<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 26, 1998
REGISTRATION NO. 333-48361
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------
FEDERATED INVESTORS, INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 6722 25-1111467
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation Classification Code
or organization) Number)
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
(412) 288-1900
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
JOHN W. MCGONIGLE
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
(412) 288-1900
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------
With Copies To:
MICHAEL C. MCLEAN
KIRKPATRICK & LOCKHART LLP
1500 OLIVER BUILDING
PITTSBURGH, PENNSYLVANIA 15222-2312
(412) 355-6500
Approximate date of commencement of the proposed sale of the securities to
the public: AT THE EFFECTIVE TIME OF THE MERGER DESCRIBED IN THIS REGISTRATION
STATEMENT.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
EXHIBIT INDEX IS ON PAGE II-3.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 1741 and 1742 of the Pennsylvania Business Corporation Law (the
"PBCL") provide that a business corporation shall have the power to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or proceeding whether civil, criminal,
administrative or investigative, by reason of the fact that such person is or
was a director, officer, employee or agent of another domestic or foreign
corporation for profit or not-for-profit, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such proceeding, if such person acted in good faith
and in a manner he reasonably believed to be in, or not opposed to, the best
interests of the corporation, and, with respect to any criminal proceeding,
has no reasonable cause to believe his conduct was unlawful. In the case of an
action by or in the right of the corporation, such indemnification is limited
to expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection with the defense or settlement of such action,
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person has been adjudged to be liable to the
corporation unless, and only to the extent that, a court determines upon
application that, despite the adjudication of liability but in view of all the
circumstances, such person is fairly and reasonably entitled to indemnity for
the expenses that the court deems proper.
PBCL Section 1744 provides that, unless ordered by a court, any
indemnification referred to above shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification is
proper in the circumstances because the director, officer, employee or agent
of the corporation has met the applicable standard of conduct. Such
determination shall be made:
(1) by the Board of Directors by a majority vote of a quorum consisting
of directors who were not parties to the proceeding; or
(2) if such a quorum is not obtainable or if obtainable and a majority
vote of a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion; or
(3) by the shareholders.
Notwithstanding the above, PBCL Section 1743 provides that to the extent
that a director, officer, employee or agent of a business corporation is
successful on the merits or otherwise in defense of any proceeding referred to
above as contained in sections 1741 and 1742, or in defense of any claim
therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith.
PBCL Section 1745 provides that expenses (including attorneys' fees)
incurred by an officer, director, employee or agent of a business corporation
in defending any such proceeding may be paid by the corporation in advance of
the final disposition of the action or proceeding upon receipt of an
undertaking to repay the amount advanced if it is ultimately determined that
the director, officer, employee or agent of the corporation is not entitled to
be indemnified by the corporation.
PBCL Section 1746 provides that the indemnification and advancement of
expenses provided by, or granted pursuant to, the foregoing provisions is not
exclusive of any other rights to which a person seeking indemnification may be
entitled under any bylaw, agreement, vote of shareholders or disinterested
directors or otherwise both as to action in such person's official capacity
and as to action in another capacity while holding office, and that
indemnification may be granted under any bylaw, agreement, vote of
shareholders or directors or otherwise for any action taken whether or not the
corporation would have the power to indemnify the person under any other
provision of law and whether or not the indemnified liability arises or arose
from any threatened,
II-1
<PAGE>
pending or completed action by or in the right of the corporation, provided,
however, that no indemnification may be made in any case where the act or
failure to act giving rise to the claim for indemnification is determined by a
court to have constituted willful misconduct or recklessness.
The By-Laws of the Registrant provide that the Directors, officers, agents
and employees of the Registrant shall be indemnified as of right to the
fullest extent now or hereafter not prohibited by law in connection with any
actual or threatened action, suit or proceeding, civil, criminal,
administrative, investigative or other (whether brought by or in the right of
the Registrant or otherwise) arising out of their service to the Registrant or
to another enterprise at the request of the Registrant.
PBCL Section 1747 permits a Pennsylvania business corporation to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another threatened, pending or completed action or other enterprise, against
any liability asserted against such person and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify the person against such liability under the
provisions described above.
The By-Laws of the Registrant provide that the Registrant may purchase and
maintain insurance to protect itself and any Director, officer, agent or
employee entitled to indemnification under the By-Laws against any liability
asserted against such person and incurred by such person in respect of the
service of such person to the Registrant whether or not the Registrant would
have the power to indemnify such person against such liability by law or under
the provisions of the By-Laws.
The Registrant maintains directors' and officers' liability insurance
covering its Directors and officers with respect to liabilities, including
liabilities under the Securities Act of 1933, as amended, which they may incur
in connection with their serving as such. Under this insurance, the Registrant
may receive reimbursement for amounts as to which the Directors and officers
are indemnified by the Registrant under the foregoing By-Law indemnification
provision. Such insurance also provides certain additional coverage for the
Directors and officers against certain liabilities even though such
liabilities may not be covered by the foregoing By-Law indemnification
provision.
As permitted by PBCL Section 1713, the By-Laws of the Registrant provide
that no Director shall be personally liable for monetary damages for any
action taken, unless such Director's breach of duty or failure to perform
constituted self-dealing, willful misconduct or recklessness. The PBCL states
that this exculpation from liability does not apply to the responsibility or
liability of a Director pursuant to any criminal statute or the liability of a
Director for the payment of taxes pursuant to Federal, state or local law. It
may also not apply to liabilities imposed upon directors by the Federal
securities laws. PBCL Section 1715(d) creates a presumption, subject to
exceptions, that a Director acted in the best interests of the corporation.
PBCL Section 1712, in defining the standard of care a Director owes to the
corporation, provides that a Director stands in a fiduciary relation to the
corporation and must perform his duties as a Director or as a member of any
committee of the Board in good faith, in a manner he reasonably believes to be
in the best interest of the corporation and with such care, including
reasonable inquiry, skill and diligence, as a person of ordinary prudence
would use under similar circumstances.
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<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) The following exhibits are filed as part of this registration statement:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
2.01 Agreement and Plan of Merger dated as of February 20, 1998 between
Federated Investors and the Company**
3.01 Restated Articles of Incorporation of the Company**
3.02 Restated By-Laws of the Company**
4.01 Form of Class A Common Stock certificate*
4.02 Form of Class B Common Stock certificate*
4.04 Stock Purchase Agreement dated August 1, 1989 between the Company and
Westinghouse Credit Corporation**
4.05 Intercompany Subordination Agreement dated June 15, 1996 by and among
the Company and its subsidiaries**
4.06 Shareholder Rights Agreement dated August 1, 1989 between the Company
and The Standard Fire Insurance Company, as amended through January
31, 1996**
4.07 Senior Secured Credit Agreement, dated as of January 31, 1996, by and
among Federated and the Banks set forth therein and PNC, National
Association**
4.08 Federated Note Purchase Agreement, dated as of June 15, 1996**
4.09 Federated Program Master Agreement, dated as of October 24, 1997,
among Federated, Federated Funding 1997-1, Inc., Federated Management
Company, Federated Securities Corp., Wilmington Trust Company, PLT
Finance, L.P., Putnam, Lovell & Thornton Inc. and Bankers Trust
Company (Filed herewith)
4.10 Federated Investors Program Initial Purchase Agreement, dated as of
October 24, 1997, between Federated Funding 1997-1, Inc., and
Wilmington Trust Company, solely as Trustee of the PLT Finance Trust
1997-1 (Filed herewith)
4.11 Federated Investors Program Revolving Purchase Agreement, dated as of
October 24, 1997, between Federated Funding 1997-1, Inc., and PLT
Finance, L.P. (Filed herewith)
4.12 Federated Investors Program Fee Agreement, dated as October 24, 1997,
between Federated Investors and PLT Finance, L.P. (Filed herewith)
4.13 Schedule X to Federated Program Master Agreement, dated as of October
24, 1997, among Federated, Federated Funding 1997-1, Inc., Federated
Management Company, Federated Securities Corp., Wilmington Trust
Company, PLT Finance, L.P., Putnam, Lovell & Thornton Inc. and Bankers
Trust Company (Filed herewith)
5.01 Opinion of Kirkpatrick & Lockhart LLP as to the legality of the
securities being registered*
9.01 Voting Shares Irrevocable Trust dated May 31, 1989**
10.01 Stock Incentive Plan**
10.02 Executive Annual Incentive Plan**
10.03 Federated Investors Tower Lease dated January 1, 1993, as amended on
December 2, 1995 (Filed herewith)
10.04 Federated Investors Tower Lease dated February 1, 1994 (Filed
herewith)
10.05 Centre City Tower Lease dated July 23, 1992, as amended**
21.01 Subsidiaries of the Registrant**
23.01 Consent of Kirkpatrick & Lockhart LLP (to be included in opinion to be
filed as Exhibit 5.01)*
23.02 Consent of Ernst & Young LLP**
23.03 Consent of KPMG Peat Marwick, LLP**
24.01 Power of Attorney**
27.01 Financial Data Schedule**
</TABLE>
- --------
*To be filed by amendment.
**Previously filed.
II-3
<PAGE>
(b) Financial statement schedules have been omitted because they are
inapplicable, are not required under applicable provisions of Regulation S-X,
or the information that would otherwise be included in such schedules is
contained in the Registrant's consolidated financial statements or accompanying
notes.
ITEM 22. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus
will contain the information called for by the applicable registration form
with respect to reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other Items of the applicable
form.
(6) That every prospectus (i) that is filed pursuant to paragraph (5)
immediately preceding, or (ii) that purports to meet the requirements of
section 10(a)(3) of the Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to the
registration statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(7) To respond to requests for information that is incorporated by reference
into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within
one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of
the registration statement through the date of responding to the request.
(8) To supply by means of a post-effective amendment all required information
concerning a transaction, and the company being acquired involved therein, and
that was not the subject of and included in the registration statement when it
became effective.
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<PAGE>
Insofar as indemnification for liabilities raising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter ha been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Pittsburgh, Commonwealth of
Pennsylvania, on March 26, 1998.
FEDERATED INVESTORS, INC.
By: /s/ John F. Donahue
----------------------------------
John F. Donahue
Chairman and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<S> <C>
SIGNATURE CAPACITY
DATE
/s/ John F. Donahue Chairman, Chief Executive March 26, 1998
- ------------------------- Officer and Director
John F. Donahue (Principal Executive
Officer)
* President, Chief Operating March 26, 1998
- ------------------------- Officer and Director
J. Christopher Donahue
* Director March 26, 1998
- -------------------------
John W. McGonigle
/s/ Thomas R. Donahue Chief Financial Officer March 26, 1998
- ------------------------- (Principal
Thomas R. Donahue Financial and Accounting
Officer)
*By: /s/ Thomas R. Donahue
---------------------
Thomas R. Donahue
Attorney-in-Fact
</TABLE>
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<PAGE>
Exhibit 4.09
==============================================================================
FEDERATED INVESTORS PROGRAM
MASTER AGREEMENT
Dated as of October 24, 1997
among
FEDERATED INVESTORS,
as Parent,
FEDERATED FUNDING 1997-1, INC.,
as Seller,
FEDERATED INVESTORS MANAGEMENT COMPANY,
as Transferor,
FEDERATED SECURITIES CORP.,
as Distributor,
Principal Shareholder Servicer and
Program Servicer Agent,
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee of the
PLT FINANCE TRUST 1997-1,
as Initial Purchaser,
PLT FINANCE, L.P.,
as Revolving Purchaser,
PUTNAM, LOVELL & THORNTON INC.,
as Program Administrator, and
BANKERS TRUST COMPANY,
not in its individual capacity
but solely as Funding and Collection Agent,
except as otherwise expressly provided
===============================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I RULES OF CONSTRUCTION; DEFINITIONS
1.01 Rules of Construction......................................... 2
1.02 Definitions................................................... 2
ARTICLE II EXECUTION AND DELIVERY OF
PROGRAM DOCUMENTS
2.01 Program Documents; Purchase Date.............................. 2
2.02 Execution and Delivery of Transfer
Agreement..................................................... 2
2.03 Execution and Delivery of
Purchase Agreement............................................ 3
2.04 Execution and Delivery of Program
Collection Agency Agreement................................... 3
2.05 Execution and Delivery of the Program
Servicer Agent Agreement...................................... 3
ARTICLE III CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF THE PARTIES PURSUANT TO THE PROGRAM
DOCUMENTS
3.01 Conditions to Obligations of the
Parties Under the Program Documents........................... 3
3.02 Conditions Precedent on the Initial
Purchase Date................................................. 4
3.03 Conditions Precedent on Each
Revolving Purchase Date....................................... 8
ARTICLE IV REPRESENTATIONS AND WARRANTIES
4.01 Representations and Warranties of
the Seller, the Transferor, the Parent and
the Distributor............................................... 8
4.02 Additional Representations and
Warranties of the Seller...................................... 12
4.03 Additional Representations and
Warranties of the Parent...................................... 14
4.04 Additional Representations and
Warranties of the Distributor................................. 15
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<PAGE>
4.05. Additional Representations and Warranties
of the Transferor............................................. 16
4.06 Representations and Warranties of the
Purchasers.................................................... 18
ARTICLE V COVENANTS
5.01 Covenants of the Seller, the Transferor,
the Parent and the Distributor................................ 19
5.02 Additional Covenants of the Seller............................ 23
5.03 Additional Covenants of the Parent............................ 23
5.04 Additional Covenants of the Distributor....................... 28
5.05 Additional Covenants of the Transferor........................ 29
ARTICLE VI EVENTS OF TERMINATION
6.01 Events of Termination......................................... 29
ARTICLE VII THE PROGRAM ADMINISTRATOR
7.01 Authorization and Action...................................... 33
7.02 Program Administrator's Reliance, Etc......................... 33
7.03 Rights of the Program Administrator........................... 33
ARTICLE VIII PARENT'S UNDERTAKINGS
8.01. Undertakings; Payment of Damages.............................. 34
8.02. Agreement Not Affected........................................ 34
8.03. Waiver of Notice; No Offset;
No Subrogation................................................ 35
ARTICLE IX MISCELLANEOUS
9.01. No Waiver; Modifications in Writing........................... 35
9.02. Payment....................................................... 35
9.03. Notices, Etc.................................................. 36
9.04. Costs and Expenses; Indemnification........................... 37
9.05. Taxes......................................................... 40
9.06. Execution in Counterparts..................................... 42
9.07. Binding Effect; Assignment.................................... 42
9.08. Governing Law; Submission to
Jurisdiction.................................................. 42
9.09. Severability of Provisions.................................... 43
9.10. Confidentiality............................................... 43
9.11. Intent of Agreement........................................... 43
9.12. Continuing Obligations........................................ 44
9.13. Limited Liability............................................. 44
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<PAGE>
9.14. Merger........................................................ 45
9.15. Further Acts.................................................. 45
9.16. Specific Performance; Other Rights
and Remedies.................................................. 45
9.17. No Proceedings................................................ 46
9.18. Additional Funds.............................................. 46
9.19. Trust Capacity................................................ 47
SCHEDULES
SCHEDULE I COMPANIES, FUNDS, SHARES AND RELATED MATTERS
SCHEDULE II ALLOCATION PROCEDURES
SCHEDULE III BANKRUPTCY REMOTE COVENANTS
SCHEDULE IV CONTINGENT DEFERRED SALES CHARGES
SCHEDULE V SCHEDULE OF TRANSFERABLE NASD CAP
SCHEDULE X RULES OF CONSTRUCTION; DEFINITIONS
EXHIBITS
EXHIBIT A FORM OF SELLER'S TRANSFER AGREEMENT
EXHIBIT B FORM OF INITIAL PURCHASE AGREEMENT
EXHIBIT C FORM OF TRANSFEROR'S TRANSFER AGREEMENT
EXHIBIT D FORM OF PROGRAM SERVICER AGENT AGREEMENT
EXHIBIT E FORM OF PROGRAM FUNDING AND COLLECTION
AGENCY AGREEMENT
EXHIBIT F FORM OF DISTRIBUTION PLAN
EXHIBIT G FORM OF DISTRIBUTOR'S CONTRACT
EXHIBIT H FORM OF PRINCIPAL SHAREHOLDER SERVICER'S
AGREEMENT
EXHIBIT I FORM OF SHAREHOLDER SERVICER'S AGREEMENT
EXHIBIT J FORM OF IRREVOCABLE PAYMENT INSTRUCTION
EXHIBIT K FORMS OF OPINIONS
EXHIBIT L FORM OF INVESTOR REPORT
EXHIBIT M FORM OF ADDITIONAL ELIGIBLE FUND ADDENDUM
iii
<PAGE>
FEDERATED INVESTORS PROGRAM
MASTER AGREEMENT
THIS FEDERATED INVESTORS PROGRAM MASTER AGREEMENT (this "Agreement"),
---------
dated as of October 24, 1997, among FEDERATED INVESTORS, a Delaware business
trust (together with its permitted successors and assigns, the "Parent"),
FEDERATED FUNDING 1997-1, INC., a Delaware corporation (together with its
permitted successors and assigns, in its capacity as seller hereunder and as
beneficial owner of the Initial Purchaser, the "Seller"), FEDERATED INVESTORS
MANAGEMENT COMPANY, a Pennsylvania corporation (together with its permitted
successors and assigns, the "Transferor"), FEDERATED SECURITIES CORP., a
Pennsylvania corporation (together with its permitted successors and assigns,
the "Distributor"), WILMINGTON TRUST COMPANY, not in its individual capacity but
solely as Owner Trustee of the PLT FINANCE TRUST 1997-1 (together with its
permitted successors and assigns, the "Initial Purchaser"), PLT FINANCE, L.P.
(together with its permitted successors and assigns, the "Revolving Purchaser"
and together with the Initial Purchaser, the "Purchasers"), PUTNAM, LOVELL &
THORNTON INC., a Delaware corporation (together with its permitted successors
and assigns, the "Program Administrator") and BANKERS TRUST COMPANY, not in its
individual capacity but solely as Funding and Collection Agent except as
otherwise expressly provided (together with its permitted successors and assigns
in such capacity, the "Funding and Collection Agent").
W I T N E S S E T H :
-------------------
WHEREAS, the Parent directly or indirectly owns all of the capital
stock of the Distributor, the Transferor and the Seller;
WHEREAS, the Distributor is the originator of certain "Portfolio
Assets" as hereinafter defined;
WHEREAS, the Parent, the Distributor, the Seller, the Transferor and
the Purchasers wish to establish a program pursuant to which the Purchasers will
acquire certain of the Portfolio Assets in accordance with the terms and
conditions set forth herein and in the other "Program Documents," as hereinafter
defined;
WHEREAS, the Purchasers have appointed the Program Administrator to
administer the Program;
WHEREAS, the Purchasers and the Program Administrator have appointed
the Funding and Collection Agent to serve as Funding and Collection Agent; and
<PAGE>
WHEREAS, the Purchasers and the Program Administrator wish to appoint
the Distributor as Program Servicer Agent in accordance with the terms and
conditions set forth herein and in the other Program Documents;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereto hereby agree as follows:
ARTICLE I
RULES OF CONSTRUCTION;
DEFINITIONS
Section 1.01. Rules of Construction. The rules of construction set
---------------------
forth in Schedule X hereto shall be applied to this Agreement.
Section 1.02. Definitions. Capitalized terms used herein and not
-----------
otherwise defined herein shall have the meanings ascribed thereto in Schedule X
attached hereto and by this reference made a part hereof.
ARTICLE II
EXECUTION AND DELIVERY OF PROGRAM DOCUMENTS
Section 2.01. Program Documents; Purchase Date. Subject to the terms
--------------------------------
and conditions of this Agreement and the other Program Documents, on or before
the first scheduled Purchase Date, each of the Parties severally agrees to
execute and deliver the other Program Documents to which it is to be a Party.
The Parties also agree that the events which are to occur on a Purchase Date
shall be deemed to occur simultaneously.
Section 2.02. Execution and Delivery of Transfer Agreements.
---------------------------------------------
(a) On the date hereof, the Distributor and the Transferor shall have
executed and delivered the Transferor's Transfer Agreement, and the
Transferor and the Seller shall have executed and delivered the Seller's
Transfer Agreement.
(b) Pursuant to the Transferor's Transfer Agreement, the Transferor
has acquired all right, title and interest in and to the Portfolio Assets
from the Distributor. Pursuant to the Seller's Transfer Agreement, the
Seller has acquired all right, title and interest in and to the Portfolio
Assets from the Transferor.
Section 2.03. Execution and Delivery of Purchase Agreements.
---------------------------------------------
(a) On the date hereof, the Seller and the Initial Purchaser shall
have executed and delivered the Initial Purchase Agreement. It is
contemplated that the Seller and the Revolving Purchaser will execute and
deliver the Revolving Purchase Agreement promptly hereafter.
2
<PAGE>
(b) Subject to the terms and conditions set forth herein and pursuant
to the Purchase Agreements, the Purchasers shall acquire all right, title
and interest in and to the Purchased Portfolio Assets from the Seller.
Section 2.04. Execution and Delivery of Program Funding and
---------------------------------------------
Collection Agency Agreement. On the date hereof, the Purchasers, the Program
- ---------------------------
Administrator, the Seller, the Distributor, the Transferor and the Funding and
Collection Agent shall have executed and delivered the Program Funding and
Collection Agency Agreement pursuant to which, among other things, the Funding
and Collection Agent shall receive Program Collections on the Portfolio Assets
and make distributions in respect thereof.
Section 2.05. Execution and Delivery of Program Servicer Agent
------------------------------------------------
Agreement. On the date hereof, the Distributor, the Purchasers and the Program
- ---------
Administrator shall have executed and delivered the Program Servicer Agent
Agreement pursuant to which the Distributor is appointed Program Servicer Agent.
ARTICLE III
CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF THE PARTIES PURSUANT TO THE PROGRAM DOCUMENTS
Section 3.01. Conditions to Obligations of the Parties Under the
--------------------------------------------------
Program Documents. The obligation of each Party to take the actions to be taken
- -----------------
by it under the Program Documents on any Purchase Date shall be subject to the
fulfillment or waiver on such Purchase Date of the following specified
conditions precedent set forth in Section 3.02 or Section 3.03 as applicable
(except that the obligation of any Party shall not be subject to such Party's
own performance or compliance):
(a) in the case of the Parent, the Distributor, the Program Servicer
Agent, the Transferor and the Seller, the fulfillment to their
satisfaction, or waiver by them, of the conditions precedent set forth in
clauses (a), (c), (f), (k) and (l) of Section 3.02 or in Section 3.03, as
applicable;
(b) in the case of the Program Administrator, the fulfillment to its
satisfaction, or waiver by it, of the conditions precedent set forth in all
clauses of Section 3.02 or in Section 3.03, as applicable;
(c) in the case of each Purchaser, the fulfillment to its
satisfaction, or waiver by it, of the conditions precedent set forth in all
clauses of Section 3.02 or in Section 3.03, as applicable; and
(d) in the case of the Funding and Collection Agent, the fulfillment
to its satisfaction or waiver by it, of the conditions precedent set forth
in clauses (a), (c) through (h), (k), (l) and (r) of Section 3.02 or in
Section 3.03, as applicable.
Section 3.02. Conditions Precedent on the Initial Purchase Date. The
-------------------------------------------------
conditions precedent for each Party as specified in Section 3.01 hereof for the
Initial Purchase Date are as follows:
3
<PAGE>
(a) Program Documents. The Program Documents shall have been duly
-----------------
authorized, executed and delivered by the other Parties thereto, and shall
be in full force and effect on such Purchase Date.
(b) Due Diligence. The Initial Purchaser and the Program
-------------
Administrator shall have completed and be reasonably satisfied with their
due diligence review of each Federated Entity, Company and Fund. Such due
diligence review may include, without limitation, discussions with rating
agencies, review of systems and procedures, review of UCC search reports,
and review of books and records.
(c) Representations and Warranties. All representations and
------------------------------
warranties of each Party contained in this Agreement and the other Program
Documents shall be true and accurate on and as of such Purchase Date as
though made on and as of such Purchase Date, except to the extent that such
representations and warranties relate solely to an earlier date (in which
case such representations and warranties shall be true and accurate on and
as of such earlier date).
(d) Security Documents. Copies of UCC financing statements and UCC
------------------
search reports, in form and substance acceptable to the Initial Purchaser
and the Program Administrator, covering the interests in the Portfolio
Assets conveyed by the Distributor to the Transferor pursuant to the
Transferor's Transfer Agreement and by the Transferor to the Seller
pursuant to the Seller's Transfer Agreement and in the Purchased Portfolio
Assets conveyed from the Seller to the Initial Purchaser pursuant to the
Initial Purchase Agreement as of such Purchase Date shall have been
delivered by the Distributor and the Seller to the Initial Purchaser and
evidencing to the satisfaction of the Program Administrator and the Initial
Purchaser the conveyance to the Initial Purchaser of an ownership interest
therein free and clear of Adverse Claims. Such financing statements shall
have been duly filed in all places where, and all other actions shall have
been taken which are, in the opinion of counsel for the Program
Administrator, necessary or advisable to perfect the interests reflected
thereon.
(e) Approvals. All Governmental Authorizations, Private
---------
Authorizations and Governmental Filings, if any, on the part of the Parent,
the Distributor, the Advisors, the Shareholder Servicer, the Transferor,
the Seller, the Funding and Collection Agent, the Companies, the Funds and
the Initial Purchaser that are required to be obtained or done in order to
permit the execution, delivery and performance by the Parent, the
Distributor, the Transferor, the Seller, the Funding and Collection Agent,
or the Initial Purchaser, as the case may be, of the Program Documents to
which it is a party shall have been duly obtained or delivered.
(f) Trust Documents. The other Parties shall have received certified
---------------
copies of (i) evidence that the execution, delivery and performance by the
Initial Purchaser of this Agreement and the other Program Documents to
which it is a party and any other documents to be executed by or on behalf
of the Initial Purchaser in connection with the transactions contemplated
hereby or thereby have
4
<PAGE>
been duly authorized, (ii) an incumbency certificate of Wilmington Trust
Company, as trustee of the Initial Purchaser as to the person or persons
authorized to execute and deliver all Program Documents to which the
Initial Purchaser is a party with specimen signatures of such persons
acting on behalf of the Initial Purchaser and (iii) a copy of the Trust
Agreement in respect of the Initial Purchaser.
(g) Corporate Documents. The other Parties shall have received (i) a
-------------------
copy of the certificate of incorporation or similar organizational document
of each of the Seller, the Transferor, the Parent and the Distributor
certified by the Secretary of State of the state of organization of such
Federated Entity, (ii) the by-laws or similar organizational document of
each of the Seller, the Transferor, the Parent and the Distributor and the
resolutions of the Board of Directors or governing body of each such
Federated Entity duly authorizing the execution, delivery and performance
by such Federated Entity of the Program Documents to which it is a party,
each certified by a Responsible Officer, (iii) an incumbency certificate of
each as to the person or persons authorized to execute and deliver all
Program Documents to which each such Federated Entity is a party with
specimen signatures of such persons acting on behalf thereof, and (iv) a
certificate of good standing of each of the Seller, the Transferor, the
Parent and the Distributor issued by the Secretary of State of the state of
organization of each such Federated Entity.
(h) Closing Certificates. On such Purchase Date, the following
--------------------
statements shall be true and each of the Initial Purchaser and the Program
Administrator shall have received a certificate of each of the Seller, the
Transferor, the Parent and the Distributor certifying as to the accuracy of
the following statements as to itself:
(i) the representations and warranties by it contained in
this Agreement and the other Program Documents to which
it is a party are true and accurate on and as of such
Purchase Date as though made on and as of the Purchase
Date, except to the extent that such representations
and warranties relate solely to an earlier date (in
which case such representations and warranties shall be
true and accurate on and as of such earlier date);
(ii) it has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied on
or prior to such Purchase Date; and
(iii) no event has occurred and is continuing, or will
result from the closing of the transactions on such
Purchase Date that constitutes an Event of Termination
or an event which, with the passage of time or notice
or both would constitute an Event of Termination.
5
<PAGE>
(i) Distribution Plans, Distributor's Contracts, Principal
------------------------------------------------------
Shareholder Servicer's Agreement and Shareholder Servicer's Agreement. The
---------------------------------------------------------------------
Program Administrator and the Initial Purchaser shall have received a copy
of a certificate of the President or any Vice President of the Parent
certifying that a true and complete copy of each of the following documents
is attached thereto and has been duly authorized, executed and delivered by
each of the parties thereto, and in the case of each Fund, has been
approved in the manner required by the Investment Company Act and the rules
and regulations adopted thereunder:
(i) the Distribution Plan of each Fund relating to the
Purchased Portfolio Assets, which shall be
substantially in the form of Exhibit F hereto;
(ii) the Distributor's Contracts relating to the Portfolio
Assets, which shall be substantially in the form of
Exhibit G hereto;
(iii) the Principal Shareholder Servicer's Agreement
relating to the Portfolio Assets, which shall be
substantially in the form of Exhibit H hereto; and
(iv) the Shareholder Servicer's Agreement relating to the
Portfolio Assets, which shall be substantially in the
form of Exhibit I hereto.
(j) Prospectus. The Program Administrator and the Initial Purchaser
----------
shall have received a copy of a certificate of the President or any Vice
President of the Parent certifying that a true and complete copy of the
current Prospectus for each Fund is attached and that no change therein has
been proposed which if in effect on the Initial Purchase Date would cause
the representation of the Parent set forth in Section 4.03(a) to be
incorrect.
(k) Illegality. No change shall have occurred after the date of
----------
execution and delivery of this Agreement in Applicable Law or regulations
thereunder or interpretations thereof by appropriate regulatory authorities
or any court that would make it illegal for any Party to execute, deliver
and perform the Program Documents to which it is a party and no action or
proceeding shall have been instituted nor shall any action or proceeding be
threatened before any court or governmental agency, nor shall any order,
judgment or decree have been issued by any court or governmental agency
prior to the Purchase Date, to set aside, restrain, enjoin or prevent the
completion and consummation of this Agreement or any other Program Document
or the transactions contemplated hereby or thereby.
(l) Obligations. Each obligation to be performed in favor of such
-----------
Party by any other Party on or before such Purchase Date pursuant to any
Program Document shall have been performed.
6
<PAGE>
(m) Opinions of Counsel. Each of the Initial Purchaser and the
-------------------
Program Administrator shall have received each of the following opinions
addressed to it and dated the Initial Purchase Date (and on which the
Investors are entitled to rely):
(i) & Worcester LLP, special New York and Sullivan
Investment Company Act counsel to the Parent, the
Distributor, the Transferor and the Seller,
substantially in the form of Exhibit K-1; and
(ii) Dickstein, Shapiro, Morin & Oshinsky LLP, special
counsel to each Company, substantially in the form of
Exhibit K-2.
(n) Certain Fees and Expenses. The Parent or the Distributor shall
-------------------------
have paid all reasonable fees and expenses of the Initial Purchaser and the
Program Administrator (including the reasonable accrued fees and expenses
of counsel to the Purchaser and the Program Administrator) then due and
payable in accordance herewith.
(o) Investor Reports. The Distributor shall have delivered to the
----------------
Initial Purchaser and the Program Administrator any Investor Reports due on
or prior to such Purchase Date, which shall be substantially in the form of
Exhibit L hereto and otherwise in form and substance reasonably
satisfactory to the Initial Purchaser and the Program Administrator.
(p) Program Collections. No Company shall be prevented by any
-------------------
Authority or by any Applicable Law from paying Program Collections and
Related Collections to the Program Collection Account in accordance with
the applicable Irrevocable Payment Instruction and no Company shall have so
asserted in writing.
(q) Closing Placement. The Placement of Placement Securities by the
-----------------
Initial Purchaser shall have closed, the net proceeds of which are
sufficient pay the Initial Purchase Price for the Purchased Portfolio
Assets.
(r) Other Documents. The Initial Purchaser and the Program
---------------
Administrator shall have received such other instruments, documents,
certificates and opinions as the Initial Purchaser and the Program
Administrator may have reasonably requested in order to establish the
taking of all appropriate corporate or partnership and other proceedings in
connection herewith, the consummation of the transactions contemplated
hereby, and compliance with the conditions herein set forth, in connection
with the Portfolio Assets relating to any Fund and the Purchase Price
payable on the Purchase Date, each such instrument, document, certificate
and opinion to be in form and substance reasonably satisfactory to such
Party.
Section 3.03. Conditions Precedent on Each Revolving Purchase Date.
----------------------------------------------------
The conditions precedent for each Party as specified in Section 3.01 hereof for
each Revolving Purchase Date shall be as specified in the Revolving Purchase
Agreement.
ARTICLE IV
7
<PAGE>
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Seller, the
-------------------------------------------------
Transferor, the Parent and the Distributor. Each of the Seller, the Transferor,
- ------------------------------------------
the Parent and the Distributor represents and warrants on and as of the date
hereof, on and as of each Purchase Date and, as to clause (k) hereof, on the
date such information is provided, as to itself and, in the case of the Parent,
as to each Federated Entity (other than the Seller, the Transferor and the
Distributor), as follows:
(a) it is duly organized and is validly existing and in good standing
under the laws of the jurisdiction of its organization, with full power and
authority to own and operate its property, conduct the business in which it
is now engaged and to execute and deliver and perform its obligations under
this Agreement and the other Program Documents to which it is a party, and
it is in compliance with all Applicable Law and duly qualified to do
business as a foreign corporation or business trust and is in good standing
in each jurisdiction in which the nature of its business or the performance
of its obligations under this Agreement and the other Program Documents to
which it is a party requires such qualification, where the failure to so
comply or to be so qualified could reasonably be expected to give rise to
an Adverse Effect;
(b) the execution, delivery and performance by it of this Agreement,
the other Program Documents to which it is a party and the other
instruments and agreements contemplated hereby or thereby have been duly
authorized by all requisite corporate action by it and have been duly
executed and delivered by it and constitute its legal, valid and binding
obligations, enforceable against it in accordance with their respective
terms, except as such enforceability may be limited by applicable
bankruptcy laws and any other similar laws affecting the rights and
remedies of creditors generally and by equitable principles;
(c) neither the execution and delivery of this Agreement, the other
Program Documents to which it is a party, or any instrument or agreement
referred to herein or therein, or contemplated hereby or thereby, nor the
consummation of any of the transactions herein or therein contemplated, nor
compliance with the terms, conditions and provisions hereof or thereof by
it (i) will conflict with, or result in a breach or violation of, or
constitute a default under, the certificate of its incorporation or by-
laws, (ii) will conflict with, or result in a breach or violation of, or
constitute a default under, or permit the acceleration of any obligation or
liability in, or but for any requirement of the giving of notice or the
passage of time (or both) would constitute such a conflict with, breach or
violation of, or default under, or permit any such acceleration in, any
contractual obligation or any agreement or document to which it is a party
or by which it or any of its properties is bound (or to which any such
obligation, agreement or document relates, including any Distributor's
Contract, any Principal Shareholder Servicer's Agreement, any Shareholder
Servicer's Agreement and any Distribution Plan) where such conflict, breach
or violation could reasonably be expected to give rise to an Adverse
Effect, (iii) will violate any Applicable Law, the violation of which could
reasonably be expected to give rise to an Adverse Effect, (iv) could
reasonably be expected to give
8
<PAGE>
rise to or permit the creation or imposition of any Adverse Claim upon any
Portfolio Assets or any Program Collections or any Related Collections
relating to any Fund, or (v) could, in and of themselves, reasonably be
expected to give rise to the termination of any Distributor's Contract, any
Principal Shareholder Servicer's Agreement, any Shareholder Servicer's
Agreement or any Distribution Plan;
(d) it has obtained all Governmental Authorizations and Private
Authorizations, and made all Governmental Filings, necessary for the
execution, delivery and performance by it of this Agreement, the other
Program Documents to which it is a party and the agreements and instruments
contemplated hereby or thereby and no consents which have not been obtained
or waivers under any instruments to which it is a party or by which it or
any of its properties is bound are required by it to be obtained in
connection with the execution, delivery or performance of this Agreement
and the other Program Documents, except to the extent the failure to so
obtain or make the same could not reasonably be expected to give rise to an
Adverse Effect;
(e) the principal place of business and principal executive office of
the Seller, the Transferor and the Distributor, and the place where any and
all records concerning the Purchased Portfolio Assets are kept is at their
address specified in Section 9.03 (except as otherwise permitted by Section
5.01(o));
(f) each of its representations and warranties made or deemed made
pursuant to the Program Documents is true and accurate (except to the
extent that such representations and warranties related solely to an
earlier date (in which case such representations and warranties shall be
true and accurate as of such earlier date)), and each of the applicable
conditions precedent set forth in Article III has been satisfied or waived
in writing;
(g) it is not in default in any of its obligations under this
Agreement or any other Program Document to which it is a party which
default could reasonably be expected to give rise to an Adverse Effect;
(h) there are no proceedings or investigations pending, or, to the
best of its knowledge, threatened, against it before any Authority (i)
asserting the invalidity of this Agreement, any other Program Document to
which it is a party or any certificate, document or agreement executed by
it in connection herewith or therewith, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or
any other Program Document, or (iii) seeking any determination or ruling
which, if granted, could reasonably be expected to adversely affect the
performance by it of its obligations under, or the validity or
enforceability of, this Agreement, any other Program Document to which it
is a party or any agreement, certificate or document executed by it in
connection herewith or therewith, which in each case, if adversely
determined, could otherwise reasonably be expected to give rise to an
Adverse Effect;
(i) it is not an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act;
9
<PAGE>
(j) it is not engaged principally or as one of its important
activities in the business of extending, or arranging for the extension of,
credit for the purpose of purchasing or carrying (x) any margin stock
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System or (y) any margin security within the meaning of Regulation
G of the Board of Governors of the Federal Reserve System and no part of
the proceeds of the Purchase Price or Transfer Price paid to it, if any,
under the Transfer Agreements or the Purchase Agreements will be used to
purchase or carry any margin stock or any margin securities, respectively,
within the meaning of said regulations (except investments in funds managed
by an Affiliate of the Parent in accordance with ordinary business
operations) or to extend credit to others for such purpose in a manner
which is inconsistent with or a violation of the provisions of said
regulations, and it will not hold margin stock or margin securities
(including shares in such funds) such that the aggregate current market
value (as defined in said regulations) of all thereof shall exceed 25% of
the value (as determined by any reasonable method) of its consolidated
assets;
(k) all written information provided by it or by DST Systems, Inc. at
its request to the Purchasers, the Program Administrator or any other
Person in writing for purposes of or in connection with this Agreement, the
other Program Documents to which it is a party or the transactions
contemplated hereby or thereby is, and all such information hereafter
provided by any such Person to the Purchaser, the Program Administrator or
any other Person in writing will be, when taken as a whole, true, correct
and complete in all material respects and not misleading;
(l) Neither it nor any ERISA Affiliate has engaged in a "prohibited
transaction," as such term is defined in Section 4975 of the Code or in a
transaction subject to the prohibitions of Section 406 of ERISA, which
would subject it or any ERISA Affiliate (after giving effect to any
exemption) to the tax or penalty on prohibited transactions imposed by
Section 4975 of the Code, Section 502 of ERISA or any other liability under
ERISA which tax, penalty or other liability would have an Adverse Effect.
Neither the transactions contemplated hereby nor the exercise of any of the
Purchaser's or the Program Administrator's rights and remedies under any of
the Program Documents constitutes a prohibited transaction under ERISA or
the Code or otherwise results or will result in the Purchaser or the
Program Administrator being a fiduciary or party in interest under ERISA
with respect to an ERISA plan or its assets or the Purchased Portfolio
Assets or being deemed in violation of Section 404 or Section 406 of ERISA;
(m) it has filed or caused to be filed all federal, state and local
tax returns which are required to be filed (except where such nonfiling
could not reasonably be expected to have an Adverse Effect), and paid or
caused to be paid all taxes as shown on said returns or any other taxes or
assessments payable by it to the extent that such taxes have become due
unless the same are being contested in good faith by appropriate
proceedings, and in respect of which appropriate reserves have been
established and the nonpayment of which could not reasonably be expected to
have an Adverse Effect;
10
<PAGE>
(n) the Purchased Portfolio Assets relating to each Fund constitute
Eligible Portfolio Assets;
(o) no Share of a Fund to which a Purchased Portfolio Asset relates
contains any Conversion Feature other than a Permitted Conversion Feature;
(p) no Share of a Fund taken into account in computing the Purchase
Price paid pursuant to the Purchase Agreements entitles the holder thereof
to redeem the same in a Free Redemption except in the specific situations
set forth in the Prospectus of such Fund as in effect on the date hereof or
pursuant to the Systematic Withdrawal Program;
(q) it is not contemplating the filing of a petition by it under any
state or federal bankruptcy or insolvency laws, and it has no Actual
Knowledge of any Person contemplating the filing of any such petition
against it;
(r) all financial statements of it and its consolidated subsidiaries
delivered to the other Parties fairly present its assets, liabilities and
financial condition and income as of the dates thereof and have been
prepared in accordance with generally accepted accounting principles
consistently applied; as of the date hereof, there exists no equity or
long-term investments in, or outstanding advances to, or guaranties of, any
Person except such equity, investment, advances, or guaranties reflected in
the financial statements or in the footnotes thereto;
(s) all action necessary or advisable to protect, preserve and perfect
the applicable Purchaser's first priority ownership interest in the
Purchased Portfolio Assets free and clear of all Adverse Claims has been
duly and effectively taken and no security agreement, financing statement,
equivalent security or lien instrument or continuation statement covering
all or any part of such Purchased Portfolio Assets is required to be on
file or on record in any jurisdiction, except such as may have been filed,
recorded or made as contemplated by this Agreement and the other Program
Documents; and
(t) the factual assumptions set forth in the opinion of Sullivan &
Worcester dated as of the Initial Purchase Date on certain bankruptcy
matters including "true sale" and "substantive consolidation" issues are
true and correct as of such date.
Section 4.02. Additional Representations and Warranties of the
------------------------------------------------
Seller. The Seller represents and warrants, on and as of the date hereof and on
- ------
and as of each Purchase Date, as follows:
(a) the Seller was founded solely for the purpose of performing its
obligations under the Program Documents and activities incidental thereto,
and it has the requisite corporate power and authority and legal right to
sell Portfolio Assets relating to each Fund sold on such Purchase Date, and
the Program Collections and the Ancillary Rights with respect thereto, to
the applicable Purchaser in accordance with the terms of this Agreement and
the applicable
11
<PAGE>
Purchase Agreement and the Seller has duly authorized each such sale to the
applicable Purchaser by all necessary action;
(b) the transfer of Portfolio Assets to the Seller under the Seller's
Transfer Agreement and the transfer of Portfolio Assets to the applicable
Purchaser under the applicable Purchase Agreement on such Purchase Date
each constitutes a valid and complete True Sale of all right, title and
interest in and to such Portfolio Assets, as the case may be, free and
clear of any Adverse Claim; such transfers have not been made with an
intent to hinder, delay or defraud any present or future creditor; each of
the Purchase Price and the Transfer Price is fair consideration and of
reasonably equivalent value to the Portfolio Assets so transferred; and
immediately after the purchase pursuant to the applicable Purchase
Agreement the Distributor, the Transferor and the Seller will remain
solvent and will have adequate capital for the conduct of its business;
(c) immediately after the transfer of the Portfolio Assets to the
Seller under the Seller's Transfer Agreement and immediately prior to each
purchase of the Purchased Portfolio Assets by the applicable Purchaser
under the Purchase Agreement on such Purchase Date, (i) no party claiming
through the Seller has any right, title or interest in such Portfolio
Assets, the Ancillary Rights with respect thereto or the Program
Collections in respect thereto, including any payments or proceeds in
respect thereto, (ii) the Seller owns such Portfolio Assets, the Ancillary
Rights with respect thereto and the Program Collections in respect thereto
free and clear of all Adverse Claims or other such restrictions on transfer
created by or arising out of the acts or omissions of any Federated Entity,
and (iii) such Portfolio Assets, the Ancillary Rights with respect thereto
and the right to Program Collections in respect thereto have not been sold,
transferred or assigned by the Seller to any other Person;
(d) this Agreement and the Purchase Agreements and the actions of the
Seller required to be taken pursuant to the terms hereof and thereof are
and at all times shall be effective to transfer to the applicable Purchaser
all of the Seller's right, title and interest in, to and under the
Purchased Portfolio Assets free and clear of any Adverse Claim;
(e) the Seller is not prevented by any Applicable Law from paying the
Program Collections directly to the Program Collection Account in
accordance with the applicable Irrevocable Payment Instruction;
(f) the Seller is in full compliance with the Bankruptcy Remote
Covenants;
(g) the Seller has clearly and unambiguously marked all of its books,
records and electronic, computer files and master data processing records
relating to the Portfolio Assets to indicate the interests of the
applicable Purchaser in the Purchased Portfolio Assets;
(h) giving effect to the transactions contemplated by the Program
Documents, the sum of the Seller's assets exceeds and will, immediately
following
12
<PAGE>
the transactions contemplated hereby, exceed the Seller's total liabilities
(including subordinated, unliquidated, disputed and contingent
liabilities). The Seller's assets do not and, immediately following the
transactions contemplated hereby will not, constitute unreasonably small
capital to carry out its business as conducted or as proposed to be
conducted. The Seller does not intend to, and does not believe that it
will, incur debts and liabilities (including contingent liabilities and
other commitments) beyond its ability to pay such debts as they mature
(taking into account the timing and amounts to be payable on or in respect
of obligations of the Seller); and
(i) the Seller has not used and will not use any tradenames or assumed
names other than Federated Funding 1997-1, Inc.
Section 4.03. Additional Representations and Warranties of the
------------------------------------------------
Parent. The Parent represents and warrants on and as of the date hereof and on
- ------
and as of each Purchase Date, as follows:
(a) the Parent has delivered to the Purchasers and the Program
Administrator a true, correct and complete copy of each Distribution Plan,
Distributor's Contract, Principal Shareholder Servicer's Agreement,
Shareholder Servicer's Agreement, Advisory Agreement and each Prospectus in
effect on the date of this Agreement, each of which is in full force and
effect and has not been amended in any manner from the form delivered
except: (i) in respects which could not reasonably be expected to give
rise to an Adverse Effect or (ii) with the prior written consent of the
Program Administrator; and the Fundamental Investment Objectives and
Policies relating to each Fund have not been changed in any respect from
those set forth in the Prospectus so delivered, except as approved by (1)
the board of directors or trustees of such Fund and (2) the shareholders of
such Fund;
(b) each of the Companies and each Advisor is in compliance with the
Fundamental Investment Objectives and Policies relating to each Fund;
(c) each of the Distributor, the Principal Shareholder Servicer, the
Program Servicer Agent, the Seller, the Transferor, each Advisor, the
Shareholder Servicer, each Company and the Advisory Agreement, Distribution
Plan, the Distributor's Contract, the Principal Shareholder Servicer's
Agreement, the Shareholder Servicer's Agreement, the Prospectus and the
Contingent Deferred Sales Charge arrangements, in each case relating to
each Fund, is in compliance in all material respects with Applicable Law,
including Rule 12b-1 of the Investment Company Act and the Conduct Rules;
(d) the Asset Based Sales Charge and Contingent Deferred Sales Charge
and Shareholder Servicing Fee arrangements relating to the Shares of each
Fund and the payments provided for in, and actually being made pursuant to,
the Distribution Plan and the Prospectus for each such Fund are fairly and
accurately described in the Distribution Plan and Prospectus relating to
such Fund;
13
<PAGE>
(e) the Parent is the indirect record and beneficial owner of all of
the outstanding shares of capital stock of the Seller, the Transferor, the
Shareholder Servicer and the Distributor;
(f) the Distributor is a registered broker-dealer under the Exchange
Act, and is a member of the NASD;
(g) each Advisor is a registered investment adviser under the
Investment Advisers Act;
(h) each Company is registered as an investment company under the
Investment Company Act; and
(i) neither the Seller, the Transferor, the Distributor, any Company
nor any Transfer Agent is prevented by any Applicable Law from paying the
Program Collections directly to the Program Collection Account in
accordance with the applicable Irrevocable Payment Instruction.
Section 4.04. Additional Representations and Warranties of the
------------------------------------------------
Distributor. The Distributor represents and warrants, on and as of the date
- -----------
hereof and on and as of each Purchase Date, in its capacities as Distributor,
Principal Shareholder Servicer and Program Servicer Agent, as follows:
(a) The Distributor has the requisite corporate power and authority
and legal right to sell Portfolio Assets relating to each Fund, and the
Program Collections and the Ancillary Rights with respect thereto, to the
Transferor in accordance with the terms of the Transferor's Transfer
Agreement and the Distributor has duly authorized each such sale to the
Transferor by all necessary action;
(b) the transfer of Portfolio Assets to the Transferor under the
Transferor's Transfer Agreement constitutes a valid and complete True Sale
to the Transferor of all right, title and interest in and to such Portfolio
Assets free and clear of any Adverse Claim; such transfer has not been made
with an intent to hinder, delay or defraud any present or future creditor;
the Transfer Price for such Portfolio Assets is fair consideration and of
reasonably equivalent value to the Portfolio Assets so transferred; and
immediately after the purchase pursuant to the Transferor's Transfer
Agreement the Distributor will remain solvent and will have adequate
capital for the conduct of its business;
(c) immediately after each transfer of Portfolio Assets to the
Transferor under the Transferor's Transfer Agreement and by the Transferor
to the Seller under the Seller's Transfer Agreement, and immediately prior
to each purchase of Purchased Portfolio Assets by the applicable Purchaser
under the applicable Purchase Agreement on such Purchase Date, (i) no party
claiming through the Distributor has any right, title or interest in such
Portfolio Assets, the Ancillary Rights with respect thereto or the Program
Collections in respect thereto, including any payments or proceeds in
respect thereto, and (ii) the Seller owns such Portfolio Assets, the
Ancillary Rights with respect thereto and the Program Collections in
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respect thereto free and clear of all Adverse Claims or other such
restrictions on transfer created by or arising out of the acts or omissions
of the Distributor;
(d) neither the Distributor (as Distributor, Principal Shareholder
Servicer or Program Servicer Agent) nor any Company or Transfer Agent is
prevented by any Applicable Law from paying the Program Collections
directly to the Program Collection Account in accordance with the
applicable Irrevocable Payment Instruction;
(e) the Distributor is a registered broker-dealer under the Exchange
Act, and is a member of the NASD;
(f) the Distributor has clearly and unambiguously marked its books,
records and electronic, computer files and master data processing records
relating to the Portfolio Assets to indicate the interests of the
Transferor, the Seller and the applicable Purchaser in the Portfolio
Assets;
(g) giving effect to the transactions contemplated by the Program
Documents, the sum of the Distributor's assets exceeds and will,
immediately following the transactions contemplated hereby, exceed the
Distributor's total liabilities (including subordinated, unliquidated,
disputed and contingent liabilities). The Distributor's assets do not and,
immediately following the transactions contemplated hereby will not,
constitute unreasonably small capital to carry out its business as
conducted or as proposed to be conducted. The Distributor does not intend
to, and does not believe that it will, incur debts and liabilities
(including contingent liabilities and other commitments) beyond its ability
to pay such debts as they mature (taking into account the timing and
amounts to be payable on or in respect of obligations of the Distributor);
and
(h) the Distributor has not used and will not use any trade names or
assumed names other than Federated Securities Corp.
Section 4.05. Additional Representations and Warranties of the
------------------------------------------------
Transferor. The Transferor represents and warrants, on and as of the date
- ----------
hereof and on and as of each Purchase Date, as follows:
(a) the Transferor has the requisite corporate power and authority and
legal right to sell Portfolio Assets relating to each Fund, and the Program
Collections and the Ancillary Rights with respect thereto, to the Seller in
accordance with the terms of the Seller's Transfer Agreement and the
Transferor has duly authorized each such sale to the Seller by all
necessary action;
(b) the transfer of Portfolio Assets to the Seller under the Seller's
Transfer Agreement and the transfer of Portfolio Assets to the applicable
Purchaser under the applicable Purchase Agreement on such Purchase Date
each constitutes a valid and complete True Sale of all right, title and
interest in and to such Portfolio Assets, as the case may be, free and
clear of any Adverse Claim; such transfers have not been made with an
intent to hinder, delay or defraud any present or future creditor; each of
the Purchase Price and the Transfer Price is fair consideration and
15
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of reasonably equivalent value to the Portfolio Assets so transferred; and
immediately after the purchase pursuant to the applicable Purchase
Agreement the Distributor, the Transferor and the Seller will remain
solvent and will have adequate capital for the conduct of its business;
(c) immediately after the transfer of the Portfolio Assets to the
Seller under the Seller's Transfer Agreement and immediately prior to each
purchase of the Purchased Portfolio Assets by the applicable Purchaser
under the Purchase Agreement on such Purchase Date, (i) no party claiming
through the Transferor has any right, title or interest in such Portfolio
Assets, the Ancillary Rights with respect thereto or the Program
Collections in respect thereto, including any payments or proceeds in
respect thereto, (ii) the Seller owns such Portfolio Assets, the Ancillary
Rights with respect thereto and the Program Collections in respect thereto
free and clear of all Adverse Claims or other such restrictions on transfer
created by or arising out of the acts or omissions of any Federated Entity,
and (iii) such Portfolio Assets, the Ancillary Rights with respect thereto
and the right to Program Collections in respect thereto have not been sold,
transferred or assigned by the Transferor to any other Person;
(d) the Transferor is not prevented by any Applicable Law from paying
the Program Collections directly to the Program Collection Account in
accordance with the applicable Irrevocable Payment Instruction;
(e) the Transferor has clearly and unambiguously marked all of its
books, records and electronic, computer files and master data processing
records relating to the Portfolio Assets to indicate the interests of the
applicable Purchaser in the Purchased Portfolio Assets;
(f) giving effect to the transactions contemplated by the Program
Documents, the sum of the Transferor's assets exceeds and will, immediately
following the transactions contemplated hereby, exceed the Transferor's
total liabilities (including subordinated, unliquidated, disputed and
contingent liabilities). The Transferor's assets do not and, immediately
following the transactions contemplated hereby will not, constitute
unreasonably small capital to carry out its business as conducted or as
proposed to be conducted. The Transferor does not intend to, and does not
believe that it will, incur debts and liabilities (including contingent
liabilities and other commitments) beyond its ability to pay such debts as
they mature (taking into account the timing and amounts to be payable on or
in respect of obligations of the Transferor); and
(g) the Transferor has not used and will not use any tradenames or
assumed names other than Federated Investors Management Company and
Federated Disbursing Corp.
Section 4.06. Representations and Warranties of the Purchasers. Each
------------------------------------------------
of the Initial Purchaser and the Revolving Purchaser represents and warrants on
and as of the date hereof, and on and as of each Purchase Date on which it
purchases Purchased Portfolio Assets, as to itself, as follows:
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(a) it is duly organized and is validly existing and in good standing
under the laws of the jurisdiction of its organization, with full power and
authority to execute and deliver and perform its obligations under this
Agreement and the other Program Documents to which it is a party, and it
is duly qualified to do business as a foreign corporation or business trust
and is in good standing in each jurisdiction in which the performance of
its obligations under this Agreement and the other Program Documents to
which it is a party requires such qualification, where the failure to be so
qualified could reasonably be expected to give rise to an Adverse Effect;
(b) the execution, delivery and performance by it of this Agreement,
the other Program Documents to which it is a party and the other
instruments and agreements contemplated hereby or thereby have been duly
authorized by all requisite trust or partnership, as the case may be,
action by it and have been duly executed and delivered by it and constitute
its legal, valid and binding obligations, enforceable against it in
accordance with their respective terms, except as such enforceability may
be limited by applicable bankruptcy laws and any other similar laws
affecting the rights and remedies of creditors generally and by equitable
principles;
(c) neither the execution and delivery of this Agreement, the other
Program Documents to which it is a party, or any instrument or agreement
referred to herein or therein, or contemplated hereby or thereby, nor the
consummation of any of the transactions herein or therein contemplated, nor
compliance with the terms, conditions and provisions hereof or thereof by
it (i) will conflict with, or result in a breach or violation of, or
constitute a default under, its trust document or partnership agreement, as
the case may be, or (ii) will violate any Applicable Law, the violation of
which could reasonably be expected to give rise to an Adverse Effect; and
(d) it has sufficient resources, including its rights under certain
funding arrangements and its ability to access the capital markets, to meet
its obligations under the Program Documents.
ARTICLE V
COVENANTS
Section 5.01. Covenants of the Seller, the Transferor, the Parent and
-------------------------------------------------------
the Distributor. Each of the Seller, the Transferor, the Parent and the
- ---------------
Distributor covenants and agrees that it shall and, in the case of the Parent,
that it shall cause each Federated Entity other than the Seller, the Transferor
and the Distributor to:
(a) (i) preserve and maintain its legal existence and all of its
material rights, privileges and franchises, and duly observe and conform to
all requirements of Applicable Law relative to it, the conduct of its
business or to its properties or assets, (ii) preserve and keep in full
force and effect its corporate existence, rights, privileges and
franchises, and maintain records of its resolutions or similar actions
17
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regarding the transactions contemplated by the Program Documents and (iii)
obtain, maintain and keep in full force and effect all Governmental
Authorizations and Private Authorizations which are necessary or
appropriate to properly carry out the transactions contemplated to be
performed by it under this Agreement and the other Program Documents,
except in such case where the failure to so observe, conform to, preserve,
obtain, maintain or keep in full force and effect could not reasonably be
expected to give rise to an Adverse Effect;
(b) duly fulfill all obligations on its part to be performed under or
in connection with this Agreement and the other Program Documents and the
agreements and instruments entered into in connection herewith or
therewith;
(c) keep proper books of record and account in accordance with its
normal business practice in which full and appropriate entries shall be
made of all dealings or transactions in relation to its business and
activities and shall (in the case of the Seller, the Transferor and the
Distributor) mark its data processing or other records, if any, so as to
clearly indicate that the Purchased Portfolio Assets have been sold to the
applicable Purchaser;
(d) promptly deliver to the Program Administrator copies of any
amendments or modifications to its certificate of incorporation or by-laws,
certified by an authorized officer;
(e) (i) promptly give written notice to the Program Administrator of
the occurrence of any Event of Termination (or event which, with the
passage of time or notice, or both, would constitute an Event of
Termination), the failure of any conditions precedent set forth in Section
3.02 or Section 3.03 to be fully satisfied on or immediately prior to the
applicable Purchase Date, or any breach of any term or condition of any
Program Document, which in each case relates to or is caused by it or any
of its Affiliates or the performance of any such Persons under any Program
Document, (ii) give written notice to the Program Administrator, promptly
after it becomes aware thereof, of any other Event of Termination (or event
which with the passage of time, notice or both would constitute such an
Event of Termination), or the failure of any other conditions precedent set
forth in Section 3.02 or Section 3.03 or any other breach of any terms or
conditions of any Program Documents, and (iii) promptly give written notice
to the Program Administrator of any litigation or proceedings with respect
to it or any of its Affiliates or affecting it, any of its Affiliates or
any of their respective assets or properties, which if adversely
determined, could reasonably be expected to give rise to an Adverse Effect;
(f) cause to be paid and discharged all taxes, assessments and other
charges or levies of any Authority imposed upon it, or upon any of its
income or assets, unless and to the extent that the same shall be contested
in good faith by appropriate proceedings which could not reasonably be
expected to give rise to an Adverse Effect;
(g) to the extent obtained or received by it, furnish or cause to be
furnished to the Program Administrator a copy of all Private Authorizations
and all
18
<PAGE>
Governmental Authorizations obtained or required to be obtained by it in
connection with the transactions contemplated by this Agreement, the
Transfer Agreements, the Purchase Agreements and any other Program
Documents to which it is a party;
(h) annually, or more frequently as the Program Administrator may
request upon the occurrence and during the continuance of an Event of
Termination (or an event which upon the passage of time or notice, or both,
would constitute an Event of Termination), (i) cause an independent
nationally recognized accounting firm selected by it and reasonably
satisfactory to the Program Administrator and the Parent to enter its
premises (and each other Person to whom it delegates any of its duties
under the Program Documents) and examine and audit the books, records and
accounts relating to the Portfolio Assets, the Program Collections in
respect thereof and its or such other Person's performance under the
Program Documents, (ii) permit such accounting firm to discuss its or such
other Person's affairs, finances, accounts and performance under the
Program Documents with the officers, partners, employees and accountants of
it or such other Person, (iii) cause such accounting firm to provide the
Purchasers and the Program Administrator with a certified report in respect
of the foregoing, which shall be in form and scope reasonably satisfactory
to the Program Administrator and the Purchasers, and (iv) authorize such
accounting firm to discuss such affairs, finances, records and accounts
with representatives of the Program Administrator or the Purchaser and any
Permitted Designee;
(i) permit and cause each Person to which it delegates any of its
duties under the Program Documents to permit the Purchasers, the Program
Administrator or any Permitted Designee to, upon reasonable advance notice
and during normal business hours, visit and inspect its and such Person's
books, records and accounts relating to the Purchased Portfolio Assets, the
Program Collections in respect thereto and its performance under the
Program Documents and to discuss the foregoing with the officers, partners,
employees and accountants of it and such Person, all as often as the
Purchasers, the Program Administrator or any such Permitted Designee may
reasonably request, all at the cost and expense of the requesting party;
(j) promptly, at its expense, execute and deliver to the Program
Administrator and the Purchasers such further instruments and documents,
and take such further action as the Program Administrator or the Purchasers
may from time to time reasonably request in order to further carry out the
intent and purpose of this Agreement and the other Program Documents and to
establish and protect the rights, interests and remedies created, or
intended to be created, hereby and thereby, and the protection and
perfection of each Purchaser's first priority ownership interest in the
Purchased Portfolio Assets free and clear of all Adverse Claims, including,
without limitation, the execution, delivery, recordation and filing of
financing statements and continuation statements under the UCC of any
applicable jurisdiction;
19
<PAGE>
(k) promptly deliver to the Program Administrator copies of all
notices, requests, agreements, amendments, supplements, waivers and other
documents received or delivered by it under or with respect to any of the
Program Documents;
(l) in the event that, notwithstanding the Irrevocable Payment
Instructions, it shall receive any Program Collections from any Company or
Transfer Agent or other Person, promptly upon its receipt of any such
Program Collections remit the same to the Funding and Collection Agent for
deposit into the Program Collection Account and, until such funds are so
deposited into the Program Collection Account, ensure that such amounts are
not commingled with any other funds;
(m) promptly notify the Program Administrator and the Purchasers of
any material adverse change with respect to the business, properties (in
respect of properties, other than in the ordinary course of its and each
Fund's business, as conducted on the date hereof), financial condition or
results of operations of it, or, to its knowledge, any Company or Fund
since December 31, 1996;
(n) not permit to exist any Adverse Claims on, or otherwise attempt to
transfer any interest in, any Portfolio Assets, any Ancillary Rights in
respect thereto, the Program Collections or any interest in any of the
foregoing; provided, however, that in the event that the Purchasers shall
-------- -------
not purchase certain Portfolio Assets relating to Shares of any Fund, the
Seller may transfer all or a portion of its interest in such Portfolio
Assets and the Ancillary Rights with respect thereto to another Person
provided each of the following conditions are met: (1) that such Person
and the Program Administrator, the Funding and Collection Agent and the
Purchasers shall have entered into a mutually satisfactory intercreditor
agreement and amendment to the Program Funding and Collection Agency
Agreement as contemplated by Section 8.06 thereof, and (2) the Program
Administrator, the Funding and Collection Agent and the Purchasers shall
have received such certificates and opinions as they may reasonably
request in connection therewith all in form, scope and substance
reasonably satisfactory to them;
(o) not (in the case of the Seller, the Transferor and the
Distributor) move its principal executive office or the place where it
keeps its records concerning the Purchased Portfolio Assets from the
offices specified in Section 4.01(e), unless (a) it shall have given to
the Program Administrator not less than twenty (20) days prior written
notice of its intention to do so, clearly describing the new location and
(b) it shall have taken such action, satisfactory to the Program
Administrator and the Purchasers, to maintain the title or ownership of
the Purchasers in the Purchased Portfolio Assets at all times fully
perfected and in full force and effect;
(p) not amend, waive, terminate or otherwise modify the terms of any
Irrevocable Payment Instruction or take any action inconsistent with any
Irrevocable Payment Instruction;
(q) not act affirmatively to change its operations in any material
manner if at the time of such action, based upon all of the facts and
circumstances, it is
20
<PAGE>
clear that such change would materially impair the ability of the Seller,
the Distributor or the Parent to perform their obligations under the
Program Documents;
(r) not reflect the Purchased Portfolio Assets as being owned by the
Seller or any Affiliate of the Seller (except to the extent such treatment
is required by a change in GAAP after the date hereof and all appropriate
financial statements are footnoted to reflect the sale thereof to the
Purchasers); provided that Shareholder Servicing Fees may be reflected as
--------
an asset of the Distributor, the Transferor or the Seller if such
treatment is required by GAAP and if all appropriate financial statements
are footnoted to reflect the sale thereof to the Purchasers;
(s) not take any action to cancel, terminate, amend, supplement,
modify or waive any of the provisions of the Distributor's Contract, the
Principal Shareholder Servicer's Agreement, the Shareholder Servicer's
Agreement, the Distribution Plan, the Conversion Features or the
Contingent Deferred Sales Charge arrangements applicable to the holders of
any Shares of any Fund affecting its rights thereunder (including by way
of allowing Free Redemptions in respect of Shares of any Fund under
circumstances not required by the Prospectus of such Fund in effect on the
date of this Agreement or by the Systematic Withdrawal Program or by
allowing Free Redemptions which are not Permitted Free Exchanges), or
request, consent or agree to any such cancellation, termination,
amendment, supplement, modification or waiver, except with the prior
written consent of the Program Administrator, except that it may from time
to time waive a Contingent Deferred Sales Charge that becomes payable
provided it pays in accordance with the Program Servicing Procedures an
amount to the applicable Purchaser equal to the Contingent Deferred Sales
Charge to which such Purchaser would have been entitled;
(t) cause or ensure that all written information provided to the
Seller, the Purchasers or the Program Administrator for purposes of or in
connection with this Agreement or any other Program Document or the
transactions contemplated hereby or thereby by the Parent, Seller,
Transferor, Distributor or DST Systems, Inc. at the request of any of the
foregoing is, and all such information hereafter provided in writing by
any such Person to the Seller, the Purchasers or the Program Administrator
will be, when taken as a whole, true, correct, complete in all material
respects and not misleading on the date such information is stated or
certified; and
(u) cause and ensure that all actions, which the opinion of Sullivan &
Worcester dated as of the Initial Purchase Date on certain bankruptcy
matters including "true sale" and "substantive consolidation" assumes will
be taken or omitted by it, will be taken or omitted as so assumed.
