "Participation Agreement"), among the Mortgagee, the
Mortgagor, and others as Investors, the Investors and the Mortgagee have agreed
to finance the acquisition of the certain properties described therein,
including the real property described on Schedule I hereto (such real property
described on Schedule I hereto, the "Land"), and the payment of certain
transaction expenses in connection therewith;
WHEREAS, subject to the terms and conditions set forth in the
Participation Agreement, on the date hereof the Mortgagee purchased from the
Mortgagor the Land;
WHEREAS, Mortgagee and Mortgagor have executed that certain Master Lease
and Deed of Trust, Deed to Secure Debt and Mortgage dated as of the date hereof
(the "Master Lease"), as supplemented by that certain Lease Supplement, dated as
of the date hereof (the "Related Lease Supplement"), pursuant to which the
Mortgagee leased the Land, all Improvements thereon and all other improvements
now thereon or which hereafter may be constructed thereon and all Appurtenant
Rights with respect thereto and all Equipment (collectively, the "Subject
Property") to the Mortgagor; and
WHEREAS, pursuant to the terms of this Mortgage, the Mortgagor will grant
a continuing security interest and mortgage in the Subject Property to the
Mortgagee;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1.Grant of Mortgage Lien and Security Interest: Assignment of
Rents. To secure to the Mortgagee the payment and performance of the Obligations
in a principal amount not to exceed FIVE MILLION AND 00/100 U.S. Dollars
($5,000,000), the maximum amount of principal indebtedness which is or under any
contingency may be secured hereby, together with
all other sums described below which may from time to time become due and
payable to the Mortgagee by reason of the exercise of its rights and remedies
under the Operative Documents:
(a) Subject to the terms and conditions of the Master Lease, as
supplemented by the Related Lease Supplement (including,
without limitation, the Mortgagor's rights thereunder so long
as no Lease Event of Default has occurred and is continuing),
the Mortgagor has caused the Mortgagee to hold title to the
Subject Property and does hereby mortgage, grant, bargain,
sell, convey, assign, transfer and set over to the Mortgagee,
with power of sale, to the extent permitted by Applicable Law:
(i) all of the Mortgagor's right, title and interest from time
to time in the Subject Property of whatever nature (including
without limitation Mortgagor's leasehold interest under the
Master Lease, all condemnation and insurance proceeds from the
Subject Property and all Profits as defined below); and (ii)
all of the Mortgagor's right, title and interest in and to all
proceeds of the conversion, whether voluntary or involuntary,
of any of the above-described property into cash or other
liquid claims, including, without limitation, all awards,
payments or proceeds, including interest thereon, and the
right to receive the same, which may be made as a result of
casualty, any exercise of the right of eminent domain or deed
in lieu thereof, the alteration of the grade of any street and
any injury to or decrease in the value thereof, the foregoing
being referred to hereinafter as the "Security Property".
TO HAVE AND TO HOLD the Security Property, subject however to
Permitted Property Liens (which shall include the items set
forth on Schedule II), unto the Mortgagee, its successors and
assigns forever.
(i) Protective Advances. The Mortgagee shall have the right,
but not the obligation, to make protective advances with
respect to the Security Property for the payment of
taxes, assessments, insurance premiums or costs incurred
for the protection of the Security Property, and such
protective advances, together with interest thereon at
the Overdue Rate from the date of each such advance
until it is repaid in full, shall be secured by this
Mortgage to the fullest extent and with the highest
priority contemplated by Applicable Law.
(ii) Mortgage. Subject to the limitation set forth in the
next succeeding sentence, the Mortgagor and the
Mortgagee intend that this Mortgage shall secure
Mortgagor's obligation to repay the unpaid balance of
advances made by the Mortgagee and/or the holder hereof
under the Master Lease and other Operative Documents to
the fullest extent and with the highest priority
contemplated by Applicable Law. The Obligations secured
hereby shall include, without limitation, all Basic
Rent, Accrual Rent and Fixed Rent as well as all
Supplemental Rent due from Mortgagor under the
- 2 -
Master Lease. The maximum amount of the Obligations
secured by this Mortgage, exclusive of interest thereon
(whether or not identified as interest and including
specifically all Accrual Rent under the Master Lease),
and exclusive of advances made for the payment of real
estate taxes, assessments, insurance premiums and costs
incurred for the protection of the Security Property and
all other protective advances as described in Section
1(a)(i) above, all of which are also secured by this
Mortgage, shall not exceed FIVE MILLION AND 00/100 U.S.
DOLLARS ($5,000,000).
(b) Subject to the terms and conditions of the Master Lease, as
supplemented by the Related Lease Supplement (including,
without limitation, the Mortgagor's rights thereunder so long
as no Lease Event of Default has occurred and is continuing),
the Mortgagor hereby grants to the Mortgagee a security
interest in the Mortgagor's interest in that portion of the
Security Property (the "UCC Property") subject to the Uniform
Commercial Code of the State of New York (the "UCC"). This
Mortgage shall also be deemed to be a security agreement and
shall support any financing statement showing the Mortgagee's
interest as a secured party with respect to any portion of the
UCC Property described in such financing statement. The
Mortgagor agrees, at its sole cost and expense, to execute,
deliver and file from time to time such further instruments as
may be requested by the Mortgagee to confirm and perfect the
lien of the security interest in the collateral described in
this Mortgage.
(c) The Mortgagor hereby irrevocably assigns, conveys, transfers
and sets over unto the Mortgagee (subject, however, to the
Master Lease, as supplemented by the Related Lease Supplement,
and the rights of the Mortgagor thereunder) all and every part
of the rents, issues and profits (collectively, the "Profits")
that may from time to time become due and payable on account
of any and all subleases or other occupancy agreements now
existing, or that may hereafter come into existence with
respect to the Subject Property or any part thereof, including
any guaranties of such sublease or occupancy agreements
(collectively, the "Subleases") provided, that, unless a Lease
Event of Default is continuing, the Mortgagor shall have the
right to collect and retain such Profits. Upon request of the
Mortgagee, the Mortgagor shall execute and cause to be
recorded, at its expense, supplemental or additional
assignments of any Subleases of the Subject Property. Upon the
occurrence and during the continuance of a Lease Event of
Default, the Mortgagee is hereby fully authorized and
empowered in its discretion (in addition to all other powers
and rights herein granted), to apply for and collect and
receive all such Profits and enforce such guaranty or
guaranties, and all money so received under and by virtue of
this assignment shall be applied as further security for the
payment and performance of the Obligations secured hereby.
- 3 -
(d) Notwithstanding that this Mortgage is an absolute assignment
of the Profits and the Subleases and not merely the collateral
assignment of, or the grant of a lien or security interest in,
the Profits and the Subleases, the Mortgagee grants to the
Mortgagor a revocable license to enforce all of its rights and
remedies under the Subleases, to collect and receive the
Profits and to retain, use and enjoy such Profits. Such
license shall be automatically revoked upon the occurrence and
during the continuance of any Lease Event of Default.
SECTION 2. Remedies. (a) Upon the occurrence and during the continuance of
a Lease Event of Default, each of which is also a default under this Mortgage,
the Mortgagee may exercise any one or more of the following rights and remedies
as it, in its sole discretion, may deem necessary or appropriate:
(i) collect interest on all past due sums at the Overdue
Rate;
(ii) either in person or by agent, with or without bringing
any action or proceeding, or by a receiver appointed by
a court, and without regard to the adequacy of security,
enter upon and take possession of the Security Property,
or any part thereof, in its own name, and do any acts
which it deems necessary or desirable to preserve the
value, marketability or rentability of the Security
Property, or any part thereof or interest therein, to
increase the income therefrom or to protect the security
hereof and, with or without taking possession of the
Security Property, to sue for or otherwise to collect
the Profits thereof, including, without limitation,
those past due and unpaid, and to apply the same, less
costs and expenses of operation and collection,
including, without limitation, reasonable attorneys'
fees, upon any Obligations secured hereby, all in such
order as the Mortgagee may determine. The entering upon
and taking possession of the Security Property, and the
collection of such Profits and the application thereof
as aforesaid, shall not cure or waive any Lease Event of
Default or notice of a Lease Event of Default hereunder
or invalidate any act done in response to such Lease
Event of Default and, notwithstanding the continuance in
possession of the Mortgagee or the collection, receipt
and application of Profits by the Mortgagee, the
Mortgagee shall be entitled to exercise every right
provided for herein or by law upon the occurrence and
during the continuance of any Lease Event of Default,
including, without limitation, to the extent permitted
by Applicable Law, the right to exercise the power of
sale;
(iii) to the extent permitted by Applicable Law, utilize the
procedures set forth in Article 14 of the New York Real
Property Actions and Proceedings Law and commence a
non-judicial foreclosure by power of sale. To the extent
permitted by Applicable Law, Mortgagor waives any right
granted pursuant to Section 1421 or
- 4 -
any other provision of the New York Real Property
Actions and Proceedings Law to challenge Mortgagee's
election to enforce this Mortgage by means of such
non-judicial foreclosure by power of sale;
(iv) foreclose this Mortgage in the manner provided by
Applicable Law for the foreclosure of mortgages on real
property;
(v) declare immediately due and payable without notice or
demand, except as otherwise required hereunder or under
Applicable Law, all amounts payable by the Mortgagor
hereunder or under the other Operative Documents which
are then unpaid, with all interest and sums accrued and
accelerate payment thereof notwithstanding contrary
terms of payment stated therein and exercise all other
rights and remedies available hereunder, under
Applicable Law, in equity or otherwise;
(vi) in any action to foreclose this Mortgage, and upon
notice to the Mortgagor or anyone under the Mortgagor
and without regard to the adequacy of its security or
the then value of the Security Property or the interest
of the Mortgagor therein, apply to any court having
jurisdiction to appoint a receiver or receivers of the
Security Property and the Mortgagor hereby irrevocably
consents to such appointment and, to the extent
permitted by Applicable Law, waives notice of any
application therefor. Any such receiver or receivers
shall have all the usual powers and duties of receivers
in like or similar cases and all the powers of the
Mortgagee provided for in Section D(a)(ii) above, to the
extent permitted by Applicable Law, and shall continue
as a receiver and exercise all such powers until the
date of confirmation of sale of the Security Property
unless such receivership is sooner terminated by the
Mortgagee in its sole discretion or as a court of
competent jurisdiction shall direct.
Upon the occurrence and during the continuance of a Lease
Event of Default, the Mortgagee shall be entitled to enforce
payment and performance of any Obligations secured hereby and
to exercise all rights and powers hereunder or any laws now or
hereafter in force notwithstanding that some or all of said
Obligations secured hereby may now or hereafter be otherwise
secured, whether by mortgage, deed of trust, pledge, lien,
assignment or otherwise. To the extent permitted by Applicable
Law, neither the acceptance nor the enforcement hereof,
whether by court action or pursuant to the power of sale or
other powers herein contained, shall prejudice or in any
manner affect the Mortgagee's right to realize upon or enforce
any other security now or hereafter held by the Mortgagee;
and, to the extent permitted by Applicable Law, the Mortgagee
shall be entitled to enforce the rights and remedies provided
for
- 5 -
herein and any other security now or hereafter held by the
Mortgagee in such order and manner as it may in its absolute
discretion determine. No remedy conferred upon or reserved to
the Mortgagee is intended to be exclusive of any other remedy,
but each shall be cumulative and shall be in addition to every
other remedy given hereby or now or hereafter existing at law
or in equity or by statute. To the extent permitted by
Applicable Law, every power or remedy given hereby to the
Mortgagee or to which the Mortgagee may be otherwise entitled,
may be exercised, concurrently or independently, from time to
time and as often as may be deemed expedient by the Mortgagee,
and the Mortgagee may pursue inconsistent remedies.
(b) Upon the occurrence and during the continuance of a Lease
Event of Default, the Mortgagee, in addition to and not in
lieu of or in diminution of the rights and remedies provided
above shall have all of the rights and remedies of a secured
party under the UCC, which rights and remedies may be
exercised without application to any court to the extent
permitted by the UCC.
(c) It is the intent of the parties hereto that the Master Lease
be treated as a secured borrowing as provided in Section 1,
and that, upon the occurrence and during the continuance of a
Lease Event of Default, the Mortgagee shall have remedies
provided for herein. In the event that, notwithstanding the
intention of the parties, a court of competent jurisdiction
determines that, for the purpose of remedies, the transaction
contemplated by the Master Lease constitutes a leasing
arrangement, the parties hereto acknowledge and agree that the
Mortgagee shall have, as a result of such determination, in
addition to the remedies set forth in this Section 2, all of
the rights and remedies of a landlord provided for in Article
XVI of the Master Lease, provided that the parties hereto
acknowledge and agree that it is their intent that the Master
Lease be construed as provided in Section 1.
SECTION 3. Mortgagee Grant. (a) The Mortgagee hereby conditionally grants
a Lien to the Mortgagor against all of the Mortgagee's right, title and interest
in and to the Security Property, which Lien shall be effective only if the
Mortgagee shall become the subject of any bankruptcy, insolvency or similar
proceeding and such proceeding shall result in the rejection of the Master
Lease. Such Lien shall secure the satisfaction of the Mortgagor's right to
damages and other claims arising out of the rejection of the Master Lease to the
extent and in the manner provided for pursuant to the Operative Documents.
(b) The Mortgagor agrees that the conditional Lien created in paragraph
(a) of this Section will terminate upon the termination of the Master Lease with
respect to the Subject Property for any reason other than a rejection of the
Master Lease in connection with a bankruptcy, insolvency or similar proceeding
with respect to the Mortgagee. Mortgagor covenants to promptly deliver any
releases or reconveyances reasonably required by Mortgagee to evidence such
termination of Lien.
- 6 -
(c) The Lien created in paragraph (a) of this Section is junior and
subordinate in all respects to the Liens granted by the Mortgagor in favor of
the Mortgagee pursuant to this Mortgage and the other Operative Documents.
SECTION 4. Applicable Law; Certain Particular Provisions. This Mortgage
shall be governed by and construed in accordance with the laws of the State of
New York ("Applicable Law"); and each of the Mortgagee and the Mortgagor agree
to submit to jurisdiction and the laying of venue for any suit on this Mortgage
in such state. The terms and provisions set forth in Schedule III attached
hereto are hereby incorporated by reference as though fully set forth herein. In
the event of any conflict between the terms and provisions contained in this
Mortgage and the terms and provisions set forth in Schedule III, the terms and
provisions set forth in Schedule III shall govern and control.
SECTION 5. No Merger of Title. There shall be no merger of the Master
Lease (as amended by the Related Lease Supplement) or of the leasehold estate
created thereby by reason of the fact that the same Person may acquire, own or
hold, directly or indirectly, in whole or in part, (a) the Master Lease (as
amended by the Related Lease Supplement) or the leasehold estate created thereby
or any interest in the Master Lease (as amended by the Related Lease Supplement)
or such leasehold estate, or (b) the fee estate or ground leasehold estate in
the Subject Property, except as may expressly be stated in a written instrument
duly executed and delivered by the Mortgagee.
SECTION 6. Satisfaction of the Mortgage, Security Interest and Assignment
of Rents and Subleases. If the Mortgagor complies with the provisions of this
Mortgage and irrevocably pays and performs all of the Obligations secured
hereby, in accordance with the provisions of the Master Lease, as supplemented
by the Related Lease Supplement, and the other Operative Documents and in the
manner and at the times set forth therein, without deduction, fraud or delay,
then and from thenceforth this Mortgage and the estate hereby granted and
created in favor of the Mortgagee, shall cease and become void, anything
hereinbefore contained to the contrary notwithstanding.
SECTION 7. Maximum Interest Rate. No provision of this Mortgage or any
transaction related thereto shall require the payment or permit the collection
of interest or any other amount in excess of the maximum permitted by Applicable
Law. If any excess of interest or any other amount in such respect is herein or
any other Operative Document provided for, the Mortgagor shall not be obligated
to pay such excess interest or any other amounts in excess of the amount
permitted by applicable law, and the right to demand the payment of any such
excess shall be and hereby is waived, and this provision shall control any other
provision of this Mortgage and the other Operative Documents.
SECTION 8. Security Agreement and Fixture Financing Statement. This
Mortgage is both a real property mortgage and a "security agreement" within the
meaning of the UCC. The Subject Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in
nature, of Mortgagee in the Subject Property. In Section 1(b), Mortgagor has
granted to Mortgagee, as security for the Obligations, a security interest in
the UCC Property to the full extent that the UCC Property may be subject to the
UCC. The information contained in this Section 9 is provided in order that this
Mortgage shall comply with
- 7 -
the requirements of the UCC for mortgages to be effective as financing statement
filed as a fixture filing. The name of the "debtor" is ITT INDUSTRIES, INC.; the
name of the "secured party" is REXUS L.L.C.; the mailing address of the "secured
party" from which information concerning the security interest may be obtained
and the mailing address of the "debtor" are as set forth in the first paragraph
herein. The types, or the items, of collateral covered hereby consist of the UCC
Property identified in Section 1 which constitute fixtures or personal property.
The Mortgagee is the record owner of the Land.
SECTION 9. Notices. For purposes of this instrument as a fixture filing,
and for all other purposes, unless otherwise specifically provided herein, all
notices, offers, acceptances, rejections, consents, requests, demands or other
communications to or upon the respective parties hereto shall be in writing and
shall be deemed to have been given as set forth in Section 26.4 of the Master
Lease.
SECTION 10. Counterpart Execution. This Mortgage may be executed in any
number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one and the same
instrument.
[Signature Blocks on Following Page]
- 8 -
IN WITNESS WHEREOF, each of the parties hereto has caused this Mortgage
to be duly executed by an officer thereunto duly authorized as of the date and
year first above written.
REXUS L.L.C., as Mortgagee
By: /s/ Larry Bowman
-----------------
Name: Larry Bowman
Title: President
ITT INDUSTRIES, INC., as Mortgagor
By: /s/ Donald Foley
-----------------
Name: Donald Foley
Title: Senior Vice President, Treasurer and
Director of Tax
N - 2
Schedule I
Legal Description
PARCEL 1
ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of Cheektowaga,
County of Erie and State of New York, being part of Lot No. 23, Township 11,
Range 7 of the Holland Land Company's Survey, further described as part of the
premises designated and subdivided on map filed in Erie County Clerk's Office
under Cover of Maps No. 553, more particularly bounded and described as follows:
BEGINNING at a point in the easterly line of said Subdivision Tract
distant southerly, at right angles, 20 feet from the southerly line of lands of
the former Lehigh Valley Railroad Company, now Conrail; thence southerly along
the easterly line of said Subdivision Tract 1354.22 feet to the northerly line
of Wojcik Avenue as said line is extended easterly in a direct line; running
thence westerly along the northerly line of Wojcik Avenue and said line extended
and forming an interior angle of 90 degrees 35' 50" with the last described
line 388.2 feet to the easterly line of Walkowiak Avenue; running thence
northerly along the easterly line of Walkowiak Avenue and said line extended
northerly in a direct line and forming an interior angle of 90 degrees with the
last described line 1206.09 feet to a point therein 20.0 feet southerly at right
angles from the southerly line of lands of Conrail (formerly the Lehigh Valley
Railway Company); running thence easterly along a line drawn parallel with the
southerly line of said railway company's land and forming an interior angle of
100 degrees 12' 10" with the last described line 428.70 feet to the point or
place of beginning.
PARCEL 2
ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of Cheektowaga,
County of Erie and State of New York, being parts of Lots Nos. 15 and 23,
Township 11, Range 7 of the Holland Land Company's Survey, bounded and described
as follows:
BEGINNING at the point or intersection of the northerly line of Wojcik
Avenue, as described in deed to the Town of Cheektowaga recorded in Erie County
Clerk's Office in Liber 1450 of Deeds at page 288, with the easterly line of the
lands shown upon map filed in said Clerk's Office under Cover of Maps No. 553;
running thence easterly along said northerly line of Wojcik Avenue 365.14 feet
to the westerly line of lands conveyed to Niagara, Lockport & Ontario Power
Company by deed recorded in said Clerk's Office in Liber 1392 of Deeds at page
474; running thence northerly along the westerly line of lands so conveyed to
said power company and forming an interior angle of 93 degrees 43' with the
last described line 1271.80 feet to an angle therein; running thence northerly
along the westerly line of lands so conveyed to said power company and forming
an exterior angle of 184(0) 50' 10" with the last described course 158.08 feet
to the southerly line of lands conveyed to Buffalo General Electric Company by
deed recorded in said Clerk's Office in Liber 1894 of Deeds at page 49; running
thence westerly along
the southerly line of lands so conveyed to Buffalo General Electric Company and
forming an interior angle of 71 degrees with the last described course 459.28
feet to the easterly line of the lands shown upon said map filed under Cover No.
553; running thence southerly along the easterly line of the lands, shown upon
said map and forming an interior angle of 110 degrees 48' with the last
described line 1268.64 feet to the point or place of beginning.
EXCEPTING THEREFROM a triangular parcel of land situate in the Town of
Cheektowaga, County of Erie and State of New York, being a part of Lots 15 and
23, Township 11, Range 7 of the Holland Land Company's Survey, bounded and
described as follows:
BEGINNING at the point of intersection of the southerly line of lands
conveyed by Philip Stephan by executors to the Buffalo General Electric Company
by deed dated June 16, 1926 and recorded in the Office of the Clerk of the
County of Erie in Liber 1894 of Deeds at page 49 and the westerly line of lands
conveyed by same grantors to the Niagara, Lockport and Ontario Power Company by
deed dated January 15, 1917 and recorded in the Office of said Clerk in Liber
1392 of Deeds at page 474; thence southerly along the lands so conveyed to said
Niagara, Lockport and Ontario Power Company, 73.47 feet to a point; thence
westerly, and forming an exterior angle of 107 degrees 25' with the last
described line 117.01 feet to a point on the southerly line of lands conveyed to
the Buffalo General Electric Company as above mentioned at a point on said
southerly line, 118.08 feet westerly measured along said southerly line from the
point of beginning; thence easterly along the southerly line of lands so
conveyed to said Buffalo General Electric Company, and forming an interior angle
of 36 degrees 25' with the last described line 118.08 feet to the point of
beginning.
PARCEL 3
ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of Cheektowaga,
County of Erie and State of New York, being part of Farm Lot 23, Township 11,
Range 7 of the Holland Land Company's Survey, more particularly bounded and
described as follows:
BEGINNING at the intersection of the east line of land as shown on a
subdivision map filed in the Erie County Clerk's Office under Cover No. 812 with
the south line of Wojcik Street, as a sixty (60) foot highway; running thence
easterly along the south line of said Wojcik Street 361.83 feet to the west line
of lands of the Niagara, Lockport and Ontario Power Company; running thence
southerly along the said west line of the lands of the Niagara, Lockport and
Ontario Power Company and forming an interior angle of 86(0) 17' with the last
described line 692.31 feet; thence west on a line parallel with William Street
and forming an interior angle of 93 degrees 02' 50" with the last described
line 324.10 feet to a point in the said east line of lands as shown on said
subdivision map under Cover No. 812; running thence northerly along said east
line of lands on map under Cover No. 812 and forming an interior angle of
90 degrees 04' 20" with the last described line 687.10 feet to the point or
place of beginning.
- 2 -
PARCEL 4
ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of Cheektowaga,
County of Erie and State of New York, being part of Farm Lot 23, Township 11,
Range 7 of the Holland Land Company's Survey, and being more particularly
described as follows:
COMMENCING at the intersection of the east line of lands as shown on map
filed in the office of the Clerk of the County of Erie under Map Cover No. 812
and the north line of Wojcik Street, as said north line is projected easterly;
running thence southerly along said east line of lands under Cover No. 812 as
aforesaid 15 feet; running thence easterly on a line which is parallel to the
said north line of Wojcik Street as said north line is extended or projected
easterly and forming an exterior angle of 90 degrees 34' 20" with the last
described line 364.31 feet to a point in the west line of lands of the Niagara
Mohawk Power Corporation; running thence northerly along said west line of the
Niagara Mohawk Power Corporation's lands and forming an interior angle of
93 degrees 43' with the last described line 15.03 feet to its intersection with
the said north line of Wojcik Street as said north line is extended or projected
easterly; running thence westerly along the said north line of Wojcik Street as
the same is projected easterly and forming an interior angle of 86 degrees 17'
with the last described line 365.14 feet to a point in the east line of lands as
shown under Cover No. 812 as aforesaid at the point or place of beginning.
PARCEL 5
ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of Cheektowaga,
County of Erie and State of New York, being part of Lot No. 23, Township 11,
Range 7 of the Holland Land Company's Survey, and being further bounded and
described as follows:
COMMENCING at the intersection of the east line of lands shown under Map
Cover 812 and the north line of Wojcik Street as projected easterly; thence
southerly along the east line of Map Cover 812 a distance of 60 feet to a point
(said point being the southeast corner of subdivision lot No. 51, Block S, Map
Covers 553 and 812); thence easterly and along the southerly line of lands
conveyed to the Town of Cheektowaga by deed recorded in the Erie County Clerk's
Office in Liber 1450 of Deeds at page 288 and forming an interior angle of
89 degrees 25' 40" with the last described line a distance of 361.83 feet to a
point in the west line of lands now owned by Niagara Mohawk Power Company;
thence northerly along the lands of the Niagara Mohawk Power Company and forming
an interior angle of 93 degrees 43' with the last described line a distance of
60.13 feet to its intersection with the north line of Wojcik Street as said line
is extended or projected easterly; thence westerly along said north line of
Wojcik Street as extended easterly and forming an interior angle of 86 degrees
17' with the last described line 365.14 feet to a point in the east line of
Cover No. 812, at the point of beginning.
EXCEPTING land conveyed by Town of Cheektowaga to Ashland Oil & Refining
Company by deed recorded in Deed Liber 5291, page 317.
- 3 -
PARCEL 6
ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of Cheektowaga,
County of Erie and State of New York, being part of Lot No. 23, Township 11 and
Range 7 of the Holland Land Company's Survey and according to maps filed in the
Erie County Clerk's Office under Covers Nos. 553 and 812 is known as subdivision
lots Nos. 51 and 52 in Block "S", and being further bounded and described as
follows:
BEGINNING at a point in the easterly line of Starlite Avenue (formerly
Dombrowski Avenue) at the southwest corner of the aforesaid Subdivision Lot No.
51, thence easterly at right angles to Starlite Avenue and along the south line
of said Subdivision Lot No. 51, 123.60 feet to the southeast corner of said
Subdivision Lot; thence northerly and forming an interior angle of 90 degrees
34' 20" with the last described line and along the east line of Sublots 51 and
52 as aforesaid 60.0 feet to the northeast corner of Sublot 52; thence westerly
along the north line of Sublot 52 and forming an interior angle of 89 degrees
25' 40" with the last described line 124.20 feet to the east line of Starlite
Avenue; thence southerly at right angles to the last described line 60.0 feet to
the point or place of beginning.
