Exhibit 4 (ix)
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PARTICIPATION AGREEMENT
Dated as of September 26, 2001
among
TOYS "R" US, INC., as the Construction Agent and as the Lessee,
FIRST UNION DEVELOPMENT CORPORATION,
as the Borrower and as the Lessor,
THE VARIOUS FINANCIAL INSTITUTIONS AND OTHER INSTITUTIONAL INVESTORS
WHICH ARE PARTIES HERETO FROM TIME TO TIME,
as the Tranche A Note Purchasers,
THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS WHICH ARE PARTIES
HERETO FROM TIME TO TIME, as the Tranche B Lenders,
THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS WHICH ARE PARTIES
HERETO FROM TIME TO TIME, as the Cash Collateral Lenders,
and
FIRST UNION NATIONAL BANK,
as the Agent for the Primary Financing Parties
and, respecting the Security Documents,
as the Agent for the Secured Parties
and
FIRST UNION NATIONAL BANK,
as the Escrow Agent
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TABLE OF CONTENTS
Page
SECTION 1. THE FINANCING......................................................1
SECTION 2. [RESERVED].........................................................2
SECTION 3. SUMMARY OF TRANSACTIONS............................................2
3.1. Operative Agreements..............................................2
3.2. Property Purchase.................................................2
3.3. Construction of Improvements; Commencement of Basic Rent..........2
SECTION 4. THE CLOSING........................................................3
4.1. Closing Date......................................................3
4.2. Closing Date; Acquisition Advance; Construction Advances..........3
SECTION 5. FUNDING OF ADVANCES; CONDITIONS PRECEDENT; REPORTING REQUIREMENTS
ON COMPLETION DATE; THE LESSEE'S DELIVERY OF NOTICES;
RESTRICTIONS ON LIENS............................................3
5.1. General...........................................................3
5.2. Procedures for Funding............................................4
5.3. Conditions Precedent for the Lessee, the Lessor, the Agent
and the Primary Financing Parties Relating to the Closing
Date and the Advance of Funds for the Acquisition of the
Property........................................................6
5.4. Conditions Precedent for the Lessor, the Agent and the
Tranche B Lenders Relating to the Advance of Funds after
the Acquisition Advance........................................11
5.5. Additional Reporting and Delivery Requirements on
Completion Date................................................12
5.6. The Construction Agent Delivery of Construction
Budget Modifications...........................................13
5.7. Restrictions on Liens............................................14
5.8. [Reserved].......................................................14
5.9. Extension of Construction Period Termination Date................14
5.10. Payments.........................................................14
5.11. Cash Collateral Account..........................................14
5.12. Escrow Account...................................................15
5.13. Partial Funding of Unreimbursed Costs Following an
Agency Agreement Event of Default..............................17
5.14. Rights of Tranche A Note Purchasers Upon Merger
of the Lessee..................................................17
SECTION 6. REPRESENTATIONS AND WARRANTIES....................................18
6.1. Representations and Warranties of the Borrower...................18
6.2. Representations and Warranties of the Lessee.....................20
SECTION 7. PAYMENT OF CERTAIN EXPENSES........................................27
7.1. Transaction Expenses.............................................27
7.2. No Broker, etc...................................................28
7.3. Certain Fees and Expenses........................................28
7.4. [Reserved].......................................................29
7.5. Administrative Fee...............................................29
7.6 Payment of Certain Expenses During Construction Period...........29
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SECTION 8. OTHER COVENANTS AND AGREEMENTS....................................29
8.1. Cooperation with the Construction Agent or the Lessee............29
8.2. Covenants of the Lessor..........................................30
8.3. Lessee Covenants, Consent and Acknowledgment.....................30
8.3A Affirmative Covenants............................................36
8.3A.1 Financial Statements....................................36
8.3A.2 Certificates; Other Information.........................37
8.3A.3 Legal Existence.........................................37
8.3A.4 Taxes...................................................38
8.3A.5 Observance of Legal Requirements........................38
8.3A.6 Inspection of Property; Books and Records;
Discussions..........................................38
8.3B Negative Covenants...............................................38
8.3B.1 Merger or Consolidation, Etc:...........................38
8.3B.2 Subsidiary Indebtedness.................................39
8.3B.3 Liens, Etc..............................................40
8.3B.4 Change in Nature of Business............................41
8.3B.5 Use of Proceeds.........................................41
8.3B.6 Fixed Charge Coverage Ratio.............................41
8.3B.7 Funded Indebtedness to Capitalization Ratio.............41
8.4. Sharing of Certain Payments......................................42
8.5. Grant of Easements, etc..........................................42
8.6. Appointment of the Agent by the Primary Financing Parties
and the Lessor.................................................42
8.7. Collection and Allocation of Payments and Other Amounts..........47
8.8. Release of Properties, etc.......................................50
8.9. Limitation of Lessor's Obligations...............................51
8.10. No Representations or Warranties as to the Property or
Operative Agreements...........................................52
8.11. Reliance; Advice of Counsel......................................52
8.12 [Reserved].......................................................53
8.13. Subdivision of the Property; Sale of Excess Land.................53
8.14. Non Disturbance..................................................54
SECTION 9. TRANCHE B CREDIT AGREEMENT, CASH COLLATERAL CREDIT
AGREEMENT AND NOTE PURCHASE AGREEMENT............................55
9.1. The Construction Agent's and the Lessee's Tranche B
Credit Agreement, Cash Collateral Credit Agreement
and Note Purchase Agreement Rights.............................55
SECTION 10. TRANSFER OF INTEREST..............................................56
10.1. Restrictions on Transfer.........................................56
10.2. Effect of Transfer...............................................58
SECTION 11. INDEMNIFICATION...................................................58
11.1. General Indemnity................................................58
11.2. General Tax Indemnity............................................61
11.3. Increased Costs, Illegality, etc.................................66
11.4. Funding/Contribution Indemnity...................................67
11.5. EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE,
STRICT LIABILITY, ETC..........................................68
11.6. Additional Provisions Regarding Environmental
Indemnification................................................68
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11.7. Indemnity Prior to Completion Date...............................69
SECTION 12. MISCELLANEOUS.....................................................69
12.1. Survival of Agreements...........................................69
12.2. Notices..........................................................70
12.3. Counterparts.....................................................71
12.4. Terminations, Amendments, Waivers, Etc...........................71
12.5. Headings, etc....................................................72
12.6. Parties in Interest..............................................72
12.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER
OF JURY TRIAL; VENUE...........................................72
12.8. Severability.....................................................73
12.9. Liability Limited................................................73
12.10. Rights of the Lessee.............................................74
12.11. Further Assurances...............................................75
12.12. Calculations under Operative Agreements..........................75
12.13. Confidentiality..................................................75
12.14. Financial Reporting/Tax Characterization.........................77
12.15. Set-off..........................................................77
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EXHIBITS
A - Form of Requisition - Sections 4.2, 5.2, 5.3 and 5.4
B - [Reserved]
C - Form of Secretary's Certificate - Section 5.3(z)
D - Form of Officer's Certificate - Section 5.3(aa)
E - Form of Secretary's Certificate - Section 5.3(cc)
F - Form of Officer's Certificate - Section 5.3(dd)
G - [Reserved]
H - [Reserved]
I - Form of Officer's Certificate - Section 5.5
J - [Reserved]
K - Description of Material Litigation - Section 6.2(d)
L - State of Incorporation/Formation and Principal Place of Business of the
Lessee - Section 6.2(i)
Appendix A - Rules of Usage and Definitions
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT, dated as of September 26, 2001 (as amended,
modified, extended, supplemented and/or restated from time to time, this
"Agreement") is by and among TOYS "R" US, INC., a Delaware corporation (the
"Lessee" or the "Construction Agent"); FIRST UNION DEVELOPMENT CORPORATION, a
North Carolina corporation (the "Borrower" or the "Lessor"); the various
financial institutions and other institutional investors which are parties
hereto from time to time as holders of the Tranche A Notes (subject to the
definition of Tranche A Note Purchasers in Appendix A hereto, individually, a
"Tranche A Note Purchaser" and collectively, the "Tranche A Note Purchasers");
the various banks and other lending institutions which are parties hereto from
time to time as Tranche B Lenders (subject to the definition of Tranche B
Lenders in Appendix A hereto, individually, a "Tranche B Lender" and
collectively, the "Tranche B Lenders"); the various banks and other lending
institutions which are parties hereto from time to time as Cash Collateral
Lenders (subject to the definition of Cash Collateral Lenders in Appendix A
hereto, individually a "Cash Collateral Lender" and collectively, the "Cash
Collateral Lenders") (each Tranche A Note Purchaser, each Tranche B Lender and
each Cash Collateral Lender may be referred to individually as a "Primary
Financing Party" and collectively as the "Primary Financing Parties"); FIRST
UNION NATIONAL BANK, a national banking association, as the agent for the
Primary Financing Parties and, respecting the Security Documents, as the agent
for the Secured Parties (in such capacity, the "Agent"); and FIRST UNION
NATIONAL BANK, a national banking association, as the escrow agent (the "Escrow
Agent"). Capitalized terms used but not otherwise defined in this Agreement
shall have the meanings set forth in Appendix A hereto.
In consideration of the mutual agreements herein contained and other good
and valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION 1. THE FINANCING.
Subject to the terms and conditions of this Agreement and the other
Operative Agreements and in reliance on the representations and warranties of
each of the parties hereto contained herein or made pursuant hereto, the Primary
Financing Parties have agreed to make Tranche B Loans or Cash Collateral Loans
to the Lessor or purchase the Tranche A Notes issued by the Lessor from time to
time in an aggregate principal amount of up to the aggregate amount of the
Primary Financing Parties' Commitments in order for the Lessor to acquire the
Land, and to renovate, develop and construct certain Improvements in accordance
with the Agency Agreement and the terms and provisions hereof and for the other
purposes described herein. The Tranche B Loans shall be made pursuant to the
Tranche B Credit Agreement. The Cash Collateral Loans shall be made pursuant to
the Cash Collateral Credit Agreement. The Tranche A Note Purchasers will
purchase the Tranche A Notes pursuant to the Note Purchase Agreement. The
proceeds received by the Lessor from the sale of the Tranche A Notes (the
"Tranche A Proceeds") will be deposited in the Escrow Account and disbursed to
the Lessor pursuant to the terms of the Operative Agreements. The obligations of
the Lessor under the Tranche A Notes
and the Tranche B Notes shall be secured by the Collateral (other than the Cash
Collateral). The obligations of the Lessor under the Cash Collateral Notes shall
be secured by the Cash Collateral and the Excess Land, if any.
SECTION 2. [RESERVED].
SECTION 3. SUMMARY OF TRANSACTIONS.
3.1. Operative Agreements.
On the Closing Date, each of the respective parties hereto and thereto
shall execute and deliver this Agreement, the Lease, the Agency Agreement, the
Note Purchase Agreement, the Tranche B Credit Agreement, the Cash Collateral
Credit Agreement, the Notes, the Security Agreement, each applicable Mortgage
Instrument and such other documents, instruments, certificates and opinions of
counsel as agreed to by the parties hereto.
3.2. Property Purchase.
On the Closing Date and subject to the terms and conditions of this
Agreement (a) the Agent will disburse a portion of the Tranche A Proceeds from
the Escrow Account in accordance with Section 5 of this Agreement, (b) the
Tranche B Lenders will each make Tranche B Loans in accordance with Section 5 of
this Agreement and the terms and provisions of the Tranche B Credit Agreement,
(c) the Cash Collateral Lenders will each make Cash Collateral Loans in
accordance with Section 5 of this Agreement and the terms and provisions of the
Cash Collateral Credit Agreement, and (d) the Lessor will acquire the Property,
pay other Project Costs, as applicable, and grant the Agent Liens on the
Property by execution of the required Security Documents.
3.3. Construction of Improvements; Commencement of Basic Rent.
Construction Advances will be made with respect to particular Improvements
to be repaired, replaced, installed and/or constructed on the Property and with
respect to ongoing Work regarding the Equipment and Improvements, in each case,
pursuant to the terms and conditions of this Agreement and the Agency Agreement.
The Construction Agent will act as a construction agent on behalf of the Lessor
respecting the Work regarding the Equipment and Improvements and the
expenditures of the Construction Advances related to the foregoing. The
Construction Agent shall promptly notify the Lessor upon Completion of the Work
regarding the Improvements and the Lessee shall commence to pay Basic Rent as of
the Rent Commencement Date.
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SECTION 4. THE CLOSING.
4.1. Closing Date.
All documents and instruments required to be delivered on the Closing Date
shall be delivered at the offices of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇ PLLC, Charlotte, North
Carolina, or at such other location as may be determined by the Lessor, the
Agent and the Lessee.
4.2. Closing Date; Acquisition Advance; Construction Advances.
The Construction Agent shall deliver to the Agent a requisition (a
"Requisition"), in the form attached hereto as Exhibit A or in such other form
as is satisfactory to the Agent, in its reasonable discretion, in connection
with (a) the Transaction Expenses and other fees, expenses and disbursements
payable, pursuant to Section 7.1, by the Lessor, (b) the Acquisition Advance
pursuant to Section 5.3 and (c) each Construction Advance pursuant to Section
5.4.
SECTION 5. FUNDING OF ADVANCES; CONDITIONS PRECEDENT; REPORTING
REQUIREMENTS ON COMPLETION DATE; THE LESSEE'S DELIVERY OF
NOTICES; RESTRICTIONS ON LIENS.
5.1. General.
To the extent funds have been advanced to the Lessor pursuant to this
Section 5, the Lessor will use such funds from time to time in accordance with
the terms and conditions of this Agreement and the other Operative Agreements
for the following purposes (costs expended for the following purposes are herein
referred to as the "Project Costs") (i) at the direction of the Construction
Agent to acquire the Land in accordance with the terms of this Agreement, the
Agency Agreement and the other Operative Agreements, (ii) to make Advances to
the Construction Agent to permit the acquisition, testing, engineering,
installation, development, construction, modification, design, and renovation,
as applicable, of the Property (or components thereof) in accordance with the
terms of the Agency Agreement and the other Operative Agreements, (iii) during
the Construction Period, to pay interest to the Tranche A Note Purchasers
pursuant to the Tranche A Notes, interest to the Tranche B Lenders pursuant to
the Tranche B Notes, interest to the Cash Collateral Lenders pursuant to the
Cash Collateral Notes, Transaction Expenses, and reasonable fees, expenses and
other disbursements payable under Section 7; provided, however, that Tranche A
Non-GAAP Interest Expense and any other Non-GAAP Expenses shall be included as
an amount to be paid in connection with a Requisition and shall be paid on each
Scheduled Interest Payment Date, as applicable, during the period prior to the
Rent Commencement Date out of the proceeds of the Tranche B Loans made on such
date, and (iv) Supplemental Rent constituting Transaction Expenses payable
during the Construction Period.
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5.2. Procedures for Funding.
(a) Except as expressly provided herein, Advances hereunder shall
only be made on the Closing Date and on the first day of each calendar
month, unless such day is not a Business Day, in which case on the next
occurring Business Day after the first day of such month. Not less than
(i) three (3) Business Days prior to the Closing Date and (ii) three (3)
Business Days prior to the date on which any Acquisition Advance or
Construction Advance is to be made, the Construction Agent shall deliver
to the Agent, with respect to the Closing Date, the Acquisition Advance
and each Construction Advance, a Requisition as described in Section 4.2
hereof (including without limitation Tranche A Non-GAAP Interest Expense
and any other Non-GAAP Expenses) in a form reasonably acceptable to the
Agent.
(b) Each Requisition shall: (i) be irrevocable, (ii) request funds
in an amount that is not in excess of the total aggregate of the Available
Tranche B Lender Commitments plus the balance of funds in the Escrow
Account at such time plus, in the case of the initial Requisition, the
Cash Collateral Lender Commitments, and (iii) request that the Agent
disburse funds out of the Escrow Account, that the Tranche B Lenders make
Tranche B Loans and that the Cash Collateral Lenders make Cash Collateral
Loans (in the case of the Acquisition Advance) to the Lessor for the
payment of Transaction Expenses, Property Acquisition Costs (in the case
of the Acquisition Advance) or other Project Costs (in the case of a
Construction Advance) that have previously been incurred or are to be
incurred on the date of such Advance to the extent such were not subject
to a prior Requisition, in each case as specified in the Requisition.
(c) Subject to the satisfaction of the conditions precedent set
forth in Section 5.3 or 5.4, as applicable, (i) on the Closing Date, the
Tranche A Note Purchasers shall purchase the Tranche A Notes, the proceeds
from which shall be deposited in the Escrow Account, based on their
respective Tranche A Commitments, (ii) on the Closing Date, the Cash
Collateral Lenders shall make Cash Collateral Loans based on their
respective Cash Collateral Commitments, (iii) on the Closing Date and the
date on which each Construction Advance is to be made, as applicable, the
Tranche B Lenders shall make Tranche B Loans based on their respective
Tranche B Commitments to the Lessor in an aggregate amount, together with
the Tranche A Proceeds disbursed by the Agent and, in the case of the
Closing Date, with the Cash Collateral Loans made by the Cash Collateral
Lenders toward any Requisition, equal to the amount of the Requested Funds
specified in such Requisition (up to an aggregate principal amount equal
to the aggregate of the Available Tranche B Lender Commitments), and (iv)
the total amount of Tranche A Proceeds disbursed by the Agent, Cash
Collateral Loans made by the Cash Collateral Lenders and Tranche B Loans
made by the Tranche B Lenders on such date shall (x) be used by the Lessor
to pay Project Costs including Transaction Expenses or (y) be advanced by
the Lessor on the date of such Advance to the Construction Agent or the
Lessee to pay Project Costs, as applicable. Except as provided in the
following sentence with respect to the Closing Date, the Requested Funds
shall be funded with Tranche A Proceeds and Tranche B Loans, (I) with the
Agent disbursing an amount equal to the product of the Requested Funds
(less any Non-GAAP Expenses) set forth in such
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Requisition times seventy-four and eighty-four one hundredths of one
percent (74.84%) out of the Escrow Account and (II) with the Tranche B
Lenders advancing the sum of (A) an amount equal to the product of the
Requested Funds (less any Non-GAAP Expenses) set forth in such Requisition
times twenty-five and sixteen one hundredths of one percent (25.16%) plus
(B) the total amount of Non-GAAP Expenses requested pursuant to such
Requisition in the form of Tranche B Loans; provided, however, except as
expressly provided in the immediately following proviso, to the extent
that the aggregate Available Tranche B Lender Commitments are insufficient
to fund any amount as set forth in this Section 5.2(c), such amounts shall
be funded out of the Escrow Account; provided, further, in no event shall
funds from the Escrow Account be used to fund Non-GAAP Expenses.
Notwithstanding the foregoing, in the case of the Requisition requesting
an Advance on the Closing Date, the Requested Funds shall be funded first
with Cash Collateral Loans from each Cash Collateral Lender in an amount
equal to the aggregate Cash Collateral Commitments of the Cash Collateral
Lenders, which amount shall be allocated to the cost of the Excess Land,
and second with Tranche A Proceeds and Tranche B Loans, (I) with the Agent
disbursing an amount equal to the product of the balance of the Requested
Funds (less any Non-GAAP Expenses) set forth in such Requisition times
seventy-four and eighty-four one hundredths of one percent (74.84%) out of
the Escrow Account and (II) with the Tranche B Lenders advancing the sum
of (A) an amount equal to the product of the balance of the Requested
Funds (less any Non-GAAP Expenses) set forth in such Requisition times
twenty-five and sixteen one hundredths of one percent (25.16%) plus (B)
the total amount of Non-GAAP Expenses requested pursuant to such
Requisition in the form of Tranche B Loans. Notwithstanding that the
Operative Agreements state that Advances shall be directed to the Lessor,
each Advance shall in fact be directed to the Construction Agent (for the
benefit of the Lessor) and applied by the Construction Agent (for the
benefit of the Lessor) pursuant to the requirements imposed on the Lessor
under the Operative Agreements.
(d) [Reserved].
(e) All Operative Agreements which are to be delivered to the
Lessor, the Agent or the Primary Financing Parties shall be delivered to
the Agent, on behalf of the Lessor, the Agent or the Primary Financing
Parties, and such items (except for Notes, Bills of Sale, the Deed and
chattel paper originals, with respect to which in each case there shall be
only one original) shall be delivered with originals sufficient for the
Lessor, the Agent and each Primary Financing Party. The Agent shall then
deliver such Operative Agreements to the Lessor and each Primary Financing
Party. All other items which are to be delivered to the Lessor, the Agent
or the Primary Financing Parties shall be delivered to the Agent, on
behalf of the Lessor, the Agent or the Primary Financing Parties, or
directly to such party as required by the Operative Agreements. Except as
otherwise noted, copies shall be sufficient for any other deliveries to
parties other than the Agent required under Section 5.3, 5.4 or 5.5. To
the extent any such other items delivered to the Agent are requested in
writing from time to time by the Lessor or any Primary Financing Party or
are required to be delivered by the Agent pursuant to Section 8.6(g), the
Agent shall provide a copy of such item to the party requesting it or to
the parties entitled thereto, as applicable.
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(f) The Agent hereby agrees that it will calculate the amount of
Tranche A Non-GAAP Interest Expense during each period referenced in
Section 5.2(a), and will provide prompt written notice of such amount to
the Construction Agent, for inclusion in the Requisition for such period
referenced in Section 5.2(a).
5.3. Conditions Precedent for the Lessee, the Lessor, the Agent and the
Primary Financing Parties Relating to the Closing Date and the
Advance of Funds for the Acquisition of the Property.
The obligations (i) on the Closing Date of the Lessee, the Lessor, the
Agent and the Primary Financing Parties to enter into the transactions
contemplated by this Agreement, including without limitation the obligation to
execute and deliver the applicable Operative Agreements to which each is a party
on the Closing Date and, in the case of the Tranche A Note Purchasers, to
purchase the Tranche A Notes (the proceeds from which shall be deposited in the
Escrow Account), (ii) on the Closing Date of the Agent to disburse Tranche A
Proceeds from the Escrow Account to the Lessor and the Tranche B Lenders to make
Tranche B Loans in order to pay Transaction Expenses, fees, expenses and other
disbursements payable by the Lessor under Section 7.1(a) of this Agreement and
(iii) on the Closing Date of the Agent to disburse Tranche A Proceeds, the
Tranche B Lenders to make Tranche B Loans and the Cash Collateral Lenders to
make Cash Collateral Loans for the purpose of providing funds to the Lessor
necessary to acquire the Property (the "Acquisition Advance"), in each case
(with regard to the foregoing Sections 5.3(i), (ii) and (iii)) are subject to
the satisfaction or waiver of the following conditions precedent on or prior to
the Closing Date (to the extent such conditions precedent require the delivery
of any agreement, certificate, instrument, memorandum, legal or other opinion,
appraisal, commitment, title insurance commitment, lien report or any other
document of any kind or type, such shall be in form and substance satisfactory
to the Agent and the Primary Financing Parties, in their reasonable discretion;
notwithstanding the foregoing, the obligations of each party shall not be
subject to any conditions contained in this Section 5.3 which are required to be
performed by such party):
(a) the correctness in all material respects of the representations
and warranties of the parties to this Agreement contained herein, in each
of the other Operative Agreements and each certificate delivered pursuant
to any Operative Agreement;
(b) the performance by the parties to this Agreement of their
respective agreements contained herein and in the other Operative
Agreements to be performed by them on or prior to such date;
(c) the Agent and the Primary Financing Parties shall have received
fully executed counterpart copies of the Requisition, appropriately
completed;
(d) title to the Property shall conform to the representations and
warranties set forth in Section 6.2(l) hereof;
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(e) the Construction Agent shall have delivered to the Agent and the
Primary Financing Parties a good standing certificate for the Construction
Agent in the state where the Property is located, the Deed with respect to
the Land and existing Improvements (if any), and a copy of the ▇▇▇▇ of
Sale with respect to the Equipment (if any), respecting such of the
foregoing as are being acquired on such date with the proceeds of the
Loans;
(f) there shall not have occurred and be continuing any Default or
Event of Default and no Default or Event of Default will have occurred
between the date of delivery of the Requisition and disbursement of the
Advance or after giving effect to any such Advance;
(g) the Construction Agent shall have delivered to the Agent and the
Primary Financing Parties separate title insurance commitments for the
Tranche A Proceeds and the Tranche B Loans to issue policies respecting
the Property, with such endorsements as the Agent and the Primary
Financing Parties deem reasonably necessary, in favor of the Lessor and
the Agent from a title insurance company reasonably acceptable to the
Agent and the Primary Financing Parties, but only with such title
exceptions thereto as are set forth as Permitted Encumbrances, as such
term is used in the Purchase Agreement, or as are otherwise reasonably
acceptable to the Agent and the Primary Financing Parties;
(h) the Construction Agent shall have delivered to the Agent and the
Primary Financing Parties an environmental site assessment respecting the
Property prepared by an independent recognized professional reasonably
acceptable to the Agent and the Primary Financing Parties and evidencing
no pre-existing environmental condition with respect to which there is
more than a remote risk of loss to the Lessee;
(i) the Construction Agent shall have delivered to the Agent and the
Primary Financing Parties an ALTA survey (with a flood hazard
certification) respecting the Property prepared by (i) an independent
recognized professional reasonably acceptable to the Agent and the Primary
Financing Parties and (ii) in a manner and including such information as
is reasonably required by the Agent and the Primary Financing Parties;
(j) the Construction Agent shall have caused to be delivered to the
Agent and the Primary Financing Parties a legal opinion in such form as is
reasonably acceptable to the Agent and the Primary Financing Parties with
respect to local law real property issues respecting the state in which
the Property is located addressed to the Lessor, the Agent and the Primary
Financing Parties, from counsel located in the state where the Property is
located, prepared by counsel reasonably acceptable to the Agent and the
Primary Financing Parties;
(k) [Reserved];
(l) the Construction Agent shall have delivered to the Agent and the
Primary Financing Parties invoices for, or other reasonably satisfactory
evidence of, the various
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Transaction Expenses and other fees, expenses and disbursements referenced
in Section 7 of this Agreement, as appropriate;
(m) the Construction Agent shall have caused to be delivered to the
Agent and the Primary Financing Parties Mortgage Instruments (in such form
as is reasonably acceptable to the Agent and the Primary Financing
Parties, with revisions as necessary to conform to applicable state law),
Lessor Financing Statements and Primary Financing Party Financing
Statements respecting the Property, all fully executed and in recordable
form;
(n) with respect to the Acquisition Advance, the sum of the
Available Tranche B Lender Commitment plus the Cash Collateral Commitment
plus the Tranche A Proceeds in the Escrow Account (after giving effect to
the Acquisition Advance) will be sufficient to pay all amounts payable
therefrom;
(o) the Lessee shall have delivered to the Agent with respect to the
Property a Lease Supplement and a memorandum (or short form lease)
regarding the Lease and such Lease Supplement (such memorandum or short
form lease to be in the form attached to the Lease as Exhibit B or in such
other form as is acceptable to the Agent, with modifications as necessary
to conform to applicable state law, and in form suitable for recording);
(p) [Reserved];
(q) the Construction Agent shall have delivered to the Agent a
preliminary Construction Budget for the Property;
(r) the Construction Agent shall have provided evidence to the Agent
and the Primary Financing Parties of insurance with respect to the
Property as provided in the Lease;
(s) the Construction Agent shall have caused an Appraisal regarding
the Property to be provided to the Agent and the Primary Financing Parties
from an appraiser satisfactory to the Agent and the Primary Financing
Parties;
(t) the Construction Agent shall cause (i) Uniform Commercial Code
lien searches, tax lien searches and judgment lien searches regarding the
Lessor and the Lessee to be conducted (and copies thereof to be delivered
to the Agent and the Primary Financing Parties) in such jurisdictions as
determined by the Agent by a nationally recognized search company
acceptable to the Agent and (ii) the liens referenced in such lien
searches which are objectionable to the Agent to be either removed or
otherwise handled in a manner satisfactory to the Agent;
(u) all taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of the Operative
Agreements and/or documents
8
related thereto shall have been paid or provisions for such payment shall
have been made to the satisfaction of the Agent;
(v) in the reasonable opinion of the Agent and the Primary Financing
Parties and their respective counsel, the transactions contemplated by the
Operative Agreements do not and will not subject the Lessor, the Primary
Financing Parties or the Agent to any adverse regulatory prohibitions,
constraints, penalties or fines;
(w) each of the Operative Agreements to be entered into on such date
shall have been duly authorized, executed and delivered by the parties
thereto, and shall be in full force and effect, and the Agent and the
Primary Financing Parties shall have received a fully executed copy of
each of the Operative Agreements;
(x) [Reserved];
(y) the Agent and the Primary Financing Parties shall have received
an Officer's Certificate, dated as of the Closing Date, of the Lessee in
the form attached hereto as Exhibit C or in such other form as is
reasonably acceptable to the Agent and the Primary Financing Parties
stating that (i) each and every representation and warranty of the Lessee
contained in the Operative Agreements to which it is a party is true and
correct in all material respects on and as of the Closing Date; (ii) no
Lease Default or Lease Event of Default has occurred and is continuing
under any Operative Agreement; (iii) each Operative Agreement to which the
Lessee is a party is in full force and effect with respect to it except as
the same may be limited by applicable bankruptcy, insolvency, fraudulent
transfer or conveyance, reorganization, moratorium or other similar laws
relating to or affecting creditors' or lessors' rights generally and
general principles of equity; and (iv) the Lessee has duly performed and
complied with all covenants, agreements and conditions contained herein or
in any Operative Agreement required to be performed or complied with by it
on or prior to the Closing Date;
(z) the Agent and the Primary Financing Parties shall have received
(i) a certificate of the Secretary or an Assistant Secretary of the
Lessee, dated as of the Closing Date, in the form attached hereto as
Exhibit D or in such other form as is reasonably acceptable to the Agent
and the Primary Financing Parties attaching and certifying as to (1) the
resolutions of the Board of Directors of the Lessee duly authorizing the
execution, delivery and performance by the Lessee of each of the Operative
Agreements to which it is or will be a party, (2) the articles of
incorporation of the Lessee certified as of a recent date by the Secretary
of State of its state of incorporation and its by-laws and (3) the
incumbency and signature of persons authorized to execute and deliver on
behalf of the Lessee the Operative Agreements to which it is or will be a
party and (ii) a good standing certificate (or local equivalent) from the
respective states where the Lessee is incorporated and where the principal
place of business of the Lessee is located as to its good standing in each
such state;
(aa) there shall not have occurred any material adverse change in
the consolidated assets, liabilities, operations, business or condition
(financial or otherwise)
9
of the Lessee (on a consolidated basis) from that set forth in the most
recent audited consolidated financial statements of the Lessee which have
been provided to the Agent;
(bb) the Agent, the Lessee, and the Primary Financing Parties shall
have received an Officer's Certificate of the Lessor dated as of the
Closing Date in the form attached hereto as Exhibit E or in such other
form as is reasonably acceptable to the Agent and the Lessee, stating that
(i) each and every representation and warranty of the Lessor contained in
the Operative Agreements to which it is a party is true and correct on and
as of the Closing Date, (ii) each Operative Agreement 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 Agreement required to be
performed or complied with by it on or prior to the Closing Date and (iv)
no Default or Event of Default attributable solely to Lessor has occurred
and is continuing under any Operative Agreement;
(cc) the Agent, the Lessee, and the Primary Financing Parties shall
have received (i) a certificate of the Secretary or an Assistant Secretary
of the Lessor in the form attached hereto as Exhibit F or in such other
form as is reasonably acceptable to the Agent and the Lessee, attaching
and certifying as to (A) the signing resolutions duly authorizing the
execution, delivery and performance by the Lessor of each of the Operative
Agreements to which it is or will be a party, (B) its articles of
association or other equivalent charter documents and its by-laws, as the
case may be, certified as of a recent date by an appropriate officer of
the Lessor and (C) the incumbency and signature of persons authorized to
execute and deliver on its behalf the Operative Agreements to which it is
a party and (ii) a good standing certificate from the appropriate
governmental authority in the jurisdiction of the Lessor's organization
and in New Jersey;
(dd) counsel for the Lessor acceptable to the Agent shall have
issued to the Lessee, the Primary Financing Parties and the Agent its
opinion in such form as is reasonably acceptable to the Agent and the
Primary Financing Parties and the Lessee;
(ee) the Construction Agent shall have caused to be delivered to the
Agent and the Primary Financing Parties a legal opinion in such form as is
reasonably acceptable to the Agent and the Primary Financing Parties,
addressed to the Lessor, the Agent and the Primary Financing Parties, from
counsel reasonably acceptable to the Agent;
(ff) the Tranche A Note Purchasers shall have obtained a private
placement number for the Tranche A Notes from Standard & Poor's CUSIP
Service Bureau;
(gg) no Casualty and no Condemnation respecting the Property shall
have occurred which would permit the buyer under the Purchase Agreement to
terminate the Purchase Agreement and no action shall be pending or
threatened by a Governmental Authority to initiate a Condemnation with
respect to the Property which would permit the buyer under the Purchase
Agreement to terminate the Purchase Agreement;
10
(hh) Lessee, Lessor and the Tranche A Note Purchasers shall have
received a certificate from the Placement Agent, in form and substance
satisfactory to them, dated the Closing Date, with respect to offerees of
the Tranche A Notes;
(ii) the Construction Agent shall have deposited good and
immediately available funds, in Dollars, into the Cash Collateral Account
in a sufficient amount so that after giving effect to the requested
Advance the Construction Agent is in compliance with Section 5.11 hereof;
(jj) each Tranche A Note Purchaser requesting the same in writing
shall receive from the Lessee and Lessor a certificate reasonably
satisfactory to each of such Tranche A Note Purchaser, the Lessee and the
Lessor, dated within ten (10) days of the Closing Date, with respect to
conflicts of interest with such Tranche A Note Purchaser;
(kk) at least three Business Days prior to the Closing Date, each
Tranche A Note Purchaser shall have received from the Lessor written
instructions directing the manner of the payment of funds and setting
forth (i) the name and address of the transferee bank, (ii) such
transferee's bank's ABA number, (iii) the account name and number into
which the purchase price for the Tranche A Notes is to be deposited, (iv)
the name and telephone number of the account representative responsible
for verifying receipt of such funds and (v) the Closing Date; and
(ll) contemporaneously on the Closing Date, the Lessor shall sell to
each of the Tranche A Note Purchasers, and such Tranche A Note Purchasers
shall purchase, the Tranche A Notes to be purchased by them on the Closing
Date as specified in Schedule A to the Note Purchase Agreement.
5.4. Conditions Precedent for the Lessor, the Agent and the Tranche B
Lenders Relating to the Advance of Funds after the Acquisition
Advance.
The obligations of the Agent to make Construction Advances from the Escrow
Account, and the Tranche B Lenders to make Tranche B Loans in connection with
all requests for Advances for Project Costs subsequent to the acquisition of the
Property (and to pay the Transaction Expenses, fees, expenses and other
disbursements payable under Section 7 of this Agreement in connection therewith)
are subject to the satisfaction or waiver of the following conditions precedent
(to the extent such conditions precedent require the delivery of any agreement,
certificate, instrument, memorandum, legal or other opinion, appraisal,
commitment, title insurance commitment, lien report or any other document of any
kind or type, such shall be in form and substance satisfactory to the Agent, in
its reasonable discretion; notwithstanding the foregoing, the obligations of
each party shall not be subject to any conditions contained in this Section 5.4
which are required to be performed by such party):
(a) the correctness in all material respects on such date of the
representations and warranties of the parties to this Agreement contained
herein, in each of the other Operative Agreements and in each certificate
delivered pursuant to any Operative Agreement, except to the extent any
such representation or warranty relates to an earlier
11
date, in which case such representation or warranty shall have been true
and correct in all material respects as of such earlier date;
(b) [Reserved];
(c) the Agent and the Primary Financing Parties shall have received
a fully executed counterpart of the Requisition, appropriately completed;
(d) based upon the Construction Budget which shall satisfy the
requirements of this Agreement, the sum of the Available Tranche B Lender
Commitments plus the balance of funds in the Escrow Account will be
sufficient to complete the Improvements;
(e) there shall not have occurred and be continuing any Default or
Event of Default and no Default or Event of Default will have occurred as
a result of and after giving effect to the Construction Advance requested
by the applicable Requisition;
(f) the title insurance policies delivered in connection with the
requirements of Section 5.3(g) shall provide for (or shall be endorsed to
provide for) insurance in an amount at least equal to the maximum total
Property Cost indicated by the applicable Construction Budget referred to
in subparagraph (d) above (divided between such policy in favor of the
Tranche A Note Purchasers and the other policy in favor of the Tranche B
Lenders based on the percentages for Advances as set forth in Section
5.2(c)) and there shall be no title change or exception reasonably
objectionable to the Agent;
(g) the Construction Agent shall have delivered to the Agent copies
of the Construction Documents;
(h) [Reserved];
(i) the Construction Agent shall have delivered, or caused to be
delivered, to the Agent, Bills of Sale or other documents reasonably
requested by the Agent in order to perfect the interest of the Lessor, in
each case with regard to any Equipment or other components of the Property
then being acquired with the proceeds of the Loans; and
(j) all taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of the Operative
Agreements shall have been paid or provisions for such payment shall have
been made to the reasonable satisfaction of the Agent.