Section 5.02. Additional Covenants of the Seller. The Seller
----------------------------------
covenants and agrees that it shall:
21
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(a) use the Purchase Price paid to it on the Purchase Date solely for
the purpose of purchasing Portfolio Assets or for reimbursing itself for
the purchase price of the Portfolio Assets purchased under the Seller's
Transfer Agreement pursuant to and in accordance with the terms of the
Seller's Transfer Agreement; and
(b) comply in all respects with the Bankruptcy Remote Covenants at all
times.
Section 5.03. Additional Covenants of the Parent. The Parent
----------------------------------
covenants and agrees that it shall:
(a) cause the Seller to use the Purchase Price paid to it on any
Purchase Date solely for the purpose of purchasing Portfolio Assets or for
reimbursing itself for the purchase price of the Portfolio Assets
purchased under the Seller's Transfer Agreement pursuant to and in
accordance with the terms of the Seller's Transfer Agreement; and cause
the Transferor to use the Transfer Price paid to it on any date solely for
the purpose of purchasing Portfolio Assets or for reimbursing itself for
the purchase price of the Portfolio Assets purchased under the
Transferor's Transfer Agreement pursuant to and in accordance with the
terms of the Transferor's Transfer Agreement;
(b) cause each Advisor to manage each applicable Fund in accordance
with the Fundamental Investment Objectives and Policies in respect of such
Fund as in effect from time to time;
(c) (consistent with the fiduciary obligations of the Federated
Entities to the Funds) use its best efforts, which are commercially
reasonable in relation to the consequence to the Purchasers if they are
not successful, to maintain the Fundamental Investment Objectives and
Policies in respect of any Fund as reflected in the Prospectus of such
Fund, except for changes approved by: (i) the board of directors or
trustees and (ii) shareholders of each Fund; and, in the event that as a
consequence of fiduciary obligations of the Federated Entities to the
Funds it cannot resist a proposed change in the Fundamental Investment
Objectives and Policies in respect of the Fund, or in the event that
despite its best efforts such change will be made, it shall, prior to
taking any action inconsistent with the maintenance of such Fundamental
Investment Objectives and Policies, or failing to take the action it could
otherwise take, or to the effectiveness of such change, as the case may
be: (i) notify the Purchasers and the Program Administrator in writing of
the nature of such change, and (ii) if applicable, provide certification
by a responsible officer that such change is necessary in order to comply
with such fiduciary obligations;
(d) (consistent with the fiduciary obligations of the Federated
Entities to the Funds) use its best efforts, which are commercially
reasonable in relation to the consequences to the Purchasers if they are
not successful, to obtain the approval of the Board of Trustees of each
Company in respect of each Fund to: (a) annually re-approve the
Distribution Plan, the Distributor's Contract, the Principal Shareholder
Servicer's Agreement, and the Shareholder Servicer's
22
<PAGE>
Agreement relating to each such Fund, if necessary in order to continue
payments in respect of the Purchased Portfolio Assets relating to such
Fund, and (b) in the event any of the foregoing shall be terminated with
respect to any such Fund, to approve a new distribution plan and
distributor's contract, principal shareholder servicer's agreement, and
the shareholder servicer's agreement in respect of such Fund so as to
permit the continued payments in respect of the Purchased Portfolio Assets
relating to such Fund as though no such termination had occurred. In the
event that as a consequence of fiduciary obligations of the Federated
Entities to the Funds, it cannot endeavor to obtain the approval of the
Board of Trustees of a Fund to take the actions described in clauses (a)
and (b) above, or in the event that despite its efforts such action will
not be taken, it shall, prior to taking any action inconsistent with the
actions described in clauses (a) and (b) above, or failing to take any
action it could otherwise take, or to any termination referred to in
clause (b) above: (i) notify the Purchasers and the Program Administrator
in writing of the nature of such failure or inability or termination, and
(ii) provide certification by a Responsible Officer that such failure or
inability is required in order to comply with such fiduciary obligations;
(e) provide prompt written notice to the Purchasers and the Program
Administrator of any action by the Board of Directors of any Advisor or
the Shareholder Servicer or the Board of Trustees of any Company in
respect of any Fund to make any modification, amendment or supplement to,
or any waiver of any provisions of, or any termination, of any
Distribution Plan, any Distributor's Contract, any Principal Shareholder
Servicer's Agreement, any Shareholder Servicer's Agreement, any Advisory
Agreement, any Conversion Feature, any Contingent Deferred Sales Charge
arrangement, any Fundamental Investment Objectives and Policies of any
Company in respect of any Fund, or any modification, amendment, supplement
or waiver in the amounts payable or actually being paid thereunder, each
as in effect on the date of that agreement, to the extent that any such
modification, amendment, supplement or waiver could reasonably be expected
to give rise to an Adverse Effect;
(f) cause each of the Seller, the Transferor and the Distributor, to
comply in all respects with their covenants under the Program Documents at
all times;
(g) furnish to the Program Administrator:
(A) annually within 120 days after the end of each fiscal year
audited consolidated financial statements of the Parent and its
consolidated subsidiaries prepared in accordance with GAAP for
such fiscal year;
(B) quarterly within 45 days after the end of the first three fiscal
quarters of any fiscal year unaudited consolidated financial
statements of the Parent and its consolidated subsidiaries
prepared in accordance with GAAP for such fiscal quarter;
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(C) such other information as the Program Administrator or the
Purchasers may reasonably request and which is reasonably
available;
(h) (consistent with the fiduciary obligations of the Federated
Entities to the Funds) not initiate or propose the adoption by any Fund of
a plan of liquidation, a plan to dispose of a substantial portion of its
assets out of the ordinary course of business (except in connection with a
merger expressly authorized by this Agreement) or any other plan of action
with similar effect (a "Liquidation Plan"), and use its best efforts,
which are commercially reasonable in relation to the consequences to the
Purchasers if they are not successful, to cause the board of directors or
board of trustees and shareholders of each Fund to avoid adopting any
Liquidation Plan, and in any event the Parent shall promptly notify the
Program Administrator of any proposed Liquidation Plan by any Fund;
(i) the Parent will not permit to occur any change in Control of the
Parent, the Distributor, the Principal Shareholder Servicer, the
Shareholder Servicer or any Advisor unless either:
(1) in connection with such change in Control:
(i) either (A) such Distributor, Principal Shareholder Servicer,
Shareholder Servicer, Advisor or the Parent shall remain distributor,
principal shareholder servicer, shareholder servicer or advisor, as
the case may be, for the Funds and the Parent shall remain the
ultimate parent of each of the foregoing or (B) if another Person
shall be retained to replace any of the foregoing to act as
distributor, principal shareholder servicer, shareholder servicer or
investment advisor, as the case may be, for the Funds, or as parent,
such Person shall (x) meet the requirements of (iii) below with
reference to the expertise, experience and capacity applicable to the
function it undertakes to perform and (y) have agreed, in respect of
periods from and after its retention, to be bound by the undertakings
of the Distributor, the Principal Shareholder Servicer, the
Shareholder Servicer, the Advisor or the Parent, as the case may be,
under the Program Documents and shall have confirmed as of a current
date the representations and warranties of the Distributor, the
Principal Shareholder Servicer, the Shareholder Servicer, the Advisor
or the Parent, as the case may be, except such representations and
warranties as expressly relate solely to an earlier date (in which
case such representations and warranties shall be true and correct as
of such earlier date);
(ii) in the case where another Person is retained to replace the
Distributor, Principal Shareholder Servicer, Shareholder Servicer or
the Advisor to act as distributor, principal shareholder servicer,
shareholder servicer or investment advisor, as the case may be, for
the Funds, ownership of at least 51% of the voting securities of each
of the Persons serving as the distributor, the principal shareholder
24
<PAGE>
servicer, the shareholder servicer or investment advisor to the Funds
is retained by, or transferred to, a single Person (the "Immediate
Parent");
(iii) in the case where another Person is retained to replace the
Distributor, Principal Shareholder Servicer, Shareholder Servicer,
Advisor or the Parent to act as distributor, principal shareholder
servicer, shareholder servicer, investment advisor or parent, as the
case may be, for the Funds, in the reasonable opinion of the Parent,
the Immediate Parent, together with its affiliated subsidiaries
(including the Immediate Parent and the Persons then serving as
distributor, principal shareholder servicer, shareholder servicer and
investment advisor to the Funds) in the aggregate, have financial
resources and mutual fund management, distribution and investment
advisory expertise, experience and capacity immediately after the
change in Control sufficient to satisfy the obligations of their
counterparts under the Program Documents; and
(iv) in the case where another Person is retained to replace the
Distributor, Principal Shareholder Servicer, Shareholder Servicer or
the Advisor to act as distributor, principal shareholder servicer,
shareholder servicer or investment advisor, as the case may be, for
the Funds, a majority of the Board of Trustees or Board of Directors
of the Funds, including a majority who are not "Interested Persons"
(as defined by Section 2(a)(19) of the Investment Company Act) shall
have either (i) reapproved the Distributor's Contracts, the Principal
Shareholder Servicer's Agreements, the Shareholder Servicer's
Agreements and any advisory contracts, or (ii) approved substitute
agreements substantially identical thereto so that no Adverse Effect
could reasonably be expected to result from such substitute
agreements; or
(2) the Program Administrator shall have consented to such change in
Control, such consent not to be unreasonably withheld;
provided, however, that nothing in this Section 5.03(i) shall be
-------- -------
deemed to restrict the ability of the Parent directly or indirectly to engage in
any offering of its capital stock so long as no Person or group of Persons
acting in concert (other than Persons who are currently in control of the Parent
and any employee benefit plan or related trust of the Parent or any of its
Subsidiaries) shall obtain Control of the Parent as a result thereof; and
(j) ensure that each Transfer Agent's tracking capabilities and/or the
Seller's tracking capabilities for each Fund is sufficient to: (i) track the
Portfolio Assets and provide the information specified to be in the Investor
Reports and (ii) identify and remit Program Collections and Related Collections
to the Funding and Collection Agent, and the Parent shall use its best efforts
to replace any Transfer Agent which does not maintain such capabilities or in
respect of which an event similar to those described in Section 6.01(e) occurs
(whether or not the Transfer Agent is a Federated Entity to which Section
6.01(e) applies) within 60 days after becoming aware of such event.
25
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Section 5.04. Additional Covenants of the Distributor. The
---------------------------------------
Distributor covenants and agrees that it shall:
(a) not reflect the Portfolio Assets or Program Collections in respect
thereof as being owned by the Distributor or any Affiliate of the
Distributor (except to the extent such treatment is required by a change
in GAAP after the date hereof and all appropriate financial statements are
footnoted to reflect the sale thereof to the Purchasers); provided that
--------
Shareholder Servicing Fees may be reflected as an asset of the
Distributor, the Transferor or the Seller if such treatment is required by
GAAP and if all appropriate financial statements are footnoted to reflect
the sale thereof to the Purchasers;
(b) promptly upon preparation, deliver to the Program Administrator,
copies of the semi-annual unaudited reports and annual audited reports of
each Company;
(c) (consistent with the fiduciary obligations of the Federated
Entities to the Funds) use its best efforts, which are commercially
reasonable in relation to the consequences to the Purchasers if they are
not successful, to obtain the approval of the Board of Trustees of each
Company in respect of each Fund to: (a) annually re-approve the
Distribution Plan, the Distributor's Contract, the Principal Shareholder
Servicer's Agreement, and the Shareholder Servicer's Agreement relating to
each such Fund, if necessary in order to continue payments in respect of
the Purchased Portfolio Assets relating to such Fund, and (b) in the event
any of the foregoing shall be terminated with respect to any such Fund, to
approve a new distribution plan and distributor's contract, principal
shareholder servicer's agreement, and the shareholder servicer's agreement
in respect of such Fund so as to permit the continued payments in respect
of the Purchased Portfolio Assets relating to such Fund as though no such
termination had occurred. In the event that as a consequence of fiduciary
obligations of the Federated Entities to the Funds it cannot endeavor to
obtain the approval of the Board of Trustees of a Fund to take the actions
described in clauses (a) and (b) above, or in the event that despite its
efforts such action will not be taken, it shall, prior to taking any
action inconsistent with the actions described in clauses (a) and (b)
above, or failing to take any action it could otherwise take, or to any
termination referred to in clause (b) above: (i) notify the Purchasers
and the Program Administrator in writing of the nature of such failure or
inability or termination, and (ii) provide certification by a Responsible
Officer that such failure or inability is required in order to comply with
such fiduciary obligations;
(d) provide prompt written notice to the Program Administrator of any
action by its Board of Directors or the Board of Directors of any Advisor
or the Shareholder Servicer or the Board of Trustees of any Company in
respect of any Fund to make any modification, amendment or supplement to,
or any waiver of any provisions of, or any termination, of any
Distribution Plan, any Distributor's Contract, any Principal Shareholder
Servicer's Agreement, any Shareholder Servicer's Agreement any Advisory
Agreement, any Conversion Feature, any Contingent Deferred Sales Charge
arrangement, or any Fundamental Investment
26
<PAGE>
Objectives and Policies of any Company in respect of any Fund, or any
modification, amendment, supplement or waiver in the amounts payable or
actually being paid thereunder, each as in effect on the date of that
agreement, to the extent that any such modification, amendment, supplement
or waiver could reasonably be expected to give rise to an Adverse Effect;
(e) deliver to the Program Administrator, promptly after the filing
thereof with the SEC, any report on Form N-SAR (or successor form), any
Prospectus (including any Form N-1A (or successor form) and any statement
of additional information) or any amendment or supplement to any of the
foregoing, any proxy statements and all other notices (out of the ordinary
course) to shareholders of each Fund, annual reports of each Company and
any other filings (out of the ordinary course), made by any Company in
respect of each Fund;
(f) promptly notify the Program Administrator of any material adverse
change with respect to the business, properties (in respect of properties,
other than in the ordinary course of the Distributor's and each Fund's
business, as conducted on the date hereof) or the financial condition or
results of operations of the Distributor, or to the Distributor's
knowledge, any Company or Fund, since December 31, 1996, including any
material change in the sales commission structure relating to any Fund or
arrangements, distribution fees, contingent deferred sales charges or
exchange privileges for shareholders; and
(g) keep each Irrevocable Payment Instruction in full force and
effect.
Section 5.05. Additional Covenants of the Transferor. The Transferor
--------------------------------------
covenants and agrees that it shall:
(a) use the Transfer Price paid to it on the Purchase Date solely for
the purpose of purchasing Portfolio Assets or for reimbursing itself for
the purchase price of the Portfolio Assets purchased under the Transferor's
Transfer Agreement pursuant to and in accordance with the terms of the
Transferor's Transfer Agreement.
ARTICLE VI
EVENTS OF TERMINATION
Section 6.01. Events of Termination. If any of the following events
---------------------
(each an "Event of Termination") shall occur:
(a) the Parent, the Distributor (as Distributor, Principal
Shareholder Servicer or as Program Servicer Agent), the Seller, the
Transferor, the Shareholder Servicer, any Advisor, any Transfer Agent or
any Company or Fund shall fail to make or cause to be made in the manner
and when due any payment or deposit to be made or to be caused to be made
by it under this Agreement or any of the other Program Documents and such
failure shall continue for three (3) Business Days; or
27
<PAGE>
(b) the Parent, the Distributor (as Distributor, Principal Shareholder
Servicer or as Program Servicer Agent), the Seller, the Transferor, the
Shareholder Servicer, any Advisor, any Transfer Agent or any Selling Agent,
or any Company shall fail to perform or observe any covenant or agreement
on its part to be performed or observed under any Program Document (other
than those described in clause (a) of this Section 6.01) and such failure
could have an Adverse Effect; or
(c) (i) any representation or warranty made or deemed made by the
Parent, the Distributor (as Distributor, Principal Shareholder Servicer or
as Program Servicer Agent), the Transferor, the Seller, the Shareholder
Servicer (or any of their respective officers) under or in connection with
any Program Document (except where such incorrect or misleading
representation or warranty could not reasonably be expected to give rise to
an Adverse Effect) shall have been incorrect when made or deemed made, or
(ii) any Investor Report or any other statement, certificate or report
delivered by or on behalf of the Parent, the Distributor, the Seller or the
Shareholder Servicer in connection with this Agreement, or any other
Program Document (except where such incorrect or misleading document or
statement could not reasonably be expected to give rise to an Adverse
Effect), shall have been false, incorrect or misleading when delivered; or
(d) the applicable Purchaser shall fail to acquire in a True Sale, or
shall cease to have, a 100% undivided ownership interest in any Purchased
Portfolio Asset, free and clear of any Adverse Claim; or
(e) (i) the Seller, the Transferor, the Distributor, the Parent, the
Shareholder Servicer, any Advisor, any Transfer Agent which is a Federated
Entity, any Company or any Fund or any Significant Affiliate thereof shall
generally not pay its Debts as such Debts become due, or shall admit in
writing its inability to pay its Debts generally, or shall make a general
assignment for the benefit of creditors or in the case of the Distributor
the Distributor shall otherwise become "insolvent" within the meaning of
SIPA; or (ii) any proceeding shall be instituted by or against the Seller,
the Transferor, the Distributor, the Parent, the Shareholder Servicer, any
Advisor, any Transfer Agent which is a Federated Entity, any Company, any
Fund or any Significant Affiliate thereof seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
Debts under any Applicable Law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property and, in
the case of any such proceeding instituted against it (but not instituted
by it), either such proceeding shall remain undismissed or unstayed for a
period of sixty (60) days; or (iii) any of the actions sought in any
proceeding described in (ii) above (including an order for relief against,
or the appointment of a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property) shall occur;
or (iv) the Seller, the Transferor, the Distributor, the Parent, the
Shareholder Servicer, any Advisor, any Transfer Agent which is a Federated
Entity, any Company, any Fund or any Significant Affiliate
28
<PAGE>
thereof shall take any action to authorize any of the actions set forth
above in this Section 6.01(e); or
(f) there shall have occurred any material adverse change in (i) the
financial condition or results of operations of the Parent and its
consolidated subsidiaries taken as a whole since December 31, 1996; or (ii)
the Seller, the Transferor the Shareholder Servicer, the Parent, the
Distributor, any Advisor or any Transfer Agent which is a Federated Entity
shall fail to make payments when due in respect of Debt aggregating in
excess of $5,000,000, provided that the determination of default on such
Debt is not being diligently contested in good faith through appropriate
proceedings;
(g) any Distribution Plan, Distributor's Contract, Principal
Shareholder Servicer's Agreement, Shareholder Servicer's Agreement,
Prospectus, the Conduct Rules, or the Contingent Deferred Sales Charge
arrangements applicable to holders of Shares of any Fund or the terms of
any Conversion Feature in respect of any Share of any Fund, each as in
effect on the date of this Agreement, shall be amended, waived,
supplemented or modified, in any manner or by any means (including a change
in Applicable Law), which could reasonably be expected to have an Adverse
Effect, unless waived by the Program Administrator;
(h) the Securities Investor Protection Corporation, established under
SIPA, shall have applied for a protective decree against the Distributor;
or
(i) the Distributor shall have failed to meet the minimum capital
requirements prescribed from time to time by Rule 15c3-1 under the Exchange
Act and such failure continues uncured for 10 days after the Distributor
obtains knowledge thereof; or
(j) the SEC shall have modified or terminated Rule 12b-1 of the
Investment Company Act or the NASD shall have modified or terminated the
Conduct Rules in a manner which could reasonably be expected to give rise
to an Adverse Effect; or
(k) the Distributor shall cease to be registered as a broker/dealer
under the Exchange Act and with the NASD or the NASD suspends the
Distributor's membership or registration; or
(l) any Company or any Transfer Agent shall, without the written
consent of the Program Administrator, fail to withhold from redemption
proceeds paid to any holder of a Share any Contingent Deferred Sales
Charges required to be withheld and remit such funds to the Program
Collection Account in accordance with any Irrevocable Payment Instruction,
or shall be prevented by any Authority or by any Applicable Law from doing
so or any Company or any Transfer Agent shall so assert in writing; or
(m) any Company shall be required by any Authority or any Applicable
Law to cease or suspend the sale of Shares of any Fund under circumstances
that could reasonably be expected to result in an Adverse Effect; or
29
<PAGE>
(n) any Company in respect of itself or any Fund shall propose or
effect a merger or other combination with another Person not constituting a
Fund if, in the reasonable judgment of the Program Administrator, the
amount of the potential unrealized Program Collections from such Fund is
material; or
(o) as of any Calculation Date the NAV Decline Ratio (adjusted for
stock splits, capital gains and annual and quarterly income distributions)
from the end of the immediately preceding calendar month shall be twenty-
five percent (25%) or more; or
(p) the applicable Advisor shall cease to act as the investment
advisor of any Fund under the applicable Advisory Agreement; or
(q) aggregate Free Redemptions result in the occurrence of the
Redemption Threshold Date;
then in respect of any occurrence of any such event, the Program Administrator
may in respect of each such occurrence, by notice to the Seller declare the
Revolving Purchase Termination Date to have occurred (in which case the
Revolving Purchase Termination Date shall be deemed to have occurred); provided,
--------
that, upon the occurrence of any event (without any requirement for the giving
of notice) described in subsection (e) or (h) of this Section 6.01, the
Revolving Purchase Termination Date shall be deemed to have automatically
occurred.
ARTICLE VII
THE PROGRAM ADMINISTRATOR
Section 7.01. Authorization and Action. (A) Each Purchaser hereby
------------------------
irrevocably appoints and authorizes the Program Administrator to take such
action as agent on its behalf and to exercise such powers under this Agreement,
and the other Program Documents as are delegated to the Program Administrator by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. As to any matters not expressly provided for by this
Agreement or the other Program Documents, the Program Administrator shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of such Purchaser; provided,
--------
however, that the Program Administrator shall not be required to take any action
- -------
which exposes the Program Administrator to personal liability or which is
contrary to this Agreement, the other Program Documents or Applicable Law.
Section 7.02. Program Administrator Reliance, Etc. Neither the
-----------------------------------
Program Administrator nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement or any of the other Program Documents,
except for its or their own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, the Program Administrator: (i) may
consult with legal counsel (including counsel for the
30
<PAGE>
Seller, the Parent, the Distributor, the Servicer or any Advisor or Transfer
Agent), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (ii)
makes no warranty or representation to any of the other parties to this
Agreement and shall not be responsible to any of the other parties to this
Agreement for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement or the other Program
Documents; (iii) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Program Documents on the part of any of the other parties
to this Agreement or to inspect the property (including the books and records)
of any of the other parties to this Agreement; (iv) shall not be responsible for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement, the other Program Documents or any other instrument
or document furnished pursuant hereto or thereto in respect of any Person other
than the Program Administrator; and (v) shall incur no liability under or in
respect of this Agreement or any other Program Document by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telecopier, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
Section 7.03. Rights of the Program Administrator. Each Federated
-----------------------------------
Entity hereby agrees that the Program Administrator is hereby authorized to (i)
upon the occurrence of any Event of Termination (or event which with the passage
of time or notice, or both, would constitute an Event of Termination) which
relates to the Seller, the Shareholder Servicer, the Parent, the Distributor, or
any other Federated Entity, or (ii) at any time that the Program Administrator
in its sole discretion believes that the event contemplated in Section 6.01(e),
(f) or (h) could occur in respect of the Seller, the Shareholder Servicer, the
Parent, the Distributor or any other Federated Entity, deliver an Allocation
Notice to the Funding and Collection Agent.
ARTICLE VIII
PARENT'S UNDERTAKINGS
Section 8.01. Undertakings; Payment of Damages. The Parent hereby
--------------------------------
irrevocably and unconditionally agrees and guarantees for the benefit of each
Purchaser, the Program Administrator, the Indenture Trustee and each Indemnified
Party to cause the Seller, the Transferor, the Shareholder Servicer, the
Distributor (as Distributor, Principal Shareholder Servicer and Program Servicer
Agent) and each other Federated Entity to perform and punctually and completely
carry out each and every agreement, covenant or undertaking of the Seller, the
Transferor, the Shareholder Servicer, the Distributor (as Distributor, Principal
Shareholder Servicer and Program Servicer Agent) and each other Federated Entity
under this Agreement and each other Program Document in accordance with the
terms thereof, notwithstanding that the Seller, the Transferor, the Shareholder
Servicer, the Distributor (as Distributor, Principal Shareholder Servicer or
Program Servicer Agent), or other Federated Entity fails to fully perform any
such agreements, covenants and undertakings for any reason, including
liquidation, insolvency, dissolution, receivership, bankruptcy, assignment for
the benefit of creditors, reorganization, composition, adjustment, legal
limitations, court order, disability, incapacity, invalidity,
31
<PAGE>
unenforceability, defense, offset or counterclaim. Each of the Parent, the
Distributor and the Transferor further covenants and agrees that it shall, and
the Parent shall cause Federated Investors Inc., a Pennsylvania corporation, and
FII Holdings Inc., a Delaware corporation, to, (i) comply at all times with
items 1, 2, 4 through 7, 11, 12, 14 and 15 of the Bankruptcy Remote Covenants in
all respects, (ii) not commingle assets with Seller and (iii) maintain an arm's-
length relationship with Seller, (iv) note the separate legal existence and
financial condition of the Seller in any consolidated financial statements which
include the Seller and (v) maintain adequate capital in light of its
contemplated business operation.
Section 8.02. Agreement Not Affected. The Purchasers and the Program
----------------------
Administrator may proceed to exercise any right or remedy which it might have
pursuant to this Article VIII or Applicable Law without regard to any actions or
omissions of the Purchasers, the Program Administrator or any other Person. The
validity of this Article VIII shall not be affected by any action or inaction
which may be taken under or in respect of any Program Document. The Purchasers
and the Program Administrator at its option may proceed in the first instance
against the Parent to obtain a remedy under any Program Document in the amount
and in the manner set forth in such Program Document, without being obliged to
resort first to any claim or action against the Seller, the Transferor, the
Shareholder Servicer, the Distributor (as Distributor, Principal Shareholder
Servicer or Program Servicer Agent) or any other Federated Entity.
Section 8.03. Waiver of Notice; No Offset; No Subrogation. The
-------------------------------------------
Parent hereby waives any and all notices or demands to which it may otherwise be
entitled in connection with the pursuit of any remedy hereunder, under any other
Program Document or, to the extent permitted under Applicable Law; provided,
--------
that this sentence shall not constitute a waiver on behalf of the Seller, the
Transferor, the Shareholder Servicer, the Distributor (as Distributor,
Principal Shareholder Servicer or Program Servicer Agent) or any other Federated
Entity of any notice or demand to which the Seller, the Transferor, the
Shareholder Servicer, the Distributor (as Distributor, Principal Shareholder
Servicer or Program Servicer Agent), or any other Federated Entity is entitled
under the Program Documents. The obligations of the Parent under this Article
VIII shall not be subject to any defense, counterclaim or right of offset which
the Parent, the Seller, the Transferor, the Shareholder Servicer, the
Distributor (as Distributor, Principal Shareholder Servicer or Program Servicer
Agent), or any other Person has or may have against any Purchaser, the Program
Administrator, any Indemnified Party or any other Person, whether in respect of
this Agreement, any other Program Document, any Purchased Portfolio Assets or
otherwise, but nothing herein shall limit the right of the Parent to pursue any
claim in a separate action.
ARTICLE IX
MISCELLANEOUS
Section 9.01. No Waiver; Modifications in Writing. No failure or
-----------------------------------
delay on the part of the Program Administrator or any Purchaser or any
Indemnified Party exercising any right, power or remedy hereunder or under any
other Program Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other
32
<PAGE>
right, power or remedy. The remedies provided for herein are cumulative and are
not exclusive of any remedies that may be available to the Program Administrator
and the Purchasers, at law or in equity. No amendment, modification, supplement,
termination or waiver of this Agreement or any other Program Document shall be
effective unless the same shall be in writing and signed by the parties thereto.
Any waiver of any provision of this Agreement, and any consent to any departure
by any party to this Agreement or any other Program Document from the terms of
any provision of this Agreement or any other Program Document, shall be
effective only in the specific instance and for the specific purpose for which
given. No notice to or demand on any party to this Agreement or any other
Program Document in any case shall entitle a Federated Entity to any other or
further notice or demand in similar or other circumstances.
Section 9.02. Payment. Unless otherwise provided herein, whenever
-------
any payment to be made hereunder or under any other Program Document shall be
due on a non-Business Day, such payment shall be made on the next succeeding
Business Day. All amounts owing and payable to the Purchaser, the Program
Administrator or any Indemnified Party under this Agreement or under any other
Program Document shall be paid in immediately available funds without
counterclaim, setoff, deduction, defense, abatement, suspension or deferment,
but nothing herein shall limit the right of the Seller, the Parent or the
Distributor to pursue any claim in a separate action. Each of the Seller, the
Parent and the Distributor hereby agrees to pay interest on any amounts payable
by it under this Agreement or under any other Program Document, which shall not
be paid in full when due, for the period commencing on the due date thereof
until, but not including, the date the same is paid in full at the Post-Default
Rate. For purposes of calculating the Post-Default Rate interest, any amount
received by or on behalf of the Purchasers, the Program Administrator or any
Indemnified Party after the close of the Fedwire shall be deemed to have been
received on the next succeeding Business Day.
Section 9.03. Notices, Etc. (a) All notices, demands, instructions
------------
and other communications required or permitted to be given to or made upon any
party hereto or to any other Program Document shall be in writing and shall be
personally delivered or sent by first-class, registered, certified or express
mail, postage prepaid, or by prepaid telegram (with messenger delivery specified
in the case of a telegram), or by telecopier, or by prepaid courier service.
Unless otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section 9.03, notices, demands, instructions and
other communications in writing shall be given to or made upon the respective
parties hereto or to the other Program Documents at their respective addresses
(or to their respective telecopier numbers) indicated below:
If to the Initial Purchaser:
PLT Finance Trust 1997-1
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust
Administration
Facsimile No.: (302) 651-8882
33
<PAGE>
If to the Revolving Purchaser:
PLT Finance, L.P.
19 Fulton Street, 5th Floor
South Street Seaport
New York, New York 10038
Attention: Vice President
Facsimile No.: (212) 233-0829
If to the Program Administrator:
Putnam, Lovell & Thornton Inc.
19 Fulton Street, 5th Floor
South Street Seaport
New York, New York 10038
Attention: Vice President
Facsimile No.: (212) 233-0829
If to the Parent, the Seller, the Transferor or the Distributor:
Federated Investors
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
Attention: Raymond J. Hanley
Facsimile No.: (412) 288-7046
If to the Funding and Collection Agent:
Bankers Trust Company
Four Albany Street
New York, New York 10006
Attention: Corporate Trust and
Agency Group-Structured Finance
Facsimile No.: 212-250-6439
(b) All notices, demands, consents, requests and other communications
to be sent or delivered hereunder or under any other Program Document shall be
deemed to be given or become effective for all purposes of this Agreement or of
such Program Document as follows: (a) when delivered in person, when given; (b)
when sent by mail, when received by the Person to whom it is given, unless it is
mailed by registered, certified or express mail, in which case it shall be
deemed given or effective on the earlier of the date of receipt or refusal; and
(c) when sent by telegram, telecopy or other form of rapid transmission shall be
deemed to be given or effective when receipt of such transmission is
acknowledged, electronically or otherwise.
Section 9.04. Costs and Expenses; Indemnification. (a) Regardless of
-----------------------------------
whether or not any of the transactions contemplated hereby are actually
consummated, the
34
<PAGE>
Parent agrees to pay promptly on demand to the other Parties hereto (other than
any other Federated Entity) (i) all reasonable costs and expenses in connection
with the preparation, review, negotiation, reproduction, execution, delivery,
administration and any modification, amendment and waiver of this Agreement and
the other Program Documents, (ii) all costs and expenses incurred in connection
with the enforcement of, or preservation of, any rights under this Agreement and
the other Program Documents, (iii) all actuarial fees, UCC filing fees and
periodic auditing expenses in connection with the transactions contemplated by
this Agreement and the other Program Documents, and (iv) all reasonable fees and
disbursements of counsel in connection with the foregoing.
(b) Indemnification. The Parent agrees to indemnify and hold harmless
---------------
the Purchasers, the Program Administrator, the Funding and Collection Agent, the
Placement Agent, and each of their respective Investors, Affiliates and the
respective officers, directors, employees, trustees, agents, advisors, and any
Person controlling any of the foregoing (each, an "Indemnified Party") from and
against any and all damages, losses, liabilities, expenses, obligations,
penalties, actions, suits, judgments and disbursements of any kind or nature
whatsoever (including the reasonable fees and disbursements of counsel)
(collectively the "Liabilities") that are incurred by or asserted or awarded
against any Indemnified Party, in each case arising out of or in connection with
or by reason of (and regardless of whether or not any such transactions are
consummated) any of the transactions contemplated by the Program Documents,
including without limitation, any one or more of following:
(i) any failure or alleged (by Persons other than the
Indemnified Party) failure by any Federated Entity to perform any of
its obligations, covenants, or agreement contained in any Program
Document to which it is a party promptly and fully;
(ii) any representation or warranty made or deemed made by any
Federated Entity contained in any Program Document or in any
certificate, written statement or report delivered by or on behalf of
any such Person in connection herewith or therewith is, or is alleged
(by Persons other than the Indemnified Party) to have been false or
misleading in any respect when made;
(iii) any failure by any Federated Entity to comply promptly
and fully with any Applicable Law or any contractual obligation
binding upon it;
(iv) any proceeding by or against any Federated Entity seeking
to adjudicate such Person, bankrupt or insolvent, or seeking
liquidation, winding up, administration, reorganization, arrangement,
adjustment, protection, relief, or composition of such Person or the
debts of such Person under any law relating to bankruptcy, insolvency,
liquidation, administrative, reorganization or relief of debtors or
seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian, administrator, liquidator, or other
similar official for such Person or for a substantial part of such
Person's property; and
35
<PAGE>
(v) preparation for a defense of, any investigation, litigation
or proceeding arising out of any of the transactions, events or
circumstances described above.
provided, however, that the Parent shall not be required to indemnify any
- -------- -------
Indemnified Party in respect of any Liability to the extent such Liability (A)
is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted directly and primarily from such Indemnified
Party's gross negligence or willful misconduct, or (B) arises out of the
Purchased Portfolio Assets proving to be uncollectible, except to the extent
that such uncollectibility is attributable to what would not have occurred but
for any one or more of the events described in clauses (i) through (v) above, or
(C) arises out of a subsequent sale or assignment of any Purchased Portfolio
Assets by any Purchaser and is not attributable to, or would not have accrued
but for, one or more of the events or circumstances described in clauses (i)
through (v) above; and provided, further that the Parent shall be required to
-------- -------
indemnify Wilmington Trust Company only if and to the extent that the Seller, as
Beneficial Owner, is required to indemnify Wilmington Trust Company under the
Trust Agreement.
(c) Unless the Parent shall have assumed responsibility for contesting
a Liability as provided in the next sentence, the Program Administrator and the
Purchasers may, but shall have no obligation to, contest, settle or compromise
such Liability. The Parent may pursue, at its sole cost and expense, such
lawful rights as are available at law to contest any Liability asserted against
the Purchasers or the Program Administrator provided: (i) the Parent has assumed
responsibility for such contest and conceded in writing its responsibility to
indemnify the Indemnified Party, in accordance with this Section, for the full
amount of such Liability; (ii) such contest is conducted in a manner which does
not result in a Lien on the Portfolio Assets and, if the manner of contest does
not defer the obligation to pay the Liability, the Parent shall pay such
Liability when due, subject to the right to recover such Liability if the
contest is successful, (iii) the Parent shall have provided to the Indemnified
Party such undertakings as the Indemnified Party shall request, in form and
substance satisfactory to the Indemnified Party whereby the Parent agrees to
hold the Indemnified Party harmless from any and all liabilities, costs and
expenses which may arise as a consequence of such contest; (iv) the Parent shall
have furnished the Indemnified Party with an opinion, in form and scope
reasonably satisfactory to the Indemnified Party that there is a meritorious
basis for such contest; (v) the contest of such Liability may be conducted in a
manner which does not affect the liability of the Indemnified Party, for any
liability not indemnified by the Parent; (vi) the contest of such Liability can
be separated from any contest of any other liability in respect of which the
Parent has not indemnified the Indemnified Party, without prejudicing the
Indemnified Party's ability to deal with or otherwise contest such other
liability; and (vii) the Indemnified Party has not waived its right to
indemnification by the Parent in respect of such Liability. The Parent shall
keep the Indemnified Party fully advised on a current basis concerning any such
contest, and, without limiting the foregoing: (a) the Parent shall give the
Indemnified Party reasonable notice of and a reasonable opportunity to be
present in person or by counsel at any proceeding in connection therewith; (b)
the Parent shall give the Indemnified Party notice of any proposed filings or
papers to be served or filed by the Parent in connection with any such
proceedings and a reasonable opportunity to comment upon them; and (c) the
Parent shall promptly supply the Indemnified Party with copies of
36
<PAGE>
any filings or papers served upon the Parent in connection with such
proceedings; it being understood that the Indemnified Party shall bear its own
costs incurred in connection with any participation by the Indemnified Party or
its counsel in the contest as contemplated by this sentence.
(d) Without prejudice to the survival of any other agreement of the
Parent, hereunder, the agreement and obligations of the Parent contained in this
Section 9.04 and of the Parent in Article VIII shall survive the termination of
this Agreement.
Section 9.05. Taxes. (a) Any and all payments by any Federated
-----
Entity, any Transfer Agent, any Company or any Fund under this Agreement, any
Irrevocable Payment Instrument or any other Program Document shall be made free
and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, taxes imposed on the recipient's income, and
---------
franchise taxes imposed on the recipient, by (i) the United States federal
government, (ii) the jurisdiction under the laws of which the recipient is
organized or any political subdivision thereof, (iii) the jurisdiction in which
is located the principal executive office of the recipient or any political
subdivision thereof or (iv) any other jurisdiction which asserts the authority
to impose such tax on the basis of contacts the recipient maintains with such
jurisdiction other than the contacts arising out of the transactions
contemplated hereby (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If any Federated Entity, any Transfer Agent, any Company or any Fund shall be
required by Applicable Law to deduct any Taxes from or in respect of any sum
payable hereunder or under any other Program Document, (i) the sum payable
hereunder or thereunder shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 9.05) the recipient receives an amount equal to
the sum it would have received had no such deductions been made, (ii) such
Federated Entity, Transfer Agent, Company or Fund shall make such deductions and
(iii) such Federated Entity, Transfer Agent, Company or Fund shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with Applicable Law.
(b) In addition, the Parent agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any transfer of Portfolio Assets in connection herewith
or from the execution, delivery or registration of, or otherwise with respect
to, this Agreement or any other Program Document (hereinafter referred to as
"Other Taxes").
(c) The Parent will indemnify the Program Administrator and the
Purchasers for the full amount of Taxes or Other Taxes (including any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section
9.05) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted, so long as there is a reasonable basis for the
assertion of such Taxes or Other Taxes. This indemnification shall be made
within 30 days from the date the Program Administrator or the Purchaser makes
written demand therefor to the Parent. The Purchasers and the Program
Administrator shall endeavor to avoid or reduce any Taxes or Other Taxes subject
37
<PAGE>
to the foregoing indemnity; provided that they shall not be required to take any
--------
action which, in their sole judgment, may subject them to any adverse effect.
(d) Within thirty (30) days after the date of any payment of Taxes,
the Parent will furnish to the Purchasers and the Program Administrator the
original or a certified copy of a receipt evidencing payment thereof.
(e) In the event the Parent, shall pay a Tax or Other Tax pursuant to
this Section 9.05 and all or a portion of such Tax or Other Tax previously paid
by the Parent is later refunded by the applicable taxing Authority the recipient
of such refund shall pay to the Parent, the portion of such refund which relates
to the amount previously paid by the Parent.
(f) Unless the Parent shall have assumed responsibility for contesting
a Tax or Other Tax described in paragraph (c) of this Section 9.05 as provided
in the next sentence, the Program Administrator and the Purchasers may, but
shall have no obligation to, contest, settle or compromise such Tax or Other
Tax. The Parent may pursue, at its sole cost and expense, such lawful rights as
are available at law to contest any Tax or Other Tax asserted against the
Purchasers or the Program Administrator provided: (i) the Parent has assumed
responsibility for such contest and conceded in writing its responsibility to
indemnify such Purchaser or the Program Administrator, as the case may be, in
accordance with this Section, for the full amount of such Tax or Other Tax; (ii)
such contest is conducted in a manner which does not result in a Lien on the
Portfolio Assets and, if the manner of contest does not defer the obligation to
pay the Tax or Other Tax, the Parent shall pay such Tax or Other Tax when due,
subject to the right to recover such Tax or Other Tax if the contest is
successful, (iii) to the extent not covered by Section 9.04(b), the Parent shall
have provided to such Purchaser or the Program Administrator, as the case may
be, such undertakings as such Purchaser or the Program Administrator, as the
case may be, shall request, in form and substance satisfactory to such
Purchaser, or the Program Administrator, as the case may be, whereby the Parent
agrees to hold such Purchaser or the Program Administrator, as the case may be,
harmless from any and all liabilities, costs and expenses which may arise as a
consequence of such contest; (iv) the Parent shall have furnished such Purchaser
or the Program Administrator, as the case may be, with an opinion, in form and
scope reasonably satisfactory to such Purchaser or the Program Administrator, as
the case may be, of counsel reasonably satisfactory to such Purchaser or the
Program Administrator, as the case may be, that there is a meritorious basis for
such contest; (v) the contest of such Tax or Other Tax may be conducted in a
manner which does not affect the liability of such Purchaser or the Program
Administrator, as the case may be, for any tax not indemnified by Parent; (vi)
the contest of such Tax or Other Tax can be separated from any contest of any
other tax in respect of which the Parent has not indemnified such Purchaser or
the Program Administrator, as the case may be, without prejudicing such
Purchaser's or the Program Administrator's, as the case may be, ability to deal
with or otherwise contest such other liability; and (vii) such Purchaser or the
Program Administrator, as the case may be, has not waived its right to
indemnification by the Parent in respect of such Tax or Other Tax. The Parent
shall keep such Purchaser or the Program Administrator, as the case may be,
fully advised on a current basis concerning any such contest, and, without
limiting the foregoing: (a) the Parent shall give such Purchaser or the Program
Administrator, as the case may be, reasonable notice of and a reasonable
opportunity to be present in person or by counsel at any proceeding in
38
<PAGE>
connection therewith; (b) the Parent shall give such Purchaser or the Program
Administrator, as the case may be, notice of any proposed filings or papers to
be served or filed by the Parent in connection with any such proceedings and a
reasonable opportunity to comment upon them; and (c) the Parent shall promptly
supply such Purchaser or the Program Administrator, as the case may be, with
copies of any filings or papers served upon the Parent in connection with such
proceedings; it being understood that such Purchaser or the Program
Administrator, as the case may be, shall bear its own costs incurred in
connection with any participation by such Purchaser or the Program
Administrator, as the case may be, or its counsel in the contest as contemplated
by this sentence.
(g) Without prejudice to the survival of any other agreement of the
Parent, hereunder, the agreements and obligations of the Parent contained in
this Section 9.05 shall survive the termination of this Agreement.
Section 9.06. Execution in Counterparts. This Agreement and each
-------------------------
other Program Document may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
agreement.
Section 9.07. Binding Effect; Assignment. This Agreement and the
--------------------------
various representation and covenants set forth herein shall be binding upon the
parties hereto and their respective successors and assigns, and inure to the
benefit of the parties hereto and their respective Investors, successors and
assigns. No Federated Entity shall assign its rights or obligations hereunder
or under any other Program Document or in connection herewith or therewith or
any interest herein or therein (voluntarily, or by operation of law or
otherwise) without the Program Administrator's and the Purchasers' prior written
consent. This Agreement and the Program Administrator's and the Purchasers'
rights herein, and in the Purchased Portfolio Assets, the Program Collections
and the Ancillary Rights with respect thereto shall be assignable, in whole or
in part, by the Purchasers and the Program Administrator and their respective
successors and assigns.
Section 9.08. Governing Law; Submission to Jurisdiction. (a) THIS
-----------------------------------------
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
NEW YORK AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF SAID STATE WITHOUT REGARD TO ITS CONFLICTS OF LAWS PROVISIONS.
(b) Each of the Seller, the Transferor, the Parent and the Distributor
hereby irrevocably submits itself to the non-exclusive jurisdiction of the
courts of the State of New York and to the non-exclusive jurisdiction of any
Federal Court of the United States located in the southern district of New York,
for the purposes of any suit, action or other proceeding arising out of this
Agreement or any other Program Document or any of the transactions contemplated
hereby or thereby.
Section 9.09. Severability of Provisions. Any provision of this
--------------------------
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be
39
<PAGE>
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 9.10. Confidentiality. Unless otherwise required by
---------------
Applicable Law, the parties hereto agree to maintain the confidentiality of the
Program Documents (and all drafts hereof and thereof) other than the Transfer
Agreement, the Distributor's Contracts, the Shareholder Servicer's Agreements,
the Advisory Agreements, the Distribution Plans and the Prospectuses and the
transactions contemplated thereby, and all information disclosed by the parties
pursuant to or in connection with the Program Documents, in communications with
third parties and otherwise; provided, that such documents and information may
--------
be disclosed (i) to assignees, participants and potential assignees and
participants of the Purchasers and the Program Administrator provided that
confidentiality commitments similar hereto from such third parties are obtained
by the appropriate Purchaser or the Program Administrator, (ii) to third parties
to the extent such disclosure is consented to in writing by all parties to this
Agreement (which consent shall not be unreasonably withheld) and such disclosure
is made pursuant to a written confidentiality agreement in form and substance
substantially identical to this Section 9.10, (iii) the officers, partners,
directors and employees, legal counsel and internal and external auditors of the
parties hereto, (iv) as the Program Administrator or the Purchaser may deem
necessary or appropriate in connection with any Placement or its warehouse
financing arrangements and (v) in connection with any litigation or the
protection or enforcement of a party's rights and remedies under or relating to
the Program Documents; provided, further, that any disclosure of financial
-------- -------
statements of the Parent or the Distributor pursuant to clause (iv) to Investors
or rating agencies will be (a) limited to statements of financial position, or
(b) available for review at the Program Administrator's office, or (c) subject
to the consent of the Parent, such consent not to be unreasonably withheld.
Section 9.11. Intent of Agreement. It is the intention of this
-------------------
Agreement and the Purchase Agreements that each purchase of Purchased Portfolio
Assets hereunder shall convey to the applicable Purchaser an undivided 100%
ownership interest in such Purchased Portfolio Assets on the Purchase Date
therefor and that such transactions shall constitute a True Sale and not a
secured loan. If, notwithstanding such intention, any conveyance of Purchased
Portfolio Assets from the Seller to a Purchaser shall ever be recharacterized as
a secured loan and not a sale, it is the intention of this Agreement and the
Purchase Agreements that such agreements shall constitute collectively a
security agreement under Applicable Law, and that the Seller shall be deemed to
have granted to such Purchaser, and hereby does so grant, a duly perfected first
priority security interest in all of the Seller's right, title and interest in,
to and under such Purchased Portfolio Assets free and clear of any Adverse
Claim. Each party hereto represents and warrants that it has executed and
delivered the Program Documents and agreed to participate in the transactions
contemplated thereby in reliance on the formation and treatment of the Seller as
a legal entity separate from any other Federated Entity or other Person.
Section 9.12. Continuing Obligations. Notwithstanding any other
----------------------
provision of this Agreement or the other Program Documents, to the extent that
any obligation of the Federated Entities under, pursuant to and in connection
with the Purchased Portfolio Assets remains unperformed or executory, the
Federated Entities shall be obligated to perform such obligation to the same
extent as if the purchase and sale
40
<PAGE>
contemplated hereby had not taken place, and the Purchasers and the Program
Administrator shall not be required or obligated in any manner to perform or
fulfill any of the obligations of the Federated Entities under, pursuant to or
in connection with any Purchased Portfolio Assets.
Section 9.13. Limited Liability. (a) The parties to this Agreement
-----------------
are expressly put on notice of and hereby expressly agree to the limitation of
liability as set forth in the Declaration of Trust of the Parent and agree that
the obligations assumed by the Parent pursuant to this Agreement and the other
Program Documents be limited in any case to the trust and its assets. The
parties to this Agreement shall not seek satisfaction of any obligation of the
Parent under this Agreement or any other Program Document from any of the
shareholders of the trust, the trustees, officers or agents of those entities,
or any of them, except as contemplated under the Declaration of Trust of the
Parent.
(b) The Parties to this Agreement are expressly put on notice of and
hereby expressly agree to the limitation of liability as set forth in the Trust
Agreement of the Initial Purchaser and agree that the obligations assumed by the
Initial Purchaser pursuant to this Agreement and the other Program Documents be
limited in any case to the trust and its assets. Nothing herein shall be
construed as creating any liability of the entity serving as Trustee of the
trust, individually or personally, to perform any covenant either expressed or
implied contained in any of the Program Documents all such liability, if any,
being expressly waived by the parties hereto and by any Person claiming by,
through or under such parties. The parties to this Agreement shall not seek
satisfaction of any obligation of the Initial Purchaser under this Agreement or
any other Program Document from any of the shareholders of the trust, the
trustees, directors, officers, employees or agents of those entities, or any of
them, except as contemplated under the Trust Agreement of the Initial Purchaser,
as the case may be.
(c) None of the Federated Entities (other than the Parent), nor any
shareholder, officers or agents of any thereof, shall be liable hereunder or
under the other Program Documents for the obligations of the Seller, and the
other parties hereto and thereto shall look solely to the assets of the Seller
for the payment of any claim hereunder or thereunder for the performance of the
obligations of the Seller, except to the extent expressly set forth herein or in
any other Program Document.
Section 9.14. Merger. The Program Documents taken as a whole
------
incorporate the entire agreement between the parties thereto concerning the
subject matter thereof. The Program Documents supersede any prior agreements
among the parties relating to the subject matter thereof.
Section 9.15. Further Acts. Each party agrees that at any time, and
------------
from time to time, it will do all such things and execute and deliver all such
instruments, assignments, other documents and assurances, as such other party or
its counsel reasonably deems necessary or desirable in order to carry out the
express intent, purpose and conditions of this Agreement and the other Program
Documents and the transactions contemplated hereby and thereby, and without
limiting the generality of the foregoing, to the extent permitted by Applicable
Law, upon the Program Administrator's written request from time to time, the
Parent, the Distributor and the Seller shall make, execute, acknowledge and
deliver and file and record in the proper filing and recording places all
41
<PAGE>
such instruments, and take all such actions, as the Program Administrator may
reasonably deem necessary or advisable for assuring or confirming to each
Purchaser its rights and interest in and to, and remedies in respect of, the
Purchased Portfolio Assets. In addition, the Seller, the Transferor, the
Distributor and the Parent, agree to do all things and execute and deliver all
instruments, assignments, other documents and assurances, as the Program
Administrator or its counsel reasonably deems necessary to permit each Purchaser
to convey any portion of its right, title and interest in the Purchased
Portfolio Assets and the Program Documents in connection with any assignment by
such Purchaser permitted by this Agreement and the other Program Documents.
Section 9.16. Specific Performance; Other Rights and Remedies. The
-----------------------------------------------
parties hereto recognize that certain of their rights under this Agreement and
the other Program Documents are unique and, accordingly, the parties hereto
shall, in addition to such other remedies as may be available to any of them at
law or in equity or under this Agreement and the other Program Documents, have
the right to enforce their rights hereunder and thereunder by actions for
injunctive permitted relief and specific performance to the extent permitted by
Applicable Law. The rights and remedies of the Program Administrator and the
Purchasers under this Agreement and the other Program Documents are cumulative
and are not in lieu of, but are in addition to, any other rights and remedies
which the Program Administrator and the Purchasers may have under or by virtue
of any Applicable Law, or in equity, or any other agreement or obligations to
which the Program Administrator and such Purchaser is a party. The rights and
remedies of the Program Administrator and the Purchasers under this Agreement
and the other Program Documents may be exercised from time to time and as often
as such exercise is deemed expedient. Without limiting the generality of the
foregoing, the Seller acknowledges and agrees that it will be impossible to
measure in money the damage to the Program Administrator or the Purchasers in
the event of a breach of any of the terms and provisions of this Agreement or
any other Program Document, and that, in the event of any such breach, the
Program Administrator and the Purchasers may not have an adequate remedy at law,
although the foregoing shall not constitute a waiver of any of the Program
Administrator's or the Purchasers' rights, powers, privileges and remedies
against or in respect of a breaching party, any collateral or any other Person
or thing under this Agreement, any other Program Document or Applicable Law. It
is therefore agreed that each of the Program Administrator and the Purchasers,
in addition to all other such rights, powers, privileges and remedies that it
may have, shall be entitled to injunctive relief, specific performance or such
other equitable relief as it may request to exercise or otherwise enforce any of
the terms of those provisions and to enjoin or otherwise restrain any act
prohibited thereby, and the Seller shall not argue and hereby waives any defense
that there is an adequate remedy available at law.
Section 9.17. No Proceedings. Each Party agrees that it will not
--------------
institute against the Seller or the Purchasers, or join any other Person in
instituting against Seller or Purchasers, any insolvency proceeding (including
any proceeding of the type described in Section 6.01(e)). The foregoing shall
not limit the right of any Party to file any claim in or otherwise take any
action in any insolvency proceeding that was instituted against Seller or
Purchasers by any other Person.
Section 9.18. Additional Funds. Unless an Event of Termination (or
----------------
an event which, with the passage of time or notice, or both, would constitute an
Event of
42
<PAGE>
Termination) shall have occurred and be continuing, the Seller may request that
an Additional Eligible Fund become a "Fund" under this Agreement on the Addition
Effective Date for such Additional Eligible Fund. On and as of such Addition
Effective Date, (i) each Additional Eligible Fund shall become a Fund hereunder,
(ii) the Program Documents (including Schedule I to the Master Agreement) shall
be deemed to be supplemented to reflect such addition, and (iii) any reference
in this Agreement to any change or modification since the date of this Agreement
to the distributor's contract, distribution plan, principal shareholder
servicer's agreement, advisory agreement, prospectus or contingent deferred
sales charge arrangement in respect of such Additional Eligible Fund shall be
deemed to refer to any change or modification thereof since such Addition
Effective Date.
The term "Addition Effective Date" shall mean with respect to any
Additional Eligible Fund, the first date on which all of the following
conditions shall have been satisfied:
(i) the Program Administrator shall have received a fully executed
Additional Eligible Fund Addendum, together with such signed opinions of
counsel to the applicable Company, the Distributor, the Transferor, the
Seller and the Parent, each dated a date reasonably near the Addition
Effective Date, as the Program Administrator shall have reasonably
requested, all in form, scope and substance satisfactory to the Program
Administrator;
(ii) the Program Administrator shall have received such instruments,
certificates and documents regarding the addition of such Additional
Eligible Fund from the Distributor, the Transferor, the Parent, the Seller
and the applicable Company as the Program Administrator shall reasonably
request; and
(iii) the Program Administrator shall have received evidence
satisfactory to it that (a) the conditions in respect of such Additional
Eligible Fund set forth in Section 3.02 of this Agreement immediately after
the Addition Effective Date shall be satisfied, and (b) that on such
Addition Effective Date the Portfolio Assets relating to such Additional
Eligible Fund shall constitute Eligible Portfolio Assets.
Section 9.19. Trust Capacity. In executing and delivering this
--------------
Agreement and any other Program Document, Wilmington Trust Company acts solely
as Owner Trust of PLT Finance Trust 1997-1 and not in any individual capacity,
and all persons having any claim against Wilmington Trust Company by reason of
the transactions contemplated hereby shall not have any recourse to Wilmington
Trust Company in its individual capacity.
43
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
FEDERATED INVESTORS
By: /s/ Thomas R. Donahue
-------------------------
Name: Thomas R. Donahue
Title: Vice President
FEDERATED FUNDING 1997-1, INC.
By: /s/ Thomas R. Donahue
---------------------------
Name: Thomas R. Donahue
Title: Vice President
FEDERATED INVESTORS MANAGEMENT
COMPANY
By: /s/ Thomas R. Donahue
---------------------------
Name: Thomas R. Donahue
Title: Vice President
FEDERATED SECURITIES CORP.
By: /s/ Byron F. Bowman
---------------------------
Name: Byron F. Bowman
Title: Vice President
44
<PAGE>
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee of the
PLT FINANCE TRUST 1997-1 as Initial
Purchaser
By: /s/ Debra Eberly
----------------
Name: Debra Eberly
Title: Administrative Account Manager
PLT FINANCE, L.P.
By: PLT Finance, Inc.,
General Partner
By: /s/ William P. Henson
---------------------
Name: William P. Henson
Title: Vice President and Treasurer
PUTNAM, LOVELL & THORNTON INC.,
as Program Administrator
By: /s/ Robert T. Fleisher
----------------------
Name: Robert T. Fleisher
Title: Vice President
BANKERS TRUST COMPANY, not in its individual capacity
but solely as
Funding and Collection Agent
By: /s/ Louis Bodi
--------------
Name: Louis Bodi
Title: Vice President
45
<PAGE>
01740009.AQ4
918
46
<PAGE>
Schedule I
To
Master Agreement
COMPANIES, FUNDS SHARES AND RELATED MATTERS
-------------------------------------------
COMPANY:
- -------
SHARES
------
Federated American Leaders Fund, Inc. Class B
Federated Equity Funds
FUNDS SHARES
----- ------
1. Federated Aggressive Growth Fund Class B
2. Federated Growth Strategies Fund Class B
3. Federated Small Cap Strategies Fund Class B
4. Federated Capital Appreciation Fund Class B
COMPANY:
- -------
Federated Equity Income Fund, Inc. Class B
Federated Fund for U.S Government
Securities, Inc. Class B
Federated Government Income
Securities, Inc. Class B
Federated High Income Bond Fund, Inc. Class B
Federated Municipal Opportunities
Fund, Inc. Class B
Federated Municipal Securities Fund, Inc. Class B
Federated Stock and Bond Fund, Inc. Class B
Federated Utility Fund, Inc. Class B
I-1
<PAGE>
Fixed Income Securities, Inc.
FUNDS SHARES
----- ------
1. Federated Strategic Income Fund Class B
COMPANY:
- -------
International Series, Inc.
FUNDS SHARES
----- ------
1. Federated International Equity Fund Class B
2. Federated International Income Fund Class B
COMPANY:
- -------
Investment Series Funds, Inc.
FUNDS SHARES
----- ------
1. Federated Bond Fund Class B
COMPANY:
- -------
Liberty U.S. Government Money Market Trust Class B
Municipal Securities Income Trust
FUNDS SHARES
----- ------
1. Federated Pennsylvania Municipal
Income Fund Class B
COMPANY:
- -------
World Investment Series, Inc.
