EXHIBIT (10)(g)
MASTER LEASE AGREEMENT
Dated as of
December 27, 1999
Between
FATICO 1999 TRUST,
Lessor
and
FIRST AMERICAN TITLE INSURANCE COMPANY,
Lessee
MASTER LEASE AGREEMENT
TABLE OF CONTENTS
Page
1. LEASING....................................................... 1
2. TERM, RENT AND PAYMENT........................................ 2
3. TAXES......................................................... 3
4. DELIVERY, USE AND OPERATION................................... 3
5. MAINTENANCE................................................... 4
6. INSURANCE..................................................... 4
7. LOSS OR DAMAGE................................................ 5
8. REPORTS....................................................... 6
9. END OF LEASE OPTIONS.......................................... 6
(a) Purchase................................................. 6
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(b) Return................................................... 7
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(c) Extension................................................ 8
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(d) Notice of Election....................................... 8
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10. DEFAULT; REMEDIES............................................. 8
11. ASSIGNMENT.................................................... 10
12. INDEMNIFICATION............................................... 10
13. OWNERSHIP FOR TAX PURPOSES; GRANT OF SECURITY
INTEREST; USURY SAVINGS....................................... 12
14. REPRESENTATIONS AND WARRANTIES OF LESSEE...................... 13
15. CHOICE OF LAW; JURISDICTION................................... 15
16. [INTENTIONALLY OMITTED]....................................... 15
17. CHATTEL PAPER................................................. 15
18. MISCELLANEOUS................................................. 15
19. DEFINITIONS................................................... 18
20. ASSIGNMENT BY EDISON.......................................... 25
21. LIMITATION OF LIABILITY....................................... 25
________________________________________
EXHIBIT NO. 1 - EQUIPMENT SCHEDULE
ANNEX A - DESCRIPTION OF EQUIPMENT
ANNEX B - BILL OF SALE
ANNEX C - CERTIFICATE OF ACCEPTANCE
ANNEX D - RETURN PROVISIONS
ANNEX E - FINANCIAL TERMS
ANNEX F - ESTOPPEL/WAIVER AGREEMENT
EXHIBIT NO. 2 - EQUIPMENT SUBLEASE AGREEMENT
EXHIBIT NO. 3 - CORPORATE GUARANTY
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MASTER LEASE AGREEMENT
THIS MASTER LEASE AGREEMENT ("Agreement") is made as of the ____ day of
December, 1999, between FATICO 1999 TRUST, a Delaware business trust, with an
office at c/o Wilmington Trust Company, as Owner Trustee, Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890-0001 (hereinafter called,
together with its successors and assigns, if any, "Lessor"), and FIRST AMERICAN
TITLE INSURANCE COMPANY, a California corporation with its mailing address and
chief place of business at 1 First American Way, Santa Ana, California 92707
(hereinafter called "Lessee").
WITNESSETH:
1. LEASING
(a) This Agreement shall be effective from and after the date of execution
hereof. Subject to the terms and conditions set forth below, Lessor agrees to
lease to Lessee, and Lessee agrees to lease from Lessor, the equipment
("Equipment") described in Annex A to any schedule delivered pursuant hereto in
substantially the form attached hereto as Exhibit No. 1 ("Schedule"). Terms
defined or specified in a Schedule and not otherwise defined herein shall have
the meanings ascribed to them in such Schedule. Certain definitions are provided
in Section 19 hereof.
(b) Subject to the terms and conditions hereof, Lessor agrees to purchase
the Equipment for an aggregate purchase price of up to $81,658,500 from Lessee
and to lease the same to Lessee under a Schedule. Lessor's obligation to
purchase and lease any Equipment shall be subject to consummation of the loan to
be made by the Lender to Lessor pursuant to the Financing Documents with respect
to such Equipment, and receipt by Lessor, on or prior to the earlier of the
Basic Term Commencement Date or Last Delivery Date specified in the Schedule
with respect to such Equipment, of each of the following documents in form and
substance satisfactory to Lessor and the Operating Agent: (i) the Schedule
relating to the Equipment then to be leased hereunder (which Equipment shall be
acceptable to Lessor and the Operating Agent), (ii) an executed Bill of Sale
from Lessee with respect to the Equipment then to be leased hereunder, in the
form of Annex B to the applicable Schedule, in favor of Lessor, (iii) Uniform
Commercial Code financing statements duly executed by Lessee, describing the
Equipment then to be leased hereunder and any Additional Collateral, as
reasonably may be required by Lessor or the Operating Agent, together with
Uniform Commercial Code lien search reports with respect to Lessee confirming
that such Equipment and Additional Collateral is not then subject to a security
interest perfected by the filing of a Uniform Commercial Code financing
statement against Lessee, or Uniform Commercial Code statements of termination
or partial release, as applicable, with respect to any such security interests
then having been filed with respect to such Equipment and Additional Collateral,
(iv) evidence of insurance which complies with the requirements of Section 6,
(v) an appraisal in form and substance, and by an appraiser, satisfactory to
Lessor and the Operating Agent, with respect to the Equipment then to be leased
hereunder, (vi) a Corporate Guaranty in substantially the form attached hereto
as Exhibit No. 3 ("Guaranty"), duly executed by The First American Financial
Corporation ("Guarantor"), and (vii) such opinions, certificates and other
documents as Lessor or the Operating Agent may reasonably request. In addition,
Lessee shall execute and deliver to Edison, on behalf of Lessor, a Borrowing
Request in the amount of the Capitalized Lessor's Cost of the Equipment
described on such Schedule, not less than five (5) Business Days prior to the
requested funding of a Schedule. Simultaneously with the execution of the Bill
of Sale, Lessee shall also execute a Certificate of Acceptance, in the form of
Annex C to the applicable Schedule, covering all of the Equipment described in
the Bill of Sale. Upon execution by Lessee of any Certificate of Acceptance, the
Equipment described thereon shall be deemed to have been delivered to, and
irrevocably accepted by, Lessee for lease hereunder.
(c) The amount to be paid by Lessor with respect to any item of the
Equipment shall be not more than the appraised value of such item of the
Equipment.
(d) LESSEE ACKNOWLEDGES THAT IT HAS SELECTED THE EQUIPMENT WITHOUT ANY
ASSISTANCE FROM LESSOR, ANY EDISON PROGRAM PARTY OR ANY OF THEIR RESPECTIVE
AGENTS OR EMPLOYEES. LESSOR DOES NOT MAKE, HAS NOT MADE, NOR SHALL BE DEEMED TO
MAKE OR HAVE MADE, ANY WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED,
WRITTEN OR ORAL, WITH RESPECT TO THE EQUIPMENT LEASED HEREUNDER OR ANY COMPONENT
THEREOF, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY AS TO DESIGN, COMPLIANCE
WITH SPECIFICATIONS, QUALITY OF MATERIALS OR WORKMANSHIP, MERCHANTABILITY,
FITNESS FOR ANY PURPOSE, USE OR OPERATION, SAFETY, PATENT, TRADEMARK OR
COPYRIGHT INFRINGEMENT, OR TITLE. All such risks, as between Lessor and any
Edison Program Party, on the one hand, and Lessee, on the other hand, are to be
borne by Lessee. Without limiting the foregoing, neither Lessor nor any Edison
Program Party shall have any responsibility or liability to Lessee or any other
Person with respect to any of the following (i) any liability, loss or damage
caused or alleged to be caused directly or indirectly by any Equipment, any
inadequacy thereof, any deficiency or defect (latent or otherwise) therein, or
any other circumstance in connection therewith; (ii) the use, operation or
performance of any Equipment or any risks relating thereto; (iii) any
interruption of service, loss of business or anticipated profits or
consequential damages; or (iv) the delivery, operation, servicing, maintenance,
repair, improvement or replacement of any Equipment. If, and so long as, no
Default exists under this Agreement, Lessee shall be, and hereby is, authorized
during the Term to assert and enforce, at Lessee's sole cost and expense, from
time to time, in the name of and for the account of Lessor and/or Lessee, as
their interests may appear, whatever claims and rights Lessor may have against
any supplier of the Equipment.
2. TERM, RENT AND PAYMENT
(a) The Rent payable hereunder and Lessee's right to use any Equipment shall
commence on the date of execution by Lessee of the Certificate of Acceptance for
such Equipment (the "Basic Term Commencement Date"). The term of this Agreement
(the "Term") as to any Equipment shall be the period specified in the applicable
Schedule for such Equipment; provided that the term of all Schedules shall end
on the same date. If any Term is extended, the word "Term" shall be deemed to
refer to all extended terms, and all provisions of this Agreement shall apply
during any extended term, except as otherwise may be specifically provided in
writing by Lessee, Lessor and the Operating Agent. The maximum Term, including
all extensions, shall not exceed six (6) years.
(b) Rent shall be paid to Lessor by wire transfer of immediately available
funds to: Bankers Trust New York, New York, New York 10006, Account No.
00386337, ABA No. 021-001-033, Reference: FATICO 1999 Trust Collection Account
#29195, or to such other account as the Collateral Agent (or, after all amounts
payable to the Edison Program Parties hereunder and under the Financing
Documents have been paid in full in cash, Lessor) may direct in writing; and
shall be effective upon receipt. Payments of Rent shall be paid monthly in
arrears in the amount set forth in, and due in accordance with, the provisions
of the applicable Schedule. In no event shall any Rent payments be refunded to
Lessee. If Rent is not paid within three (3) Business Days of its due date,
Lessee agrees to pay a late charge of Five Cents ($0.05) per dollar on, and in
addition to, the amount of such Rent but not exceeding the Maximum Lawful Rate,
if any.
(c) This Agreement is a net lease. Lessee's obligation to pay Rent and other
amounts due hereunder shall be absolute and unconditional. Lessee shall not be
entitled to any abatement or reductions of, or set-offs against, said Rent or
other amounts, including, without limitation, those arising or allegedly arising
out of claims (present or future, alleged or actual, and including claims
arising out of strict liability in tort or negligence of Lessor or any Edison
Program Party) of Lessee against Lessor or any Edison Program Party under this
Agreement or otherwise. This Agreement shall not terminate and the obligations
of Lessee shall not be affected by reason of any defect in or damage to, or loss
of possession, use or destruction of, any Equipment from whatsoever cause. It is
the intention of the parties that Rents and other amounts due hereunder shall
continue to be payable in all events in the manner and at the times set forth
herein unless the obligation to do so shall have been terminated pursuant to the
express terms hereof.
3. TAXES
Lessee shall have no liability for taxes imposed by the United States of
America or any State or political subdivision thereof which are on or measured
by the net income of Lessor (except with respect to any indemnification or
reimbursement obligation of Lessee hereunder which is expressly stated to be on
an after-tax basis). Lessee shall report (to the extent that it is legally
permissible) and pay promptly all other taxes, fees and assessments due,
imposed, assessed or levied against any Equipment (or the purchase, ownership,
delivery, leasing, possession, use or operation thereof), any Additional
Collateral, this Agreement (or any
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rentals or receipts hereunder), any Schedule, any Financing Document, Lessor,
any Edison Program Party or Lessee by any foreign, Federal, state or local
government or taxing authority during or related to the term of this Agreement,
including, without limitation, all license and registration fees, and all sales,
use, personal property, excise, gross receipts, franchise, stamp or other taxes,
imposts, duties and charges, together with any penalties, fines or interest
thereon (all hereinafter called "Taxes"). Lessee shall (i) reimburse Lessor and
each Edison Program Party on an after-tax basis upon receipt of written request
for reimbursement for any Taxes charged to or assessed against Lessor or such
Edison Program Party, (ii) on request of Lessor or any Edison Program Party,
submit written evidence of Lessee's payment of Taxes, (iii) on all reports or
returns show the ownership of the Equipment by Lessee, and (iv) send a copy
thereof to Lessor.
4. DELIVERY, USE AND OPERATION
(a) The parties acknowledge that this transaction is a sale/leaseback of the
Equipment and such Equipment is in Lessee's possession or in the possession
of Lessee's Affiliates as of the Basic Term Commencement Date.
(b) Lessee agrees that the Equipment will be used by Lessee and/or its
Affiliates solely in the conduct of its business and in a manner complying
with all applicable Federal, state, and local laws and regulations, and any
applicable insurance policies, and Lessee and/or its Affiliates shall not
discontinue use of the Equipment.
(c) Lessee shall not directly or indirectly create, incur, assume, or suffer
to exist any Lien on or with respect to the Equipment, any Additional Collateral
or any part thereof, title thereto, or any interest of Lessor, the Lender or the
Collateral Agent therein or in this Agreement except Permitted Liens. Lessee
will promptly, at its own expense, take or cause to be taken such action as may
be necessary to discharge any Lien which is not a Permitted Lien.
(d) Lessee shall, and shall cause its Affiliates to, permit any person
designated by Lessor or any Edison Program Party during normal business hours
upon reasonable notice to visit, inspect and survey the Equipment and/or the
Additional Collateral, its condition, use, and operation, and the records
maintained in connection therewith, and to discuss the affairs and finances of
Lessee with the Chief Financial Officer of Lessee. Neither Lessor nor any Edison
Program Party shall have any duty to make any such inspection and shall not
incur any liability or obligation by reason of not making any such inspection.
Lessor's or any Edison Party Program's failure to object to any condition or
procedure observed or observable in the course of an inspection hereunder shall
not be deemed to waive or modify any of the terms of this Agreement with respect
to such condition or procedure.
(e) Lessee will keep the Equipment in the State and County designated as the
Equipment Location (specified in the applicable Schedule) within the Continental
United States and shall not move the Equipment to another County within such
State, or to another State, without the prior written consent of Lessor and the
Operating Agent. In connection with any move of the Equipment to another State,
or to another County within such State, Lessee shall obtain and provide to
Lessor an Estoppel/Waiver Agreement in the form of Annex F to the applicable
Schedule with respect to such new location (if requested by Lessor or the
Operating Agent) and such Uniform Commercial Code financing statements as may be
required by Lessor and the Operating Agent.
(f) Provided that no Default shall then have occurred and be continuing, at
Lessee's expense, upon thirty (30) days' prior written notice to Lessor, Lessee
may elect to replace a unit of Equipment (a "Substituted Item") with a
replacement unit of equipment (a "Replacement Item"). Each Replacement Item
shall be of the same type of equipment as the Substituted Item (that is, a
computer shall be substituted for a computer); shall be free and clear of all
liens and encumbrances; and shall have at least the value, utility and remaining
useful life and be in as good an operating condition as the Substituted Item,
assuming that the Substituted Item had been maintained in accordance with the
provisions of this Agreement (as established to the reasonable satisfaction of
Lessor and the Collateral Agent), and Lessee shall provide to Lessor a
certificate executed by the Chief Financial Officer of Lessee to that effect.
Replacements pursuant hereto shall be limited to once per each consecutive six
(6) month period for any number of Substituted Items and the aggregate
Capitalized Lessor's Cost of the Substituted Items shall not be less than
$1,000,000.00 per
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replacement. Lessee shall execute and deliver to Lessor a Bill
of Sale and an amended Annex A to the applicable Equipment Schedule with respect
to each Replacement Item, together with such documents and instruments as
reasonably may be required by Lessor or the Collateral Agent in connection with
such replacement, including (without limitation) Uniform Commercial Code
financing statements to be filed at Lessee's expense. Upon compliance by Lessee
with the provisions hereof, Lessor will transfer to Lessee, on an AS IS, WHERE
IS BASIS, without recourse or warranty, express or implied, of any kind
whatsoever ("AS IS BASIS"), all of Lessor's interest in and to the Substituted
Item. Lessor shall not be required to make and may specifically disclaim any
representation or warranty as to the co(f)abndition of the Substituted Item and
any other matters (except that Lessor shall warrant that it conveyed whatever
interest it received in such Substituted Item free and clear of any Lessor's
Lien). At Lessee's expense, Lessor shall execute and deliver to Lessee such
Uniform Commercial Code statements of termination as reasonably may be required
in order to terminate any interest of Lessor in and to such Substituted Item.
5. MAINTENANCE
(a) Lessee will, and will cause its Affiliates to, at its sole expense,
maintain each unit of Equipment and any Additional Collateral in good operating
order, repair, condition and appearance in accordance with manufacturer's
recommendations (if applicable), normal wear and tear excepted. Lessee shall, if
at any time reasonably requested by Lessor, affix in a prominent position on
each unit of Equipment and any Additional Collateral plates, tags or other
identifying labels showing the interest therein of Lessor.
(b) Lessee will not, and will not permit its Affiliates to, without the prior
written consent of Lessor and the Operating Agent, affix or install any
accessory, equipment or device on any Equipment or any Additional Collateral if
such addition will impair the value, originally intended function or use of such
Equipment or any Additional Collateral. All additions, repairs, parts, supplies,
accessories, equipment, and devices furnished, attached or affixed to any
Equipment or any Additional Collateral which are not readily removable shall be
made only in compliance with applicable law, shall be free and clear of all
liens, encumbrances or rights of others, and shall become the property of
Lessor. Lessee will not, without the prior written consent of Lessor and the
Operating Agent and subject to such conditions as Lessor and the Operating Agent
may impose for its protection, affix or install any Equipment or any Additional
Collateral to or in any other personal or real property.
(c) Any alterations or modifications to the Equipment or any Additional
Collateral that may, at any time during the Term of this Agreement, be required
to comply with any applicable law, rule or regulation shall be made at the
expense of Lessee.
6. INSURANCE
Lessee agrees, at its own expense, to keep all Equipment insured for such
amounts as specified in Paragraph C of the applicable Schedule and against such
hazards as Lessor or the Operating Agent may require, including, but not limited
to, insurance for damage to or loss of such Equipment or any Additional
Collateral and liability coverage for personal injuries, death or property
damage. All such policies shall be with companies, and on terms, satisfactory
to Lessor and the Collateral Agent. All insurance: (1) shall name the
Collateral Agent (or, after all amounts payable to the Edison Program Parties
hereunder and under the Financing Documents have been paid in full in cash,
Lessor), as loss payee ATIMA and Lessor, Wilmington Trust Company, each Edison
Program Party and each beneficiary of the Trust, as additional insured solely
with respect to the Equipment (without responsibility for premiums); (2) shall
provide that any cancellation or material change in coverage shall not be
effective as to Lessor, Wilmington Trust Company or any Edison Program Party
until thirty (30) days after receipt by Lessor and the Collateral Agent of
written notice from such insurer(s) of such cancellation or change; (3) shall
insure Lessor's, Wilmington Trust Company's and each Edison Program Party's
interest regardless of any breach or violation by Lessee of any warranties,
declarations or conditions in such policies; (4) shall include a severability of
interest clause providing that such policy shall operate in the same manner as
if there were a separate policy covering each insured; (5) shall waive any right
of set-off due to Lessee's actions or inactions; and (6) shall waive any right
of subrogation against Lessor, Wilmington Trust Company or any Edison Program
Party. Such insurance shall be primary without right of contribution and shall
not be subject to any offset by any other insurance carried by Lessor, or
Lessee, Wilmington Trust Company, or any Edison Program Party. Such insurance
shall expressly provide
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that all of the provisions thereof shall operate in the same manner as if there
were a separate policy covering each insured; provided, however, that such
policies shall not operate to increase the insurer's limit of liability. Lessee
agrees to deliver to Lessor evidence of insurance satisfactory to Lessor. No
insurance shall be subject to any co-insurance clause. Lessee hereby appoints
the Collateral Agent (or, after all amounts payable to the Edison Program
Parties hereunder and under the Financing Documents have been paid in full in
cash, Lessor) as Lessee's attorney-in-fact to make proof of loss and claim for
insurance, and to make adjustments with insurers and to receive payment of and
execute or endorse all documents, checks or drafts in connection with payments
made as a result of such insurance policies. Any reasonable expense of the
Collateral Agent or Lessor in adjusting or collecting insurance shall be borne
by Lessee. With respect to claims for damage to any unit of Equipment or any
Additional Collateral where the amount of the claim (when aggregated with the
amount of all other claims with respect to the Equipment or any Additional
Collateral during the then current calendar year) does not exceed $250,000,
Lessee may make adjustments with insurers and receive directly the proceeds of
such claims. With respect to claims for damage to any unit of Equipment or any
Additional Collateral where the amount of the claim (when aggregated with the
amount of all other claims with respect to the Equipment or any Additional
Collateral during the then current calendar year) exceeds $250,000, the
Collateral Agent (or the Lessor, as applicable), may make adjustments with
insurers and receive directly the proceeds of such claims unless Lessor, the
Operating Agent and the Collateral Agent expressly consent in writing to the
adjustment of such claim by Lessee. Subject to the second preceding sentence,
Lessor (or the Collateral Agent, as assignee) may, at its option, apply proceeds
of insurance, in whole or in part, to (x) repair or replace Equipment,
Additional Collateral or any portion thereof, or (y) after the occurrence of a
Default or event which, with the giving of notice, or the lapse of time, or
both, would become a Default hereunder, satisfy any obligation of Lessee to
Lessor hereunder. Lessee also agrees, at its own expense, to keep all of the
Additional Collateral insured in accordance with Lessee's customary practices.
7. LOSS OR DAMAGE
(a) Lessee hereby assumes and shall bear the entire risk of any loss, theft,
damage to, or destruction of, any unit of Equipment from any cause whatsoever at
all times during the Term.
(b) Lessee shall promptly and fully notify Lessor and the Collateral Agent
in writing if any unit of Equipment shall be or become worn out, lost, stolen,
destroyed, irreparably damaged in the reasonable determination of Lessee, or
permanently rendered unfit for use from any cause whatsoever (such occurrences
being hereinafter called "Casualty Occurrences"); provided that such notice to
Lessor and the Collateral Agent shall not be required if the aggregate
Capitalized Lessor's Cost of all units of Equipment then having suffered a
Casualty Occurrence during the then current calendar year does not exceed
$250,000. In all events, regardless of whether a notice is required pursuant to
the immediately preceding sentence, on the Rent Payment Date next succeeding a
Casualty Occurrence (the "Payment Date"), Lessee shall either (as selected by
Lessee):
(1) replace the unit of Equipment having suffered the Casualty
Occurrence with equipment of comparable make and model, and otherwise in
accordance with the provisions of Section 4(f) hereof; or
(2) pay Lessor (in the manner provided in Section 2(b)) the sum of (x)
the Lease Balance of such unit calculated in accordance with Annex E as of the
Rent Payment Date next preceding such Casualty Occurrence ("Calculation Date");
(y) all Rents and other amounts which are due hereunder as of the Payment Date;
and (z) all Related Third Party Costs. Upon payment of all sums due hereunder,
the Term as to such Equipment shall terminate and (except in the case of the
loss, theft or complete destruction of such unit) Lessee shall be entitled to
recover possession of such Equipment.
8. REPORTS
(a) Lessee will notify Lessor in writing, within ten (10) days after any tax
or other Lien (other than a Permitted Lien) shall attach to any Equipment or any
of the Additional Collateral, of the full particulars thereof and of the
location of such Equipment or any of the Additional Collateral on the date of
such notification.
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(b) Lessee will cause to be delivered to Lessor, within one hundred twenty
(120) days of the close of each fiscal year of Lessee, Lessee's balance sheet
and profit and loss statement, prepared in accordance with statutory
requirements consistently applied, certified by a nationally recognized firm of
independent certified public accountants; and Lessee will deliver to Lessor
quarterly, within ninety (90) days of the close of each fiscal quarter of
Lessee, in reasonable detail, copies of Lessee's quarterly financial reports
certified by the Chief Financial Officer of Lessee.
(c) Lessee will promptly and fully report to Lessor in writing if any
Equipment or any of the Additional Collateral is lost or damaged (where the
estimated repair costs (when aggregated with the repair costs of all other
Equipment or any of the Additional Collateral incurred during the then current
calendar year) would exceed $250,000), or is otherwise involved in an accident
causing personal injury or property damage.
