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EXHIBIT 10.42
PARTICIPATION AGREEMENT
dated as of September 28, 1998
among
PEOPLESOFT, INC.,
as Lessee,
WILMINGTON TRUST COMPANY,
not in its individual capacity,
except as expressly stated herein, but solely as Owner Trustee,
as Lessor,
ABN AMRO LEASING, INC.,
as Certificate Purchaser,
ABN AMRO BANK N.V.,
not in its individual capacity,
except as expressly stated herein, but solely as Indenture Trustee
and
THE FINANCIAL INSTITUTIONS LISTED ON SCHEDULE I,
as Note Purchasers
PeopleSoft Hacienda II Lease Facility
TABLE OF CONTENTS
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Page
SECTION 1. DEFINITIONS; INTERPRETATION 2
SECTION 2. CLOSING DATE 2
SECTION 3. ACQUISITION OF THE PROPERTY; FUNDING OF ADVANCES 2
SECTION 3.1. Owner Trustee Commitment 2
SECTION 3.2. Certificate Purchasers' Commitments 3
SECTION 3.3. Note Purchasers' Commitments 3
SECTION 3.4. Procedures for Acquisition of the Ground Lease Interest 3
SECTION 3.5. Procedures for Advances 3
SECTION 3.6. Allocation of Commitments 6
SECTION 3.7. Use of Commitments 6
SECTION 3.8. Termination, Reduction or Extension of Participants' Commitments 7
SECTION 3.9. Types of Advances; Interest and Certificate Yield Rates; Procedures 9
SECTION 3.10. Computation of Interest and Certificate Yield 11
SECTION 4. FEES 12
SECTION 4.1. Commitment Fees 12
SECTION 4.2. Underwriting Fee 12
SECTION 4.3. Administrative Fee 12
SECTION 4.4. Overdue Fees 12
SECTION 4.5. Extension Fee 12
SECTION 5. CERTAIN INTENTIONS OF THE PARTIES 12
SECTION 5.1. Nature of Transaction 12
SECTION 5.2. Amounts Due Under Lease 14
SECTION 6. CONDITIONS PRECEDENT TO CLOSING DATE,ACQUISITION OF GROUND LEASE INTEREST AND
ADVANCES 15
SECTION 6.1. Conditions Precedent Documentation 15
(a) Acquisition and Funding Request 15
(b) Closing Date; Operative Documents 15
(c) Environmental Certificate 16
(d) Appraisal 16
(e) Ground Lease 16
(f) Lease Supplement; Equipment Schedule 16
(g) Survey and Title Insurance 16
(h) Evidence of Recording and Filing 17
(i) Evidence of Insurance 17
(j) Evidence of Use of Proceeds 17
(k) Taxes 17
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(l) Opinions of Counsel 17
(m) Approvals 18
(n) Litigation 18
(o) Requirements of Law 18
(p) Responsible Officer's Certificate of the Lessee 18
(q) The Lessee's Resolutions and Incumbency Certificate, etc 18
(r) Responsible Officer's Certificate of the Guarantor 19
(s) The Guarantor's Resolutions and Incumbency Certificate, etc 19
(t) Ground Lease Interest Acquisition Date 19
(u) No Material Adverse Effect 19
(v) Officer's Certificate of the Lessor 19
(w) The Lessor's Resolutions and Incumbency Certificate, etc 19
(x) Construction Budget; Plans and Specifications 20
(y) Sale of All Notes and Certificates 20
(z) Legal Fees and Expenses 20
SECTION 6.2. Further Conditions Precedent 20
(a) Representations and Warranties 20
(b) Performance of Covenants 20
(c) Title 20
(d) No Default 21
SECTION 6.3. Conditions Precedent to Closing Date 21
(a) Operative Documents 21
(b) Representations and Warranties 21
(c) Performance of Covenants 21
(d) No Default 21
SECTION 7. COMPLETION DATE CONDITIONS 21
SECTION 7.1. Conditions 21
(a) Construction Completion 21
(b) Architect's Certificate; DateDown Endorsement 22
(c) Lessee Certification 22
SECTION 8. REPRESENTATIONS 22
SECTION 8.1. Representations of the Bank and the Lessor 22
(a) Due Organization, etc 22
(b) Authorization; No Conflict 23
(c) Enforceability, etc 23
(d) Litigation 23
(e) Assignment 23
(f) Defaults 23
(g) Use of Proceeds 24
(h) Securities Act 24
(i) Chief Place of Business 24
(j) Federal Reserve Regulations 24
(k) Investment Company Act 24
(l) No Plan Assets 24
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SECTION 8.2. Representations of the Participants 24
(i) Due Organization, etc 26
(ii) Authorization; No Conflict 26
(iii) Enforceability, etc 26
(iv) Litigation 27
(v) Defaults 27
(vi) Securities Act 27
(vii) Investment Company Act 27
SECTION 8.3. Representations of the Lessee 27
(a) Corporate Status 27
(b) Corporate Power and Authority 27
(c) No Violation 28
(d) Litigation 28
(e) Governmental Approvals 28
(f) Investment Company Act 28
(g) Public Utility Holding Company Act 28
(h) Information 29
(i) Taxes 29
(j) Compliance with ERISA 29
(k) Environmental and Other Regulations 29
(l) Offer of Securities, etc 29
(m) Financial Statements 30
(n) No Material Adverse Change 30
(o) No Defaults 30
(p) Properties; Leases 30
(q) Licenses, Permits, etc 31
(r) Year 2000 31
SECTION 8.4. Representations of the Lessee With Respect to the Property
on the Ground Lease Interest Acquisition Date 31
(a) Representations 31
(b) Property 31
(c) Title 33
(d) Insurance 33
(e) Lease 33
(f) Protection of Interests 33
(g) Flood Hazard Areas 33
(h) Conditions Precedent 33
SECTION 8.5. Representations of the Lessee With Respect to Each
Advance 34
(a) Representations 34
(b) Improvements 34
(c) No Liens 34
(d) Advance 34
(e) Lease 34
(f) Protection of Interests 34
(g) Title Insurance Date Down Endorsement 35
SECTION 8.6. Representations and Warranties of the Indenture Trustee 35
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(a) Due Organization 35
(b) Due Authorization; Enforceability 35
(c) No Violation 35
(d) Litigation 36
SECTION 9. PAYMENT OF CERTAIN EXPENSES 36
SECTION 9.1. Transaction Expenses 36
SECTION 9.2. Brokers' Fees and Stamp Taxes 37
SECTION 9.3. Obligations 37
SECTION 10. OTHER COVENANTS AND AGREEMENTS 37
SECTION 10.1. Covenants of the Lessee 37
(a) Information 37
(b) Compliance with Laws 39
(c) Further Assurances 39
(d) Existence; Franchises; Businesses 39
(e) Books and Records 39
(f) Minimum Consolidated Quick Ratio 39
(g) Minimum Consolidated Tangible Net Worth 40
(h) Maximum Consolidated Debt to Consolidated Total Capital Ratio 40
(i) Minimum Consolidated Fixed Charge Ratio 40
(j) Minimum Consolidated Cash Balances 40
(k) Liens 40
(l) Mergers, Acquisitions, Etc 41
(m) Asset Dispositions 41
(n) Transactions with Affiliates 42
(o) Restricted Payments 42
(p) Investments 42
(q) Maintenance and Repair 43
(r) Payment of Taxes 43
(s) Insurance 43
SECTION 10.2. Cooperation with the Lessee 43
SECTION 10.3. Covenants of the Owner Trustee, the Certificate Holders,
and the Bank 43
(a) Discharge of Liens 43
(b) Trust Agreement 43
(c) Successor Owner Trustee 44
(d) Indebtedness; Other Business 44
(e) Instructions 44
(f) Change of Chief Place of Business 44
(g) Performance of Covenants 44
SECTION 11. LESSEE DIRECTIONS 45
SECTION 12. TRANSFERS OF PARTICIPANTS' INTERESTS 45
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SECTION 12.1. Restrictions on and Effect of Transfer by Participants 45
(a) Transfer of Notes 45
(b) Note Transfer Procedures 45
(c) Transfers of Certificates 46
(d) Effect 48
(e) Arranger's Fee 48
SECTION 12.2. Covenants and Agreements of Participants 48
(a) Participations 48
(b) Transferee Indemnities 49
SECTION 12.3. Future Participants 49
SECTION 13. INDEMNIFICATION 49
SECTION 13.1. General Indemnification 49
SECTION 13.2. End of Term Indemnity 51
SECTION 13.3. Environmental Indemnity 52
SECTION 13.4. Proceedings in Respect of Claims 54
SECTION 13.5. General Impositions Indemnity 55
(a) Indemnification 55
(b) Payments 56
(c) Reports and Returns 56
(d) Income Inclusions 57
(e) Withholding Taxes 57
(f) Contests of Impositions 57
(g) Documentation of Withholding Status 59
(h) Limitation on Tax Indemnification 60
SECTION 13.6. Funding Losses 60
SECTION 13.7. Regulation D Compensation 60
SECTION 13.8. Basis for Determining Interest Rate or Certificate Yield Rate
Inadequate or Unfair 61
SECTION 13.9. Illegality 61
SECTION 13.10. Increased Cost and Reduced Return 62
SECTION 13.11. Notice and Mitigation 63
SECTION 13.12. Substitution of Participant 63
SECTION 13.13. Indemnity Payments in Addition to Residual Value Guarantee Amount 64
SECTION 13.14. Limitations on Indemnification 64
SECTION 13.15. Lessor Indemnification 64
(a) Indemnified Losses 64
(c) No Indemnification for Certain Matters. 65
(d) Limitations on Indemnification by Lessor. 65
(d) Repayment to the Lessor. 65
(f) Survival, Reinstatement. 66
(g) Indemnification Procedures 66
SECTION 14. THE INDENTURE TRUSTEE 66
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SECTION 15. MISCELLANEOUS 66
SECTION 15.1. Survival of Agreements 66
SECTION 15.2. No Broker, etc 67
SECTION 15.3. Notices 67
SECTION 15.4. Counterparts 67
SECTION 15.5. Amendments 67
SECTION 15.6. Headings, etc 68
SECTION 15.7. Parties in Interest 68
SECTION 15.8. GOVERNING LAW 69
SECTION 15.9. Severability 69
SECTION 15.10. Liability Limited 69
SECTION 15.11. Further Assurances 69
SECTION 15.12. Submission to Jurisdiction 70
SECTION 15.13. Confidentiality 70
SECTION 15.14. WAIVER OF JURY TRIAL 70
SECTION 15.15. Usury Savings Clause 70
SCHEDULES
SCHEDULE I Participants' Commitments
SCHEDULE II Notice Information and Funding Offices
SCHEDULE III Environmental Matters
SCHEDULE IV Intellectual Property Matters
APPENDICES
APPENDIX 1 Definitions and Interpretation
EXHIBITS
EXHIBIT A Form of Acquisition Request
EXHIBIT B-1 Form of Funding Request
EXHIBIT B-2 Form of Fixed Rate Request
EXHIBIT C Form of Environmental Certificate
EXHIBIT D Opinion of Special Counsel to Lessee
EXHIBIT E Opinion of Special Counsel to Owner Trustee
EXHIBIT F Opinion of Special Counsel to Co-Trustee
EXHIBIT G Ground Lease
EXHIBIT H Form of Architect's Completion Certificate
EXHIBIT I Form of Lessee's Completion Certificate
EXHIBIT J Form of Assignment and Acceptance
EXHIBIT K Form of Participant's Letter
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EXHIBIT L Assignment of Lease and Consent to Assignment
EXHIBIT M Construction Agency Agreement
EXHIBIT N Construction Agency Agreement Assignment
EXHIBIT O Guarantee
EXHIBIT P Cash Collateral Agreement
EXHIBIT Q Leasehold Construction Deed of Trust
EXHIBIT R Form of Financial Covenant Compliance Certificate
PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT, dated as of September 28, 1998 (this
"Participation Agreement"), is entered into by and among PEOPLESOFT, INC., a
Delaware corporation, as Lessee (together with its permitted successors and
assigns, the "Lessee"); WILMINGTON TRUST COMPANY, a Delaware banking
corporation, not in its individual capacity, except as expressly stated herein,
but solely as Owner Trustee (together with its successors in such capacity, the
"Owner Trustee" or the "Lessor"); ABN AMRO LEASING, INC., as Certificate
Purchaser (the "Certificate Purchaser"); ABN AMRO BANK N.V., not in its
individual capacity except as expressly stated herein, but solely as Indenture
Trustee (together with its successors in such capacity, the "Indenture
Trustee"); and the financial institutions listed on Schedule I, as Note
Purchasers (the "Note Purchasers").
PRELIMINARY STATEMENT
In accordance with the terms of the Trust Agreement, this Participation
Agreement, the Lease, the Indenture and the other Operative Documents,
A. the Trust under the Trust Agreement has been created for
the purpose of providing financing for the construction of two office buildings,
one common building containing a cafeteria and fitness center, a parking
structure and the Data Center, on the real property located in Pleasanton,
California to be owned by the Ground Lessor, leased to the Lessor and subleased
to the Lessee, and the Improvements to be constructed and owned by the Lessor
and leased to the Lessee;
B. the Lessor contemplates acquiring a leasehold interest in
such parcel of land by leasing the Land, as lessee, from the Ground Lessor, as
ground lessor;
C. using Advances from the Lessor, the Lessee contemplates
building, as Construction Agent, certain Improvements on such Land for the
Lessor, acquiring certain items of Equipment, if any, to be used in connection
with such Improvements, and subleasing as Lessee, the Land and leasing the
Improvements and Equipment from the Lessor under the Lease;
D. the Certificate Purchasers are willing to provide a portion
of the funding of the costs of construction of the Property and acquisition of
the Equipment;
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E. the Lessor wishes to obtain, and the Note Purchasers are
willing to provide, limited recourse financing of the remaining portion of the
funding of the costs of construction of the Property and acquisition of the
Equipment;
F. concurrently with the execution and delivery of this
Agreement, the Indenture Trustee is entering into the Indenture, pursuant to
which Indenture, among other things, (i) the Owner Trustee creates a security
interest in the Property for the benefit of the Participants, and (ii) provision
is made for the issuance of Notes to the Note Holders as evidence of the
participation of each Note Holder in the Advances for the Property; and
G. concurrently with the execution and delivery of this
Agreement, the Owner Trustee is entering into (i) the Mortgage, pursuant to
which Mortgage the Owner Trustee grants a mortgage on the Property, and (ii) the
other Security Documents, in each case for the benefit of the Participants.
In consideration of the mutual agreements contained in this
Participation Agreement and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1.
DEFINITIONS; INTERPRETATION
Unless the context shall otherwise require, capitalized terms used and
not defined herein shall have the meanings assigned thereto in Appendix 1 hereto
for all purposes hereof; and the rules of interpretation set forth in Appendix 1
hereto shall apply to this Participation Agreement.
SECTION 2.
CLOSING DATE
The closing date (the "Closing Date") shall occur on such date as the
parties may agree, which shall be the earliest date on which all the conditions
precedent thereto set forth in Sections 6.1, 6.2 and 6.3 hereof shall have been
satisfied or waived by the applicable parties as set forth therein.
SECTION 3.
ACQUISITION OF THE PROPERTY; FUNDING OF ADVANCES
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SECTION 3.1. Owner Trustee Commitment. Subject to the conditions and
terms hereof, the Owner Trustee shall take the following actions at the written
request of the Lessee from time to time during the Commitment Period:
(a) enter into the Ground Lease and the other Operative Documents to
which it is to be a party;
(b) make Advances (out of funds provided by the Participants) for the
purpose of financing the construction of the Improvements and the acquisition of
the Equipment, if any;
(c) lease the Land pursuant to the Ground Lease; and
(d) sublease the Land and lease the Improvements and Equipment, if any,
as Lessor to the Lessee under the Lease.
SECTION 3.2. Certificate Purchasers' Commitments. Subject to the terms
and conditions hereof, each Certificate Purchaser severally shall make available
to the Lessor at the request of the Lessee from time to time during the
Commitment Period on each Funding Date an amount (each a "Certificate Purchaser
Amount") in immediately available funds equal to such Certificate Purchaser's
Commitment Percentage of the amount of the Advance being funded on such Funding
Date. Notwithstanding any other provision hereof, no Certificate Purchaser shall
be obligated to make available any Certificate Purchaser Amount if, after giving
effect to the proposed Certificate Purchaser Amount, the outstanding aggregate
amount of Certificate Purchaser Amounts of such Certificate Purchaser would
exceed such Certificate Purchaser's Commitment.
SECTION 3.3. Note Purchasers' Commitments. Subject to the terms and
conditions hereof, each Note Purchaser severally shall make Loans to the Lessor
at the request of the Lessee from time to time during the Commitment Period on
each Funding Date in an amount in immediately available funds equal to such Note
Purchaser's Commitment Percentage of the amount of the Advance being funded on
such Funding Date. Notwithstanding any other provision hereof, no Note Purchaser
shall be obligated to make any Loan if, after giving effect to the proposed
Loan, the outstanding aggregate amount of such Note Purchaser's Loans would
exceed such Note Purchaser's Commitment.
SECTION 3.4. Procedures for Acquisition of the Ground Lease Interest.
The Lessee shall give the Owner Trustee and the Indenture Trustee prior written
notice not later than 10:00 a.m., San Francisco time, three Business Days prior
to the proposed Ground Lease Interest Acquisition Date, pursuant to an
Acquisition Request substantially in the form of Exhibit A (an "Acquisition
Request"), specifying with respect to such Ground Lease Interest: (i) the
proposed Ground Lease Interest Acquisition Date, (ii) the Ground Lease Interest
to be acquired and (iii) the Property Improvements Costs to be funded in
connection with the acquisition of the Ground Lease Interest. The Indenture
Trustee shall promptly forward a copy of such Acquisition Request to each
Certificate Purchaser and each Note Purchaser.
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SECTION 3.5. Procedures for Advances.
(a) Funding Request. With respect to each funding of an Advance, the
Lessee shall give the Lessor and the Indenture Trustee prior written notice not
later than 11:00 a.m., New York time, four (4) Business Days (in the case of a
Fixed Rate Advance) or three (3) Business Days in the case of a Eurodollar Rate
Advance) prior to the proposed Funding Date, pursuant, in each case, to a
Funding Request substantially in the form of Exhibit B-1 (a "Funding Request"),
specifying (i) the proposed Funding Date, (ii) the amount and purpose of the
Advance requested, (iii) whether such Advance is to be comprised of a Eurodollar
Rate Advance or a Fixed Rate Advance, (iv) the initial Interest Period for any
such Eurodollar Rate Advance, (v) the payee of such Advance and (vi) that the
Advance will be utilized to fund Property Improvements Costs. The Indenture
Trustee shall promptly forward a copy of such Funding Request to each
Participant. The Lessee shall not request more than one Funding Date during any
calendar month. Each Eurodollar Rate Advance (other than an Interest Payment
Advance or an amount to be capitalized pursuant to Section 3.9(f)) shall be in a
minimum amount of $1,000,000 or in amounts of $100,000 in excess thereof.
Subject to the satisfaction or waiver of the conditions precedent to such
Advance set forth in Section 3.5 and Section 6, each Participant shall fund its
pro rata share of such Advance by making available to the Lessor its
proportionate share of such Advance as Loans or Certificate Purchaser Amounts,
as the case may be, in immediately available federal funds by wire transfer to
the Agent for deposit to the Lessee's demand deposit account with the Indenture
Trustee not later than 1:00 p.m. New York time, on the applicable Funding Date.
Upon (i) the Lessee's receipt of the funds provided by the Participants with
respect to an Advance, and (ii) satisfaction or waiver of the conditions
precedent to such Advance set forth in Section 6, the Lessee shall pay or retain
as payment or reimbursement of Property Improvements Costs, in each case from
the funds provided by the Participants for such Advance.
(b) Procedure for Fixed Rate Advances.
(i) When the Lessee wishes to request the Lessor to make, and the
Participants to submit through the Agent an offer to fund, Loans and
Certificate Purchaser Amounts with respect to a Fixed Rate Advance or
convert a Eurodollar Rate Advance to a Fixed Rate Advance or continue a
Fixed Rate Advance as another Fixed Rate Advance, it shall transmit to
the Indenture Trustee by facsimile transmission a request in
substantially the form of Exhibit B-2 (a "Fixed Rate Request") so as to
be received no later than 12:00 noon (New York time) four (4) Business
Days prior to the date of the proposed Fixed Rate Advance, conversion
or continuation specifying:
(1) the proposed date of such Advance, conversion or continuation,
which shall be a Business Day and, (A) if a conversion from a
Eurodollar Rate Advance, shall be the last day of the
applicable Interest Period with respect to the Advance to be
converted or (B)
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if a continuation of a Fixed Rate Advance, shall be the last
day of the Fixed Rate Period applicable thereto;
(2) the aggregate amount of such Fixed Rate Advance, conversion or
continuation, which shall be a minimum amount of $5,000,000;
and
(3) the maturity date with respect thereto (the "Fixed Rate
Maturity Date"), which shall be a Business Day not later than
the Maturity Date.
The Lessee shall pay to the Indenture Trustee a fee of $1,000 for each
Fixed Rate Request.
(ii) Upon receipt of a Fixed Rate Request from the Lessee, the
Indenture Trustee will promptly forward such Fixed Rate Request to the
Participants by facsimile transmission.
(iii)(1) Each Participant, upon receipt of a Fixed Rate Request, shall
submit an offer (a "Fixed Rate Offer") to fund its Loans or
Certificate Purchaser Amounts with respect to the applicable
Fixed Rate Advance, convert its Loans or Certificate Purchaser
Amounts with respect to the applicable Eurodollar Rate Advance
to the requested Fixed Rate Advance or continue its Loans or
Certificate Purchaser Amounts with respect to the applicable
Fixed Rate Advance to the requested Fixed Rate Advance in
response to such Fixed Rate Request. Each Fixed Rate Offer
must comply with the requirements of this subsection (iii) and
must be submitted to the Indenture Trustee by facsimile
transmission not later than 11:00 a.m. (New York time) three
(3) Business Days prior to the proposed Funding Date,
conversion date or continuation date.
(2) Each Fixed Rate Offer shall specify:
(A) the proposed date of the Advance, conversion or
continuation;
(B) the principal amount of such Participant's Loans or
Certificate Purchaser Amounts with respect to the
Advance, conversion or continuation for which such
Fixed Rate Offer is being made, which principal
amount must be equal to such Participant's pro rata
share of the aggregate amount requested;
(C) the fixed rate per annum (rounded upward to the
nearest 1/100th of 1%) offered for such Fixed Rate
Advance; and
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(D) the Fixed Rate Maturity Date with respect to such
Fixed Rate Advance (which shall be the date requested
by the Lessee) (the period from the date any Fixed
Rate Advance is made to its Fixed Rate Maturity Date
is referred to as a "Fixed Rate Period").
(iv) Promptly on receipt on the third Business Day prior to the
proposed Funding Date or conversion or continuation date, the Indenture
Trustee will notify the Lessee of the terms of all Fixed Rate Offers
submitted by the Participants with respect to the Fixed Rate Request.
The Indenture Trustee's notice to the Lessee shall specify (1) the
aggregate amount for which offers have been received; and (2) the
respective amounts and interest rates, as the case may be, and the
weighted average interest rate so offered. Subject only to the
provisions of Section 6 and to the Lessee's right to reject all Fixed
Rate Offers set forth in Section 3.5(b)(v), any Fixed Rate Offer shall
be irrevocable.
(v) Promptly upon receipt of the Indenture Trustee's notice referred to
in Section 3.5(b)(iv) above, on the third Business Day prior to the
proposed Funding Date or conversion or continuation date, the Lessee
shall notify the Indenture Trustee of its acceptance or non-acceptance
of the Fixed Rate Offers which it has received pursuant to Section
3.5(b)(iv). The Lessee shall be under no obligation to accept any
offer, but if any offer is rejected, all Fixed Rate Offers with respect
to the same Fixed Rate Request must be rejected. If the Lessee accepts
any Fixed Rate Offer, the Lessee must accept all Fixed Rate Offers with
respect to the same Fixed Rate Request only in whole. If the Fixed Rate
Offers are rejected or if no response is received from the Lessee, the
Lessee may elect to have the applicable Advance be a Eurodollar Rate
Advance pursuant to Section 3.5(a) or (c) hereof provided the
conditions thereto are met. Otherwise, the Advance that was the subject
of such Fixed Rate Request shall be a Eurodollar Rate Advance with an
Interest Period of one month commencing on the applicable Funding Date
or proposed conversion date, provided, that no Interest Period shall
commence or terminate on or after the Maturity Date.
(c) Conversion and Continuation Procedures. The Lessee may (i)(A) on
the last day of any Fixed Rate Period, convert all or any part of any Fixed Rate
Advance to a Eurodollar Rate Advance or (B) on the last day of any Interest
Period, continue the applicable Eurodollar Rate Advance as a Eurodollar Rate
Advance for a successive Interest Period, by giving notice to the Indenture
Trustee by 12:00 noon, New York time, on a day which is at least three Business
Days prior to the proposed date of such conversion or continuation or (ii) on
the last day of any Fixed Rate Period, continue all or any part of any Fixed
Rate Advance as another Fixed Rate Advance by giving the notice and following
the procedure set forth in Section 3.5(b). Each such notice with respect to the
conversion into or continuation of a Eurodollar Rate Advance shall be
irrevocable, shall be effective upon receipt by the Indenture Trustee, shall be
in writing (or by telephone to be confirmed in writing by the Lessee on the
Business Day such telephonic notice was given), shall specify the Type, the date
and amount of the conversion or
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continuation, the Advances to be converted or continued and the Interest Period
applicable thereto. If the Lessee fails to give appropriate notice pursuant to
this Section 3.5(c) or Section 3.5(b), such Advance shall automatically become a
Eurodollar Rate Advance with an Interest Period of one month at the end of its
then current Fixed Rate Period or Interest Period, provided, that no Interest
Period shall commence or terminate on or after the Maturity Date. Promptly upon
receipt of each notice of conversion or continuation, the Indenture Trustee
shall advise each Participant thereof. No Fixed Rate Advance shall be converted
or continued on any day other than the last day of the Fixed Rate Period
relating to such Advance.
SECTION 3.6. Allocation of Commitments. Schedule I hereto contains an
allocation for each Participant of (i) the amount of its Commitment representing
its Tranche A Loan Commitment ("Tranche A Loan Commitment"), (ii) the amount of
its commitment representing its Tranche B Loan Commitment ("Tranche B Loan
Commitment"), (iii) the amount of its commitment representing its Certificate
Purchaser Commitment ("Certificate Commitment"), (iv) the amount of its
Commitment (and allocation to its Tranche A Loan Commitment and Tranche B Loan
Commitment) allocated to the 364 Day Commitment, and (v) the amount of its
Commitment (and allocation to its Tranche A Loan Commitment, Tranche B Loan
Commitment and Certificate Commitment) allocated to the Eighteen Month
Commitment. The Lessee, the Lessor and the Participants have approved all such
allocations and commitments. Schedule I shall be amended as required to reflect
changes in the allocations set forth thereon due to the addition of additional
Participants pursuant to Section 12.1.