FUNDS SHARES
----- ------
1. Federated World Utility Fund Class B
2. Federated Asia Pacific Growth Fund Class B
I-2
<PAGE>
3. Federated Emerging Markets Fund Class B
4. Federated European Growth Fund Class B
5. Federated International Small
Company Fund Class B
6. Federated Latin American Growth Fund Class B
7. Federated International High Income
Fund Class B
8. Federated International Growth Fund Class B
I-3
<PAGE>
SCHEDULE II
to
the Federated Investors
Program Master Agreement
PROGRAM ALLOCATION PROCEDURES
Program Collections in respect of Portfolio Assets which constitute
Contingent Deferred Sales Charges, Asset Based Sales Charges and Shareholder
Servicing Fees related to Shares of each Fund shall be allocated by the Program
Administrator among the Initial Purchaser, the Revolving Purchaser and the
Seller in accordance with this Schedule II.
Defined terms used in this Schedule II and not otherwise defined
herein shall have the meaning assigned to them in Schedule X to the Master
Agreement. As used herein the following terms shall have the meanings
indicated:
"Commission Share", means in respect of any Fund, each Share of such
----------------
Fund, other than an Omnibus Share, which is issued under circumstances which
would normally give rise to an obligation of the holder of such Share to pay a
Contingent Deferred Sales Charge upon redemption of such Share (including,
without limitation, any Share of such Fund issued in connection with a Permitted
Free Exchange) and any such Share shall continue to be a Commission Share of
such Fund prior to the redemption (including a redemption in connection with a
Permitted Free Exchange) or conversion of such Share, even though the obligation
to pay the Contingent Deferred Sales Charge may have expired or conditions for
waivers thereof may exist.
"Date of Original Issuance" means in respect of any Commission Share,
-------------------------
the date with reference to which the amount of the Contingent Deferred Sales
Charge payable on redemption thereof, if any, is computed.
"4% Commission Assets" means, in respect of all Funds, as of any date,
--------------------
the sum of: (a) in respect of all Shares of all Funds sold by Selling Agents
listed on Exhibit II which have always sold Shares only on a 4% sales commission
basis, the aggregate Net Asset Value as of such date of all outstanding Shares
of all Funds sold by such Selling Agents or derived from such Shares by dividend
reinvestment, free exchanges or otherwise and (b) in respect of all Shares of
all Funds sold by all other Selling Agents listed on Exhibit II, the aggregate
Net Asset Values (as of the respective Dates of Original Issuance) of all
Commission Shares and Omnibus Shares sold by such Selling Agents on a 4% sales
commission basis which were issued on or prior to such date and which have not
been converted to Class A Shares pursuant to a Permitted Conversion Feature.
"Free Share" means, in respect of any Fund, each Share of such Fund,
----------
other than a Commission Share or Omnibus Share (including, without limitation,
any Share issued in connection with the reinvestment of dividends or capital
gains).
"Inception Date" means in respect of any Fund, the first date on which
--------------
such Fund issued Shares.
<PAGE>
"Net Asset Value" means, (i) with respect to any Fund, as of the date
---------------
any determination thereof is made, the net asset value of such Fund computed in
the manner such value is required to be computed by such Fund in its reports to
its shareholders, and (ii) with respect to any Share of such Fund as of any
date, the quotient obtained by dividing: (A) the net asset value of such Fund
(as computed in accordance with clause (i) above) allocated to Shares of such
Fund (in accordance with the constituent documents for such Fund) as of such
date, by (B) the number of Shares of such Fund outstanding on such date.
"Omnibus Share" means, in respect of any Fund, a commission share sold
-------------
by one of the Selling Agents listed on Exhibit I. If, subsequent to closing of
the Program, the Program Administrator reasonably determines that the Seller's
Transfer Agent is able to track all commission shares sold by any of the Selling
Agents listed on Exhibit I in the same manner as Commission Shares are currently
tracked in respect of Selling Agents not listed on Exhibit I, then Exhibit I
shall be amended to delete such Selling Agent from Exhibit I so that commission
shares sold by such Selling Agent will thereafter be treated as Commission
Shares.
PART I: ATTRIBUTION OF SHARES
- ------------------------------
Shares of each Fund, which are outstanding from time to time, shall be
attributed to the Initial Purchaser, the Revolving Purchaser and the Seller in
accordance with the following rules;
(1) Commission Shares:
-----------------
(a) Commission Shares attributed to the Initial Purchaser shall be
Commission Shares related to Portfolio Assets acquired by the Initial Purchaser,
the Date of Original Issuance of which occurred on or after the Inception Date
of such Fund and on or prior to the Initial Purchase Cut-Off Date.
(b) Commission Shares attributed to the Revolving Purchaser shall be
Commission Shares related to Portfolio Assets acquired by the Revolving
Purchaser, the Date of Original Issuance of which occurs after the Initial
Purchase Cut-Off Date and on or prior to the last Purchase Cut-Off Date.
(c) Commission Shares attributable to the Seller shall be Commission
Shares, the Date of Original Issuance of which occurs after the last Purchase
Cut-Off Date.
(d) A Commission Share of a particular Fund (the "Issuing Fund")
------------
issued in consideration of the investment of proceeds of the redemption of a
Commission Share of another Fund (the "Redeeming Fund") in connection with a
--------------
Permitted Free Exchange, is deemed to have a Date of Original Issuance identical
to the Date of Original Issuance of the Commission Share of the Redeeming Fund
and any such Commission Share will be attributed to the Initial Purchaser, the
Revolving Purchaser or the Seller based upon such Date of Original Issuance in
accordance with rules (a), (b) and (c) above.
(e) A Commission Share redeemed other than in connection with a
Permitted Free Exchange or converted to a Class A share is attributable to the
Initial Purchaser, Revolving Purchaser or Seller based upon the Date of Original
Issuance in accordance with rule (a), (b), (c) and (d) above.
2
<PAGE>
(2) Omnibus Shares:
--------------
Omnibus Shares of a Fund outstanding on any date shall be attributed
to the Initial Purchaser, Revolving Purchaser or Seller, as the case may be, in
the same proportion that outstanding Commission Shares of such Fund are
attributed to it on such date.
(3) Free Shares:
-----------
Free Shares of a Fund outstanding on any date shall be attributed to
the Initial Purchaser, Revolving Purchaser or Seller, as the case may be, in the
same proportion that the Commission Shares of such Fund outstanding on such date
are attributed to it on such date.
PART II: ALLOCATION OF CONTINGENT DEFERRED SALES CHARGES ("CDSCS")
- -------------------------------------------------------------------
(1) CDSCs Related to the Redemption of Commission Shares:
----------------------------------------------------
CDSCs in respect of the redemption of Commission Shares shall be
allocated to the Initial Purchaser, Revolving Purchaser or Seller depending upon
whether the related redeemed Commission Share is attributable to the Initial
Purchaser, Revolving Purchaser or Seller, as the case may be, in accordance with
Part I above.
(2) CDSCs Related to the Redemption of Omnibus Shares:
-------------------------------------------------
Aggregate CDSCs in respect of the redemption of Omnibus Shares of all
Funds during any period shall be allocated to the Initial Purchaser, Revolving
Purchaser or Seller in the same proportion that aggregate CDSCs related to
Commission Shares of all Funds during such period were allocated to each
thereof.
PART III: ALLOCATION OF ASSET BASED SALES CHARGES
- --------------------------------------------------
Assuming that the Asset Based Sales Charge remains constant over time
and among Funds so that Part VI hereof does not become operative:
(1) The portion of the aggregate Asset Based Sales Charges accrued in
respect of all Shares of all Funds during any calendar month allocable to the
Initial Purchaser, Revolving Purchaser or Seller is determined by multiplying
the total of such Asset Based Sales Charges by the following fraction:
(A + C)/2
_________
(B + D)/2
where:
3
<PAGE>
A = The aggregate Net Asset Value of all Shares of all Funds attributed to
the Initial Purchaser, the Revolving Purchaser or the Seller, as the
case may be, and outstanding at the beginning of such calendar month
B = The aggregate Net Asset Value of all Shares of all Funds at the
beginning of such calendar month
C = The aggregate Net Asset Value of all Shares of all Funds attributed to
the Initial Purchaser, the Revolving Purchaser or the Seller, as the
case may be, and outstanding at the end of such calendar month
D = The aggregate Net Asset Value of all Shares of all Funds at the end of
such calendar month
(2) If the Program Administrator reasonably determines that the
Transfer Agent is able to produce automated monthly reports which allocate the
average Net Asset Value of the Commission Shares (or all Shares if available) of
all Funds among the Initial Purchaser, Revolving Purchaser and Seller in a
manner consistent with the methodology detailed in Part I and Part III(1) above,
the portion of the Asset Based Sales Charges accrued in respect of all Shares of
all Funds during a particular calendar month will be allocated to the Initial
Purchaser, the Revolving Purchaser or the Seller by multiplying the total of
such Asset Based Sales Charges by the following fraction:
(A)/(B)
where:
A = Average Net Asset Value of all the Commission Shares (or all Shares if
available) of all Funds for such calendar month attributed to the
Initial Purchaser, the Revolving Purchaser or the Seller, as the case
may be
B = Total average Net Asset Value of all Commission Shares (or all Shares
if available) of all Funds for such calendar month
PART IV: ALLOCATION OF SHAREHOLDER SERVICING FEES
- --------------------------------------------------
The portion of the Shareholder Servicing Fees accrued in respect of
all Shares of all of the Funds during a particular calendar month and allocable
to the Initial Purchaser and the Revolving Purchaser is determined by the
following formula:
(A - (E x ((C + D)/2))) x B
where:
A = Shareholder Servicing Fees accrued in respect of all Shares of all of
the Funds during a particular calendar month
B = fraction referred to in Part III (1) for such calendar month, in
respect of the Initial Purchaser or the Revolving Purchaser, as the
case may be
4
<PAGE>
C = 4% Commission Assets of all Funds as of the beginning of such calendar
month
D = 4% Commission Assets of all Funds as of the end of such calendar month
E = .25% times a fraction the numerator of which is the number of days in
such calendar month and the denominator of which is 365
The remainder of such Shareholder Servicing Fees accrued in respect of
a Fund during a particular calendar month and not allocated to the Initial
Purchaser or Revolving Purchaser shall be allocated to the Seller.
PART V: ALLOCATION OF OTHER AMOUNTS (IF ANY)
- ---------------------------------------------
The allocation of amounts such as expense and indemnity payments shall
be accomplished in the following manner:
1. The Program Administrator will determine whether any such amounts
are intended to (i) be distributed in a manner similar to Program Collections
("Receivable Reimbursement Payment"), or (ii) reimburse a particular Person for
--------------------------------
specific losses, cost, damages or other expenses other than losses for which a
Receivable Reimbursement Payment is being made ("Expense Payments").
----------------
2. Receivable Reimbursement Payments shall be allocated as nearly as
possible in the same manner as the Collections in respect of the Shares to which
they related would be allocated as provided in Parts I through IV of this
Schedule II; provided, that, if any such payment by a particular payor is not
-------- ----
sufficient to replace the full amount required to be replaced by such payment,
such payment shall be allocated to each person to which the amount replaced
would have been allocated as nearly as practicable in the proportion that the
full amount of indemnification required to be made to such indemnitee from such
payor bears to the total amount of indemnification required to be made to all
such indemnitees from such payor.
PART VI: ADJUSTMENT OF THE INITIAL PURCHASER'S
- -----------------------------------------------
PORTION, THE REVOLVING PURCHASER'S PORTION
- ------------------------------------------
AND THE SELLER'S PORTION
- ------------------------
The Parties to the Program Documents recognize that, if the terms of
any Distributor's Contract, any Principal Shareholder Servicer's Agreement, any
Distribution Plan, any Prospectus, the Conduct Rules or any other Applicable Law
change disproportionately reduces, in a manner inconsistent with the intent of
the Program Documents, the amount of the Initial Purchaser's Portion, the
Revolving Purchaser's Portion or the Seller's Portion that would have been
payable on any Monthly Settlement Date had no such change occurred, the
definitions of the Initial Purchaser's Portion, the Revolving Purchaser's
Portion and/or the Seller's Portion in respect of the Shares relating to such
Fund shall be adjusted by agreement among the Initial Purchaser, the Revolving
Purchaser, the Seller, the Program Administrator and the Funding and Collection
Agent; provided, however, if the Initial Purchaser, the Revolving Purchaser, the
-------- -------
Seller, the Program Administrator and the Funding and Collection Agent cannot
agree within thirty (30) days after the date of any such change in Applicable
Laws or in any Distributor's Contract, any Principal Shareholder Servicer's
Agreement, Distribution Plan, Prospectus or the Conduct Rules, the Parties
5
<PAGE>
shall submit the question to arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association and the decision
reached by the arbitrator shall be final and binding on the Parties hereto. The
Funding and Collection Agent shall be notified promptly in writing by the
Program Administrator of any adjustment in the Initial Purchaser's Portion, the
Revolving Purchaser's Portion or the Seller's Portion or of any arbitration
award pursuant to this Part VI.
6
<PAGE>
EXHIBIT I TO
PROGRAM ALLOCATION PROCEDURES
SELLING AGENTS CURRENTLY OFFERING OMNIBUS SHARES
1. Merrill Lynch, Pierce, Fenner & Smith Incorporated
2. Core-Link
7
<PAGE>
EXHIBIT II TO
PROGRAM ALLOCATION PROCEDURES
SELLING AGENTS CURRENTLY SELLING SHARES
UNDER A 4% COMMISSION STRUCTURE
8
<PAGE>
Schedule III
To
Master Agreement
BANKRUPTCY REMOTE COVENANTS
---------------------------
The Seller shall, and the Parent shall cause the Seller to:
1. maintain books and records separate from any other Person;
2. maintain its accounts separate from any other Person;
3. not commingle assets with those of any affiliate;
4. conduct its own business in its own name;
5. prepare and maintain separate financial statements;
6. pay its own liabilities out of its own funds;
7. observe all corporate formalities;
8. maintain an arm's-length relationship with its affiliates;
9. not guarantee or become obligated for the debts of any other
entity or hold out its credit as being available to satisfy the obligations of
others;
10. not acquire obligations or securities of its shareholders;
11. allocate fairly and reasonably any overhead for shared office
space, if any;
12. use separate stationery, invoices, and checks;
13. not pledge its assets for the benefit of any other Person or make
any loans or advances to any Person;
14. hold itself out as a separate entity;
15. correct any known misunderstanding regarding its separate
identity;
16. maintain adequate capital in light of its contemplated business
operations, including an initial capital contribution by FII Holdings Inc. of
$25,000;
17. ensure that its certificate of incorporation shall: (a) limit its
corporate purposes to the performance of its obligations under the Program
Documents and activities incidental thereto, including the ownership of the
beneficial interest in the Initial Purchaser; (b) prohibit it from incurring
Debt, other than in connection with the activities described in (a); (c) require
that it
<PAGE>
have at least one duly appointed Independent Director; (d) require the
unanimous consent of its directors to: (i) institute bankruptcy or insolvency
proceedings, (ii) dissolve, liquidate, consolidate, merge, or sell all, or
substantially all, of its assets, (iii) engage in any activity other than that
specified in (a) above or (iv) amend its certificate of incorporation; and (e)
require that the directors consider the interests of the Purchasers and
creditors in connection with all corporate actions;
18. not permit the Distributor or the Transferor to have any equity
or other ownership interest, direct or indirect, in it; and
19. not conduct its daily business such that it requires management by
any other Federated Entity or other Person.
(ii)
<PAGE>
Schedule IV
To
Master Agreement
CONTINGENT DEFERRED SALES CHARGE SCHEDULE
-----------------------------------------
<TABLE>
<CAPTION>
Years from
Fund Shares Purchase CDSC Rate
- -------------------- ---------
<S> <C>
0-1 5.50%
1-2 4.75
2-3 4.0
3-4 3.0
4-5 2.0
5-6 1.0
6+ 0.0
</TABLE>
<PAGE>
Schedule V
To
Master Agreement
SCHEDULE OF TRANSFERABLE NASD CAP
If the number of calendar months which have passed since the Date of
Original Issuance of the Share of th Redeeming Fund redeemed in connection with
a Permitted Free Exchange falls in a given range of calendar months indicated in
Column I below, the amount by which the Maximum Aggregate Sales Charge Allowable
in respect of the Issuing Fund must be increased as a result of such Free
Exchange is the percentage set forth in Column II below directly opposite such
range of calendar months in Column I of the date of redemption Net Asset Value
of the Share of the Redeeming Fund so redeemed.
I II
CALENDAR MONTHS PERCENTAGE
- --------------- ----------
0 to 12 5.90%
13 to 24 5.25%
25 to 36 4.60%
37 to 48 4.00%
49 to 60 3.40%
61 to 72 2.90%
73 to 84 2.50%
85 to 96 2.00%
97 or more 0%
<PAGE>
Schedule X
To
Master Agreement
RULES OF CONSTRUCTION; DEFINITIONS
----------------------------------
[Distributed Separately]
<PAGE>
Exhibit 4.10
================================================================================
FEDERATED INVESTORS PROGRAM
INITIAL PURCHASE AGREEMENT
Dated as of October 24, 1997
between
FEDERATED FUNDING 1997-1, INC.,
as Seller
and
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee of the
PLT FINANCE TRUST 1997-1,
as Initial Purchaser
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I RULES OF CONSTRUCTION; DEFINITIONS
1.01. Rules of Construction....................... 1
1.02. Definitions................................. 1
ARTICLE II SALE AND PURCHASE OF THE PORTFOLIO ASSETS
2.01. Sale and Purchase........................... 2
2.02. Transfers and Payments...................... 2
2.03. Recording of Sales and Transfers............ 2
2.04. Initial Purchaser's Collection Rights....... 3
2.05. Continuing Obligations...................... 3
2.06. Further Assurances.......................... 3
ARTICLE III SECURITY INTEREST
3.01. Security Interest........................... 3
ARTICLE IV MISCELLANEOUS
4.01. Modifications in Writing.................... 4
4.02. Notices..................................... 4
4.03. Binding Effect, Assignment.................. 4
4.04. Governing Law............................... 4
4.05. Severability of Provisions.................. 4
4.06. Trust Capacity.............................. 4
EXHIBITS
Exhibit A Purchased Portfolio Assets
i
<PAGE>
FEDERATED INVESTORS PROGRAM
INITIAL PURCHASE AGREEMENT
FEDERATED INVESTORS PROGRAM INITIAL PURCHASE AGREEMENT, dated as of
October 24, 1997 (this "Agreement"), between FEDERATED FUNDING 1997-1, INC. (the
"Seller") and WILMINGTON TRUST COMPANY, not in its individual capacity but
solely as Owner Trustee of the PLT FINANCE TRUST 1997-1 (the "Initial
Purchaser").
W I T N E S S E T H:
WHEREAS, the Seller and the Initial Purchaser are parties to that
certain Federated Investors Program Master Agreement dated as of the date hereof
with Federated Investors, as Parent, the Seller, the Initial Purchaser, and the
"Distributor," "Transferor," "Funding and Collection Agent," "Revolving
Purchaser" and "Program Administrator," each as defined therein (the "Master
Agreement").
WHEREAS, the Seller desires to sell to the Initial Purchaser, and the
Initial Purchaser desires to purchase from the Seller, on the terms and subject
to the conditions specified in this Agreement and the Master Agreement, the
Purchased Portfolio Assets (defined as hereinafter provided);
NOW, THEREFORE, in consideration of the foregoing premises, and the
mutual covenants and agreements herein contained, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
ARTICLE I
RULES OF CONSTRUCTION; DEFINITIONS
Section 1.01 Rules of Construction. The rules of construction set
---------------------
forth in Schedule X to the Master Agreement shall be applied to this Agreement.
Section 1.02. Definitions. Capitalized terms not expressly defined
-----------
herein, which are defined in Schedule X to the Master Agreement, shall have the
same meanings herein as in said Schedule.
<PAGE>
ARTICLE II
SALE AND PURCHASE OF THE RECEIVABLES
Section 2.01. Sale and Purchase. (a) The Seller hereby agrees to
-----------------
sell, transfer, convey and assign to the Initial Purchaser, and the Initial
Purchaser hereby agrees to purchase, in each case on the terms and subject to
the conditions set forth in this Agreement and in Article III of the Master
Agreement, all of the Seller's right, title and interest in, to and under all
Purchased Portfolio Assets described on Exhibit A hereto, including all
Ancillary Rights relating thereto.
(b) The parties to this Agreement intend that the transactions
contemplated hereby shall be, and shall be treated as, a purchase by the Initial
Purchaser and a sale by the Seller of the Purchased Portfolio Assets,
constituting a True Sale, and shall not be treated as a lending transaction.
The sale of Purchased Portfolio Assets by the Seller hereunder shall be without
recourse to, or representation or warranty of any kind (express or implied) by,
the Seller, except as set forth in the Master Agreement.
Section 2.02. Transfers and Payments. (a) Subject to the terms and
----------------------
conditions of the Master Agreement, the Seller shall convey the Purchased
Portfolio Assets arising directly or indirectly out of the Commission Shares of
each Fund issued on or prior to the Initial Purchase Cut-Off Date to the Initial
Purchaser on the Initial Purchase Date, and the Initial Purchaser shall pay to
the Seller a purchase price in the amount of $110,213,867 (the "Initial Purchase
Price") therefor.
(b) The parties agree, to the fullest extent they may lawfully do so,
that the Initial Purchase Price for the purchase and sale of the Purchased
Portfolio Assets pursuant to Section 2.02(a) above represents reasonably
equivalent value for the transfer of the same by the Seller to the Initial
Purchaser pursuant to this Agreement.
Section 2.03. Recording of Sales and Transfers. In connection with
--------------------------------
the sale and conveyance of Purchased Portfolio Assets pursuant hereto, the
Seller shall indicate on its books and records that all such Purchased Portfolio
Assets have been sold or conveyed to the Initial Purchaser. In addition, the
Seller shall not carry any Purchased Portfolio Assets on its accounting records,
and the Seller agrees that all such Purchased Portfolio Assets have been and
will be, as contemplated by the terms of this Agreement, transferred and sold to
the Initial Purchaser and carried on the Initial Purchaser's accounting records.
Notwithstanding the foregoing, Shareholder Servicing Fees may be reflected as
assets of the Distributor, the Transferor or the Seller if such treatment is
required by GAAP and if all appropriate financial statements are footnoted to
reflect the sale thereof to the Purchasers.
Section 2.04. Initial Purchaser's Collection Rights. The Initial
-------------------------------------
Purchaser shall be entitled to take all actions it considers reasonable to
collect from the respective Companies and Funds all payments in respect of the
Purchased Portfolio Assets as and when the same shall become due. The Seller
hereby irrevocably authorizes and empowers the Initial Purchaser to demand, sue
for, collect and receive payment of any funds due with respect to the Purchased
Portfolio Assets in the name of the Seller, if required in the judgment of the
Initial Purchaser.
2
<PAGE>
Section 2.05. Continuing Obligations. Notwithstanding any other
----------------------
provision of this Agreement, to the extent that any obligation of the Seller
under, pursuant to and in connection with the Purchased Portfolio Assets remains
unperformed or executory, the Seller shall be obligated to perform such
obligation to the same extent as if the purchase and sale contemplated hereby
had not taken place, and the Initial Purchaser shall not be required or
obligated in any manner to perform or fulfill any of the obligations of Seller
under, pursuant to or in connection with any Purchased Portfolio Assets.
Section 2.06. Further Assurances. The Seller agrees to do such
------------------
further acts and things, and to execute and deliver to the Initial Purchaser
such additional assignments, agreements, powers and instruments, as are
reasonably required by the Initial Purchaser to carry into effect the purposes
of this Agreement or to better assure and confirm unto the Initial Purchaser its
rights, power and remedies hereunder.
ARTICLE III
SECURITY INTEREST
Section 3.01. Security Interest. For valuable consideration, the
-----------------
receipt and sufficiency of which are hereby acknowledged, and to induce the
Initial Purchaser to purchase the Purchased Portfolio Assets hereunder, the
Seller hereby grants to the Initial Purchaser, in order to secure the Initial
Purchaser's rights under this Agreement, a security interest in any remaining
right, title and interest in and to the Purchased Portfolio Assets that remain
property of the Seller's estate, notwithstanding this Agreement.
ARTICLE IV
MISCELLANEOUS
Section 4.01. Modifications in Writing. This Agreement and any term
-------------------------
or provision hereof may only be amended, modified or waived by a written
instrument executed by the parties hereto and by any additional Persons whose
execution is required pursuant to Section 9.01 of the Master Agreement.
Section 4.02. Notices. All notices, demands, instructions and other
--------
communications required or permitted to be given to or made upon any party
hereto shall be given or made in accordance with Section 9.03 of the Master
Agreement.
Section 4.03. Binding Effect; Assignment. This Agreement shall be
--------------------------
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. No party shall assign any of its rights or
obligations hereunder without the prior written consent of the other parties
hereto and of any additional Persons whose consent is required pursuant to
Section 9.07 of the Master Agreement; provided that the Purchaser's right, title
and interest in, to and under this Agreement, including all of the Initial
Purchaser's right, title and interest in and to Purchased Portfolio Assets may
be assigned as contemplated by the Program Documents without the consent of the
Seller.
3
<PAGE>
Section 4.04. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
-------------
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT
REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
Section 4.05. Severability of Provisions. Any provisions of this
---------------------------
Agreement which are 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 or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 4.06. Trust Capacity. In executing and delivering this
--------------
Agreement and any other Program Document, Wilmington Trust Company acts solely
as Owner Trustee of PLT Finance Trust 1997-1 and not in any individual capacity,
and all persons having any claim against Wilmington Trust Company by reason of
the transactions contemplated hereby shall not have any recourse to Wilmington
Trust Company in its individual capacity.
4
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and date first above written.
FEDERATED FUNDING 1997-1, INC.,
as Seller
By: /s/ Thomas R. Donahue
---------------------------
Name: Thomas R. Donahue
Title: Vice President
WILMINGTON TRUST COMPANY,
not in its individual capacity
but solely as Owner Trustee of the
PLT FINANCE TRUST 1997-1
By: /s/ Debra Eberly
-------------------------------
Name: Debra Eberly
Title: Administrative Account Manager
5
<PAGE>
Exhibit A to
Initial Purchase Agreement
Purchased Portfolio Assets
--------------------------
All Portfolio Assets, together with the Program Collections and the
Ancillary Rights with respect thereto, arising directly or indirectly out of the
Commission Shares of each Fund issued on or prior to the Initial Purchase Cut-
Off Date, and, pursuant to the Program Allocation Procedures, consisting of
[Confidential Treatment Requested] of Portfolio Assets arising directly or
indirectly out of 5.5% Commission Shares and [Confidential Treatment Requested]
of Portfolio Assets arising directly or indirectly out of Commission Shares sold
on a 4% commission basis.
A-1
<PAGE>
Exhibit 4.11
================================================================================
FEDERATED INVESTORS PROGRAM
REVOLVING PURCHASE AGREEMENT
Dated as of October 24, 1997
between
FEDERATED FUNDING 1997-1, INC.,
as Seller
and
PLT FINANCE, L.P.,
as Revolving Purchaser
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I RULES OF CONSTRUCTION; DEFINITIONS
1.01. Rules of Construction....................... 1
1.02. Definitions................................. 1
ARTICLE II SALE AND PURCHASE OF THE PORTFOLIO ASSETS
2.01. Sale and Purchase........................... 4
2.02. Purchase Notices............................ 4
2.03. Transfers and Payments...................... 4
2.04. Recording of Sales and Transfers............ 5
2.05. Initial Purchaser's Collection Rights....... 5
2.06. Continuing Obligations...................... 5
2.07. Further Assurances.......................... 5
ARTICLE III CONDITIONS PRECEDENT
3.01. Conditions to Obligations of the
Parties Under the Program Documents......... 5
3.02. Conditions Precedent on the Initial
Revolving Purchase Date..................... 6
3.03. Conditions Precedent on Each Revolving
Purchase Date............................... 9
ARTICLE IV SECURITY INTEREST
4.01. Security Interest........................... 10
ARTICLE V MISCELLANEOUS
5.01. Modifications in Writing.................... 10
5.02. Notices..................................... 11
5.03. Binding Effect, Assignment.................. 11
5.04. Governing Law............................... 11
5.05. Severability of Provisions.................. 11
SCHEDULES
SCHEDULE I Purchase Price Percentage
EXHIBITS
EXHIBIT A Form of Revolving Purchase Notice
i
<PAGE>
EXHIBIT B Attribution of Placement Net Cash Gains, Placement Net Cash Losses
and Residuals to Revolving Purchaser's Purchased Portfolio Assets
ii
<PAGE>
FEDERATED INVESTORS PROGRAM
REVOLVING PURCHASE AGREEMENT
FEDERATED INVESTORS PROGRAM REVOLVING PURCHASE AGREEMENT, dated as of
October 24, 1997 (this "Agreement"), among FEDERATED FUNDING 1997-1, INC. (the
"Seller") and PLT Finance, L.P. (the "Revolving Purchaser").
W I T N E S S E T H:
WHEREAS, the Seller and the Revolving Purchaser are parties to that
certain Federated Investors Program Master Agreement dated as of the date hereof
with Federated Investors, as Parent, the Seller, the Revolving Purchaser, and
the "Distributor," "Transferor," "Funding and Collection Agent," "Initial
Purchaser" and "Program Administrator," each as defined therein (the "Master
Agreement").
WHEREAS, the Seller desires to sell to the Revolving Purchaser, and
the Revolving Purchaser desires to purchase from the Seller, from time to time,
on the terms and subject to the conditions specified in this Agreement and the
Master Agreement, the Revolving Purchaser's Purchased Portfolio Assets (defined
as hereinafter provided) pursuant to the Federated Investors program (the
"Program");
NOW, THEREFORE, in consideration of the foregoing premises, and the
mutual covenants and agreements herein contained, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
ARTICLE I
RULES OF CONSTRUCTION; DEFINITIONS
Section 1.01. Rules of Construction. The rules of construction set
---------------------
forth in Schedule X to the Master Agreement shall be applied to this Agreement.
Section 1.02. Definitions. Capitalized terms not expressly defined
-----------
herein, which are defined in Schedule X to the Master Agreement, shall have the
same meanings herein as in said Schedule. In addition, the following terms
shall have the following meanings:
"Fee" means a fee consisting of a Placement Component and a Program
---
Collection Component.
"Placement Component" means, in respect of any Placement involving, in
-------------------
whole or in part, the Revolving Purchaser's Purchased Portfolio Assets, an
amount, computed on the twelve month anniversary (the "Computation Date") of the
Placement Determination Date in respect of such Placement, equal to
[Confidential Treatment Requested] percent [Confidential Treatment Requested]
of the excess, if any, of (a) the amount of the Placement Net Cash Gain in
respect of such Placement minus (b) the aggregate of the Placement Net Cash
Loss, if any, realized from each Placement closed after the Placement
Determination
<PAGE>
Date and prior to the Computation Date in respect of such Placement minus
(c) the amount of Unrecovered Program Expenditures as of such Computation Date.
"Placement Determination Date" means, in respect of any Placement, the
----------------------------
day on which such Placement is closed.
"Placement Gross Proceeds" means in respect of any Placement, the
------------------------
total cash proceeds raised in respect of such Placement.
"Placement Net Cash Gain" means, in respect of any Placement, the
-----------------------
excess, if any, of (a) the Placement Net Cash Proceeds minus (b) amounts payable
upon the closing of such Placement pursuant to funding arrangements established
by the Revolving Purchaser for the purpose of funding the purchase price paid by
it for the portfolio assets acquired pursuant to the Program and other similar
programs to the extent such excess is attributable to the Revolving Purchaser's
Purchased Portfolio Assets included in such Placement as determined pursuant to
Exhibit B hereto.
"Placement Net Cash Loss" means, in respect of any Placement, the
-----------------------
excess, if any, of (a) amounts payable upon the closing of such Placement
pursuant to funding arrangements established by the Revolving Purchaser for the
purpose of funding the purchase price paid by it for the portfolio assets
acquired pursuant to the Program and other similar programs minus (b) the
Placement Net Cash Proceeds to the extent such excess is attributable to the
Revolving Purchaser's Purchased Portfolio Assets included in such Placement as
determined pursuant to Exhibit B hereto.
"Placement Net Cash Proceeds" means in respect of any Placement, the
---------------------------
Placement Gross Proceeds in respect of such Placement reduced by Placement
Origination Costs in respect of such Placement.
"Placement Origination Costs" means, in respect of any Placement, the
---------------------------
portion of all out-of-pocket costs and expenses incurred in connection with such
Placement, whether payable directly by the Revolving Purchaser or paid out of
the proceeds of such Placement, including, but not limited to, (a) fees and
disbursements of counsel, (b) fees and disbursements of accountants, (c) fees
and disbursements of Rating Agencies, (d) underwriting spreads, placement fees
and disbursements of placement agents (including, the Program Administrator),
(e) printing expenses, (f) registration, filing and listing fees, and (g) fees
and disbursements of trustees, collection agents or similar service providers.
"Program Collection Component" means, as of any Monthly Settlement
----------------------------
Date, an amount, computed on the Monthly Settlement Date, equal to [Confidential
Treatment Requested] percent [Confidential Treatment Requested] of (a) for
any Placement, the excess, if any, of (i) Residuals minus (ii) the amount of
Unrecovered Program Expenditures as of such Monthly Settlement Date and (b) for
the Revolving Purchaser's Purchased Portfolio Assets which have not yet been
made part of a Placement, (i) all Program Collections attributable to such
Purchased Portfolio Assets minus (ii) amounts payable pursuant to funding
arrangements established by the Revolving Purchaser for the purpose of funding
the purchase price paid by it for the portfolio assets acquired pursuant to the
Program and other similar programs minus (iii) the amount of Unrecovered Program
Expenditures as of such Monthly Settlement Date.
2
<PAGE>
"Program Expenditures" means all out-of-pocket costs incurred by the
--------------------
Revolving Purchaser pursuant to the Program and not reimbursed by the Seller or
the other Federated Entities pursuant to the Program Documents, including, but
not limited to: (a) fees and disbursements of counsel, (b) fees and
disbursements of accountants, (c) filing fees, (d) fees and disbursements of the
Funding and Collection Agent and similar service providers, and (e) the fees and
disbursements of the Program Administrator, but excluding all Placement
Origination Costs previously taken into account in computing Placement Net Cash
Proceeds.
"Purchase" means each acquisition of Portfolio Assets by the Revolving
--------
Purchaser pursuant to this Agreement and the other Program Documents.
"Purchase Notice" means the notice substantially in the form of
---------------
Exhibit A hereto, from the Seller to the Revolving Purchaser and the Program
Administrator specifying (i) the Revolving Purchase Date, (ii) the Revolving
Purchase Price for the Portfolio Assets relating to each Fund payable on such
Revolving Purchase Date, (iii) the Sale Cutoff Date relating to the Portfolio
Assets of each Fund, and (iv) the computation of each such Revolving Purchase
Price in reasonable detail satisfactory to the Program Administrator.
"Residuals" means, in respect of any Placement, the excess, if any, of
---------
(i) all program collections attributable to portfolio assets originally acquired
by the Revolving Purchaser pursuant to the Program and other similar programs
minus (ii) amounts payable pursuant to funding arrangements established on
behalf of the Placement Trust for the purpose of funding the purchase price paid
by it for portfolio assets originally acquired pursuant to the Program and other
similar programs to the extent such excess is attributable to the Revolving
Purchaser's Purchased Portfolio Assets included in such Placement as determined
pursuant to Exhibit B.
"Revolving Purchase Limit" means at any time, $100,000,000, (or such
------------------------
other amount as shall be agreed to in writing by the Revolving Purchaser, the
Program Administrator, and the Seller) less the outstanding principal amount of
Revolving Purchaser Warehouse Funding Debt; provided, that on and after the
--------
Revolving Purchase Termination Date, the Revolving Purchase Limit shall be
deemed to be zero for all purposes.
"Revolving Purchaser Warehouse Funding Debt" means indebtedness
------------------------------------------
incurred by the Revolving Purchaser pursuant to the funding arrangements
established by the Revolving Purchaser for the purpose of funding the Purchase
Price paid by it for Revolving Purchaser's Purchased Portfolio Assets acquired
pursuant to the Program.
"Revolving Purchaser's Purchased Portfolio Assets" means Portfolio
------------------------------------------------
Assets acquired by the Revolving Purchaser pursuant to the Program.
"Unamortized Gross Purchase Amount" means, in respect of the Revolving
---------------------------------
Purchaser's Purchased Portfolio Assets relating to any Fund, as of any date of
determination, (i) the Maximum Aggregate Sales Charge Allowable, minus (ii) the
aggregate amounts paid by the applicable Company (including amounts paid by the
holders of Shares of such Fund in respect of Contingent Deferred Sales Charges)
in respect of such Fund and deposited in the Program Collection Account and
applied and distributed to the payment of such Revolving Purchaser's Purchased
Portfolio Assets in accordance with the terms of the Program Funding and
Collection Agency Agreement through such date of determination.
3
<PAGE>
"Unrecovered Program Expenditures" means, as of any date, all
--------------------------------
unreimbursed Program Expenditures.
ARTICLE II
SALE AND PURCHASE OF THE RECEIVABLES
Section 2.01. Sale and Purchase. (a) The Seller hereby agrees to
-----------------
sell, transfer, convey and assign to the Revolving Purchaser, and the Revolving
Purchaser hereby agrees to purchase, twice each month (approximately at the
beginning and middle of each calendar month (or such other interval as shall be
mutually agreed to in writing)) on each Revolving Purchase Date until the
Revolving Purchase Termination Date, in each case on the terms and subject to
the conditions set forth in this Agreement and in the Master Agreement, all of
the Seller's right, title and interest in, to and under all Purchased Portfolio
Assets, other than those Purchased Portfolio Assets sold to the Initial
Purchaser on the Initial Purchase Date.
(b) The parties to this Agreement intend that each transaction
contemplated hereby shall be, and shall be treated as, a purchase by the
Revolving Purchaser and a sale by the Seller of the Revolving Purchaser's
Purchased Portfolio Assets relating thereto, constituting a True Sale, and shall
not be treated as a lending transaction. Each sale of Revolving Purchaser's
Purchased Portfolio Assets by the Seller hereunder shall be without recourse to,
or representation or warranty of any kind (express or implied) by, the Seller,
except as set forth in the Master Agreement.
Section 2.02. Purchase Notices. The Seller shall transmit or shall
----------------
cause to be transmitted to the Program Administrator and the Revolving Purchaser
(with a copy to the Funding and Collection Agent), no later than 10:00 a.m. (New
York City time) three business days prior to such proposed Revolving Purchase
Date, by facsimile transmission, a Purchase Notice. The Seller represents and
warrants that the information set forth in each Purchase Notice is true and
correct.
Section 2.03. Transfers and Payments. (a) Subject to the terms and
----------------------
conditions set forth herein and the Master Agreement, the Seller shall convey to
the Revolving Purchaser on each Revolving Purchase Date, and the Revolving
Purchaser shall pay to the Seller the Revolving Purchase Price for, all
Portfolio Assets arising directly or indirectly out of Commission Shares of each
Fund issued on or after the immediately preceding Purchase Cut-Off Date and
prior to the Purchase Cut-Off Date specified in the Purchase Notice for the
Revolving Purchase Date in question. One of the two Purchase Cut-Off Dates
falling in each calendar month shall be the last Business Day of such calendar
month.
(b) The parties agree, to the fullest extent they may lawfully do so,
that the Revolving Purchase Price for the purchase and sale of the Revolving
Purchaser's Purchased Portfolio Assets relating thereto pursuant to Section
2.03(a) above represents reasonably equivalent value for the transfer of the
same by the Seller to the Revolving Purchaser pursuant to this Agreement.
Section 2.04. Recording of Sales and Transfers. In connection with
--------------------------------
each sale and conveyance of Revolving Purchaser's Purchased Portfolio Assets
relating thereto pursuant hereto,
4
<PAGE>
the Seller shall indicate on its books and records that all such Revolving
Purchaser's Purchased Portfolio Assets relating thereto have been sold or
conveyed to the Revolving Purchaser. In addition, the Seller shall not carry any
Revolving Purchaser's Purchased Portfolio Assets sold to the Revolving Purchaser
on its accounting records, and the Seller agrees that all such Revolving
Purchaser's Purchased Portfolio Assets have been and will be, as contemplated by
the terms of this Agreement, transferred and sold to the Revolving Purchaser and
carried on the Revolving Purchaser's accounting records. Notwithstanding the
foregoing, Shareholder Servicing Fees may be reflected as assets of the
Distributor, the Transferor or the Seller if such treatment is required by GAAP
and if all appropriate financial statements are footnoted to reflect the sale
thereof to the Revolving Purchaser, in a manner reasonably satisfactory to the
Program Administrator.
Section 2.05. Revolving Purchaser's Collection Rights. The Revolving
---------------------------------------
Purchaser shall be entitled to take all actions it considers reasonable to
collect from the respective Companies and Funds all payments in respect of the
Revolving Purchaser's Purchased Portfolio Assets as and when the same shall
become due. The Seller hereby irrevocably authorizes and empowers the Revolving
Purchaser to demand, sue for, collect and receive payment of any funds due with
respect to the Revolving Purchaser's Purchased Portfolio Assets in the name of
the Seller, if required in the judgment of the Revolving Purchaser.
Section 2.06. Continuing Obligations. Notwithstanding any other
----------------------
provision of this Agreement, to the extent that any obligation of the Seller
under, pursuant to and in connection with the Revolving Purchaser's Purchased
Portfolio Assets remains unperformed or executory, the Seller shall be obligated
to perform such obligation to the same extent as if the purchase and sale
contemplated hereby had not taken place, and the Revolving Purchaser shall not
be required or obligated in any manner to perform or fulfill any of the
obligations of Seller under, pursuant to or in connection with any Revolving
Purchaser's Purchased Portfolio Assets.
Section 2.07. Further Assurances. The Seller agrees to do such
------------------
further acts and things, and to execute and deliver to the Revolving Purchaser
such additional assignments, agreements, powers and instruments, as are
reasonably required by the Revolving Purchaser to carry into effect the purposes
of this Agreement or to better assure and confirm unto the Revolving Purchaser
its rights, power and remedies hereunder.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.01. Conditions to Obligations of the Parties Under this
---------------------------------------------------
Revolving Purchase Agreements. The obligation of each Party to take the actions
- -----------------------------
to be taken by it under this Revolving Purchase Agreement on any Revolving
Purchase Date shall be subject to the fulfillment or waiver on such Revolving
Purchase Date of the following specified conditions precedent set forth in
Section 3.02 or Section 3.03 (except that the obligation of any Party shall not
be subject to such Party's own performance or compliance):
(a) in the case of the Parent, the Distributor, the Program Servicer
Agent, the Transferor and the Seller, the fulfillment to their
satisfaction, or waiver by them, of the conditions precedent set forth in
clauses (a), (j) and (k) of Section 3.02;
5
<PAGE>
(b) in the case of each of the Program Administrator and Revolving
Purchaser, the fulfillment to its satisfaction, or waiver by it, of the
conditions precedent set forth in all clauses of Section 3.02 or in Section
3.03 as applicable; and
(c) in the case of the Funding and Collection Agent, the fulfillment
to its satisfaction, or waiver by it, of the conditions set forth in
clauses (a), (d), (e) (f), (j) and (k) of Section 3.02.
Section 3.02. Conditions Precedent on the Initial Revolving Purchase
----------------------------------- ------------------
Date. The conditions precedent for each Party as specified in Section 3.01
- ----
hereof above for each Initial Revolving Purchase Date are as follows:
(a) Program Documents. The Program Documents shall have been duly
-----------------
authorized, executed and delivered by the other Parties thereto, and shall
be in full force and effect on such Revolving Purchase Date.
(b) Due Diligence. The Revolving Purchaser and the Program
-------------
Administrator shall have completed and be reasonably satisfied with their
due diligence review of each Federated Entity, Company and Fund. Such due
diligence review may include, without limitation, discussions with rating
agencies, review of systems and procedures, review of UCC search reports,
and review of books and records.
(c) Security Documents. Copies of UCC financing statements and UCC
------------------
search reports, in form and substance acceptable to the Revolving Purchaser
and the Program Administrator, covering the interests in the Portfolio
Assets conveyed by the Distributor to the Transferor pursuant to the
Transferor's Transfer Agreement and by the Transferor to the Seller
pursuant to the Seller's Transfer Agreement and in the Revolving
Purchaser's Purchased Portfolio Assets conveyed from the Seller to the
Revolving Purchaser pursuant to the Revolving Purchase Agreement as of such
Initial Revolving Purchase Date shall have been delivered by the
Distributor and the Seller to the Revolving Purchaser and evidencing to the
satisfaction of the Program Administrator and the Revolving Purchaser the
conveyance to the Revolving Purchaser of an undivided ownership interest
therein free and clear of Adverse Claims. Such financing statements shall
have been duly filed in all places where, and all other actions shall have
been taken which are, in the opinion of counsel for the Program
Administrator, necessary or advisable to perfect the interests reflected
thereon.
(d) Approvals. All Governmental Authorizations, Private
---------
Authorizations and Governmental Filings, if any, on the part of the Parent,
the Distributor, the Advisors, the Shareholder Servicer, the Transferor,
the Seller, the Funding and Collection Agent, the Companies, the Funds and
the Revolving Purchaser that are required to be obtained or done in order
to permit the execution, delivery and performance by the Parent, the
Distributor, the Transferor, the Seller, the Funding and Collection Agent,
or the Revolving Purchaser, as the case may be, of the Program Documents to
which it is a party shall have been duly obtained or delivered.
(e) Corporate Documents. The other Parties shall have received
-------------------
certified copies of (i) evidence that the execution, delivery and
performance by the Revolving Purchaser of this Agreement and the other
Program Documents to which it is a party and any other
6
<PAGE>
documents to be executed by or on behalf of the Revolving Purchaser in
connection with the transactions contemplated hereby or thereby have been
duly authorized, and (ii) an incumbency certificate of the General Partner
of the Revolving Purchaser as to the person or persons authorized to
execute and deliver all Program Documents to which the Revolving Purchaser
is a party with specimen signatures of such persons acting on behalf of the
Revolving Purchaser.
(f) Corporate Documents. The other Parties shall have received (i) a
-------------------
copy of the certificate of incorporation or similar organizational document
of each of the Seller, the Transferor, the Parent and the Distributor
certified by the Secretary of State of the state of organization of such
Federated Entity, (ii) the by-laws or similar organizational document of
each of the Seller, the Transferor, the Parent and the Distributor and the
resolutions of the Board of Directors or governing body of each such
Federated Entity duly authorizing the execution, delivery and performance
by such Federated Entity of the Program Documents to which it is a party,
each certified by a Responsible Officer, (iii) an incumbency certificate of
each as to the person or persons authorized to execute and deliver all
Program Documents to which each such Federated Entity is a party with
specimen signatures of such persons acting on behalf thereof, and (iv) a
certificate of good standing of each of the Seller, the Transferor, the
Parent and the Distributor issued by the Secretary of State of the state of
organization of each such Federated Entity.
(g) Closing Certificates. On such Initial Revolving Purchase Date,
--------------------
the following statements shall be true and each of the Revolving Purchaser
and the Program Administrator shall have received a certificate of each of
the Seller, the Parent and the Distributor certifying as to the accuracy of
the following statements as to itself:
(i) the representations and warranties by it contained in
this Agreement and the other Program Documents to which it
is a party are true and accurate on and as of such Purchase
Date as though made on and as of the Purchase Date, except
to the extent that such representations and warranties
relate solely to an earlier date (in which case such
representations and warranties shall be true and accurate on
and as of such earlier date);
(ii) it has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied on or
prior to such Purchase Date; and
(iii) no event has occurred and is continuing, or will result from
the closing of the transactions on such Purchase Date that
constitutes an Event of Termination or an event which, with
the passage of time or notice or both would constitute an
Event of Termination.
(h) Distribution Plans, Distributor's Contracts, Principal
------------------------------------------------------
Shareholder Servicer's Agreement and Shareholder Servicer's Agreement. The
---------------------------------------------------------------------
Program Administrator and the Revolving Purchaser shall have received a
copy of a certificate of the President or any Vice President of the Parent
certifying that a true and complete copy of each of the following documents
is attached thereto and has been duly authorized, executed and delivered by
each
7
<PAGE>
of the parties thereto, and in the case of each Fund, has been approved in
the manner required by the Investment Company Act and the rules and
regulations adopted thereunder:
(i) the Distribution Plan of each Fund relating to the Revolving
Purchaser's Purchased Portfolio Assets, which shall be
substantially in the form of Exhibit F to the Master
Agreement;
(ii) the Distributor's Contracts relating to the Portfolio
Assets, which shall be substantially in the form of Exhibit
G to the Master Agreement;
(iii) the Principal Shareholder Servicer's Agreement relating to
the Portfolio Assets, which shall be substantially in the
form of Exhibit H to the Master Agreement; and
(iv) the Shareholder Servicer's Agreement relating to the
Portfolio Assets, which shall be substantially in the form
of Exhibit I to the Master Agreement.
(i) Prospectus. The Program Administrator and the Revolving Purchaser
----------
shall have received a copy of a certificate of the President or any Vice
President of the Parent certifying that a true and complete copy of the
current Prospectus for each Fund is attached and that no change therein has
been proposed which if in effect on such Initial Revolving Purchase Date
would cause the representation of the Parent set forth in Section 4.03(a)
of the Master Agreement to be incorrect.
(j) Illegality. No change shall have occurred after the date of
----------
execution and delivery of this Agreement in Applicable Law or regulations
thereunder or interpretations thereof by appropriate regulatory authorities
or any court that would make it illegal for any Party to execute, deliver
and perform the Program Documents to which it is a party and no action or
proceeding shall have been instituted nor shall any action or proceeding be
threatened before any court or governmental agency, nor shall any order,
judgment or decree have been issued by any court or governmental agency
prior to such Initial Revolving Purchase Date, to set aside, restrain,
enjoin or prevent the completion and consummation of this Agreement or any
other Program Document or the transactions contemplated hereby or thereby.
(k) Obligations. Each obligation to be performed in favor of such
-----------
Party by any other Party on or before the Initial Revolving Purchase Date
pursuant to any Program Document shall have been performed.
(l) Opinions of Counsel. Each of the Revolving Purchaser and the
-------------------
Program Administrator shall have received each of the following opinions
addressed to it and dated the Initial Revolving Purchase Date:
(i) Sullivan & Worcester LLP, special New York and Investment
Company Act counsel to the Parent, the Distributor, the
Transferor and the Seller, substantially in the form of
Exhibit K-1 to the Master Agreement; and
8
<PAGE>
(ii) Dickstein, Shapiro, Morin & Oshinsky LLP, special counsel to
each Company, substantially in the form of Exhibit K-2 to
the Master Agreement.
(m) Program Approval. The Program shall have been approved by the
----------------
Revolving Purchaser and Program Administrator pursuant to their
underwriting criteria.
(n) Other Documents. The Revolving Purchaser and the Program
---------------
Administrator shall have received such other instruments, documents,
certificates and opinions as the Revolving Purchaser and the Program
Administrator may have reasonably requested in order to establish the
taking of all appropriate corporate or partnership and other proceedings in
connection herewith, the consummation of the transactions contemplated
hereby, and compliance with the conditions herein set forth, in connection
with the Portfolio Assets relating to any Fund and the Purchase Price
payable on the Purchase Date, each such instrument, document, certificate
and opinion to be in form and substance reasonably satisfactory to such
Party.
Section 3.03. Conditions Precedent on Each Revolving Purchase Date.
----------------------------------------------------
The conditions precedent for the Revolving Purchaser specified for each
Revolving Purchase Date are as follows:
(a) Program Documents. Each of the Program Documents shall be in
-----------------
full force and effect on such Revolving Purchase Date.
(b) Representations and Warranties. Each of the representations and
------------------------------
warranties of each Party contained in the Program Documents shall be true
and accurate.
(c) Certain Fees and Expenses. The Parent or the Distributor shall
-------------------------
have paid all reasonable fees and expenses of the Revolving Purchaser and
the Program Administrator (including the reasonable accrued fees and
expenses of counsel to the Purchaser and the Program Administrator) then
due and payable in accordance herewith.
(d) Investor Reports. The Distributor shall have delivered to the
----------------
Program Administrator any Investor Reports due on or prior to such
Revolving Purchase Date, which shall be substantially in the form of
Exhibit L to the Master Agreement and otherwise in form and substance
reasonably satisfactory to the Revolving Purchaser and the Program
Administrator.
(e) Program Collections. No Company shall be prevented by any
-------------------
Authority or by any Applicable Law from paying Program Collections and
Related Collections to the Program Collection Account in accordance with
the applicable Irrevocable Payment Instruction and no Company shall have so
asserted in writing.
(f) No Event of Termination. No Event of Termination or event which,
-----------------------
with the passage of time, or notice or both, would constitute an Event of
9
<PAGE>
Termination shall have occurred and be continuing as of such Revolving
Purchase Date.
(g) Revolving Purchase Limit. Immediately after giving effect to
------------------------
such Purchase, the Revolving Purchase Limit shall be equal to or greater
than zero.
(h) Revolving Purchaser Funding. The Revolving Purchaser has
---------------------------
sufficient resources to meet its obligations pursuant to the Program
Documents.
ARTICLE IV
SECURITY INTEREST
Section 4.01. Security Interest. For valuable consideration, the
-----------------
receipt and sufficiency of which are hereby acknowledged, and to induce the
Revolving Purchaser to purchase the Revolving Purchaser's Purchased Portfolio
Assets hereunder, the Seller hereby grants to the Revolving Purchaser, in order
to secure the Revolving Purchaser's rights under this Agreement, a security
interest in any remaining right, title and interest in and to the Revolving
Purchaser's Purchased Portfolio Assets that remain property of the Seller's
estate, notwithstanding this Agreement.
ARTICLE V
MISCELLANEOUS
Section 5.01. Modifications in Writing. This Agreement and any term
-------------------------
or provision hereof may only be amended, modified or waived by a written
instrument executed by the parties hereto and by any additional Persons whose
execution is required pursuant to Section 9.01 of the Master Agreement.
Section 5.02. Notices. All notices, demands, instructions and other
--------
communications required or permitted to be given to or made upon any party
hereto shall be given or made in accordance with Section 9.03 of the Master
Agreement.
Section 5.03. Binding Effect; Assignment. This Agreement shall be
--------------------------
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. No party shall assign any of its rights or
obligations hereunder without the prior written consent of the other parties
hereto and of any additional Persons whose consent is required pursuant to
Section 9.07 of the Master Agreement; provided that the Purchaser's right, title
and interest in, to and under this Agreement, including all of the Revolving
Purchaser's right, title and interest in and to Revolving Purchaser's Purchased
Portfolio Assets may be assigned as contemplated by the Program Documents
without the consent of the Seller.
Section 5.04. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
-------------
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL
BE GOVERNED BY AND CONSTRUED IN
10
<PAGE>
ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.
Section 5.05. Severability of Provisions. Any provisions of this
---------------------------
Agreement which are 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 or
affecting the validity or enforceability of such provision in any other
jurisdiction.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and date first above written.
FEDERATED FUNDING 1997-1, INC.,
as Seller
By:/s/ Thomas R. Donahue
---------------------------------
Name: Thomas R. Donahue
Title: Vice President
PLT FINANCE, L.P.
BY: PLT FINANCE, INC., as General Partner
By:/s/ William P. Henson
---------------------------------
Name: William P. Henson
Title: Vice President and
Treasurer
11
<PAGE>
Schedule I
To
Revolving
Purchase Agreement
PURCHASE PRICE PERCENTAGE
COMPANY:
- -------
All Companies
PURCHASE PRICE
FUNDS SHARES PERCENTAGE
----- ------ --------------
4.0% 5.5%
Commission Commission
---------- ----------
1. All Funds Class B [Confidential Treatment Requested]
I-1
<PAGE>
Exhibit A
To
Revolving
Purchase Agreement
REVOLVING PURCHASE NOTICE
FEDERATED INVESTORS PROGRAM
PLT FINANCE, L.P.
as Revolving Purchaser
PUTNAM, LOVELL & THORNTON INC.
as Program Administrator
Re: Federated Investors Program Revolving Purchase Agreement dated
as of October 24, 1997 (the "Revolving Purchase Agreement")
between Federated Funding 1997-1, Inc., and PLT Finance, L.P.
----------------------------------------------------------------
Pursuant to Section 2.02 of the above-referenced Revolving Purchase
Agreement, you are hereby notified that on ______________, 199__ (the "Revolving
Purchase Date"), the undersigned proposes, subject to the terms and conditions
set forth in the Revolving Purchase Agreement and the other Program Documents,
to sell to PLT Finance, L.P., certain Portfolio Assets relating to each of the
Funds, as set forth in Schedule I attached hereto. The Purchase Cut-Off Dates
and the Revolving Purchase Prices for such Portfolio Assets are set forth on
Schedule II attached hereto. Capitalized terms used herein unless otherwise
defined herein shall have the meanings assigned to such terms in the Revolving
Purchase Agreement.
The undersigned certifies that the conditions precedent set forth in
Section 3.02 of the Revolving Purchase Agreement have been satisfied. The
undersigned represents that Schedule I hereto is true, correct and complete and
accurately described the Portfolio Assets to be purchased by the Revolving
Purchaser on the Revolving Purchase Date, that the Unamortized Gross Purchase
Amount in respect of each such Portfolio Assets is properly represented on
Schedule I, that each Portfolio Asset designated as being under the 5.5%
Commission Structure represents an entitlement to Distribution Fees and
Servicing Fees at an annual rate of one percent (1%) per annum of Net Asset
Value and that each Portfolio Asset designated as being under the 4% Commission
Structure represents an entitlement to Distribution Fees at an annual rate of
three quarters of one percent (0.75%) per annum of Net Asset Value.
FEDERATED FUNDING 1997-1, INC.
BY:_______________________________
Authorized Signatory
A-1
<PAGE>
Schedule I
to Exhibit A
to Federated
Investors Program
Revolving Purchase
Agreement
Revolving Purchase Date: _________________
Aggregate Revolving Purchase Price: _________________
Purchase Cut-Off Date: _________________
4% Commission Structures Sales: _________________
4% Revolving Purchase Price: _________________
5.5% Commission Structure Sales: _________________
5.5% Revolving Purchase Price: _________________
Unamortized Gross Purchase Amount: _________________
A-2
<PAGE>
Exhibit B
To
Revolving
Purchase Agreement
Attribution of Placement of Net Cash Gains, Placement Net Cash Losses and
- -------------------------------------------------------------------------
Residuals to Revolving Purchaser's Purchased Portfolio Assets
- -------------------------------------------------------------
Section 1: Attribution of Placement Net Cash Gain
- --------------------------------------------------
The portion of the Placement Net Cash Gain, if any, in respect of any Placement
is allocated to the Revolving Purchaser's Portfolio Assets by multiplying (i)
the Placement Net Cash Gain for such Placement by (ii) a fraction, the numerator
of which is the outstanding principal, immediately prior to the Placement
Determination Date, of the Revolving Purchaser Warehouse Funding Debt related to
the Purchased Portfolio Assets included in such Placement and the denominator of
which is the outstanding principal immediately prior to the Placement
Determination Date, of all Revolving Purchaser Warehouse Funding Debt related to
all purchased portfolio assets included in such Placement.
Section 2: Attribution of Placement Net Cash Loss
- --------------------------------------------------
The portion of the Placement Net Cash Loss, if any, in respect of any Placement
is allocated to the Revolving Purchaser's Purchased Portfolio Assets by
multiplying (i) the Placement Net Cash Loss for such Placement by (ii) a
fraction, the numerator of which is the outstanding principal, immediately prior
to the Placement Determination Date, of the Revolving Purchaser Warehouse
Funding Debt related to the Purchased Portfolio Assets included in such
Placement, and the denominator of which is the outstanding principal,
immediately prior to the Placement Determination Date, of all Revolving
Purchaser Warehouse Funding Debt related to all purchased portfolio assets
included in such Placement.
Section 3: Attribution of Residuals
- ------------------------------------
The portion of Residuals, if any, in respect of the any Placement is allocated
to the Revolving Purchaser's Purchased Portfolio Assets by multiplying (i) the
Residuals as of any Monthly Settlement Date for such Placement by (ii) a
fraction, the numerator of which is the outstanding principal, immediately prior
to the Placement Determination Date, of the Revolving Purchaser Warehouse
Funding Debt related to the Purchased Portfolio Assets included in such
Placement, and the denominator of which is the outstanding principal,
immediately prior to the Placement Determination Date, of all Revolving
Purchaser Warehouse Funding Debt related to all purchased portfolio assets
included in such Placement.
B-1
<PAGE>
Exhibit 4.12
FEDERATED INVESTORS PROGRAM
FEE AGREEMENT
Dated as of October 24, 1997
between
FEDERATED INVESTORS,
as Parent
and
PLT FINANCE, L.P.,
as Revolving Purchaser
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I RULES OF CONSTRUCTION; DEFINITIONS
1.01. Rules of Construction............... 1
1.02. Definitions......................... 1
ARTICLE II FEE
2.01. Fee................................. 2
2.02. Payment............................. 2
2.03. Certain Understandings.............. 2
ARTICLE III MISCELLANEOUS
3.01. Modifications in Writing............ 2
3.02. Notices............................. 2
3.03. Binding Effect, Assignment.......... 2
3.04. Governing Law....................... 3
3.05. Severability of Provisions.......... 3
<PAGE>
FEDERATED INVESTORS PROGRAM
FEE AGREEMENT
FEDERATED INVESTORS PROGRAM FEE AGREEMENT, dated as of October 24,
1997 (this "Agreement"), among FEDERATED INVESTORS (the "Parent") and PLT
Finance, L.P. (the "Revolving Purchaser").
W I T N E S S E T H:
WHEREAS, the Parent and the Revolving Purchaser are parties to that
certain Federated Investors Program Master Agreement dated as of the date hereof
with the Parent, the Seller, the Revolving Purchaser, and the "Distributor,"
"Transferor," "Funding and Collection Agent," "Initial Purchaser" and "Program
Administrator," each as defined therein (the "Master Agreement") relating to the
program contemplated thereby (the "Program");
WHEREAS, the Seller and the Revolving Purchaser are also parties to
the Revolving Purchase Agreement; and
WHEREAS, the Parent and the Revolving Purchaser wish to set forth
their understandings relating to the Fee as hereinafter defined;
NOW, THEREFORE, in consideration of the foregoing premises, and the
mutual covenants and agreements herein contained, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
ARTICLE I
RULES OF CONSTRUCTION; DEFINITIONS
Section 1.01. Rules of Construction. The rules of construction set
---------------------
forth in Schedule X to the Master Agreement shall be applied to this Agreement.
Section 1.02. Definitions. Capitalized terms not expressly defined
-----------
herein, which are defined in Schedule X to the Master Agreement or in the
Revolving Purchase Agreement (defined as hereinafter provided), shall have the
same meanings herein as in said Schedule X or Revolving Purchase Agreement.