- 4 -
Schedule II
Additional Permitted Property Liens
NONE
Schedule III
Local Law Provisions
1. NYRPL 291-f. Section 291-f of the New York State Real Property Law
shall apply to any cancellation, abridgement, modification, or prepayment of any
Lease, it being intended that Mortgagee shall have the benefit of Section 291-f.
2. Commercial Property. Mortgagee represents that this Mortgage does not
encumber real property principally improved or to be improved by one or more
structures containing in the aggregate not more than six (6) residential
dwelling units, each having its own separate cooking facilities.
3. Trust Fund. Mortgagor agrees that it will receive the advances secured
by this Mortgage and will hold the right to receive such advances as a trust
fund to be applied first for the purpose of paying the cost of improvement, if
any, and will apply the same first to the payment of such costs before using any
part of the total of the same for any other purpose and will comply with Section
13 of the New York Lien Law. To the extent permitted by Applicable Law,
Mortgagor will indemnify and hold Mortgagee harmless against any loss or
liability, cost or expense, including, without limitation, any judgments,
attorneys' fees, costs of appeal, bonds, arising out of or relating to any
proceeding instituted by any claimant alleging a violation by Mortgagee or
Mortgagor of any Section of Article 3A of the New York Lien Law. The provisions
of this Section 3 shall survive the payment and performance of Mortgagor's
obligations under this Mortgage and the other Operative Documents.
4. Maximum Principal Indebtedness. NOTWITHSTANDING ANYTHING CONTAINED
HEREIN TO THE CONTRARY, THE MAXIMUM PRINCIPAL INDEBTEDNESS WHICH IS OR UNDER ANY
CONTINGENCY MAY BE SECURED BY THIS MORTGAGE IS FIVE MILLION AND 00/100 U.S.
DOLLARS ($5,000,000), TOGETHER WITH (I) TAXES, CHARGES OR ASSESSMENTS WHICH MAY
BE IMPOSED BY LAW UPON THE SUBJECT PROPERTY, (II) PREMIUMS ON INSURANCE POLICIES
COVERING THE SUBJECT PROPERTY, AND (III) EXPENSES INCURRED IN UPHOLDING THE LIEN
OF THIS MORTGAGE INCLUDING, BUT NOT LIMITED TO, (A) THE EXPENSES OF ANY
LITIGATION TO PROSECUTE OR DEFEND THE RIGHTS AND LIEN CREATED BY THIS MORTGAGE,
(B) ANY AMOUNT, COST OR CHARGE TO WHICH THE MORTGAGEE BECOMES SUBROGATED, UPON
PAYMENT, WHETHER UNDER RECOGNIZED PRINCIPLES OF LAW OR EQUITY, OR UNDER EXPRESS
STATUTORY AUTHORITY, AND (C) INTEREST AT THE OVERDUE RATE (OR REGULAR INTEREST
RATE) AND PENALTIES PROVIDED FOR HEREIN OR IN THE OTHER OPERATIVE DOCUMENTS.
- 2 -
5. Last Dollars Secured; Priority. This Mortgage secures only a portion of
the Obligations. The parties agree that any payments or payment on account of
the Obligations shall be and be deemed to be applied first to the portion of the
Obligations that is not secured hereby, it being the parties' intent that the
portion of the Obligations last remaining unpaid shall be secured hereby.
- 3 -
Schedule IV
Defined Terms
"Appurtenant Rights" means, with respect to the Land and the Subject
Property, (i) all agreements, easements, rights of way or use, rights of ingress
or egress, privileges, appurtenances, tenements, and other rights and benefits
at any time belonging or pertaining to the Land and the Subject Property,
including the use of any streets, ways, alleys, vaults or strips of land
adjoining, abutting, adjacent or contiguous to the Land and (ii) all permits,
licenses and rights, whether or not of record, appurtenant to the Land and (iii)
all of the Mortgagor's right, title and interest in all general intangibles
relating to the design, development, operation, management and use of the
Subject Property, all certificates of occupancy, zoning variances, building, use
or other permits, approvals, authorizations and consents obtained from and all
materials prepared for filing or filed with any Governmental Authority in
connection with the development, use, operation or management of the Subject
Property, all construction, service, engineering, consulting, leasing,
architectural and other similar contracts concerning the design, construction,
management, operation, occupancy and/or use of the Subject Property, all
architectural drawings, plans, specifications, soil tests, feasibility studies,
appraisals, environmental studies, engineering reports and similar materials
relating to any portion of or all of the Subject Property, and all payment and
performance bonds or warranties or guarantees relating to the Subject Property,
all to the extent assignable.
"Equipment" means any equipment the removal of which could reasonably be
expected to affect the value or utility of the Land or the Subject Property,
taken together or separately, including heating, electrical, switch gear, power
supply, lighting, plumbing, ventilation, air conditioning and air cooling
systems, refrigerating equipment, generators, locking and unlocking equipment,
communication systems, sprinkler system and fire prevention systems, security
systems and fixtures of all kinds; provided, however, that the term "Equipment"
shall expressly exclude all inventory, furniture and furnishings.
- 4 -
===============================================================================
LEASE SUPPLEMENT
AND
SHORT FORM/MEMORANDUM OF LEASE
Dated as of December 15, 2004
between
REXUS L.L.C.,
as Lessor
and
ITT INDUSTRIES, INC.,
as Lessee
LOCATION OF PROPERTY:
Street Address: 175 Standard Parkway
Cheektowaga, New York 14227
County: Erie
Block: 1
Lot: 28
Record and Return to:
Jones Day
222 East 41st Street
New York, NY 10017
Attention: Leonard C. Pojednic, Esq.
===============================================================================
LEASE SUPPLEMENT AND SHORT FORM/MEMORANDUM OF LEASE
THIS LEASE SUPPLEMENT AND SHORT FORM/MEMORANDUM OF LEASE, dated as of
December 15, 2004 (this "Supplement"), between REXUS L.L.C., a Delaware limited
liability company with an address at Rexus L.L.C., c/o Societe Generale,
(Canada), as Lessor Administrator, 1501 McGill College, Bureau 1800, Montreal,
Quebec, H3A 3MB, Canada, as the lessor (the "Lessor"), and ITT INDUSTRIES, INC.,
an Indiana corporation, with an address at [ITT Industries, Inc., 4 West Red Oak
Lane, White Plains, NY 10604, Attention: Donald Foley, Treasurer], as lessee
(the "Lessee").
WHEREAS, pursuant to a Participation Agreement, dated as of the date
hereof (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "Participation Agreement"), among the Lessee, the Lessor,
and Air Bail S.A.S. and RBS Lombard, Inc., as Investors, the Investors and the
Lessor have agreed to finance the acquisition of the certain properties
described therein, including the real property described on Schedule I hereto
(such real property described on Schedule I hereto, the "Land"), and the payment
of certain transaction expenses in connection therewith;
WHEREAS, subject to the terms and conditions set forth in the
Participation Agreement, on the date hereof the Lessor purchased from the Lessee
the Land;
WHEREAS, Lessor and Lessee have executed that certain Master Lease and
Deed of Trust, Deed to Secure Debt and Mortgage dated as of the date hereof (the
"Master Lease"); and
WHEREAS, the Lessor wishes to lease the Land and lease all Improvements
now thereon or which hereafter may be constructed thereon and all Appurtenant
Rights with respect thereto to the Lessee (collectively, the "Subject
Property");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Definitions; Interpretation. For purposes of this Supplement,
capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to them in Appendix A to the Master Lease, and the rules of
interpretation set forth in such Appendix A shall apply to this Supplement.
SECTION 2. The Properties. Effective upon the execution and delivery of
this Supplement by the Lessor and the Lessee, the Subject Property shall be
subject to the terms and provisions of the Master Lease and the Lessor hereby
grants, conveys, transfers and assigns to the Lessee those interests, rights,
titles, estates, powers and privileges provided for in the Master Lease with
respect to the Subject Property.
SECTION 3. Amendments to Master Lease with Respect to Subject Property.
Effective upon the execution and delivery of this Supplement by the Lessor and
the Lessee, the following terms and provisions shall apply to the Master Lease
with respect to the Subject Property:
A. Short Form/Memorandum of Lease. The parties hereto set forth the
following information which shall constitute a short form or memorandum of the
Master Lease, as supplemented by this Supplement:
(a) The name and address of the Lessor as set forth in the Master
Lease is:
Rexus L.L.C.
Societe Generale (Canada), as Lessor Administrator
1501 McGill College
Bureau 1800
Montreal, QC, H3A 3MB
Canada
Attention: Manager, Treasury & Loan Servicing Group
with a copy to:
Rexus L.L.C.
Societe Generale, New York Branch
1221 Avenue of the Americas
New York, New York 10020
Attention: President
(b) The name and address of the Lessee as set forth in the Master
Lease is:
ITT Industries, Inc.
4 West Red Oak Lane
White Plains, NY 10604
Attention: Donald Foley, Treasurer
(c) The lease to which this memorandum of lease pertains is the
Master Lease as supplemented by this Supplement and the other
Supplements.
(d) The leased premises are the Subject Property which includes
the Land more particularly described on Schedule I attached
hereto.
(e) The Lessor acquired title to the Land by deed dated on or
about the date hereof and about to be recorded or filed for
record in the Office of the County Clerk of Erie County, New
York.
- 2 -
(f) The term of the Master Lease shall commence on the date hereof
and shall expire on December 17, 2014 unless earlier
terminated in accordance with the terms of the Master Lease,
as supplemented by this Supplement.
(g) The Master Lease contains certain purchase rights and options
during the Lease Term pursuant to which the Lessee or its
designee may acquire the Subject Property.
(h) In addition to those terms referred to herein, the Master
Lease contains numerous other terms, covenants and conditions
that affect the Subject Property, and notice is hereby given
that reference should be had to the Master Lease with respect
to the details of such terms, covenants and conditions. A copy
of the Master Lease or of the other agreements referenced
herein or therein may be obtained from any of the parties
hereto at the addresses set forth herein.
B. Ownership of the Subject Property. The parties hereto intend that for
(i) financial accounting purposes with respect to the Lessee, (ii) United States
federal and all United States state and local income tax purposes and (iii)
United States state real estate and commercial law and bankruptcy purposes, (1)
the Lease will be treated as a financing arrangement, (2) the Lessor will be
deemed a lender making a loan to the Lessee in an aggregate amount equal to the
Original Aggregate Property Cost which loan is secured by the Properties, and
(3) the Lessee will be treated as the owner of the Properties described in the
Lease Supplements and will be entitled to all tax benefits ordinarily available
to an owner of properties similar to the Properties for such tax purposes.
Nevertheless, the Lessee acknowledges and agrees that none of the Lessor, the
Arranger or any Investor has made any representations or warranties to the
Lessee concerning the tax, accounting or legal characteristics of the Operative
Documents and that the Lessee has obtained and relied upon such tax, accounting
and legal advice concerning the Operative Documents as it deems appropriate. The
parties hereto will not take any position inconsistent with the intentions
expressed herein. It is the intent of the parties hereto that the Master Lease,
as supplemented by the Lease Supplements, grants a security interest and
mortgage or deed to secure debt or deed of trust, as the case may be, in and on
each Property to the Lessor for the benefit of the Lessor to secure the
performance of the Lessee under and payment of all amounts under this Master
Lease and the other Operative Documents all as more specifically set forth in
each Lease Supplement. Specifically, without limiting the generality of the
foregoing, the parties hereto intend and agree that in the event of any
insolvency or receivership proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency laws or statute of the United
States of America or any state or commonwealth thereof affecting the Lessee, the
Lessor or the Investors or any collection actions, the transactions evidenced by
the Operative Documents shall be regarded as loans made to the Lessee by the
Lessor and the Investors as unrelated third party lenders of the Lessee.
SECTION 4. Ratification; Incorporation. Except as specifically modified
hereby, the terms and provisions of the Master Lease are hereby ratified and
confirmed and remain in full force and effect. The terms of the Master Lease (as
amended by this Supplement) are by this reference incorporated herein and made a
part hereof.
- 3 -
SECTION 5. Original Supplement. The single executed original of this
Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the
signature page thereof and containing the receipt of the Lessor therefor on or
following the signature page thereof shall be the original executed counterpart
of this Supplement (the "Original Executed Counterpart"). To the extent that
this Supplement constitutes chattel paper, as such term is defined in the
Uniform Commercial Code as in effect in any applicable jurisdiction, no security
interest in this Supplement may be created through the transfer or possession of
any counterpart other than the Original Executed Counterpart.
SECTION 6. Applicable Law; Certain Particular Provisions. This Supplement
shall be governed by and construed in accordance with the laws of the State of
New York.
SECTION 7. No Merger of Title. There shall be no merger of the Master
Lease (as amended by this Supplement) or of the leasehold estate created thereby
by reason of the fact that the same Person may acquire, own or hold, directly or
indirectly, in whole or in part, (a) the Master Lease (as amended by this
Supplement) or the leasehold estate created thereby or any interest in the
Master Lease (as amended by this Supplement) or such leasehold estate, (b) the
fee estate or ground leasehold estate in the Subject Property, except as may
expressly be stated in a written instrument duly executed and delivered by the
Lessor.
SECTION 8. Notices. All notices, offers, acceptances, rejections,
consents, requests, demands or other communications to or upon the respective
parties hereto shall be in writing and shall be deemed to have been given as set
forth in Section 26.4 of the Master Lease.
SECTION 9. Counterpart Execution. This Supplement may be executed in any
number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one and the same
instrument.
[Signature Blocks on Following Page]
- 4 -
IN WITNESS WHEREOF, each of the parties hereto has caused this Supplement
to be duly executed by an officer thereunto duly authorized as of the date and
year first above written.
REXUS L.L.C., as Lessor
By: /s/ Larry Bowman
----------------
Name: Larry Bowman
Title: President
ITT INDUSTRIES, INC., as Lessee
By: /s/ Donald Foley
----------------
Name: Donald Foley
Title: Senior Vice President,
Treasurer and Director
of Tax
N-2
Schedule I
Legal Description
PARCEL 1
ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of Cheektowaga,
County of Erie and State of New York, being part of Lot No. 23, Township 11,
Range 7 of the Holland Land Company's Survey, further described as part of the
premises designated and subdivided on map filed in Erie County Clerk's Office
under Cover of Maps No. 553, more particularly bounded and described as follows:
BEGINNING at a point in the easterly line of said Subdivision Tract
distant southerly, at right angles, 20 feet from the southerly line of lands of
the former Lehigh Valley Railroad Company, now Conrail; thence southerly along
the easterly line of said Subdivision Tract 1354.22 feet to the northerly line
of Wojcik Avenue as said line is extended easterly in a direct line; running
thence westerly along the northerly line of Wojcik Avenue and said line extended
and forming an interior angle of 90 degrees 35' 50" with the last described line
388.2 feet to the easterly line of Walkowiak Avenue; running thence northerly
along the easterly line of Walkowiak Avenue and said line extended northerly in
a direct line and forming an interior angle of 90 degrees with the last
described line 1206.09 feet to a point therein 20.0 feet southerly at right
angles from the southerly line of lands of Conrail (formerly the Lehigh Valley
Railway Company); running thence easterly along a line drawn parallel with the
southerly line of said railway company's land and forming an interior angle of
100 degrees 12' 10" with the last described line 428.70 feet to the point or
place of beginning.
PARCEL 2
ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of Cheektowaga,
County of Erie and State of New York, being parts of Lots Nos. 15 and 23,
Township 11, Range 7 of the Holland Land Company's Survey, bounded and described
as follows:
BEGINNING at the point or intersection of the northerly line of Wojcik
Avenue, as described in deed to the Town of Cheektowaga recorded in Erie County
Clerk's Office in Liber 1450 of Deeds at page 288, with the easterly line of the
lands shown upon map filed in said Clerk's Office under Cover of Maps No. 553;
running thence easterly along said northerly line of Wojcik Avenue 365.14 feet
to the westerly line of lands conveyed to Niagara, Lockport & Ontario Power
Company by deed recorded in said Clerk's Office in Liber 1392 of Deeds at page
474; running thence northerly along the westerly line of lands so conveyed to
said power company and forming an interior angle of 93 degrees 43' with the last
described line 1271.80 feet to an angle therein; running thence northerly along
the westerly line of lands so conveyed to said power company and forming an
exterior angle of 184 degrees 50' 10" with the last described course 158.08 feet
to the southerly line of lands conveyed to Buffalo General Electric Company by
deed recorded in said Clerk's Office in Liber 1894 of Deeds at page 49; running
thence westerly along
the southerly line of lands so conveyed to Buffalo General Electric Company and
forming an interior angle of 71(degree) with the last described course 459.28
feet to the easterly line of the lands shown upon said map filed under Cover No.
553; running thence southerly along the easterly line of the lands, shown upon
said map and forming an interior angle of 110(degree) 48' with the last
described line 1268.64 feet to the point or place of beginning.
EXCEPTING THEREFROM a triangular parcel of land situate in the Town of
Cheektowaga, County of Erie and State of New York, being a part of Lots 15 and
23, Township 11, Range 7 of the Holland Land Company's Survey, bounded and
described as follows:
BEGINNING at the point of intersection of the southerly line of lands
conveyed by Philip Stephan by executors to the Buffalo General Electric Company
by deed dated June 16, 1926 and recorded in the Office of the Clerk of the
County of Erie in Liber 1894 of Deeds at page 49 and the westerly line of lands
conveyed by same grantors to the Niagara, Lockport and Ontario Power Company by
deed dated January 15, 1917 and recorded in the Office of said Clerk in Liber
1392 of Deeds at page 474; thence southerly along the lands so conveyed to said
Niagara, Lockport and Ontario Power Company, 73.47 feet to a point; thence
westerly, and forming an exterior angle of 107 degrees 25' with the last
described line 117.01 feet to a point on the southerly line of lands conveyed to
the Buffalo General Electric Company as above mentioned at a point on said
southerly line, 118.08 feet westerly measured along said southerly line from the
point of beginning; thence easterly along the southerly line of lands so
conveyed to said Buffalo General Electric Company, and forming an interior angle
of 36 degrees 25' with the last described line 118.08 feet to the point of
beginning.
PARCEL 3
ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of Cheektowaga,
County of Erie and State of New York, being part of Farm Lot 23, Township 11,
Range 7 of the Holland Land Company's Survey, more particularly bounded and
described as follows:
BEGINNING at the intersection of the east line of land as shown on a
subdivision map filed in the Erie County Clerk's Office under Cover No. 812 with
the south line of Wojcik Street, as a sixty (60) foot highway; running thence
easterly along the south line of said Wojcik Street 361.83 feet to the west line
of lands of the Niagara, Lockport and Ontario Power Company; running thence
southerly along the said west line of the lands of the Niagara, Lockport and
Ontario Power Company and forming an interior angle of 86 degrees 17' with the
last described line 692.31 feet; thence west on a line parallel with William
Street and forming an interior angle of 93 degrees 02' 50" with the last
described line 324.10 feet to a point in the said east line of lands as shown on
said subdivision map under Cover No. 812; running thence northerly along said
east line of lands on map under Cover No. 812 and forming an interior angle of
90 degrees 04' 20" with the last described line 687.10 feet to the point or
place of beginning.
N - 2
PARCEL 4
ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of Cheektowaga,
County of Erie and State of New York, being part of Farm Lot 23, Township 11,
Range 7 of the Holland Land Company's Survey, and being more particularly
described as follows:
COMMENCING at the intersection of the east line of lands as shown on map
filed in the office of the Clerk of the County of Erie under Map Cover No. 812
and the north line of Wojcik Street, as said north line is projected easterly;
running thence southerly along said east line of lands under Cover No. 812 as
aforesaid 15 feet; running thence easterly on a line which is parallel to the
said north line of Wojcik Street as said north line is extended or projected
easterly and forming an exterior angle of 90 degrees 34' 20" with the last
described line 364.31 feet to a point in the west line of lands of the Niagara
Mohawk Power Corporation; running thence northerly along said west line of the
Niagara Mohawk Power Corporation's lands and forming an interior angle of 93
degrees 43' with the last described line 15.03 feet to its intersection with the
said north line of Wojcik Street as said north line is extended or projected
easterly; running thence westerly along the said north line of Wojcik Street as
the same is projected easterly and forming an interior angle of 86(0) 17' with
the last described line 365.14 feet to a point in the east line of lands as
shown under Cover No. 812 as aforesaid at the point or place of beginning.
PARCEL 5
ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of Cheektowaga,
County of Erie and State of New York, being part of Lot No. 23, Township 11,
Range 7 of the Holland Land Company's Survey, and being further bounded and
described as follows:
COMMENCING at the intersection of the east line of lands shown under Map
Cover 812 and the north line of Wojcik Street as projected easterly; thence
southerly along the east line of Map Cover 812 a distance of 60 feet to a point
(said point being the southeast corner of subdivision lot No. 51, Block S, Map
Covers 553 and 812); thence easterly and along the southerly line of lands
conveyed to the Town of Cheektowaga by deed recorded in the Erie County Clerk's
Office in Liber 1450 of Deeds at page 288 and forming an interior angle of 89
degrees 25' 40" with the last described line a distance of 361.83 feet to a
point in the west line of lands now owned by Niagara Mohawk Power Company;
thence northerly along the lands of the Niagara Mohawk Power Company and forming
an interior angle of 93 degrees 43' with the last described line a distance of
60.13 feet to its intersection with the north line of Wojcik Street as said line
is extended or projected easterly; thence westerly along said north line of
Wojcik Street as extended easterly and forming an interior angle of 86 degrees
17' with the last described line 365.14 feet to a point in the east line of
Cover No. 812, at the point of beginning.
EXCEPTING land conveyed by Town of Cheektowaga to Ashland Oil & Refining
Company by deed recorded in Deed Liber 5291, page 317.
N - 2
PARCEL 6
ALL THAT TRACT OR PARCEL OF LAND, situate in the Town of Cheektowaga,
County of Erie and State of New York, being part of Lot No. 23, Township 11 and
Range 7 of the Holland Land Company's Survey and according to maps filed in the
Erie County Clerk's Office under Covers Nos. 553 and 812 is known as subdivision
lots Nos. 51 and 52 in Block "S", and being further bounded and described as
follows:
BEGINNING at a point in the easterly line of Starlite Avenue (formerly
Dombrowski Avenue) at the southwest corner of the aforesaid Subdivision Lot No.
51, thence easterly at right angles to Starlite Avenue and along the south line
of said Subdivision Lot No. 51, 123.60 feet to the southeast corner of said
Subdivision Lot; thence northerly and forming an interior angle of 90 degrees
34' 20" with the last described line and along the east line of Sublots 51 and
52 as aforesaid 60.0 feet to the northeast corner of Sublot 52; thence westerly
along the north line of Sublot 52 and forming an interior angle of 89 degrees
25' 40" with the last described line 124.20 feet to the east line of Starlite
Avenue; thence southerly at right angles to the last described line 60.0 feet to
the point or place of beginning.
N - 2
===============================================================================
MORTGAGE,
SECURITY AGREEMENT AND FINANCING
STATEMENT (INCLUDING FIXTURE FILING),
AND
SUPPLEMENT
AND
SHORT FORM/MEMORANDUM OF LEASE
Dated as of December 15, 2004
between
REXUS L.L.C.,
as Lessor/Mortgagee
and
ITT INDUSTRIES, INC.,
as Lessee/Mortgagor
LOCATION OF MORTGAGED PROPERTY:
Street Address: 4410 & 4450 Fountain Boulevard
Colorado Springs, Colorado
County: El Paso County, Colorado
Record and Return to:
Jones Day
222 East 41st Street
New York, NY 10017
Attention: Leonard C. Pojednic, Esq.
===============================================================================
MORTGAGE, SECURITY AGREEMENT AND
FINANCING STATEMENT (INCLUDING FIXTURE FILING),
AND SUPPLEMENT AND SHORT FORM/MEMORANDUM OF LEASE
THIS MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT (INCLUDING
FIXTURE FILING), AND SUPPLEMENT AND SHORT FORM/MEMORANDUM OF LEASE (this
"Supplement") dated as of December 17, 2004, between REXUS L.L.C., a Delaware
limited liability company with an address at Societe Generale, New York Branch,
1221 Avenue of the Americas, New York, New York 10020 as the lessor/mortgagee
(the "Lessor/Mortgagee"), and ITT INDUSTRIES, INC., an Indiana corporation, with
an address at 4 West Red Oak Lane, White Plains, New York 10604, as
Lessee/Mortgagor (the "Lessee/Mortgagor").
WHEREAS, Lessor/Mortgagee and Lessee/Mortgagor have executed that certain
Master Lease and Deed of Trust, Deed to Secure Debt and Mortgage dated as of
December 14, 2004 (the "Master Lease");
WHEREAS the Lessor/Mortgagee is the owner of the land described on
Schedule I attached hereto (the "Land"), and wishes to lease the Land and lease
all Improvements now thereon or which hereafter may be constructed thereon to
the Lessee/Mortgagor;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Definitions; Interpretation. For purposes of this Supplement,
capitalized terms used herein and not otherwise defined herein or in Schedule IV
hereto shall have the meanings assigned to them in Appendix A to the Master
Lease, and the rules of interpretation set forth in such Appendix A shall apply
to this Supplement.
SECTION 2. The Properties. Effective upon the execution and delivery of
this Supplement by the Lessor/Mortgagee and the Lessee/Mortgagor, the Land, all
Improvements on the Land and all other improvements now on the Land or which
hereafter may be constructed thereon and all Appurtenant Rights with respect
thereto and all Equipment (collectively, the "Subject Property") shall be
subject to the terms and provisions of the Master Lease and the Lessor/Mortgagee
hereby grants, conveys, transfers and assigns to the Lessee/Mortgagor those
interests, rights, titles, estates, powers and privileges provided for in the
Master Lease with respect to the Subject Property.
SECTION 3. Amendments to Master Lease with Respect to Subject Property.
Effective upon the execution and delivery of this Supplement by the
Lessor/Mortgagee and the Lessee/Mortgagor, the following terms and provisions
shall apply to the Master Lease with respect to the Subject Property:
A. Short Form/Memorandum of Lease. The parties hereto set forth the
following information which shall constitute a short form or memorandum of the
Master Lease, as supplemented by this Supplement:
(a) The name and address of the Lessor/Mortgagee as set forth in
the is:
Rexus L.L.C.
c/o Societe Generale (Canada), as Lessor Administrator
1501 McGill College
Bureau 1800
Montreal, Quebec, H3A 3MB
Canada
Attention: Manager, Treasury & Loan Servicing Group
with a copy to:
Societe Generale, New York Branch
1221 Avenue of the Americas
New York, New York 10020
Attention: President
(b) The name and address of the Lessee/Mortgagor as set forth in
the Master Lease is:
ITT Industries, Inc.
4 West Red Oak Lane
White Plains, New York 10604
Attention: _________________
(c) The lease to which this memorandum of lease pertains is the
Master Lease as supplemented by this Supplement and the other
Supplements.
(d) The leased premises are the Subject Property which includes
the Land more particularly described on Schedule I attached
hereto.
(e) The Lessor/Mortgagee acquired title to the Land by deed dated
on or about the date hereof and about to be recorded or filed
for record in the El Paso County, Colorado Clerk's office.