5.5. Additional Reporting and Delivery Requirements on Completion Date.
Within ten (10) days after the Completion Date for the Property, the
Construction Agent shall deliver to the Agent and the Primary Financing Parties
an Officer's Certificate in the form attached hereto as Exhibit I or in such
other form as is reasonably acceptable to the Agent specifying the Completion
Date for the Property and the aggregate Property Cost for the Property, and that
all representations and warranties of the Construction Agent and Lessee in
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each of the Operative Agreements and each certificate delivered pursuant thereto
are true and correct in all material respects as of the Completion Date. The
Agent shall have the right to contest the information contained in such
Officer's Certificate. Furthermore, on or prior to the Completion Date for the
Property, the Construction Agent shall deliver or cause to be delivered to the
Agent and the Primary Financing Parties (unless previously delivered to the
Agent and the Primary Financing Parties) the following, each of which shall be
in form and substance acceptable to the Agent, in its reasonable discretion: (v)
a title insurance endorsement regarding the title insurance policy delivered in
connection with the requirements of Section 5.3(g), but only to the extent such
endorsement is necessary to provide for insurance in an amount at least equal to
the maximum total Property Cost (divided between such policy in favor of the
Tranche A Note Purchasers and the other policy in favor of the Tranche B Lenders
based on the percentages for Advances as set forth in Section 5.2(c)) and, if
endorsed, the endorsement shall not include a title change or exception
reasonably objectionable to the Agent; (w) an as-built survey for the Property,
(x) insurance certificates respecting such Property as required hereunder and
under the Lease and (y) if reasonably requested by the Agent, amendments to the
Lessor Financing Statements executed by the appropriate parties. In addition, on
the Completion Date, the Construction Agent covenants and agrees that the
recording fees, documentary stamp taxes or similar amounts required to be paid
in connection with the related Mortgage Instruments shall have been paid in an
amount required by applicable law, subject, however, to the obligation that such
costs be funded from Tranche A Proceeds or Tranche B Loans to the extent
required pursuant to Section 7.1.
5.6. The Construction Agent Delivery of Construction Budget
Modifications.
(a) The Construction Agent covenants and agrees to deliver to the
Agent each month notification of any modification to the Construction
Budget regarding the Property if such modification increases the cost to
construct the Property over the Construction Budget as of the Closing
Date; provided no Construction Budget may be increased unless (a) the
title insurance policies referenced in Section 5.3(g) are also modified or
endorsed, if necessary, to provide for insurance in an amount that
satisfies the requirements of Section 5.4(f) of this Agreement and (b)
after giving effect to any such amendment, the Construction Budget remains
in compliance with the requirements of Section 5.4(d) of this Agreement.
(b) In the event any such modification to the Construction Budget
regarding the Property that is not caused by any acts or failure to act of
the Construction Agent increases the cost to construct the Property by
such amount as would cause the Available Tranche B Lender Commitments plus
the balance of funds remaining in the Escrow Account to be insufficient to
complete the Improvements, at the request of the Construction Agent, the
Agent shall use all reasonable efforts to find lenders, financial
institutions or other institutional investors (including without
limitation any existing Tranche B Lenders) willing to fund such additional
amounts with the consent of each of the Tranche A Noteholders.
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5.7. Restrictions on Liens.
On the Closing Date, the Construction Agent shall cause the Property
acquired by the Lessor on such date to be free and clear of all Liens except
those referenced in Sections 6.2(r)(i) and 6.2(r)(ii), such other Liens that are
expressly set forth as title exceptions on the title commitment or policy issued
under Section 5.3(g) with respect to the Property, Liens for Taxes that are not
yet due and payable and such other Liens that have been expressly approved or
agreed to by the Agent. On the date the Property is either sold to a third party
(other than the Lessee or any Affiliate or designee of the Lessee) in accordance
with the terms of the Operative Agreements or, pursuant to Section 22.1(a) of
the Lease Agreement, retained by the Lessor, the Lessee shall cause the Property
to be free and clear of all Liens (other than Lessor Liens, such other Liens
that are expressly set forth as title exceptions on the title commitment or
policy issued under Section 5.3(g) with respect to the Property, to the extent
such title commitment has been approved by the Agent, Liens for Taxes that are
not yet due and payable and such other Liens that have been expressly approved
or agreed to by the Agent).
5.8. [Reserved].
5.9. Extension of Construction Period Termination Date.
The parties hereto agree that, so long as no Agency Agreement Default or
Agency Agreement Event of Default shall have occurred and be continuing, the
Construction Agent shall have the right upon thirty (30) days written notice to
the Agent, the Lessor and the Primary Financing Parties to extend the
Construction Period Termination Date from September 26, 2003 to March 26, 2004.
5.10. Payments.
All payments of Rent, and other amounts payable to any Financing Party to
be made by the Construction Agent or the Lessee under this Agreement or any
other Operative Agreements (excluding Excepted Payments which shall be paid
directly to the party to whom such payments are owed) shall be made to the Agent
at the office designated by the Agent from time to time by written notice as
provided herein in Dollars and in immediately available funds, without setoff,
deduction, or counterclaim. Subject to the definition of "Interest Period" in
Appendix A attached hereto, whenever any payment under this Agreement or any
other Operative Agreements shall be stated to be due on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time in such case shall be included in the computation of
interest and fees payable pursuant to the Operative Agreements, as applicable
and as the case may be; provided, that in the case of the Tranche A Notes, such
extension of time shall not be included in the computation of interest payable
on such next succeeding Business Day.
5.11. Cash Collateral Account.
(a) On the Closing Date and pursuant to the Cash Collateral
Agreement, the Construction Agent shall pledge to the Agent, for the
benefit of the Cash Collateral
14
Lenders, as security for the Cash Collateral Obligations, by delivery to
the Intermediary or by otherwise depositing into the Cash Collateral
Account, Cash Collateral in an amount such that the fair market value of
the Cash Collateral in the Cash Collateral Account after such pledge or
deposit on such date is equal to or greater than one hundred five percent
(105%) of the outstanding aggregate principal amount of Cash Collateral
Loans on such date.
(b) If on any date the fair market value of the Cash Collateral in
the Cash Collateral Account shall be less than one hundred five percent
(105%) of the outstanding aggregate principal amount of Cash Collateral
Loans on such date, then the Construction Agent or the Lessee shall pledge
to the Agent, for the benefit of the Cash Collateral Lenders, by delivery
to the Intermediary or by otherwise depositing into the Cash Collateral
Account, additional Cash Collateral in an amount such that the fair market
value of the Cash Collateral in the Cash Collateral Account after such
pledge or deposit on such date is equal to or greater than one hundred
five percent (105%) of the outstanding aggregate principal amount of Cash
Collateral Loans on such date.
(c) Beginning on the date thirty (30) days after the Closing Date
(unless such day is not a Business Day, then on the next occurring
Business Day) and on the same calendar day of each month thereafter
(unless such day is not a Business Day, then on the next occurring
Business Day, or unless there is no such corresponding calendar day in
such month, then on the next occurring Business Day in the following
month), the Lessee shall furnish to the Agent an Officer's Certificate in
the form of Schedule 5.11 setting forth the Lessee's calculation, in
reasonable detail, demonstrating compliance by the Lessee with the
provisions of this Section 5.11 as of such date.
(d) The Lessor, the Construction Agent and the Lessee hereby
acknowledge and agree that the Cash Collateral Account (and the Cash
Collateral on deposit therein from time to time) constitutes additional
Collateral to secure any and all Cash Collateral Obligations and the
Lessor, the Lessee and the Construction Agent agree to execute and deliver
any agreements, financing statements, instruments or other documents
reasonably requested by the Agent to perfect the security interest of the
Cash Collateral Lenders in the Cash Collateral Account (including without
limitation the Cash Collateral Agreement and the Cash Collateral Control
Agreement).
(e) Notwithstanding any provision contained herein or in any other
Operative Agreement to the contrary, upon payment in full of the principal
of and interest on the Cash Collateral Notes and all other Cash Collateral
Obligations then due and owing to the Cash Collateral Lenders, the Agent
shall, upon the written request of the Lessee, cause all amounts then on
deposit in the Cash Collateral Account to be returned to the Lessee.
5.12. Escrow Account.
(a) On the Closing Date, the Borrower shall cause the proceeds from the
sale of the Tranche A Notes to be deposited with the Escrow Agent in cash in the
Escrow Account, in the name of the Agent, for the benefit of the Borrower, which
will be available to pay amounts
15
requested to be paid on the Closing Date and for Construction Advances requested
in accordance with Section 4 and Sections 5.3 and 5.4.
(b) Upon receipt by the Agent of a Requisition from the Construction Agent
in accordance with Sections 4.2 and 5.2(a) and (b), and upon satisfaction or
express waiver of the conditions set forth in Sections 5.3 or 5.4, as
applicable, the Agent shall disburse from the Escrow Account Tranche A Proceeds
to the Construction Agent (on the Lessor's behalf) in the manner and in amounts
as set forth in Section 5.2(c). In the event the Tranche A Proceeds in the
Escrow Account from which such disbursements shall be made are invested in more
than one type of Cash Equivalents, the Construction Agent shall provide to the
Agent (together with the Requisition) written instructions specifying the Cash
Equivalents to be liquidated in order to fund the Advance requested in such
Requisition. In the absence of such written instructions, the Agent (in its sole
discretion) shall fund such Advance with the proceeds from any funds then on
deposit in the Escrow Account. The Lessor and the Construction Agent expressly
acknowledge and agree to release and hold the Agent harmless from any Claim
arising out of the funding of any Advance pursuant to the immediately preceding
sentence.
(c) From the Closing Date until the Completion Date (so long as no Lease
Event of Default shall have occurred and be continuing), the Agent shall invest
any Tranche A Proceeds held in the Escrow Account in cash or Cash Equivalents,
as the Construction Agent shall direct by furnishing a written notice; provided,
if a Lease Event of Default shall have occurred and be continuing or in the
absence of written instructions from the Construction Agent, all Tranche A
Proceeds then on deposit in the Escrow Account shall be invested in Cash
Equivalents of the type described in clause (e) of the definition of "Cash
Equivalents". Any interest or income earned on amounts invested in Cash
Equivalents pursuant to this Section 5.12 shall be added to the balance of funds
in the Escrow Account. The Lessor and the Construction Agent acknowledge and
agree that neither the Agent nor the Escrow Agent shall be liable or responsible
for the loss or diminishment of all or any portion of the Tranche A Proceeds
deposited from time to time in the Escrow Account resulting from any cause,
except to the extent such loss or diminishment is attributable to the gross
negligence or willful misconduct of the Agent or the failure of the Escrow Agent
to use ordinary care in the handling of funds.
(d) On the Completion Date respecting the Property (provided no Lease
Default or Lease Event of Default shall have occurred and be continuing), the
Agent shall (i) disburse to the Construction Agent (on behalf of the Lessor) any
Tranche A Proceeds remaining in the Escrow Account to be used by the
Construction Agent for the construction or purchase of additional tenant
improvements and other personal property to be used in connection with the
Property as Lessee's corporate headquarters building and related facilities or
(ii) upon the request of the Construction Agent, apply such Tranche A Proceeds
remaining in the Escrow Account (and any earnings thereon) on such date in
partial payment of the Tranche A Notes then outstanding in accordance with
Section 8.2(a) of the Note Purchase Agreement.
(e) The Lessor and the Construction Agent hereby acknowledge and agree
that the Escrow Account (and the Tranche A Proceeds on deposit therein from time
to time) constitutes additional Collateral to secure any and all obligations of
the Lessor and the Construction Agent to the Tranche A Note Purchasers, and the
Lessor and the Construction Agent agree to execute
16
and deliver any agreements, financing statements, instruments or other documents
reasonably requested by the Agent to perfect the security interest of the
Tranche A Note Purchasers in the Escrow Account (including without limitation
the Assignment of Escrow Account and the Escrow Account Control Agreement).
(f) The Escrow Agent acknowledges and agrees to the provisions set forth
in this Section 5.12 as such provisions relate to the Escrow Account.
5.13. Partial Funding of Unreimbursed Costs Following an Agency Agreement
Event of Default.
Notwithstanding any provision in any Operative Agreement to the contrary,
each Tranche B Lender agrees that, following an Agency Agreement Event of
Default and upon the payment by the Construction Agent of all amounts required
to be paid by the Construction Agent pursuant to Section 5.4 of the Agency
Agreement (if the Construction Agent has not elected to cure such Agency
Agreement Event of Default by purchasing the Property pursuant to Section 5.3(c)
of the Agency Agreement), such Tranche B Lender will make a Tranche B Loan (up
to such Tranche B Lender's Available Tranche B Lender Commitment) to the
Construction Agent, on behalf of the Borrower, in an amount equal to 10.1% of
the accreted value of any unreimbursed costs actually paid by the Construction
Agent in connection with the construction of the Property; provided, however, no
Tranche B Lender shall be required to make such a Tranche B Loan unless the
Construction Agent shall have submitted to the Agent a Requisition adequately
describing the costs for which the Construction Agent is seeking reimbursement,
together with evidence reasonably satisfactory to the Agent that such amounts
have in fact been paid by the Construction Agent.
5.14. Rights of Tranche A Note Purchasers Upon Merger of the Lessee.
Notwithstanding any provision to the contrary in any Operative Agreement
(including without limitation Section 8.3B.1), if, as of the Rent Commencement
Date under the Lease or any time thereafter, a consolidation or merger, or any
conveyance or transfer of all or substantially all of the Property of the Lessee
permitted in accordance with Section 8.3B.1(a) has occurred since the Closing
Date and the Successor Person is not a corporation or other entity organized
under the laws of any state of the United States or the District of Columbia,
then any Tranche A Note Purchaser shall have the right, but not the obligation,
within sixty (60) days thereafter to require the Lessee to pay to such Tranche A
Note Purchaser an amount equal to the principal amount outstanding on the
Tranche A Note held by such Tranche A Note Purchaser, together with interest
accrued thereon to the date of such payment and all other amounts attributable
to such Tranche A Note but without any Make Whole Amount, and, upon receipt of
such amount from the Lessee, such Tranche A Note Purchaser shall transfer all of
its right, title and interest in and to its Tranche A Note to the Lessee.
Following any such transfer, solely for the purpose of determining whether the
holders of the requisite percentage of the aggregate principal amount of Tranche
A Notes then outstanding approved or consented to any amendment, waiver or
consent to be given under this Agreement, the Note Purchase Agreement, the
Tranche A Notes or any other Operative Agreement, or have directed the taking of
any action provided herein or in the Tranche A Notes to be taken upon the
direction of the holders of a
17
specified percentage of the aggregate principal amount of Tranche A Notes then
outstanding, Tranche A Notes directly or indirectly owned by the Lessee or any
Affiliate of the Lessee shall be deemed not to be outstanding.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
6.1. Representations and Warranties of the Borrower.
The Borrower represents and warrants to each of the other parties hereto
that as of the Closing Date and the date of each Advance (except to the extent
any such representation or warranty relates to an earlier date):
(a) It is a corporation duly organized and validly existing and in
good standing under the laws of the State of North Carolina, is qualified
to do business in New Jersey and in each jurisdiction necessary to permit
the Borrower to own and lease the Property and perform its obligations
under the Operative Agreements and has the power and authority to enter
into and perform its obligations under each of the Operative Agreements to
which it is or will be a party and each other agreement, instrument and
document to be executed and delivered by it on or before such Closing Date
in connection with or as contemplated by each such Operative Agreement to
which the Borrower is or will be a party, and is a multi-purpose,
Wholly-Owned Entity of First Union Corporation;
(b) The execution, delivery and performance of each Operative
Agreement 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
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 or any other consent or approval that
has not previously been obtained, (ii) does or will contravene any Legal
Requirement, (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, (A) its charter or by-laws, or (B) any
indenture, mortgage, chattel mortgage, deed of trust, conditional sales
contract, bank loan or 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 contravention, breach, default or Lien under clause (B)
could reasonably be expected to materially and adversely affect its
ability to perform its obligations under the Operative Agreements to which
it is a party or would question the validity or enforceability of any of
the Operative Agreements to which it is or will become a party or (iv)
does or will require any Governmental Action by any Governmental
Authority;
(c) Each Operative Agreement to which the Borrower is or will be a
party have been, or on or before such Closing Date or date of Advance will
be, duly executed and delivered by the Borrower, and each Operative
Agreement to which the Borrower is a party constitutes, or upon execution
and delivery will constitute, a legal, valid and
18
binding obligation enforceable against the Borrower in accordance with the
terms thereof;
(d) There is no action or proceeding pending or, to its knowledge,
threatened to which it is or will be a party before any Governmental
Authority that, if adversely determined, would materially and adversely
affect its ability to perform its obligations under the Operative
Agreements to which it is a party or would question the validity or
enforceability of any of the Operative Agreements to which it is or will
become a party;
(e) The Borrower has not assigned or transferred any of its right,
title or interest in or under the Lease, the Agency Agreement or its
interest in the Property or any portion thereof, except in accordance with
the Operative Agreements;
(f) No Default or Event of Default under the Operative Agreements
attributable to it has occurred and is continuing;
(g) Except as otherwise contemplated in the Operative Agreements,
the proceeds of the Advances shall not be applied by the Borrower for any
purpose other than the purchase and/or lease of the Property, the
acquisition, installation and testing of the Equipment, the repair,
replacement, renovation and/or construction of Improvements and the
payment of interest, Transaction Expenses and the fees, expenses and other
disbursements referenced in the Operative Agreements, in each case which
accrue prior to the Rent Commencement Date with respect to the Property;
(h) Neither the Borrower nor any Person authorized by the Borrower
to act on its behalf has offered or sold any interest in the Borrower's
Interest 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, in the case of the
Notes, the Agent and eighty-five (85) other institutions, and neither the
Borrower nor any Person authorized by the Borrower to act on its behalf
will take any action which would subject, as a direct result of such
action alone, the issuance or sale of any interest in the Borrower's
Interest or the Notes to the provisions of Section 5 of the Securities Act
or require the qualification of any Operative Agreement under the Trust
Indenture Act of 1939, as amended;
(i) The Borrower's principal place of business, chief executive
office and office where the documents, accounts and records relating to
the transactions contemplated by this Agreement and each other Operative
Agreement are kept are located at One First Union Center, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇;
(j) The Borrower is not engaged principally in, and does not have as
one (1) of its important activities, the business of extending credit for
the purpose of purchasing or carrying any margin stock (within the meaning
of Regulation U), and no part of the proceeds of the Loans will be used by
it to purchase or carry any margin stock or to
19
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 Regulations T, U, or X;
(k) The Borrower is not an "investment company" or a company
controlled by an "investment company" within the meaning of the Investment
Company Act;
(l) The Property is free and clear of all Lessor Liens attributable
to the Lessor;
(m) [Reserved].
(n) The Borrower's true legal name as registered in the jurisdiction
of its organization is First Union Development Corporation and its Federal
Employer Identification Number is ▇▇-▇▇▇▇▇▇▇. The Borrower does not use,
or transact any business under, any trade name other than its legal name;
and
(o) The Borrower has filed all tax returns and all other material
reports that are required under applicable Law to be filed by them and has
paid all taxes or other charges of any Governmental Authority due pursuant
to such returns or other reports, except for any taxes or other charges
that are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves have been set aside on the
books and records of the Borrower.
6.2. Representations and Warranties of the Lessee.
Lessee represents and warrants to each of the other parties hereto that as
of the Closing Date and the date of each Advance (except to the extent that any
such representation or warranty relates to an earlier date):
(a) The Lessee and each Subsidiary of Lessee is duly organized or
formed and validly existing in good standing under the laws of the
jurisdiction of its incorporation or formation, is qualified to do
business and is in good standing in each jurisdiction in which the nature
of its business makes such qualification necessary, and has all requisite
power and authority to own its properties and to carry on its business as
now conducted, except in the case of Subsidiaries where the failure to be
so organized, formed or qualified, or to have such power and authority, or
to own such properties, or to carry on such business, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect;
(b) (i) The Lessee has the power and authority to enter into and
perform its obligations under the Operative Agreements to which it is a
party or will be a party and has the corporate power and authority to act
as the Construction Agent and the Lessee;
(ii) The execution and delivery by the Lessee of this
Agreement and the other applicable Operative Agreements to which the
Lessee is a party as of such date and
20
the performance by the Lessee of its obligations under this Agreement and
the other applicable Operative Agreements to which the Lessee is a party
are within the corporate powers of the Lessee, have been duly authorized
by all necessary corporate action on the part of the Lessee (including
without limitation any necessary shareholder action), have been duly
executed and delivered, have received all necessary governmental approval,
and do not and will not (A) violate any Legal Requirement which is binding
on the Lessee, (B) contravene or conflict with, or result in a breach of,
any provision of the Articles of Incorporation, By-Laws or other
organizational documents of the Lessee or of any agreement, indenture,
instrument or other document which is binding on the Lessee or (C) result
in, or require, the creation or imposition of any Lien (other than
pursuant to the terms of the Operative Agreements) on any asset of the
Lessee;
(c) This Agreement and the other applicable Operative Agreements to
which the Lessee is a party, executed prior to or as of such date by the
Lessee, constitute the legal, valid and binding obligation of the Lessee,
enforceable against the Lessee, in accordance with their terms except as
the same may be limited by applicable bankruptcy, insolvency, fraudulent
transfer or conveyance, reorganization, moratorium or other similar laws
relating to or affecting creditors' or lessors' rights generally and
general principles of equity;
(d) Except as set forth on EXHIBIT K, there are no actions, suits or
proceedings pending or, to Lessee's knowledge, threatened against the
Lessee or any of its Subsidiaries in any court or before any Governmental
Authority (nor shall any order, judgment or decree have been issued or, to
the knowledge of the Lessee, proposed to be issued by any Governmental
Authority against the Lessee to set aside, restrain, enjoin or prevent the
full performance of any Operative Agreement or any transaction
contemplated thereby) that (i) concern the Property or Lessee's interest
therein, (ii) question the validity or enforceability of any Operative
Agreement to which the Lessee is a party or the overall transaction
described in the Operative Agreements to which the Lessee is a party or
(iii) have or could reasonably be expected to have a Material Adverse
Effect;
(e) No Governmental Action by any Governmental Authority or other
authorization, registration, consent, approval, waiver, notice or other
action by, to or of any other Person pursuant to any Legal Requirement or
any contract, indenture, instrument or agreement or for any other reason
is required to authorize or is required in connection with (i) the
execution, delivery or performance by Lessee of any Operative Agreement to
which the Lessee is a party, (ii) the legality, validity, binding effect
or enforceability against Lessee of any Operative Agreement to which the
Lessee is a party, (iii) the acquisition, ownership, construction,
completion, occupancy, operation, leasing or subleasing by Lessee of the
Property or (iv) the Construction Agent's request for any Advance, in each
case, except those which have been obtained and are in full force and
effect or those which the failure to obtain could not reasonably be
expected to have a Material Adverse Effect;
21
(f) Upon the execution and delivery of the Lease Supplement to the
Lease, (i) the Lessee will have unconditionally accepted the Property
subject to the Lease Supplement, and (ii) no offset will exist with
respect to any Rent or other sums payable under the Lease;
(g) [Reserved];
(h) All information with respect to Lessee or any of its Affiliates
heretofore or contemporaneously herewith furnished in writing by Lessee
(or any of its Affiliates) to the Agent, the Lessor or any Primary
Financing Party for purposes of or in connection with this Agreement and
the transactions contemplated hereby is true and accurate in every
material respect on the date as of which such information is dated or
certified, and such information, taken as a whole, does not omit to state
any material fact necessary to make such information, taken as a whole,
not misleading; provided, that no representation is made with respect to
competitor, market, forward - looking or any other information provided to
the Lessee by third parties unrelated to the Lessee and attributed to such
third party;
(i) The location of the Construction Agent and the Lessee for
purposes of the UCC is Delaware. Prior to the Completion Date, the
principal place of business, chief executive office and office of the
Construction Agent and the Lessee where the documents, accounts and
records relating to the transactions contemplated by this Agreement and
each other Operative Agreement are kept are located at ▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇. Following the Completion Date, the principal
place of business, chief executive office and office of the Construction
Agent and the Lessee where such documents, amounts and records will be
kept will be located at the address of the Property;
(j) The representations and warranties of Lessee set forth in any of
the Operative Agreements are true and correct. There exists no Lease
Default or Lease Event of Default under any of the Operative Agreements
which is continuing and which has not been cured within any cure period
expressly granted under the terms of the applicable Operative Agreement or
otherwise waived in accordance with the applicable Operative Agreement;
(k) The Property being financed consists of Land and existing
Improvements thereon which Improvements are either suitable for occupancy
at the time of acquisition or will be demolished, renovated and/or
modified in accordance with the terms of this Agreement;
(l) The Lessor has good and marketable fee simple title to the
Property, subject only to (i) such Liens referenced in Sections 5.3(g),
6.2(r)(i) and 6.2(r)(ii) on the Closing Date and (ii) subject to Section
5.7, Permitted Liens and Lessor Liens after the Closing Date;
22
(m) 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 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 such Property in accordance with Section 14.2(b) of the
Lease and in accordance with the National Flood Insurance Act of 1968, as
amended;
(n) [Reserved];
(o) [Reserved];
(p) [Reserved];
(q) [Reserved];
(r) (i) The Security Documents create, as security for the
Obligations (as such term is defined in the Security Agreement),
valid and enforceable security interests in, and Liens on, all of
the Collateral, in favor of the Agent, for the benefit of the
Secured Parties and such security interests and Liens are subject to
no other Liens other than Liens that are expressly set forth as
title exceptions on the title commitment issued in accordance with
Section 5.3(g) with respect to the Property; and
(ii) The Lease Agreement creates, as security for the
obligations of the Lessee under the Lease Agreement, valid and
enforceable security interests in, and Liens on, the Property leased
thereunder, in favor of the Lessor, and such security interests and
Liens are subject to no other Liens other than Liens that are
expressly set forth as title exceptions on the title commitment
issued in accordance with Section 5.3(g) with respect to the
Property;
(s) (i) Neither Lessee nor any Subsidiary of Lessee is engaged
principally, or as one of its more important activities, in the
business of extending credit for the purposes of buying or carrying
Margin Stock (as defined in Regulation U); and
(ii) No part of the proceeds of any Advance will be used,
whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose that entails a violation
of, or that is inconsistent with, the provisions of the Regulations
of the Board including Regulation T, U or X;
(t) Except as otherwise could not reasonably be expected to have a
Material Adverse Effect, to Lessee's knowledge:
(i) Except with respect to those environmental matters (the
"Existing Environmental Matters") disclosed in that certain Final
Phase I and Phase II Environmental Site Assessment of Pointview
Corporate Park, One Cyanamid
23
Drive, Wayne, New Jersey prepared by ATC Associates Inc. dated as of
May 24, 2001 (the "Environmental Reports") with respect to the
Property delivered to the Lessor and the Primary Financing Parties
on or before the Closing Date as such Existing Environmental Matters
relate to clause (e) of the definition of "Material Adverse Effect",
the Property (including soils, surface waters, groundwaters on, at
or under the Property) does not contain and is not otherwise
affected by, and to Lessee's knowledge has not previously contained
or been affected by, any Hazardous Substance in amounts or
concentrations which (A) constitute or constituted a violation of
applicable Environmental Laws or (B) could give rise to liability or
obligation under applicable Environmental Laws;
(ii) Except with respect to the Existing Environmental Matters
as such Existing Environmental Matters relate to clause (e) of the
definition of "Material Adverse Effect", the Property and all
operations conducted in connection therewith are in compliance, and
have been in compliance, with all applicable Environmental Laws, and
there are no Hazardous Substances at, under or about the Property or
such operations which could reasonably be expected to interfere with
the continued operation of the Property;
(iii) Lessee and all Subsidiaries of Lessee have obtained, are
in compliance with, and have made all appropriate filings for
issuance or renewal of, all environmental permits with respect to
the Property, and all such environmental permits are in full force
and effect;
(iv) Neither Lessee nor any Subsidiary thereof has received
any notice of violation, alleged violation, noncompliance, liability
or potential liability regarding environmental matters or compliance
with Environmental Laws, in each case, with respect to the Property,
nor does Lessee have knowledge or reason to believe that, except
with respect to the Existing Environmental Matters as such Existing
Environmental Matters relate to clause (e) of the definition of
"Material Adverse Effect", any such notice will be received or is
being threatened;
(v) Except with respect to the Existing Environmental Matters
as such Existing Environmental Matters relate to clause (e) of the
definition of "Material Adverse Effect", Hazardous Substances have
not been transported or disposed of from the Property in violation
of, or in a manner or to a location which could reasonably be
expected to give rise to liability under, applicable Environmental
Laws, nor have any Hazardous Substances been generated, treated,
stored or disposed of at, on or under the Property in violation of,
or in a manner which could reasonably be expected to give rise to
liability under, any applicable Environmental Laws;
(vi) No judicial proceedings or governmental or administrative
action is pending, or threatened, under any applicable Environmental
Law with respect to the Property to which Lessee or any Subsidiary
thereof has been or will be named as a party, nor are there any
consent decrees or other decrees, consent
24
orders, administrative orders or other orders, or other
administrative or judicial requirements binding upon or applicable
to Lessee or any Subsidiary outstanding under any applicable
Environmental Law with respect to the Property;
(vii) Except with respect to the Existing Environmental
Matters as such Existing Environmental Matters relate to clause (e)
of the definition of "Material Adverse Effect", there has been no
release, or threat of release, of Hazardous Substances at or from
the Property, in violation of or in amounts or in a manner that
could reasonably be expected to give rise to liability under
applicable Environmental Laws; and
(viii) Neither Lessee nor any Subsidiary of Lessee has, with
respect to the Property, (A) failed to comply with any applicable
Environmental Law or to obtain, maintain or comply with any
applicable permit, license or other approval required under any
applicable Environmental Law or (B) become subject to any
Environmental Law or (C) become subject to any Environmental Claim;
(u) The issuance, sale and delivery of the Tranche A Notes and the
interests in the Operative Agreements under the circumstances contemplated
hereby do not require the registration or qualification of such Tranche A
Notes or interests under the Securities Act, any state securities laws, or
the Trust Indenture Act of 1939. Neither Lessee nor anyone authorized to
act on the Lessee's behalf has, directly or indirectly, solicited any
offers to acquire, offered or sold: (i) any interest in the Tranche A
Notes, the Property, the Lease or the Operative Agreements in violation of
Section 5 of the Securities Act or any state securities laws, or (ii) any
interest in any security or lease the offering of which, for purposes of
the Securities Act or any state securities laws, would be deemed to be
part of the same offering as the offering of the aforementioned interests.
Neither the Lessee nor anyone authorized to act on its behalf was involved
in (y) offering or soliciting offers for the Tranche A Notes (or any
similar securities) or (z) selling Notes (or any similar securities) to
any Person other than the Tranche A Note Purchasers and Tranche B Lenders
identified and contacted by the Agent and eighty-five (85) other
institutional investors;
(v) The Property is located in Wayne, New Jersey. The Property and
any present use and presently anticipated future use thereof by Lessee and
its agents, assignees, employees, invitees, lessees, licensees and tenants
comply with all Legal Requirements (including zoning and land use laws
(subject to any rezoning, variances and approvals obtained or to be
obtained by the Construction Agent or the Lessee) and Environmental Laws)
and Insurance Requirements, except for such instances of non-compliance
that could not reasonably be expected to have, individually or in the
aggregate, a Material
25
Adverse Effect. No notices, complaints or orders of violation or
non-compliance or liability have been issued to the Lessee or, to the best
of its knowledge, threatened by any Person with respect to the Property or
the present or intended future use thereof, except for such violations and
instances of non-compliance as could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, and Lessee is
not aware of any circumstances which could give rise to the issuance of
any such notices, complaints or orders;
(w) The Property has been acquired in an arms-length transaction
and, to the best of Lessee's knowledge (based on the Appraisal, a copy of
which has been delivered to the Lessor, the Agent and the Primary
Financing Parties), at a price that is not in excess of fair market value;
(x) The consolidated balance sheet and income statement of the
Lessee and its Consolidated Subsidiaries as of February 3, 2001 and May 5,
2001, together with related consolidated statements of operations and
retained earnings and of cash flows as of February 3, 2001 and May 5,
2001, fairly present in all material respects the consolidated financial
condition of the Lessee and its Consolidated Subsidiaries as at such dates
and the consolidated results of the operations of the Lessee and its
Consolidated Subsidiaries for the period ended on such dates, all in
accordance with GAAP, subject with respect to the May 5, 2001 financial
statements, to changes resulting from audit and normal year end audit
adjustments;
(y) Neither the Lessee nor any of its Subsidiaries is in default
with respect to any judgment, order, writ, injunction, decree or decision
of any Governmental Authority which default could reasonably be expected
to have a Material Adverse Effect. Each of the Lessee and its Subsidiaries
is complying in all material respects with all statutes, regulations,
rules and orders applicable to it of all Governmental Authorities, a
violation of which could reasonably be expected to have a Material Adverse
Effect;
(z) Each of the Lessee and its Subsidiaries has filed or caused to
be filed all tax returns required to be filed and has paid, or has made
adequate provision for the payment of, all taxes shown to be due and
payable on said returns or in any assessments made against it, except (a)
any Taxes that are being contested in good faith by appropriate
proceedings and for which the Lessee or such Subsidiary, as applicable,
has set aside on its books adequate reserves or (b) to the extent that the
failure to do so could not reasonably be expected to result in a Material
Adverse Effect;
(aa) The Lessee is not subject to regulation under the Public
Utility Holding Company Act of 1935, as amended, the Federal Power Act or
the Investment Company Act of 1940, as amended, nor is the Lessee subject
to any statute or regulation which prohibits the incurrence of
indebtedness under this Agreement or the other Operative Agreements,
including, without limitation, statutes or regulations relative to common
or contract carriers or to the sale of electricity, gas, steam, water,
telephone, telegraph or other public utility services;
(bb) There has been no material adverse change in the consolidated
assets, liabilities, operations, business or conditions (financial or
otherwise) of the Lessee and its Consolidated Subsidiaries taken as a
whole from that set forth in the financial statements referenced in
Section 6.2(x);
26
(cc) The execution and delivery of the Operative Agreements will not
involve any transaction that is subject to the prohibitions of Section 406
of ERISA or in connection with which a tax could be imposed pursuant to
Section 4975(c)(1)(A)-(D) of the Code. The representation by the Lessee in
the first sentence of this Section 6.2(cc) is made in reliance upon and
subject to the accuracy of the representations of the Tranche A Note
Purchasers in Section 6.2 of the Note Purchase Agreement as to the sources
of the funds used to pay the purchase price of the Tranche A Notes to be
purchased by them thereunder; and
(dd) Lessee's true legal name as registered in the jurisdiction of
its organization is "Toys "R" Us, Inc.," and its federal employer
identification number is ▇▇-▇▇▇▇▇▇▇. Lessee does not use, or transact any
business under, any trade name other than its legal name.
SECTION 7. PAYMENT OF CERTAIN EXPENSES.
7.1. Transaction Expenses.
(a) The Lessor agrees on the Closing Date, to pay, or cause to be
paid, all Transaction Expenses arising from the Closing Date, including
without limitation all reasonable fees, expenses and disbursements of
▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC, as counsel for the Agent and the Lessor, and
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, as counsel for the Tranche A Note Purchasers (but
excluding the fees, expenses and disbursements of counsel for any
individual Tranche A Note Purchaser), the Lessor and the Agent in
connection with the transactions contemplated by the Operative Agreements
and incurred in connection with such Closing Date, the reasonable
out-of-pocket expenses of the Lessor due and payable on such Closing Date,
all fees, taxes and expenses for the recording, registration and filing of
documents and all other reasonable fees, expenses and disbursements
incurred in connection with such Closing Date; provided, however, the
Lessor shall be required to pay such amounts described in this Section
7.1(a) only if (i) such amounts are properly described in a Requisition
delivered on or before the Closing Date, and (ii) funds are made available
by the Tranche B Lenders and by the Agent (from the Escrow Account) in
connection with such Requisition in an amount sufficient to allow such
payment. On the Closing Date after delivery and receipt of the Requisition
referenced in Section 4.2(a) hereof and satisfaction of the other
conditions precedent for such date, the Tranche B Lenders shall make
Tranche B Loans, and the Agent shall advance funds from the Escrow
Account, to the Lessor to pay for the Transaction Expenses, fees, expenses
and other disbursements referenced in this Section 7.1(a). The Lessee
agrees to timely pay all amounts referred to in this Section 7.1(a) to the
extent the Lessor is not required to pay such amounts.