ARTICLE II
FEE
Section 2.01. Fee. In consideration of the undertaking of the Parent
---
pursuant to the Master Agreement to cause each Advisor to manage each Fund in
accordance with its
<PAGE>
Fundamental Investment Objectives and Policies in effect from time to time, the
Revolving Purchaser agrees to pay to the Parent the Fee.
Section 2.02. Payment. The Placement Component shall be payable on
-------
the twelve month anniversary of the Placement Determination Date for the related
Placement. The Program Collection Component shall be payable on each Monthly
Settlement Date.
Section 2.03. Certain Understandings. Nothing in this Agreement
----------------------
shall be construed as making the Parent a partner of, joint venturer with or
employee of the Revolving Purchaser. All payments hereunder shall be deemed
payments to an independent contractor.
ARTICLE III
MISCELLANEOUS
Section 3.01. Modifications in Writing. This Agreement and any term
-------------------------
or provision hereof may only be amended, modified or waived by a written
instrument executed by the parties hereto and by any additional Persons whose
execution is required pursuant to Section 9.01 of the Master Agreement.
Section 3.02. Notices. All notices, demands, instructions and other
--------
communications required or permitted to be given to or made upon any party
hereto shall be given or made in accordance with Section 9.03 of the Master
Agreement.
Section 3.03. Binding Effect; Assignment. This Agreement shall be
--------------------------
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. No party shall assign any of its rights or
obligations hereunder without the prior written consent of the other parties
hereto and of any additional Persons whose consent is required pursuant to
Section 9.07 of the Master Agreement; provided that the Purchaser's right, title
and interest in, to and under this Agreement, including all of the Revolving
Purchaser's right, title and interest in and to Purchased Portfolio Assets may
be assigned as contemplated by the Program Documents without the consent of the
Seller.
Section 3.04. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
-------------
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT
REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
Section 3.05. Severability of Provisions. Any provisions of this
---------------------------
Agreement which are 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 or
affecting the validity or enforceability of such provision in any other
jurisdiction.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and date first above written.
FEDERATED INVESTORS,
as Parent
By: /s/ Denis McAuley
-----------------------------
Name: Denis McAuley
Title: Vice President
PLT FINANCE, L.P.
BY: PLT FINANCE, INC., as General Partner
By: /s/ William P. Henson
-----------------------------
Name: William P. Henson
Title: Vice President and Treasurer
<PAGE>
Exhibit 4.13
[S&K DRAFT ]
SCHEDULE X
----------
RULES OF CONSTRUCTION; DEFINITIONS
Section 1.01 Rules of Construction. For all purposes of the Program
---------------------
Documents, except as otherwise expressly provided or unless the context
otherwise requires:
Singular words shall connote the plural as well as the singular, and
vice versa (except as indicated), as may be appropriate.
Unless otherwise indicated, references within any document to
appendices, articles, schedules, sections, paragraphs, clauses or exhibits are
references to appendices, articles, schedules, sections, paragraphs, clauses or
exhibits in or to such document.
The words "herein," "hereof" and "hereunder" and other words of
similar import used in any document refer to such document as a whole and not to
any particular appendix, article, schedule, section, paragraph, clause, exhibit
or other subdivision.
The headings, subheadings and table of contents are solely for
convenience of reference and shall not constitute a part of any such document
nor shall they affect the meaning, construction or effect of any provision
thereof.
References to any Person shall include such Person, its permitted
successors and assigns.
Except as otherwise expressly provided, reference to any agreement
means such agreement as amended, modified or supplemented from time to time in
accordance with the applicable provisions thereof and other Operative Documents.
Except as otherwise expressly provided, any reference to any statute,
law or regulation shall be deemed to be a reference to such statute, law rule or
regulation as from time to time in effect, any successor statutory or regulatory
provision.
References to "including" shall mean including without limiting the
generality of any description preceding such term, and for purposes hereof the
rule of ejusdem generis shall not be applicable to limit a general statement,
followed by or referable to an enumeration of specific matters, to matters
similar to those specifically mentioned.
Each of the parties to the Program Documents and its counsel have
reviewed and revised, or requested revisions to, the Program Documents, and the
usual rule of construction that any ambiguities are to be resolved against the
drafting party shall be inapplicable in the construction and interpretation of
the Program Documents.
Section 1.02 Definitions. The following terms shall have the
------------
following meanings:
<PAGE>
"Actual Knowledge" means, (i) as it applies to any natural Person,
----------------
actual knowledge of such Person, (ii) as it applies to any Person which is a
corporate entity or business trust, actual knowledge of a Responsible Officer of
such Person, and (iii) as it applies to any Person which is a trust entity,
actual knowledge of such trustee determined with reference to all applicable
provisions of this definition.
"Addition Effective Date" shall have the meaning assigned to such term
-----------------------
in Section 9.18 of the Master Agreement.
"Additional Eligible Fund" shall mean any additional series of any
------------------------
Company:
(i) which shall have in full force and effect a distribution plan,
distributor's contract, principal shareholder servicer's agreement and
shareholder servicing agreement, substantially in the form of Exhibits F,
G, H and I to the Master Agreement;
(ii) with respect to which the Distributor shall act as a principal
underwriter and principal shareholder servicer, the Shareholder Servicer
shall act as shareholder servicer and an Advisor shall act as investment
adviser;
(iii) with respect to which the Distributor shall be entitled to receive
Asset Based Sales Charges, Shareholder Servicing Fees and Contingent
Deferred Sales Charges on a basis and at a level comparable to that of
other Funds;
(iv) with respect to which there shall be in full force and effect an
Irrevocable Payment Instruction, in the form of Exhibit J to the Master
Agreement, which has been acknowledged and agreed to by the related Company
and the Transfer Agent as contemplated thereby; and
(v) in respect of which the applicable Advisor or the Distributor shall
have furnished to the Purchasers and the Program Administrator: (A) a true
and complete copy of the prospectus for such series; (B) a true and
complete copy of the distribution plan in respect of such series; (C) a
true and complete copy of the distributor's contract and principal
shareholder servicer's agreement and the shareholder servicing agreement in
respect of such series; and (D) to the extent not reflected in the
prospectus described in clause (A) above, a statement of the Fundamental
Investment Objectives and Policies of such series.
"Additional Eligible Fund Addendum" means the addendum substantially
---------------------------------
in the form of Exhibit M to the Master Agreement executed by the Distributor,
the Seller, the Transferor, the Parent, the Purchasers and the Program
Administrator.
"Adverse Claim" means any Lien of any Person (other than (i) any such
-------------
right or claim of the Purchasers or the Program Administrator created by or
pursuant to this Agreement or any other Program Document, and (ii) any Lien
created by the Purchasers).
"Adverse Effect" means (i) any occurrence of, or any increase in, any
--------------
Adverse Claim on the Purchased Portfolio Assets, (ii) any occurrence of, or any
increase in, any material claims, damages, losses, liabilities, expenses,
obligations, penalties or disbursements of any kind or nature of the Purchasers
or the Program Administrator arising out of the transactions
<PAGE>
contemplated by the Program Documents, (iii) any adverse effect upon the status
of any transfer of any Portfolio Assets or Purchased Portfolio Assets under the
Program Documents as a True Sale, (iv) any adverse effect upon the Seller's
status as a Bankruptcy Remote Entity, (v) any material adverse effect upon the
Seller's, the Parent's, the Distributor's, the Shareholder Servicer's, any
Advisor's, any Transfer Agent's or any Company's ability to pay or perform its
respective obligations under any Program Document in a timely manner, (vi) any
adverse effect on the status of the Portfolio Assets as Eligible Portfolio
Assets, (vii) any adverse effect on the amount or timely receipt by the Funding
and Collection Agent of any Program Collections in accordance with the terms of
any Irrevocable Payment Instruction or any other Program Document, (viii) any
adverse effect on the Purchasers' right, title or interest in the Purchased
Portfolio Assets, the Program Collections in respect thereto, the Program
Collection Account or the Ancillary Rights in respect of the Purchased Portfolio
Assets, (ix) any material adverse effect on any of the other rights of the
Purchasers or the Program Administrator under the Program Documents, or (x) any
material adverse effect on the remedies of the Purchasers or the Program
Administrator under any Program Document.
"Advisor" means each of Federated Advisers, Federated Global Research
-------
Corp. and Federated Management in their capacities as investment advisors and
managers of the Companies included in the Program, and any other Federated
Entity which is a permitted successor or assignee of any of them in such
capacities.
"Advisory Agreement" means with respect to any Fund, the agreement
------------------
between the applicable Advisor and the related Company in respect of such Fund
and any replacement agreement as may be adopted in the future, pursuant to which
the Advisor provides investment advisory services to such Fund.
"Affiliate" of a referenced Person means (a) another Person
---------
controlling, controlled by or under common control with such referenced Person,
or (b) any other Person beneficially owning or controlling ten percent (10%) or
more of the outstanding voting securities or rights of or the interest in the
capital, distributions or profits of the referenced Person, provided, however,
-------- -------
that the term "Affiliate" shall not include any Fund, any Company, or any
similar investment company for which the Parent and/or its Affiliates provide
the type of services contemplated by the Distributor's Contracts and the
Advisory Agreements. The terms "control," "controlling," "controlled" and the
like shall mean the direct or indirect possession of the power to direct or
cause the direction of the management or policies of a Person or the disposition
of its assets or properties, whether through ownership, by contract, arrangement
or understanding, or otherwise.
"Allocation Notice" means a written notice from the Program
-----------------
Administrator to the Funding and Collection Agent (with a copy to each of the
other parties to the Program Funding and Collection Agency Agreement) stating
funds are to be allocated in accordance with the Allocation Procedures and
disbursed in accordance with Section 4.03(a) of the Program Funding and
Collection Agency Agreement on a more frequent basis, which notice shall specify
the frequency of such allocation.
"Allocation Procedures" means the allocation procedures set forth in
---------------------
Schedule II to the Master Agreement.
"Amortized Maximum Aggregate Sales Charge Allowable" means with
--------------------------------------------------
respect to the Portfolio Assets relating to any Fund as of any date of
determination, (i) an amount equal to the
<PAGE>
Maximum Aggregate Sales Charge Allowable payable in respect of such Portfolio
Assets, minus (ii) the aggregate amounts paid by the applicable Company and the
holders of its Shares relating thereto.
"Ancillary Rights" means all of the Seller's, Transferor's and
----------------
Distributor's rights, remedies, title and interests in, to and under (i) the
Program Documents (to the extent of representations, warranties, covenants and
other rights and remedies thereunder with respect to the Purchased Portfolio
Assets), including the right to receive payments pursuant thereto, (ii) all UCC
financing statements covering any of the foregoing, (iii) all proceeds thereof,
and (iv) all other rights the Seller, the Transferor or the Distributor, as the
case may be, may have in respect of the foregoing under Applicable Law, in each
case as they relate to the Purchased Portfolio Assets.
"Applicable Law" means all applicable laws and treaties, judgments,
--------------
decrees, injunctions, writs and orders of any court, tribunal, arbitrator or
governmental agency or authority or regulatory body and rules, regulations,
orders, licenses and permits of any governmental body, instrumentality, agency
or authority or regulatory body.
"Asset Based Sales Charges" means fees payable by a Fund, or a Company
-------------------------
with respect to a Fund pursuant to the Distribution Plan and Distributor's
Contract in consideration of the distribution of its Shares, excluding the
Shareholder Servicing Fee.
"Assigned Portion" shall have the meaning assigned to such term in
----------------
Section 8.06 of the Program Funding and Collection Agency Agreement.
"Authority" means any governmental or self-regulatory authority
---------
(including the NASD, the stock exchanges and the SEC), whether executive,
legislative, judicial, regulatory, administrative or other, or any combination
thereof, including any federal, state, territorial, county, municipal or other
government or governmental or self-regulatory agency, arbitrator, board, body,
branch, bureau, commission, corporation, court, department, instrumentality,
master, mediator, panel, referee, system or other political unit or subdivision
or other entity of any of the foregoing, whether domestic or foreign.
"Authorized Representative" shall have the meaning assigned to such
-------------------------
term in Section 4.03(d) of the Program Funding and Collection Agency Agreement.
"Authorized Representative Certificate" shall have the meaning
-------------------------------------
assigned to such term in Section 4.03(d) of the Program Funding and Collection
Agency Agreement.
"Bankruptcy Code" means Title 11 of the United States Code, Sections
---------------
101, et seq., and the rules and regulations promulgated thereunder, as amended
-- ---
from time to time.
"Bankruptcy Remote Covenants" means the covenants set forth in
---------------------------
Schedule III to the Master Agreement.
"Bankruptcy Remote Entity" means a special purpose entity formed under
------------------------
the laws of one of the states of the United States or the District of Columbia
which is organized and operated in a manner designed to insulate it from the
risk of becoming the subject of reorganization or liquidation under the
Bankruptcy Code and that satisfies all of the published criteria of Standard &
Poor's relating to special purpose, bankruptcy remote entities.
<PAGE>
"Base Rate" means, for any period, a fluctuating interest rate per
---------
annum as shall be in effect from time to time which rate per annum shall at all
times be equal to the higher of:
(a) the Prime Rate; and
(b) 1/2 of one percent per annum above the Federal Funds Rate.
"Business Day" means any day on which banks are not authorized or
------------
required to close in New York City and on which banks are not authorized or
required to close in Pittsburgh, Pennsylvania.
"Calculation Date" means the last day of each calendar month.
----------------
"Cash Equivalents" shall have the meaning assigned to such term in
----------------
Section 4.04 of the Program Funding and Collection Agency Agreement.
"Cause" shall have the meaning assigned to such term in Section 5.01
-----
of Program Servicer Agent Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and as it
----
may be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
"Commission Share" means, in respect of any Fund, each Share of such
----------------
Fund which is issued under circumstances which would normally give rise to an
obligation of the holder of such Share to pay a Contingent Deferred Sales Charge
upon redemption of such Share, including any Share of such Fund issued in
connection with a Permitted Free Exchange, and any such Share shall not cease to
be a Commission Share prior to the redemption (including a redemption in
connection with a Permitted Free Exchange) or conversion even though the
obligation to pay the Contingent Deferred Sales Charge shall have expired or
conditions for waivers thereof shall exist.
"Company" means each investment company registered with the SEC under
-------
the Investment Company Act specified on Schedule I to the Master Agreement, as
the same may be supplemented pursuant to Section 9.18.
"Complete Termination" shall (i) in respect of the Distribution Plan
--------------------
in respect of any Fund have the meaning assigned to such term in such
Distribution Plan in effect on the date of the Master Agreement, and (ii) in
respect of the Principal Shareholder Servicer's Agreement in respect of any Fund
have the meaning assigned to such term in such Principal Shareholder Servicer's
Agreement.
"Conduct Rules" means the Conduct Rules of the NASD, and the rules,
-------------
regulations and interpretations (including examples and explanations) of the
NASD in respect thereto, as the same may from time to time be amended,
supplemented or modified.
"Contingent Deferred Sales Charge" means the contingent deferred sales
--------------------------------
charges payable, either directly or by withholding from the proceeds of the
redemption of the Shares of
<PAGE>
such Fund, by the shareholders of such Fund on any redemption of Shares relating
to such Fund in accordance with the Distributor's Contract and the Prospectus
relating to such Fund.
"Control" shall have the meaning assigned in Section 2(a)(9) of the
-------
Investment Company Act.
"Conversion Feature" means with respect to any Share of any Fund, a
------------------
mandatory or elective provision (including a provision which permits or requires
such Share to be converted into a share of a different class) which may result
in a reduction or termination of any amount owing from the related Company or
Fund in respect of such Share or the shareholder in respect of the Portfolio
Assets relating to such Share (or the Share obtained by virtue of a conversion
of such Share) at some point in the future.
"Corporate Trust Office" shall mean the principal office of Bankers
----------------------
Trust Company at which, at any particular time, its corporate trust business
shall be administered, which office at the date of the execution of the Program
Documents is located at Four Albany Street, New York, New York 10006, Attention:
Corporate Trust and Agency Group-Structured Finance or at any other time at such
other address as Bankers Trust Company may designate from time to time.
"CP Yield" means the daily yield on "1-month commercial paper" (quoted
--------
on a bank-discount basis, on commercial paper for firms whose bond rating is
"AA" or the equivalent) as made available by the Federal Reserve Board on
Statistical Release H.15(519) or, if such index is no longer published and no
replacement is adopted, such other index as may be selected by the Program
Administrator and accepted by the Seller.
"Date of Original Issuance" shall have the meaning assigned to such
-------------------------
term in the Allocation Procedures.
"Debt" of any Person means, on any date: (i) all indebtedness of such
----
Person for borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person to pay the deferred purchase price of property, (iv) all lease
obligations of such Person which have been or should be included in total
liabilities in accordance with GAAP, (v) all indebtedness secured by a Lien on
any asset of such Person, whether or not such Person has assumed or is otherwise
liable for such indebtedness, (vi) all Debt of others guaranteed in any manner,
directly or indirectly, by such Person (or in effect guaranteed indirectly by
such Person through an agreement intended to have the effect of enabling an
obligor other than such Person to satisfy Debt or to assure the holder of Debt
of such obligor against loss, whether through an obligation of such Person to
purchase property or services or to maintain such obligor's financial condition
or otherwise), (vii) all reimbursement obligations of such Person in respect of
letters of credit, foreign currency sale agreements and bankers' acceptances,
except such as are obtained by such Person to secure performance of obligations
(other than for borrowed money or similar obligations) incurred in the ordinary
course of such Person's business that are not overdue or in default beyond the
expiration of any applicable grace or cure period and (viii) all obligations of
such Person under interest rate protection agreements (including interest rate
swaps, caps, floors, collars and similar agreements) and other market protection
agreements.
<PAGE>
"Deposited Collection Funds" means all funds at any time and from time
--------------------------
to time on deposit in or otherwise to the credit of the Program Collection
Account, including Cash Equivalents.
"Distribution Plan" means with respect to any Fund the distribution
-----------------
plan of the related Company, in respect thereto, pursuant to which Shares of
such Fund are distributed by the Distributor and provided no Complete
Termination has occurred, any successor or replacement distribution plan.
"Distributor" shall have the meaning assigned to such term in the
-----------
preambles to the Master Agreement.
"Distributor's Contract" shall mean, with respect to any Fund, the
----------------------
agreement between the Distributor and the applicable Company of such Fund and
any replacement agreement as may be adopted in the future, pursuant to which the
Distributor has been appointed as the agent of such Company to sell and
distribute the Shares of such Fund.
"Dollars" and "$" mean lawful money of the United States of America.
------- -
"Eligible Portfolio Assets" shall mean a Portfolio Asset: (a) which
-------------------------
constitutes an "account" or "general intangible", as such terms are defined in
the UCC of all jurisdictions the laws of which are applicable for determining
whether the interests created by the Program Documents are perfected, and the
obligor in respect of which is organized in the United States but not a
governmental entity (provided that a Portfolio Asset shall not be deemed to fail
--------
to meet the foregoing obligor condition solely because a minor portion of the
Shareholders of a Fund are not organized in or residents of the United States or
are governmental entities); (b) which is denominated and payable in Dollars; (c)
which constitutes a legal, valid and binding contractual obligation of the
obligor thereof enforceable in accordance with its terms, which is fully vested,
not executory and shall not be subject to a dispute, offset, counterclaim,
defense or Adverse Claim whatsoever, except as enforceability may be limited by
applicable bankruptcy laws and other similar laws effecting the rights and
remedies of creditors generally and equitable principles whether considered in a
proceeding in equity or law, and in the case of Portfolio Assets sold on a 5.5%
commission structure basis, each of the conditions set forth in the Principal
Shareholder Servicer's Agreement and Shareholder Services Agreement have been
met in respect of the related Shares which are necessary so that the Principal
Shareholder Servicer's entitlement to the Shareholder Servicing Fee in respect
of the related Shares is deemed to be fully earned as of the issuance thereof
and to render the applicable Fund's obligation to pay the Shareholder Servicing
Fee in respect thereof absolute and unconditional and so that it shall not be
subject to dispute, offset, counterclaim or any defense whatsoever (except in
connection with a Complete Termination, as defined in the Principal Shareholder
Servicer's Agreement); (d) which does not and the origination of which did not
contravene any Applicable Law; (e) which, in respect of Asset Based Sales
Charges, requires the payment thereof at the Maximum Sales Charge Allowable; (f)
which, in respect of Contingent Deferred Sales Charges, requires the payment
thereof at the rate set forth on Schedule IV to the Master Agreement; (g) which,
in respect of Shareholder Servicing Fees, requires the payment thereof at the
Maximum Service Fee Allowable; and (h) with respect to which the related Share
does not have a Conversion Feature other than a Permitted Conversion Feature.
<PAGE>
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, and the regulations promulgated thereunder. Section
references to ERISA are to ERISA, as in effect at the date of this Agreement
and, as of the relevant date, any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" means any corporation or trade or business that is a
---------------
member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which a Person is a member and (ii) solely for purposes of potential
liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code
and the lien created under Section 302(f) of ERISA and Section 412(n) of the
Code, described in Section 414(m) or (o) of the Code of which such Person is a
member.
"Event of Termination" shall have the meaning specified in Section
--------------------
6.01 of the Master Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, and the
------------
rules and regulations of the SEC thereunder.
"Exchange Share" shall mean, in respect of any Fund, Shares of such
--------------
Fund that were issued in a Permitted Free Exchange of Shares of any other Fund.
"Federal Funds Rate" means, for any period, a fluctuating interest
------------------
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Citibank from three Federal funds brokers of recognized
standing selected by it.
"Federated Entity" means each of the Parent, the Seller, the
----------------
Transferor, the Distributor (as Distributor, Principal Shareholder Servicer and
Program Servicer Agent), the Shareholder Servicer, each Advisor and each
Transfer Agent which is an Affiliate of any thereof.
"Fedwire" means the Fedwire funds transfer system maintained by the
-------
Federal Reserve Banks.
"Fee Agreement" shall mean Federated Investors Program Fee Agreement
-------------
referencing the Master Agreement which is contemplated to be executed and
delivered by the Parent and the Revolving Purchaser.
"5.5% Commission Shares" means Commission Shares sold on a 5.5%
----------------------
commission basis.
"FOF Funds" means a Fund acting as a fund-of-funds.
---------
"Free Redemptions" means a redemption of Shares of any Fund (other
----------------
than Reinvested Shares of such Fund) by a shareholder of such Fund under any
arrangement which relieves or defers, in whole or in part, such shareholder's
obligation to pay the maximum
<PAGE>
Contingent Deferred Sales Charge which would have been payable in the absence of
such arrangement by any other shareholder of such Fund redeeming a Share of such
Fund that had been held by such other shareholder for the same period the Shares
of such Fund had been held by the shareholder in question, including (i)
arrangements pursuant to which certain Persons are entitled to acquire Shares of
such Fund under circumstances in which no Contingent Deferred Sales Charges will
be payable by them, and (ii) arrangements pursuant to which Contingent Deferred
Sales Charges are deferred in connection with the redemption of Shares of such
Fund because the redeeming shareholder is reinvesting all or a portion of the
proceeds of such redemption in shares of another fund; provided, however, that
-------- -------
the term "Free Redemptions" shall not include any Permitted Free Exchanges.
"Free Share" means, in respect of any Fund, each Share of such Fund
----------
other than a Commission Share.
"Fund" means each separate series of a Company specified on Schedule I
----
to the Master Agreement, as the same may be supplemented pursuant to Section
9.18 of the Master Agreement.
"Fundamental Investment Objectives and Policies" means, with respect
----------------------------------------------
to any Fund, the fundamental investment objectives and policies and the
fundamental borrowing policies specified in the Prospectus for such Fund in
effect from time to time.
"Funding and Collection Agent" means Bankers Trust Company, as funding
----------------------------
and collection agent under the Program Funding and Collection Agency Agreement.
"Funding and Collection Agent Fee" means the fee payable to the
--------------------------------
Funding and Collection Agent pursuant to Section 7.02 of the Program Funding and
Collection Agency Agreement.
"GAAP" means generally accepted accounting principles in the United
----
States of America in effect from time to time.
"Governmental Authorizations" means all franchises, permits, licenses,
---------------------------
approvals, consents and other authorizations of any kind of all Authorities.
"Governmental Filings" means all filings, including franchise and
--------------------
similar tax filings, and the payment of all fees, assessments, interests and
penalties associated with such filings with all Authorities.
"Indemnified Party" shall have the meaning assigned to such term in
-----------------
Section 9.04(b) of the Master Agreement.
"Indenture Concentration Account" shall mean the account of the
-------------------------------
Initial Purchaser maintained by Bankers Trust Company, at Four Albany Street,
New York, New York 10006, ABA No.: 021001033, Acct. No.: 01419647, for further
credit to 24060, Ref. "PLT Finance Trust 1997-1", or such other account as the
Initial Purchaser shall designate in writing to the Program Administrator and
the Funding and Collection Agent.
<PAGE>
"Indenture Trustee" shall have the meaning assigned to such term in
-----------------
the Trust Agreement.
"Independent Director" means an individual director of the Seller who
--------------------
shall be at no time (a) a holder of any beneficial interest in any Affiliate of
the Seller, or (b) an employee, trustee, officer or director of any Affiliate of
the Seller.
"Initial Purchase Agreement" means the Federated Investors Program
--------------------------
Initial Purchase Agreement dated as of the date of the Master Agreement
substantially in the form of Exhibit B to the Master Agreement between the
Initial Purchaser and the Seller.
"Initial Purchase Cut-Off Date" means March 31, 1997.
-----------------------------
"Initial Purchase Date" means the Purchase Date for the purchase of
---------------------
Portfolio Assets by the Initial Purchaser.
"Initial Purchase Price" shall have the meaning assigned to it in
----------------------
Section 2.02(a) of the Initial Purchase Agreement.
"Initial Purchaser" shall have the meaning assigned to it in the
-----------------
preamble to the Master Agreement.
"Initial Purchaser's Asset Based Sales Charge Portion" means the
----------------------------------------------------
portion of the Purchased Portfolio Assets constituting Asset Based Sales Charges
allocable to the Initial Purchaser pursuant to the Allocation Procedures.
"Initial Purchaser's CDSC Portion" means the portion of the Portfolio
--------------------------------
Assets relating to all Funds constituting Contingent Deferred Sales Charges
allocable to the Initial Purchaser pursuant to the Allocation Procedures.
"Initial Purchaser's Investment Earnings" shall have the meaning
---------------------------------------
assigned to such term in Section 4.03(c) of the Program Funding and Collection
Agency Agreement.
"Initial Purchaser's Portion" means, on any date, the sum of (i)
----------------------------
Initial Purchaser's CDSC Portion, (ii) Initial Purchaser's Asset Based Sales
Charge Portion, (iii) the Initial Purchaser's Shareholder Servicing Fee Portion,
(iv) the Initial Purchaser's Investment Earnings, and (v) all other amounts to
which the Initial Purchaser is entitled under the Program Documents which are
deposited in the Program Collection Account, reduced by the sum of (x) the
Initial Purchaser's allocable portion, determined in accordance with Section
4.03(b)(i) of the Program Funding and Collection Agency Agreement, of the
amounts distributed in accordance with Section 4.03(a)(i) and (ii) of the
Program Funding and Collection Agency Agreement and (y) the Initial Purchaser's
allocable portion, determined in accordance with Section 4.03(b)(ii) of the
Program Funding and Collection Agency Agreement, of the amounts distributed in
accordance with Section 4.03(a)(iii) of the Program Funding and Collection
Agency Agreement.
"Initial Purchaser's Shareholder Servicing Fee Portion" means the
-----------------------------------------------------
portion of the Portfolio Assets relating to all Funds constituting Shareholder
Servicing Fees allocable to the Initial Purchaser pursuant to the Allocation
Procedures.
<PAGE>
"Investment Advisers Act" means the Investment Advisers Act of 1940,
-----------------------
as amended, and the rules and regulations of the SEC thereunder.
"Investment Company Act" means the Investment Company Act of 1940, as
----------------------
amended, and the rules and regulations of the SEC thereunder.
"Investment Earnings" means as of any Monthly Settlement Date, the
-------------------
interest and income resulting from the investment performance of the Cash
Equivalents (taken as a whole), if any, for the most recent calendar month
ending prior to the Monthly Settlement Date in question (or, in the case of a
Monthly Settlement Date which occurs during the first week of a calendar month,
for the second most recent calendar month ending prior to the Monthly Settlement
Date in question).
"Investment Losses" means as of any Monthly Settlement Date, the
-----------------
losses resulting from the investment performance of the Cash Equivalents (taken
as a whole), if any, for the most recent calendar month ending prior to the
Monthly Settlement Date in question (or, in the case of a Monthly Settlement
Date which occurs during the first week of a calendar month, for the second most
recent calendar month ending prior to the Monthly Settlement Date in question).
"Investor" shall mean in respect of any Person, holders of any equity
--------
securities or Debt of such Person the proceeds of which were used to purchase
interests in the Purchased Portfolio Assets.
"Investor Report" means the report in substantially the form of
---------------
Exhibit L to the Master Agreement, together with the DST Systems, Inc. reports
specified in the Program Servicing Procedures.
"Irrevocable Payment Instruction" means the Distributor's,
-------------------------------
Transferor's and Seller's irrevocable payment instruction to each Company and
the Transfer Agent in respect of each Fund, in the form of Exhibit J to the
Master Agreement.
"Liability" shall have the meaning assigned to such term in Section
---------
9.04(b) of the Master Agreement.
"Lien" means any claim, mortgage, pledge, hypothecation, assignment,
----
deposit arrangement, encumbrance, lien or security interest (statutory or
other), or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, and the filing of any financing
statement under the UCC or comparable law of any jurisdiction), or other charge
or encumbrance, including the retained security title of a conditional vendor or
lessor.
"Master Agreement" shall mean that certain Federated Investors Program
----------------
Master Agreement dated as of October 24, 1997 among Federated Investors,
Federated Funding 1997-1, Inc., Federated Investors Management Company,
Federated Securities Corp., PLT Finance Trust 1997-1, PLT Finance, L.P., Putnam,
Lovell & Thornton Inc. and Bankers Trust Company, as Funding and Collection
Agent.
<PAGE>
"Maximum Aggregate Sales Charge Allowable" means with respect to any
----------------------------------------
Fund the maximum Asset Based Sales Charge which may be paid by the related
Company in respect of Shares of such Fund pursuant to the Distributor's
Contract, together with interest thereon at the Maximum Interest Allowable,
relating to such Fund and pursuant to the "maximum sales charge rule" set forth
in the Conduct Rules, assuming the related Company in respect of such Fund pays
a separate Service Fee in respect of Shares of such Fund, unreduced by payments
theretofore made in respect thereof by such Company, in respect of Shares of
such Fund.
"Maximum Interest Allowable" means the maximum interest which may be
--------------------------
taken into account under Section 2830(d) of the Conduct Rules in computing the
Maximum Aggregate Sales Charge Allowable.
"Maximum Sales Charge Allowable" means with respect to any Fund the
------------------------------
maximum Asset Based Sales Charge which may be paid by the related Fund or
Company in respect of such Fund at any time under the Conduct Rules, including
the annual limit and the limit on the Maximum Aggregate Sales Charge Allowable.
"Maximum Service Fee Allowable" means with respect to any Fund the
-----------------------------
maximum Service Fee which may be paid by the related Company in respect of
Shares of such Fund under the Conduct Rules.
"Monthly Collection Determination Date" shall mean the twenty ninth
-------------------------------------
(29th) calendar day of each calendar month, during the term of the Master
Agreement, or if such day is not a Business Day, the next succeeding Business
Day; provided however, that if there is no such day in such calendar month, the
-------- -------
Monthly Collection Determination Date shall occur on the first Business Day of
the immediately following calendar month.
"Monthly Settlement Date" shall mean the Business Day next succeeding
-----------------------
each Monthly Collection Determination Date.
"Multiemployer Plan" means a multiemployer plan defined as such in
------------------
Section 3(37) or 4001(a)(3) of ERISA to which contributions have been, or were
required to have been, made by a Person or any ERISA Affiliate, or under which
such Person or any ERISA Affiliate may incur any liability.
"NASD" means the National Association of Securities Dealers, Inc.
----
"NAV Decline Ratio" in reference to a period from the end of one month
-----------------
(the "Reference Date") to a later Calculation Date shall be determined by (i)
determining the negative or positive percentage change in the Net Asset Value
per Share of each Fund from the Reference Date to the Calculation Date, (ii)
computing the arithmetic sum of the products obtained by multiplying the
percentage change obtained in clause (i) for Shares of each Fund by the Net
Asset Value of the Shares of such Fund on the Calculation Date, and (iii) if the
sum obtained in clause (ii) is negative dividing the sum obtained in clause (ii)
by the Net Asset Value of all Shares of all Funds on the Calculation Date and
expressing the result as a negative percentage, and if the sum obtained in
clause (iii) is positive the NAV Decline Ratio shall be zero.
"Net Asset Value" means, (i) with respect to any Fund, as of the date
---------------
any determination thereof is made, the net asset value of such Fund computed in
the manner such
<PAGE>
value is required to be computed by the applicable Company, in respect of such
Fund in its reports to its shareholders, and (ii) with respect to any Share of
such Fund as of any date, the quotient obtained by dividing the net asset value
of such Fund (as computed in accordance with clause (i) above) as of such date
allocated to the Shares of such Fund (in accordance with the Distribution Plan
and the Prospectus) by the number of Shares of such Fund outstanding on such
date.
"Other Taxes" shall have the meaning assigned to such term in Section
-----------
9.05 of the Master Agreement.
"Overnight Equivalents" shall have the meaning assigned to such term
---------------------
in Section 3.04(a) of the Program Funding and Collection Agency Agreement.
"Parent" shall have the meaning assigned to such term in the preambles
------
to the Master Agreement.
"Permitted Bank" shall have the meaning assigned to such term in
--------------
Section 4.04(a)(iv) of the Program Funding and Collection Agency Agreement.
"Permitted Conversion Feature" means with respect to any Share of any
----------------------------
Fund, a Conversion Feature in respect of such Fund which, by its terms, may not
become effective prior to the calendar month following the calendar month in
which falls the eighth year anniversary of the issuance of such Share or, if
such Share constitutes an Exchange Share, of the Share from which such Exchange
Share derives; provided, that Free Shares of any holder relating to any Fund
--------
shall convert in proportion to the number of Shares (other than Free Shares) of
that holder in such Fund being converted on such date.
"Permitted Debt" means Debt created by, arising out of or
--------------
contemplated by the Program Documents.
"Permitted Designee" means, (a) the Program Administrator and the
------------------
Purchasers, and (b) any officer, partner, employee, agent, representative, legal
counsel, auditors or trustee designated by the Purchasers or the Program
Administrator, as the case may be.
"Permitted Entity" shall have the meaning assigned to such term in
----------------
Section 5.02 of the Program Servicer Agent Agreement.
"Permitted Free Exchange" means any exchange of Shares of one Fund
-----------------------
(the "Redeeming Fund") for Exchange Shares of another Fund (the "Issuing Fund"),
where, pursuant to the applicable constituent documents of the Issuing Fund:
(i) Exchange Shares of the Issuing Fund are deemed for all purposes (including
the computation of the amount of, and timing of payment of the related
Contingent Deferred Sales Charge) to have been acquired at the time when the
exchanged Shares of the Redeeming Fund were acquired (or deemed to have been
acquired) by the holder thereof; (ii) the exchanging shareholder becomes
obligated to pay to the Issuing Fund the same Contingent Deferred Sales Charge
in respect of the Exchange Shares of the Issuing Fund and on the same terms as
such holder was obligated to pay to the Redeeming Fund in respect of the Shares
of the Redeeming Fund so exchanged; (iii) the date upon which such Exchange
Shares of the Issuing Fund received in the Exchange are converted pursuant to
the Permitted Conversion Feature is the same as the date the exchanged Shares of
the Redeeming Fund were to be converted pursuant to the Permitted Conversion
Feature of the exchanged Shares; (iv) the Maximum
<PAGE>
Aggregate Sales Charge Allowable in respect of the Issuing Fund pursuant to the
Distributor's Contract, the Distribution Plan and the Prospectus of the Issuing
Fund is increased on the effective date of the exchange by a percentage of the
Net Asset Value on such exchange date of the Shares of the Redeeming Fund being
so exchanged determined in accordance with Schedule V to the Master Agreement
with reference to the number of calendar months which have passed since the Date
of Original Issuance of the Share of the Redeeming Fund redeemed in connection
with such exchange; provided, that the amount of such increase shall not exceed
--------
the Amortized Maximum Aggregate Sales Charge Allowable of the Redeeming Fund
immediately prior to the exchange; (v) the Amortized Maximum Aggregate Sales
Charge Allowable in respect of the Redeeming Fund is reduced by the same amount
as the Maximum Aggregate Sales Charge Allowable in respect of such Issuing Fund
is increased; and (vi) both the redemption of the Shares of the Redeeming Fund
so exchanged and the issuance of the Shares of the Issuing Fund are effected at
the Net Asset Value of such Shares at the date of the exchange without any
reduction for fees or expenses attributable to such exchange.
"Permitted Liens" means Liens created by or arising out of the Program
---------------
Documents.
"Person" means an individual, a corporation, a partnership, a joint
------
venture, a limited liability company, a trust or unincorporated organization, a
joint stock company or other similar organization, a government or any political
subdivision thereof, a court, or any other legal entity whether acting in an
individual, fiduciary or other capacity.
"Placement" means any transaction pursuant to which a Purchaser
---------
(including, without limitation, any Placement Trust which obtains such interest
directly or indirectly from such Purchaser) sells or otherwise transfers,
participates or causes to be sold, transferred or participated interests in the
Purchased Portfolio Assets relating to any Fund (including the right to receive
any portion of any Program Collections) to any Person, including a Placement
Trust which publicly or privately sells debt instruments and/or certificates or
other instruments representing ownership interests in such Placement Trust or
interest in any Purchased Portfolio Assets relating to any Fund.
"Placement Agent" means Putnam, Lovell & Thornton Inc., as placement
---------------
agent for any Placement.
"Placement Securities" means the debt or equity securities issued by
--------------------
the Purchaser or a Placement Trust and representing interests in the Purchased
Portfolio Assets.
"Placement Trust" shall mean any trust or other special purpose entity
---------------
to which any interest in any of the Purchased Portfolio Assets relating to any
Fund or the right to receive any Program Collections with respect thereto has
been transferred in connection with a Placement.
"Plan" means an employee benefit or other plan as defined in Section
----
3(3) of ERISA established or maintained by a Person or any ERISA Affiliate
during the five-year period ended immediately prior to the Purchase Date or to
which such Person or any ERISA Affiliate makes, is obligated to make or has,
within the five-year period ended immediately prior to the Purchase Date, been
required to make contributions or under which such Person or any ERISA Affiliate
may incur any liability or which covers any employee or former employee of such
Person or any ERISA Affiliate other than a Multiemployer Plan.
<PAGE>
"Portfolio Assets" means with respect to each Fund, all of the rights
----------------
under the related Distributor's Contract, the related Distribution Plan, the
related Prospectus and the related Principal Shareholder Servicer's Agreement to
receive amounts paid or payable in respect of Asset Based Sales Charges
(including interest at the Maximum Interest Allowable), Contingent Deferred
Sales Charges, and Shareholder Servicing Fees in each case in respect of the
Shares of such Fund and in respect of Shares of any other Fund acquired in any
Permitted Free Exchange of Shares of the Fund in question, including any similar
amount paid or payable under any replacement distribution plan, distributor's
contract, principal shareholder servicer's agreement or prospectus, and any
continuation payments in respect thereof paid or payable by the related Company
in respect of the Shares of such Fund in the event of a termination of the
related Distribution Plan, Distributor's Contract, Principal Shareholder
Servicer's Agreement or Prospectus, and all shareholder servicing fees payable
by any fund arising out of Class A shares of such fund acquired by FOF Funds
with the proceeds of 5.5% Commission Shares.
"Post-Default Rate" means in respect of any amount not paid when due,
-----------------
a rate per annum during the period commencing on the due date thereof until such
amount is paid in full equal to the Base Rate as in effect from time to time
plus two percent (2%).
"Prime Rate" means the rate of interest from time to time announced by
----------
NationsBank, N.A. at its principal office as its prime commercial lending rate.
The Prime Rate is a reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer.
"Principal Shareholder Servicer" shall mean, in respect of any Fund,
------------------------------
the Distributor, in its capacity as principal shareholder servicer in respect of
such Fund.
"Principal Shareholder Servicer's Agreement" means, in respect of any
------------------------------------------
Fund, the agreement between the Principal Shareholder Servicer and the
applicable Company in respect of such Fund pursuant to which the Principal
Shareholder Servicer agrees to act in such capacity in respect of Shares of such
Fund, and any replacement agreement pursuant to which the Principal Shareholder
Servicer has been appointed principal shareholder servicer in respect of Shares
of such Fund.
"Private Authorizations" means all franchises, permits, licenses,
----------------------
approvals, consents and other authorizations of all Persons (other than
Authorities) including those with respect to trademarks, service marks, trade
names, copyrights, computer software programs and technical and other knowhow.
"Program" means the program established by the Program Documents
-------
pursuant to which the Purchasers will purchase Portfolio Assets.
"Program Administrator" shall have the meaning assigned to such term
---------------------
in the preambles to the Master Agreement.
"Program Collection Account" shall have the meaning assigned to such
--------------------------
term in Section 4.01 of the Program Funding and Collection Agency Agreement.
<PAGE>
"Program Collections" means (i) all amounts paid or payable in respect
-------------------
of the Portfolio Assets relating to each Fund by the applicable Fund or Company
or by each shareholder of such Fund that in either case are allocable to the
Purchased Portfolio Assets in accordance with the Allocation Procedures and (ii)
all proceeds in respect of the foregoing.
"Program Costs" means the aggregate Program Servicer Agent fees and
-------------
expenses, the aggregate Funding and Collection Agent fees and expenses and
reasonable counsel and accountants fees and expenses, the reasonable fees and
expenses of other customary service providers and the amounts due under any
interest rate protection agreements in connection with the Program.
"Program Documents" means each Distributor's Contract, each
-----------------
Distribution Plan, each Prospectus, each Principal Shareholder Servicer's
Agreement, each Shareholder Servicer's Agreement, the Fee Letter, the Master
Agreement, the Program Funding and Collection Agency Agreement, the Transferor's
Transfer Agreement, the Seller's Transfer Agreement, the Purchase Agreements,
the Trust Agreement, the Fee Agreement, each Transfer Agent's Agreement, each
Selling Agent's Agreement, each Irrevocable Payment Instruction and the Program
Servicer Agent Agreement, and all exhibits, schedules and annexes any thereof.
"Program Funding and Collection Agency Agreement" means the Federated
-----------------------------------------------
Investors Program Funding and Collection Agency Agreement, dated as of the date
of the Master Agreement substantially in the form of Exhibit E to the Master
Agreement among the Purchasers, the Program Administrator, the Seller, the
Transferor, the Distributor and the Funding and Collection Agent.
"Program Servicer Agent" means the Distributor in its capacity as
----------------------
program servicer agent under the Program Servicer Agent Agreement.
"Program Servicer Agent Fee" shall have the meaning assigned to such
--------------------------
term in Section 3.03 of the Program Servicer Agent Agreement.
"Program Servicing Procedures" means the Federated Investors Program
----------------------------
Servicing Procedures in the form of Exhibit A to the Program Servicer Agent
Agreement and as amended from time to time by the Program Servicer Agent with
the prior written consent of the Program Administrator.
"Program Servicer Agent Agreement" means the Federated Investors
--------------------------------
Program Servicer Agent Agreement dated the date of the Master Agreement
substantially in the form of Exhibit D to the Master Agreement, among the
Purchasers, the Program Administrator and the Distributor, as Program Servicer
Agent
"Program Servicer Agent Remittance Account" means the account of the
-----------------------------------------
Program Servicer Agent maintained by PNC Bank at 2 PNC Plaza, 620 Liberty Ave.,
Pittsburgh, PA 15265, ABA No.: 043000096, Acct. No.: 2434291, Ref. "For the
benefit of Federated Securities Corp.", or at such other account as the Program
Servicer Agent shall designate in writing to the Program Administrator and the
Funding and Collection Agent.
<PAGE>
"Prospectus" means with respect to any Fund the prospectus filed with
----------
the SEC as a part of the related Company's registration statement on Form N-1A,
as amended, and shall include the related statement of additional information
included in such registration statement.
"Purchase Agreements" means the Initial Purchase Agreement and the
-------------------
Revolving Purchase Agreement.
"Purchase Cut-Off Date" means, in respect of the Initial Purchase
---------------------
Date, the Initial Purchase Cut-Off Date, and in respect of each Revolving
Purchase Date the date specified as such in the Revolving Purchase Notice
delivered in respect of such Revolving Purchase Date.
"Purchase Date" means the date of each purchase of Portfolio Assets
-------------
pursuant to the Purchase Agreements.
"Purchase Price" means the Initial Purchase Price or the Revolving
--------------
Purchase Price, as the case may be.
"Purchase Price Percentage" means, with respect to the Portfolio
-------------------------
Assets relating to any Fund, the percentages set forth opposite the name of such
Fund under the heading "Purchase Price Percentages" on Schedule I to the
Revolving Purchase Agreement, determined with reference to the applicable Fund
and whether such Portfolio Assets are based upon a 4.0% or 5.5% commission
structure.
"Purchased Portfolio Assets" means with respect to any Fund, as of any
--------------------------
date, the Portfolio Assets allocated to Purchasers, in accordance with the
Purchase Agreements and the Allocation Procedures, together with the Program
Collections and Ancillary Rights with respect thereto, which is intended to
include in respect of each Purchaser all Asset Based Sales Charges and
Contingent Deferred Sales Charges payable by or in respect of such Fund arising
out of the Shares attributed to such Purchaser, all Shareholder Servicing Fees
payable by or in respect of such Fund arising out of the Shares attributed to
such Purchaser which constitute or derive from 5.5% Commission Shares and all
shareholder servicing fees payable by any fund arising out of Class A shares of
such fund acquired by FOF Funds with the proceeds of 5.5% Commission Shares
attributed to such Purchaser.
"Purchaser" means the Initial Purchaser or the Revolving Purchaser.
---------
"Redemption Threshold Date" means the first day during any three
-------------------------
calendar month period on which the aggregate Net Asset Values (determined with
respect to each redeemed Share as of the date of such redemption) of all Shares
relating to Purchased Portfolio Assets, which were redeemed in Free Redemptions
during the portion of such period up to and including the day in question,
equals or exceeds the product of (a) the average of the aggregate Net Asset
Values of all Funds as of the three immediately preceding Calculation Dates, and
(b) one-half of one percent (0.50%).
"Reinvested Share" means, in respect of any Fund, a Share which is
----------------
issued by such Fund as a result of the reinvestment of dividends or other
distributions, whether ordinary income, capital gain or exempt-interest
dividends or other distributions, of such Fund.
<PAGE>
"Related Collections" means (i) all amounts paid or payable in respect
-------------------
of the Portfolio Assets relating to each Fund by the applicable Fund or Company
or by each shareholder of such Fund and (ii) all proceeds of the foregoing,
excluding, in the case of (i) and (ii) above, all Program Collections.
"Responsible Officer" means, (i) with respect to any Person which is a
-------------------
corporate entity or business trust other than Bankers Trust Company, any officer
or Person with like authority or employee of such Person with responsibility and
authority for the matters relating to such Person's participation in the
transactions contemplated by the Program Documents, including the person to whom
notices to such Person are to be directed as identified pursuant to the notice
provisions of any Program Document, and (ii) with respect to Bankers Trust
Company, any officer assigned to the Corporate Trust Office, including any
managing director, vice president, assistant vice president, assistant
treasurer, assistant secretary or any other officer of Bankers Trust Company
customarily performing functions similar to those performed by any of the above
designated officers and having direct responsibility for the administration of
the Program Documents, and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
"Revolving Purchase Agreement" means the Federated Investors Program
----------------------------
Revolving Purchase Agreement referencing the Master Agreement which is
contemplated to be executed and delivered by the Revolving Purchaser and the
Seller.
"Revolving Purchase Date" shall mean each Purchase Date for the
-----------------------
purchase of Portfolio Assets by the Revolving Purchaser under the Revolving
Purchase Agreement.
"Revolving Purchase Limit" means $100,000,000, or such other amount as
------------------------
shall be agreed to in writing by the Revolving Purchaser, the Program
Administrator and the Seller.
"Revolving Purchase Notice" shall have the meaning assigned to such
-------------------------
term in Section 1.02 of the Revolving Purchase Agreement.
"Revolving Purchase Price" means with respect to the Portfolio Assets
------------------------
relating to any Fund to be purchased on a Revolving Purchase Date, an amount
equal to the product of (A) the Purchase Price Percentage relating to such Fund,
and (B) the total issue price of the Shares of such Fund sold on or after the
preceding Revolving Purchase Date and prior to such Revolving Purchase Date;
provided, however, that in the event that the Seller or any other Federated
- -------- -------
Entity has received any Program Collections in respect of such Portfolio Assets
to be purchased hereunder prior to the purchase thereof by the Revolving
Purchaser, the Revolving Purchase Price for such Portfolio Assets shall be
adjusted as agreed to by the Program Administrator and the Seller in order to
reflect the reduced amount payable to the Revolving Purchaser in respect of such
Sales Charges and notwithstanding anything in this Agreement to the contrary the
Revolving Purchaser shall have no obligation to purchase any such Portfolio
Assets under this Agreement until such reduced Revolving Purchase Price has been
so agreed upon.
"Revolving Purchase Termination Date" means the date which is the
-----------------------------------
third anniversary of the date of the Master Agreement, or such later date as
shall be agreed to in writing by the Revolving Purchaser, the Seller and the
Program Administrator, or such earlier date which is (i) declared or deemed to
have occurred pursuant to Section 6.01 of the Master Agreement, or (ii) the date
on which the Seller terminates the Revolving Purchase Agreement by notice in
writing
<PAGE>
to the Revolving Purchaser and the Program Administrator following the Revolving
Purchaser's failure to make a requested purchase under the Revolving Purchase
Agreement for a period in excess of 30 days in respect of which all conditions
precedent to such purchase have been satisfied (except for Section 3.03(h) of
the Revolving Purchase Agreement).
"Revolving Purchaser" shall have the meaning assigned to such term in
-------------------
the preambles to the Master Agreement.
"Revolving Purchaser Deposited Funds" means all funds at any time and
-----------------------------------
from time to time on deposit in or otherwise to the credit of the Revolving
Purchaser's Funding Account, including Cash Equivalents.
"Revolving Purchaser Funding Amount" shall have the meaning assigned
----------------------------------
to such term in the Revolving Purchase Agreement.
"Revolving Purchaser's Asset Based Sales Charge Portion" means the
------------------------------------------------------
portion of the Portfolio Assets relating to all Funds constituting Asset Based
Sales Charges allocable to the Revolving Purchaser pursuant to the Allocation
Procedures.
"Revolving Purchaser's CDSC Portion" means the portion of the
----------------------------------
Portfolio Assets relating to all Funds constituting Contingent Deferred Sales
Charges allocable to the Revolving Purchaser pursuant to the Allocation
Procedures.
"Revolving Purchaser's Funding Account" shall have the meaning
-------------------------------------
assigned to such term in Article III of the Program Funding and Collection
Agency Agreement.
"Revolving Purchaser's Investment Earnings" shall have the meaning
-----------------------------------------
assigned to such term in Section 4.03(c) of the Program Funding and Collection
Agency Agreement.
"Revolving Purchaser's Portion" means, on any date, the sum of (i)
-----------------------------
Revolving Purchaser's CDSC Portion, (ii) Revolving Purchaser's Asset Based Sales
Charge Portion, (iii) the Revolving Purchaser's Shareholder Servicing Fee
Portion, (iv) the Revolving Purchaser's Investment Earnings, and (v) all other
amounts to which the Revolving Purchaser is entitled under the Program Documents
which are deposited in the Program Collection Account, reduced by the sum of (x)
the Revolving Purchaser's allocable portion, determined in accordance with
Section 4.03(b)(i) of the Program Funding and Collection Agency Agreement, of
the amounts distributed in accordance with Section 4.03(a)(i) and (ii) of the
Program Funding and Collection Agency Agreement and (y) the Revolving
Purchaser's allocable portion, determined in accordance with Section 4.03(b)(ii)
of the Program Funding and Collection Agency Agreement, of the amounts
distributed in accordance with Section 4.03(a)(iii) of the Program Funding and
Collection Agency Agreement.
"Revolving Purchaser's Remittance Account" shall mean the account of
----------------------------------------
the Revolving Purchaser maintained by Bankers Trust Company, at Four Albany
Street, New York, New York 10006, ABA No.: 021001033, Acct. No.: 01419647 for
further credit to 23486, Ref. "Federated Investors" or such other account as the
Revolving Purchaser shall designate in writing to the Program Administrator and
the Funding and Collection Agent.
<PAGE>
"Revolving Purchaser's Shareholder Servicing Fee Portion" means the
-------------------------------------------------------
portion of the Portfolio Assets relating to all Funds constituting Shareholder
Servicing Fees allocable to the Revolving Purchaser pursuant to the Allocation
Procedures.
"Rule 12b-1" means Rule 12b-1 adopted under the Investment Company
----------
Act, as the same may from time to time be amended, supplemented or modified.
"Sales Charge" shall have the meaning set forth in Section 2830(b)(8)
------------
of the Conduct Rules.
"SEC" means the United States Securities and Exchange Commission or
---
any other governmental authority of the United States of America at the time
administrating the Securities Act, the Investment Company Act or the Exchange
Act.
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations of the SEC thereunder.
"Seller" shall have the meaning assigned to such term in the preambles
------
to the Master Agreement.
"Seller's Asset Based Sales Charge Portion" means the portion of the
-----------------------------------------
Portfolio Assets relating to all Funds constituting Asset Based Sales Charges
allocable to the Seller pursuant to the Allocation Procedures.
"Seller's CDSC Portion" means the portion of the Portfolio Assets
---------------------
relating to all Funds constituting Contingent Deferred Sales Charges allocable
to the Seller pursuant to the Allocation Procedures.
"Seller's Investment Earnings" shall have the meaning assigned to such
----------------------------
term in Section 4.03(c) of the Program Funding and Collection Agency Agreement.
"Seller's Portion" means, on any date, the sum of (i) Seller's CDSC
----------------
Portion, (ii) Seller's Asset Based Sales Charge Portion, (iii) the Seller's
Shareholder Servicing Fee Portion, and (iv) the Seller's Investment Earnings,
reduced by (x) the Seller's allocable portion, determined in accordance with
Section 4.03(b)(i) of the Program Funding and Collection Agency Agreement, of
the amounts distributed in accordance with Section 4.03(a)(i) and (ii) of the
Program Funding and Collection Agency Agreement, and (y) the Seller's allocable
portion, determined in accordance with Section 4.03(b)(ii) of the Program
Funding and Collection Agency Agreement, of the amounts distributed in
accordance with Section 4.03(a)(iii) of the Program Funding and Collection
Agency Agreement.
"Seller's Remittance Account" shall mean the account of the Seller
---------------------------
maintained by PNC Bank, at 2 PNC Plaza, 620 Liberty Ave., Pittsburgh, PA 15265,
ABA No.: 043000096, Acct. No.: 1010937889 Ref. "For the benefit of Federated
Funding 1997-1, Inc.", or such other account as the Seller shall designate in
writing to the Program Administrator and the Funding and Collection Agent.
<PAGE>
"Seller's Shareholder Servicing Fee Portion" means the portion of the
------------------------------------------
Portfolio Assets relating to all Funds constituting Shareholder Servicing Fees
allocable to the Seller pursuant to the Allocation Procedures.
"Seller's Transfer Agreement" means the Transfer Agreement dated as of
---------------------------
the date hereof, substantially in the form of Exhibit A to the Master Agreement,
between the Seller and the Transferor pursuant to which the Transferor transfers
the Portfolio Assets to the Seller.
"Selling Agent" means each Person which acts as direct or indirect
-------------
distributor, underwriter, broker, dealer or agent for the Shares of a Fund
together with its successors and assigns.
"Selling Agent's Agreement" means each agreement pursuant to which a
-------------------------
Person undertakes to act as Selling Agent in respect of the Shares of any Fund.
"Service Fee" shall have the meaning set forth in Section 2830(b)(9)
-----------
of the Conduct Rules.
"Shareholder Servicer" means Federated Shareholder Services, in its
--------------------
capacity as shareholder servicer for the Companies.
"Shareholder Servicer's Agreement" means, in respect of any Fund, the
--------------------------------
agreement among the applicable Company in respect of such Fund, the Distributor
and the Shareholder Servicer pursuant to which the Shareholder Servicer
undertakes to act as shareholder servicer in respect of the Shares of such Fund.
"Shareholder Servicing Fee" means the fees payable by a Fund or by a
-------------------------
Company with respect to the Shares of a Fund pursuant to the Principal
Shareholder Servicer's Agreement in consideration of services to holders of
Shares of such Fund.
"Shares" means in respect of any Fund, any class of shares of such
------
Fund which are specified on Schedule I hereto, as the same may be supplemented
pursuant to Section 9.18 of the Master Agreement.
"Significant Affiliates" means (i) any corporation or holding company
----------------------
or similar entity which after the date hereof owns or controls the majority of
the outstanding voting securities of the Seller, or (ii) any Affiliate of the
Seller which is a subsidiary of the Parent if the Parent's beneficial interest
in the total assets of such subsidiary is equal to or greater than ten percent
(10%) of the total assets of the Parent, and in any event shall include the
Distributor, the Parent, the Shareholder Servicer, the Transferor, the Advisors
and any Transfer Agent which is a Federated Entity.
"SIPA" means the Securities Investor Protection Act of 1970, as
----
amended from time to time and the regulations promulgated and the rulings issued
thereunder.
"Standard & Poor's" means Standard & Poor Ratings Services, a division
-----------------
of McGraw-Hill, Inc.
<PAGE>
"Successors" shall have the meaning assigned to such term in Section
----------
5.02 of the Program Servicer Agent Agreement.
"Systematic Withdrawal Program" means the program permitted by the
-----------------------------
Funds whereby shareholders are allowed to withdraw up to 12% of their account
balance per year free of the applicable Contingent Deferred Sales Charge;
provided that, unless the prior written consent of the Program Administrator has
been obtained (which shall not be unreasonably withheld) (i) the account must be
at least one year old; (ii) the account must have a balance of $10,000 in order
to establish a Systematic Withdrawal Program; (iii) withdrawals free of the
Contingent Deferred Sales Charge will be limited to 12% annually; (iv) all
dividends and capital gains must be reinvested; and (v) withdrawals can be
scheduled monthly, quarterly or semi-annually.
"Taxes" shall have the meaning assigned to such term in Section 9.05
-----
of the Master Agreement.
"Transfer Agent" means any Person in its capacity as transfer agent
--------------
for the Funds.
"Transfer Agent's Agreement" means each agreement pursuant to which a
--------------------------
Transfer Agent undertakes to act as transfer agent for any Fund.
"Transfer Agreements" means the Transferor's Transfer Agreement and
-------------------
the Seller's Transfer Agreement.
"Transfer Price" means the price at which each of the Portfolio Assets
--------------
is sold to the Transferor or the Seller, as the case may be, under the
applicable Transfer Agreement, which shall equal the Purchase Price for such
Portfolio Asset.
"Transferor" shall have the meaning assigned to such term in the
----------
preambles to the Master Agreement.
"Transferor's Transfer Agreement" means the Transfer Agreement dated
-------------------------------
as of the date hereof, substantially in the form of Exhibit C to the Master
Agreement, between the Transferor and the Distributor pursuant to which the
Distributor transfers the Portfolio Assets to the Transferor.
"Transferred Portfolio Assets", when used in the Transferor's Transfer
----------------------------
Agreement, shall have the meaning assigned to such term in Section 2.01(a)
thereof, and, when used in the Seller's Transfer Agreement, shall have the
meaning assigned to such term in Section 2.01(a) thereof.
"True Sale" means, with respect to any transfer of an asset or
---------
property, the sale of an ownership interest in such asset or property (not the
granting of a security interest therein), within the meaning of all Applicable
Law, including the UCC and the Bankruptcy Code, and, without limiting the
generality of the foregoing, which is enforceable against all creditors of the
Person making such transfer and all Affiliates of such Person in accordance with
the terms of such transfer, notwithstanding the bankruptcy, insolvency or
reorganization of, or similar proceeding with respect to, or the appointment of
a receiver or conservator of the Person making such transfer or any Affiliate of
such Person, and in connection with any proceeding under the Bankruptcy Code, in
respect of which any one or more of the Person making such transfer or any
Affiliate of
<PAGE>
such Person is the "debtor", as such term is used in the Bankruptcy Code, the
Purchased Portfolio Assets and the proceeds thereof will not be deemed the
property of the debtor.
"Trust Agreement" means the PLT Finance 1997-1 Owner Trust Agreement,
---------------
dated as of the date of the Master Agreement among Putnam, Lovell & Thornton
Inc., as Trustor, Wilmington Trust Company, as the Owner Trustee, and Federated
Funding 1997-1, Inc., as Beneficial Owner.
"UCC" means the Uniform Commercial Code, as from time to time in
---
effect in the applicable jurisdictions.
"Unamortized Gross Purchase Amount" shall have the meaning assigned to
---------------------------------
such term in Section 1.02 of the Revolving Purchase Agreement.
<PAGE>
EXHIBIT 10.03
________________________________________________________________________________
AGREEMENT OF LEASE
between
LIBERTY CENTER VENTURE, A PENNSYLVANIA GENERAL PARTNERSHIP,
COMPRISED OF METROPOLITAN LIFE INSURANCE COMPANY AND
GRANT LIBERTY DEVELOPMENT GROUP ASSOCIATES; AND
GRANT STREET ASSOCIATES, INC., AS THE COURT APPOINTED
RECEIVER FOR LIBERTY CENTER VENTURE,
Landlord,
and
FEDERATED INVESTORS, INC.
Tenant.