(f) The term of the Master Lease shall commence on the date hereof
and shall expire on December 17, 2014 unless earlier
terminated in accordance with the terms of the Master Lease,
as supplemented by this Supplement.
(g) The Master Lease contains certain purchase rights and options
during the Lease Term pursuant to which the Lessee/Mortgagor
or its designee may acquire the Subject Property.
- 2 -
(h) In addition to those terms referred to herein, the Master
Lease contains numerous other terms, covenants and conditions
that affect the Subject Property, and notice is hereby given
that reference should be had to the Master Lease with respect
to the details of such terms, covenants and conditions. A copy
of the Master Lease or of the other agreements referenced
herein or therein may be obtained from any of the parties
hereto at the addresses set forth herein.
B. Ownership of the Subject Property. The parties hereto intend that for
(i) financial accounting purposes with respect to the Lessee/Mortgagor, (ii)
United States federal and all United States state and local income tax purposes
and (iii) United States state real estate and commercial law and bankruptcy
purposes, (1) the Lease will be treated as a financing arrangement, (2) the
Lessor/Mortgagee will be deemed a lender making a loan to the Lessee/Mortgagor
in an aggregate amount equal to the Original Aggregate Property Cost which loan
is secured by the Properties, and (3) the Lessee/Mortgagor will be treated as
the owner of the Properties described in the Lease Supplements and will be
entitled to all tax benefits ordinarily available to an owner of properties
similar to the Properties for such tax purposes. Nevertheless, the
Lessee/Mortgagor acknowledges and agrees that none of the Lessor/Mortgagee, the
Arranger or any Investor has made any representations or warranties to the
Lessee/Mortgagor concerning the tax, accounting or legal characteristics of the
Operative Documents and that the Lessee/Mortgagor has obtained and relied upon
such tax, accounting and legal advice concerning the Operative Documents as it
deems appropriate. The parties hereto will not take any position inconsistent
with the intentions expressed herein. It is the intent of the parties hereto
that this Lease grants a security interest and mortgage or deed to secure debt
or deed of trust, as the case may be, in and on each Property to the
Lessor/Mortgagee for the benefit of the Lessor/Mortgagee to secure the
performance of the Lessee/Mortgagor under and payment of all amounts under this
Master Lease and the other Operative Documents all as more specifically set
forth in each Lease Supplement. Specifically, without limiting the generality of
the foregoing, the parties hereto intend and agree that in the event of any
insolvency or receivership proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency laws or statute of the United
States of America or any state or commonwealth thereof affecting the
Lessee/Mortgagor, the Lessor/Mortgagee or the Investors or any collection
actions, the transactions evidenced by the Operative Documents shall be regarded
as loans made to the Lessee/Mortgagor by the Lessor/Mortgagee and the Investors
as unrelated third party lenders of the Lessee/Mortgagor.
C. Grant of Mortgage Lien and Security Interest: Assignment of Rents. To
secure to the Lessor/Mortgagee the payment and performance of all Obligations:
(a) Subject to the terms and conditions of the Master Lease as
supplemented by this Supplement (including, without
limitation, the Lessee/Mortgagor's rights hereunder and
thereunder), the Lessee/Mortgagor has caused the
Lessor/Mortgagee to hold title to the Subject Property and
Lessee/Mortgagor does hereby mortgage, grant, bargain, sell,
convey, assign, transfer and set over to the Lessor/Mortgagee,
with power of sale, to the extent permitted by Applicable Law:
(i) all of the Lessee/Mortgagor's right, title and interest
from time to time in the
- 3 -
Subject Property of whatever nature including, without
limitation, Lessee/Mortgagor's leasehold interest under the
Master Lease; all condemnation and insurance proceeds relative
to the Subject Property and all Profits as defined below; and
(ii) all of the Lessee/Mortgagor's right, title and interest
in and to all proceeds of the conversion, whether voluntary or
involuntary, of any of the above-described property into cash
or other liquid claims, including, without limitation, all
awards, payments or proceeds, including interest thereon, and
the right to receive the same, which may be made as a result
of casualty, any exercise of the right of eminent domain or
deed in lieu thereof, the alteration of the grade of any
street and any injury to or decrease in the value thereof, the
foregoing being referred to hereinafter as the "Security
Property".
TO HAVE AND TO HOLD the Security Property, subject however to
Permitted Property Liens (which shall include the items set
forth on Schedule II), unto the Lessor/Mortgagee, its
successors and assigns forever.
(i) Protective Advances. The Lessor/Mortgagee shall have the
right, but not the obligation, to make protective
advances with respect to the Security Property for the
payment of taxes, assessments, insurance premiums or
costs incurred for the protection of the Security
Property, and such protective advances, together with
interest thereon at the Overdue Rate from the date of
each such advance until it is repaid in full, shall be
secured by this Supplement to the fullest extent and
with the highest priority contemplated by applicable
law.
(ii) Mortgage. The Lessee/Mortgagor and the Lessor/Mortgagee
intend that this Supplement shall secure
Lessee/Mortgagor's obligation to repay the unpaid
balance of advances made by the Lessor/Mortgagee and/or
the holder hereof under the Master Lease and other
Operative Documents to the fullest extent and with the
highest priority contemplated by applicable law. The
obligations secured hereby shall include, without
limitation, all Basic Rent, Accrual Rent and Fixed Rent
as well as all Supplemental Rent due from
Lessee/Mortgagor under the Master Lease. The maximum
amount of advances, exclusive of interest thereon
(whether or not identified as interest and including
specifically all Accrual Rent under the Master Lease),
and exclusive of advances made for the payment of real
estate taxes, assessments, insurance premiums and costs
incurred for the protection of the Security Property,
all of which are also secured by this Supplement, which
may be outstanding at any time is One Hundred Twenty
Million and 00/100 Dollars ($120,000,000.00).
- 4 -
(b) Subject to the terms and conditions of the Master Lease as
supplemented by this Supplement (including, without
limitation, the Lessee/Mortgagor's rights hereunder and
thereunder so long as no Lease Event of Default has occurred
and is continuing), the Lessee/Mortgagor hereby grants to the
Lessor/Mortgagee a security interest in the Lessee/Mortgagor's
interest in that portion of the Security Property (the "UCC
Property") subject to the Uniform Commercial Code of the State
of Colorado (the "UCC"). The Master Lease, as supplemented by
this Supplement, shall also be deemed to be a security
agreement and shall support any financing statement showing
the Lessor/Mortgagee's interest as a secured party with
respect to any portion of the UCC Property described in such
financing statement. The Lessee/Mortgagor agrees, at its sole
cost and expense, to execute, deliver and file from time to
time such further instruments as may be requested by the
Lessor/Mortgagee to confirm and perfect the lien of the
security interest in the collateral described in this
Supplement.
(c) The Lessee/Mortgagor hereby irrevocably assigns, conveys,
transfers and sets over unto the Lessor/Mortgagee (subject,
however, to the Master Lease and the rights of the
Lessee/Mortgagor thereunder and hereunder) any and all
subleases or other occupancy agreements now existing, or that
may hereafter come into existence with respect to the Subject
Property or any part thereof, including any guaranties of such
sublease or occupancy agreements (collectively, the
"Subleases") and all and every part of the rents, issues and
profits (collectively, the "Profits") that may from time to
time become due and payable on account of the Subleases,
provided, that, unless a Lease Event of Default is continuing,
the Lessee/Mortgagor shall have the right to collect and
retain such Profits. Upon request of the Lessor/Mortgagee, the
Lessee/Mortgagor shall execute and cause to be recorded, at
its expense, supplemental or additional assignments of any
Subleases of the Subject Property. Upon the occurrence and
during the continuance of a Lease Event of Default, the
Lessor/Mortgagee is hereby fully authorized and empowered in
its discretion (in addition to all other powers and rights
herein granted), to apply for and collect and receive all such
Profits and enforce such guaranty or guaranties, and all money
so received under and by virtue of this assignment shall be
applied as further security for the payment and performance of
the Obligations secured hereby.
(d) Notwithstanding that this Supplement is an absolute assignment
of the Profits and the Subleases and not merely the collateral
assignment of, or the grant of a lien or security interest in
the Profits and the Subleases, the Lessor/Mortgagee grants to
the Lessee/Mortgagor a revocable license to collect and
receive the Profits and to retain, use and enjoy such Profits.
Such license shall be automatically revoked upon the
occurrence and during the continuance of any Lease Event of
Default.
- 5 -
D. Remedies.
(a) Upon the occurrence and during the continuance of a Lease
Event of Default, each of which are also events of default
under this Supplement, the Lessor/Mortgagee may exercise any
one or more of the following rights and remedies as it, in its
sole discretion, may deem necessary or appropriate:
(i) collect interest on all past due sums at the Overdue
Rate;
(ii) terminate the Master Lease and, either in person or by
agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and
without regard to the adequacy of security, enter upon
and take possession of the Security Property, or any
part thereof, in its own name, and do any acts which it
deems necessary or desirable to preserve the value,
marketability or rentability of the Security Property,
or any part thereof or interest therein, to increase the
income therefrom or to protect the security hereof and,
with or without taking possession of the Security
Property, to sue for or otherwise to collect the Profits
thereof, including, without limitation, those past due
and unpaid, and to apply the same, less costs and
expenses of operation and collection, including, without
limitation, reasonable attorneys' fees, upon any
Obligations secured hereby, all in such order as the
Lessor/Mortgagee may determine. The entering upon and
taking possession of the Security Property, and the
collection of such Profits and the application thereof
as aforesaid, shall not cure or waive any Lease Event of
Default or notice of a Lease Event of Default hereunder
or invalidate any act done in response to such Lease
Event of Default and, notwithstanding the continuance in
possession of the Lessor/Mortgagee or the collection,
receipt and application of Profits by the
Lessor/Mortgagee, the Lessor/Mortgagee shall be entitled
to exercise every right provided for herein or by law
upon the occurrence and during the continuance of any
Lease Event of Default, including, without limitation,
the right to exercise the power of sale;
(iii) declare all sums secured hereby immediately due and
payable by delivery to the Lessee/Mortgagor a written
declaration of the occurrence and continuance of a Lease
Event of Default and deliver a notice of non-judicial
foreclosure by power of sale of the Subject Property,
and proceed with such non-judicial foreclosure in
accordance with Applicable Law;
(iv) in lieu of sale pursuant to the power of sale conferred
hereby, foreclose in the manner provided by Applicable
Law for the foreclosure of mortgages on real property;
- 6 -
(v) whether or not a non-judicial or judicial foreclosure
proceeding as described above has been commenced,
declare immediately due and payable without notice or
demand, as otherwise required hereunder or under
Applicable Law, all amounts payable by the
Lessee/Mortgagor hereunder or under the other Operative
Documents which are then unpaid, with all interest and
sums accrued and accelerate payment thereof
notwithstanding contrary terms of payment stated therein
and exercise all rights and remedies available
hereunder, at law, in equity or otherwise;
(vi) as a matter of right, and upon notice to the
Lessee/Mortgagor or anyone under the Lessee/Mortgagor
and without regard to the adequacy of its security or
the then value of the Security Property or the interest
of the Lessee/Mortgagor therein, apply to any court
having jurisdiction to appoint a receiver or receivers
of the Security Property and the Lessee/Mortgagor hereby
irrevocably consents to such appointment and, to the
extent permitted by Applicable Law, waives notice of any
application therefor. Any such receiver or receivers
shall have all the usual powers and duties of receivers
in like or similar cases and all the powers of the
Lessor/Mortgagee provided for above, and shall continue
as a receiver and exercise all such powers until the
date of confirmation of sale of the Security Property
unless such receivership is sooner terminated by the
Lessor/Mortgagee in its sole discretion.
Upon the occurrence and during the continuance of a Lease
Event of Default, the Lessor/Mortgagee shall be entitled to
enforce payment and performance of any Obligations secured
hereby and to exercise all rights and powers hereunder or any
laws now or hereafter in force notwithstanding that some or
all of said Obligations secured hereby may now or hereafter be
otherwise secured, whether by mortgage, deed of trust, pledge,
lien, assignment or otherwise. Neither the acceptance nor the
enforcement hereof, whether by court action or pursuant to the
power of sale or other powers herein contained, shall
prejudice or in any manner affect the Lessor/Mortgagee's right
to realize upon or enforce any other security now or hereafter
held by the Lessor/Mortgagee, and the Lessor/Mortgagee shall
be entitled to enforce the rights and remedies provided for
herein and any other security now or hereafter held by the
Lessor/Mortgagee in such order and manner as it may in its
absolute discretion determine. No remedy conferred upon or
reserved to the Lessor/Mortgagee is intended to be exclusive
of any other remedy, but each shall be cumulative and shall be
in addition to every other remedy given hereby or now or
hereafter existing at law or in equity or by statute. Every
power or remedy given hereby to the Lessor/Mortgagee or to
which the Lessor/Mortgagee may be otherwise entitled, may be
exercised, concurrently or independently, from time to time
and as often as may be
- 7 -
deemed expedient by the Lessor/Mortgagee, and the
Lessor/Mortgagee may pursue inconsistent remedies.
(b) Upon the occurrence and during the continuance of a Lease
Event of Default, the Lessor/Mortgagee, in addition to and not
in lieu of or in diminution of the rights and remedies
provided above shall have all of the rights and remedies of a
secured party under the UCC, which rights and remedies may be
exercised without application to any court to the extent
permitted by the UCC.
(c) It is the intent of the parties hereto that the Master Lease
be treated as a secured borrowing as provided in Section 3B
above, and that, upon the occurrence and during the
continuance of a Lease Event of Default, the Lessor/Mortgagee
shall have remedies provided for herein. In the event that,
notwithstanding the intention of the parties, a court of
competent jurisdiction determines that, for the purpose of
remedies, the transaction contemplated by the Master Lease
constitutes a leasing arrangement, the parties hereto
acknowledge and agree that the Lessor/Mortgagee shall have, as
a result of such determination, in addition to the remedies
set forth in this Section 3D(a) above, all of the rights and
remedies of a landlord provided for in Article XVI of the
Master Lease, provided that the parties hereto acknowledge and
agree that it is their intent that the Master Lease be
construed as provided in Section 3B above.
SECTION 4. Lessor/Mortgagee Grant. (a) The Lessor/Mortgagee hereby
unconditionally grants a security interest in and a Lien to the Lessee/Mortgagor
against all of the Lessor/Mortgagee's right, title and interest in and to the
Security Property, which Lien shall be effective only if the Lessor/Mortgagee
shall become the subject of any bankruptcy, insolvency or similar proceeding and
such proceeding shall result in the rejection of the Master Lease. Such Lien
shall secure the satisfaction of the Lessee/Mortgagor's right to damages and
other claims arising out of the rejection of the Master Lease to the extent and
in the manner provided for pursuant to the Operative Documents.
(b) The Lessee/Mortgagor agrees that the conditional Lien created in
paragraph (a) of this Section 4 will terminate upon the termination of the
Master Lease with respect to the Subject Property for any reason other than a
rejection of the Master Lease in connection with a bankruptcy, insolvency or
similar proceeding with respect to the Lessor/Mortgagee. Lessee/Mortgagor
covenants to promptly deliver any releases or reconveyances reasonably required
by Lessor/Mortgagee to evidence such termination of Lien.
(c) The Lien created in paragraph (a) of this Section 4 is junior and
subordinate in all respects to the Liens granted by the Lessee/Mortgagor in
favor of the Lessor/Mortgagee pursuant to this Supplement and the other
Operative Documents.
- 8 -
SECTION 5. Ratification; Incorporation. Except as specifically modified
hereby, the terms and provisions of the Master Lease are hereby ratified and
confirmed and remain in full force and effect. The terms of the Master Lease (as
amended by this Supplement) are by this reference incorporated herein and made a
part hereof.
SECTION 6. Original Supplement. The single executed original of this
Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the
signature page thereof and containing the receipt of the Lessor/Mortgagee
therefor on or following the signature page thereof shall be the original
executed counterpart of this Supplement (the "Original Executed Counterpart").
To the extent that this Supplement constitutes chattel paper, as such term is
defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction, no security interest in this Supplement may be created through the
transfer or possession of any counterpart other than the Original Executed
Counterpart.
SECTION 7. Applicable Law; Certain Particular Provisions. This Supplement
shall be governed by and construed in accordance with the laws of the
jurisdictions identified in this Section 7 (the "Applicable Law") which shall
for most purposes be the laws of the State of New York; provided, however, that
the provisions of this Supplement relating to the creation, perfection and
enforcement of the lien and security interest created by this Supplement in
respect of the Subject Property and the exercise of each remedy provided hereby,
including the power of foreclosure or power of sale procedures set forth in this
Supplement, shall be governed by and construed in accordance with the internal
law of the State of Colorado, and each of the Lessor/Mortgagee and the
Lessee/Mortgagor agree to submit to jurisdiction and the laying of venue for any
suit on this Supplement in the State of Colorado. The terms and provisions set
forth in Schedule III attached hereto are hereby incorporated by reference as
though fully set forth herein. In the event of any conflict between the terms
and provisions contained in the body of the Master Lease (as amended by this
Supplement) and the terms and provisions set forth in Schedule III, the terms
and provisions set forth in Schedule III shall govern and control.
SECTION 8. No Merger of Title. There shall be no merger of the Master
Lease (as amended by this Supplement) or of the leasehold estate created thereby
by reason of the fact that the same Person may acquire, own or hold, directly or
indirectly, in whole or in part, (a) the Master Lease (as amended by this
Supplement) or the leasehold estate created thereby or any interest in the
Master Lease (as amended by this Supplement) or such leasehold estate, (b) the
fee estate or ground leasehold estate in the Subject Property, except as may
expressly be stated in a written instrument duly executed and delivered by the
Lessor/Mortgagee.
SECTION 9. Satisfaction of the Mortgage, Security Interest and Assignment
of Rents and Subleases. If the Lessee/Mortgagor complies with the provisions of
this Supplement and irrevocably pays and performs (to the reasonable
satisfaction of Lessor/Mortgagee) all of the Obligations secured hereby, in
accordance with the provisions of the Master Lease, as supplemented by this
Supplement and the other Operative Documents and in the manner and at the times
set forth therein, without deduction, fraud or delay, then and from thenceforth
this Supplement and the estate hereby granted and created in favor of the
Lessor/Mortgagee, shall cease and become void, anything hereinbefore contained
to the contrary notwithstanding.
- 9 -
SECTION 10. Maximum Interest Rate. No provision of this Supplement or any
transaction related thereto shall require the payment or permit the collection
of interest or any other amount in excess of the maximum permitted by Applicable
Law. If any excess of interest or any other amount in such respect is herein or
any other Operative Document provided for, the Lessee/Mortgagor shall not be
obligated to pay such excess interest or any other amounts in excess of the
amount permitted by applicable law, and the right to demand the payment of any
such excess shall be and hereby is waived, and this provision shall control any
other provision of this Supplement and the other Operative Documents.
SECTION 11. Security Agreement and Fixture Financing Statement. This
Supplement is both a real property mortgage and a "security agreement" within
the meaning of the UCC. The Subject Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in
nature, of Lessee/Mortgagor in the Subject Property. In Section 3.C (b) above,
Lessee/Mortgagor has granted to Lessor/Mortgagee, as security for the
Obligations, a security interest in the UCC Property to the full extent that the
UCC Property may be subject to the UCC. The information contained in this
Section 11 is provided in order that this Supplement shall comply with the
requirements of the UCC for mortgages to be effective as financing statement
filed as a fixture filing. The name of the "debtor" is ITT INDUSTRIES, INC.; the
name of the "secured party" is REXUS L.L.C.; the mailing address of the "secured
party" from which information concerning the security interest may be obtained
and the mailing address of the "debtor" are as set forth in Section 12 of this
Supplement. The types, or the items, of collateral covered hereby consist of the
UCC Property identified in Section 3.C which constitute fixtures or personal
property. The Lessor/Mortgagee is the record owner of the Land.
SECTION 12. Notices. For purposes of this instrument all notices shall be
in writing and must be given in the manner provided in Section 14.3 of the
Participation Agreement to the addresses set forth in Schedule V hereto.
SECTION 13. Counterpart Execution. This Supplement may be executed in any
number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one and the same
instrument.
[Signature Blocks on Following Page]
- 10 -
IN WITNESS WHEREOF, each of the parties hereto has caused this Supplement
to be duly executed by an officer thereunto duly authorized as of the date and
year first above written.
REXUS L.L.C., as Lessor/Mortgagee
By: /s/ Larry Bowman
----------------
Name: Larry Bowman
Title: President
ITT INDUSTRIES, INC., as Lessee/Mortgagor
By: /s/ Donald Foley
----------------
Name: Donald Foley
Title: Senior Vice President,
Treasurer and Director
of Tax
N - 2
Schedule I
Legal Description
LOT 1 IN FOSTER TECHNOLOGICAL CENTER, IN THE CITY OF COLORADO SPRINGS, EL PASO
COUNTY, COLORADO (A PLAT OF WHICH IS RECORDED IN PLAT BOOK D-4 AT PAGE 76 OF THE
RECORDS OF EL PASO COUNTY, COLORADO), TOGETHER WITH A NON-EXCLUSIVE EASEMENT FOR
INGRESS, EGRESS AND PUBLIC UTILITY PURPOSES AS RECORDED IN BOOK 5556 AT PAGE
1087 OF THE EL PASO COUNTY RECORDS.
LOT 2 IN FOSTER TECHNOLOGICAL CENTER, IN THE CITY OF COLORADO SPRINGS, COUNTY OF
EL PASO, STATE OF COLORADO, AS RECORDED IN PLAT BOOK D-4 AT PAGE 76 OF THE
RECORDS OF EL PASO COUNTY, COLORADO AND AS AMENDED BY ENGINEER'S STATEMENT
RECORDED NOVEMBER 16, 1989 IN BOOK 5686 AT PAGE 979 OF THE RECORDS OF EL PASO
COUNTY, COLORADO.
THE ABOVE-DESCRIBED PROPERTY CONTAINS 5.79 ACRES, MORE OR LESS, AND IS SHOWN ON
THAT CERTAIN SURVEY PREPARED BY JOHN KEILERS & ASSOCIATES, BY JOHN KEILERS,
PROFESSIONAL LAND SURVEYOR NO. 23890, DATED DECEMBER 14, 1993.
AND
property located in the County of El Paso, State of Colorado, to wit:
LOT 1 IN BLOCK 1 IN GATEWAY SUBDIVISION NO. 13, IN EL PASO COUNTY,
COLORADO. NOTE: SAID PROPERTY HAS BEEN REPLATTED INTO LOTS 1 AND 2, FOSTER
TECHNOLOGICAL CENTER AND LOTS 1,2 AND 3, FOSTER TECHNOLOGICAL CENTER
FILING NO. 2, COUNTY OF EL PASO, STATE OF COLORADO. EXCEPT: 1. LOT 2,
FOSTER TECHNOLOGICAL CENTER (PARTIAL RELEASE RECORDED AUGUST 26, 1988 IN
BOOK 5547 AT PAGE 1030). 2. THE MAJORITY OF LOT 1, FOSTER TECHNOLOGICAL
CENTER (AS DESCRIBED IN PARTIAL RELEASE RECORDED JUNE 27, 1985 IN BOOK
5026 AT PAGE 103).
Schedule II
Additional Permitted Property Liens
NONE
Schedule III
Local Law Provisions
- 2 -
Schedule IV
Defined Terms
"Appurtenant Rights" means, with respect to the Land and the Subject
Property, (i) all agreements, easements, rights of way or use, rights of ingress
or egress, privileges, appurtenances, tenements, and other rights and benefits
at any time belonging or pertaining to the Land and the Subject Property,
including the use of any streets, ways, alleys, vaults or strips of land
adjoining, abutting, adjacent or contiguous to the Land and (ii) all permits,
licenses and rights, whether or not of record, appurtenant to the Land and (iii)
all of the Lessee/Mortgagor's right, title and interest in all general
intangibles relating to the design, development, operation, management and use
of the Subject Property, all certificates of occupancy, zoning variances,
building, use or other permits, approvals, authorizations and consents obtained
from and all materials prepared for filing or filed with any Governmental
Authority in connection with the development, use, operation or management of
the Subject Property, all construction, service, engineering, consulting,
leasing, architectural and other similar contracts concerning the design,
construction, management, operation, occupancy and/or use of the Subject
Property, all architectural drawings, plans, specifications, soil tests,
feasibility studies, appraisals, environmental studies, engineering reports and
similar materials relating to any portion of or all of the Subject Property, and
all payment and performance bonds or warranties or guarantees relating to the
Subject Property, all to the extent assignable.
"Equipment" means any equipment the removal of which could reasonably be
expected to affect the value or utility of the Land or the Subject Property,
taken together or separately, including heating, electrical, switch gear, power
supply, lighting, plumbing, ventilation, air conditioning and air cooling
systems, refrigerating equipment, generators, locking and unlocking equipment,
communication systems, sprinkler system and fire prevention systems, security
systems and fixtures of all kinds; provided, however, that the term "Equipment"
shall expressly exclude all inventory, furniture and furnishings.
- 3 -
Schedule V
Notice Information
LESSEE/MORTGAGOR
ITT INDUSTRIES, INC.
4 West Red Oak Lane
White Plains, New York 10604
Attention: Donald Foley, Treasurer
with a copy to:
Red Oak Corporate Park
4 West Red Oak Lane
White Plains, New York 10604
Attention: Keith Richey, International Tax Counsel
LESSOR/MORTGAGEE
REXUS L.L.C.
c/o Societe Generale (Canada), as Lessor Administrator
1501 McGill College
Bureau 1800
Montreal, Quebec, H3A 3MB
Canada
Attention: Manager, Treasury & Loan Servicing Group
with a copy to:
Societe Generale, New York Branch
1221 Avenue of the Americas
New York, New York 10020
Attention: President
- 4 -
===============================================================================
OPEN-END MORTGAGE,
SECURITY AGREEMENT AND FINANCING
STATEMENT (INCLUDING FIXTURE FILING),
AND
SUPPLEMENT
AND
SHORT FORM/MEMORANDUM OF LEASE
Dated as of December 15, 2004
between
REXUS L.L.C.,
as Lessor/Mortgagee
and
ITT INDUSTRIES, INC.,
as Lessee/Mortgagor
LOCATION OF MORTGAGED PROPERTY:
Street Address: 701 E. Lugbill Road
Archbold, Ohio
County: Fulton County, Ohio
Record and Return to:
Jones Day
222 East 41st Street
New York, NY 10017
Attention: Leonard C. Pojednic, Esq.