SECTION 3.7. Use of Commitments. (a) All remittances by each
Participant to the Lessor to fund Advances shall be allocated first, to the 364
Day Commitment of such Participant, and second, to the Eighteen Month Commitment
of such Participant. Unless extended as provided in this Section 3.7, the 364
Day Commitment shall terminate on the day which is 364 days after the Closing
Date and the unused portion thereof shall not be available to the Lessor
thereafter. The Lessee shall notify the Lessor, the Indenture Trustee and each
Participant not less than forty-five (45) days prior to the expiration date of
the 364 Day Commitment whether it wishes to extend the availability of the
unused portion of the 364 Day Commitment to the Six Month Extension Termination
Date. The availability of the unused portion of the 364 Day Commitment shall not
be extended unless the Indenture Trustee and each Participant, in its sole
discretion, has notified the Lessor and the Indenture Trustee within fifteen
(15) days prior to such termination date that it will permit the unused portion
of its 364 Day Commitment to be extended to the Six Month Extension Termination
Date commencing on the Extension Date. The Indenture Trustee shall notify the
Lessee whether the Participants have agreed to permit the extension of such
unused portion of the 364 Day Commitment to the Six Month Extension Termination
Date. Any portion that is so extended shall bear Commitment Fees from and after
the Extension Date at a rate applicable to the 364 Day Commitment. The parties
hereto shall amend Schedule I hereto in connection with any such extension.
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(b) If the 364 Day Commitment is extended pursuant to Section 3.7(a),
the Lessee shall pay to each Participant its pro rata share of the Extension Fee
on the Extension Date.
SECTION 3.8. Termination, Reduction or Extension of Participants'
Commitments. (a) The Lessor shall have the right, upon not less than five (5)
Business Days' written notice to the Indenture Trustee, to terminate the
Participants' Commitments or, from time to time, to reduce the amount of the
Participants' Commitments, provided that (i) after giving effect to such
reduction, the aggregate outstanding principal amount of the Tranche A Loans
shall not exceed the aggregate Tranche A Loan Commitments, (ii) after giving
effect to such reduction, the aggregate outstanding principal amount of the
Tranche B Loans shall not exceed the aggregate Tranche B Loan Commitments, (iii)
after giving affect to such reduction, the aggregate principal amount of the
Certificates shall not exceed the aggregate Certificate Commitments, and (iv)
any such reduction shall be made pro rata among the Participants' Commitments
within each tranche. At any time other than during the continuance of an Event
of Default the Lessor shall exercise such right only as directed by the Lessee
and after the occurrence and during the continuance of an Event of Default the
Lessor shall exercise such right only as directed by the Required Participants.
(b) The Lessee may, by written request to the Lessor and Indenture
Trustee (which the Indenture Trustee shall promptly forward to each Participant)
given at any time from time to time after six (6) months after the Closing Date,
request (an "Extension Request") that the Maturity Date be extended to the date
that is five (5) years after the date requested by the Lessee (the "Extension
Effective Date"). No later than the date (the "Extension Response Date") which
is (30) days after such request has been delivered to each of the Participants,
each Participant will notify the Lessor in writing (with a copy to the Indenture
Trustee and the Lessee) whether or not it consents to such Extension Request
(which consent may be granted or denied by each Participant in its sole
discretion and may be conditioned on receipt of such financial information or
other documentation as may be specified by such Participant including without
limitation satisfactory appraisals of the Property), provided that any
Participant that fails to so advise the Lessor on or prior to the Extension
Response Date shall be deemed to have denied such Extension Request. The
extension of the Maturity Date contemplated by any Extension Request shall
become effective as of the Extension Effective Date on or after the Extension
Response Date on which all of the Participants (other than non-consenting
Participants (each a "Non-Consenting Participant") which have been replaced by
Replacement Participants in accordance with Section 3.8(c)) shall have consented
to such Extension Request; provided that:
(A) on both the date of the Extension Request and the
Extension Effective Date, (x) each of the
representations and warranties made by the Lessee and
the Lessor in or pursuant to the Operative Documents
shall be true and correct in all material respects as
if made on and as of each such date, except for
representations and warranties made as of a specific
date,
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which shall be true and correct in all material
respects as of such date, (y) no Event of Default
shall have occurred and be continuing, and (z) on
each of such dates the Indenture Trustee shall have
received a certificate of the Lessee and the Lessor,
each as to itself, as to the matters set forth in
clause (x) above and from the Lessee as to the
matters set forth in clause (y) above, and
(B) the Indenture Trustee and the Required Participants
shall have received satisfactory evidence that the
Expiration Date shall, after giving effect to any
extension thereof which has become effective on or
prior to such Extension Effective Date, occur on the
Maturity Date as so extended.
(c) The Lessee shall be permitted to replace any Non-Consenting
Participant under this Section 3.8 with a replacement bank or other financial
institution (a "Replacement Participant") at any time on or prior to the date
which is thirty (30) days after the relevant Extension Response Date; provided
that (i) such replacement does not conflict with any Requirement of Law, (ii)
the Replacement Participant shall purchase, at par, all of the Notes and/or
Certificates of such Non-Consenting Participant on or prior to the date of
replacement, (iii) the Lessee shall be liable to such Non-Consenting Participant
under Section 13 of this Agreement if any Advance (or Loan or Certificate
Purchaser Amount with respect thereto) shall be prepaid (or purchased) other
than on the last day of the Interest Period or Interest Periods relating
thereto, (iv) the Replacement Participant, if not already a Participant, shall
be reasonably satisfactory to the Required Participants, (v) such replacement
shall be made in accordance with the provisions of Section 12 of this Agreement
(provided that the Lessee or the relevant Replacement Participant shall be
obligated to pay or cause to be paid the Transaction Expenses arising in
connection therewith), (vi) the Replacement Participant shall have agreed to be
subject to all of the terms and conditions of this Agreement (including the
extension of the Maturity Date contemplated by the relevant Extension Request)
and the other Operative Documents, and (vii) at any time other than during the
continuance of an Event of Default, the Lessee shall have the exclusive right to
designate the Replacement Participant. The Indenture Trustee hereby agrees to
cooperate with the Lessee in the Lessee's efforts to arrange one or more
Replacement Participants as contemplated by this Section 3.8(c).
SECTION 3.9. Types of Advances; Interest and Certificate Yield Rates;
Procedures.
(a) Each Advance shall be comprised of either a Fixed Rate Advance or a
Eurodollar Rate Advance (each being herein called a "Type" of Advance), as the
Lessee shall specify in the related Funding Request or notice of conversion or
continuation pursuant to Section 3.5. Each Fixed Rate Advance (and Loan and
Certificate Purchaser Amount with respect to such Fixed Rate Advance) shall bear
interest or, with respect to a Certificate Purchaser Amount, yield ("Certificate
Yield"), as the case may be, for each
17
day during the Fixed Rate Period with respect thereto at a rate per annum equal
to the Fixed Rate determined with respect to such Fixed Rate Period plus the
Applicable Margin.
(b) Each Eurodollar Rate Advance (and Loan and Certificate Purchaser
Amount with respect to such Eurodollar Rate Advance) shall bear interest or
Certificate Yield, as the case may be, for each day during each Interest Period
with respect thereto at a rate per annum equal to the Eurodollar Rate determined
for such day plus the Applicable Margin; provided, however, that:
(i) each Advance and related Loan and Certificate Purchaser Amount
outstanding during the period beginning on the Closing Date and ending
on the date three (3) Business Days thereafter shall bear interest or
Certificate Yield during such period at a rate per annum equal to the
Alternate Base Rate plus the Applicable Margin; and
(ii) an Advance and related Loan and Certificate Purchaser Amount shall
bear interest or Certificate Yield, as the case may be, at a rate per
annum equal to the Alternate Base Rate plus the Applicable Margin to
the extent expressly required by the terms hereof.
The Lessee shall give irrevocable written notice to the Indenture Trustee, in
accordance with Section 3.5 and the applicable provisions of the term "Interest
Period" set forth in Appendix 1, of the length of each Interest Period to be
applicable to each Eurodollar Rate Advance.
(c) If all or a portion of (i) the amount of any Loans or Certificate
Purchaser Amounts with respect to any Advance, (ii) any interest or Certificate
Yield payable thereon or (iii) any other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum which is equal to
the Overdue Rate.
(d) Interest and Certificate Yield shall be payable in immediately
available funds (except as provided in paragraph (e) below) in arrears on each
Scheduled Payment Date, provided that (i) interest accruing pursuant to
paragraph (c) of this Section 3.9 shall be payable from time to time on demand
and (ii) each prepayment of Advances shall be accompanied by accrued interest to
the date of such prepayment on the amount of Advances so prepaid plus amounts
payable under Section 13.6 hereof. The Indenture Trustee shall provide the
Lessee with not less than five (5) days' notice of the amount of Basic Rent due
on any Scheduled Payment Date.
(e) On each date which is three (3) Business Days prior to each
Scheduled Payment Date during the Construction Period, unless the Lessee
notifies the Lessor prior to such date that the Lessee desires to pay in cash on
the Scheduled Payment Date the accrued interest and Certificate Yield on Loans
and Certificate Purchaser Amounts, respectively, with respect to Advances
allocated to Property Improvement Costs during the Construction Period and makes
such cash payment on the Scheduled Payment Date,
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the Lessee shall be deemed to have requested an Advance comprised of an Interest
Payment Advance pursuant to Section 3.5 and the Lessor shall be deemed to have
requested a funding of Loans and Certificate Purchaser Amounts pursuant to
Sections 3.2 and 3.3 with respect to such Advance in an amount equal to the
aggregate amount of the Basic Rent due and payable on such date with respect to
accrued interest and Certificate Yield on Loans and Certificate Purchaser
Amounts, respectively, with respect to outstanding Advances. Each Interest
Payment Advance shall initially be deemed to be a Eurodollar Rate Advance having
a one month Interest Period. The Funding Date with respect to any such Interest
Payment Advance (and related Loans and Certificate Purchaser Amounts and with
respect thereto) shall be the relevant Scheduled Payment Date (provided that
such Advance and such funding shall be subject to satisfaction of the applicable
conditions precedent set forth in Section 6) and the proceeds of such payment
shall be applied to pay such accrued interest and Certificate Yield. On each
such Funding Date during the Construction Period, the Property Cost and Property
Improvements Cost shall be increased by an amount equal to the Basic Rent paid
on such date with respect to such Property with the proceeds of such payment.
The Indenture Trustee shall provide the Lessee on a monthly basis with a
detailed statement or other form of confirmation showing all deemed Interest
Payment Advances made to the Lessee pursuant to this Section 3.9(e).
(f) Capitalization of Certain Amounts During Construction Period.
(i) On each date during the Construction Period that any amount is
payable by the Lessee under the Operative Documents on account of (A)
Basic Rent (to the extent provided in Section 3.9(e)), (B) fees
pursuant to Section 4 or (c) Supplemental Rent consisting of amounts
payable by the Lessor as rent or otherwise under the Ground Lease, such
amounts shall be capitalized by automatically treating such amount as
an Advance and related Loans and Certificate Purchaser Amounts made on
such date.
(ii) If any Lessor Party shall request the Lessor to capitalize the
amount of (A) any Claims or Taxes pursuant to Section 13.1(z) or
13.5(a), (B) any increased costs or reduced amounts pursuant to clause
(2) of Section 13.10(a) or (C) any loss or liability pursuant to
Section 24.1 of the Lease, any such amount shall be capitalized by
automatically treating such amount as an Advance and related Loans and
Certificate Purchaser Amounts (funded by such Lessor Party); provided,
however, that the Lessee shall have no obligation to pay any such
amounts if the Lessee exercises the Remarketing Option or is otherwise
required to pay the Residual Value Guarantee Amount in accordance with
the Lease and the other Operative Documents, except to the extent such
amounts may be included in the Residual Value Guarantee Amount. If any
such capitalized amounts are included in the Asset Termination Value,
Lease Balance or Participant Balance (the "3.9(f)(ii) portion" of the
Asset Termination Value, Lease Balance or Participant Balance), all the
Lessee payments and other amounts applied to the Asset Termination
Value, Lease Balance or Participant Balance shall be applied as
follows:
19
(1) If any 3.9(f)(ii) portion is outstanding when a payment is
to be applied to the Asset Termination Value, Lease Balance or
Participant Balance, such payment shall first be applied to
the 3.9(f)(ii) portion of the Asset Termination Value, Lease
Balance or Participant Balance and shall be shared by the
Lessor Parties that funded such 3.9(f)(ii) portion of the
Asset Termination Value, Lease Balance, or Participant Balance
pro rata based on the amounts so funded by and owed to such
Lessor Parties.
(2) If any amount of such payment then remains, such remaining
amount shall be applied to all other amounts included in the
Asset Termination Value, Lease Balance or Participant Balance
(the "project costs portion" of the Asset Termination Value,
Lease Balance or Participant Balance) and shall be shared by
the Participants as provided in Section 6.2 to Section 6.10 of
the Indenture.
The Indenture Trustee shall notify the Lessee, the Lessor and each
Participant of each amount capitalized and treated as an Advance (and related
Loans and Certificate Purchaser Amounts) under this Section 3.9(f)(ii) within
fifteen (15) days after each such Advance.
(iii) Transaction Expenses incurred during the Construction Period
shall be funded as Advances and related Loans and Certificate Purchaser
Amounts and capitalized to the extent set forth in Section 9.1.
SECTION 3.10. Computation of Interest and Certificate Yield. (a) For
purposes of determining the Alternate Base Rate, interest and Certificate Yield
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed; and for purposes of determining a Eurodollar
Rate or a Fixed Rate, interest and Certificate Yield shall be calculated on the
basis of a 360-day year for the actual days elapsed. The Indenture Trustee shall
as soon as practicable after the commencement of each Interest Period or Fixed
Rate Period notify the Lessor, the Lessee and the Participants of each
determination of a Eurodollar Rate or a Fixed Rate. Any change in the interest
rate on an Advance and related Loans and Certificate Purchaser Amounts resulting
from a change in the Alternate Base Rate, the Eurocurrency Reserve Requirements
or the Applicable Margin shall become effective as of the opening of business on
the day on which such change becomes effective. The Indenture Trustee shall as
soon as practicable notify the Lessor, the Lessee and the Participants of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Indenture Trustee
pursuant to any provision of this Agreement shall be conclusive and binding on
the Lessor, the Lessee and the Participants in the absence of manifest error.
The Indenture Trustee shall, at the request of such parties, deliver to such
parties a statement showing the quotations used by the Indenture Trustee in
determining any interest rate pursuant to Section 3.9(a).
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SECTION 4.
FEES
SECTION 4.1. Commitment Fees. The Lessee shall pay to the Indenture
Trustee for the account of each Participant a commitment fee (the "Commitment
Fees") for the period from and including the Closing Date to the earlier of (i)
the Completion Date or (ii) the Outside Completion Date, computed in the case of
each Participant at a rate per annum equal to the Commitment Fee Rate applicable
to the 364 Day Commitment or the Eighteen Month Commitment, as the case may be,
on the amount of the Available Commitment of such Participant, in each case
during the period for which payment is made, payable on each Commitment Fee
Payment Date. Commitment Fees shall be calculated on the basis of a 365- (or
366-, as the case may be) day year for the actual days elapsed.
SECTION 4.2. Underwriting Fee. The Lessee shall pay to the Arranger the
underwriting fee (the "Underwriting Fee") referred to in, and at such times as
provided in, the Arranger Fee Letter.
SECTION 4.3. Administrative Fee. The Lessee shall pay an administrative
fee (the "Administrative Fee") to the Arranger for its own account as provided
in, and at such times as provided in, the Arranger Fee Letter.
SECTION 4.4. Overdue Fees. If all or a portion of any fee due hereunder
shall not be paid when due, such overdue amount shall bear interest, payable by
the Lessee on demand, at a rate per annum equal to the Overdue Rate from the
date of such nonpayment until such amount is paid in full (as well after as
before judgment).
SECTION 4.5. Extension Fee. The Lessee shall pay the Extension Fee to
the Indenture Trustee for the account of each Participant agreeing to an
extension of the 364 Day Commitment if any portion of the 364 Day Commitment is
extended pursuant to Section 3.7. The Extension Fee shall be payable on the
Extension Date.
SECTION 5.
CERTAIN INTENTIONS OF THE PARTIES
SECTION 5.1. Nature of Transaction. (a) It is the intent of the parties
hereto that: (i) the Lease constitutes an "operating lease" pursuant to
Statement of Financial Accounting Standards No. 13, as amended, for purposes of
Lessee's financial reporting, and (ii) for purposes of federal, state and local
income or franchise taxes and for any other tax imposed on or measured by
income, the transaction contemplated hereby is a financing arrangement and
preserves ownership in the Property in the Lessee.
21
Accordingly, and notwithstanding any provision of this Participation Agreement
to the contrary, the parties hereto agree and declare that: (i) the transactions
contemplated by the Lease are intended to have a dual, rather than single, form;
and (ii) all references in this Participation Agreement to the "lease" of the
Property which fail to reference such dual form do so as a matter of convenience
only and do not reflect the intent of parties hereto as to the true form of such
arrangements. Nevertheless, the Lessee acknowledges and agrees that neither the
Indenture Trustee, the Lessor nor any Participant has made any representations
or warranties to the Lessee concerning the tax, accounting or legal
characteristics of the Operative Documents and that the Lessee has obtained and
relied upon such tax, accounting and legal advice concerning the Operative
Documents as it deems appropriate.
(b) Anything to the contrary in the Operative Documents
notwithstanding, the parties hereto intend and agree that with respect to the
nature of the transactions evidenced by the Lease in the context of the exercise
of remedies under the Operative Documents, including, without limitation, in the
case of any proceedings under commercial or real estate law, any insolvency or
receivership proceedings or a petition under the United States bankruptcy laws
or any other applicable insolvency laws or statute of the United States of
America or any State or Commonwealth thereof affecting the Lessee, the Lessor,
or any Participant or any enforcement or collection actions, (i) the
transactions evidenced by the Lease are loans made by the Lessor and the
Participants as unrelated third party lenders to the Lessee secured by the
Property, (ii) the obligations of the Lessee under the Lease to pay Basic Rent
and Supplemental Rent or Asset Termination Value in connection with a purchase
of the Property pursuant to the Lease shall be treated as payments of interest
on and principal of, respectively, loans from the Lessor and the Participants to
the Lessee, and (iii) the Lease grants a security interest and mortgage or deed
of trust or lien, as the case may be, in the Property to the Lessor and the
Participants to secure the Lessee's performance under and payment of all amounts
under the Lease and the other Operative Documents.
(c) Specifically, without limiting the generality of subsection (b) of
this Section 5.1, the parties hereto further intend and agree that, for the
purpose of securing the Lessee's obligations for the repayment of the
above-described loans from the Lessor and the Participants to the Lessee, (i)
the Lease shall also be deemed to be a security agreement and financing
statement within the meaning of Article 9 of the Uniform Commercial Code (and
specifically, a construction mortgage, as said term is defined in Section
9-313(1)(c) of the Uniform Commercial Code) and a real property mortgage or deed
of trust; (ii) the conveyance provided for in Article II of the Lease shall be
deemed to be a grant by the Lessee to the Lessor and the Participants of a
mortgage lien and security interest in all of the Lessee's right, title and
interest in and to the Property and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, investments, securities or other
property, whether in the form of cash, investments, securities or other property
(it being understood that Lessee hereby mortgages and warrants and grants a
security interest in the Property to Lessor and the Participants to secure such
loans); (iii) the possession by the Lessor or any of its agents of notes and
such other items of property as constitute instruments, money, negotiable
documents or
22
chattel paper shall be deemed to be "possession by the secured party" for
purposes of perfecting the security interest pursuant to Section 9-305 of the
Uniform Commercial Code; and (iv) notifications to Persons holding such
property, and acknowledgments, receipts or confirmations from financial
intermediaries, bankers or agents (as applicable) of the Lessee shall be deemed
to have been given for the purpose of perfecting such security interest under
Applicable Law. The Lessor and the Lessee shall, to the extent consistent with
the Lease, take such actions and execute, deliver, file and record such other
documents, financing statements, mortgages and deeds of trust as may be
reasonably necessary to ensure that, if the Lease were deemed to create a
security interest in the Property in accordance with this Section, such security
interest would be deemed to be a perfected security interest of first priority
under Applicable Law and will be maintained as such throughout the Term.
(d) Specifically, without limiting the generality of subsections (a),
(b) and (c) of this Section 5.1, the parties hereto intend and agree that, for
purposes of filing federal, state and local returns, reports and other
statements relating to income or franchise taxes, or any other taxes imposed
upon or measured by income, (i) the Lessee shall be entitled to take any
deduction, credit, allowance or other reporting position consistent with its
status as owner of the Property; and (ii) neither the Lessor nor any Participant
shall take an initial position on its federal, state and local returns, reports
and other statements relating to income or franchise taxes that is inconsistent
with the Lessee's status as owner of the Property.
(e) If the transaction evidenced by this Agreement and the other
Operative Documents can no longer be treated as an operating lease pursuant to
GAAP for accounting purposes, all provisions in the Operative Documents limiting
the Lessee's obligation to pay the Lease Balance or Asset Termination Value
(including the Remarketing Option) shall no longer apply. If any such change in
accounting treatment shall occur, the Lessee shall enter into such amendments to
the Operative Documents as the Lessor or the Required Participants may
reasonably request to reflect the foregoing.
SECTION 5.2. Amounts Due Under Lease. Anything else herein or elsewhere
to the contrary notwithstanding, it is the intention of the Lessee, the Lessor,
the Participants and the Indenture Trustee that: (i) the amount and timing of
installments of Basic Rent due and payable from time to time from the Lessee
under the Lease shall be equal to the aggregate payments due and payable as
interest and principal on the Notes and Certificate Yield on, and the
Certificate Purchaser Amounts with respect to, the Certificates on each Payment
Date; (ii) if the Lessee elects the Purchase Option or becomes obligated to
purchase the Property under the Lease, the Notes, the Certificate Purchaser
Amounts, all interest and Certificate Yield, thereon and all other obligations
of the Lessee owing to the Certificate Holders, the Owner Trustee, the Note
Holders and the Indenture Trustee shall be paid in full by the Lessee; (iii) if
the Lessee properly elects the Remarketing Option, the Lessee shall only be
required to pay to the Lessor the proceeds of the sale of the Property, the
Residual Value Guarantee Amount and any amounts due pursuant to Section 13 of
this Participation Agreement and Section 22.1 of the Lease; and (iv) upon an
Event of Default resulting in an acceleration of the Lessee's obligation to
purchase the
23
Property under the Lease, the amounts then due and payable by the Lessee under
the Lease shall include all amounts necessary to pay in full the Asset
Termination Value, plus all other amounts then due from the Lessee to the Note
Holders, the Indenture Trustee, the Certificate Holders and the Owner Trustee
under the Operative Documents.
SECTION 6.
CONDITIONS PRECEDENT TO CLOSING DATE,
ACQUISITION OF GROUND LEASE INTEREST AND ADVANCES
SECTION 6.1. Conditions Precedent -- Documentation. The obligation of
the Lessor to acquire the Ground Lease Interest by ground lease on the Ground
Lease Interest Acquisition Date, the obligation of the Lessor to make an Advance
to finance the acquisition of Equipment or the construction of any Improvements
or the funding of any Interest Payment Advance or other Section 3.9(f)(ii)
portion on any Funding Date, and the obligation of each Participant to purchase
its respective Notes and/or Certificates on the Closing Date and to make
available to the Lessor its related portion of each such Advance on such Funding
Date are subject to satisfaction or waiver of the following conditions precedent
and the conditions precedent set forth in Section 6.2 and Section 6.3 (it being
understood that the Lessor's obligation to acquire such Ground Lease Interest or
to finance such Equipment, if any, or Improvements shall not be subject to the
conditions precedent set forth in this Section 6.1, Section 6.2 or Section 6.3
to the extent such conditions are actions required of the Lessor) on or prior to
the Closing Date, Ground Lease Interest Acquisition Date or such Funding Date,
as the case may be:
(a) Acquisition and Funding Request. Prior to the Ground Lease Interest
Acquisition Date or applicable Funding Date, the Indenture Trustee and the
Lessor shall have received a fully executed counterpart of the Acquisition
Request or Funding Request, as the case may be, appropriately completed by the
Lessee, in accordance with Sections 3.4 and 3.5, respectively; provided, that
this condition shall be deemed to have been satisfied in connection with an
Interest Payment Advance or funding of a Section 3.9(f)(ii) portion pursuant to
Section 3.9 hereof.
(b) Closing Date; Operative Documents. The Closing Date shall have
occurred and each of the Operative Documents to be entered into on the Closing
Date shall have been duly authorized, executed and delivered by the parties
thereto, and shall be in full force and effect, including, without limitation,
(i) this Participation Agreement, (ii) the Lease, (iii) the Indenture, (iv) the
Notes, (v) the Trust Agreement, (vi) the Certificates, (vii) the Guarantee,
(viii) the Cash Collateral Agreement, (ix) the Construction Agency Agreement,
(x) the Construction Agency Agreement Assignment, (xi) the Mortgage, (xii) the
Assignment of Lease, (xiii) the Consent to Assignment, (xv) the Ground Lease and
(xvi) the Appointment of Co-Trustee. No Default or Event of Default shall exist
thereunder (both before and after giving effect to the transactions contemplated
by the Operative Documents), and the Lessor, the Indenture Trustee and each
Participant shall each have received a fully executed copy of each of such
Operative
24
Documents (other than (A) the Lease and Lease Supplement, of which the Indenture
Trustee shall receive the originals and the Lessor and the Certificate
Purchasers shall receive specimens, (B) the Certificates, of which each
Certificate Purchaser shall receive its original and the Lessee, the Indenture
Trustee and the Note Purchasers shall receive specimens), and (C) the Notes, of
which each Note Purchaser shall receive its original and the other parties shall
receive specimens. On or prior to the Closing Date or the Ground Lease Interest
Acquisition Date, as applicable, the Operative Documents (or memoranda thereof),
any supplements thereto and any financing statements in connection therewith
required under the Uniform Commercial Code shall have been recorded, registered
and filed, if necessary, in such manner as to enable the respective counsel to
render their opinions referred to in clauses (l) below.