FOR PREMISES IN
THE FEDERATED INVESTORS TOWER
DATED AS OF JANUARY 1, 1993
________________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Article and Title Page
- ----------------- ----
<S> <C>
ARTICLE 1 - DEFINITIONS.................................................. 2
ARTICLE 2 - AGREEMENT TO LEASE; TERM; RIGHT TO LEASE
AVAILABLE SPACE; RIGHT TO REDUCE SIZE OF PREMISES............ 11
ARTICLE 3 - BASIC RENT................................................... 17
ARTICLE 4 - ADDITIONAL RENT.............................................. 20
ARTICLE 5 - USE OF PREMISES.............................................. 24
ARTICLE 6 - LANDLORD PAYMENTS,
TENANT IMPROVEMENT ALLOWANCES, UPGRADES...................... 24
ARTICLE 7 - ALTERATIONS.................................................. 28
ARTICLE 8 - BUILDING SERVICES............................................ 31
ARTICLE 9 - ASSIGNMENT AND SUBLETTING'................................... 35
ARTICLE 10 - ACCESS TO PREMISES.......................................... 38
ARTICLE 11 - REPAIRS..................................................... 39
ARTICLE 12 - SURRENDER OF PREMISES....................................... 40
ARTICLE 13 - TENANT LIABILITY, INDEMNIFICATION AND INSURANCE............. 41
ARTICLE 14 - FIRE OR OTHER HAZARD........................................ 44
ARTICLE 15 - SUBORDINATION, MORTGAGEE'S APPROVAL AND ATTORNMENT.......... 47
ARTICLE 16 - RECORDATION................................................. 48
ARTICLE 17 - CONDEMNATION................................................ 48
ARTICLE 18 - ESTOPPEL CERTIFICATES....................................... 50
ARTICLE 19 - BANKRUPTCY.................................................. 51
ARTICLE 20 - DEFAULTS AND REMEDIES....................................... 51
ARTICLE 21 - NON-WAIVER.................................................. 54
ARTICLE 22 - EXONERATION................................................. 54
ARTICLE 23 - QUIET ENJOYMENT............................................. 55
ARTICLE 24 - LANDLORD'S REPRESENTATIONS AND COVENANTS....................55
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE 25 - SPRINKLERS.................................................. 56
ARTICLE 26 - UNAVOIDABLE DELAY........................................... 57
ARTICLE 27 - SUCCESSORS.................................................. 57
ARTICLE 28 - GOVERNING LAW............................................... 57
ARTICLE 29 - SEVERABILITY................................................ 57
ARTICLE 30 - CAPTIONS.................................................... 57
ARTICLE 31 - GENDER...................................................... 58
ARTICLE 32 - NOTICES..................................................... 58
ARTICLE 33 - BROKERS..................................................... 60
ARTICLE 34 - EXECUTION/COUNTERPARTS...................................... 60
ARTICLE 35 - RULES AND REGULATIONS....................................... 60
ARTICLE 36 - NO REPRESENTATIONS BY LANDLORD.............................. 60
ARTICLE 37 - EXHIBITS.................................................... 61
ARTICLE 38 - ENTIRE AGREEMENT............................................ 61
ARTICLE 39 - ALTERNATIVE DISPUTE RESOLUTION.............................. 61
ARTICLE 40 - RECOUPMENT.................................................. 63
ARTICLE 41 - MISCELLANEOUS............................................... 64
</TABLE>
EXHIBITS
- --------
"A" - Legal Description of Land
"A-1" - Plan of Premises
"B" - Calculation of Rentable Area
"C" - Additional Rent Template
"D" - Permitted Exceptions
"E" - Form of Space Report
"F" - Outstanding Obligations under the Existing Lease
"G" - Electricity "Base Line" Calculation
"H" - Rules and Regulations
"I" - Payment Dates of Tenant Improvement And Refurbishment
Allowances
"J" - Building Standard Cleaning and Janitorial Services
"K" - Form of Memorandum of Lease
iii
<PAGE>
AGREEMENT OF LEASE
------------------
THIS LEASE is dated as of the 1st day of January, 1993, between
LIBERTY CENTER VENTURE, a Pennsylvania General Partnership, comprised of
Metropolitan Life Insurance Company and Grant Liberty Development Group
Associates; and GRANT STREET ASSOCIATES, INC., as the Court Appointed Receiver
for Liberty Center Venture, (collectively called the "Landlord") and FEDERATED
INVESTORS, INC., a Pennsylvania corporation, having its principal office at
Federated Investors Tower, Liberty Center, 1001 Liberty Avenue, Pittsburgh,
Pennsylvania 15222 (the "Tenant").
WITNESSETH:
----------
WHEREAS, Landlord is the owner of certain land ("Land") situate in the
City of Pittsburgh, Allegheny County, Pennsylvania as more particularly
described in Exhibit "A" attached hereto; and
WHEREAS, Landlord has developed a mixed use development upon the Land
(the "Project") including a first class general office building ("Building"), a
parking garage ("Parking Garage"), a podium ("Podium") and a hotel ("Hotel")
each as further defined in Section 1.1; and
WHEREAS, by Order of Court dated June 15, 1993, Grant Street
Associates, Inc. was appointed as the Receiver for Liberty Center Venture by the
Court of Common Pleas of Allegheny County, Pennsylvania; and
WHEREAS, Tenant leases space in the Building pursuant to an Agreement
of Lease dated November 30, 1984 between Tenant and Grant Liberty Development
Group Associates ("Original Lessor"); and
WHEREAS, such lease was amended pursuant to the provisions of (i) the
First Amendment to Lease between Original Lessor and Tenant dated August 13,
1986; (ii) the Second Amendment to Lease between Original Lessor and Tenant
dated December 4, 1986; (iii) the Third Amendment to Lease Agreement between
Liberty Center Venture and Tenant dated September 13, 1990; (iv) the Fourth
Amendment to Lease Agreement between Liberty Center Venture and Tenant dated
July 10, 1992; and (v) the Fifth Amendment to Lease Agreement between Liberty
Center Venture and Tenant dated December 8, 1993 (the lease as amended shall be
referred to herein as the "Existing Lease"); and
WHEREAS, Tenant and Landlord wish to enter into this Lease and thereby
terminate and replace the Existing Lease; and
1
<PAGE>
WHEREAS, Grant Street Associates, Inc. has joined in this Lease as
Receiver for Liberty Center Venture; and
WHEREAS, this Lease shall continue in full force and effect in the
event that the appointment of Grant Street Associates, Inc. as Receiver for
Liberty Center Venture is reversed, overturned or otherwise terminated by
subsequent judicial action.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties, intending to be legally bound hereby, agree as follows:
ARTICLE 1 - DEFINITIONS
-----------------------
1.1 For the purpose of this Lease, the following terms shall have the
following meanings:
(a) "Additional Rent" shall mean Operating Rent and any other
amounts required to be paid by Tenant to Landlord under this Lease other than
Basic Rent.
(b) "Additional Variable Operating Expenses" shall have the
meaning as set forth in Section 1.1(nn) (i) (E).
(c) "Advisor" shall have the meaning as set forth in Section
39(c).
(d) Intentionally deleted.
(e) "After Hours" shall have the meaning as set forth in Section
8.1(a) (iii).
(f) "AIREA" shall have the meaning as set forth in Section
3.1(b).
(g) "Available Space" shall have the meaning as set forth in
Section 2.4.
(h) "Bankruptcy Code" shall have the meaning as set forth in
Article 40.
(i) "Base Year" shall mean the period of twelve consecutive
months commencing on January 1, 1993, and ending on December 31, 1993.
(j) "Basic Rent" shall have the meaning as set forth in Section
3.1.
2
<PAGE>
(k) "Building" shall mean that first class twenty-seven (27)
story office building located at 11th Street and Liberty Avenue at Grant Street,
Pittsburgh, Pennsylvania known as the Federated Investors Tower.
(l) "Building Holidays" shall mean those days designated as
holidays by the New York Stock Exchange from time to time including, but not
limited to, New Year's Day, Memorial Day, July 4th, Labor Day, Thanksgiving and
Christmas Day.
(m) "Central Mechanical Room" shall mean the mechanical room
serving both the Building and the Hotel as shown on Exhibit "A-1".
(n) "Code" shall have the meaning as set forth in Section
7.1(e).
(o) "Commencement Date" shall mean January 1, 1993.
(p) "Common Areas" shall mean those areas in the Building used
in common by Tenant and other tenants of the Office Area.
(q) "Diesel Fuel Pump Room" shall be that room located within
the Parking Garage containing Tenant's diesel fuel pumps and diesel fuel storage
for supply to Tenant's emergency electrical generators located in the UPS Room.
(r) "Event of Default" shall have the meaning as set forth in
Section 20.1
(s) "Existing Lease" shall have the meaning as set forth in the
preamble to this Agreement.
(t) "Expansion Notice" shall have the meaning as set forth in
Section 2.4(a).
(u) "Expansion Space" shall have the meaning as set forth in
Section 2.4 (a).
(v) "Fifth Amendment" shall have the meaning as set forth in
Section 2.8.
(w) "Final Notice" shall have the meaning as set forth in
Section 2.3.
(x) "General Building Services" shall have the meaning as set
forth in Section 8.1.
3
<PAGE>
(y) "Hotel" shall mean the first class hotel developed as part
of the Project which contains approximately six hundred (600) guest rooms and
substantial meeting facilities.
(z) "Hotel Operator" shall have the meaning as set forth in
Section 24.2(b).
(aa) "Initial Leased Premises" shall mean the following areas in
the Building and Parking Garage reserved for or dedicated to Tenant's use: (i)
Floors 15 through 27 inclusive of the Building and Floors 10, 11 and one-half of
the 8th floor of the Building, as shown on the drawing attached hereto as
Exhibit "A-1"; (ii) Tenant's Uninterrupted Power Supply Room (the "UPS Room")
and Tenant's Special Mechanical Room, both located on the 4th floor of the
Building; (iii) Tenant's 1st Floor Receiving Area as shown on Exhibit "A-1";
(iv) the Tenant's Upper Parking Lobby as shown on Exhibit "A-1"; and (v) the
Diesel Fuel Pump Room located in the Parking Garage.
(bb) "Initial Term" shall have the meaning as set forth in
Section 2.2.
(cc) "Installations" shall have the meaning as set forth in
Section 12.2.
(dd) "Insurance Premiums" shall mean premiums and other charges
incurred by Landlord with respect to the following insurance on or for the
Building, the Land, or any portion thereof, and on any employees engaged (in
whole or in part) in connection with management, maintenance and/or operation of
the Building or Land:
(i) all risk insurance coverage with extended coverage
endorsement, including coverage against the perils of flood and earthquakes;
(ii) public liability insurance;
(iii) elevator insurance;
(iv) boiler insurance, sprinkler leakage, water damage, legal
liability and pilferage insurance on Building equipment, property and materials;
(v) workers' compensation and employer's liability insurance
for the employees specified above, and such premiums shall be prorated between
the Building and the Hotel based upon the percentage of services performed by
such employees for the Building and for the Hotel;
4
<PAGE>
(vi) rent and business interruption insurance for the business
of Landlord;
(vii) all other insurance which a reasonably prudent operator
of a first-class office building may carry; and
(viii) any other insurance concerning or relating to the
ownership and/or operation of the Building or Land in such amounts and of such
types as Landlord may elect to carry in its reasonable discretion.
(ee) "Land" shall mean the land upon which the Project is
situate as more particularly described in Exhibit "A".
(ff) "Landlord" shall have the meaning as set forth in the
preamble to this Lease.
(gg) "Landlord's Cost" shall mean the actual hourly cost to
Landlord of providing a particular service to Tenant as determined annually by
Landlord, exclusive of Landlord's overhead and profit, which shall not be
unreasonable in comparison with the cost for similar services in other first
class office buildings in the City of Pittsburgh. Landlord shall provide
reasonably satisfactory evidence of such cost and its calculation thereof at the
reasonable request of Tenant.
(hh) "Lease Year" shall mean any calendar year during the Term.
(ii) "Loading Dock" shall mean the loading dock serving the
Hotel, the Building, and retail tenants of the Project and corridors providing
access to such loading dock as shown on Exhibit "A-1".
(jj) "Normal Office Hours" shall mean 8:00 a.m. to 6:00 p.m.,
Monday through Friday, and 8:00 a.m. to 1:00 p.m. Saturday. All other time
periods and all Building Holidays shall be considered "after hours"; provided,
however, that there shall be no after hours charge for HVAC services provided to
Tenant between 7:00 a.m. and 7:00 p.m. Monday through Saturday. The charges to
Tenant for overtime HVAC services shall be calculated in accordance with the
terms of Section 4.2(a) hereof.
(kk) "Office Area" shall mean the Office Floors, except for the
portion of Floor 5 occupied by the Central Mechanical Room, the Office Lobby,
and those areas of Floors 2, 3 and 4 dedicated to office use as shown on Exhibit
"A-1".
(ll) "Office Floors" shall mean Floors 5 through 27 of the
Building.
5
<PAGE>
(mm) "Office Lobby" shall mean the area on the ground floor of
the Building as shown on Exhibit "A-1".
(nn) "Operating Expenses" shall mean:
(i) (A) All those expenses of every kind and character
actually incurred during each year in respect of the operation, management, and
maintenance of the Office Area in accordance with generally accepted accounting
principles and sound management practices as applied to the operation,
management and maintenance of first class office buildings, including without
limitation: (1) Insurance Premiums with respect to the Building, Land, and/or
its operation; (2) expenses for any capital improvements and acquisitions made
to the Building amortized over the estimated useful life of such improvements or
acquisitions if such capital expenses result in net savings of labor and/or
other costs over the estimated useful life of the improvements or acquisition or
are incurred to replace existing improvements and equipment; (3) expenses for
any capital improvements made to the Building in order to comply with applicable
laws, rules, ordinances and/or regulations where such compliance is required as
a result of any change in Tenant's use or layout of the Premises or change in
the location of partitions or trade fixtures in the Premises; and (4) costs of
on-site Building management personnel and an on-site Building management office,
but not the expenses set forth in (ii) below; (B) one-half (1/2) of the expense
of operating, managing and maintaining the Central Mechanical Room; (C) one-
third (1/3) of the expense of operating, managing and maintaining the Loading
Dock; (D) fifty and twenty-seven one hundredths percent (50.27%) of the expense
of maintaining the areas on the Land outside of the Building used in common by
all tenants of the Project, subject to adjustment if additional improvements are
constructed on the Land; and (E) those additional expenses (the "Additional
Variable Operating Expenses") which Landlord would have incurred during each
Lease Year had the Building been at least ninety percent (90%) occupied.
(ii) Operating Expenses shall not include the following:
(A) expenses for any capital improvements and acquisitions (whether owned or
leased) not specified in Subsection 1.1(nn) (i) (A) (2) and (3) above; (B)
expenses for repairs or other work occasioned by fire, windstorm or other
insured hazard to the extent recovered through insurance actually carried or
which would have been recovered through the insurance which is required to be
carried by Landlord as set forth in Section 13.1(b) in the event that Landlord
did not carry such insurance; (C) expenses incurred in leasing or procuring new
tenants (e.g., lease commissions, advertising expenses and expenses of
renovating space for new tenants); (D) legal expenses in enforcing the terms of
any lease, and legal expenses regarding the actions styled Grant Liberty
-------------
6
<PAGE>
Development Group Associates V. Metropolitan Life Insurance Company, pending
- -------------------------------------------------------------------
in the United Stated District Court for the Western District of Pennsylvania at
90-CA-1424, and Metropolitan Life Insurance Company V. Liberty Center Venture
-------------------------------------------------------------
V. Urban Redevelopment Auth. of Pittsburgh and City of Pittsburgh, filed in the
- -----------------------------------------------------------------
Allegheny County Court of Common Pleas at GD91-04073, and any other disputes
among the entities which comprise the Landlord, or between Landlord, any
partners of Landlord and any lenders to Landlord or the Project; (E) interest or
amortization payments on any mortgage or mortgages; (F) expenses in connection
with maintaining and operating the Parking Garage; (G) the cost of any other
tenant's decorations; (H) the cost of correcting design or construction defects
in the Building; (I) expenses for relamping and reballastering the Premises
(which shall be reimbursed directly by Tenant to Landlord) or the premises of
any tenants other than Tenant; (J) the cost of electricity consumed on the
premises of other tenants of the Building; (K) interest on loans made to the
Landlord as debtor; (L) compensation of management personnel not engaged
exclusively in connection with management of the Building; (M) fines or
penalties for violations of laws or regulations by Landlord; (N) cost of
services provided exclusively for particular tenants; (o) Landlord's general
overhead except as related to the maintenance of an on-site Building management
office; and (P) sums reimbursed to Tenant for any capital improvements made by
Tenant in connection with the "Upgrade Work" as defined in Section 6.3 hereof.
(iii) The Additional Variable Operating Expenses shall
annually be determined by Landlord and Tenant by mutual agreement based on the
variable operating expenses incurred in connection with occupied space. For such
purpose, Landlord and Tenant recognize and agree that such operating expenses
are seldom directly proportionate to the percentage of occupancy of the Building
and that the Tenant's Additional Rent should not be increased or decreased as
result of vacancies in the Building. If Landlord and Tenant cannot agree upon
the amount of Additional Variable Operating Expenses for any Lease Year within
sixty (60) days after the end of such Lease Year, Landlord or Tenant may submit
the determination to the alternative dispute resolution procedures in accordance
with Article 39 hereof.
(oo) "Operating Manager" shall have the meaning as set forth in
Section 39(a).
(pp) "Operating Rent" shall have the meaning as set forth in
Section 4.1(a).
(qq) "Original Lessor" shall have meaning as set forth in the
Fourth Recital of this Agreement.
7
<PAGE>
(rr) "Parking Garage" shall mean the parking garage located
below street level on the Land consisting of two (2) floors of parking and
containing parking spaces for approximately 580 cars.
(ss) "Plans" shall mean those final building drawings and
specifications as have been prepared by Grant Liberty Joint Venture Architects.
(tt) "Podium" shall mean that four story structure connecting
the Building and the Hotel and shown on the Plans.
(uu) "Preliminary Notice" shall have the meaning as set forth
in Section 2.3.
(vv) "Premises" shall mean the actual space leased by Tenant
from time to time under this Lease.
(ww) "Prime Rate" shall mean the effective prime rate per
annum, as announced from time to time by Mellon Bank, N.A. at its headquarters
in Pittsburgh, Pennsylvania as its prime rate, such rate to change automatically
from time to time effective as of the effective date of each such change.
(xx) "Private Parking Area" shall mean the area on the upper
level of the Parking Garage shown on Exhibit "A-i" as "Parking Area" which
includes thirty (30) parking spaces in a separate private area and a private
elevator entranceway.
(yy) "Project" shall have meaning as set forth in the Second
Recital of this Agreement.
(zz) "Reduction Space" shall have the meaning as set forth in
Section 2.5(a).
(aaa) "Refurbishment Allowance" shall have the meaning as set
forth in Section 6.4.
(bbb) "Refusal Notice" shall have the meaning as set forth in
Section 2.4(c).
(ccc) "Refusal Space" shall have the meaning as set forth in
Section 2.4(c).
(ddd) "Reimbursement Amount" shall have the meaning as set forth
in Section 6.3.
(eee) "Remaining Operating Expenses" shall have the meaning as
set forth in Section 4.1.
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(fff) "Renewal Options" shall have the meaning as set forth in
Section 2.3.
(ggg) "Renewal Term Rent" shall have the meaning as set forth in
Section 3.1(b).
(hhh) "Renewal Terms" shall have the meaning as set forth in
Section 2.3.
(iii) "Rent" shall mean the Basic Rent, Additional Rent and all
other moneys to be paid by Tenant to Landlord under this Lease.
(jjj) "Senior Manager" shall have the meaning as set forth in
Section 39(b).
(KKK) "Space Report" shall have the meaning as set forth in
Section 2.4(a).
(111) "Square Feet" shall mean square feet of leasable area
measured and calculated pursuant to Exhibit "B".
(mmm) "Square Foot" shall mean one square foot of leasable area
measured and calculated pursuant to Exhibit "B".
(nnn) "Sum A" shall have the meaning as set forth in Section
3.1(b).
(ooo) "Sum B" shall have the meaning as set forth in Section
3.1(b).
(ppp) "Taxes" shall, for purposes of this Lease, include (i) all
real and personal property taxes, ad valorem or specific or otherwise, levied
upon, or with respect to the Building and any furniture, fixtures, machinery,
and equipment used in the operation of the Building; (ii) assessments (on the
same schedule of payments incurred by Landlord), general or special (whether or
not for work commenced or completed during the term of this Lease), ad valorem
or specific or otherwise, levied upon, or with respect to the Building and/or
Landlord and/or tenant improvements comprising, and any furniture, fixtures,
machinery, and equipment used in the operation of the Building; (iii) any tax or
excise in addition thereto or substitution thereof levied by any governmental
authority upon or in respect or by reason of ownership, leasing, operation or
occupancy of the Building and incurred by Landlord, and any tax against Landlord
on rents, including the Pittsburgh Business Privilege Tax (the Pittsburgh
Business Privilege Tax payable by Tenant shall not include any amount which
represents a tax levied on Landlord by reason of Tenant reimbursing Landlord for
such Pittsburgh Business Privilege Tax), and/or additional rents
9
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from the Building (but excluding income and excess profits, taxes, franchise,
capital stock, and inheritance taxes, and license, inspection and permit fees);
(iv) any water charges and/or sewer rents which may be assessed, levied,
confirmed, or imposed on or in respect of or be a lien upon the Building; (v)
any and all fees, costs and expenses incurred by Landlord in negotiating,
appealing, or contesting any of the foregoing items specified above in (i)
through (iv); and (vi) fifty and twenty-seven one hundredths percent (50.27%) of
the foregoing items specified above in (i) through (v) which are assessed,
levied, imposed or incurred with respect to the Land, subject to adjustment if
additional improvements are constructed on the Land. Taxes shall not include any
penalties or interest in arrears and shall be computed as if paid at discount to
the full extent permitted by law.
(qqq) "Tax Protest" shall have the meaning as set forth in
Section 4.4.
(rrr) "Tenant" shall have the meaning as set forth in the
preamble to this Agreement.
(sss) "Tenant Alterations" shall have the meaning as set forth
in Section 7.1(a).
(ttt) "Tenant Finish Allowance" shall have the meaning as set
forth in Section 6.5.
(uuu) "Tenant's Cleaning Contractor" shall have the meaning as
set forth in Section 8.4(c).
(vvv) "Tenant's Cleaning Personnel" shall have the meaning as
set forth in Section 8.4(c).
(www) "Tenant's Share" shall mean the percentage of Operating
Expenses and Taxes to be paid by Tenant, calculated in accordance with Exhibit
"C". In the event that: (i) Tenant exercises its right to lease any Expansion
Space; or (ii) Tenant exercises its right to reduce the size of its Premises; or
(iii) Landlord exercises its right to recapture pursuant to Section 9.4, then,
in any such event, Tenant's Share shall be recalculated by pro-rating Tenant's
Share based on the date Tenant's liability to pay Basic Rent with respect to
such space commenced or terminated, as the case may be.
(xxx) "Tenant's Upper Parking Lobby" shall mean the area on the
upper level of the Parking Garage shown on Exhibit "A-1" as "Lobby G232" which
contains an aggregate area of 169 square feet.
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(yyy) "Term" shall mean the Initial Term set forth in Section
2.2 together with any Renewal Terms as set forth in Section 2.3.
(zzz) "Upgrade Work" shall have the meaning as set forth in
Section 6.3.
(aaaa) "UPS Room" shall have the meaning as set forth in Section
1.1(aa).
(bbbb) "Utility Charges" shall mean all costs for electricity,
steam, gas, water or other utilities or fuels required in connection with the
operation and maintenance of the Building or any portion thereof incurred by
Landlord and not separately metered for and paid directly by any other tenant of
the Building; provided, however, that with respect to electricity the term
Utility Charges shall include only electricity consumed in the Common Areas and
shall not include: (i) any electricity consumed by Tenant in the Premises,
provided that certain costs for such electricity shall be paid by Tenant in
accordance with the terms of Section 4.1(a) (i) hereof; or (ii) any electricity
consumed on the premises of any other tenant of the Building.
(cccc) "Value" shall have the meaning as set forth in Section
3.1(b).
(dddd) "Window Treatments" shall mean the Building standard
window treatment consisting of one horizontal mini-blind for each window in the
Premises.
ARTICLE 2 -
AGREEMENT TO LEASE; TERM; RIGHT TO LEASE
AVAILABLE SPACE; RIGHT TO REDUCE SIZE OF PREMISES
-------------------------------------------------
2.1 Demise. Landlord does hereby demise and let unto Tenant and
------
Tenant does hereby rent . hire, take and lease from Landlord all that portion of
the Building known as the Federated Investors Tower located at the corner of
Liberty Avenue and 11th Street at Grant Street, Pittsburgh, Pennsylvania,
consisting of 318,983 Square Feet defined herein as the "Initial Leased
Premises", together with the right to the use, in common with others, of the
lobbies, entrances, elevators, and other public portions of the Building.
Further, Landlord hereby grants to Tenant a license to use certain space in the
Office Lobby, the exact size and location of such space to be as mutually agreed
to by Landlord and Tenant, for the location and operation of Tenant's security
desk. Landlord hereby agrees to the present size and location of Tenant's
existing security desk in the Office Lobby.
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TO HAVE AND TO HOLD unto the Tenant, its permitted successors and
assigns for the Term of this Lease, but subject and subordinate to the
agreements, encumbrances, covenants and conditions set forth in Exhibit "D"
attached hereto and made a part hereof.
2.2 Initial Term. The initial term of this Lease (the "Initial
------------
Term") shall commence as of 12:00 A.M. on January 1, 1993, and will terminate at
11:59 P.M. on December 31, 2007.
2.3 Renewal Options. Provided that no Event of Default has occurred
---------------
and is continuing under this Lease on either the date on which the Preliminary
Notice or Final Notice (as hereinafter defined) is received by Landlord or on
the last day of the immediately preceding Lease Term, Tenant shall have the
right (the "Renewal Options") to renew this Lease for two (2) successive terms
of five (5) years each arid one final term of four (4) years (the "Renewal
Terms") . Tenant shall give Landlord a conditional written notice ("Preliminary
Notice") of its election to renew this Lease at least twenty-four (24) months
prior to the expiration of the then existing Term. The Basic Rent for such
Renewal Term shall then be determined in accordance with Section 3.1(b) hereof.
Tenant may then exercise a Renewal Option by giving Landlord a final written
notice ("Final Notice") of such exercise at least twelve (12) months before the
expiration of the then existing Term or within thirty (30) days following the
determination of the Basic Rent for such Renewal Term in accordance with Section
3.1(b), whichever is later.
2.4 Right to Lease Available Space. Landlord further grants to
------------------------------
Tenant the right. so long as no Event of Default by Tenant has occurred and is
continuing, to lease additional Available Space (as hereinafter defined) in the
Building upon the following terms and conditions:
(a) On or before January 1 and July 1 of each year during
the Term, Landlord shall provide to Tenant a written report regarding the status
of all leasable area in the Building in the form attached hereto as Exhibit "E"
(the "Space Report") . The Space Report shall set forth the expiration date of
all leases of space in the Building, the location and size of such leasable
space, whether or not the tenant under each existing lease has any renewal
options and the dates by which such renewal options must be exercised, and a
description of all vacant space in the Building. Landlord further agrees that if
during the period between the dates of any consecutive Space Reports any tenant
of the Building vacates, indicates in writing its intention to vacate, or agrees
in writing with Landlord to vacate any space in the Building in advance of the
scheduled vacation date set forth in the most recent Space Report with regard to
such space, then Landlord shall so
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notify Tenant in writing by an interim report within ten (10) business days
following the occurrence of such action. If Tenant desires to lease any of such
vacant space or any of 2 the then occupied space after the expiration of an
existing lease (with no renewal rights or containing renewal rights which were
not exercised) with another tenant of the Building (collectively called the
"Available Space") as set forth on the Space Report or such interim report,
Tenant shall have a period of thirty (30) days after its receipt of a Space
Report or such interim report in which to respond, in writing (the "Expansion
Notice"), declaring its intention to lease any of the Available Space and
identifying the Available Space to be leased by Tenant (the "Expansion Space").
Tenant acknowledges that if an existing tenant of any such Expansion
Space timely exercises a pre-existing renewal option, expansion option or other
right with respect to the leasing of such Expansion Space, and the existing
tenant and Landlord do not: (j) modify or amend the existing tenant's lease in a
significant, material manner in connection with the exercise by such tenant of
its renewal right, expansion right or other such right; or (ii) waive any
significant, material term or provision thereof in connection with the exercise
by such tenant of its renewal right, expansion right or other such right, then
Tenant shall have no right to lease such Expansion Space. Tenant further
acknowledges that if an existing tenant has a renewal option, expansion option,
or other right with respect to the leasing of such Expansion Space wherein the
rent is to be calculated at a fair market rate or a percentage thereof, then the
rental rate as agreed to by Landlord and such tenant shall be deemed to be the
fair market rate or the percentage thereof as referenced in such renewal option,
expansion option or other right.
Each Expansion Notice delivered by Tenant to Landlord shall specify
whether or not such Expansion Space will become part of the Premises under the
terms of this Lease.
(b) Tenant acknowledges and agrees that it shall be entitled to lease
such Expansion Space as part of the Premises pursuant to this Lease only if such
Expansion Space constitutes at least one-half (1/2) of a full floor of the
Building. If Tenant elects to lease such Expansion Space pursuant to this Lease
and such Expansion Space is to become part of the Premises hereunder, then the
following terms shall be applicable: (i) the Basic Rent for such Expansion Space
shall be calculated at the rate at which Tenant is then currently paying Basic
Rent for the Premises in accordance with the terms of this Lease; (ii) Operating
Rent for such Expansion Space shall be calculated by reference to the Base Year;
and (iii) Landlord shall pay to Tenant the Tenant Finish Allowance (as defined
in Section 6.5 hereof) for such Expansion Space, advanced to Tenant in monthly
draws based on the value of
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the improvements made by Tenant (up to the maximum amount of the Tenant Finish
Allowance) completed as certified by Tenant's architect on AIA Form G702 and
submitted to Landlord along with appropriate supporting documentation and copies
of paid invoices regarding such improvements. Tenant further acknowledges and
agrees that no Expansion Space leased by Tenant pursuant to this Lease may be
subsequently designated by Tenant as Reduction Space pursuant to Section 2.5(a)
hereof.
(c) If Tenant informs Landlord in an Expansion Notice that such
Expansion Space is not to become part of the Premises under the terms of this
Lease, then Tenant may lease such Expansion Space from Landlord upon such terms
and conditions as the Landlord and Tenant may agree in writing . In the event
that Landlord and Tenant do not agree on such terms for the leasing of the space
as described in the first sentence of this Subparagrapn (c), then Tenant shall
have a right of first refusal with respect to such space (the "Refusal Space")
on the following terms and conditions:
(i) such right of first refusal shall continue so long as (a) Tenant
leases no less than 265,000 Square Feet in the Building (being the size of the
Initial Leased Premises less 53,983 Square Feet), and (b) an Event of Default
has not occurred and is not continuing under the terms of this Lease; and
(ii) if Landlord receives a bona fide offer to lease all or part of
such Refusal Space. Landlord shall give written notice to Tenant (the "Refusal
Notice") of such offer. Tenant shall have the right for a period of five (S)
days after its receipt of such Refusal Notice to agree, in writing, to lease the
space identified in the Refusal Notice on the terms set forth in the Refusal
Notice; and
(iii) If within the above-described five (5) day period (a) Tenant
notifies Landlord, in writing, that Tenant does not intend to lease such Refusal
Space. or (b) Tenant does not respond, in writing, to the Refusal Notice stating
that Tenant elects to lease such Refusal Space on the terms and conditions as
set forth in the Refusal Notice, then Landlord shall be permitted to lease such
Refusal Space on the terms as set forth in the Refusal Notice and Tenant's right
of first refusal hereunder shall terminate with respect to the lease by Landlord
of such Refusal Space as set forth in the Refusal Notice.
(d) The Commencement Date for such Expansion Space shall be the
earlier of: (i) for any Expansion Space which is less than 5,000 Square Feet,
ninety (90) days after the date on which Landlord delivers possession of such
Expansion Space to Tenant in broom clean condition with no demolition; or (ii)
for any Expansion
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Space which is 5,000 Square Feet or more, one hundred twenty (120) days after
the date on which Landlord delivers possession of such Expansion Space to Tenant
in broom clean condition with no demolition; or (iii) the date upon which Tenant
occupies part of the Expansion Space for the conduct of Tenant's business.
2.5 Right to Reduce Size of the Premises. The Tenant shall have a
------------------------------------
one time right to reduce the size of the Premises in accordance with the
following terms and conditions:
(a) Tenant shall provide Landlord with at least twelve (12)
months prior written notice of its intention to reduce the size of the Premises.
Such written notice shall be delivered by Tenant to Landlord no later than
December 31, 1995 and such notice shall specify the date on which Tenant shall
vacate such portion of the Premises. If Tenant exercises its right to reduce the
size of the Premises as set forth herein, Tenant may reduce the size of the
Premises by an amount not to exceed 53.983 Square Feet of area (the "Reduction
Space") . The Reduction Space consists of and is limited to the rentable area of
the Tenant's Premises located on the 8th, 10th and 11th floors of the Building,
and does not include any Expansion Space leased by Tenant whether pursuant to
this Lease or otherwise. The actual vacation of such space by Tenant shall occur
no earlier than December 31, 1996, and no later than on December 31, 1998.
(b) Tenant shall have no right to reduce the size of the
Premises for any part of the 15th through 27th floors (inclusive) of the
Building. In no event shall Tenant be permitted to reduce its Premises below the
size of 265,000 Square Feet, which is the size of the Initial Leased Premises
less 53,983 Square Feet. There shall be no cancellation penalty to the Tenant
because of its exercise of the right to reduce the size of the Premises as set
forth herein.
(c) If Tenant elects to reduce the size of the Premises by an
amount of less than 53,983 Square Feet in less than full floor increments, no
less than one-half (1/2) floor may be returned to Landlord pursuant to such
reduction of the Premises (except in the case of the 8th floor on which Tenant
is presently occupying only one-half (1/2) the floor, in which event Tenant will
return to Landlord all of its space located on such 8th floor). It is further
agreed that should Tenant reduce the size of the Premises on a floor now
currently occupied in its entirety by Tenant, the expense of erecting a common
corridor on such floor shall be borne by the Landlord.
2.6 Parking. (a) Landlord does hereby grant Tenant a license to use
sixty (60) non-reserved and thirty (30) reserved parking spaces in the Parking
Garage at monthly rental and upon
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terms and subject to rules and regulations uniformly applicable for such parking
spaces in the Parking Garage. In the event there are not at least ten (10) other
reserved parking spaces in the: Parking Garage leased to others, the reserved
parking spaces shall be licensed at a monthly rental as is comparable with
similar private reserved parking in the Golden Triangle area of the City of
Pittsburgh. The reserved spaces shall be located in the Private Parking Area.
Landlord shall make available to Tenant on the same terms a license to use six
(6) non-reserved parking spaces for every additional floor (three (3) for every
additional half-floor) of Expansion Space which Tenant leases and makes a part
of the Premises pursuant to the terms of this Lease. If Tenant desires to
license additional parking spaces in connection with Tenant's lease of Expansion
Space pursuant to the terms of this Lease, then Tenant must exercise such right
by providing written notice thereof to Landlord at the time that Tenant delivers
its Expansion Notice to Landlord with respect to such Expansion Space containing
a designation that such Expansion Space is to become a part of the Premises
hereunder. Landlord may not revoke any license given pursuant to this section
during the Term of this Lease and all rental due in connection with such license
shall be considered Additional Rent under this Lease.
(b) Tenant may upon thirty (30) days notice to Landlord reduce
the number of non-reserved parking spaces licensed to Tenant in which event
Landlord shall have no obligation to reserve such spaces for use by Tenant.
(c) Landlord shall not be required to monitor the Parking Garage
or any areas within the Parking Garage except as provided in Section 8.3 hereof.
2.7 Name. Landlord agrees that the Building shall remain named and
----
designated as the "Federated Investors Tower" so long as Tenant occupies not
less than 100,000 Square Feet in the Building.
2.8 Termination of Existing Lease. Upon the execution and delivery
-----------------------------
of this Lease by Landlord and Tenant, the Existing Lease shall be deemed to be
terminated and of no further force and effect. All Basic Rent and Operating Rent
(as such terms are defined in the Existing Lease) and all other amounts payable
by Tenant to Landlord pursuant to the Existing Lease shall be paid in full on
the date of execution of this Lease. Exhibit "F" to this Lease sets forth the
sums due under the Existing Lease which are to be paid by Tenant to Landlord, or
to be credited by Landlord to Tenant, upon the execution of this Lease. All of
such amounts shall be credited against Tenant's liability for Basic Rent and
Additional Rent for the period beginning on the Commencement Date
16
<PAGE>
and ending on the date of execution of this Lease. In the event that the
calculation as set forth on Exhibit "F" indicates that a credit balance is due
and owing to Tenant, then the amount of such credit balance shall be applied
against Basic Rent hereunder for consecutive successive month(s) beginning on
the date of execution of this Lease until such credit balance has been
reimbursed in full to Tenant. Notwithstanding the foregoing, the 2,380 Square
Feet located on the 7th Floor of the Building and occupied by Tenant pursuant to
the Fifth Amendment to Lease dated December 8, 1993 (the "Fifth Amendment")
shall become subject to this Lease, but the Term and Basic Rent provisions
relating to such space as set forth in the Fifth Amendment shall continue to be
governed by Sections 2 and 3 of the Fifth Amendment and not by the terms of this
Lease; provided, however that Tenant shall have no separate renewal rights with
regard to such 2,380 Square Feet and, upon the expiration of the term for such
space as set forth in the Fifth Amendment, Tenant shall either: (i) elect in
writing to have such space be a part or the Expansion Space and become part of
the Premises under the terms of this Lease; or (ii) agree in writing with
Landlord regarding other terms and conditions for the leasing of such space; or
(iii) return possession of such space to Landlord.
ARTICLE 3 - BASIC RENT
----------------------
3.1 Basic Rent. Tenant covenants and agrees to pay Landlord during
----------
the Term in lawful currency of the United States, without any previous demand
therefor and without any set off or deduction except as made by Tenant pursuant
to its recoupment rights specified in this Lease, an annual basic rent ("Basic
Rent"), subject to adjustment as provided below, as follows:
(a) During the Initial Term, the Basic Rent shall be in the
following amounts paid in advance on the first day of each month throughout the
Initial Term:
(i) For the period commencing January 1, 1993 and ending on
December 31, 1997, Tenant shall pay to Landlord Basic Rent.in the amount of
Nineteen Dollars ($19.00) per Square Foot per year, being the sum of Six Million
Sixty Thousand Six Hundred Seventy Seven Dollars ($6,060,677.00) per annum,
payable in equal monthly installments of Five Hundred Five Thousand Fifty Six
and 42/100 Dollars ($505,056.42); and
(ii) For the period commencing on January 1, 1998 and ending on
December 31, 2001, Tenant shall pay to Landlord Basic Rent in the amount of
Twenty-One Dollars ($21.00) per Square Foot per year, being the sum of Six
Million Six Hundred Ninety Eight Thousand Six Hundred Forty Three Dollars
($6,698,643.00) per annum, payable in equal monthly installments of Five Hundred
Fifty
17
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Eight Thousand Two Hundred Twenty and 25/100 Dollars ($558,220.25); and
(iii) For the period commencing on January 1, 2002 and ending on
December 31, 2005, Tenant shall pay to Landlord Basic Rent in the amount of
TWENTY-TWO and 50/100 Dollars ($22.50) per Square Foot per year, being the sum
of Seven Million One Hundred Seventy Seven Thousand One Hundred Seventeen and
50/100 Dollars ($7,177,117.50) per annum, payable in equal monthly installments
of Five Hundred Ninety Eight Thousand Ninety Three and 13/100 Dollars
($598,093.13); and
(iv) For the period commencing on January 1, 2006 and ending on
December 31, 2007, Tenant shall pay to Landlord Basic Rent in the amount of
Twenty-Four Dollars ($24.00) per Square Foot per year, being the sum of Seven
Million Six Hundred Fifty Five Thousand Five Hundred Ninety Two Dollars
($7,655,592.00) per annum, payable in equal monthly installments of Six Hundred
Thirty Seven Thousand Nine Hundred Sixty Six Dollars ($637,966.00).
The actual dollar calculations of Basic Rent as set forth in
subparagraphs (i) through (iv) hereinabove are subject to: (a) increase for any
Expansion Space leased by Tenant which is designated by Tenant as becoming part
of the Premises, and (b) decrease for any Reduction Space which is returned by
Tenant to Landlord or any space recaptured by Landlord pursuant to Section 9.4.
(b) For each Renewal Term, Basic Rent shall be adjusted to an
amount ("Renewal Term Rent") which shall be the lesser of: (i) one hundred
percent (100%) of fair market rent ("Value") for such Renewal Term; provided,
however, that in no event shall such Value be less than the Basic Rent for the
year immediately prior to the first year of each respective Renewal Term; or
(ii) twenty-five dollars ($25.00) per Square Foot per year for the first Renewal
Term of five years; twenty-seven dollars ($27.00) per Square Foot per year for
the second Renewal Term of five years, and twenty-nine dollars ($29.00) per
Square Foot per year for the third Renewal Term of four years. Value shall be
the rental rate for other leases of comparable size space in comparable Class
"A" office buildings located in downtown Pittsburgh at the time of commencement
of each Renewal Term. The Base Year shall be 1993 for all Renewal Terms. If the
Value cannot be agreed upon by Landlord and Tenant within thirty (30) days after
the Preliminary Notice, as defined in Section 2.3 hereof, the Value shall be
determined by an appraiser or appraisers agreed upon by Landlord and Tenant. If
Landlord and Tenant are unable to agree on an appraiser or appraisers within
forty-five (45) days after the Preliminary Notice, Landlord and Tenant each
shall appoint, within sixty (60) days after Preliminary Notice of the exercise
of the
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Renewal Option, a reputable real estate appraiser who is a member of the
American Institute of Real Estate Appraisers or of a successor body hereafter
constituted and exercising similar functions (referred to hereinafter as
"AIREA") and who has no affiliation of any kind with either Landlord or Tenant.
If either of the parties fails to appoint an appraiser within such sixty (60)
day period, then the one appraiser appointed shall be the sole appraiser and the
provision of this Section 3.1(b) relating to more than one appraiser shall not
apply. The third appraiser shall be appointed by the first two appraisers. If
the first two appraisers are unable to agree on a third appraiser within thirty
(30) days after the appointment of the second appraiser. then the third
appraiser shall be appointed by the then President of AIREA unless such
President is affiliated with either Landlord or Tenant, in which case the third
appraiser shall be appointed by the highest ranking officer of the AIREA who is
not affiliated with either Landlord or Tenant. If the determinations of any two
or all three of the appraisers shall be identical in amount, such amount shall
be the Value. If the determination of all three appraisers shall be different in
amount, the highest appraised Value shall be averaged with the middle Value
(said average being hereinafter referred to as "Sum A"), the lowest appraised
Value shall be averaged with the middle Value (said average being hereinafter
referred to as Sum "B"), and the Value shall be determined as follows:
(i) If neither Sum A nor Sum B differs from the middle appraised
Value by more than five percent (5%) of such middle appraised Value, the
then Value shall be deemed to be the average of the three appraisals;
(ii) If either Sum A or Sum B (but not both of said sums) differs
from the middle appraised value by more than five percent (5%) of such
middle appraised Value, the then Value shall be the average of the middle
appraised Value and the appraised value closest in amount to said middle
Value; and
(iii) If both Sum A and Sum B differ from the middle appraised Value
by more than five percent (5%) of such middle appraised Value, the
appraisals shall have no force and effect, and the Value shall be
determined by a panel of not less than three nor more than five qualified
real estate appraisers who shall be members of the AIREA and who shall not
be affiliated with the Landlord or Tenant, in which case the panel shall be
appointed by the highest ranking officer of the AIREA who shall not be
affiliated with Landlord or Tenant.
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The Value as determined in accordance with the provisions of this
Section 3.1(b) shall be binding and conclusive on the Landlord and Tenant if
Tenant gives Final Notice of its exercise of the applicable Renewal Option. All
costs and expenses of any appraisal shall be shared equally by Landlord and
Tenant and all agreements with appraisers appointed in accordance with this
Subsection 3.1(b) must provide that such appraisals be completed within three
(3) months of such appointment.
ARTICLE 4 - ADDITIONAL RENT
---------------------------
4.1 Operating Rent
--------------
(a) Tenant agrees to pay as operating rent ("Operating Rent") to
Landlord, for each year subsequent to the Base Year, an amount equal to: (i)
charges for all electricity consumed by Tenant in the Premises which exceed the
charges for all electricity consumed by Tenant in the Premises for the Base Year
("Tenant's Base Line Electric Usage") as provided in Section 4.1(b); (ii)
Tenant's Share of the amount, if any, by which the Taxes, Utility Charges and
Insurance Premiums incurred by Landlord with respect to the Building for such
year exceed such charges for the Base Year as set forth on Exhibit "G"; (iii)
Tenant's Share of all Operating Expenses other than Taxes, Utility Charges and
Insurance Premiums (the "Remaining Operating Expenses") as automatically
increased by four percent (4%) per year on a compounded, cumulative basis over
the Remaining Operating Expenses for the Base Year; and (iv) to the extent in
any Lease Year or partial Lease Year the Remaining Operating Expenses increase
by more than seven percent (7%) from the immediately preceding Lease Year, the
portion of such increase in excess of seven percent (7%). Exhibit "C" to this
Lease contains the Operating Rent template which sets forth in detail the Base
Year Taxes and Operating Expenses and the calculation of Additional Rent.
(b) Tenant's Base Line E1ectric Usage is 7.94 watts per Square
Foot as set forth on Exhibit "G" hereto. The electrical charges to be paid by
Tenant shall consist of any increase in the consumption of electricity in excess
of Tenant's Base Line Electric Usage and any increase in excess of the average
of the electric rates for the year 1993 as enacted by the utility provider.
Tenant shall pay any estimated increase in electricity costs in the same manner
as other estimated Operating Rent increases as set forth in Section 4.1(c) of
this Agreement.
(c) Tenant shall pay Landlord, monthly in advance beginning
January 1, 1994, one-twelfth (1/12th) of the amounts, if any, reasonably
estimated annually by Landlord to be Tenant's Operating Rent for the current
Lease Year.
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(d) Landlord shall furnish to Tenant a statement, certified by
an independent public accounting firm, of the Operating Rent and Taxes for each
full or partial Lease Year on or before April 1st of the following Lease Year.
To the extent that the Tenant's Operating Rent owed by Tenant for any full or
partial Lease Year is more than the amount actually paid by Tenant under Section
4.1(a), then Tenant shall pay the actual amounts of Operating Rent due Landlord
within fifteen (15) days after receipt of the aforesaid statements. If the
Operating Rent paid by Tenant for any full or partial Lease Year exceeds the
amount of Operating Rent actually owed to Landlord, such excess shall be
refunded to Tenant within fifteen (15) days after such statement is furnished.
4.2 Other Charges. Tenant shall, within fifteen (15) days after
-------------
Landlord's presenting Tenant with an itemized invoice, pay to Landlord as
Additional Rent all amounts required to be paid pursuant to this Lease,
including, without limitation, the following:
(a) Overtime HVAC charges shall be charged to Tenant for HVAC
utilized by Tenant: (i) before 7:00 a.m. or after 7:00 P.M. Monday through
Saturday; provided, however, that Tenant acknowledges that full HVAC services
shall not be run continuously on Saturdays and Tenant shall be required to place
a telephone call to Landlord to order such HVAC services (and Tenant shall also
advise Landlord of the approximate time to turn off such HVAC services); and
(ii) at any time on Sunday. Such overtime HVAC charges shall be charged to
Tenant at an initial rate during the Base Year of $40.00 per hour, regardless of
the number of floors in the Building for which such overtime HVAC is utilized.
Such overtime HVAC rate shall be increased by 4% per year compounded annually
for each Lease Year subsequent to the Base Year. The Landlord and Tenant hereby
acknowledge that the $40.00 per hour charge for overtime HVAC services is made
in contemplation of the continuation of Tenant's current usage of overtime HVAC
on a periodic basis and by a limited number of Tenant's personnel and
departments for a limited number of hours. If Tenant changes its current manner
of business operations in the Premises and commences a double shift of personnel
working any hours before 7:00 a.m. or after 7:00 p.m., extends its business
hours, or otherwise has an overtime usage of HVAC services of more than six
hundred fifty (650) hours of overtime usage in any Lease Year, Tenant shall pay
to Landlord, for each hour of overtime HVAC usage in excess of 650 hours per
Lease Year, Landlord's actual cost to provide such overtime HVAC services to
Tenant. Landlord's actual cost shall be as determined by an electrical
engineering firm to be mutually selected by Landlord and Tenant, and the expense
of retaining such electrical engineering firm shall be shared equally between
Landlord and Tenant.
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(b) Any charges for parking pursuant to Section 2.6(a).
(c) Any charges for relamping or reballasting pursuant to
Subsection 8.1(d).
(d) Any charges for additional elevator service pursuant to
Section 8.2.
(e) Any charges for repairs pursuant to Section 11.2.
4.3 Partial Months. If (i) Tenant reduces the size of its Premises as
--------------
set forth in Section 2.5 hereof and the actual return by Tenant to Landlord of
the Reduction Space is not made on the first day of the month; or (ii) Tenant
leases any Expansion Space (which is designated by Tenant to become part of the
Premises) and the Commencement Date for the leasing of such Expansion Space is
not on the first day of the month; or (iii) the Lease termination date is not
the last day of the month, a prorated monthly installment of Basic Rent and
Additional Rent shall be paid at the then current rate for the fractional month
during which the Commencement Date and/or termination date occurs.
4.4 Tax Protests.
------------
(a) If the assessment on the Land and/or the Building for real
estate tax purposes is increased or decreased subsequent to the date hereof,
Tenant shall receive notice from Landlord of such increased or decreased
assessment in sufficient detail to enable Tenant to analyze the effect of such
increase on Tenant's Operating Rent and to consult with Landlord.
(b) Should Landlord determine that it does not wish to protest
such real estate tax assessment, Tenant shall have the right after consultation
with Landlord to challenge by legal proceedings or otherwise any such assessment
in the name of the Landlord ("Tax Protest") and Landlord shall cooperate fully
with Tenant in providing all necessary information, documents and testimony to
allow Tenant to protest such real estate tax assessments. Tenant's selection,
use of, and fee arrangements with legal counsel, real estate appraisers and
experts shall be subject to Landlord's approval, such approval shall not be
unreasonably withheld.
(c) In the event any Tax Protest results in an increase in Taxes
for any year during the Term of this Lease, Tenant shall upon fifteen (15) days'
notice, pay to Landlord the Tenant's Share of such increase, even if the Term of
this Lease has expired prior to the final disposition of such Tax Protest.
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(d) In the event any Tax Protest results in a recovery of Taxes
paid by Landlord or a reduction in Taxes to be paid by Landlord in respect of
any calendar year, the amount of such recovery or reduction (net of costs
incurred in obtaining such recovery) shall be treated as a reduction in Taxes
for that calendar year in which Landlord actually receives such refund or is
entitled to such reduction.
(e) Tenant shall have the rights conferred by this Section 4.4
only so long as Tenant is leasing not less than 100,000 Square Feet.
(f) In the event any Tax Protest results in a recovery or
savings of Taxes for any year during the Term of this Lease, Landlord shall from
such savings (and up to a maximum amount of the tax savings for the Project)
reimburse Tenant for all its costs and expenses, including reasonable attorneys'
fees, incurred in connection with such Tax Protest to the extent of the fee
arrangement previously approved by Landlord in accordance with (b) above.
4.5 Landlord's Books. Landlord shall allow Tenant access to its
----------------
books and records at reasonable times at Landlord' 5 offices to substantiate and
audit the Additional Rent. Landlord will submit to Tenant with each calculation
or estimate of Additional Rent such detailed information concerning Taxes and
Operating Expenses and the total rentable space in the Building as is reasonably
necessary for Tenant to verify such calculation. In addition, for the purpose of
such verification Tenant shall be entitled, during regular business hours for a
period of one year from the date each such calculation is submitted by Landlord
to Tenant, to cause an independent certified public accountant to examine
Landlord's books and records for the purpose of further verifying such
calculations by Landlord. For the purpose of any such examination Landlord will
produce such books and records for examination in Allegheny County,
Pennsylvania. Appropriate adjustments between Landlord and Tenant based upon the
verifications provided for above will be made within thirty (30) days after such
verification. If Tenant's examination of Landlord's books and records
demonstrates that the actual Operating Rent paid by Tenant (i) exceeds the
actual Operating Rent that should have been charged to and paid by Tenant by in
the aggregate of up to and including three percent (3%), then Tenant shall pay
for the entire cost of such audit, or (ii) exceeds the actual Operating Rent
that should have been charged to and paid by Tenant by in the aggregate of more
than three percent (3%) and up to and including five percent (5%), then Landlord
and Tenant shall share equally the cost of such audit as reasonably incurred by
Tenant, or (iii) exceeds the actual Operating Rent that should have been charged
to and paid by Tenant by in the aggregate of more than five
23
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percent (5%), then Landlord shall reimburse Tenant for the cost of such audit as
reasonably incurred by Tenant.
ARTICLE 5 - USE OF PREMISES
---------------------------
Tenant shall use and occupy the Premises for general office and
financial services uses and those additional uses which are or in the future may
be incidental or accessory to general office or financial services uses,
subject, however, to all of the terms of this Lease, including without
limitation Article 7 -Alterations herein. Tenant shall not use or occupy the
Premises for any other purpose or business without the prior written consent of
Landlord. In no event may the Premises be used for any "walk-in" business other
than financial services uses without such consent.
Tenant shall observe and comply with all applicable governmental laws,
statutes, ordinances, rules and regulations governing Tenant's use of the
Premises and the Rules and Regulations attached as Exhibit "H". All such Rules
and Regulations shall apply to Tenant and its employees, agents, licensees,
invitees, subtenants and contractors, provided all Rules and Regulations adopted
by Landlord from time to time shall be uniformly enforced among all Building
tenants. Landlord shall not without Tenant's consent make any changes to the
Rules and Regulations which would materially interfere with Tenant's reasonable
use and enjoyment of the Premises as contemplated by this Lease. Tenant's
consent to changes in the Rules and Regulations shall not be unreasonably
withheld.
ARTICLE 6 - LANDLORD PAYMENTS,
------------------------------
TENANT IMPROVEMENT ALLOWANCES, UPGRADES
---------------------------------------
6.1 Payment by Landlord. Landlord will pay to Tenant the sum of Nine
-------------------
Hundred Forty Five Thousand Five Hundred Fifty Six Dollars ($945,556.00) upon
the execution of this Lease by the parties, which sum represents the remaining
payment for the Tenant finish allowances on floors 15, 16 and 17 of the Building
pursuant to the Existing Lease.
6.2 Improvement Allowance.
---------------------
(a) In the event that Tenant does not exercise its right to reduce
the size of the Premises as described in Section 2.5 of this Lease, then
Landlord will reimburse Tenant for a tenant improvement allowance at the rate of
$26.15 per Square Foot in a total sum not to exceed One Million Four Hundred
Twelve Thousand Twenty-Eight Dollars ($1,412,028.00), attributable to the 53,983
Square Feet occupied by Tenant on the 8th, 10th and 11th floors of the Building.
In the event that Tenant does not notify Landlord in
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writing and delivered to Landlord on or before December 31, 1995 that Tenant is
exercising its right to reduce the size of its Premises, then such reimbursement
shall occur within thirty (30) days after December 31, 1995.
(b) In the event that Tenant exercises its right to reduce the size
of its Premises as set forth in Section 2.5 herein and Tenant returns all of the
53,983 Square Feet of Reduction Space to Landlord on December 31, 1996, then the
amount of the improvement allowance owing to Tenant shall be solely as set forth
in the Fourth Amendment to Lease Agreement between Liberty Center Venture and
Tenant dated July 10, 1992 (being the sum of $909,241.00, which sum Tenant has
already received as a rent credit for such space) and no additional amount of
the above referenced improvement allowance shall be due and owing to Tenant.
(c) In the event that Tenant exercises its right to reduce the size
of its Premises as set forth in Section 2.5 herein and Tenant returns all or
part of the 53,983 Square Feet of Reduction Space to Landlord at any time after
December 31, 1996, then Tenant shall receive the amount of the improvement
allowance as set forth in the Fourth Amendment to Lease Agreement between
Liberty Center Venture and Tenant dated July 10, 1992 (being the sum of
$909,241.00, which sum Tenant has already received as a rent credit for such
space), plus an additional 73/120 of such improvement allowance calculated on a
per Square Foot basis and pro-rated on a monthly basis for each full month after
December 31, 1996 during which Tenant occupies all or part of the aforesaid
53,983 Square Feet. Such reimbursement to Tenant shall occur within sixty (60)
days after the date on which Tenant returns the Reduction Space to Landlord.
(d) If Tenant exercises its right to reduce the size of the Premises
by less than all of the 53,983 Square Feet pursuant to Section 2.5 hereof, then,
with respect to the remaining balance of the 53,983 Square Feet which Tenant is
not returning to Landlord pursuant to Section 2.5, Landlord shall reimburse
Tenant for the tenant improvement allowance at the rate of $26.15 per Square
Foot with respect to the remaining Square Footage which continues to be leased
by Tenant on the 8th, 10th, and 11th floors of the Building. Such reimbursement
shall occur within sixty (60) days after December 31, 1995.
6.3 Lobby and Elevator Cab Upgrades. Landlord will reimburse Tenant
-------------------------------
up to a maximum sum of One Million Dollars ($1,000,000.00) (the "Reimbursement
Amount") for the actual costs incurred by Tenant in connection with: (i) the
upgrade of all eleven (11) elevator cabs in the Building; and (ii) the upgrade
of the Building lobby including but not limited to the purchase and installation
of new lobby flooring, and the relocation and
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reconstruction of the lobby security desk. Items (i) and (ii) shall hereafter be
referred to as the "Upgrade Work." Landlord shall have the right to approve the
design and materials to be used in connection with the Upgrade Work, which
approval shall not be unreasonably withheld or delayed. The payment of the
Reimbursement Amount to Tenant for the Upgrade Work shall be made within sixty
(60) days after the completion of all Upgrade Work and Landlord's receipt of (x)
all paid invoices and lien waivers for such work and (y) a certificate of
Tenant's architect indicating that all Upgrade Work was completed in accordance
with the approved plans and specifications. Landlord hereby grants to Tenant a
temporary license with respect to the Building lobby, elevator cabs and elevator
shafts to the extent required to perform the Upgrade Work. Tenant may commence
the Upgrade Work at any time after the execution and delivery of this Lease by
the Landlord and Tenant. Tenant shall provide Landlord with at least thirty (30)
days prior written notice before commencing any of such Upgrade Work. All of
such Upgrade Work shall be performed by Tenant and its contractors in compliance
with all insurance requirements and in compliance with all applicable laws,
regulations, ordinances and requirements of any governmental and quasi-
governmental bodies or agencies having jurisdiction thereof. The Tenant shall
obtain all required permits and governmental approvals for such Upgrade Work,
and Tenant shall perform or cause such work to be performed in a manner which
will not interfere with or substantially impair the operation, use and enjoyment
of the Building by Landlord and/or any other tenant of the Building. Tenant
shall, upon the request of Landlord, perform the elevator cab upgrade work and
any other Upgrade Work which would materially disrupt or interfere with the
normal operation of the Building at hours other than during Normal Office Hours.
Tenant shall indemnify, defend and hold Landlord harmless from and against all
claims, demands, causes of action, damages and liability arising or resulting
from the Upgrade Work unless such claim, demand, cause of action, damages or
liability results solely from the negligence or intentional acts of Landlord.
6.4 Tenant Refurbishment Allowance. Landlord shall provide a tenant
------------------------------
refurbishment allowance (the Refurbishment Allowance") as provided herein on the
tenth anniversary and, if applicable, the twentieth anniversary and thirtieth
anniversary of the original occupancy by Tenant under the Existing Lease or this
Lease of each increment of space in the Premises. Exhibit "I" hereto sets forth
the original occupancy dates for each increment of space in the Building which
is presently occupied by Tenant. The Refurbishment Allowance shall be equal to
ten dollars ($10.00) per Square Foot increased by four percent (4%) compounded
each year from January 1, 1993; provided, however, that no such compounding
shall be applicable to all or any portion of the 53,983 Square Feet of the
Premises as described in Section 2.5(a) hereof until the tenth anniversary date
of the occupancy by Tenant of each increment
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of space with respect to such 53,983 Square Feet and, accordingly, no such
compounding shall commence until the eleventh year following the anniversary
date of the occupancy by Tenant of each increment of space of such 53,983 Square
Feet and until such eleventh year Tenant shall receive only a ten dollar
($10.00) per Square Foot Refurbishment Allowance (which is to be paid on the
tenth anniversary date of the occupancy by Tenant of each increment of space)
with respect to such 53,983 Square Feet. Further, in the event that Tenant
exercises its right to reduce the Premises by up to the 53,983 Square Feet
described in Section 2.5 hereof, Tenant will forfeit and shall not be entitled
to a Refurbishment Allowance with respect to the space that is returned to
Landlord by Tenant pursuant to Section 2.5 hereof. It is further agreed by
Landlord and Tenant that: (i) the Refurbishment Allowance shall be used by
Tenant for actual refurbishment of the Premises for which such allowance is
given; and (ii) no Refurbishment Allowance will be paid with respect to any
portion of the Premises for which a Refurbishment Allowance has previously been
paid under this Section and with respect to which less than five years remain on
the Term of this Lease; provided, however, that if Tenant subsequently exercises
one or more Renewal Options such that more than five years remain on the Term of
this Lease (and the exercise of such renewal options causes Tenant to reach the
above described tenth, twentieth or thirteenth anniversaries, respectively),
then Tenant shall receive the Refurbishment Allowance with respect to such
portion of the Premises; and (iii) the Refurbishment Allowance shall be payable
by Landlord to Tenant on the later of (x) the ten, twenty and thirty year
anniversary dates, as the case may be, and (y) the date on which the
Refurbishment Allowance is actually expended by Tenant.
6.5 Improvement Allowance with Respect to Expansion Space. If Tenant
-----------------------------------------------------
elects to lease Expansion Space pursuant to Section 2.4 hereof and agrees, in
writing, that such Expansion Space is to become part of the Premises leased by
Tenant under the terms of this Lease, then in the event that at least five (5)
years remain in the current Term (or if Tenant has exercised one or more Renewal
Options as set forth in Section 2.3 so that at least five (5) years remain on
such renewal term), Tenant shall receive a Tenant finish allowance (the "Tenant
Finish Allowance") in the year in which Tenant leases any of the Expansion
Space, which Tenant Finish Allowance shall be equal to the sum of Twenty-Five
Dollars ($25.00) per Square Foot and shall be increased by four percent (4%)
compounded per year from January 1, 1993. In the event that less than five (5)
years remain in the current Term or any Renewal Term with respect to such
Expansion Space, then the Tenant Finish Allowance shall be an amount which would
be equal to the sum of $5.00 per Square Foot per year (increased by four percent
(4%) compounded per year from January 1, 1993) for each full Lease Year
remaining on the current Term or current Renewal Term; provided,
27
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however, that if Tenant subsequently exercises one or more Renewal Options such
that at least five (5) years remain on such Term or Renewal Term, then Landlord
shall pay to Tenant the difference between (i) the actual improvement allowance
(calculated at $5.00 per Square Foot per year and compounded as set forth
hereinabove) received by Tenant with respect to such Expansion Space and (ii)
the Tenant Finish Allowance calculated in accordance with the first sentence of
this Section 6.5.