===============================================================================
Archbold, Ohio Lease Supplement
OPEN-END MORTGAGE, SECURITY AGREEMENT AND
FINANCING STATEMENT (INCLUDING FIXTURE FILING),
AND SUPPLEMENT AND SHORT FORM/MEMORANDUM OF LEASE
Maximum Principal Amount Secured Hereunder Not to Exceed $120,000,000.00
THIS OPEN-END MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT
(INCLUDING FIXTURE FILING), AND SUPPLEMENT AND SHORT FORM/MEMORANDUM OF LEASE
(this "Supplement") dated as of December 17, 2004, between REXUS L.L.C., a
Delaware limited liability company with an address at Societe Generale, New York
Branch, 1221 Avenue of the Americas, New York, New York 10020 as the
lessor/mortgagee (the "Lessor/Mortgagee"), and ITT INDUSTRIES, INC., an Indiana
corporation, with an address at 4 West Red Oak Lane, White Plains, New York
10604, as Lessee/Mortgagor (the "Lessee/Mortgagor").
WHEREAS, Lessor/Mortgagee and Lessee/Mortgagor have executed that certain
Master Lease and Deed of Trust, Deed to Secure Debt and Mortgage dated as of
December 14, 2004 (the "Master Lease");
WHEREAS the Lessor/Mortgagee is the owner of the real property legally
described on Schedule I attached hereto, and wishes to lease the land (the
"Land") and lease all Improvements now thereon or which hereafter may be
constructed thereon to the Lessee/Mortgagor;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Definitions; Interpretation. For purposes of this Supplement,
capitalized terms used herein and not otherwise defined herein or in Schedule IV
hereto shall have the meanings assigned to them in Appendix A to the Master
Lease, and the rules of interpretation set forth in such Appendix A shall apply
to this Supplement.
SECTION 2. The Properties. Effective upon the execution and delivery of
this Supplement by the Lessor/Mortgagee and the Lessee/Mortgagor, the Land, all
Improvements on the Land and all other improvements now on the Land or which
hereafter may be constructed thereon and all Appurtenant Rights with respect
thereto and all Equipment (collectively, the "Subject Property") shall be
subject to the terms and provisions of the Master Lease and the Lessor/Mortgagee
hereby grants, conveys, transfers and assigns to the Lessee/Mortgagor those
interests, rights, titles, estates, powers and privileges provided for in the
Master Lease with respect to the Subject Property.
SECTION 3. Amendments to Master Lease with Respect to Subject Property.
Effective upon the execution and delivery of this Supplement by the
Lessor/Mortgagee and the Lessee/Mortgagor, the following terms and provisions
shall apply to the Master Lease with respect to the Subject Property:
Archbold, Ohio Lease Supplement
A. Short Form/Memorandum of Lease. The parties hereto set forth the
following information which shall constitute a short form or memorandum of the
Master Lease, as supplemented by this Supplement:
(a) The name and address of the Lessor/Mortgagee as referenced in
the Master Lease and set forth in the Participation Agreement
is:
Rexus L.L.C.
c/o Societe Generale (Canada), as Lessor Administrator
1501 McGill College
Bureau 1800
Montreal, Quebec, H3A 3MB
Canada
Attention: Manager, Treasury & Loan Servicing Group
with a copy to:
Societe Generale, New York Branch
1221 Avenue of the Americas
New York, New York 10020
Attention: President
(b) The name and address of the Lessee/Mortgagor as set forth in
the Master Lease is:
ITT Industries, Inc.
4 West Red Oak Lane
White Plains, New York 10604
Attention: _________________________
(c) The lease to which this memorandum of lease pertains is the
Master Lease as supplemented by this Supplement and the other
Supplements.
(d) The leased premises are the Subject Property which includes
the Land more particularly described on Schedule I attached
hereto.
(e) The Lessor/Mortgagee acquired title to the Land by deed dated
on or about the date hereof and about to be recorded or filed
for record in the Recorder's Office of Fulton County, Ohio.
(f) The term of the Master Lease shall commence on the date hereof
and shall expire on December 17, 2014 unless earlier
terminated in accordance with the terms of the Master Lease,
as supplemented by this Supplement.
(g) The Master Lease contains certain purchase rights and options
during the Lease Term pursuant to which the Lessee/Mortgagor
or its designee may acquire the Subject Property.
Archbold, Ohio Lease Supplement
- 2 -
(h) In addition to those terms referred to herein, the Master
Lease contains numerous other terms, covenants and conditions
that affect the Subject Property, and notice is hereby given
that reference should be had to the Master Lease with respect
to the details of such terms, covenants and conditions. A copy
of the Master Lease or of the other agreements referenced
herein or therein may be obtained from any of the parties
hereto at the addresses set forth herein.
Lessor/Mortgagee and Lessee/Mortgagor agree to execute and record a
separate document containing information set forth above.
B. Ownership of the Subject Property. The parties hereto intend that for
(i) financial accounting purposes with respect to the Lessee/Mortgagor, (ii)
United States federal and all United States state and local income tax purposes
and (iii) United States state real estate and commercial law and bankruptcy
purposes, (1) the Master Lease will be treated as a financing arrangement, (2)
the Lessor/Mortgagee will be deemed a lender making a loan to the
Lessee/Mortgagor in an aggregate amount equal to the Original Aggregate Property
Cost which loan is secured by the Properties, and (3) the Lessee/Mortgagor will
be treated as the owner of the Properties described in the Lease Supplements and
will be entitled to all tax benefits ordinarily available to an owner of
properties similar to the Properties for such tax purposes. Nevertheless, the
Lessee/Mortgagor acknowledges and agrees that none of the Lessor/Mortgagee, the
Arranger or any Investor has made any representations or warranties to the
Lessee/Mortgagor concerning the tax, accounting or legal characteristics of the
Operative Documents and that the Lessee/Mortgagor has obtained and relied upon
such tax, accounting and legal advice concerning the Operative Documents as it
deems appropriate. The parties hereto will not take any position inconsistent
with the intentions expressed herein. It is the intent of the parties hereto
that the Master Lease grants a security interest and mortgage or deed to secure
debt or deed of trust, as the case may be, in and on each Property to the
Lessor/Mortgagee for the benefit of the Lessor/Mortgagee to secure the
performance of the Lessee/Mortgagor under and payment of all amounts under this
Master Lease and the other Operative Documents all as more specifically set
forth in each Lease Supplement. Specifically, without limiting the generality of
the foregoing, the parties hereto intend and agree that in the event of any
insolvency or receivership proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency laws or statute of the United
States of America or any state or commonwealth thereof affecting the
Lessee/Mortgagor, the Lessor/Mortgagee or the Investors or any collection
actions, the transactions evidenced by the Operative Documents shall be regarded
as loans made to the Lessee/Mortgagor by the Lessor/Mortgagee and the Investors
as unrelated third party lenders of the Lessee/Mortgagor.
C. Grant of Mortgage Lien and Security Interest: Assignment of Rents. To
secure to the Lessor/Mortgagee the payment and performance of all Obligations:
(a) Subject to the terms and conditions of the Master Lease as
supplemented by this Supplement (including, without
limitation, the Lessee/Mortgagor's rights hereunder and
thereunder), the Lessee/Mortgagor has caused the
Lessor/Mortgagee to hold title to the Subject Property and
Lessee/Mortgagor does hereby mortgage, grant, bargain, sell,
convey,
Archbold, Ohio Lease Supplement
- 3 -
assign, transfer and set over to the Lessor/Mortgagee, with
power of sale, to the extent permitted by Applicable Law: (i)
all of the Lessee/Mortgagor's right, title and interest from
time to time in the Subject Property of whatever nature
including, without limitation, Lessee/Mortgagor's leasehold
interest under the Master Lease; all condemnation and
insurance proceeds relative to the Subject Property and all
Profits as defined below; and (ii) all of the
Lessee/Mortgagor's right, title and interest in and to all
proceeds of the conversion, whether voluntary or involuntary,
of any of the above-described property into cash or other
liquid claims, including, without limitation, all awards,
payments or proceeds, including interest thereon, and the
right to receive the same, which may be made as a result of
casualty, any exercise of the right of eminent domain or deed
in lieu thereof, the alteration of the grade of any street and
any injury to or decrease in the value thereof, the foregoing
being referred to hereinafter as the "Security Property".
TO HAVE AND TO HOLD the Security Property, subject however to
Permitted Property Liens (which shall include the items set
forth on Schedule II), unto the Lessor/Mortgagee, its
successors and assigns forever.
(i) Protective Advances. The Lessor/Mortgagee shall have the
right, but not the obligation, to make protective
advances with respect to the Security Property for the
payment of taxes, assessments, insurance premiums or
costs incurred for the protection of the Security
Property, and such protective advances, together with
interest thereon at the Overdue Rate from the date of
each such advance until it is repaid in full, shall be
secured by this Supplement to the fullest extent and
with the highest priority contemplated by applicable
law.
(ii) Mortgage. The Lessee/Mortgagor and the Lessor/Mortgagee
intend that this Supplement shall secure
Lessee/Mortgagor's obligation to repay the unpaid
balance of advances made by the Lessor/Mortgagee and/or
the holder hereof under the Master Lease and other
Operative Documents to the fullest extent and with the
highest priority contemplated by applicable law. The
obligations secured hereby shall include, without
limitation, all Basic Rent, Accrual Rent and Fixed Rent
as well as all Supplemental Rent due from
Lessee/Mortgagor under the Master Lease. The maximum
amount of advances, exclusive of interest thereon
(whether or not identified as interest and including
specifically all Accrual Rent under the Master Lease),
and exclusive of advances made for the payment of real
estate taxes, assessments, insurance premiums and costs
incurred for the protection of the Security Property,
all of which are also secured by this Supplement, which
may be
Archbold, Ohio Lease Supplement
- 4 -
outstanding at any time is One Hundred Twenty Million
and 00/100 Dollars ($120,000,000.00).
(b) Subject to the terms and conditions of the Master Lease as
supplemented by this Supplement (including, without
limitation, the Lessee/Mortgagor's rights hereunder and
thereunder so long as no Lease Event of Default has occurred
and is continuing), the Lessee/Mortgagor hereby grants to the
Lessor/Mortgagee a security interest in the Lessee/Mortgagor's
interest in that portion of the Security Property (the "UCC
Property") subject to the Uniform Commercial Code of the State
of Ohio (the "UCC"). The Master Lease, as supplemented by this
Supplement, shall also be deemed to be a security agreement
and shall support any financing statement showing the
Lessor/Mortgagee's interest as a secured party with respect to
any portion of the UCC Property described in such financing
statement. The Lessee/Mortgagor agrees, at its sole cost and
expense, to execute, deliver and file from time to time such
further instruments as may be requested by the
Lessor/Mortgagee to confirm and perfect the lien of the
security interest in the collateral described in this
Supplement.
(c) The Lessee/Mortgagor hereby irrevocably assigns, conveys,
transfers and sets over unto the Lessor/Mortgagee (subject,
however, to the Master Lease and the rights of the
Lessee/Mortgagor thereunder and hereunder) any and all
subleases or other occupancy agreements now existing, or that
may hereafter come into existence with respect to the Subject
Property or any part thereof, including any guaranties of such
sublease or occupancy agreements (collectively, the
"Subleases") and all and every part of the rents, issues and
profits (collectively, the "Profits") that may from time to
time become due and payable on account of the Subleases,
provided, that, unless a Lease Event of Default is continuing,
the Lessee/Mortgagor shall have the right to collect and
retain such Profits. Upon request of the Lessor/Mortgagee, the
Lessee/Mortgagor shall execute and cause to be recorded, at
its expense, supplemental or additional assignments of any
Subleases of the Subject Property. Upon the occurrence and
during the continuance of a Lease Event of Default, the
Lessor/Mortgagee is hereby fully authorized and empowered in
its discretion (in addition to all other powers and rights
herein granted), to apply for and collect and receive all such
Profits and enforce such guaranty or guaranties, and all money
so received under and by virtue of this assignment shall be
applied as further security for the payment and performance of
the Obligations secured hereby.
(d) Notwithstanding that this Supplement is an absolute assignment
of the Profits and the Subleases and not merely the collateral
assignment of, or the grant of a lien or security interest in
the Profits and the Subleases, the Lessor/Mortgagee grants to
the Lessee/Mortgagor a revocable license to collect and
receive the Profits and to retain, use and enjoy such Profits.
Archbold, Ohio Lease Supplement
- 5 -
Such license shall be automatically revoked upon the
occurrence and during the continuance of any Lease Event of
Default.
D. Remedies.
(a) Upon the occurrence and during the continuance of a Lease
Event of Default, each of which are also events of default
under this Supplement, the Lessor/Mortgagee may exercise any
one or more of the following rights and remedies as it, in its
sole discretion, may deem necessary or appropriate:
(i) collect interest on all past due sums at the Overdue
Rate;
(ii) terminate the Master Lease and, either in person or by
agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and
without regard to the adequacy of security, enter upon
and take possession of the Security Property, or any
part thereof, in its own name, and do any acts which it
deems necessary or desirable to preserve the value,
marketability or rentability of the Security Property,
or any part thereof or interest therein, to increase the
income therefrom or to protect the security hereof and,
with or without taking possession of the Security
Property, to sue for or otherwise to collect the Profits
thereof, including, without limitation, those past due
and unpaid, and to apply the same, less costs and
expenses of operation and collection, including, without
limitation, reasonable attorneys' fees, upon any
Obligations secured hereby, all in such order as the
Lessor/Mortgagee may determine. The entering upon and
taking possession of the Security Property, and the
collection of such Profits and the application thereof
as aforesaid, shall not cure or waive any Lease Event of
Default or notice of a Lease Event of Default hereunder
or invalidate any act done in response to such Lease
Event of Default and, notwithstanding the continuance in
possession of the Lessor/Mortgagee or the collection,
receipt and application of Profits by the
Lessor/Mortgagee, the Lessor/Mortgagee shall be entitled
to exercise every right provided for herein or by law
upon the occurrence and during the continuance of any
Lease Event of Default, including, without limitation,
the right to exercise the power of sale;
(iii) declare all sums secured hereby immediately due and
payable by delivery to the Lessee/Mortgagor a written
declaration of the occurrence and continuance of a Lease
Event of Default and deliver a notice of non-judicial
foreclosure by power of sale of the Subject Property,
and proceed with such non-judicial foreclosure in
accordance with Applicable Law;
Archbold, Ohio Lease Supplement
- 6 -
(iv) whether or not a non-judicial or judicial foreclosure
proceeding as described above has been commenced,
declare immediately due and payable without notice or
demand, as otherwise required hereunder or under
Applicable Law, all amounts payable by the
Lessee/Mortgagor hereunder or under the other Operative
Documents which are then unpaid, with all interest and
sums accrued and accelerate payment thereof
notwithstanding contrary terms of payment stated therein
and foreclose against the Security Property in the
manner provided by Applicable Law, and exercise all
other rights and remedies available hereunder, at law,
in equity or otherwise;
(v) as a matter of right, and upon notice to the
Lessee/Mortgagor or anyone under the Lessee/Mortgagor
and without regard to the adequacy of its security or
the then value of the Security Property or the interest
of the Lessee/Mortgagor therein, apply to any court
having jurisdiction to appoint a receiver or receivers
of the Security Property and the Lessee/Mortgagor hereby
irrevocably consents to such appointment and, to the
extent permitted by Applicable Law, waives notice of any
application therefor. Any such receiver or receivers
shall have all the usual powers and duties of receivers
in like or similar cases and all the powers of the
Lessor/Mortgagee provided for above, and shall continue
as a receiver and exercise all such powers until the
date of confirmation of sale of the Security Property
unless such receivership is sooner terminated by the
Lessor/Mortgagee in its sole discretion.
Upon the occurrence and during the continuance of a Lease
Event of Default, the Lessor/Mortgagee shall be entitled to
enforce payment and performance of any Obligations secured
hereby and to exercise all rights and powers hereunder or any
laws now or hereafter in force notwithstanding that some or
all of said Obligations secured hereby may now or hereafter be
otherwise secured, whether by mortgage, deed of trust, pledge,
lien, assignment or otherwise. Neither the acceptance nor the
enforcement hereof, whether by court action or pursuant to the
power of sale or other powers herein contained, shall
prejudice or in any manner affect the Lessor/Mortgagee's right
to realize upon or enforce any other security now or hereafter
held by the Lessor/Mortgagee, and the Lessor/Mortgagee shall
be entitled to enforce the rights and remedies provided for
herein and any other security now or hereafter held by the
Lessor/Mortgagee in such order and manner as it may in its
absolute discretion determine. No remedy conferred upon or
reserved to the Lessor/Mortgagee is intended to be exclusive
of any other remedy, but each shall be cumulative and shall be
in addition to every other remedy given hereby or now or
hereafter existing at law or in equity or by statute. Every
power or remedy given hereby to the Lessor/Mortgagee or to
which the Lessor/Mortgagee may be otherwise entitled, may be
exercised,
Archbold, Ohio Lease Supplement
- 7 -
concurrently or independently, from time to time and as often
as may be deemed expedient by the Lessor/Mortgagee, and the
Lessor/Mortgagee may pursue inconsistent remedies.
(b) Upon the occurrence and during the continuance of a Lease
Event of Default, the Lessor/Mortgagee, in addition to and not
in lieu of or in diminution of the rights and remedies
provided above shall have all of the rights and remedies of a
secured party under the UCC, which rights and remedies may be
exercised without application to any court to the extent
permitted by the UCC.
(c) It is the intent of the parties hereto that the Master Lease
be treated as a secured borrowing as provided in Section 3B
above, and that, upon the occurrence and during the
continuance of a Lease Event of Default, the Lessor/Mortgagee
shall have remedies provided for herein. In the event that,
notwithstanding the intention of the parties, a court of
competent jurisdiction determines that, for the purpose of
remedies, the transaction contemplated by the Master Lease
constitutes a leasing arrangement, the parties hereto
acknowledge and agree that the Lessor/Mortgagee shall have, as
a result of such determination, in addition to the remedies
set forth in this Section 3D(a) above, all of the rights and
remedies of a landlord provided for in Article XVI of the
Master Lease, provided that the parties hereto acknowledge and
agree that it is their intent that the Master Lease be
construed as provided in Section 3B above.
SECTION 4. Lessor/Mortgagee Grant. (a) The Lessor/Mortgagee hereby
unconditionally grants a security interest in and a Lien to the Lessee/Mortgagor
against all of the Lessor/Mortgagee's right, title and interest in and to the
Security Property, which Lien shall be effective only if the Lessor/Mortgagee
shall become the subject of any bankruptcy, insolvency or similar proceeding and
such proceeding shall result in the rejection of the Master Lease. Such Lien
shall secure the satisfaction of the Lessee/Mortgagor's right to damages and
other claims arising out of the rejection of the Master Lease to the extent and
in the manner provided for pursuant to the Operative Documents.
(b) The Lessee/Mortgagor agrees that the conditional Lien created in
paragraph (a) of this Section 4 will terminate upon the termination of the
Master Lease with respect to the Subject Property for any reason other than a
rejection of the Master Lease in connection with a bankruptcy, insolvency or
similar proceeding with respect to the Lessor/Mortgagee. Lessee/Mortgagor
covenants to promptly deliver any releases or reconveyances reasonably required
by Lessor/Mortgagee to evidence such termination of Lien.
(c) The Lien created in paragraph (a) of this Section 4 is junior and
subordinate in all respects to the Liens granted by the Lessee/Mortgagor in
favor of the Lessor/Mortgagee pursuant to this Supplement and the other
Operative Documents.
SECTION 5. Ratification; Incorporation. Except as specifically modified
hereby, the terms and provisions of the Master Lease are hereby ratified and
confirmed and remain in full
Archbold, Ohio Lease Supplement
- 8 -
force and effect. The terms of the Master Lease (as amended by this Supplement)
are by this reference incorporated herein and made a part hereof.
SECTION 6. Original Supplement. The single executed original of this
Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the
signature page thereof and containing the receipt of the Lessor/Mortgagee
therefor on or following the signature page thereof shall be the original
executed counterpart of this Supplement (the "Original Executed Counterpart").
To the extent that this Supplement constitutes chattel paper, as such term is
defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction, no security interest in this Supplement may be created through the
transfer or possession of any counterpart other than the Original Executed
Counterpart.
SECTION 7. Applicable Law; Certain Particular Provisions. This Supplement
shall be governed by and construed in accordance with the laws of the
jurisdictions identified in this Section 7 (the "Applicable Law") which shall
for most purposes be the laws of the State of New York; provided, however, that
the provisions of this Supplement relating to the creation, perfection and
enforcement of the lien and security interest created by this Supplement in
respect of the Subject Property and the exercise of each remedy provided hereby,
including the power of foreclosure or power of sale procedures set forth in this
Supplement, shall be governed by and construed in accordance with the internal
law of the State of Ohio, and each of the Lessor/Mortgagee and the
Lessee/Mortgagor agree to submit to jurisdiction and the laying of venue for any
suit on this Supplement in the State of Ohio. The terms and provisions set forth
in Schedule III attached hereto are hereby incorporated by reference as though
fully set forth herein. In the event of any conflict between the terms and
provisions contained in the body of the Master Lease (as amended by this
Supplement) and the terms and provisions set forth in Schedule III, the terms
and provisions set forth in Schedule III shall govern and control.
SECTION 8. No Merger of Title. There shall be no merger of the Master
Lease (as amended by this Supplement) or of the leasehold estate created thereby
by reason of the fact that the same Person may acquire, own or hold, directly or
indirectly, in whole or in part, (a) the Master Lease (as amended by this
Supplement) or the leasehold estate created thereby or any interest in the
Master Lease (as amended by this Supplement) or such leasehold estate, (b) the
fee estate or ground leasehold estate in the Subject Property, except as may
expressly be stated in a written instrument duly executed and delivered by the
Lessor/Mortgagee.
SECTION 9. Satisfaction of the Mortgage, Security Interest and Assignment
of Rents and Subleases. If the Lessee/Mortgagor complies with the provisions of
this Supplement and irrevocably pays and performs (to the reasonable
satisfaction of Lessor/Mortgagee) all of the Obligations secured hereby, in
accordance with the provisions of the Master Lease, as supplemented by this
Supplement and the other Operative Documents and in the manner and at the times
set forth therein, without deduction, fraud or delay, then and from thenceforth
this Supplement and the estate hereby granted and created in favor of the
Lessor/Mortgagee, shall cease and become void, anything hereinbefore contained
to the contrary notwithstanding.
SECTION 10. Maximum Interest Rate. No provision of this Supplement or any
transaction related thereto shall require the payment or permit the collection
of interest or any other amount in excess of the maximum permitted by Applicable
Law. If any excess of interest
Archbold, Ohio Lease Supplement
- 9 -
or any other amount in such respect is herein or any other Operative Document
provided for, the Lessee/Mortgagor shall not be obligated to pay such excess
interest or any other amounts in excess of the amount permitted by applicable
law, and the right to demand the payment of any such excess shall be and hereby
is waived, and this provision shall control any other provision of this
Supplement and the other Operative Documents.
SECTION 11. Security Agreement and Fixture Financing Statement. This
Supplement is both a real property mortgage and a "security agreement" within
the meaning of the UCC. The Subject Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in
nature, of Lessee/Mortgagor in the Subject Property. In Section 3.C (b) above,
Lessee/Mortgagor has granted to Lessor/Mortgagee, as security for the
Obligations, a security interest in the UCC Property to the full extent that the
UCC Property may be subject to the UCC. The information contained in this
Section 11 is provided in order that this Supplement shall comply with the
requirements of the UCC for mortgages to be effective as financing statement
filed as a fixture filing. The name of the "debtor" is ITT INDUSTRIES, INC.; the
name of the "secured party" is REXUS L.L.C.; the mailing address of the "secured
party" from which information concerning the security interest may be obtained
and the mailing address of the "debtor" are as set forth in Section 12 of this
Supplement. The types, or the items, of collateral covered hereby consist of the
UCC Property identified in Section 3.C which constitute fixtures or personal
property. The Lessor/Mortgagee is the record owner of the Land.
SECTION 12. Notices. For purposes of this instrument all notices shall be
in writing and must be given in the manner provided in Section 14.3 of the
Participation Agreement to the addresses set forth in Schedule V hereto.
SECTION 13. Counterpart Execution. This Supplement may be executed in any
number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one and the same
instrument.
[Signature Blocks on Following Page]
Archbold, Ohio Lease Supplement
- 10 -
IN WITNESS WHEREOF, each of the parties hereto has caused this Supplement
to be duly executed by an officer thereunto duly authorized as of the date and
year first above written.
REXUS L.L.C., as Lessor/Mortgagee
By: /s/ Larry Bowman
----------------
Name: Larry Bowman
Title: President
ITT INDUSTRIES, INC., as Lessee/Mortgagor
By: /s/ Donald Foley
----------------
Name: Donald Foley
Title: Senior Vice President,
Treasurer and Director of Tax
Archbold, Ohio Lease Supplement
N - 2
Schedule I
Legal Description
Being a parcel of land in the northwest 1/4 of Section 4, Town 6 North, Range 5
East, Archbold Village, German Township, Fulton County, Ohio; more particularly
described as follows:
Commencing at the 1/4 corner on the north side of the above described section;
thence in a southerly direction and binding upon the quarter line a distance of
1078.82 feet to a metal surveyor's stake and the place of beginning; thence
continuing in a southerly direction and binding upon the quarter line a distance
of 550 feet to an anchor post and the north right of way line of Lugbill Road;
thence in a westerly direction and binding upon the north right of way line of
Lugbill Road a distance of 1188 feet to a metal surveyor's stake; thence in a
northerly direction and parallel with quarter line a distance of 550 feet to a
metal surveyor's stake; thence in an easterly direction and parallel with
Lugbill Road a distance of 1188 feet to a metal surveyor's stake and the place
of beginning and containing fifteen (15) acres of land, more or less; subject,
however, to all legal highways and easements of record.
Address of Premises: 701 E. Lugbill Road
Archbold, Ohio
Permanent Parcel Number: 17-033388-00.000
Archbold, Ohio Lease Supplement
Schedule II
Additional Permitted Property Liens
NONE
Archbold, Ohio Lease Supplement
Schedule III
Local Law Provisions
Archbold, Ohio Lease Supplement
Schedule IV
Defined Terms
"Appurtenant Rights" means, with respect to the Land and the Subject
Property, (i) all agreements, easements, rights of way or use, rights of ingress
or egress, privileges, appurtenances, tenements, and other rights and benefits
at any time belonging or pertaining to the Land and the Subject Property,
including the use of any streets, ways, alleys, vaults or strips of land
adjoining, abutting, adjacent or contiguous to the Land and (ii) all permits,
licenses and rights, whether or not of record, appurtenant to the Land and (iii)
all of the Lessee/Mortgagor's right, title and interest in all general
intangibles relating to the design, development, operation, management and use
of the Subject Property, all certificates of occupancy, zoning variances,
building, use or other permits, approvals, authorizations and consents obtained
from and all materials prepared for filing or filed with any Governmental
Authority in connection with the development, use, operation or management of
the Subject Property, all construction, service, engineering, consulting,
leasing, architectural and other similar contracts concerning the design,
construction, management, operation, occupancy and/or use of the Subject
Property, all architectural drawings, plans, specifications, soil tests,
feasibility studies, appraisals, environmental studies, engineering reports and
similar materials relating to any portion of or all of the Subject Property, and
all payment and performance bonds or warranties or guarantees relating to the
Subject Property, all to the extent assignable.