(c) Environmental Certificate. The Indenture Trustee, each Participant
and the Lessor shall have received an Environmental Certificate substantially in
the form of Exhibit C (an "Environmental Certificate") with respect to the
Property, provided that such Environmental Certificate shall be delivered not
less than five (5) Business Days prior to the Ground Lease Interest Acquisition
Date and accompanied by the Environmental Audit for the Property, each of which
shall have been approved by the Indenture Trustee, the Required Participants and
the Lessor, it being understood and agreed that the Lessee agrees to provide a
Phase II environmental site assessment with respect to any Recognized
Environmental Conditions (as defined in the certificate) shown on such
certificate or indicated in the Environmental Audit within ninety (90) days
following the Ground Lease Interest Acquisition Date if requested by the
Required Participants, to remedy any such conditions within two hundred seventy
(270) days following the Ground Lease Interest Acquisition Date and to deliver
to the Indenture Trustee, the Lessor and each Participant upon completion of
such remedial action a written statement by the consultant who prepared the
Environmental Audit indicating that all such exceptions have been remedied in
compliance with Applicable Law.
(d) Appraisal. On or prior to the Ground Lease Interest Acquisition
Date, the Indenture Trustee, the Lessor and the Participants shall have received
an Appraisal of the Property, which Appraisal shall (i) show as of the projected
Completion Date the Fair Market Sales Value of the Ground Lease Interest and the
Improvements to be constructed thereon in accordance with the Plans and
Specifications, and (ii) meet the other applicable requirements set forth in the
definition of the term "Appraisal" contained in Appendix 1.
(e) Ground Lease. As of the Ground Lease Interest Acquisition Date, the
conditions to commencement of the lease term under the Ground Lease shall have
been satisfied to satisfaction of, or waived by, the Ground Lessor, the Lessor
and the Participants, the Ground Lease shall have been duly executed and shall
be in full force and effect and the lease term thereunder shall have commenced
as of such date.
(f) Lease Supplement; Equipment Schedule. The Lessee and the Lessor
shall have delivered (i) on or prior to the Ground Lease Interest Acquisition
Date, the original counterpart of the Lease Supplement executed by the Lessee
and the Lessor to the
25
Indenture Trustee and (ii) on or prior to the applicable Funding Date, a duly
executed Equipment Schedule covering any Equipment, if any, being acquired with
the proceeds of such Advance by the Lessor.
(g) Survey and Title Insurance. On or prior to the Ground Lease
Interest Acquisition Date, the Lessee shall have delivered (i) an ALTA/ACSM
(1992)(Urban) Survey of the Property, including Table A numbers 1, 2, 3, 4, 6,
8, 9, 10 and 11, certified to the Lessor, the Indenture Trustee, the
Participants and the title company and otherwise in form reasonably acceptable
to the Participants, (ii) an ALTA (1992) owners title insurance policy with
extended coverage over the general exceptions, insuring leasehold title in the
Lessor to the Ground Lease and the Ground Lease Interest and fee title in the
Lessor to the Improvements, subject only to the Permitted Exceptions, (iii) an
ALTA (1992) Loan Policy insuring the Indenture Trustee that the Lien of the
Mortgage is a first and primary lien in the Lessor's interest in the Lease, in
the leasehold title to the Ground Lease Interest and in the fee title to the
Improvements, subject only to pending disbursements for construction and the
Permitted Exceptions, and (iv) an ALTA (1992) Loan Policy insuring the Indenture
Trustee that the Lien of the Lease is a first and primary Lien in the Lessee's
interest in the Property; such policies each in an amount not less than the
estimated Property Cost and to be reasonably satisfactory to the Lessor, the
Indenture Trustee and the Participants with extended coverage, access, tax
parcel, survey identicality, variable rate, future advances, usury,
comprehensive, fraudulent conveyances, doing business, mechanics liens and
zoning endorsements and such other endorsements as and to the extent available
in such jurisdiction where the Property is located, if requested by the Required
Participants.
(h) Evidence of Recording and Filing. On or prior to the Ground Lease
Interest Acquisition Date, the Indenture Trustee shall have received evidence
reasonably satisfactory to it that each of the Ground Lease, the Lease
Supplement, the Assignment of Lease and Supplement to Assignment of Lease, the
Consent to Assignment and the Mortgage shall have been or are being recorded
with the appropriate Governmental Authorities in the order in which such
documents are listed in this clause, and the UCC Financing Statements with
respect to the Property being acquired shall have been or are being filed with
the appropriate Governmental Authorities.
(i) Evidence of Insurance. On or prior to the Ground Lease Interest
Acquisition Date, copies of the Lessee's insurance policies with respect to the
Property required to be maintained pursuant to the Lease shall have been
delivered to the insurance consultant of the Lessor and the Participants and
such policies shall be reasonably satisfactory to such insurance consultant, the
Lessor and the Participants.
(j) Evidence of Use of Proceeds. On or prior to the applicable Funding
Date, the Indenture Trustee and each Participant shall have received evidence
reasonably satisfactory to the Indenture Trustee and each Participant as to the
use of the proceeds of the Advance in accordance with the provisions of Section
8.1(g).
26
(k) Taxes. On or prior to the Ground Lease Interest Acquisition Date,
all taxes, fees and other charges in connection with the execution, delivery,
recording, filing and registration of the Operative Documents shall have been
paid or provisions for such payment shall have been made to the satisfaction of
the Indenture Trustee, each Participant and the Lessor.
(l) Opinions of Counsel. On or prior to the Closing Date, (i) the
Lessee shall have delivered to the Indenture Trustee, each Participant and the
Lessor an opinion of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, counsel to the Lessee,
as to the matters set forth in Exhibit D (with an appropriate update on the
Ground Lease Interest Acquisition Date (if different than the Closing Date) with
respect to the Property and the Mortgage); (ii) the Owner Trustee shall have
delivered to the Indenture Trustee, the Lessee and each Participant an opinion
of counsel reasonably satisfactory to the Indenture Trustee, each Participant
and the Lessee in the form set forth on Exhibit E; and (iii) ▇▇▇▇▇▇ & Whitney,
counsel to the Co-Trustee, shall have issued to the Lessor, the Indenture
Trustee, the Lessee and the Participants its opinion to the effect and in the
form set forth on Exhibit F.
(m) Approvals. All necessary (or, in the reasonable opinion of the
Lessor, the Participants or the Indenture Trustee or any of their respective
counsel, advisable) Governmental Actions and covenants and approvals of or by
any Governmental Authority or other Person, in each case required by any
Requirement of Law, covenant or restriction affecting the Property or the
transactions contemplated thereby shall have been obtained or made and be in
full force and effect prior to the time required to be in effect.
(n) Litigation. No action or proceeding shall have been instituted, nor
shall any action or proceeding be threatened, before any Governmental Authority,
nor shall any order, judgment or decree have been issued or proposed to be
issued by any Governmental Authority (i) to set aside, restrain, enjoin or
prevent the full performance of this Participation Agreement, the Lease or any
other Operative Document or any transaction contemplated hereby or thereby or
(ii) which is reasonably likely to have a Material Adverse Effect.
(o) Requirements of Law. In the reasonable opinion of the Lessor, the
Participants, the Indenture Trustee and their respective counsel, the
transactions contemplated by the Operative Documents do not and will not violate
any Requirement of Law and do not and will not subject the Lessor, the Indenture
Trustee or any Participant to any adverse regulatory or tax prohibitions or
constraints.
(p) Responsible Officer's Certificate of the Lessee. The Lessor, each
Participant and the Indenture Trustee shall each have received a Responsible
Officer's Certificate, dated as of the Closing Date, of the Lessee stating that
(i) each and every representation and warranty of the Lessee contained in the
Operative Documents to which it is a party is true and correct on and as of the
Closing Date; (ii) no Default or Event of Default under the Lease, the Ground
Lease or the Construction Agency Agreement has occurred and is continuing; (iii)
each Operative Document to which the Lessee is a party is in full force and
effect with respect to it; and (iv) the Lessee has duly
27
performed and complied with all covenants, agreements and conditions contained
herein or in any Operative Document required to be performed or complied with by
it on or prior to the Closing Date.
(q) The Lessee's Resolutions and Incumbency Certificate, etc. On or
prior to the Closing Date, the Lessor, each Participant and the Indenture
Trustee shall each have received (i) a certificate of the Secretary or an
Assistant Secretary of the Lessee attaching and certifying as to (A) the
resolutions of the Board of Directors of the Lessee, duly authorizing the
execution, delivery and performance by the Lessee of documents and agreements of
the type represented by each Operative Document to which it is or will be a
party, (B) its articles of incorporation and bylaws, and (C) the incumbency and
signature of persons authorized to execute and deliver on its behalf the
Operative Documents to which it is a party, and (ii) a good standing certificate
from the appropriate officer of the state in which the Property is located.
(r) Responsible Officer's Certificate of the Guarantor. The Lessor,
each Participant and the Indenture Trustee shall each have received a
Responsible Officer's Certificate, dated as of the Closing Date, of the
Guarantor stating that (i) each and every representation and warranty of the
Guarantor contained in the Operative Documents to which it is a party is true
and correct on and as of the Closing Date; (ii) no Default or Event of Default
under the Guarantee has occurred and is continuing; (iii) each Operative
Document to which the Guarantor is a party is in full force and effect with
respect to it; and (iv) the Guarantor has duly performed and complied with all
covenants, agreements and conditions contained herein or in any Operative
Document required to be performed or complied with by it on or prior to the
Closing Date.
(s) The Guarantor's Resolutions and Incumbency Certificate, etc. On or
prior to the Closing Date, the Lessor, each Participant and the Indenture
Trustee shall each have received a certificate of the Secretary or an Assistant
Secretary of the Guarantor attaching and certifying as to (i) the resolutions of
its Board of Directors duly authorizing the execution, delivery and performance
by the Guarantor of documents and agreements of the type represented by each
Operative Document to which it is or will be a party (ii) its articles of
incorporation and by-laws, and (iii) the incumbency and signature of persons
authorized to execute and deliver on its behalf the Operative Documents to which
it is a party.
(t) Ground Lease Interest Acquisition Date. The Ground Lease Interest
Acquisition Date shall occur on or prior to September 28, 1998.
(u) No Material Adverse Effect. As of each Funding Date, there shall
not have occurred any Material adverse change in the Lessee's or the Guarantor's
capital structure, ownership or consolidated assets, liabilities, results of
operations, or financial condition from that set forth or contemplated in the
most recent financial statements delivered pursuant to Section 8.4(m) or Section
10.1(a), and no event or condition shall have occurred that would result in a
Material Adverse Effect, provided that for purposes of this condition precedent,
the Momentum Transaction shall not be deemed to constitute a Material adverse
change or result in a Material Adverse Effect.
28
(v) Officer's Certificate of the Lessor. The Lessee, the Indenture
Trustee and each Participant shall have received a certificate of an Authorized
Officer of the Lessor, dated as of the Closing Date, stating that (i) each and
every representation and warranty of the Lessor contained in the Operative
Documents to which it is a party is true and correct on and as of the Closing
Date, (ii) each Operative Document to which the Lessor is a party is in full
force and effect with respect to it, (iii) the Lessor has duly performed and
complied with all covenants, agreements and conditions contained herein or in
any Operative Document required to be performed or complied with by it on or
prior to the Closing Date, and (iv) the Lessor has the capacity to act as a
trustee and hold the Property in the jurisdiction in which the Property is
located.
(w) The Lessor's Resolutions and Incumbency Certificate, etc. On or
prior to the Closing Date, the Lessee, the Indenture Trustee and each
Participant shall have received a certificate of the Secretary or an Assistant
Secretary of the Lessor attaching and certifying as to (i) the resolutions of
the Board of Directors duly authorizing the execution, delivery and performance
by the Lessor of documents and agreements of the type represented by each
Operative Document to which it is or will be a party, (ii) the pertinent
provisions of its by-laws and (iii) the incumbency and signature of persons
authorized to execute and deliver on its behalf the Operative Documents to which
it is a party.
(x) Construction Budget; Plans and Specifications. On or prior to the
Ground Lease Interest Acquisition Date, each Participant shall have received a
copy of the "Design Review" Plans and Specifications and Budget, each in a form
reasonably satisfactory to each Participant. The Chief Financial Officer of the
Lessee shall certify that the "Final" Plans and Specifications will conform to
the "Design Review" Plans and Specifications in all Material respects and the
Budget was prepared based on the "Design Review" Plans and Specifications.
(y) Sale of All Notes and Certificates. On the Closing Date, each of
the Notes and Certificates shall have been purchased by the other Note
Purchasers and Certificate Purchasers, as applicable.
(z) Legal Fees and Expenses. The Lessee shall have caused to be paid as
provided in Section 9 all reasonable fees and expenses of attorneys for the
Owner Trustee, the Indenture Trustee and any Participant (which attorneys may be
employees of such Person) paid or incurred in connection with the preparation,
negotiation, execution and delivery of the Operative Documents.
SECTION 6.2. Further Conditions Precedent. The obligation of the Lessor
to acquire the Ground Lease Interest on the Ground Lease Interest Acquisition
Date or to make an Advance on any Funding Date and the obligation of each
Participant to make available its related portion of such Advance on such
Funding Date are subject to satisfaction or waiver of the following conditions
precedent and to satisfaction on or before the Ground Lease Interest Acquisition
Date, the Closing Date or such Funding
29
Date, as the case may be, of the conditions precedent set forth in Section 6.1
(it being understood that the Lessor's obligations to acquire the Ground Lease
Interest and each Participant's obligation to fund an Advance shall not be
subject to the conditions precedent set forth in Section 6.1, Section 6.3 and
this Section 6.2 to the extent such conditions are actions required of the
Lessor or such Participant, as the case may be):
(a) Representations and Warranties. On such date the representations
and warranties of the Lessee, the Guarantor, the Lessor, the Indenture Trustee
and each Participant contained herein and in each of the other Operative
Documents shall be true and correct as though made on and as of such date,
except to the extent such representations or warranties relate solely to an
earlier date, in which case such representations and warranties shall have been
true and correct on and as of such earlier date.
(b) Performance of Covenants. The parties hereto shall have performed
their respective agreements contained herein and in the other Operative
Documents to be performed by them on or prior to such date.
(c) Title. Title to the Property shall conform to the representations
and warranties set forth in Section 8.4(c).
(d) No Default. There shall not have occurred and be continuing any
Default or Event of Default under any of the Operative Documents, and no Default
or Event of Default under any of the Operative Documents will have occurred
after giving effect to the acquisition of the Property and/or the making of the
Advance requested by such Funding Request, as the case may be.
SECTION 6.3. Conditions Precedent to Closing Date. The obligation of
the Lessor, the Indenture Trustee, each Participant, the Lessee and the
Guarantor to execute and deliver the Operative Documents referred to in Section
6.3(a) hereof on the Closing Date and to consummate the closing on the Closing
Date are subject to satisfaction or waiver of the following conditions precedent
(it being understood that such Person's obligations under this Section 6.3 shall
not be subject to the conditions precedent set forth in this Section 6.3 to the
extent such conditions are actions required of such Person):
(a) Operative Documents. Each of the Operative Documents to be entered
into on the Closing Date shall have been duly authorized, executed and delivered
by the parties thereto, and shall be in full force and effect
(b) Representations and Warranties. On such date the representations
and warranties of the Lessee, the Guarantor, the Lessor, the Indenture Trustee
and each Participant contained herein and in each of the other Operative
Documents shall be true and correct as though made on and as of such date.
30
(c) Performance of Covenants. The parties hereto shall have performed
their respective agreements contained herein and in the other Operative
Documents to be performed by them on or prior to such date.
(d) No Default. There shall not have occurred and be continuing any
Default or Event of Default under any of the Operative Documents, and no Default
or Event of Default under any of the Operative Documents will have occurred
after giving effect to the execution and delivery of the Operative Documents.
SECTION 7.
COMPLETION DATE CONDITIONS
SECTION 7.1. Conditions. The occurrence of the Completion Date shall be
subject to the fulfillment to the satisfaction of, or waiver by, the Required
Participants of the following conditions precedent at which time "Completion"
shall be deemed to have occurred:
(a) Construction Completion. The construction of the Improvements shall
have been completed substantially in accordance with the Plans and
Specifications and all Applicable Law and Insurance Requirements, and the
Property shall be ready for occupancy and use as a facility described in Recital
A of this Agreement. This shall require, without limiting the generality of the
preceding sentence, that (i) all utilities required to adequately service the
Improvements for their intended use are available and "tapped on" and hooked up
pursuant to adequate permits (including any that may be required under
applicable Environmental Laws) and (ii) access to the Improvements for
pedestrians and motor vehicles from publicly dedicated streets and public
highways is available.
(b) Architect's Certificate; Date-Down Endorsement. The Lessee shall
have furnished to the Lessor and the Indenture Trustee a (i) certificate of the
Architect (substantially in the form of Exhibit H) dated at or about the
Completion Date and stating that (a) the Improvements have been completed
substantially in accordance with the Plans and Specifications and the Property
is ready for occupancy, (b) the Property, as so completed, complies in all
material respects with all Applicable Laws, and certifying that attached thereto
are true and complete copies of an "as built" or "record" set of the Plans and
Specifications, and a plat of survey of the Property "as built" showing all
paving, driveways, fences and exterior improvements; and (ii) a date-down
endorsement to or amendment and restatement of the title insurance policies
described in Section 6.1(g).
(c) Lessee Certification. The Lessee shall have furnished the Lessor
and the Indenture Trustee with a certification of the Lessee (substantially in
the form of Exhibit I) as follows:
31
(i) The representations and warranties of the Lessee with respect to
the Property set forth in Section 8.4(b) are true and correct as of the
Completion Date. All amounts owing to third parties for the
construction of the Improvements have been paid in full.
(ii) No changes or modifications were made to the related Plans and
Specifications after the Closing Date that have had a Material adverse
effect on the value, use or useful life of the Property.
SECTION 8.
REPRESENTATIONS
SECTION 8.1. Representations of the Bank and the Lessor. Bank, in its
individual capacity and the Owner Trustee, each as to itself, represents and
warrants to each of the other parties hereto as follows, provided that the
representations in the following paragraphs (f), (g), (h), (i), (j), (k) and (l)
are made solely in its capacity as the Owner Trustee:
(a) Due Organization, etc. It is a Delaware banking corporation duly
organized and validly existing and in good standing under the laws of the United
States and has the corporate power and authority to enter into and perform its
obligations under the Trust Agreement and (assuming due authorization, execution
and delivery of the Trust Agreement by the Certificate Purchasers) has the
corporate and trust power and authority to act as the Owner Trustee and to enter
into and perform the obligations under each of the other Operative Documents to
which the Bank or the Owner Trustee, as the case may be, is or will be a party
and each other agreement, instrument and document to be executed and delivered
by it in connection with or as contemplated by each such Operative Document to
which the Bank or the Owner Trustee, as the case may be, is or will be a party.
(b) Authorization; No Conflict. The execution, delivery and performance
of each Operative Document to which it is or will be a party, either in its
individual capacity or (assuming due authorization, execution and delivery of
the Trust Agreement by the Certificate Purchasers) as the Owner Trustee, as the
case may be, has been duly authorized by all necessary action on its part and
neither the execution and delivery thereof, nor the consummation of the
transactions contemplated thereby, nor compliance by it with any of the terms
and provisions thereof (i) does or will require any approval or consent of any
trustee or holders of any of its indebtedness or obligations, (ii) does or will
contravene any current United States law, governmental rule or regulation
relating to its banking or trust powers, (iii) does or will contravene or result
in any breach of or constitute any default under, or result in the creation of
any Lien upon any of its property under, its articles of association or by-laws,
or any indenture, mortgage, deed of trust, conditional sales contract, credit
agreement or other agreement or instrument to which it is a party or by which it
or its properties may be bound or affected or (iv) does or will
32
require any Governmental Action by any Governmental Authority of the United
States and regulating its banking or trust powers.
(c) Enforceability, etc. The Trust Agreement and, assuming the Trust
Agreement is the legal, valid and binding obligation of the Certificate
Purchasers, each other Operative Document to which the Bank or the Owner
Trustee, as the case may be, is or will be a party have been, or on or before
the Closing Date or Ground Lease Interest Acquisition Date will be, duly
executed and delivered by the Bank or the Owner Trustee, as the case may be, and
the Trust Agreement and each such other Operative Document to which the Bank or
the Owner Trustee, as the case may be, is a party constitutes, or upon execution
and delivery will constitute, a legal, valid and binding obligation enforceable
against the Bank or the Owner Trustee, as the case may be, in accordance with
the terms thereof, except as the same may be limited by insolvency, bankruptcy,
reorganization or other laws relating to or affecting creditors' rights or by
general equitable principles.
(d) Litigation. There is no action or proceeding pending or, to its
knowledge, threatened to which it is or will be a party, either in its
individual capacity or as the Owner Trustee, before any Governmental Authority
that, if adversely determined, would materially and adversely affect its
ability, in its individual capacity or as Owner Trustee, to perform its
obligations under the Operative Documents to which it is a party, would have a
material adverse effect on the financial condition of the Owner Trustee or would
question the validity or enforceability of any of the Operative Documents to
which it is or will become a party.
(e) Assignment. It has not assigned or transferred any of its right,
title or interest in or under the Lease except in accordance with the Operative
Documents.
(f) Defaults. No Default or Event of Default under the Operative
Documents attributable to it has occurred and is continuing.
(g) Use of Proceeds. The proceeds of the Notes and the Certificates
shall be applied solely in accordance with the Operative Documents.
(h) Securities Act. Neither the Owner Trustee nor any Person authorized
by the Owner Trustee to act on its behalf has offered or sold any interest in
the Trust Estate or the Notes, or in any similar security relating to the
Property, or in any security the offering of which for the purposes of the
Securities Act would be deemed to be part of the same offering as the offering
of the aforementioned securities to, or solicited any offer to acquire any of
the same from, any Person other than the Certificate Purchasers, the Note
Purchasers and other accredited investors, and neither the Owner Trustee nor any
Person authorized by the Owner Trustee to act on its behalf will take any action
which would subject the issuance or sale of any interest in the Trust Estate or
the Notes to the provisions of Section 5 of the Securities Act or require the
qualification of any Operative Document under the Trust Indenture Act of 1939,
as amended.
(i) Chief Place of Business. The Owner Trustee's chief place of
business, chief executive office and office where the documents, accounts and
records relating to
33
the transactions contemplated by this Participation Agreement and each other
Operative Document are kept are located at ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Administration.
(j) Federal Reserve Regulations. The Owner Trustee is not engaged
principally in the business of extending credit for the purpose of purchasing or
carrying any margin stock (within the meaning of Regulation U of the Board), and
no part of the proceeds of the Notes or the Certificates will be used by it to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any such margin stock or for any purpose that
violates, or is inconsistent with, the provisions of Regulation G, T, U, or X of
the Board.
(k) Investment Company Act. The Owner Trustee is not an "investment
company" or a company controlled by an "investment company" within the meaning
of the Investment Company Act.
(l) No Plan Assets. The Owner Trustee is not acquiring its interests in
the Property with the assets of any Plan (or its related trust).
SECTION 8.2. Representations of the Participants. (a) Representations
of each Participant. Each Participant severally as to itself represents to the
other parties hereto as follows:
(i) The Notes or Certificates to be purchased by it are being acquired
by it for its own account and for investment and not with a view to any
distribution thereof, but without prejudice to the rights of such
Participant at all times to sell or otherwise dispose of all or any
part of its Notes or Certificates in accordance with the terms hereof
and of the Operative Documents and under an exemption from the
Securities Act and otherwise in compliance with all applicable state
securities laws, subject, nevertheless to any requirement of law that
the disposition of such Participant's Notes or Certificates at all
times shall be within its control.
(ii) Each Participant, by its purchase and acceptance of a Note or
Certificate, hereby represents and warrants to each of the other
parties hereto that at least one of the following statements is an
accurate representation as to the source of funds to be used by such
Participant to make its investment hereunder:
(A) If such Participant is an insurance company, no part
of such funds constitutes assets allocated to any
separate account maintained by it in which any Plan
(or its related trust) has any interest; or
(B) If such Participant is an insurance company, to the
extent that any part of such funds constitutes assets
allocated to any separate account maintained by it,
it has disclosed in writing to
34
the Lessee, the other Participants, the Owner
Trustee, and the Indenture Trustee the names of each
Plan whose assets in such account exceed ten percent
of the total assets or are expected to exceed ten
percent of the total assets of such account as of the
date of such investment (for the purposes of this
subdivision (B), all Plans maintained by the same
employer or employee organization are deemed to be a
single plan); or
(C) If such Participant is a bank, to the extent that any
part of such funds constitutes assets allocated to
any bank collective investment vehicle maintained by
it, it has disclosed in writing to the Lessee, the
Participants, the Owner Trustee, and the Indenture
Trustee the names of each Plan whose assets in such
vehicle exceed ten percent of the total assets or are
expected to exceed ten percent of the total assets of
such vehicle as of the date of such investment (for
the purpose of this subdivision (C), all Plans
maintained by the same employer or employee
organization are deemed to be a single plan); or
(D) If such Participant is other than an insurance
company, no part of such funds constitutes assets of
any Plan (other than a governmental plan exempt from
the coverage of ERISA); or
(E) If such Participant is an insurance company, such
funds constitute assets allocated to a general
account and such general account is an "insurance
company general account" as such term is defined in
Section V(e) of Department of Labor Prohibited
Transaction Exemption ("PTE") 95-60 (issued July 12,
1995) and such investment is eligible for and
satisfies the requirements of PTE 95-60; or
(F) If such funds constitute assets of a specific Plan,
complete and correct information as to the identity
of which such Participant has disclosed in writing to
the Lessee, the other Participants, the Owner Trustee
and the Indenture Trustee; or
(G) The source of funds is an "investment fund" managed
by a "qualified professional asset manager" or "QPAM"
(as defined in Part V of PTE 84-14, issued March 13,
1984), provided that no other party to the
transactions described in this Agreement and no
"affiliate" of such other party (as defined in
Section V(C) of PTE 84-14) has at this time, and
during the immediately preceding one year, exercised
the authority to appoint or terminate said QPAM as
manager of the assets of any plan identified in
writing pursuant to clause (F) or to
35
negotiate the terms of said QPAM's management
agreement on behalf of any such identified plans.
(b) Representations of each Certificate Purchaser. Each Certificate
Purchaser severally as to itself represents and warrants to each of the other
parties hereto as follows:
(i) Due Organization, etc. It is a duly organized and validly existing
corporation in good standing under the laws of the jurisdiction of its
incorporation and has the corporate power and authority to execute,
deliver and carry out the terms and provisions of the Operative
Documents to which it is or will be a party.