ARTICLE 7 - ALTERATIONS
-----------------------
7.1 (a) From time to time after the Commencement Date, Tenant, at
Tenant's own expense, may make only such alterations, installations, additions,
improvements or changes in or to the interior of the Premises ("Tenant
Alterations") which do not: (i) in any way affect or alter the structure of the
Building; (ii) exceed the structural capacity of any portion of the Building; or
(iii) adversely and materially affect the operation of the Building, any utility
systems within or to the Building, or the rights, privileges or tenancy of any
other tenant in the Building.
(b) If Tenant makes any Tenant Alterations:
(i) Tenant, at least fifteen (15) days before commencement
of work or delivery of materials to the Building, shall furnish to Landlord
plans and specifications, necessary approvals and permits, names and addresses
of all contractors and subcontractors, contractor's liability insurance, and
indemnification in form and amount reasonably satisfactory to Landlord.
(ii) Landlord shall have the right to require that Tenant
promptly remove any Tenant Alterations which Landlord reasonably determines are
not in accordance with Landlord's standard work letter for tenants in the
Building or are not of a type and nature which is commonly acceptable to tenants
in first class office buildings in the City of Pittsburgh and are not likely to
be acceptable to subsequent tenants of the portion of the Premises in which such
Tenant Alterations are located at the end of Term by notifying Tenant of such
requirement no later than ten (10) days after Landlord's receipt of the plans
and specifications of such Tenant Alterations. If such notice is not given to
Tenant, then in that event the construction shall remain upon and be surrendered
with the Premises at the end of the Term or be removed at Tenant's option.
Tenant shall repair any damage occasioned by such removal whether or not
Landlord required such removal, and, in default thereof, Landlord may effect
said removals and repairs at Tenant's expense.
28
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(iii) Tenant shall perform or cause such work to be
performed in a manner which will not materially interfere with or impair the use
and enjoyment of any other portion of the Building by Landlord and/or other
tenants.
(iv) Tenant shall pay the cost of all Tenant Alterations
and any costs of decorating or redecorating the Premises and the Building
occasioned by Tenant Alterations. Landlord acknowledges that it may be obligated
to reimburse Tenant for all or part of such cost as specifically set forth in
Article 6 hereof.
(v) Tenant hereby covenants and agrees not to place or
permit to be placed any lien or liens on or against the Premises, the Land
and/or the Building and Tenant shall hold harmless, indemnify and defend
Landlord from and against any such lien or liens. In the event of any Tenant
Alterations costing in excess of One Hundred Thousand Dollars ($100,000.00),
Tenant shall at Landlord's request and expense, cause each prime contractor and
subcontractor to agree to waive, relinquish and disclaim any right or power to
cause any lien to attach to the Landlord's interest in the Premises, the Land
and/or the Building and Tenant shall furnish to Landlord documents evidencing
the filing of such agreements at its option.
(vi) Tenant shall pay all sums of money in respect of any
labor, services, materials, supplies or equipment furnished or alleged to have
been furnished to Tenant in or about the Premises, Land and/or Building which
may be secured by any mechanic's, materialmens' or other lien against the
Premises, Land and/or Building or the Landlord's interest therein and will cause
each such lien to be discharged at the time performance of any obligation
secured thereby matures. Tenant may contest such lien, but if such lien is
reduced to final judgment and if such judgment or process thereon is not stayed,
or if stayed and said stay expires, then and in each event Tenant shall
forthwith pay and discharge said judgment.
(vii) Landlord shall have the right to post and maintain on
the Premises notices of non-responsibility under the laws of the Commonwealth of
Pennsylvania.
(viii) Upon completing any Tenant Alteration, Tenant shall,
at Landlord's reasonable request, use its best efforts to furnish Landlord with
contractors' affidavits and full and final waivers of lien covering all labor
and materials expended and used.
(ix) All Tenant Alterations shall comply with all laws,
ordinances, rules and regulations of all governmental
29
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authorities, and shall be constructed in a good and workmanlike manner, and only
good grades of materials shall be used. Such construction shall be done in a
manner which does not cause an increase in the rates for the insurance held by
Landlord pursuant to Subsection 13.1(b) hereof.
(x) Tenant shall permit Landlord to inspect and review all
construction operations in connection with any Tenant Alterations. Landlord
shall not unreasonably interfere with such construction.
(c) Subject to Section 7.1(a), Tenant shall have the right to
install, change and revise in and upon the Premises, at its own expenses,
machinery, trade fixtures, communications systems, alarm systems, lighting
fixtures, security devices, shelving, movable partitions and other equipment or
utility and service connections required for or convenient in connection with
the conduct of its business, provided no such action shall interfere with any
communication system, alarm system, security device or utility services for any
portion of the Building other than the Premises.
(d) If communications systems, alarm systems, security devices
or other utility or services connections are installed or changed in accordance
with this Article, such work shall be provided by Tenant if within the Premises,
however, any such work within other areas of the Building will be done by
Landlord at Tenant's expense and all such systems and devices shall be
designated, maintained and operated so as not to interfere with any signal,
communications, alarm or other utility systems of Landlord or of other tenants
in the Building.
(e) Subject to Section 12.3 hereof, Tenant at its option upon
prior notice to Landlord may remove such leasehold improvements as referred to
in Sections 7.1(c) and 7.1(d) from the Premises at any time prior to or at the
end of the Term of this Lease except any such improvements as may be needed to
conform with any applicable electrical, building, zoning, health, safety,
seismic, fire, energy and other codes, requirements or relevant provisions of
any law, regulation or ordinance issued or adopted by the City of Pittsburgh,
County of Allegheny, Commonwealth of Pennsylvania, or the Government of the
United States of America, or any agency, department or other governmental agency
having jurisdiction over the Building, (collectively called "Code"), and subject
to the provisions of such Sections. In the event of such removal Tenant shall at
its own expense promptly repair any damage to the Premises caused by such
removal.
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ARTICLE 8 - BUILDING SERVICES
-----------------------------
8.1 General Building Services. Landlord shall provide, in a manner
-------------------------
befitting a first class office building in the City of Pittsburgh, the following
services and facilities (the "General Building Services"):
(a) Chilled water for the air conditioning system serving the
Premises as follows:
(i) Throughout the Premises during hours of 7:00 a.m. to
7:00 p.m. Monday through Friday and 7:00 a.m. to 7:00 p.m. on
Saturdays, except when such days are Building Holidays, at no extra
charge; provided, however, that certain costs of such electricity and
other utility services shall be an Operating Expense as set forth
elsewhere in this Lease.
(ii) In Tenant's mechanical rooms and data processing rooms
(not to exceed 6,000 Square Feet) on a 24 hour 365 day basis at no
extra charge; provided, however, that the cost of electricity and
other utility services for providing such chilled water shall be an
Operating Expense.
(iii) At other hours, ("After Hours") in such space as
Tenant may request, provided that such request shall be made prior to
the end of Normal Office Hours. Requests for After Hours service may
be made by telephone to the number specified by Landlord. Tenant shall
submit to Landlord a list of Tenant's personnel authorized to make
such requests. Tenant shall pay to Landlord the cost for such overtime
HVAC Services as set forth in Section 4.2(a) hereof.
(iv) Landlord will maintain the air conditioning system in
a manner befitting a first class office building and will use all
reasonable care to keep the same in proper and efficient operating
condition and with the capacity for which it was designed.
(v) Tenant agrees to cooperate fully with Landlord and to
abide by all the regulations and requirements which Landlord may
reasonably prescribe for the proper functioning and protection of the
heating, ventilating and air conditioning systems. Tenant also agrees
to abide by all governmental regulations regarding heating and cooling
and agrees to indemnify Landlord for
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any liabilities imposed upon Landlord for Tenant's failure to do so.
(b) Hot and unheated water for ordinary cleaning purposes,
central lavatory facilities, Tenant's executive dining room kitchen on the 27th
Floor, Tenant's chief executive officer's private bathroom on the 27th Floor and
the vending area and cafeteria currently located on the 17th Floor. The cost of
electricity used in point of source heating units in said areas, other than the
central lavatory facilities, shall be included in the cost of electricity
consumed by Tenant in the Premises as determined pursuant to Section 4.1. hereof
(c) Chilled water for drinking fountains.
(d) Relamping and reballasting in Common Areas. However,
relamping and reballasting in Tenant's Premises shall be performed by Tenant, or
by Landlord at Tenant's direction in which case Tenant shall pay Landlord's
Cost thereof.
8.2 Elevator Service and Loading Dock. Landlord shall at all times
---------------------------------
provide passenger elevator services (which will be automatic) for Tenant in
common with other tenants; provided, however, one elevator shall be on call for
Tenant's exclusive use at all times during the hours of 7:00 a.m. through 7:00
p.m. Monday through Friday and 6:00 a.m. through 4:00 p.m. on Saturday (and at
all other times at Tenant's expense) to service the Premises exclusively.
Landlord shall provide, freight elevator service in common with others
during Normal Office Hours. If Tenant shall require freight elevator service
and/or use of the Loading Dock outside of Normal Office Hours, Tenant shall pay
Landlord for any required services of building personnel.
8.3 Attendants. Landlord shall provide attendants during Normal
----------
Office Hours for the reception and direction of visitors to the Building. After
Normal Office Hours, Landlord shall monitor the lobby of the Building and
elsewhere throughout the Building and Parking Garage to such extent as is
required in Landlord's judgment to reasonably protect the Building. By providing
such services in and about the Building, Landlord assumes no liability to
Tenant for loss, damage or theft of Tenant's installations, equipment or
personal property unless such loss, damage, or theft is due to the negligence or
willful action of Landlord or its employees or agents. Tenant shall have the
right to provide, at its sole cost and expense, attendants for the reception and
direction of Tenant's visitors to the Premises.
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8.4 Cleaning and Janitorial Services.
--------------------------------
(a) Landlord shall provide Building Standard Cleaning and Janitorial
Services in and about the Building and the Premises in accordance with a
schedule of "Building Standard Cleaning and Janitorial Service" attached hereto
as Exhibit "J". To the extent that Tenant shall require special or more frequent
cleaning and janitorial services, Landlord shall, upon reasonable advance notice
by Tenant, furnish such special cleaning services. Tenant agrees to pay
Landlord, within fifteen (15) days of being billed therefor, Landlord's Cost for
providing such additional service, such charge to be deemed Additional Rent.
(b) Without limiting the generality of the foregoing, the following
shall be considered to be "special cleaning services".
1. Any cleaning and maintenance in areas of special
security such as storage vaults.
2. All cleaning services performed at times other than
normal cleaning hours as described on Exhibit "J".
(c) Landlord grants to Tenant the right to provide its own cleaning
services for the Premises through an independent contractor at Tenant's own cost
and expense. Tenant may exercise such right from time to time by giving Landlord
not less than sixty (60) days' prior written notice. During the Lease Year or
Lease Years or portions thereof with respect to which notice is thereby given,
Landlord shall not be obligated to provide cleaning services for the Leased
Premises. In the event Tenant obtains its own cleaning service: (i) the
personnel, equipment and work must be up to the standards for a first class
office building in the City of Pittsburgh; (ii) the contractor performing the
cleaning services ("Tenant's Cleaning Contractor") must maintain insurance which
Landlord reasonably deems to be adequate; (iii) the Tenant's Cleaning Contractor
shall provide to Landlord and maintain with Landlord a current list of the names
and addresses of all of its personnel working in the Building ("Tenant's
Cleaning Personnel"); (iv) Landlord may photograph and require Tenant's Cleaning
Personnel to wear identification badges; (v) Tenant's Cleaning Personnel shall
be subject to the Rules and Regulations of the Building governing after Normal
Office Hours invitees; (vi) in the event that Tenant elects to utilize Tenant's
Cleaning Contractor for the Premises, Tenant shall receive a credit against
Operating Rent equal to the difference (calculated on a cost per square foot
basis) between (x) the amount which Landlord was paying for such cleaning and
janitorial service for the Building prior to Tenant's election to utilize its
own cleaning personnel, and (y) the amount which Landlord is required to pay for
such cleaning and
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janitorial service for the Building in the year following Tenant's election to
utilize Tenant's Cleaning Contractor. Tenant acknowledges that notwithstanding
Tenant's election to hire an independent contractor to clean its own Premises,
Landlord may continue to be obligated to pay the same amount for such cleaning
services for the Building until the expiration of the then current janitorial
contract with Landlord's cleaning contractor.
8.5 Interruption of Services.
------------------------
(a) If the Landlord shall fail to provide any of the General
Building Services to be provided by Landlord in accordance with this Article 8,
Tenant may, after seven (7) days notice to Landlord, provide the same. The
amount of any sums paid by Tenant for such purpose may be deducted by Tenant
from monthly payments of Basic Rent provided that the amount of such deduction
taken in any month is not greater than five percent (5%) of the monthly Basic
Rent.
(b) If all or any portion of Premises shall be untenantable, the
Rent or Rent allocable to such portion shall abate beginning from the third
(3rd) full day of such failure until the Premises or portion thereof may again
be occupied, provided that Tenant shall give Landlord notice of such failure at
least forty-eight (48) hours before such abatement shall commence. If
substantial portions of the Premises are made tenantable before others, the Rent
allocable to such Premises shall commence upon restoration thereof. For the
purposes of this Subsection 8.5(b), by way of example and not limitation, the
Premises or portion thereof shall be considered "untenantable" if Landlord fails
to provide: (i) any elevator service, (ii) unheated water for lavatory services,
or (iii) HVAC to maintain a temperature of no less than 64*F or no greater than
80*F.
(c) For purposes of this Section 8.5, time shall be deemed to be
of the essence.
8.6 Security. If the cost to Landlord for security services in the
--------
Building and/or the cost of hazard insurance for the Building increases as a
result of Tenant vacating all or any portion of the Premises, Tenant shall pay
Landlord, on demand as Additional Rent, such increase(s) in cost.
8.7 Office Building Directory. Landlord shall provide Space in the
-------------------------
Office Building Directory in the lobby to designate Tenant's floors and
departments as may be reasonably acceptable to Tenant as adequate for Tenant's
purposes.
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8.8 Window Treatments. Landlord shall provide the Window Treatments
-----------------
for the Premises at Landlord's sole cost and expense.
ARTICLE 9 - ASSIGNMENT AND SUBLETTING
-------------------------------------
9.1 Notice. Should Tenant wish to assign or sublet all or a portion
------
of the Premises (including the reserved parking spaces located in the Private
Parking Area) for all or a portion of the remainder of the Term of this Lease it
shall give Landlord notice of such intention to assign or sublet sixty (60) days
prior to the commencement date of such assignment or subletting unless
Landlord's consent is not required for such assignment or subletting pursuant to
Section 9.2 and Landlord has no right to recapture pursuant to Section 9.4, in
which case Tenant shall give Landlord Notice within five (5) days after such
assignment or subletting. This notice shall specify the amount and location of
the space and period of term of such sublet or assignment, the identity of the
proposed assignee or sublessee and, if a subletting, the rent to be paid to
Tenant.
9.2 Consent Not Required. Subject to this Article 9, Tenant may
--------------------
assign or sublet all or a portion of the Premises for all or a portion of the
remainder of the Term of this Lease without the consent of the Landlord provided
that:
(a) The business or occupation of the proposed subtenant or
assignee is not extra hazardous, disruptive, or illegal and is permissible under
Article 5 and in keeping with the character of the Building.
(b) Tenant remains primarily liable to Landlord for payment of
the Rent herein reserved and for performance of all other terms of this Lease
required to be performed by Tenant.
(c) In the case of Premises other than the Private Parking Area,
Tenant has not offered such space to a current tenant in the Building or a
former tenant who has been a tenant in the Building within three (3) years of
the date the subletting or assignment is scheduled to commence, or within one
(1) year of such date, if the following conditions apply: (i) more than ninety
percent (90%) of the Square Feet of the Building are leased; (ii) space
comparable to the space Tenant proposes to sublease or assign is not available
in the Building from Landlord; and (iii) no such comparable space will be so
available within six (6) months of the scheduled date of commencement of the
assignment or sublease.
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(d) the proposed subtenant or assignee has a net worth equal to or
greater than that of Tenant as of the date of this Lease.
9.3 Assignment Requirements. In the event of an assignment of all
-----------------------
or a portion of the Premises, each assignee shall assume and be deemed to have
assumed this Lease and shall be and remain liable jointly and severally with
Tenant for the payment of the Basic Rent, Additional Rent and any other sums due
hereunder and for the total performance of all of the terms, covenants,
conditions and agreements herein contained on Tenant's part to be performed
during the Term of this Lease. No assignment of this Lease shall in any way
relieve Tenant from its obligations under this Lease. No assignment shall be
binding on Landlord unless such assignee shall deliver to Landlord a counterpart
of such assignment and an instrument in recordable form which contains a
covenant of assumption by the assignee; but the failure or refusal of the
assignee to execute such instrument of assumption shall not release or discharge
the assignee from its liability as set forth above.
9.4 Recapture. In the event that at any time or from time to time
---------
during the Term of this Lease, Tenant desires to sublease all or any part of the
Premises, and if, after such sublease, Tenant shall occupy less than sixty (60%)
percent of the Initial Leased Premises, Landlord shall have the right to be
exercised by giving written notice to Tenant thirty (30) days after receipt of
the Tenant's notice described in Section 9.1, to recapture the space described
in Tenant's notice and such recapture notice, shall, if given, cancel and
terminate this Lease with respect to the space therein described as of the date
for the commencement of such proposed sublease as stated in Tenant's notice. If
Tenant's notice shall cover all of the Premises, and if Landlord shall give the
aforesaid recapture notice with respect thereto, the Term of this Lease shall
expire and end on the date stated in Tenant's notice as fully and completely as
if that date had been herein definitely fixed for the expiration of the Term of
this Lease. If, however, this Lease shall be cancelled pursuant to the foregoing
with respect to less than the entire Premises, the Basic Rent and any Additional
Rent shall be adjusted on the basis of the number of Square Feet retained by
Tenant in proportion to the number of Square Feet contained in the Premises, as
described in this Lease, and this Lease as so amended shall continue thereafter
in full force and effect. If Landlord fails to exercise such option, and Tenant
fails to complete a sublease with a third party within sixty (60) days
thereafter in accordance with the terms of the Notice, Tenant shall again comply
with all the conditions of this Article 9 as if the notice and option
hereinabove referred to had not been given and received.
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9.5 Subleasing Requirements. Any sublease entered into by Tenant for
-----------------------
all or a portion of the Premises shall be subject to and made upon the following
terms:
(a) Any such sublease shall be subject to the terms of this
Lease and no sublease shall release or relieve Tenant of any of its obligations
hereunder.
(b) The term of any sublease shall not extend beyond the Initial
Term unless Tenant has exercised a Renewal Option in which case such term shall
not extend beyond the Renewal Term of the latest Renewal Option to be exercised
by Tenant.
(c) No sublease shall violate any negative covenant as to use
contained in any mortgage affecting the Building.
(d) No sublease shall be valid and no subtenant shall take
possession of the Premises subleased until an executed counterpart of such
sublease and a copy of any agreements relating to such sublease have been
delivered to the Landlord. All such documents shall be delivered by Tenant to
Landlord within ten (10) days after the execution thereof.
(e) No sublessee shall have a right to further sublease.
(f) No sublessee shall be entitled to exercise a Renewal Option
unless Tenant exercises its Renewal Option for the entire Premises (but this
shall not limit Tenant's right to exercise a Renewal Option for the portion of
the Premises not sublet by Tenant).
(g) Any rentals or benefits in lieu of any rentals received by
Tenant which are in excess of the Rent allocable to such space and the expenses
incurred by Tenant through such subletting shall be payable fifty percent (50%)
to Tenant and fifty Percent (50%) to Landlord as Additional Rent.
In the event Tenant advertises space for subletting, either
directly or through a real estate agent, the advertisement shall have the prior
written approval of the Landlord which shall not be unreasonably withheld.
9.6 Tenant's Affiliates. Any use or occupancy of the Premises by any
-------------------
corporation or entity which controls or is controlled by the Tenant, or under
common control with the Tenant or otherwise affiliated with the Tenant, shall be
a use or occupancy of the Premises by the Tenant and shall not be deemed a
Sublease of the Premises or an assignment or transfer of any right, title or
interest in this Lease, the leasehold estate created
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hereby or any part of same, to any such corporation or entity governed by this
Section 9.6 notwithstanding that the corporation or entity may reimburse or pay
the Tenant any part of the cost to Tenant for such use and occupancy.
9.7 Non-Conforming Assignment or Sublet. Any purported assignment or
-----------------------------------
subletting by Tenant which is materially not in conformity with this Article
shall be voidable by Landlord unless Tenant cures such nonconformity within
thirty (30) days after notice from Landlord. If not so cured, Landlord may
require Tenant to terminate same and to recover possession of the Premises or
portion thereof so assigned or sublet. The failure of Tenant to so perform
within thirty (30) days after notice from Landlord shall entitle Landlord in
addition to any other rights and remedies it may have under this Lease to
terminate the nonconforming assignment or sublease on Tenant's behalf and
recover possession. Landlord is hereby granted Tenant's irrevocable
power-of-attorney coupled with an interest to so terminate the nonconforming
assignment or sublease and recover possession.
ARTICLE 10 - ACCESS TO PREMISES
--------------------------------
Landlord, its employees and agents shall have the right to enter the
Premises at all reasonable times upon giving Tenant reasonable prior notice and
with minimal disruption to Tenant's use of the Premises for the purpose of
examining or inspecting the same, showing the same to prospective purchasers or
mortgagees, performing extraordinary cleaning and maintenance, and making such
alterations, repairs, improvements or additions to the Premises or to the
Building as Landlord may deem necessary or desirable. Landlord, its employees
and agents shall also have such right of access for the purpose of showing the
Premises to prospective tenants during the final twelve (12) months of the Term.
Notwithstanding the foregoing, Landlord shall not enter the area designated as
"data center" without a guard or other representative provided by Tenant, except
in emergency conditions. If representative of Tenant shall not be present to
open and permit entry into the Premises at any time when such entry by Landlord
is necessary or permitted hereunder, Landlord, its employees and agents may
enter by means of a master key (or forcibly in the event of an emergency),
without liability of Landlord to Tenant, so long as Landlord is not negligent in
exercising the right, and without such entry constituting an eviction of Tenant
or termination of this Lease; provided Landlord shall promptly repair any
unnecessary damage caused by such entry.
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ARTICLE 11 - REPAIRS
--------------------
11.1 Landlord's Maintenance. Landlord shall promptly make all
----------------------
repairs necessary to maintain the plumbing, air conditioning and electrical
systems, windows, floors (excluding carpeting), and all other items which
constitute a part of the Premises or public access of the Building and are
installed or furnished by Landlord, except repairs of Tenant's trade fixtures
and property and installations which Tenant was obligated to make or which were
performed by Landlord or others at Tenant's request. Landlord shall not be
required to make any such repairs until the expiration of a reasonable period of
time after receipt of written notice from Tenant that such repairs are needed.
If Landlord fails to commence and diligently pursue such repairs prior to the
expiration of such period, Tenant may in addition to its rights under Section
8.5, make such repairs and recoup its cost by deducting the cost thereof from
monthly payments of Basic Rent. The amount of such deduction by Tenant in any
one month shall not exceed the greater of: (i) five percent (5%) of the monthly
Basic Rent, and (ii) an amount required in order to amortize Tenant's actual
cost for such repairs in equal monthly amounts over a period of twelve
consecutive months. The Tenant's actual cost for such repairs shall be verified
and substantiated by paid invoices and other appropriate documentation delivered
to Landlord. Tenant shall notify Landlord in writing prior to the making of any
repairs for which Tenant intends to claim a right of recoupment hereunder. All
repairs shall be in the quality and class of the undamaged condition. In no
event shall Landlord be obligated under this Section to repair any damage caused
by any act, omission or negligence of the Tenant or its employees, agents,
invitees, licensees, subtenants or contractors.
11.2 Tenant's Maintenance. Tenant shall take good care of the
--------------------
Premises and the fixtures and appurtenances therein. Landlord shall, at Tenant's
sole cost and expense, repair and replace all damage or injury to the Premises
and Building and to fixtures and equipment caused by Tenant or its employees,
agents, invitees, licensees, subtenants, or contractors, or as the result of all
or any of them moving in or out of the Building or by installation or removal of
furniture, fixtures or other property, which repairs and replacements shall be
in quality and class equal to the undamaged condition.
11.3 Interferences and Delays. Landlord shall not be liable by reason
------------------------
of any inconvenience, injury to, or interference with Tenant's business arising
from the making of any necessary repairs or alterations, additions or
improvements in or to the Premises or the Land and Building or to any
appurtenances or equipment therein unless such inconvenience, or injury or
interference shall be occasioned by the negligence or willful
39
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action of Landlord, its agents, servants and/or employees. Landlord shall make a
reasonable effort to avoid unnecessary inconvenience to or interference with
Tenant's business. There shall be no abatement of Rent because of repairs,
alterations, additions or improvements except in the event of untenantability as
provided elsewhere in the Lease. Landlord covenants to use its best efforts to
implement such repairs, alterations, additions or improvements in a timely and
expeditious manner.
ARTICLE 12 - SURRENDER OF PREMISES
----------------------------------
12.1 Surrender. At termination of this Lease by lapse of time or
---------
otherwise, Tenant shall surrender the Premises to Landlord, together with
alterations, additions, and improvements thereto, in broom-clean condition and
in good order and repair, except for ordinary wear and tear and damage for which
Tenant is not obligated to make repairs under this Lease. If the Premises are
not left in such condition by Tenant then Landlord may restore the Premises to
such condition and Tenant shall pay Landlord for the cost of such restoration.
12.2 Landlord's Property. Upon such termination all installations,
-------------------
alterations, additions, hardware and improvements ("Installations") which have
been installed by Landlord upon the Premises shall remain upon the Premises and
shall be Landlord's property, all without compensation, allowance or credit.
12.3 Tenant's Property. At the expiration or earlier termination of
-----------------
this Lease, Tenant may remove from the Premises all trade fixtures, office
equipment, computer equipment, files and furniture which have been placed by
Tenant in the Premises if and to the extent that such removal will not cause any
damage to the structural integrity of the Building or to the floors, ceilings,
walls, HVAC, or electrical, plumbing, life safety, security or communication
systems. Such removal shall be at Tenant's sole expense and risk, and any damage
or unsightly conditions resulting from such removal shall be repaired by Tenant.
All such repair work and removal are to be completed no later than forty-five
(45) days after the date upon which this Lease terminates. Notwithstanding the
foregoing, Tenant shall have no obligation to perform said repairs at the
termination of this Lease if such repairs will be substantially demolished to
prepare the Premises for a new tenant. Further, and notwithstanding the first
sentence of this Section 12.3, if an Event of Default has occurred and is
continuing then Tenant shall not be permitted to remove any trade fixtures from
the Premises.
12.4 Waiver. TENANT EXPRESSLY WAIVES TO LANDLORD THE BENEFIT OF
------
TENANT OF 68 P.S. SECTION 250.501, APPROVED APRIL 6,
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1951, ENTITLED "LANDLORD AND TENANT ACT OF 1951", AS MAY BE AMENDED FROM TIME TO
TIME, REQUIRING NOTICE TO QUIT UPON THE EXPIRATION OF THE TERM OF THIS LEASE OR
AT THE EXPIRATION OF ANY EXTENSION OR RENEWAL THEREOF, OR UPON ANY EARLIER
TERMINATION OF THiS LEASE, AS HEREIN PROVIDED. TENANT COVENANTS AND AGREES TO
VACATE, REMOVE FROM AND DELIVER UP AND SURRENDER THE POSSESSION OF THE PREMISES
TO LANDLORD UPON THE EXPIRATION OF THIS TERM OR UPON EXPIRATION OF AND EXTENSION
OR RENEWAL THEREOF, OR UPON ANY EARLIER TERMINATION OF THIS LEASE, As HEREIN
PROVIDED, WITHOUT SUCH NOTICE, IN THE CONDITION AS REQUIRED ABOVE.
ARTICLE 13 - TENANT LIABILITY, INDEMNIFICATION AND INSURANCE
------------------------------------------------------------
13.1 (a) Tenant's Insurance. Tenant covenants and agrees to
------------------
provide on or before the commencement of the Term and to keep in force during
the entire Term of this Lease: (1) comprehensive general liability insurance
for the mutual benefit of Landlord and Tenant relating to the Premises and its
appurtenances on an occurrence basis in an amount of not less than $2,000,000.00
in respect of personal injury, or death or property damage liability which
insurance shall name Landlord as an additional insured; and (2) fire and
extended coverage, vandalism, malicious mischief, boiler and machinery and all-
risk insurance in an amount adequate to cover the cost of replacement of all
leasehold or building improvements in the Premises which were originally
constructed or provided by or on behalf of Tenant, at Tenant's cost and expense,
as well as the cost of replacement of all fixtures, equipment, decoration,
contents, and personal property of Tenant. Tenant agrees to deliver to Landlord
at least ten (10) days prior to the time such insurance is first required to be
carried by Tenant, and thereafter at least fifteen (15) days prior to the
expiration of any such policy a certificate(s) of insurance evidencing
compliance with its obligations hereunder.
(b) Landlord's Insurance. Landlord agrees to maintain: (1)
--------------------
comprehensive general liability insurance relating to the Building and the
Common Areas on an occurrence basis in the minimum amount of Two Million Dollars
($2,000,000.00); and (2) fire and extended coverage, vandalism, malicious
mischief and special extended coverage insurance to the extent of the
replacement value of the Building and improvements originally constructed by
Landlord, at its own cost and expense. Landlord agrees to deliver to Tenant at
least ten (10) days prior to the time such insurance is first required to be
carried by Landlord, and thereafter at least fifteen (15) days prior to the
expiration of any such policy a certificate(s) of insurance evidencing
compliance with its obligations hereunder.
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13.2 Non-Waiver. The minimum limits of the comprehensive
----------
general liability policy of insurance shall in no way limit or diminish
Landlord's or Tenant's liability under Section 13.3 hereof and shall be subject
to increase at any time, and from time to time, after the commencement of the
fifth Lease Year of the Term, if the parties, in the exercise of their
reasonable judgment, shall deem the same necessary for adequate protection.
Within thirty (30) days after demand therefor by Landlord or Tenant the
requested party shall furnish the requesting party with evidence that such
demand has been complied with.
13.3 Indemnities.
-----------
(a) Subject to the waiver of subrogation provision of Section
13.6, Tenant will indemnify, save harmless, and defend Landlord from and against
any and all claims and demands in connection with any accident, injury or damage
whatsoever caused to any person or property arising directly or indirectly out
of the business conducted by Tenant, its employees, agents, contractors,
subtenants or assigns in the Premises or occurring in, on or about the Premises
or any part thereof, for which Landlord is not responsible by virtue of any
negligent act or omission, or otherwise under the terms of this Lease, or
arising directly or indirectly from any act or omission of Tenant or any
concessionaire or subtenant or their respective licensees, servants, agents,
employees, or contractors, and from and against any and all costs, expenses and
liability incurred in connection with any such claim or proceeding brought
thereon. The comprehensive general liability coverage maintained by Tenant
pursuant to this Lease shall specifically insure the contractual obligations of
Tenant as set forth herein.
(b) Subject to the waiver of subrogation provision of Section
13.6, Landlord will indemnify, save harmless, and defend the Tenant from and
against any and all claims and demands in connection with any accident, injury
or damage whatsoever caused to any person or property arising directly or
indirectly out of Landlord's operation of the Building, or arising directly or
indirectly from any negligent or willful act or omission of Landlord, its
servants, agents, employees or contractors, and from and against any and all
costs, expenses and liability incurred in connection with any such claim or
proceeding brought thereon. The comprehensive general liability coverage
maintained by Landlord pursuant to this Lease shall specifically insure the
contractual obligations of Landlord as set forth herein.
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13.4 Fire Rating Rules.
-----------------
(a) Tenant shall, at its own cost and expense, comply with all
of the rules and regulations of the fire insurance rating organization having
jurisdiction over the Building and any similar body only to the extent that such
compliance does not require structural building alterations or any alteration to
the Premises. If, at any time and from time to time, as a result of or in
connection with any failure by Tenant to comply with the foregoing sentence or
any act of omission or commission by Tenant, its employees, contractors or
licensees, or as a result of or in connection with the use to which the Premises
are put (notwithstanding that such use may be for the purposes hereinbefore
permitted or that such use may have been consented to by Landlord), the fire
insurance rate(s) applicable to the Premises, or the Building in which same are
located, or to any other premises in said Building, or to any adjacent property
owned or controlled by Landlord or an affiliate of Landlord, and/or to the
contents in any or all of the aforesaid properties shall be higher than that
which would be applicable for the least hazardous type of occupancy legally
permitted therein, Tenant agrees that it will pay directly to Landlord, on
demand, as Additional Rent, such portion of the premiums for all fire insurance
policies in force with respect to the aforesaid property and the contents of any
occupant thereof as shall be attributable to such higher rate(s) (and such
premium charges as paid directly to Landlord shall not be an Operating Expense).
(b) Landlord represents that it will review Tenant's electrical
usage requirements which Tenant wishes to submit to Landlord and Landlord will
approve or disapprove such usage requested based upon whether such usage will
cause an overload to the electrical system of the Premises, so long as Tenant's
equipment performs within and is used in accordance with manufacturers
specifications and is used at the location specified by Tenant's request to
Landlord. If Tenant installs any electrical equipment which Landlord has not
approved that overloads the lines in the Premises or the Building in which the
Premises are located, Tenant shall, at its own cost and expense, promptly make
whatever changes are necessary to remedy such condition and to comply with all
reasonable requirements of the Landlord and the Board of Fire Insurance
Underwriters and any similar body and any governmental authority having
jurisdiction thereof. For the purpose of this paragraph, any finding or schedule
of the Fire Insurance Rating organization having jurisdiction thereof shall be
deemed to be conclusive. If gas is used in the Premises, Tenant shall install
gas cutoff devices (manual and automatic).
13.5 Abandonment of Premises. In the event Tenant vacates all or
-----------------------
any portion of the Premises and such vacation causes
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an increase in the premiums for the insurance maintained by Landlord pursuant to
Section 13.1(b) hereof, Tenant shall pay directly to Landlord, on demand, as
Additional Rent, the amount of such increase (and the amount of such premium
charges paid directly to Landlord shall not be an Operating Expense).
13.6 Waiver of Subrogation. Each insurance policy carried by
---------------------
Landlord or Tenant and insuring all or any part of the Building, including
improvements, alterations and changes in and to the Premises made by either of
them and Tenant's trade fixtures or contents therein, shall be written in a
manner to provide that the insurance company waives all right of recovery by
way of subrogation against Landlord or Tenant, as the case may be, in connection
with any loss or damage to the Premises or the Building or to property or
business caused by any of the perils covered by fire and extended coverage,
building and contents, and business interruption insurance, for which either
party may be reimbursed as a result of insurance coverage affecting any loss
suffered by it; provided, however, that the foregoing waivers shall apply only
to the extent of any recovery made by the parties hereto under any policy of
insurance now or hereafter issued. So long as the policy or policies involved
can be so written and maintained in effect, neither Landlord nor Tenant shall be
liable to the other for any such loss or damage.
ARTICLE 14 - FIRE OR OTHER HAZARD
---------------------------------
14.1 Restoration. Should the Premises (or any part thereof) be
-----------
damaged or destroyed by fire or other hazard insured under the standard fire and
casualty insurance policy with approved standard extended coverage endorsement
applicable to the Premises, Landlord shall, except as otherwise provided herein,
and to the extent it recovers proceeds from such insurance, repair and/or
rebuild the same with reasonable diligence. Landlord will give Tenant notice
within forty-five (45) days of the damage or destruction referred to in this
Section 14.1, of Landlord's reasonable estimate of the time needed to repair or
rebuild the same. Landlord's obligation hereunder shall be limited to the
Building and improvements (including Tenant Finish Allowances) originally
provided by Landlord at the Commencement Date of the term of this Lease Landlord
shall not be obligated to repair, rebuild or replace any property belonging to
Tenant or any leasehold or building improvements in the Premises which were
originally constructed or provided by or on behalf of Tenant at Tenant's cost.
14.2 Abatement. If any portion of the Premises shall be untenantable
---------
and cannot reasonably be used for the permitted use herein as a result of such
hazard, the Rent allocable to such portion shall abate until the earlier of: (i)
for any damage to the Premises which occurs to less than 5,000 Square Feet,
ninety (90)
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days after the date on which Landlord substantially completes its repairs to the
Building and the improvements originally constructed by Landlord at the
Commencement Date; (ii) for any damage to the Premises which occurs to 5,000
Square Feet or more, one hundred twenty (120) days after the date on which
Landlord substantially completes its repairs to the Building and the
improvements originally constructed by Landlord at the Commencement Date; or
(iii) when the Premises are again ready for occupancy by Tenant for the conduct
of its business. If substantial portions of the Premises are made tenantable
before others, and such portions are capable of sustaining Tenant's business,
the Rent allocable to such restored Premises shall commence thirty (30) days
after notice to Tenant of the completion of restoration thereof or upon Tenant's
full occupancy thereof, if sooner. If the entire Premises shall be untenantable
then the Term of this Lease shall be extended. for a period equal to the period
beginning on the date of such casualty and ending on the earlier of the date on
which Tenant becomes liable to pay Rent with respect to: (i) the Premises, or
(ii) any substantial portion of the Premises that is capable of sustaining
Tenant's business.
14.3 Landlord's Option to Terminate.
------------------------------
(a) Notwithstanding anything to the contrary contained in the
preceding Section 14.1 or elsewhere in this Lease, Landlord, at its option, may
terminate this Lease on thirty (30) days notice to Tenant, given within sixty
(60) days after the occurrence of any damage or destruction if (1) at least
fifty percent (50%) of the Premises is damaged or destroyed as a result of a
risk which is not covered by Landlord's insurance. Further, if the Premises, the
Building or tenant improvements in the Premises which were originally
constructed by Landlord for Tenant, or any substantial parts of any of the
foregoing are rendered unfit for use and occupancy by reason of damage occurring
within five (5) years of the end of the Term, Landlord shall not be obligated to
repair and restore the same unless Tenant shall within forty-five (45) days of
the occurrence of such damage either (a) exercise additional Renewal Option(s)
hereunder such that at least ten (10) years remain on the Term from the date of
Tenant's occupancy of the restored Premises, or (b) if all Renewal Options have
been exercised, renew this Lease for an additional term such that at least ten
years remain in the Term from the date of Tenant's occupancy of the restored
Premises, upon the terms and subject to all of the conditions applicable to a
Renewal Term hereunder, which additional term Landlord hereby grants Tenant.
Under either of said circumstances, the term of the Renewal Option or the
additional term shall be extended for an additional period equal to the time
required for such repair and restoration. If Tenant does not agree to exercise
the additional Renewal Option(s) or to
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renew this Lease hereof for the above described ten (10) year period, this Lease
shall at Landlord's option terminate as set forth in this Section.
(b) In the event that Landlord exercises the right to terminate
as set forth in this Section and the damage to the Building and/or Premises
which was the cause of such termination is restored within three (3) years of
such damage, then Landlord shall offer the Premises to Tenant under the terms
and conditions of this Lease as such terms and conditions would have been in
effect had the damage not occurred. Such offer shall remain open for a period of
sixty (60) days.
14.4 Tenant's Option to Terminate.
----------------------------
(a) Notwithstanding anything to the contrary contained in
Section 14.1 or elsewhere in this Lease, Tenant, at Tenant's option, may
terminate this Lease if: (i) the Premises or any parts thereof are damaged or
destroyed, and (ii) the Landlord will be unable to complete the repair and
restoration of the Premises in less than (A) twenty four (24) months after the
expiration of the forty-five (45) day period provided in Section 14.1 if thirty
three percent (33%) or less of the Premises is damaged, or (B) eighteen (18)
months after the expiration of the forty-five (45) day period provided in
Section 14.1 if more than thirty three percent (33%) of the Premises is damaged.
Tenant shall notify Landlord of its election to terminate this Lease following
the occurrence of such damage or destruction within thirty (30) days of the
earlier of: (i) its receipt of Landlord's estimate of the time needed to repair
or rebuild the Premises, or (ii) the expiration of the forty-five (45) day
period provided in Section 14.1 in which Landlord is required to furnish such
estimate to Tenant. Tenant shall have no right to terminate this Lease upon the
occurrence of a casualty to any part of the Premises if the damaged Premises can
reasonably be restored in less than (A) twenty four (24) months after the
expiration of the forty-five (45) day period provided in Section 14.1 if thirty
three percent (33%) or less of the Premises is damaged, or (B) eighteen (18)
months after the expiration of the forty-five (45) day period provided in
Section 14.1 if more than thirty three percent (33%) of the Premises is damaged.
(b) If Tenant does not elect to terminate this Lease or if
Landlord has estimated that such repair and restoration will be completed in
less than: (i) twenty four (24) months after the expiration of the forty-five
(45) day period set forth in Section 14.1 if thirty three percent (33%) or less
of the Premises is damaged, or (ii) eighteen (18) months after the expiration of
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the forty-five (45) day period set forth in Section 14.1 if more than thirty
three percent (33%) of the Premises is damaged, then Landlord shall immediately
(unless Landlord has the right, and has elected, to terminate this Lease
pursuant to Section 14.3) commence and complete the restoration and
reconstruction of the Premises as set forth in Section 14.1. If Landlord fails
to complete such repair and restoration within the time period as estimated by
Landlord, then the Basic Rent allocable to such portion of the Premises shall
abate beginning on the date on which Tenant's obligation to pay Basic Rent with
respect to such portion of the Premises resumes under Section 14.2 in an amount
equal to the Basic Rent which would have been allocable to such portion of the
Premises (but which was abated pursuant to Section 14.2) during the period
beginning on the date on which Landlord estimated that such repairs would be
completed and ending on the date in which Landlord satisfies its obligation to
restore the Premises under Section 14.1; provided, however, that the date as
estimated by Landlord for completion of the required repairs and restoration
shall be extended for any delay occurring after the Landlord has provided the
estimated completion date to Tenant and resulting from labor strikes, acts of
God, delays caused by Tenant, its agents or contractors, or for any other cause
beyond Landlord's control.
14.5 Waiver. Except to the extent specifically provided for in this
------
Lease, none of the Rent payable by Tenant, nor any of Tenant's other obligations
under any provisions of this Lease, shall be affected by any damage to or
destruction of the Premises or Building by any cause whatsoever, and Tenant
hereby specifically waives any and all additional rights it might otherwise have
under any law or statute.
ARTICLE 15 - SUBORDINATION, MORTGAGEE'S APPROVAL AND ATTORNMENT
---------------------------------------------------------------
15.1 Subordination. Provided that Landlord has complied with the
-------------
provisions of Section 15.3, Landlord shall have the right and privilege to
subject and subordinate this Lease at all times to the lien of any and all
mortgages, ground leases and superior leases now or hereafter placed upon
Landlord's interest in the Premises and on the Land and Building or upon any
buildings hereafter placed upon the Land and to any and all advances to be made
under such mortgages, and all renewals, modifications, extensions,
consolidations and replacements thereof. This provision shall be self operative,
and Tenant further covenants and agrees to execute and deliver, upon demand,
such further instrument or instruments subordinating this Lease on the foregoing
basis to the lien of any such mortgage, ground lease or superior lease as shall
be desired by the Landlord and any mortgagees or lessor.
15.2 Attornment. Provided that Landlord has complied with the
----------
provisions of Section 15.3, Tenant shall, in the event of the sale or assignment
of Landlord's interest in the Land and/or
47
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Building, or in the event of any proceedings brought for the foreclosure of, or
in the event of the exercise of the power of sale under any mortgage covering
the Land and Building, or in the event of termination of Landlord's interest in
the Lana and/or Building pursuant to any ground lease or superior lease, attorn
to and recognize such purchaser, mortgagee or lessor as Landlord under this
Lease, and in any such events, Landlord named herein shall not thereafter be.
liable on this Lease except for actions and omissions occurring prior to such
attornment.
15.3 Non-Disturbance. Landlord shall procure and deliver for Tenant's
---------------
benefit, concurrently with the execution of this Lease, a written agreement
between Tenant and the lessor of any existing ground lease or superior lease or
holder of any mortgage, to which this Lease is subordinate, providing in
substance that so long as Tenant is not in material default under this Lease
beyond any grace period, Tenant shall not be joined as a party defendant in any
action or proceeding which may be instituted or taken by the lessor for the
purpose of terminating any ground lease or superior lease by reason of any
default thereunder, or in any foreclosure action or proceeding which may be
instituted or taken by the holder of any mortgage, Tenant shall not be evicted
from the Premiss, nor shall Tenant's leasehold estate or possession under this
Lease be terminated or disturbed, nor shall any of Tenant's rights under this
Lease be affected, in any way, by reason of any default under any ground lease,
superior lease or any mortgage, and if Landlord's interest in the Building or
this Lease shall be terminated, this Lease shall remain in effect. Further, in
the event that any future ground lease, superior lease or mortgage, to which
this Lease is subordinate, is entered into by Landlord after the date of this
Lease, Landlord shall also procure and deliver for Tenant's benefit, with
reasonable promptness, an agreement between Tenant and the lessor of any future
ground lease or superior lease or holder of any mortgage which agreement shall
set forth the Provisions as described in the first sentence of this Section
15.3.
ARTICLE 16 - RECORDATION
------------------------
This Lease Agreement may not be recorded, but a memorandum thereof, in
the form attached hereto as Exhibit "K", may be recorded by Landlord or Tenant.
Both parties agree to execute any further documents as may be necessary or
convenient for such recordation or to terminate any recorded memorandum of the
Existing Lease.
ARTICLE 17 - CONDEMNATION
-------------------------
17.1 Complete Taking. In the event that the whole or Substantially
---------------
the whole of the Building shall be condemned or taken in any manner for any
public or quasi-public use, this Lease, and the terms and estate hereby granted,
shall forthwith cease and
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terminate as of the date possession is taken by the taking authority.
17.2 Partial Taking. In the event that any part of the Building
--------------
shall be so condemned or taken, this Lease shall remain in force and effect as
to the part of the Premises not so condemned or taken, except that: (i) if the
taking shall nevertheless be so extensive that Landlord shall decide not to
restore the Building, then Landlord (whether or not the Premises are affected)
may at its option terminate this Lease and the term and estate hereby granted
shall be terminated as of the date of such taking of possession for such use; or
(ii) Tenant may, if mare than twenty-five percent (25%) of the Premises should
be condemned or taken, elect at any time within sixty (60) days of the date of
such taking, to cancel this Lease upon written notice to Landlord, and thereupon
this Lease shall terminate upon the date Tenant may specify in said notice. Upon
any such taking or condemnation and the continuing in force of this Lease as to
any part of the Premises, the Basic Rent and Tenant's Share shall be abated by
an amount representing the part of the Basic Rent and Tenant's Share properly
allocable to the portion of the Premises which may be so condemned or taken.
17.3 Termination. In the event of the termination of this Lease
-----------
pursuant to the provisions of Section 17.1 or 17.2, this Lease and the term and
estate hereby granted shall expire as of the date of such termination in the
same manner and with the same effect as if that were the date set for the normal
expiration of the Term. The provisions of this Section 17.3 shall apply pro
---
tanto to any partial termination of this Lease pursuant to the provisions of
- -----
this Article.
17.4 Award. Landlord shall be entitled to receive the entire award
-----
arising from any condemnation proceeding without deduction therefrom for any
estate vested in Tenant by this Lease and Tenant shall receive no part of such
award or awards, except as provided in Section 17.5. Tenant hereby expressly
assigns to Landlord any and all of its right, title and interest in or to such
award or awards or any part thereof.
17.5 Tenant's Award. Notwithstanding the foregoing, in the event of
--------------
any condemnation or taking pursuant to Section 17.1 or 17.2, Tenant shall be
entitled to appear, claim, prove and receive in the condemnation proceeding such
portion of such award or such award as may be made as represents the total value
of all alterations and improvements constructed by Tenant, together with such
amounts for business interruption, moving expenses and similar items for which a
tenant may recover damages under applicable law.
17.6 Temporarv Taking. If the temporary use or occupancy of all or
----------------
any part of the Premises shall be condemned or taken for
49
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any public or quasi-public use during the Term, Tenant shall be entitled to any
award for same and this Lease shall be and remain unaffected by such
condemnation or taking and Tenant shall continue to pay in full the Basic Rent,
Additional Rent and other sums payable hereunder by Tenant. In the event of any
such taking as in this Section 17.6 referred to, Tenant shall be entitled to
appear, claim, prove and receive the entire award for such taking as represents
compensation for use or occupancy of the Premises and Landlord shall be entitled
to appear, claim, prove and receive the entire award as represents the cost of
restoration of the Premises.
17.7 Restoration. In the event of: (i) any condemnation or taking of
-----------
less than the whole of the Building and this Lease shall continue in effect in
whole or in part; or (ii) any condemnation or taking for a temporary use or
occupancy of all or any part of the Premises, Landlord, at its expense, and
whether or not any award or awards shall be sufficient for the purposes, shall
proceed with reasonable diligence to repair, alter and restore the remaining
part of the Building and the Premises to substantially their former condition to
the extent that the same may be feasible and so as to constitute a complete and
tenantable Building and Premises.
ARTICLE 18 - ESTOPPEL CERTIFICATES
----------------------------------
At any time, and from time to time but not more than once a year,
either party upon the written request of Landlord, any mortgagee, Tenant, or any
subtenant agrees to execute and deliver to the requesting party without charge
and in a form satisfactory to the requesting party, within ten (10) days of such
written request, a written statement: (i) ratifying this Lease; (ii) confirming
the Commencement Date and termination date of the Term of this Lease; (iii)
certifying that Tenant is in occupancy of the Premises, and that this Lease is
in full force and effect and has not been modified, assigned, supplemented or
amended, except by such writings as shall be stated; (iv) certifying that to the
best of Tenant's knowledge or Landlord's knowledge as the case may be that all
conditions and agreements under this Lease to be satisfied and performed have
been satisfied and performed except as shall be stated; (v) certifying that
Tenant or Landlord as the case may be is not in material default under this
Lease and that there are no defenses or offsets against the enforcement of this
Lease by the other then known or stating the defaults and/or defenses claimed by
Tenant or Landlord as the case may be; (vi) reciting the amount of advance Rent,
if any, paid by Tenant and the date to which Rent has been paid; and (vii) any
other pertinent information which Landlord, Tenant, the mortgagee or subtenant
shall reasonably require.
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ARTICLE 19 - BANKRUPTCY
-----------------------
If there shall be filed against Tenant, in any court, pursuant to any
statute, either of the United States or of any state, a petition in bankruptcy
or insolvency or for reorganization or for the appointment of a receiver or
trustee of all of Tenant's property and Tenant fails to secure a discharge
thereof within thirty (30) days from the date of such filing or within such
reasonable time required to obtain a discharge, or if Tenant shall voluntarily
file any such petition or make an assignment for the benefit of creditors or
petition for or enter into an arrangement with Tenant's creditors, then, in any
such event, this Lease, at the option of Landlord, may be cancelled and
terminated. In the event of a termination of this Lease pursuant to this
article, neither Tenant nor any other person claiming through or under Tenant
(whether by virtue of any statute or any order of any court or otherwise) shall
be entitled to acquire or remain in possession of the Premises except as
otherwise provided by law, or written agreement, and Landlord shall have no
further liability hereunder to Tenant or any such other person except for any
amounts accrued or actions or omissions occurring prior to such termination, and
Tenant and any such person shall forthwith quit and surrender the Premises. If
this Lease shall be so cancelled or terminated, Landlord, in addition to the
other rights and remedies of Landlord contained elsewhere in this Lease, or
under any statute or rule of law, may retain as liquidated damages any Rent, and
any other money received by Landlord from Tenant or otherwise on behalf of
Tenant.
ARTICLE 20 - DEFAULTS AND REMEDIES
----------------------------------
20.1 Defaults. The occurrence of any of the following, if the same
--------
continues uncured after such notice and grace periods as hereinafter set forth,
if any, shall constitute an "Event of Default" under this Lease by Tenant:
(a) Tenant shall fail, neglect or refuse to pay any installment
of Rent or any other monies agreed by it to be paid within ten (10) days after
notice that the same is due and payable in accordance with the terms hereof.
(b) Tenant shall refuse to comply with provision(s) of the Rules
and Regulations, which failure or refusal Landlord reasonably deems to create a
material and immediate nuisance or a dangerous condition and which default can
be and is not cured within thirty (30) days after notice of such failure or
refusal.
(c) Tenant shall fail or refuse to keep and perform any of the
other covenants, conditions, stipulations or agreements herein contained, and in
the event any such default shall continue for a period of more than sixty (60)
days after notice thereof
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<PAGE>
(provided, however, that if the cause for giving such notice involves the
making of repairs or other matters reasonably requiring a longer period of
time than said sixty (60) day period, Tenant shall be deemed to have complied
with said notice so long as it has commenced to comply with such notice within
said sixty (60) day period and is diligently prosecuting compliance of said
notice).
(d) Tenant shall more than four (4) separate times in any twelve
(12) month period be more than ten (10) days late in the payment of Rent,
Additional Rent and/or other sums or charges due Landlord under this Lease or
default in the keeping, observing or performing of any other material covenants
or agreements herein contained to be kept, observed or performed by Tenant and
irrespective of whether or not Tenant shall have timely cured any defaults;
provided that Landlord shall have given Tenant written notice of each such late
payment prior to the receipt of such payment.
20.2 Remedies. In the event of any Event of Default under this
--------
Lease, Landlord, at its option, may terminate this Lease upon and by giving
written notice of termination to Tenant; and/or exercise any one or more of the
following remedies upon written notice to Tenant:
(a) Landlord may perform for the account of Tenant any such
default of Tenant and immediately recover as Additional Rent any expenditures
made and the amount of any obligations incurred in connection therewith, plus
interest at the Prime Rate from the date of any such expenditure.
(b) Enter and take possession of the Premises and all trade
fixtures, installations, alterations and improvements installed or placed in the
Premises by Tenant.
(c) Relet the Premises or any part thereof for such terms, upon
such conditions as Landlord may deem proper and at a rental rate as close to the
then current market rate as Landlord reasonably can. In the event of such
reletting: (i) Landlord shall receive and collect the rent therefrom and shall
first apply such rent against such expenses as Landlord may have incurred in
recovering possession of the Premises, placing the same in good order and
condition, altering or repairing the same for reletting, and such other
expenses, commissions and charges, including attorneys' fees, which Landlord may
have paid or incurred in connection with such repossession and reletting, and
then shall apply such rent against any amounts due Landlord under the Lease; and
(ii) the tenant of such reletting shall be under no obligation to see to the
application by Landlord of any rent collected by Landlord, nor shall Tenant have
any right to collect any rent under such reletting.
52
<PAGE>
In exercising its right to attempt to relet the Premises Landlord may
make such alterations, repairs, replacements and/or decorations in the Premises
as Landlord, in Landlord's sole judgment, considers advisable and necessary for
the purpose of reletting the Premises; and the making of such alterations,
repairs, replacements and/or decorations shall not operate or be construed to
release Tenant from liability hereunder as aforesaid. Landlord shall, in no
event, be liable in any way whatsoever for failure to relet the Premises, or, in
the event that the Premises are relet, for failure to collect the Rent hereof
under such reletting unless Landlord has acted in a commercially unreasonable
manner.
(d) Notwithstanding any such reletting by Landlord without
termination of this Lease, Landlord may elect to terminate this Lease for a
previous Event of Default. Should Landlord at any time terminate this Lease, in
addition to any other remedy it may have, it may recover from Tenant any direct
damages it may incur by reason of such breach, including the cost of recovering
and reletting the Premises and including at the time of such termination the
worth of the excess, if any, of the amount of Rent reserved in this Lease for
the remainder of the Term over the then reasonable rental value of the Premises
for the remainder of the Term.
(e) In addition to any and all remedies provided hereunder or by law,
upon the occurrence of any Event of Default by Tenant hereunder, Tenant hereby
empowers any attorney of any court of record within the United States to appear,
with or without declaration filed, for Tenant, and for any other persons
claiming under, by or through Tenant, and confess judgment forthwith against
Tenant and such other persons and in favor of Landlord, in an amicable action of
ejectment for the Premises, together with such costs of suit and reasonable
attorneys' commission for collection and forthwith issue a writ or writs of
execution thereon, with release of all errors, and without stay of execution,
and inquisition and extension upon any levy or real estate is hereby expressly
waived, and condemnation agreed to, and exemption of any and all property from
levy and sale by virtue of any exemption law 'low in force or which may be
hereafter enacted is also expressly Waived by Tenant. The entry of judgment
under the foregoing warrant shall not exhaust the same, but successive judgments
may be entered thereunder from time to time as often as defaults occur.
(f) Landlord shall have the right of injunction, in the event of a
breach or threatened breach by Tenant of any of the terms and conditions hereof,
to restrain the same and the right to invoke any remedy allowed by law or in
equity, whether or not other remedies, indemnity or reimbursements are herein
provided. The rights and remedies given to Landlord in this Lease are distinct,
separate and cumulative remedies; and no one of them, whether or
53
<PAGE>
not exercised by Landlord, shall be deemed to be in exclusion of any of the
others.
(g) Tenant hereby expressly waives any and all rights of redemption
granted by or under any present or future laws in the event of Tenant being
evicted or dispossessed for any cause, or in the event of Landlord's obtaining
possession of the Premises, by reason of the violation by Tenant of any of the
covenants and conditions of this Lease or otherwise.
20.3 Interest on Late Payments. In addition to all other remedies,
-------------------------
any amount billed by Landlord and required to be paid by Tenant under the
provisions of this Lease shall begin to accrue interest on the sixteenth (l6th)
day after such billing if payment has not been made by such date. Any payment
of Basic Rent, Additional Rent or rent for the Private Parking Area shall begin
to accrue interest on the day after such payment is due if payment has not been
made by such date. The aforesaid interest shall: (i) be at the Prime Rate; (ii)
continue to accrue until payment is received by Landlord; and (iii) be deemed
reimbursement of extra costs and losses suffered by Landlord due to such delay
in payment. No interest shall be owed by Tenant to Landlord, however, with
respect to any payments of Basic Rent, Additional Rent or any other amounts
payable to Landlord by Tenant hereunder if Tenant has exercised its right to
recoupment as set forth in Article 40 of this Lease in the amount of the
payments recouped by Tenant.
ARTICLE 2l - NON-WAIVER
-----------------------
The failure or delay on the part of either party to enforce or
exercise at any time any of the provisions, rights or remedies in this Lease
shall not constitute a waiver of such right, nor shall it affect the validity of
this Lease or any part therefrom or the right of the party to thereafter enforce
each and every such provision, right or remedy contained herein. No waiver of
any breach of this Lease shall be held to be a waiver of any other or subsequent
breach. The receipt and acceptance by Landlord of Rent at a time when the
payment of such Rent is in default under this Lease shall not be construed as a
waiver of such default. No act or thing done by Landlord or Landlord's agents or
employees during the term of this Lease shall be deemed an acceptance of a
Surrender of the Premises, and no agreement to accept such a surrender shall be
valid unless in writing and signed by Landlord.
ARTICLE 22 - EXONERATION
------------------------
Neither the Landlord nor any successor in interest that may be an
individual, joint venture, tenancy in common, firm or Partnership, general or
limited, shall be subject to personal
54
<PAGE>
liability on such individual or on the members of such joint venture, tenancy in
common, firm or partnership in respect to any of the covenants or conditions of
this Lease. The Tenant shall look solely to the equity of the Landlord in, the
Land and Project and the rents, issues and profits derived therefrom for the
satisfaction of the damages of the Tenant in the event of a breach by the
Landlord. This clause is and shall be considered an integral part of this
Lease.
ARTICLE 23 - QUIET ENJOYMENT
----------------------------
Landlord covenants that it has good and marketable title to the
Building and the Premises; that, upon recordation of the lease memorandum in
accordance with Article 16 hereof, Tenant shall have a valid leasehold estate in
the Premises free and clear of mortgages, liens and encumbrances, except as set
forth in Exhibit "ID"; that it has not violated any applicable zoning or any
other land use control laws; and that, so long as Tenant pays the Rent due and
payable hereunder and performs the covenants herein on its part to be performed,
Tenant shall and may peaceably have, hold and enjoy the Premises for the Term of
this Lease.
ARTICLE 24 - LANDLORD'S REPRESENTATIONS AND COVENANTS
-----------------------------------------------------
24.1 Identity of Landlord; Validity of Lease. Landlord represents
---------------------------------------
that it is a Pennsylvania general partnership whose general partners are
Metropolitan Life Insurance Company and Grant Liberty Development Group
Associates (a Pennsylvania general partnership having as its general partners
Forest City Grant Liberty Associates, a Pennsylvania Limited Partnership; JLM
Grant Liberty Associates, a Pennsylvania Limited Partnership; WJB Grant Liberty
Associates, a Pennsylvania Limited Partnership; UDA Grant Liberty Associates, a
Pennsylvania Limited Partnership; and BHKR Grant Liberty Associates, a
Pennsylvania Limited Partnership). Grant Street Associates, Inc. is the Court
appointed Receiver of Liberty Center Venture, having been so appointed by Order
of Court dated June 15, 1993, entered at No. G.D. 91-04073 in the Court of
Common Pleas of Allegheny County, Pennsylvania. A copy of such Order of Court
has been provided to Tenant.
In the event of any change in control or ownership of Landlord,
Landlord shall give Tenant written notice thereof within sixty (60) days after
the occurrence of such change. Landlord represents and covenants to Tenant that
this Lease shall remain in full force and effect and be binding on Landlord in
the event that the appointment of Grant Street Associates, Inc. as Receiver for
Liberty Center Venture is reversed, overturned or otherwise terminated by
subsequent judicial action.
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24.2 Hotel.
-----
(a) The enclosed pedestrian access between the Building and the
Hotel shall be open at reasonable times, subject to any security requirements
of the Hotel and the Building.
(b) Landlord shall use its best efforts and will cooperate with
Tenant in obtaining from the operator of the Hotel (the "Hotel Operator"):
(i) A suite or suites to be designated for Tenant's
exclusive use within the Hotel which suite or suites shall be
leased or licensed directly by the Hotel Operator to Tenant at
the normal rates chargeable by the Hotel Operator;
(ii) Priority as to the use of an available suite or
suites from time to time;
(iii) The use by Tenant and such of its employees and
guests as it shall in writing designate on a preferential
basis of any recreational facilities and amenities that may be
available within the Hotel at normal charges for the use of such
facilities and amenities.