(d) Concurrently with delivery of the annual financial statements
referenced in Section 8(b) hereof,or upon request by Lessor or the Collateral
Agent, Lessee will furnish a certificate of an authorized officer of Lessee
stating that he has reviewed the activities of Lessee and that, to the best of
his knowledge, there exists no Default or event which, with the giving of notice
or the lapse of time (or both), would become such a Default. Promptly (but in no
event more than three (3) Business Days) after the occurrence of any Default or
event which, with the giving of notice or the lapse of time (or both), would
become such a Default, Lessee shall provide written notice thereof to Lessor and
the Operating Agent.
(e) Lessee will provide to Lessor evidence of insurance required by the
terms hereof, promptly upon request by Lessor or the Collateral Agent.
(f) Lessee will provide to Lessor copies of all information, documents and
records regarding or in respect to the Equipment and any Additional Collateral
and its use, maintenance and/or condition, within ten (10) days of Lessor's or
the Collateral Agent's request therefor.
9. END OF LEASE OPTIONS
Upon the expiration of the Term of each Schedule, Lessee shall cause a
third party sale or return, or purchase or extend the Term with respect to, all
(but not less than all) of the Equipment leased under all Schedules executed
hereunder, upon the following terms and conditions. Lessee may exercise the
options pursuant to this Section 9 only if no Default or event which, with the
giving of notice, or the lapse of time, or both, would constitute a Default,
exists at any time during the period from the date of giving notice of the
exercise of such option through and including the date the exercise of such
option is effectuated.
(a) Purchase. If Lessee shall not have exercised its extension option, or
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its option to return the Equipment pursuant to this Section, Lessee shall have
the option, upon the expiration of the Term of each Schedule, to purchase all
(but not less than all) of the Equipment described on all Schedules executed
hereunder upon the following terms and conditions: If Lessee desires to exercise
this option with respect to the Equipment, Lessee shall pay to Lessor (in the
manner set forth in Section 2(b)) on the last day of the Term with respect to
the applicable Schedule, in addition to the scheduled Rent (if any) then due on
such date and all other sums then due hereunder, in cash the purchase price for
the Equipment so purchased, determined as hereinafter provided. The purchase
price of the Equipment shall be an amount equal to the Lease Balance of such
Equipment (as specified on the Schedule), plus all sales or transfer taxes and
charges upon sale (if any), plus all Related Third Party Costs, and all other
reasonable and documented expenses incurred by Lessor or any Edison Program
Party in connection with such sale, including, without limitation, any such
expenses incurred based on a notice from Lessee to Lessor that Lessee intended
to return the Equipment. Upon satisfaction of the conditions specified in this
Paragraph, Lessor will transfer, on an AS IS BASIS, all of Lessor's interest in
and to the Equipment. Lessor shall not be required to make and may specifically
disclaim any representation or warranty as to the condition of such Equipment
and other matters (except that Lessor shall warrant that it has conveyed
whatever interest it received in the Equipment from Lessee, free and clear of
any Lessor's Lien). At Lessee's expense, Lessor shall execute and deliver to
Lessee such Uniform Commercial Code Statements of Termination as reasonably may
be required in order to terminate any interest of Lessor in and to the
Equipment.
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(b) Return.
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(1) Unless Lessee shall have exercised its extension option, or its
purchase option pursuant to this Section 9, upon the expiration of the Term of
each Schedule, as to all (but not less than all) of the Equipment described on
all Schedules executed hereunder, Lessee shall cause the Equipment to satisfy
the return conditions specified in Annex D attached to the Schedules. Lessor and
Lessee will cause the Equipment to be sold to one or more independent third
parties upon the expiration of the Term with respect to each individual Schedule
(such sale to be consummated on the date of expiration of the Term with respect
to such individual Schedule). The proposed sale of the Equipment shall be
subject to the prior written approval of the Collateral Agent and the Residual
Support Provider if the anticipated Net Sales Proceeds to be received as a
result of such sale is less than the Lease Balance with respect to such
Equipment.
(2) If all of the Equipment has been sold to an independent third party
or parties upon the expiration of the Term of the Schedule with respect thereto,
the gross sales proceeds shall be paid to Lessor (in the manner set forth in
Section 2(b) hereof). If the net sales proceeds resulting from the sale of the
Equipment pursuant to this Section 9 (b) after application of the gross sales
proceeds to reimburse Lessor and the Edison Program Parties for all reasonable
costs, expenses and fees, including storage, reasonable and necessary
maintenance and other remarketing fees incurred by Lessor or any Edison Program
Party in connection with such sale, and any sales or transfer taxes and charges
upon sale) (the "Net Sales Proceeds"): (i) is less than the Lease Balance
(determined as of the expiration of the Term of the Schedule with respect
thereto) with respect to such Equipment, then Lessee shall pay to Lessor (in the
manner set forth in Section 2(b)) on the last day of the Term with respect to
the applicable Schedule the amount of such deficiency (provided, however, that
in no event shall the aggregate amount so required to be paid by Lessee for all
Schedules exceed the aggregate of the Maximum Lessee Risk Amounts for all
Schedules) plus the scheduled Rent (if any) then due on such date and all other
sums then due hereunder; or (ii) is more than the Lease Balance (determined as
of the expiration of the Term of the Schedule with respect thereto) plus all
sales or transfer taxes and charges upon sale, plus all Related Third Party
Costs, and all other reasonable and documented expenses incurred by Lessor or
any Edison Program Party in connection with such sale, including, without
limitation, any such expenses incurred based on a notice from Lessee to Lessor
that Lessee intended to return the Equipment, plus Rent (if any) then due, then
Lessor shall pay to Lessee such excess.
(3) If all of the Equipment has not been sold to an independent third
party or parties upon the expiration of the Term of the Schedule with respect
thereto, Lessee shall return the Equipment to Lessor in accordance with the
provisions of Annex D attached to the applicable Schedule and Lessee shall pay
to Lessor (in the manner set forth in Section 2(b)) on the last day of the Term
with respect to each individual Schedule the Lease Balance (determined as of the
expiration of the Term of the Schedule with respect thereto) with respect to the
Equipment, plus Rent (if any) then due. Lessor shall then attempt to sell the
Equipment to an independent third party or parties and the gross sales proceeds
with respect to such Equipment shall be paid to Lessor (in the manner set forth
in Section 2(b) hereof). That portion of the Net Sales Proceeds received by
Lessor which is in excess of the amount of all Related Third Party Costs, and
all other reasonable and documented expenses incurred by Lessor or an Edison
Program Party in connection with such sale, including, without limitation, any
such expenses incurred based on a notice from Lessee to Lessor that Lessee
intended to return the Equipment (the "Excess Amount"), shall be paid by Lessor
to Lessee. If the amount of the Lease Balance paid by Lessee pursuant to this
Section 9(b)(3), minus the Excess Amount, exceeds the Maximum Lessee Risk
Amounts for all Schedules, Lessor shall additionally pay to Lessee that portion
of the amount of such excess over the Maximum Lessee Risk Amounts for all
Schedules as does not exceed the Maximum Lessor Risk Amounts for all Schedules.
Each of the parties hereto expressly acknowledges and agrees that none of
Lender, the Operating Agent, the Collateral Agent or any Edison Program Party
shall have any obligations to Lessee with respect to the payment of such amounts
to Lessee pursuant to this Section 9(b)(3).
(4) Upon sale of the Equipment in accordance with this Section 9(b) and
receipt by Lessor of the gross sales proceeds with respect thereto, Lessor will
transfer, on an AS IS BASIS, all of Lessor's interest in and to such Equipment.
Lessor shall not be required to make and may specifically disclaim any
representation or warranty as to the condition of such Equipment and other
matters (except that Lessor shall warrant that it has conveyed whatever interest
it received in such Equipment from Lessee or the Supplier free and clear of any
Lessor's Lien). At Lessee's expense, Lessor shall execute and deliver to Lessee
such
7
Uniform Commercial Code Statements of Termination as reasonably may be required
in order to terminate any interest of Lessor in and to such Equipment.
(c) Extension. If Lessee shall not have exercised its option to return the
---------
Equipment or its purchase option pursuant to this Section, Lessee shall have the
option, upon the expiration of the Basic Term, to extend the Agreement with
respect to all, but not less than all, of the Equipment for an additional term
of twelve (12) months (the "Extension Term") at a monthly rental to be paid in
arrears on each of the twelve (12) Rent Payment Dates following the last day of
the Basic Term, and calculated as the sum of (i) that amount as is equal to the
Lease Balance as of the expiration of the Basic Term divided by twelve (12),
plus (ii) interest on the Lease Balance outstanding from time to time during the
Extension Term at a rate per annum equal to the sum of two hundred (200) basis
points over the Daily Borrowing Rate calculated, as to each day in any Rent
Payment Period, at the Daily Borrowing Rate applicable to such day, in twelve
(12) equal monthly installments. Rent during the Extension Term shall be paid to
Lessor in the manner set forth in Section 2(b) hereof. At the end of the
Extension Term, provided that Lessee is not then in Default under this
Agreement, Lessee shall purchase all, and not less than all, of such Equipment
for $1.00 cash, together with all Rent and other sums then due on such date,
plus all taxes and charges upon transfer (if any) and all other reasonable and
documented expenses incurred by Lessor in connection with such transfer. Upon
satisfaction of the conditions specified in this Paragraph, Lessor will
transfer, on an AS IS BASIS, all of Lessor's interest in and to the Equipment.
Lessor shall not be required to make and may specifically disclaim any
representation or warranty as to the condition of the Equipment and any other
matters (except that Lessor shall warrant that it has conveyed whatever interest
it received from Lessee in the Equipment free and clear of any Lessor's Lien).
At Lessee's expense, Lessor shall execute and deliver to Lessee such Uniform
Commercial Code Statements of Termination as reasonably may be required in order
to terminate any interest of Lessor in and to the Equipment.
(d) Notice of Election. Lessee shall give Lessor and the Operating Agent
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irrevocable written notice of its election of the options specified in this
Section not less than three hundred sixty-five (365) days before the expiration
of the Basic Term of the first Schedule to be executed under this Agreement.
Such election shall be effective with respect to all Equipment described on all
Schedules executed hereunder. If Lessee fails timely to provide such notice,
without further action Lessee automatically shall be deemed to have elected to
purchase the Equipment pursuant to Paragraph (a) of this Section.
10. DEFAULT; REMEDIES
(a) Lessor may (or shall if so directed by the Lender or the Collateral
Agent) in writing declare this Agreement in default ("Default") if: (1) Lessee
breaches its obligation to pay Rent or any other sum as and when due; (2) Lessee
breaches any of its insurance obligations under Section 6 hereof; (3) Lessee
shall or shall attempt to (except as expressly permitted by the provisions of
this Agreement) remove, sell, transfer, encumber (except to the extent of a
Permitted Lien), part with possession of or assign, any Equipment, any
Additional Collateral, or any part thereof, or use any Equipment or any
Additional Collateral for an illegal purpose or permit the same to occur; (4)
Lessee breaches any of its other obligations hereunder and fails to cure that
breach within thirty (30) days after written notice thereof; (5) any
representation or warranty made by Lessee in connection with this Agreement
shall be false or misleading in any material respect; (6) Lessee becomes
insolvent or ceases to do business as a going concern; (7) Lessee shall file a
voluntary petition in bankruptcy or a voluntary petition or an answer seeking
reorganization in a proceeding under any bankruptcy laws (as now or hereafter in
effect) or an answer admitting the material allegations of a petition filed
against Lessee in any such proceeding, or Lessee shall, by voluntary petition,
answer or consent, seek relief under the provisions of any other now existing or
future bankruptcy or other similar law (other than a law which does not provide
for or permit the readjustment or alteration of Lessee's obligations hereunder)
providing for the reorganization or liquidation of corporations, or providing
for an agreement, composition, extension or adjustment with its creditors; (8) a
petition is filed against Lessee in a proceeding under applicable bankruptcy
laws or other insolvency laws (other than any law which does not provide for or
permit any readjustment or alteration of Lessee's obligations hereunder), as now
or hereafter in effect, and is not withdrawn or dismissed within thirty (30)
days thereafter, or if, under the provisions of any law (other than any law
which does not provide for or permit any readjustment or alteration of Lessee's
obligations hereunder) providing for reorganization or liquidation of
corporations which may apply to Lessee, any court of competent jurisdiction
shall assume jurisdiction, custody or control of Lessee of any substantial part
of its property and such
8
jurisdiction, custody or control shall remain in force unrelinquished, unstayed
or unterminated for a period of thirty (30) days; (9) Lessee shall have
terminated its corporate existence, consolidated with, merged into, or conveyed
or leased substantially all of its assets as an entirety to any Person (such
actions being referred to as an "Event"), unless not less than sixty (60) days
prior to such Event: (x) such Person is organized and existing under the laws of
the United States or any state, and executes and delivers to Lessor an agreement
containing an effective assumption by such Person of the due and punctual
performance of this Agreement; and (y) each of Lessor, Lender and the Collateral
Agent confirms in writing that it is reasonably satisfied as to the
creditworthiness of such Person; (10) Lessee shall be in default under any
agreement between General Electric Capital Corporation and Lessee; (11) Lessee
shall be in default under any material obligation for the payment of borrowed
money, for the deferred purchase price of property or any lease agreement; (12)
there occurs a default or anticipatory repudiation under the Guaranty; or (13)
effective control of Lessee's voting capital stock, issued and outstanding from
time to time, is not retained by Guarantor (unless Lessee shall have provided
thirty (30) days' prior written notice to Lessor and Operating Agent of the
proposed disposition of stock and Lessor and Operating Agent shall have
consented thereto in writing). Such declaration shall apply to all Schedules
except as specifically excepted by Lessor, the Lender and the Collateral Agent.
(b) After Default, whether arising before or after the exercise of options
pursuant to Section 9 hereof, Lessee shall, without further demand, forthwith
pay to Lessor (in the manner set forth in Section 2(b)) (i) as liquidated
damages for loss of a bargain and not as a penalty, the Lease Balance of all of
the Equipment (calculated in accordance with Annex D attached to the Schedules
as of the Rent Payment Date next preceding the declaration of default), and (ii)
all Rents and other sums then due hereunder, plus all Related Third Party Costs.
If Lessee fails to pay the amounts specified in the preceding sentence, then, at
the request of the Collateral Agent (or, after all amounts payable to the Edison
Program Parties hereunder and under the Financing Documents have been paid in
full in cash, Lessor), Lessee shall return the Equipment to Lessor in accordance
with the provisions of Annex D to the Schedules; and, in such event, Lessee
hereby authorizes Lessor and the Collateral Agent to enter, with or without
legal process, any premises where any Equipment or any Additional Collateral is
located and take possession thereof. Lessor or the Collateral Agent may, but
shall not be required to, sell the Equipment or any Additional Collateral at
private or public sale, in bulk or in parcels, with or without notice, and
without having the Equipment or any Additional Collateral present at the place
of sale; or Lessor or the Collateral Agent may, but shall not be required to,
lease, otherwise dispose of or keep idle all or part of the Equipment or any
Additional Collateral; and Lessor or the Collateral Agent may use Lessee's
premises for any or all of the foregoing without liability for rent, costs,
damages or otherwise. The proceeds of sale, lease or other disposition, if any,
shall be applied in the following order of priorities: (1) to pay all of
Lessor's and the Collateral Agent's costs, charges and expenses incurred in
taking, removing, holding, repairing and selling, leasing or otherwise disposing
of the Equipment and any Additional Collateral; then, (2) to the extent not
previously paid by Lessee, to pay Lessor and each Edison Program Party all sums
due from Lessee hereunder for payment in each case in the manner set forth in
Section 2(b); then, (3) to reimburse to Lessee any sums previously paid by
Lessee as liquidated damages; and (4) any surplus shall be paid to Lessee.
Lessee shall pay any deficiency in clauses (1) and (2) forthwith.
(c) After declaration by Lessor of a Default hereunder, in addition to the
foregoing rights, Lessor (acting at the direction of the Collateral Agent) may
(i) terminate the lease as to any or all of the Equipment, and/or (2) exercise
any and all rights and remedies available to it under the UCC or other
applicable law with respect to the Additional Collateral. If Lessor exercises it
rights and remedies with respect to the Additional Collateral, the proceeds
received therefrom shall be applied as specified in Paragraph (b) of this
Section.
(d) The foregoing remedies are cumulative, and any or all thereof may be
exercised in lieu of or in addition to each other or any remedies at law, in
equity, or under statute. Lessee waives notice of sale or other disposition (and
the time and place thereof), and the manner and place of any advertising. Lessee
shall pay all reasonable attorney's fees actually incurred by Lessor or any
Edison Program Party in enforcing the provisions of this Agreement and any
ancillary documents. Waiver of any default shall not be a waiver of any other or
subsequent default.
(e) Any default under the terms of this or any other agreement between
General Electric Capital Corporation and Lessee may be declared by Lessor a
default under this and any such other agreement.
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11. ASSIGNMENT
(a) LESSEE SHALL NOT ASSIGN, MORTGAGE, SUBLET OR HYPOTHECATE ANY EQUIPMENT,
ANY ADDITIONAL COLLATERAL OR THE INTEREST OF LESSEE HEREUNDER WITHOUT THE PRIOR
WRITTEN CONSENT OF LESSOR, LENDER AND THE COLLATERAL AGENT. Notwithstanding the
foregoing, Lessee may sublease the Equipment and any Additional Collateral to
any Affiliate of Lessee, on the following terms and conditions: (1) such
sublease shall be evidenced by an Equipment Sublease Agreement in substantially
the form attached hereto as Exhibit No. 2 (collectively, the "Sublease"); the
term of the Sublease shall not extend beyond the Term of this Agreement; and the
Sublease shall be expressly subject and subordinate to Lessor's interest in and
to the Equipment and any Additional Collateral and to this Agreement.
(b) Lessee acknowledges that, to the extent permitted under the Funding
Agreement, Lessor and any beneficiary of the Trust may assign its rights granted
hereunder, including the benefit of any indemnities, and upon such assignment,
such assignee shall have, to the extent of such assignment, all rights of Lessor
or such beneficiary, as applicable, hereunder and, to the extent permitted under
the Funding Agreement, may in turn assign such rights. Lessee agrees that, upon
any such assignment, such assignee may enforce directly, without joinder of
Lessor, the rights of Lessor set forth in this Agreement. All such assignees,
including parties to the Funding Agreement in the case of any assignment to such
parties, shall be third-party beneficiaries of, and shall be entitled to enforce
Lessor's rights and remedies under, this Agreement to the same extent as if they
were parties hereto. Lessee hereby waives and agrees not to assert against any
such assignee any defense, set-off, recoupment claim or counterclaim which
Lessee has or may at any time have against Lessor or any other person for any
reason whatsoever.
(c) Subject always to the foregoing, this Agreement inures to the benefit
of, and is binding upon, the successors and assigns of the parties hereto.
12. INDEMNIFICATION
(a) Without limiting any other rights that Lessor, any beneficiary of the
Trust, Wilmington Trust Company or any Edison Program Party or any director,
officer, employee or agent or incorporator of such party (each an "Indemnified
Party") may have hereunder or under applicable law, Lessee hereby agrees to
indemnify each Indemnified Party from and against any and all claims, losses,
liabilities, obligations, damages, penalties, actions, judgments, proceedings,
suits, in contract or tort, and including, but not limited to, any Indemnified
Party's strict liability in tort ("Claims"), and related costs and expenses of
any nature whatsoever, including reasonable attorneys' fees and disbursements
and other costs of investigation or defense, including those incurred upon any
appeal (all of the foregoing being collectively referred to as "Indemnified
Amounts"), which may be imposed on, incurred by or asserted against an
Indemnified Party in any way arising out of or relating to (i) the selection,
manufacture, purchase, acceptance or rejection of the Equipment and/or the
Additional Collateral, the ownership of the Equipment and/or the Additional
Collateral, and the delivery, lease, possession, maintenance, use, condition,
return or operation of the Equipment and/or the Additional Collateral
(including, without limitation, latent and other defects, whether or not
discoverable by any Indemnified Party or Lessee, and any claim for patent,
trademark or copyright infringement or environmental damage), or (ii) the
condition of the Equipment and/or the Additional Collateral sold or disposed of
after use by Lessee or employees of Lessee, or (iii) any Environmental Claim or
Environmental Loss and, unless Lessee is then contesting in good faith such
Environmental Claim or Environmental Loss, Lessee shall fully and promptly pay,
perform and discharge any such Environmental Claim or Environmental Loss, or
(iv) any breach of Lessee's obligations under this Agreement or any Document, or
(v) the financing or the purchase and lease hereunder, or (vi) this transaction,
excluding, however, Indemnified Amounts to the extent resulting from gross
negligence or willful misconduct on the part of such Indemnified Party, or (vii)
any actions brought against any Indemnified Party that arise out of Lessee's
actions (or actions of Lessee's agents) or this transaction. Without limiting or
being limited by the foregoing, Lessee shall pay on demand to each Indemnified
Party any and all amounts necessary to indemnify such Indemnified Party from and
against any and all Indemnified Amounts relating to or resulting from:
(A) reliance on any representation or warranty made or deemed made by
Lessee (or any of its officers) under or in connection with this Agreement, any
Document, any Financing Document or any
10
report or other information delivered by Lessee pursuant hereto which shall have
been incorrect in any material respect when made or deemed made or delivered;
(B) the failure by Lessee to comply with any term, provision or
covenant contained in this Agreement, any Document or any other agreement
executed by it in connection with this Agreement or with any applicable law,
rule or regulation with respect to any Equipment or any Additional
Collateral, or the nonconformity of any Equipment or any Additional
Collateral with any such applicable law, rule or regulation; or
(C) the failure to vest and maintain vested in Lessee legal and
equitable title to and ownership of the Equipment, free and clear of any
Liens (other than any such Lien created in favor of Lessor, the Lender or the
Collateral Agent) whether existing at the time of the purchase of such
Equipment or at any time thereafter, and to maintain or transfer to Lessor a
first priority, perfected security interest in the Equipment and in the
Additional Collateral.
(b) Lessee shall, upon request, defend any actions based on, or arising out
of, any of the foregoing.
(c) In case any action, suit or proceeding shall be brought against any
Indemnified Party for which indemnification is sought under this Section 12,
such Indemnified Party shall notify Lessee of the commencement thereof, and
Lessee shall be entitled, at its expense, to participate in, and, to the extent
that Lessee desires to, assume and control the defense thereof; provided,
however, that (i) the failure of any Indemnified Party to give such notice shall
not release Lessee from any of its obligations under this Section 12, except to
the extent that failure to give notice of any action, suit or proceeding against
such Indemnified Party shall (x) have a material adverse effect on Lessee's
ability to defend such Claim, or (y) have a material adverse effect on Lessee's
ability to recover proceeds under applicable insurance maintained by Lessee,
(ii) Lessee shall keep such Indemnified Party fully apprised of the status of
such action, suit or proceeding and shall provide such Indemnified Party with
all information with respect to such action, suit or proceeding as such
Indemnified Party shall reasonably request, and (iii) 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
Indemnified Party, (x) such action, suit or proceeding involves any risk of
imposition of criminal liability or will involve a risk of sale, forfeiture or
loss of, or the creation of any Lien (other than a Permitted Lien) on any
Equipment or any Additional Collateral unless, in the case of civil liability,
Lessee shall have posted a bond or other security satisfactory to the relevant
Indemnified Party in respect to 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 Lessee which Lessee
and the Indemnified Party have been unable to sever from the indemnified
Claim(s), or (C) a Default has occurred and is continuing. The Indemnified Party
may participate in a reasonable manner at its own expense and with its own
counsel in any proceeding conducted by Lessee in accordance with the foregoing.
Lessee shall not enter into any settlement or other compromise with respect to
any Claim which is entitled to be indemnified under clause (a) without the prior
written consent of the applicable Indemnified Party, which consent shall not be
unreasonably withheld in the case of a money settlement not involving an
admission of liability of such Indemnified Party.