"Equipment" means any equipment the removal of which could reasonably be
expected to affect the value or utility of the Land or the Subject Property,
taken together or separately, including heating, electrical, switch gear, power
supply, lighting, plumbing, ventilation, air conditioning and air cooling
systems, refrigerating equipment, generators, locking and unlocking equipment,
communication systems, sprinkler system and fire prevention systems, security
systems and fixtures of all kinds; provided, however, that the term "Equipment"
shall expressly exclude all inventory, furniture and furnishings.
Archbold, Ohio Lease Supplement
- 3 -
Schedule V
Notice Information
LESSEE/MORTGAGOR
ITT INDUSTRIES, INC.
4 West Red Oak Lane
White Plains, New York 10604
Attention: Donald Foley, Treasurer
with a copy to:
Red Oak Corporate Park
4 West Red Oak Lane
White Plains, New York 10604
Attention: Keith Richey, International Tax Counsel
LESSOR/MORTGAGEE
REXUS L.L.C.
c/o Societe Generale (Canada), as Lessor Administrator
1501 McGill College
Bureau 1800
Montreal, Quebec, H3A 3MB
Canada
Attention: Manager, Treasury & Loan Servicing Group
with a copy to:
Societe Generale, New York Branch
1221 Avenue of the Americas
New York, New York 10020
Attention: President
Archbold, Ohio Lease Supplement
- 4 -
- --------------------------------------------------------------------------------
MORTGAGE,
SECURITY AGREEMENT AND FINANCING
STATEMENT (INCLUDING FIXTURE FILING),
AND
SUPPLEMENT
AND
SHORT FORM/MEMORANDUM OF LEASE
Dated as of December 15, 2004
between
REXUS L.L.C.,
as Lessor/Mortgagee
and
ITT INDUSTRIES, INC.,
as Lessee/Mortgagor
LOCATION OF MORTGAGED PROPERTY:
Street Address: 8200 Austin Avenue
Morton Grove, Illinois
County: Cook County, Illinois
Record and Return to:
Jones Day
222 East 41st Street
New York, NY 10017
Attention: Leonard C. Pojednic, Esq.
- --------------------------------------------------------------------------------
MORTGAGE, SECURITY AGREEMENT AND
FINANCING STATEMENT (INCLUDING FIXTURE FILING),
AND SUPPLEMENT AND SHORT FORM/MEMORANDUM OF LEASE
THIS MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT (INCLUDING
FIXTURE FILING), AND SUPPLEMENT AND SHORT FORM/MEMORANDUM OF LEASE (this
"Supplement") dated as of December 17, 2004, between REXUS L.L.C., a Delaware
limited liability company with an address at Societe Generale (Canada), as
Lessor Administrator, 1501 McGill College, Bureau 1800, Montreal, Quebec, H3A
3MB, Canada, as the lessor/mortgagee (the "Lessor/Mortgagee"), and ITT
INDUSTRIES, INC., an Indiana corporation, with an address at 4 West Red Oak
Lane, White Plains, New York 10604, as Lessee/Mortgagor (the
"Lessee/Mortgagor").
WHEREAS, Lessor/Mortgagee and Lessee/Mortgagor have executed that certain
Master Lease and Deed of Trust, Deed to Secure Debt and Mortgage dated as of
December 14, 2004 (the "Master Lease");
WHEREAS the Lessor/Mortgagee is the owner of the land described on
Schedule I attached hereto (the "Land"), and wishes to lease the Land and lease
all Improvements now thereon or which hereafter may be constructed thereon to
the Lessee/Mortgagor;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Definitions; Interpretation. For purposes of this Supplement,
capitalized terms used herein and not otherwise defined herein or in Schedule IV
hereto shall have the meanings assigned to them in Appendix A to the Master
Lease, and the rules of interpretation set forth in such Appendix A shall apply
to this Supplement.
SECTION 2. The Properties. Effective upon the execution and delivery of
this Supplement by the Lessor/Mortgagee and the Lessee/Mortgagor, the Land, all
Improvements on the Land and all other improvements now on the Land or which
hereafter may be constructed thereon and all Appurtenant Rights with respect
thereto and all Equipment (collectively, the "Subject Property") shall be
subject to the terms and provisions of the Master Lease and the Lessor/Mortgagee
hereby grants, conveys, transfers and assigns to the Lessee/Mortgagor those
interests, rights, titles, estates, powers and privileges provided for in the
Master Lease with respect to the Subject Property.
SECTION 3. Amendments to Master Lease with Respect to Subject Property.
Effective upon the execution and delivery of this Supplement by the
Lessor/Mortgagee and the Lessee/Mortgagor, the following terms and provisions
shall apply to the Master Lease with respect to the Subject Property:
A. Short Form/Memorandum of Lease. The parties hereto set forth the
following information which shall constitute a short form or memorandum of the
Master Lease, as supplemented by this Supplement:
(a) The name and address of the Lessor/Mortgagee as set forth in
the Master Lease is:
Rexus L.L.C.
Societe Generale (Canada) as Lessor Administrator
1501 McGill College
Bureau 1800
Montreal, QC, H3A 3MB
Canada
Attention: Manager, Treasury & Loan Servicing Group
with a copy to:
Rexus L.L.C.
Societe Generale, New York Branch
1221 Avenue of the Americas
New York, New York 10020
Attention: President
(b) The name and address of the Lessee/Mortgagor as set forth in
the Master Lease is:
ITT Industries, Inc.
4 West Red Oak Lane
White Plains, New York 10604
Attention: _________________
(c) The lease to which this memorandum of lease pertains is the
Master Lease as supplemented by this Supplement and the other
Supplements.
(d) The leased premises are the Subject Property which includes
the Land more particularly described on Schedule I attached
hereto.
(e) The Lessor/Mortgagee acquired title to the Land by deed dated
on or about the date hereof and about to be recorded or filed
for record in the office of the Cook County Recorder.
(f) The term of the Master Lease shall commence on the date hereof
and shall expire on December 17, 2014 unless earlier
terminated in accordance with the terms of the Master Lease,
as supplemented by this Supplement.
- 2 -
(g) The Master Lease contains certain purchase rights and options
during the Lease Term pursuant to which the Lessee/Mortgagor
or its designee may acquire the Subject Property.
(h) In addition to those terms referred to herein, the Master
Lease contains numerous other terms, covenants and conditions
that affect the Subject Property, and notice is hereby given
that reference should be had to the Master Lease with respect
to the details of such terms, covenants and conditions. A copy
of the Master Lease or of the other agreements referenced
herein or therein may be obtained from any of the parties
hereto at the addresses set forth herein.
B. Ownership of the Subject Property. The parties hereto intend that for
(i) financial accounting purposes with respect to the Lessee/Mortgagor, (ii)
United States federal and all United States state and local income tax purposes
and (iii) United States state real estate and commercial law and bankruptcy
purposes, (1) the Lease will be treated as a financing arrangement, (2) the
Lessor/Mortgagee will be deemed a lender making a loan to the Lessee/Mortgagor
in an aggregate amount equal to the Original Aggregate Property Cost which loan
is secured by the Properties, and (3) the Lessee/Mortgagor will be treated as
the owner of the Properties described in the Lease Supplements and will be
entitled to all tax benefits ordinarily available to an owner of properties
similar to the Properties for such tax purposes. Nevertheless, the
Lessee/Mortgagor acknowledges and agrees that none of the Lessor/Mortgagee, the
Arranger or any Investor has made any representations or warranties to the
Lessee/Mortgagor concerning the tax, accounting or legal characteristics of the
Operative Documents and that the Lessee/Mortgagor has obtained and relied upon
such tax, accounting and legal advice concerning the Operative Documents as it
deems appropriate. The parties hereto will not take any position inconsistent
with the intentions expressed herein. It is the intent of the parties hereto
that this Lease grants a security interest and mortgage or deed to secure debt
or deed of trust, as the case may be, in and on each Property to the
Lessor/Mortgagee for the benefit of the Lessor/Mortgagee to secure the
performance of the Lessee/Mortgagor under and payment of all amounts under this
Master Lease and the other Operative Documents all as more specifically set
forth in each Lease Supplement. Specifically, without limiting the generality of
the foregoing, the parties hereto intend and agree that in the event of any
insolvency or receivership proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency laws or statute of the United
States of America or any state or commonwealth thereof affecting the
Lessee/Mortgagor, the Lessor/Mortgagee or the Investors or any collection
actions, the transactions evidenced by the Operative Documents shall be regarded
as loans made to the Lessee/Mortgagor by the Lessor/Mortgagee and the Investors
as unrelated third party lenders of the Lessee/Mortgagor.
C. Grant of Mortgage Lien and Security Interest: Assignment of Rents. To
secure to the Lessor/Mortgagee the payment and performance of all Obligations:
(a) Subject to the terms and conditions of the Master Lease as
supplemented by this Supplement (including, without
limitation, the Lessee/Mortgagor's rights hereunder and
thereunder), the Lessee/Mortgagor has caused the
Lessor/Mortgagee to hold title to the Subject Property and
- 3 -
Lessee/Mortgagor does hereby mortgage, grant, bargain, sell,
convey, assign, transfer and set over to the Lessor/Mortgagee,
with power of sale, to the extent permitted by Applicable Law:
(i) all of the Lessee/Mortgagor's right, title and interest
from time to time in the Subject Property of whatever nature
including, without limitation, Lessee/Mortgagor's leasehold
interest under the Master Lease; all condemnation and
insurance proceeds relative to the Subject Property and all
Profits as defined below; and (ii) all of the
Lessee/Mortgagor's right, title and interest in and to all
proceeds of the conversion, whether voluntary or involuntary,
of any of the above-described property into cash or other
liquid claims, including, without limitation, all awards,
payments or proceeds, including interest thereon, and the
right to receive the same, which may be made as a result of
casualty, any exercise of the right of eminent domain or deed
in lieu thereof, the alteration of the grade of any street and
any injury to or decrease in the value thereof, the foregoing
being referred to hereinafter as the "Security Property".
TO HAVE AND TO HOLD the Security Property, subject however to
Permitted Property Liens (which shall include the items set
forth on Schedule II), unto the Lessor/Mortgagee, its
successors and assigns forever.
(i) Protective Advances. The Lessor/Mortgagee shall have the
right, but not the obligation, to make protective
advances with respect to the Security Property for the
payment of taxes, assessments, insurance premiums or
costs incurred for the protection of the Security
Property, and such protective advances, together with
interest thereon at the Overdue Rate from the date of
each such advance until it is repaid in full, shall be
secured by this Supplement to the fullest extent and
with the highest priority contemplated by applicable
law.
(ii) Mortgage. The Lessee/Mortgagor and the Lessor/Mortgagee
intend that this Supplement shall secure
Lessee/Mortgagor's obligation to repay the unpaid
balance of advances made by the Lessor/Mortgagee and/or
the holder hereof under the Master Lease and other
Operative Documents to the fullest extent and with the
highest priority contemplated by applicable law. The
obligations secured hereby shall include, without
limitation, all Basic Rent, Accrual Rent and Fixed Rent
as well as all Supplemental Rent due from
Lessee/Mortgagor under the Master Lease. The maximum
amount of advances, exclusive of interest thereon
(whether or not identified as interest and including
specifically all Accrual Rent under the Master Lease),
and exclusive of advances made for the payment of real
estate taxes, assessments, insurance premiums and costs
incurred for the protection of the Security Property,
all of which are also secured by this Supplement, which
may be
- 4 -
outstanding at any time is One Hundred Twenty Million
and 00/100 Dollars ($120,000,000.00).
(b) Subject to the terms and conditions of the Master Lease as
supplemented by this Supplement (including, without
limitation, the Lessee/Mortgagor's rights hereunder and
thereunder so long as no Lease Event of Default has occurred
and is continuing), the Lessee/Mortgagor hereby grants to the
Lessor/Mortgagee a security interest in the Lessee/Mortgagor's
interest in that portion of the Security Property (the "UCC
Property") subject to the Uniform Commercial Code of the State
of Illinois (the "UCC"). The Master Lease, as supplemented by
this Supplement, shall also be deemed to be a security
agreement and shall support any financing statement showing
the Lessor/Mortgagee's interest as a secured party with
respect to any portion of the UCC Property described in such
financing statement. The Lessee/Mortgagor agrees, at its sole
cost and expense, to execute, deliver and file from time to
time such further instruments as may be requested by the
Lessor/Mortgagee to confirm and perfect the lien of the
security interest in the collateral described in this
Supplement.
(c) The Lessee/Mortgagor hereby irrevocably assigns, conveys,
transfers and sets over unto the Lessor/Mortgagee (subject,
however, to the Master Lease and the rights of the
Lessee/Mortgagor thereunder and hereunder) any and all
subleases or other occupancy agreements now existing, or that
may hereafter come into existence with respect to the Subject
Property or any part thereof, including any guaranties of such
sublease or occupancy agreements (collectively, the
"Subleases") and all and every part of the rents, issues and
profits (collectively, the "Profits") that may from time to
time become due and payable on account of the Subleases,
provided, that, unless a Lease Event of Default is continuing,
the Lessee/Mortgagor shall have the right to collect and
retain such Profits. Upon request of the Lessor/Mortgagee, the
Lessee/Mortgagor shall execute and cause to be recorded, at
its expense, supplemental or additional assignments of any
Subleases of the Subject Property. Upon the occurrence and
during the continuance of a Lease Event of Default, the
Lessor/Mortgagee is hereby fully authorized and empowered in
its discretion (in addition to all other powers and rights
herein granted), to apply for and collect and receive all such
Profits and enforce such guaranty or guaranties, and all money
so received under and by virtue of this assignment shall be
applied as further security for the payment and performance of
the Obligations secured hereby.
(d) Notwithstanding that this Supplement is an absolute assignment
of the Profits and the Subleases and not merely the collateral
assignment of, or the grant of a lien or security interest in
the Profits and the Subleases, the Lessor/Mortgagee grants to
the Lessee/Mortgagor a revocable license to collect and
receive the Profits and to retain, use and enjoy such Profits.
- 5 -
Such license shall be automatically revoked upon the
occurrence and during the continuance of any Lease Event of
Default.
D. Remedies.
(a) Upon the occurrence and during the continuance of a Lease
Event of Default, each of which are also events of default
under this Supplement, the Lessor/Mortgagee may exercise any
one or more of the following rights and remedies as it, in its
sole discretion, may deem necessary or appropriate:
(i) collect interest on all past due sums at the Overdue
Rate;
(ii) terminate the Master Lease and, either in person or by
agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and
without regard to the adequacy of security, enter upon
and take possession of the Security Property, or any
part thereof, in its own name, and do any acts which it
deems necessary or desirable to preserve the value,
marketability or rentability of the Security Property,
or any part thereof or interest therein, to increase the
income therefrom or to protect the security hereof and,
with or without taking possession of the Security
Property, to sue for or otherwise to collect the Profits
thereof, including, without limitation, those past due
and unpaid, and to apply the same, less costs and
expenses of operation and collection, including, without
limitation, reasonable attorneys' fees, upon any
Obligations secured hereby, all in such order as the
Lessor/Mortgagee may determine. The entering upon and
taking possession of the Security Property, and the
collection of such Profits and the application thereof
as aforesaid, shall not cure or waive any Lease Event of
Default or notice of a Lease Event of Default hereunder
or invalidate any act done in response to such Lease
Event of Default and, notwithstanding the continuance in
possession of the Lessor/Mortgagee or the collection,
receipt and application of Profits by the
Lessor/Mortgagee, the Lessor/Mortgagee shall be entitled
to exercise every right provided for herein or by law
upon the occurrence and during the continuance of any
Lease Event of Default, including, without limitation,
the right to exercise the power of sale;
(iii) declare all sums secured hereby immediately due and
payable by delivery to the Lessee/Mortgagor a written
declaration of the occurrence and continuance of a Lease
Event of Default and deliver a notice of non-judicial
foreclosure by power of sale of the Subject Property,
and proceed with such non-judicial foreclosure in
accordance with Applicable Law;
- 6 -
(iv) in lieu of sale pursuant to the power of sale conferred
hereby, foreclose in the manner provided by Applicable
Law for the foreclosure of mortgages on real property;
(v) whether or not a non-judicial or judicial foreclosure
proceeding as described above has been commenced,
declare immediately due and payable without notice or
demand, as otherwise required hereunder or under
Applicable Law, all amounts payable by the
Lessee/Mortgagor hereunder or under the other Operative
Documents which are then unpaid, with all interest and
sums accrued and accelerate payment thereof
notwithstanding contrary terms of payment stated therein
and exercise all rights and remedies available
hereunder, at law, in equity or otherwise;
(vi) as a matter of right, and upon notice to the
Lessee/Mortgagor or anyone under the Lessee/Mortgagor
and without regard to the adequacy of its security or
the then value of the Security Property or the interest
of the Lessee/Mortgagor therein, apply to any court
having jurisdiction to appoint a receiver or receivers
of the Security Property and the Lessee/Mortgagor hereby
irrevocably consents to such appointment and, to the
extent permitted by Applicable Law, waives notice of any
application therefor. Any such receiver or receivers
shall have all the usual powers and duties of receivers
in like or similar cases and all the powers of the
Lessor/Mortgagee provided for above, and shall continue
as a receiver and exercise all such powers until the
date of confirmation of sale of the Security Property
unless such receivership is sooner terminated by the
Lessor/Mortgagee in its sole discretion.
Upon the occurrence and during the continuance of a Lease
Event of Default, the Lessor/Mortgagee shall be entitled to
enforce payment and performance of any Obligations secured
hereby and to exercise all rights and powers hereunder or any
laws now or hereafter in force notwithstanding that some or
all of said Obligations secured hereby may now or hereafter be
otherwise secured, whether by mortgage, deed of trust, pledge,
lien, assignment or otherwise. Neither the acceptance nor the
enforcement hereof, whether by court action or pursuant to the
power of sale or other powers herein contained, shall
prejudice or in any manner affect the Lessor/Mortgagee's right
to realize upon or enforce any other security now or hereafter
held by the Lessor/Mortgagee, and the Lessor/Mortgagee shall
be entitled to enforce the rights and remedies provided for
herein and any other security now or hereafter held by the
Lessor/Mortgagee in such order and manner as it may in its
absolute discretion determine. No remedy conferred upon or
reserved to the Lessor/Mortgagee is intended to be exclusive
of any other remedy, but each shall be cumulative and shall be
in addition to every other remedy given hereby or now or
hereafter existing at law or in equity or by statute.
- 7 -
Every power or remedy given hereby to the Lessor/Mortgagee or
to which the Lessor/Mortgagee may be otherwise entitled, may
be exercised, concurrently or independently, from time to time
and as often as may be deemed expedient by the
Lessor/Mortgagee, and the Lessor/Mortgagee may pursue
inconsistent remedies.
(b) Upon the occurrence and during the continuance of a Lease
Event of Default, the Lessor/Mortgagee, in addition to and not
in lieu of or in diminution of the rights and remedies
provided above shall have all of the rights and remedies of a
secured party under the UCC, which rights and remedies may be
exercised without application to any court to the extent
permitted by the UCC.
(c) It is the intent of the parties hereto that the Master Lease
be treated as a secured borrowing as provided in Section 3B
above, and that, upon the occurrence and during the
continuance of a Lease Event of Default, the Lessor/Mortgagee
shall have remedies provided for herein. In the event that,
notwithstanding the intention of the parties, a court of
competent jurisdiction determines that, for the purpose of
remedies, the transaction contemplated by the Master Lease
constitutes a leasing arrangement, the parties hereto
acknowledge and agree that the Lessor/Mortgagee shall have, as
a result of such determination, in addition to the remedies
set forth in this Section 3D(a) above, all of the rights and
remedies of a landlord provided for in Article XVI of the
Master Lease, provided that the parties hereto acknowledge and
agree that it is their intent that the Master Lease be
construed as provided in Section 3B above.
SECTION 4. Lessor/Mortgagee Grant. (a) The Lessor/Mortgagee hereby
unconditionally grants a security interest in and a Lien to the Lessee/Mortgagor
against all of the Lessor/Mortgagee's right, title and interest in and to the
Security Property, which Lien shall be effective only if the Lessor/Mortgagee
shall become the subject of any bankruptcy, insolvency or similar proceeding and
such proceeding shall result in the rejection of the Master Lease. Such Lien
shall secure the satisfaction of the Lessee/Mortgagor's right to damages and
other claims arising out of the rejection of the Master Lease to the extent and
in the manner provided for pursuant to the Operative Documents.
(b) The Lessee/Mortgagor agrees that the conditional Lien created in
paragraph (a) of this Section 4 will terminate upon the termination of the
Master Lease with respect to the Subject Property for any reason other than a
rejection of the Master Lease in connection with a bankruptcy, insolvency or
similar proceeding with respect to the Lessor/Mortgagee. Lessee/Mortgagor
covenants to promptly deliver any releases or reconveyances reasonably required
by Lessor/Mortgagee to evidence such termination of Lien.
(c) The Lien created in paragraph (a) of this Section 4 is junior and
subordinate in all respects to the Liens granted by the Lessee/Mortgagor in
favor of the Lessor/Mortgagee pursuant to this Supplement and the other
Operative Documents.
- 8 -
SECTION 5. Ratification; Incorporation. Except as specifically modified
hereby, the terms and provisions of the Master Lease are hereby ratified and
confirmed and remain in full force and effect. The terms of the Master Lease (as
amended by this Supplement) are by this reference incorporated herein and made a
part hereof.
SECTION 6. Original Supplement. The single executed original of this
Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the
signature page thereof and containing the receipt of the Lessor/Mortgagee
therefor on or following the signature page thereof shall be the original
executed counterpart of this Supplement (the "Original Executed Counterpart").
To the extent that this Supplement constitutes chattel paper, as such term is
defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction, no security interest in this Supplement may be created through the
transfer or possession of any counterpart other than the Original Executed
Counterpart.
SECTION 7. Applicable Law; Certain Particular Provisions. This Supplement
shall be governed by and construed in accordance with the laws of the
jurisdictions identified in this Section 7 (the "Applicable Law") which shall
for most purposes be the laws of the State of New York; provided, however, that
the provisions of this Supplement relating to the creation, perfection and
enforcement of the lien and security interest created by this Supplement in
respect of the Subject Property and the exercise of each remedy provided hereby,
including the power of foreclosure or power of sale procedures set forth in this
Supplement, shall be governed by and construed in accordance with the internal
law of the State of Illinois, and each of the Lessor/Mortgagee and the
Lessee/Mortgagor agree to submit to jurisdiction and the laying of venue for any
suit on this Supplement in the State of Illinois. The terms and provisions set
forth in Schedule III attached hereto are hereby incorporated by reference as
though fully set forth herein. In the event of any conflict between the terms
and provisions contained in the body of the Master Lease (as amended by this
Supplement) and the terms and provisions set forth in Schedule III, the terms
and provisions set forth in Schedule III shall govern and control.
SECTION 8. No Merger of Title. There shall be no merger of the Master
Lease (as amended by this Supplement) or of the leasehold estate created thereby
by reason of the fact that the same Person may acquire, own or hold, directly or
indirectly, in whole or in part, (a) the Master Lease (as amended by this
Supplement) or the leasehold estate created thereby or any interest in the
Master Lease (as amended by this Supplement) or such leasehold estate, (b) the
fee estate or ground leasehold estate in the Subject Property, except as may
expressly be stated in a written instrument duly executed and delivered by the
Lessor/Mortgagee.
SECTION 9. Satisfaction of the Mortgage, Security Interest and Assignment
of Rents and Subleases. If the Lessee/Mortgagor complies with the provisions of
this Supplement and irrevocably pays and performs (to the reasonable
satisfaction of Lessor/Mortgagee) all of the Obligations secured hereby, in
accordance with the provisions of the Master Lease, as supplemented by this
Supplement and the other Operative Documents and in the manner and at the times
set forth therein, without deduction, fraud or delay, then and from thenceforth
this Supplement and the estate hereby granted and created in favor of the
Lessor/Mortgagee, shall cease and become void, anything hereinbefore contained
to the contrary notwithstanding.
- 9 -
SECTION 10. Maximum Interest Rate. No provision of this Supplement or any
transaction related thereto shall require the payment or permit the collection
of interest or any other amount in excess of the maximum permitted by Applicable
Law. If any excess of interest or any other amount in such respect is herein or
any other Operative Document provided for, the Lessee/Mortgagor shall not be
obligated to pay such excess interest or any other amounts in excess of the
amount permitted by applicable law, and the right to demand the payment of any
such excess shall be and hereby is waived, and this provision shall control any
other provision of this Supplement and the other Operative Documents.
SECTION 11. Security Agreement and Fixture Financing Statement. This
Supplement is both a real property mortgage and a "security agreement" within
the meaning of the UCC. The Subject Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in
nature, of Lessee/Mortgagor in the Subject Property. In Section 3.C (b) above,
Lessee/Mortgagor has granted to Lessor/Mortgagee, as security for the
Obligations, a security interest in the UCC Property to the full extent that the
UCC Property may be subject to the UCC. The information contained in this
Section 11 is provided in order that this Supplement shall comply with the
requirements of the UCC for mortgages to be effective as financing statement
filed as a fixture filing. The name of the "debtor" is ITT INDUSTRIES, INC.; the
name of the "secured party" is REXUS L.L.C.; the mailing address of the "secured
party" from which information concerning the security interest may be obtained
and the mailing address of the "debtor" are as set forth in Section 12 of this
Supplement. The types, or the items, of collateral covered hereby consist of the
UCC Property identified in Section 3.C which constitute fixtures or personal
property. The Lessor/Mortgagee is the record owner of the Land.
SECTION 12. Notices. For purposes of this instrument all notices shall be
in writing and must be given in the manner provided in Section 14.3 of the
Participation Agreement to the addresses set forth in Schedule V hereto.
SECTION 13. Counterpart Execution. This Supplement may be executed in any
number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one and the same
instrument.
[Signature Blocks on Following Page]
- 10 -
IN WITNESS WHEREOF, each of the parties hereto has caused this Supplement
to be duly executed by an officer thereunto duly authorized as of the date and
year first above written.