(b) Assuming no Default or Event of Default shall have occurred and
be continuing and only for the period prior to the Rent Commencement Date,
the Lessor agrees on the date of any Construction Advance and on the
Completion Date to pay, or cause to be paid, all Transaction Expenses
including without limitation all reasonable fees, expenses and
disbursements of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇ PLLC, as counsel for the Agent
27
and the Lessor, and ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, as counsel for the Tranche A Note
Purchasers (but excluding the fees, expenses and disbursements of counsel
for any individual Tranche A Note Purchaser), in connection with the
transactions contemplated by the Operative Agreements and billed in
connection with such Advance or such Completion Date, all amounts
described in Section 7.1(a) of this Agreement which have not been
previously paid, the reasonable out-of-pocket expenses of the Lessor, all
fees, expenses and disbursements incurred with respect to the various
items referenced in Sections 5.3, 5.4 and/or 5.5 (including without
limitation any premiums for title insurance policies and charges for any
updates to such policies), all fees, expenses and disbursements incurred
with respect to obtaining a rating from the National Association of
Insurance Commissioners and all other reasonable fees, expenses and
disbursements in connection with such Advance or such Completion Date
including without limitation all expenses relating to and all fees, taxes
and expenses for the recording, registration and filing of documents and
during the Commitment Period, all fees, expenses and costs referenced in
Sections 7.3(a), 7.3(b), 7.3(d) and 7.5; provided, however, the Lessor
shall be required to pay such amounts described in this Section 7.1(b)
only if (i) such amounts are properly described in a Requisition delivered
on the applicable date and (ii) funds are made available by the Tranche B
Lenders and by the Agent (from the Escrow Account), in connection with
such Requisition in an amount sufficient to allow such payment. On the
date of any Construction Advance or the Completion Date, after delivery of
the applicable Requisition and satisfaction or express waiver of the other
conditions precedent for such date, the Agent shall advance Tranche A
Proceeds from the Escrow Account and the Tranche B Lenders shall make
Tranche B Loans to the Lessor to pay for the Transaction Expenses, fees,
expenses and other disbursements referenced in this Section 7.1(b). The
Lessee agrees to timely pay all amounts referred to in this Section 7.1(b)
to the extent the Lessor is not required to pay such amounts.
(c) All fees payable pursuant to the Operative Agreements shall be
calculated on the basis of a year of three hundred sixty (360) days for
the actual days elapsed.
7.2. 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 the Operative Agreements or the transactions
contemplated thereby, nor has it authorized any broker, finder or financial
adviser retained or employed by any other Person so to act.
7.3. Certain Fees and Expenses.
The Lessee agrees to pay or cause to be paid (a) all reasonable
out-of-pocket expenses of the Lessor (including without limitation reasonable
counsel fees and expenses) incurred in connection with the transactions
contemplated hereby and by the other Operative Agreements (b) all reasonable
out-of-pocket costs and expenses incurred by the Lessee, the Agent, the Primary
Financing Parties or the Lessor in entering into any Lease Supplement and any
future amendments, modifications, supplements, restatements and/or replacements
with respect to any of the Operative Agreements, whether or not such Lease
Supplement, amendments,
28
modifications, supplements, restatements and/or replacements are ultimately
entered into, or giving or withholding of waivers or consents hereto or thereto,
which have been requested by the Lessee, (c) all reasonable out-of-pocket costs
and expenses incurred by the Lessee, the Agent, the Primary Financing Parties or
the Lessor in connection with any exercise of remedies under any Operative
Agreement or any purchase of the Property pursuant to the terms of the Operative
Agreements by the Construction Agent, the Lessee or its designee and (d) all
reasonable out-of-pocket costs and expenses incurred by the Lessee, the Agent,
any Primary Financing Party or the Lessor in connection with any transfer or
conveyance of the Property to the Lessee or its designee or any third party
pursuant to the terms of the Operative Agreements, whether or not such transfer
or conveyance is ultimately accomplished, but in all cases excluding the fees,
expenses and disbursements of counsel for any individual Tranche A Note
Purchaser or Tranche B Lender or Cash Collateral Lender.
7.4. [Reserved].
7.5. Administrative Fee.
The Lessee shall pay or cause to be paid an administrative fee to the
Agent (for its individual account) in the amount of $65,000.00 per year (or such
other amount as may be agreed upon by the Lessee and the Agent from time to
time) which shall be paid on the Closing Date and each annual anniversary
thereof and such amount shall be deemed to be earned in full by the Agent as of
such Closing Date or annual anniversary thereof, as applicable.
7.6. Payment of Certain Expenses During Construction Period.
During the Construction Period, Lessee shall, in its capacity as Lessee
under the Lease and as Construction Agent pursuant to the Agency Agreement, pay
the Transaction Expenses and other fees and expenses referenced in Section 7.1,
7.3(a), 7.3(b), 7.3(d) and 7.5 with the proceeds of one or more Advances made in
accordance with the provisions of the Operative Agreements and upon satisfaction
or express waiver of the conditions applicable to such Advance, and such amounts
shall be added to the Property Cost respecting the Property.
SECTION 8. OTHER COVENANTS AND AGREEMENTS.
8.1. Cooperation with the Construction Agent or the Lessee.
The Primary Financing Parties, the Lessor and the Agent shall, at the
expense of and to the extent reasonably requested by the Construction Agent or
the Lessee (but without assuming additional liabilities on account thereof and
only to the extent such is acceptable to the Primary Financing Parties, the
Lessor and/or the Agent, as applicable, in their reasonable discretion),
cooperate with the Construction Agent or the Lessee in connection with the
Construction Agent or the Lessee satisfying its covenant obligations contained
in the Operative Agreements including without limitation at any time and from
time to time, promptly and duly executing and delivering any and all such
further instruments, documents and financing statements (and continuation
statements related thereto).
29
8.2. Covenants of the Lessor.
The Lessor hereby agrees that so long as this Agreement is in effect:
(a) The Lessor will not create or permit to exist at any time, and
it will, at its own cost and expense, promptly take such action as may be
necessary duly to discharge, or to cause to be discharged, all Lessor
Liens on the Property;
(b) [Reserved];
(c) The Lessor shall not (i) commence any case, proceeding or other
action under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, arrangement,
winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (ii) seek appointment of a receiver,
trustee, custodian or other similar official for all or any substantial
benefit of the creditors of the Lessor; and the Lessor shall not take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in this paragraph;
(d) The Lessor shall give prompt written notice to the Lessee, the
Primary Financing Parties and the Agent if the Lessor's principal 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 at One First Union Center, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇;
and
(e) The Lessor shall take or refrain from taking such actions and
grant or refrain from granting such approvals with respect to the
Operative Agreements and/or relating to the Property in each case as
directed in writing by the Agent or, in connection with Section 8.5
hereof, the Lessee; provided, however, that notwithstanding the foregoing
provisions of this subparagraph (e) the Lessor, the Agent and the Primary
Financing Parties each acknowledge, covenant and agree that neither the
Lessor nor the Agent shall act or refrain from acting except in accordance
with the provisions of the Intercreditor Agreement; provided, further,
that each of the Agent, the Primary Financing Parties and the Lessee
acknowledges, covenants and agrees that it will not instruct the Lessor to
take any action in violation of the terms of any Operative Agreement.
8.3. Lessee Covenants, Consent and Acknowledgment.
(a) The Lessee acknowledges and agrees that the Borrower, pursuant
to the terms and conditions of the Security Agreement and the Mortgage
Instruments, shall create Liens respecting the Property, Equipment and
Improvements described therein in favor of the Agent. The Lessee hereby
irrevocably consents to the creation, perfection and maintenance of such
Liens. The Lessee shall, to the extent reasonably requested by any of the
other parties hereto, cooperate with the other parties in connection with
their
30
covenants herein or in the other Operative Agreements and shall from time
to time duly execute and deliver any and all such future instruments,
documents and financing statements (and continuation statements related
thereto) as any other party hereto may reasonably request.
(b) The Lessor hereby instructs the Lessee, and the Lessee hereby
acknowledges and agrees, that until such time as the Notes are paid in
full and the Liens evidenced by the Security Agreement and the Mortgage
Instruments have been released (i) any and all Rent (excluding Excepted
Payments) and any and all other amounts of any kind or type under any of
the Operative Agreements due and owing or payable to any Person shall
instead be paid directly to the Agent (excluding Excepted Payments) or as
the Agent may direct from time to time for allocation and distribution in
accordance with the procedures set forth in Section 8.7 hereof, (ii) all
rights of the Lessor under the Lease shall be exercised by the Agent and
(iii) the Lessee shall cause all notices, certificates, financial
statements, communications and other information which are delivered, or
are required to be delivered, to the Lessor, to be delivered to the Agent,
as Lessor's agent.
(c) The Lessee shall not consent to any amendment, supplement or
other modification of the terms or provisions of any Operative Agreement
to which it is a party except in accordance with Section 12.4 of this
Agreement.
(d) The Lessee hereby covenants and agrees that (except for amounts
payable as Basic Rent, payments made in connection with the satisfaction
or removal of Lessor Liens, certain Transaction Expenses funded by
Advances pursuant to the Operative Agreements, principal and interest due
and owing under the Notes or the Note Purchase Agreement, the Tranche B
Credit Agreement or the Cash Collateral Credit Agreement, any Make-Whole
Amount, prepayment premiums and other amounts payable under the Notes, the
Note Purchase Agreement, the Tranche B Credit Agreement or the Cash
Collateral Credit Agreement that arise solely as a result of an Event of
Default attributable to the Borrower, amounts expressly excluded from
indemnification pursuant to Sections 11.1, 11.2 and 11.7, amounts due and
owing or otherwise payable or incurred as a result of or in connection
with any voluntary assignment, transfer or sale of a participation
interest by Lessor or any Tranche A Note Purchaser (other than as set
forth in Section 5.14 of this Agreement or Section 13.2 of the Note
Purchase Agreement), Tranche B Lender or Cash Collateral Lender, legal
expenses of any individual Tranche A Note Purchaser, Tranche B Lender or
Cash Collateral Lender, costs incurred by any individual Tranche A Note
Purchaser, Tranche B Lender or Cash Collateral Lender in determining to
participate in the transaction contemplated by the Operative Agreements
(including costs and expenses of reviewing the Operative Agreements and/or
private placement memorandum), and payment obligations of one Financing
Party to another Financing Party other than those set forth in Section
13.2 of the Note Purchase Agreement) any and all payment obligations owing
from time to time under the Operative Agreements by any Person to the
Agent, the Lessor, the Escrow Agent, any Primary Financing Party or any
other Person shall (without further action) be deemed to be Supplemental
Rent obligations payable by the Lessee; provided, however, during the
period prior to the Completion Date, the Construction Agent may submit a
Requisition
31
for such Supplemental Rent obligations and such Supplemental Rent
obligations shall be payable by the Construction Agent with the proceeds
of one or more Advances made in accordance with the provisions of the
Operative Agreements and upon satisfaction or express waiver of the
conditions applicable to such Advance, and such amounts shall be added to
the Property Cost respecting the Property; provided, further, in the event
the Construction Agent shall fail to comply with the requirements set
forth in the immediately preceding proviso or shall fail to submit a
Requisition for such Supplemental Rent obligations, the Construction Agent
shall pay such Supplemental Rent obligation to such Person from its own
funds. Without limitation, such Supplemental Rent obligations of the
Lessee shall include (except to the extent specifically excluded pursuant
to the first sentence of this Section 8.3(d)) any amounts payable by the
Lessor pursuant to Section 13.2 of the Note Purchase Agreement,
administrative fees, breakage costs, indemnities, other reasonable fees
and transaction expenses incurred by the parties hereto in connection with
the transactions contemplated by the Operative Agreements.
(e) The Lessee hereby covenants and agrees to cause an Appraisal or
reappraisal (in form and substance reasonably satisfactory to the Agent
and from an appraiser selected by the Agent) to be issued respecting the
Property as requested by the Agent from time to time (i) at each and every
time as such shall be required to satisfy any regulatory requirements
imposed on the Agent, the Lessor and/or any Primary Financing Party and
(ii) after the occurrence of a Lease Event of Default, the costs and
expenses of which shall be deemed to be a Supplemental Rent obligation
payable in accordance with the provisions of Section 8.3(d).
(f) [Reserved].
(g) At any time the Lessor or the Agent is entitled under the
Operative Agreements to possession of the Property or any component
thereof, each of the Construction Agent and the Lessee hereby covenants
and agrees, at its own cost and expense, to assemble and make the Property
or such component, as applicable, available to the Agent (on behalf of the
Lessor).
(h) The Lessee hereby covenants and agrees that Equipment respecting
the Property shall at no time constitute in excess of ten percent (10%) of
the aggregate Advances respecting the Property funded at such time under
the Operative Agreements.
(i) [Reserved].
(j) The Lessee hereby covenants and agrees that it shall give prompt
notice to the Agent if the Lessee's principal 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 at the locations set forth in Section 6.2(i) or if it shall change
its name.
(k) [Reserved].
32
(l) [Reserved].
(m) The Lessee hereby covenants and agrees that the rights of the
Lessee under this Agreement and the Lease shall not impair or in any way
diminish the obligations of the Construction Agent and/or the rights of
the Lessor under the Agency Agreement.
(n) [Reserved].
(o) Lessee shall promptly notify the Agent and each Primary
Financing Party, or cause the Agent and each Primary Financing Party to be
promptly notified, upon a Responsible Officer of such Lessee gaining
knowledge of the occurrence of any Default or Event of Default which is
continuing at such time and describing the same in reasonable detail with
a description of the action the Lessee or any Affiliate has taken or
proposes to take with respect thereto. In any event, such notice shall be
provided to the Agent within five (5) days of when a Responsible Officer
of Lessee gains such knowledge.
(p) [Reserved].
(q) [Reserved].
(r) [Reserved].
(s) Promptly after obtaining any required architectural approvals by
any business park or any other applicable entity with oversight
responsibility for the applicable Improvements, the Construction Agent
shall deliver to the Agent copies of the same.
(t) Except as otherwise contemplated by the Operative Agreements,
the Construction Agent shall not use the proceeds of any Advance for any
purpose other than the acquisition or lease of the Property, the
acquisition, installation and testing of the Equipment, the repair,
replacement, renovation and/or construction of Improvements and the
payment of interest, Transaction Expenses and the fees, expenses and other
disbursements by the Lessee or the Lessor referenced in any Operative
Agreement, and other Project Costs, in each case which accrue prior to the
Rent Commencement Date with respect to the Property.
(u) The Plans and Specifications for the Property will be prepared
prior to the commencement of construction in accordance with all
applicable Legal Requirements (including without limitation all applicable
Environmental Laws and building, planning, zoning and fire codes), except
to the extent the failure to comply therewith, individually or in the
aggregate, shall not have and could not reasonably be expected to have a
Material Adverse Effect. Upon completion of the Improvements for the
Property in accordance with the applicable Plans and Specifications, such
Improvements will be within any building restriction lines and will not
encroach in any manner onto any
33
adjoining land (except as permitted by express written easements, which
have been approved by the Agent).
(v) The Property shall be improved in all material respects in
accordance with the applicable Plans and Specifications in a good and
workmanlike manner and shall be operational.
(w) The Lessee shall deliver (or cause to be delivered) an annual
certificate evidencing the insurance required to be maintained by the
Lessee under Article XIV of the Lease on the date such certificate is due
thereunder.
(x) The Property shall comply with all Insurance Requirements
(unless the failure to comply with such Insurance Requirements will not
result in a denial of coverage under any insurance policy required to be
maintained hereunder or under any other Operative Agreement) and all
standards of Lessee with respect to similar properties owned by Lessee.
(y) The Property shall comply with all Legal Requirements (including
without limitation all zoning and land use laws and Environmental Laws),
except to the extent that failure to comply therewith, individually or in
the aggregate, shall not have and could not reasonably be expected to have
a Material Adverse Effect; provided, that Lessee may contest any such
Legal Requirements in accordance with Section 13.1 of the Lease.
(z) All utility services and facilities necessary for the
construction and operation of the Improvements and the installation and
operation of the Equipment regarding the Property (including without
limitation gas, electrical, water and sewage services and facilities)
shall be available at the applicable Land or shall be constructed prior to
the Completion Date for the Property.
(aa) The acquisition, installation and testing of the Equipment (if
any) and construction of the Improvements (if any) shall be performed in a
good and workmanlike manner, substantially in accordance with the
applicable Plans and Specifications.
(bb) Except to the extent contemplated in Section 8.13 with respect
to the Excess Land, upon recordation of the Mortgage Instruments in the
real estate recording office in the applicable Approved State identified
by the Construction Agent or the Lessee, (x) the Lien created by the
Tranche B Mortgage Instruments in the real property described therein
shall be a perfected first priority mortgage Lien on the Property in favor
of the Agent, for the benefit of the Tranche B Lenders and (y) the Lien
created by the Tranche A Mortgage Instruments in the real property
described therein shall be a perfected second priority mortgage Lien
(subject to the Lien created by the Tranche B Mortgage Instruments) on the
Property in favor of the Agent, for the benefit of the Tranche A Note
Purchasers. To the extent that the security interests in the portion of
the Collateral comprised of personal property can be perfected by filing
in the filing offices in the applicable Approved States or elsewhere
identified by the Construction Agent or the Lessee, upon filing of the
Primary Financing Party Financing Statements in such
34
filing offices, the security interests created by the Security Agreement
shall be perfected first priority security interests in such personal
property in favor of the Agent, for the ratable benefit of the Secured
Parties.
(cc) Except to the extent contemplated under Section 8.13 respecting
the Excess Land, upon recordation of the memorandum of the Lease Agreement
(or, a short form lease) in the real estate recording office in the
applicable Approved State identified by the Construction Agent or the
Lessee, the Lien created by the Lease Agreement in the real property
described therein shall be a perfected mortgage Lien (subject only to the
Lien of the Mortgage Instruments and, to the extent covering such real
property, the Security Agreement) on the Property in favor of the Agent,
for the benefit of the Secured Parties. To the extent that the security
interests in the portion of the Property comprised of personal property
can be perfected by the filing in the filing offices in the applicable
Approved State or elsewhere identified by the Construction Agent or the
Lessee, upon filing of the Lessor Financing Statements in such filing
offices, the security interests created by the Lease Agreement shall be
perfected security interests (subject only to the Lien of the Security
Agreement and, to the extent covering such personal property, the Mortgage
Instruments) in such personal property in favor of the Lessor, which
rights pursuant to the Lessor Financing Statements are assigned to the
Agent, for the benefit of the Secured Parties.
(dd) Lessee shall not incur or suffer to exist any Lien on the
Property other than the Liens created and/or evidenced by the Security
Documents, Permitted Liens and as otherwise permitted under Sections 8.5.
(ee) Lessee shall deliver a written notice to Agent and the Lessor
promptly upon Lessee's receiving notice or actual knowledge of a
Responsible Officer of Lessee of the taking by a Governmental Authority of
an action which would constitute a Condemnation, receiving notice of a
material violation of any Legal Requirement on or at the Property,
including any Environmental Law, under which liability may be imposed upon
Lessor, Agent, any Primary Financing Party or Lessee, or receiving notice
or actual knowledge of modification of the Property (other than routine
construction progress, fire, life-safety and similar inspections) required
to remove or cure any violation of Lessor under which criminal liability
may be imposed upon Agent, any Primary Financing Party or Lessee.
(ff) Lessee shall not, nor shall it permit anyone authorized to act
on its behalf to, take any action which would subject the Property, the
Operative Agreements, the issuance or sale of the Notes, or any security
or lease the offering of which, for purposes of the Securities Act or any
state securities laws, would be deemed to be part of the same offering of
the aforementioned items, to the registration requirements of Section 5 of
the Securities Act or any state securities laws.
(gg) Not less than two (2) Business Days prior to any prepayment of
any Tranche A Note, the Lessee (on behalf of the Lessor) shall deliver to
each affected holder
35
of one or more Tranche A Notes a certificate of a Responsible Officer
specifying the calculation of such Make-Whole Amount as of the specified
prepayment date.
(hh) Lessee will promptly (but in no event more than ten (10)
Business Days after such event or occurrence) provide written notice to
the Agent if it shall change its legal name or use, or transact any
business under, any trade name other than its legal name.
(ii) The Lessee agrees that in the event neither S&P nor Moody's
provides a rating of the Lessee, the Lessee shall cause one of the Rating
Agencies to issue and maintain at all times a "private letter" rating for
the Lessee, and to submit to such Rating Agency the materials and
information necessary for, and a request for, a new "private letter"
rating every six (6) months thereafter. The Lessee further agrees to
provide each of the Tranche A Note Purchasers a copy of such "private
letter" rating and will permit and allow such Tranche A Note Purchasers to
discuss such rating with the Rating Agency.
(jj) The Construction Agent shall deliver (i) evidence of builder's
risk insurance in compliance with the requirements set forth in Section
2.6(f) of the Agency Agreement and (ii) a certificate of the Insurance
Consultant on or before the date of the initial Construction Advance
respecting the Property and every three (3) year anniversary thereof,
certifying as to compliance by the Construction Agent with the
requirements of Article XIV of the Lease and otherwise in form and
substance reasonably satisfactory to the Agent.
8.3A. Affirmative Covenants.
The Lessee agrees that, so long as this Agreement is in effect or any
other amount is owing under this Agreement or under any other Operative
Agreement to any Financing Party, the Lessee will:
8.3A.1. Financial Statements.
Maintain a standard system of accounting in accordance with GAAP, and
furnish or cause to be furnished to the Agent and each Primary Financing Party:
(a) Form 10-K. As soon as available, but in any event within 105
days after the end of each fiscal year of the Lessee, a copy of the annual
audited Consolidated financial statements of the Lessee and its
Consolidated Subsidiaries prepared in conformity with GAAP and as filed
with the SEC in the Lessee's Annual Report on Form 10-K for such fiscal
year. Such financial statements shall be certified by Accountants, which
certification shall (i) state that the examination by such Accountants in
connection with such financial statements has been made in accordance with
generally accepted auditing standards and (ii) include the opinion of such
Accountants that such financial statements have been prepared in
accordance with GAAP.
36
(b) Form 10-Q. As soon as available, but in any event within 50 days
after the end of each quarter (except the last quarter) of each fiscal
year of the Lessee, copies of unaudited Consolidated financial statements
of the Lessee and its Consolidated Subsidiaries as filed with the SEC in
the Lessee's Quarterly Report on Form 10-Q for such quarter.
(c) Ratings. As soon as available, but in any event within two
Business Days after any downgrade or withdrawal by either S&P or Moody's
of the Debt Rating of the Lessee, written notice to the Agent thereof, and
of the effective date thereof, in each case certified by a Financial
Officer of the Lessee.
(d) Compliance Certificate. The financial statements to be delivered
pursuant to paragraphs (a) and (b) above shall be accompanied by a
certificate of a Financial Officer of the Lessee (i) certifying that no
Lease Default or Lease Event of Default has occurred and was continuing as
of the end of the fiscal period covered by such statements, or, if such a
Lease Default or Lease Event of Default has occurred and was continuing at
the end of such fiscal period, the action the Lessee proposes to take with
respect thereto and (ii) setting forth the Funded Indebtedness to
Capitalization Ratio as at the end of such fiscal period and the Fixed
Charge Coverage Ratio for the period of four fiscal quarters then ended,
including computations thereof in reasonable detail.
(e) Other Information. Such other information regarding the Lessee
as any Primary Financing Party may, through the Agent, reasonably and in
good faith request in writing.
8.3A.2 Certificates; Other Information.
Furnish to the Agent and each Primary Financing Party promptly upon their
becoming available, copies of all (i) 10-K, 10-Q, 8-K or other material,
regular, periodic or special reports, schedules and other documents which the
Lessee or any of its Subsidiaries may now or hereafter be required to file with
or deliver to any securities exchange or the SEC, (ii) information regarding the
Lessee that is necessary to meet the requirements of Rule 144A(d)(4) to enable
resales of the Tranche A Notes to be made under Rule 144A, upon request of a
Tranche A Note Purchaser, in the event that the Lessee is no longer subject to
the periodic reporting requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, as amended, and (iii) material news releases and annual
reports relating to the Lessee or any of its Subsidiaries.
8.3A.3 Legal Existence.
Except as permitted in Section 8.3B.1, maintain, and cause each of its
Subsidiaries (other than Subsidiaries that do not constitute a Material
Subsidiary Group) so to maintain, its legal existence in good standing in the
jurisdiction of its incorporation or formation and in each other jurisdiction in
which the failure so to do could reasonably be expected to have a Material
Adverse Effect.
37
8.3A.4 Taxes.
Pay and discharge when due, and cause each of its Subsidiaries so to do,
all Taxes, assessments and governmental charges, license fees and levies which,
if unpaid, could reasonably be expected to have a Material Adverse Effect,
unless and to the extent only that such Taxes, assessments, charges, license
fees and levies shall be contested in good faith and by appropriate proceedings
diligently conducted by the Lessee or such Subsidiary and provided that the
Lessee shall give the Agent prompt notice of such contest and that such reserve
or other appropriate provision as shall be required by the Accountants in
accordance with GAAP shall have been made therefor.
8.3A.5 Observance of Legal Requirements.
Observe and comply in all respects, and cause each of its Subsidiaries so
to do, with all Legal Requirements of all Governmental Authorities, which now or
at any time hereafter may be applicable to it, a violation of which could
reasonably be expected to have a Material Adverse Effect, except such thereof as
shall be contested in good faith and by appropriate proceedings diligently
conducted by it, provided that the Lessee shall give the Agent prompt notice of
such contest and that such reserve or other appropriate provision as shall be
required by the Accountants in accordance with GAAP shall have been made
therefor.
8.3A.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of record and account in which full, true and correct
entries in conformity with GAAP and all Legal Requirements shall be made of all
dealings and transactions in relation to its business and activities and, after
the occurrence and during the continuance of a Lease Event of Default, permit
representatives of the Agent and any Primary Financing Party, upon at least two
Business Days' prior written notice, to visit its corporate headquarters, and to
discuss the business, operations, prospects, licenses, property and financial
condition of the Lessee and its Subsidiaries with the officers thereof.
8.3B Negative Covenants.
The Lessee agrees that, so long as this Agreement is in effect or any
amount is owing by the Lessee under this Agreement or under any other Operative
Agreement to any Financing Party, it will not:
8.3B.1 Merger or Consolidation, Etc:
(a) Consolidate with, be acquired by, or merge into or with any
Person, or convey or otherwise transfer all or substantially all of its
property except that the Lessee may consolidate with or merge with another
Person, or convey or transfer all or substantially all of its property to
another Person, provided that (A) the Lessee shall have given the Agent
prior notice thereof, (B) the Person formed by such consolidation or into
which the Lessee is merged, or the Person which acquires by conveyance or
transfer all or substantially all of such property, or any Person owning
beneficially 100 percent of the
38
Voting Stock of such Person (in each case, the "Successor Person") shall
expressly assume by an instrument executed and delivered to the Agent, in
form satisfactory to the Agent, the obligations of the Lessee and
Guarantor under the Operative Agreements, (C) no Lease Default or Lease
Event of Default shall exist before or after giving effect thereto, and
(D) the Agent shall have received such documents, opinions and
certificates as the Agent shall have reasonably requested in connection
therewith.
(b) Upon any consolidation or merger, or any conveyance or transfer
of all or substantially all of the property of the Lessee in accordance
with Section 8.3B.1(a), the Successor Person shall succeed to, and be
substituted for, and may exercise every right and power of, and shall be
subject to all obligations and liabilities of, the Lessee under this
Agreement with the same effect as if such Successor Person had been named
as the Lessee herein. In the event of any such conveyance or transfer, the
Lessee, as the predecessor Person, may be dissolved, wound up or
liquidated at any time thereafter, provided that until such time the
Lessee, as such predecessor Person, shall retain all of its obligations
and liabilities under this Agreement, except for the obligations of the
Lessee under Sections 8.3, 8.3A and 8.3B.
8.3B.2 Subsidiary Indebtedness.
(a) Permit any Subsidiary to create, incur, assume or permit to
exist any Indebtedness described in clause (a), (b), (c), (e), (f) or (g)
of the definition of such term, other than:
(i) any such Indebtedness existing on the date hereof and set
forth in Schedule 8.3B.2 and extensions, renewals and replacements
of any such Indebtedness that do not increase the outstanding
principal amount thereof;
(ii) any such Indebtedness to the Lessee or any other
Subsidiary of Lessee; and
(iii) any such Indebtedness of the type described in clause
(f) of the definition of such term to the extent the Liens described
in such clause (f) secure liabilities of another Subsidiary, which
liabilities are permitted under this Section 8.3B.2; and
(iv) other such Indebtedness; provided that the sum of (A) the
aggregate outstanding principal amount of such Indebtedness and (B)
the aggregate outstanding principal amount of the obligations
secured by Liens permitted under Section 8.3B.3(i) does not at any
time exceed 10% of Consolidated Tangible Net Worth.
(b) Permit any Subsidiary of Lessee to enter into, assume or be a
party to any Guarantee of Indebtedness of the Lessee (other than any
Guarantee in connection with the Lessee Credit Agreement) unless such
Subsidiary shall also guarantee the obligations of the Lessee hereunder
and under the other Operative Agreements.
39
8.3B.3 Liens, Etc.
Create, assume, incur or suffer to exist or permit any Subsidiary to
create, assume, incur or suffer to exist, any Lien on any property now owned or
hereafter acquired by it, or assign, or permit any Subsidiary to assign, any
income or right with respect thereto, other than:
(a) respecting the Property, Permitted Liens and Lessor Liens and,
respecting any other property, Non-prohibited Encumbrances;
(b) any Lien on any property of the Lessee or any Subsidiary of the
Lessee existing on the date hereof and set forth in Schedule 8.3B.3, and
any other Lien on any property of the Lessee or any Subsidiary of the
Lessee existing on the date hereof that was incurred in the ordinary
course of business and does not secure (i) Indebtedness to Persons other
than the Lessee or any Subsidiary of the Lessee of the type described in
clauses (a), (b) or (g) of the definition of such term or (ii) Guarantees
in respect of any such Indebtedness; provided that (i) no such Lien shall
apply to any other property of the Lessee or any Subsidiary of the Lessee
and (ii) any such Lien shall secure only those obligations which it
secures on the date hereof;
(c) any Lien existing on any property prior to the acquisition
thereof by the Lessee or any Subsidiary of the Lessee, and any Lien
existing on any property of any Person (other than a Subsidiary of the
Lessee) that is merged into or consolidated with the Lessee or a
Subsidiary of the Lessee, or that otherwise becomes a Subsidiary of the
Lessee, prior to the time such Person is so merged or consolidated or
becomes a Subsidiary of the Lessee; provided that (i) such Lien is not
created in contemplation of such acquisition, merger or consolidation or
such Person becoming a Subsidiary of the Lessee, as the case may be, (ii)
such Lien shall not apply to any other property of the Lessee or any
Subsidiary of the Lessee and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition, merger or
consolidation or the date such Person becomes a Subsidiary of the Lessee,
as the case may be;
(d) Liens on fixed or capital assets acquired, constructed or
improved by the Lessee or any Subsidiary of the Lessee securing the
purchase price of such fixed or capital assets or Indebtedness (including
Capital Lease Obligations) of the Lessee or any Subsidiary of the Lessee
incurred and used to finance the acquisition, construction or improvement
of such fixed or capital assets; provided that (i) such Liens and the
Indebtedness secured thereby are incurred prior to or within one year
after such acquisition or the completion of such construction or
improvement, and (ii) such Liens shall not apply to any other property of
the Lessee or any Subsidiary of the Lessee;
(e) Liens arising in connection with Capital Lease Obligations of
Subsidiaries of the Lessee not prohibited under Section 8.3B.2; provided
that no such Lien shall extend to or cover any property other than the
property subject to such Capital Lease Obligations;
40
(f) Liens on property of any Subsidiary of the Lessee securing
obligations owing to the Lessee or any other Subsidiary of the Lessee;
(g) Liens securing any extension, renewal or refunding (or
successive extensions, renewals or refundings) in whole or in part of any
obligations secured by Liens referred to in the foregoing paragraphs (a)
through (f); provided that the principal amount of the obligations secured
by any such Lien shall not exceed the principal amount outstanding
immediately prior to such extension, renewal or refunding, and that any
such Lien shall be limited to the property which, immediately prior to
such extension, renewal or refunding, secured such obligations;
(h) Liens constituting Indebtedness of the type described in Section
8.3B.2(a)(iii); and
(i) Liens not expressly permitted by clauses (a) through (h) above;
provided that the sum of (i) the aggregate outstanding principal amount of
the Indebtedness permitted by clause (a)(iv) of Section 8.3B.2 and (ii)
the aggregate principal amount of outstanding obligations secured by Liens
(which amount, in the case of any sale of accounts receivable, shall be
deemed to equal the lesser of the aggregate uncollected balance of the
accounts so sold and the maximum claim of the purchaser with respect
thereto) permitted by this clause (i) does not at any time exceed 10% of
Consolidated Tangible Net Worth.
8.3B.4 Change in Nature of Business.
Make, or permit any of its Subsidiaries (other than Subsidiaries that do
not constitute a Material Subsidiary Group) to make, any material change in the
nature of its business as carried out at the date hereof, other than reasonable
extensions thereof.
8.3B.5 Use of Proceeds.
(a) Use the proceeds of the Financing other than for the purposes
set forth in this Agreement and the other Operative Agreements or (b) use
any part of the proceeds of the Financing, directly or indirectly, for a
purpose which violates the provisions of Regulations U or X of the Board
of Governors of the Federal Reserve System, as amended.
8.3B.6 Fixed Charge Coverage Ratio.
Permit the Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Lessee, in each case taken as one accounting period, to
be less than 1.80 to 1.00.
8.3B.7 Funded Indebtedness to Capitalization Ratio.
Permit the Funded Indebtedness to Capitalization Ratio, as of the last day
of each fiscal quarter of the Lessee, to be greater than 0.58 to 1.0.
41
8.4. Sharing of Certain Payments.
Except for Excepted Payments, the parties hereto acknowledge and agree
that all payments due and owing by the Lessee to the Lessor under the Lease or
any of the other Operative Agreements shall be made by the Lessee directly to
the Agent as more particularly provided in Section 8.3 hereof. The Lessor, the
Agent, the Primary Financing Parties and the Lessee acknowledge the terms of
Section 8.7 of this Agreement regarding the allocation of payments and other
amounts made or received from time to time under the Operative Agreements and
agree that all such payments and amounts are to be allocated as provided in
Section 8.7 of this Agreement.
8.5. Grant of Easements, etc.
The Agent, the Primary Financing Parties and the Lessor hereby agree that,
so long as no Event of Default shall have occurred and be continuing, and until
such time as the Agent gives instructions to the contrary to the Lessor after
the occurrence and continuance of such Event of Default, the Lessor shall, with
the prior consent of the Agent not to be unreasonably withheld, from time to
time at the request of the Lessee, in connection with the transactions
contemplated by the Agency Agreement, the Lease or the other Operative
Agreements, (i) grant easements and other rights with respect to the Property,
(ii) release existing easements or other rights which are for the benefit of the
Property, (iii) execute and deliver to any Person any instrument appropriate to
confirm or effect such grants or releases, (iv) execute and deliver to any
Person such other documents or materials in connection with the acquisition,
development, construction, testing, demolition or operation of the Property,
including without limitation reciprocal easement agreements, construction
contracts, operating agreements, development agreements, plats, replats or
subdivision documents, and (v) participate and cooperate in the subdivision and
sale of the Excess Land in accordance with Section 8.13; provided, that each of
the agreements referred to in this Section 8.5 shall be of the type normally
executed by the Lessee in the ordinary course of its business and shall be on
commercially reasonable terms so as not to diminish the value of the Property in
any material respect (except in the case of the sale of the Excess Land) or
otherwise have a Material Adverse Effect.
8.6. Appointment of the Agent by the Primary Financing Parties and the
Lessor.
(a) The Secured Parties and the Cash Collateral Lenders acknowledge
and agree and direct that the rights and remedies of the beneficiaries of
the Lien of the Security Documents shall be exercised by the Agent on
behalf of the Secured Parties and the Cash Collateral Lenders in
accordance with the provisions of the Intercreditor Agreement; provided,
in all cases, the Agent shall allocate payments and other amounts received
in accordance with Section 8.7. The Agent is further appointed to provide
notices under the Operative Agreements on behalf of the Lessor and each
Primary Financing Party (as determined by the Agent, in its reasonable
discretion), to receive notices under the Operative Agreements on behalf
of the Lessor and each Primary Financing Party and (subject to Section
8.5) to take such other action under the Operative Agreements on behalf of
the Lessor as the Agent shall determine in its reasonable
42
discretion from time to time. The Agent hereby accepts such appointments.
Further, the Agent shall be entitled to take such action on behalf of the
Lessor as is delegated to the Agent under any Operative Agreement (whether
express or implied) as may be reasonably incidental thereto.