Each Indemnified Party shall at the expense of Lessee supply Lessee with
such information and documents reasonably requested by Lessee as are necessary
or advisable for Lessee to participate in any action, suit or proceeding to the
extent permitted by this Section 12. Unless a Default shall have occurred, no
Indemnified Party shall enter into any settlement or other compromise with
respect to any Claim which is entitled to be indemnified under this Section 12,
without the prior written consent of Lessee, which consent shall not
unreasonably be withheld, unless such Indemnified Party waives its right to be
indemnified under this Section 12 with respect to such Claim.
Upon payment in full of any Claim by Lessee pursuant to this Section 12,
to or on behalf of an Indemnified Party, Lessee, without further action, shall
be subrogated to any and all claims that such Indemnified Party may have
relating thereto (other than claims in respect of insurance policies maintained
by such Indemnified Party at its own expense), and such Indemnified Party shall,
upon the request of Lessee and at the sole cost and expense of Lessee, execute
such instruments of assignment and conveyance, evidence of claims and payment
and such other documents, instruments and agreements as may be necessary to
11
preserve any such claims and otherwise cooperate with Lessee and give such
further assurances as are necessary or advisable to enable Lessee vigorously to
pursue such claims.
Any Indemnified Amount payable to an Indemnified Party pursuant to
this Section 12 shall be paid to such Indemnified Party promptly (and in any
event within five (5) Business Days) upon receipt of a written demand therefor
from such Indemnified Party, accompanied by a written statement describing in
reasonable detail the basis for such indemnity and the computation of the amount
so payable.
(d) All of the Indemnified Parties' rights, privileges and indemnities
contained in this Section shall survive the expiration or other termination of
this Agreement and the rights, privileges and indemnities contained herein are
expressly made for the benefit of, and shall be enforceable by the Indemnified
Parties and their successors and assigns.
13. OWNERSHIP FOR TAX PURPOSES; GRANT OF SECURITY INTEREST; USURY SAVINGS
(a) For income tax purposes, Lessor will treat Lessee as the owner of the
Equipment. Accordingly, unless prohibited by applicable law, Lessor agrees (i)
to treat Lessee as the owner of the Equipment on its federal income tax return,
(ii) not to take actions or positions inconsistent with such treatment on or
with respect to its federal income tax return, and not claim any tax benefits
available to an owner of the Equipment on or with respect to its federal income
tax return. The foregoing undertakings by Lessor shall not be violated by
Lessor's taking a tax position through inadvertence so long as such inadvertent
tax position is reversed by Lessor promptly upon its discovery. Lessor shall in
no event be liable to Lessee if Lessee fails to secure any of the tax benefits
available to the owner of the Equipment.
(b) In order to secure the prompt payment of the Rent and all of the other
amounts from time to time outstanding under and with respect to the Schedules,
and the performance and observance by Lessee of all the agreements, covenants
and provisions thereof (including, without limitation, all of the agreements,
covenants and provisions of this Agreement that are incorporated therein):
(1) Lessee hereby grants to Lessor a first priority security interest
in: (A) the Equipment leased under the Schedules, (B) all equipment (as such
term is defined in the UCC) now or hereafter located at any Equipment Location;
together with all additions, attachments, accessions and accessories thereto
whether or not furnished by the supplier of the Equipment or the Additional
Collateral and any and all substitutions, replacements or exchanges therefor,
together with all warranties with respect thereto, manuals and other books and
records relating thereto, in each such case in which Lessee shall from time to
time acquire an interest, and (C) the Sublease now or hereafter in effect,
including (i) all rights of Lessee to receive monies due and to become due under
or pursuant to the Sublease, (ii) all rights of Lessee to receive proceeds of
any insurance, indemnity, warranty or guaranty with respect to the Sublease,
(iii) claims of Lessee for damages arising out of or for breach of or default
under the Sublease, and (iv) the right of Lessee to amend, waive or terminate
the Sublease, to perform under the Sublease and to compel performance and
otherwise exercise all remedies and rights under the Sublease; and any and all
insurance and/or other proceeds (but without power of sale) of the property in
and against which a security interest is granted hereunder.
(2) Lessee shall cause each of its Affiliates which owns equipment (as
such term is defined in the UCC) located at the corporate headquarters of
Guarantor and/or of Lessee, or at any Equipment Location to grant to Lessor a
first priority security interest in such equipment (as such term is defined in
the UCC) now or hereafter located at the corporate headquarters of Guarantor
and/or of Lessee, or at an Equipment Location, together with all additions,
attachments, accessions and accessories thereto whether or not furnished by the
supplier of such equipment and any and all substitutions, replacements or
exchanges therefor, together with all warranties with respect thereto, manuals
and other books and records relating thereto, in each such case in which such
Affiliate shall from time to time acquire an interest, and any and all insurance
and/or other proceeds (but without power of sale by Lessee except in compliance
with the terms of this Agreement) of the property in and against which a
security interest is granted hereunder. Lessee acknowledges that such Affiliates
will enjoy a substantial economic benefit by virtue of the leasing of the
Equipment by Lessor to Lessee pursuant to this Agreement, by virtue of the
permitted use of such Equipment by such Affiliate hereunder. The collateral
described in Clauses (B) and (C) of Section 13(b)(1) hereof and
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the collateral described in this Section 13(b)(2) is hereinafter collectively
referred to as the "Additional Collateral".
(c) It is the intention of the parties hereto to comply with any applicable
usury laws to the extent that any Schedule is determined to be subject to such
laws; accordingly, it is agreed that, anything in this Agreement or any of the
Documents or Financing Documents to the contrary notwithstanding, if at any time
the rate of interest payable by any Person under this Agreement or any of the
Documents or Financing Documents exceeds the highest rate of interest
permissible under any applicable law (the "Maximum Lawful Rate"), then, so long
as the Maximum Lawful Rate would be exceeded, the rate of interest under this
Agreement or such Document or Financing Documents shall be equal to the Maximum
Lawful Rate. If at any time thereafter the rate of interest payable under this
Agreement or such Document or Financing Document is less than the Maximum Lawful
Rate, such Person shall continue to pay interest under this Agreement and such
Document and such Financing Document at the Maximum Lawful Rate until such time
as the total interest received from such Person is equal to the total interest
that would have been received had the applicable law not limited the interest
rate payable under this Agreement or such Document or Financing Document. In no
event shall the total interest received by Lessor, the Lender and the Collateral
Agent under this Agreement or any of the Documents or Financing Documents exceed
the amount which Lessor, the Lender and the Collateral Agent could lawfully have
received, had the interest due under this Agreement or such Documents or
Financing Documents been calculated since the date hereof at the Maximum Lawful
Rate.
14. REPRESENTATIONS AND WARRANTIES OF LESSEE
Lessee hereby represents and warrants to Lessor that on the date hereof and
on the date of execution of each Schedule:
(a) Lessee is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation (specified in the
first sentence of this Agreement); and is duly qualified to transact business as
a foreign corporation in good standing wherever necessary to carry on its
present business and operations.
(b) This Agreement, the Schedules, the Bill of Sale, the Sublease, and all
related documents (collectively, the "Documents") have been duly authorized,
executed and delivered by Lessee and constitute valid, legal and binding
agreements, enforceable in accordance with their terms, except to the extent
that the enforcement of remedies therein provided may be limited under
applicable bankruptcy and insolvency laws, public policy and equitable
principles.
(c) No approval, consent or withholding of objections is required from any
Governmental Authority with respect to the entry into or performance by Lessee
of the Documents except such as have already been obtained.
(d) Lessee has adequate power and capacity to enter into, and perform under,
the Documents. The entry into and performance by Lessee of the Documents will
not: (i) violate any judgment, order, law or regulation applicable to Lessee or
any provision of Lessee's articles of incorporation, charter or by-laws; or (ii)
result in any breach of, constitute a default under or result in the creation of
any lien, charge, security interest or other encumbrance upon any Equipment
and/or any Additional Collateral pursuant to any indenture, mortgage, deed of
trust, bank loan or credit agreement or other instrument (other than this
Agreement) to which Lessee is a party.
(e) There are no suits or proceedings pending or threatened in court or
before any commission, board or other administrative agency against or affecting
Lessee or any of its Affiliates, which will have a Material Adverse Effect. As
used herein, "Material Adverse Effect" shall mean (1) a materially adverse
effect on the business, condition (financial or otherwise), prospects,
operations, performance or properties of Lessee, Guarantor or any of Lessee's
Affiliates, or (2) a material impairment of the ability of Lessee to perform its
obligations under or to remain in compliance with the Documents, or of the
ability of any of Lessee's Affiliates to perform its obligations under or to
remain in compliance with the Sublease to which it is a party, or of the ability
of Guarantor to perform its obligations under or to remain in compliance with
the Guaranty.
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(f) The Equipment accepted under any Certificate of Acceptance and any
Additional Collateral is and will remain tangible personal property and is not
and shall not constitute real property fixtures.
(g) Each financial statement delivered to Lessor has been prepared in
accordance with statutory requirements, and since the date of the most recent
such financial statement, there has been no material adverse change in the
financial condition of Lessee.
(h) The Equipment and the Additional Collateral will at all times be used
for commercial or business purposes.
(i) The corporate headquarters, chief executive office and chief place of
business (as either of such terms is used in Article 9 of the Uniform Commercial
Code) of Lessee and Guarantor is located at the address set forth above, and
Lessee and Guarantor shall give Lessor prior written notice of any relocation of
its corporate headquarters, chief executive office or chief place of business
from its present location.
(j) Upon the filing in the jurisdictions noted on Schedule A attached hereto
of Uniform Commercial Code financing statements describing Lessor, as secured
party, and Lessee, as debtor, and the Equipment as collateral, Lessor shall have
a first priority perfected lien on and security interest under the Uniform
Commercial Code in the Equipment covered by such Certificate of Acceptance. Upon
the filing in the jurisdictions noted on Schedule A attached hereto of Uniform
Commercial Code financing statements describing Lessor, as secured party, and
Sublessee, as debtor, and the Additional Collateral as collateral, Lessor shall
have a first priority perfected lien on and security interest under the Uniform
Commercial Code in the Additional Collateral.
(k) Lessee has reviewed the areas within its business and operations which
could be adversely affected by, and has developed a program to address on a
timely basis, the "Year 2000 Problem" (that is, the risk that computer
applications used by Lessee may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date on or
after December 31, 1999), and has made related appropriate inquiry of material
suppliers and vendors. Based on such review and program, Lessee believes that
the "Year 2000 Problem" will not have a Material Adverse Effect.
(l) The Pledge Agreement (as such term is defined in the Credit Agreement)
has been terminated and the collateral pledged thereunder has been released.
(m) No item of the Equipment or any Additional Collateral is subject to the
motor vehicle titling provisions of any state law, and no certificate of title
has been or is required to be issued with respect to any item of the Equipment.
15. CHOICE OF LAW; JURISDICTION
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES
OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
REGARDLESS OF THE LOCATION OF THE EQUIPMENT OR ANY ADDITIONAL COLLATERAL. The
parties agree that any action or proceeding arising out of or relating to this
Agreement may be commenced in the United States District Court for the Southern
District of New York and the parties irrevocably submit to the jurisdiction of
such court and agree not to assert, by way of motion, as a defense or otherwise,
in any such suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such court, that the suit, action or proceeding
is brought in an inconvenient form, that the venue of such suit, action or
proceeding is improper, or that this Agreement or the subject matter hereof or
the transaction contemplated hereby may not be enforced in or by such court.
14
16. [INTENTIONALLY OMITTED]
17. CHATTEL PAPER
To the extent that any Schedule would constitute chattel paper, as such
term is defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction, no security interest therein may be created through the transfer
or possession of this Agreement in and of itself without the transfer or
possession of the original of a Schedule executed pursuant to this Agreement and
incorporating this Agreement by reference; and no security interest in this
Agreement and a Schedule may be created by the transfer or possession of any
counterpart of the Schedule other than the original counterpart containing the
receipt therefor executed by General Electric Capital Corporation, as Collateral
Agent.
18. MISCELLANEOUS
(a) LESSEE HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY,
THIS AGREEMENT, ANY OF THE FINANCING DOCUMENTS OR OTHER DOCUMENTS OR FINANCING
RELATED DOCUMENTS, ANY DEALINGS BETWEEN LESSEE AND LESSOR (INCLUDING ITS
ASSIGNS) RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED
TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LESSEE
AND LESSOR. The scope of this waiver is intended to be all encompassing of any
and all disputes that may be filed in any court (including, without limitation,
contract claims, tort claims, breach of duty claims, and all other common law
and statutory claims). THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT,
ANY FINANCING DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO
THIS TRANSACTION OR ANY RELATED TRANSACTION. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
(b) Any cancellation or termination by Lessor, pursuant to the provisions
of this Agreement, any Schedule, supplement or amendment hereto, or the lease of
any Equipment hereunder, shall not release Lessee from any then outstanding
obligations to Lessor or any Edison Program Party hereunder.
(c) All Equipment and any Additional Collateral shall at all times remain
personal property regardless of the degree of its annexation to any real
property and shall not by reason of any installation in, or affixation to, real
or personal property become a part thereof.
(d) Time is of the essence of this Agreement. Lessor's failure at any time
to require strict performance by Lessee of any of the provisions hereof shall
not waive or diminish Lessor's right thereafter to demand strict compliance
therewith.
(e) Lessee agrees, upon Lessor's or the Collateral Agent's request, to
execute any instrument necessary or expedient for filing, recording or
perfecting the interest of Lessor.
(f) All notices required to be given hereunder shall be in writing,
personally delivered, delivered by overnight courier service, or sent by
certified mail, return receipt requested, addressed to the other party at its
respective address stated above or at such other address as such party shall
from time to time designate in writing to the other party; and shall be
effective from the date of receipt.
(g) This Agreement and any Schedule and Annexes thereto constitute the
entire agreement of the parties with respect to the subject matter hereof. NO
VARIATION OR MODIFICATION OF THIS AGREEMENT OR ANY WAIVER OF ANY OF ITS
PROVISIONS OR CONDITIONS, SHALL BE VALID UNLESS IN WRITING AND SIGNED BY AN
AUTHORIZED REPRESENTATIVE OF THE PARTIES HERETO. Any provision of this Agreement
which 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
15
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
(h) The representations, warranties and covenants of Lessee herein shall be
deemed to survive the closing hereunder. Lessor's obligations to acquire and
lease specific items of Equipment shall be conditioned upon Lessee providing to
Lessor such information with respect to Lessee's and Guarantor's financial
condition as Lessor may require, and Lessor being satisfied that there shall
have been no material adverse change in the business or financial condition of
Lessee and Guarantor from the date of execution hereof. The obligations of
Lessee under Sections 3, 9, 12 and 18(l) hereof which accrue during the term of
this Agreement and obligations which by their express terms survive the
termination of this Agreement, shall survive the termination of this Agreement.
(i) In case of a failure of Lessee to comply with any provision of this
Agreement, Lessor shall have the right, but shall not be obligated, to effect
such compliance, in whole or in part; and all moneys spent and expenses and
obligations incurred or assumed by Lessor in effecting such compliance (together
with interest thereon at the rate specified in Paragraph (j) of this Section)
shall constitute additional Rent due to Lessor within five (5) days after the
date Lessor sends notice to Lessee requesting payment. Lessor's effecting such
compliance shall not be a waiver of Lessee's default.
(j) Any Rent or other amount not paid to Lessor when due hereunder shall
bear interest, both before and after any judgment or termination hereof, at the
lesser of eighteen percent (18%) per annum or the Maximum Lawful Rate (the
"Overdue Rate").
(k) Any provisions in this Agreement and any Schedule which are in conflict
with any statute, law or applicable rule shall be deemed omitted, modified or
altered to conform thereto.
(l) Lessee agrees to pay on demand all reasonable costs and expenses
incurred by Lessor or any Edison Program Party in connection with the
preparation, execution, delivery, filing, recording, and administration of any
of the Documents or the Financing Documents, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for Lessor or any Edison
Program Party (provided, however, that Lessee shall not be responsible for
Lessor's or any Edison Program Party's expenses related to the receipt of
blanket sales/use tax rulings relating to this transaction or otherwise), and
all costs and expenses, if any, in connection with the enforcement of any of the
Documents or the Financing Documents. In addition, Lessee shall pay any and all
stamp and other taxes and fees payable or determined to be payable in connection
with the execution, delivery, filing and recording of any of the Documents or
the Financing Documents and the other documents to be delivered under the
Documents or the Financing Documents, and agrees to save Lessor and each Edison
Program Party harmless from and against any and all liabilities with respect to
or resulting from any delay attributed to Lessee in paying or failing to pay
such taxes and fees.
(m) (1) If Lessor or the Operating Agent on behalf of any Edison Program
Party shall have determined that the adoption after the date hereof of any law,
treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, reserve requirements or similar requirements
or compliance by such Edison Program Party with any request or directive
regarding capital adequacy, reserve requirements or similar requirements
(whether or not having the force of law) from any central bank or other
Governmental Authority increases or would have the effect of increasing the
amount of capital, reserves or other funds required to be maintained by such
Edison Program Party against commitments made by it under this Agreement or any
Financing Document and thereby reducing the rate of return on such Edison
Program Party's capital as a consequence of its commitments hereunder or
thereunder, then Lessee shall from time to time upon demand by Lessor or the
Operating Agent pay to Lessor or, if demand is made by the Operating Agent, to
the Collateral Agent on behalf of such Edison Program Party additional amounts
sufficient to compensate such Edison Program Party for such reduction together
with interest thereon from the third Business Day following the date of any such
demand until payment in full at the Overdue Rate. A certificate as to the amount
of that reduction and showing the basis of the computation thereof submitted by
Lessor or the Operating Agent to Lessee shall be final, binding and conclusive
on the parties hereto (absent manifest error) for all purposes.
16
(2) If, due to any Regulatory Change, there shall be any increase in the
cost to Lessor or any Edison Program Party of agreeing to make or making,
funding or maintaining any commitment hereunder or under any Financing Document,
or any reduction in any amount receivable by Lessor or such Edison Program Party
hereunder or thereunder (any such increase in cost or reduction in amounts
receivable are hereinafter referred to as "Additional Costs"), then Lessee
shall, from time to time upon demand by Lessor or the Operating Agent, pay to
the Collateral Agent on behalf of such Edison Program Party additional amounts
sufficient to compensate such Edison Program Party for such Additional Costs
together with interest thereon from the date demanded until payment in full
thereof at the Overdue Rate. Lessor or Edison Program Party, as applicable,
agrees that, as promptly as practicable after it becomes aware of any
circumstance referred to above that would result in any such Additional Costs,
it shall, to the extent not inconsistent with its internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses
incurred by it and payable to it by Lessee pursuant to this Section 18(m).
(3) Determinations by any Edison Program Party for purposes of this
Section of the effect of any Regulatory Change on its costs of making, funding
or maintaining any commitments hereunder or under any Financing Document or on
amounts receivable by it hereunder or thereunder or of the additional amounts
required to compensate such Edison Program Party in respect of any Additional
Costs shall be set forth in a written notice to Lessee in reasonable detail and
shall be final, binding and conclusive on Lessee (absent manifest error) for all
purposes.
(n) Lessee shall pay to the Collateral Agent for the account of the Lender,
upon the request of the Lender, such amount or amounts as shall compensate the
Lender for any loss (including loss of profit), cost or expense incurred by the
Lender (as reasonably determined by the Lender) as a result of any repayment of
an advance (and interest thereon) pursuant to the Funding Agreement other than
on the maturity date of the Commercial Paper (or other financing source) funding
such advance, such compensation to be limited to an amount equal to any loss or
expense suffered by the Lender during the period from the date of receipt of
such repayment to (but excluding) the maturity date of such Commercial Paper (or
other financing source), if the rate of interest obtainable by the Lender upon
the redeployment of an amount of funds equal to the amount of such repayment is
less than the rate of interest applicable to such Commercial Paper (or other
financing source) (such expense to be referred to as "Breakage Costs"). The
determination by the Lender of the amount of any such loss or expense shall be
set forth in a written notice to Lessee in reasonable detail and shall be
conclusive, absent manifest error.
(o) Lessee shall provide a copy of all notices, reports, financing
statements and/or other documents required or permitted to be provided by Lessee
to Lessor hereunder, to: (1) General Electric Capital Corporation, Capital
Funding, Inc., 777 Long Ridge Road, Building B, 1st Floor, Stamford, Connecticut
06927, Attention: Legal Department; and (2) the Operating Agent at 3001 Summer
Street, 2nd Floor, Stamford, Connecticut 06927, Attention: Manager, Conduit
Administration; or to such other address as may be specified by such parties
from time to time pursuant hereto.
(p) So long as no Default occurs, neither Lessor nor any person authorized
by Lessor shall interfere with Lessee's right to peaceably and quietly possess
and use the Equipment during the Term, subject to the terms and provisions of
this Agreement.
(q) All payments made under this Agreement by Lessee shall be made as
provided in Section 2(b) hereof; provided, however, that indemnity payments made
for the benefit of the beneficiaries of the Trust shall be payable directly to
such beneficiaries of the Trust.
(r) Lessee agrees that, from and after the date hereof and until the date
one (1) year plus one (1) day following the date on which all Commercial Paper
has been indefeasibly paid in full in cash, it will not, directly or indirectly,
institute or cause to be instituted against Edison or Lessor any proceeding of
the type referred to in Subsections 9.1(d) and (e) of the Funding Agreement.
17
19. DEFINITIONS
The following terms when used in this Agreement or in the Schedules shall
have the following meanings:
"Additional Collateral" shall have the meaning given such term in Section
13(b)(2) of this Agreement.
"Additional Costs" shall have the meaning given such term in Section
18(m)(2) of this Agreement.
"Administrative Services Agreement" means the Administrative Services
Agreement, dated as of September 22, 1997, between the Lender and the
Operating Agent, as amended, supplemented, restated or otherwise modified
and in effect from time to time.
"Advance Outstanding" shall have the meaning given such term in the Funding
Agreement.
"Adverse Environmental Condition" shall refer to (i) the existence or the
continuation of the existence, of an Environmental Emission (including,
without limitation, a sudden or non-sudden accidental or non-accidental
Environmental Emission), of, or exposure to, any Contaminant, odor or
audible noise in violation of any Applicable Environmental Law, at, in, by,
from or related to any Equipment or any Additional Collateral, (ii) the
environmental aspect of the transportation, storage, treatment or disposal
of materials in connection with the operation of any Equipment or any
Additional Collateral in violation of any Applicable Environmental Law, or
(iii) the violation, or alleged violation, of any Environmental Law
connected with any Equipment or any Additional Collateral.
"Affected Party" means each of the following Persons: the Lender, the
Liquidity Agent, each Liquidity Lender, the Operating Agent, the Letter of
Credit Agent, each Letter of Credit Provider, the Collateral Agent, the
Depositary, the Residual Support Provider and each Affiliate of the
foregoing Persons.
"Affiliate" shall refer, with respect to any given Person, to (a) each
Person that directly or indirectly, owns or controls, whether beneficially,
or as a trustee, guardian or other fiduciary, five percent (5%) or more of
the Stock having ordinary voting power in the election of directors of such
Person, (b) each Person that controls, is controlled by, or is under common
control with, such Person, or (c) each of such Person's officers, directors,
joint venturers and partners. For the purposes of this definition, "control"
of a Person means the possession, directly or indirectly, of the power to
direct or cause the direction of its management or policies, whether through
the ownership of voting securities, by contract or otherwise; provided,
however, that Wilmington Trust Company, in its individual capacity, shall
not be deemed to be an Affiliate of any of Lessee, the Trust or The Fifth
Third Leasing Company.
"Agreement" shall have the meaning given such term in the preamble to this
Agreement.
"AS IS BASIS" shall have the meaning given such term in Section 4(f) of this
Agreement.
"Basic Term" shall have the meaning given such term in Annex E to the
Schedule.
"Basic Term Commencement Date" shall have the meaning given such term in
Section 2(a) of this Agreement.
"Basic Term Rent" shall have the meaning given such term in Annex E to the
Schedule.