(ii) Authorization; No Conflict. The execution, delivery and
performance of each Operative Document to which it is or will be a
party has been duly authorized by all necessary action on its part and
neither the execution and delivery by it thereof, nor the consummation
of the transactions by it contemplated thereby, nor compliance by it
with any of the terms and provisions thereof (A) does or will require
any approval or consent of any trustee or holders of any of its
indebtedness or obligations, (B) does or will contravene any current
United States law, governmental rule or regulation specifically
applicable to it, (C) does or will contravene or result in any breach
of or constitute any default under, or result in the creation of any
Lien upon any of its property under, its certificate of incorporation
or bylaws, or any indenture, mortgage, deed of trust, conditional sales
contract, credit agreement or other agreement or instrument to which it
is a party or by which it or its properties may be bound or affected
which would have a material adverse effect on the ability of such
Certificate Purchaser to perform its obligations under the Operative
Documents to which it is a Party or (D) based upon the representations
of the Lessee contained in Section 8.4(j), does or will require on its
behalf any Governmental Action by any Governmental Authority not
already expressly provided for in the Operative Documents.
(iii) Enforceability, etc. Each Operative Document to which such
Certificate Purchaser is or will be a party has been or on or before
the Closing Date or Ground Lease Interest Acquisition Date will be,
duly executed and delivered by such Certificate Purchaser and each such
Operative Document to which such Certificate Purchaser is a party
constitutes, or upon execution and delivery will constitute, a legal,
valid and binding obligation enforceable against such Certificate
Purchaser in accordance with the terms thereof, except as the same may
be limited by insolvency, bankruptcy, reorganization or other laws
relating to or affecting creditors' rights or by general equitable
principles.
(iv) Litigation. There is no action or proceeding pending or, to its
knowledge, threatened to which it is a party on the Closing Date before
any Governmental Authority that, if adversely determined, would
materially and adversely affect its ability to perform its obligations
under the Operative Documents to which it is a party, would have a
material adverse effect on the financial condition of such
36
Certificate Purchaser or would question the validity or enforceability
of any of the Operative Documents to which it is or will become a
party.
(v) Defaults. No Default or Event of Default under the Operative
Documents attributable to it has occurred and is continuing.
(vi) Securities Act. Neither such Certificate Purchaser nor any Person
authorized by such Certificate Purchaser to act on its behalf has
offered or sold any interest in the Trust Estate, or in any similar
security relating to the Property, or in any security the offering of
which for the purposes of the Securities Act would be deemed to be part
of the same offering as the offering of the aforementioned securities
to, or solicited any offer to acquire any of the same from, any Person
and neither such Certificate Purchaser nor any Person authorized by
such Certificate Purchaser to act on its behalf will take any action
which would subject the issuance or sale of any interest in the Trust
Estate to the provisions of Section 5 of the Securities Act or require
the qualification of any Operative Document under the Trust Indenture
Act of 1939, as amended.
(vii) Investment Company Act. Such Certificate Purchaser is not an
"investment company" or a company "controlled" by an investment company
within the meaning of the Investment Company Act.
SECTION 8.3. Representations of the Lessee. The Lessee represents and
warrants to each of the other parties hereto that:
(a) Corporate Status. The Lessee (i) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and (ii) has duly qualified and is authorized to do business and has obtained a
certificate of authority to transact business as a foreign corporation in the
jurisdiction where the Property is located and in each other jurisdiction where
the failure to so qualify is reasonably likely to be Material.
(b) Corporate Power and Authority. The Lessee has corporate power and
authority to execute, deliver and carry out the terms and provisions of the
Operative Documents to which it is or will be a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Operative Documents to which it is or will be a party and has or will
have duly executed and delivered each Operative Document required to be executed
and delivered by it and, assuming the due authorization, execution and delivery
thereof on the part of each other party thereto, each such Operative Document
constitutes or will constitute a legal, valid and binding obligation enforceable
against it in accordance with its terms, except as the same may be limited by
insolvency, bankruptcy, reorganization or other laws relating to or affecting
the enforcement of creditors' rights or by general equitable principles.
(c) No Violation. Neither the execution, delivery and performance by
the Lessee of the Operative Documents to which it is or will be a party nor
compliance with
37
the terms and provisions thereof, nor the consummation by the Lessee of the
transactions contemplated therein (i) will result in a violation by the Lessee
of any applicable provision of any law, statute, rule, regulation, order, writ,
injunction or decree of any court or governmental instrumentality having
jurisdiction over the Lessee or the Property that would (x) adversely affect the
validity or enforceability of the Operative Documents to which the Lessee is a
party, or the title to, or value or condition of, the Property, or (y) have a
Material Adverse Effect on the consolidated financial position, business or
consolidated results of operations of the Lessee, or (z) have an adverse effect
on the ability of the Lessee to perform its obligations under the Operative
Documents, (ii) will conflict with or result in any breach under, or (other than
pursuant to the Operative Documents) result in the creation or imposition of (or
the obligation to create or impose) any Lien upon any of the property or assets
of Lessee pursuant to the terms of, any indenture, loan agreement or other
agreement for borrowed money to which the Lessee is a party or by which it or
any of its property or assets is bound or to which it may be subject (other than
Permitted Liens), or (iii) will violate any provision of the certificate or
articles of incorporation or bylaws of the Lessee.
(d) Litigation. There are no actions, suits or proceedings pending or,
to the knowledge of the Lessee, threatened (i) that are reasonably likely to
have a Material Adverse Effect or (ii) that question the validity of the
Operative Documents or the rights or remedies of the Lessor, the Indenture
Trustee or the Participants with respect to the Lessee or the Property under the
Operative Documents.
(e) Governmental Approvals. No Governmental Action by any Governmental
Authority having jurisdiction over the Lessee or the Property is required to
authorize or is required in connection with (i) the execution, delivery and
performance by the Lessee of any Operative Document or (ii) the legality,
validity, binding effect or enforceability against the Lessee of any Operative
Document, except for the filing or recording of the Operative Documents listed
in Section 8.4(f) hereof with the appropriate Governmental Authorities, all of
which will have been completed on or prior to the Ground Lease Interest
Acquisition Date.
(f) Investment Company Act. The Lessee is not an "investment company"
or a company "controlled" by an "investment company," within the meaning of the
Investment Company Act.
(g) Public Utility Holding Company Act. The Lessee is not a "holding
company, or a "subsidiary company," or an "affiliate" of a "holding company, or
of a "subsidiary company" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(h) Information. The information and materials regarding the Lessee and
the Property which were provided by the Lessee to one or more of the
Participants prior to the Closing Date or the Ground Lease Interest Acquisition
Date are true and accurate in all material respects on the date as of which such
information and materials are dated or certified and not incomplete by omitting
to state any material fact necessary to make such
38
information not misleading at such time in light of the circumstances under
which such information was provided.
(i) Taxes. All United States federal income tax returns and all other
Material tax returns which are required to have been filed have been or will be
prepared in accordance with applicable law and filed by or on behalf of the
Lessee by the respective due dates, including extensions, and all taxes due with
respect to the Lessee pursuant to such returns or pursuant to any assessment
received by the Lessee have been or will be paid. The charges, accruals and
reserves on the books of the Lessee in respect of taxes or other governmental
charges are, in the opinion of the Lessee, adequate.
(j) Compliance with ERISA. Each member of the ERISA Group has fulfilled
its obligations under the minimum funding standards of ERISA and the Code with
respect to each Plan and is in compliance in all Material respects with the
presently applicable provisions of ERISA and the Code with respect to each Plan.
No member of the ERISA Group has (i) sought a waiver of the minimum funding
standard under Section 412 of the Code in respect of any Plan, (ii) failed to
make any contribution or payment to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement, or made any amendment to any Plan or Benefit
Arrangement, which has resulted or could result in the imposition of a Lien or
the posting of a bond or other security under ERISA or the Code or (iii)
incurred any liability under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA. The execution and delivery of
this Agreement, including the issuance and sale of the Notes and the
Certificates and the consummation of the transactions contemplated hereby and
thereby under the Operative Documents on the Closing Date will not involve any
prohibited transactions, within the meaning of Section 406 of ERISA or in
connection with which a tax could be imposed pursuant to Section 4975 of the
Code, involving the use of "Plan assets" (as defined in Regulation Section
2510.3-010 of ERISA). The representation by the Lessee in the preceding sentence
is made in reliance upon the subject to the correctness of the representations
by the Participants in Section 8.2(a) hereof.
(k) Environmental and Other Regulations. Except as set forth in
Schedule III attached hereto, the Lessee is in compliance with, and the Property
is in compliance in all material respects with, all Environmental Laws in the
jurisdiction in which the Property is located and in all other domestic
jurisdictions, other than, with respect to such other jurisdictions, those
Environmental Laws the non-compliance with which would not have a Material
Adverse Effect.
(l) Offer of Securities, etc. Neither the Lessee nor any Person
authorized to act on its behalf has, directly or indirectly, offered (i) any
interest in the Property, the Lease or the Trust Estate or any other interest
similar thereto (the sale or offer of which would be integrated with the sale or
offer of such interest in the Property, the Lease or the Trust Estate), for sale
to, or solicited any offer to acquire any of the same from, any Person other
than the Participants, the Owner Trustee, the Indenture Trustee and other
"accredited investors" (as defined in Regulation D of the Securities and
Exchange Commission) or (ii) any Notes or any other similar securities (the sale
or offer of which
39
would be integrated with the sale or offer of the Notes, for sale to, or
solicited any offer to acquire any of the same from, any Person other than the
Participants and other "accredited investors" (as defined in Regulation D of the
Securities and Exchange Commission)).
(m) Financial Statements.
(i) The audited consolidated statement of financial position of the
Lessee and its consolidated Subsidiaries as of December 31, 1997 and
the related consolidated statements of income, stockholders equity and
cash flows for the fiscal year then ended, reported on by Ernst & Young
LLP, a copy of which has been delivered to each of the Lessor, the
Participants and the Indenture Trustee, present fairly in all material
respects, in conformity with generally accepted accounting principles,
the financial position of the Lessee as of such date and its results of
operations and cash flows for such fiscal year.
(ii) The unaudited consolidated statement of financial position of the
Lessee and its consolidated Subsidiaries as of June 30, 1998 and the
related unaudited consolidated statements of income, stockholders
equity and cash flows for the year to date, a copy of which has been
delivered to each of the Lessor, the Participants and the Indenture
Trustee, present fairly in all material respects, in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with the financial statements referred to in
clause (i) of this subsection (m), the consolidated financial position
of the Lessee as of such date and its consolidated results of
operations and cash flows for such year-to-date period (subject to
normal year-end adjustments).
(n) No Material Adverse Change. Since December 31, 1997, there has been
no Material adverse change in the condition (financial or otherwise), business,
operations, assets, liabilities or properties of the Lessee and its consolidated
Subsidiaries taken as a whole, and there has been no damage, destruction or loss
of the physical property (whether or not covered by insurance) of the Lessee and
its consolidated Subsidiaries which taken as a whole materially and adversely
affects their business or operations or the ability of the Lessee to perform its
obligations under the Operative Documents to which it is a party, provided that
for purposes of this representation and warranty, the Momentum Transaction shall
not be deemed to constitute a Material adverse change or result in a Material
Adverse Effect.
(o) No Defaults. Neither the Lessee nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement to which it is a party or by
which it is bound, which default, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(p) Properties; Leases. The Lessee and its respective Subsidiaries have
good and sufficient title to their respective properties that individually or in
the aggregate are
40
Material, including all properties reflected in the Lessee's most recent audited
financial statements referred to in Section 8.3(m) or purported to have been
acquired by the Lessee or any of its Subsidiaries after the date of such audited
financial statements (except as sold or otherwise disposed of in the ordinary
course of business), in each case free and clear of Liens prohibited in any
Operative Document other than Permitted Liens. All leases that individually or
in the aggregate are Material are valid and subsisting and are in full force and
effect in all material respects.
(q) Licenses, Permits, etc. Except as disclosed in Schedule IV,
(i) The Lessee and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, service
marks, trademarks and trade names, or rights thereto, that individually
or in the aggregate are Material, without known conflict with the
rights of others;
(ii) To the best knowledge of the Lessee, no product of the Lessee or
any of its Subsidiaries infringes in any material respect any license,
permit, franchise, authorization, patent, copyright, service ▇▇▇▇,
trademark, trade name or other right owned by any other Person; and
(iii) To the best knowledge of the Lessee, there is no Material
violation by any Person of any right of the Lessee or any of its
Subsidiaries with respect to any patent, copyright, service ▇▇▇▇,
trademark, trade name or other right owned or used by the Lessee or any
of its Subsidiaries.
(r) Year 2000. The Lessee and its Subsidiaries have reviewed or are
reviewing the areas within their business and operations which could be
adversely affected by, and have developed or are developing a program to address
on a timely basis, the "Year 2000 problem" (that is, the risk that computer
applications used by the Lessee and its Subsidiaries may be unable to recognize
and perform properly date-sensitive functions involving certain dates prior to
and any date after December 31, 1999), and have made related appropriate inquiry
of material suppliers and vendors. Based on such review and program, the Lessee
believes that the "Year 2000 Problem" will not have a Material Adverse Effect on
the Lessee.
SECTION 8.4. Representations of the Lessee With Respect to the Property
on the Ground Lease Interest Acquisition Date. The Lessee hereby represents and
warrants as follows as of the Ground Lease Interest Acquisition Date:
(a) Representations. The representations and warranties of the
Construction Agent and the Lessee set forth in the Operative Documents are true
and correct. The Construction Agent and the Lessee are in compliance in with
their respective obligations under the Operative Documents and there exists no
Default or Event of Default.
(b) Property. The Property consists of the Ground Lease Interest on
which facilities of the type described in Recital A of this Agreement will be
constructed
41
pursuant to the Construction Agency Agreement. The Property is located in the
State of California. The Property as improved substantially in accordance with
the related Plans and Specifications and the anticipated use thereof by the
Lessee and its agents, assignees, employees, invitees, lessees, licensees,
contractors and tenants will comply in all material respects with all
Requirements of Law (including, without limitation, Title III of the Americans
with Disabilities Act, all zoning and land use laws and Environmental Laws) and
Insurance Requirements, except for such Requirements of Law as the Lessee shall
be contesting in good faith by appropriate proceedings. The related Plans and
Specifications have been or will be prepared in all material respects in
accordance with applicable Requirements of Law (including, without limitation,
Title III of the Americans with Disabilities Act, applicable Environmental Laws
and building, planning, zoning and fire codes) and upon completion of the
facility substantially in accordance with the Plans and Specifications, such
facility and the other Improvements on such Property will not encroach in any
manner onto any adjoining land (except as permitted by express written easements
or as insured by appropriate title insurance) and such facility and other
Improvements will comply in all Material respects with all applicable
Requirements of Law (including, without limitation, Title III of the Americans
with Disabilities Act, all applicable Environmental Laws and building, planning,
zoning and fire codes). Upon completion of such facility substantially in
accordance with the related Plans and Specifications, the Improvements
including, without limitation, structural members, the plumbing, heating, air
conditioning and electrical systems thereof, and all water, sewer, electric,
gas, telephone and drainage facilities will be completed in a workmanlike manner
and will be in first class working condition and fit for use as a suburban
office facility, and all other utilities required to adequately service the
Improvements for their intended use are or will be available and "tapped on" and
hooked up pursuant to adequate permits (including any that may be required under
applicable Environmental Laws). There is no action, suit or proceeding
(including any proceeding in condemnation or eminent domain or under any
Environmental Law) pending or, to the best of the Lessee's knowledge, threatened
with respect to the Lessee, its Affiliates or such Property which adversely
affects the title to, or the use, operation or value of, the Property. No fire
or other casualty with respect to the Property has occurred. The Property has
available all material services of public facilities and other utilities
necessary for use and operation of such facility and the other Improvements for
their primary intended purposes, including, without limitation, adequate water,
gas and electrical supply, storm and sanitary sewerage facilities, telephone,
other required public utilities and means of access to such facility from
publicly dedicated streets and public highways for pedestrians and motor
vehicles. All utilities serving such Property, or proposed to serve such
Property in accordance with the related Plans and Specifications, are located
in, and vehicular access to the Improvements on such Property is provided by,
either public rights-of-way abutting such Property or Appurtenant Rights. All
material licenses, approvals, authorizations, consents, permits (including,
without limitation, building, demolition and environmental permits, licenses,
approvals, authorizations and consents), easements and rights-of-way, including
proof and dedication, required for (x) the use, treatment, storage, transport,
disposal or disposition of any Hazardous Substance on, at, under or from such
Property during the construction of the Improvements thereon, and (y)
construction of such Improvements in accordance with the related Plans and
Specifications and the
42
Construction Agency Agreement have either been obtained from the appropriate
Governmental Authorities having jurisdiction or from private parties, as the
case may be, or will be obtained from the appropriate Governmental Authorities
having jurisdiction or from private parties, as the case may be, prior to
commencing any such construction or use and operation, as applicable and will in
each case be maintained by the Lessee during the periods for which they are
required by Applicable Law or such Governmental Authorities.
(c) Title. Upon execution and recordation of the Ground Lease, the
Ground Lease will create a valid and subsisting leasehold estate in the Land in
favor of the Lessor, subject only to Permitted Exceptions.
(d) Insurance. The Lessee has obtained insurance coverage covering the
Property which meets the requirements of Article XIV of the Lease, and such
coverage is in full force and effect.
(e) Lease. Upon the execution and delivery of the Lease Supplement to
the Lease, (i) the Lessee will have unconditionally accepted the Property and
will be bound by the terms of the Lease Supplement and will have a valid
leasehold or subleasehold interest in the Property, subject only to the
Permitted Exceptions; (ii) the Lessee's obligation to pay Rent will be an
independent covenant and no right of deduction or offset will exist with respect
to any Rent or other sums payable under the Lease; and (iii) no Rent under the
Lease will have been prepaid and the Lessee will have no right to prepay the
Rent, except as specifically set forth therein.
(f) Protection of Interests. (i) On the Ground Lease Interest
Acquisition Date, the Lease Supplement, the Assignment of Lease, the Supplement
to Assignment of Lease, the Consent to Assignment and the Mortgage are each in a
form sufficient, and if recorded with the Official Records of Alameda County
will have been recorded in all recording offices necessary, to grant perfected
first priority liens (other than Permitted Exceptions) on the Property to the
Indenture Trustee or the Lessor, as the case may be, (ii) the Indenture Trustee
Financing Statements are each in a form sufficient, and if filed with the
Official Records of Alameda County and the office of the Secretary of State of
California, will have been filed in all filing offices necessary, to create a
valid and perfected first (other than Permitted Exceptions) priority security
interest in the Lessor's interest in all Equipment, if any, to be located on the
Property and the Improvements; and (iii) the Lessor Financing Statements are
each in a form sufficient, and if filed with the Official Records of Alameda
County and the office of the Secretary of State of California will have been
filed in all filing offices necessary, to perfect the Lessor's interest under
the Lease to the extent the Lease is a security agreement.
(g) Flood Hazard Areas. No portion of the Property is located in an
area identified as a special flood hazard area by the Federal Emergency
Management Agency or other applicable agency, or if any portion of the Property
is located in an area identified as a special flood hazard area by the Federal
Emergency Management Agency or other applicable agency, then flood insurance has
been obtained for the Property or
43
such portion thereof in accordance with Section 14.2(b) of the Lease and in
accordance with the National Flood Insurance Act of 1968, as amended.
(h) Conditions Precedent. All conditions precedent contained in this
Agreement and in the other Operative Documents relating to the acquisition and
leasing of the Property by the Lessor have been satisfied in full or waived.
SECTION 8.5. Representations of the Lessee With Respect to Each
Advance. The Lessee hereby represents and warrants as of each Funding Date on
which an Advance is made as follows:
(a) Representations. The representations and warranties of the
Construction Agent and the Lessee set forth in the Operative Documents
(including the representations and warranties set forth in Sections 8.3 and 8.4)
are true and correct in all Material respects on and as of such Funding Date,
except to the extent such representations or warranties relate solely to an
earlier date, in which case such representations and warranties shall have been
true and correct in all Material respects on and as of such earlier date. The
Construction Agent and the Lessee are in compliance in all Material respects
with their respective obligations under the Operative Documents and there exists
no Event of Default or, to the Lessee's knowledge, Default. No Event of Default
or, to the Lessee's knowledge, Default will occur as a result of, or after
giving effect to, the Advance requested by the Acquisition Request or the
Funding Request on such date.
(b) Improvements. Construction of the Improvements to date has been
performed in a good and workmanlike manner, substantially in accordance with the
Plans and Specifications and in compliance with all Insurance Requirements and
Requirements of Law.
(c) No Liens. There have been no Liens against the Property since the
recordation of the Ground Lease, the Lease Supplement, the Assignment of Lease,
the Consent to Assignment or the Mortgage other than Permitted Exceptions and
Lessor Liens, if any. The Certificate Purchaser Amounts and Loans funding such
Advance are secured by the Lien of the Mortgage.
(d) Advance. The amount of the Advance requested represents amounts
owing or amounts that the Lessee reasonably believes will be due in the one
hundred twenty (120) days following such Advance from the Lessee to third
parties in respect of Property Improvements Costs, or amounts paid by the Lessee
to third parties in respect of Property Costs for which the Lessee has not
previously been reimbursed by an Advance. The conditions precedent to such
Advance and the related remittances by the Participants with respect thereto set
forth in Section 6 have been satisfied.
(e) Lease. Upon the execution and delivery of each Equipment Schedule
to the Lease, the Lessee will have unconditionally accepted the Equipment, if
any, subject to the Lease Supplement and will have good and marketable title to
a valid and subsisting leasehold interest in such Equipment, subject only to
Permitted Exceptions.
44
(f) Protection of Interests. On each Funding Date for the acquisition
of Equipment, (i) the Lease Supplement, the applicable Equipment Schedule and
the Mortgage are each a form sufficient to grant perfected Liens on the Lessee's
and the Lessor's interests, respectively, in the Equipment to the Lessor and
Indenture Trustee, respectively, (ii) the Indenture Trustee Financing Statements
are each in a form sufficient, and if filed with the Official Records of Alameda
County and the Office of the Secretary of State of California, will have been
filed in all filing offices necessary, to create a valid and perfected first
priority security interest in such interest in such Equipment, and (iii) the
Lessor Financing Statements are each in a form sufficient, and if filed with the
Official Records of Alameda County and the Office of the Secretary of State of
California, will have been filed in all filing offices necessary, to perfect the
Lessor's interest in such Equipment under the Lease to the extent the Lease is a
security agreement.
(g) Title Insurance Date Down Endorsement. Prior to each Advance during
the Construction Period and prior to an Advance following the Construction
Period for Property Improvement Costs to which a mechanics' lien could take
priority over the lien of the Mortgage or the lien of the Lease, the Lessee
shall furnish the Lessor an endorsement or other coverage reasonably acceptable
to the Indenture Trustee from the title insurance company issuing the policies
pursuant to Section 6.1, insuring the Lessor and the Indenture Trustee that (i)
all mechanics' or similar liens and claims for such liens which could arise from
that part of the Property Improvements Costs previously paid for, if any, or to
be paid for with the then proposed Advance, have been waived and (ii) there has
not been filed with respect to all or any parts of the Ground Lease Interest and
Improvements any mechanics' or similar liens or claims of such liens that are
not discharged of record, or insured over by the title insurance company, in
respect of any part of the Ground Lease Interest and Improvements. The Lessee
shall pay or cause to be paid the cost of any such endorsement or coverage.
SECTION 8.6. Representations and Warranties of the Indenture Trustee.
The Indenture Trustee in its individual capacity represents and warrants to each
of the other parties hereto that:
(a) Due Organization. It is a corporation duly organized and validly
existing under the laws of The Netherlands and has corporate power and authority
to enter into and perform its obligations under this Agreement and each other
Operative Documents to which it is or will be party.
(b) Due Authorization; Enforceability. This Agreement and each other
Operative Document to which it is or will be a party (as the Indenture Trustee
and, to the extent expressly so provided therein, in its individual capacity)
have been, or when executed and delivered will be, duly authorized by all
necessary corporate action on the part of the Indenture Trustee and have been,
or on the Closing Date or Ground Lease Interest Acquisition Date will have been,
duly executed and delivered by the Indenture Trustee (as the Indenture Trustee
or in its individual capacity, as the case may be), and,
45
assuming the due authorization, execution and delivery hereof and thereof by the
other parties hereto and thereto and that this Agreement and each other
Operative Document to which it is or will be a party constitutes the legal,
valid and binding obligation of the other parties hereto and thereto, are or,
upon execution and delivery thereof, will be legal, valid and binding
obligations of the Indenture Trustee (as the Indenture Trustee or in its
individual capacity, as the case may be), enforceable against it in accordance
with their respective terms, except as the same may be limited by insolvency,
bankruptcy, reorganization or other laws relating to or affecting the
enforcement of creditors' rights or by general equitable principles. The Notes
issued on the Closing Date will have been duly authenticated on the Closing
Date.
(c) No Violation. The execution, delivery and performance by the
Indenture Trustee of this Agreement and each other Operative Document to which
it is or will be a party are not and will not be inconsistent with the articles
of incorporation or by-laws of the Indenture Trustee, do not and will not
contravene any applicable law, rule or regulation of the [State of Delaware] or
any federal law, rule or regulation of the United States of America governing
its banking, trust or fiduciary activities and will not contravene any provision
of, or constitute a default under, any indenture, mortgage, contract or other
instrument to which it is a party or by which it or its properties are bound, or
require any consent or approval of any Governmental Authority under any
applicable law, rule or regulation of the State of Delaware or any federal law,
rule or regulation of the United States of America governing its banking, trust
or fiduciary activities.
(d) Litigation. There are no actions or proceedings pending or, to its
knowledge, threatened, to which it is or will be a party, either in its
individual capacity or as Indenture Trustee, before any court, tribunal,
administrative agency, board or arbitrator in the State of Delaware that concern
the Property or the transaction contemplated by the Operative Documents or that,
if adversely determined, would materially and adversely affect is ability to
perform its obligations under the Operative Documents to which it is a party,
would have a material adverse effect on the financial condition of the Indenture
Trustee or would question the validity or enforceability of any of the Operative
Documents to which it is or is to become a party.
SECTION 9.
PAYMENT OF CERTAIN EXPENSES
The Lessee agrees, for the benefit of the Lessor, the
Indenture Trustee and the Participants, that:
SECTION 9.1. Transaction Expenses. (a) During the Construction Period,
(i) the Lessee shall pay from time to time all Transaction Expenses of the
Lessee and the Ground Lessor in respect of the transactions consummated on the
Closing Date, the Ground Lease Interest Acquisition Date or any Funding Date,
and (ii) all other
46
Transaction Expenses shall be capitalized and paid as Advances funded by related
Loans and Certificate Purchaser Amounts on the date of payment.