Tenant acknowledges that this Subsection 24.2(b) is not a guaranty that the
Hotel Operator will give Tenant such preferential treatment.
24.3 Recreational Facilities. Tenant, its employees and guests shall
-----------------------
also be entitled to the use on a preferential basis of any other recreational
facilities located within the Project and of amenities generally available to
the public, all at normal charges for the use of such facilities and amenities.
ARTICLE 25 - SPRINKLERS
-----------------------
If the "sprinkler system" installed in the Building shall be damaged
or injured by reason of any act or omission of Tenant, or Tenant's agents,
servants, employees, licensees or visitors, Tenant will forthwith restore the
same to good working conditions at its own expense. If after initial occupancy
and by reason of Tenant's business, or any change by Tenant in the location of
partitions, trade fixtures or other contents of the Premises, changes,
modifications ications, alterations, additional sprinkler heads or other
equipment are required by the Board of Fire Underwriters or any bureau,
department or official of the state or city government having jurisdiction over
the Building or become necessary to
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prevent the imposition of a penalty or charge against the full allowance for a
sprinkler system in the fire insurance rate as fixed by the fire insurance
company insuring the Building, then Tenant shall, at Tenant's expense, promptly
make and supply such changes, modifications, alterations, additional sprinkler
heads or other equipment within the Premises.
ARTICLE 26 - UNAVOIDABLE DELAY
------------------------------
Except for the purpose of determining whether the Premises or any
portion thereof are untenantable pursuant to any provisions of this Lease, in
the event that either party shall be delayed or hindered in, or prevented from
the performance of any work, service or other acts required under this Lease to
be performed by such party, and such delay or hinderance is due to strikes,
lockouts, acts of God, governmental restrictions, unavoidable fire or other
casualty, or other causes of a like nature beyond the control of the party so
delayed or hindered, then performance of such work, service or other act shall
be excused for the period of such delay and the period for the performance of
such work, service or other act shall be extended for a period equivalent to the
period of such delay. In no event shall such delay constitute a termination of
this Lease, or any extension thereof.
ARTICLE 27 - SUCCESSORS
-----------------------
The respective rights and obligations provided in this Lease shall
bind and shall inure to the benefit of the parties hereto, their legal
representatives, heirs, successors and assigns.
ARTICLE 28 - GOVERNING LAW
--------------------------
This Lease shall be construed, governed and enforced in accordance
with the laws of the Commonwealth of Pennsylvania.
ARTICLE 29 - SEVERABILITY
-------------------------
If any provision of this Lease shall be held to be invalid, void or
unenforceable, the remaining provisions hereof shall in no way be affected or
impaired and such remaining provisions shall remain in full force and effect.
ARTICLE 30 - CAPTIONS
---------------------
Article headings, section headings and titles and the table of
contents to this Lease are for convenience and reference only, and are in no way
to be construed as defining, limiting or
57
<PAGE>
modifying the scope or intent of the various provisions of this Lease.
ARTICLE 31 - GENDER
-------------------
As used in this Lease, the word "person" shall mean and include
where appropriate, an individual, corporation, partnership or other entity, the
plural shall be substituted for the singular, and the singular for the plural,
where appropriate, and words of any gender shall mean and include any other
gender.
ARTICLE 32 - NOTICES
--------------------
All notices required or permitted hereunder shall be effective when
tendered to the recipient by the postal authorities and shall be deemed
sufficiently given if sent by registered or certified mail, return receipt
requested, addressed to the Landlord or Tenant, as the case may be, as follows:
To Landlord: Metropolitan Life Insurance Company
Suite 1910
600 Vine Street
Cincinnati, OH 45202
Attn: Assistant Vice President
Real Estate Investments
and
2001 Spring Road
Suite 400
Oak Brook, IL 60521-1813
Attn: Vice President
Forest City Grant Liberty Associates
1400 Terminal Tower
Cleveland, OH 44113-2204
Attn: R.H. Marques, Vice President
JLM Grant Liberty Associates
Essex Street and Route 17
Maywood, NJ 07607
Attn: Joseph L. Muscarelle, Jr.
UDA Grant Liberty Associates
1133 Penn Avenue
Pittsburgh, Pennsylvania 15222
Attention: Don Carter
58
<PAGE>
WJB Grant Liberty Associates
c/o Omni Evaluation Services
P.O. Box 62310
Pittsburgh, PA 15241
Attention: Randall Benyon
Burt, Hill, Kosar, Rittlemann Assoc.
400 Morgan Center
Butler, PA 16001
Attention: Ralph Burt
c/o Losi M. Roth
with a copy to: Liberty Center Venture
c/o Alan B. Gordon, Esquire
Sable, Makoroff & Gusky, P.C.
Seventh Floor Frick Building
437 Grant Street
Pittsburgh, PA 15219
James Dawson, President
Grant Street Associates, Inc.
2626 One Mellon Bank Center
500 Grant Street
Pittsburgh, PA 15219
To Tenant: 1001 Liberty Avenue
Pittsburgh, PA 15222
Attn: David M. Taylor
with a copy to: Alan H. Finegold, Esquire
Kirkpatrick & Lockhart
1500 Oliver Building
Pittsburgh, PA 15222
John H. Cummings, Jr., Esquire
Federated Investors, Inc.
1001 Liberty Avenue
Pittsburgh, PA 15222
Robert S. Carey
The Carey Company
Suite 950
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222
Either party may change its address by written notice so given to the
other. The notice to Grant Street Associates, Inc. as set forth above shall be
required so long as Grant Street Associates, Inc. remains as the Receiver for
Landlord. Landlord
59
<PAGE>
shall notify Tenant in the event that Grant Street Associates, Inc. is no longer
the Receiver for Liberty Center Venture.
ARTICLE 33 - BROKERS
--------------------
Landlord hereby warrants to Tenant that no real estate broker has or
will represent Landlord in this transaction. Tenant hereby warrants to Landlord
that no real estate broker other than The Carey Company has or will represent
Tenant in this transaction. Landlord and Tenant shall indemnify each other
against and hold the other harmless from all liabilities, claims, and
expenses (including reasonable attorneys fees) arising out of the breach of
their respective warranty. Landlord shall pay to The Carey Company a total
commission in the sum of Three Hundred Thousand Dollars ($300,000.00) for all
services rendered by it in connection with this Lease. Such commission shall be
earned and be payable to The Carey Company only upon the execution of this Lease
by both the Landlord and Tenant.
ARTICLE 34 - EXECUTION/COUNTERPARTS
-----------------------------------
This Lease shall become effective only when it has been signed by a
duly authorized officer or representative of each of the parties and delivered
to the other party. This Lease may be executed in multiple counterparts. Each
of such fully executed copies shall be deemed original and it shall not be
necessary in making proof of this Lease to produce or account for more than one
such counterpart.
ARTICLE 35 - RULES AND REGULATIONS
----------------------------------
Rules and Regulations for the Building are attached hereto as Exhibit
"H" and incorporated herein. If there are inconsistencies between the Rules
and Regulations in Exhibit "H" and the Lease, the Lease provisions shall
prevail. Landlord shall not be required to enforce the Rules and Regulations
except to the extent necessary to prevent an adverse effect on Tenant's use and
enjoyment of the Premises. Landlord will not#discriminate against Tenant in the
administration of the Rules and Regulations. Tenant may use the food preparation
and dining facilities currently located in the Premises as the same may be
relocated by Tenant in its discretion.
ARTICLE 36 - NO REPRESENTATIONS BY LANDLORD
-------------------------------------------
Tenant acknowledges and agrees that, except as expressly set forth in
this Lease, and the exhibits hereto, there have been no representations,
promises or warranties made by or on behalf of Landlord with respect to the
Premises or the Land and Building or
60
<PAGE>
with respect to the suitability of either for the conduct of Tenant's business.
ARTICLE 37 - EXHIBITS
---------------------
All Exhibits attached hereto are incorporated herein by reference and
made a part hereof.
ARTICLE 38 - ENTIRE AGREEMENT.
-----------------------------
This Lease, including the Exhibits hereto, contains all the
agreements, conditions, understandings, representations and warranties made
between the parties hereto with respect to the subject matters hereof, and may
not be modified orally or in any manner other than by an agreement in writing
signed by both parties hereto or their respective successors in interest. This
Lease supersedes the Existing Lease (except as otherwise provided in Section 2.8
hereof) and the letter of intent dated November 29, 1993 executed by Landlord
and Tenant.
ARTICLE 39 - ALTERNATIVE DISPUTE RESOLUTION
-------------------------------------------
(a) Except as otherwise provided in this Lease, if any dispute arises
out of this Lease, either Landlord or Tenant shall have the right to invoke
dispute resolution procedures pursuant to this Article by written notice to the
other party. The invocation by either party of the dispute resolution procedures
set forth in this Article shall serve to preclude the commencement of judicial
proceedings by either party hereto during the pendency of such dispute
resolution proceedings except as otherwise provided in Section 39(i) below.
Each party shall name a representative (the "Operating Manager") promptly after
execution of this Lease who shall participate in the resolution of disputes
pursuant to this Article. Each party may at any time replace the Operating
Manager by providing written notice to the other party of the identity of its
new Operating Manager. The Operating Managers shall meet within ten (10) days
after receipt of written notice that dispute resolution pursuant to this Article
is being invoked and shall attempt to resolve the dispute through informal
discussions.
(b) If the dispute is not resolved at such meeting by the Operating
Managers, then within ten (10) days after the Operating Managers meet each
Operating Manager shall refer the dispute to a senior executive (the "Senior
Manager") of the party. The Senior Manager for Tenant shall be any elected
officer of Tenant and for Landlord shall be as designated by the partners of
Landlord. The Senior Managers shall meet (either in person or by
61
<PAGE>
telephone conference call) to attempt to resolve the dispute within thirty (30)
days after the dispute has been referred to them. Not less than fifteen (15)
days prior to the meeting of the Senior Managers, the Operating Managers shall
exchange written summaries of the issues and the evidence relating to the
dispute.
(c) If the dispute is not resolved at the initial meeting of the
Senior Managers, it shall be referred within thirty (30) days after the meeting
of the Senior Managers to a mutually acceptable neutral advisor (the "Advisor")
to be mutually selected by the parties.
(d) The parties shall enter into an agreement with the Advisor
prohibiting any ex parte contacts with the Advisor without the written consent
-- -----
of the other party and requiring the Advisor to treat any information conveyed
to him as confidential. The agreement shall provide that the Advisor will be
disqualified as a trial witness, consultant, or expert for either party and that
his advisory opinion of the likely outcome of any litigation of the dispute is
inadmissible in any subsequent arbitration or judicial proceedings for any
purpose. The agreement shall also provide that the fees and expense of the
Advisor are to be divided equally between the parties, provided, however, that
if the dispute is not settled and subsequently proceeds to trial or to formal
arbitration, then the fees and expenses of the Advisor shall be apportioned in
the same manner as costs allowed by the trial court or arbitrator, respectively.
(e) Ten (10) days after the Advisor has been designated, each party
shall submit to the Advisor, and to the other party, a Written statement of no
more than thirty (30) pages summarizing the issues and underlying evidence
supporting its position. The Advisor may in his sole discretion conduct a
mini-trial, under such rules of procedure as he shall prescribe, at which the
parties shall present their respective positions on the dispute.
(f) The Advisor shall, within thirty (30) days after his appointment,
deliver to the parties his nonbinding written opinion which evaluates each
party's position and concludes which party is likely to prevail at a judicial
trial on the merits. Within ten (10) days after the Advisor issues such written
opinion to the Parties, the Senior Managers shall meet again in an attempt to
resolve the dispute.
(g) After the procedures described in the preceding Subsections (a)
through (f) have been carried out and good faith attempts to resolve the dispute
pursuant thereto have failed: (i) either party may begin formal judicial
proceedings relating to any dispute arising out of this Lease which is alleged
to involve default by either party pursuant to this Lease; or (ii) upon written
agreement of the parties the dispute may be submitted to
62
<PAGE>
formal arbitration by a panel of three arbitrators conducted according to the
rules of arbitration of the American Arbitration Association. Such arbitration
shall be held in Pittsburgh, Pennsylvania. Either party may institute a formal
judicial proceeding with respect to disputes alleged to involve an Event of
Default pursuant to this Lease at any time when necessary to prevent the running
of any applicable statute of limitations, provided that any such judicial
proceeding is thereafter stayed pending the completion of the proceedings
provided for in this section.
(h) The dispute resolution procedure set forth in this Section is
intended to be a method for reaching negotiated compromises of disputes. All
written or oral statements or conduct, including offers of settlement, made in
the course of proceedings held hereunder shall: (i) be deemed to be
confidential, (ii) not be construed as an admission of liability for any
purpose, and (iii) be inadmissible in a court of law or equity for any purpose.
(i) The existence of a dispute resolution proceeding under this
section shall not be deemed to be a waiver or suspension of any rights or
obligations of either Landlord or Tenant under this Lease and each party shall
continue to perform its obligations under this Lease while the dispute
resolution proceeding is being conducted, except that if (1) the dispute
involves an Event of Default (i) described in Section 20.1(a) with respect to
Tenant's Obligations to pay Basic Rent or Additional Rent, or (ii) described in
Section 20.1(c) if there is an immediate and substantial danger to life or
property, or such non-performance by Tenant is in violation of an applicable
law, regulation or court order, Landlord shall have the right to forego the
dispute resolution provisions of this Article 39 and may, at its option,
immediately commence any judicial proceedings necessary or desirable to obtain
the benefit of Landlord's remedies contained in Article 20, and (2) nothing in
this Article 39 shall preclude Tenant's right to forego the dispute resolution
provisions of this Article 39 and seek equitable relief in one or more judicial
proceedings against Landlord to enjoin actions of Landlord which prevent Tenant
from using the Premises for the conduct of Tenant's business or to obtain one or
more injunctions against Landlord which require that Landlord take actions in
order to enable Tenant to conduct its business in the Premises as provided
herein.
ARTICLE 40 - RECOUPMENT.
-----------------------
With regard to Article 6 of this Lease, as well as any Other
provisions in this Lease which require or provide for the Payment of money by
Landlord to or for the benefit of Tenant, in
63
<PAGE>
the event that Landlord shall fail to make timely payment of such sums within
thirty (30) days after receipt of written notice from Tenant stating that such
payment is due, Tenant shall thereafter have the right from time to time to
recoup, without additional charge, interest or penalty thereon, against any
obligation of Tenant to pay Rent or other sums due under this Lease to or for
the benefit of Landlord, any amount then owed by Landlord to Tenant under this
Lease and not paid within thirty (30) days after Landlord's receipt of the above
referenced written notice. In the event Tenant exercises such right of
recoupment, Tenant shall provide written notice to Landlord of the exercise of
such right of recoupment, and such notice shall contain a statement setting
forth the calculation of such recoupment amount. Landlord acknowledges and
agrees that the rights granted to Tenant in this Article 40 are in the nature of
recoupment and not merely of set-off. In the event that any bankruptcy
proceeding is commenced under Title 11 of the U.S. Code, as amended, or any
successor statute (the "Bankruptcy Code"), Landlord agrees that Tenant's right
to recoupment shall not be subject to the automatic stay imposed by Section 362
of the Bankruptcy Code or otherwise and that Landlord shall not object to
Tenant's right to relief from the automatic stay; provided, however, that the
-------- -------
provisions of this Article 40 shall not be construed to prevent Landlord from
asserting any claim or defense relating to such claimed recoupment by Tenant in
such bankruptcy proceeding regarding the amount of Rent that Tenant has withheld
in exercise of its right of recoupment on the basis that the amount withheld
exceeds Landlord's liability to Tenant under any of the above-referenced
provisions of this Lease (or other defenses or claims which Landlord may have
regarding such recoupment under the terms of this Lease).
ARTICLE 41 - MISCELLANEOUS
--------------------------
41.1 Mutual Release. Except as otherwise provided in this Lease,
--------------
Landlord, for itself and its successors and assigns, hereby releases Tenant, its
successors and assigns, and all past, present and future partners, officers,
directors, shareholders, parent corporations, affiliates, subsidiaries, agents,
representatives and employees of Tenant, of and from any and all liabilities,
claims, demands, and rights of action of whatever kind or nature, whether in
contract or tort or in law or equity or otherwise, which it ever had, now has or
may have in the future, and agrees that it will never institute any action or
suit at law or in equity or otherwise against Tenant or any of Tenant's
successors or assigns, or any of Tenant's past, present or future partners,
officers, directors, shareholders, parent corporation or corporations,
affiliates, agents, representatives or employees, nor institute or prosecute or
in any way aid in the institution or prosecution of any claim, demand, action or
cause of action for damages, costs, expenses, compensation or other amount for
or on account of any damage or loss, known or unknown, past, present or
64
<PAGE>
future, arising out of, relating to or in connection with the Existing Lease or
Tenant's occupancy of the Premises or any portion thereof prior to the date on
which this Lease is executed and delivered by Tenant and Landlord.
Except as otherwise provided in this Lease, Tenant, for itself and its
successors and assigns, hereby releases Landlord, its successors and assigns,
and all past, present and future partners, officers, directors, shareholders,
parent corporations, affiliates, subsidiaries, agents, representatives and
employees of Landlord, of and from any and all liabilities, claims, demands, and
rights of actions of whatever kind or nature, whether in contract or tort or in
law or equity or otherwise, which it ever had, now has or may have in the
future, and agrees that it will never institute any action or suit at law or in
equity or otherwise against Landlord or any of Landlord's successors or assigns,
or any of Landlord's past, present or future partners, officers, directors,
shareholders, parent corporation or corporations, affiliates, agents,
representatives or employees, nor institute, prosecute or in any way aid in the
institution or prosecution of any claim, demand, action, or cause of action for
damages, costs, expenses, compensation or other amount for or on account of any
damage or loss, known or unknown, past, present or future, arising out of,
relating to or in connection with the Existing Lease or Tenant's occupancy of
the Premises or any portion thereof prior to the date on which this Lease is
executed and delivered by Tenant and Landlord.
41.2 Old Escalation Billing. Upon execution of this Lease by the
----------------------
Landlord and Tenant, the Tenant shall pay to Landlord the sum of Seven Hundred
Seventy-Three Thousand One Hundred Forty-Three Dollars ($773,143.00) as a
complete and final payment for all back escalation and overtime HVAC charges
currently due and owing by Tenant to Landlord under the Existing Lease. A
detailed analysis of the calculation of such back escalation and overtime HVAC
charges was prepared by Landlord and provided to Tenant in that certain
correspondence dated May 4, 1993, at page 5, under the heading "Old Escalation
Billing", and such calculation of Old Escalation Billing is hereby confirmed by
Tenant.
41.3 Sale of Building. If the Building or Land are formally listed
----------------
for sale by Landlord, then Landlord shall notify the Tenant, in writing and
within seven (7) days of such listing, of the listing of the Building or Land
for sale and the listing price thereof. Such notice to Tenant shall not in any
manner be construed as granting to Tenant any right to purchase, option to
purchase, or right of first refusal concerning the Building or Land.
65
<PAGE>
IN WITNESS WHEREOF, and intending to be legally bound hereby, Landlord
and Tenant have hereunto respectively signed and sealed multiple originals of
this Lease as of the day and year first above written.
TENANT:
FEDERATED INVESTORS, INC.
Date: May 4, 1994 By: [SIGNATURE ILLEGIBLE]
----------------- -----------------------------
TITLE:__________________________
LANDLORD:
LIBERTY CENTER VENTURE.
BY: GRANT STREET ASSOCIATES, INC., as Receiver for
LIBERTY CENTER VENTURE
By: /s/ James C. Dawson
-------------------------------
James C. Dawson, President
BY: GRANT LIBERTY DEVELOPMENT GROUP
ASSOCIATES, PARTNER
FOREST CITY GRANT LIBERTY ASSOCIATES, Partner
By: FOREST CITY RESIDENTIAL
DEVELOPMENT, INC.,
General Partner
By: /s/ R.H. Marques
----------------------------
R.H. Marques, Vice President
JLM GRANT LIBERTY ASSOCIATES, Partner
By: JOS. L. MUSCARELLE, INC.,
General Partner
By: /s/ Joseph L. Muscarelle
----------------------------
Joseph L. Muscarelle, President
BY: METROPOLITAN LIFE INSURANCE COMPANY, PARTNER
By: /s/ Dennis J. Conroy
----------------------------
Dennis J. Conroy
Title: ASSISTANT VICE PRESIDENT
<PAGE>
EXHIBIT 10.04
AGREEMENT OF LEASE
BETWEEN
LIBERTY CENTER VENTURE, A PENNSYLVANIA GENERAL PARTNERSHIP,
COMPRISED OF METROPOLITAN LIFE INSURANCE COMPANY
AND GRANT LIBERTY DEVELOPMENT GROUP ASSOCIATES; AND
GRANT STREET ASSOCIATES, INC., AS THE COURT APPOINTED
RECEIVER FOR LIBERTY CENTER VENTURE,
LANDLORD,
AND
FEDERATED INVESTORS, INC.
TENANT.
FOR PREMISES IN
THE FEDERATED INVESTORS TOWER
DATED AS OF FEBRUARY 1, 1994
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Article and Title Page
- ----------------- ----
<S> <C>
ARTICLE 1 - DEFINITIONS.................................................. 2
ARTICLE 2 - AGREEMENT TO LEASE; TERM..................................... 10
ARTICLE 3 - BASIC RENT................................................... 11
ARTICLE 4 - ADDITIONAL RENT.............................................. 12
ARTICLE 5 - USE OF PREMISES.............................................. 14
ARTICLE 6 - INTENTIONALLY DELETED........................................ 14
ARTICLE 7 - ALTERATIONS.................................................. 14
ARTICLE 8 - BUILDING SERVICES............................................ 17
ARTICLE 9 - ASSIGNMENT AND SUBLETTING.................................... 21
ARTICLE 10 - ACCESS TO PREMISES........................................... 24
ARTICLE 11 - REPAIRS...................................................... 25
ARTICLE 12 - SURRENDER OF PREMISES........................................ 26
ARTICLE 13 - TENANT LIABILITY, INDEMNIFICATION AND INSURANCE.............. 27
ARTICLE 14 - FIRE OR OTHER HAZARD......................................... 30
ARTICLE 15 - SUBORDINATION, MORTGAGEE'S APPROVAL AND ATTORNMENT........... 31
ARTICLE 16 - RECORDATION.................................................. 32
ARTICLE 17 - CONDEMNATION................................................. 33
ARTICLE 18 - ESTOPPEL CERTIFICATES........................................ 34
ARTICLE 19 - BANKRUPTCY................................................... 34
ARTICLE 20 - DEFAULTS AND REMEDIES........................................ 35
ARTICLE 21 - NON-WAIVER................................................... 38
ARTICLE 22 - EXONERATION.................................................. 38
ARTICLE 23 - QUIET ENJOYMENT.............................................. 38
ARTICLE 24 - LANDLORD'S REPRESENTATIONS AND COVENANTS..................... 39
ARTICLE 25 - SPRINKLERS................................................... 39
ARTICLE 26 - UNAVOIDABLE DELAY............................................ 39
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE 27 - SUCCESSORS................................................... 40
ARTICLE 28 - GOVERNING LAW................................................ 40
ARTICLE 29 - SEVERABILITY................................................. 40
ARTICLE 30 - CAPTIONS..................................................... 40
ARTICLE 31 - GENDER....................................................... 40
ARTICLE 32 - NOTICES...................................................... 40
ARTICLE 33 - BROKERS...................................................... 42
ARTICLE 34 - EXECUTION/COUNTERPARTS....................................... 42
ARTICLE 35 - RULES AND REGULATIONS........................................ 43
ARTICLE 36 - NO REPRESENTATIONS BY LANDLORD............................... 43
ARTICLE 37 - EXHIBITS..................................................... 43
ARTICLE 38 - ENTIRE AGREEMENT............................................. 43
ARTICLE 39 - ALTERNATIVE DISPUTE RESOLUTION............................... 43
ARTICLE 40 - TENANT REFURBISHMENT ALLOWANCE............................... 45
</TABLE>
EXHIBITS
- --------
"A" - Legal Description of Land
"A-l" - Plan of Premises
"B" - Calculation of Rentable Area
"C" - Rules and Regulations
"D" - Building Standard Cleaning and Janitorial
Services
"E" - Permitted Exceptions
"F" - Form of Memorandum of Lease
ii
<PAGE>
AGREEMENT OF LEASE
------------------
THIS LEASE is dated as of the 1st day of February, 1994, between
LIBERTY CENTER VENTURE, a Pennsylvania General Partnership, comprised of
Metropolitan Life Insurance Company and Grant Liberty Development Group
Associates; and GRANT STREET ASSOCIATES, INC., as the Court Appointed Receiver
for Liberty Center Venture, (collectively called the "Landlord") and FEDERATED
INVESTORS, INC., a Pennsylvania corporation, having its principal office at
Federated Investors Tower, Liberty Center, 1001 Liberty Avenue, Pittsburgh,
Pennsylvania 15222 (the "Tenant").
WITNESSETH:
----------
WHEREAS, Landlord is the owner of certain land ("Land") situate in the
City of Pittsburgh, Allegheny County, Pennsylvania as more particularly
described in Exhibit "A" attached hereto; and
WHEREAS, Landlord has developed a mixed use development upon the Land
(the "Project") including a first class general office building ("Building"), a
parking garage ("Parking Garage"), a podium ("Podium") and a hotel ("Hotel")
each as further defined in Section 1.1; and
WHEREAS, by Order of Court dated June 15, 1993, Grant Street
Associates, Inc. was appointed as the Receiver for Liberty Center Venture by the
Court of Common Pleas of Allegheny County, Pennsylvania; and
WHEREAS, Tenant desires to lease space in the Building on the terms
and conditions as hereinafter set forth; and
WHEREAS, Tenant and Landlord wish to enter into this Lease; and
WHEREAS, Grant Street Associates, Inc. has joined in this Lease as
Receiver for Liberty Center Venture; and
WHEREAS, this Lease shall continue in full force and effect in the
event that the appointment of Grant Street Associates, Inc. as Receiver for
Liberty Center Venture is reversed, overturned or otherwise terminated by
subsequent judicial action.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties, intending to be legally bound hereby, agree as follows:
<PAGE>
ARTICLE 1 - DEFINITIONS
-----------------------
1.1 For the purpose of this Lease, the following terms shall have the
following meanings:
(a) "Additional Rent" shall mean Operating Rent and any other
amounts required to be paid by Tenant to Landlord under this Lease other than
Basic Rent.
(b) "Additional Variable Operating Expenses" shall have the
meaning as set forth in Section l.l(nn) (i) (E) .
(c) "Advisor" shall have the meaning as set forth in Section
39(c).
(d) Intentionally deleted.
(e) "After Hours" shall have the meaning as set forth in Section
8.1(a) (iii).
(f) Intentionally Deleted.
(g) Intentionally Deleted.
(h) Intentionally Deleted.
(i) "Base Year" shall mean the period of twelve consecutive
months commencing on January 1, 1994, and ending on December 31, 1994.
(j) "Basic Rent" shall have the meaning as set forth in Section
3.1.
(k) "Building" shall mean that first class twenty-seven (27)
story office building located at 11th Street and Liberty Avenue at Grant Street,
Pittsburgh, Pennsylvania known as the Federated Investors Tower.
(1) "Building Holidays" shall mean those days designated as
holidays by the New York Stock Exchange from time to time including, but not
limited to, New Year's Day, Memorial Day, July 4th, Labor Day, Thanksgiving and
Christmas Day.
(m) Intentionally Deleted.
(n) "Code" shall have the meaning as set forth in Section
7.1(e).
2
<PAGE>
(o) "Commencement Date" shall mean February 1, 1994;
(p) "Common Areas" shall mean those areas in the Building used
in common by Tenant and other tenants of the Office Area.
(q) "Comparison Year" shall have the meaning as set forth in
Section 4.1.
(r) "Election" shall have the meaning as set forth in Article
40.
(s) "Event of Default" shall have the meaning as set forth in
Section 20.1
(t) Intentionally Deleted.
(u) Intentionally Deleted.
(v) Intentionally Deleted.
(w) Intentionally Deleted.
(x) "General Building Services" shall have the meaning as set
forth in Section 8.1.
(y) "Hotel" shall mean the first class hotel developed as part
of the Project which contains approximately six hundred (600) guest rooms and
substantial meeting facilities.
(z) Intentionally Deleted.
(aa) Intentionally Deleted.
(bb) "Initial Term" shall have the meaning as set forth in
Section 2.2.
(cc) "Installations" shall have the meaning as set forth in
Section 12.2.
(dd) "Insurance Premiums" shall mean premiums and other charges
incurred by Landlord with respect to the following insurance on or for the
Building, the Land, or any portion thereof, and on any employees engaged (in
whole or in part) in connection with management, maintenance and/or operation of
the Building or Land:
3
<PAGE>
(jj) "Normal Office Hours" shall mean 8:00 a.m. to 6:00 p.m.,
Monday through Friday, and 8:00 a.m. to 1:00 p.m. Saturday. All other time
periods and all Building Holidays shall be considered "after hours". The charges
to Tenant for overtime HVAC services shall be calculated in accordance with the
terms of Section 4.2(a) hereof.
(kk) "Office Area" shall mean the Office Floors, except for the
portion of Floor 5 occupied by the Central Mechanical Room, the Office Lobby,
and those areas of Floors 2, 3 and 4 dedicated to office use as shown on Exhibit
"A-l".
(ll) "Office Floors" shall mean Floors 5 through 27 of the
Building.
(mm) "Office Lobby" shall mean the area on the ground floor of
the Building as shown on Exhibit "A-l".
(nn) "Operating Expenses" shall mean:
(i) (A) All those expenses of every kind and character
actually incurred during each year in respect of the operation (including
electricity expenses), management, and maintenance of the Office Area in
accordance with generally accepted accounting principles and sound management
practices as applied to the operation, management and maintenance of first class
office buildings, including without limitation: (1) Insurance Premiums with
respect to the Building, Land, and/or its operation; (2) expenses for any
capital improvements and acquisitions made to the Building amortized over the
estimated useful life of such improvements or acquisitions if such capital
expenses result in net savings of labor and/or other costs over the estimated
useful life of the improvements or acquisition or are incurred to replace
existing improvements and equipment; (3) expenses for any capital improvements
made to the Building in order to comply with applicable laws, rules, ordinances
and/or regulations where such compliance is required as a result of any change
in Tenant's use or layout of the Premises or change in the location of
partitions or trade fixtures in the Premises; and (4) costs of on-site Building
management personnel and an on-site Building management office, but not the
expenses set forth in (ii) below; (B) three and ninety eight one hundredths
percent (3.98%) of the expense of maintaining the areas on the Land outside of
the Building used in common by all tenants of the Project, subject to adjustment
if additional improvements are constructed on the Land; and (C) those additional
expenses (the "Additional Variable Operating Expenses") which Landlord would
have incurred during each Lease Year had the Building been at least ninety
percent (90%) occupied.
5
<PAGE>
(ii) Operating Expenses shall not include the following: (A)
expenses for any capital improvements and acquisitions (whether owned or leased)
not specified in Subsection 1.1(nn)(i)(A)(2) and (3) above; (B) expenses for
repairs or other work occasioned by fire, windstorm or other insured hazard to
the extent recovered through insurance actually carried or which would have been
recovered through the insurance which is required to be carried by Landlord as
set forth in Section 13.1(b) in the event that Landlord did not carry such
insurance; (C) expenses incurred in leasing or procuring new tenants (e.g.,
lease commissions, advertising expenses and expenses of renovating space for new
tenants); (D) legal expenses in enforcing the terms of any lease, and legal
expenses regarding the actions styled Grant Liberty Development Group Associates
------------------------------------------
v. Metropolitan Life Insurance Company, pending in the United States District
- --------------------------------------
Court for the Western District of Pennsylvania at 90-CA-1424, and Metropolitan
------------
Life Insurance Company v. Liberty Center Venture v. Urban Redevelopment Auth. of
- --------------------------------------------------------------------------------
Pittsburgh and City of Pittsburgh, filed in the Allegheny County Court of Common
- ---------------------------------
Pleas at GD91-04073, and any other disputes among the entities which comprise
the Landlord, or between Landlord, any partners of Landlord and any lenders to
Landlord or the Project; (E) interest or amortization payments on any mortgage
or mortgages; (F) expenses in connection with maintaining and operating the
Parking Garage; (G) the cost of any other tenant's decorations; (H) the cost of
correcting design or construction defects in the Building; (I) expenses for
relamping and reballastering the Premises (which shall be reimbursed directly by
Tenant to Landlord) or the premises of any tenants other than Tenant; (J) the
cost of electricity consumed on the premises of other tenants of the Building;
(K) interest on loans made to the Landlord as debtor; (L) compensation of
management personnel not engaged exclusively in connection with management of
the Building; (M) fines or penalties for violations of laws or regulations by
Landlord; (N) cost of services provided exclusively for particular tenants; (O)
Landlord's general overhead except as related to the maintenance of an on-site
Building management office.
(iii) The Additional Variable Operating Expenses shall
annually be determined by Landlord and Tenant by mutual agreement based on the
variable operating expenses incurred in connection with occupied space. For such
purpose, Landlord and Tenant recognize and agree that such operating expenses
are seldom directly proportionate to the percentage of occupancy of the Building
and that the Tenant's Additional Rent should not be increased or decreased as a
result of vacancies in the Building. If Landlord and Tenant cannot agree upon
the amount of Additional Variable Operating Expenses for any Lease Year within
sixty (60) days after the end of such Lease Year, Landlord or Tenant may submit
the determination to the alternative dispute resolution procedures in accordance
with Article 39 hereof.
6
<PAGE>
(oo) "Operating Manager" shall have the meaning as set forth in
Section 39(a).
(pp) "Operating Rent" shall have the meaning as set forth in
Section 4.1(a).
(qq) Intentionally Deleted.
(rr) "Parking Garage" shall mean the parking garage located
below street level on the Land consisting of two (2) floors of parking and
containing parking spaces for approximately 580 cars.
(ss) Intentionally Deleted.
(tt) "Podium" shall mean that four story structure connecting
the Building and the Hotel.
(uu) Intentionally Deleted.
(vv) "Premises" shall mean the entire 12th floor of the
Building, consisting of 20,510 Square Feet.
(ww) "Prime Rate" shall mean the effective prime rate per
annum, as announced from time to time by Mellon Bank, N.A. at its headquarters
in Pittsburgh, Pennsylvania as its prime rate, such rate to change automatically
from time to time effective as of the effective date of each such change.
(xx) Intentionally Deleted.
(yy) "Project" shall have meaning as set forth in the Second
Recital of this Agreement.
(zz) Intentionally Deleted.
(aaa) Intentionally Deleted.
(bbb) Intentionally Deleted.
(ccc) Intentionally Deleted.
(ddd) Intentionally Deleted.
(eee) "Renewal Notice" shall have the meaning as set forth in
Section 2.3.
(fff) "Renewal Option" shall have the meaning as set forth in
Section 2.3.
7
<PAGE>
(ggg) "Renewal Term Rent" shall have the meaning as set forth
in Section 3.1(b).
(hhh) "Renewal Term" shall have the meaning as set forth in
Section 2.3.
(iii) "Rent" shall mean the Basic Rent, Additional Rent and all
other moneys to be paid by Tenant to Landlord under this Lease.
(jjj) "Senior Manager" shall have the meaning as set forth in
Section 39(b).
(kkk) Intentionally Deleted.
(111) "Square Feet" shall mean square feet of leasable area
measured and calculated pursuant to Exhibit "B".
(mmm) "Square Foot" shall mean one square foot of leasable area
measured and calculated pursuant to Exhibit "B".
(nnn) Intentionally Deleted.
(ooo) Intentionally Deleted.
(ppp) "Taxes" shall, for purposes of this Lease, include: (i)
all real and personal property taxes, ad valorem or specific or otherwise,
levied upon, or with respect to the Building and any furniture, fixtures,
machinery, and equipment used in the operation of the Building; (ii) assessments
(on the same schedule of payments incurred by Landlord), general or special
(whether or not for work commenced or completed during the term of this Lease),
ad valorem or specific or otherwise, levied upon, or with respect to the
Building and/or Landlord and/or tenant improvements comprising, and any
furniture, fixtures, machinery, and equipment used in the operation of the
Building; (iii) any tax or excise in addition thereto or substitution thereof
levied by any governmental authority upon or in respect or by reason of
ownership, leasing, operation or occupancy of the Building and incurred by
Landlord, and any tax against Landlord on rents, including the Pittsburgh
Business Privilege Tax (the Pittsburgh Business Privilege Tax payable by Tenant
shall not include any amount which represents a tax levied on Landlord by reason
of Tenant reimbursing Landlord for such Pittsburgh Business Privilege Tax),
and/or additional rents from the Building (but excluding income and excess
profits, taxes, franchise, capital stock, and inheritance taxes, and license,
inspection and permit fees); (iv) any water charges and/or sewer rents which may
be assessed, levied, confirmed, or imposed on or in respect of or be a lien upon
the Building; (v) any and all fees, costs and expenses incurred by Landlord in
negotiating, appealing,
8
<PAGE>
or contesting any of the foregoing items specified above in (i) through (iv);
and (vi) three and ninety eight one hundredths percent (3.98%) of the foregoing
items specified above in (i) through (v) which are assessed, levied, imposed or
incurred with respect to the Land, subject to adjustment if additional
improvements are constructed on the Land. Taxes shall not include any penalties
or interest in arrears and shall be computed as if paid at discount to the full
extent permitted by law.
(qqq) Intentionally Deleted.
(rrr) "Tenant" shall have the meaning as set forth in the
preamble to this Agreement.
(sss) "Tenant Alterations" shall have the meaning as set forth
in Section 7.1(a).
(ttt) Intentionally Deleted.
(uuu) "Tenant's Cleaning Contractor" shall have the meaning as
set forth in Section 8.4(c).
(vvv) "Tenant's Cleaning Personnel" shall have the meaning as
set forth in Section 8.4(c).
(www) "Tenant's Share" shall mean the percentage (being 3.98%)
of Operating Expenses and Taxes to be paid by Tenant.
(xxx) Intentionally Deleted.
(yyy) "Term" shall mean the Initial Term set forth in Section
2.2 together with any Renewal Term as set forth in Section 2.3.
(zzz) Intentionally Deleted.
(aaaa) Intentionally Deleted.
(bbbb) "Utility Charges" shall mean all costs for electricity,
steam, gas, water or other utilities or fuels required in connection with the
operation and maintenance of the Building or any portion thereof incurred by
Landlord and not separately metered for and paid directly by any other tenant of
the Building.
(cccc) Intentionally Deleted.
(dddd) "Window Treatments" shall mean the Building standard
window treatment consisting of one horizontal mini-blind for each window in the
Premises.
9
<PAGE>
ARTICLE 2 -
AGREEMENT TO LEASE; TERM.
2.1 Demise. Landlord does hereby demise and let unto Tenant and
------
Tenant does hereby rent, hire, take and lease from Landlord all that portion of
the Building known as the Federated Investors Tower located at the corner of
Liberty Avenue and 11th Street at Grant Street, Pittsburgh, Pennsylvania,
consisting of the entire 12th floor of the Building and being 20,510 Square Feet
defined herein as the " Premises", together with the right to the use, in common
with others, of the lobbies, entrances, elevators, and other public portions of
the Building.
TO HAVE AND TO HOLD unto the Tenant, its permitted successors and
assigns for the Term of this Lease, but subject and subordinate to the
agreements, encumbrances, covenants and conditions set forth in Exhibit "E"
attached hereto and made a part hereof.
2.2 Initial Term. The initial term of this Lease (the "Initial
------------
Term") shall commence as of 12:00 A.M. on February 1, 1994, and will terminate
at 11:59 P.M. on December 31, 1996. Provided that no Event of Default has
occurred and is continuing under the terms of this Lease, Tenant may elect, in
writing, that the Premises leased by Tenant under the terms of this Lease shall
become part of the Tenant's "Premises" as leased under the terms of that certain
Lease between Landlord and Tenant dated as of January 1, 1993 (the "Master
Lease") by written notice from Tenant to Landlord received no later than (a)
December 31, 1995 if Tenant has not exercised its option to renew the Lease as
set forth in Section 2.3 hereof, or (b) one hundred eighty (180) days prior to
the expiration of the Renewal Term if Tenant has exercised its option to renew
the Lease as set forth in Section 2.3 hereof (the "Election Date"). In the
event that Tenant elects that the Premises leased herein shall become part of
the "Premises" leased under the Master Lease, then: (i) the Premises leased
herein shall become part of the "Premises" under the Master Lease effective as
of the first day of the month immediately following the month in which Tenant
notifies Landlord that it has elected that the Premises leased herein are to
become part of the Master Lease, (ii) the Basic Rent for the Premises leased
herein shall thereafter be calculated at the rates as set forth in the Master
Lease, (iii) the Base Year shall be 1993, and (iv) Tenant shall receive a
refurbishment allowance for the Premises leased herein in an amount as set forth
in Article 40 hereof. In the event that Tenant does not elect that the Premises
leased herein are to become part of the "Premises" leased under the Master
Lease, then Tenant shall vacate the Premises leased herein upon the expiration
of the Term of this Lease.
10
<PAGE>
2.3 Renewal Option. Provided that no Event of Default has occurred
--------------
and is continuing under this Lease on the date on which the Renewal Notice (as
hereinafter defined) is received by Landlord or on the last day of the Initial
Term, Tenant shall have the right (the "Renewal Option") to renew this Lease for
one (1) successive term of no less than six (6) months and no more than twenty
four (24) months (the "Renewal Term"). Tenant shall give Landlord written
notice ("the Renewal Notice") of its election to renew this Lease on or before
December 31, 1995, and such Renewal Notice shall set forth the length of time
(being no less than six (6) months and no more than twenty four (24) months) for
which the Renewal Term shall occur. The Basic Rent for such Renewal Term shall
then be as set forth in Section 3.1(a) hereof.
2.4 Parking.
-------
(a) Landlord does hereby grant Tenant a license to use six (6) non-
reserved parking spaces in the Parking Garage at monthly rental and upon terms
and subject to rules and regulations uniformly applicable for such parking
spaces in the Parking Garage. In the event there are not at least ten (10) other
reserved parking spaces in the Parking Garage leased to others, the reserved
parking spaces. shall be licensed at a monthly rental as is comparable with
similar private reserved parking in the Golden Triangle area of the City of
Pittsburgh. The reserved spaces shall be located in the Private Parking Area.
Landlord may not revoke any license given pursuant to this section during the
Term of this Lease and all rental due in connection with such license shall be
considered Additional Rent under this Lease.
(b) Landlord shall not be required to monitor the Parking Garage or
any areas within the Parking Garage except as provided in Section 8.3 hereof.
ARTICLE 3 - BASIC RENT
----------------------
3.1 Basic Rent. Tenant covenants and agrees to pay Landlord during
----------
the Term in lawful currency of the United States, without any previous demand
therefor and without any set off or deduction except as made by Tenant pursuant
to its recoupment rights specified in this Lease, an annual basic rent ("Basic
Rent"), subject to adjustment as provided below, as follows:
(a) During the Initial Term and the Renewal Term, if any, the
Basic Rent shall be in the following amounts paid in advance on the first day of
each month throughout the Initial Term and any Renewal Term:
11
<PAGE>
(i) For the period commencing February 1, 1994 and ending on December
31, 1997 (if Tenant has exercised its Renewal Option such that the Renewal Term
extends beyond December 31, 1996, being the Expiration Date of the Initial
Term), Tenant shall pay to Landlord Basic Rent in the amount of Three Hundred
Sixty Six Thousand Sixty Five Dollars ($366,065.00) per annum, payable in equal
monthly installments of Thirty Thousand Five Hundred Five and 42/100 Dollars
($30,505.42); and
(ii) For the period commencing on January 1, 1998 and ending on the
last day of the Renewal Term, Tenant shall pay to Landlord Basic Rent in the
amount of Three Hundred Ninety Nine Thousand Nine Hundred Forty Five Dollars
($399,945.00) per annum, payable in equal monthly installments of Thirty Three
Thousand Three Hundred Twenty Eight and 75/100 Dollars ($33,328.75).
ARTICLE 4 - ADDITIONAL RENT
---------------------------
4.1 Operating Rent.
--------------
(a) As Operating Rent, Tenant shall pay to Landlord each year
subsequent to the Base Year during the Term hereof and any Renewal Term,
Tenant's Share of any increases in Operating Expenses, Taxes and Insurance
Premiums over the Operating Expenses, Taxes and Insurance Premiums for the Base
Year. The increase, if any, in Operating Expenses, Taxes and Insurance Premiums
shall be determined by subtracting the Base Year Operating Expenses, Taxes and
Insurance Premiums from the Operating Expenses, Taxes and Insurance Premiums for
each Calendar Year subsequent to 1994 ("Comparison Year"). Tenant's Share of
increased Operating Expenses, Taxes and Insurance Premiums shall be calculated
by multiplying the increases in such costs by 3.98%.
(b) Tenant shall pay Landlord, monthly in advance beginning
January 1, 1995, one-twelfth (1/12th) of the amounts, if any, reasonably
estimated annually by Landlord to be Tenant's Operating Rent for the current
Lease Year.
(c) Landlord shall furnish to Tenant a statement, certified by
an independent public accounting firm, of the Operating Rent and Taxes for each
full or partial Lease Year on or before April 1st of the following Lease Year.
To the extent that the Tenant's Operating Rent owed by Tenant for any full or
partial Lease Year is more than the amount actually paid by Tenant under Section
4.1(a), then Tenant shall pay the actual amounts of Operating Rent due Landlord
within fifteen (15) days after receipt of the aforesaid statements. If the
Operating Rent paid by Tenant
12
<PAGE>
for any full or partial Lease Year exceeds the amount of Operating Rent actually
owed to Landlord, such excess shall be refunded to Tenant within fifteen (15)
days after such statement is furnished.
4.2 Other Charges. Tenant shall, within fifteen (15) days after
-------------
Landlord's presenting Tenant with an itemized invoice, pay to Landlord as
Additional Rent all amounts required to be paid pursuant to this Lease,
including, without limitation, the following:
(a) Overtime HVAC charges shall be charged to Tenant for HVAC
utilized by Tenant before or after Normal Office Hours.
(b) Any charges for parking pursuant to Section 2.6(a).
(c) Any charges for relamping or reballasting pursuant to
Subsection 8.l(d).
(d) Any charges for additional elevator service pursuant to
Section 8.2.
(e) Any charges for repairs pursuant to Section
11.2.
4.3 Partial Months. If the Lease termination date is not the last
--------------
day of the month, a prorated monthly installment of Basic Rent and Additional
Rent shall be paid at the then current rate for the fractional month during
which the termination date occurs.
4.4 Intentionally Deleted.
4.5 Landlord's Books. Landlord shall allow Tenant access to its
----------------
books and records at reasonable times at Landlord's offices to substantiate and
audit the Additional Rent. Landlord will submit to Tenant with each calculation
or estimate of Additional Rent such detailed information concerning Taxes and
Operating Expenses and the total rentable space in the Building as is reasonably
necessary for Tenant to verify such calculation. In addition, for the purpose of
such verification Tenant shall be entitled, during regular business hours for a
period of one year from the date each such calculation is submitted by Landlord
to Tenant, to cause an independent certified public accountant to examine
Landlord's books and records for the purpose of further verifying such
calculations by Landlord. For the purpose of any such examination Landlord will
produce such books and records for examination in Allegheny County,
Pennsylvania. Appropriate adjustments between Landlord and Tenant based upon the
verifications provided for above will be made within thirty (30) days after such
verification. If Tenant's examination of Landlord's books and records
demonstrates that the actual Operating Rent paid by Tenant: (i) exceeds the
actual Operating Rent that
13
<PAGE>
should have been charged to and paid by Tenant by in the aggregate of up to and
including three percent (3%), then Tenant shall pay for the entire cost of such
audit, or (ii) exceeds the actual Operating Rent that should have been charged
to and paid by Tenant by in the aggregate of more than three percent (3%) and up
to and including five percent (5%), then Landlord and Tenant shall share equally
the cost of such audit as reasonably incurred by Tenant, or (iii) exceeds the
actual Operating Rent that should have been charged to and paid by Tenant by in
the aggregate of more than five percent (5%), then Landlord shall reimburse
Tenant for the cost of such audit as reasonably incurred by Tenant.
ARTICLE 5 - USE OF PREMISES
---------------------------
Tenant shall use and occupy the Premises for general office and
financial services uses and those additional uses which are or in the future may
be incidental or accessory to general office or financial services uses,
subject, however, to all of the terms of this Lease, including without
limitation Article 7 - Alterations herein. Tenant shall not use or occupy the
Premises for any other purpose or business without the prior written consent of
Landlord. In no event may the Premises be used for any "walk-in" business other
than financial services uses without such consent.
Tenant shall observe and comply with all applicable governmental laws,
statutes, ordinances, rules and regulations governing Tenant's use of the
Premises and the Rules and Regulations attached as Exhibit "C". All such Rules
and Regulations shall apply to Tenant and its employees, agents, licensees,
invitees, subtenants and contractors, provided all Rules and Regulations adopted
by Landlord from time to time shall be uniformly enforced among all Building
tenants. Landlord shall not without Tenant's consent make any changes to the
Rules and Regulations which would materially interfere with Tenant's reasonable
use and enjoyment of the Premises as contemplated by this Lease. Tenant's
consent to changes in the Rules and Regulations shall not be unreasonably
withheld.
ARTICLE 6 - INTENTIONALLY DELETED
---------------------------------
ARTICLE 7 - ALTERATIONS
-----------------------
7.1 (a) From time to time after the Commencement Date, Tenant, at
Tenant's own expense, may make only such alterations, installations, additions,
improvements or changes in or to the interior of the Premises ("Tenant
Alterations") which do not: (i)
14
<PAGE>
in any way affect or alter the structure of the Building; (ii) exceed the
structural capacity of any portion of the Building; or (iii) adversely and
materially affect the operation of the Building, any utility Systems within or
to the Building, or the rights, privileges or tenancy of any other tenant in the
Building.
(b) If Tenant makes any Tenant Alterations:
(i) Tenant, at least fifteen (15) days before
commencement of work or delivery of materials to the Building, shall furnish to
Landlord plans and specifications, necessary approvals and permits, names and
addresses of all contractors and subcontractors, contractor's liability
insurance, and indemnification in form and amount reasonably satisfactory to
Landlord.
(ii) Landlord shall have the right to require that Tenant
promptly remove any Tenant Alterations which Landlord reasonably determines are
not in accordance with Landlord's standard work letter for tenants in the
Building or are not of a type and nature which is commonly acceptable to tenants
in first class office buildings in the City of Pittsburgh and are not likely to
be acceptable to subsequent tenants of the portion of the Premises in which such
Tenant Alterations are located at the end of Term by notifying Tenant of such
requirement no later than ten (10) days after Landlord's receipt of the plans
and specifications of such Tenant Alterations. If such notice is not given to
Tenant, then in that event the construction shall remain upon and be surrendered
with the Premises at the end of the Term or be removed at Tenant's option.
Tenant shall repair any damage occasioned by such removal whether or not
Landlord required such removal, and, in default thereof, Landlord may effect
said removals and repairs at Tenant's expense.
(iii) Tenant shall perform or cause such work to be
performed in a manner which will not materially interfere with or impair the use
and enjoyment of any other portion of the Building by Landlord and/or other
tenants.
(iv) Tenant shall pay the cost of all Tenant Alterations
and any costs of decorating or redecorating the Premises and the Building
occasioned by Tenant Alterations. Landlord acknowledges that it may be obligated
to reimburse Tenant for all or part of such cost as specifically set forth in
Article 40 hereof.
(v) Tenant hereby covenants and agrees not to place or
permit to be placed any lien or liens on or against the Premises, the Land
and/or the Building and Tenant shall hold harmless, indemnify and defend
Landlord from and against any such
15
<PAGE>
lien or liens. In the event of any Tenant Alterations costing in excess of
Twenty Five Thousand Dollars ($25,000.00), Tenant shall at Landlord's request
and expense, cause each prime contractor and subcontractor to agree to waive,
relinquish and disclaim any right or power to cause any lien to attach to the
Landlord's interest in the Premises, the Land and/or the Building and Tenant
shall furnish to Landlord documents evidencing the filing of such agreements at
its option.
(vi) Tenant shall pay all sums of money in respect of any
labor, services, materials, supplies or equipment furnished or alleged to have
been furnished to Tenant in or about the Premises, Land and/or Building which
may be secured by any mechanic's, materialmens' or other lien against the
Premises, Land and/or Building or the Landlord's interest therein and will cause
each such lien to be discharged at the time performance of any obligation
secured thereby matures. Tenant may contest such lien, but if such lien is
reduced to final judgment and if such judgment or process thereon is not stayed,
or if stayed and said stay expires, then and in each event Tenant shall
forthwith pay and discharge said judgment.
(vii) Landlord shall have the right to post and maintain on
the Premises notices of non-responsibility under the laws of the Commonwealth of
Pennsylvania.
(viii) Upon completing any Tenant Alteration, Tenant shall,
at Landlord's reasonable request, use its best efforts to furnish Landlord with
contractors' affidavits and full and final waivers of lien covering all labor
and materials expended and used.
(ix) All Tenant Alterations shall comply with all laws,
ordinances, rules and regulations of all governmental authorities, and shall be
constructed in a good and workmanlike manner, and only good grades of materials
shall be used. Such construction shall be done in a manner which does not cause
an increase in the rates for the insurance held by Landlord pursuant to
Subsection 13.1(b) hereof.
(x) Tenant shall permit Landlord to inspect and review
all construction operations in connection with any Tenant Alterations. Landlord
shall not unreasonably interfere with such construction.
(c) Subject to Section 7.1(a), Tenant shall have the right to
install, change and revise in and upon the Premises, at its own expenses,
machinery, trade fixtures, communications systems, alarm systems, lighting
fixtures, security devices, shelving, movable partitions and other equipment or
utility and
16
<PAGE>
service connections required for or convenient in connection with the conduct of
its business, provided no such action shall interfere with any communication
system, alarm system, security device or utility services for any portion of the
Building other than the Premises.
(d) If communications systems, alarm systems, security devices
or other utility or services connections are installed or changed in accordance
with this Article, such work shall be provided by Tenant if within the Premises,
however, any such work within other areas of the Building will be done by
Landlord at Tenant's expense and all such systems and devices shall be
designated, maintained and operated so as not to interfere with any signal,
communications, alarm or other utility systems of Landlord or of other tenants
in the Building.
(e) Subject to Section 12.3 hereof, Tenant at its option upon
prior notice to Landlord may remove such leasehold improvements as referred to
in Sections 7.1(c) and 7.1(d) from the Premises at any time prior to or at the
end of the Term of this Lease except any such improvements as may be needed to
conform with any applicable electrical, building, zoning, health, safety,
seismic, fire, energy and other codes, requirements or relevant provisions of
any law, regulation or ordinance issued or adopted by the City of Pittsburgh,
County of Allegheny, Commonwealth of Pennsylvania, or the Government of the
United States of America, or any agency, department or other governmental agency
having jurisdiction over the Building, (collectively called "Code"), and subject
to the provisions of such Sections. In the event of such removal Tenant shall at
its own expense promptly repair any damage to the Premises caused by such
removal.
ARTICLE 8 - BUILDING SERVICES
-----------------------------
8.1 General Building Services. Landlord shall provide, in a manner
-------------------------
befitting a first class office building in the City of Pittsburgh, the following
services and facilities (the "General Building Services"):
(a) Chilled water for the air conditioning system serving the
Premises as follows:
(i) Throughout the Premises during hours of 7:00 a.m. to
7:00 p.m. Monday through Friday and 7:00 a.m. to 7:00 p.m. on
Saturdays, except when such days are Building Holidays, at no extra
charge; provided, however, that certain costs of such electricity and
other utility services shall be an Operating Expense as set forth
elsewhere in this Lease.
17
<PAGE>
(ii) Intentionally Deleted
(iii) At other hours, ("After Hours") in such space as
Tenant may request, provided that such request shall be made prior to
the end of Normal Office Hours. Requests for After Hours service may
be made by telephone to the number specified by Landlord. Tenant shall
submit to Landlord a list of Tenant's personnel authorized to make
such requests. Tenant shall pay Landlord for such overtime HVAC
Services at the rate of fifty dollars ($50.00) per hour.
(iv) Landlord will maintain the air conditioning system in
a manner befitting a first class office building and will use all
reasonable care to keep the same in proper and efficient operating
condition and with the capacity for which it was designed.
(v) Tenant agrees to cooperate fully with Landlord and to
abide by all the regulations and requirements which Landlord may
reasonably prescribe for the proper functioning and protection of the
heating, ventilating and air conditioning systems. Tenant also agrees
to abide by all governmental regulations regarding heating and cooling
and agrees to indemnify Landlord for any liabilities imposed upon
Landlord for Tenant's failure to do so.
(b) Hot and unheated water for ordinary cleaning purposes and
central lavatory facilities. The cost of electricity used in point of source
heating units in said areas, other than the central lavatory facilities, shall
be included in the cost of electricity consumed by Tenant in the Premises as
determined pursuant to Section 4.1. hereof
(c) Chilled water for drinking fountains.
(d) Relamping and reballasting in Common Areas. However,
relamping and reballasting in Tenant's Premises shall be performed by Tenant, or
by Landlord at Tenant's direction in which case Tenant shall pay Landlord's Cost
thereof.
8.2 Elevator Service and Loading Dock. Landlord shall at all times
---------------------------------
provide passenger elevator services (which will be automatic) for Tenant in
common with other tenants.
Landlord shall provide freight elevator service in common with
others during Normal Office Hours. If Tenant shall require freight elevator
service and/or use of the Loading Dock
18
<PAGE>
outside of Normal Office Hours, Tenant shall pay Landlord for any required
services of building personnel.
8.3 Attendants. Landlord shall provide attendants during Normal
----------
Office Hours for the reception and direction of visitors to the Building. After
Normal Office Hours, Landlord shall monitor the lobby of the Building and
elsewhere throughout the Building and Parking Garage to such extent as is
required in Landlord's judgment to reasonably protect the Building. By providing
such services in and about the Building, Landlord assumes no liability to Tenant
for loss, damage or theft of Tenant's installations, equipment or personal
property unless such loss, damage, or theft is due to the negligence or willful
action of Landlord or its employees or agents. Tenant shall have the right to
provide, at its sole cost and expense, attendants for the reception and
direction of Tenant's visitors to the Premises.
8.4 Cleaning and Janitorial Services.
--------------------------------
(a) Landlord shall provide Building Standard Cleaning and Janitorial
Services in and about the Building and the Premises in accordance with a
schedule of "Building Standard Cleaning and Janitorial Service" attached hereto
as Exhibit "D". To the extent that Tenant shall require special or more
frequent cleaning and janitorial services, Landlord shall, upon reasonable
advance notice by Tenant, furnish such special cleaning services. Tenant agrees
to pay Landlord, within fifteen (15) days of being billed therefor, Landlord's
Cost for providing such additional service, such charge to be deemed Additional
Rent.
(b) Without limiting the generality of the foregoing, the following
shall be considered to be "special cleaning services".
1. Any cleaning and maintenance in areas of special
security such as storage vaults.
2. All cleaning services performed at times other than
normal cleaning hours as described on Exhibit "D".
(c) In the event that Tenant elects to provide its own cleaning
services for the "Premises" under the terms of the Master Lease, then Landlord
grants to Tenant the right to provide its own cleaning services for the Premises
leased herein through an independent contractor at Tenant's own cost and
expense. Tenant may exercise such right from time to time by giving Landlord not
less than sixty (60) days' prior written notice. During the Lease Year or Lease
Years or portions thereof with respect to which notice is thereby given,
Landlord shall not be obligated to provide
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cleaning services for the Premises. In the event Tenant obtains its own cleaning
service: (i) the personnel, equipment and work must be up to the standards for a
first class office building in the City of Pittsburgh; (ii) the contractor
performing the cleaning services ("Tenant's Cleaning Contractor") must maintain
insurance which Landlord reasonably deems to be adequate; (iii) the Tenant's
Cleaning Contractor shall provide to Landlord and maintain with Landlord a
current list of the names and addresses of all of its personnel working in the
Building ("Tenant's Cleaning Personnel"); (iv) Landlord may photograph and
require Tenant's Cleaning Personnel to wear identification badges; (v) Tenant's
Cleaning Personnel shall be subject to the Rules and Regulations of the Building
governing after Normal Office Hours invitees; (vi) in the event that Tenant
elects to utilize Tenant's Cleaning Contractor for the Premises, Tenant shall
receive a credit against Operating Rent equal to the difference (calculated on a
cost per square foot basis) between (x) the amount which Landlord was paying for
such cleaning and janitorial service for the Building prior to Tenant's election
to utilize its own cleaning personnel, and (y) the amount which Landlord is
required to pay for such cleaning and janitorial service for the Building in the
year following Tenant's election to utilize Tenant's Cleaning Contractor. Tenant
acknowledges that notwithstanding Tenant's election to hire an independent
contractor to clean its own Premises, Landlord may continue to be obligated to
pay the same amount for such cleaning services for the Building until the
expiration of the then current janitorial contract with Landlord's cleaning
contractor.
8.5 Interruption of Services.
------------------------
(a) If the Landlord shall fail to provide any of the General
Building Services to be provided by Landlord in accordance with this Article 8,
Tenant may, after seven (7) days notice to Landlord, provide the same. The
amount of any sums paid by Tenant for such purpose may be deducted by Tenant
from monthly payments of Basic Rent provided that the amount of such deduction
taken in any month is not greater than five percent (5%) of the monthly Basic
Rent.
(b) If all or any portion of the Premises shall be untenantable,
the Rent or Rent allocable to such portion shall abate beginning from the third
(3rd) full day of such failure until the Premises or portion thereof may again
be occupied, provided that Tenant shall give Landlord notice of such failure at
least forty-eight (48) hours before such abatement shall commence. If
substantial portions of the Premises are made tenantable before others, the Rent
allocable to such Premises shall commence upon restoration thereof. For the
purposes of this Subsection 8.5(b), by way of example and not limitation, the
Premises or portion thereof shall be considered "untenantable" if Landlord fails
to
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provide: (i) any elevator service, (ii) unheated water for lavatory services, or
(iii) HVAC to maintain a temperature of no less than 64 degrees Fahrenheit or no
greater than 80 degrees Fahrenheit.
(c) For purposes of this Section 8.5, time shall be deemed to be
of the essence.
8.6 Security. If the cost to Landlord for security services in the
--------
Building and/or the cost of hazard insurance for the Building increases as a
result of Tenant vacating all or any portion of the Premises, Tenant shall pay
Landlord, on demand as Additional Rent, such increase(s) in cost.