"Borrowing Request" shall have the meaning given such term in the Funding
Agreement.
"Breakage Costs" shall have the meaning given such term in Section 18(n) of
this Agreement.
"Business Day" shall mean any day other than a Saturday, a Sunday, and any
day on which banking institutions located in the States of New York or
California are authorized by law or other governmental action to close.
18
"Calculation Date" shall have the meaning given such term in Section 7(b)(2)
of this Agreement.
"Capitalized Lessor's Cost" shall have the meaning given such term in Annex E
to the Schedule.
"Casualty Occurrence" shall have the meaning given such term in Section 7(b)
of this Agreement.
"Claims" shall have the meaning given such term in Section 12(a) of this
Agreement.
"Collateral Agent" means General Electric Capital Corporation, in its
capacity as collateral agent for the Lender and certain secured parties of
Lender under the Funding Agreement and certain other related documents.
"Collateral Agent Agreement" means the Collateral Agent and the Security
Agreement dated as of September 22, 1997, among Edison, the Depositary and
General Electric Capital Corporation in its capacities as (a) the Collateral
Agent, (b) the Operating Agent, and (c) the Letter of Credit Agent, as
amended, supplemented, restated or otherwise modified and in effect from time
to time.
"Commercial Paper" means those certain short-term promissory notes issued by
Edison or any subsidiary of Edison denominated in U.S. Dollars or other
currencies issued and sold from time to time in the United States of America
or in other jurisdictions pursuant to the terms and provisions of the
Administrative Services Agreement.
"Contaminant" shall refer to those substances which are regulated by or form
the basis of liability under any Environmental Law, including, without
limitation, asbestos, polychlorinated biphenyls ("PCBs"), and radioactive
substances.
"Daily Borrowing Rate" shall have the meaning given such term in Annex E to
the Schedule.
"Dealer" means any dealer or placement agent party to a Dealer Agreement.
"Dealer Agreement" means any dealer agreement or placement agency agreement
entered into by Edison for the distribution of Commercial Paper, as amended,
supplemented, restated or otherwise modified and in effect from time to time.
"Default" shall have the meaning given such term in Section 10(a) of this
Agreement.
"Depositary" means the Initial Depositary in its capacity as issuing and
paying agent and depositary under the Initial Depositary Agreement, and any
other Person from time to time acting as issuing and/or paying agent and/or
depositary under a Depositary Agreement, in each case together with their
respective successors and permitted assigns in such capacity.
"Depositary Agreement" means (i) the Initial Depositary Agreement and (ii)
any other issuing or paying agent and/or depositary agreement from time to
time entered into by Edison or any subsidiary of Edison, the Operating Agent,
the Collateral Agent and any other Person acting as depositary and/or issuing
or paying agent with respect to any Commercial Paper, each as amended,
supplemented, restated or otherwise modified and in effect from time to time.
"Documents" shall have the meaning given such term in Section 14(b) of this
Agreement.
"Edison" means Edison Asset Securitization, L.L.C., a limited liability
company organized under the laws of the State of Delaware, and its successors
and assigns.
"Edison Program Parties" means Edison, in its capacity as Lender, General
Electric Capital Corporation in its capacity as Operating Agent, Borrower
Collateral Agent, Collateral Agent, Liquidity Lender, Residual Support
Provider and Letter of Credit Provider, and any Person or Persons who succeed
to such functions, or any other Persons from time to time notified by Lessor
to Lessee as providing financing to
19
Lessor in respect of its acquisition, ownership or leasing of the Equipment,
whether by way of superior lease, loan or otherwise.
"Equipment" shall mean (i) the equipment listed in Annex A to the
Schedules, (ii) Parts or components thereof, (iii) ancillary equipment or
devices furnished therewith under this Agreement, (iv) all manuals and
records with respect to such Equipment, and (v) all substitutions,
replacements and renewals of any and all thereof, including, but not
limited to, any replacement equipment which may from time to time be
substituted, pursuant to Section 4(f) hereof, for the Equipment leased
hereunder; together in each case with any and all Parts incorporated or
installed in or attached thereto or any and all Parts temporarily removed
therefrom. Except as otherwise set forth herein, at such time as
replacement equipment shall be so substituted and leased hereunder, such
replaced item of Equipment shall cease to be Equipment hereunder.
"Equipment Location" shall mean all locations owned or operated by Lessee
and/or its Affiliates within the County and State specified on Annex A to
the Schedule.
"Environmental Claim" shall refer to any accusation, allegation, notice of
violation, claim, demand, abatement or other order or direction
(conditional or otherwise) by any governmental authority or any Person for
personal injury (including sickness, disease or death), tangible or
intangible property damage, damage to the environment or other adverse
effects on the environment, or for fines, penalties or restrictions,
resulting from or based upon any Adverse Environmental Condition.
"Environmental Emission" shall refer to any actual or threatened release,
spill, omission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor environment, or
into or out of any of the Equipment or the Additional Collateral,
including, without limitation, the movement of any Contaminant or other
substance through or in the air, soil, surface water, groundwater, or
property.
"Environmental Law" shall mean any Federal, foreign, state or local law,
rule or regulation pertaining to the protection of the environment,
including, but not limited to, the Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA") (42 U.S.C. Section 9601
et seq.), the Hazardous Material Transportation Act (49 U.S.C. Section 1801
-- ---
et seq.), the Federal Water Pollution Control Act (33 U.S.C. Section 1251
-- ---
et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section
-- ---
6901 et seq.), Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic
-- --- -- ---
Substances Control Act (15 U.S.C. Section 2601 et seq.), the Federal
-- ---
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 1361
et seq.), and the Occupational Safety and Health Act (19 U.S.C. Section
-- ---
651 et seq.), as these laws have been amended or supplemented, and any
-- ---
analogous foreign, Federal, state or local statutes, and the regulations
promulgated pursuant thereto.
"Environmental Loss" shall mean any loss, cost, damage, liability,
deficiency, fine, penalty or expense (including, without limitation,
reasonable attorneys' fees, engineering and other professional or expert
fees), investigation, removal, cleanup and remedial costs (voluntarily or
involuntarily incurred) and damages to, loss of the use of or decrease in
value of the Equipment or the Additional Collateral arising out of or
related to any Adverse Environmental Condition.
"Event" shall have the meaning given such term in Section 10(a)(9) of this
Agreement.
"Excess Amount" shall have the meaning given such term in Section 9(b)(3)
of this Agreement.
"Extension Term" shall have the meaning given such term in Section 9(c) of
this Agreement.
"Fair Market Rental Value" means an amount equal to the rental obtainable
in an arms' length transaction between a willing and informed lessor and a
willing and informed lessee under no compulsion to lease (and assuming
that, as of the date of determination, the Equipment is in at least the
condition required by Annex D).
20
"Fair Market Value" means an amount equal to the price which a willing
buyer (who is neither a lessee in possession nor a used equipment dealer)
would pay for the Equipment in an arms'-length transaction to a willing
seller under no compulsion to sell; provided, however, that in such
determination: (i) the Equipment shall be assumed to be in at least the
condition required by Annex D; (ii) the Equipment shall be valued on an in
use basis; (iii) in the case of any installed Equipment, that Equipment
shall be valued on an installed basis; and (iv) costs of removal from the
current location shall not be a deduction from such valuation.
"Financing Documents" means the Funding Agreement, the Residual Support
Agreement (as defined in the Funding Agreement), the Residual Support
Letter of Credit (as defined in the Funding Agreement), the Administrative
Services Agreement, the Collateral Agent Agreement, the Commercial Paper,
the Letter of Credit, the Letter of Credit Agreement, the Liquidity Loan
Agreement, the Depositary Agreement and the Dealer Agreements.
"Funding Agreement" means the Receivables Funding Agreement, dated as of
December 27, 1999, among Lessor, Lender and General Electric Capital
Corporation, as Operating Agent and Collateral Agent.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantor" shall have the meaning given such term in Section 1(b) of this
Agreement.
"Guaranty" shall have the meaning given such term in Section 1(b) of this
Agreement.
"Indemnified Amounts" shall have the meaning given such term in Section
12(a) of this Agreement.
"Indemnified Party" shall have the meaning given such term in Section 12(a)
of this Agreement.
"Initial Depositary" shall mean Bankers Trust Company, or any other Person
designated as the successor Depositary pursuant to and in accordance with
the terms of the Depositary Agreement, in its capacity as issuing and
paying agent or trustee in connection with the issuance of Commercial
Paper.
"Initial Depositary Agreement" shall mean the Depositary Agreement, dated
as of September 22, 1997, between the Lender and the Initial Depositary and
consented to by the Collateral Agent and the Operating Agent, as amended,
supplemented, restated or otherwise modified and in effect from time to
time.
"Interest Component" shall have the meaning given such term in Annex E to
the Schedule.
"Lease Balance" shall have the meaning given such term in Annex E to the
Schedule.
"Lender" means Edison, in its capacity as the Lender under the Funding
Agreement.
"Lessee" shall have the meaning given such term in the preamble to this
Agreement.
"Lessor" shall have the meaning given such term in the preamble to this
Agreement.
"Lessor's Lien" shall mean any Lien affecting the Equipment or any part
thereof arising as a result of (i) any claim against Lessor not related to
the transactions contemplated by this Agreement; (ii) any affirmative act
of Lessor not expressly contemplated by this Agreement or not permitted
without consent (which consent has not been granted) by Lessee or that is
in violation of any term of this Agreement or not taken as a result of the
occurrence and continuance of a Default as permitted by this Agreement; or
(iii) taxes imposed against Lessor or the consolidated group of taxpayers
of which it is a member which are not to be indemnified against by Lessee
under this Agreement; provided, however, that there shall be excluded from
this definition and no Lessor's Lien shall exist if such Lien is being
diligently contested
21
in good faith so long as neither such proceedings nor Lien involves a
material danger of the sale, forfeiture or loss of the Equipment or adversely
affects Lessee's rights under this Agreement.
"Letter of Credit" means the Irrevocable Letter of Credit No. EASLOC1 dated
September 22, 1997, issued by the Letter of Credit Providers at the request
of Edison in favor of the Collateral Agent pursuant to the Letter of Credit
Agreement.
"Letter of Credit Agreement" means that certain Letter of Credit
Reimbursement Agreement dated as of September 22, 1997, among Edison, the
Letter of Credit Agent, the Letter of Credit Providers, the Operating Agent
and the Collateral Agent, as amended, supplemented, restated or otherwise
modified and in effect from time to time.
"Letter of Credit Providers" means, initially, General Electric Capital
Corporation, in its capacity as issuer of the Letter of Credit under the
Letter of Credit Agreement, and thereafter its successors and permitted
assigns in such capacity.
"LIBOR" shall have the meaning given such term in Exhibit No. 1 to Annex E to
the Schedule.
"Lien" shall mean any mortgage, chattel mortgage, pledge, lien, charge,
encumbrance, lease, exercise of rights, security interest, lease in the
nature of a security interest, statutory right in rem, or claim of any kind,
including any thereof arising under any conditional sale agreement, equipment
trust agreement or title retention agreement.
"Liquidity Agent" means General Electric Capital Corporation, in its capacity
as agent for the Liquidity Lenders pursuant to the Liquidity Loan Agreement.
"Liquidity Lenders" means, collectively, General Electric Capital Corporation
and any other providers of Liquidity Loans under the Liquidity Loan
Agreement.
"Liquidity Loan Agreement" means the Liquidity Loan Agreement dated as of
December 27, 1999, among Edison, as borrower, and General Electric Capital
Corporation in its capacities as (a) the Operating Agent for Edison, (b) the
Collateral Agent, (c) the initial Liquidity Lender and (d) the Liquidity
Agent.
"Liquidity Loans" means any and all borrowings by Edison under the Liquidity
Loan Agreement.
"Material Adverse Effect" shall have the meaning given such term in Section
14(e) of this Agreement.
"Maximum Lawful Rate" shall have the meaning given such term in Section 13(c)
of this Agreement.
"Maximum Lease Term" shall have the meaning given such term in Section 9(d)
of this Agreement.
"Maximum Lessee Risk Amount" shall have the meaning given such term in Annex
E to the Schedule.
"Maximum Lessor Risk Amount" shall have the meaning given such term in Annex
E to the Schedule.
"Net Sales Proceeds" shall have the meaning given such term in Section
9(b)(2) of this Agreement.
"Operating Agent" means General Electric Capital Corporation, in its capacity
as operating agent for the Lender under the Funding Agreement and certain
related documents.
"Overdue Rate" shall have the meaning given such term in Section 18(j) of
this Agreement.
"Owner Trustee" means Wilmington Trust Company, not in its individual
capacity, but solely as owner trustee under the Trust Agreement, and any
successor owner trustee appointed thereunder.
22
"Parts" shall mean all appliances, components, parts, instruments,
appurtenances, accessories, furnishings and other equipment of whatever
nature which may now or from time to time be incorporated or installed in or
attached to, or were provided by the manufacturer with, the Equipment and/or
the Additional Collateral, including after temporary removal from such
Equipment and/or the Additional Collateral.
"Payment Date" shall have the meaning given such term in Section 7(b) of this
Agreement.
"Permitted Lien" shall mean (i) the rights of Lessor and Lessee as herein
provided, (ii) Lessor's Liens, (iii) Liens for taxes either not yet due or
being diligently contested in good faith by appropriate proceedings and so
long as adequate reserves are maintained with respect to such Liens and
available to Lessee for the payment of such taxes and only so long as neither
such proceedings nor such Liens involve any material danger of the sale,
forfeiture, loss or loss of use of the Equipment, the Additional Collateral
or any part thereof, or any interest of Lessor, the Lender or the Collateral
Agent therein or any risk of criminal liability of Lessor or any Edison
Program Party, and Lessee has given Lessor prior written notice of Lessee's
intent to contest any such taxes and Lessee has agreed to indemnify Lessor
and each Edison Program Party for any and all costs and expenses (including,
without limitation reasonable attorneys' fees) which Lessor or any Edison
Program Party may incur as a result of such contest, (iv) inchoate
materialmen's, mechanics', workmen's, repairmen's, or other like inchoate
Liens arising in the ordinary course of Lessee's business for sums either not
delinquent or being diligently contested in good faith and only so long as
neither such proceedings nor any such Liens involve any material danger of
the sale, forfeiture, loss or loss of use of the Equipment, the Additional
Collateral or any part thereof, or any interest of Lessor, the Lender or the
Collateral Agent therein or any material risk of material civil liability and
further provided that adequate reserves are maintained with respect to such
Liens and provided that Lessee has given Lessor written notice thereof, (v)
the rights of others under agreements or arrangements to the extent expressly
permitted under this Agreement, (vi) Liens arising out of any judgment or
award against Lessee with respect to which at the time an appeal or
proceeding for review is being prosecuted in good faith by appropriate
proceedings diligently conducted and with respect to which there shall have
been secured a stay of execution pending such appeal or proceeding for review
and so long as adequate reserves are available to the Lessee for the payment
of such obligations and there is no material danger of sale, forfeiture,
loss, or loss of use of the Equipment or any Additional Collateral or
material risk of material civil liability and Lessee shall have given Lessor
written notice thereof, and (vii) any Lien against which the Lessee causes to
be provided a bond in such amount and under such terms and conditions as are
reasonably satisfactory to Lessor and the Collateral Agent.
"Person" shall include any individual, partnership, corporation, trust,
unincorporated organization, government or department or agency thereof and
any other entity.
"Regulatory Change" means any change after the date hereof in any Federal,
state or foreign law or regulation (including Regulation D of the Federal
Reserve Board) or the adoption or making after such date of any
interpretation, directive or request under any Federal, state or foreign law
or regulation (whether or not having the force of law) by any Governmental
Authority charged with the interpretation or administration thereof that, in
each case, is applicable to any Affected Party.
"Related Documents" shall have the meaning given such term in the Funding
Agreement.
"Related Third Party Costs" means any Additional Costs, Breakage Costs or
other indemnities or costs required to be paid by Lessor to the Lender or any
Edison Program Party in connection with or as a result of the relevant action
under this Agreement.
"Rent" shall have the meaning given such term in Annex E to the Schedule.
"Rent Payment Date" shall have the meaning given such term in Annex E to the
Schedule.
"Rent Payment Period" shall have the meaning given such term in Annex E to
the Schedule.
"Replacement Item" shall have the meaning given such term in Section 4(f) of
this Agreement.
23
"Residual Support Provider" means General Electric Capital Corporation.
"Schedule" shall have the meaning given such term in Section 1(a) of this
Agreement.
"Settlement Date" shall have the meaning given such term in the Funding
Agreement.
"Stock" shall have the meaning given such term in the Funding Agreement.
"Sublease" shall have the meaning given such term in Section 11(a) of this
Agreement.
"Substituted Item" shall have the meaning given such term in Section 4(f)
of this Agreement.
"Taxes" shall have the meaning given such term in Section 3(a) of this
Agreement.
"Term" shall have the meaning given such term in Section 2(a) of this
Agreement.
"Trust" shall mean the FATICO 1999 Trust, a Delaware business trust,
created pursuant to the Trust Agreement.
"Trust Agreement" shall mean that certain Trust Agreement dated as of
December 22, 1999, between The Fifth Third Leasing Company and Wilmington
Trust Company.
(c) Rules of Construction. Unless otherwise specified, references in any
---------------------
Related Document or any of the Appendices thereto to a Section, subsection or
clause refer to such Section, subsection or clause as contained in such Related
Document. The words "herein," "hereof" and "hereunder" and other words of
similar import used in any Related Document refer to such Related Document as a
whole, including all annexes, exhibits and schedules, as the same may from time
to time be amended, restated, modified or supplemented, and not to any
particular section, subsection or clause contained in such Related Document or
any such annex, exhibit or schedule. Wherever from the context it appears
appropriate, each term stated in either the singular or plural shall include the
singular and the plural, and pronouns stated in the masculine, feminine or
neuter gender shall include the masculine, feminine and neuter genders. The
words "including," "includes" and "include" shall be deemed to be followed by
the words "without limitation"; the word "or" is not exclusive; references to
Persons include their respective successors and assigns (to the extent and only
to the extent permitted by the Related Documents) or, in the case of
Governmental Authorities, Persons succeeding to the relevant functions of such
Persons; references to any agreement refer to that agreement as from time to
time amended or supplemented or as the terms of such agreement are waived or
modified in accordance with its terms; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations.
20. ASSIGNMENT BY EDISON. In the event Edison assigns all or any part of
its interest herein and in the other Related Documents, including all or any
portion of the Advances Outstanding and interest thereon (whether pursuant to
the Liquidity Loan Agreement or otherwise), (i) all references in the Related
Documents to "Edison", "Lender", "Operating Agent", "Liquidity Agent", "Edison
Program Parties" and "Affected Party" shall mean and include such assignee(s)
and if such assignment is an assignment in whole, shall thereafter mean and
refer only to such assignee(s); provided, however, that if such assignee(s) have
or appoint an agent to act on their behalf, then all references in the Related
Documents to "Operating Agent", "Collateral Agent" and "Liquidity Agent" shall
mean and include such agent (and if such assignment is an assignment in whole,
shall thereafter mean and refer only to such agent), and such agent and such
assignee(s) shall be included as "Affected Parties" and "Edison Program
Parties"; and (ii) for purposes of determining the Daily Borrowing Rate and
amounts payable thereto, such assignee(s) shall be deemed to be "Liquidity
Lenders" which have funded the Advances Outstanding through "Liquidity Loans".
Any subsequent assignment by such assignee(s) shall have a corresponding effect.
21. LIMITATION OF LIABILITY. Notwithstanding anything contained herein to
the contrary, this Agreement has been signed by Wilmington Trust Company, not in
its individual capacity but solely in its capacity as Owner Trustee of the
Trust, and in no event shall Wilmington Trust Company or any beneficial owner of
the Trust have any liability for the representations, warranties, covenants,
agreements or other
24
obligations of the Trust hereunder, as to all of which recourse shall be had
solely to the assets of the Trust. For all purposes of this Agreement and any
other document, Wilmington Trust Company and the Owner Trustee shall be entitled
to the benefits of the Trust Agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
25
IN WITNESS WHEREOF, Lessee and Lessor have caused this Master Lease
Agreement to be executed by their duly authorized representatives as of the date
first above written.
LESSOR: LESSEE:
FATICO 1999 TRUST FIRST AMERICAN TITLE INSURANCE COMPANY
By: WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as
Owner Trustee
By: /s/ Anita E. Dallago By: /s/ Max O. Valdes
-------------------------- ---------------------------------
Name: Anita E. Dallago Name: Max O. Valdes
------------------------ -------------------------------
Title: Administrative Account Title: CFO - VP
----------------------- ------------------------------
Manager
-----------------------
Receipt of this original counterpart is hereby acknowledged on this ____ day of
December, 1999.
GENERAL ELECTRIC CAPITAL CORPORATION,
as Collateral Agent
By:_________________________________
Name:_______________________________
Title:______________________________
26
SCHEDULE A
UCC FILING JURISDICTIONS
------------------------
Secretary of State of Alabama
Secretary of State of Arizona
Secretary of State of California
Secretary of State of Connecticut
Recorder of Deeds of the District of Columbia
Secretary of State of Delaware
Secretary of State of Florida
Clerk of the Superior Court of Fulton County, Georgia
Secretary of State of Idaho
Secretary of State of Illinois
Secretary of State of Indiana
Secretary of State Louisiana
Secretary of State of Maine
Secretary of State of Maryland
Secretary of State of Massachusetts (dual)
Clerk of the Town of Boston City, Massachusetts
Clerk of the Town of Springfield City, Massachusetts
Secretary of State of Michigan
Secretary of State of Minnesota
Secretary of State of Mississippi (dual)
Chancery Clerk Hinds Co., Mississippi
Secretary of State of Missouri (dual)
Recorder of St. Louis City, Missouri
Secretary of State of New Hampshire (dual)
Clerk of the Town of Hillsborough, New Hampshire
Secretary of State of Nevada
Secretary of State of New Jersey
Secretary of State of New Mexico
Secretary of State of North Carolina (dual)
Register of Deeds of Guilford County, North Carolina
Secretary of State of Oklahoma
Secretary of State of Oregon
Secretary of State of Pennsylvania (dual)
Prothonotary of Allegheny Co., Pennsylvania
Prothonotary of Lawrence Co., Pennsylvania
Prothonotary of Montgomery Co., Pennsylvania
Prothonotary of Philadelphia Co., Pennsylvania
Secretary of State of Rhode Island
Secretary of State of South Carolina
Secretary of State of Tennessee
Secretary of State of Texas
Secretary of State of Utah
Secretary of State of Vermont
Secretary of State of Virginia (dual)
Clerk of the Court of Fairfax Co., Virginia
Clerk of the City of Norfolk City, Virginia
Clerk of the County of Richmond Co., Virginia
Clerk of the City of Roanoke City, Virginia
Secretary of State of Washington
Department of Financial Institutions of Wisconsin
Secretary of State of Wyoming (dual)
Clerk of the County of Natrona Co., Wyoming
Clerk of the County of Niobrara Co., Wyoming
Clerk of the County of Platte Co., Wyoming
27
EXHIBIT NO. 1
EQUIPMENT SCHEDULE
SCHEDULE NO. ________________
DATED THIS ___________ DAY OF ____________, _____
TO MASTER LEASE AGREEMENT DATED AS OF DECEMBER 27, 1999
Lessor & Mailing Address: Lessee & Mailing Address:
FATICO 1999 TRUST FIRST AMERICAN TITLE INSURANCE COMPANY
c/o Wilmington Trust Company, as Owner Trustee 1 First American Way
Rodney Square North Santa Ana, California 92707
1100 North Market Street
Wilmington, Delaware 19890-0001
This Equipment Schedule is executed pursuant to, and incorporates by reference
the terms and conditions of, and capitalized terms not defined herein shall have
the meanings assigned to them in, the Master Lease Agreement identified above
("Agreement"; said Agreement and this Equipment Schedule being collectively
referred to as "Lease"). This Equipment Schedule, incorporating by reference
the Agreement, constitutes a separate instrument of lease.