REXUS L.L.C., as Lessor/Mortgagee
By: /s/ Larry Bowman
-----------------------------------
Name: Larry Bowman
Title: President
ITT INDUSTRIES, INC., as Lessee/Mortgagor
By: /s/ Donald Foley
-----------------------------------
Name: Donald Foley
Title: Senior Vice President,
Treasurer and Director of Tax
N - 2
Schedule I
Legal Description
That part of the South half of the South half of Section 20; Township 41 North,
Range 13, East of the Third Principal Meridian, described as follows:
Beginning at the North East corner of the South East quarter of the South West
quarter of said Section; thence South on the East line of said South West
quarter, 164.89 feet to the North line of the South 2 1/2 acres of the North 5
acres of the West half of the South West quarter of the South East quarter of
said Section; thence East on said North line of South 2 1/2 acres of the North 5
acres of the West half of the South West quarter of the South East quarter of
said Section, 660.52 feet to the East line of the West half of the South West
quarter of the South East quarter of said Section; thence South on said East
line of the West half of the South West quarter of the South East quarter of
said Section, 494.76 feet to the South line of North 10 acres of the West half
of the South West quarter of the South East quarter of said Section; thence West
on the South line of North 10 acres of the West half of the South West quarter
of the South East quarter of said Section, 660.36 feet to the East line of the
South West quarter of said Section; thence North on East line of said South West
quarter 0.15 feet to South line of the North half of the South East quarter of
the South West quarter of said Section 20; thence West on said South line of the
North half of the South East quarter of the South West quarter of said Section,
264.29 feet to East line of the West 1 1/2 acres of the East 5 1/2 acres of the
South half of the South half of the South West quarter of said Section; thence
South on said East line of West 1 1/2 acres of the East 5 1/2 acres of the South
half of the South half of the South West quarter of said Section to South line
of North 310 feet of the East 12 acres of the South half of the South half of
the South West quarter of said Section; thence West on said South line of North
310 feet of East 12 acres of the South half of the South half of the South West
quarter of said Section, 508.88 feet to East line of West 20 feet of East 12
acres of the South half of the South half of the South West quarter of said
Section; thence South on the East line of said West 20 feet of the East 12 acres
of the South half of the South half of the South West quarter of said Section,
298.77 feet to a point 50 feet North of the South line of the South West quarter
of said Section 20; thence West on a line parallel to and 50 feet North of South
line of the South West quarter of said Section, 35 feet; thence North on a line
parallel to and 15 feet West of the West line of the East 12 acres of the South
half of the South half of the South West quarter of said Section, 359 feet and 5
inches; thence North Easterly 42.95 feet to a point on West line of East 12
acres of the South half of the South half of the South West quarter of said
Section, said point being 449 feet 5 inches North of South line of said South
West quarter of said Section 20; thence North on West line of East 12 acres of
the South half of the South West quarter of said Section, 209.34 feet to South
line of the North half of the South East quarter of the South West quarter of
said Section; thence West on said South line of the North half of the South East
quarter of the South West quarter of said Section, 461.44 feet to Easterly line
of the Chicago, Milwaukee, St. Paul and Pacific Railroad right of way; thence
northwesterly on said Easterly line of the Chicago, Milwaukee, St. Paul and
Pacific railroad right of way, 353.0 feet to North line of the South half of the
North half of the South West quarter of the South West quarter of said Section;
thence East on said North line of the South half of the North half of the South
West quarter of the South West quarter of said Section, 73.65 feet to West line
of the South East quarter of the South West quarter of said
Section; thence North on West line of said South East quarter of the South West
quarter of said Section, 329.13 feet to North line of the South East quarter of
the South West quarter of said Section; thence East on said North line of the
South East quarter of the South West quarter of said Section, 1315.35 feet to
place of beginning, as shown on the plat of survey made by Chicago Guarantee
Survey Company dated August 15, 1963, No. 6307019. Except from the above that
part thereof conveyed by Quit Claim Deeds to the Village of Morton Grove,
Illinois, for road purposes recorded as documents 18992719 and 19036359 in Cook
County, Illinois. The legal descriptions of said part thereof conveyed are set
forth in said Quit Claim Deeds as follows:
The East 33 feet of the North 1/2 of the Southeast 1/4 of the Southwest 1/4
(except that part convey to Chicago, Milwaukee, St. Paul and Pacific Railroad)
of Section 20, Township 41 North, Range 13 East of the Third Principal Meridian,
in Cook County, Illinois, and
The East 33 feet of the South 2-1/2 acres of the North 10 acres of the West 1/2
of the Southwest 1/4 of the Southeast 1/4 of Section 20, Township 41 North,
Range 13, East of the Third Principal Meridian in Cook County, Illinois, and
The West 33 feet of the South 7-1/2 acres of the North 10 Acres of the West 1/2
of the Southwest 1/4 of the Southeast 1/4 of Section 20, Township 41 North,
Range 13, East of the Third Principal Meridian in Cook County, Illinois, and
The East 33 feet of the South 5 acres of the North 7-1/2 acres of W 1/2, SW 1/4,
SE 1/4 of Section 20, Township 41 North, Range 13 East of the Third Principal
Meridian Cook County, Illinois.
- 2 -
Schedule II
Additional Permitted Property Liens
NONE
Schedule III
Local Law Provisions
- 2 -
Schedule IV
Defined Terms
"Appurtenant Rights" means, with respect to the Land and the Subject
Property, (i) all agreements, easements, rights of way or use, rights of ingress
or egress, privileges, appurtenances, tenements, and other rights and benefits
at any time belonging or pertaining to the Land and the Subject Property,
including the use of any streets, ways, alleys, vaults or strips of land
adjoining, abutting, adjacent or contiguous to the Land and (ii) all permits,
licenses and rights, whether or not of record, appurtenant to the Land and (iii)
all of the Lessee/Mortgagor's right, title and interest in all general
intangibles relating to the design, development, operation, management and use
of the Subject Property, all certificates of occupancy, zoning variances,
building, use or other permits, approvals, authorizations and consents obtained
from and all materials prepared for filing or filed with any Governmental
Authority in connection with the development, use, operation or management of
the Subject Property, all construction, service, engineering, consulting,
leasing, architectural and other similar contracts concerning the design,
construction, management, operation, occupancy and/or use of the Subject
Property, all architectural drawings, plans, specifications, soil tests,
feasibility studies, appraisals, environmental studies, engineering reports and
similar materials relating to any portion of or all of the Subject Property, and
all payment and performance bonds or warranties or guarantees relating to the
Subject Property, all to the extent assignable.
"Equipment" means any equipment the removal of which could reasonably be
expected to affect the value or utility of the Land or the Subject Property,
taken together or separately, including heating, electrical, switch gear, power
supply, lighting, plumbing, ventilation, air conditioning and air cooling
systems, refrigerating equipment, generators, locking and unlocking equipment,
communication systems, sprinkler system and fire prevention systems, security
systems and fixtures of all kinds; provided, however, that the term "Equipment"
shall expressly exclude all inventory, furniture and furnishings.
- 3 -
Schedule V
Notice Information
LESSEE/MORTGAGOR
ITT INDUSTRIES, INC.
4 West Red Oak Lane
White Plains, New York 10604
Attention: Donald Foley, Treasurer
with a copy to:
Red Oak Corporate Park
4 West Red Oak Lane
White Plains, New York 10604
Attention: Keith Richey, International Tax Counsel
LESSOR/MORTGAGEE
REXUS L.L.C.
Societe Generale (Canada) as Lessor Administrator
1501 McGill College
Bureau 1800
Montreal, QC, H3A 3MB
Canada
Attention: Manager, Treasury & Loan Servicing Group
with a copy to:
Rexus L.L.C.
Societe Generale, New York Branch
1221 Avenue of the Americas
New York, New York 10020
Attention: President
- 4 -
- --------------------------------------------------------------------------------
MORTGAGE,
SECURITY AGREEMENT AND FINANCING
STATEMENT (INCLUDING FIXTURE FILING),
AND
SUPPLEMENT
AND
SHORT FORM/MEMORANDUM OF LEASE
Dated as of December 15, 2004
between
REXUS L.L.C.,
as Lessor/Mortgagee
and
ITT INDUSTRIES, INC.,
as Lessee/Mortgagor
LOCATION OF MORTGAGED PROPERTY:
Street Address: 3500 N. Spaulding Avenue
Chicago, Illinois
County: Cook County, Illinois
Record and Return to:
Jones Day
222 East 41st Street
New York, NY 10017
Attention: Leonard C. Pojednic, Esq.
- --------------------------------------------------------------------------------
MORTGAGE, SECURITY AGREEMENT AND
FINANCING STATEMENT (INCLUDING FIXTURE FILING),
AND SUPPLEMENT AND SHORT FORM/MEMORANDUM OF LEASE
THIS MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT (INCLUDING
FIXTURE FILING), AND SUPPLEMENT AND SHORT FORM/MEMORANDUM OF LEASE (this
"Supplement") dated as of December 17, 2004, between REXUS L.L.C., a Delaware
limited liability company with an address at Societe Generale, New York Branch,
1221 Avenue of the Americas, New York, New York 10020 as the lessor/mortgagee
(the "Lessor/Mortgagee"), and ITT INDUSTRIES, INC., an Indiana corporation, with
an address at 4 West Red Oak Lane, White Plains, New York 10604, as
Lessee/Mortgagor (the "Lessee/Mortgagor").
WHEREAS, Lessor/Mortgagee and Lessee/Mortgagor have executed that certain
Master Lease and Deed of Trust, Deed to Secure Debt and Mortgage dated as of
December 14, 2004 (the "Master Lease");
WHEREAS the Lessor/Mortgagee is the owner of the land described on
Schedule I attached hereto (the "Land"), and wishes to lease the Land and lease
all Improvements now thereon or which hereafter may be constructed thereon to
the Lessee/Mortgagor;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Definitions; Interpretation. For purposes of this Supplement,
capitalized terms used herein and not otherwise defined herein or in Schedule IV
hereto shall have the meanings assigned to them in Appendix A to the Master
Lease, and the rules of interpretation set forth in such Appendix A shall apply
to this Supplement.
SECTION 2. The Properties. Effective upon the execution and delivery of
this Supplement by the Lessor/Mortgagee and the Lessee/Mortgagor, the Land, all
Improvements on the Land and all other improvements now on the Land or which
hereafter may be constructed thereon and all Appurtenant Rights with respect
thereto and all Equipment (collectively, the "Subject Property") shall be
subject to the terms and provisions of the Master Lease and the Lessor/Mortgagee
hereby grants, conveys, transfers and assigns to the Lessee/Mortgagor those
interests, rights, titles, estates, powers and privileges provided for in the
Master Lease with respect to the Subject Property.
SECTION 3. Amendments to Master Lease with Respect to Subject Property.
Effective upon the execution and delivery of this Supplement by the
Lessor/Mortgagee and the Lessee/Mortgagor, the following terms and provisions
shall apply to the Master Lease with respect to the Subject Property:
A. Short Form/Memorandum of Lease. The parties hereto set forth the
following information which shall constitute a short form or memorandum of the
Master Lease, as supplemented by this Supplement:
(a) The name and address of the Lessor/Mortgagee as set forth in
the Master Lease is:
Rexus L.L.C.
Societe Generale, New York Branch
1221 Avenue of the Americas
New York, New York 10020
Attention: President
(b) The name and address of the Lessee/Mortgagor as set forth in
the Master Lease is:
ITT Industries, Inc.
4 West Red Oak Lane
White Plains, New York 10604
Attention: _________________
(c) The lease to which this memorandum of lease pertains is the
Master Lease as supplemented by this Supplement and the other
Supplements.
(d) The leased premises are the Subject Property which includes
the Land more particularly described on Schedule I attached
hereto.
(e) The Lessor/Mortgagee acquired title to the Land by deed dated
on or about the date hereof and about to be recorded or filed
for record in the office of the Cook County Recorder.
(f) The term of the Master Lease shall commence on the date hereof
and shall expire on December 17, 2014 unless earlier
terminated in accordance with the terms of the Master Lease,
as supplemented by this Supplement.
(g) The Master Lease contains certain purchase rights and options
during the Lease Term pursuant to which the Lessee/Mortgagor
or its designee may acquire the Subject Property.
(h) In addition to those terms referred to herein, the Master
Lease contains numerous other terms, covenants and conditions
that affect the Subject Property, and notice is hereby given
that reference should be had to the Master Lease with respect
to the details of such terms, covenants and conditions. A copy
of the Master Lease or of the other agreements referenced
herein or therein may be obtained from any of the parties
hereto at the addresses set forth herein.
- 2 -
B. Ownership of the Subject Property. The parties hereto intend that for
(i) financial accounting purposes with respect to the Lessee/Mortgagor, (ii)
United States federal and all United States state and local income tax purposes
and (iii) United States state real estate and commercial law and bankruptcy
purposes, (1) the Lease will be treated as a financing arrangement, (2) the
Lessor/Mortgagee will be deemed a lender making a loan to the Lessee/Mortgagor
in an aggregate amount equal to the Original Aggregate Property Cost which loan
is secured by the Properties, and (3) the Lessee/Mortgagor will be treated as
the owner of the Properties described in the Lease Supplements and will be
entitled to all tax benefits ordinarily available to an owner of properties
similar to the Properties for such tax purposes. Nevertheless, the
Lessee/Mortgagor acknowledges and agrees that none of the Lessor/Mortgagee, the
Arranger or any Investor has made any representations or warranties to the
Lessee/Mortgagor concerning the tax, accounting or legal characteristics of the
Operative Documents and that the Lessee/Mortgagor has obtained and relied upon
such tax, accounting and legal advice concerning the Operative Documents as it
deems appropriate. The parties hereto will not take any position inconsistent
with the intentions expressed herein. It is the intent of the parties hereto
that this Lease grants a security interest and mortgage or deed to secure debt
or deed of trust, as the case may be, in and on each Property to the
Lessor/Mortgagee for the benefit of the Lessor/Mortgagee to secure the
performance of the Lessee/Mortgagor under and payment of all amounts under this
Master Lease and the other Operative Documents all as more specifically set
forth in each Lease Supplement. Specifically, without limiting the generality of
the foregoing, the parties hereto intend and agree that in the event of any
insolvency or receivership proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency laws or statute of the United
States of America or any state or commonwealth thereof affecting the
Lessee/Mortgagor, the Lessor/Mortgagee or the Investors or any collection
actions, the transactions evidenced by the Operative Documents shall be regarded
as loans made to the Lessee/Mortgagor by the Lessor/Mortgagee and the Investors
as unrelated third party lenders of the Lessee/Mortgagor.
C. Grant of Mortgage Lien and Security Interest: Assignment of Rents. To
secure to the Lessor/Mortgagee the payment and performance of all Obligations:
(a) Subject to the terms and conditions of the Master Lease as
supplemented by this Supplement (including, without
limitation, the Lessee/Mortgagor's rights hereunder and
thereunder), the Lessee/Mortgagor has caused the
Lessor/Mortgagee to hold title to the Subject Property and
Lessee/Mortgagor does hereby mortgage, grant, bargain, sell,
convey, assign, transfer and set over to the Lessor/Mortgagee,
with power of sale, to the extent permitted by Applicable Law:
(i) all of the Lessee/Mortgagor's right, title and interest
from time to time in the Subject Property of whatever nature
including, without limitation, Lessee/Mortgagor's leasehold
interest under the Master Lease; all condemnation and
insurance proceeds relative to the Subject Property and all
Profits as defined below; and (ii) all of the
Lessee/Mortgagor's right, title and interest in and to all
proceeds of the conversion, whether voluntary or involuntary,
of any of the above-described property into cash or other
liquid claims, including, without limitation, all awards,
payments or proceeds, including interest thereon, and the
right to receive the same,
- 3 -
which may be made as a result of casualty, any exercise of the
right of eminent domain or deed in lieu thereof, the
alteration of the grade of any street and any injury to or
decrease in the value thereof, the foregoing being referred to
hereinafter as the "Security Property".
TO HAVE AND TO HOLD the Security Property, subject however to
Permitted Property Liens (which shall include the items set
forth on Schedule II), unto the Lessor/Mortgagee, its
successors and assigns forever.
(i) Protective Advances. The Lessor/Mortgagee shall have the
right, but not the obligation, to make protective
advances with respect to the Security Property for the
payment of taxes, assessments, insurance premiums or
costs incurred for the protection of the Security
Property, and such protective advances, together with
interest thereon at the Overdue Rate from the date of
each such advance until it is repaid in full, shall be
secured by this Supplement to the fullest extent and
with the highest priority contemplated by applicable
law.
(ii) Mortgage. The Lessee/Mortgagor and the Lessor/Mortgagee
intend that this Supplement shall secure
Lessee/Mortgagor's obligation to repay the unpaid
balance of advances made by the Lessor/Mortgagee and/or
the holder hereof under the Master Lease and other
Operative Documents to the fullest extent and with the
highest priority contemplated by applicable law. The
obligations secured hereby shall include, without
limitation, all Basic Rent, Accrual Rent and Fixed Rent
as well as all Supplemental Rent due from
Lessee/Mortgagor under the Master Lease. The maximum
amount of advances, exclusive of interest thereon
(whether or not identified as interest and including
specifically all Accrual Rent under the Master Lease),
and exclusive of advances made for the payment of real
estate taxes, assessments, insurance premiums and costs
incurred for the protection of the Security Property,
all of which are also secured by this Supplement, which
may be outstanding at any time is One Hundred Twenty
Million and 00/100 Dollars ($120,000,000.00).
(b) Subject to the terms and conditions of the Master Lease as
supplemented by this Supplement (including, without
limitation, the Lessee/Mortgagor's rights hereunder and
thereunder so long as no Lease Event of Default has occurred
and is continuing), the Lessee/Mortgagor hereby grants to the
Lessor/Mortgagee a security interest in the Lessee/Mortgagor's
interest in that portion of the Security Property (the "UCC
Property") subject to the Uniform Commercial Code of the State
of Illinois (the "UCC"). The Master Lease, as supplemented by
this Supplement, shall also be deemed to be a security
agreement and shall support any financing statement
- 4 -
showing the Lessor/Mortgagee's interest as a secured party
with respect to any portion of the UCC Property described in
such financing statement. The Lessee/Mortgagor agrees, at its
sole cost and expense, to execute, deliver and file from time
to time such further instruments as may be requested by the
Lessor/Mortgagee to confirm and perfect the lien of the
security interest in the collateral described in this
Supplement.
(c) The Lessee/Mortgagor hereby irrevocably assigns, conveys,
transfers and sets over unto the Lessor/Mortgagee (subject,
however, to the Master Lease and the rights of the
Lessee/Mortgagor thereunder and hereunder) any and all
subleases or other occupancy agreements now existing, or that
may hereafter come into existence with respect to the Subject
Property or any part thereof, including any guaranties of such
sublease or occupancy agreements (collectively, the
"Subleases") and all and every part of the rents, issues and
profits (collectively, the "Profits") that may from time to
time become due and payable on account of the Subleases,
provided, that, unless a Lease Event of Default is continuing,
the Lessee/Mortgagor shall have the right to collect and
retain such Profits. Upon request of the Lessor/Mortgagee, the
Lessee/Mortgagor shall execute and cause to be recorded, at
its expense, supplemental or additional assignments of any
Subleases of the Subject Property. Upon the occurrence and
during the continuance of a Lease Event of Default, the
Lessor/Mortgagee is hereby fully authorized and empowered in
its discretion (in addition to all other powers and rights
herein granted), to apply for and collect and receive all such
Profits and enforce such guaranty or guaranties, and all money
so received under and by virtue of this assignment shall be
applied as further security for the payment and performance of
the Obligations secured hereby.
(d) Notwithstanding that this Supplement is an absolute assignment
of the Profits and the Subleases and not merely the collateral
assignment of, or the grant of a lien or security interest in
the Profits and the Subleases, the Lessor/Mortgagee grants to
the Lessee/Mortgagor a revocable license to collect and
receive the Profits and to retain, use and enjoy such Profits.
Such license shall be automatically revoked upon the
occurrence and during the continuance of any Lease Event of
Default.
D. Remedies.
(a) Upon the occurrence and during the continuance of a Lease
Event of Default, each of which are also events of default
under this Supplement, the Lessor/Mortgagee may exercise any
one or more of the following rights and remedies as it, in its
sole discretion, may deem necessary or appropriate:
(i) collect interest on all past due sums at the Overdue
Rate;
- 5 -
(ii) terminate the Master Lease and, either in person or by
agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and
without regard to the adequacy of security, enter upon
and take possession of the Security Property, or any
part thereof, in its own name, and do any acts which it
deems necessary or desirable to preserve the value,
marketability or rentability of the Security Property,
or any part thereof or interest therein, to increase the
income therefrom or to protect the security hereof and,
with or without taking possession of the Security
Property, to sue for or otherwise to collect the Profits
thereof, including, without limitation, those past due
and unpaid, and to apply the same, less costs and
expenses of operation and collection, including, without
limitation, reasonable attorneys' fees, upon any
Obligations secured hereby, all in such order as the
Lessor/Mortgagee may determine. The entering upon and
taking possession of the Security Property, and the
collection of such Profits and the application thereof
as aforesaid, shall not cure or waive any Lease Event of
Default or notice of a Lease Event of Default hereunder
or invalidate any act done in response to such Lease
Event of Default and, notwithstanding the continuance in
possession of the Lessor/Mortgagee or the collection,
receipt and application of Profits by the
Lessor/Mortgagee, the Lessor/Mortgagee shall be entitled
to exercise every right provided for herein or by law
upon the occurrence and during the continuance of any
Lease Event of Default, including, without limitation,
the right to exercise the power of sale;
(iii) declare all sums secured hereby immediately due and
payable by delivery to the Lessee/Mortgagor a written
declaration of the occurrence and continuance of a Lease
Event of Default and deliver a notice of non-judicial
foreclosure by power of sale of the Subject Property,
and proceed with such non-judicial foreclosure in
accordance with Applicable Law;
(iv) in lieu of sale pursuant to the power of sale conferred
hereby, foreclose in the manner provided by Applicable
Law for the foreclosure of mortgages on real property;
(v) whether or not a non-judicial or judicial foreclosure
proceeding as described above has been commenced,
declare immediately due and payable without notice or
demand, as otherwise required hereunder or under
Applicable Law, all amounts payable by the
Lessee/Mortgagor hereunder or under the other Operative
Documents which are then unpaid, with all interest and
sums accrued and accelerate payment thereof
notwithstanding contrary terms of payment stated therein
and exercise all rights and remedies available
hereunder, at law, in equity or otherwise;
- 6 -
(vi) as a matter of right, and upon notice to the
Lessee/Mortgagor or anyone under the Lessee/Mortgagor
and without regard to the adequacy of its security or
the then value of the Security Property or the interest
of the Lessee/Mortgagor therein, apply to any court
having jurisdiction to appoint a receiver or receivers
of the Security Property and the Lessee/Mortgagor hereby
irrevocably consents to such appointment and, to the
extent permitted by Applicable Law, waives notice of any
application therefor. Any such receiver or receivers
shall have all the usual powers and duties of receivers
in like or similar cases and all the powers of the
Lessor/Mortgagee provided for above, and shall continue
as a receiver and exercise all such powers until the
date of confirmation of sale of the Security Property
unless such receivership is sooner terminated by the
Lessor/Mortgagee in its sole discretion.
Upon the occurrence and during the continuance of a Lease
Event of Default, the Lessor/Mortgagee shall be entitled to
enforce payment and performance of any Obligations secured
hereby and to exercise all rights and powers hereunder or any
laws now or hereafter in force notwithstanding that some or
all of said Obligations secured hereby may now or hereafter be
otherwise secured, whether by mortgage, deed of trust, pledge,
lien, assignment or otherwise. Neither the acceptance nor the
enforcement hereof, whether by court action or pursuant to the
power of sale or other powers herein contained, shall
prejudice or in any manner affect the Lessor/Mortgagee's right
to realize upon or enforce any other security now or hereafter
held by the Lessor/Mortgagee, and the Lessor/Mortgagee shall
be entitled to enforce the rights and remedies provided for
herein and any other security now or hereafter held by the
Lessor/Mortgagee in such order and manner as it may in its
absolute discretion determine. No remedy conferred upon or
reserved to the Lessor/Mortgagee is intended to be exclusive
of any other remedy, but each shall be cumulative and shall be
in addition to every other remedy given hereby or now or
hereafter existing at law or in equity or by statute. Every
power or remedy given hereby to the Lessor/Mortgagee or to
which the Lessor/Mortgagee may be otherwise entitled, may be
exercised, concurrently or independently, from time to time
and as often as may be deemed expedient by the
Lessor/Mortgagee, and the Lessor/Mortgagee may pursue
inconsistent remedies.
(b) Upon the occurrence and during the continuance of a Lease
Event of Default, the Lessor/Mortgagee, in addition to and not
in lieu of or in diminution of the rights and remedies
provided above shall have all of the rights and remedies of a
secured party under the UCC, which rights and remedies may be
exercised without application to any court to the extent
permitted by the UCC.
- 7 -
(c) It is the intent of the parties hereto that the Master Lease
be treated as a secured borrowing as provided in Section 3B
above, and that, upon the occurrence and during the
continuance of a Lease Event of Default, the Lessor/Mortgagee
shall have remedies provided for herein. In the event that,
notwithstanding the intention of the parties, a court of
competent jurisdiction determines that, for the purpose of
remedies, the transaction contemplated by the Master Lease
constitutes a leasing arrangement, the parties hereto
acknowledge and agree that the Lessor/Mortgagee shall have, as
a result of such determination, in addition to the remedies
set forth in this Section 3D(a) above, all of the rights and
remedies of a landlord provided for in Article XVI of the
Master Lease, provided that the parties hereto acknowledge and
agree that it is their intent that the Master Lease be
construed as provided in Section 3B above.
SECTION 4. Lessor/Mortgagee Grant. (a) The Lessor/Mortgagee hereby
unconditionally grants a security interest in and a Lien to the Lessee/Mortgagor
against all of the Lessor/Mortgagee's right, title and interest in and to the
Security Property, which Lien shall be effective only if the Lessor/Mortgagee
shall become the subject of any bankruptcy, insolvency or similar proceeding and
such proceeding shall result in the rejection of the Master Lease. Such Lien
shall secure the satisfaction of the Lessee/Mortgagor's right to damages and
other claims arising out of the rejection of the Master Lease to the extent and
in the manner provided for pursuant to the Operative Documents.
(b) The Lessee/Mortgagor agrees that the conditional Lien created in
paragraph (a) of this Section 4 will terminate upon the termination of the
Master Lease with respect to the Subject Property for any reason other than a
rejection of the Master Lease in connection with a bankruptcy, insolvency or
similar proceeding with respect to the Lessor/Mortgagee. Lessee/Mortgagor
covenants to promptly deliver any releases or reconveyances reasonably required
by Lessor/Mortgagee to evidence such termination of Lien.
(c) The Lien created in paragraph (a) of this Section 4 is junior and
subordinate in all respects to the Liens granted by the Lessee/Mortgagor in
favor of the Lessor/Mortgagee pursuant to this Supplement and the other
Operative Documents.
SECTION 5. Ratification; Incorporation. Except as specifically modified
hereby, the terms and provisions of the Master Lease are hereby ratified and
confirmed and remain in full force and effect. The terms of the Master Lease (as
amended by this Supplement) are by this reference incorporated herein and made a
part hereof.
SECTION 6. Original Supplement. The single executed original of this
Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the
signature page thereof and containing the receipt of the Lessor/Mortgagee
therefor on or following the signature page thereof shall be the original
executed counterpart of this Supplement (the "Original Executed Counterpart").
To the extent that this Supplement constitutes chattel paper, as such term is
defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction, no security interest in this Supplement may be created through the
transfer or possession of any counterpart other than the Original Executed
Counterpart.