(b) Each Primary Financing Party hereby designates and appoints the
Agent as the agent of such Primary Financing Party under this Agreement
and the other Operative Agreements, and each such Primary Financing Party
authorizes the Agent, in such capacity, to execute the Operative
Agreements as agent for and on behalf of such Primary Financing Party, to
take such action on behalf of such Primary Financing Party under the
provisions of this Agreement and the other Operative Agreements and to
exercise such powers and perform such duties as are expressly delegated to
the Agent by the terms of this Agreement and other Operative Agreements,
together with such other powers as are reasonably incidental thereto.
Subject to the terms of the Operative Agreements (including without
limitation the Intercreditor Agreement), each of the Primary Financing
Parties directs the Agent to exercise such powers, make such decisions and
otherwise perform such duties as are delegated to the Agent hereunder or
thereunder. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship
with any Primary Financing Party, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into
this Agreement or any other Operative Agreement or otherwise exist against
the Agent.
(c) The Agent may execute any of its duties under this Agreement and
the other Operative Agreements by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters
pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it
with reasonable care.
(d) Neither the Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates shall be (a) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Operative Agreement (except
for its or such Person's own gross negligence, willful misconduct or its
or such Person's failure to use ordinary care in the handling of funds) or
(b) responsible in any manner to any of the Primary Financing Parties for
any recitals, statements, representations or warranties made by the
Borrower or the Lessee or any officer thereof contained in this Agreement
or any other Operative Agreement or in any certificate, report, statement
or other document referred to or provided for in, or received by the Agent
under or in connection with, this Agreement or any other Operative
Agreement or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Operative
Agreement or for any failure of the Borrower or the Lessee to perform its
obligations hereunder or thereunder. The Agent shall not be under any
obligation to any Primary Financing Party to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Operative Agreement, or to
inspect the properties, books or records of the Borrower or the Lessee.
43
(e) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel
(including without limitation counsel to the Borrower or the Lessee),
independent accountants and other experts selected by the Agent. The Agent
may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement
or any other Operative Agreement unless it shall first receive such advice
or concurrence of the Majority Secured Parties, the Majority Tranche A
Note Purchasers, the Majority Tranche B Lenders, the Majority Cash
Collateral Lenders or all the Primary Financing Parties, as the case may
be, as set forth in the Intercreditor Agreement or any other Operative
Agreement or it shall first be indemnified to its satisfaction by the
Primary Financing Parties against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Operative
Agreements in accordance with the Intercreditor Agreement, and any action
taken or failure to act pursuant thereto shall be binding upon all the
Primary Financing Parties and all future holders of the Notes.
(f) The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder (other than the
failure of the Lessee to pay Basic Rent as and when due and the failure of
the Lessee to deliver, or cause to be delivered, the certificates
described in Section 8.3(w) and Section 8.3(jj)) unless the Agent has
received written notice from a Primary Financing Party, the Lessee or the
Borrower referring to this Agreement or such other Operative Agreement,
describing such Default or Event of Default and stating that such notice
is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Primary Financing
Parties and the Lessee. The Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed in
accordance with the terms of the Intercreditor Agreement; provided, that
unless and until the Agent shall have received such directions, the Agent
may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Primary Financing
Parties; provided, further, the foregoing shall not limit the rights of
the Majority Secured Parties, the Majority Tranche A Note Purchasers, the
Majority Tranche B Lenders, the Majority Cash Collateral Lenders or all
the Primary Financing Parties, as the case may be, as described in this
Agreement or the Intercreditor Agreement.
(g) Each Primary Financing Party expressly acknowledges that neither
the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties
to it and that no act by the Agent hereinafter taken, including without
limitation any review of the affairs of the Borrower or the
44
Lessee, shall be deemed to constitute any representation or warranty by
the Agent to any Primary Financing Party. Each Primary Financing Party
represents to the Agent that it has, independently and without reliance
upon the Agent or any other Primary Financing Party, and based on such
documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and the
Lessee and made its own decision to purchase its Tranche A Notes or make
its Tranche B Loans or Cash Collateral Loans hereunder and enter into this
Agreement. Each Primary Financing Party also represents that it will,
independently and without reliance upon the Agent or any other Primary
Financing Party, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this
Agreement and the other Operative Agreements, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness
of the Borrower and the Lessee. The Agent agrees to provide to the Primary
Financing Parties notices, reports and other documents that are
customarily provided by the Agent in its capacity as Agent in transactions
similar to the transactions contemplated hereby and by the other Operative
Agreements. Except for notices, reports and other documents expressly
required to be furnished to the Primary Financing Parties by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide
any Primary Financing Party with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower or the Lessee
which may come into the possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
(h) The Primary Financing Parties agree to indemnify the Agent, in
its capacity as such (to the extent not reimbursed by the Borrower or the
Lessee and without limiting any obligation of the Borrower or the Lessee
under and in accordance with the terms of the Operative Agreements to do
so), ratably according to their respective Commitment Percentages in
effect on the date on which indemnification is sought under this Section
(or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Notes shall have been paid in
full, ratably in accordance with their Commitment Percentages immediately
prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including without limitation at any time following the payment of the
Notes) be imposed on, incurred by or asserted against any of them in any
way relating to or arising out of, the Commitments, this Agreement, any of
the other Operative Agreements or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by any of them under or in
connection with any of the foregoing; provided, that no Primary Financing
Party shall be liable for the payment of any portion of such liabilities,
obligations, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the gross negligence or
willful misconduct of the Agent, or its failure to use ordinary care in
the handling of funds. The agreements in this Section shall survive the
payment of the Notes and all other amounts payable hereunder.
45
(i) The Agent and its Affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Borrower or the
Lessee as though the Agent were not the Agent hereunder and under the
other Operative Agreements. With respect to its Tranche B Loans or Cash
Collateral Loans made or renewed by it and any Tranche B Note or Cash
Collateral Note issued to it, the Agent shall have the same rights and
powers under this Agreement and the other Operative Agreements as any
Tranche B Lender or Cash Collateral Lender and may exercise the same as
though it were not the Agent, and the terms "Tranche B Lender", "Tranche B
Lenders", "Cash Collateral Lender" and "Cash Collateral Lenders" shall
include the Agent in its individual capacity.
(j) (i) The Agent may resign at any time as the Agent upon sixty
(60) days' notice to the Primary Financing Parties, the Borrower
and, so long as no Lease Event of Default shall have occurred and be
continuing, the Lessee. If the Agent shall resign as the Agent under
this Agreement, a successor Agent shall be appointed by the Majority
Tranche A Note Purchasers, the Majority Cash Collateral Lenders and
the Majority Tranche B Lenders which successor Agent shall be
subject to the approval of, so long as no Lease Event of Default
shall have occurred and be continuing, the Lessee, such approval not
to be unreasonably withheld or delayed. If no successor Agent is
appointed prior to the effective date of the resignation of the
resigning Agent, the Agent may appoint, after consulting with the
Primary Financing Parties and subject to the approval of, so long as
no Lease Event of Default shall have occurred and be continuing, the
Lessee, such approval not to be unreasonably withheld or delayed, a
successor Agent. Any successor Agent, however appointed, shall be a
bank or trust company incorporated and doing business within the
United States of America and having a combined capital and surplus
of at least $200,000,000 and having a Debt Rating equal to or higher
than the Debt Rating of the Lessee on the date of such appointment,
if there be such an institution willing, able and legally qualified
to perform the duties of the Agent hereunder upon reasonable or
customary terms. If no successor Agent has accepted appointment as
the Agent by the date which is sixty (60) days following a retiring
Agent's notice of resignation, the retiring Agent's notice of
resignation shall nevertheless thereupon become effective and the
Primary Financing Parties shall perform all of the duties of the
Agent until such time, if any, as the Majority Tranche A Note
Purchasers, the Majority Cash Collateral Lenders and the Majority
Tranche B Lenders appoint a successor Agent, as provided for above.
If no successor Agent shall have been appointed in accordance with
the provisions of this Section 8.3(j)(i) on or before the effective
date of such resignation, the Lessee shall pay Rent to such Person
or Persons and at such location as the parties hereto shall agree at
such time. Upon the effective date of such resignation, only such
successor Agent shall succeed to all the rights, powers and duties
of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's rights, powers and duties in such
capacity shall be terminated. After any retiring Agent resigns
hereunder as the Agent, the provisions of this Section 8.6, Section
9.5 of the Tranche B Credit Agreement, Section 9.5 of the Cash
Collateral Credit Agreement and Section 15.1 of the Note
46
Purchase Agreement shall inure to such retiring Agent's benefit as
to any actions taken or omitted to be taken by it while it was the
Agent under this Agreement.
(ii) The Agent may be removed (x) by any of the Majority
Tranche A Note Purchasers, the Majority Cash Collateral Lenders or
the Majority Tranche B Lenders in the case of fraud,
misappropriation of funds or the commission of illegal acts by the
Agent or where the Agent has failed to perform its obligations
hereunder or under any other Operative Agreement in any material
respect, or (y) any time at the request of any Primary Financing
Party, but only with the consent of the Majority Tranche A Note
Purchasers, the Majority Cash Collateral Lenders and the Majority
Tranche B Lenders and so long as no Lease Event of Default shall
have occurred and be continuing, the Lessee. Any such removal shall
be effective upon the acceptance of appointment of a successor Agent
in accordance with the provisions of paragraph (i) of this Section
8.6(j); provided, however, to the extent the Agent being replaced
pursuant to clause (x) of this Section 8.6(j)(ii) is also a Tranche
A Note Purchaser, a Cash Collateral Lender or a Tranche B Lender,
such Person shall not be permitted to vote in connection with the
appointment or approval of a successor Agent pursuant to paragraph
(i) of this Section 8.6(j).
(k) Other than the exercise of reasonable care to assure the safe
custody of the Collateral while being held by the Agent hereunder or under
any other Operative Agreement, the Agent shall have no duty or liability
to preserve rights pertaining thereto, it being understood and agreed that
the Lessee shall be responsible for preservation of all rights in the
Collateral, and the Agent shall be relieved of all responsibility for the
Collateral upon surrendering it or tendering the surrender of it to the
Lessee. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the
Agent accords its own property, which shall be no less than the treatment
employed by a reasonable and prudent agent in the industry, it being
understood that the Agent shall not have responsibility for taking any
necessary steps to preserve rights against any parties with respect to any
of the Collateral.
8.7. Collection and Allocation of Payments and Other Amounts.
(a) The Lessee has agreed pursuant to Section 5.10 and otherwise in
accordance with the terms of this Agreement to pay to (i) the Agent any
and all Rent (excluding Excepted Payments) and any and all other amounts
of any kind or type under any of the Operative Agreements due and owing or
payable by the Lessee to any party hereto and (ii) each Person as
appropriate the Excepted Payments. Promptly after receipt, the Agent shall
apply and allocate, in accordance with the terms of this Section 8.7, such
amounts received from the Lessee and all other payments, receipts and
other consideration of any kind whatsoever received by the Agent pursuant
to the Security Agreement or otherwise received by the Agent, the Lessor
or any of the Primary Financing Parties in connection with the Collateral,
the Security Documents or any of the other Operative Agreements. Ratable
distributions among the Primary Financing Parties
47
under this Section 8.7 shall be made based on the ratio of the amounts
outstanding under the Notes to the aggregate Property Cost. Ratable
distributions among the Tranche A Note Purchasers under this Section 8.7
shall be made based on the ratio of the amounts outstanding under an
individual Tranche A Note Purchaser's Tranche A Note to the aggregate of
all amounts outstanding under all of the Tranche A Note Purchasers'
Tranche A Notes. Ratable distributions among the Cash Collateral Lenders
under this Section 8.7 shall be made based on the ratio of the amounts
outstanding under an individual Cash Collateral Lender's Cash Collateral
Note to the aggregate of all amounts outstanding under all of the Cash
Collateral Lenders' Cash Collateral Notes. Ratable distributions among the
Tranche B Lenders under this Section 8.7 shall be made based on the ratio
of the individual Tranche B Lender's Commitment for Tranche B Loans to the
aggregate of all the Tranche B Lenders' Commitments for Tranche B Loans.
(b) Payments and other amounts received by the Agent or Lessor from
time to time in accordance with the terms of subparagraph (a) shall be
applied and allocated as follows (subject in all cases to Section 8.7(c)):
(i) Any such payment or amount identified as or deemed to be
Basic Rent shall be applied and allocated by the Agent if no Lease
Default or Lease Event of Default is in effect, first, ratably to
the Primary Financing Parties for application and allocation to the
payment of interest on the Notes and thereafter the principal of the
Notes which is due and payable on such date; second, to any and all
other amounts owing under the Operative Agreements to the Primary
Financing Parties; and third, any excess shall be paid to the Lessee
or such Person or Persons as the Lessee may designate; provided,
that if a Lease Default or Lease Event of Default is in effect, such
amounts shall instead be held by the Agent until the earlier of (I)
the first date thereafter on which no Lease Default or Lease Event
of Default shall be in effect (in which case such amounts shall be
applied pursuant to this subparagraph (i)) and (II) the Expiration
Date (or, if earlier, the date of any Acceleration), in which case
such amounts shall be applied and allocated in the manner
contemplated by Section 8.7(b)(iv).
(ii) If on any date the Agent or the Lessor shall receive any
amount in respect of any Casualty, Condemnation or Environmental
Violation pursuant to Sections 15.1(a) or 15.1(g) of the Lease
(excluding any payments in respect thereof which are payable to the
Lessee in accordance with the Lease) and such payment is in an
amount less than the Termination Value at such time, the Lessor or
the Agent, as the case may be, shall be required to pay such amount
received in accordance with Section 8.7(b)(iii) hereof; provided,
that any excess shall be paid to Lessee or its designee in
accordance with Section 15.1 of the Lease.
(iii) An amount equal to any payment identified as proceeds of
the sale or other disposition (or lease upon the exercise of
remedies) of the Property (other than the Excess Land) to a third
party or any portion thereof, whether pursuant to Article XXII of
the Lease or the exercise of remedies under the Security Documents
or otherwise or the exercise of foreclosure remedies under the
Lease,
48
and any payment in respect of excess wear and tear pursuant to
Section 22.3 of the Lease (whether such payment relates to a period
before or after the Construction Period Termination Date), shall be
applied and allocated by the Agent first, ratably to the payment of
the principal and interest of the Tranche B Loans then outstanding,
second, to any and all other amounts owing under the Operative
Agreements to the Tranche B Lenders under the Tranche B Loans,
third, to the extent such amount exceeds the maximum amount to be
returned pursuant to the foregoing provisions of this paragraph
(iii), ratably to the payment of the principal, interest and
Make-Whole Amount, if any, on the Tranche A Notes then outstanding,
fourth, to any and all other amounts owing under the Operative
Agreements to the Tranche A Note Purchasers under the Tranche A
Notes, and fifth, to the extent moneys remain after application and
allocation pursuant to clauses first through fourth above, to the
Lessor for application and allocation to any and all other amounts
owing to any Financing Party as the Lessor shall determine.
(iv) An amount equal to (A) any payment pursuant to Section
22.1(b) of the Lease (or otherwise) of the Maximum Residual
Guarantee Amount in respect of the Property, (B) any other amount
payable after the occurrence of an Event of Default not covered by
Sections 8.7(b)(i) or 8.7(b)(iii) above (including without
limitation any amount received in connection with an action for
liquidated damages pursuant to Section 17.4 or Section 17.6 of the
Lease or a payment of the Maximum Amount or by set off by the
Agent), and (C) any amount payable under the Structural Guarantee
shall be applied and allocated by the Agent first, ratably, to the
payment of the principal, interest and Make-Whole Amount, if any, on
the Tranche A Notes then outstanding, second, to any and all other
amounts owing under the Operative Agreements to the Tranche A Note
Purchasers under the Tranche A Notes, third, to the extent such
amount exceeds the maximum amount to be retained pursuant to the
foregoing provisions of this paragraph (iv), ratably to the payment
of the principal and interest balance of the Tranche B Loans then
outstanding, fourth, to the Tranche B Lenders under the Tranche B
Loans, and fifth, to the extent moneys remain after application and
allocation pursuant to clauses first through fourth above, to the
Lessor for application and allocation to any and all other amounts
owing to any Financing Party as the Lessor shall determine.
(v) An amount equal to any such payment identified as
Supplemental Rent payable to the Agent, the Lessor or any Primary
Financing Party shall be applied and allocated by the Agent to the
payment of any amounts then owing to the Agent, the Primary
Financing Parties, the Lessor and the other parties to the Operative
Agreements (or any of them) (other than any such amounts payable
pursuant to the preceding provisions of this Section 8.7(b)) as
shall be determined by the Agent in its reasonable discretion;
provided, however, that Supplemental Rent received after the
occurrence and continuance of an Event of Default shall be applied
and allocated as set forth in Section 8.7(b)(iv).
49
(vi) Except as set forth in subparagraph (ii) of this Section
8.7(b), any payment of Termination Value shall be applied and
allocated by the Agent if no Lease Default or Lease Event of Default
is in effect, first, ratably to the Primary Financing Parties for
application and allocation to the payment of the principal, interest
and Make-Whole Amount, if any, on the Notes which is due and payable
on such date; second, to any and all other amounts owing under the
Operative Agreements to the Financing Parties; third, any excess
shall be paid to the Lessee or such Person or Persons as the Lessee
may designate; provided, that if a Lease Default or Lease Event of
Default is in effect, such amount shall be applied and allocated in
the manner contemplated by Section 8.7(b)(iv).
(vii) Any Excess Land Payment Amount or payment of Cash
Collateral Rent shall be applied and allocated first, ratably to the
Cash Collateral Lenders for application and allocation to the
payment of the Cash Collateral Loan Balance which is due and payable
on such date; and second, any excess shall be paid to the Lessee or
such Person or Persons as the Lessee may designate.
(viii) The Agent in its reasonable judgment shall identify the
nature of each payment or amount received by the Agent and apply and
allocate each such amount in the manner specified above.
(c) Notwithstanding any provision contained herein or in any other
Operative Agreement to the contrary, upon the payment in full of the Notes
and all other amounts then due and owing by the Lessor hereunder or under
any Operative Agreement and the payment in full of all other amounts then
due and owing to the Primary Financing Parties, the Lessor, the Agent and
the other Financing Parties pursuant to the Operative Agreements, any
moneys remaining with the Agent shall be returned to the Lessee or its
designee. Notwithstanding the foregoing, the obligations of the Lessee to
pay all amounts due to any Financing Party under the Notes or any other
Operative Agreement shall be automatically reinstated if and to the extent
that for any reason any payment by or on behalf of the Lessee is rescinded
or must be otherwise restored by any Financing Party, whether as a result
of any proceedings in bankruptcy or reorganization or otherwise, and the
Lessee agrees that it will, subject to Section 11.7 of the Participation
Agreement, indemnify each Financing Party on demand for all reasonable
costs and expenses (including, without limitation, reasonable fees of
counsel) incurred by any Financing Party in connection with such
rescission or restoration, including without limitation any such costs and
expenses incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar payment
under any bankruptcy, insolvency or similar law.
8.8. Release of Properties, etc.
If the Lessee shall at any time purchase the Property pursuant to the
Lease, or the Construction Agent shall purchase the Property pursuant to the
Agency Agreement, or if the Property shall be sold in accordance with Article
XXII of the Lease, then, upon satisfaction by the Borrower of its obligation to
prepay the Financing and all other amounts owing to the
50
Primary Financing Parties under the Operative Agreements, the Agent is hereby
authorized and directed to release such Property from the Liens created by the
Security Documents to the extent of its interest therein. In addition, upon the
termination of the Commitments and the payment in full of the Financing and all
other amounts owing by the Borrower and the Lessee hereunder or under any other
Operative Agreement, the Agent is hereby authorized and directed to release the
Property from the Liens created by the Security Documents to the extent of its
interest therein. Following any such release, the Agent shall, at the sole cost
and expense of the Lessee, execute and deliver to the Borrower and the Lessee
such documents as the Borrower or the Lessee shall reasonably request to
evidence such release.
8.9. Limitation of Lessor's Obligations.
(a) The Lessor shall not have any duty or obligation to manage,
control, use, make any payment in respect of, register, record, insure,
inspect, sell, dispose of or otherwise deal with the Property or any other
part of the Borrower's Interest, or to otherwise take or refrain from
taking any action under or in connection with any Operative Agreement to
which the Lessor is a party, except as expressly provided by the terms of
the Operative Agreements or in written instructions from all the Primary
Financing Parties and/or the Majority Secured Parties, as applicable,
received pursuant to Section 8.6; and no implied duties or obligations
shall be read into the Operative Agreements against the Lessor. The Lessor
shall have no duty or obligation to supervise or monitor the performance
of the Construction Agent under the Agency Agreement, which for all
purposes shall be an independent contractor. The Lessor nevertheless
agrees that it will promptly take all action as may be necessary to
discharge any Lessor Liens on any part of the Property.
(b) The Lessor agrees that it will not manage, control, use, sell,
dispose of or otherwise deal with the Property or any other part of the
Borrower's Interest except (a) as required by the terms of the Operative
Agreements, (b) in accordance with the powers granted to, or the authority
conferred upon, it pursuant to the Operative Agreements or (c) in
accordance with the express terms hereof and with written instructions
from all the Primary Financing Parties and/or the Majority Secured
Parties, as applicable, pursuant to Section 8.6.
(c) Except in accordance with written instructions furnished
pursuant to an applicable provision of the Operative Agreements (expressly
cited in such instructions), and without limitation of the generality of
Section 8.9(a), the Lessor shall not have any duty to (i) file, record or
deposit any Operative Agreement or any other document, or to maintain any
such filing, recording or deposit or to refile, rerecord or redeposit any
such document; (ii) obtain insurance on the Property or effect or maintain
any such insurance, other than to receive and forward to each Primary
Financing Party and the Agent any notices, policies, certificates or
binders furnished to the Lessor pursuant to the Lease; (iii) maintain the
Property; (iv) pay or discharge any Tax or any Lien owing with respect to
or assessed or levied against any part of the Borrower's Interest, except
as provided in the last sentence of Section 8.9(a), other than to forward
notice of such Tax or Lien received by the Lessor to each Primary
Financing Party and the Agent; (v) confirm, verify,
51
investigate or inquire into the failure to receive any reports or
financial statements of Lessee or any other Person; (vi) inspect the
Property at any time or ascertain or inquire as to the performance or
observance of any of the covenants of Lessee or any other Person under any
Operative Agreement with respect to the Property; or (vii) manage,
control, use, sell, dispose of or otherwise deal with the Property or any
part thereof or any other part of the Borrower's Interest, except as
provided in Section 8.9(b).
(d) The Lessor, in the exercise or administration of its powers
pursuant to the Operative Agreements, may, at the expense and, so long as
no Lease Default or Lease Event of Default shall have occurred and be
continuing, with the consent of Lessee (which amounts may be funded prior
to the Construction Period Termination Date in accordance with the
Operative Agreements) employ agents, attorneys, accountants, and auditors
and enter into agreements with any of them and the Lessor shall not be
liable for the default or misconduct of any such agents, attorneys,
accountants or auditors if such agents, attorneys, accountants or auditors
shall have been selected by it with reasonable care.
8.10. No Representations or Warranties as to the Property or Operative
Agreements.
THE LESSOR MAKES (i) NO REPRESENTATION OR WARRANTY, EITHER EXPRESS OR
IMPLIED, AS TO THE TITLE, VALUE, USE, CONDITION, DESIGN, OPERATION,
MERCHANTABILITY OR FITNESS FOR USE OF THE PROPERTY (OR ANY PART THEREOF), OR ANY
OTHER REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO THE PROPERTY (OR ANY PART THEREOF) AND THE LESSOR SHALL NOT BE LIABLE
FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR THE FAILURE OF THE PROPERTY,
OR ANY PART THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT except that the Lessor
hereby represents, warrants and covenants to each Primary Financing Party and
the Lessee that it will comply with the last sentence of Section 8.9(a), and
(ii) no representation or warranty as to the validity or enforceability of any
Operative Agreement as against any Person other than the Lessor or as to the
correctness of any statement made by a Person other than the Lessor contained in
any thereof.
8.11. Reliance; Advice of Counsel.
The Lessor shall not incur any liability to any Person in acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report, opinion, bond or other document or paper reasonably believed by it to be
genuine and believed by it in good faith to be signed by the proper party or
parties. The Lessor may accept and rely upon a certified copy of a resolution of
the board of directors or other governing body of any corporate party as
conclusive evidence that such resolution has been duly adopted by such body and
that the same is in full force and effect. As to any fact or matter the manner
of ascertainment of which is not specifically prescribed herein, the Lessor may
for all purposes of the Operative Agreements rely on an Officer's Certificate of
the relevant party, as to such fact or matter, and such certificate shall
constitute full protection to the Lessor for any action taken or omitted to be
taken by it
52
reasonably in good faith in reliance thereon. In the administration of the
Lessor's duties, the Lessor may execute and perform its powers and duties
directly or through agents or attorneys and may consult with counsel,
accountants and other skilled Persons to be selected and employed by it, and the
Lessor shall not be liable for anything done, suffered or omitted reasonably in
good faith by it in accordance with the advice or opinion of any such counsel,
accountants or other skilled Persons and not contrary to the Operative
Agreements.
8.12. [Reserved].
8.13. Subdivision of the Property; Sale of Excess Land.
(a) The Construction Agent and the Lessee shall have the right to
subdivide the Property into one or more parcels of Land on the following
terms and conditions:
(i) (A) the Construction Agent or the Lessee shall file with
the appropriate Governmental Authorities in the Township of ▇▇▇▇▇,
Passaic County, New Jersey an application for subdivision (in
accordance with all applicable Laws) of the Excess Land from the
Remaining Property, (B) the Construction Agent or the Lessee shall
cause the subdivision plan (in form and substance reasonably
satisfactory to the Agent and the Primary Financing Parties,
prepared by a professional reasonably satisfactory to the Agent and
accurately and completely depicting the Remaining Property and the
Excess Land such that legal descriptions of each may be verified) to
be delivered to the Agent and the Primary Financing Parties with
regard to the Excess Land and the Remaining Property and (C) the
Lessee shall deliver an Officer's Certificate to the Agent and the
Primary Financing Parties certifying to the following: (I) that such
subdivision plan is true and accurate and has been appropriately
recorded in the appropriate recording office, (II) that the legal
descriptions of the Remaining Property and the Excess Land attached
thereto are true and accurate and (III) that the Remaining Property
has (or, upon Completion, will have) such easements, utility
services and other facilities necessary or appropriate to operate,
utilize, maintain and control such Remaining Property in a
commercially reasonable manner;
(ii) concurrently with the subdivision of the Property in
accordance with Section 8.13(a)(i), (A) the Tranche A Note
Purchasers shall execute such termination statements, quit-claims,
releases of mortgage or other documents or instruments as the
Lessee, the Construction Agent, the Lessor, the Agent or the Cash
Collateral Lenders shall reasonably request to cause the Excess Land
to be released from the Liens of the Tranche A Mortgage Instruments
and the Liens of the other Security Documents in favor of the
Tranche A Note Purchasers, (B) the Tranche B Lenders shall execute
such termination statements, quit-claims, releases of mortgage or
other documents or instruments as the Lessee, the Construction
Agent, the Lessor, the Agent or the Cash Collateral Lenders shall
reasonably request to cause the Excess Land to be released from the
Liens of the Tranche B Mortgage Instruments and the Liens of the
other Security Documents in favor of the Tranche B Lenders,
53
and (C) the Construction Agent or the Lessee shall have delivered or
cause to be delivered to the Agent, the Tranche A Note Purchasers
and the Tranche B Lenders a "Certificate as to Approval of
Subdivision of Land" issued by the appropriate administrative
officer of the Township of ▇▇▇▇▇, Passaic County, New Jersey
pursuant to N.J.S.A. 40:55D-56; and
(iii) concurrently with the subdivision of the Property in
accordance with Section 8.13(a)(i), the Lessee shall cause an
Appraisal for the Remaining Property to be delivered to the Agent
evidencing a Fair Market Sales Value of the Remaining Property of
one hundred percent (100%) or more of the Property Cost allocable to
such Remaining Property.
(b) The Construction Agent and the Lessee shall have the right to
sell, transfer and convey all or any portion of the Excess Land in
accordance with the provisions set forth in Section 21.1 of the Lease.
(c) Upon the sale, transfer or conveyance of any Excess Land in
accordance with Section 8.13(b) and Section 21.1 of the Lease, and upon
application of the proceeds from such sale, transfer or conveyance in
accordance with Section 21.1(b)(ii) of the Lease, the amount of Cash
Collateral required to be maintained in the Cash Collateral Account
pursuant to Section 5.11 shall be reduced by the Excess Land Payment
Amount so received and applied, and the Agent shall, promptly following
the written request of the Lessee or the Construction Agent and so long as
no Lease Default or Lease Event of Default shall have occurred and be
continuing, cause any excess amounts then on deposit in the Cash
Collateral Account to be returned to the Lessee or the Construction Agent.
8.14. Non Disturbance.
In the event of a foreclosure under any Security Document (other
than the Lease), so long as there shall then exist no Lease Event of
Default, the Primary Financing Parties agree, for themselves and their
respective successors and assigns, that neither the leasehold interest,
right of possession nor use and enjoyment of the Property by Lessee under
the Lease shall be extinguished or terminated by reason of such
foreclosure, but rather the Lease shall continue in full force and effect
and the Lease shall automatically and unconditionally become a direct
lease between the Primary Financing Parties or any successor thereto, as
lessor as if such Primary Financing Parties or successor were the Lessor
originally named in the Lease, and Lessee. If any award, compensation or
proceeds of insurance are received by or turned over to Lessor, the Agent
or any Primary Financing Party in accordance with the Lease, in respect of
any Casualty or Condemnation (collectively, as used in this Section 8.14,
"proceeds"), and if a Lease Default or Lease Event of Default shall not
have occurred and be continuing, then Lessor, Agent and the Primary
Financing Parties shall make available for expenses related to the
Restoration of the Property, all such proceeds it receives pursuant to the
terms of the Lease.
54
SECTION 9. TRANCHE B CREDIT AGREEMENT, CASH COLLATERAL CREDIT
AGREEMENT AND NOTE PURCHASE AGREEMENT.
9.1. The Construction Agent's and the Lessee's Tranche B Credit
Agreement, Cash Collateral Credit Agreement and Note Purchase
Agreement Rights.
Notwithstanding anything to the contrary contained in the Tranche B Credit
Agreement, the Cash Collateral Credit Agreement or the Note Purchase Agreement,
the Agent, the Tranche A Note Purchasers, the Tranche B Lenders, the Lessee and
the Lessor hereby agree that, prior to the occurrence and continuation of any
Lease Default under Sections 17.1(a), (b), (g), (h) or (j) of the Lease or Lease
Event of Default, the Construction Agent or the Lessee, as the case may be,
shall have the following rights:
(a) the right to designate an account to which amounts funded under
the Operative Agreements shall be credited pursuant to Section 2.3(a) of
the Tranche B Credit Agreement and Section 2.3(a) of the Cash Collateral
Credit Agreement;
(b) the right to terminate or reduce the Tranche B Commitments
pursuant to Section 2.5(a) of the Tranche B Credit Agreement;
(c) the right to exercise the conversion and continuation options
pursuant to Section 2.7 of the Tranche B Credit Agreement and Section 2.7
of the Cash Collateral Credit Agreement;
(d) the right to receive any notice and any certificate, in each
case issued pursuant to Section 2.11(a) of the Tranche B Credit Agreement
and Section 2.11(a) of the Cash Collateral Credit Agreement;
(e) [Reserved];
(f) the right to approve any successor Escrow Agent;
(g) the right to consent to any assignment by a Tranche B Lender or
a Cash Collateral Lender to which the Lessor has the right to consent
pursuant to Section 9.8 of the Tranche B Credit Agreement or Section 9.8
of the Cash Collateral Credit Agreement, as applicable;
(h) the right to make determinations as to whether the Tranche B
Loans and Cash Collateral Loans will be Eurodollar Loans or ABR Loans
pursuant to Sections 2.1(b), 2.3(a) and 2.8(a) of the Tranche B Credit
Agreement and Sections 2.1(b), 2.3 and 2.8(a) of the Cash Collateral
Credit Agreement, respectively;
(i) the right to require Borrower to elect to convert Eurodollar
Loans to ABR Loans pursuant to Section 2.7 of the Tranche B Credit
Agreement and Section 2.7 of the Cash Collateral Credit Agreement,
respectively;
55
(j) the right to elect to require any Cash Collateral Lender to
transfer or assign its interests, rights and obligations under the Cash
Collateral Credit Agreement to a replacement bank or institution, or to
require the Borrower to prepay all outstanding Cash Collateral Loans
pursuant to Section 2.11 of the Cash Collateral Credit Agreement; and
(k) the right to elect to require any Tranche B Lender to transfer
or assign its interests, rights and obligations under the Tranche B Credit
Agreement to a replacement bank or institution, or to require the Borrower
to prepay all outstanding Tranche B Loans pursuant to Section 2.11 of the
Tranche B Credit Agreement.
SECTION 10. TRANSFER OF INTEREST.
10.1. Restrictions on Transfer.
(a) Each Tranche B Lender may, at its own cost and expense, participate,
assign or transfer all or a portion of its interest hereunder and under the
other Operative Agreements in accordance with Sections 9.7 and 9.8 of the
Tranche B Credit Agreement; provided, that each Tranche B Lender that
participates, assigns or transfers all or a portion of its interest hereunder
and under the other Operative Agreements shall deliver to the Agent and the
Lessee a copy of each Assignment and Acceptance (as referenced in Section 9.8 of
the Tranche B Credit Agreement) for purposes of maintaining the Register under
the Tranche B Credit Agreement. Each Cash Collateral Lender may, at its own cost
and expense, participate, assign or transfer all or a portion of its interest
hereunder and under the other Operative Agreements in accordance with Sections
9.7 and 9.8 of the Cash Collateral Credit Agreement; provided, that each Cash
Collateral Lender that participates, assigns or transfers all or a portion of
its interest hereunder and under the other Operative Agreements shall deliver to
the Agent and the Lessee a copy of each Assignment and Acceptance (as referenced
in Section 9.8 of the Cash Collateral Credit Agreement) for purposes of
maintaining the Register under the Cash Collateral Credit Agreement. The Lessor
may, subject to the rights of the Lessee under the Lease and the other Operative
Agreements and to the Lien of the applicable Security Documents, but only with
the prior written consent of the Agent and, so long as no Lease Default under
Sections 17.1(a), (b), (g), (h), or (j) of the Lease or Lease Event of Default
shall have occurred and be continuing, the Lessee (which consent may be withheld
by the Agent or the Lessee in such party's sole discretion) at Lessor's sole
expense, directly or indirectly, assign, convey, appoint an agent with respect
to enforcement of, or otherwise transfer any of its right, title or interest in
or to the Property, the Lease and the other Operative Agreements (including
without limitation any right to indemnification thereunder), or any other
document relating to the Property or any interest in the Property as provided in
the Lease to a special purpose entity owned by any Person with a minimum net
worth of at least $200,000,000.00 and a Debt Rating of a Rating Agency of "A" or
higher. The provisions of the immediately preceding sentence shall not apply to
the obligations of the Lessor to transfer the Property or the Excess Land to the
Lessee, its designee or a third party purchaser pursuant to Article XXI or XXII
of the Lease upon payment for the Property in accordance with the terms and
conditions of the Lease. Except as otherwise expressly permitted under the
Operative Agreements (including pursuant to Article XXV of the Lease), the
Lessee
56
may not assign any of the Operative Agreements or any of its rights or
obligations thereunder or with respect to the Property in whole or in part to
any Person without the prior written consent of the Agent, each Primary
Financing Party and the Lessor. Each Tranche A Note Purchaser may, at its own
expense, participate, assign or transfer all or a portion of its interest
hereunder and under the other Operative Agreements only in accordance with the
provisions of the Note Purchase Agreement.
(b) Notwithstanding anything to the contrary in Section 10.1(a), no
consent shall be required from the Agent, the Lessee or any Primary Financing
Party (but Lessor shall provide one hundred eighty (180) days (or such shorter
period as required by the Legal Requirement giving rise to the assignment,
conveyance, appointment or transfer contemplated by this Section 10.1(b))
written notice to the Agent and the Lessee) in connection with any assignment,
conveyance, appointment or transfer by the Lessor required by any Legal
Requirement of all or any of its right, title or interest in or to the Property,
the Lease and the other Operative Agreements (including without limitation any
right to indemnification thereunder), or any other document relating to the
Property or any interest in the Property as provided in the Lease to a special
purpose entity or any Person with a minimum net worth of at least
$200,000,000.00 and a Debt Rating of a Rating Agency of "A" or higher; provided,
in such case, so long as no Lease Default under Sections 17.1(a), (b), (g), (h)
or (j) of the Lease or Lease Event of Default shall have occurred and be
continuing, Lessee shall have the right to require the Lessor (unless such
transfer or conveyance has already occurred, in which case the Lessee shall have
the right to require such transferee) to transfer its interest to another Person
with a minimum net worth of at least $200,000,000.00 and a Debt Rating of a
Rating Agency of "A" or higher (or to a special purpose entity owned by such a
Person) selected by the Lessee, in its reasonable discretion; provided, further,
Lessee shall be responsible for any cost or expense incurred by the Lessor in
connection with any assignment, conveyance, appointment or transfer by the
Lessor pursuant to this Section 10.1(b).