A. Equipment.
---------
Pursuant to the terms of the Agreement, Lessor agrees to acquire and lease
to Lessee the Equipment listed on Annex A attached hereto and made a part
hereof.
B. Financial Terms.
---------------
The financial terms of this Schedule are specified on Annex E attached
hereto and made a part hereof.
C. Insurance.
---------
1. Public Liability: $10,000,000, total liability per occurrence.
2. Casualty and Property Damage: An amount equal to the higher of the
Lease Balance or the full replacement cost of the Equipment.
This Schedule is not binding or effective with respect to the Agreement or
the Equipment until executed on behalf of Lessor and Lessee by authorized
representatives of Lessor and Lessee, respectively.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
3
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
FATICO 1999 TRUST FIRST AMERICAN TITLE INSURANCE COMPANY
By: Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
By:__________________________________ By:__________________________________
Name:________________________________ Name:________________________________
Title:_______________________________ Title:_______________________________
Attest:
By:__________________________________
Name:________________________________
Title:_______________________________
Receipt of this original counterpart is hereby acknowledged on this ____ day of
December, 1999.
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Collateral Agent
By:__________________________________
Name: Joan B. Makara
Title: Authorized Signatory
Counterpart No. ____ of 10 serially numbered manually executed counterparts. To
the extent, if any, that this document constitutes chattel paper under the
Uniform Commercial Code, no security interest in or sale of the lease created
hereby may be created or perfected through the transfer and possession of any
counterpart, other than the original counterpart containing the receipt therefor
executed by General Electric Capital Corporation, as Collateral Agent.
4
ANNEX A
TO
SCHEDULE NO. __________________
DATED THIS _____ DAY OF ________, _____
TO MASTER LEASE AGREEMENT DATED AS OF DECEMBER 27, 1999
DESCRIPTION OF EQUIPMENT
State and County
of
Serial Numbers Type and Model Equipment
Manufacturer (if applicable) of Equipment Cost Per Unit Location
- ---------------------------------------------------------------------------------------------------
ANNEX B
TO
SCHEDULE NO. ______________
DATED THIS _____ DAY OF ________, _____
TO MASTER LEASE AGREEMENT DATED AS OF DECEMBER 27, 1999
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS: FIRST AMERICAN TITLE INSURANCE COMPANY
("Seller"), for and in consideration of the sum of One Dollar ($1) and other
good and valuable consideration, provided by FATICO 1999 TRUST ("Buyer"), the
receipt of which is hereby acknowledged, does hereby sell, assign, transfer, set
over and convey to Buyer the equipment (the "Equipment") leased under Schedule
No. _____ dated as of __________, _____, executed pursuant to the Master Lease
Agreement dated as of December ___, 1999 (the "Master Lease Agreement"), each
between Seller and Buyer. Capitalized terms used herein without definition shall
have the meaning given them in the Master Lease Agreement.
Buyer and Seller agree and acknowledge that the sale and conveyance
contemplated hereby is solely for the purpose of granting to Buyer a security
interest in the Equipment. All Equipment in which an interest is conveyed
hereby shall remain in the possession of Seller or its Affiliates pursuant to
the Lease and legal title shall remain with Seller.
Buyer is purchasing the Equipment described above in reliance upon its
personal inspection and knowledge of the Equipment and in an "AS-IS, WHERE-IS",
condition.
SELLER MAKES NO WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND OR NATURE
EXCEPT THAT (1) SELLER HAS GOOD TITLE TO THE EQUIPMENT, FREE AND CLEAR OF ALL
LIENS, CLAIMS AND ENCUMBRANCES, (2) BUYER WILL ACQUIRE ITS INTEREST IN THE
EQUIPMENT FREE FROM ALL LIENS, CLAIMS AND ENCUMBRANCES, AND (3) SELLER HAS THE
RIGHT TO SELL AND CONVEY THE EQUIPMENT. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, SELLER MAKES NO WARRANTIES WITH RESPECT TO THE QUALITY, CONTENT,
CONDITION, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE EQUIPMENT
AND NO WARRANTIES AGAINST PATENT INFRINGEMENT OR THE LIKE.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Buyer and Seller have executed this Bill of Sale this
_____ day of _______________, _____.
BUYER: SELLER:
FATICO 1999 TRUST FIRST AMERICAN TITLE INSURANCE COMPANY
By: Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
By:______________________________ By:______________________________
Name:____________________________ Name:____________________________
Title:___________________________ Title:___________________________
2
ANNEX C
TO
SCHEDULE NO._________
DATED THIS _____ DAY OF __________, _____
TO MASTER LEASE AGREEMENT DATED AS OF DECEMBER 27, 1999
CERTIFICATE OF ACCEPTANCE
To: FATICO 1999 TRUST
Pursuant to the provisions of the above Schedule and Master Lease Agreement
(collectively, the "Lease"), Lessee hereby certifies and warrants that (a) all
Equipment listed in the related Bill of Sale or invoice is in good condition and
appearance, installed (if applicable), at the Equipment Location specified in
Annex A to the Schedule, and in good working order; and (b) Lessee accepts the
Equipment for all purposes of the Lease and all attendant documents.
Lessee does further certify that as of the date hereof (i) Lessee is not in
default under the Lease; and (ii) the representations and warranties made by
Lessee pursuant to or under the Lease are true and correct on the date hereof.
______________________________________________
Lessee's Authorized Representative
Dated: __________ ___, _____
ANNEX D
TO
SCHEDULE NO. ___________
DATED THIS _____ DAY OF ____________, _____
TO MASTER LEASE AGREEMENT DATED AS OF DECEMBER 27, 1999
RETURN PROVISIONS: Upon the expiration or any termination of the Term of this
- -----------------
Schedule provided that Lessee has elected not to exercise its extension option
or its purchase option pursuant to Section 9 of the Lease, Lessee shall, at its
expense:
(A) Properly remove all Lessee or Affiliate installed markings which are
not necessary for the operation, maintenance or repair of the Equipment.
(B) Ensure all Equipment and equipment operations conform to all
applicable local, state, and federal laws, health and safety guidelines.
(C) The Equipment shall be redelivered with all component parts in good
operating condition. All components must meet or exceed the manufacturer's
minimum recommended specifications unless otherwise specified.
(D) Upon sale of the Equipment to a third party, provide transportation to
any locations anywhere in the world selected by Lessor.
(E) Obtain and pay for a policy of transit insurance for the redelivery
period in an amount equal to the replacement value of the Equipment and the
Collateral Agent shall be named as the loss payee on all such policies of
insurance.
(F) Be responsible for the cost of all repairs, alterations, inspections,
appraisals, storage charges, insurance costs, demonstration costs, and other
related costs necessary to place the Equipment in such condition as to be in
complete compliance with this Lease.
(G) Lessor has the right to attempt resale of the Equipment from the
Equipment Locations with the Lessee's full cooperation and assistance, for a
period of one hundred twenty (120) days from Lease expiration. During this
period, the Equipment must remain operational with the necessary electrical
power to maintain and demonstrate the Equipment to any potential buyer.
(H) Lessor at its sole discretion may, from time to time, inspect the
Equipment at the Lessee's sole expense. If any discrepancies are found as they
pertain to the general condition of the Equipment, Lessor will communicate these
discrepancies to the Lessee in writing. Lessee shall have thirty (30) days to
rectify these discrepancies. Lessee shall pay all expenses for the reinspection
by the Lessor appointed expert, if corrective measures are required.
(I) The Equipment shall be free from all Contaminants and otherwise fully
in compliance with all Environmental Laws.
In addition, with respect to all computer and computer-related equipment:
(1) At least one hundred twenty (120) days and not more than one hundred
fifty (150) days prior to expiration of the Lease, provide to Lessor a detailed
inventory of all primary components of the Equipment. The inventory should
include, but not be limited to, a listing of model and serial numbers for all
primary components comprising the Equipment (i. e. laptops, processors, and
monitors).
(2) At least ninety (90) days prior to expiration of the Lease, cause
manufacturer's representative, qualified equipment maintenance provider, or in-
house computer support expert (acceptable to the Lessor), to perform a
comprehensive test of the hardware and operating system of the Equipment; and
if during such inspection, examination and test, the authorized inspector finds
either the hardware or operating system of the Equipment not operating within
the manufacturer's specifications, then Lessee shall repair or replace such
defective material and, after corrective measures are completed, Lessee will
provide for a follow-up inspection of the Equipment by the authorized inspector.
(3) Provide for a comprehensive report which certifies that the Equipment
has been properly inspected, examined and tested and that the hardware and
operating system are operating within the manufacturer's specifications.
(4) At Lease termination or upon receiving reasonable notice from Lessor,
provide or cause the vendor(s), manufacturer(s), maintenance providers, or in-
house computer personnel to provide to Lessor the following documents: (1) one
set of service manuals and operating manuals including replacements and/or
additions thereto, such that all documentation is completely up-to-date; (2) one
set of documents, detailing maintenance records, and other technical data
concerning the set-up and operation of the Equipment, including replacements
and/or additions thereto, such that all documentation is completely up-to-date.
(5) Provide for the deinstallation, packing, transporting and certifying
of the Equipment to include, but not limited to, the following: (1) the
manufacturer's representative, maintenance provider, or in-house computer
support personnel shall de-install all Equipment (including all wire, cable and
mounting hardware) in accordance with the specifications of the manufacturer;
(2) the Equipment shall be packed properly and in accordance to the
manufacturer's recommendations; (3) Lessee shall transport the Equipment in a
manner consistent with the manufacturer's recommendations and practices; and (4)
Lessee shall obtain and pay for a policy of transit insurance for the redelivery
period in an amount equal to the replacement value of the Equipment and Lessor
shall be named as the loss payee on all such policies of insurance.
(6) At the request of Lessor, provide safe, secure storage for the
Equipment for one hundred twenty (120) days after expiration or earlier
termination of the Lease at an accessible location satisfactory to Lessor.
(7) Each item of the Equipment shall be not more than two and one-half (2
1/2) years old.
In addition, with respect to all furniture, fixtures and equipment (other than
computers or computer-related equipment):
(8) At least ninety (90) days and not more than one hundred twenty (120)
days prior to the termination of the Lease: (1) ensure Equipment has been
maintained and is operating within the manufacturer's specifications; (2) cause
manufacturer's representative, or other qualified maintenance provider,
acceptable to Lessor, to perform a physical inspection and test all of the
components and capabilities of the Equipment and provide a full inspection
report to Lessor, and that there should be no missing screws, bolts, fasteners,
etc.; the furniture will be free of all large scratches, marks, gouges, dents,
discoloration or stains; all drawers, runners and locks will be in good working
condition, will include keys; and there shall be no evidence of extreme use or
overloading, i.e. bowed or sagging shelves; and (3) if during such inspection
the Equipment is found not to be in compliance with the above, then Lessee shall
remedy them per the Lease Agreement and provide a follow-up inspection to verify
the Equipment meets the return provisions.
(9) Upon lease termination, Lessee shall (1) have the manufacturer's
representative, or other person acceptable to Lessor, de-install all Equipment
including all wire, cable and mounting hardware; (2) if applicable, ensure all
necessary permits and labor are obtained to deliver the Equipment; (3) the
Equipment shall be packed properly and in accordance with the manufacturer's
recommendations; (4) the Lessee shall provide for the transportation of the
Equipment, in a manner consistent with the manufacturer's recommendations and
practices, to any locations within the continental United States as Lessor shall
direct; and shall have the Equipment unloaded at such locations; (5) at Lessor's
choice, either (a) allow Lessor, at Lessor's expense, and provided Lessor has
provided reasonable notice to Lessee, to arrange for an on-site auction of the
Equipment which will be conducted in a manner that will not interfere with the
Lessee's business operations, or (b) Lessee shall provide free safe storage for
the Equipment for a period not to exceed one hundred twenty (120) days from the
Lease expiration.
2
ANNEX E
TO
SCHEDULE NO. ___________
DATED THIS _____ DAY OF _______________, _____
TO MASTER EQUIPMENT LEASE AGREEMENT DATED AS OF DECEMBER 27, 1999
FINANCIAL TERMS: The financial terms applicable with respect to this Schedule
- ---------------
are as follows:
1. Capitalized Lessor's Cost: $81,037,000.
2. Basic Term: sixty (60) months; or, with respect to each subsequently
executed Schedule, the then unexpired portion of the Basic Term with
respect to the first Schedule.
3. Basic Term Commencement Date: December 29, 1999.
4. Last Delivery Date: December 29, 1999.
5. Initial Lease Balance: $81,037,000 (provided, however, that the Lease
Balance shall be reduced from time to time by the amount of each
Principal Component actually paid by Lessee hereunder; provided
further that the Lease Balance shall not be reduced solely as a
result of a rejection of the Agreement in the event of the bankruptcy
of Lessee).
6. Lessee Federal Employer Identification Number: 95-2566122.
RENT: The Rent applicable with respect to this Schedule is as follows:
- ----
Commencing on the fifth Business Day after the initial Rent Payment
Period, and on the fifth Business Day after each successive Rent Payment Period
(or, in the case of the final Rent Payment Period, on the last day of the final
Rent Payment Period) (each, a "Rent Payment Date") during the Basic Term, Lessee
shall pay as rent ("Basic Term Rent" or "Rent") monthly installments of
principal and interest, in arrears, in the amount of the sum of the Principal
Component and the Interest Component. As used herein, "Rent Payment Period"
shall mean the period from and including the date on which Lessee executes the
Certificate of Acceptance with respect to the Equipment described on this
Schedule, to but excluding the twenty-ninth day of the next calendar month
thereafter, and the period from and including the twenty-ninth day of each
successive calendar month thereafter to but excluding the twenty-ninth day of
the next succeeding calendar month thereafter (provided, however, that the final
Rent Payment Period shall commence on (and include) the last day of the Rent
Payment Period immediately preceding the final Rent Payment Period and end on
(but exclude) the final Rent Payment Date). As used herein "Principal Component"
as to any Rent Payment Date shall mean the amount specified on Exhibit No. 2 to
this Annex E. As used herein, "Interest Component" as to any Rent Payment Date
shall mean the sum, for each day in the related Rent Payment Period (to the
extent the advance outstanding is funded by Commercial Paper) or the related
Payment Period (to the extent the Advance Outstanding is not funded by
Commercial Paper), of the product of the Daily Borrowing Rate (determined
pursuant to Exhibit No. 1 to this Annex E) for such day, times the Lease Balance
as of the immediately preceding Rent Payment Date.
LEASE BALANCE, MAXIMUM LESSEE RISK AMOUNT AND MAXIMUM LESSOR RISK AMOUNT: The
- ------------------------------------------------------------------------
Lease Balance, Maximum Lessee Risk Amount and Maximum Lessor Risk Amount with
respect to the Equipment described on this Schedule are as follows:
Maximum Maximum
End of Month Lease Balance Lessee Risk Amount Lessor Risk Amount
------------ ------------- ------------------- ------------------
60 42.8571 27.9610 14.8962
expressed as a percent of the Capitalized Lessor's Cost of the Equipment. If
Lessee exercises the option pursuant to Section 9(c) of the Agreement, the Lease
Balance shall be reduced by the amount received by Lessor pursuant to clause (i)
of Section 9(c) of the Agreement. Reductions shall be effective as of the date
such payments are received by Lessor as provided in Section 2(b) of the
Agreement and applied on the relevant Rent Payment Date.
2
EXHIBIT NO. 1 TO ANNEX E
------------------------
Daily Interest = CP Interest Amount + Liquidity Interest Amount
- -------------- + LOC Interest Amount + Margin Amount
Daily Borrowing Rate = (Daily Interest/Advance Outstanding)
- --------------------
CP Interest Amount = Borrower CP Net Amount x Daily Weighted Average
- ------------------ CP Rate x Edison Funding Factor
Borrower CP Net Amount = Advance Outstanding - Borrower Liquidity Loans
- ---------------------- Outstanding + Borrower Liquidity Deposits -
Borrower LOC Draws Outstanding + Borrower LOC
Deposits
Weighted Average CP Rate = Average of the rate of interest for all tranches
- ------------------------ of outstanding Commercial Paper issued by the
Lender, weighted by the outstanding Commercial
Paper in each tranche
Daily Weighted Average
- ----------------------
CP Rate = Weighted Average CP Rate / 360
- -------
Edison Funding Factor = Net Proceeds Amount / Aggregate CP Net Amount
- ---------------------
Liquidity Interest Amount = Borrower Liquidity Loans Outstanding x (Non-CP
- ------------------------- Drawn Rate/360)
LOC Interest Amount = Borrower LOC Draws Outstanding x (LOC Draw Rate
- ------------------- / 360)
Non-CP Drawn Rate = For any day in a Payment Period, an interest
- ----------------- rate per annum equal to:
(a) if the Liquidity Providers are required to
provide a Liquidity Loan with less than
three Business Days' notice or on a date
other than a Rent Payment Date (in which
case the Base Rate shall apply until the
next Rent Payment Date), if the LIBOR market
is closed, or if the Liquidity Agent
determines that it is illegal for any
Liquidity Provider to make a Liquidity Loan
accruing interest at a rate based upon
LIBOR, the Base Rate; and
(b) otherwise LIBOR.
Base Rate = The higher of (a) the highest prime, base or
- --------- equivalent rate of interest announced or
published on or most recently before such date
by any of the five (5) largest member banks of
the New York Clearing House Association, Inc.
(with the understanding that such rate may
merely serve as a basis upon which effective
rates of interest are calculated for loans
making reference to such rate and that such rate
is not necessarily the lowest or best rate at
which such banks calculate interest or extend
credit), and (b) the Federal Funds Rate, plus
2.00%.
Federal Funds Rate = The rate on overnight federal funds transactions
- ------------------ with members of the Federal Reserve System
arranged by federal funds brokers announced or
published on or most recently before such date
by the Federal Reserve Bank of New York.
LIBOR = For any Payment Period, the per annum rate for
- ----- deposits in Dollars for a period of 30 days
which appears on page "Ticker LIBOR01M" of
Bloomberg Capital Markets Screen as of 11:00
a.m., London time, on the last Business Day of
the immediately preceding Payment Period.
If such rate does not appear on such page on
such day, the rate will be determined on the
basis of the rates at which deposits in United
States dollars are offered by the reference
banks selected by the Operating Agent at
approximately 11:00 a.m., London time, on such
day to prime banks in the London interbank
market for a period of one month commencing on
that day. The Operating Agent will request the
principal London office of each of the reference
banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate
for that day will be the arithmetic mean of the
quotations. If fewer than two quotations are
provided as requested, the rate for that day
will be the arithmetic mean of the rates quoted
by two or more major banks in New York City,
selected by the Operating Agent, in its sole
discretion at approximately 11:00 a.m., New York
City time, on that day for loans in United
States dollars to leading European banks for a
period of 30 days.
LOC Draw Rate = is set forth in Schedule 2 hereto.
- -------------
Margin Amount = Advance Outstanding x (Daily Margin (or, if a
- ------------- Default exists, Daily Default Margin)).
Daily Margin = the "Daily Margin" (determined pursuant to the
- ------------ pricing grid set forth below) / 360
Guarantor's Senior Unsecured
Credit Rating "Daily Margin"
-------------------------------------------
A-/A3 and higher 75
BBB+/Baa1 90
BBB/Baa2 105
BBB-/Baa3 120
BB+/Ba1 380
BB/Ba2 and below, withdrawn,
suspended or terminated 450
For purposes hereof, the applicable credit
rating shall be the higher of the credit rating
specified by Moody's Investors Service, Inc.
and/or Standard & Poor's Ratings Group, A
Division of McGraw-Hill, Inc., with respect to
Guarantor's senior unsecured credit at any date
of determination; provided, however, that if
there is more than one level rating difference
between the two credit ratings or either credit
rating falls below BBB- or Baa3, then the lower
credit rating shall be applicable.
Daily Default Margin = (Daily Margin + 2.00%) / 360
- --------------------
2
DEFINITIONS
-----------
Aggregate CP Net Amount means the sum of the Borrower CP Net Amount and
- ----------------------- the-corresponding amounts for all borrowers from
and sellers to Edison under the related funding
agreements.
Borrower Liquidity Deposits means the amount of proceeds from Borrower
- --------------------------- Liquidity Loans Outstanding which cannot be used
to pay maturing Commercial Paper and are,
therefore, held in the Collateral Account until
Commercial Paper matures and can be paid.
Borrower Liquidity Loans means as of any date, the aggregate outstanding
- ------------------------ principal amount of Liquidity Loans as of such
Outstanding date; provided, however, that the Borrower
- ----------- Liquidity Loans Outstanding shall not exceed
Advance Outstanding -Borrower Letter of Credit
Draws Outstanding + Borrower Letter of Credit
Deposits - Borrower CP Net Amount + Borrower
Liquidity Deposits.
Borrower LOC Deposits means the amount of proceeds from Borrower LOC
- --------------------- Draws Outstanding which cannot be used to pay
maturing Commercial Paper and are, therefore, held
in the Collateral Account until Commercial Paper
matures and can be paid.
Borrower LOC Draws means as of any date the aggregate outstanding
- ------------------ principal amount of proceeds from Borrower LOC
Outstanding Draws allocated to the Borrower; provided,
- ----------- however, that the Borrower LOC Draws Outstanding
shall not exceed Advance Outstanding - Borrower
LOC Draws Outstanding + Borrower Liquidity
Deposits - Borrower CP Net Amount + Borrower LOC
Deposits.
Net Proceeds Amount means the difference for all Commercial Paper
- ------------------- outstanding on the applicable date of the
aggregate face amount of such Commercial Paper
minus the discount therefrom reflected in the
price to the initial investor and the dealer fees
for such Commercial Paper.
Payment Period means, with respect to each Liquidity Loan,
- -------------- initially the period commencing on (and including)
the date such Liquidity Loan is made and ending on
(but excluding) the next Rent Payment Date and,
thereafter, the period commencing on (and
including) the last Rent Payment Date and ending
on (but excluding) the next Rent Payment Date.
3
Schedule 1 to Exhibit No. 1
---------------------------
LOC Draw Rate
- -------------
"LOC Draw Rate" means on any day in a Monthly Payment Period, an interest rate
- --------------
per annum equal to the higher of:
(a) the highest prime, base or equivalent lending rate of interest
announced or published on or most recently before such date by any of the five
largest member banks of the New York Clearing House Association, Inc. (with the
understanding that such rates may merely serve as a basis upon which effective
rates of interest are calculated for loans making reference to such prime, base
or equivalent rates and that such rates are not necessarily the lowest or best
rates at which such banks calculate interest or extend credit); and
(b) LIBOR, which shall equal for this purpose the per annum rate for
deposits in Dollars for a period of 30 days which appears on Telerate Page 3750
as of 11:00 a.m., London time, on the last Business Day of the immediately
preceding Monthly Payment Period. If such rate does not appear on Telerate Page
3750 on such day, the rate will be determined on the basis of the rates at which
deposits in United States dollars are offered by the reference banks selected by
the Operating Agent at approximately 11:00 a.m., London time, on such day to
prime banks in the London interbank market for a period of one month commencing
on that day. The Operating Agent will request the principal London office of
each of the reference banks to provide a quotation of its rate. If at least two
such quotations are provided, the rate for that day will be the arithmetic mean
of the quotations. If fewer than two quotations are provided as requested, the
rate for that day will be the arithmetic mean of the rates quoted by two or more
major banks in New York City, selected by the Operating Agent, in its sole
discretion at approximately 11:00 a.m., New York City time, on that day for
loans in United States dollars to leading European banks for a period of 30
days.
"Monthly Payment Period" means, with respect to each draw on the Letter of
- -----------------------
Credit or Residual Letter of Credit, any period commencing on the date in a
calendar month on which such draw is made or any subsequent first day of a
calendar month and ending on (and including) the last day of such calendar
month.