(b) On the Closing Date and during the Construction Period,
the following Transaction Expenses shall be paid as Advances (and funded by
related Loans and Certificate Purchaser Amounts) and subsequent to the
Construction Period, the Lessee shall pay, as the case may be, (i) the initial
and annual fee of Bank for acting as Owner Trustee and all expenses of the Owner
Trustee and any necessary co-trustees (including reasonable counsel fees and
expenses) or any successor Owner Trustee, for acting as Owner Trustee under the
Trust Agreement, (ii) the initial and annual fee of the Indenture Trustee
(including reasonable counsel fees and expenses) or any successor Indenture
Trustee for acting as Indenture Trustee under the Indenture, (iii) all
Transaction Expenses of the Lessor, (iv) the Commitment Fees, (v) the
Underwriting Fee, (vi) the Administrative Fee, (vii) all Transaction Expenses
incurred by the Indenture Trustee, the Participants or the Lessor in entering
into any future amendments or supplements with respect to any of the Operative
Documents, whether or not such amendments or supplements are ultimately entered
into, or giving or withholding of waivers or consents hereto or thereto, in each
case (except after the occurrence of an Event of Default) which have been
requested by or approved by the Lessee, (viii) all Transaction Expenses incurred
by the Lessor, the Participants or the Indenture Trustee in connection with any
purchase of the Property by the Lessee or other Person pursuant to Articles XVI,
XVII, XX or XXII of the Lease, and (ix) all Transaction Expenses incurred by any
of the other parties hereto in respect of enforcement of any of their rights or
remedies against the Lessee in respect of the Operative Documents. The Lessee
shall pay its own Transaction Expenses and those of the Ground Lessor.
SECTION 9.2. Brokers' Fees and Stamp Taxes. The Lessee shall pay or
cause to be paid any brokers' fees and any and all stamp, transfer and other
similar taxes, fees and excises, if any, including any interest and penalties,
which are payable in connection with the transactions contemplated by this
Participation Agreement and the other Operative Documents.
SECTION 9.3. Obligations. The Lessee shall pay on or before the due
date thereof, all costs, expenses and other amounts required to be paid the
Owner Trustee under the Mortgage, the Indenture (other than the principal of,
and interest on, the Notes) and the Assignment of Lease.
SECTION 10.
OTHER COVENANTS AND AGREEMENTS
SECTION 10.1. Covenants of the Lessee. The Lessee hereby agrees that so
long as this Participation Agreement is in effect:
47
(a) Information. The Lessee will deliver to the Lessor, the
Participants and the Indenture Trustee:
(i) as soon as available and in any event within ninety (90) days after
the end of each fiscal year of the Lessee, a statement of financial
position of the Lessee and its consolidated subsidiaries as of the end
of such fiscal year and the related consolidated statements of income,
stockholders equity and cash flows for such fiscal year, setting forth
in each case in comparative form the figures for the previous fiscal
year, all reported on by independent public accountants of nationally
recognized standing, together with a Responsible Officer's Certificate
from the chief financial officer of the Lessee substantially in the
form of Exhibit R hereto containing a computation of, and showing
compliance with, each of the financial ratios and restrictions
contained in this Section 10.1;
(ii) as soon as available and in any event within forty-five (45) days
after the end of each of the first three quarters of each fiscal year
of the Lessee, an unaudited consolidated statement of financial
position of the Lessee as of the end of such period and the related
consolidated statements of income, stockholders equity and cash flows
for such period and for the portion of the Lessee's fiscal year ended
at the end of such period, together with a Responsible Officer's
Certificate of the chief financial officer of the Lessee or other
officer responsible for the financial affairs of the Lessee
substantially in the form of Exhibit R hereto containing a computation
of, and showing compliance with, each of the financial ratios and
restrictions contained in this Section 10.1 and stating that no Default
known to the Lessee or Event of Default has occurred or is continuing
or, if any Default known to the Lessee or Event of Default has occurred
and is continuing, describing it and the steps, if any, being taken to
cure it;
(iii) promptly after the filing thereof, if applicable, copies (without
exhibits thereto other than, in the case of reports on Form 10-K, the
portions of the annual report incorporated therein by reference) of all
reports on Forms 10-K, 10-Q and 8-K (or their equivalents), which the
Lessee shall have filed with the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended;
(iv) if and when any member of the ERISA Group (1) gives or is required
to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV or ERISA, or
knows that the plan administrator of any Plan has given or is required
to give notice of any such reportable event, a copy of the notice of
such reportable event given or required to be given to the PBGC; (2)
receives notice of complete or partial withdrawal liability under Title
IV of ERISA or notice that any Multiemployer Plan is in reorganization,
is insolvent or has been terminated, a copy of such notice; (3)
receives notice from the PBGC under Title IV of ERISA of an intent to
terminate, impose liability (other than for premiums under Section 4007
of ERISA) in respect of, or appoint a trustee to
48
administer any Plan, a copy of such notice; (4) applies for a waiver of
the minimum funding standard under Section 412 of the Code, a copy of
such application; (5) gives notice of intent to terminate any Plan
under Section 4041(c) of ERISA, a copy of such notice and other
information filed with the PBGC; (6) gives notice of withdrawal from
any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or
(7) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes
any amendment to any Plan or Benefit Arrangement which has resulted or
could result in the imposition of a Lien or the posting of a bond or
other security, a certificate of the chief financial officer or the
chief accounting officer of the Lessee setting forth details as to such
occurrence and action, if any, which the Lessee or applicable member of
the ERISA Group is required or proposes to take;
(v) promptly after the occurrence of any Default known to the Lessee or
Event of Default, notice thereof in writing, together with information
regarding the steps, if any, being taken to cure it; and
(vi) from time to time such additional information regarding the
Lessee, the Lessee or the Property as the Lessor or the Indenture
Trustee, at the request of any Participant, may reasonably request.
(vii) statements of financial performance and compliance certificates
required to be provided by the Lessee to the Lessor, the Indenture
Trustee and the Participants herein shall: (i) include a statement that
the Year 2000 remediation efforts of the Lessee and its Subsidiaries
are ongoing and no substantial changes have occurred in the disclosures
on this subject contained in the most recent filings made by the Lessee
to the Securities and Exchange Commission and; (ii) indicate whether an
auditor, regulator, or third party consultant has issued a management
letter or other communication regarding the Year 2000 exposure, program
or progress of the Lessee and/or its Subsidiaries.
(b) Compliance with Laws. The Lessee will, and will cause its
Subsidiaries to, comply in all material respects with all applicable laws,
ordinances, rules, regulations, orders and requirements of governmental
authorities (including, without limitation, Environmental Laws and ERISA and the
rules and regulations thereunder) except where the necessity of compliance
therewith is contested in good faith by appropriate proceedings and such contest
is not reasonably likely to result in a Material Adverse Effect.
(c) Further Assurances. The Lessee shall take or cause to be taken from
time to time all action necessary to assure during the Term that title to the
Property remains in the Lessor as contemplated by Section 12.1 of the Lease,
that the Lessor holds a perfected Lien on the Property securing the Lease
Balance as contemplated by Section 7.1 of the Lease, and that the Indenture
Trustee holds a perfected Lien on the Property, the Lease and the Indenture
Trust Estate securing the repayment of the Notes and Certificates.
49
(d) Existence; Franchises; Businesses. Except as otherwise expressly
permitted in this Agreement, the Lessee shall, and shall cause each Subsidiary
to (i) maintain in full force and effect its separate existence and all rights,
licenses, leases and franchises reasonably necessary to the conduct of its
business, and (ii) continue doing business as a whole in the lines of business
in which they were engaged on the Closing Date.
(e) Books and Records. The Lessee shall, and shall cause each
Subsidiary to, maintain its books and records in accordance with GAAP, and
permit the Lessor and each Participant to make or cause to be made inspections
and audits of any books, records and papers of the Lessee and its Subsidiaries
and to make extracts therefrom at all such reasonable times after reasonable
notice and as often as any such Person may reasonably require, provided that (i)
at any time other than during the continuance of an Event of Default, such
Person shall not make such inspections and audits more often than once yearly
without a specific reasonable purpose and (ii) at any time after the occurrence
and during the continuance of an Event of Default, (A) the Lessee shall pay for
the cost and expense of any such inspections and audits and (B) the Lessor and
each Participant shall have the right to speak directly with the auditors of the
Lessee in the presence of the Lessee.
(f) Minimum Consolidated Quick Ratio. The Lessee shall maintain at all
times a minimum Consolidated Quick Ratio of 1.00 to 1.00, provided that the
Consolidated Quick Ratio shall be reduced to .95 to 1.0 solely for the fiscal
quarter in which the Momentum Distribution is made.
(g) Minimum Consolidated Tangible Net Worth. At no time will the
Lessee's Consolidated Tangible Net Worth be less than an amount equal to the sum
of (i) eighty-five percent (85%) of the Lessee's Consolidated Tangible Net Worth
at the end of the fiscal quarter ending June 30, 1998 (as adjusted for the
fiscal quarter in which the Momentum Transaction is consummated) plus (ii) an
amount equal to seventy-five percent (75%) of the Lessee's Consolidated Net
Income for each fiscal quarter of the Lessee beginning with the quarter ending
after June 30, 1998 (but with no deduction on account of negative Consolidated
Net Income for any fiscal quarter, unless such negative Consolidated Net Income
was caused solely by charges taken for the purchase of in-process research and
development, in which case such amount shall be deducted) plus (iii) one hundred
percent (100%) of the aggregate net proceeds, including the fair market value of
property other than cash (as determined in good faith by the Board of Directors
of the Lessee), received by the Lessee from the issuance and sale after June 30,
1998 of any capital stock of the Lessee (other than the issuance and sale of any
capital stock (x) to a Subsidiary of the Lessee or (y) which is required to be
redeemed, or is redeemable at the option of the holder, if certain events or
conditions occur or exist or otherwise) or in connection with the conversion or
exchange of any Indebtedness of the Lessee into capital stock of the Lessee
after June 30, 1998.
(h) Maximum Consolidated Debt to Consolidated Total Capital Ratio. At
no time shall the ratio of the Lessee's Consolidated Debt to Consolidated Total
Capital be
50
greater than 0.35 to 1.00, provided that prior to the Lessee or any Subsidiary
incurring any new Debt, the Lessee shall prepare a pro forma consolidated
balance sheet as of the end of the Lessee's next preceding fiscal quarter
reflecting such new Debt and the application of the proceeds thereof, and such
pro forma must show that the financial covenants contained in Sections 10.1
(f)-(j) would not be violated as a result of the incurrence of such new Debt.
(i) Minimum Consolidated Fixed Charge Ratio. The Lessee shall maintain
at all times a minimum Consolidated Fixed Charge Ratio of 1.5 to 1.00 as
measured at the end of any fiscal quarter on a rolling four quarter basis.
(j) Minimum Consolidated Cash Balances. At no time shall the Lessee's
Consolidated Cash Balance fall below Lessee's Adjusted Consolidated Total
Liabilities and 150% of Adjusted Consolidated Current Liabilities.
(k) Liens. The Lessee shall not, and shall not permit any Subsidiary
to, create, assume, or permit to exist, any Lien on any of its property or
assets now owned or hereafter acquired except (i) Liens in favor of the Lessor
or the Indenture Trustee under the Operative Documents, (ii) statutory Liens of
landlords, (iii) easements, rights-of-way, zoning and similar restrictions and
other similar charges or encumbrances not interfering with the ordinary conduct
of business on assets other than the Property and which do not detract
materially from the value of the property to which they attached or impair
materially the use thereof, (iv) Liens created to secure purchase money
Indebtedness or Capitalized Lease Obligations, provided that such Liens are only
in respect of the property or assets subject to, and secure only, such
Indebtedness, (v) Permitted Liens and (vi) Liens in an amount (exclusive of
other Liens permitted under this Section 10.1(k)) at any time not to exceed 10%
of the Lessee's Consolidated Tangible Assets at such time to secure any
Indebtedness of the Lessee and Liens permitted under Section 10.1(k)(i) of the
Participation Agreement dated as of December 4, 1996, as amended (the "Initial
Participation Agreement") among the Lessee and the Lessor, the Indenture Trustee
and the Participants (as such terms are defined therein). Notwithstanding the
foregoing there shall be no Liens on any of the Cash Collateral or the
Collateral other than Liens in favor of the Lessor and the Indenture Trustee,
for the benefit of the Participants.
(l) Mergers, Acquisitions, Etc.. The Lessee shall not, nor shall it
permit any Subsidiary to, enter into any merger, consolidation or amalgamation,
or liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), acquire or establish any Subsidiary or acquire all or
substantially all of the assets of any other Person; provided, however, that as
long as no Default of which the Lessee has knowledge or could have obtained
knowledge through the exercise of reasonable diligence in the ordinary course of
business or resulting from any affirmative act of the Lessee or Event of Default
shall have occurred before or immediately after giving effect thereto:
(i) any Subsidiary of the Lessee may be merged or consolidated with or
into the Lessee (provided, however, that the Lessee shall be the
continuing or surviving corporation) or with or into any one or more
wholly-owned Subsidiaries
51
of the Lessee (provided, however, that the wholly-owned Subsidiary or
Subsidiaries shall be the continuing or surviving corporation);
(ii) the Lessee may merge or consolidate with any other Person so long
as the Lessee is the surviving corporation;
(iii) the Lessee and its Subsidiaries may make any Investment permitted
by Section 10.1(p);
(iv) the Lessee and its Subsidiaries may make any acquisition in which
the consideration paid consists entirely of common stock of the Lessee
or any of its Subsidiaries; and
(v) the Lessee and its Subsidiaries may make any acquisition in which
the cash portion of the consideration paid is $50,000,000 or less.
(m) Asset Dispositions. The Lessee shall not, nor shall it permit any
Subsidiary to, Transfer any of its assets or property, whether now owned or
hereafter acquired; provided, however, that as long as no Default of which the
Lessee has knowledge or could have obtained knowledge through the exercise of
reasonable diligence in the ordinary course of business or resulting from any
affirmative act of the Lessee or Event of Default shall have occurred before or
immediately after giving effect thereto:
(i) any wholly-owned Subsidiary may Transfer any or all of its assets
(upon voluntary liquidation or otherwise) to the Lessee or any other
wholly-owned Subsidiary of the Lessee;
(ii) the Lessee and its Subsidiaries may Transfer any surplus, damaged,
worn or obsolete equipment (other than the Equipment, unless the Lessee
has purchased the same or substituted equipment therefor as permitted
by the Lease) or inventory for not less than fair market value;
(iii) the Lessee and its Subsidiaries may Transfer any defaulted
receivables to a collection agency in the ordinary course of business;
(iv) the Lessee may Transfer ▇▇▇ ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇;
(v) the Lessee may Transfer receivables to PeopleSoft Credit Corp. in
connection with the financing by the Lessee of any initial sale of a
particular software license to a third party;
(vi) the Lessee and its Subsidiaries may Transfer any other assets or
property (other than the Property or the property (as defined in the
Initial Participation Agreement)), provided that the aggregate value of
such assets and property (based on the greater of the fair market value
or book value of such assets or properties)
52
so Transferred in any fiscal year on a rolling aggregate basis does not
exceed fifteen percent (15%) of the Lessee's Consolidated Tangible Net
Worth as measured at the end of each fiscal quarter of the Lessee; and
(vii) the Lessee may make the Momentum Distribution.
(n) Transactions with Affiliates. The Lessee shall not, nor shall it
permit any Subsidiary to, conduct any business or enter into any transaction or
series of similar transactions (including the purchase, sale, lease or exchange
of any property or the rendering of any service) with any Affiliate of the
Lessee or any legal or beneficial owner of 5% or more of any class of capital
stock of the Lessee or with any Affiliate of such owner unless the terms of such
business, transaction or series of transactions are (i) as favorable to the
Lessee or such Subsidiary as terms that would be obtainable at the time for a
comparable transaction or series of similar transactions in arm's-length
dealings with an unrelated third Person or, if such transaction is not one which
by its nature could be obtained from such Person, is on fair and reasonable
terms and (ii) are in the ordinary course of business or, if not in the ordinary
course of business, are set forth in writing and the board of directors of the
Lessee or such Subsidiary, as the case may be, has determined in good faith that
such business or transaction or series of transactions meet the applicable
criteria set forth in clause (i) above.
(o) Restricted Payments. The Lessee shall not, nor shall it cause or
permit any of its Subsidiaries to, make any Restricted Payment; provided, that
(i) Lessee's Subsidiaries may make dividends, distributions and payments to the
Lessee, (ii) the Lessee may make Restricted Payments consisting of payments made
to repurchase or retire, or payments upon the exercise or conversion of,
warrants outstanding on the Closing Date to purchase the Company's common stock
and (iii) the Lessee may make the Restricted Payments contemplated by the
Momentum Transaction.
(p) Investments. The Lessee shall not, nor shall it permit any of its
Subsidiaries to, make any investment in, or make or accrue loans or advances of
money to any Person, through the direct or indirect lending of money, holding of
securities or otherwise, other than Permitted Investments and the investment
contemplated by the Momentum Transaction.
(q) Maintenance and Repair. The Lessee, at its sole cost and expense,
shall, and shall cause each of its Subsidiaries to, maintain its properties in
good working order, mechanical condition and repair and make all necessary
repairs thereto, of every kind and nature whatsoever, whether interior or
exterior, ordinary or extraordinary, structural or nonstructural or foreseen or
unforeseen, in each case as required by all Requirements of Law in all material
respects, insurance requirements and contractual requirements and on a basis
consistent with the operation and maintenance of commercial properties
comparable in type and location to such properties and in compliance with
prudent industry practice.
53
(r) Payment of Taxes. The Lessee and each of its Subsidiaries shall
promptly pay when due all taxes, assessments or other charges owing by the
Lessee or such Subsidiary, except for such taxes, assessments and other charges
that are being contested in good faith by appropriate proceedings and adequate
reserves shall have been set aside therefor in accordance with GAAP.
(s) Insurance. The Lessee shall maintain, and cause each Subsidiary to
maintain, such insurance as may be required by law and such other insurance, to
such extent and against such hazards and liabilities, as is customarily
maintained by companies similarly situated.
SECTION 10.2. Cooperation with the Lessee. The Lessor, the Participants
and the Indenture Trustee shall, to the extent reasonably requested by the
Lessee (but without assuming additional liabilities, duties or other obligations
on account thereof), at the Lessee's expense, cooperate with the Lessee in
connection with its covenants contained herein including, without limitation, at
any time and from time to time, upon the request of the Lessee, to promptly and
duly execute and deliver any and all such further instruments, documents and
financing statements (and continuation statements related thereto) as the Lessee
may reasonably request in order to perform such covenants.
SECTION 10.3. Covenants of the Owner Trustee, the Certificate Holders,
and the Bank. Each of the Owner Trustee, the Certificate Holders and the Bank,
as applicable, hereby agrees with the other parties hereto that so long as this
Participation Agreement is in effect:
(a) Discharge of Liens. Each of the Certificate Holders, the Owner
Trustee and Bank, each agreeing as to itself only, will not create or permit to
exist at any time, and will, at its own cost and expense, promptly take such
action as may be necessary duly to discharge, or to cause to be discharged, all
Lessor Liens on the Property attributable to it; provided, however, that the
Certificate Holders, the Owner Trustee and Bank shall not be required to so
discharge any such Lessor Lien while the same is being contested in good faith
by appropriate proceedings diligently prosecuted so long as such proceedings
shall not involve any material danger of impairment of the Liens of the
Liability or the Security Documents or of the sale, forfeiture or loss of, and
shall not interfere with the use or disposition of, the Property or title
thereto or any interest therein or the payment of Rent.
(b) Trust Agreement. Without prejudice to any right under the Trust
Agreement of the Owner Trustee to resign, or the Certificate Holders' right
under the Trust Agreement to remove the institution acting as Owner Trustee,
each of the Certificate Holders and the Owner Trustee hereby agrees with the
Lessee, each Note Holder and the Indenture Trustee (i) not to terminate or
revoke the trust created by the Trust Agreement except as permitted by Article V
of the Trust Agreement, (ii) not to amend, supplement, terminate or revoke or
otherwise modify any provision of the Trust Agreement in such a manner as to
adversely affect the rights of any such party without the prior written consent
of such party and (iii) to comply with all of the terms of the
54
Trust Agreement, the nonperformance of which would adversely affect any such
party or the Property or title thereto or any interest therein or the payment of
Rent.
(c) Successor Owner Trustee. The Owner Trustee or any successor may
resign or be removed by the Certificate Holders as Owner Trustee, a successor
Owner Trustee may be appointed, and a corporation may become the Owner Trustee
under the Trust Agreement, only in accordance with the provisions of Article IV
of the Trust Agreement and, in the absence of a Default or an Event of Default,
with the consent of the Lessee, which consent shall not be unreasonably withheld
or delayed.
(d) Indebtedness; Other Business. The Owner Trustee, in its capacity as
Owner Trustee under the Trust Agreement, and not in its individual capacity,
shall not contract for, create, incur or assume any indebtedness, or enter into
any business or other activity, other than pursuant to or under the Operative
Documents.
(e) Instructions. The Certificate Holders shall give the Owner Trustee
all instructions necessary for the Owner Trustee to carry out the Certificate
Purchasers' and the Owner Trustee's obligations under the Operative Documents,
including without limitation the Indenture and the Security Documents and shall
not instruct the Owner Trustee to take any action in contravention of the
Operative Documents.
(f) Change of Chief Place of Business. The Owner Trustee shall give
prompt notice to the Lessee and the Indenture Trustee if the Owner Trustee's
name changes or the chief place of business or chief executive office, or the
office where the records concerning the accounts or contract rights relating to
the Property are kept, shall cease to be located as set forth in Section 8.1(i).
(g) Performance of Covenants. The Lessor will (i) cause its
representations and warranties contained herein and each of the other Operative
Documents to be true and correct as of the date made or deemed made herein or
therein, (ii) perform on a timely basis its covenants and agreements contained
herein and in the other Operative Documents and (iii) deliver on a timely basis
all certificates, statements and other documents required to be delivered by it
herein and in the other Operative Documents.
SECTION 11.
LESSEE DIRECTIONS
The Note Holders, the Indenture Trustee, the Certificate Purchasers,
the Lessee and the Owner Trustee hereby agree that, so long as no Default or
Event of Default under the Lease exists, the Lessee shall have the exclusive
right to approve any successor Indenture Trustee pursuant to Section 7.8 of the
Indenture.
55
SECTION 12.
TRANSFERS OF PARTICIPANTS' INTERESTS
SECTION 12.1. Restrictions on and Effect of Transfer by Participants.
(a) Transfer of Notes. Each Note Holder agrees that it will transfer
any Notes held by it only in a transaction which is exempt from registration
under the Securities Act and otherwise in accordance with applicable federal and
state securities laws, the terms hereof and of the Security Documents. By
acceptance of any Notes, each Note Holder shall be deemed to have made the
representations set forth in Section 8.2(a) hereof and such acceptance shall
constitute such Note Holder's agreement to be bound by the terms and provisions
of this Agreement and the Security Documents.
(b) Note Transfer Procedures. Each of the parties hereto, and each
other Note Holder, by its acceptance of a Note, hereby agrees as follows:
(i) On or prior to the date of any transfer of a Note by a Note Holder,
such Note Holder shall furnish to the Certificate Holders, the Owner
Trustee, the Indenture Trustee and the Lessee a written notice (a
"Transfer Notice") (A) setting forth the name of the proposed
transferee, (B) specifying the particular representation contained in
Section 8.2(a)(ii) hereof that shall be deemed made by the transferee
Note Holder upon such transfer and (C) in the event that such notice
shall specify that the representation that shall be deemed made by the
proposed transferee is of the type set forth in subparagraph (B), (C),
or (E) of Section 8.2(a)(ii) hereof, such notice shall be given not
less than ten days prior to the date of transfer and shall further set
forth the information required to be disclosed pursuant to such
subparagraph; and
(ii) In the event that the Transfer Notice shall contain information of
the type described in clause (C) of the preceding paragraph, then the
Lessee shall use commercially reasonable efforts to determine as
promptly as practicable (but in no event later than ten days following
receipt of the Transfer Notice) whether, as a result of matters
relating to the Lessee or the Certificate Holders or any of their
respective Affiliates, the proposed transfer could result in a
prohibited transaction, within the meaning of section 406 or 407 of
ERISA or in a transaction in connection with which a tax could be
imposed pursuant to Section 4975 of the Code (or any successor
provision thereto); and
(iii) In the event that the Lessee shall determine that the proposed
transfer could result in such a prohibited transaction or a transaction
in connection with which a tax could be imposed pursuant to Section
4975 of the Code, then (a) the Lessee shall thereupon furnish written
notice to such Note Holder and such other party describing in
reasonable detail the basis of such conclusion and (b) such Note Holder
shall refrain from consummating the proposed transaction, unless and
until such Note Holder shall obtain the written concurrence of the
Lessee and the Certificate Holders to such transfer. Upon the request
of such Note Holder,
56
the Lessee and the Certificate Holders, as appropriate, agree to confer
in good faith regarding such conclusion.
(iv) Prior to a refinancing, if any, of the Notes and Certificates in
the private placement market, the restrictions on transfer applicable
to Certificate Holders set forth in Section 12.1(c) shall be equally
applicable to transfers of Notes by Note Holders and each Note Holder
wishing to transfer any Note shall comply therewith, substituting "Note
Holder", "Notes" and "Note Purchaser" for "Certificate Holder",
"Certificates" and "Certificate Purchaser" as required.
(c) Transfers of Certificates. No Certificate Holder may (without, in
the absence of a continuing Lease Default or Lease Event of Default, the prior
written consent of the Lessee (not to be unreasonably withheld)) assign, convey
or otherwise transfer all or any portion of its right, title or interest in, to
or under its Certificates or any of the Operative Documents, or the Property,
provided that (1) any Certificate Holder may pledge its interest without the
consent of the Lessee to any Federal Reserve Bank, (2) each transferee must be
an Institutional Investor, (3) without the prior written consent of the Lessee,
any Certificate Purchaser may transfer all or any portion of its interest to any
Institutional Investor that has either capital, surplus and undivided profits of
at least $40,000,000 or a net worth of at least $40,000,000 and (4) without the
prior written consent of the Lessee, each Certificate Purchaser may transfer all
or any portion of its interest to any Affiliate of such Participant or to any
other existing Participant; provided that in the case of any transfer (other
than to such Affiliate) each of the following conditions and any other
applicable conditions of the other Operative Documents are satisfied:
(i) Required Notice and Effective Date. If a Certificate Holder desires
to effect a transfer of its Certificates (or any portion thereof), it
shall give written notice of each such proposed transfer to the Lessee,
the Indenture Trustee and each other Participant at least five (5)
Business Days prior to such proposed transfer, setting forth the name
of such proposed transferee, the percentage or interest to be retained
by such Participant, if any, and the date on which such transfer is
proposed to become effective. All reasonable out-of-pocket costs
(including, without limitation, legal expenses) incurred by the Lessor,
the Indenture Trustee or any Participant in connection with any such
disposition by such Participant under this Section 12.1(c) shall be
borne by such transferring Participant. In the event of a transfer
under this Section 12.1(c), any expenses incurred by the transferee in
connection with its review of the Operative Documents and its
investigation of the transactions contemplated thereby shall be borne
by such transferee or the relevant Participant, as they may determine,
but shall not be considered costs and expenses which the Lessee is
obligated to pay or reimburse under Section 9. Any such proposed
transfer shall become effective upon the later of (i) the date proposed
in the transfer notice referred to above and (ii) the date on which all
conditions to such transfer set forth in this Section 12.1(c) shall
have been satisfied.