(c) In the event that any change in GAAP occurs that adversely affects the
financial accounting reporting of the Lessor, as such reporting relates to the
transactions contemplated by the Operative Agreements, Lessor shall provide
written notice of such change to Lessee (a "Change in GAAP Notice"), which
notice shall specify the effective date of such change in GAAP and shall contain
details as to the types and amounts of any loss, claim and/or increased costs
incurred or to be incurred by Lessor as a result of such change in GAAP, and
(subject to Section 11.7) Lessee agrees to indemnify Lessor for any loss, claim
or increased costs incurred by Lessor as a result of the change in GAAP from and
after the date of Lessee's receipt of such Change in GAAP Notice. After receipt
of any such Change in GAAP Notice, Lessee shall have the right (i) to require
the Lessor to transfer its interest to another Person with a minimum net worth
of at least $200,000,000.00 and a Debt Rating of a Rating Agency of "A" or
higher (or to a special purpose entity owned by such a Person) selected by
Lessee, in its reasonable discretion; or (ii) give irrevocable written notice of
its election to exercise the Purchase Option pursuant to Section 20.1 of the
Lease on the first Payment Date occurring at least sixty (60) days after
Lessee's receipt of such Change in GAAP Notice.
(d) Upon the occurrence and during the continuance of an Event of Default
by the Lessor, Lessee shall have the right to require the Lessor to transfer its
interest in the Property and
57
the Operative Agreements to a Person with a minimum net worth of at least
$200,000,000.00 and a Debt Rating of a Rating Agency of "A" or higher (or to a
special purpose entity owned by such a Person) selected by the Lessee, in its
reasonable discretion.
10.2. Effect of Transfer.
From and after any transfer effected in accordance with this Section 10,
the transferor shall be released, to the extent of such transfer, from its
liability hereunder and under the other documents to which it is a party in
respect of obligations to be performed on or after the date of such transfer;
provided, however, that any transferor shall remain liable hereunder and under
such other documents to the extent that the transferee shall not have assumed
the obligations of the transferor thereunder. Upon any transfer by the Lessor or
a Primary Financing Party as above provided, any such transferee shall assume
the obligations of the Lessor or the Primary Financing Party, as the case may
be, and shall be deemed the "Lessor" or a "Primary Financing Party", as the case
may be, for all purposes of such documents and each reference herein to the
transferor shall thereafter be deemed a reference to such transferee for all
purposes, except as provided in the preceding sentence. Notwithstanding any
transfer of all or a portion of the transferor's interest as provided in this
Section 10, the transferor shall be entitled to all benefits accrued and all
rights vested prior to such transfer including without limitation rights to
indemnification under any such document.
SECTION 11. INDEMNIFICATION.
11.1. General Indemnity.
Subject to the limitations set forth in Section 11.7 hereof, whether or
not any of the transactions contemplated hereby shall be consummated, the
Indemnity Provider hereby assumes liability for and agrees to defend, indemnify
and hold harmless each Indemnified Person on an After Tax Basis from and against
any Claims which may be imposed on, incurred by or asserted against an
Indemnified Person by any third party, including without limitation Claims
arising from the negligence of an Indemnified Person (but not to the extent such
Claims arise from the gross negligence or willful misconduct of such Indemnified
Person, as determined by a court of competent jurisdiction) in any way relating
to or arising or alleged to arise out of the negotiation, execution, delivery,
performance or enforcement of this Agreement, the Lease or any other Operative
Agreement or on or with respect to the Property or any component thereof,
including without limitation Claims in any way relating to or arising or alleged
to arise out of (a) the financing, refinancing, purchase, acceptance, rejection,
ownership, design, construction, refurbishment, development, delivery,
non-delivery, leasing, subleasing, possession, use, occupancy, operation,
maintenance, repair, modification, transportation, condition, sale, return,
repossession (whether by summary proceedings or otherwise), or any disposition
of the Property or any part thereof, including without limitation the
acquisition, holding or disposition of any interest in the Property, lease or
agreement comprising a portion of any thereof; (b) any latent or other defects
in the Property or any portion thereof whether or not discoverable by an
Indemnified Person or the Indemnity Provider; (c) a violation of, or penalties
arising from any violation of, Environmental Laws, Environmental Claims or other
loss of or damage to any
58
property or the environment, relating to the Property, the Lease, the Agency
Agreement or the Indemnity Provider; (d) the Operative Agreements, or any
transaction contemplated thereby; (e) any breach by the Indemnity Provider of
any of its representations or warranties under the Operative Agreements to which
the Indemnity Provider is a party or failure by the Indemnity Provider to
perform or observe any covenant or agreement to be performed by it under any of
the Operative Agreements; (f) the transactions contemplated hereby or by any
other Operative Agreement, in respect of the application of Parts 4 and 5 of
Subtitle B of Title I of ERISA; (g) personal injury, death or property damage,
including without limitation Claims based on strict or absolute liability in
tort; (h) any claim for patent, trademark or copyright infringement; and (i) any
fees, expenses and/or other assessments by any business park or any other
applicable entity with oversight responsibility for the Property.
If a written demand is made against any Indemnified Person or if any
proceeding shall be commenced against such Indemnified Person (including without
limitation a written notice of such proceeding) for any Claim, such Indemnified
Person shall promptly notify the Indemnity Provider in writing and shall not
take action with respect to such Claim without the consent of the Indemnity
Provider for thirty (30) days after the receipt of such notice by the Indemnity
Provider; provided, however, that in the case of any such Claim, if action shall
be required by law or regulation to be taken prior to the end of such period of
thirty (30) days, such Indemnified Person shall endeavor to, in such notice to
the Indemnity Provider, inform the Indemnity Provider of such shorter period,
and no action shall be taken with respect to such Claim without the consent of
the Indemnity Provider before seven (7) days before the end of such shorter
period unless the Indemnified Person shall be required by such law or regulation
to take action prior to the end of such seven (7) day period; provided, further,
that the failure of such Indemnified Person to give the notices referred to in
this sentence shall not diminish the Indemnity Provider's obligation hereunder
except to the extent such failure precludes the Indemnity Provider from
contesting all or any part of such Claim, but only for the portion of the Claim
that the Indemnity Provider is precluded from contesting.
If, within thirty (30) days of receipt of such notice from the Indemnified
Person (or such shorter period as the Indemnified Person has notified the
Indemnity Provider is required by law or regulation for the Indemnified Person
to respond to such Claim), the Indemnity Provider shall request in writing that
such Indemnified Person respond to such Claim, the Indemnified Person shall, at
the reasonable expense of the Indemnity Provider, in good faith conduct and
control such action (including without limitation by pursuit of appeals)
(provided, however, that (A) if such Claim, in the Indemnity Provider's
reasonable discretion, can be pursued by the Indemnity Provider on behalf of or
in the name of such Indemnified Person, the Indemnified Person, at the Indemnity
Provider's request, shall allow the Indemnity Provider to conduct and control
the response to such Claim and (B) in the case of any Claim (and notwithstanding
the provisions of the foregoing subsection (A)), the Indemnified Person may
request in writing that the Indemnity Provider conduct and control the response
to such Claim (with counsel to be selected by the Indemnity Provider and
consented to by such Indemnified Person, such consent not to be unreasonably
withheld or delayed; provided, however, that any Indemnified Person may retain
separate counsel at the expense of the Indemnity Provider in the event of a
potential conflict of interest between such Indemnified Person and the Indemnity
Provider)) by, in the sole discretion of the Person conducting and controlling
the response to such Claim (1) resisting payment
59
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 Indemnity Provider
from time to time.
The party controlling the response to any Claim shall consult in good
faith with the non-controlling party and shall keep the non-controlling party
reasonably informed as to the conduct of the response to such Claim; provided,
that all decisions ultimately shall be made in the discretion of the controlling
party. The parties agree that an Indemnified Person may at any time decline to
take further action with respect to the response to such Claim and may settle
such Claim if such Indemnified Person shall waive its rights to any indemnity
from the Indemnity Provider that otherwise would be payable in respect of such
Claim (and any future Claim, the pursuit of which is precluded by reason of such
resolution of such Claim) and shall pay to the Indemnity Provider any amount
previously paid or advanced by the Indemnity Provider pursuant to this Section
11.1 by way of indemnification or advance for the payment of an amount regarding
such Claim, except reasonable expenses therefrom incurred by such Indemnified
Person in connection with the response to such Claim.
Notwithstanding the foregoing provisions of this Section 11.1, an
Indemnified Person shall not be required to take any action and the Indemnity
Provider shall not be permitted to respond to any Claim in its own name or that
of the Indemnified Person unless (A) the Indemnity Provider shall have agreed to
pay and shall pay to such Indemnified Person on demand and on an After Tax Basis
all reasonable costs, losses and expenses that such Indemnified Person actually
incurs in connection with such Claim, including without limitation all
reasonable legal, accounting and investigatory fees and disbursements and the
Indemnity Provider shall have agreed that the Claim is an indemnifiable Claim
hereunder, (B) the Indemnified Person 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, (C) if such Claim shall involve the payment of any amount prior to
the resolution of such Claim, the Indemnity Provider shall provide to the
Indemnified Person an interest-free advance in an amount equal to the amount
that the Indemnified Person is required to pay (with no additional net after-tax
cost to such Indemnified Person) prior to the date such payment is due, (D) in
the case of an appeal of an adverse determination of a Claim that must be
pursued in the name of an Indemnified Person (or an Affiliate thereof), the
Indemnity Provider shall have provided to such Indemnified Person an opinion of
independent counsel selected by the Indemnity Provider and reasonably
satisfactory to the Indemnified Person stating that the position asserted in
such appeal will more likely than not prevail and (E) no Event of Default by the
Indemnity Provider shall have occurred and be continuing. In no event shall an
Indemnified Person be required to appeal an adverse judicial determination to
the United States Supreme Court. In addition, an Indemnified Person 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 to the position taken by the Indemnity Provider by a
court of competent jurisdiction pursuant to the contest provisions of this
Section 11.1, unless there shall have been a change in law (or interpretation
thereof) and the Indemnified Person shall have received, at the Indemnity
Provider's expense, an opinion of independent counsel selected by the Indemnity
Provider and
60
reasonably acceptable to the Indemnified Person stating that as a result of such
change in law (or interpretation thereof), it is more likely than not that the
Indemnified Person will prevail in such contest. In no event shall the Indemnity
Provider be permitted to adjust or settle any Claim without the consent of the
Indemnified Person to the extent any such adjustment or settlement involves, or
is reasonably likely to involve, any performance by or adverse admission by or
with respect to the Indemnified Person.
11.2. General Tax Indemnity.
(a) Subject to the limitations set forth in Section 11.7 hereof, the
Indemnity Provider shall pay and assume liability for, and does hereby
agree to indemnify, protect and defend the Property and all Indemnified
Persons, and hold them harmless against, all Impositions on an After Tax
Basis, and all payments pursuant to the Operative Agreements shall be made
free and clear of and without deduction for any and all present and future
Impositions.
(b) Notwithstanding anything to the contrary in Section 11.2(a)
hereof, the following shall be excluded from the indemnity required by
Section 11.2(a):
(i) Taxes (other than Taxes that are, or are in the nature of,
sales, use, rental, value added, ad valorem, transfer or property
taxes) that are imposed on a Indemnified Person (other than the
Lessor) by the United States federal government that are based on or
measured by the net income (including without limitation taxes based
on capital gains and minimum taxes) of such Person; provided, that
this clause (i) shall not be interpreted to prevent a payment from
being made on an After Tax Basis if such payment is otherwise
required to be so made;
(ii) Taxes (other than Taxes that are, or are in the nature
of, sales, use, rental, value added, ad valorem, transfer or
property taxes) that are imposed on any Indemnified Person (other
than the Lessor) by any state or local jurisdiction or taxing
authority within any state or local jurisdiction and that are based
upon or measured by the net income (including without limitation
taxes based on capital gains and minimum taxes) of such Person;
provided that such Taxes shall not be excluded under this
subparagraph (ii) to the extent such Taxes would have been imposed
had the location, possession or use of the Property in, the location
or the operation of the Lessee in, or the Lessee's making payments
under the Operative Agreements from, the jurisdiction imposing such
Taxes been the sole connection between such Indemnified Person and
the jurisdiction imposing such Taxes; provided, further, that this
clause (ii) shall not be interpreted to prevent a payment from being
made on an After Tax Basis if such payment is otherwise required to
be so made;
(iii) any Tax to the extent it relates to any act, event or
omission that occurs after the termination of the Lease and
redelivery or sale of the Property in accordance with the terms of
the Lease (but not any Tax that relates to such
61
termination, redelivery or sale and/or to any period prior to such
termination, redelivery or sale); and
(iv) any Taxes which are imposed on an Indemnified Person as a
result of the gross negligence or willful misconduct of such
Indemnified Person itself, as determined by a court of competent
jurisdiction (as opposed to gross negligence or willful misconduct
imputed to such Indemnified Person), but not Taxes imposed as a
result of ordinary negligence of such Indemnified Person.
Notwithstanding the foregoing, the exclusions from the definition of
"Impositions" set forth in clauses (i), (ii) and (iii) shall not apply (but the
other exclusions shall apply) to any Taxes or increase in Taxes imposed on an
Indemnified Person net of any decrease in Taxes realized by such Indemnified
Person, to the extent that such tax increase or decrease would not have occurred
if on each date of an Advance the Primary Financing Parties has advanced funds
to the Lessee in the form of a loan secured by the Property in an amount equal
to the Acquisition and Construction Advances funded on such date of an Advance,
with debt service equal to the Basic Rent payable on each Schedule Interest
Payment Date and a principal balance at the maturity of such loan in an amount
equal to the then outstanding amount of the Notes at the end of the term of the
Lease.
(c) (i) Subject to the terms of Section 11.2(f) and 11.7, the
Indemnity Provider shall pay or cause to be paid in a timely manner
all Impositions directly to the taxing authorities where feasible
and otherwise to the Indemnified Person, as appropriate, and the
Indemnity Provider shall at its own expense, upon such Indemnified
Person's reasonable request, furnish to such Indemnified Person
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 11.2(f) and which the Indemnity
Provider pays directly to the taxing authorities, the Indemnity
Provider 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 Indemnity Provider reimburses
an Indemnified Person, the Indemnity Provider shall do so within
thirty (30) days after receipt by the Indemnity Provider of demand
by such Indemnified Person describing in reasonable detail the
nature of the Imposition and the basis for the demand (including
without limitation the computation of the amount payable),
accompanied by receipts or other reasonable evidence of such demand.
In the case of Impositions for which a contest is conducted pursuant
to Section 11.2(f), the Indemnity Provider shall pay such
Impositions or reimburse such Indemnified Person 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 11.2(f).
(iii) At the Indemnity Provider's request, the amount of any
indemnification payment by the Indemnity Provider pursuant to
subsection (a)
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shall be verified and certified by an independent public accounting
firm mutually acceptable to the Indemnity Provider and the
Indemnified Person. The fees and expenses of such independent public
accounting firm shall be paid by the Indemnity Provider unless such
verification shall result in an adjustment in the Indemnity
Provider's favor of fifteen percent (15%) or more of the payment as
computed by the Indemnified Person, in which case such fee shall be
paid by the Indemnified Person.
(d) The Indemnity Provider 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 Indemnity Provider under
or arising out of subsection (a) and of which the Indemnity Provider has
knowledge or should have knowledge, the Indemnity Provider, at its sole
cost and expense, shall notify the relevant Indemnified Person of such
requirement and (except if such Indemnified Person notifies the Indemnity
Provider that such Indemnified Person intends to prepare and file such
report or return) (A) to the extent required or permitted by and
consistent with Legal Requirements, make and file in the Indemnity
Provider's 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 Indemnified Person, advise such Indemnified Person of such fact
and prepare such return, statement or report for filing by such
Indemnified Person or, where such return, statement or report shall be
required to reflect items in addition to any obligations of the Indemnity
Provider under or arising out of subsection (a), provide such Indemnified
Person at the Indemnity Provider's expense with information sufficient to
permit such return, statement or report to be properly made with respect
to any obligations of the Indemnity Provider under or arising out of
subsection (a) no later than fifteen (15) days prior to the due date
thereof. Such Indemnified Person shall, upon the Indemnity Provider's
request and at the Indemnity Provider's expense, provide any data
maintained by such Indemnified Person (and not otherwise available to or
within the control of the Indemnity Provider) with respect to the Property
which the Indemnity Provider may reasonably require to prepare any
required tax returns or reports.
(e) As between the Indemnity Provider on one hand, and each
Financing Party on the other hand, the Indemnity Provider shall be
responsible for, and the Indemnity Provider shall indemnify and hold
harmless each Financing Party (without duplication of any indemnification
required by subsection (a)) on an After Tax Basis against, any obligation
for United States or foreign withholding taxes or similar levies, imposts,
charges, fees, deductions or withholdings (collectively, "Withholdings")
imposed in respect of the interest payable on the Notes or with respect to
any other payments under the Operative Agreements (all such payments being
referred to herein as "Exempt Payments" to be made without deduction,
withholding or set off) (and, if any Financing Party receives a demand for
such payment from any taxing authority or a Withholding is otherwise
required with respect to any Exempt Payment, the Indemnity Provider shall
discharge such demand on behalf of such Financing Party); provided,
however, that the obligation of the Indemnity Provider under this Section
11.2(e) shall not apply to:
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(i) Withholdings on any Exempt Payment to any Financing Party
which is a non-U.S. Person unless such Financing Party is, on the
date hereof (or on the date it becomes a Financing Party hereunder)
and on the date of any change in the principal place of business or
the lending office of such Financing Party, entitled to submit a
Form W-8BEN or Form W-8ECI or successor applicable form, certifying
in each case that such party is entitled under Section 1441 or 1442
of the Code or any other applicable provision thereof or under any
applicable tax treaty or convention to receive payments pursuant to
the Operative Agreements without deduction or withholding of United
States federal income tax and is a foreign Person thereby entitled
to an exemption from United States backup withholding taxes (except
where the failure of the exemption results from a change in the
principal place of business of the Lessee); provided, however, if a
failure of the exemption is due to a change in law after the date
hereof or in the case of a Financing Party that acquires its
interest after the date hereof, a change in law occurring after such
date, then the Indemnity Provider shall be liable for any
withholding resulting therefrom; or
(ii) Any U.S. Taxes imposed solely by reason of the failure by
a non-U.S. Person to comply with applicable certification,
information, documentation or other reporting requirements
concerning the nationality, residence, identity or connections with
the United States of America of such non-U.S. Person if such
compliance is required by statute or regulation of the United States
of America as a precondition to relief or exemption from such U.S.
Taxes if the Indemnity Provider has provided such certification,
information, documentation or other reporting requirements to the
Financing Party on a timely basis and the Financing Party is
eligible for such relief or exemption.
For the purposes of this Section 11.2(e), (A) "U.S. Person" shall mean a
citizen, national or resident of the United States of America, a
corporation, partnership or other entity created or organized in or under
any laws of the United States of America or any State thereof, or any
estate or trust that is subject to Federal income taxation regardless of
the source of its income, (B) "U.S. Taxes" shall mean any present or
future tax, assessment or other charge or levy imposed by or on behalf of
the United States of America or any taxing authority thereof or therein,
(C) "Form W-8BEN" shall mean Form W-8BEN (Certificate of Foreign Status of
Beneficial Owner for United States Withholding) of the Department of the
Treasury of the United States of America and (D) "Form W-8ECI" shall mean
Form W-8ECI (Certificate of Foreign Person's Claim for Exemption from
Withholding on Income Effectively Connected with the Conduct of a Trade or
Business in the United States) of the Department of the Treasury of the
United States of America (or in relation to either such Form such
successor and related forms as may from time to time be adopted by the
relevant taxing authorities of the United States of America to document a
claim to which such Form relates). Each of the Forms referred to in the
foregoing clauses (C) and (D) shall include such successor and related
forms as may from time to time be adopted by the relevant taxing
authorities of the United States of America to document a claim to which
such Form relates.
64
If a Financing Party or an Affiliate with whom such Financing Party
files a consolidated tax return (or equivalent) subsequently receives the
benefit in any country of a tax credit or an allowance resulting from U.S.
Taxes with respect to which it has received a payment of an additional
amount under this Section 11.2(e), such Financing Party will pay to the
Indemnity Provider such part of that benefit as in the opinion of such
Financing Party will leave it (after such payment) in a position no more
and no less favorable than it would have been in if no additional payment
had been required to be paid, provided always that (i) such Financing
Party will be the sole judge of the amount of any such benefit and of the
date on which it is received, (ii) such Financing Party will have the
absolute discretion as to the order and manner in which it employs or
claims tax credits and allowances available to it and (iii) such Financing
Party will not be obliged to disclose to the Borrower any information
regarding its tax affairs or tax computations. A subsequent loss of such
tax credit or allowance with respect to which a payment is made pursuant
to this paragraph to an Indemnity Provider shall be treated as an
Imposition that is indemnifiable under Section 11.2(a) hereof without
regard to the exclusions of Section 11.2(b)(i), (ii), and (iii) hereof.
Each non-U.S. Person that shall become a Financing Party after the
date hereof shall, upon the effectiveness of the related transfer or
otherwise upon becoming a Financing Party hereunder, be required to
provide all of the forms and statements referenced above or other
evidences of exemption from Withholdings if the Indemnity Provider has
provided such certification, information, documentation or other reporting
requirements to the Financing Party and the Financing Party is eligible
for such relief or exemption.
(f) If a written Claim is made against any Indemnified Person or if
any proceeding shall be commenced against such Indemnified Person
(including without limitation a written notice of such proceeding), for
any Impositions, the provisions in Section 11.1 relating to notification
and rights to contest shall apply; provided, however, that the Indemnity
Provider shall have the right to conduct and control such contest only if
such contest involves a Tax other than a Tax on net income of the
Indemnified Person that can be pursued independently from any other
proceeding involving a Tax liability of such Indemnified Person and the
Indemnity Provider agrees to pay to such Indemnified Person on demand the
Impositions which are the subject of such claim to the extent the contest
is unsuccessful. The controlling party shall provide the non-controlling
party with a copy of (or appropriate excerpts from) any reports or claims
issued by the relevant auditing agents or taxing authority to the
controlling party thereof, in connection with such claim or the contest
thereof.
(g) The parties agree that any party to this Participation Agreement
(and each employee, representative, or other agent of such party) may
disclose the tax aspects of the transactions contemplated by this
Participation Agreement and the structural aspects of these transactions
as they relate to such tax aspects without limitation of any kind on such
disclosure.
65
11.3. Increased Costs, Illegality, etc.
(a) If, due to either (i) the introduction of or any change in or in
the interpretation of any law or regulation (but excluding any
introduction of or change in any law or regulation that has the sole
effect of increasing reportable income or the income tax rate or reducing
income tax deductions of a Financing Party) or (ii) the compliance with
any guideline or request hereafter adopted, promulgated or made by any
central bank or other Governmental Authority (whether or not having the
force of law), there shall be any increase in the cost to any Financing
Party of agreeing to make or making, funding or maintaining Advances, then
the Lessee shall from time to time, upon demand by such Financing Party
(with a copy of such demand to the Agent but, in the case of any Tranche B
Lender or Cash Collateral Lender, subject to the terms of Section 2.11 of
the Tranche B Credit Agreement or Section 2.11 of the Cash Collateral
Credit Agreement, as the case may be), pay to the Agent for the account of
such Financing Party additional amounts sufficient to compensate such
Financing Party for such increased cost on an After Tax Basis. A
certificate as to the amount of such increased cost, submitted to the
Lessee and the Agent by such Financing Party, shall be conclusive and
binding for all purposes, absent manifest error.
(b) If any Financing Party determines that compliance with any law
or regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law, but in
each case promulgated or made after the date hereof) affects or would
affect the amount of capital required or expected to be maintained by such
Financing Party or any corporation controlling such Financing Party and
that the amount of such capital is increased by or based upon the
existence of such Financing Party's commitment to make Advances or upon
the Advances, then, upon demand by such Financing Party (with a copy of
such demand to the Agent but, in the case of any Tranche B Lender or Cash
Collateral Lender, subject to the terms of Section 2.11 of the Tranche B
Credit Agreement or Section 2.11 of the Cash Collateral Credit Agreement,
as the case may be), the Lessee shall pay to the Agent for the account of
such Financing Party, from time to time as specified by such Financing
Party, additional amounts sufficient to compensate such Financing Party or
such corporation on an After Tax Basis in the light of such circumstances,
to the extent that such Financing Party reasonably determines such
increase in capital to be allocable to the existence of such Financing
Party's commitment to make such Advances. A certificate as to such amounts
submitted to the Lessee and the Agent by such Financing Party shall be
conclusive and binding for all purposes, absent manifest error.
(c) [Reserved].
(d) Without affecting its rights under Sections 11.3(a) or 11.3(b)
or any other provision of any Operative Agreement, each Financing Party
agrees that if there is any increase in any cost to or reduction in any
amount receivable by such Financing Party with respect to which the Lessee
would be obligated to compensate such Financing Party pursuant to Sections
11.3(a) or 11.3(b), such Financing Party shall use reasonable efforts to
select an alternative office for Advances which would not result in any
such increase in
66
any cost to or reduction in any amount receivable by such Financing Party;
provided, however, that no Financing Party shall be obligated to select an
alternative office for Advances if such Financing Party determines that
(i) as a result of such selection such Financing Party would be in
violation of any applicable law, regulation, treaty, or guideline, or
would incur additional costs or expenses or (ii) such selection would be
inadvisable for regulatory reasons or materially inconsistent with the
interests of such Financing Party.
(e) With reference to the obligations of the Lessee set forth in
Sections 11.3(a) through 11.3(d), the Lessee shall not have any obligation
to pay to any Financing Party amounts owing under such Sections for any
period which is more than one (1) year prior to the date upon which the
request for payment therefor is delivered to the Lessee.
(f) Notwithstanding any other provision of this Agreement, if any
Tranche B Lender or Cash Collateral Lender shall notify the Agent and the
Agent shall notify the Borrower and the Lessee that the introduction of or
any change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that
it is unlawful, for any Tranche B Lender or Cash Collateral Lender to
perform its obligations hereunder and under the other Operative Agreements
to make or maintain Eurodollar Loans then (i) each Eurodollar Loan will
automatically, at the earlier of the end of the Interest Period for such
Eurodollar Loan or the date required by law, convert into an ABR Loan and
(ii) the obligation of such Tranche B Lender or Cash Collateral Lender to
make, convert or continue Eurodollar Loans shall be suspended until the
Agent shall notify the Lessee that such Tranche B Lender or Cash
Collateral Lender has determined that the circumstances causing such
suspension no longer exist.
11.4. Funding/Contribution Indemnity.
Subject to the provisions of Section 2.11(a) of the Tranche B Credit
Agreement and Section 2.11(a) of the Cash Collateral Credit Agreement, as
applicable, the Lessee agrees to indemnify each Tranche B Lender and Cash
Collateral Lender and to hold each Tranche B Lender and Cash Collateral Lender
harmless from any loss or reasonable expense which such Tranche B Lender or Cash
Collateral Lender may sustain or incur as a consequence of (a) any default by
the Construction Agent in connection with the drawing of funds for any Advance,
(b) any default in making any prepayment after a notice thereof has been given
in accordance with the provisions of the Operative Agreements or (c) the making
of a voluntary or involuntary payment of Eurodollar Loans on a day which is not
the last day of an Interest Period with respect thereto. The Lessee agrees to
indemnify each Tranche A Note Purchaser and to hold each Tranche A Note
Purchaser harmless from any loss or reasonable expense which such Tranche A Note
Purchaser may sustain or incur as a consequence of the making of a voluntary or
involuntary payment of any Tranche A Note on a day which is not the Maturity
Date. Such indemnification shall be (I) respecting Tranche B Loans and Cash
Collateral Loans, in an amount equal to the excess, if any, of (x) the amount of
interest which would have accrued on the amount so paid, or not so borrowed,
accepted, converted or continued for the period from the date of such payment or
of such failure to borrow, accept, convert or continue to the last day of such
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Interest Period (or, in the case of a failure to borrow, accept, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable Eurodollar Rate plus the Applicable
Percentage for such Loan for such Interest Period over (y) the amount of
interest (as determined by such Financing Party in its reasonable discretion)
which would have accrued to such Financing Party on such amount by reemploying
such funds in loans of the same type and amount during the period from the date
of payment or failure to borrow to the last day of the then applicable Interest
Period (or, in the case of a failure to borrow, the Interest Period that would
have commenced on the date of such failure) and (II) respecting the Tranche A
Notes, the Make-Whole Amount. This covenant shall survive the termination of the
Operative Agreements and the payment of all other amounts payable hereunder.
11.5. EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE, STRICT LIABILITY,
ETC.
WITHOUT LIMITING THE GENERALITY OF THE INDEMNIFICATION PROVISIONS OF ANY
AND ALL OF THE OPERATIVE AGREEMENTS AND TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH PERSON PROVIDING INDEMNIFICATION OF ANOTHER PERSON UNDER ANY OPERATIVE
AGREEMENT HEREBY FURTHER EXPRESSLY RELEASES EACH BENEFICIARY OF ANY SUCH
INDEMNIFICATION FROM ALL CLAIMS FOR LOSS OR DAMAGE, DESCRIBED IN ANY OPERATIVE
AGREEMENT, CAUSED BY ANY ACT OR OMISSION ON THE PART OF ANY SUCH BENEFICIARY
ATTRIBUTABLE TO THE ORDINARY NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OR STRICT
LIABILITY OF ANY SUCH BENEFICIARY, AND INDEMNIFIES, EXONERATES AND HOLDS EACH
SUCH BENEFICIARY FREE AND HARMLESS FROM AND AGAINST ANY AND ALL ACTIONS, CAUSES
OF ACTION, SUITS, CLAIMS, LOSSES, COSTS, LIABILITIES, DAMAGES AND EXPENSES
(INCLUDING WITHOUT LIMITATION REASONABLE ATTORNEY'S FEES AND EXPENSES),
DESCRIBED ABOVE, INCURRED BY ANY SUCH BENEFICIARY (IRRESPECTIVE OF WHETHER ANY
SUCH BENEFICIARY IS A PARTY TO THE ACTION FOR WHICH INDEMNIFICATION UNDER THIS
AGREEMENT OR ANY OTHER OPERATIVE AGREEMENT IS SOUGHT) ATTRIBUTABLE TO THE
ORDINARY NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OR STRICT LIABILITY OF ANY
SUCH BENEFICIARY.
11.6. Additional Provisions Regarding Environmental Indemnification.
Without limiting the generality of Section 11.1, each and every
Indemnified Person shall at all times have the rights and benefits, and the
Indemnity Provider shall have the obligations, in each case provided pursuant to
the Operative Agreements with respect to environmental matters, violations of
any Environmental Law, any Environmental Claim, the Existing Environmental
Matters or other loss of or damage to any property or the environment relating
to the Property, the Lease, the Agency Agreement or the Indemnity Provider
(including without limitation the rights and benefits provided pursuant to
Section 11.1(c)).
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11.7. Indemnity Prior to Completion Date.
Notwithstanding the provisions of Sections 11.1, 11.2, 11.3, 11.4, 11.5
and 11.6 (other than with respect to matters concerning indemnification for
environmental conditions existing on or before the Closing Date, including
without limitation the Existing Environmental Matters) and any other indemnity
obligations of the Indemnity Provider under the Operative Agreements, (a) the
Lessor shall be the only beneficiary of the provisions set forth in Sections
11.1, 11.2, 11.3, 11.4, 11.5 and 11.6 (again, subject to the immediately
preceding parenthetical phrase) and any other indemnity obligations of the
Indemnity Provider under the Operative Agreements with respect to any Claim
arising thereunder solely for the period prior to the Completion Date related to
the Property, and (b) such limited rights of indemnification referenced in
Section 11.7(a) (to the extent relating to third-party claims) shall be limited
to third-party claims caused by or resulting from the Indemnity Provider's acts
or omissions and/or all other Persons acting by, through or under the Indemnity
Provider (including, without limitation, contractors, subcontractors and other
Persons contracted or controlled by the Construction Agent). After the
Completion Date for the Property, each Indemnified Person shall be a beneficiary
of the provisions set forth in Sections 11.1 through 11.6.
To the extent the Indemnity Provider is not obligated to indemnify any
Indemnified Person with respect to Claims arising under Sections 11.1, 11.2,
11.3, 11.4, 11.5 or 11.6 and any other indemnity obligations of the Indemnity
Provider under the Operative Agreements prior to the Completion Date, the Lessor
shall provide such indemnities in favor of such Indemnified Person in accordance
with the relevant provisions of Sections 11.1, 11.2, 11.3, 11.4, 11.5 or 11.6
and any other indemnity obligations of the Indemnity Provider under the
Operative Agreements as the case may be. It is acknowledged and agreed that any
amount for which the Lessor becomes obligated to any Indemnified Person pursuant
hereto shall become a Claim for which the Lessor is entitled to indemnity from
the Indemnity Provider pursuant to and subject to the limitations set forth in
subpart (b) of the first sentence of the preceding paragraph.
THE INDEMNITY OBLIGATIONS UNDERTAKEN BY THE LESSOR PURSUANT TO THIS
SECTION 11.7 ARE IN ALL RESPECTS SUBJECT TO THE LIMITATIONS ON LIABILITY
REFERENCED IN SECTION 12.9.
SECTION 12. MISCELLANEOUS.
12.1. Survival of Agreements.
The representations, warranties, covenants, indemnities and agreements of
the parties provided for in the Operative Agreements, and the parties'
obligations under any and all thereof, shall survive the execution and delivery
of this Agreement, the transfer of the Property to the Lessor, the acquisition
of the Property (or any of its components), the construction of any
Improvements, the Completion of the Property, any disposition of any interest of
the Lessor in the Property, the payment of the Notes 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
69
Agreements. Except as otherwise expressly set forth herein or in other Operative
Agreements, the indemnities of the parties provided for in the Operative
Agreements shall survive the expiration or termination of any thereof with
respect to matters occurring prior to such expiration or termination.
12.2. Notices.
All notices required or permitted to be given under any Operative
Agreement shall be in writing. Notices may be served by certified or registered
mail, postage paid with return receipt requested; by private courier, prepaid;
by telex, facsimile, or other telecommunication device capable of transmitting
or creating a written record; or personally. Notices sent by mail or courier
shall be deemed delivered when delivered as addressed, or if the addressee
refuses delivery, when presented for delivery notwithstanding such refusal.
Telex or telecommunicated notices shall be deemed delivered when receipt is
acknowledged by the addressee or its office. Personal delivery shall be
effective when accomplished. Unless a party changes its address by giving notice
to the other party as provided herein, notices shall be delivered to the parties
at the following addresses:
If to the Construction Agent or the Lessee, to such entity at the
following address:
Toys "R" Us, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Borrower or the Lessor, to such entity at the following address:
First Union Development Corporation
c/o First Union Securities, Inc.
One First Union Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Van ▇. ▇▇▇▇▇, Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
70
If to the Agent, to it at the following address:
First Union National Bank
c/o First Union Securities, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Van ▇. ▇▇▇▇▇, Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Escrow Agent, to it at the following address:
First Union National Bank
Corporate Trust
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ or
(▇▇▇) ▇▇▇-▇▇▇▇
If to any Primary Financing Party, to it at the address set forth
for such Primary Financing Party in Exhibit A to the Note Purchase
Agreement or in Schedule 2.1 of the Tranche B Credit Agreement or in
Schedule 2.1 of the Cash Collateral Credit Agreement, as applicable.
From time to time any party may designate additional parties and/or
another address for notice purposes by notice to each of the other parties
hereto. Each notice hereunder shall be effective upon receipt or refusal
thereof.
12.3. Counterparts.
This 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 (1) and the same
instrument.
12.4. Terminations, Amendments, Waivers, Etc.
Each Operative Agreement may be terminated, amended, supplemented, waived
or modified only by an instrument in writing signed by the Agent (as directed by
the Secured Parties in accordance with the terms of the Intercreditor
Agreement), the Lessor and the Lessee (to the extent the Lessee is a party to
such Operative Agreement); provided, to the extent no Lease Default under
Sections 17.1(a), (b), (g), (h) or (j) of the Lease or Lease Event of Default
shall have occurred and be continuing, the Agent and the Lessor shall not amend,
supplement, waive or modify any provision of any Operative Agreement which is
binding on the Lessee or
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the Property in such a manner as to adversely affect the rights of the Lessee
without the prior written consent (not to be unreasonably withheld or delayed)
of the Lessee.
12.5. Headings, etc.
The Table of Contents and headings of the various Articles and 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.
12.6. Parties in Interest.
Except as expressly provided herein, none of the provisions of this
Agreement are intended for the benefit of any Person except the parties hereto.