EXHIBIT NO. 2 TO ANNEX E
------------------------
Rent Payment Date Principal Component
----------------- -------------------
1 through 60 $ 771, 781.34
ANNEX F
TO
SCHEDULE NO. ______________
DATED THIS ______ DAY OF ___________, _____
TO MASTER LEASE AGREEMENT DATED AS OF DECEMBER 27, 1999
ESTOPPEL/WAIVER AGREEMENT
___________________, _____
______________________
______________________
Gentlemen/Ladies:
FATICO 1999 TRUST ("Lessor"), has entered into, or is about to enter into,
a lease (the "Lease") with First American Title Insurance Company ("Lessee"),
pursuant to which Lessee has leased or will lease from Lessor certain personal
property (such property, together with any replacements thereof, being referred
to as the "Personal Property"). Some or all of the Personal Property is, or
will be, located at certain premises described on Annex A (the "Premises").
This letter is being sent to you because of your interest in the Premises.
By your signature below, you hereby agree (and we shall rely on your
agreement) that: (i) the Personal Property is, and shall remain, personal
property regardless of the method by which it may be, or become, affixed to the
Premises; (ii) your interest in the Personal Property and any proceeds thereof
(including, without limitation, proceeds of any insurance therefor) shall be,
and remain, subject to the interest of Lessor and its assigns (until and unless
Lessor shall formally release or transfer its interest in the Personal Property
to Lessee); (iii) Lessor and its assigns, and their respective employees and
agents, shall have the right with prior notice, from time to time, to enter the
Premises for the purpose of inspecting the Personal Property; and (iv) Lessor
and its assigns, and their respective employees and agents, shall have the
right, upon any default by Lessee under the Lease, to enter the Premises and to
remove the Personal Property from the Premises. Lessor agrees to reimburse you
for any damages actually caused to the Premises by Lessor, or its employees or
agents, during any such removal. These agreements shall be binding upon, and
shall inure to the benefit of, any successors and assigns of the parties hereto.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
We appreciate your cooperation in this matter of mutual interest.
FATICO 1999 TRUST
By: Wilmington Trust Company,
not in its individual capacity, but
solely as Owner trustee
By:_______________________________________
Name:_____________________________________
Title:____________________________________
2
AGREED TO AND ACCEPTED BY:
By:____________________________
Name:__________________________
Title:_________________________
Date:_____________________________, _____
[_] Mortgagee
[_] Landlord
[_] Realty Manager
3
EXHIBIT NO. 2
EQUIPMENT SUBLEASE AGREEMENT
THIS EQUIPMENT SUBLEASE AGREEMENT is made as of the 27/th/ day of December,
1999, by and between FIRST AMERICAN TITLE INSURANCE COMPANY (hereinafter
referred to as "Lessee") and _____________________________ (hereinafter referred
to as "Sublessee").
FATICO 1999 TRUST (hereinafter referred to as "Lessor"), by a Master Lease
Agreement dated as of December 27, 1999 (hereinafter referred to as the
"Agreement"), leased to Lessee certain equipment described in the Schedules
executed or to be executed pursuant to said Agreement. Capitalized terms used
herein without definition shall have the meaning given them in the Agreement.
Lessee and Sublessee desire to enter into a sublease of a part of the
equipment to Sublessee.
NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00) in hand
paid, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and the mutual covenants, terms and conditions
hereinafter contained, the parties hereby agree as follows:
20. Lessee hereby agrees to sublease to Sublessee, and Sublessee hereby
agrees to sublease from Lessee, those certain items of equipment, personal
property and other property, together with all components, parts,
additions, accessions and attachments incorporated therein, now or
hereafter leased to Lessee pursuant to the Agreement and described on the
Schedules now or hereafter executed pursuant to the Agreement and specified
in a Specification of Equipment for Sublease (all such property hereinafter
collectively referred to as the "Equipment"), on the terms and conditions
set forth in the Agreement and in the Schedules executed pursuant to said
Agreement.
21. Sublessee agrees that it shall be bound by each and every covenant,
term and condition contained in the Agreement and the applicable Schedules,
and that it shall perform promptly as and when due all said covenants,
terms and conditions. The term of this Sublease Agreement and the rental to
be paid hereunder shall be the Term of the Agreement, and the Rent required
to be paid under the Agreement, with respect to the Equipment. Payments
under this Sublease Agreement shall be made to Lessee at the address
specified pursuant to Section 6 hereof. Upon expiration of the term of this
Sublease Agreement, the Equipment shall be returned to Lessee (or, if
directed by Lessee, to Lessor) in accordance with the provisions of the
Agreement.
3. Sublessee further agrees that: (a) Sublessee waives, and agrees that
it will not assert against Lessor, or any Edison Program Party or any successor
or assignee of Lessor or any Edison Program Party, any defense, set-off,
recoupment, claim or counterclaim which Sublessee may at any time have against
Lessee for any reason whatsoever; (b) Lessor or any Edison Program Party shall
have no obligation to perform any of the duties of Lessee under this Sublease
Agreement, including (but not limited to) payment of any taxes or other sums,
furnishing of maintenance, repairs, replacements, service or insurance; (c) the
Equipment, when subjected to Sublessee's use and control, will continue to be
personal property under applicable law at all times during the term of this
Sublease Agreement, and Lessor or any Edison Program Party or its designated
employee(s) or agent(s) may inspect the Equipment at its location during normal
business hours; (d) the Equipment shall not be used outside the Continental
United States; and (e) Sublessee shall not sell, assign or further sublease any
of its rights in and to the Equipment or under this Sublease Agreement.
4. Sublessee represents and warrants that: (a) Sublessee is a corporation
duly organized and validly existing in good standing under the laws of the state
of its incorporation. (b) The execution, delivery and performance of this
Sublease Agreement: (1) have been duly authorized by all necessary corporate
action on the part of Sublessee; (2) do not require the approval of any
stockholders, trustee or holder of any obligations of Sublessee except such as
have been duly obtained; and (3) do not and will not contravene any law,
governmental rule, regulation or order now binding or result in the creation of
any lien or encumbrance upon the property of Sublessee under, any indenture,
mortgage, contract or other agreement to which Sublessee is a party or by which
it or its property is bound. (c) This Sublease Agreement constitutes the legal,
valid and binding obligation of Sublessee enforceable against Sublessee in
accordance with the terms hereof. (d) There are no pending actions
4
or proceedings to which Sublessee is a party, and there are no other pending or
threatened actions or proceedings of which Sublessee has knowledge, before any
court, arbitrator or administrative agency, which, either individually or in the
aggregate, would materially adversely affect the financial condition of
Sublessee, or the ability of Sublessee to perform its obligations hereunder.
Further, Sublessee is not in default under any obligation for the payment of
borrowed money, for the deferred purchase price of property or for the payment
of any rent which, either individually or in the aggregate, would have the same
such effect. (e) Sublessee is an equipment user and not a broker or seller of
equipment. Sublessee agrees that Lessor may rely upon the truth and accuracy of
all representations and warranties made to Lessee by Sublessee in this Sublease
Agreement to the same extent and effect as if such representations and
warranties had been made directly to and for the benefit of Lessor.
5. Upon the occurrence of any event specified as a Default (as defined in
the Agreement) by or with respect to Sublessee under this Sublease Agreement (to
effectuate the foregoing, the provisions of Section 10 of the Lease are
incorporated herein by this reference, together with all related definitions and
ancillary provisions, mutatis mutandis, such that references to Lessee in such
------- --------
provisions shall refer to the Sublessee hereunder), Lessee shall have all rights
and remedies available to the Lessor in the Agreement (excluding, however, the
right to sell, lease or otherwise dispose of the Equipment).
6. Lessee further agrees that neither the sublease of the Equipment nor
anything in this Sublease Agreement shall relieve Lessee of its obligations to
Lessor or any Edison Program Party under the Agreement and it shall remain
primarily liable thereunder, and none of Lessor or any Edison Program Party
shall be required to (a) proceed against Sublessee; (b) proceed against or
exhaust any security held from Sublessee; or (c) pursue any other remedy in
Lessor's or any Edison Program Party's power whatsoever; before proceeding
against Lessee. Furthermore, Lessee acknowledges and agrees that a separate
action or actions may be brought and prosecuted against Lessee whether an action
is brought against Sublessee or whether Sublessee be joined in any such action
or actions.
7. (a) WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, OPERATING AGENT AND
LESSEE, SUBLESSEE WILL NOT ASSIGN, TRANSFER OR ENCUMBER ANY OF ITS RIGHTS OR
OBLIGATIONS HEREUNDER OR UNDER ANY SCHEDULE, OR ITS LEASEHOLD INTEREST, FURTHER
SUBLET THE EQUIPMENT OR OTHERWISE PERMIT THE EQUIPMENT TO BE OPERATED OR USED
BY, OR TO COME INTO OR REMAIN IN THE POSSESSION OF, ANYONE BUT SUBLESSEE. No
assignment or further sublease, whether authorized in this Section or in
violation of the terms hereof, shall relieve Sublessee of its obligations, and
Sublessee shall remain primarily liable, hereunder and under each Schedule. Any
unpermitted assignment, transfer, encumbrance, delegation or further sublease by
Sublessee shall be void ab initio. (b) WITHOUT THE PRIOR WRITTEN CONSENT OF
-- ------
LESSOR AND OPERATING AGENT, LESSEE WILL NOT ASSIGN, TRANSFER OR ENCUMBER ANY OF
ITS RIGHTS OR OBLIGATIONS HEREUNDER. (c) Subject always to the foregoing, this
Sublease shall inure to the benefit of, and is binding upon, the successors and
permitted assigns of the parties hereto.
8. The parties agree that this Sublease Agreement is expressly subject
and subordinate to Lessor's interest in and to the Equipment and to the
Agreement and the rights of Lessor under the Agreement and that, upon the
declaration by Lessor of a Default under the Agreement and written notice
thereof to the parties by Lessor, at the sole discretion of Lessor as specified
in such notice: (a) Sublessee shall make all payments then due or thereafter
becoming due under this Sublease Agreement directly to Lessor; and/or (b) this
Sublease Agreement shall be terminated and Lessor shall have all rights and
remedies specified in the Agreement.
9. All notices and other communications hereunder shall be in writing,
personally delivered, delivered by overnight courier service, sent by facsimile
transmission (with confirmation of receipt), or sent by certified mail, return
receipt requested, addressed to the other party at its respective address stated
below the signature of such party or at such other address as such party shall
from time to time designate in writing to the other party; and shall be
effective from the date of receipt.
10. (a) This Sublease Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and shall not be amended
or altered in any manner except by a document in writing executed by both
parties. This Sublease Agreement may not be amended, and no waiver of any of the
provisions hereof shall be effective, without the prior written consent of
Lessor.
5
(b) Any provision of this Sublease Agreement which 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.
(c) SUBLESSEE HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING
TO WHICH SUBLESSEE AND/OR LESSEE MAY BE PARTIES ARISING OUT OF OR IN ANY WAY
PERTAINING TO THIS SUBLEASE AGREEMENT. IT IS HEREBY AGREED AND UNDERSTOOD THAT
THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL
PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE
NOT PARTIES TO THIS SUBLEASE AGREEMENT. THIS WAIVER IS KNOWINGLY, WILLINGLY AND
VOLUNTARILY MADE BY SUBLESSEE, AND LESSEE AND SUBLESSEE HEREBY ACKNOWLEDGE THAT
NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE
THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT.
SUBLESSEE FURTHER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF
THIS SUBLEASE AGREEMENT AND IN THE MAKING OF THIS WAIVER BY LEGAL COUNSEL,
SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS
THIS WAIVER WITH COUNSEL.
(d) THIS SUBLEASE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO
THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE
EQUIPMENT. The parties agree that any action or proceeding arising out of or
relating to this Sublease Agreement may be commenced in any state or Federal
court of competent jurisdiction in the State of New York and each party agrees
that a summons and complaint commencing an action or proceeding in any such
court shall be properly served and shall confer personal jurisdiction if served
personally or by certified mail to it at its address designated pursuant hereto,
or as otherwise provided under the laws of the State of New York.
11. Sublessee hereby grants to Lessor a first priority security interest
in all equipment (as such term is defined in the UCC) now or hereafter located
at the Equipment Location specified on the Specification of Equipment for
Sublease executed pursuant hereto, together with all additions, attachments,
accessions and accessories thereto whether or not furnished by the supplier of
such equipment and any and all substitutions, replacements or exchanges
therefor, together with all warranties with respect thereto, manuals and other
books and records relating thereto, in each such case in which Sublessee shall
from time to time acquire an interest, and any and all insurance and/or other
proceeds (but without power of sale) of the property in and against which a
security interest is granted, in order to secure the prompt payment of the Rent
and all of the other amounts from time to time outstanding under and with
respect to the Schedules, and the performance and observance by Lessee of all
the agreements, covenants and provisions thereof (including, without limitation,
all of the agreements, covenants and provisions of the Master Lease Agreement
that are incorporated therein). Sublessee acknowledges that it will enjoy a
substantial economic benefit by virtue of the leasing of the Equipment by Lessor
to Lessee pursuant to the Master Lease Agreement, by virtue of the use of such
Equipment by Sublessee permitted under this Equipment Sublease Agreement.
12. The parties hereto acknowledge and agree that Edison, Operating Agent,
and General Electric Capital Corporation, as Borrower Collateral Agent and as
Collateral Agent, shall be deemed to be third party beneficiaries of this
Sublease Agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
6
IN WITNESS WHEREOF, the parties have caused this Equipment Sublease
Agreement to be duly executed, as of the day and year first above written.
FIRST AMERICAN TITLE INSURANCE COMPANY _____________________________________
Lessee Sublessee
By:________________________________ By:__________________________________
Name:______________________________ Name:________________________________
Title:_____________________________ Title:_______________________________
1 First American Way Address:______________________
Santa Ana, California 92707 ______________________________
______________________________
THIS EQUIPMENT SUBLEASE AGREEMENT IS ACCEPTED
BY LESSOR
FATICO 1999 TRUST
By: Wilmington Trust Company,
not in its individual capacity but solely as Owner Trustee
By:________________________________
Name:______________________________
Title:_____________________________
FIRST AMERICAN TITLE INSURANCE COMPANY ("Lessee") hereby assigns to FATICO 1999
TRUST, all right, title and interest of Lessee in the foregoing Equipment
Sublease Agreement and all rents and issues therefrom, as security for the
performance by Lessee of its obligations pursuant to the Master Lease Agreement
dated as of December ___, 1999.
Manual execution hereunder acknowledges this to be the original executed
Equipment Sublease Agreement, and that all other copies have been conspicuously
marked "COUNTERPART".
FIRST AMERICAN TITLE INSURANCE COMPANY
Lessee
By:_______________________________________
Name:_____________________________________
Title:____________________________________
7
Receipt of this original counterpart is hereby acknowledged on this _____ day of
December, 1999.
GENERAL ELECTRIC CAPITAL CORPORATION,
as Collateral Agent
By:__________________________________
Name: Joan B. Makara
Title: Authorized Signatory
8
SPECIFICATION OF
EQUIPMENT FOR SUBLEASE
Pursuant to Equipment Sublease Agreement dated as December 27, 1999
All Equipment described on Equipment Schedule No. _______________ located at the
Equipment Location specified on the attached Schedule
Date: December __, 1999 FIRST AMERICAN TITLE INSURANCE COMPANY
Lessee
By:____________________________________
Name:__________________________________
Title:_________________________________
_______________________________________
Sublessee
By:____________________________________
Name:__________________________________
Title:_________________________________
SCHEDULE TO SPECIFICATION OF
EQUIPMENT FOR SUBLEASE
Equipment Location:
EXHIBIT NO. 3
CORPORATE GUARANTY
------------------
Date: December 27, 1999
FATICO 1999 Trust, together with its successors and assigns
c/o Wilmington Trust Company, Owner Trustee
Rodney Square North
1100 N. Market Street
Wilmington, Delaware 19890-0001
Edison Program Parties
c/o General Electric Capital Corporation
Capital Funding, Inc.
3001 Summer Street
2nd Floor
Stamford, Connecticut 06927
Attn: Manager, Conduit Administration
To induce FATICO 1999 Trust, together with its successors and assigns
("Lessor"), to enter into that certain Master Lease Agreement dated as of the
date hereof, as now or hereafter amended (the "Master Lease Agreement"), with
First American Title Insurance Company ("Lessee"), providing for the purchase
and lease of certain equipment by Lessor to Lessee, as evidenced by certain
Schedules (as defined therein) now or hereafter executed pursuant to the Master
Lease Agreement between Lessor and Lessee, and to induce the Edison Program
Parties to provide certain financing in connection with the transaction
contemplated by the Master Lease Agreement, such Schedules and the other Related
Documents (such Schedules, together with the Master Lease Agreement and the
other Related Documents, being collectively referred to as "Account Documents"
and each an "Account Document"), but without in any way binding Lessor or the
Edison Program Parties and their successors and assigns (being collectively
referred to as "Beneficiaries" and each being referred to as a "Beneficiary") to
do so, for good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, The First American Financial Corporation ("undersigned")
does hereby guarantee to Beneficiaries, their successors and assigns, the due,
regular and punctual payment of any sum or sums of money which the Lessee may
owe to Beneficiaries now or at any time hereafter whether evidenced by an
Account Document, on open account or otherwise, and whether it represents
principal, interest, rent, late charges, indemnities, an original balance, an
accelerated balance, liquidated damages, a balance reduced by partial payment, a
deficiency after sale or other disposition of any leased equipment, collateral
or security, or any other type of sum of any kind whatsoever that the Lessee may
owe to Beneficiaries now or at any time hereafter, and does hereby further
guarantee to Beneficiaries, their successors and assigns, the due, regular and
punctual performance of any other duty or obligation of any kind or character
whatsoever that the Lessee may owe to Beneficiaries now or at any time hereafter
(all such payment and performance obligations being collectively referred to as
"Obligations"). Undersigned does hereby further guarantee to pay upon demand all
losses, costs, attorneys' fees and expenses which may be suffered by
Beneficiaries by reason of the Lessee's default or default of the undersigned.
Capitalized terms used herein without definition shall have the meaning given
them in the Account Documents.
This Corporate Guaranty (the "Guaranty") is a guaranty of prompt payment
and performance (and not merely a guaranty of collection). Nothing herein shall
require Beneficiaries to first seek or exhaust any remedy against the Lessee,
its successors and assigns, or any other person obligated with respect to the
Obligations, or to first foreclose, exhaust or otherwise proceed against any
leased equipment, collateral or security which may be given in connection with
the Obligations. It is agreed that Beneficiaries may, upon any breach or default
of the Lessee, or at any time thereafter, make demand upon the undersigned and
receive payment and performance of the Obligations, with or without notice or
demand for payment or performance by the Lessee, its successors or assigns,
11
or any other person. Suit may be brought and maintained against the undersigned
at the election of any Beneficiary, without joinder of the Lessee or any other
person as parties thereto. Each Beneficiary may severally enforce this Guaranty.
The undersigned agrees that its obligations under this Guaranty shall be
primary, absolute, continuing and unconditional, irrespective of and unaffected
by any of the following actions or circumstances (regardless of any notice to or
consent of the undersigned): (a) the genuineness, validity, regularity and
enforceability of the Account Documents or any other document; (b) any
extension, renewal, amendment, change, waiver or other modification of the
Account Documents or any other document; (c) the absence of, or delay in, any
action to enforce the Account Documents, this Guaranty or any other document;
(d) the failure or delay of any Beneficiary in obtaining any other guaranty of
the Obligations (including without limitation, the failure of any Beneficiary to
obtain the signature of any other guarantor hereunder); (e) the release of,
extension of time for payment or performance by or any other indulgence granted
to the Lessee or any other person with respect to, the Obligations by operation
of law or otherwise; (f) the existence, value, condition, loss, subordination or
release (with or without substitution) of or failure to have title to or perfect
and maintain a security interest in, or the time, place and manner of any sale
or other disposition of any leased equipment, collateral or security given in
connection with the Obligations, or any other impairment (whether intentional or
negligent, by operation of law or otherwise) of the rights of the undersigned;
(g) the Lessee's voluntary or involuntary bankruptcy, assignment for the benefit
of creditors, reorganization, or similar proceedings affecting the Lessee or any
of its assets; or (h) any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
The undersigned agrees that this Guaranty shall remain in full force and
effect or be reinstated (as the case may be) if at any time payment or
performance of any of the Obligations (or any part thereof) is rescinded,
reduced or must otherwise be restored or returned by Beneficiaries, all as
though such payment or performance had not been made. If, by reason of any
bankruptcy, insolvency or similar laws affecting the rights of creditors,
Beneficiaries shall be prohibited from exercising any of their rights or
remedies against the Lessee or any other person or against any property, then,
as between Beneficiaries and the undersigned, such prohibition shall be of no
force and effect, and Beneficiaries shall have the right to make demand upon,
and receive payment from, the undersigned of all amounts and other sums that
would be due to Beneficiaries upon a default with respect to the Obligations.
The undersigned hereby represents and warrants that: (a) the undersigned is
a corporation duly organized, validly existing and in good standing under the
laws of the State of California; and is duly qualified to transact business as a
foreign corporation in good standing wherever necessary to carry on its present
business and operations. (b) This Guaranty has been duly authorized, executed
and delivered by the undersigned and constitutes the valid, legal and binding
obligation of the undersigned, enforceable in accordance with its terms, except
to the extent that the enforcement of remedies herein provided may be limited
under applicable bankruptcy and insolvency laws, public policy and equitable
principles; (c) no approval, consent or withholding of objections is required
from any Governmental Authority with respect to the execution or performance by
the undersigned of this Guaranty, except such as have already been obtained; (d)
the undersigned has adequate corporate power and capacity to enter into, and
perform under, this Guaranty; and its execution and performance of this Guaranty
will not: (1) violate any judgment, order, law or regulation applicable to it or
any provision of its articles of incorporation, charter or by-laws; or (2)
result in any breach of, constitute a default under or result in the creation of
any lien, charge, security interest or other encumbrance upon any of its assets
pursuant to any indenture, mortgage, deed of trust, bank loan or credit
agreement or other instrument to which the undersigned is a party; (e) there are
no suits or proceedings pending or threatened in court or before any commission,
board or other administrative agency against or affecting the undersigned, which
will have a Material Adverse Effect; (f) each financial statement of the
undersigned delivered to any of the Beneficiaries has been prepared in
accordance with GAAP, and since the date of the most recent such audited
financial statement, there has been no material adverse change in the financial
condition of the undersigned; and (g) the undersigned has reviewed the areas
within its business and operations which could be adversely affected by, and has
developed a program to address on a timely basis, the "Year 2000 Problem" (that
is, the risk that computer applications used by the undersigned may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date on or after December 31, 1999), and has made related
appropriate inquiry of material suppliers and vendors. Based on such review and
program, the undersigned believes that the "Year 2000 Problem" will not have a
Material Adverse Effect.
12
The undersigned covenants and agrees that: (a) if at any time it ceases to
be a reporting company under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), it will provide to Beneficiaries: (1) within ninety (90)
days after the end of each of its fiscal years, its balance sheet and related
statement of income and statement of cash flows of Guarantor, prepared in
accordance with GAAP, all in reasonable detail and certified by independent
certified public accountants of nationally recognized standing selected by the
undersigned; and (2) within sixty (60) days after the end of each quarter of its
fiscal year, its balance sheet and related statement of income and statement of
cash flows for such quarter, internally prepared in accordance with GAAP and
certified by its Chief Financial Officer; (b) as and when provided pursuant to
the Credit Agreement (as such term is hereinafter defined), it shall provide to
Beneficiaries the covenant compliance certificate required to be provided by it
pursuant to the Credit Agreement; (c) it will promptly provide written notice to
Beneficiaries in the event that its senior unsecured credit rating by Moody's
Investors Service, Inc. and/or Standard & Poors Ratings Group, a division of
McGraw-Hill, Inc., is changed; and (d) it will promptly execute and deliver to
Beneficiaries such further documents, instruments and assurances and take such
further action as Beneficiaries from time to time reasonably may request in
order to carry out the intent and purpose of this Guaranty and to establish and
protect the rights and remedies created or intended to be created in their favor
hereunder.