- 8 -
SECTION 7. Applicable Law; Certain Particular Provisions. This Supplement
shall be governed by and construed in accordance with the laws of the
jurisdictions identified in this Section 7 (the "Applicable Law") which shall
for most purposes be the laws of the State of New York; provided, however, that
the provisions of this Supplement relating to the creation, perfection and
enforcement of the lien and security interest created by this Supplement in
respect of the Subject Property and the exercise of each remedy provided hereby,
including the power of foreclosure or power of sale procedures set forth in this
Supplement, shall be governed by and construed in accordance with the internal
law of the State of Illinois, and each of the Lessor/Mortgagee and the
Lessee/Mortgagor agree to submit to jurisdiction and the laying of venue for any
suit on this Supplement in the State of Illinois. The terms and provisions set
forth in Schedule III attached hereto are hereby incorporated by reference as
though fully set forth herein. In the event of any conflict between the terms
and provisions contained in the body of the Master Lease (as amended by this
Supplement) and the terms and provisions set forth in Schedule III, the terms
and provisions set forth in Schedule III shall govern and control.
SECTION 8. No Merger of Title. There shall be no merger of the Master
Lease (as amended by this Supplement) or of the leasehold estate created thereby
by reason of the fact that the same Person may acquire, own or hold, directly or
indirectly, in whole or in part, (a) the Master Lease (as amended by this
Supplement) or the leasehold estate created thereby or any interest in the
Master Lease (as amended by this Supplement) or such leasehold estate, (b) the
fee estate or ground leasehold estate in the Subject Property, except as may
expressly be stated in a written instrument duly executed and delivered by the
Lessor/Mortgagee.
SECTION 9. Satisfaction of the Mortgage, Security Interest and Assignment
of Rents and Subleases. If the Lessee/Mortgagor complies with the provisions of
this Supplement and irrevocably pays and performs (to the reasonable
satisfaction of Lessor/Mortgagee) all of the Obligations secured hereby, in
accordance with the provisions of the Master Lease, as supplemented by this
Supplement and the other Operative Documents and in the manner and at the times
set forth therein, without deduction, fraud or delay, then and from thenceforth
this Supplement and the estate hereby granted and created in favor of the
Lessor/Mortgagee, shall cease and become void, anything hereinbefore contained
to the contrary notwithstanding.
SECTION 10. Maximum Interest Rate. No provision of this Supplement or any
transaction related thereto shall require the payment or permit the collection
of interest or any other amount in excess of the maximum permitted by Applicable
Law. If any excess of interest or any other amount in such respect is herein or
any other Operative Document provided for, the Lessee/Mortgagor shall not be
obligated to pay such excess interest or any other amounts in excess of the
amount permitted by applicable law, and the right to demand the payment of any
such excess shall be and hereby is waived, and this provision shall control any
other provision of this Supplement and the other Operative Documents.
SECTION 11. Security Agreement and Fixture Financing Statement. This
Supplement is both a real property mortgage and a "security agreement" within
the meaning of the UCC. The Subject Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in
nature, of Lessee/Mortgagor in the Subject Property. In Section 3.C (b) above,
Lessee/Mortgagor has granted to Lessor/Mortgagee, as security for the
Obligations, a security interest in the UCC Property to the full extent that the
UCC Property may
- 9 -
be subject to the UCC. The information contained in this Section 11 is provided
in order that this Supplement shall comply with the requirements of the UCC for
mortgages to be effective as financing statement filed as a fixture filing. The
name of the "debtor" is ITT INDUSTRIES, INC.; the name of the "secured party" is
REXUS L.L.C.; the mailing address of the "secured party" from which information
concerning the security interest may be obtained and the mailing address of the
"debtor" are as set forth in Section 12 of this Supplement. The types, or the
items, of collateral covered hereby consist of the UCC Property identified in
Section 3.C which constitute fixtures or personal property. The Lessor/Mortgagee
is the record owner of the Land.
SECTION 12. Notices. For purposes of this instrument all notices shall be
in writing and must be given in the manner provided in Section 14.3 of the
Participation Agreement to the addresses set forth in Schedule V hereto.
SECTION 13. Counterpart Execution. This Supplement may be executed in any
number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one and the same
instrument.
[Signature Blocks on Following Page]
- 10 -
IN WITNESS WHEREOF, each of the parties hereto has caused this Supplement
to be duly executed by an officer thereunto duly authorized as of the date and
year first above written.
REXUS L.L.C., as Lessor/Mortgagee
By: /s/ Larry Bowman
-----------------------------------
Name: Larry Bowman
Title: President
ITT INDUSTRIES, INC., as Lessee/Mortgagor
By: /s/ Donald Foley
-----------------------------------
Name: Donald Foley
Title: Senior Vice President,
Treasurer and Director
of Tax
Schedule I
Legal Description
Tract 1:
The East 140 feet of the West 954.72 feet of the South 145.56 feet of the North
521 feet of the North East quarter of the South East quarter of Section 23,
Township 40 North, Range 13, East of the Third Principal Meridian (excepting
therefrom a triangular parcel in the Southeast corner of the described tract
lying East of a line drawn from a point 4.16 feet West of the South East corner
to a point 32.27 feet North of the South East corner of said tract also except
from said tract a parcel of land lying between the East line of the West 814.72
feet of the aforesaid North East quarter of the South East quarter of Section 23
and a curved line having a radius of 33 feet, said curved line being tangent to
the East line of the West 754.72 feet and also tangent to the South line of the
North 521 feet of the North East quarter of the South East quarter of Section 23
aforesaid);
Also a parcel of land in the aforesaid North East quarter of the South East
quarter of Section 23 bounded and described as follows: beginning at a point on
the South line of the North 521 feet of said quarter of the quarter Section
bearing South 89 Degrees 50 Minutes 30 Seconds East 929.02 feet from the West
line thereof; thence South 0.06 feet to the point of tangency of a curved line
lying on the East line of the West 929.02 feet of the aforesaid quarter, quarter
Section curve convex to the South East; thence South Westerly along said curved
line with a radius of 349.76 feet a distance of 191.65 feet; thence North 31
Degrees 23 Minutes 45 Seconds East 45.50 feet tangent to the last described
curved line to the point of tangency of a curved line convex to the South East;
thence North Easterly along said curved line with a radius of 349.76 feet a
distance of 152.73 feet to an intersection with the South line of the North 521
feet of the North East quarter of the South East quarter of Section 23
aforesaid; thence North 89 Degrees 50 Minutes 30 Seconds West 21.54 feet along
said line to the place of beginning, all in Cook County, Illinois.
Tract 2:
That part of the South 418.19 feet of the North 939.19 feet of the North East
Quarter of South East Quarter of Section 23, Township 40 North, range 13 East of
the Third Principal Meridian described as follows: Beginning at a point on the
North line of said tract which is 580 feet East of the West line of the
Northeast 1/4 of the Southeast 1/4 of said Section 23; thence Southeasterly
along a curved line convex to the Southwest with a radius of 945.37 feet a
distance of 264.54 feet to a point 608.99 feet East of the West line and 783
feet South of the North line of the aforesaid quarter quarter Section; thence
South 22 Degrees 55 Minutes 36 Seconds East 169.78 feet to a point on the South
line of the North 939.19 feet of the Northeast quarter of the Southeast quarter
of Section 23 aforesaid which bears South 89 Degrees, 50 Minutes, 30 Seconds
East 675.13 feet from the West line thereof; thence South 89 Degrees 50 Minutes
30 Seconds East along the South line of the tract 59.02 feet; thence North 31
Degrees 23 Minutes 45 Seconds East 275.76 feet to the point of tangency of a
curved line convex to the Southeast; thence Northeasterly along said curved line
with a radius of 349.76 feet a distance of 191.65 feet to the
point of tangency of said curved line on the East line of the West 929.02 feet
of the aforesaid quarter quarter Section; thence North along said tangent line
0.06 feet to the South line of the North 521 feet of said quarter quarter
section; thence North 89 Degrees, 50 Minutes, 30 Seconds West along said line
349.02 feet to the beginning, except that part of the North 939.19 feet of the
Northeast quarter of the Southeast quarter of Section 23, Township 40 North,
Range 13 East of the Third Principal Meridian, described as beginning at a point
on the South line of above described premises, said point being 734.15 feet East
of the West line of said 1/4 1/4 Section; said South line of the North 939.19
feet bears South 89 Degrees, 50 Minutes, 30 Seconds East; thence North 31
Degrees, 23 Minutes, 45 Seconds East, 83.51 feet to a point; thence South 37
Degrees 24 Minutes, 45 Seconds West, 89.71 feet to the South line of the North
939.19 feet of said quarter quarter Section; thence South 89 Degrees 50 Minutes
30 Seconds East along said line 11.0 feet to the point of beginning.
Tract 3:
That part of South 120 feet of the North 521 feet of the West 754.72 feet of the
Northeast 1/4 of Southeast 1/4 of Section 23, Township 40 North, range 13 East
of the Third Principal Meridian, lying East of a line drawn from a point on the
North line of said tract 182.72 feet West of the Northeast corner thereof to a
point on South line of said tract 194.72 feet West of the Southeast corner
thereof, in Cook County, Illinois. Also That part of the Northeast 1/4 of
Southeast 1/4 of Section 23 bounded and described as follows: beginning at
Southwest corner of above described tract; thence East along South line thereof
20 feet; thence Southeasterly along a curved line convex to Southwest with
radius 945.37 feet, a distance of 264.54 feet to a point 608.99 feet East of the
West line of the Northeast 1/4 of Southeast 1/4 of Section 23 aforesaid and on a
line 783 feet South of the North line of said 1/4 1/4 Section; thence North 89
Degrees, 50 Minutes, 30 Seconds West along said line 3.03 feet; thence North 14
Degrees, 24 Minutes, 53 Seconds West 138.53 feet to a point of tangency of
curved line convex to the Southwest; thence Northwesterly along said curved line
with a radius of 332.76 feet a distance of 83.72 feet to the point of tangency
of the East line of the West 561 feet of the Northeast 1/4 of the Southeast 1/4
of said Section 23 which is 586.21 feet South of the North line thereof; thence
Northwesterly 45.22 feet to the place of beginning, all in Cook County,
Illinois.
Tract 4:
That part of the South 543.0 feet of the North 783.0 feet of the Northeast 1/4
of the Southeast 1/4 of Section 23, Township 40 North, Range 13 East of the
Third Principal Meridian described as: Beginning at a point in the South line of
above described premises said point of beginning 605.75 feet East of the West
line of said 1/4 1/4 Section said South line of the North 783.0 feet bears South
89 Degrees, 50 Minutes, 30 Seconds East; thence South 89 Degrees, 50 Minutes 30
Seconds East along said line a distance of 0.21 feet; thence North 14 Degrees,
24 Minutes, 53 Seconds West 138.53 feet to a point of tangency on a curved line
convex to the West; thence Northwesterly along said curved line with a radius of
332.76 feet a distance of 83.72 feet to its paint of tangency on the East line
of the West 561.0 feet of said 1/4 1/4 Section which is 586.21 feet South of the
North line of said 1/4 1/4 Section; thence Northwesterly 45.22 feet to a point
521.0 feet South of the North line of said 1/4 1/4 Section and on the East line
of the West 586.21 feet South of the North line of said 1/4 1/4 Section and on
the East line of the West 560 feet of
- 2 -
said 1/4 1/4 Section; thence North on said line 281.0 feet to the South line of
the North 240.0 feet of aforesaid 1/4 1/4 Section; thence West on said line 17.0
feet to the East line to the West 543 feet of said 1/4 1/4 Section; thence South
on said line 286.26 feet; thence Southeasterly 40.01 feet to a point which is
586.26 feet South of the North line and 544.0 feet East of the West line of said
1/4 1/4 Section said point being also the point of tangency of a curved line
convex to the Southwest which is tangent to the East line of the West 544.0 feet
aforesaid; thence Southeasterly along said curved line with a radius of 349.76
feet a distance of 139.95 feet to a point of tangency; thence South 22 Degrees,
55 Minutes, 36 Seconds East along said tangent 87.58 feet to the place of
beginning, in Cook County, Illinois, excepting therefrom the South 161.0 feet of
the North 401 feet of the East 17.0 feet of the West 560 feet of the Northeast
1/4 of the Southeast 1/4 of Section 23, Township 40 North, range 13, East of the
third Principal meridian, in Cook County, Illinois.
Tract 5:
That part of the South 236.02 feet of the North 899.19 feet of the East 1/2 of
the South East 1/4 of
Section 23, Township 40 North, Range 13 East of the Third Principal Meridian,
described as follows:
Beginning at the point of the intersection of the South line of the North 663.17
feet of the East 1/2 of said South East 1/4 with the East line of the West 555.0
feet of the East 1/2 of the said South East 1/4; thence South 0 Degrees, 00
Minutes, 00 Seconds West, along the East line of the West 555.00 feet of the
East 1/2 of said South East 1/4 a distance of 210.02 feet to a point on the
South line of the North 873.19 feet of the East 1/2 of said South East 1/4;
thence South 44 Degrees, 55 Minutes, 15 Seconds East 36.82 feet to a point on
the South line of the North 899.19 feet of the east 1/2 of said South East 1/4
which bears South 89 Degrees, 50 Minutes, 30 Seconds East 581.00 feet from the
West line of the East 1/2 of said South East 1/4; thence South 89 Degrees, 50
minutes, 30 Seconds East, along the South line of the North 899.19 feet of the
East 1/2 of said Southeast 1/4, 77.19 feet to a point on a line "A", said line
"A" being a line drawn from a point 608.99 feet East of the West line and 783.00
feet South of the North line of said South East 1/4 to a point on the South line
of the North 939.19 feet of said South East 1/4 which bears South 89 Degrees, 50
Minutes, 30 Seconds East 675.13 feet from the west line thereof; thence North 22
Degrees, 55 Minutes, 36 Seconds West along said line "A", 126.30 feet to said
point being 608.99 feet East of said west line and 783.00 feet South of said
North line; thence North 89 Degrees, 50 Minutes, 30 Seconds West along the South
line of the North 783.00 feet thereof, 3.24 feet to a point 605.75 feet East of
said West line; thence North 22 Degrees, 55 Minutes, 36 Seconds West 87.58 feet
to a point of tangency; thence Northwesterly 41.72 feet along the arc of a
circle convex to the South West within a radius of 349.76 feet to a point on the
South line of the North 663.17 feet thereof; thence North 89 Degrees, 50
Minutes, 30 seconds West along the aforesaid South line, 2.71 feet to the point
of beginning, in Cook County, Illinois.
- 3 -
Schedule II
Additional Permitted Property Liens
NONE
Schedule III
Local Law Provisions
- 2 -
Schedule IV
Defined Terms
"Appurtenant Rights" means, with respect to the Land and the Subject
Property, (i) all agreements, easements, rights of way or use, rights of ingress
or egress, privileges, appurtenances, tenements, and other rights and benefits
at any time belonging or pertaining to the Land and the Subject Property,
including the use of any streets, ways, alleys, vaults or strips of land
adjoining, abutting, adjacent or contiguous to the Land and (ii) all permits,
licenses and rights, whether or not of record, appurtenant to the Land and (iii)
all of the Lessee/Mortgagor's right, title and interest in all general
intangibles relating to the design, development, operation, management and use
of the Subject Property, all certificates of occupancy, zoning variances,
building, use or other permits, approvals, authorizations and consents obtained
from and all materials prepared for filing or filed with any Governmental
Authority in connection with the development, use, operation or management of
the Subject Property, all construction, service, engineering, consulting,
leasing, architectural and other similar contracts concerning the design,
construction, management, operation, occupancy and/or use of the Subject
Property, all architectural drawings, plans, specifications, soil tests,
feasibility studies, appraisals, environmental studies, engineering reports and
similar materials relating to any portion of or all of the Subject Property, and
all payment and performance bonds or warranties or guarantees relating to the
Subject Property, all to the extent assignable.
"Equipment" means any equipment the removal of which could reasonably be
expected to affect the value or utility of the Land or the Subject Property,
taken together or separately, including heating, electrical, switch gear, power
supply, lighting, plumbing, ventilation, air conditioning and air cooling
systems, refrigerating equipment, generators, locking and unlocking equipment,
communication systems, sprinkler system and fire prevention systems, security
systems and fixtures of all kinds; provided, however, that the term "Equipment"
shall expressly exclude all inventory, furniture and furnishings.
- 3 -
Schedule V
Notice Information
LESSEE/MORTGAGOR
ITT INDUSTRIES, INC.
4 West Red Oak Lane
White Plains, New York 10604
Attention: Donald Foley, Treasurer
with a copy to:
Red Oak Corporate Park
4 West Red Oak Lane
White Plains, New York 10604
Attention: Keith Richey, International Tax Counsel
LESSOR/MORTGAGEE
REXUS L.L.C.
Societe Generale, New York Branch
1221 Avenue of the Americas
New York, New York 10020
Attention: President
- 4 -
[This Space For Recording Use only]
================================================================================
MORTGAGE,
SECURITY AGREEMENT AND FINANCING
STATEMENT (INCLUDING FIXTURE FILING)
Dated as of December 15, 2004
between
REXUS L.L.C.,
as Mortgagee
and
ITT INDUSTRIES, INC.,
as Mortgagor
LOCATION OF SECURITY PROPERTY:
Street Address: 100 Kingsland Road
Clifton, New Jersey
County: Passaic
Block: 83.01
Lot: 1.01
Record and Return to:
Jones Day
222 East 41st Street
New York, NY 10017
Attention: Leonard C. Pojednic, Esq.
================================================================================
[This Space For Recorder's Use Only]
MORTGAGE, SECURITY AGREEMENT AND
FINANCING STATEMENT (INCLUDING FIXTURE FILING)
THIS MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT (INCLUDING
FIXTURE FILING), dated as of December 15, 2004 (this "Mortgage"), between REXUS
L.L.C., a Delaware limited liability company with an address at c/o Societe
Generale, (Canada), as Lessor Administrator, 1501 McGill College, Bureau 1800,
Montreal, Quebec, H3A 3MB, Canada as the Mortgagee (the "Mortgagee"), and ITT
INDUSTRIES, INC., an Indiana corporation, with an address at 4 West Red Oak
Lane, White Plains, New York 10604, as Mortgagor (the "Mortgagor"). For purposes
of this Mortgage, capitalized terms used herein and not otherwise defined herein
or in Schedule IV hereto shall have the meanings assigned to them in Appendix A
to the Master Lease (as defined below), and the rules of interpretation set
forth in such Appendix A shall apply to this Mortgage.
WHEREAS, pursuant to a Participation Agreement, dated as of the date
hereof (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "Participation Agreement"), among the Mortgagee, the
Mortgagor, and the Investors named therein, the Investors and the Mortgagee have
agreed to finance the acquisition from Mortgagor of the six properties
identified in the Operative Documents (the "Other Properties");
WHEREAS, Mortgagee and Mortgagor have executed that certain Master Lease
and Deed of Trust, Deed to Secure Debt and Mortgage dated as of the date hereof
(the "Master Lease"), as supplemented by that certain Lease Supplement, dated as
of the date hereof (the "Related Lease Supplement"), pursuant to which the
Mortgagee leased to the Mortgagor the Other Properties which term includes all
Improvements thereon and all other improvements now located or which hereafter
may be constructed thereon and all Appurtenant Rights with respect thereto;
WHEREAS, all Obligations of Mortgagor to Mortgagee and the Investors under
the Master Lease and the other Operative Documents are personal, full recourse
obligations of Mortgagor;
WHEREAS, Mortgagor is the sole owner of the land described in Schedule I
hereto and all buildings and improvements located or to be located thereon and
all Appurtenant Rights with respect thereto and all equipment (the "Subject
Property");
WHEREAS, pursuant to the Participation Agreement, the Master Lease and the
other Operative Documents, Mortgagor has agreed to deliver to Mortgagee this
Mortgage for the purpose of securing all Obligations of Mortgagor to Mortgagee
under the Participation Agreement, the Master Lease and the other Operative
Documents; and
WHEREAS, Mortgagee's receipt of this Mortgage is a requirement and
precondition of the Participation Agreement and the other Operative Document:
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Grant of Mortgage Lien and Security Interest: Assignment of
Rents. To secure to the Mortgagee the payment and performance of the Obligations
for a principal amount not to exceed One Hundred Sixty Five Million and 00/100
US Dollars ($165,000,000.00), which is the maximum amount of principal
indebtedness secured hereby, together with all interest, expenses and other sums
which may from time to time become due and payable to the Mortgagee under the
Operative Documents or by reason of the exercise of its rights and remedies
under this Mortgage or any of the Operative Documents:
(a) The Mortgagor does hereby mortgage, grant, bargain, sell,
convey, assign, transfer and set over to the Mortgagee, with
power of sale, to the extent permitted by Applicable Law: (i)
all of the Mortgagor's right, title and interest in the
Subject Property, all condemnation and insurance proceeds
relative to the subject property and all profits as described
below; and (ii) all of the Mortgagor's right, title and
interest in and to all proceeds of the conversion, whether
voluntary or involuntary, of any of the above-described
property into cash or other liquid claims, including, without
limitation, all awards, payments or proceeds, including
interest thereon, and the right to receive the same, which may
be made as a result of casualty, any exercise of the right of
eminent domain or deed in lieu thereof, the alteration of the
grade of any street and any injury to or decrease in the value
thereof, the foregoing being referred to hereinafter as the
"Security Property".
TO HAVE AND TO HOLD the Security Property, subject however to
Permitted Property Liens (which shall include the items set
forth on Schedule II), unto the Mortgagee, its successors and
assigns forever.
(i) Protective Advances. The Mortgagee shall have the right,
but not the obligation, to make protective advances with
respect to the Security Property for the payment of
taxes, assessments, insurance premiums or costs incurred
for the protection of the Security Property, and such
protective advances, together with interest thereon at
the Overdue Rate from the date of each such advance
until it is repaid in full, shall be secured by this
Mortgage to the
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fullest extent and with the highest priority
contemplated by Applicable Law.
(ii) Mortgage. The Mortgagor and the Mortgagee intend that
this Mortgage shall secure Mortgagor's obligation to
repay the unpaid balance of advances made by the
Mortgagee and/or the holder hereof under the Master
Lease and other Operative Documents to the fullest
extent and with the highest priority contemplated by
applicable law. The obligations secured hereby shall
include, without limitation, all Basic Rent, Accrual
Rent and Fixed Rent as well as all Supplemental Rent due
from Mortgagor under the Master Lease. The maximum
amount of advances, exclusive of interest thereon
(whether or not identified as interest and including
specifically all Accrual Rent under the Master Lease),
and exclusive of advances made for the payment of real
estate taxes, assessments, insurance premiums and costs
incurred for the protection of the Security Property,
all of which are also secured by this Supplement, which
may be outstanding at any time is One Hundred Sixty Five
Million and 00/100 Dollars ($165,000,000.00).
(b) The Mortgagor hereby grants to the Mortgagee a security
interest in the Mortgagor's interest in that portion of the
Security Property (the "UCC Property") subject to the Uniform
Commercial Code of the State of New Jersey (the "UCC"). This
Mortgage shall also be deemed to be a security agreement and
shall support any financing statement showing the Mortgagee's
interest as a secured party with respect to any portion of the
UCC Property described in such financing statement. The
Mortgagor agrees, at its sole cost and expense, to execute,
deliver and file from time to time such further instruments as
may be requested by the Mortgagee to confirm and perfect the
lien of the security interest in the collateral described in
this Mortgage.
(c) The Mortgagor hereby irrevocably assigns, conveys, transfers
and sets over unto the Mortgagee all and every part of the
rents, issues and profits (collectively, the "Profits") that
may from time to time become due and payable on account of any
and all subleases or other occupancy agreements now existing,
or that may hereafter come into existence with respect to the
Subject Property or any part thereof, including any guaranties
of such sublease or occupancy agreements (collectively, the
"Subleases") provided, that, unless a Lease Event of Default
is continuing, the Mortgagor shall have the right to collect
and retain such Profits. Upon request of the Mortgagee, the
Mortgagor shall execute and cause to be recorded, at its
expense, supplemental or additional assignments of any
Subleases of the Subject Property. Upon the occurrence and
during the continuance of a Lease Event of Default, the
Mortgagee is hereby fully authorized and empowered in its
discretion (in addition to all other powers and rights herein
granted), to apply for and collect and receive all such
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Profits and enforce such guaranty or guaranties, and all money
so received under and by virtue of this assignment shall be
applied as further security for the payment and performance of
the Obligations secured hereby.
(d) Notwithstanding that this Mortgage is an absolute assignment
of the Profits and the Subleases and not merely the collateral
assignment of, or the grant of a lien or security interest in,
the Profits and the Subleases, the Mortgagee grants to the
Mortgagor a revocable license to collect and receive the
Profits and to retain, use and enjoy such Profits. Such
license shall be automatically revoked upon the occurrence and
during the continuance of any Lease Event of Default.
(e) It is intended that this Mortgage shall be a Lessor Mortgage
and that the Subject Property be a Security Property and a
Property as those terms are defined in the Participation
Agreement and the other Operative Documents and that all terms
covenants conditions and requirements of said Operative
Documents applicable thereto shall apply to the Subject
Property including without limitation those relating to sale,
lease or further encumbrance of any Property.
SECTION 2. Remedies. (a) Upon the occurrence and during the continuance of
a Lease Event of Default each of which is also a default under this Mortgage,
the Mortgagee may exercise any one or more of the following rights and remedies
as it, in its sole discretion, may deem necessary or appropriate:
(i) collect interest on all past due sums at the Overdue
Rate;
(ii) terminate the Master Lease and, either in person or by
agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and
without regard to the adequacy of security, enter upon
and take possession of the Security Property, or any
part thereof, in its own name, and do any acts which it
deems necessary or desirable to preserve the value,
marketability or rentability of the Security Property,
or any part thereof or interest therein, to increase the
income therefrom or to protect the security hereof and,
with or without taking possession of the Security
Property, to sue for or otherwise to collect the Profits
thereof, including, without limitation, those past due
and unpaid, and to apply the same, less costs and
expenses of operation and collection, including, without
limitation, reasonable attorneys' fees, upon any
Obligations secured hereby, all in such order as the
Mortgagee may determine. The entering upon and taking
possession of the Security Property, and the collection
of such Profits and the application thereof as
aforesaid, shall not cure or waive any Lease Event of
Default or notice of a Lease Event of Default hereunder
or invalidate any act done in response to such Lease
Event of Default and, notwithstanding the continuance in
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possession of the Mortgagee or the collection, receipt
and application of Profits by the Mortgagee, the
Mortgagee shall be entitled to exercise every right
provided for herein or by law upon the occurrence and
during the continuance of any Lease Event of Default,
including, without limitation, the right to exercise the
power of sale;
(iii) declare all Obligations and sums secured hereby
immediately due and payable by delivery to the Mortgagor
of written declaration of the occurrence and continuance
of a Lease Event of Default and to the extent permitted
by Applicable Law, conduct a non-judicial foreclosure by
power of sale;
(iv) foreclose this mortgage in the manner provided by
Applicable Law for the foreclosure of mortgages on real
property;
(v) whether or not a judicial or non-judicial foreclosure
has been commenced, declare immediately due and payable
without notice or demand, except as otherwise required
hereunder or under Applicable Law, all amounts payable
by the Mortgagor hereunder or under the other Operative
Documents which are then unpaid, with all interest and
sums accrued and accelerate payment thereof
notwithstanding contrary terms of payment stated therein
and exercise all other rights and remedies available
hereunder, under Applicable Law, in equity or otherwise;
(vi) without regard to the adequacy of its security or the
then value of the Security Property or the interest of
the Mortgagor therein, apply to any court having
jurisdiction to appoint a receiver or receivers of the
Security Property and the Mortgagor hereby irrevocably
consents to such appointment and, to the extent
permitted by Applicable Law, waives notice of any
application therefor. Any such receiver or receivers
shall have all the usual powers and duties of receivers
in like or similar cases and all the powers of the
Mortgagee provided for herein, and shall continue as a
receiver and exercise all such powers until the date of
confirmation of sale of the Security Property unless
such receivership is sooner terminated by the Mortgagee
in its sole discretion or as a court of competent
jurisdiction shall direct.