57
(ii) Assumption of Obligations. Any transferee of a Certificate
Holder's interest pursuant to this Section 12.1 shall execute and
deliver to the Indenture Trustee, the Lessor and the Lessee an
Assignment and Acceptance in substantially the form attached hereto as
Exhibit J ("Assignment and Acceptance"), duly executed by such
transferee and the transferring Participant, and a letter in
substantially the form of the Participant's Letter attached hereto as
Exhibit K ("Participant's Letter"), duly executed by such transferee,
and thereupon the obligations of the transferring Participant under the
Operative Documents shall be proportionately released and reduced to
the extent of such transfer. Upon any such transfer as above provided,
the transferee shall be deemed to be bound by all obligations (whether
or not yet accrued) under, and to have become a party to, all Operative
Documents to which its transferor was a party, shall be deemed the
pertinent "Participant" for all purposes of the Operative Documents and
shall be deemed to have made that portion of the payments pursuant to
this Participation Agreement previously made or deemed to have been
made by the transferor represented by the interest being conveyed; and
each reference herein and in the other Operative Documents to the
pertinent "Certificate Purchaser" or "Certificate Holder" shall
thereafter be deemed a reference to the transferee, to the extent of
such transfer, for all purposes. Upon any such transfer, the Indenture
Trustee shall deliver to each Participant, the Lessor and the Lessee a
new Schedule I and Schedule II to this Agreement, revised to reflect
the relevant information for such new Participant and the Commitment of
such new Participant (and the revised Commitment of the transferor
Participant if it shall not have transferred its entire interest).
(iii) Representations. Notwithstanding anything to the contrary set
forth above, no Certificate Holder may assign, convey or transfer its
interest to any Person, unless such Person shall have delivered to the
Indenture Trustee, the Lessor and the Lessee a certificate confirming
the accuracy of the representations and warranties set forth in Section
8 with respect to such Person (other than as such representation or
warranty relates to the execution and delivery of Operative Documents)
and representing that such Person has, independently and without
reliance upon the Indenture Trustee, any other Participant or, except
to the extent of the Lessee's representations made under the Operative
Documents when made, the Lessee, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into this transaction, the Property and the Lessee and
made its own decision to enter into this transaction.
(iv) Applicable Law. Such transfer shall comply with Applicable Law and
shall not require registration under any securities law applicable
thereto.
(v) At-Risk Requirements. Any transferee of a Certificate Holder's
interest pursuant to this Section 12.1 agrees to comply with the
"at-risk" requirements under GAAP with respect to such interest as set
forth in Issues 90-15, 96-21 and 97-1 of The Emerging Issues Task Force
Abstracts published by the Financial Accounting Standards Board,
provided that the foregoing transfer restriction shall
58
not apply (A) after the occurrence and during the continuance of an
Event of Default or (B) to any transfer necessitated as a result of any
of the events specified in Section 13.9.
(d) Effect. From and after any transfer of its Notes or Certificates,
the transferring Participant shall be released, to the extent assumed by the
transferee, from its liability and obligations hereunder and under the other
Operative Documents to which such transferor is a party in respect of
obligations to be performed on or after the date of such transfer. Upon any
transfer by a Participant as above provided, any such transferee shall be deemed
a "Participant" for all purposes of such documents and each reference herein to
a Participant shall thereafter be deemed a reference to such transferee for all
purposes to the extent of such transfer, except as the context may otherwise
require. Notwithstanding any transfer as provided in this Section 12.1, the
transferor shall be entitled to all benefits accrued and all rights vested prior
to such transfer, including, without limitation, rights to indemnification under
this Participation Agreement or any other Operative Document.
(e) Arranger's Fee. Each transferring Participant shall pay to the
Arranger a transfer fee of $2,500.
SECTION 12.2. Covenants and Agreements of Participants.
(a) Participations. Each Participant covenants and agrees that it will
not grant participations in its Notes or Certificates to any Person (a
"Sub-Participant") unless such participation complies with Applicable Law and
does not require registration under any securities law applicable thereto and
such Sub-Participant (i) is a bank or other financial institution and (ii)
represents and warrants, in writing, to such Participant for the benefit of the
Participants, the Lessor and the Lessee that (A) no part of the funds used by it
to acquire an interest in any Participation Interest constitutes assets of any
"employee benefit plan" (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA, or "plan" (as defined in Section 4975(e)(1) of the Code)
and (B) such Sub-Participant is acquiring its interest for investment purposes
without a view to the distribution thereof. Any such Person shall require any
transferee of its interest in its Notes or Certificates to make the
representations and warranties set forth in the preceding sentence, in writing,
to such Person for its benefit and the benefit of the Participants, the Lessor,
the Indenture Trustee and Lessee. In the event of any such sale by a Participant
of a participating interest in its Notes or Certificates to a Sub-Participant,
such Participant's obligations under this Participation Agreement and under the
other Operative Documents shall remain unchanged, such Participant shall remain
solely responsible for the performance thereof, such Participant shall remain
the holder of its Notes or Certificates, for all purposes under this
Participation Agreement and under the other Operative Documents, and the Lessor,
the Indenture Trustee and, except as set forth in Section 12.2(b), the Lessee
shall continue to deal solely and directly with such Participant in connection
with such Participant's rights and obligations under this Participation
Agreement and under the other Operative Documents.
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(b) Transferee Indemnities. Each Sub-Participant shall be entitled to
the benefits of Sections 13.5, 13.6, and 13.7 and 13.10 with respect to its
participation in the Notes or Certificates outstanding from time to time;
provided that no Sub-Participant shall be entitled to receive any greater amount
pursuant to such Sections than the transferor Participant would have been
entitled to receive in respect of the amount of the participation transferred by
such transferor Participant to such Sub-Participant had no such transfer or
participation occurred.
SECTION 12.3. Future Participants. Each Participant shall be deemed to
be bound by and, upon compliance with the requirements of this Section 12, will
be entitled to all of the benefits of the provisions of, this Participation
Agreement.
SECTION 13.
INDEMNIFICATION
SECTION 13.1. General Indemnification. The Lessee agrees, whether or
not any of the transactions contemplated hereby shall be consummated, to assume
liability for, and to indemnify, protect, defend, save and keep harmless each
Indemnitee, on an After Tax Basis, from and against, any and all Claims that may
be imposed on, incurred by or asserted against such Indemnitee (whether because
of action or omission by such Indemnitee or otherwise), whether or not such
Indemnitee shall also be indemnified as to any such Claim by any other Person
and whether or not such Claim arises or accrues prior to the Closing Date or
after the Expiration Date, in any way relating to or arising out of:
(a) any of the Operative Documents or any of the transactions
contemplated thereby or any violation thereof by the Lessee, and any amendment,
modification or waiver in respect thereof;
(b) the Property, the Lease, the Ground Lease, the Trust Estate, the
Indenture Trust Estate or any part thereof or interest therein;
(c) the purchase, design, construction, preparation, installation,
inspection, delivery, non-delivery, acceptance, rejection, ownership,
management, possession, operation, rental, lease, sublease, repossession,
maintenance, repair, alteration, modification, addition or substitution,
storage, transfer of title, redelivery, use, financing, refinancing,
disposition, operation, condition, sale (including, without limitation, any sale
pursuant to Sections 16.2, 16.3, 16.4, 17.2(c), 17.2(e) or 17.4 of the Lease or
any sale pursuant to Articles XX or XXII of the Lease), return or other
disposition of all or any part or any interest in the Property or the imposition
of any Lien (or incurring of any liability to refund or pay over any amount as a
result of any Lien) thereon, including, without limitation: (1) Claims or
penalties arising from any violation of federal, state or local law, rule,
regulation or order or in tort (strict liability or otherwise), (2) latent or
other defects, whether or not discoverable, (3) any Claim based upon a violation
or
60
alleged violation of the terms of any restriction, easement, condition or
covenant or other matter affecting title to the Property, (4) the making of any
Modifications in violation of any standards imposed by any insurance policies
required to be maintained by Lessee pursuant to the Lease which are in effect at
any time with respect to the Property or any part thereof, (5) any Claim for
patent, trademark or copyright infringement, and (6) Claims arising from any
public improvements with respect to the Property resulting in any charge or
special assessments being levied against the Property or any plans to widen,
modify or realign any street or highway adjacent to the Property;
(d) the offer, issuance or sale of the Notes and Certificates, provided
that (i) the Lessor shall not be entitled to indemnification under this clause
(d) if it shall have been determined by a court of competent jurisdiction to
have breached its representation set forth in Section 8.1(h), (ii) no
Participant shall be entitled to indemnification under this clause (d) if it
shall have been determined by a court of competent jurisdiction to have breached
its representation set forth in Section 8.2(b)(vi) and (iii) neither the Lessor,
the Indenture Trustee nor any Participant shall be entitled to indemnification
under this clause (d) with respect to any Claim which a court of competent
jurisdiction determines to have arisen out of any misrepresentation of a
material fact made by the Lessor, the Indenture Trustee or such Participant,
unless the misrepresentation was made in reliance upon and in conformity with
information furnished to the Lessor, the Indenture Trustee or such Participant,
as applicable, by the Lessee;
(e) the breach by the Lessee of any covenant, representation or
warranty made by it or deemed made by it in any Operative Document or any
certificate required to be delivered by any Operative Document;
(f) the retaining or employment of any broker, finder or financial
advisor by the Lessee to act on its behalf in connection with this Participation
Agreement, or the incurring of any fees or commissions to which the Lessor might
be subjected by virtue of entering into the transactions contemplated by this
Participation Agreement;
(g) the existence of any Lien on or with respect to the Property, the
Improvements, the Equipment, any Basic Rent or Supplemental Rent, the Cash
Collateral, title thereto, or any interest therein including any Liens which
arise out of the possession, use, occupancy, construction, repair or rebuilding
of the Property or by reason of labor or materials furnished or claimed to have
been furnished to the Lessee, the Existing Owner, the Lessor or any of their
contractors or agents or by reason of the financing of the Property or any
personalty or equipment purchased or leased by the Lessee or Improvements or
Modifications constructed by the Lessee, except Lessor Liens and Liens in favor
of the Indenture Trustee or the Lessor;
(h) the transactions contemplated by the Lessee hereby or by any other
Operative Document, in respect of the application of Parts 4 and 5 of Subtitle B
of Title I of ERISA and any prohibited transaction described in Section 4975(c)
of the Code (other than any Claim resulting from a breach of representation or
warranty of the Lessor or any Participant); or
61
(i) the lease of the Ground Lease Interest and the purchase or
ownership of the other Property by the Lessor, or any matters arising therefrom
or related thereto;
provided, however, the Lessee shall not be required to indemnify (x) the Lessor
for any Claim to the extent arising from any misrepresentation by the Lessor
under Section 8.1 (e) or (l) or from the failure by the Lessor to comply with
Section 10.3 (a), or (y) any Indemnitee under this Section 13.1 for any of the
following: (1) any Claim to the extent resulting from the willful misconduct or
gross negligence of such Indemnitee (it being understood that the Lessee shall
be required to indemnify an Indemnitee even if the ordinary (but not gross)
negligence of such Indemnitee caused or contributed to such Claim), (2) any
Claim resulting from Lessor Liens which the Lessor is responsible for
discharging under the Operative Documents, (3) any Claim to the extent
attributable to acts or events occurring after the expiration of the Term or the
return or remarketing of the Property so long as the Lessor, the Indenture
Trustee and the Participants are not exercising remedies against the Lessee in
respect of the Operative Documents and no Default or Event of Default under the
Lease has occurred and is continuing, (4) any Imposition or other claims for
Taxes of the type(s) described in Section 13.5 and (5) any Claims of the type(s)
described in Sections 13.2 (only with respect to claims in respect of a decline
in the Fair Market Sales Value of the Property as a result of an event described
in Section 13.2(b) and the Lessee's exercise of the Remarketing Option), 13.6,
13.7, 13.8 and 13.10, or (z) any Indemnitee for any such Claim under this
Section 13.1 arising during the Construction Period except as follows:
(1) The Lessee shall indemnify the Indemnitees as provided in
this Section 13.1 from and against any and all such
liabilities, losses, damages and expenses caused by or arising
from any failure by the Lessee to comply with any of its
obligations under the Operative Documents (including its
insurance obligations), any representation by the Lessee in
any of the Operative Documents not being true, any negligence
or willful misconduct of the Lessee, or any claim by any
third-party against the Lessee (or against any Indemnitee)
based upon the alleged action or inaction by the Lessee.
(2) If any Lessor Party incurs any such claims or expenses for
which the Lessee is not obligated to indemnify such Lessor
Party pursuant to clause (z) (1) of Section 13.1, such claims
shall, if such Lessor Party shall so request by a written
notice to the Lessor, be capitalized pursuant to Section
3.9(f).
It is expressly understood and agreed that the indemnity provided for herein
shall survive the expiration or termination of and shall be separate and
independent from any remedy under the Lease or any other Operative Document.
Without limiting the express rights of any Indemnitee under this Section 13.1,
this Section 13.1 shall be construed as an indemnity only and not a guaranty of
residual value of the Property or as a guaranty of the Participation Interests.
62
SECTION 13.2. End of Term Indemnity.
(a) If the Lessee elects the Remarketing Option and there would, after
giving effect to the proposed remarketing transactions, be a Shortfall Amount,
then prior to the Maturity Date and as a condition to the Lessee's right to
complete the remarketing of the Property pursuant to Section 22.1 of the Lease,
the Lessee shall cause to be delivered to the Lessor at least 30 days prior to
the Expiration Date, at the Lessee's sole cost and expense, an Appraisal in form
and substance satisfactory to the Lessor, the Indenture Trustee and the Required
Participants (the "End of the Term Report") which shall state the appraiser's
conclusions as to the reason for any decline in the Fair Market Sales Value of
the Property from that anticipated for such date in the Appraisal delivered on
the Closing Date.
(b) Prior to the Expiration Date, the Lessee shall pay to the Lessor an
amount (not to exceed the Shortfall Amount) equal to the portion of the
Shortfall Amount that the End of the Term Report demonstrates was the result of
a decline in the Fair Market Sales Value of the Property due to:
(i) extraordinary wear and tear, excessive usage, failure to maintain,
to repair, to restore, to rebuild or to replace, failure to comply with
the Lease and all applicable laws, failure to use, workmanship, method
of installation or removal or maintenance, repair, rebuilding or
replacement (excepting in each case ordinary wear and tear);
(ii) any Modification made to, or any rebuilding of, the Property or
any part thereof by the Lessee without the consent of the Lessor; or
(iii) the existence of any Hazardous Activity, Hazardous Substance or
Environmental Violations; or
(iv) any restoration or rebuilding carried out by the Lessee or any
sublessee; or
(v) any condemnation of any portion of the Property pursuant to Article
XV of the Lease; or
(vi) any use of the Property or any part thereof by the Lessee or any
sublessee other than as a suburban office facility; or
(vii) any grant, release, dedication, transfer, annexation or amendment
made pursuant to Section 12.2 of the Lease; or
(viii) the failure of the Lessor to have a good and marketable
leasehold or fee estate in the Property, as required by the Operative
Documents, free and clear of all Liens (including Permitted Liens) and
exceptions to title, except (A) such Liens or exceptions to title that
existed on the Ground Lease Interest Acquisition
63
Date and were disclosed in the policy of title insurance delivered
pursuant to Section 6.1; (B) Lessor Liens and (C) other Liens
specifically consented to by the Lessor.
SECTION 13.3. Environmental Indemnity. Without limitation of the other
provisions of this Section 13, the Lessee hereby agrees to indemnify, hold
harmless and defend each Indemnitee from and against any and all claims
(including without limitation third party claims for personal injury or real or
personal property damage), losses (including but not limited to any loss of
value of the Property), damages, liabilities, fines, penalties, charges,
administrative and judicial proceedings (including informal proceedings) and
orders, judgments, remedial action, requirements, enforcement actions of any
kind, and all reasonable and documented costs and expenses incurred in
connection therewith (including but not limited to reasonable and documented
attorneys' and/or paralegals' fees and expenses), including, but not limited to,
all costs incurred in connection with any investigation or monitoring of site
conditions or any clean-up, remedial, removal or restoration work by any
federal, state or local government agency, which such Indemnitee becomes subject
to because of its involvement with the Property, the transactions contemplated
by the Operative Documents or any other matter referred to in paragraphs (a)
through (i) of Section 13.1 arising in whole or in part, out of:
(a) the presence on or under the Property of any Hazardous Substances,
or any Releases or discharges of any Hazardous Substances on, under, from or
onto the Property;
(b) any activity, including, without limitation, construction, carried
on or undertaken on or off the Property, and whether by the Lessee, the Lessor,
the Ground Lessor or any predecessor in title or any employees, agents,
contractors or subcontractors of the Lessee, the Lessor, the Ground Lessor or
any predecessor in title, or any other Persons (including such Indemnitee), in
connection with the handling, treatment, removal, storage, decontamination,
cleanup, transport or disposal of any Hazardous Substances that at any time are
located or present on or under or that at any time migrate, flow, percolate,
diffuse or in any way move onto or under the Property;
(c) loss of or damage to any property or the environment (including,
without limitation, cleanup costs, response costs, remediation and removal
costs, cost of corrective action, costs of financial assurance, fines and
penalties and natural resource damages), or death or injury to any Person, and
all expenses associated with the protection of wildlife, aquatic species,
vegetation, flora and fauna, and any mitigative action required by or under
Environmental Laws;
(d) any claim concerning lack of compliance with Environmental Laws, or
any act or omission causing an environmental condition that requires remediation
or would allow any Governmental Authority to record a Lien on the land records;
(e) any residual contamination on or under the Property, or affecting
any natural resources, or any contamination of any property or natural resources
arising in
64
connection with the generation, use, handling, storage, transport or disposal of
any such Hazardous Substances, and irrespective of whether any of such
activities were or will be undertaken in accordance with applicable
Environmental Laws; or
(f) any material inaccuracies, misrepresentations, misstatements, and
omissions and any conflicting information contained in or omitted from the
Environmental Audit;
provided, however, the Lessee shall not be required to indemnify any Indemnitee
under this Section 13.3 for (1) any Claim to the extent resulting from the
willful misconduct or gross negligence of such Indemnitee (it being understood
that the Lessee shall be required to indemnify an Indemnitee even if the
ordinary (but not gross) negligence of such Indemnitee caused or contributed to
such Claim), (2) subject to the provisions Section 15.2 of the Lease, any Claim
to the extent attributable to acts or events occurring after the expiration of
the Term or the return or remarketing of the Property so long as the Lessor, the
Indenture Trustee and the Participants are not exercising remedies against the
Lessee in respect of the Operative Documents and no Default or Event of Default
under the Lease has occurred and is continuing, (3) any Imposition or other
claims for Taxes of the type(s) described in Section 13.5 or (4) any Claims of
the type(s) described in Sections 13.2 (only with respect to claims in respect
of a decline in the Fair Market Sales Value of the Property and the Lessee's
exercise of the Remarketing Option), 13.6, 13.7, 13.8 and 13.10. It is expressly
understood and agreed that the indemnity provided for herein shall survive the
expiration or termination of and shall be separate and independent from any
remedy under the Lease or any other Operative Document.
SECTION 13.4. Proceedings in Respect of Claims. With respect to any
amount that the Lessee is requested by an Indemnitee to pay by reason of Section
13.1 or 13.3, such Indemnitee shall, if so requested by the Lessee and prior to
any payment, submit such additional information to the Lessee as the Lessee may
reasonably request and which is in the possession of such Indemnitee to
substantiate properly the requested payment.
In case any action, suit or proceeding shall be brought against any
Indemnitee, such Indemnitee shall notify the Lessee of the commencement thereof,
and if the Construction Period limitation on indemnification set forth in clause
(z) of the proviso to Section 13.1 does not apply, the Lessee shall be entitled,
at its expense, to participate in, and, to the extent that the Lessee desires
to, assume and control the defense thereof; provided, however, that the Lessee
shall have acknowledged in writing its obligation to fully indemnify such
Indemnitee in respect of such action, suit or proceeding, and the Lessee shall
keep such Indemnitee fully apprised of the status of such action, suit or
proceeding and shall provide such Indemnitee with all information with respect
to such action, suit or proceeding as such Indemnitee shall reasonably request,
and provided further, that the Lessee shall not be entitled to assume and
control the defense of any such action, suit or proceeding if and to the extent
that, (A) in the reasonable opinion of such Indemnitee, (x) such action, suit or
proceeding involves any possibility of imposition of criminal liability or any
risk of material civil liability on such Indemnitee or will involve
65
a material risk of the sale, forfeiture or loss of, or the creation of any Lien
(other than a Permitted Lien) on the Property or any part thereof unless, in the
case of civil liability or Lien, the Lessee shall have posted a bond or other
security satisfactory to the relevant Indemnitee in respect to such risk or (y)
the control of such action, suit or proceeding would involve an actual or
potential conflict of interest, (B) such proceeding involves Claims not fully
indemnified by the Lessee which the Lessee and the Indemnitee have been unable
to sever from the indemnified claim(s), or (C) an Event of Default under the
Lease has occurred and is continuing. The Indemnitee may participate in a
reasonable manner at its own expense and with its own counsel in any proceeding
conducted by the Lessee in accordance with the foregoing. The Lessee shall not
enter into any settlement or other compromise with respect to any Claim which is
entitled to be indemnified under Section 13.1 or 13.3 without the prior written
consent of the Indemnitee which consent shall not be unreasonably withheld in
the case of a money settlement not involving an admission of liability of such
Indemnitee.
Each Indemnitee shall at the expense of the Lessee cooperate with and
supply the Lessee with such information and documents reasonably requested by
the Lessee as are necessary or advisable for the Lessee to participate in any
action, suit or proceeding to the extent permitted by Section 13.1 or 13.3.
Unless an Event of Default under the Lease shall have occurred and be
continuing, no Indemnitee shall enter into any settlement or other compromise
with respect to any Claim which is entitled to be indemnified under Section 13.1
or 13.3 without the prior written consent of the Lessee, which consent shall not
be unreasonably withheld, unless such Indemnitee waives its right to be
indemnified under Section 13.1 or 13.3 with respect to such Claim.
Upon payment in full of any Claim by the Lessee pursuant to Section
13.1 or 13.3 to or on behalf of an Indemnitee, the Lessee, without any further
action, shall be subrogated to any and all claims that such Indemnitee may have
relating thereto (other than claims in respect of insurance policies maintained
by such Indemnitee at its own expense), and such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be necessary to preserve
any such claims and otherwise cooperate with the Lessee and give such further
assurances as are necessary or advisable to enable the Lessee vigorously to
pursue such claims.
Any amount payable to an Indemnitee pursuant to Section 13.1 or 13.3
shall be paid to such Indemnitee promptly upon receipt of a written demand
therefor from such Indemnitee, accompanied by a written statement describing in
reasonable detail the basis for such indemnity and the computation of the amount
so payable and, if requested by the Lessee, such determination shall be verified
by a nationally recognized independent accounting firm mutually acceptable to
the Lessee and the Indemnitee at the expense of the Lessee.
SECTION 13.5. General Impositions Indemnity.
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(a) Indemnification. The Lessee shall pay and assume liability for, and
does hereby agree to indemnify, protect and defend the Property and all
Indemnitees, and hold them harmless against, all Impositions on an After Tax
Basis; provided, however, that the Lessee shall have no obligation to indemnify
any Indemnitee for any such Impositions under this Section 13.5 arising during
the Construction Period except as follows:
(1) The Lessee shall indemnify the Indemnitees as provided in
this Section 13.5 from and against any and all such
Impositions caused by or arising from any failure by the
Lessee to comply with any of its obligations under the
Operative Documents (including its insurance obligations), any
representation by the Lessee in any of the Operative Documents
not being true, any negligence or willful misconduct of the
Lessee, or any claim by any third-party against the Lessee (or
against any Indemnitee) based upon the alleged action or
inaction by the Lessee.
(2) If any Lessor Party incurs any such claims or expenses for
which the Lessee is not obligated to indemnify such Lessor
Party pursuant to Section 13.5(a), such liabilities, losses,
damages and expenses shall, if such Lessor Party shall so
request by a written notice to the Lessor, be capitalized
pursuant to Section 3.9(f).
(b) Payments. (i) Subject to the terms of Section 13.5(a) and (f), the
Lessee shall pay or cause to be paid all Impositions directly to the taxing
authorities where feasible and otherwise to the Indemnitee, as appropriate, and
the Lessee shall at its own expense, upon such Indemnitee's reasonable request,
furnish to such Indemnitee copies of official receipts or other satisfactory
proof evidencing such payment.
(ii) In the case of Impositions for which no contest is conducted
pursuant to Section 13.5(f) and which the Lessee pays directly to the
taxing authorities, the Lessee shall pay such Impositions prior to the
latest time permitted by the relevant taxing authority for timely
payment. In the case of Impositions for which the Lessee reimburses an
Indemnitee, the Lessee shall do so within twenty (20) days after
receipt by the Lessee of demand by such Indemnitee describing in
reasonable detail the nature of the Imposition and the basis for the
demand (including the computation of the amount payable), but in no
event shall the Lessee be required to pay such reimbursement prior to
thirty (30) days before the latest time permitted by the relevant
taxing authority for timely payment. In the case of Impositions for
which a contest is conducted pursuant to Section 13.5(f), the Lessee
shall pay such Impositions or reimburse such Indemnitee for such
Impositions, to the extent not previously paid or reimbursed pursuant
to subsection (a), prior to the latest time permitted by the relevant
taxing authority for timely payment after conclusion of all contests
under Section 13.5(f).
(iii) At the Lessee's request, the amount of any indemnification
payment by the Lessee pursuant to subsection (a) shall be
verified and certified by an independent public accounting
firm mutually acceptable to the Lessee and the Indemnitee. The
fees and expenses of such independent public
67
accounting firm shall be paid by the Lessee unless such verification
shall result in an adjustment in the Lessee's favor of 5% or more of
the payment as computed by the Indemnitee, in which case such fee shall
be paid by the Indemnitee.