12.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL;
VENUE.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW), EXCEPT TO
THE EXTENT THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED ARE
REQUIRED TO APPLY. Any legal action or proceeding with respect to this
Agreement or any other Operative Agreement may be brought in the courts of
the State of New York or of the United States for the Southern District of
New York, and, by execution and delivery of this Agreement, each of the
parties to this Agreement hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the nonexclusive
jurisdiction of such courts. Each of the parties to this Agreement further
irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to it at
the address set out for notices pursuant to Section 12.2, such service to
become effective upon receipt or rejection. Nothing herein shall affect
the right of any party to serve process in any other manner permitted by
Law.
(b) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO
THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVES TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO ANY DISPUTE OR THIS AGREEMENT, ANY
OTHER OPERATIVE AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
(c) Each of the parties to this Agreement hereby irrevocably waives
any objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Agreement or any other Operative Agreement brought in
the courts referred to in subsection (a) above and hereby further
irrevocably waives and agrees not to plead or claim in any such court
72
that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
Subject to the other applicable provisions of the Operative Agreements,
the parties shall have the right to proceed in any court of proper jurisdiction
or by self-help to exercise or prosecute the following remedies, as applicable:
(i) all rights to foreclose against any real or personal property or other
security by exercising a power of sale or under applicable law by judicial
foreclosure including a proceeding to confirm the sale; (ii) all rights of
self-help including peaceful occupation of real property and collection of
rents, set-off and peaceful possession of personal property; and (iii) obtaining
provisional or ancillary remedies including injunctive relief, sequestration,
garnishment, attachment, appointment of receiver and filing an involuntary
bankruptcy proceedings. Any claim or controversy with regard to any party's
entitlement to such remedies is a Dispute.
Each party to this Agreement agrees that it shall not have a remedy of
punitive or exemplary damages against any other party in any Dispute and hereby
waives any right or claim to punitive or exemplary damages it has now or which
may arise in the future in connection with any Dispute.
12.8. Severability.
Any provision of this 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.
12.9. Liability Limited.
(a) [Reserved].
(b) Anything to the contrary contained in this Agreement, the
Tranche B Credit Agreement, the Cash Collateral Credit Agreement, the Note
Purchase Agreement, the Notes or in any other Operative Agreement
notwithstanding, no Exculpated Person shall be personally liable in any
respect for any liability or obligation arising hereunder or in any other
Operative Agreement including without limitation the payment of the
principal of, or interest on, the Notes, or for monetary damages for the
breach of performance of any of the covenants contained in the Tranche B
Credit Agreement, the Cash Collateral Credit Agreement, the Note Purchase
Agreement, the Notes, this Agreement, the Security Agreement or any of the
other Operative Agreements. The Primary Financing Parties and the Agent
agree that, in the event any remedies under any Operative Agreement are
pursued, neither the Primary Financing Parties nor the Agent shall have
any recourse against any Exculpated Person, for any deficiency, loss or
Claim for monetary damages or otherwise resulting therefrom and recourse
shall be had solely and exclusively against the Borrower's Interest
(excluding Excepted Payments) and the Lessee (with respect to the Lessee's
obligations under the Operative Agreements); but
73
nothing contained herein shall be taken to prevent recourse against or the
enforcement of remedies against the Borrower's Interest (excluding
Excepted Payments) in respect of any and all liabilities, obligations and
undertakings contained herein and/or in any other Operative Agreement.
Notwithstanding the provisions of this Section, nothing in any Operative
Agreement shall: (i) constitute a waiver, release or discharge of any
indebtedness or obligation evidenced by the Notes arising under any
Operative Agreement or secured by any Operative Agreement, but the same
shall continue until paid or discharged; (ii) relieve any Exculpated
Person from liability and responsibility for (but only to the extent of
the damages arising by reason of): active waste knowingly committed by any
Exculpated Person with respect to the Property, any fraud, gross
negligence or willful misconduct on the part of any Exculpated Person;
(iii) relieve any Exculpated Person from liability and responsibility for
(but only to the extent of the moneys misappropriated, misapplied or not
turned over) (A) except for Excepted Payments, misappropriation or
misapplication by the Lessor (i.e., application in a manner contrary to
any of the Operative Agreements) of any insurance proceeds or condemnation
award paid or delivered to the Lessor by any Person other than the Agent,
(B) except for Excepted Payments, any deposits or any escrows or amounts
owed by the Construction Agent under the Agency Agreement held by the
Lessor or (C) except for Excepted Payments, any rent or other income or
funds received by the Lessor from the Lessee that is not turned over to
the Agent; (iv) affect or in any way limit the Agent's rights and remedies
under any Operative Agreement with respect to the Rents and rights and
powers of the Agent under the Operative Agreements or to obtain a judgment
against the Lessee's interest in the Property pursuant to the terms of the
Operative Agreements or the Agent's rights and powers to obtain a judgment
against the Lessor or the Lessee; or (v) relieve any Exculpated Person
from liability and responsibility (A) with respect to such Person's
obligations concerning Lessor Liens pursuant to Section 8.2(a) and the
last sentence of Section 8.9(a) hereof or (B) to the extent such liability
or responsibility is attributable to any representation or warranty of any
Exculpated Person contained in Section 6.1 hereof that was false or
inaccurate in any material way when made (provided, that no deficiency
judgment or other money judgment shall be enforced against any Exculpated
Person except to the extent of the Lessor's interest in the Borrower's
Interest (excluding Excepted Payments) or to the extent the Lessor may be
liable as otherwise contemplated in clauses (ii), (iii) or (v) of this
Section 12.9(b)).
12.10. Rights of the Lessee.
If at any time all obligations (i) of the Borrower under the Tranche B
Credit Agreement, the Cash Collateral Credit Agreement, the Note Purchase
Agreement, the Notes, the Security Documents and the other Operative Agreements
and (ii) of the Lessee under the Operative Agreements have in each case been
satisfied or discharged in full, then the Lessee shall be entitled to (a)
terminate the Lease and (b) receive all amounts then held under the Operative
Agreements and all proceeds with respect to the Property. Upon the termination
of the Lease pursuant to the foregoing clause (a), the Lessor shall transfer to
the Lessee or its designee all of its right, title and interest free and clear
of the Lien of the Lease, the Lien of the Security Documents and all other
Operative Agreements and all Lessor Liens in and to the Property and
74
any amounts or proceeds referred to in the foregoing clause (b) shall be paid
over to the Lessee or its designee.
12.11. 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 this Participation Agreement, the other Operative Agreements and the
transactions contemplated hereby and thereby (including without limitation the
preparation, execution and filing of any and all Uniform Commercial Code
financing statements, filings of Mortgage Instruments 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 without limitation 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 Agreement. In addition, in connection with the sale or other
disposition of the Property or any portion thereof, the Lessee agrees to execute
such instruments of conveyance as reasonably required pursuant to the Operative
Agreements in connection therewith.
12.12. Calculations under Operative Agreements.
The parties hereto agree that all calculations and numerical
determinations to be made under the Operative Agreements by the Lessor shall be
made by the Agent and that such calculations and determinations shall be
conclusive and binding on the parties hereto in the absence of manifest error.
12.13. Confidentiality.
Each Financing Party severally agrees to keep confidential all non-public
information pertaining to the Lessee or any of its Subsidiaries which is
provided to it by the Lessee or any of its Subsidiaries and which an officer of
the Lessee or any of its Subsidiaries has requested in writing be kept
confidential, and shall not intentionally disclose such information to any
Person except:
(a) to the extent such information is public when received by such
Person or becomes public thereafter due to the act or omission of any
party other than such Person;
(b) to the extent such information is lawfully and independently
obtained from a source other than the Lessee or any of its Subsidiaries
and such information from such source is not, to such Person's knowledge,
subject to an obligation of confidentiality or, if such information is
subject to an obligation of confidentiality, that disclosure of such
information is permitted;
75
(c) to counsel, auditors or accountants retained by any such Person
or any Affiliates of any such Person (if such Affiliates are permitted to
receive such information pursuant to clause (f) or (g) below), provided
they agree to keep such information confidential as if such Person or
Affiliate were party to this Agreement and to financial institution
regulators, including examiners of any Financing Party or any Affiliate
thereof in the course of examinations of such Persons;
(d) in connection with any litigation or the enforcement or
preservation of the rights of any Financing Party under the Operative
Agreements;
(e) to the extent required by any applicable statute, rule or
regulation or court order (including without limitation, by way of
subpoena) or pursuant to the request of any regulatory or Governmental
Authority having jurisdiction over any such Person (including, but not
limited to, the National Association of Insurance Commissioners);
provided, however, that such Person shall endeavor (if not otherwise
prohibited by Law) to notify the Lessee prior to any disclosure made
pursuant to this clause (e), except that no such Person shall be subject
to any liability whatsoever for any failure to so notify the Lessee;
(f) any Financing Party may disclose such information to another
Financing Party or to any Affiliate of a Financing Party that is a direct
or indirect owner of any Financing Party (provided, in each case that such
Affiliate has agreed to maintain confidentiality as if it were such
Financing Party);
(g) any Financing Party may disclose such information to an
Affiliate of any Financing Party to the extent required in connection with
the transactions contemplated hereby or to the extent such Affiliate is
involved in, or provides advice or assistance to such Person with respect
to, such transactions (provided, in each case that such Affiliate has
agreed to maintain confidentiality as if it were such Financing Party);
(h) in connection with any proposed or actual assignment or grant of
a participation by any of the Primary Financing Parties of interests in
the Note Purchase Agreement, the Tranche B Credit Agreement, the Cash
Collateral Credit Agreement or any Note to such other financial
institution (who shall in turn agree in writing to maintain
confidentiality as if it were a Primary Financing Party originally party
to this Agreement); or
(i) any Financing Party may disclose the Operative Agreements to any
Rating Agency requesting the same.
Subject to the terms of Sections 12.13(a)-12.13(i), under the terms of any
one or more of which circumstances disclosure shall be permitted, each Financing
Party severally agrees to keep confidential all non-public information
pertaining to the financing structure described in the unrecorded Operative
Agreements. Any Person required to maintain the confidentiality of information
as provided in this Section 12.13 shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the
76
confidentiality of such information as such Person would accord to its own
confidential information.
12.14. Financial Reporting/Tax Characterization.
Lessee agrees to obtain advice from its own accountants and tax counsel
regarding the financial reporting treatment and the tax characterization of the
transactions described in the Operative Agreements. Lessee further agrees that
Lessee shall not rely upon any statement of any Financing Party or any of their
respective Affiliates and/or Subsidiaries regarding any such financial reporting
treatment and/or tax characterization. The transactions described in the
Operative Agreements are intended to comply fully with the requirements of FAS
13, FAS 98, EITF 90-15, EITF 96-21, EITF 97-1 and EITF 97-10.
12.15. Set-off.
In addition to any rights now or hereafter granted under applicable Law
and not by way of limitation of any such rights, after the occurrence of any
Lease Event of Default and during the continuance thereof, the Primary Financing
Parties, the Lessor and any assignee of a Primary Financing Party or the Lessor
in accordance with the applicable provisions of the Operative Agreements are
hereby authorized by the Lessee at any time or from time to time, without notice
to the Lessee or to any other Person, any such notice being hereby expressly
waived, to set-off and to appropriate and to apply any and all deposits (general
or special, time or demand, including without limitation indebtedness evidenced
by certificates of deposit, whether matured or unmatured) and any other
indebtedness at any time held or owing by the Primary Financing Parties, the
Lessor, their respective Affiliates or any assignee or participant of a Primary
Financing Party in accordance with the applicable provisions of the Operative
Agreements to or for the credit or the account of the Lessee against and on
account of the obligations of the Lessee under the Operative Agreements
irrespective of whether or not (a) the Primary Financing Parties or the Lessor
shall have made any demand under any Operative Agreement or (b) the Agent shall
have declared any or all of the obligations of the Lessee under the Operative
Agreements to be due and payable and although such obligations shall be
contingent or unmatured. Notwithstanding the foregoing, neither the Agent nor
any other Financing Party shall exercise, or attempt to exercise, any right of
setoff, banker's lien, or the like, against any deposit account or property of
the Lessee held by the Agent or any other Financing Party, without the prior
written consent of the Agent (acting upon the direction of the Secured Parties
in accordance with the Intercreditor Agreement), and any Financing Party
violating this provision shall indemnify the Agent and the other Financing
Parties from any and all costs, expenses, liabilities and damages resulting
therefrom. The contractual restriction on the exercise of setoff rights provided
in the foregoing sentence is solely for the benefit of the Agent and the
Financing Parties and may not be enforced by the Lessee.
[signature pages follow]
77
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.
CONSTRUCTION AGENT
AND LESSEE: TOYS "R" US, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: SR. VICE PRESIDENT-TREASURER
-------------------------------
[signature pages continue]
BORROWER AND LESSOR: FIRST UNION DEVELOPMENT CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
--------------------------------
Title: VICE PRESIDENT
-------------------------------
[signature pages continue]
THE AGENT AND
TRANCHE B LENDERS: FIRST UNION NATIONAL BANK,
as a Tranche B Lender and as the Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
--------------------------------
Title: VICE PRESIDENT
-------------------------------
[signature pages continue]
ESCROW AGENT: FIRST UNION NATIONAL BANK,
as the Escrow Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
--------------------------------
Title: VICE PRESIDENT
-------------------------------
[signature pages continue]
TRANCHE A NOTE PURCHASERS: ALLSTATE LIFE INSURANCE COMPANY,
as a Tranche A Note Purchaser
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title:
-------------------------------
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title:
-------------------------------
Authorized Signatories
[signature pages continue]
EQUITRUST LIFE INSURANCE COMPANY,
as a Tranche A Note Purchaser
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Title: Fixed Income-Vice President
-------------------------------
[signature pages continue]
FARM BUREAU LIFE INSURANCE COMPANY,
as a Tranche A Note Purchaser
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Title: Fixed Income-Vice President
-------------------------------
[signature pages continue]
FARM BUREAU MUTUAL INSURANCE COMPANY,
as a Tranche A Note Purchaser
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Title: Fixed Income-Vice President
-------------------------------
[signature pages continue]
FIRST UNION SECURITIES, INC.,
as a Tranche A Note Purchaser
By: /s/ [ILLEGIBLE]
----------------------------------
Name: [ILLEGIBLE]
--------------------------------
Title: Director
-------------------------------
[signature pages continue]
HARBOURVIEW CDO III, LIMITED,
as a Tranche A Note Purchaser
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: Sr. Vice President
-------------------------------
[signature pages continue]
STATE OF WISCONSIN INVESTMENT BOARD,
as a Tranche A Note Purchaser
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Title: Portfolio Manager
-------------------------------
[signature pages continue]
CASH COLLATERAL LENDERS: FIRST UNION NATIONAL BANK,
as a Cash Collateral Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
--------------------------------
Title: VICE PRESIDENT
-------------------------------
[signature pages end]
Schedule 5.11
[Form of Officer's Certificate]
I, ______________________, _____________________ of TOYS "R" US. INC. (the
"Lessee") hereby certify that, to the best of my knowledge and belief, with
respect to that certain Participation Agreement dated as of September 26, 2001
(as amended, modified, restated or supplemented from time to time, the
"Participation Agreement"; all of the defined terms in the Participation
Agreement are incorporated herein by reference) among the Lessee, the Lessor,
the Tranche A Note Purchasers, the Tranche B Lenders, the Cash Collateral
Lenders, the Agent and the Escrow Agent:
a. The copies of the investment account statements which accompany this
Officer's Certificate are true and correct copies of the investment
account statements relating to the Cash Collateral Account received
by the Lessee from the Intermediary covering the monthly period
beginning on _____________, 200__ and ending on __________, 200__;
b. Since ___________ (the date of the last similar certification, or,
if none, the Closing Date) no Lease Default or Lease Event of
Default has occurred; and
Delivered herewith are detailed calculations demonstrating compliance by
the Lessee with the provisions of Section 5.11 of the Participation Agreement as
of the end of the period referred to above.
This ______ day of ___________, ______.
TOYS "R" US, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Attachment to Officer's Certificate
Calculations Demonstrating Compliance with Section 5.11
of the Participation Agreement
(Attach copies of Cash Collateral Account Statements)
Schedule 8.3B.2
Existing Subsidiary Indebtedness
I. Capitalized Lease Obligations of Toys "R" Us (Canada) Ltd. in an aggregate
amount of US$2,020,206.
II. Capitalized Lease Obligations of Toys "R" Us S. A. R. L. in an aggregate
amount of US$2,088,186.
III. Industrial Revenue Bonds of TRU of Puerto Rico, due 2005, in an aggregate
principal amount of US$20,000,000 (guaranteed by Toys "R" Us, Inc.).
IV. Industrial Revenue Bonds of Toys "R" Us-Nytex, due 2014, in an aggregate
principal amount of US$2,500,000 (guaranteed by Toys "R" Us, Inc.).
V. Industrial Revenue Bonds of Toys "R" Us-Penn, Inc., due 2014, in an
aggregate principal amount of US$1,120,000 (guaranteed by Toys "R" Us,
Inc.)
VI. Indebtedness of Toys "R" Us-Service, Inc. and ▇▇▇▇▇▇▇▇ International,
Inc., as Joint Obligors, under the Limited Recourse Yen Receivables
Financing due 2005 in an aggregate amount of US$120,095,475.
VII. Guarantee by Toys "R" Us-Delaware, Inc. of the obligations of Toys "R" Us,
Inc. under the CHF406,006,562.50 Letter of Credit and Reimbursement
Facility agented by Citibank, N.A. (due 2004)
VIII. Uncommitted Lines of Credit:
A. One or more Canadian Subsidiaries of Toys "R" Us, Inc. with Canadian
Imperial Bank of Commerce in a maximum aggregate principal amount of
CAD$20,000,000.
B. One or more UK Subsidiaries of Toys "R" Us, Inc. with Barclays Bank
in a maximum aggregate principal amount of GBP5,000,000.
C. One or more German Subsidiaries of Toys "R" Us, Inc. with ComerzBank
in a maximum aggregate principal amount of DEM30,000,000.
D. One or more French Subsidiaries of Toys "R" Us, Inc. with Societe
Generale in a maximum aggregate principal amount of FRF70,000,000.
E. One or more French Subsidiaries of Toys "R" Us, Inc. with Credit
Lyonnais in a maximum aggregate principal amount of FRF70,000,000.
F. One or more Australian Subsidiaries of Toys "R" Us, Inc. with
Commonwealth Bank in a maximum aggregate principal amount of
AUD$15,000,000.
Schedule 8.3B.3
Existing Liens
I. Liens created on certain royalties, service payments and other payment
receivables (and proceeds thereof) of Toys "R" Us-Service, Inc. and
▇▇▇▇▇▇▇▇ International, Inc., arising in connection with the Limited
Recourse Yen Receivables Financing referred to in Item VI of Schedule
8.3B.2.
II. Liens on equipment and related assets arising in connection with Capital
Lease Obligations referred to in Items I and II of Schedule 8.3B.2.
III. Liens arising in connection with various Capital Lease Obligations of Toys
"R" Us, Inc., in an aggregate amount of $24,192,542 (of which $21,193,333
is comprised of capitalized leases of cash registers with ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇).
IV. Liens arising under mortgages of real property of Toys "R" Us, Inc.,
located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇.
V. Liens arising in connection with the Industrial Revenue Bonds of various
subsidiaries of Toys "R" Us, Inc. referred to in Items III, IV and V of
Schedule 8.3B.2.
VI. Cash of approximately GBP40,000,000 on deposit with The Chase Manhattan
Bank, as Investment Manager, for defeasance of the remaining
Stepped-Coupon Bonds due 2017.
EXHIBIT A
REQUISITION FORM
(Pursuant to Sections 4.2, 5.2, 5.3 and 5.4 of the Participation Agreement)
TOYS "R" US, INC., a Delaware corporation (the "Company" or the
"Construction Agent") hereby certifies as true and correct and delivers the
following Requisition to FIRST UNION NATIONAL BANK, as the agent for the Primary
Financing Parties (hereinafter defined) and respecting the Security Documents,
as the agent for the Secured Parties (the "Agent"):
Reference is made herein to that certain Participation Agreement dated as
of September 26, 2001 (as amended, modified, extended, supplemented, restated
and/or replaced from time to time, the "Participation Agreement") among the
Company, in its capacity as the Lessee and as the Construction Agent, First
Union Development Corporation, as the lessor (the "Lessor"), the various
financial institutions and other institutional investors which are parties
thereto from time to time as purchasers of Tranche A Notes (the "Tranche A Note
Purchasers"), the various banks and other lending institutions which are parties
thereto from time to time as lenders under the Tranche B Credit Agreement (the
"Tranche B Lenders"), the various banks and other lending institutions which are
parties thereto from time to time as lenders under the Cash Collateral Credit
Agreement (the "Cash Collateral Lenders") (the Tranche A Note Purchasers, the
Tranche B Lenders and the Cash Collateral Lenders may be referred to
collectively as the "Primary Financing Parties"), the Agent and First Union
National Bank, as the Escrow Agent (the "Escrow Agent"). Capitalized terms used
herein but not otherwise defined herein shall have the meanings set forth
therefor in the Participation Agreement.
Check one:
____ CLOSING DATE: _________________
(three (3) Business Days prior notice required for Advance)
____ CONSTRUCTION ADVANCE DATE:_____________
(three (3) Business Days prior notice required for Advance)
1. Transaction Expenses and other fees, expenses and disbursements under
Sections 7.1(a) or 7.1(b) of the Participation Agreement and any and all
other amounts contemplated to be financed under the Participation
Agreement including without limitation any Work, broker's fees, taxes,
recording fees and the like: See attached Schedule 1.
2. Description of Land (which shall be a legal description of the Land
subject to the Lease): See attached Schedule 2.
3. Description of Equipment: See attached Schedule 3.
A-1
4. Construction Budget (which shall include, without limitation, line items
for capitalized interest and Transaction Expenses): See attached Schedule
4.
5. Aggregate Loans and disbursements from the Escrow Account requested since
the Closing Date with respect to the Property, including without
limitation all amounts requested under this Requisition:
[Amount of Cash Collateral Loan Request: [$______________]
(Closing Date Only)]
Amount Drawn Prior to Current Requisition: $______________ (a)
Current Draw for Project Costs: $______________ (b)
A-Note Interest on Escrow Principal (Fixed): $______________ (c)
Calculation of Non-GAAP Expense for Current Period:
A-Note Interest on Drawn Balance $______________ (d)
A-Note Interest on Undrawn Balance $______________ (e)
Less Returns on Reinvested Funds $______________ (f)
Tranche A Non-GAAP Interest Expense (e-f) $______________ (g)
Other Non-GAAP Expenses (itemize) $______________ (h)
Total Non-GAAP Expenses (g + h) $______________ (i)
B-Loan Interest for Current Period $______________ (j)
Cash Collateral Loan Interest for Current Period $______________ (k)
Calculation of A-Note Request = 74.84% (b+d+j+k)
Calculation of B-Loan Request = 25.16% (b+d+j+k) + i
In connection with this Requisition, the Company hereby requests that [the
Cash Collateral Lenders make Cash Collateral Loans to the Lessor in the amount
of $___________], the Tranche B Lenders make Loans to the Lessor in the amount
of $______________ and that the Agent disburse Tranche A Proceeds from the
Escrow Account in the amount of $________________. The Company hereby certifies
(i) that the foregoing amounts requested do not exceed the total aggregate of
the Available Tranche B Lender Commitments [plus the Cash Collateral
Commitments] plus Tranche A Proceeds currently on deposit in the Escrow Account
and (ii) each of the provisions of the Participation Agreement applicable to the
Tranche B Loans [, the Cash Collateral Loans] and disbursements of Tranche A
Proceeds from the Escrow Account requested hereunder have been complied with as
of the date of this Requisition.
The Company requests the Tranche B Loans be allocated as follows:
$______________ ABR Loans
$______________ Eurodollar Loans
A-2
[The Company requests the Cash Collateral Loans be allocated as follows:]
[$______________ ABR Loans]
[$______________ Eurodollar Loans]
6. Each and every representation and warranty of the Construction Agent
contained in the Operative Agreements to which it is a party is true and
correct in all material respects, on and as of the date hereof (except to
the extent any such representation or warranty relates to an earlier date,
in which case such representation or warranty shall have been true and
correct as of such earlier date).
7. No Lease Default or Lease Event of Default has occurred and is continuing
under any Operative Agreement, and no Lease Default or Lease Event of
Default will occur under any of the Operative Agreements as a result of,
or after giving effect to, the Advance requested hereby on the date of
such Advance.
8. Each Operative Agreement to which Construction Agent is a party is in full
force and effect with respect to it, except as the same may be limited by
applicable bankruptcy, insolvency, fraudulent transfer or conveyance,
reorganization, moratorium or other similar laws relating to or affecting
creditors' or lessors' rights generally and general principles of equity.
9. The Construction Agent has duly performed and complied with all covenants,
agreements and conditions contained in the Participation Agreement or in
any Operative Agreement required to be performed or complied with by it on
or prior to the date hereof.
10. After giving effect to the Advance requested in this Requisition, the sum
of the Available Tranche B Lender Commitments plus the balance of funds in
the Escrow Account will be sufficient to complete the Improvements.
A-3
The Company has caused this Requisition to be executed by its duly
authorized officer as of this _____ day of __________, ______.
TOYS "R" US, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
A-4
Schedule 1
[Schedule of Transaction Expenses and other Fees]
A-5
Schedule 2
Description of Land
(Legal Description and Street Address)
A-6
Schedule 3
Description of Equipment
A-7
Schedule 4
[Construction Budget
Item Budgeted Funded to Date Funded this Draw]
---- -------- -------------- -----------------
A-8
EXHIBIT B
[Reserved]
B-1
EXHIBIT C
TOYS "R" US, INC.
OFFICER'S CERTIFICATE
(Pursuant to Section 5.3(y) of the Participation Agreement)
TOYS "R" US, INC., a Delaware corporation (the "Company"), DOES HEREBY
CERTIFY as follows:
1. Each and every representation and warranty of the Company contained
in the Operative Agreements to which it is a party is true and
correct in all material respects on and as of the date hereof,
except to the extent any such representation or warranty relates to
an earlier date, in which case such representation or warranty shall
have been true and correct in all material respects as of such
earlier date.
2. No Lease Default or Lease Event of Default has occurred and is
continuing under any Operative Agreement.
3. Each Operative Agreement to which the Company is a party is in full
force and effect with respect to it, except as the same may be
limited by applicable bankruptcy, insolvency, fraudulent transfer or
conveyance, reorganization, moratorium or other similar laws
relating to or affecting creditors' or lessors' rights generally and
general principles of equity.
4. The Company has duly performed and complied with all covenants,
agreements and conditions contained in the Participation Agreement
(hereinafter defined) or in any Operative Agreement required to be
performed or complied with by it on or prior to the date hereof.
Capitalized terms used in this Officer's Certificate and not otherwise
defined herein have the respective meanings ascribed thereto in the
Participation Agreement, dated as of September 26, 2001 among the Company, as
the Lessee and as the Construction Agent, First Union Development Corporation,
as the Lessor, the various financial institutions and other institutional
investors which are parties thereto from time to time, as Tranche A Note
Purchasers (the "Tranche A Note Purchasers"), the various banks and other
lending institutions which are parties thereto from time to time, as Tranche B
Lenders (the "Tranche B Lenders"), the various banks and other lending
institutions which are parties thereto from time to time, as Cash Collateral
Lenders (the "Cash Collateral Lenders"), First Union National Bank, as the agent
for the Primary Financing Parties and respecting the Security Documents, as the
agent for the Secured Parties (the "Agent") and First Union National Bank, as
the escrow agent (the "Escrow Agent").
C-1
IN WITNESS WHEREOF, the Company has caused this Officer's Certificate to
be duly executed and delivered as of this _____ day of __________, ______.
TOYS "R" US, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
C-2
EXHIBIT D
TOYS "R" US, INC.
SECRETARY'S CERTIFICATE
(Pursuant to Section 5.3(z) of the Participation Agreement)
TOYS "R" US, INC., a Delaware corporation (the "Company") DOES HEREBY
CERTIFY as follows:
1. Attached hereto as Schedule 1 is a true, correct and complete copy
of the resolutions of the Board of Directors of the Company duly
adopted by the Board of Directors of the Company on __________. Such
resolutions have not been amended, modified or rescinded since their
date of adoption and remain in full force and effect as of the date
hereof.
2. Attached hereto as Schedule 2 is a true, correct and complete copy
of the Articles of Incorporation of the Company on file in the
Office of the Secretary of State of __________. Such Articles of
Incorporation have not been amended, modified or rescinded since
their date of adoption and were in full force and effect on the date
of the resolutions referenced in paragraph 1 and remain in full
force and effect as of the date hereof.
3. Attached hereto as Schedule 3 is a true, correct and complete copy
of the Bylaws of the Company. Such Bylaws have not been amended,
modified or rescinded since their date of adoption and remain in
full force and effect as of the date hereof.
4. The persons named below now hold the offices set forth opposite
their names, and the signatures opposite their names and titles are
their true and correct signatures.
Name Office Signature
---- ------ ---------
------------------- ----------------------- -------------------------
------------------- ----------------------- -------------------------
IN WITNESS WHEREOF, the Company has caused this Secretary's Certificate to be
duly executed and delivered as of this _____ day of ___________, ______.
TOYS "R" US, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
D-1
Schedule 1
Board Resolutions
D-2
Schedule 2
Articles of Incorporation
▇-▇
▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇
▇-▇
EXHIBIT E
FIRST UNION DEVELOPMENT CORPORATION
OFFICER'S CERTIFICATE
(Pursuant to Section 5.3(bb) of the Participation Agreement)
FIRST UNION DEVELOPMENT CORPORATION, a North Carolina corporation (the
"Lessor"), DOES HEREBY CERTIFY as follows:
1. Each and every representation and warranty of the Lessor contained
in the Operative Agreements to which it is a party is true and
correct on and as of the date hereof.
2. Each Operative Agreement to which the Lessor is a party is in full
force and effect with respect to it.
3. The Lessor has duly performed and complied with all covenants,
agreements and conditions contained in the Participation Agreement
(hereinafter defined) or in any Operative Agreement required to be
performed or complied with by it on or prior to the date hereof,
other than those conditions which have been expressly waived.
4. No Default or Event of Default attributable solely to the Lessor has
occurred and is continuing under any Operative Agreement.
Capitalized terms used in this Officer's Certificate and not otherwise defined
herein have the respective meanings ascribed thereto in the Participation
Agreement dated as of September 26, 2001 among Toys "R" Us, Inc., as the Lessee
and as the Construction Agent, the Lessor, the various financial institutions
and other institutional investors which are parties thereto from time to time,
as Tranche A Note Purchasers (the "Tranche A Note Purchasers"), the various
banks and other lending institutions which are parties thereto from time to
time, as Tranche B Lenders (the "Tranche B Lenders"), the various banks and
other lending institutions which are parties thereto from time to time, as Cash
Collateral Lenders (the "Cash Collateral Lenders"), First Union National Bank,
as the agent for the Primary Financing Parties and, respecting the Security
Documents, as the agent for the Secured Parties (the "Agent") and First Union
National Bank, as the escrow agent (the "Escrow Agent").
E-1
IN WITNESS WHEREOF, the Lessor has caused this Officer's Certificate to be duly
executed and delivered as of this _____ day of __________________, ______.
FIRST UNION DEVELOPMENT CORPORATION
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
E-2
EXHIBIT F
FIRST UNION DEVELOPMENT CORPORATION
SECRETARY'S CERTIFICATE
(Pursuant to Section 5.3(cc) of the Participation Agreement)
CERTIFICATE OF [ASSISTANT] SECRETARY
I, ______________________, duly elected and qualified [Assistant]
Secretary of First Union Development Corporation (the "Company"), hereby certify
as follows:
1. Attached hereto as Schedule 1 is a true, correct and complete copy
of the resolutions of the Board of Directors of the Company duly
adopted by the Board of Directors of the Company on __________. Such
resolutions have not been amended, modified or rescinded since their
date of adoption and remain in full force and effect as of the date
hereof.
2. Attached hereto as Schedule 2 is a true, correct and complete copy
of the Articles of Incorporation of the Company on file in the
Office of the Secretary of State of North Carolina. Such Articles of
Incorporation have not been amended, modified or rescinded since
their date of adoption and were in full force and effect on the date
of the resolutions referenced in paragraph 1 and remain in full
force and effect as of the date hereof.
3. Attached hereto as Schedule 3 is a true, correct and complete copy
of the Bylaws of the Company. Such Bylaws have not been amended,
modified or rescinded since their date of adoption and remain in
full force and effect as of the date hereof.
4. The persons named below now hold the offices set forth opposite
their names, and the signatures opposite their names and titles are
their true and correct signatures.
Name Office Signature
---- ------ ---------
------------------- ----------------------- -------------------------
------------------- ----------------------- -------------------------
F-1
IN WITNESS WHEREOF, the Company has caused this ________ Secretary's Certificate
to be duly executed and delivered as of this _____ day of ___________, ______.
FIRST UNION DEVELOPMENT CORPORATION
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
F-2
EXHIBIT G
[Reserved]
G-1
EXHIBIT H
[Reserved]
H-1
EXHIBIT I
TOYS "R" US, INC.
OFFICER'S CERTIFICATE
(Pursuant to Section 5.5 of the Participation Agreement)
TOYS "R" US, INC., a Delaware corporation (the "Company") DOES HEREBY
CERTIFY as follows:
1. The address for the subject Property is
_________________________________________________________________.
2. The Completion Date for the construction of Improvements at the
Property occurred on ______________.
3. The aggregate Property Cost for the Property was $___________.
4. All representations and warranties of the Company in each Operative
Agreement and in each certificate delivered pursuant thereto are
true and correct in all material respects as of the Completion Date,
except to the extent any such representation or warranty relates to
an earlier date, in which case such representation or warranty shall
have been true and correct in all material respects as of such
earlier date.
5. No changes or modifications other than those approved by the Agent
were made to the Plans and Specifications as provided to the
appraiser for purposes of preparing the Appraisal that, to our
knowledge individually or in the aggregate have caused or reasonably
could cause the Fair Market Sales Value of the Improvements to be
materially less than the Fair Market Sales Value at Completion as
set forth in the Appraisal.
Capitalized terms used in this Officer's Certificate and not otherwise defined
have the respective meanings ascribed thereto in the Participation Agreement
dated as of September 26, 2001 among the Company, as the Lessee and as the
Construction Agent, First Union Development Corporation, as the lessor (the
"Lessor"), the various financial institutions and other institutional investors
which are parties thereto from time to time as purchasers of Tranche A Notes
(the "Tranche A Note Purchasers"), the various banks and other lending
institutions which are parties thereto from time to time as lenders under the
Tranche B Credit Agreement (the "Tranche B Lenders"), the various banks and
other lending institutions which are parties thereto from time to time, as
lenders under the Cash Collateral Credit Agreement (the "Cash Collateral
Lenders"), (the Tranche A Note Purchasers, the Tranche B Lenders and the Cash
Collateral Lender may be referred to as the "Primary Financing Parties"), First
Union National Bank, as the agent for the Primary Financing Parties and,
respecting the Security Documents, as the agent for the Secured Parties and
First Union National Bank, as the escrow agent (the "Escrow Agent").
I-1
IN WITNESS WHEREOF, the Company has caused this Officer's Certificate to be duly
executed and delivered as of this ____ day of ______________, ______.
TOYS "R" US, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
I-2
Schedule 1
(Documentation in Support of Aggregate Property Cost)
I-3
EXHIBIT J
[Reserved]
J-1
EXHIBIT K
[Description of Material Litigation]
(Pursuant to Section 6.2(d) of the Participation Agreement)
None.
K-1
--------------------------------------------------------------------------------
Appendix A
Rules of Usage and Definitions
--------------------------------------------------------------------------------
I. Rules of Usage
The following rules of usage shall apply to this Appendix A and the Operative
Agreements (and each appendix, schedule, exhibit and annex to the foregoing)
unless otherwise required by the context or unless otherwise defined therein:
(a) Except as otherwise expressly provided, any definitions set forth
herein or in any other document shall be equally applicable to the singular and
plural forms of the terms defined.
(b) Except as otherwise expressly provided, references in any document to
articles, sections, paragraphs, clauses, annexes, appendices, schedules or
exhibits are references to articles, sections, paragraphs, clauses, annexes,
appendices, schedules or exhibits in or to such document.
(c) The headings, subheadings and table of contents used in any document
are solely for convenience of reference and shall not constitute a part of any
such document nor shall they affect the meaning, construction or effect of any
provision thereof.
(d) References to any Person shall include such Person, its successors,
permitted assigns and permitted transferees.
(e) Except as otherwise expressly provided, reference to any agreement
means such agreement as amended, modified, extended, supplemented and/or
restated from time to time in accordance with the applicable provisions thereof.
(f) Except as otherwise expressly provided, references to any law includes
any amendment or modification to such law and any rules or regulations issued
thereunder or any law enacted in substitution or replacement therefor.