Upon the occurrence and during the continuance of a Lease
Event of Default, the Mortgagee shall be entitled to enforce
payment and performance of any Obligations secured hereby and
to exercise all rights and powers hereunder or any laws now or
hereafter in force notwithstanding that some or all of said
Obligations secured hereby may now or hereafter be otherwise
secured, whether by mortgage, deed of trust, pledge, lien,
assignment or otherwise. To the extent permitted by
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Applicable Law, neither the acceptance nor the enforcement
hereof, whether by court action or pursuant to the power of
sale or other powers herein contained, shall prejudice or in
any manner affect the Mortgagee's right to realize upon or
enforce any other security now or hereafter held by the
Mortgagee and, to the extent permitted by Applicable Law, the
Mortgagee shall be entitled to enforce the rights and remedies
provided for herein and any other security now or hereafter
held by the Mortgagee in such order and manner as it may in
its absolute discretion determine. No remedy conferred upon or
reserved to the Mortgagee is intended to be exclusive of any
other remedy, but each shall be cumulative and shall be in
addition to every other remedy given hereby or now or
hereafter existing at law or in equity or by statute. To the
extent permitted by Applicable Law, every power or remedy
given hereby to the Mortgagee or to which the Mortgagee may be
otherwise entitled, may be exercised, concurrently or
independently, from time to time and as often as may be deemed
expedient by the Mortgagee, and the Mortgagee may pursue
inconsistent remedies.
(b) Upon the occurrence and during the continuance of a Lease
Event of Default, the Mortgagee, in addition to and not in
lieu of or in diminution of the rights and remedies provided
above shall have all of the rights and remedies of a secured
party under the UCC, which rights and remedies may be
exercised without application to any court to the extent
permitted by the UCC.
SECTION 3. Applicable Law; Certain Particular Provisions. This Mortgage
shall be governed by and construed in accordance with the laws of the State of
New Jersey ("Applicable Law") and each of the Mortgagee and the Mortgagor agree
to submit to jurisdiction and the laying of venue for any suit on this Mortgage
in such state. The terms and provisions set forth in Schedule III attached
hereto are hereby incorporated by reference as though fully set forth herein. In
the event of any conflict between the terms and provisions contained in the body
of this Mortgage and the terms and provisions set forth in Schedule III, the
terms and provisions set forth in Schedule III shall govern and control.
SECTION 4. Satisfaction of the Mortgage, Security Interest and Assignment
of Rents and Subleases. If the Mortgagor complies with the provisions of this
Mortgage and irrevocably pays and performs (to the reasonable satisfaction of
Mortgagor) all of the Obligations secured hereby, in accordance with the
provisions of the Master Lease, and the other Operative Documents and in the
manner and at the times set forth therein, without deduction, fraud or delay,
then and from thenceforth this Mortgage and the estate hereby granted and
created in favor of the Mortgagee, shall cease and become void, anything
hereinbefore contained to the contrary notwithstanding.
SECTION 5. Maximum Interest Rate. No provision of this Mortgage or any
transaction related thereto shall require the payment or permit the collection
of interest or any other amount in excess of the maximum permitted by Applicable
Law. If any excess of interest or any other amount in such respect is herein or
any other Operative Document provided for, the Mortgagor
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shall not be obligated to pay such excess interest or any other amounts in
excess of the amount permitted by applicable law, and the right to demand the
payment of any such excess shall be and hereby is waived, and this provision
shall control any other provision of this Mortgage and the other Operative
Documents.
SECTION 6. Security Agreement and Fixture Financing Statement. This
Mortgage is both a real property mortgage and a "security agreement" within the
meaning of the UCC. The Subject Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in
nature, of Mortgagee in the Subject Property. Mortgagor has herein granted to
Mortgagee, as security for the Obligations, a security interest in the UCC
Property to the full extent that the UCC Property may be subject to the UCC. The
information contained in this Section 6 is provided in order that this Mortgage
shall comply with the requirements of the UCC for mortgages to be effective as
financing statement filed as a fixture filing. The name of the "debtor" is ITT
INDUSTRIES, INC.; the name of the "secured party" is REXUS L.L.C.; the mailing
address of the "secured party" from which information concerning the security
interest may be obtained and the mailing address of the "debtor" are as set
forth in Schedule V hereto. The types, or the items, of collateral covered
hereby consist of the UCC Property identified in Section 1 which constitute
fixtures or personal property. The Mortgagee is the record owner of the Land.
SECTION 7. Notices. For purposes of this instrument as a fixture filing,
and for all other purposes, unless otherwise specifically provided herein, all
notices, offers, acceptances, rejections, consents, requests, demands or other
communications to or upon the respective parties hereto shall be in writing and
shall be given in the manner set forth in Section 26.4 of the Master Lease and
delivered to Mortgagor or Mortgagee at the addresses set forth above.
[Signature Block on Following Page]
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IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to be duly
executed by an officer thereunto duly authorized as of the date and year first
above written.
ITT INDUSTRIES, INC., as Mortgagor
By: /s/ Donald Foley
----------------
Name: Donald Foley
Title: Senior Vice President, Treasurer and
Director of Tax
N - 1
Schedule I
Legal Description
Commencing at a point on the westerly side of River Road (55 feet wide), 30 feet
from the centerline of previous 50 ft. R.O.W., said point being the dividing
line between Block 83.01 Lot 4 and Block 83.01 Lot 1.01 and running the
following courses and distances; thence
Section 1. Along the dividing line between Block 83.01 Lot 1.01 and Block 83.01
Lot 4 North 69 degrees 00'57" East a distance of 5.20 feet to the Point
of Beginning; thence
A. South 05 degrees 05'53" West, a distance of 84.32 feet; thence
B. South 06 degrees 35'47" East, a distance of 143.14 feet; thence
C. South 11 degrees 26'17" East, a distance of 103.17 feet; thence
D. North 87 degrees 33'42" West, a distance of 418.94 feet; thence
E. South 25 degrees 25'19" West, a distance of 193.71 feet; thence
F. North 87 degrees 33'42" West, a distance of 170.64 feet; thence
G. North 64 degrees 34'55" West, a distance of 163.25 feet; thence
H. North 87 degrees 33'42" West, a distance of 190.32 feet; thence
I. South 08 degrees 24'41" West, a distance of 112.10 feet; thence
J. North 81 degrees 21'01" West, a distance of 51.42 feet; thence
K. South 08 degrees 58'57" West, a distance of 11.07 feet; thence
L. North 81 degrees 06'09" West, a distance of 204.71 feet; thence
M. North 05 degrees 22'50" West, a distance of 193.17 feet; thence
N. South 85 degrees 10'45" West, a distance of 181.84 feet; thence
O. North 50 degrees 31'04" West, a distance of 79.81 feet; thence
P. North 21 degrees 43'47" West, a distance of 350.63 feet; thence
Q. North 04 degrees 55'42" West, a distance of 95.18 feet; thence
R. North 00 degrees 00'51" East, a distance of 299.57 feet; thence
S. South 89 degrees 59'09" East, a distance of 78.00 feet; thence
T. North 00 degrees 00'51" East, a distance of 25.00 feet; thence
U. South 89 degrees 59'09" East, a distance of 374.44 feet; thence
V. South 74 degrees 48'47" East, a distance of 87.22 (Survey) 86.15 (Deed)
feet; thence
W. South 72 degrees 56'47" East, a distance of 262.88 feet; thence
X. South 67 degrees 53'17" East, a distance of 129.78 feet; thence
Y. South 58 degrees 23'37" East, a distance of 293.48 feet; thence
Z. South 69 degrees 00'57" East, a distance of 527.06 feet to the Point
of Beginning.
Encompassing an area of 1,131,200 sf or 25.969 Acres.
Schedule II
Additional Permitted Property Liens
None
Schedule III
Local Law Provisions
1. Warranty of Title. At the time of the recordation of this Mortgage,
Mortgagor is well seized of an indefeasible estate in fee simple in the portion
of the Security Property which constitutes real property and owns good title to
the portion of the Security Property which constitutes personal property, and
Mortgagor has good right, full power and lawful authority to convey, mortgage
and grant a security interest therein and to assign any Rents due Mortgagor
relative to the Security Property. Said title of Mortgagor in the Security
Property is free and clear of all liens, charges, easements, covenants,
conditions, restrictions and encumbrances whatsoever, other than liens expressly
permitted under the Loan Agreement, including, as to the personal property and
fixtures, security agreements, conditional sales contracts and anything of a
similar nature. Mortgagor shall and will forever defend the title to the
Security Property against the claims of all persons whomsoever.
2. Mortgage Taxes. In the event of the passage of any federal, state or
local governmental law, order, rule or regulation subsequent to the date hereof
which changes or modifies in any manner the laws now in force governing the
taxation of mortgages or debts secured by mortgages or the manner of collecting
taxes so as to materially and adversely affect Mortgagee, all sums secured by
this Mortgage and all interest accrued thereon shall become due forthwith at the
option of Mortgagee and be payable 60 days after notice to Mortgagor.
Notwithstanding the foregoing, instead of paying all the sums secured by this
Mortgage and all interest accrued thereon as provided above, Mortgagor shall
have the right to pay to Mortgagee an amount which will place Mortgagee in
exactly the same position Mortgagee would have been in had the events outlined
above not occurred, provided, however, if such payment may, in Mortgagee's
judgment, be considered unlawful by a court of competent jurisdiction, then such
payment may not be made and all sums secured by this Mortgage and all interest
accrued thereon shall become due forthwith at the option of Mortgagee and
payable 60 days after notice to Mortgagor as aforesaid.
3. No Tax Credits. Mortgagor shall not claim or demand or be entitled to
receive any credit or credits on any principal or interest payable with respect
to any Obligations, for so much of the taxes, assessments or similar charges
assessed against the Security Property, or any part thereof, as are applicable
to the Obligations or to Mortgagee's interest in the Security Property. No
deduction shall be claimed from the taxable value of the Security Property or
any part thereof by reason of the Obligations or this Mortgage.
4. Further Assurances; After Acquired Property. At any time and from time
to time, upon request from Mortgagee, Mortgagor shall make, execute and deliver,
or cause to be made, executed and delivered, to Mortgagee and, where
appropriate, to cause to be recorded or filed, or both, and from time to time
thereafter to be re-recorded or refiled, or both, at such time and in such
offices and places as shall be deemed desirable by Mortgagee, any and all such
other and further mortgages, security agreements, financing statements,
continuation statements, instruments of further assurances, certificates and
other documents as may, in the opinion of
Mortgagee, be necessary or desirable in order to effectuate, complete or
perfect, or to continue and preserve (i) the obligations of the Mortgagor under
this Mortgage and the other Operative Documents, and (ii) the lien and security
interest of this Mortgage as a first and prior lien and security interest upon
all of the Security Property, whether now or hereafter acquired by Mortgagor.
Upon any failure by Mortgagor to so make, execute and deliver each of such
documents after written demand, Mortgagee may make, execute, record, file,
re-record and refile, as appropriate, any and all such mortgages, security
agreements, financing statements, continuation statements, instruments,
certificates and documents for and in the name of Mortgagor, and Mortgagor
hereby irrevocably appoints Mortgagee as its agent and attorney-in-fact in
connection therewith. The lien and security interest hereof will automatically
attach, without further act, to all after-acquired property owned by Mortgagor
attached to or used in connection with the operation of the Security Property or
any part thereof.
5. Receiver. If a Lease Event of Default shall have occurred and be
continuing, Mortgagee, upon application to a court of competent jurisdiction,
shall be entitled as a matter of strict right without notice and without regard
to the occupancy or value of any security for the Obligations or the insolvency
of any party bound for its payment to the appointment of a receiver to take
possession of and to operate the Security Property and to collect and apply the
rents, issues, profits, revenues, awards and other benefits thereof. The
receiver shall have all of the rights and powers to the fullest extent permitted
by law. Mortgagor shall pay to Mortgagee upon demand all of Mortgagee's costs
and expenses, including, without limitation, receiver's fees and expenses and
attorneys' fees and expenses, incurred pursuant to this Section plus interest
thereon accruing at the Default Rate, and all such amounts shall be additional
indebtedness comprising Obligations.
6. Mortgagee's Power of Enforcement. If a Lease Event of Default shall
have occurred and be continuing, Mortgagee may, either with or without entry or
taking possession as herein provided or otherwise, proceed by suit or suits at
law or in equity or by any other appropriate proceeding or remedy (i) to enforce
payment of the Obligations or the performance of any term, covenant, condition
or agreement of this Mortgage or any other right, (ii) to foreclose this
Mortgage and to sell the Security Property as an entirety or otherwise, as
Mortgagee may determine, and (iii) to pursue any other remedy available to it,
including, without limitation, any remedy available to it under any of the
Operative Documents, all as Mortgagee shall deem most effectual for such
purposes. Mortgagee may take action either by such proceedings or by the
exercise of its powers with respect to entry or taking possession, as Mortgagee
may determine. Mortgagee may elect to pursue any one or more or all of the
foregoing.
7. Purchase by Mortgagee. Upon any foreclosure sale, Mortgagee may bid for
and purchase the Security Property and shall be entitled to apply all or any
part of any indebtedness or obligation secured hereby as a credit to the
purchase price.
8. Fees and Expenses; Application of Proceeds of Sale. In any suit to
foreclose the lien hereof, there shall be allowed and included as additional
indebtedness secured hereby (and part of the Obligations) in the decree for
sale, to the extent permitted by law, all costs and expenses which may be paid
or incurred by or on behalf of Mortgagee or the holder of the Notes
for attorneys' fees and expenses, appraiser's fees and expenses, receiver's fees
and expenses, insurance, taxes, outlays for documentary and expert evidence,
costs for preservation of the Security Property, stenographer's charges,
publication cost and costs of procuring all abstracts of title, title searches
and examinations, and similar data and assurances with respect to title as
Mortgagee may deem to be necessary either to prosecute such suit or to evidence
to bidders at any sale which may be had pursuant to such decree the true
condition of the title to or value of the Security Property, or for any other
reasonable purpose. The amount of any such costs and expenses which may be paid
or incurred after the decree for sale is entered may be estimated and the amount
of such estimate may be allowed and included as additional indebtedness secured
hereby (and part of the Obligations) in the decree for sale. In the event of a
foreclosure sale of the Security Property, the proceeds of said sale shall be
applied first to the expenses of such sale and of all proceedings in connection
therewith, including, without limitation, attorneys' fees and expenses, then to
insurance premiums, liens, assessments, taxes and charges, including, without
limitation, utility charges, then to payment of the outstanding principal
balance of any Obligations secured hereby, then to the Remaining Obligations.
9. Waiver of Appraisement, Valuation, Stay, Extension and Redemption Laws.
Mortgagor agrees, to the fullest extent permitted by law, that if a Lease Event
of Default occurs hereunder, neither Mortgagor nor anyone claiming through or
under Mortgagor shall or will set up, claim or seek to take advantage of any
appraisement, valuation, stay, extension, homestead or redemption laws now or
hereafter in force, in order to prevent or hinder the enforcement or foreclosure
of this Mortgage, or the absolute sale of the Security Property hereby conveyed,
or the final and absolute putting into possession thereof, immediately after
such sale, of the purchasers thereat, and Mortgagor, for itself and all who may
at any time claim by, through or under it, hereby waives and releases, to the
fullest extent permitted by law, the benefit of all such laws and any and all
rights to have the assets comprised in the security intended to be created
hereby marshalled upon any foreclosure of the lien hereof.
10. Leases. Mortgagee, at its option, is authorized to foreclose this
Mortgage subject to the rights of any tenants of the Security Property, or to
name said tenants in the foreclosure, and the failure to make such tenants
parties to any such foreclosure proceedings and to foreclose their rights will
not be, nor be asserted to be by Mortgagor, a defense to any proceedings
instituted by Mortgagee to collect the sums secured hereby, or any deficiency
remaining unpaid after the foreclosure sale of the Security Property.
11. Discontinuance of Proceedings and Restoration of the Parties. In case
Mortgagee shall have proceeded to enforce any right, power or remedy under this
Mortgage by foreclosure, entry or otherwise, and such proceedings shall have
been discontinued or abandoned for any reason, or shall have been determined
adversely to Mortgagee, then and in every such case, Mortgagor and Mortgagee
shall be restored to their former positions and rights hereunder, and all
rights, powers and remedies of Mortgagee shall continue as if no such proceeding
had been taken.
12. Suits to Protect the Security Property. Upon the occurrence of a Lease
Event of Default hereunder, Mortgagee shall have the power (i) to institute and
maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Security Property by any
acts which may be unlawful or in violation of this Mortgage; (ii) to preserve or
protect its interest in the Security Property and in the rents, issues, profits,
revenues, awards and other benefits arising therefrom; and (iii) to restrain the
enforcement of or compliance with any legislation or other governmental
enactment, regulation, rule, order or other requirement that may be
unconstitutional or otherwise invalid, if the enforcement of or compliance with
such enactment, regulation, rule, order or other requirement would impair the
security hereunder or be prejudicial to the interest of Mortgagee, and all costs
and expenses incurred by Mortgagee in connection therewith (including, without
limitation, attorneys' fees and expenses) shall be paid by Mortgagor to
Mortgagee on demand with interest at the Default Rate, and all such amounts
shall be additional indebtedness secured hereby (and part of the Obligations).
13. Mortgagee May File Proofs of Claim. In the case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or
other proceedings affecting Mortgagor, its creditors or its property, Mortgagee,
to the extent permitted by law, shall be entitled to file such proofs of claim
and other documents as may be necessary or advisable in order to have the claims
of Mortgagee allowed in such proceedings for the entire amount due and payable
by Mortgagor under this Mortgage at the date of the institution of such
proceedings and for any additional amount which may become due and payable by
Mortgagor hereunder after such date.
14. Assignment. For $10.00 and other good and valuable consideration,
including the indebtedness evidenced by the Operative Documents, the receipt and
sufficiency of which are hereby acknowledged, Mortgagor has granted, bargained,
sold and conveyed, and by these presents does grant, bargain, sell and convey
absolutely unto Mortgagee any leases and the rents payable to Mortgagor relative
to the Security Property, subject only to the hereinafter referenced License, to
have and to hold the Leases and the Rents unto Mortgagee, forever, and Mortgagor
does hereby bind itself, its successors and assigns to warrant and forever
defend the title to the leases and the rents unto Mortgagee against every person
whomsoever lawfully claiming or to claim the same or any part thereof by or
through Mortgagor; provided, however, if Mortgagor shall pay or cause to be paid
and shall perform and discharge or cause to be performed and discharged, the
Obligations on or before the date same is to be paid, performed and discharged,
then this assignment shall terminate and be of no further force and effect, and
all rights, titles and interests conveyed pursuant to this assignment shall
become revested in Mortgagor without the necessity of any further act or
requirement by Mortgagor or Mortgagee. Notwithstanding any provisions herein,
Mortgagor may only lease the Security Property to third parties in accordance
with the Operative Documents.
15. Limited License. Mortgagee hereby grants to Mortgagor a limited
license (the "License"), nonexclusive with the rights of Mortgagee reserved in
this Mortgage, to exercise and enjoy all incidences of ownership of the Leases
and the Rents, including specifically but without limitation the right to
collect, demand, sue for, attach, levy, recover and receive the Rents, and to
give proper receipts, releases and acquittances therefor. Mortgagor hereby
agrees to receive all Rents and hold the same as a trust fund to be applied, and
to apply the Rent so collected, to the payment, satisfaction and discharge of
the indebtedness described in the Operative Documents as and when the same shall
become due and payable. Thereafter, Mortgagor may use the balance of the Rent
collected in any manner not inconsistent with the Operative Documents.
16. Enforcement of Leases. Subject to and in accordance with the terms and
conditions of Section 1.16 of this Mortgage, Mortgagor shall (a) duly and
punctually perform and comply with any and all representations, warranties,
covenants and agreements expressed as binding upon the landlord under any Lease,
(b) maintain each of the Leases in full force and effect during the term
thereof, (c) to the extent commercially reasonable, appear in and defend any
action or proceeding in any manner connected with any of the Leases, (d) deliver
to Mortgagee copies of executed counterparts of all Leases and (e) deliver to
Mortgagee such further information, and execute and deliver to Mortgagee such
further assurances and assignments, with respect to the Leases as Mortgagee may
from time to time reasonably request. Without Mortgagee's prior written consent,
Mortgagor shall not materially discount any future accruing Rent, or assign or
grant a security interest in or to the License or any of the Leases.
17. Suits; Attornment. Subject to the License and the provisions of
Section 2.1.2 of this Mortgage, Mortgagee hereby reserves and may exercise the
right and Mortgagor hereby acknowledges that Mortgagee has the right (but not
the obligation), upon the occurrence and during the continuance of a Lease Event
of Default, to collect, demand, sue for, attach, levy, recover and receive any
Rent, to give proper receipts, releases and acquittances therefor and, after
deducting the expenses of collection, to apply the net proceeds thereof as a
credit upon any portion of any indebtedness secured hereby selected by
Mortgagee, notwithstanding that such portion selected may not then be due and
payable or that such portion is otherwise adequately secured. Mortgagor hereby
authorizes and directs any lessee of the Security Property to deliver any such
payment to, and otherwise to attorn all other obligations under the Leases
direct to, Mortgagee. Mortgagor hereby ratifies and confirms all that Mortgagee
shall do or cause to be done by virtue and in compliance with the terms of this
assignment. No lessee shall be required to inquire into the authority of
Mortgagee to collect any Rent, and any lessee's obligation to Mortgagor shall be
absolutely discharged to the extent of its payment to Mortgagee.
18. Remedies. Upon or at any time after the occurrence of a Lease Event of
Default, Mortgagee, at its option and in addition to the remedies provided in
this Mortgage, shall have the complete, continuing and absolute right, power and
authority to terminate the License solely by the giving of written notice of
termination to Mortgagor. Upon Mortgagee's giving of such notice, the License
shall immediately terminate without any further action being required of
Mortgagee. Thereafter, as long as any Event of Default shall exist, Mortgagee
shall have the exclusive right, power and authority to take any and all action
as described above, regardless of whether a foreclosure sale of the remainder of
the Security Property has occurred under this Mortgage, or whether Mortgagee has
taken possession of the remainder of the Security Property or attempted to do
any of the same. No action referred to above or in this Section taken by
Mortgagee shall constitute an election of remedy. Notwithstanding any term to
the contrary herein, in the event of such a termination of Mortgagor's License,
such License shall be reinstated when and if the applicable Event of Default
shall have been cured or waived.
19. No Obligation of Mortgagee. Neither the acceptance by Mortgagee of the
assignment granted in this Mortgage, nor the granting of any other right, power,
privilege or authority in this Mortgage, nor the exercise of any of the
aforesaid, shall (a) prior to the actual taking of physical possession and
operational control of the Security Property by Mortgagee, be deemed to
constitute Mortgagee as a "mortgagee in possession" or (b) at any time
thereafter,
obligate Mortgagee (i) to appear in or defend any action or proceeding relating
to the Leases, the Rents or the remainder of the Security Property, (ii) to take
any action hereunder, (iii) to expend any money or incur any expenses or perform
or discharge any obligation, duty or liability with respect to any Lease, (iv)
to assume any obligation or responsibility for any deposits which are not
physically delivered to Mortgagee or (v) for any injury or damage to person or
property sustained in or about the Security Property.
20. Mortgagor's Indemnities. So long as the License is in effect,
Mortgagor shall indemnify and hold Mortgagee harmless from and against any and
all liability, loss, cost, damage or expense which Mortgagee incurs under or by
reason of this assignment, or for any action taken by Mortgagee hereunder in
accordance with the terms hereof, or by reason of or in defense of any and all
claims and demands whatsoever which are asserted against Mortgagee arising out
of the Leases. In the event Mortgagee incurs any such liability, loss, cost,
damage or expense, the amount thereof together with all reasonable attorneys'
fees and interest thereon at the Default Rate shall be payable by Mortgagor to
Mortgagee, within 10 days after demand by Mortgagee, and shall be secured by
this Mortgage, provided that Mortgagor shall have no duty or liability hereunder
to indemnify and hold Mortgagee harmless from matters resulting from the willful
misconduct or gross negligence of Mortgagee.
Schedule IV
Defined Terms
"Appurtenant Rights" means, with respect to the Land and the Subject
Property, (i) all agreements, easements, rights of way or use, rights of ingress
or egress, privileges, appurtenances, tenements, and other rights and benefits
at any time belonging or pertaining to the Land and the Subject Property,
including the use of any streets, ways, alleys, vaults or strips of land
adjoining, abutting, adjacent or contiguous to the Land and (ii) all permits,
licenses and rights, whether or not of record, appurtenant to the Land and (iii)
all of the Lessee/Mortgagor's right, title and interest in all general
intangibles relating to the design, development, operation, management and use
of the Subject Property, all certificates of occupancy, zoning variances,
building, use or other permits, approvals, authorizations and consents obtained
from and all materials prepared for filing or filed with any Governmental
Authority in connection with the development, use, operation or management of
the Subject Property, all construction, service, engineering, consulting,
leasing, architectural and other similar contracts concerning the design,
construction, management, operation, occupancy and/or use of the Subject
Property, all architectural drawings, plans, specifications, soil tests,
feasibility studies, appraisals, environmental studies, engineering reports and
similar materials relating to any portion of or all of the Subject Property, and
all payment and performance bonds or warranties or guarantees relating to the
Subject Property, all to the extent assignable.
"Equipment" means any equipment the removal of which could reasonably be
expected to affect the value or utility of the Land or the Subject Property,
taken together or separately, including heating, electrical, switch gear, power
supply, lighting, plumbing, ventilation, air conditioning and air cooling
systems, refrigerating equipment, generators, locking and unlocking equipment,
communication systems, sprinkler system and fire prevention systems, security
systems and fixtures of all kinds; provided, however, that the term "Equipment"
shall expressly exclude all inventory, furniture and furnishings.