The undersigned shall be deemed to be in default hereunder ("Default") if:
(a) any representation or warranty made by the undersigned in connection with
this Guaranty shall be false or misleading in any material respect; (b) it shall
fail to perform or observe any covenant, condition or agreement to be performed
or observed by it hereunder and such failure shall continue unremedied for a
period of thirty (30) days after the earlier of the actual knowledge of
Guarantor or written notice thereof to the undersigned by Beneficiaries; or (c)
it becomes insolvent or ceases to do business as a going concern; or (d) it
shall file a voluntary petition in bankruptcy or a voluntary petition or an
answer seeking reorganization in a proceeding under any bankruptcy laws (as now
or hereafter in effect) or an answer admitting the material allegations of a
petition filed against it in any such proceeding, or it shall, by voluntary
petition, answer or consent, seek relief under the provisions of any other now
existing or future bankruptcy or similar law (other than a law which does not
provide for or permit the readjustment or alteration of its obligations
hereunder) providing for the reorganization or liquidation of corporations, or
providing for an agreement, composition, extension or adjustment with its
creditors; or (e) a petition is filed against it in a proceeding under
applicable bankruptcy laws or other insolvency laws (other than any law which
does not provide for or permit any readjustment or alteration of its obligations
hereunder), as now or hereafter in effect, and is not withdrawn or dismissed
within thirty (30) days thereafter, or if, under the provisions of any law
(other than any law which does not provide for or permit any readjustment or
alteration of its obligations hereunder) providing for reorganization or
liquidation of corporations which may apply to it, any court of competent
jurisdiction shall assume jurisdiction, custody or control of it or any
substantial part of its property and such jurisdiction, custody or control shall
remain in force unrelinquished, unstayed or unterminated for a period of thirty
(30) days; or (f) it shall have consolidated with, merged into, or conveyed or
leased substantially all of its assets as an entirety to any Person (such
actions being referred to as an "Event"), unless not less than sixty (60) days
prior to such Event: (1) such Person is organized and existing under the laws of
the United States or any state, and executes and delivers to Beneficiaries an
agreement containing an effective assumption by such Person of the due and
punctual performance of this Guaranty; and (2) each of Beneficiaries, Lender and
the Collateral Agent confirms in writing that it is reasonably satisfied as to
the creditworthiness of such Person; or (g) there is an anticipatory repudiation
of its obligations pursuant to this Guaranty; or (h) any certificate, statement,
representation, warranty or audit contained herein or heretofore or hereafter
furnished with respect to this Guaranty by or on behalf of the undersigned
proving to have been false in any material respect at the time as of which the
facts therein set forth were stated or certified, or having omitted any
substantial contingent or unliquidated liability or claim against it; or (i) it
shall be in default under that certain Credit Agreement dated as of July 2,
1999, as now or hereafter amended, among Guarantor, the Lenders party thereto,
and The Chase Manhattan Bank, as Administrative Agent, or any successor thereto
or replacement thereof (the "July 2, 1999 Credit Agreement"), that certain
Amended and Restated Credit Agreement dated as of July 29, 1997, as now or
hereafter amended, among Guarantor, the Lenders party thereto, The Chase
Manhattan Bank, as Administrative Agent, and Chase Securities, Inc. as Arranger
(and together with the July 2, 1999 Credit Agreement, being sometimes herein
collectively referred to as the "Credit Agreement"), or any other material
obligation for borrowed money, for the deferred purchase price of property or
any lease agreement, and the applicable grace period with respect thereto shall
have expired; or (j) the corporate existence of the undersigned is terminated
and its obligations in connection with this Guaranty are not assumed by a
successor in interest reasonably satisfactory to Beneficiaries; or (k) as a
result of or in connection with a change in the ownership of fifty percent (50%)
or more of the capital stock of the
13
undersigned, the debt to worth ratio of the undersigned equals or exceeds twice
its debt to worth ratio as of the date of this Guaranty, without their prior
written consent. As used herein, "debt to worth ratio" shall mean the ratio of
(1) total liabilities which, in accordance with GAAP, would be included in the
liability side of a balance sheet, to (2) tangible net worth including the sum
of the par or stated value of all outstanding capital stock, surplus and
undivided profits, less any amounts attributable to good will, patents,
copyrights, mailing lists, catalogs, trademarks, bond discount and underwriting
expenses, organization expenses and other intangibles, all as determined in
accordance with GAAP.
Upon a Default hereunder, Beneficiaries may, at their option, declare this
Guaranty to be in default by written notice to the undersigned (without election
of remedies), and at any time thereafter, may do any one or more of the
following, all of which are hereby authorized by the undersigned:
A. declare the Account Document to be in default and thereafter sue for
and recover all liquidated damages, accelerated rentals and/or other sums
otherwise recoverable from Lessee thereunder; and/or
B. sue for and recover all damages then or thereafter incurred by
Beneficiaries as a result of such Default; and/or
C. seek specific performance of the obligations of the undersigned
hereunder.
In addition, the undersigned shall be liable for all reasonable attorneys'
fees and other costs and expenses incurred by reason of any Default or the
exercise of Beneficiaries' remedies hereunder and/or under the Account Document.
No right or remedy referred to herein is intended to be exclusive, but each
shall be cumulative, and shall be in addition to any other remedy referred to
above or otherwise available at law or in equity, and may be exercised
concurrently or separately from time to time.
Notice of acceptance of this Guaranty and of any default by the Lessee or
any other person is hereby waived. Presentment, protest, demand, and notice of
protest, demand and dishonor of any of the Obligations, and the exercise of
possessory, collection or other remedies for the Obligations, are hereby waived.
The undersigned warrants that it has adequate means to obtain from the Lessee on
a continuing basis financial data and other information regarding the Lessee and
is not relying upon Beneficiaries to provide any such data or other information.
Without limiting the foregoing, notice of adverse change in the Lessee's
financial condition or of any other fact which might materially increase the
risk of the undersigned is also waived. All settlements, compromises, accounts
stated and agreed balances made in good faith between the Lessee, its successors
or assigns, and Beneficiaries shall be binding upon and shall not affect the
liability of the undersigned.
Payment of all amounts now or hereafter owed to the undersigned by the
Lessee or any other obligor for any of the Obligations is hereby subordinated in
right of payment to the indefeasible payment in full to Beneficiaries of all
Obligations and is hereby assigned to Beneficiaries as security therefor. The
undersigned hereby irrevocably and unconditionally waives and relinquishes all
statutory, contractual, common law, equitable and all other claims against the
Lessee and any other obligor for any of the Obligations, any collateral
therefor, or any other assets of the Lessee or any such other obligor, for
subrogation, reimbursement, exoneration, contribution, indemnification, setoff
or other recourse in respect of sums paid or payable to Beneficiaries by the
undersigned hereunder, and the undersigned hereby further irrevocably and
unconditionally waives and relinquishes any and all other benefits which it
might otherwise directly or indirectly receive or be entitled to receive by
reason of any amounts paid by, or collected or due from, it, the Lessee or any
other obligor for any of the Obligations, or realized from any of their
respective assets.
THE UNDERSIGNED HEREBY UNCONDITIONALLY WAIVES ITS RIGHT TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR
INDIRECTLY, THIS GUARANTY, THE OBLIGATIONS GUARANTEED HEREBY, ANY OF THE RELATED
DOCUMENTS, ANY DEALINGS BETWEEN US RELATING TO THE SUBJECT MATTER HEREOF OR
THEREOF, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN US. THE SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT
MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND
14
ALL OTHER COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER IS IRREVOCABLE MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY,
THE OBLIGATIONS GUARANTEED HEREBY, OR ANY RELATED DOCUMENTS. IN THE EVENT OF
LITIGATION THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
As used in this Guaranty, the word "person" shall include any individual,
corporation, partnership, limited liability entity, joint venture, association,
joint-stock company, trust, unincorporated organization, or any government or
any political subdivision thereof.
This Guaranty is intended by the parties as a final expression of the
guaranty of the undersigned and is also intended as a complete and exclusive
statement of the terms thereof. No course of dealing, course of performance or
trade usage, nor any parol evidence of any kind, shall be used to supplement or
modify any of the terms hereof. There are no conditions to the full
effectiveness of this Guaranty. This Guaranty and each of its provisions may
only be waived, modified, varied, released, terminated or surrendered, in whole
or in part, by a duly authorized written instrument signed by Beneficiaries. No
failure by Beneficiaries to exercise their rights hereunder shall give rise to
any estoppel against Beneficiaries, or excuse the undersigned from performing
hereunder. The waiver by Beneficiaries of any right to demand performance
hereunder shall not be a waiver of any subsequent or other right to demand
performance hereunder.
The rights and obligations of the undersigned may not be assigned or
delegated without Beneficiaries' prior written consent. This Guaranty shall bind
the undersigned's successors and permitted assigns and the benefits thereof
shall extend to and include the successors and assigns of any Beneficiaries. In
the event of default hereunder, Beneficiaries may at any time inspect
undersigned's records, or at their option, undersigned shall furnish
Beneficiaries with a current independent audit report.
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES
OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
The parties agree that any action or proceeding arising out of or relating to
this Agreement may be commenced in the United States District Court for the
Southern District of New York. If any provisions of this Guaranty are in
conflict with any applicable statute, rule or law, then such provisions shall be
deemed null and void to the extent that they may conflict therewith, but without
invalidating any other provisions hereof.
All notices required to be given hereunder shall be deemed adequately given
if sent by certified mail to the addressee at its address stated herein, or at
such other place as such addressee may have designated in writing.
Any provision of this Guaranty which 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.
Each signatory on behalf of a corporate guarantor warrants that he had
authority to sign on behalf of such corporation and by so signing, to bind said
guarantor corporation hereunder.
15
IN WITNESS WHEREOF, this Corporate Guaranty is executed as of the day and
year above written.
ATTEST
THE FIRST AMERICAN FINANCIAL
_________________________________ By: ____________________________________
Secretary/Assistant Secretary Name:___________________________________
Title:__________________________________
1 First American Way
Santa Ana, California 92707
16
CERTIFIED RESOLUTION
--------------------
The undersigned hereby certifies that he is Secretary of The First American
Financial Corporation, that the following resolution was passed at a meeting of
the Board of Directors of said corporation held on September 18, 1968, duly
called, a quorum being present, that said resolution has not since been revoked
or amended, and that the form of guaranty referred to therein is the form shown
attached hereto:
"BE IT RESOLVED, that any two of the following officers, to wit: the
chairman of the board, any vice chairman of the board, the president, any vice
president, the chief financial officer, or any one of them in conjunction with
the secretary or any assistant secretary, with or without the seal of this
corporation may:
1. Make, sign, execute and deliver in the name of and on behalf of this
corporation on its own account, all conveyances, deeds, quitclaims,
leases, mortgages, powers of attorney, bonds of indemnity or other
undertakings, contracts for the purchase or sale of real or personal
property, repurchase agreements, guaranties, reconveyances of property,
releases and satisfactions of mortgages, judgments and other liens;
2. Assign, transfer and deliver bonds, certificates of stock and other
obligations and instruments belonging to this corporation;
3. Make, sign, execute and deliver any other instruments, documents or
agreements relating to or affecting the property or business of this
corporation, which may be found necessary, proper or expedient to be
executed, signed and delivered in conducting the business of this
corporation."
WITNESS my hand and the seal of this corporation on this ____ day of
December, 1999.
____________________________________
Secretary
CERTIFICATION AND REPRESENTATION BY SIGNING OFFICERS
----------------------------------------------------
We, the undersigned, _______________ and _______________ being the
_______________ and _______________ of The First American Financial
Corporation, the corporation which executed the Guaranty attached hereto, hereby
jointly and severally certify and represent to FATICO 1999 Trust that each of
the undersigned executed the Guaranty for and on behalf of said corporation and
that in so executing said instrument the undersigned were duly authorized to do
so in their named capacity as officers and by so executing to hereby bind said
guarantor corporation to the terms of said instrument as therein set forth.
____________________________(L.S.) _________________________________(L.S.)
Dated: December ___, 1999 Dated: December ___, 1999
EQUIPMENT SCHEDULE
SCHEDULE NO. 1
DATED THIS 29TH DAY OF DECEMBER, 1999
TO MASTER LEASE AGREEMENT DATED AS OF DECEMBER 27, 1999
Lessor & Mailing Address: Lessee & Mailing Address:
FATICO 1999 TRUST FIRST AMERICAN TITLE INSURANCE COMPANY
c/o Wilmington Trust Company, as Owner Trustee 1 First American Way
Rodney Square North Santa Ana, California 92707
1100 North Market Street
Wilmington, Delaware 19890-0001
This Equipment Schedule is executed pursuant to, and incorporates by reference
the terms and conditions of, and capitalized terms not defined herein shall have
the meanings assigned to them in, the Master Lease Agreement identified above
("Agreement"; said Agreement and this Equipment Schedule being collectively
referred to as "Lease"). This Equipment Schedule, incorporating by reference the
Agreement, constitutes a separate instrument of lease.
A. Equipment.
---------
Pursuant to the terms of the Agreement, Lessor agrees to acquire and
lease to Lessee the Equipment listed on Annex A attached hereto and made a part
hereof.
B. Financial Terms.
---------------
The financial terms of this Schedule are specified on Annex E attached
hereto and made a part hereof.
C. Insurance.
---------
1. Public Liability: $10,000,000, total liability per occurrence.
2. Casualty and Property Damage: An amount equal to the higher of
the Lease Balance or the full replacement cost of the Equipment.
This Schedule is not binding or effective with respect to the Agreement
or the Equipment until executed on behalf of Lessor and Lessee by authorized
representatives of Lessor and Lessee, respectively.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
FATICO 1999 TRUST FIRST AMERICAN TITLE INSURANCE COMPANY
By: Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
Attest:
By:___________________________
Name:_________________________
Title:________________________
Receipt of this original counterpart is hereby acknowledged on this ____ day of
December, 1999.
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Collateral Agent
By:___________________________
Name: Joan B. Makara
Title: Authorized Signatory
Counterpart No. ____ of 10 serially numbered manually executed counterparts. To
the extent, if any, that this document constitutes chattel paper under the
Uniform Commercial Code, no security interest in or sale of the lease created
hereby may be created or perfected through the transfer and possession of any
counterpart, other than the original counterpart containing the receipt therefor
executed by General Electric Capital Corporation, as Collateral Agent.
2
ANNEX A
TO
SCHEDULE NO. 1
DATED THIS 29TH DAY OF DECEMBER, 1999
TO MASTER LEASE AGREEMENT DATED AS OF DECEMBER 27, 1999
Equipment: All furniture, fixtures, and equipment, including (but not limited
to) the following located in the following counties:
ACCO storage units
acoustical panels
air compressors
air conditioning units
alarm systems
Apple Computers
Area Maps
ARM Pentium 400 CPUs
Artwork
AST Computers
automated document builders
automatic teller machine sirens
automatic teller machines
awnings
Back Pack Parallels
Backup Tape Drives
batteries
Binding Machines
Bio Pheumatic Lift Chairs
blinds
bookcases
Brother Printers
Bulk Mailing SW
cabinets
cables
calculators
Cap Desks
carpet
Cash Drawers
CD players
CD wire racks
Cellular Telephones
chairs
Chalk Boards
clocks
Coat Racks
coffeemakers
Compaq Deskpro 575 Computers
computer equipment
computer hard drives
computer memory
computer mice
Computer Stands
computer supplies
computer tapes
Computer Workstation
Computersamerica Servers
Conference Tables
Continuous Form Signers
Copier Tables
copiers
cornice boards
couches
coupling kits
Craden Printers
credenzas
Credit Manager 11 1200s
Credit Prompters
cubicles
Data Com Cables
data equipment
data lines
data processing equipment
decorations
Dell XPS T500 Mhz Pentiums
desks
Desks w/ Returns
dining room sets
dishwashers
disk controllers
display cabinets
disposals
Electrical Wiring
e-mail systems
Epson Stylus Clr Printers
escrow systems
Ethernet cards
Executive Chairs
fans
Fast Web consulting systems
fax boards
fax cartridges
Fax Machine Upgrades
fax machines
fax servers
file drawers
Fire Proof Files
Flags
forklifts
Furniture
Furniture & Equipment SF
generators
glass desk tops
hot water dispensers
HP Laserjet 4s
hutches
IBM Typewriters
IBM Wheelwriters
ice machines
Imagewriters
2
imaging systems
Intertel Phone Install
intranetware
keyboards
Kitchen Tables
ladders
laminators
lamps
lan lines
Lans Fax w/ Server
Large Folding Tables
Laser 5SI Printers
Laser Jet Printers
Laser Wires
Laserjet 800N Printers w/ 2/500 Sheet Bin & 3yr warranty
Lateral Files
library equipment
light fixtures
Lindsey-Ferrari furniture
Log Solution Hardware
logos
loveseats
mail room equipment
memory
Microwave Carts
microwaves
mirrors
Mita Faxs w/ tray
Mobiltech Car Phones
modems
monitor stands
monitors
Mosaic Hangings
motherboards
Neopost Postage Machines
nerve centers
netware
network components
Office Furniture
office support tools
Olympia Manual Typewriters
optical platters
P200 32MB 1/2 G w/Mon
Pactel Phone Systems
paging systems
paintings
panels
paper drills
Papercutters
parking lot attendant booth
pedestals
Phone Cards
phone headsets
photography equipment
pictures
3
Pictures and Paintings
PII266s 64MB 2.5G
Pitney Bowes Postage Machines
Plants and New Pots
port serial adapters
postal equipment
power supplies
PowerMac Computers and Monitors
Printer Cables
Printer HP Laserjets
printer memory
printer stands
Printer Tables
Printer-HWP Deskwriters
printers
Printers Ikidata ML 590
prints
Pritner HP 800Ns w/ Tray & Mailbox
projectors
Proline Pent Computers
rack cabinets
recorders/transcribers
Refrige Avanti
refrigerators
roll film carriers
Round End Tables
routers
rugs
scanners
Secretary Chairs
Secretary Returns
security systems
servers
service bars
sheet feeders
shelves
shredders
Side Chairs
signs
Small Folding Tables
sorters
Space Stations
Speaker Phone
Steno Chairs
Steno Desks
Steno Desks w/ Lamps
Storage Cabinets
Storage Shelves
storage units
surge and spike protectors
Swivel Chairs
tables
Tabletop Mailbox w/ envelope Feed & Stand
tape backups
Tape510 Tripack-B/U Units
4
Telephone Installation
telephone systems
televisions
Teller Counters
Tile
toners
tools
Trade Show Booths
trash cans
Typewriter Stands
typewriters
Unisys PW300 PCs
Unisys Terminals
V Shaped Desks
vacuum cleaners
vases
velobinders
Vertical Blinds w/ Valences
video cassette recorders
video conference equipment
virus scan programs
Wall Clocks
Wallpaper
WAN equipment
wanreader laser guns
water coolers
white boards
Wilson Shredders
window dressings
wiring
Workstation Lights
workstations
STATE COUNTY COST
- -------------------------------------------------------------
Alabama Jefferson
Arizona Maricopa
California Alameda
California Alpine/Amador
California Contra Costa
California El Dorado
California Fresno
California Humboldt
California Kern
California Kings
California Los Angeles
California Madera
California Monterey
California Nevada
California Orange
5
STATE COUNTY COST
- ----------------------------------------------------------------------------
California Oxnard
California Placer
California Riverside
California Sacramento
California San Bernardino
California San Diego
California San Francisco
California San Luis Obispo
California San Mateo
California Santa Barbara
California Santa Clara
California Santa Cruz
California Shasta
California Solano
California Sonoma
California Stanislaus
California Sutter
California Tulare
California Yolo
Connecticut Fairfield
Connecticut Hartford
DC District of Columbia
Delaware Kent
Delaware New Castle
Delaware Sussex
Florida Broward
Florida Clay
Florida Collier
Florida Dade
Florida Duval
Florida Escambia
Florida Franklin
Florida Hillsborough
Florida Indian River
Florida Lee
Florida Leon
Florida Manatee
Florida Marian
Florida Monroe
Florida Nassau
Florida Okaloosa
Florida Orange
Florida Osceola
Florida Palm Beach
Florida Pasco
Florida Pinellas
Florida Sarasota
Florida Seminole
Florida St. Lucie
Georgia Fulton
Idaho Bingham
6
STATE COUNTY COST
- ----------------------------------------------------------------------------
Illinois Cook
Illinois DuPage
Illinois Grundy
Illinois Kane
Illinois Lake
Illinois Madison
Illinois Mason
Illinois McHenry
Illinois Saint Clair
Illinois Will
Indiana Hancock
Indiana Hendricks
Indiana Johnson
Indiana Lake
Indiana Marion
Indiana Porter
Kentucky Fayette
Kentucky Kenton
Louisiana Orleans
Maine Cumberland
Maryland Baltimore City
Massachuetts Hampden
Massachuetts Suffolk
Michigan Bay
Michigan Calhoun
Michigan Clinton
Michigan Eaton
Michigan Emmet
Michigan Genesee
Michigan Ingham
Michigan Kent
Michigan Kent/Ottawa
Michigan Lapeer
Michigan Lenawee
Michigan Macomb
Michigan Midland
Michigan Monroe
Michigan Muskegon
Michigan Oakland
Michigan Oakland/Wayne
Michigan Ottawa
Michigan Saginaw
Michigan Shiawassee
Michigan Tuscola
Michigan Washtenaw
Michigan Wayne
Minnesota Hennepin
Mississippi Hinds
Missouri St. Louis
Nevada Clark
Nevada Washington
7
STATE COUNTY COST
- ----------------------------------------------------------------------------
New Hampshire Hillsborough
New Jersey Camden
New Jersey Middlesex
New Jersey Somerset
New Mexico Bernalillo
North Carlolina Guilford
Oklahoma Oklahoma City
Oregon Benton
Oregon Clackamas
Oregon Coos
Oregon Deschutes
Oregon Klamath
Oregon Lake
Oregon Lincoln
Oregon Linn
Oregon Marion
Oregon Multnomah
Oregon Polk
Oregon Tillamook
Oregon Washington
Pennsylvania Allegheny
Pennsylvania Lawrence
Pennsylvania Montgomery
Pennsylvania Philadelphia
Rhode Island Providence
South Carolina Richland
Tennessee Hamilton
Tennessee Shelby
Tennessee Williamson
Texas Denton
Utah Box Elder
Utah Cache
Utah Davis
Utah Duchesne
Utah Iron
Utah Millard
Utah Morgan
Utah Salt Lake
Utah Sanpete
Utah Sevier
Utah Summit
Utah Tooele
Utah Utah
Utah Washington
Vermont Chittenden
Virginia Fairfax
Virginia Norfolk
Virginia Richmond
Virginia Roanoke
Washington Clark
Washington King
8
STATE COUNTY COST
- ----------------------------------------------------------------------------
Washington Kitsap
Washington Mason
Washington Pacific
Washington Pierce
Washington Snohomish
Washington Thurston
Wisconsin Brown
Wisconsin Dane
Wisconsin Iowa
Wisconsin LaCrosse
Wisconsin Manitowoc
Wisconsin Milwaukee
Wisconsin Oconto
Wisconsin Outagamie
Wisconsin Portage
Wisconsin Shawano
Wisconsin Waupaca
Wisconsin Waushara
Wisconsin Winnebago
Wyoming Natrona
Wyoming Niobrara
Wyoming Platte
---------------
Total $81,037,000
===============
9
ANNEX B
TO
SCHEDULE NO. 1
DATED THIS 29TH DAY OF DECEMBER, 1999
TO MASTER LEASE AGREEMENT DATED AS OF DECEMBER 27, 1999
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS: FIRST AMERICAN TITLE INSURANCE COMPANY
("Seller"), for and in consideration of the sum of One Dollar ($1) and other
good and valuable consideration, provided by FATICO 1999 TRUST ("Buyer"), the
receipt of which is hereby acknowledged, does hereby sell, assign, transfer, set
over and convey to Buyer the equipment (the "Equipment") leased under Schedule
No. 1 dated as of December 29, 1999, executed pursuant to the Master Lease
Agreement dated as of December 27, 1999 (the "Master Lease Agreement"), each
between Seller and Buyer. Capitalized terms used herein without definition shall
have the meaning given them in the Master Lease Agreement.