(g) When used in any document, words such as "hereunder", "hereto",
"hereof" and "herein" and other words of like import shall, unless the context
clearly indicates to the contrary, refer to the whole of the applicable document
and not to any particular article, section, subsection, paragraph or clause
thereof.
(h) References to "including" means including without limiting the
generality of any description preceding such term and for purposes hereof the
rule of ejusdem generis shall not be applicable to limit a general statement,
followed by or referable to an enumeration of specific matters, to matters
similar to those specifically mentioned.
A-1
(i) Each of the parties to the Operative Agreements and their counsel have
reviewed and revised, or requested revisions to, the Operative Agreements, and
the usual rule of construction that any ambiguities are to be resolved against
the drafting party shall be inapplicable in the construction and interpretation
of the Operative Agreements and any amendments or exhibits thereto.
(j) Capitalized terms used in any Operative Agreements which are not
defined in this Appendix A but are defined in another Operative Agreement shall
have the meaning so ascribed to such term in the applicable Operative Agreement.
(k) In computing any period of time for purposes of any Operative
Agreement, the mechanics for counting the number of days set forth in Rule 6 of
the Federal Rules of Civil Procedure shall be observed.
II. Definitions
"ABR" shall mean, for any day, a rate per annum equal to the greater of
(a) the Prime Lending Rate in effect on such day, and (b) the Federal Funds
Effective Rate in effect on such day plus one-half of one percent (0.5%). For
purposes hereof: "Prime Lending Rate" shall mean the rate announced by the Agent
from time to time as its prime lending rate as in effect from time to time. The
Prime Lending Rate is a reference rate and is one of several interest rate bases
used by the Agent and does not necessarily represent the lowest or most
favorable rate offered by the Agent actually charged to any customer. Any
Tranche B Lender or Cash Collateral Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Lending Rate. The Prime
Lending Rate shall change automatically and without notice from time to time as
and when the prime lending rate of the Agent changes. "Federal Funds Effective
Rate" shall mean, for any period, a fluctuating interest rate per annum equal
for each day during such period to the weighted average of the rates on
overnight Federal funds transactions with members or the Federal Reserve System
arranged by Federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Agent from three (3) Federal funds brokers of recognized
standing selected by it. Any change in the ABR due to a change in the Prime
Lending Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Lending
Rate or the Federal Funds Effective Rate, respectively.
"ABR Loans" shall mean Tranche B Loans or Cash Collateral Loans the rate
of interest applicable to which is based upon the ABR.
"Acceleration" shall have the meaning given to such term in Section 6 of
the Tranche B Credit Agreement, Section 6 of the Cash Collateral Credit
Agreement and/or Section 11 of the Note Purchase Agreement.
A-2
"Accountants" means Ernst & Young (or any successor thereto), or any other
firm of certified public accountants of recognized national standing selected by
the Lessee.
"Accumulated Funding Deficiency" shall have the meaning given to such term
in Section 302 of ERISA.
"Accounts" shall have the meaning given to such term in Section 1 of the
Security Agreement.
"Acquisition Advance" shall have the meaning given to such term in Section
5.3 of the Participation Agreement.
"Advance" shall mean a Construction Advance or an Acquisition Advance.
"Affiliate" shall mean, with respect to any Person, any Person or group
acting in concert in respect of the Person in question that, directly or
indirectly, controls or is controlled by or is under common control with such
Person.
"After Tax Basis" shall mean, with respect to any payment to be received,
the amount of such payment increased so that, after deduction of the amount of
all taxes required to be paid by the recipient calculated at the then maximum
marginal rates generally applicable to Persons of the same type as the
recipients with respect to the receipt by the recipient of such amounts (less
any tax savings realized as a result of the payment of the indemnified amount),
such increased payment (as so reduced) is equal to the payment otherwise
required to be made.
"Agency Agreement" shall mean the Agency Agreement, dated as of the
Closing Date between the Construction Agent and the Lessor.
"Agency Agreement Default" shall mean any event or condition which, with
the lapse of time or the giving of notice, or both, would constitute an Agency
Agreement Event of Default.
"Agency Agreement Event of Default" shall have the meaning given to such
term in Section 5.1 of the Agency Agreement.
"Agent" shall mean First Union National Bank, as agent for the Primary
Financing Parties pursuant to the Tranche B Credit Agreement, the Cash
Collateral Credit Agreement and the Note Purchase Agreement, or any successor
agent appointed in accordance with the terms of the Tranche B Credit Agreement,
the Cash Collateral Credit Agreement and the Note Purchase Agreement and
respecting the Security Documents, as agent for the Secured Parties.
"Applicable Percentage" shall mean (i) for Tranche B Eurodollar Loans,
1.73% and (ii) for Cash Collateral Eurodollar Loans, (A) during the Construction
Period, 0.50% and (B) after the Construction Period, 0.40%.
"Appraisal" shall mean, with respect to the Property, an "as-built"
appraisal to be delivered in connection with the Participation Agreement or in
accordance with the terms of the
A-3
Lease, in each case prepared by a reputable appraiser reasonably acceptable to
the Agent, which in the reasonable judgment of counsel to the Agent, complies
with all of the provisions of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended, the rules and regulations adopted pursuant
thereto, and all other applicable Legal Requirements.
"Appraisal Procedure" shall have the meaning given such term in Section
22.4 of the Lease.
"Approved Bank" shall mean any bank whose short-term commercial paper
rating from S&P is at least A-1 or the equivalent thereof or from ▇▇▇▇▇'▇ is at
least P-1 or the equivalent thereof.
"Approved State" shall mean the State of New Jersey.
"Appurtenant Rights" shall mean (a) all agreements, easements, rights of
way or use, rights of ingress or egress, privileges, appurtenances, tenements,
hereditaments and other rights and benefits at any time belonging or pertaining
to the Land underlying the Improvements or the Improvements, including without
limitation the use of any streets, ways, alleys, vaults or strips of land
adjoining, abutting, adjacent or contiguous to the Land and (b) all permits,
licenses and rights, whether or not of record, appurtenant to such Land or the
Improvements.
"Assignment and Acceptance" shall mean either an Assignment and Acceptance
in the form attached to the Tranche B Credit Agreement as Exhibit B or an
Assignment and Acceptance in the form attached to the Cash Collateral Credit
Agreement as EXHIBIT B, as applicable.
"Assignment of Escrow Account" shall mean the Assignment of Escrow Account
dated on the Closing Date executed by the Lessor and agreed and accepted by the
Construction Agent and the Agent.
"Available Tranche B Lender Commitment" shall mean, as to any Tranche B
Lender at any time, an amount equal to the excess, if any, of (a) the amount of
such Tranche B Lender's Commitment over (b) the aggregate principal amount of
all Tranche B Loans made by such Tranche B Lender as of such date (but without
giving effect to any repayments or prepayments of any Tranche B Loans under the
Tranche B Credit Agreement).
"Bankruptcy Code" shall mean Title 11 of the U. S. Code entitled
"Bankruptcy," as now or hereafter in effect or any successor thereto.
"Bankruptcy Event" means with respect to Borrower or the Lessee, any
voluntary or involuntary dissolution, winding-up, total or partial liquidation
or reorganization, or bankruptcy, insolvency, receivership or other statutory or
common law proceedings or arrangements involving the Borrower or the Lessee or
the readjustment of its liabilities or any assignment for the benefit of
creditors or any marshalling of its assets or liabilities.
A-4
"Basic Documents" shall mean the following: the Participation Agreement,
the Agency Agreement, the Tranche B Credit Agreement, the Note Purchase
Agreement, the Cash Collateral Credit Agreement, the Notes, the Lease and the
Security Agreement.
"Basic Rent" shall mean an amount equal to the scheduled interest due on
any Scheduled Interest Payment Date (but not including interest on (a) any Note
due prior to the Rent Commencement Date with respect to the Property or (b) any
overdue amounts under Section 2.8(b) of the Tranche B Credit Agreement, Section
2.8(b) of the Cash Collateral Credit Agreement, Section 7.1(b) of the Note
Purchase Agreement or otherwise) payable in accordance with the Lease and the
Participation Agreement.
"Basic Term" shall have the meaning given to such term in Section 2.2 of
the Lease.
"Beneficiaries" shall have the meaning given to such term in Section 1 of
the Structural Guarantee.
"Benefitted Lender" shall have the meaning specified in Section 9.10(a) of
the Tranche B Credit Agreement or Section 9.10(a) of the Cash Collateral Credit
Agreement, as applicable.
"Benefitted Note Purchaser" shall have the meaning specified in Section
22.6(a) of the Note Purchase Agreement.
"▇▇▇▇ of Sale" shall mean a ▇▇▇▇ of Sale regarding Equipment in form and
substance satisfactory to the Agent.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States (or any successor).
"Borrower" shall mean First Union Development Corporation, a North
Carolina corporation, and any successor, replacement and/or additional borrower
or lessor expressly permitted under the Operative Agreements.
"Borrower's Interest" shall mean the Borrower's rights in, to and under
the Property, the Operative Agreements, any other property contributed on behalf
of the Lessee and any and all other property or assets from time to time of the
Borrower obtained with respect to the Operative Agreements, including, without
limitation, Modifications, and all amounts of Rent, insurance proceeds and
condemnation awards, indemnity or other payments of any kind received by the
Borrower pursuant to the Operative Agreements.
"Borrowing Date" shall mean any Business Day specified in a notice
delivered pursuant to Section 2.3 of the Tranche B Credit Agreement as a date on
which the Lessor requests the Tranche B Lenders to make Loans thereunder.
"Budgeted Total Property Cost" shall mean, at any date of determination
with respect to the Property during the Construction Period, an amount equal to
the aggregate amount which the
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Construction Agent in good faith expects to be expended in order to achieve
Completion with respect to the Property.
"Business Day" shall mean a day other than a Saturday, Sunday or other day
on which commercial banks in New Jersey, North Carolina or any other states from
which the Agent or any Tranche B Lender funds the transactions contemplated by
the Operative Agreements are authorized or required by law to close; provided,
however, that when used in connection with a Eurodollar Loan, the term "Business
Day" shall also exclude any day on which banks are not open for dealings in
dollar deposits in the London interbank market.
"Called Principal" shall mean, with respect to any Tranche A Note, the
principal of such Tranche A Note that is to be prepaid or has become or is
declared to be immediately due and payable, as the context requires.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Capital Stock" shall mean any nonredeemable capital stock of the Lessee
or any of its Subsidiaries or of any other applicable Person, whether common or
preferred.
"Capitalized Lease" shall mean, as applied to any Person, any lease of
property (whether real, personal, tangible, intangible or mixed of such Person)
by such Person as the lessee which would be capitalized on a balance sheet of
such Person prepared in accordance with GAAP.
"Cash Collateral" shall mean such cash and/or Cash Equivalents
constituting part of the Collateral pledged by the Construction Agent or the
Lessee and maintained in the Cash Collateral Account, all as referenced in the
Cash Collateral Agreement.
"Cash Collateral Account" shall mean the cash collateral account
(including without limitation the deposits and certificates of deposit in such
account) which is the subject of the Cash Collateral Agreement and held at ▇▇▇▇▇
Fargo Bank Northwest, National Association as account number 37737.
"Cash Collateral Agreement" shall mean the Assignment of Cash Collateral
Account dated as of the Initial Closing Date executed by the Lessee in favor of
the Agent, on behalf of the Cash Collateral Lenders.
"Cash Collateral Agreement Event of Default" shall have the meaning
specified in Section 3.1 of the Cash Collateral Agreement.
"Cash Collateral Commitments" shall mean the obligation of the Cash
Collateral Lenders to make the Cash Collateral Loans on the Closing Date to the
Lessor in an aggregate principal
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amount not to exceed the aggregate of the amounts set forth opposite each Cash
Collateral Lender's name on Schedule 2.1 to the Cash Collateral Credit
Agreement; provided, no Cash Collateral Lender shall be obligated to make Cash
Collateral Loans in excess of such Cash Collateral Lender's share of the Cash
Collateral Commitments as set forth adjacent to such Cash Collateral Lender's
name on Schedule 2.1 to the Cash Collateral Credit Agreement.
"Cash Collateral Control Agreement" shall mean that certain Control
Agreement dated as of the Closing Date among the Agent, the Lessor, the
Construction Agent and the Intermediary.
"Cash Collateral Credit Agreement" shall mean the Cash Collateral Credit
Agreement, dated as of the Closing Date, among the Borrower, the Agent and the
Cash Collateral Lenders, as specified therein.
"Cash Collateral Credit Agreement Default" shall mean any event or
condition which, with the lapse of time or the giving of notice, or both, would
constitute a Cash Collateral Credit Agreement Event of Default.
"Cash Collateral Credit Agreement Event of Default" shall mean any event
or condition defined as an "Event of Default" in Section 6 of the Cash
Collateral Credit Agreement.
"Cash Collateral Eurodollar Loans" shall mean Cash Collateral Loans the
rate of interest applicable to which is based upon the Eurodollar Rate.
"Cash Collateral Lenders" shall mean First Union National Bank and shall
include the several banks and other financial institutions from time to time
party to the Cash Collateral Credit Agreement that commit to make the Cash
Collateral Loans.
"Cash Collateral Loan" shall mean the loans made pursuant to the Cash
Collateral Commitments.
"Cash Collateral Loan Balance" shall mean, at any date of determination,
the sum of the outstanding aggregate principal amount of Cash Collateral Loans,
plus any accrued and unpaid interest owing to the Cash Collateral Lenders under
the Cash Collateral Notes, plus any amounts payable to any Cash Collateral
Lender pursuant to Section 11.4 of the Participation Agreement, plus, to the
extent the same is not duplicative of the amounts payable under any of the
foregoing, all other amounts then due and payable to any Cash Collateral Lender
under any Operative Agreement.
"Cash Collateral Maturity Date" shall mean the second anniversary of the
Closing Date, unless a later date has been expressly agreed to in writing by
each of the Borrower, the Lessee, the Agent, and each of the Cash Collateral
Lenders.
"Cash Collateral Note" shall have the meaning given to it in Section 2.2
of the Cash Collateral Credit Agreement.
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"Cash Collateral Obligations" means the collective reference to all
obligations, now existing or hereafter arising, owing by the Borrower and/or the
Lessee and/or any of their affiliates to the Cash Collateral Lenders under or
pursuant to the Operative Agreements whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred, which may
arise under, out of, or in connection with the Participation Agreement, the Cash
Collateral Credit Agreement, the Lease Agreement, the Agency Agreement, the Cash
Collateral Notes, or any of the other Operative Agreements, whether on account
of principal, advanced amounts, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
reasonable fees and disbursements of counsel to the Agent or to the Cash
Collateral Lenders) that are required to be paid by the Borrower and/or the
Lessee pursuant to the terms of the Operative Agreements.
"Cash Collateral Rent" shall mean, at any date of determination, an amount
sufficient to pay the Cash Collateral Loan Balance then due and owing.
"Cash Equivalents" shall mean (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (b) U.S. dollar denominated
time and demand deposits and certificates of deposit of any Approved Bank having
capital and surplus in excess of $500,000,000, in each case with maturities of
not more than 270 days from the date of acquisition, (c) commercial paper and
variable or fixed rate notes, in each case with maturities of not more than 270
days from the date of acquisition, issued by any Approved Bank (or by the parent
company thereof), or issued or guaranteed by any domestic corporation rated A-1
(or the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof)
or better by Moody's (d) repurchase agreements with a bank or trust company
(including any of the Tranche B Lenders) or recognized securities dealer having
capital and surplus in excess of $500,000,000 for direct obligations issued by
or fully guaranteed by the United States of America and having, on the date of
purchase thereof, a fair market value of at least 100% of the amount of the
repurchase obligations, and (e) investments, classified in accordance with GAAP
as current assets, in money market investment programs registered under the
Investment Company Act of 1940, as amended, which are administered by reputable
financial institutions having capital of at least $500,000,000 and the
portfolios of which are limited to investments of the character described in the
foregoing subdivisions (a) through (c).
"Cash Interest Expense" means, for any period, interest expense (net of
interest income) of the Lessee and its Consolidated Subsidiaries for such period
including, without duplication, Consolidated interest capitalized in such
period, minus non-cash interest expense of the Lessee and its Consolidated
Subsidiaries for such period, in each case determined in accordance with GAAP.
"Casualty" shall mean any damage or destruction of all or any portion of
the Property as a result of a fire or other casualty.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C.ss.9601 et seq., as amended by
the Superfund Amendments and Reauthorization Act of 1986.
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"Change in GAAP Notice" shall have the meaning given to such term in
Section 10.1(c) of the Participation Agreement.
"Chattel Paper" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Claims" shall mean any and all obligations, liabilities, losses, actions,
suits, penalties, claims, demands, costs and expenses (including without
limitation reasonable attorney's fees and expenses) of any nature whatsoever,
but excluding Impositions.
"Closing" shall have the meaning given to such term in Section 3 of the
Note Purchase Agreement.
"Closing Date" shall mean September 26, 2001.
"Code" shall mean the Internal Revenue Code of 1986 together with rules
and regulations promulgated thereunder, as amended from time to time, or any
successor statute thereto.
"Collateral" shall mean all assets of the Lessor, the Construction Agent
and the Lessee, now owned or hereafter acquired, upon which a Lien is purported
to be created by one or more of the Security Documents.
"Commencement Date" shall have the meaning specified in Section 2.2 of the
Lease.
"Commitments" shall mean the Tranche A Commitments of each Tranche A Note
Purchaser as set forth in Schedule A to the Note Purchase Agreement, as such
Schedule A may be amended or replaced from time to time, the Tranche B
Commitments of each Tranche B Lender as set forth in Schedule 2.1 to the Tranche
B Credit Agreement, as such Schedule 2.1 may be amended or replaced from time to
time and the Cash Collateral Commitments of each Cash Collateral Lender as set
forth in Schedule 2.1 to the Cash Collateral Credit Agreement, as such Schedule
2.1 may be amended or replaced from time to time.
"Commitment Percentage" shall mean, as to any Primary Financing Party at
any time, the percentage which such Primary Financing Party's Commitment then
constitutes of the aggregate Commitments (or, with respect to the Tranche B
Lenders, at any time after the Commitments shall have expired or terminated, the
percentage which the aggregate principal amount of such Primary Financing
Party's Financing then outstanding constitutes of the aggregate principal amount
of all of the Financing then outstanding).
"Commitment Period" shall mean the period from and including the Closing
Date to and including the Construction Period Termination Date, or such earlier
date as the Tranche B Commitments shall terminate as provided in the Tranche B
Credit Agreement.
"Completion" shall mean, with respect to the Property, such time as the
acquisition, installation, testing and final completion (subject to completion
of punch list items) of the
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Improvements on the Property has been achieved in accordance with the Plans and
Specifications, the Agency Agreement and/or the Lease, and in compliance with
all Legal Requirements and Insurance Requirements and a certificate of occupancy
has been issued with respect to the Property by the appropriate governmental
entity (except if non-compliance, individually or in the aggregate, shall not
have and could not reasonably be expected to have a Material Adverse Effect or
if compliance with any of the foregoing is otherwise waived by the Agent upon
instruction from the Secured Parties in accordance with the terms of the
Intercreditor Agreement).
"Completion Date" shall mean the date on which Completion for the Property
has occurred.
"Condemnation" shall mean any taking or sale of the use, access,
occupancy, easement rights or title to the Property or any part thereof, wholly
or partially (temporarily or permanently), by or on account of any actual or
threatened eminent domain proceeding or other taking of action by any Person
having the power of eminent domain, including without limitation an action by a
Governmental Authority to change the grade of, or widen the streets adjacent to,
the Property or alter the pedestrian or vehicular traffic flow to the Property
so as to result in a change in access to the Property, or by or on account of an
eviction by paramount title or any transfer made in lieu of any such proceeding
or action.
"Consolidated" refers to the Lessee and its Subsidiaries the accounts of
which are consolidated with those of the Lessee for financial reporting
purposes.
"Consolidated EBITDAR" means, for any period, net income (or net loss) of
the Lessee and its Consolidated Subsidiaries for such period plus (a) the sum of
(i) interest expense (net of interest income), (ii) income tax expense, (iii)
depreciation expense, (iv) amortization expense, (v) Consolidated Rent Expense,
(vi) extraordinary losses in excess of $5,000,000 and (vii) LIFO charges of the
Lessee and its Consolidated Subsidiaries, in each case for such period, minus
(b) the sum of (i) extraordinary gains in excess of $5,000,000 and (ii) LIFO
credits of the Lessee and its Consolidated Subsidiaries, in each case for such
period, all determined in accordance with GAAP.
"Consolidated Rent Expense" means, for any period, rental expense (net of
rental income) of the Lessee and its Consolidated Subsidiaries determined in
accordance with GAAP for such period.
"Consolidated Subsidiary" shall mean, as to any Person, any Subsidiary of
such Person which under the rules of GAAP consistently applied should have its
financial results consolidated with those of such Person for purposes of
financial accounting statements.
"Consolidated Tangible Net Worth" means, at any date of determination, the
sum of all amounts which would be included under shareholders' equity on a
Consolidated balance sheet of the Lessee and its Subsidiaries determined in
accordance with GAAP as at such date less all assets of the Lessee and its
Subsidiaries, determined on a Consolidated basis at such date, that would be
classified as intangible assets in accordance with GAAP.
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"Construction Advance" shall mean an advance of funds to pay Project Costs
pursuant to Section 5.4 of the Participation Agreement.
"Construction Agent" shall mean Toys "R" Us, Inc., a Delaware corporation,
as the construction agent under the Agency Agreement.
"Construction Budget" shall mean the cost (net of any amounts payable by
the seller under the Purchase Agreement or made available to the Lessor, the
Lessee or the Construction Agent from funds held in escrow or other arrangements
made pursuant to the Purchase Agreement) of acquisition, installation, testing,
repairing, renovating, constructing, equipping and developing the Property and
other Project Costs as determined by the Construction Agent in its reasonable,
good faith judgment.
"Construction Commencement Date" shall mean, with respect to Improvements,
the date on which construction of such Improvements commences pursuant to the
Agency Agreement.
"Construction Contract" shall mean each of (i) the construction contract
between the Construction Agent and the General Contractor, and (ii) each other
contract entered into between the Construction Agent or the Lessee with a
Contractor for the construction of Improvements or any portion thereof on the
Property, in each case in form and substance reasonably satisfactory to the
Lessor.
"Construction Documents" shall mean each of the Construction Contracts,
the Construction Budget, the Construction Schedule, the Plans and
Specifications, and each Performance Bond.
"Construction Period" shall mean the period commencing on the Construction
Commencement Date for the Property and ending on the Completion Date for the
Property.
"Construction Period Property" shall have the meaning given to such term
in Section 5.3(b) of the Agency Agreement.
"Construction Period Termination Date" shall mean (a) the earlier of (i)
the date that the Tranche B Commitments have been terminated in their entirety
in accordance with the terms of Section 2.5(a) of the Tranche B Credit
Agreement, or (ii) September 26, 2003 (subject to extension in accordance with
Section 5.9 of the Participation Agreement) or (b) any such later date as shall
be agreed to by the Majority Secured Parties.
"Construction Schedule" shall mean the schedule prepared by the
Construction Agent in its reasonable, good faith judgment reflecting, in
reasonable detail, the anticipated progress and timing of the acquisition,
installation, testing, repairing, renovating, constructing, equipping and
developing the Property.
"Contractor" shall mean each entity with whom the Construction Agent or
the Lessee contracts to construct any Improvements or any portion thereof on the
Property.
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"Controlled Group" shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Lessee, are treated as a single employer
under Section 414 of the Code.
"Credit Documents" shall mean the Participation Agreement, the Tranche B
Credit Agreement, the Note Purchase Agreement, the Cash Collateral Credit
Agreement, the Notes and the Security Documents.
"Debt Rating" shall mean, as of any date of determination thereof and with
respect to any Person, the ratings most recently published by the Rating
Agencies relating to the unsecured, unsupported senior long-term debt
obligations of such Person.
"Deed" shall mean a bargain and sale deed regarding the Land and/or
Improvements in form and substance satisfactory to the Agent.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Discounted Value" shall mean, with respect to the Called Principal of any
Tranche A Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective scheduled
due dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor (applied on
the same periodic basis as that on which interest on the Notes is payable) equal
to the Reinvestment Yield with respect to such Called Principal.
"Dispute" shall mean any claim or controversy arising out of, or relating
to, the Operative Agreements between or among the parties thereto.
"Documents" shall have the meaning given to such term in Section 1 of the
Security Agreement.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Domestic Subsidiary" shall mean, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the laws of
any State of the United States or the District of Columbia.
"Election Date" shall have the meaning given to such term in Section 20.1
of the Lease.
"Election Notice" shall have the meaning given to such term in Section
20.1 of the Lease.
"Employee Benefit Plan" or "Plan" shall mean an employee benefit plan
(within the meaning of Section 3(3) of ERISA, including without limitation any
Multiemployer Plan), or any "plan" as defined in Section 4975(e)(1) of the Code
and as interpreted by the Internal Revenue
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Service and the Department of Labor in rules, regulations, releases or bulletins
in effect on the Closing Date.
"Environmental Claims" shall mean any investigation, notice, violation,
demand, allegation, action, suit, injunction, judgment, order, consent decree,
penalty, fine, lien, proceeding, or claim (whether administrative, judicial, or
private in nature) relating to or affecting the Property arising (a) pursuant
to, or in connection with, an actual or alleged violation of, any Environmental
Law, (b) in connection with any Hazardous Substance, (c) from any abatement,
removal, remedial, corrective, or other response action in connection with a
Hazardous Substance, Environmental Law, or other order of a Tribunal or (d) from
any actual or alleged damage, injury, threat, or harm to health, safety, natural
resources, or the environment.
"Environmental Laws" shall mean any Law, permit, consent, approval,
license, award, or other authorization or requirement of any Tribunal relating
to emissions, discharges, releases, threatened releases of any Hazardous
Substance into ambient air, surface water, ground water, publicly owned
treatment works, septic system, or land, or otherwise relating to the handling,
storage, treatment, generation, use, or disposal of Hazardous Substances,
pollution or to the protection of health or the environment, including without
limitation CERCLA, the Resource Conservation and Recovery Act, 42 U.S.C. ss.
6901, et seq., and state statutes analogous thereto.
"Environmental Reports" shall have the meaning given to such term in
Section 6.2(t) of the Participation Agreement.
"Environmental Violation" shall mean any activity, occurrence or condition
that violates or threatens (if the threat requires remediation under any
Environmental Law and is not remediated during any grace period allowed under
such Environmental Law) to violate or results in or threatens (if the threat
requires remediation under any Environmental Law and is not remediated during
any grace period allowed under such Environmental Law) to result in
noncompliance with any Environmental Law relating to or affecting the Property.
"Equipment" shall mean equipment, apparatus, furnishings, fittings and
personal property of every kind and nature whatsoever purchased, leased or
otherwise acquired using the proceeds of Advances by the Construction Agent, the
Lessee or the Lessor and all improvements and modifications thereto and
replacements thereof, whether or not now owned or hereafter acquired or now or
subsequently attached to, contained in or used or usable in any way in
connection with any operation of any Improvements, including but without
limiting the generality of the foregoing, all equipment described in the
Appraisal including without limitation all heating, electrical, and mechanical
equipment, lighting fixtures, switchboards, plumbing, ventilation, air
conditioning and air-cooling apparatus, refrigerating, and incinerating
equipment, escalators, elevators, loading and unloading equipment and systems,
cleaning systems (including without limitation window cleaning apparatus),
telephones, communications systems (including without limitation satellite
dishes and antennae), televisions, computers, sprinkler systems and other fire
prevention and extinguishing apparatus and materials, security systems, motors,
engines, machinery, pipes, pumps, tanks, conduits, appliances, fittings and
fixtures of every kind and description.
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"Equipment Schedule" shall mean (a) each Equipment Schedule attached to
the applicable Requisition and (b) each Equipment Schedule attached to the
applicable Lease Supplement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" shall mean each entity required to be aggregated with
the Lessee pursuant to the requirements of Section 414(b) or (c) of the Code.
"Escrow Account" shall mean that certain deposit account (including
without limitation the deposits and other property in such account) which is
held at First Union National Bank as account number 2572004235.
"Escrow Account Control Agreement" shall mean that certain Control
Agreement dated as of the Closing Date among the Agent, the Lessor, the
Construction Agent and the Escrow Agent.
"Escrow Agent" shall mean First Union National Bank, a national banking
association, as escrow agent regarding the Escrow Account.
"Eurocurrency Reserve Requirements" shall mean for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal) of reserve requirements in effect on such day
(including without limitation basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed on eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Loans" shall mean Tranche B Eurodollar Loans and Cash
Collateral Eurodollar Loans.
"Eurodollar Rate" shall mean for the Interest Period for each Eurodollar
Loan comprising part of the same borrowing or advance (including without
limitation conversions, extensions and renewals), a per annum interest rate
equal to a fraction (a) expressed as a percentage (rounded upward to the nearest
one one-hundredth (1/100) of one percent (1%)) (i) with the numerator equal to a
per annum interest rate determined by the Agent on the basis of the offered
rates for deposits in dollars for a period of time corresponding to such
Interest Period (and commencing on the first day of such Interest Period),
reported on Telerate page 3750 as of 11:00 a.m. (London time) two (2) Business
Days before the first day of such Interest Period and (ii) the denominator equal
to 100% minus the Eurocurrency Reserve Requirements. In the event no such
offered rates appear on Telerate page 3750, "Eurodollar Rate" shall mean for the
Interest Period for each Eurodollar Loan comprising part of the same borrowing
or advance (including without limitation conversions, extensions and renewals),
a per annum interest rate equal to a fraction (b) expressed as a percentage
(rounded upward to the nearest one one-hundredth (1/100) of one percent (1%))
(i) with the numerator equal to a per annum interest rate determined by the
Agent on the basis of
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the offered rates for deposits in dollars for a period of time corresponding to
such Interest Period (and commencing on the first day of such Interest Period),
which appear on the Reuters Screen LIBO Page as of 11:00 a.m. (London time) two
(2) Business Days before the first day of such Interest Period (provided that if
at least two (2) such offered rates appear on the Reuters Screen LIBO Page, the
rate in respect of such Interest Period will be the arithmetic mean of such
offered rates) and (ii) the denominator equal to 100% minus the Eurocurrency
Reserve Requirements. As used herein, "Reuters Screen LIBO Page" means the
display designated as page "LIBO" on the Reuters Monitor Money Rates Service (or
such other page as may replace the LIBO page on that service for the purpose of
displaying London interbank offered rates of major banks) ("RMMRS"). In the
event the RMMRS is not then quoting such offered rates, "Eurodollar Rate" shall
mean for the Interest Period for each Eurodollar Loan comprising part of the
same borrowing or advance (including without limitation conversions, extensions
and renewals), a per annum interest rate equal to a fraction (c) expressed as a
percentage (rounded upward to the nearest one one-hundredth (1/100) of one
percent (1%)) (i) with the numerator equal to the average per annum rate of
interest determined by the office of the Agent (each such determination to be
conclusive and binding) as of two (2) Business Days prior to the first day of
such Interest Period, as the effective rate at which deposits in immediately
available funds in U.S. dollars are being, have been, or would be offered or
quoted by the Agent to major banks in the applicable interbank market for
Eurodollar deposits at any time during the Business Day which is the second
Business Day immediately preceding the first day of such Interest Period, for a
term comparable to such Interest Period and in the amount of the requested
Eurodollar Loan and (ii) the denominator equal to 100% minus the Eurocurrency
Reserve Requirements. If no such offers or quotes are generally available for
such amount, then the Agent shall be entitled to determine the Eurodollar Rate
from another recognized service or interbank quotation, or by estimating in its
reasonable judgment the per annum rate (as described above) that would be
applicable if such quote or offers were generally available.
"Event of Default" shall mean a Lease Event of Default, an Agency
Agreement Event of Default, a Tranche B Credit Agreement Event of Default, a
Cash Collateral Credit Agreement Event of Default or a Note Purchase Agreement
Event of Default.
"Event of Loss" shall mean any Casualty, Condemnation or Environmental
Violation that causes or results in the delivery of a Termination Notice by the
Lessee in accordance with Section 16.1 of the Lease.
"Excepted Payments" shall mean:
(a) all indemnity payments (including without limitation indemnity
payments made pursuant to Section 11 of the Participation Agreement),
whether made by adjustment to Basic Rent or otherwise, to which any
Financing Party or any of its Affiliates, agents, officers, directors or
employees is entitled;
(b) any amounts (other than Basic Rent or Termination Value) payable
under any Operative Agreement to reimburse any Financing Party or any of
its Affiliates (including without limitation the reasonable expenses of
any Financing Party incurred in
A-15
connection with any such payment) for performing or complying with any of
the obligations of the Lessee under and as permitted by any Operative
Agreement;
(c) any amount payable to the Lessor or any Primary Financing Party
by a transferee permitted under the Operative Agreements as the purchase
price of the Lessor's interest in the Borrower's Interest (which amount
shall not include any amounts necessary to pay the principal, interest and
Make-Whole Amount on the Notes or any other amount payable to the Agent or
the Primary Financing Parties) or such Primary Financing Party's interest
in the transactions contemplated by the Operative Agreements (or a portion
thereof);
(d) any insurance proceeds (or payments with respect to risks
self-insured or policy deductibles) under liability policies other than
such proceeds or payments payable or any Financing Party;
(e) any insurance proceeds under policies maintained by the Lessor
or any other Financing Party pursuant to or in accordance with the terms
of the Operative Agreements;
(f) Transaction Expenses or other amounts, fees, disbursements or
expenses paid or payable to or for the benefit of the Lessor or any other
Financing Party;
(g) any payments in respect of interest to the extent attributable
to payments referred to in clauses (a) through (f) above; and
(h) any rights of the Financing Parties to demand, collect, ▇▇▇ for
or otherwise receive and enforce payment of any of the foregoing amounts,
provided that such rights shall not include the right to terminate the
Lease.
"Excess Land" shall mean, with respect to the Property, any undeveloped
Land which has been identified and subdivided by the Lessee or the Construction
Agent for sale, transfer and conveyance to a third party which is not a
Subsidiary or Affiliate of the Lessee or the Construction Agent in accordance
with the requirements of Section 8.13 of the Participation Agreement.
"Excess Land Payment Amount" shall mean, with respect to any Excess Land
sold in accordance with Section 8.13 of the Lease, the net sales proceeds of
such Excess Land.
"Excess Proceeds" shall mean the excess, if any, of the aggregate of all
awards, compensation or insurance proceeds payable in connection with a Casualty
or Condemnation over the Termination Value paid by the Lessee pursuant to the
Lease with respect to such Casualty or Condemnation.
"Exculpated Persons" shall mean the Lessor (except with respect to the
representations and warranties and the other obligations of the Lessor pursuant
to the Operative Agreements
A-16
expressly undertaken by it in its capacity as a Primary Financing Party), its
officers, directors, shareholders and partners.
"Exempt Payments" shall have the meaning specified in Section 11.2(e) of
the Participation Agreement.
"Existing Environmental Matters" shall have the meaning given to such term
in Section 6.2(t) of the Participation Agreement.
"Expiration Date" shall mean the last day of the Term; provided, in no
event shall the Expiration Date be later than the tenth anniversary of the
Closing Date, unless a later date has been expressly agreed to in writing by
each of the Lessor, the Lessee, the Agent, and the Primary Financing Parties in
accordance with the terms and conditions set forth in Section 2.2 of the Lease.
"Fair Market Sales Value" shall mean, with respect to the Property, the
amount, which in any event, shall not be less than zero (0), that would be paid
in cash in an arms-length transaction between an informed and willing purchaser
and an informed and willing seller, neither of whom is under any compulsion to
purchase or sell, respectively, the Property. Fair Market Sales Value of the
Property shall be determined based on the assumption that, except for purposes
of Section 17 of the Lease, the Property is in the condition and state of repair
required under Section 10.1 of the Lease and the Lessee is in compliance with
the other requirements of the Operative Agreements.
"Federal Funds Effective Rate" shall have the meaning given to such term
in the definition of ABR.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Lessee.
"Financing" shall mean the financing extended pursuant to the Tranche B
Credit Agreement, the Cash Collateral Credit Agreement or the Note Purchase
Agreement and shall include both the Tranche A Proceeds, the Tranche B Loans and
the Cash Collateral Loans.
"Financing Parties" shall mean the Lessor, the Agent, the Escrow Agent and
the Primary Financing Parties.
"First Priority Liens" shall have the meaning given to such term in
Section 3.1 of the Intercreditor Agreement.
"Fixed Charge Coverage Ratio" means, on each date of determination, the
ratio of Consolidated EBITDAR to the sum of Consolidated Cash Interest Expense
and Consolidated Rent Expense for the period of four consecutive fiscal quarters
of the Lessee ended on or immediately prior to such date.
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"Fixtures" shall mean all fixtures relating to the Improvements, including
without limitation all components thereof, located in or on the Improvements,
together with all replacements, modifications, alterations and additions
thereto.