8.7 Office Building Directory. Landlord shall provide space in the
-------------------------
Office Building Directory in the lobby to designate Tenant's floors and
departments as may be reasonably acceptable to Tenant as adequate for Tenant's
purposes.
ARTICLE 9 - ASSIGNMENT AND SUBLETTING
-------------------------------------
9.1 Notice. Should Tenant wish to assign or sublet all or a portion
------
of the Premises for all or a portion of the remainder of the Term of this Lease
it shall give Landlord notice of such intention to assign or sublet sixty (60)
days prior to the commencement date of such assignment or subletting unless
Landlord's consent is not required for such assignment or subletting pursuant to
Section 9.2 and Landlord has no right to recapture pursuant to Section 9.4, in
which case Tenant shall give Landlord notice within five (5) days after such
assignment or subletting. This notice shall specify the amount and location of
the space and period of term of such sublet or assignment, the identity of the
proposed assignee or sublessee and, if a subletting, the rent to be paid to
Tenant.
9.2 Consent Not Required. Subject to this Article 9, Tenant may
--------------------
assign or sublet all or a portion of the Premises for all or a portion of the
remainder of the Term of this Lease without the consent of the Landlord provided
that:
(a) The business or occupation of the proposed subtenant or
assignee is not extra hazardous, disruptive, or illegal and is permissible under
Article 5 and in keeping with the character of the Building.
(b) Tenant remains primarily liable to Landlord for payment of
the Rent herein reserved and for performance of all other terms of this Lease
required to be performed by Tenant.
(c) Tenant has not offered such space to a current tenant in the
Building or a former tenant who has been a tenant in
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the Building within three (3) years of the date the subletting or assignment is
scheduled to commence, or within one (1) year of such date, if the following
conditions apply: (i) more than ninety percent (90%) of the Square Feet of the
Building are leased; (ii) space comparable to the space Tenant proposes to
sublease or assign is not available in the Building from Landlord; and (iii) no
such comparable space will be so available within six (6) months of the
scheduled date of commencement of the assignment or sublease.
(d) the proposed subtenant or assignee has a net worth equal to or
greater than that of Tenant as of the date of this Lease.
9.3 Assignment Requirements. In the event of an assignment of all
-----------------------
or a portion of the Premises, each assignee shall assume and be deemed to have
assumed this Lease and shall be and remain liable jointly and severally with
Tenant for the payment of the Basic Rent, Additional Rent and any other sums due
hereunder and for the total performance of all of the terms, covenants,
conditions and agreements herein contained on Tenant's part to be performed
during the Term of this Lease. No assignment of this Lease shall in any way
relieve Tenant from its obligations under this Lease. No assignment shall be
binding on Landlord unless such assignee shall deliver to Landlord a counterpart
of such assignment and an instrument in recordable form which contains a
covenant of assumption by the assignee; but the failure or refusal of the
assignee to execute such instrument of assumption shall not release or discharge
the assignee from its liability as set forth above.
9.4 Recapture. In the event that at any time or from time to time
---------
during the Term of this Lease, Tenant desires to sublease all or any part of the
Premises, and if, after such sublease, Tenant shall occupy less than sixty
percent (60%) of the PREMISES, Landlord shall have the right to be exercised by
giving written notice to Tenant thirty (30) days after receipt of the Tenant's
notice described in Section 9.1, to recapture the space described in Tenant's
notice and such recapture notice, shall, if given, cancel and terminate this
Lease with respect to the space therein described as of the date for the
commencement of such proposed sublease as stated in Tenant's notice. If
Tenant's notice shall cover all of the Premises, and if Landlord shall give the
aforesaid recapture notice with respect thereto, the Term of this Lease shall
expire and end on the date stated in Tenant's notice as fully and completely as
if that date had been herein definitely fixed for the expiration of the Term of
this Lease. If, however, this Lease shall be cancelled pursuant to the
foregoing with respect to less than the entire Premises, the Basic Rent and any
Additional Rent shall be adjusted on the basis of the number of Square Feet
retained by Tenant in proportion to the number of Square Feet contained in the
Premises, as described in this Lease,
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and this Lease as so amended shall continue thereafter in full force and effect.
If Landlord fails to exercise such option, and Tenant fails to complete a
sublease with a third party within sixty (60) days thereafter in accordance with
the terms of the notice, Tenant shall again comply with all the conditions of
this Article 9 as if the notice and option hereinabove referred to had not been
given and received.
9.5 Subleasing Requirements. Any sublease entered into by Tenant for
-----------------------
all or a portion of the Premises shall be subject to and made upon the following
terms:
(a) Any such sublease shall be subject to the terms of this
Lease and no sublease shall release or relieve Tenant of any of its obligations
hereunder.
(b) The term of any sublease shall not extend beyond the Initial
Term unless Tenant has exercised the Renewal Option in which case such term
shall not extend beyond the Renewal Term.
(c) No sublease shall violate any negative covenant as to use
contained in any mortgage affecting the Building.
(d) No sublease shall be valid and no subtenant shall take
possession of the Premises subleased until an executed counterpart of such
sublease and a copy of any agreements relating to such sublease have been
delivered to the Landlord. All such documents shall be delivered by Tenant to
Landlord within ten (10) days after the execution thereof.
(e) No sublessee shall have a right to further sublease.
(f) No sublessee shall be entitled to exercise the Renewal
Option unless Tenant exercises its Renewal Option for the entire Premises (but
this shall not limit Tenant's right to exercise the Renewal Option for the
portion of the Premises not sublet by Tenant).
(g) Any rentals or benefits in lieu of any rentals received by
Tenant which are in excess of the Rent allocable to such space and the expenses
incurred by Tenant through such subletting shall be payable fifty percent (50%)
to Tenant and fifty percent (50%) to Landlord as Additional Rent.
In the event Tenant advertises space for subletting, either
directly or through a real estate agent, the advertisement shall have the prior
written approval of the Landlord which shall not be unreasonably withheld.
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<PAGE>
9.6 Tenant's Affiliates. Any use or occupancy of the Premises by any
-------------------
corporation or entity which controls or is controlled by the Tenant, or under
common control with the Tenant or otherwise affiliated with the Tenant, shall
be a use or occupancy of the Premises by the Tenant and shall not be deemed a
sublease of the Premises or an assignment or transfer of any right, title or
interest in this Lease, the leasehold estate created hereby or any part of same,
to any such corporation or entity governed by this Section 9.6 notwithstanding
that the corporation or entity may reimburse or pay the Tenant any part of the
cost to Tenant for such use and occupancy.
9.7 Non-Conforming Assignment or Sublet. Any purported assignment or
-----------------------------------
subletting by Tenant which is materially not in conformity with this Article
shall be voidable by Landlord unless Tenant cures such nonconformity within
thirty (30) days after notice from Landlord. If not so cured, Landlord may
require Tenant to terminate same and to recover possession of the Premises or
portion thereof so assigned or sublet. The failure of Tenant to so perform
within thirty (30) days after notice from Landlord shall entitle Landlord in
addition to any other rights and remedies it may have under this Lease to
terminate the nonconforming assignment or sublease on Tenant's behalf and
recover possession. Landlord is hereby granted Tenant's irrevocable power-of-
attorney coupled with an interest to so terminate the nonconforming assignment
or sublease and recover possession.
ARTICLE 10 - ACCESS TO PREMISES
-------------------------------
Landlord, its employees and agents shall have the right to enter the
Premises at all reasonable times upon giving Tenant reasonable prior notice and
with minimal disruption to Tenant's use of the Premises for the purpose of
examining or inspecting the same, showing the same to prospective purchasers or
mortgagees, performing extraordinary cleaning and maintenance, and making such
alterations, repairs, improvements or additions to the Premises or to the
Building as Landlord may deem necessary or desirable. Landlord, its employees
and agents shall also have such right of access for the purpose of showing the
Premises to prospective tenants during the final twelve (12) months of the Term.
If representatives of Tenant shall not be present to open and permit entry into
the Premises at any time when such entry by Landlord is necessary or permitted
hereunder, Landlord, its employees and agents may enter by means of a master key
(or forcibly in the event of an emergency), without liability of Landlord to
Tenant, so long as Landlord is not negligent in exercising the right, and
without such entry constituting an eviction of Tenant or termination of this
Lease; provided Landlord shall promptly repair any unnecessary damage caused by
such entry.
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<PAGE>
ARTICLE 11 - REPAIRS
--------------------
11.1 Landlord's Maintenance. Landlord shall promptly make all
----------------------
repairs necessary to maintain the plumbing, air conditioning and electrical
systems, windows, floors (excluding carpeting), and all other items which
constitute a part of the Premises or public access of the Building and are
installed or furnished by Landlord, except repairs of Tenant's trade fixtures
and property and installations which Tenant was obligated to make or which were
performed by Landlord or others at Tenant's request. Landlord shall not be
required to make any such repairs until the expiration of a reasonable period of
time after receipt of written notice from Tenant that such repairs are needed.
If Landlord fails to commence and diligently pursue such repairs prior to the
expiration of such period, Tenant may in addition to its rights under Section
8.5, make such repairs and recoup its cost by deducting the cost thereof from
monthly payments of Basic Rent. The amount of such deduction by Tenant in any
one month shall not exceed the greater of: (i) five percent (5%) of the monthly
Basic Rent, and (ii) an amount required in order to amortize Tenant's actual
cost for such repairs in equal monthly amounts over a period of twelve
consecutive months. The Tenant's actual cost for such repairs shall be verified
and substantiated by paid invoices and other appropriate documentation delivered
to Landlord. Tenant shall notify Landlord in writing prior to the making of any
repairs for which Tenant intends to claim a right of recoupment hereunder. All
repairs shall be in the quality and class of the undamaged condition. In no
event shall Landlord be obligated under this Section to repair any damage caused
by any act, omission or negligence of the Tenant or its employees, agents,
invitees, licensees, subtenants or contractors.
11.2 Tenant's Maintenance. Tenant shall take good care of the
--------------------
Premises and the fixtures and appurtenances therein. Landlord shall, at Tenant's
sole cost and expense, repair and replace all damage or injury to the Premises
and Building and to fixtures and equipment caused by Tenant or its employees,
agents, invitees, licensees, subtenants, or contractors, or as the result of all
or any of them moving in or out of the Building or by installation or removal of
furniture, fixtures or other property, which repairs and replacements shall be
in quality and class equal to the undamaged condition.
11.3 Interferences and Delays. Landlord shall not be liable by
------------------------
reason of any inconvenience, injury to, or interference with Tenant's business
arising from the making of any necessary repairs or alterations, additions or
improvements in or to the Premises or the Land and Building or to any
appurtenances or equipment therein unless such inconvenience, or injury or
interference shall be occasioned by the negligence or willful
25
<PAGE>
action of Landlord, its agents, servants and/or employees. Landlord shall make a
reasonable effort to avoid unnecessary inconvenience to or interference with
Tenant's business. There shall be no abatement of Rent because of repairs,
alterations, additions or improvements except in the event of untenantability
as provided elsewhere in the Lease. Landlord covenants to use its best efforts
to implement such repairs, alterations, additions or improvements in a timely
and expeditious manner.
ARTICLE 12 - SURRENDER OF PREMISES
----------------------------------
12.1 Surrender. At termination of this Lease by lapse of time or
---------
otherwise, Tenant shall surrender the Premises to Landlord, together with
alterations, additions, and improvements thereto, in broom-clean condition and
in good order and repair, except for ordinary wear and tear and damage for which
Tenant is not obligated to make repairs under this Lease. If the Premises are
not left in such condition by Tenant then Landlord may restore the Premises to
such condition and Tenant shall pay Landlord for the cost of such restoration.
12.2 Landlord's Property. Upon such termination all installations,
-------------------
alterations, additions, hardware and improvements ("Installations") which have
been installed by Landlord upon the Premises shall remain upon the Premises and
shall be Landlord's property, all without compensation, allowance or credit.
12.3 Tenant's Property. At the expiration or earlier termination of
-----------------
this Lease, Tenant may remove from the Premises all trade fixtures, office
equipment, computer equipment, files and furniture which have been placed by
Tenant in the Premises if and to the extent that such removal will not cause any
damage to the structural integrity of the Building or to the floors, ceilings,
walls, HVAC, or electrical, plumbing, life safety, security or communication
systems. Such removal shall be at Tenant's sole expense and risk, and any damage
or unsightly conditions resulting from such removal shall be repaired by Tenant.
All such repair work and removal are to be completed no later than forty-five
(45) days after the date upon which this Lease terminates. Notwithstanding the
foregoing, Tenant shall have no obligation to perform said repairs at the
termination of this Lease if such repairs will be substantially demolished to
prepare the Premises for a new tenant. Further, and notwithstanding the first
sentence of this Section 12.3, if an Event of Default has occurred and is
continuing then Tenant shall not be permitted to remove any trade fixtures from
the Premises.
12.4 Waiver. TENANT EXPRESSLY WAIVES TO LANDLORD THE BENEFIT OF
------
TENANT OF 68 P.S. SECTION 250.501, APPROVED APRIL 6,
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1951, ENTITLED "LANDLORD AND TENANT ACT OF 1951", AS MAY BE AMENDED FROM TIME TO
TIME, REQUIRING NOTICE TO QUIT UPON THE EXPIRATION OF THE TERM OF THIS LEASE OR
AT THE EXPIRATION OF ANY EXTENSION OR RENEWAL THEREOF, OR UPON ANY EARLIER
TERMINATION OF THIS LEASE, As HEREIN PROVIDED. TENANT COVENANTS AND AGREES TO
VACATE, REMOVE FROM AND DELIVER UP AND SURRENDER THE POSSESSION OF THE PREMISES
TO LANDLORD UPON THE EXPIRATION OF THIS TERM OR UPON EXPIRATION OF ANY EXTENSION
OR RENEWAL THEREOF, OR UPON ANY EARLIER TERMINATION OF THIS LEASE, AS HEREIN
PROVIDED, WITHOUT SUCH NOTICE, IN THE CONDITION AS REQUIRED ABOVE.
ARTICLE 13 - TENANT LIABILITY, INDEMNIFICATION AND INSURANCE
------------------------------------------------------------
13.1 (a) Tenant's Insurance. Tenant covenants and agrees to provide
------------------
on or before the commencement of the Term and to keep in force during the entire
Term of this Lease: (1) comprehensive general liability insurance for the mutual
benefit of Landlord and Tenant relating to the Premises and its appurtenances on
an occurrence basis in an amount of not less than $2,000,000.00 in respect of
personal injury, or death or property damage liability which insurance shall
name Landlord as an additional insured; and (2) fire and extended coverage,
vandalism, malicious mischief, boiler and machinery and all-risk insurance in an
amount adequate to cover the cost of replacement of all leasehold or building
improvements in the Premises which were originally constructed or provided by or
on behalf of Tenant, at Tenant's cost and expense, as well as the cost of
replacement of all fixtures, equipment, decoration, contents, and personal
property of Tenant. Tenant agrees to deliver to Landlord at least ten (10) days
prior to the time such insurance is first required to be carried by Tenant, and
thereafter at least fifteen (15) days prior to the expiration of any such policy
a certificate(s) of insurance evidencing compliance with its obligations
hereunder.
(b) Landlord's Insurance. Landlord agrees to maintain: (1)
--------------------
comprehensive general liability insurance relating to the Building and the
Common Areas on an occurrence basis in the minimum amount of Two Million Dollars
($2,000,000.00); and (2) fire and extended coverage, vandalism, malicious
mischief and special extended coverage insurance to the extent of the
replacement value of the Building and improvements originally constructed by
Landlord, at its own cost and expense. Landlord agrees to deliver to Tenant at
least ten (10) days prior to the time such insurance is first required to be
carried by Landlord, and thereafter at least fifteen (15) days prior to the
expiration of any such policy a certificate(s) of insurance evidencing
compliance with its obligations hereunder.
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13.2 Non-Waiver. The minimum limits of the comprehensive
----------
general liability policy of insurance shall in no way limit or diminish
Landlord's or Tenant's liability under Section 13.3 hereof and shall be subject
to increase at any time, and from time to time, after the commencement of the
fifth Lease Year of the Term, if the parties, in the exercise of their
reasonable judgment, shall deem the same necessary for adequate protection.
Within thirty (30) days after demand therefor by Landlord or Tenant the
requested party shall furnish the requesting party with evidence that such
demand has been complied with.
13.3 Indemnities.
-----------
(a) Subject to the waiver of subrogation provision of Section
13.6, Tenant will indemnify, save harmless, and defend Landlord from and against
any and all claims and demands in connection with any accident, injury or damage
whatsoever caused to any person or property arising directly or indirectly out
of the business conducted by Tenant, its employees, agents, contractors,
subtenants or assigns in the Premises or occurring in, on or about the Premises
or any part thereof, for which Landlord is not responsible by virtue of any
negligent act or omission, or otherwise under the terms of this Lease, or
arising directly or indirectly from any act or omission of Tenant or any
concessionaire or subtenant or their respective licensees, servants, agents,
employees, or contractors, and from and against any and all costs, expenses and
liability incurred in connection with any such claim or proceeding brought
thereon. The comprehensive general liability coverage maintained by Tenant
pursuant to this Lease shall specifically insure the contractual obligations of
Tenant as set forth herein.
(b) Subject to the waiver of subrogation provision of Section
13.6, Landlord will indemnify, save harmless, and defend the Tenant from and
against any and all claims and demands in connection with any accident, injury
or damage whatsoever caused to any person or property arising directly or
indirectly out of Landlord's operation of the Building, or arising directly or
indirectly from any negligent or willful act or omission of Landlord, its
servants, agents, employees or contractors, and from and against any and all
costs, expenses and liability incurred in connection with any such claim or
proceeding brought thereon. The comprehensive general liability coverage
maintained by Landlord pursuant to this Lease shall specifically insure the
contractual obligations of Landlord as set forth herein.
13.4 Fire Rating Rules.
-----------------
(a) Tenant shall, at its own cost and expense, comply with all
of the rules and regulations of the fire insurance
28
<PAGE>
rating organization having jurisdiction over the Building and any similar body
only to the extent that such compliance does not require structural building
alterations or any alteration to the Premises. If, at any time and from time to
time, as a result of or in connection with any failure by Tenant to comply with
the foregoing sentence or any act of omission or commission by Tenant, its
employees, contractors or licensees, or as a result of or in connection with the
use to which the Premises are put (notwithstanding that such use may be for the
purposes hereinbefore permitted or that such use may have been consented to by
Landlord), the fire insurance rate(s) applicable to the Premises, or the
Building in which same are located, or to any other premises in said Building,
or to any adjacent property owned or controlled by Landlord or an affiliate of
Landlord, and/or to the contents in any or all of the aforesaid properties shall
be higher than that which would be applicable for the least hazardous type of
occupancy legally permitted therein, Tenant agrees that it will pay directly to
Landlord, on demand, as Additional Rent, such portion of the premiums for all
fire insurance policies in force with respect to the aforesaid property and the
contents of any occupant thereof as shall be attributable to such higher rate(s)
(and such premium charges as paid directly to Landlord shall not be an Operating
Expense).
(b) Landlord represents that it will review Tenant's electrical
usage requirements which Tenant wishes to submit to Landlord and Landlord will
approve or disapprove such usage requested based upon whether such usage will
cause an overload to the electrical system of the Premises, so long as Tenant's
equipment performs within and is used in accordance with manufacturers
specifications and is used at the location specified by Tenant's request to
Landlord. If Tenant installs any electrical equipment which Landlord has not
approved that overloads the lines in the Premises or the Building in which the
Premises are located, Tenant shall, at its own cost and expense, promptly make
whatever changes are necessary to remedy such condition and to comply with all
reasonable requirements of the Landlord and the Board of Fire Insurance
Underwriters and any similar body and any governmental authority having
jurisdiction thereof. For the purpose of this paragraph, any finding or schedule
of the Fire Insurance Rating organization having jurisdiction thereof shall be
deemed to be conclusive. If gas is used in the Premises, Tenant shall install
gas cutoff devices (manual and automatic).
13.5 Abandonment of Premises. In the event Tenant vacates all or
-----------------------
any portion of the Premises and such vacation causes an increase in the premiums
for the insurance maintained by Landlord pursuant to Section 13.1(b) hereof,
Tenant shall pay directly to Landlord, on demand, as Additional Rent, the amount
of such increase (and the amount of such premium charges paid directly to
Landlord shall not be an Operating Expense).
13.6 Waiver of Subrogation. Each insurance policy carried by
----------------------
Landlord or Tenant and insuring all or any part of the
29
<PAGE>
Building, including improvements, alterations and changes in and to the Premises
made by either of them and Tenant's trade fixtures or contents therein, shall be
written in a manner to provide that the insurance company waives all right of
recovery by way of subrogation against Landlord or Tenant, as the case may be,
in connection with any loss or damage to the Premises or the Building or to
property or business caused by any of the perils covered by fire and extended
coverage, building and contents, and business interruption insurance, for which
either party may be reimbursed as a result of insurance coverage affecting any
loss suffered by it; provided, however, that the foregoing waivers shall apply
only to the extent of any recovery made by the parties hereto under any policy
of insurance now or hereafter issued. So long as the policy or policies involved
can be so written and maintained in effect, neither Landlord nor Tenant shall be
liable to the other for any such loss or damage.
ARTICLE 14 - FIRE OR OTHER HAZARD
---------------------------------
14.1 Restoration. Should the Premises (or any part thereof) be
-----------
damaged or destroyed by fire or other hazard insured under the standard fire and
casualty insurance policy with approved standard extended coverage endorsement
applicable to the Premises, Landlord shall, except as otherwise provided herein,
and to the extent it recovers proceeds from such insurance, repair and/or
rebuild the same with reasonable diligence. Landlord will give Tenant notice
within forty-five (45) days of the damage or destruction referred to in this
Section 14.1, of Landlord's reasonable estimate of the time needed to repair or
rebuild the same. Landlord's obligation hereunder shall be limited to the
Building and improvements originally provided by Landlord at the Commencement
Date of the term of this Lease. Landlord shall not be obligated to repair,
rebuild or replace any property belonging to Tenant or any leasehold or building
improvements in the Premises which were originally constructed or provided by or
on behalf of Tenant at Tenant's cost.
14.2 Abatement. If any portion of the Premises shall be untenantable
---------
and cannot reasonably be used for the permitted use herein as a result of such
hazard, the Rent allocable to such portion shall abate until the earlier of: (i)
for any damage to the Premises which occurs to less than 5,000 Square Feet,
ninety (90) days after the date on which Landlord substantially completes its
repairs to the Building and the improvements originally constructed by Landlord
at the Commencement Date; (ii) for any damage to the Premises which occurs to
5,000 Square Feet or more, one hundred twenty (120) days after the date on which
Landlord substantially completes its repairs to the Building and the
improvements originally constructed by Landlord at the Commencement Date; or
(iii) when the Premises are again ready for occupancy by Tenant for the conduct
of its business. If substantial portions of the Premises are made tenantable
before others, and such portions are capable of sustaining Tenant's business,
the Rent allocable to such restored Premises shall commence thirty (30) days
after notice to
30
<PAGE>
Tenant of the completion of restoration thereof or upon Tenant's full occupancy
thereof, if sooner. If the entire Premises shall be untenantable then the Term
of this Lease shall be extended for a period equal to the period beginning on
the date of such casualty and ending on the earlier of the date on which Tenant
becomes liable to pay Rent with respect to: (i) the Premises, or (ii) any
substantial portion of the Premises that is capable of sustaining Tenant's
business.
14.3 Landlord's Option to Terminate.
------------------------------
(a) Notwithstanding anything to the contrary contained in the
preceding Section 14.1 or elsewhere in this Lease, Landlord, at its option, may
terminate this Lease on thirty (30) days notice to Tenant, given within sixty
(60) days after the occurrence of any damage or destruction if at least fifty
percent (50%) of the Premises is damaged or destroyed as a result of a risk
which is not covered by Landlord's insurance. Further, if the Premises, the
Building or tenant improvements in the Premises which were originally
constructed by Landlord for Tenant, or any substantial parts of any of the
foregoing are rendered unfit for use and occupancy by reason of damage occurring
at any time during the Term, Landlord, at its discretion, may terminate this
Lease or may restore such Premises in accordance with Paragraph 14.1 hereof; but
Landlord shall, not be obligated to repair and restore the Premises unless
Tenant shall, within forty-five (45) days of the occurrence of such damage,
elect in writing to make the Premises leased herein a part of the "Premises" as
leased by Tenant under the terms of the Master Lease. In the event that Tenant
elects to make the Premises leased herein part of the "Premises" leased under
the terms of the Master Lease, the provisions of Section 14 of the Master Lease
shall then be controlling.
14.4 Waiver. Except to the extent specifically provided for in this
------
Lease, none of the Rent payable by Tenant, nor any of Tenant's other obligations
under any provisions of this Lease, shall be affected by any damage to or
destruction of the Premises or Building by any cause whatsoever, and Tenant
hereby specifically waives any and all additional rights it might otherwise have
under any law or statute.
ARTICLE 15 - SUBORDINATION, MORTGAGEE'S APPROVAL AND ATTORNMENT
---------------------------------------------------------------
15.1 Subordination. Provided that Landlord has complied with the
-------------
provisions of Section 15.3, Landlord shall have the right and privilege to
subject and subordinate this Lease at all times to the lien of any and all
mortgages, ground leases and superior leases now or hereafter placed upon
Landlord's interest in the Premises and on the Land and Building or upon any
buildings hereafter placed upon the Land and to any and all advances to be made
under such mortgages, and all renewals, modifications, extensions,
consolidations and replacements thereof. This provision shall be self operative,
and Tenant further covenants and agrees to
31
<PAGE>
execute and deliver, upon demand, such further instrument or instruments
subordinating this Lease on the foregoing basis to the lien of any such
mortgage, ground lease or superior lease as shall be desired by the Landlord and
any mortgagees or lessor.
15.2 Attornment. Provided that Landlord has complied with the
----------
provisions of Section 15.3, Tenant shall, in the event of the sale or assignment
of Landlord's interest in the Land and/or Building, or in the event of any
proceedings brought for the foreclosure of, or in the event of the exercise of
the power of sale under any mortgage covering the Land and Building, or in the
event of termination of Landlord's interest in the Land and/or Building pursuant
to any ground lease or superior lease, attorn to and recognize such purchaser,
mortgagee or lessor as Landlord under this Lease, and in any such events,
Landlord named herein shall not thereafter be liable on this Lease except for
actions and omissions occurring prior to such attornment.
15.3 Non-Disturbance. Landlord shall procure and deliver for
---------------
Tenant's benefit, concurrently with the execution of this Lease, a written
agreement between Tenant and the lessor of any existing ground lease or superior
lease or holder of any mortgage, to which this Lease is subordinate, providing
in substance that so long as Tenant is not in material default under this Lease
beyond any grace period, Tenant shall not be joined as a party defendant in any
action or proceeding which may be instituted or taken by the lessor for the
purpose of terminating any ground lease or superior lease by reason of any
default thereunder, or in any foreclosure action or proceeding which may be
instituted or taken by the holder of any mortgage, Tenant shall not be evicted
from the Premises, nor shall Tenant's leasehold estate or possession under this
Lease be terminated or disturbed, nor shall any of Tenant's rights under this
Lease be affected, in any way, by reason of any default under any ground lease,
superior lease or any mortgage, and if Landlord's interest in the Building or
this Lease shall be terminated, this Lease shall remain in effect. Further, in
the event that any future ground lease, superior lease or mortgage, to which
this Lease is subordinate, is entered into by Landlord after the date of this
Lease, Landlord shall also procure and deliver for Tenant's benefit, with
reasonable promptness, an agreement between Tenant and the lessor of any future
ground lease or superior lease or holder of any mortgage which agreement shall
set forth the provisions as described in the first sentence of this Section
15.3.
ARTICLE 16 - RECORDATION
------------------------
This Lease Agreement may not be recorded, but a memorandum thereof, in
the form attached hereto as Exhibit "F", may be recorded by Landlord or Tenant.
Both parties agree to execute any further documents as may be necessary or
convenient for such recordation or to terminate any recorded memorandum of the
Existing Lease.
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ARTICLE 17 - CONDEMNATION
-------------------------
17.1 Complete Taking. In the event that the whole or substantially
---------------
the whole of the Building shall be condemned or taken in any manner for any
public or quasi-public use, this Lease, and the terms and estate hereby granted,
shall forthwith cease and terminate as of the date possession is taken by the
taking authority.
17.2 Partial Taking. In the event that any part of the Building
--------------
shall be so condemned or taken, this Lease shall remain in force and effect as
to the part of the Premises not so condemned or taken, except that: (i) if the
taking shall nevertheless be so extensive that Landlord shall decide not to
restore the Building, then Landlord (whether or not the Premises are affected)
may at its option terminate this Lease and the term and estate hereby granted
shall be terminated as of the date of such taking of possession for such use; or
(ii) Tenant may, if more than twenty-five percent (25%) of the Premises should
be condemned or taken, elect at any time within sixty (60) days of the date of
such taking, to cancel this Lease upon written notice to Landlord, and thereupon
this Lease shall terminate upon the date Tenant may specify in said notice. Upon
any such taking or condemnation and the continuing in force of this Lease as to
any part of the Premises, the Basic Rent and Tenant's Share shall be abated by
an amount representing the part of the Basic Rent and Tenant's Share properly
allocable to the portion of the Premises which may be so condemned or taken.
17.3 Termination. In the event of the termination of this Lease
-----------
pursuant to the provisions of Section 17.1 or 17.2, this Lease and the term and
estate hereby granted shall expire as of the date of such termination in the
same manner and with the same effect as if that were the date set for the normal
expiration of the Term. The provisions of this Section 17.3 shall apply pro
---
tanto to any partial termination of this Lease pursuant to the provisions of
- -----
this Article.
17.4 Award. Landlord shall be entitled to receive the entire award
-----
arising from any condemnation proceeding without deduction therefrom for any
estate vested in Tenant by this Lease and Tenant shall receive no part of such
award or awards, except as provided in Section 17.5. Tenant hereby expressly
assigns to Landlord any and all of its right, title and interest in or to such
award or awards or any part thereof.
17.5 Tenant's Award. Notwithstanding the foregoing, in the event of
--------------
any condemnation or taking pursuant to Section 17.1 or 17.2, Tenant shall be
entitled to appear, claim, prove and receive in the condemnation proceeding such
portion of such award or such award as may be made as represents the total value
of all alterations and improvements constructed by Tenant, together with such
amounts for business interruption, moving expenses and similar items for which a
tenant may recover damages under applicable law.
33
<PAGE>
17.6 Temporary Taking. If the temporary use or occupancy of all or
----------------
any part of the Premises shall be condemned or taken for any public or quasi-
public use during the Term, Tenant shall be entitled to any award for same and
this Lease shall be and remain unaffected by such condemnation or taking and
Tenant shall continue to pay in full the Basic Rent, Additional Rent and other
sums payable hereunder by Tenant. In the event of any such taking as in this
Section 17.6 referred to, Tenant shall be entitled to appear, claim, prove and
receive the entire award for such taking as represents compensation for use or
occupancy of the Premises and Landlord shall be entitled to appear, claim, prove
and receive the entire award as represents the cost of restoration of the
Premises.
17.7 Restoration. In the event of: (i) any condemnation or taking of
-----------
less than the whole of the Building and this Lease shall continue in effect in
whole or in part; or (ii) any condemnation or taking for a temporary use or
occupancy of all or any part of the Premises, Landlord, at its expense, and
whether or not any award or awards shall be sufficient for the purposes, shall
proceed with reasonable diligence to repair, alter and restore the remaining
part of the Building and the Premises to substantially their former condition to
the extent that the same may be feasible and so as to constitute a complete and
tenantable Building and Premises.
ARTICLE 18 - ESTOPPEL CERTIFICATES
----------------------------------
At any time, and from time to time but not more than once a year,
either party upon the written request of Landlord, any mortgagee, Tenant, or any
subtenant agrees to execute and deliver to the requesting party without charge
and in a form satisfactory to the requesting party, within ten (10) days of such
written request, a written statement: (i) ratifying this Lease; (ii) confirming
the Commencement Date and termination date of the Term of this Lease; (iii)
certifying that Tenant is in occupancy of the Premises, and that this Lease is
in full force and effect and has not been modified, assigned, supplemented or
amended, except by such writings as shall be stated; (iv) certifying that to the
best of Tenant's knowledge or Landlord's knowledge as the case may be that all
conditions and agreements under this Lease to be satisfied and performed have
been satisfied and performed except as shall be stated; (v) certifying that
Tenant or Landlord as the case may be is not in material default under this
Lease and that there are no defenses or offsets against the enforcement of this
Lease by the other then known or stating the defaults and/or defenses claimed by
Tenant or Landlord as the case may be; (vi) reciting the amount of advance Rent,
if any, paid by Tenant and the date to which Rent has been paid; and (vii) any
other pertinent information which Landlord, Tenant, the mortgagee or subtenant
shall reasonably require.
ARTICLE 19 - BANKRUPTCY
-----------------------
If there shall be filed against Tenant, in any court, pursuant to any
statute, either of the United States or of any
34
<PAGE>
state, a petition in bankruptcy or insolvency or for reorganization or for the
appointment of a receiver or trustee of all of Tenant's property and Tenant
fails to secure a discharge thereof within thirty (30) days from the date of
such filing or within such reasonable time required to obtain a discharge, or if
Tenant shall voluntarily file any such petition or make an assignment for the
benefit of creditors or petition for or enter into an arrangement with Tenant's
creditors, then, in any such event, this Lease, at the option of Landlord, may
be cancelled and terminated. In the event of a termination of this Lease
pursuant to this article, neither Tenant nor any other person claiming through
or under Tenant (whether by virtue of any statute or any order of any court or
otherwise) shall be entitled to acquire or remain in possession of the Premises
except as otherwise provided by law, or written agreement, and Landlord shall
have no further liability hereunder to Tenant or any such other person except
for any amounts accrued or actions or omissions occurring prior to such
termination, and Tenant and any such person shall forthwith quit and surrender
the Premises. If this Lease shall be so cancelled or terminated, Landlord, in
addition to the other rights and remedies of Landlord contained elsewhere in
this Lease, or under any statute or rule of law, may retain as liquidated
damages any Rent, and any other money received by Landlord from Tenant or
otherwise on behalf of Tenant.
ARTICLE 20 - DEFAULTS AND REMEDIES
----------------------------------
20.1 Defaults. The occurrence of any of the following, if the same
--------
continues uncured after such notice and grace periods as hereinafter set forth,
if ANY, shall constitute an "Event of Default" under this Lease by Tenant:
(a) Tenant shall fail, neglect or refuse to pay any installment of
Rent or any other monies agreed by it to be paid within ten (10) days after
notice that the same is due and payable in accordance with the terms hereof.
(b) Tenant shall refuse to comply with provision(s) of the Rules and
Regulations, which failure or refusal Landlord reasonably deems to create a
material and immediate nuisance or a dangerous condition and which default can
be and is not cured within thirty (30) days after notice of such failure or
refusal.
(c) Tenant shall fail or refuse to keep and perform any of the other
covenants, conditions, stipulations or agreements herein contained, and in the
event any such default shall continue for a period of more than sixty (60) days
after notice thereof (provided, however, that if the cause for giving such
notice involves the making of repairs or other matters reasonably requiring a
longer period of time than said sixty (60) day period, Tenant shall be deemed to
have complied with said notice so long as it has commenced to comply with such
notice within said sixty (60) day period and is diligently prosecuting
compliance of said notice).
35
<PAGE>
(d) Tenant shall more than four (4) separate times in any
twelve (12) month period be more than ten (10) days late in the payment of Rent,
Additional Rent and/or other sums or charges due Landlord under this Lease or
default in the keeping, observing or performing of any other material covenants
or agreements herein contained to be kept, observed or performed by Tenant and
irrespective of whether or not Tenant shall have timely cured any defaults;
provided that Landlord shall have given Tenant written notice of each such late
payment prior to the receipt of such payment.
20.2 Remedies. In the event of any Event of Default under this Lease,
--------
Landlord, at its option, may terminate this Lease upon and by giving written
notice of termination to Tenant; and/or exercise any one or more of the
following remedies upon written notice to Tenant:
(a) Landlord may perform for the account of Tenant any such
default of Tenant and immediately recover as Additional Rent any expenditures
made and the amount of any obligations incurred in connection therewith, plus
interest at the Prime Rate from the date of any such expenditure.
(b) Enter and take possession of the Premises and all trade
fixtures, installations, alterations and improvements installed or placed in the
Premises by Tenant.
(c) Relet the Premises or any part thereof for such terms, upon
such conditions as Landlord may deem proper and at a rental rate as close to the
then current market rate as Landlord reasonably can. In the event of such
reletting: (i) Landlord shall receive and collect the rent therefrom and shall
first apply such rent against such expenses as Landlord may have incurred in
recovering possession of the Premises, placing the same in good order and
condition, altering or repairing the same for reletting, and such other
expenses, commissions and charges, including attorneys' fees, which Landlord may
have paid or incurred in connection with such repossession and reletting, and
then shall apply such rent against any amounts due Landlord under the Lease; and
(ii) the tenant of such reletting shall be under no obligation to see to the
application by Landlord of any rent collected by Landlord, nor shall Tenant have
any right to collect any rent under such reletting.
In exercising its right to attempt to relet the Premises Landlord may
make such alterations, repairs, replacements and/or decorations in the Premises
as Landlord, in Landlord's sole judgment, considers advisable and necessary for
the purpose of reletting the Premises; and the making of such alterations,
repairs, replacements and/or decorations shall not operate or be construed to
release Tenant from liability hereunder as aforesaid. Landlord shall, in no
event, be liable in any way whatsoever for failure to relet the Premises, or, in
the event that the Premises are relet, for failure to collect the Rent hereof
under such
36
<PAGE>
reletting unless Landlord has acted in a commercially unreasonable manner.
(d) Notwithstanding any such reletting by Landlord without
termination of this Lease, Landlord may elect to terminate this Lease for a
previous Event of Default. Should Landlord at any time terminate this Lease, in
addition to any other remedy it may have, it may recover from Tenant any direct
damages it may incur by reason of such breach, including the cost of recovering
and reletting the Premises and including at the time of such termination the
worth of the excess, if any, of the amount of Rent reserved in this Lease for
the remainder of the Term over the then reasonable rental value of the Premises
for the remainder of the Term.
(e) In addition to any and all remedies provided hereunder or by
law, upon the occurrence of any Event of Default by Tenant hereunder, Tenant
hereby empowers any attorney of any court of record within the United States to
appear, with or without declaration filed, for Tenant, and for any other persons
claiming under, by or through Tenant, and confess judgment forthwith against
Tenant and such other persons and in favor of Landlord, in an amicable action of
ejectment for the Premises, together with such costs of suit and reasonable
attorneys' commission for collection and forthwith issue a writ or writs of
execution thereon, with release of all errors, and without stay of execution,
and inquisition and extension upon any levy or real estate is hereby expressly
waived, and condemnation agreed to, and exemption of any and all property from
levy and sale by virtue of any exemption law now in force or which may be
hereafter enacted is also expressly waived by Tenant. The entry of judgment
under the foregoing warrant shall not exhaust the same, but successive judgments
may be entered thereunder from time to time as often as defaults occur.
(f) Landlord shall have the right of injunction, in the event of a
breach or threatened breach by Tenant of any of the terms and conditions hereof,
to restrain the same and the right to invoke any remedy allowed by law or in
equity, whether or not other remedies, indemnity or reimbursements are herein
provided. The rights and remedies given to Landlord in this Lease are distinct,
separate and cumulative remedies; and no one of them, whether or not exercised
by Landlord, shall be deemed to be in exclusion of any of the others.
(g) Tenant hereby expressly waives any and all rights of redemption
granted by or under any present or future laws in the event of Tenant being
evicted or dispossessed for any cause, or in the event of Landlord's obtaining
possession of the Premises, by reason of the violation by Tenant of any of the
covenants and conditions of this Lease or otherwise.
20.3 Interest on Late Payments. In addition to all other remedies,
-------------------------
any amount billed by Landlord and required to be paid by Tenant under the
provisions of this Lease shall begin to accrue interest on the sixteenth (16th)
day after such billing if payment
37
<PAGE>
has not been made by such date. Any payment of Basic Rent, Additional Rent or
rent for the Private parking Area shall begin to accrue interest on the day
after such payment is due if payment has not been made by such date. The
aforesaid interest shall: (i) be at the Prime Rate; (ii) continue to accrue
until payment is received by Landlord; and (iii) be deemed reimbursement of
extra costs and losses suffered by Landlord due to such delay in payment.
ARTICLE 21 - NON-WAIVER
-----------------------
The failure or delay on the part of either party to enforce or
exercise at any time any of the provisions, rights or remedies in this Lease
shall not constitute a waiver of such right, nor shall it affect the validity of
this Lease or any part therefrom or the right of the party to thereafter enforce
each and every such provision, right or remedy contained herein. No waiver of
any breach of this Lease shall be held to be a waiver of any other or subsequent
breach. The receipt and acceptance by Landlord of Rent at a time when the
payment of such Rent is in default under this Lease shall not be construed as a
waiver of such default. No act or thing done by Landlord or Landlord's agents or
employees during the term of this Lease shall be deemed an acceptance of a
surrender of the Premises, and no agreement to accept such a surrender shall be
valid unless in writing and signed by Landlord.
ARTICLE 22 - EXONERATION
------------------------
Neither the Landlord nor any successor in interest that may be an
individual, joint venture, tenancy in common, firm or partnership, general or
limited, shall be subject to personal liability on such individual or on the
numbers of such joint venture, tenancy in common, firm or partnership in respect
to any of the covenants or conditions of this Lease. The Tenant shall look
solely to the equity of the Landlord in the Land and Project and the rents,
issues and profits derived therefrom for the satisfaction of the damages of the
Tenant in the event of a breach by the Landlord. This clause is and shall be
considered an integral part of this Lease.
ARTICLE 23 - QUIET ENJOYMENT
----------------------------
Landlord covenants that it has good and marketable title to the
Building and the Premises; that, upon recordation of the lease memorandum in
accordance with Article 16 hereof, Tenant shall have a valid leasehold estate in
the Premises free and clear of mortgages, liens and encumbrance, except as set
forth in Exhibit "E"; that it has not violated any applicable zoning or any
other land use control laws; and that, so long as Tenant pays the Rent due and
payable hereunder and performs the covenants herein on its part to be performed,
Tenant shall and may peaceably have, hold and enjoy the Premises for the Term of
this Lease.
ARTICLES 24 - LANDLORD'S REPRESENTATIONS AND COVENANTS
------------------------------------------------------
38
<PAGE>
24.1 Identity of Landlord; Validity of Lease. Landlord represents
---------------------------------------
that it is a Pennsylvania general partnership whose general partners are
Metropolitan Life Insurance Company and Grant Liberty Development Group
Associates (a Pennsylvania general partnership having as its general partners
Forest City Grant Liberty Associates, a Pennsylvania Limited Partnership; JLM
Grant Liberty Associates, a Pennsylvania Limited Partnership; WJB Grant Liberty
Associates, a Pennsylvania Limited Partnership; UDA Grant Liberty Associates, a
Pennsylvania Limited Partnership; and BHKR Grant Liberty Associates, a
Pennsylvania Limited Partnership). Grant Street Associates, Inc. is the Court
appointed Receiver of Liberty Center Venture, having been so appointed by Order
of Court dated June 15, 1993, entered at No. G.D. 91-04073 in the Court of
Common Pleas of Allegheny County, Pennsylvania. A copy of such Order of Court
has been provided to Tenant.
In the event of any change in control or ownership of Landlord,
Landlord shall give Tenant written notice thereof within sixty (60) days after
the occurrence of such change. Landlord represents and covenants to Tenant that
this Lease shall remain in full force and effect and be binding on Landlord in
the event that the appointment of Grant Street Associates, Inc. as Receiver for
Liberty Center Venture is reversed, overturned or otherwise terminated by
subsequent judicial action.
ARTICLE 25 - SPRINKLERS
-----------------------
If the "sprinkler system" installed in the Building shall be damaged
or injured by reason of any act or omission of Tenant, or Tenant's agents,
servants, employees, licensees or visitors, Tenant will forthwith restore the
same to good working conditions at its own expense. If after initial occupancy
and by reason of Tenant's business, or any change by Tenant in the location of
partitions, trade fixtures or other contents of the Premises, changes,
modifications, alterations, additional sprinkler heads or other equipment are
required by the Board of Fire Underwriters or any bureau, department or official
of the state or city government having jurisdiction over the Building or become
necessary to prevent the imposition of a penalty or charge against the full
allowance for a sprinkler system in the fire insurance rate as fixed by the fire
insurance company insuring the Building, then Tenant shall, at Tenant's expense,
promptly make and supply such changes, modifications, alterations, additional
sprinkler heads or other equipment within the Premises.
ARTICLE 26 - UNAVOIDABLE DELAY
------------------------------
Except for the purpose of determining whether the Premises or any
portion thereof are untenantable pursuant to any provisions of this Lease, in
the event that either party shall be delayed or hindered in, or prevented from
the performance of any work, service or other acts required under this Lease to
be performed by such party, and such delay or hinderance is due to
39
<PAGE>
strikes, lockouts, acts of God, governmental restrictions, unavoidable fire or
other casualty, or other causes of a like nature beyond the control of the party
so delayed or hindered, then performance of such work, service or other act
shall be excused for the period of such delay and the period for the performance
of such work, service or other act shall be extended for a period equivalent to
the period of such delay. In no event shall such delay constitute a termination
of this Lease, or any extension thereof.
ARTICLE 27 - SUCCESSORS
-----------------------
The respective rights and obligations provided in this Lease shall
bind and shall inure to the benefit of the parties hereto, their legal
representatives, heirs, successors and assigns.
ARTICLE 28 - GOVERNING LAW
--------------------------
This Lease shall be construed, governed and enforced in accordance
with the laws of the Commonwealth of Pennsylvania.
ARTICLE 29 - SEVERABILITY
-------------------------
If any provision of this Lease shall be held to be invalid, void or
unenforceable, the remaining provisions hereof shall in no way be affected or
impaired and such remaining provisions shall remain in full force and effect.
ARTICLE 30 - CAPTIONS
---------------------
Article headings, section headings and titles and the table of
contents to this Lease are for convenience and reference only, and are in no way
to be construed as defining, limiting or modifying the scope or intent of the
various provisions of this Lease.
ARTICLE 31 - GENDER
-------------------
As used in this Lease, the word "person" shall mean and include where
appropriate, an individual, corporation, partnership or other entity, the plural
shall be substituted for the singular, and the singular for the plural, where
appropriate, and words of any gender shall mean and include any other gender.
ARTICLE 32 - NOTICES
--------------------
All notices required or permitted hereunder shall be effective when
tendered to the recipient by the postal authorities and shall be deemed
sufficiently given if sent by registered or certified mail, return receipt
requested, addressed to the Landlord or Tenant, as the case may be, as follows:
To Landlord: Metropolitan Life Insurance Company
40
<PAGE>
Suite 1910
600 Vine Street
Cincinnati, OH 45202
Attn: Assistant Vice President Real
Estate Investments
and
2001 Spring Road
Suite 400
Oak Brook, IL 60521-1813
Attn: Vice President
Forest City Grant Liberty Associates
1400 Terminal Tower
Cleveland, OH 44113-2204
Attn: R.H. Marques, Vice President
JLM Grant Liberty Associates
Essex Street and Route 17
Maywood, NJ 07607
Attn: Joseph L. Muscarelle, Jr.
UDA Grant Liberty Associates
1133 Penn Avenue
Pittsburgh, Pennsylvania 15222
Attention: Don Carter
WJB Grant Liberty Associates
c/o Omni Evaluation Services
P.O. Box 62310
Pittsburgh, PA 15241
Attention: Randall Benyon
Burt, Hill, Kosar, Rittlemann Assoc.
400 Morgan Center
Butler, PA 16001
Attention: Ralph Burt
c/o Losi M. Roth
with a copy to: Liberty Center Venture
c/o Alan B. Gordon, Esquire
Sable, Makoroff & Gusky, P.C.
Seventh Floor Frick Building
437 Grant Street
Pittsburgh, PA 15219
41
<PAGE>
James Dawson, President
Grant Street Associates, Inc.
2626 One Mellon Bank Center
500 Grant Street
Pittsburgh, PA 15219
To Tenant: 1001 Liberty Avenue
Pittsburgh, PA 15222
Attn: David M. Taylor
with a copy to: Alan H. Finegold, Esquire
Kirkpatrick & Lockhart
1500 Oliver Building
Pittsburgh, PA 15222
John H. Cummings, Jr., Esquire
Federated Investors, Inc.
1001 Liberty Avenue
Pittsburgh, PA 15222
Robert S. Carey
The Carey Company
Suite 950
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222
Either party may change its address by written notice so given to the
other. The notice to Grant Street Associates, Inc. as set forth above shall be
required so long as Grant Street Associates, Inc. remains as the Receiver for
Landlord. Landlord shall notify Tenant in the event that Grant Street
Associates, Inc. is no longer the Receiver for Liberty Center Venture.
ARTICLE 33 - BROKERS
--------------------
Landlord hereby warrants to Tenant that no real estate broker has or
will represent Landlord in this transaction. Tenant hereby warrants to Landlord
that no real estate broker other than The Carey Company has or will represent
Tenant in this transaction. Landlord and Tenant shall indemnify each other
against and hold the other harmless from all liabilities, claims, and expenses
(including reasonable attorneys fees) arising out of the breach of their
respective warranty. Landlord shall pay to The Carey Company a total commission
in the sum of Eighteen Thousand Dollars ($18,000.00) for all services rendered
by it in connection with this Lease. Such commission shall be earned and be
payable to The Carey Company only upon the execution of this Lease by both the
Landlord and Tenant.
ARTICLE 34 - EXECUTION/COUNTERPARTS
-----------------------------------
This Lease shall become effective only when it has been signed by a
duly authorized officer or representative of each of the parties and delivered
to the other party. This Lease may be
42
<PAGE>
executed in multiple counterparts. Each of such fully executed copies shall be
deemed original and it shall not be necessary in making proof of this Lease to
produce or account for more than one such counterpart.
ARTICLE 35 - RULES AND REGULATIONS
----------------------------------
Rules and Regulations for the Building are attached hereto as Exhibit
"C" and incorporated herein. If there are inconsistencies between the Rules and
Regulations in Exhibit "C" and the Lease, the Lease provisions shall prevail.
Landlord shall not be required to enforce the Rules and Regulations except to
the extent necessary to prevent an adverse effect on Tenant's use and enjoyment
of the Premises. Landlord will not discriminate against Tenant in the
administration of the Rules and Regulations. Tenant may use the food preparation
and dining facilities currently located in the Premises as the same may be
relocated by Tenant in its discretion.
ARTICLE 36 - NO REPRESENTATIONS BY LANDLORD
-------------------------------------------
Tenant acknowledges and agrees that, except as expressly set forth in
this Lease, and the exhibits hereto, there have been no representations,
promises or warranties made by or on behalf of Landlord with respect to the
Premises or the Land and Building or with respect to the suitability of either
for the conduct of Tenant's business.
ARTICLE 37 - EXHIBITS
---------------------
All Exhibits attached hereto are incorporated herein by reference and
made a part hereof.
ARTICLE 38 - ENTIRE AGREEMENT.
-----------------------------
This Lease, including the Exhibits hereto, contains all the
agreements, conditions, understandings, representations and warranties made
between the parties hereto with respect to the subject matters hereof, and may
not be modified orally or in any manner other than by an agreement in writing
signed by both parties hereto or their respective successors in interest.
ARTICLE 39 - ALTERNATIVE DISPUTE RESOLUTION
-------------------------------------------
(a) Except as otherwise provided in this Lease, if any dispute arises
out of this Lease, either Landlord or Tenant shall have the right to invoke
dispute resolution procedures pursuant to this Article by written notice to the
other party. The invocation by either party of the dispute resolution procedures
set forth in this Article shall serve to preclude the commencement of judicial
proceedings by either party hereto during the pendency of such dispute
resolution proceedings except as otherwise provided in Section 39(i) below. Each
party shall name a representative (the
43
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"Operating Manager") promptly after execution of this Lease who shall
participate in the resolution of disputes pursuant to this Article. Each party
may at any time replace the Operating Manager by providing written notice to the
other party of the identity of its new Operating Manager. The Operating Managers
shall meet within ten (10) days after receipt of written notice that dispute
resolution pursuant to this Article is being invoked and shall attempt to
resolve the dispute through informal discussions.
(b) If the dispute is not resolved at such meeting by the Operating
Managers, then within ten (10) days after the Operating Managers meet each
Operating Manager shall refer the dispute to a senior executive (the "Senior
Manager") of the party. The Senior Manager for Tenant shall be any elected
officer of Tenant and for Landlord shall be as designated by the partners of
Landlord. The Senior Managers shall meet (either in person or by telephone
conference call) to attempt to resolve the dispute within thirty (30) days after
the dispute has been referred to them. Not less than fifteen (15) days prior to
the meeting of the Senior Managers, the Operating Managers shall exchange
written summaries of the issues and the evidence relating to the dispute.
(c) If the dispute is not resolved at the initial meeting of the
Senior Managers, it shall be referred within thirty (30) days after the meeting
of the Senior Managers to a mutually acceptable neutral advisor (the "Advisor")
to be mutually selected by the parties.
(d) The parties shall enter into an agreement with the Advisor
prohibiting any ex parte contacts with the Advisor without the written consent
-- -----
of the other party and requiring the Advisor to treat any information conveyed
to him as confidential. The agreement shall provide that the Advisor will be
disqualified as a trial witness, consultant, or expert for either party and that
his advisory opinion of the likely outcome of any litigation of the dispute is
inadmissible in any subsequent arbitration or judicial proceedings for any
purpose. The agreement shall also provide that the fees and expense of the
Advisor are to be divided equally between the parties, provided, however, that
if the dispute is not settled and subsequently proceeds to trial or to formal
arbitration, then the fees and expenses of the Advisor shall be apportioned in
the same manner as costs allowed by the trial court or arbitrator, respectively.
(e) Ten (10) days after the Advisor has been designated, each party
shall submit to the Advisor, and to the other party, a written statement of no
more than thirty (30) pages summarizing the issues and underlying evidence
supporting its position. The Advisor may in his sole discretion conduct a mini-
trial, under such rules of procedure as he shall prescribe, at which the parties
shall present their respective positions on the dispute.
(f) The Advisor shall, within thirty (30) days after his appointment,
deliver to the parties his nonbinding written opinion which evaluates each
party's position and concludes which party is
44
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likely to prevail at a judicial trial on the merits. Within ten (10) days after
the Advisor issues such written opinion to the parties, the Senior Managers
shall meet again in an attempt to resolve the dispute.
(g) After the procedures described in the preceding subsections (a)
through (f) have been carried out and good faith attempts to resolve the dispute
pursuant thereto have failed: (i) either party may begin formal judicial
proceedings relating to any dispute arising out of this Lease which is alleged
to involve default by either party pursuant to this Lease; or (ii) upon written
agreement of the parties the dispute may be submitted to formal arbitration by a
panel of three arbitrators conducted according to the rules of arbitration of
the American Arbitration Association. Such arbitration shall be held in
Pittsburgh, Pennsylvania. Either party may institute a formal judicial
proceeding with respect to disputes alleged to involve an Event of Default
pursuant to this Lease at any time when necessary to prevent the running of any
applicable statute of limitations, provided that any such judicial proceeding is
thereafter stayed pending the completion of the proceedings provided for in this
section.
(h) The dispute resolution procedure set forth in this Section is
intended to be a method for reaching negotiated compromises of disputes. All
written or oral statements or conduct, including offers of settlement, made in
the course of proceedings held hereunder shall: (i) be deemed to be
confidential, (ii) not be construed as an admission of liability for any
purpose, and (iii) be inadmissible in a court of law or equity for any purpose.
(i) The existence of a dispute resolution proceeding under this
section shall not be deemed to be a waiver or suspension of any rights or
obligations of either Landlord or Tenant under this Lease and each party shall
continue to perform its obligations under this Lease while the dispute
resolution proceeding is being conducted, except that if (1) the dispute
involves an Event of Default (i) described in Section 20.1(a) with respect to
Tenant's obligations to pay Basic Rent or Additional Rent, or (ii) described in
Section 20.1(c) if there is an immediate and substantial danger to life or
property, or such non-performance by Tenant is in violation of an applicable
law, regulation or court order, Landlord shall have the right to forego the
dispute resolution provisions of this Article 39 and may, at its option,
immediately commence any judicial proceedings necessary or desirable to obtain
the benefit of Landlord's remedies contained in Article 20, and (2) nothing in
this Article 39 shall preclude Tenant's right to forego the dispute resolution
provisions of this Article 39 and seek equitable relief in one or more judicial
proceedings against Landlord to enjoin actions of Landlord which prevent Tenant
from using the Premises for the conduct of Tenant's business or to obtain one or
more injunctions against Landlord which require that Landlord take actions in
order to enable Tenant to conduct its business in the Premises as provided
herein.
45
<PAGE>
ARTICLE 40 - TENANT REFURBISHMENT ALLOWANCE
-------------------------------------------
Tenant shall not receive any improvement or other allowance with
respect to the Premises leased herein unless Tenant elects in writing, within
the time periods as described in Section 2.2 hereof, that such Premises are to
become part of the "Premises" leased by Tenant under the terms of the Master
Lease (the "Election"). Upon the Election, Landlord will reimburse Tenant in an
amount not to exceed twelve dollars ($12.00) per Square Foot for the Tenant's
actual cost of refurbishment of the Premises (for new carpet, painting,
wallpapering and the like). Such refurbishment allowance is to be used by Tenant
solely for the actual refurbishment of the Premises leased herein, and Landlord
agrees that such refurbishment allowance may be applied against initial
improvements to the Premises made by Tenant prior to its occupancy of the
Premises. Such refurbishment allowance shall be payable by Landlord to Tenant
within thirty (30) days after Landlord's receipt of copies of paid invoices and
other evidence reasonably requested by Landlord to confirm the completion of the
refurbishment work regarding the Premises. The parties agree that upon the
Election, Tenant shall become entitled to receive a Refurbishment Allowance (as
such term is defined in Section 6.4 of the Master Lease) on the tenth
anniversary and, if applicable, the twentieth anniversary of the first day on
which the Premises become part of the "Premises" leased by Tenant under the
Master Lease in amounts determined by reference to Section 6.4 and the "Base
Year TIA/PSF" column of Exhibit I of the Master Lease. At the request of either
party at any time subsequent to the Election, the other party hereto shall
execute an amendment to the Master Lease pursuant to which an amended Exhibit I
containing an additional column setting forth the Refurbishment Allowance to be
paid by Landlord to Tenant relating to the Premises leased hereunder shall be
added to the Master Lease.
46
<PAGE>
IN WITNESS WHEREOF, and intending to be legally bound hereby, Landlord
and Tenant have hereunto respectively signed and sealed multiple originals of
this Lease as of the day and year first above written.
TENANT:
FEDERATED INVESTORS, INC.
Date: October 12, 1994 By: SIGNATURE ILLEGIBLE
---------------- ------------------------------
TITLE: __________________________
LANDLORD:
LIBERTY CENTER VENTURE:
BY: GRANT STREET ASSOCIATES, INC., as Receiver for LIBERTY
CENTER VENTURE
By: /s/ James C. Dawson
----------------------------------------------------------
James C. Dawson, President
BY: GRANT LIBERTY DEVELOPMENT GROUP ASSOCIATES, PARTNER
FOREST CITY GRANT LIBERTY ASSOCIATES, Partner
By: FOREST CITY RESIDENTIAL DEVELOPMENT, INC.,
General Partner
By: /s/ R.H. Marques
---------------------------------------------------
R.H. Marques, Vice President
JLM GRANT LIBERTY ASSOCIATES, Partner
By: JOS. L. MUSCARELLE, INC.,
General Partner
By: /s/ Joseph L. Muscarelle
---------------------------------------------------
Joseph L. Muscarelle, President
BY: METROPOLITAN LIFE INSURANCE COMPANY, PARTNER
By: /s/ Dennis J. Conroy
---------------------------------------------------
DENNIS J. CONROY
Title: ASSISTANT VICE PRESIDENT
------------------------------------------------
47
<PAGE>
FIRST AMENDMENT TO AGREEMENT OF LEASE FOR
PREMISES IN THE FEDERATED INVESTORS TOWER
-----------------------------------------
THIS FIRST AMENDMENT TO AGREEMENT OF LEASE FOR PREMISES IN THE FEDERATED
INVESTORS TOWER is made and entered into as of the 2nd day of November, 1995, by
and between:
LIBERTY CENTER VENTURE, a Pennsylvania General Partnership ("Landlord");
AND
FEDERATED INVESTORS, INC. ("Tenant").
WHEREAS, Landlord and Tenant entered into an Agreement of Lease for Premises
in The Federated Investors Tower (the "Lease") dated as of the 1st day of
February, 1994, said Premises consisting of the entire 12th floor of the
Building (as defined therein) and being 20,510 square feet; and
<PAGE>
WHEREAS, Landlord and Tenant now wish to amend the Lease under the following
terms and conditions;
NOW THEREFORE, Landlord and Tenant, in consideration of the mutual covenants
herein contained and intending to be legally bound, agree as follows:
I Section 2.3 of the Lease is hereby amended to read as follows:
2.3 Renewal Option. Provided that no Event of Default has occurred and is
--------------
continuing under this Lease on the date on which the Renewal Notice (as
hereinafter defined) is received by Landlord or on the last day of the Initial
Term, Tenant shall have the right (the "Renewal Option") to renew this Lease for
one (1) successive term of no less than twelve (12) months and no more than
twenty-four (24) months (the "Renewal Term"). Tenant shall give Landlord written
notice (the "Renewal Notice") of its election to renew this Lease on or before
December 31, 1996, and such Renewal Notice shall set forth the length of time
(being no less than twelve (12) months and no more than twenty-four (24) months
for which the Renewal Term shall occur. The Basic Rent for such Renewal Term
shall then be as set forth in Section 3.1(a) hereof.
2
<PAGE>
II Republication of Lease. All terms and conditions of the Lease not
----------------------
inconsistent herewith shall remain in full force and effect through the Initial
Term and during the Renewal Term.
IN WITNESS WHEREOF, this instrument has been duly executed by the parties hereto
as of the date first above written.
TENANT: FEDERATED INVESTORS, INC.
By: /s/ David M. Taylor
------------------------------
Its: Vice President
------------------------------
ATTEST:
By: /s/ John N. Cummings
------------------------------
Its: Staff Attorney
------------------------------
LANDLORD: LIBERTY CENTER VENTURE
By: New Liberty Center Partnership,
General Partner
By: F. C. Liberty, Inc., General
Partner
By: /s/ R. H. Marques
------------------------------
Its: V.P. Fin & Admin
------------------------------
Title
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