(c) Reports and Returns. (i) The Lessee shall be responsible for
preparing and filing any real and personal property or ad valorem tax returns in
respect of the Property. In case any other report or tax return shall be
required to be made with respect to any obligations of the Lessee under or
arising out of subsection (a) and of which the Lessee has knowledge or should
have knowledge, the Lessee, at its sole cost and expense, shall notify the
relevant Indemnitee of such requirement and (except if such Indemnitee notifies
the Lessee that such Indemnitee intends to file such report or return) (A) to
the extent required or permitted by and consistent with Applicable Law, make and
file in its own name such return, statement or report; and (B) in the case of
any other such return, statement or report required to be made in the name of
such Indemnitee, advise such Indemnitee of such fact and prepare such return,
statement or report for filing by such Indemnitee or, where such return,
statement or report shall be required to reflect items in addition to any
obligations of the Lessee under or arising out of subsection (a), provide such
Indemnitee at the Lessee's expense with information sufficient to permit such
return, statement or report to be properly made with respect to any obligations
of the Lessee under or arising out of subsection (a). Such Indemnitee shall,
upon the Lessee's request and at the Lessee's expense, provide any data
maintained by such Indemnitee (and not otherwise available to or within the
control of the Lessee) with respect to the Property which the Lessee may
reasonably require to prepare any required tax returns or reports. Each
Indemnitee agrees to use its best efforts to send to the Lessee a copy of any
written request or other notice that the Indemnitee receives with respect to any
reports or returns required to be filed with respect to the Property or the
transactions contemplated by the Operative Documents, it being understood that
no Indemnitee shall have any liability for failure to provide such copies.
(d) Income Inclusions. If as a result of the payment or reimbursement
by the Lessee of any expenses of the Lessor or the payment of any Transaction
Expenses incurred in connection with the transactions contemplated by the
Operative Documents, the Lessor or any Participant shall suffer a net increase
in any federal, state or local income tax liability, the Lessee shall indemnify
such Persons (without duplication of any indemnification required by subsection
(a)) on an After Tax Basis for the amount of such increase. The calculation of
any such net increase shall take into account any current or future tax savings
realized or reasonably expected to be realized by such person in respect
thereof, as well as any interest, penalties and additions to tax payable by the
Lessor, or any Participant or such Affiliate, in respect thereof.
(e) Withholding Taxes. As between the Lessee on one hand, and the
Lessor or the Indenture Trustee and any Participant on the other hand, the
Lessee shall be responsible for, and, subject to the provisions of Sections
13.5(g) and (h), the Lessee shall indemnify and hold harmless the Lessor, the
Indenture Trustee and the Participants (without duplication of any
indemnification required by subsection (a)) on an After Tax
68
Basis against, any obligation for United States or foreign withholding taxes
imposed in respect of payments with respect to the Participation Interests or
with respect to Rent payments under the Lease or payments of the Asset
Termination Value or Purchase Option Price (and, if the Lessor, the Indenture
Trustee or any Participant receives a demand for such payment from any taxing
authority, the Lessee shall discharge such demand on behalf of the Lessor, the
Indenture Trustee or such Participant). Notwithstanding the foregoing, the
Lessee shall not be responsible for any payment of any withholding tax if the
Lessee is not liable under the Operative Documents for payment of the ultimate
tax.
(f) Contests of Impositions. (i) If a written claim is made against any
Indemnitee or if any proceeding shall be commenced against such Indemnitee
(including a written notice of such proceeding), for any Impositions, such
Indemnitee shall promptly notify the Lessee in writing and shall not take action
with respect to such claim or proceeding without the consent of the Lessee for
thirty (30) days after the receipt of such notice by the Lessee; provided,
however, that, in the case of any such claim or proceeding, if action shall be
required by law or regulation to be taken prior to the end of such 30-day
period, such Indemnitee shall, in such notice to the Lessee, inform the Lessee
of such shorter period, and no action shall be taken with respect to such claim
or proceeding without the consent of the Lessee before 2 days before the end of
such shorter period; provided, further, that the failure of such Indemnitee to
give the notices referred to this sentence shall not diminish the Lessee's
obligation hereunder except to the extent such failure precludes the Lessee from
contesting all or part of such claim.
(ii) If, within thirty (30) days of receipt of such notice from the
Indemnitee (or such shorter period as the Indemnitee has notified the
Lessee is required by law or regulation for the Indemnitee to commence
such contest), the Lessee shall request in writing that such Indemnitee
contest such Imposition, the Indemnitee shall, at the expense of the
Lessee, in good faith conduct and control such contest (including,
without limitation, by pursuit of appeals) relating to the validity,
applicability or amount of such Impositions (provided, however, that
(A) if such contest involves a tax other than a tax on net income and
can be pursued independently from any other proceeding involving a tax
liability of such Indemnitee, the Indemnitee, at the Lessee's request,
shall allow the Lessee to conduct and control such contest and (B) in
the case of any contest, the Indemnitee may request the Lessee to
conduct and control such contest) by, in the sole discretion of the
Person conducting and controlling such contest, (1) resisting payment
thereof, (2) not paying the same except under protest, if protest is
necessary and proper, (3) if the payment be made, using reasonable
efforts to obtain a refund thereof in appropriate administrative and
judicial proceedings, or (4) taking such other action as is reasonably
requested by the Lessee from time to time.
(iii) The party controlling any contest shall consult in good faith
with the non-controlling party and shall keep the non-controlling party
reasonably informed as to the conduct of such contest; provided, that
all decisions ultimately shall be
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made in the sole discretion of the controlling party. The parties agree
that an Indemnitee may at any time decline to take further action with
respect to the contest of any Imposition and may settle such contest if
such Indemnitee shall waive its rights to any indemnity from the Lessee
that otherwise would be payable in respect of such claim (and any
future claim by any taxing authority, the contest of which is precluded
by reason of such resolution of such claim) and shall pay to the Lessee
any amount previously paid or advanced by the Lessee pursuant to this
Section 13.5 by way of indemnification or advance for the payment of an
Imposition other than expenses of such contest.
(iv) Notwithstanding the foregoing provisions of this Section 13.5, an
Indemnitee shall not be required to take any action and the Lessee
shall not be permitted to contest any Impositions in its own name or
that of the Indemnitee unless (A) the Lessee shall have agreed such
Imposition is subject to indemnity hereunder and shall pay to such
Indemnitee on demand and on an After Tax Basis all reasonable costs,
losses and expenses that such Indemnitee actually incurs in connection
with contesting such Impositions, including, without limitation, all
reasonable legal, accounting and investigatory fees and disbursements,
(B) in the case of a claim that must be pursued in the name of an
Indemnitee (or an Affiliate thereof), the amount of the potential
indemnity (taking into account all similar or logically related claims
that have been or could be raised in any audit involving such
Indemnitee for which the Lessee may be liable to pay an indemnity under
this Section 13.5) exceeds $100,000, (C) the Indemnitee shall have
reasonably determined that the action to be taken will not result in
any material danger of sale, forfeiture or loss of the Property, or any
part thereof or interest therein, will not interfere with the payment
of Rent, and will not result in risk of criminal liability, (D) if such
contest shall involve the payment of the Imposition prior to the
contest, the Lessee shall provide to the Indemnitee an interest-free
advance in an amount equal to the Imposition that the Indemnitee is
required to pay (with no additional net after-tax cost to such
Indemnitee), (E) in the case of a claim that must be pursued in the
name of an Indemnitee (or an Affiliate thereof), the Lessee shall have
provided to such Indemnitee an opinion of independent tax counsel
selected by the Indemnitee and reasonably satisfactory to the Lessee
stating that a reasonable basis exists to contest such claim (or, in
the case of an appeal of an adverse determination, an opinion of such
counsel to the effect that there is substantial authority for the
position asserted in such appeal) and (F) no Event of Default hereunder
shall have occurred and be continuing. In no event shall an Indemnitee
be required to appeal an adverse judicial determination to the United
States Supreme Court. In addition, an Indemnitee shall not be required
to contest any claim in its name (or that of an Affiliate) if the
subject matter thereof shall be of a continuing nature and shall have
previously been decided adversely by a court of competent jurisdiction
pursuant to the contest provisions of this Section 13.5, unless there
shall have been a change in law (or interpretation thereof) and the
Indemnitee shall have received, at the Lessee's expense, an opinion of
independent tax counsel selected by the Indemnitee and reasonably
acceptable to
70
the Lessee stating that as a result of such change in law (or
interpretation thereof), it is more likely than not that the Indemnitee
will prevail in such contest.
(g) Documentation of Withholding Status. Each Participant (or any
successor thereto or transferee thereof) that is organized under the laws of a
jurisdiction outside of the United States of America and each Lessor or
Indenture Trustee that is organized under the laws of a jurisdiction outside of
the United States of America shall:
(i) on or before the date it becomes a party to any Operative Document,
deliver to the Lessor and the Lessee any certificates, documents, or
other evidence that shall be required by the Code or Treasury
Regulations issued pursuant thereto to establish its exemption from
United States Federal withholding requirements, including (A) two
valid, duly completed, original copies of Internal Revenue Service Form
1001 or Form 4224 or successor applicable form, properly and duly
executed, certifying in each case that such party is entitled to
receive payments pursuant to the Operative Documents without deduction
or withholding of United States Federal income taxes, or (B) a valid,
duly completed, original copy of Internal Revenue Service Form W-8 or
Form W-9 or applicable successor form, properly and duly executed,
certifying that such party is entitled to an exemption from United
States of America backup withholding tax; and
(ii) so long as it shall be legally entitled to do so, on or before the
date that any such form described above expires or becomes obsolete, or
after the occurrence of any event requiring a change in the most recent
such form previously delivered to the Lessor and the Lessee, deliver to
the Lessee two further valid, duly completed, original copies of any
such form or certification, properly and duly executed.
(h) Limitation on Tax Indemnification. The Lessee shall not be required
to indemnify any Indemnitee, or to pay any increased amounts to any Indemnitee
or tax authority with respect to any Impositions pursuant to this Section 13.5
to the extent that such Imposition is attributable to such Indemnitee's failure
to comply with the provisions of Section 13.5(g) (and, in such case, the Lessee
may deduct and withhold all Taxes required by law as a result of such
noncompliance from payments made by the Lessee pursuant to the Operative
Documents).
(i) Tax Savings. In the event an Indemnitee receives a refund (or
similar tax savings) in respect of any Imposition paid or reimbursed by the
Lessee, such Indemnitee shall within thirty (30) days thereafter remit the
amount of such refund (or tax savings) to the Lessee, provided that the amount
so remitted shall not exceed the lesser of: (i) the amount received by such
Indemnitee as a refund (or tax savings) net of all reasonable costs and expenses
incurred by such Indemnitee in connection with obtaining and paying such amount;
and (ii) (a) the amount of all prior payments by the Lessee to such Indemnitee
with respect to Impositions, plus any refunded interest, less (b) the amount of
all prior payments by the Indemnitee to the Lessee under this Section 13.5(i).
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SECTION 13.6. Funding Losses. If any payment of any Eurodollar Rate
Advance or any portion of any Loan or Certificate Purchaser Amount with respect
thereto is made on any day other than the last day of an Interest Period
applicable thereto, or if any payment of any Fixed Rate Advance or any portion
of any Loan or Certificate Purchaser Amount with respect thereto is made on any
day other than the last day of the Fixed Rate Period applicable thereto, or if
the Lessee fails to utilize the proceeds of any Loans or Certificate Purchaser
Amounts after notice has been given to the Lessor or any Participant in
accordance with Section 3 or 4, the Lessee shall reimburse the Lessor and each
Participant within fifteen (15) days after demand for any resulting loss,
expense, breakage costs or swap breakage costs incurred by it, including
(without limitation) any loss incurred in obtaining, liquidating or employing
deposits from third parties, provided that in the case of a Eurodollar Rate
Advance or a Fixed Rate Advance, such Participant or the Lessor shall have
delivered to the Lessee a certificate as to the amount of such loss, expense or
costs, which certificate shall be conclusive in the absence of manifest error,
and provided further that in the case of a Eurodollar Rate Advance, such loss
shall in no event exceed the interest or Certificate Yield on the Loans or
Certificate Purchaser Amounts funding such Advance which would have been payable
for the balance of such Interest Period, less the amount actually earned by the
Lessor or such Participant on such Loans or Certificate Purchaser Amounts.
SECTION 13.7. Regulation D Compensation. For so long as any Participant
or the Lessor is required to increase its existing reserve percentage against
"Eurocurrency Liabilities" (or any other category of liabilities which include
deposits by reference to which the interest rate or Certificate Yield rate on
its Loans or Certificate Purchaser Amounts or Advances is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of such Participant to United States residents), and,
as a result, the cost to such Participant (or its Funding Office) or the Lessor
of making or maintaining its Loans or Certificate Purchaser Amounts with respect
to any Advance is increased, then such Participant or the Lessor may require the
Lessee to pay, contemporaneously with each payment of interest or Certificate
Yield on the Loans or Certificate Purchaser Amounts an additional amount at a
rate per annum up to but not exceeding the excess of (i) (A) the applicable
Eurodollar Rate divided by (B) one minus the Eurocurrency Reserve Requirements
and (ii) the applicable Eurodollar Rate.
SECTION 13.8. Basis for Determining Interest Rate or Certificate Yield
Rate Inadequate or Unfair. If on or prior to the first day of any Interest
Period:
(a) deposits in dollars (in the applicable amounts) are not being
offered to the Indenture Trustee in the relevant market for such Interest Period
or any Participants shall advise the Indenture Trustee that the Eurodollar Rate
as determined by the Indenture Trustee will not adequately and fairly reflect
the cost to such Participant of funding its Loans or Certificate Purchaser
Amounts with respect to any Advance for such Interest Period; or
72
(b) any Participant determines that, by reason of the adoption, on or
after the date of this Participation Agreement, of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Participant (or its Funding Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
governmental agency, it is restricted, directly or indirectly, in the amount it
may hold of (i) a category of liabilities that includes deposits by reference to
which, or on the basis of which, the interest rates or Certificate Yield rates
applicable to Advances based on the Eurodollar Rate are directly or indirectly
determined, or (ii) the category of assets which includes Advances based on the
Eurodollar Rate;
the Indenture Trustee shall forthwith give notice thereof to the Lessee and the
Participants, whereupon until the Indenture Trustee notifies the Lessee that the
circumstances giving rise to such suspension no longer exist, each outstanding
Loan and Certificate Purchaser Amount shall begin to bear interest at the
Alternate Base Rate plus the Applicable Margin on the last day of the then
current Interest Period applicable thereto.
SECTION 13.9. Illegality. If, on or after the date of this
Participation Agreement, the adoption of any applicable law, rule or regulation,
or any change therein, or any change in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any
Participant (or its Funding Office) with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency, shall make it unlawful or impossible for any Participant (or its Funding
Office) to make, maintain or fund its Loans or Certificate Purchaser Amounts
with respect to any Advance and such Participant shall so notify the Indenture
Trustee, the Indenture Trustee shall forthwith give notice thereof to the other
Participants and the Lessee, whereupon until such Participant notifies the
Lessee and the Indenture Trustee that the circumstances giving rise to such
suspension no longer exist, the obligation of such Participant to fund its Loans
or Certificate Purchaser Amounts with respect to any Advance shall be suspended.
If such notice is given, each outstanding Loan and Certificate Purchaser Amount
of such Participant then outstanding shall begin to bear interest at the
Alternate Base Rate plus the Applicable Margin either (a) on the last day of the
then current Interest Period applicable to such Advance if such Participant may
lawfully continue to maintain and fund such Loan or Certificate Purchaser Amount
to such day or (b) immediately if such Participant shall determine that it may
not lawfully continue to maintain and fund such Loan or Certificate Purchaser
Amount to such day.
SECTION 13.10.Increased Cost and Reduced Return. (a) In the event that
the adoption of any applicable law, rule or regulation, or any change therein or
in the interpretation or application thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof or compliance by any Participant or the Lessor with any
request or directive after the date
73
hereof (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(i) does or shall subject such Participant or the Lessor to
any additional tax of any kind whatsoever with respect to the
Operative Documents or any Loan or Certificate Purchaser
Amount or Advance made by it, or change the basis or the
applicable rate of taxation of payments to such Participant or
the Lessor of principal, Certificate Purchaser Amount,
Certificate Yield or any other amount payable hereunder
(except for the imposition of or change in any tax on or
measured by the overall net income of such Participant or the
Lessor (other than any such tax imposed by means of
withholding)); or
(ii) does or shall impose, modify or hold applicable any
reserve, special deposit, insurance assessment, compulsory
loan or similar requirement against assets held by, or
deposits or other liabilities in or for the account of,
advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of such Participant
or the Lessor which are not otherwise included in
determination of the rate of interest or Certificate Yield
rate on Advances hereunder;
and the result of any of the foregoing is to increase the cost to such
Participant of making or maintaining its Loan or Certificate Purchaser Amounts
or Advances or to reduce any amount receivable hereunder with respect thereto,
then in any such case, the Lessee shall promptly pay such Participant or the
Lessor, upon its demand, any additional amounts necessary to compensate such
Participant or the Lessor for such increased cost or reduced amount receivable
which such Participant or the Lessor deems to be material as determined by such
Participant or the Lessor; provided, however, that the Lessee shall have no
obligation to pay any additional amounts under this Section 13.10(a) on account
of any increased costs or reduced amounts arising during the Construction Period
except as follows:
(1) The Lessee shall pay any additional amounts under this
Section 13.10(a) on account of any increased costs or reduced
amounts caused by or arising from any failure by the Lessee to
comply with any of its obligation under the Operative
Documents (including its insurance obligations), any
representation by the Lessee in any of the Operative Documents
not being true, any negligence or willful misconduct of the
Lessee, or any claim by any third-party against the Lessee (or
against any Lessor Party) based upon the alleged action or
inaction by the Lessee.
(2) If any Lessor Party incurs any such increased costs or
reduced amounts for which the Lessee is not obligated to pay
additional amounts pursuant to clause (1) above, the amount of
such increased costs and reduced amounts shall, if such Lessor
Party shall so request by a written notice to the Lessor, be
capitalized pursuant to Section 3.9(f).
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(b) If any Participant or the Lessor shall have determined that, after
the date hereof, the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency has or would have the effect of reducing the rate of return on capital of
such Participant or the Lessor (or any entity directly or indirectly controlling
such Participant or the Lessor) as a consequence of such Participant's or the
Lessor's obligations under the Operative Documents to a level below that which
such Participant or the Lessor (or any entity directly or indirectly controlling
such Participant or the Lessor) could have achieved but for such adoption,
change, request or directive (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by such Participant or the
Lessor to be material, then from time to time, within 15 days after demand by
such Participant or the Lessor (with a copy to the Indenture Trustee), the
Lessee shall pay to such Participant or the Lessor such additional amount or
amounts as will compensate such Participant or the Lessor (or its parent) for
such reduction.
SECTION 13.11.Notice and Mitigation. Each demand for payment of
Supplemental Rent pursuant to Sections 13.6, 13.7, 13.9 or 13.10 must be
accompanied by a certificate of the Person claiming compensation (an "Affected
Person") setting forth in reasonable detail the computation of such compensation
(including the reasons therefor), which certificate shall be conclusive and
binding for all purposes absent manifest error. Prior to demand by an Affected
Person for Supplemental Rent pursuant to Sections 13.6 (other than a demand
relating to Fixed Rate Advances), 13.7, 13.9 or 13.10, such Affected Person
agrees that it will use its reasonable efforts to reduce and eliminate any claim
for compensation including, subject to Applicable Law, a change in applicable
lending office for this transaction; provided, however, that nothing herein
shall obligate an Affected Person to take any action which, in the opinion of
such Affected Person, is unlawful, or results in any unreimbursed costs or
expenses to such Affected Person, which costs or expenses would not have been
incurred but for such action. No Affected Person shall be entitled to any
compensation under this Section 13.11 with respect to Sections 13.6 (other than
a demand relating to Fixed Rate Advances), 13.7, 13.9 or 13.10 unless at the
time it requests such compensation it is the policy or general practice of such
Affected Person to demand compensation for comparable costs in similar
circumstances under comparable provisions of documents to which it is a party.
SECTION 13.12.Substitution of Participant. If (i) the obligation of any
Participant to make Loans or fund Certificate Purchaser Amounts has been
suspended pursuant to this Section 13, or (ii) any Participant has demanded
compensation or given notice of its intention to demand compensation under
Section 13.11 with respect to Sections 13.6 (other than a demand relating to
Fixed Rate Advances), 13.7, 13.8, 13.9 or 13.10, the Lessee shall have the
right, with the assistance of the Indenture Trustee, to seek one or more
mutually satisfactory substitute banks or financial institutions (which may be
one or more of the Participants) to replace such Participant under the Operative
Documents.
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SECTION 13.13.Indemnity Payments in Addition to Residual Value
Guarantee Amount. The Lessee acknowledges and agrees that its obligations to
make indemnity payments under this Section 13 are separate from, in addition to,
and do not reduce, its obligation to pay the Residual Value Guarantee Amount
under the Lease; provided, that except as otherwise set forth in Section 13.2
hereof, the Shortfall Amount payable by the Lessee in connection with the
Remarketing Option under the Lease shall not be increased under this Section 13.
SECTION 13.14.Limitations on Indemnification. Notwithstanding any other
provisions of Sections 13.1, 13.5 or 13.10 (the "Indemnification Sections") to
the contrary, during the Construction Period, the Lessee (i) shall only be
obligated to indemnify the Lessor (and not any other Indemnitee, except to the
extent any Claims of such Indemnitee, Impositions against such Indemnitee, or
losses, costs or expenses suffered or incurred by such Indemnitee arise solely
from a Fully Indemnifiable Event) for any Claims of the Lessor under Section
13.1, Impositions against the Lessor under Section 13.5, or losses, costs or
expenses suffered or incurred by the Lessor under Section 13.10 (collectively
"Lessor Losses") provided, that such Lessor Losses shall include costs and
expenses of the Lessor under Section 13.15 and (ii) shall have no right to
contest any matter covered under Section 13.1, 13.5 or 13.10, notwithstanding
the language of Section 13.1, 13.5 or 13.10, if such matter is not fully
indemnifiable by the Lessee because of the operation of Section 13.14 or because
such matter is not indemnifiable due to the exclusions set forth in Section 13.1
(z), 13.5 (a) or 13.10(a).
SECTION 13.15.Lessor Indemnification.
(a) Indemnified Losses. During the Construction Period, the Lessor
shall pay, indemnify, protect, defend, save and keep harmless each Indemnitee
(other than the Lessor, its Affiliates, successors, assigns, directors,
shareholders, partners, officers, employees and agents) (an "Indemnified Party")
on an After Tax Basis from and against any Losses (as hereinafter defined)
arising from Covered Matters (as hereinafter defined), subject to the
limitations set forth in this Section 13.15.
(b) Definitions. For purposes of this Section 13.15, the following
terms shall have the meanings set forth below:
"Covered Matters" means each of the matters set forth in the
Indemnification Sections.
"Losses" means each of the Claims, Impositions, losses, costs or
expenses indemnified against pursuant to any of the Indemnification Sections.
(c) No Indemnification for Certain Matters. The Lessor shall not be
required to indemnify or hold harmless any Indemnified Party hereunder against
any matter referred to in clause (a) of this Section (i) to the extent arising
solely as a result of any Fully Indemnifiable Event or (ii) to the extent of the
exceptions or exclusions from indemnification contained in any of the
Indemnification Sections.
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(d) Limitations on Indemnification by Lessor. The Lessor's obligation
to indemnify and hold harmless any Indemnified Party under this Section:
(i) is not an individual or personal obligation of the Lessor
or the Bank, but solely its obligation as Owner Trustee, and nothing
herein shall be construed as creating any liability on the Bank,
individually or personally, to pay, indemnify or hold harmless any
Indemnified Party under this Section;
(ii) is not an obligation binding on the Trust Estate created
by the Trust Agreement except to the extent of any payments received by
the Lessor pursuant to the Indemnification Sections;
(iii) shall be paid and discharged solely and exclusively from
amounts received by the Lessor pursuant to the Indemnification
Sections, and it is expressly agreed by each Indemnified Party that the
sole recourse of each such Person for payment or discharge of the
indemnification obligations created under this Section shall be to such
amounts paid by the Lessee or the Guarantor pursuant to the
Indemnification Sections;
(iv) is the sole and exclusive right of each Indemnified Party
against the Lessor, and any right to proceed against the Lessor
individually or otherwise under common law, federal or state securities
laws or otherwise for indemnification or contribution in connection
with the matters covered by this Section, is hereby expressly waived by
each Indemnified Party (other than claims that may be made against the
Lessor or the Bank, individually or personally, for fraud, gross
negligence or willful misconduct).
Nothing in this Section is intended as or should be construed as a limitation on
the right of any Indemnified Party to make indemnification, contribution or
other claims of any kind against the Lessee or the Guarantor, to the extent that
such claims otherwise may be made, with respect to any matter, including
indemnification for Losses of the type referred to in this Section.
(d) Repayment to the Lessor. To the extent that any payments made
pursuant to the Indemnification Sections are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid by the
Lessor to a trustee, debtor in possession, receiver or other Person under any
Bankruptcy Law, common law or equitable cause, then to such extent, the
Indemnified Parties who received any such payments from the Lessor (or any
portion thereof) shall repay any such amounts to the Lessor, or as may otherwise
be directed by a court of competent jurisdiction.
(f) Survival, Reinstatement. The indemnification obligations of the
Lessor under this Section shall survive and be reinstated to the same extent,
for the same period and in the same manner as the indemnification obligations of
the Lessee under the Indemnification Sections.
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(g) Indemnification Procedures. The right of any Indemnified Party to
seek indemnification from the Lessor under this Section is subject to and
conditioned upon compliance by any such Indemnified Party with the notice,
cooperation, appointment of counsel, contest rights and other provisions in the
Indemnification Sections as fully as if such Sections were set forth herein,
except (i) that any reference in the Indemnification Sections to the Lessee
shall be deemed to be a reference to the Lessor or, if the Lessor so directs in
any case, the Lessor and/or the Lessee for purposes of this Section and (ii) the
limitation in the Indemnification Sections on the number of counsel that may be
engaged to represent Indemnified Parties shall be deemed to be a reference to
the same number of counsel acting on behalf of Indemnified Parties rather than
Indemnitees under the Indemnification Sections, to the extent such costs are
recoverable pursuant to the Indemnification Sections.
SECTION 14.
THE INDENTURE TRUSTEE
Each Certificate Holder hereby irrevocably designates and appoints the
Indenture Trustee as the agent of such Participant under this Agreement, the
Indenture and the other Operative Documents to the extent set forth in the
Indenture, and each Certificate Holder irrevocably authorizes the Indenture
Trustee, in such capacity, to take such action on its behalf under the
provisions of this Agreement and the other Operative Documents and to exercise
such powers and perform such duties as are expressly delegated to the Indenture
Trustee by the terms of this Agreement, the Indenture and the other Operative
Documents, together with such other powers as are reasonably incidental thereto.
SECTION 15.