Buyer and Seller agree and acknowledge that the sale and conveyance
contemplated hereby is solely for the purpose of granting to Buyer a security
interest in the Equipment. All Equipment in which an interest is conveyed hereby
shall remain in the possession of Seller or its Affiliates pursuant to the Lease
and legal title shall remain with Seller.
Buyer is purchasing the Equipment described above in reliance upon its
personal inspection and knowledge of the Equipment and in an "AS-IS, WHERE-IS",
condition.
SELLER MAKES NO WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND OR NATURE
EXCEPT THAT (1) SELLER HAS GOOD TITLE TO THE EQUIPMENT, FREE AND CLEAR OF ALL
LIENS, CLAIMS AND ENCUMBRANCES, (2) BUYER WILL ACQUIRE ITS INTEREST IN THE
EQUIPMENT FREE FROM ALL LIENS, CLAIMS AND ENCUMBRANCES, AND (3) SELLER HAS THE
RIGHT TO SELL AND CONVEY THE EQUIPMENT. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, SELLER MAKES NO WARRANTIES WITH RESPECT TO THE QUALITY, CONTENT,
CONDITION, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE EQUIPMENT
AND NO WARRANTIES AGAINST PATENT INFRINGEMENT OR THE LIKE.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Buyer and Seller have executed this Bill of Sale this
_____ day of _______________, _____.
BUYER: SELLER:
FATICO 1999 TRUST FIRST AMERICAN TITLE INSURANCE COMPANY
By: Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
By:_____________________________________ By:_____________________________________
Name:___________________________________ Name:___________________________________
Title:__________________________________ Title:__________________________________
ANNEX C
TO
SCHEDULE NO. 1
DATED THIS 29TH DAY OF DECEMBER, 1999
TO MASTER LEASE AGREEMENT DATED AS OF DECEMBER 27, 1999
CERTIFICATE OF ACCEPTANCE
To: FATICO 1999 TRUST
Pursuant to the provisions of the above Schedule and Master Lease
Agreement (collectively, the "Lease"), Lessee hereby certifies and warrants that
(a) all Equipment listed in the related Bill of Sale or invoice is in good
condition and appearance, installed (if applicable), at the Equipment Location
specified in Annex A to the Schedule, and in good working order; and (b) Lessee
accepts the Equipment for all purposes of the Lease and all attendant documents.
Lessee does further certify that as of the date hereof (i) Lessee is
not in default under the Lease; and (ii) the representations and warranties made
by Lessee pursuant to or under the Lease are true and correct on the date
hereof.
_____________________________________
Lessee's Authorized Representative
Dated: __________ ___, _____
ANNEX D
TO
SCHEDULE NO. 1
DATED THIS 29TH DAY OF DECEMBER, 1999
TO MASTER LEASE AGREEMENT DATED AS OF DECEMBER 27, 1999
RETURN PROVISIONS: Upon the expiration or any termination of the Term of this
- -----------------
Schedule provided that Lessee has elected not to exercise its extension option
or its purchase option pursuant to Section 9 of the Lease, Lessee shall, at its
expense:
(A) Properly remove all Lessee or Affiliate installed markings which are
not necessary for the operation, maintenance or repair of the Equipment.
(B) Ensure all Equipment and equipment operations conform to all
applicable local, state, and federal laws, health and safety guidelines.
(C) The Equipment shall be redelivered with all component parts in good
operating condition. All components must meet or exceed the manufacturer's
minimum recommended specifications unless otherwise specified.
(D) Upon sale of the Equipment to a third party, provide transportation
to any locations anywhere in the world selected by Lessor.
(E) Obtain and pay for a policy of transit insurance for the redelivery
period in an amount equal to the replacement value of the Equipment and the
Collateral Agent shall be named as the loss payee on all such policies of
insurance.
(F) Be responsible for the cost of all repairs, alterations, inspections,
appraisals, storage charges, insurance costs, demonstration costs, and other
related costs necessary to place the Equipment in such condition as to be in
complete compliance with this Lease.
(G) Lessor has the right to attempt resale of the Equipment from the
Equipment Locations with the Lessee's full cooperation and assistance, for a
period of one hundred twenty (120) days from Lease expiration. During this
period, the Equipment must remain operational with the necessary electrical
power to maintain and demonstrate the Equipment to any potential buyer.
(H) Lessor at its sole discretion may, from time to time, inspect the
Equipment at the Lessee's sole expense. If any discrepancies are found as they
pertain to the general condition of the Equipment, Lessor will communicate these
discrepancies to the Lessee in writing. Lessee shall have thirty (30) days to
rectify these discrepancies. Lessee shall pay all expenses for the reinspection
by the Lessor appointed expert, if corrective measures are required.
(I) The Equipment shall be free from all Contaminants and otherwise fully
in compliance with all Environmental Laws.
In addition, with respect to all computer and computer-related equipment:
(1) At least one hundred twenty (120) days and not more than one hundred
fifty (150) days prior to expiration of the Lease, provide to Lessor a detailed
inventory of all primary components of the Equipment. The inventory should
include, but not be limited to, a listing of model and serial numbers for all
primary components comprising the Equipment (i.e. laptops, processors, and
monitors).
(2) At least ninety (90) days prior to expiration of the Lease, cause
manufacturer's representative, qualified equipment maintenance provider, or
in-house computer support expert (acceptable to the Lessor),
to perform a comprehensive test of the hardware and operating system of the
Equipment; and if during such inspection, examination and test, the authorized
inspector finds either the hardware or operating system of the Equipment not
operating within the manufacturer's specifications, then Lessee shall repair or
replace such defective material and, after corrective measures are completed,
Lessee will provide for a follow-up inspection of the Equipment by the
authorized inspector.
(3) Provide for a comprehensive report which certifies that the Equipment
has been properly inspected, examined and tested and that the hardware and
operating system are operating within the manufacturer's specifications.
(4) At Lease termination or upon receiving reasonable notice from Lessor,
provide or cause the vendor(s), manufacturer(s), maintenance providers, or in-
house computer personnel to provide to Lessor the following documents: (1) one
set of service manuals and operating manuals including replacements and/or
additions thereto, such that all documentation is completely up-to-date; (2) one
set of documents, detailing maintenance records, and other technical data
concerning the set-up and operation of the Equipment, including replacements
and/or additions thereto, such that all documentation is completely up-to-date.
(5) Provide for the deinstallation, packing, transporting and certifying
of the Equipment to include, but not limited to, the following: (1) the
manufacturer's representative, maintenance provider, or in-house computer
support personnel shall de-install all Equipment (including all wire, cable and
mounting hardware) in accordance with the specifications of the manufacturer;
(2) the Equipment shall be packed properly and in accordance to the
manufacturer's recommendations; (3) Lessee shall transport the Equipment in a
manner consistent with the manufacturer's recommendations and practices; and (4)
Lessee shall obtain and pay for a policy of transit insurance for the redelivery
period in an amount equal to the replacement value of the Equipment and Lessor
shall be named as the loss payee on all such policies of insurance.
(6) At the request of Lessor, provide safe, secure storage for the
Equipment for one hundred twenty (120) days after expiration or earlier
termination of the Lease at an accessible location satisfactory to Lessor.
(7) Each item of the Equipment shall be not more than two and one-half (2
1/2) years old.
In addition, with respect to all furniture, fixtures and equipment (other than
computers or computer-related equipment):
(8) At least ninety (90) days and not more than one hundred twenty
(120) days prior to the termination of the Lease: (1) ensure Equipment has been
maintained and is operating within the manufacturer's specifications; (2) cause
manufacturer's representative, or other qualified maintenance provider,
acceptable to Lessor, to perform a physical inspection and test all of the
components and capabilities of the Equipment and provide a full inspection
report to Lessor, and that there should be no missing screws, bolts, fasteners,
etc.; the furniture will be free of all large scratches, marks, gouges, dents,
discoloration or stains; all drawers, runners and locks will be in good working
condition, will include keys; and there shall be no evidence of extreme use or
overloading, i.e. bowed or sagging shelves; and (3) if during such inspection
the Equipment is found not to be in compliance with the above, then Lessee shall
remedy them per the Lease Agreement and provide a follow-up inspection to verify
the Equipment meets the return provisions.
(9) Upon lease termination, Lessee shall (1) have the manufacturer's
representative, or other person acceptable to Lessor, de-install all Equipment
including all wire, cable and mounting hardware; (2) if applicable, ensure all
necessary permits and labor are obtained to deliver the Equipment; (3) the
Equipment shall be packed properly and in accordance with the manufacturer's
recommendations; (4) the Lessee shall provide for the transportation of the
Equipment, in a manner consistent with the manufacturer's recommendations and
practices, to any locations within the continental United States as Lessor shall
direct; and shall have the Equipment unloaded at such locations; (5) at Lessor's
choice, either (a) allow Lessor, at Lessor's expense, and provided Lessor has
provided reasonable notice to Lessee, to arrange for an on-site auction of the
Equipment which will be conducted in a manner that will not interfere with the
Lessee's business operations, or (b) Lessee shall provide free safe storage for
the Equipment for a period not to exceed one hundred twenty (120) days from the
Lease expiration.
2
ANNEX E
TO
SCHEDULE NO. 1
DATED THIS 29TH DAY OF DECEMBER, 1999
TO MASTER EQUIPMENT LEASE AGREEMENT DATED AS OF DECEMBER 27, 1999
FINANCIAL TERMS: The financial terms applicable with respect to this Schedule
- ---------------
are as follows:
1. Capitalized Lessor's Cost: $81,037,000.
2. Basic Term: sixty (60) months; or, with respect to each
subsequently executed Schedule, the then unexpired portion of the
Basic Term with respect to the first Schedule.
3. Basic Term Commencement Date: December 29, 1999.
4. Last Delivery Date: December 29, 1999.
5. Initial Lease Balance: $81,037,000 (provided, however, that
the Lease Balance shall be reduced from time to time by the
amount of each Principal Component actually paid by Lessee
hereunder; provided further that the Lease Balance shall not
be reduced solely as a result of a rejection of the Agreement
in the event of the bankruptcy of Lessee).
6. Lessee Federal Employer Identification Number: 95-2566122.
RENT: The Rent applicable with respect to this Schedule is as follows:
- ----
Commencing on the fifth Business Day after the initial Rent Payment
Period, and on the fifth Business Day after each successive Rent Payment Period
(or, in the case of the final Rent Payment Period, on the last day of the final
Rent Payment Period) (each, a "Rent Payment Date") during the Basic Term, Lessee
shall pay as rent ("Basic Term Rent" or "Rent") monthly installments of
principal and interest, in arrears, in the amount of the sum of the Principal
Component and the Interest Component. As used herein, "Rent Payment Period"
shall mean the period from and including the date on which Lessee executes the
Certificate of Acceptance with respect to the Equipment described on this
Schedule, to but excluding the twenty-ninth day of the next calendar month
thereafter, and the period from and including the twenty-ninth day of each
successive calendar month thereafter to but excluding the twenty-ninth day of
the next succeeding calendar month thereafter (provided, however, that the final
Rent Payment Period shall commence on (and include) the last day of the Rent
Payment Period immediately preceding the final Rent Payment Period and end on
(but exclude) the final Rent Payment Date). As used herein "Principal Component"
as to any Rent Payment Date shall mean the amount specified on Exhibit No. 2 to
this Annex E. As used herein, "Interest Component" as to any Rent Payment Date
shall mean the sum, for each day in the related Rent Payment Period (to the
extent the advance outstanding is funded by Commercial Paper) or the related
Payment Period (to the extent the Advance Outstanding is not funded by
Commercial Paper), of the product of the Daily Borrowing Rate (determined
pursuant to Exhibit No. 1 to this Annex E) for such day, times the Lease Balance
as of the immediately preceding Rent Payment Date.
LEASE BALANCE, MAXIMUM LESSEE RISK AMOUNT AND MAXIMUM LESSOR RISK AMOUNT: The
- ------------------------------------------------------------------------
Lease Balance, Maximum Lessee Risk Amount and Maximum Lessor Risk Amount with
respect to the Equipment described on this Schedule are as follows:
Maximum Maximum
End of Month Lease Balance Lessee Risk Amount Lessor Risk Amount
------------ ------------- ------------------ ------------------
60 42.8571 27.9610 14.8962
expressed as a percent of the Capitalized Lessor's Cost of the Equipment. If
Lessee exercises the option pursuant to Section 9(c) of the Agreement, the Lease
Balance shall be reduced by the amount received by Lessor pursuant to clause (i)
of Section 9(c) of the Agreement. Reductions shall be effective as of the date
such payments are received by Lessor as provided in Section 2(b) of the
Agreement and applied on the relevant Rent Payment Date.
2
EXHIBIT NO. 1 TO ANNEX E
------------------------
Daily Interest = CP Interest Amount + Liquidity Interest Amount +
- --------------
LOC Interest Amount + Margin Amount
Daily Borrowing Rate = (Daily Interest/Advance Outstanding)
- --------------------
CP Interest Amount = Borrower CP Net Amount x Daily Weighted Average CP
- ------------------
Rate x Edison Funding Factor
Borrower CP Net Amount = Advance Outstanding - Borrower Liquidity Loans
- ----------------------
Outstanding + Borrower Liquidity Deposits -Borrower
LOC Draws Outstanding + Borrower LOC Deposits
Weighted = Average CP Rate = Average of the rate of interest
- --------
for all tranches of outstanding Commercial Paper
issued by the Lender, weighted by the outstanding
Commercial Paper in each tranche
Daily Weighted Average
- ----------------------
CP Rate = Weighted Average CP Rate / 360
- -------
Edison Funding Factor = Net Proceeds Amount / Aggregate CP Net Amount
- ---------------------
Liquidity Interest
- ------------------
Amount = Borrower Liquidity Loans Outstanding x (Non-CP
- ------
Drawn Rate/360)
LOC Interest Amount = Borrower LOC Draws Outstanding x (LOC Draw Rate /
- -------------------
360)
Non-CP Drawn Rate = For any day in a Payment Period, an interest rate
- -----------------
per annum equal to:
(a) if the Liquidity Providers are required to
provide a Liquidity Loan with less than three
Business Days' notice or on a date other than
a Rent Payment Date (in which case the Base
Rate shall apply until the next Rent Payment
Date), if the LIBOR market is closed, or if
the Liquidity Agent determines that it is
illegal for any Liquidity Provider to make a
Liquidity Loan accruing interest at a rate
based upon LIBOR, the Base Rate; and
(b) otherwise LIBOR.
Base Rate = The higher of (a) the highest prime, base or
- ---------
equivalent rate of interest announced or published
on or most recently before such date by any of the
five (5) largest member banks of the New York
Clearing House Association, Inc. (with the
understanding that such rate may merely serve as a
basis upon which effective rates of interest are
calculated for loans making reference to such rate
and that such rate is not necessarily the lowest or
best rate at which such banks calculate interest or
extend credit), and (b) the Federal Funds Rate,
plus 2.00%.
Federal Funds Rate = The rate on overnight federal funds transactions
- ------------------
with members of the Federal Reserve System arranged
by federal funds brokers announced or published on
or most recently before such date by the Federal
Reserve Bank of New York.
LIBOR = For any Payment Period, the per annum rate for
- -----
deposits in Dollars for
a period of 30 days which appears on page "Ticker
LIBOR01M" of Bloomberg Capital Markets Screen as of
11:00 a.m., London time, on the last Business Day
of the immediately preceding Payment Period. If
such rate does not appear on such page on such day,
the rate will be determined on the basis of the
rates at which deposits in United States dollars
are offered by the reference banks selected by the
Operating Agent at approximately 11:00 a.m., London
time, on such day to prime banks in the London
interbank market for a period of one month
commencing on that day. The Operating Agent will
request the principal London office of each of the
reference banks to provide a quotation of its rate.
If at least two such quotations are provided, the
rate for that day will be the arithmetic mean of
the quotations. If fewer than two quotations are
provided as requested, the rate for that day will
be the arithmetic mean of the rates quoted by two
or more major banks in New York City, selected by
the Operating Agent, in its sole discretion at
approximately 11:00 a.m., New York City time, on
that day for loans in United States dollars to
leading European banks for a period of 30 days.
LOC Draw Rate = is set forth in Schedule 2 hereto.
- -------------
Margin Amount = Advance Outstanding x (Daily Margin (or, if a
- -------------
Default exists, Daily Default Margin)).
Daily Margin = the "Daily Margin" (determined pursuant to the
- ------------
pricing grid set forth below) / 360
Guarantor's Senior Unsecured
Credit Rating "Daily Margin"
----------------------------------------------
A-/A3 and higher 75
BBB+/Baa1 90
BBB/Baa2 105
BBB-/Baa3 120
BB+/Ba1 380
BB/Ba2 and below, withdrawn,
suspended or terminated 450
For purposes hereof, the applicable credit rating
shall be the higher of the credit rating specified
by Moody's Investors Service, Inc. and/or Standard
& Poor's Ratings Group, A Division of McGraw-Hill,
Inc., with respect to Guarantor's senior unsecured
credit at any date of determination; provided,
however, that if there is more than one level
rating difference between the two credit ratings or
either credit rating falls below BBB- or Baa3, then
the lower credit rating shall be applicable.
Daily Default Margin = (Daily Margin + 2.00%) / 360
- --------------------
2
DEFINITIONS
-----------
Aggregate CP Net Amount means the sum of the Borrower CP Net Amount and
- -----------------------
the corresponding amounts for all borrowers from
and sellers to Edison under the related funding
agreements.
Borrower Liquidity Deposits means the amount of proceeds from Borrower
- ---------------------------
Liquidity Loans Outstanding which cannot be used
to pay maturing Commercial Paper and are,
therefore, held in the Collateral Account until
Commercial Paper matures and can be paid.
Borrower Liquidity Loans
- ------------------------
Outstanding means as of any date, the aggregate
- -----------
outstanding principal amount of Liquidity Loans as
of such date; provided, however, that the Borrower
Liquidity Loans Outstanding shall not exceed
Advance Outstanding -Borrower Letter of Credit
Draws Outstanding + Borrower Letter of Credit
Deposits - Borrower CP Net Amount + Borrower
Liquidity Deposits.
Borrower LOC Deposits means the amount of proceeds from Borrower LOC
- ---------------------
Draws Outstanding which cannot be used to pay
maturing Commercial Paper and are, therefore, held
in the Collateral Account until Commercial Paper
matures and can be paid.
Borrower LOC Draws
- ------------------
Outstanding means as of any date the aggregate outstanding
- -----------
principal amount of proceeds from Borrower LOC
Draws allocated to the Borrower; provided,
however, that the Borrower LOC Draws Outstanding
shall not exceed Advance Outstanding - Borrower
LOC Draws Outstanding + Borrower Liquidity
Deposits - Borrower CP Net Amount + Borrower LOC
Deposits.
Net Proceeds Amount means the difference for all Commercial Paper
- -------------------
outstanding on the applicable date of the
aggregate face amount of such Commercial Paper
minus the discount therefrom reflected in the
price to the initial investor and the dealer fees
for such Commercial Paper.
Payment Period means, with respect to each Liquidity Loan,
- --------------
initially the period commencing on (and including)
the date such Liquidity Loan is made and ending on
(but excluding) the next Rent Payment Date and,
thereafter, the period commencing on (and
including) the last Rent Payment Date and ending
on (but excluding) the next Rent Payment Date.
3
Schedule 1 to Exhibit No. 1
---------------------------
LOC Draw Rate
- -------------
"LOC Draw Rate" means on any day in a Monthly Payment Period, an interest rate
- --------------
per annum equal to the higher of:
(a) the highest prime, base or equivalent lending rate of interest
announced or published on or most recently before such date by any of the five
largest member banks of the New York Clearing House Association, Inc. (with the
understanding that such rates may merely serve as a basis upon which effective
rates of interest are calculated for loans making reference to such prime, base
or equivalent rates and that such rates are not necessarily the lowest or best
rates at which such banks calculate interest or extend credit); and
(b) LIBOR, which shall equal for this purpose the per annum rate for
deposits in Dollars for a period of 30 days which appears on Telerate Page 3750
as of 11:00 a.m., London time, on the last Business Day of the immediately
preceding Monthly Payment Period. If such rate does not appear on Telerate Page
3750 on such day, the rate will be determined on the basis of the rates at which
deposits in United States dollars are offered by the reference banks selected by
the Operating Agent at approximately 11:00 a.m., London time, on such day to
prime banks in the London interbank market for a period of one month commencing
on that day. The Operating Agent will request the principal London office of
each of the reference banks to provide a quotation of its rate. If at least two
such quotations are provided, the rate for that day will be the arithmetic mean
of the quotations. If fewer than two quotations are provided as requested, the
rate for that day will be the arithmetic mean of the rates quoted by two or more
major banks in New York City, selected by the Operating Agent, in its sole
discretion at approximately 11:00 a.m., New York City time, on that day for
loans in United States dollars to leading European banks for a period of 30
days.
"Monthly Payment Period" means, with respect to each draw on the Letter of
- -----------------------
Credit or Residual Letter of Credit, any period commencing on the date in a
calendar month on which such draw is made or any subsequent first day of a
calendar month and ending on (and including) the last day of such calendar
month.
EXHIBIT NO. 2 TO ANNEX E
------------------------
Rent Payment Date Principal Component
----------------- -------------------
1 through 60 $ 771,781.34
ANNEX F
TO
SCHEDULE NO. 1
DATED THIS 29TH DAY OF DECEMBER, 1999
TO MASTER LEASE AGREEMENT DATED AS OF DECEMBER 27, 1999
ESTOPPEL/WAIVER AGREEMENT
_____________, _____
___________________
___________________
Gentlemen/Ladies:
FATICO 1999 TRUST ("Lessor"), has entered into, or is about to enter into,
a lease (the "Lease") with First American Title Insurance Company ("Lessee"),
pursuant to which Lessee has leased or will lease from Lessor certain personal
property (such property, together with any replacements thereof, being referred
to as the "Personal Property"). Some or all of the Personal Property is, or will
be, located at certain premises described on Annex A (the "Premises"). This
letter is being sent to you because of your interest in the Premises.
By your signature below, you hereby agree (and we shall rely on your
agreement) that: (i) the Personal Property is, and shall remain, personal
property regardless of the method by which it may be, or become, affixed to the
Premises; (ii) your interest in the Personal Property and any proceeds thereof
(including, without limitation, proceeds of any insurance therefor) shall be,
and remain, subject to the interest of Lessor and its assigns (until and unless
Lessor shall formally release or transfer its interest in the Personal Property
to Lessee); (iii) Lessor and its assigns, and their respective employees and
agents, shall have the right with prior notice, from time to time, to enter the
Premises for the purpose of inspecting the Personal Property; and (iv) Lessor
and its assigns, and their respective employees and agents, shall have the
right, upon any default by Lessee under the Lease, to enter the Premises and to
remove the Personal Property from the Premises. Lessor agrees to reimburse you
for any damages actually caused to the Premises by Lessor, or its employees or
agents, during any such removal. These agreements shall be binding upon, and
shall inure to the benefit of, any successors and assigns of the parties hereto.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
We appreciate your cooperation in this matter of mutual interest.
FATICO 1999 TRUST
By: Wilmington Trust Company,
not in its individual capacity, but
solely as Owner trustee
By:__________________________________
Name:________________________________
Title:_______________________________
2
AGREED TO AND ACCEPTED BY:
By:__________________________
Name:________________________
Title:_______________________
Date:____________________________, _____
[_] Mortgagee
[_] Landlord
[_] Realty Manager
3