MISCELLANEOUS
SECTION 15.1. Survival of Agreements. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Documents, and the parties' obligations under any and all thereof,
shall survive the execution and delivery of this Participation Agreement, the
transfer of the Property to the Lessor, the construction of any Improvements,
any disposition of any interest of the Lessor in the Property or any
Improvements, payment of the Notes and Certificates and any disposition thereof
and shall be and continue in effect notwithstanding any investigation made by
any party and the fact that any party may waive compliance with any of the other
terms, provisions or conditions of any of the Operative Documents. Except as
otherwise expressly set forth herein or in other Operative Documents, the
indemnities of the parties provided for in the Operative Documents shall survive
the expiration or termination of any thereof.
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SECTION 15.2. No Broker, etc. Each of the parties hereto represents to
the others that it has not retained or employed any broker, finder or financial
adviser to act on its behalf in connection with this Participation Agreement or
the transactions contemplated herein, nor has it authorized any broker, finder
or financial adviser retained or employed by any other Person so to act. Any
party who is in breach of this representation shall indemnify and hold the other
parties harmless from and against any liability arising out of such breach of
this representation.
SECTION 15.3. Notices. Unless otherwise specifically provided herein,
all notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to any
Person shall be given in writing and delivered (i) personally, (ii) by a
nationally recognized overnight courier service, (iii) by mail (by registered or
certified mail, return receipt requested, postage prepaid) or (iv) by facsimile,
in each case directed to the address of such Person as indicated on Schedule II.
Any such notice shall be effective upon receipt or refusal.
From time to time any party may designate a new address for purposes of
notice hereunder by written notice to each of the other parties hereto in
accordance with this Section.
SECTION 15.4. Counterparts. This Participation Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 15.5. Amendments. Subject to the provisions of Section 8.1 of
the Indenture, no Operative Document nor any of the terms thereof may be
terminated, amended, supplemented, waived or modified with respect to the
Lessee, the Lessor, the Bank, the Indenture Trustee or any Participant, except
(a) in the case of a termination, amendment, supplement, waiver or modification
to be binding on the Lessee, the Lessor, the Bank, or the Indenture Trustee,
with the written agreement or consent of such party, and (b) in the case of a
termination, amendment, supplement, waiver or modification to be binding on the
Participants, with the written agreement or consent of the Required
Participants; provided, however, that
(x) no such termination, amendment, supplement, waiver or
modification shall without written agreement or consent of each Participant:
(i) modify any of the provisions of this Section 15.5, change
the definition of "Required Participants" or modify or waive any
provision of an Operative Agreement requiring action by the foregoing;
(ii) amend, modify, waive or supplement any of the provisions
of Section 3.8 or Sections 5, and 6 of the Indenture or the
representations of such Participant in Section 8 or the covenants in
Sections 7 and 10 of this Participation Agreement;
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(iii) reduce, modify, amend or waive any fees or indemnities
in favor of any Participant, including without limitation amounts
payable pursuant to Section 13 (except that any Person may consent to
any reduction, modification, amendment or waiver of any indemnity
payable to it);
(iv) modify, postpone, reduce or forgive, in whole or in part,
any payment of Rent (other than pursuant to the terms of any Operative
Agreement), any payment in respect of its Note or Certificate, or any
payment of the Asset Termination Value, Commitment Fee, Residual Value
Guarantee Amount, amounts due pursuant to Section 22.2 of the Lease,
interest, Certificate Yield or, subject to clause (iii) above, any
other amount payable under the Lease or this Participation Agreement,
or modify the definition or method of calculation of Rent (other than
pursuant to the terms of any Operative Agreement), Asset Termination
Value, Commitment Fee, Shortfall Amount, Residual Value Guarantee
Amount, Property Improvements Cost, Participant Balance, Tranche A
Participant Balance, Tranche B Participant Balance, or any other
definition which would affect the amounts to be advanced or which are
payable under the Operative Documents;
(v) consent to any assignment of the Lease, releasing the
Lessee from its obligations in respect of the payments of Rent and the
Asset Termination Value or changing the absolute and unconditional
character of such obligation;
(vi) except as authorized by the Operative Documents, release
the Lessor's interest in all or a substantial part of the Property;
(vii) amend the definition of "Event of Default;"
(viii) terminate or release the Guarantee or amend,
supplement, waive or modify any provision thereof;
(ix) increase the amount of the Commitment of such
Participant; and
(y) no other termination, amendment, supplement, waiver or
modification shall, without the written agreement or consent of the Lessor and
the Required Participants, be made to the Lease or Section 6 of this
Participation Agreement.
SECTION 15.6. Headings, etc. The Table of Contents and headings of the
various Sections of this Agreement are for convenience of reference only and
shall not modify, define, expand or limit any of the terms or provisions hereof.
SECTION 15.7. Parties in Interest. Except as expressly provided herein,
none of the provisions of this Participation Agreement are intended for the
benefit of any Person except the parties hereto. Subject to the provisions of
Section 25.1 of the Lease,
80
the Lessee shall not assign or transfer any of its rights or obligations under
the Operative Documents without the prior written consent of the Lessor, the
Indenture Trustee and the Participants, except that the Lessee may without such
consent assign rights or obligations of the Lessee under the Operative Documents
to a Subsidiary of the Lessee, provided that the Lessee remains primarily liable
with respect to such obligations and provides its full unconditional and
irrevocable guaranty of such Subsidiary's obligations under the Operative
Documents, such guaranty to be in form and substance reasonably satisfactory to
the Required Participants.
SECTION 15.8. GOVERNING LAW. THIS PARTICIPATION AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY THE LAW OF THE STATE OF CALIFORNIA (EXCLUDING ANY
CONFLICT-OF-LAW OR CHOICE-OF-LAW RULES WHICH MIGHT LEAD TO THE APPLICATION OF
THE INTERNAL LAWS OF ANY OTHER JURISDICTION) AS TO ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE.
SECTION 15.9. Severability. Any provision of this Participation
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 15.10.Liability Limited. (a) The Lessee, the Indenture Trustee,
and the Participants each acknowledge and agree that the Owner Trustee is
(except as otherwise expressly provided herein or therein) entering into this
Participation Agreement and the other Operative Documents to which it is a party
(other than the Trust Agreement), solely in its capacity as trustee under the
Trust Agreement and not in its individual capacity and that Bank shall not be
liable or accountable under any circumstances whatsoever in its individual
capacity for or on account of any statements, representations, warranties,
covenants or obligations stated to be those of the Owner Trustee in its trust
capacity, except for its own gross negligence or willful misconduct and as
otherwise expressly provided herein or in the other Operative Documents, and it
is understood and agreed that all obligations of the Lessor to the Lessee, the
Indenture Trustee, any Certificate Holder and any Note Holder under the
Operative Documents are solely nonrecourse obligations (except as otherwise
expressly provided therein) enforceable only against the Trust Estate.
(b) Each party hereto acknowledges that the provisions of
Section 7.2 of the Indenture in favor of the Indenture Trustee shall apply to
the Indenture Trustee under each other Operative Document.
SECTION 15.11.Further Assurances. The parties hereto shall promptly
cause to be taken, executed, acknowledged or delivered, at the sole expense of
the Lessee, all such further acts, conveyances, documents and assurances as the
other parties may from time to time reasonably request in order to carry out and
effectuate the intent and purposes of
81
this Participation Agreement, the other Operative Documents, and the
transactions contemplated hereby and thereby (including, without limitation, the
preparation, execution and filing of any and all Uniform Commercial Code
financing statements and other filings or registrations which the parties hereto
may from time to time request to be filed or effected). The Lessee, at its own
expense and without need of any prior request from any other party, shall take
such action as may be necessary (including any action specified in the preceding
sentence), or (if the Lessor shall so request) as so requested, in order to
maintain and protect all security interests provided for hereunder or under any
other Operative Document.
SECTION 15.12.Submission to Jurisdiction. The Lessee hereby submits to
the nonexclusive jurisdiction of the United States District Court for the
Northern District of California and of any California state court sitting in San
Francisco for purposes of all legal proceedings arising out of or relating to
the Operative Documents or the transactions contemplated hereby. The Lessee
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
SECTION 15.13.Confidentiality. The Lessor, the Indenture Trustee and
each Participant represent that they will maintain the confidentiality of the
transactions contemplated by, and of any written or oral information provided
under, the Operative Documents by or on behalf of the Lessee (hereinafter
collectively called "Confidential Information"), subject to the Lessor's, the
Indenture Trustee's and each Participant's (a) obligation to disclose any such
Confidential Information pursuant to a request or order under applicable laws
and regulations or pursuant to a subpoena or other legal process, (b) right to
disclose any such Confidential Information to its bank examiners, Affiliates,
auditors, counsel and other professional advisors and to other Participants, (c)
right to disclose any such Confidential Information in connection with any
litigation or dispute involving the Participants and the Lessee or any of its
Subsidiaries and Affiliates and (d) right to provide such information to
Sub-Participants, prospective Sub-Participants to which sales of participating
interests are permitted pursuant to this Participation Agreement and prospective
assignees to which assignments of interests are permitted pursuant to this
Participation Agreement, but only if (i) such Sub-Participant, prospective
Sub-Participant or prospective assignee agrees in writing to maintain the
confidentiality of such information on terms substantially similar to those of
this Section as if it were a "Participant" party hereto and (ii) the Lessee
receives copies of such written agreement prior to the release of such
information. Notwithstanding the foregoing, any such information supplied to a
Participant, Sub-Participant, prospective Sub-Participant or prospective
assignee under this Participation Agreement shall cease to be Confidential
Information if it is or becomes known to such Person by other than unauthorized
disclosure, or if it becomes a matter of public knowledge.
SECTION 15.14.WAIVER OF JURY TRIAL. EACH OF THE LESSEE, THE INDENTURE
TRUSTEE, THE LESSOR, AND EACH PARTICIPANT HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY
82
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE OPERATIVE DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 15.15.Usury Savings Clause. Nothing contained in this
Participation Agreement or the other Operative Documents shall be deemed to
require the payment of interest or other charges by the Lessee or any other
Person in excess of the amount which may be may lawfully be charged under any
applicable usury laws. In the event that the Lessor or any other Person shall
collect moneys under the Participation Agreement or any other Operative Document
which are deemed to constitute interest (including, without limitation, the
Basic Rent or Supplemental Rent) which would increase the effective interest
rate to a rate in excess of that permitted to be charged by applicable law, all
such sums deemed to constitute interest in excess of the legal rate shall, upon
such determination, at the option of the Person to whom such payment was made,
be returned to the Person making such payment or credited against other amounts
owed by the person making such payment.
[SIGNATURE PAGES FOLLOW]
DOCUMENT NUMBER: 363621.7
IN WITNESS WHEREOF, the parties hereto have caused this
Participation Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
PEOPLESOFT, INC., as Lessee
By:_____________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Treasurer
WILMINGTON TRUST COMPANY,
not in its individual capacity, except
as expressly stated herein, but solely
as Owner Trustee
By:_____________________________________
Name:
Title:
ABN AMRO BANK N.V.,
not in its individual capacity, except
as expressly stated herein, but solely
as Indenture Trustee
By:_____________________________________
Name:
Title:
83
By:_____________________________________
Name:
Title:
ABN AMRO LEASING, INC.,
as a Certificate Purchaser
By:_____________________________________
Name:
Title:
ABN AMRO BANK N.V.,
SAN FRANCISCO INTERNATIONAL BRANCH,
as a Note Purchaser
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
CREDIT LYONNAIS LOS ANGELES BRANCH,
as a Note Purchaser
By:_____________________________________
Name:
Title:
KEYBANK NATIONAL ASSOCIATION,
as a Note Purchaser
By:_____________________________________
Name:
Title:
BANQUE NATIONALE DE PARIS,
as a Note Purchaser
By:_____________________________________
Name:
84
Title:
FLEET BANK, as a Note Purchaser
By:_____________________________________
Name:
Title:
THE FUJI BANK, LIMITED, as a Note
Purchaser
By:_____________________________________
Name:
Title:
THE DAI-ICHI KANGYO BANK, LIMITED, as a
Note Purchaser
By:_____________________________________
Name:
Title:
THE BANK OF NOVA SCOTIA, as a Note
Purchaser
By:_____________________________________
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN, LIMITED
SAN FRANCISCO AGENCY, as a Note
Purchaser
By:_____________________________________
Name:
Title:
▇▇▇▇▇ FARGO BANK, as a Note Purchaser
By:_____________________________________
Name:
Title:
85
//SCHEDULE I
PRE-COMPLETION POST-COMPLETION
PRE-COMPLETION POST-COMPLETION COMMITMENT COMMITMENT
PARTICIPANT COMMITMENTS COMMITMENTS PERCENTAGE PERCENTAGE
364 Day Commitments
ABN AMRO LEASING, INC.
Tranche A Loan Commitment: 0.0% 0.0%
Tranche B Loan Commitment: 0.0% 0.0%
Certificate Commitment: 3.0% 3.0%
Total 364 Day Commitment: 3.0% 3.0%
ABN AMRO BANK N.V.,
SAN FRANCISCO
INTERNATIONAL BRANCH
Tranche A Loan Commitment: 9.85782568% 9.37535145%
Tranche B Loan Commitment: 0.77853796% 1.26101218%
Certificate Commitment: 0.0% 0.0%
Total 364 Day Commitment: 10.63636364% 10.63636364%
CREDIT LYONNAIS
LOS ANGELES BRANCH
Tranche A Loan Commitment: 9.68931584% 9.21508903%
Tranche B Loan Commitment: 0.76522962% 1.23945642%
Certificate Commitment: 0.0% 0.0%
Total 364 Day Commitment: 10.45454545% 10.▇▇▇▇▇▇▇▇%
KEYBANK NATIONAL ASSOCIATION
Tranche A Loan Commitment: 9.68931584% 9.21508903%
Tranche B Loan Commitment: 0.76522962% 1.23945642%
Certificate Commitment: 0.0% 0.0%
Total 364 Day Commitment: 10.45454545% 10.▇▇▇▇▇▇▇▇%
BANK ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇
Tranche A Loan Commitment: 7.58294283% 7.21180881%
Tranche B Loan Commitment: 0.59887535% 0.97000937%
Certificate Commitment: 0.0% 0.0%
Total 364 Day Commitment: 8.18181818% 8.▇▇▇▇▇▇▇▇%
FLEET BANK
Tranche A Loan Commitment: 7.58294283% 7.21180881%
Tranche B Loan Commitment: 0.59887535% 0.97000937%
Certificate Commitment: 0.0% 0.0%
Total 364 Day Commitment: 8.18181818% 8.▇▇▇▇▇▇▇▇%
MELLON BANK
Tranche A Loan Commitment: 7.58294283% 7.21180881%
Tranche B Loan Commitment: 0.59887535% 0.97000937%
Certificate Commitment: 0.0% 0.0%
Total 364 Day Commitment: 8.18181818% 8.▇▇▇▇▇▇▇▇%
THE FUJI BANK, LIMITED
Tranche A Loan Commitment: 7.58294283% 7.21180881%
Tranche B Loan Commitment: 0.59887535% 0.97000937%
Certificate Commitment: 0.0% 0.0%
Total 364 Day Commitment: 8.18181818% 8.18181818%
THE DAI-ICHI KANGYO BANK,
LIMITED SAN FRANCISCO AGENCY
Tranche A Loan Commitment: 7.58294283% 7.21180881%
Tranche B Loan Commitment: 0.59887535% 0.97000937%
Certificate Commitment: 0.0% 0.0%
Total 364 Day Commitment: 8.18181818% 8.▇▇▇▇▇▇▇▇%
THE BANK OF NOVA SCOTIA
Tranche A Loan Commitment: 7.58294283% 7.21180881%
Tranche B Loan Commitment: 0.59887535% 0.97000937%
87
Certificate Commitment: 0.0% 0.0%
Total 364 Day Commitment: 8.18181818% 8.18181818%
THE INDUSTRIAL BANK OF JAPAN,
LIMITED SAN FRANCISCO AGENCY
Tranche A Loan Commitment: 7.58294283% 7.21180881%
Tranche B Loan Commitment: 0.59887535% 0.97000937%
Certificate Commitment: 0.0% 0.0%
Total 364 Day Commitment: 8.18181818% 8.18181818%
▇▇▇▇▇ FARGO BANK
Tranche A Loan Commitment: 7.58294283% 7.21180881%
Tranche B Loan Commitment: 0.59887535% 0.97000937%
Certificate Commitment: 0.0% 0.0%
Total 364 Day Commitment: 8.18181818% 8.18181818%
AGGREGATE 364 DAY TRANCHE A 89.90000000% 85.50000000%
LOAN COMMITMENT OF ALL
PARTICIPANTS:
AGGREGATE 364 DAY TRANCHE B 7.10000000% 11.50000000%
LOAN COMMITMENT OF ALL
PARTICIPANTS:
AGGREGATE 364 DAY CERTIFICATE 3.00000000% 3.00000000%
COMMITMENT OF ALL PARTICIPANTS:
AGGREGATE 364 DAY COMMITMENT $83,000,000 $83,000,000 100.00000000% 100.00000000%
OF ALL PARTICIPANTS:
EIGHTEEN MONTH COMMITMENTS
ABN AMRO LEASING, INC.
Tranche A Loan Commitment: 0.0% 0.0%
Tranche B Loan Commitment: 0.0% 0.0%
Certificate Commitment: 3.0% 3.0%
Total Eighteen Month 3.0% 3.0%
Commitment:
88
ABN AMRO BANK N.V.,
SAN FRANCISCO
INTERNATIONAL BRANCH
Tranche A Loan Commitment: 9.85782568% 9.37535145%
Tranche B Loan Commitment: 0.77853796% 1.26101218%
Certificate Commitment: 0.0% 0.0%
Total Eighteen Month 10.63636364% 10.63636364%
Commitment:
CREDIT LYONNAIS
LOS ANGELES BRANCH
Tranche A Loan Commitment: 9.68931584% 9.21508903%
Tranche B Loan Commitment: 0.76522962% 1.23945642%
Certificate Commitment: 0.0% 0.0%
Total Eighteen Month 10.45454545% 10.45454545%
Commitment:
KEYBANK NATIONAL ASSOCIATION
Tranche A Loan Commitment: 9.68931584% 9.21508903%
Tranche B Loan Commitment: 0.76522962% 1.23945642%
Certificate Commitment: 0.0% 0.0%
Total Eighteen Month 10.45454545% 10.45454545%
Commitment:
BANK NATIONALE DE PARIS
Tranche A Loan Commitment: 7.58294283% 7.21180881%
Tranche B Loan Commitment: 0.59887535% 0.97000937%
Certificate Commitment: 0.0% 0.0%
Total Eighteen Month 8.18181818% 8.18181818%
Commitment:
FLEET BANK
Tranche A Loan Commitment: 7.58294283% 7.21180881%
Tranche B Loan Commitment: 0.59887535% 0.97000937%
Certificate Commitment: 0.0% 0.0%
89
Total Eighteen Month 8.18181818% 8.18181818%
Commitment:
MELLON BANK
Tranche A Loan Commitment: 7.58294283% 7.21180881%
Tranche B Loan Commitment: 0.59887535% 0.97000937%
Certificate Commitment: 0.0% 0.0%
Total Eighteen Month 8.18181818% 8.18181818%
Commitment:
THE FUJI BANK, LIMITED
Tranche A Loan Commitment: 7.58294283% 7.21180881%
Tranche B Loan Commitment: 0.59887535% 0.97000937%
Certificate Commitment: 0.0% 0.0%
Total Eighteen Month 8.18181818% 8.18181818%
Commitment:
THE DAI-ICHI KANGYO BANK,
LIMITED SAN FRANCISCO AGENCY
Tranche A Loan Commitment: 7.58294283% 7.21180881%
Tranche B Loan Commitment: 0.59887535% 0.97000937%
Certificate Commitment: 0.0% 0.0%
Total Eighteen Month 8.18181818% 8.18181818%
Commitment:
THE BANK OF NOVA SCOTIA
Tranche A Loan Commitment: 7.58294283% 7.21180881%
Tranche B Loan Commitment: 0.59887535% 0.97000937%
Certificate Commitment: 0.0% 0.0%
Total Eighteen Month 8.18181818% 8.18181818%
Commitment:
THE INDUSTRIAL BANK OF JAPAN,
LIMITED SAN FRANCISCO AGENCY
Tranche A Loan Commitment: 7.58294283% 7.21180881%
Tranche B Loan Commitment: 0.59887535% 0.97000937%
90
Certificate Commitment: 0.0% 0.0%
Total Eighteen Month 8.18181818% 8.18181818%
Commitment:
▇▇▇▇▇ FARGO BANK
Tranche A Loan Commitment: 7.58294283% 7.21180881%
Tranche B Loan Commitment: 0.59887535% 0.97000937%
Certificate Commitment: 0.0% 0.0%
Total Eighteen Month 8.18181818% 8.18181818%
Commitment:
AGGREGATE EIGHTEEN MONTH 89.90000000% 85.50000000%
TRANCHE A LOAN COMMITMENT OF
ALL PARTICIPANTS:
AGGREGATE EIGHTEEN MONTH 7.10000000% 11.50000000%
TRANCHE B LOAN COMMITMENT OF
ALL PARTICIPANTS:
AGGREGATE EIGHTEEN MONTH 3.00000000% 3.00000000%
CERTIFICATE COMMITMENT OF ALL
PARTICIPANTS:
AGGREGATE EIGHTEEN MONTH $27,000,000 $27,000,000 100.00000000% 100.00000000%
COMMITMENT OF ALL PARTICIPANTS:
//
SCHEDULE II
Notice Information, Funding Offices and Payment Instructions
Lessee:PEOPLESOFT, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:PEOPLESOFT, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Director of Real Estate
91
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
PEOPLESOFT, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ RESOURCE GROUP
▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & SUTCLIFFE
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Lessor:WILMINGTON TRUST COMPANY
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payments shall be made to:
Wilmington Trust Company
Wilmington, Delaware
ABA No.: ▇▇▇▇▇▇▇▇▇
For Credit to: PeopleSoft '98
Account No.: 46147-0
92
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Corp Trust
Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Indenture Trustee: ABN AMRO BANK N.V.
1325 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payments shall be made to:
Federal Reserve Bank of New York, New York, NY
ABN AMRO Bank New York
ABA No.: ▇▇▇▇▇▇▇▇▇
For account of: ABN AMRO Bank San Francisco
Account No.: 651001054541
Re: PeopleSoft, Inc.
Co-Trustee: U.S. BANK TRUST NATIONAL ASSOCIATION
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payments shall be made to:
ABA No.: ▇▇▇▇▇▇▇▇▇
U.S. Bank Trust: 180121167365
San Francisco Wire Clearing: 4730027
Ref: 95457370
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
Participant: ABN AMRO LEASING, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
93
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payments shall be made to:
LaSalle National Bank
ABA No.: ▇▇▇-▇▇▇-▇▇▇
For account of: ABN AMRO Leasing, Inc.
Account No.: ▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Participant: ABN AMRO BANK N.V.,
SAN FRANCISCO INTERNATIONAL BRANCH
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payments shall be made to:
Federal Reserve Bank of New York, New York, NY
ABN AMRO Bank New York
ABA No.: ▇▇▇▇▇▇▇▇▇
For account of: ABN AMRO Bank San Francisco
Account No.: 651001054541
Re: PeopleSoft, Inc.
Participant: CREDIT LYONNAIS LOS ANGELES BRANCH
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Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payments shall be made to:
Federal Reserve Bank of New York, New York, NY
Credit Lyonnais New York
ABA No.: ▇▇▇▇▇▇▇▇▇
For further credit to: Credit Lyonnais
Los Angeles Branch
94
Account: Credit Lyonnais New York
Re: PeopleSoft, Inc.
Participant: KEYBANK NATIONAL ASSOCIATION
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M/S 31-10-4612
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Attention: ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payments shall be made to:
KeyBank National Association, Seattle, WA
ABA No.: ▇▇▇▇▇▇▇▇▇
For further credit to: Specialty Services Team
Account No.: ▇▇▇▇▇▇▇▇
Re: PeopleSoft, Inc.
Participant: BANQUE NATIONALE DE PARIS
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payments shall be made to:
Banque Nationale de Paris New York
ABA No.: ▇▇▇▇▇▇▇▇▇
For Credit: Banque Nationale de Paris San
Francisco
Account No.: 14334000176
Participant: FLEET BANK
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Mail Stop MAOF D07A
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Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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Payments shall be made to:
Fleet Bank
ABA No.: ▇▇▇▇▇▇▇▇▇
For Credit: Commercial Loan Wire Suspense
G/L Account No.: ▇▇▇▇▇▇▇-03156
Re: PeopleSoft, Inc.
Participant: MELLON BANK, N.A.
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Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payments shall be made to:
Mellon Bank, N.A., Pittsburgh, PA
ABA No.: ▇▇▇▇▇▇▇▇▇
Account No.: 990873800 - Loan Administration
Re: PeopleSoft, Inc.
Participant: THE FUJI BANK, LIMITED
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payments shall be made to:
Bankers Trust Company, New York, NY
ABA No.: ▇▇▇▇▇▇▇▇▇
For Credit: The Fuji Bank, Limited Los Angeles
Agency
Account No.: ▇▇▇▇▇▇▇▇
Attention: CP&A
Re: PeopleSoft, Inc.
Participant: THE DAI-ICHI KANGYO BANK, LIMITED
SAN FRANCISCO AGENCY
96
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Attention: ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payments shall be made to:
The Dai-Ichi Kangyo Bank, Limited
New York Branch, New York, NY
ABA No.: 026-004307
For further credit to: The Dai-Ichi Kangyo Bank,
Limited
San Francisco Agency
Account No.: 079 740 111 268
Re: PeopleSoft, Inc.
Participant: THE BANK OF NOVA SCOTIA
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payments shall be made to:
The Bank of Nova Scotia
ABA No.: ▇▇▇▇▇▇▇▇▇
For Credit: The Bank of Nova Scotia San
Francisco Loan Service
Account No.: ▇▇▇▇▇▇▇
Re: PeopleSoft, Inc.
Participant: THE INDUSTRIAL BANK OF JAPAN, LIMITED
SAN FRANCISCO AGENCY
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Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payments shall be made to:
Bank of America NT & SA, Concord, CA
ABA No.: ▇▇▇-▇▇▇-▇▇▇
Account: The Industrial Bank of Japan, Limited
Los Angeles Agency
Account No.: 62906-14014
"For Credit to IBJ SFA, A/C 2601-22011"
Re: PeopleSoft, Inc.
Participant: ▇▇▇▇▇ FARGO
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payments shall be made to:
▇▇▇▇▇ Fargo Bank
ABA No.: ▇▇▇▇▇▇▇▇▇
For Credit: G/L# 2712-507201
Re: PeopleSoft, Inc.
Obligor #:69-43492899
Obligation #: (to be assigned)
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE III
Environmental Matters
None
SCHEDULE IV
Intellectual Property Matters
None