"Force Majeure Event" shall mean any event including without limitation
strikes, lockouts, adverse soil conditions, acts of God, adverse weather
conditions, fire or other casualty, inability to obtain labor or materials,
governmental actions or inaction, civil commotion and enemy action, if such
event shall be beyond the control of the Construction Agent; but excluding any
event, cause or condition that results from the Construction Agent's or Lessee's
financial condition.
"Form W-8BEN" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"Form W-8ECI" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"Funded Indebtedness" means, with respect to any Person, without
duplication, (a) all Indebtedness of such Person other than Indebtedness of the
types referred to in clauses (f) and (h) of the definition of "Indebtedness",
(b) all Indebtedness of another Person of the type referred to in clause (a)
above secured by (or for which the holder of such Funded Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on, or
payable out of the proceeds of production from, property owned or acquired by
such Person, whether or not the obligations secured thereby have been assumed,
and (c) all Guaranty Obligations of such Person with respect to Indebtedness of
the type referred to in clause (a) above of another Person.
"Funded Indebtedness to Capitalization Ratio" means, with respect to the
Lessee and its Consolidated Subsidiaries, the ratio of (a) Funded Indebtedness
of the Lessee and its Consolidated Subsidiaries to (b) Total Capitalization of
the Lessee and its Consolidated Subsidiaries.
"GAAP" shall mean generally accepted accounting principles, consistently
applied, set forth in the opinions and pronouncements of the accounting
principles board of the American Institute of Certified Public Accountants, and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by a significant
segment of the accounting profession, that are applicable to the circumstances
as of the date of determination.
"General Contractor" means the general contractor in connection with the
Property selected by the Construction Agent and reasonably acceptable to Agent.
"Governmental Action" shall mean all permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, written interpretations, decrees, licenses, exemptions, publications,
filings, notices to and declarations of or with, or required by, any
Governmental Authority, or required by any Legal Requirement, and shall include,
without limitation, all environmental and operating permits and licenses that
are required for the full use, occupancy, zoning and operating of the Property.
A-18
"Governmental Authority" shall mean any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"Guarantor" shall mean Toys "R" Us, Inc., as guarantor under the
Structural Guarantee.
"Hard Costs" shall mean all costs and expenses payable for supplies,
materials, labor, general conditions (including bonds, insurance and utilities)
and profit for contractors and subcontractors; fees of a construction manager,
if any; administrative, supervision, travel and overhead costs incurred by the
Construction Agent or construction manager; permit fees; all so-called "impact",
"tap", "development" or "traffic generation assessment" fees; periodic on-site
inspections required to be made by the project engineer or other special
consultants; and the cost of payment and performance bonds required by
governmental authorities; in each case with respect to the Improvements under
any Construction Contract.
"Hazardous Substance" shall mean any of the following: (a) any petroleum
or petroleum product, explosives, radioactive materials, asbestos, formaldehyde,
polychlorinated biphenyls, lead and radon gas; (b) any substance, material,
product, derivative, compound or mixture, mineral, chemical, waste, gas, medical
waste, or pollutant, in each case whether naturally occurring, man-made or the
by-product of any process, that is toxic, harmful or hazardous to the
environment or human health or safety as determined in accordance with any
Environmental Law; or (c) any substance, material, product, derivative, compound
or mixture, mineral, chemical, waste, gas, medical waste or pollutant that would
support the assertion of any claim under any Environmental Law, whether or not
defined as hazardous as such under any Environmental Law.
"Impositions" shall mean any and all liabilities, losses, expenses, costs,
charges and Liens of any kind whatsoever for fees, taxes, levies, imposts,
duties, charges, assessments or withholdings of any nature whatsoever ("Taxes")
including but not limited to (i) real and personal property taxes, including
without limitation personal property taxes on any property covered by the Lease
that is classified by Governmental Authorities as personal property, and
A-19
real estate or ad valorem taxes in the nature of property taxes; (ii) sales
taxes, use taxes and other similar taxes (including rent taxes and intangibles
taxes); (iii) excise taxes; (iv) real estate transfer taxes, conveyance taxes,
stamp taxes and documentary recording taxes and fees; (v) taxes that are or are
in the nature of franchise, income, value added, privilege and doing business
taxes, license and registration fees; (vi) assessments on the Property,
including without limitation all assessments for public Improvements or
benefits, whether or not such improvements are commenced or completed within the
Term; and (vii) taxes, Liens, assessments or charges asserted, imposed or
assessed by the PBGC or any governmental authority succeeding to or performing
functions similar to, the PBGC; and all interest, additions to tax and
penalties, which at any time prior to, during or with respect to the Term or in
respect of any period for which the Lessee shall be obligated to pay
Supplemental Rent, may be levied, assessed or imposed by any Governmental
Authority upon or with respect to (a) any Indemnified Person, the Property or
any part thereof or interest therein; (b) the leasing, financing, refinancing,
purchase, acceptance, rejection, demolition, construction, substitution,
subleasing, assignment, control, condition, occupancy, servicing, maintenance,
repair, ownership, possession, activity conducted on or in, delivery, insuring,
use, rental, lease, operation, improvement, sale, transfer of title, return or
other disposition of the Property or any part thereof or interest therein; (c)
the Notes, other indebtedness with respect to the Property, or any part thereof
or interest therein; (d) the rentals, receipts or earnings arising from the
Property or any part thereof or interest therein; (e) the Operative Agreements,
the execution, performance or enforcement thereof, or any payment made or
accrued pursuant thereto; (f) the income or other proceeds received with respect
to the Property or any part thereof or interest therein upon the sale or
disposition thereof; (g) any contract (including the Agency Agreement) relating
to the construction, acquisition or delivery of the Property or any part thereof
or interest therein; (h) the issuance of the Notes; (i) the Borrower or the
Borrower's Interest; or (j) otherwise in connection with the transactions
contemplated by the Operative Agreements.
"Improvements" shall mean, with respect to the construction, repair,
renovations, replacement and/or Modifications on the Land, all buildings,
structures, Fixtures, and other improvements of every kind existing at any time
and from time to time on or under the Land purchased or otherwise acquired using
the proceeds of Advances, together with any and all appurtenances to such
buildings, structures or improvements, including without limitation sidewalks,
utility pipes, conduits and lines, parking areas and roadways, and including
without limitation all Modifications and other additions to or changes in the
Improvements at any time, including without limitation (a) any Improvements
existing as of the Closing Date as such Improvements may be referenced on the
applicable Requisition and (b) any Improvements made subsequent to the Closing
Date.
"Indebtedness" of any Person means, at a particular time, all items which
constitute, without duplication, (a) indebtedness for borrowed money or the
deferred purchase price of property (other than trade payables and accrued
liabilities incurred in the ordinary course of business), (b) indebtedness
evidenced by notes, bonds, debentures or similar instruments, (c) obligations
with respect to any conditional sale or title retention agreement, (d)
indebtedness arising under acceptance facilities and the amount available to be
drawn under all letters of credit issued for the account of such Person, (e) all
drafts drawn under letters of credit issued for the account of such Person to
the extent such Person shall not have reimbursed the issuer in respect
A-20
of the issuer's payment of such drafts, (f) all liabilities secured by any Lien
on any property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof (other than carriers',
warehousemen's, mechanics', repairmen's or other like non-consensual statutory
Liens arising in the ordinary course of business), (g) obligations under capital
leases and (h) Guarantees in respect of the foregoing; provided that any
Indebtedness owing by the Lessee to any of its Subsidiaries or by any Subsidiary
of the Lessee to the Lessee or by any Subsidiary of the Lessee to any other
Subsidiary of the Lessee or any Guarantees in respect thereof shall not
constitute Indebtedness for purposes of this definition; and provided, further,
that the amount of any such Guarantees shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantees is made and (b) the maximum amount for which
such Person may be liable pursuant to the terms of the agreement embodying such
Guarantees unless such primary obligation and the maximum amount for which such
Person may be liable are not stated or determinable, in which case the amount of
such Guarantees shall be such Person's maximum reasonably anticipated liability
in respect thereof as determined by such Person in good faith.
"Indemnified Person" shall mean the Lessor, the Agent, the Placement
Agent, the Escrow Agent, the Primary Financing Parties and their respective
successors, assigns, directors, trustees, shareholders, partners, officers,
employees, agents and Affiliates.
"Indemnity Provider" shall mean the Lessee.
"Initial Construction Advance" shall mean any initial Advance to pay for
Property Costs for construction of any Improvements.
"Instruments" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Insurance Consultant" shall mean ▇▇▇▇▇ USA Inc.
"Insurance Requirements" shall mean all terms and conditions of any
insurance policy either required by the Lease to be maintained by the Lessee or
required by the Agency Agreement to be maintained by the Construction Agent, and
all requirements of the issuer of any such policy and, regarding self insurance,
any other requirements of the Lessee or the Construction Agent, as the case may
be.
"Intercreditor Agreement" shall mean that certain Intercreditor and Lien
Subordination Agreement dated as of the Closing Date among the Lessee, the
Lessor, the Tranche A Note Purchasers, the Tranche B Lenders, the Cash
Collateral Lenders and the Agent.
"Interest Period" shall mean during the Commitment Period and thereafter
as to any Eurodollar Loan (i) with respect to the initial Interest Period and
any Interest Period immediately following a conversion from an ABR Loan to a
Eurodollar Loan, the period beginning on the date of such Eurodollar Loan and
ending on the first day of the following month, and (ii) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending one (1) month thereafter; provided, however,
that
A-21
all of the foregoing provisions relating to Interest Periods are subject to the
following: (A) if any Interest Period would end on a day which is not a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next succeeding
calendar month, then on the next preceding Business Day), (B) no Interest Period
shall extend beyond the Expiration Date, as the case may be, (C) where an
Interest Period begins on a day for which there is no numerically corresponding
day in the calendar month in which the Interest Period is to end, such Interest
Period shall end on the last Business Day of such calendar month, (D) there
shall not be more than four (4) Interest Periods outstanding at any one (1)
time.
"Interim Term" shall have the meaning given to such term in Section 2.2 of
the Lease.
"Intermediary" shall mean ▇▇▇▇▇ Fargo Bank Northwest, National
Association, a national banking association.
"Investment Company Act" shall mean the Investment Company Act of 1940, as
amended, together with the rules and regulations promulgated thereunder.
"Land" shall mean a parcel of real property described on (a) the
Requisition issued by the Construction Agent on the Closing Date relating to
such parcel and (b) the schedules to each applicable Lease Supplement executed
and delivered in accordance with the requirements of Section 2.4 of the Lease,
but shall exclude the Excess Land if and when such Excess Land is sold pursuant
to Section 21.1 of the Lease.
"Land Cost" shall have the meaning specified in Section 5.4 of the Agency
Agreement.
"Law" shall mean any statute, law, ordinance, regulation, rule, directive,
order, writ, injunction or decree of any Tribunal.
"Lease" or "Lease Agreement" shall mean the Lease Agreement dated as of
the Closing Date, between the Lessor and the Lessee, together with the Lease
Supplement thereto.
"Lease Default" shall mean any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute a Lease Event of
Default.
"Lease Event of Default" shall have the meaning specified in Section 17.1
of the Lease.
"Lease Supplement" shall mean the Lease Supplement substantially in the
form of Exhibit A to the Lease, together with all attachments and schedules
thereto.
"Legal Requirements" shall mean all foreign, federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions affecting the Lessor, the Lessee,
the Agent, any Primary Financing Party or the Property, Land, Improvement,
Equipment or the taxation, demolition, construction, use or alteration of such
Property, Land, Improvements, or Equipment whether now or hereafter enacted and
in force, including without limitation any that require repairs, modifications
or
A-22
alterations in or to the Property or in any way limit the use and enjoyment
thereof (including without limitation all building, zoning and fire codes and
the Americans with Disabilities Act of 1990, 42 U.S.C. ss. 12101 et. seq., and
any other similar federal, state or local laws or ordinances and the regulations
promulgated thereunder) and any that may relate to environmental requirements
(including without limitation all Environmental Laws), and all permits,
certificates of occupancy, licenses, authorizations and regulations relating
thereto, and all covenants, agreements, restrictions and encumbrances contained
in any instruments which are either of record or known to the Lessee affecting
the Property or the Appurtenant Rights.
"Lessee" shall have the meaning set forth in the Lease.
"Lessee Credit Agreement" shall mean that certain 364-Day Credit Agreement
dated as of September 19, 2001, among Lessee, as borrower, The Bank of New York,
as Administrative Agent and the lenders party thereto as such may hereafter be
amended, modified, supplemented, restated and/or replaced from time to time.
"Lessor" shall mean First Union Development Corporation, a North Carolina
corporation, and any successor, replacement and/or additional lessor or lessor
expressly permitted under the Operative Agreements.
"Lessor Financing Statements" shall mean UCC financing statements and
fixture filings appropriately completed and executed for filing in the
applicable jurisdictions in order to protect the Lessor's interest under the
Lease to the extent the Lease is a security agreement or a mortgage.
"Lessor Lien" shall mean any Lien, true lease or sublease or disposition
of title arising as a result of (a) any claim against the Lessor not resulting
from the transactions contemplated by the Operative Agreements, (b) any act or
omission of the Lessor which is not required by the Operative Agreements or is
in violation of any of the terms of the Operative Agreements, (c) any claim
against the Lessor with respect to Taxes or Transaction Expenses against which
the Lessee is not required to indemnify the Lessor pursuant to Section 11 of the
Participation Agreement or (d) any claim against the Lessor arising out of any
transfer by the Lessor of all or any portion of the interest of the Lessor in
the Property, the Borrower's Interest or the Operative Agreements other than the
transfer of title to or possession of any Property by the Lessor pursuant to and
in accordance with the Lease, the Note Purchase Agreement, the Tranche B Credit
Agreement, the Cash Collateral Credit Agreement, the Security Agreement or the
Participation Agreement or pursuant to the exercise of the remedies set forth in
Article XVII of the Lease.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien, option or charge of any kind.
"Limited Recourse Amount" shall mean with respect to the Property, an
amount equal to the Termination Value with respect to the Property on each
Payment Date, less the Maximum Residual Guarantee Amount as of such date with
respect to the Property.
A-23
"Majority Cash Collateral Lenders" shall mean at any time, Cash Collateral
Lenders whose Cash Collateral Loans outstanding represent at least fifty-one
percent (51%) of (a) the aggregate Cash Collateral Loans outstanding or (b) to
the extent there are no Cash Collateral Loans outstanding, the aggregate of the
Cash Collateral Commitments.
"Majority Secured Parties" shall mean at any time, Primary Financing
Parties whose Financings outstanding represent at least fifty-one percent (51%)
of (a) the aggregate Financings outstanding or (b) to the extent there are no
Financings outstanding, the aggregate of the Primary Financing Party
Commitments.
"Majority Tranche A Note Purchasers" shall mean at any time, Tranche A
Note Purchasers whose Tranche A Proceeds outstanding represent at least
fifty-one percent (51%) of the aggregate Tranche A Proceeds outstanding.
"Majority Tranche B Lenders" shall mean at any time, Tranche B Lenders
whose Tranche B Loans outstanding represent at least fifty-one percent (51%) of
(a) the aggregate Tranche B Loans outstanding or (b) to the extent there are no
Tranche B Loans outstanding, the aggregate of the Tranche B Commitments.
"Make-Whole Amount" shall mean, with respect to any Tranche A Note, an
amount equal to the excess, if any of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Tranche A Note
over the amount of such Called Principal; provided that the Make-Whole Amount
may in no event be less than zero. In the event any holder of a Tranche A Note
disagrees with the calculation by the Lessee or Borrower of the Make Whole
Amount, such holder of a Tranche A Note shall provide notice to the Lessee,
Borrower and the other holders of the Tranche A Notes setting forth in
reasonable detail its calculation of the Make Whole Amount. In case of such a
disagreement, the calculation of the Make Whole Amount shall be made by an
independent accounting firm reasonably acceptable to the parties to such
disagreement.
"Marketing Notice" shall have the meaning given to such term in Section
3.2(c) of the Intercreditor Agreement.
"Marketing Period" shall mean, if the Lessee has given a Sale Notice in
accordance with Section 20.1 of the Lease, the period commencing on the date
such Sale Notice is given and ending on the Expiration Date.
"Marketing Price" shall have the meaning given to such term in Section
3.2(c) of the Intercreditor Agreement.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets or properties of any Person and its
Subsidiaries taken as a whole.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business, condition (financial or otherwise), assets, liabilities or operations
of the Lessee and its Consolidated Subsidiaries taken as a whole, (b) the
ability of Lessee to perform its obligations
A-24
under any Operative Agreement to which it is a party, (c) the validity or
enforceability of any Operative Agreement or the rights and remedies of the
Agent, the Primary Financing Parties, or the Lessor thereunder, (d) the
validity, priority or enforceability of any Lien on the Property or the
Collateral created by any of the Operative Agreements, or (e) the fair market
value, utility or useful life of the Property or the use, or ability of the
Lessee to use, the Property for the purpose for which it was intended.
"Material Subsidiary Group" means any Subsidiary or group of Subsidiaries
as to which, individually or in the aggregate, any of the following tests are
met: (a) the Lessee's and the other Subsidiaries' investments in and advances to
such Subsidiary or group of Subsidiaries exceed 10% of the total assets of the
Lessee and its Subsidiaries on a Consolidated basis as of the last day of the
most recently completed fiscal year of the Lessee, (b) such Subsidiary's or
group of Subsidiaries' proportionate share of the total assets (after
intercompany eliminations) of the Lessee and its Subsidiaries on a Consolidated
basis exceeds 10% of the total assets of the Lessee and its Subsidiaries on a
Consolidated basis as of the last day of the most recently completed fiscal year
of the Lessee, or (c) the equity in the income from continuing operations before
income taxes, extraordinary items and the cumulative effect of a change in
accounting principles of such Subsidiary or group of Subsidiaries exceeds 10% of
such income of the Lessee and its Subsidiaries on a Consolidated basis for the
most recently completed fiscal year of the Lessee. In the event any new
Subsidiary shall be acquired or formed, the status of any one or more
Subsidiaries as a Material Subsidiary Group shall be determined on a pro forma
basis, giving effect to such acquisition or formation as if it had occurred at
the beginning of the most recently completed fiscal year of the Lessee.
"Maturity Date" shall mean the Expiration Date.
"Maximum Amount" shall have the meaning given to such term in Section 5.4
of the Agency Agreement.
"Maximum Residual Guarantee Amount" shall mean, at any date of
determination, an amount equal to the sum of all amounts due and owing to the
Tranche A Note Purchasers under the Note Purchase Agreement, the Tranche A Notes
and under any other Operative Agreement.
"Modifications" shall have the meaning specified in Section 11.1(a) of the
Lease.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage Instruments" shall mean each deed of trust and any other
instrument executed by the Lessor and the Lessee in favor of the Agent (for the
benefit of the Primary Financing Parties and the Lessor) and evidencing a Lien
on the Property, in form and substance reasonably acceptable to the Agent,
including without limitation the Tranche A Mortgage Instrument and the Tranche B
Mortgage Instrument.
"Multiemployer Plan" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Lessee or
any ERISA Affiliate and that is covered by Title IV of ERISA.
A-25
"Multiple Employer Plan" shall mean a plan to which the Lessee or any
ERISA Affiliate and at least one (1) other employer other than an ERISA
Affiliate is making or accruing an obligation to make, or has made or accrued an
obligation to make, contributions.
"Net Worth" means, as of any date, shareholders' equity or net worth of
the Lessee and its Consolidated Subsidiaries on a consolidated basis as
determined in accordance with GAAP.
"Non-GAAP Expenses" shall mean Tranche A Non-GAAP Interest Expense,
up-front structuring fees and any monthly extension fees paid or payable to the
Tranche B Lenders, any other non-capitalized expenses relating to the Property
determined in accordance with GAAP, as such term was defined on the Closing
Date, and any other non-capitalized expenses expressly approved by Lessor and
each Tranche B Lender (in their sole discretion) from time to time.
"Non-prohibited Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in good faith and by appropriate proceedings diligently
conducted by the Lessee or a Subsidiary of Lessee, as applicable, and
provided that the Lessee shall give the Agent prompt notice of such
contest and that such reserve or other appropriate provision as shall be
required in accordance with GAAP shall have been made therefor;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more
than 90 days or are being contested in good faith by appropriate
proceedings;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations or to secure public or statutory
obligations;
(d) Liens securing the performance of, or payment in respect of,
bids, trade contracts, leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature, in each
case in the ordinary course of business;
(e) judgment Liens in respect of judgments that do not constitute an
Event of Default under clause (m) of Section 17.1 of the Lease.
(f) any interest or title of a lessor or sublessor (other than a
lessor or sublessor under a lease or sublease that constitutes a Capital
Lease Obligation or that is entered into as part of a sale-leaseback
arrangement) and any restriction or encumbrance to which the interest or
title of such lessor or sublessor may be subject that is incurred in the
ordinary course of business;
A-26
(g) Liens in favor of customs and revenue authorities arising as a
matter of law or pursuant to a bond to secure payment of customs duties in
connection with the importation of goods;
(h) customary rights of setoff upon deposits of cash in favor of
banks or other depository institutions in which such cash is maintained in
the ordinary course of business;
(i) Liens on goods (or related documents of title) securing
reimbursement obligations under trade letters of credit issued for the
account of the Lessee or its Subsidiaries in the ordinary course of
business in connection with the purchase of such goods; and
(j) easements, operating agreements, covenants, conditions, rights
of way, survey exceptions, licenses, zoning restrictions and other
encumbrances on title to, or restriction on the use of, real property that
do not render title to the property encumbered thereby unmarketable or
adversely affect the use of such property for its present purposes in any
material manner;
provided that, except as provided in clauses (d), (h) and (i) above, the term
"Non-prohibited Encumbrances" shall not include any Lien securing Indebtedness.
"Note Purchase Agreement" shall mean that certain Note Purchase Agreement
dated as of the Closing Date among the Tranche A Note Purchasers, the Borrower
and the Agent.
"Note Purchase Agreement Default" shall mean any event or condition which,
with the lapse of time or the giving of notice, or both, would constitute a Note
Purchase Agreement Event of Default.
"Note Purchase Agreement Event of Default " shall have the meaning given
to such term in Section 11 of the Note Purchase Agreement.
"Notes" shall mean those notes issued to the Primary Financing Parties
pursuant to the Note Purchase Agreement, the Tranche B Credit Agreement or the
Cash Collateral Credit Agreement and shall include all of the Tranche A Notes,
the Tranche B Notes and the Cash Collateral Notes.
"Obligations" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Officer's Certificate" with respect to any person shall mean a
certificate executed on behalf of such person by a Responsible Officer who has
made or caused to be made such examination or investigation as is necessary to
enable such Responsible Officer to express an informed opinion with respect to
the subject matter of such Officer's Certificate.
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"Operative Agreements" shall mean the following: the Participation
Agreement, the Agency Agreement, the Note Purchase Agreement, the Tranche B
Credit Agreement, the Cash Collateral Credit Agreement, the Notes, the Lease,
the Lease Supplement, the Security Agreement, the Assignment of Escrow Account,
the Escrow Account Control Agreement, the Cash Collateral Agreement, the Cash
Collateral Control Agreement, the Intercreditor Agreement, the Structural
Guarantee, the Mortgage Instruments, the other Security Documents, the Deed, the
Bills of Sale and any and all other agreements, documents and instruments
executed in connection with any of the foregoing.
"Ordinary Course Liens" shall mean:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 8.3A.4;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more
than 90 days or are being contested in good faith by appropriate
proceedings;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations or to secure public or statutory
obligations;
(d) Liens securing the performance of, or payment in respect of,
bids, trade contracts, leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature, in each
case in the ordinary course of business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (m) of Section 17.1 of the Lease;
(f) any interest or title of a lessor or sublessor (other than a
lessor or sublessor under a lease or sublease that constitutes a Capital
Lease Obligation or that is entered into as part of a sale-leaseback
arrangement) and any restriction or encumbrance to which the interest or
title of such lessor or sublessor may be subject that is incurred in the
ordinary course of business;
(g) Liens in favor of customs and revenue authorities arising as a
matter of law or pursuant to a bond to secure payment of customs duties in
connection with the importation of goods;
(h) customary rights of setoff upon deposits of cash in favor of
banks or other depository institutions in which such cash is maintained in
the ordinary course of business;
(i) Liens on goods (or related documents of title) securing
reimbursement obligations under trade letters of credit issued for the
account of the Lessee or its
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Subsidiaries in the ordinary course of business in connection with the
purchase of such goods; and
(j) easements, operating agreements, covenants, conditions, rights
of way, survey exceptions, licenses, zoning restrictions and other
encumbrances on title to, or restrictions on the use of, real property
that do not render title to the property encumbered thereby unmarketable
or adversely affect the use of such property for its present purposes in
any material manner;
provided that, except as provided in clauses (d), (h) and (i) above, the term
"Ordinary Course Liens" shall not include any Lien securing Indebtedness.
"Original Executed Counterpart" shall have the meaning given to such term
in Section 5 of Exhibit A to the Lease.
"Overdue Interest" shall mean any interest payable pursuant to Section
2.8(b) of the Tranche B Credit Agreement or Section 2.8(b) of the Cash
Collateral Credit Agreement, as applicable.
"Overdue Rate" shall mean (a) with respect to Basic Rent and Supplemental
Rent, and any other amount owed under or with respect to the Tranche B Credit
Agreement, the Note Purchase Agreement, the Cash Collateral Credit Agreement,
the Notes or the Security Documents, the rate specified in Section 2.8(b) of the
Tranche B Credit Agreement, Section 2.8(b) of the Cash Collateral Credit
Agreement or 7.1(b) of the Note Purchase Agreement, as applicable, and (b) with
respect to any other amount, the amount referred to in clause (y) of Section
2.8(b) of the Tranche B Credit Agreement, clause (y) of Section 2.8(b) of the
Cash Collateral Credit Agreement or clause (y) of Section 7.1(b) of the Note
Purchase Agreement, as applicable.
"Participant" shall have the meaning given to such term in Section 9.7 of
the Tranche B Credit Agreement or Section 9.7 of the Cash Collateral Credit
Agreement, as applicable.
"Participation Agreement" shall mean the Participation Agreement dated as
of the Closing Date, among the Lessee, the Lessor, the Primary Financing
Parties, the Agent and the Escrow Agent.
"Payment Date" shall mean any Scheduled Interest Payment Date and any date
on which interest in connection with a prepayment of principal on the Financing
is due under the Tranche B Credit Agreement, the Cash Collateral Credit
Agreement, the Note Purchase Agreement or the Notes.
"PBGC" shall mean the Pension Benefit Guaranty Corporation created by
Section 4002(a) of ERISA or any successor thereto.
"Pension Plan" shall mean a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to title IV of ERISA (other than a
Multiemployer Plan), and to which
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the Lessee or any ERISA Affiliate may have any liability, including without
limitation any liability by reason of having been a substantial employer within
the meaning of section 4063 of ERISA at any time during the preceding five (5)
years, or by reason of being deemed to be a contributing sponsor under section
4069 of ERISA.
"Performance Bonds" shall mean any performance bonds and labor and
material payment bonds as to the General Contractor and any other Contractor
(and any of their respective subcontractors) as may be reasonably required by
the Agent, each of which shall name the Lessor and the Agent as additional
obligees.
"Permitted Encumbrances" shall have the meaning given to such term in
Section 5 of the Purchase Agreement.
"Permitted Facility" shall mean Pointview Corporate Park, located in
Wayne, New Jersey (together with improvements existing or to be built thereon).
"Permitted Liens" shall mean, with respect to the Property:
(a) the respective rights and interests of the parties to the
Operative Agreements as provided in the Operative Agreements;
(b) the rights of any sublessee or assignee under a sublease or an
assignment expressly permitted by the terms of the Lease for no longer
than the duration of the Lease;
(c) Liens for Taxes that either are not yet due or are being
contested in accordance with the provisions of Section 13.1 of the Lease;
(d) Liens arising by operation of law, materialmen's, mechanics',
workmen's, repairmen's, employees', carriers', warehousemen's and other
like Liens relating to the construction of the Improvements or in
connection with any Modifications or arising in the ordinary course of
business for amounts that either are not more than thirty (30) days past
due or are being diligently contested in good faith by appropriate
proceedings, so long as such proceedings satisfy the conditions for the
continuation of proceedings to contest Taxes set forth in Section 13.1 of
the Lease;
(e) Liens of any of the types referred to in clause (d) above that
have been bonded for not less than the full amount in dispute (or as to
which other security arrangements reasonably satisfactory to the Lessor
and the Agent have been made), which bonding (or arrangements) shall
comply with applicable Legal Requirements, and shall have effectively
stayed any execution or enforcement of such Liens;
(f) Liens arising out of judgments or awards with respect to which
appeals or other proceedings for review are being prosecuted in good faith
and for the payment of which adequate reserves have been provided as
required by GAAP, which are or will be covered by a policy or policies of
insurance or for which other appropriate provisions
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have been made, so long as such proceedings have the effect of staying the
execution of such judgments or awards and, if such appeal relates to
Taxes, the conditions for the continuation of proceedings to contest Taxes
set forth in Section 13.1 of the Lease have been satisfied;
(g) Liens in favor of municipalities to the extent agreed to by the
Lessor and the Agent;
(h) all encumbrances, exceptions, restrictions, easements, rights of
way, servitudes, encroachments and irregularities in title, other than
Liens which, in the reasonable assessment of the Agent, will have a
Material Adverse Effect;
(i) any other Lien expressly consented to or approved by the Agent;
and
(j) Permitted Encumbrances.
"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, governmental authority or any other entity.
"Placement Agent" shall mean First Union Securities, Inc., in its capacity
as the Placement Agent under the Note Purchase Agreement.
"Plan" means an employee benefit or other plan established or maintained
by the Lessee or any ERISA Affiliate and that is covered by Title IV of ERISA,
other than a Multiemployer Plan.
"Plans and Specifications" shall mean, with respect to Improvements,
Equipment and other components of the Property, the plans and specifications for
such Improvements, Equipment and other components of the Property to be
constructed, as such Plans and Specifications may be amended, modified or
supplemented from time to time in accordance with the terms of the Operative
Agreements.
"Primary Financing Party Commitments" shall mean the Primary Financing
Party Commitment of (i) each Tranche A Note Purchaser as set forth on Schedule A
to the Note Purchase Agreement, as such Schedule A may be amended and replaced
from time to time, (ii) each Tranche B Lender as set forth in Schedule 2.1 to
the Tranche B Credit Agreement as such Schedule 2.1 may be amended and replaced
from time to time and (iii) each Cash Collateral Lender as set forth in Schedule
2.1 to the Cash Collateral Credit Agreement as such Schedule 2.1 may be amended
and replaced from time to time.
"Primary Financing Parties" shall mean the Tranche A Note Purchasers, the
Tranche B Lenders, the Cash Collateral Lenders and any other banks, financial
institutions or other institutional investors which may be from time to time a
Tranche A Note Purchaser, a Tranche B Lender or a Cash Collateral Lender to the
Participation Agreement and any of the Tranche B
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Credit Agreement, the Note Purchase Agreement or the Cash Collateral Credit
Agreement pursuant to the terms thereof.
"Primary Financing Party Financing Statements" shall mean UCC financing
statements and fixture filings appropriately completed and executed for filing
in the applicable jurisdiction in order to procure a security interest in favor
of the Agent in the Collateral subject to the Security Documents.
"Prime Lending Rate" shall have the meaning given to such term in the
definition of ABR.
"Prohibited Transaction" shall mean a transaction that is prohibited under
Section 4975 of the Code or Section 406 of ERISA and not exempt under Section
4975 of the Code or Section 408 of ERISA.
"Project Cost" shall have the meaning given to such term in Section 5.1 of
the Participation Agreement; provided, however, Project Costs shall not include
any amounts paid by the seller under the Purchase Agreement or otherwise made
available to the Lessor or Construction Agent from funds held in escrow or other
arrangements made pursuant to the Purchase Agreement.
"Property" shall mean the Permitted Facility that is (or is to be)
acquired, constructed and/or renovated pursuant to the terms of the Operative
Agreements, the Land and each item of Equipment and the various Improvements, in
each case located on such Land.
"Property Acquisition Cost" shall mean the cost to the Lessor to purchase
the Property on the Closing Date.
"Property Cost" shall mean, with respect to the Property at any date of
determination, an amount equal to (a) the aggregate principal amount of all
Advances made on or prior to such date and advanced to or for the benefit of the
Construction Agent pursuant to and for the purposes set forth in Section 5.1 of
the Participation Agreement with respect to the Property minus (b) the aggregate
amount of prepayments or repayments as the case may be of the Tranche A Notes,
the Tranche B Loans or the Cash Collateral Loans allocated to reduce the
Property Cost of the Property pursuant to Section 8 of the Note Purchase
Agreement, Section 2.6(c) of the Tranche B Credit Agreement or Section 2.6(c) of
the Cash Collateral Credit Agreement, respectively.
"PTE" shall have the meaning given to such term in Section 6.2(a) of the
Note Purchase Agreement.
"Purchase Agreement" shall mean collectively, (i) that certain Purchase
and Sale Agreement between WWG Pointview LLC, as seller, and Toys "R" Us, Inc,
as purchaser, dated as of July 6, 2001 and (ii) that certain letter agreement
between WWG Pointview LLC and Toys "R" Us, Inc. dated as of July 6, 2001.
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"Purchase Option" shall have the meaning given to such term in Section
20.1 of the Lease.
"Purchasing Lender" shall have the meaning given to such term in Section
9.8(a) of the Tranche B Credit Agreement or Section 9.8(a) of the Cash
Collateral Credit Agreement, as applicable.
"QPAM Exemption" shall mean Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Rating Agencies" shall mean ▇▇▇▇▇'▇, S&P and Fitch Investors Service,
L.P. or, in each case, any successor nationally recognized statistical rating
organization.
"Register" shall have the meaning given to such term in Section 9.9(a) of
the Tranche B Credit Agreement or Section 9.9(a) of the Cash Collateral Credit
Agreement, as applicable.
"Regulation D" shall mean Regulation D of the Board, as the same may be
modified and supplemented and in effect from time to time.
"Regulation T" shall mean Regulation T of the Board, as the same may be
modified and supplemented and in effect from time to time.
"Regulation U" shall mean Regulation U of the Board, as the same may be
modified and supplemented and in effect from time to time.
"Regulation X" shall mean Regulation X of the Board, as the same may be
modified and supplemented and in effect from time to time.
"Reinvestment Yield" shall mean, with respect to the Called Principal of
any Tranche A Note, 0.50% over the yield to maturity implied by (a) the yields
reported, as of 10:00 A.M. (New York City time) on the third Business Day
preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page USD" of the Bloomberg Financial Markets Services
Screen (or, if not available, any other nationally recognized trading screen
reporting on-line intraday trading in U.S. Treasury securities) for actively
traded U.S. Treasury securities having a maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date, or (b) if such yields
are not reported as of such time or the yields reported as of such time are not
ascertainable, the Treasury Constant Maturity Series Yields reported, for the
latest day for which such yields have been so reported as of the second Business
Day preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having a constant
maturity equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield will be determined, if necessary, by (i)
converting U.S. Treasury ▇▇▇▇ quotations to bond-equivalent yields in accordance
with accepted financial practice and (ii) interpolating linearly between (1) the
actively traded U.S. Treasury security with the maturity closest to and greater
than the Remaining Average Life and (2) the
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actively traded U.S. Treasury security with the maturity closest to and less
than the Remaining Average Life.
"Related Financing Party" shall have the meaning given to such term in
Section 3.12 of the Intercreditor Agreement.
"Release" shall mean any release, pumping, pouring, emptying, injecting,
escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal or
emission of a Hazardous Substance.
"Remaining Average Life" shall mean, with respect to any Called Principal,
the number of years (calculated to the nearest one-twelfth year) obtained by
dividing (a) such Called Principal into (b) the sum of the products obtained by
multiplying (i) the principal component of each Remaining Scheduled Payment with
respect to such Called Principal by (ii) the number of years (calculated to the
nearest one-twelfth year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.
"Remaining Property" shall mean, as the context shall require, (i) the
portion of the Property exclusive of the Excess Land following the subdivision
of the Property in accordance with Section 8.13(a) of the Participation
Agreement or (ii) the portion of the Property which remains subject to the Lease
and the other Operative Agreements after any Excess Land is sold, transferred,
conveyed or purchased by any third party in accordance with Section 8.13(b) of
the Participation Agreement.
"Remaining Scheduled Payments" shall mean, with respect to the Called
Principal of any Tranche A Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with respect to
such Called Principal if no payment of such Called Principal were made prior to
its scheduled due date; provided that if such Settlement Date is not a date on
which interest payments are due to be made under the terms of the Tranche A
Notes, then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and required
to be paid on such Settlement Date.
"Rent" shall mean, collectively, the Basic Rent, the Cash Collateral Rent
and the Supplemental Rent, in each case payable under the Lease.
"Rent Commencement Date" shall mean the Completion Date.
"Reportable Event" shall have the meaning specified in Section 4043 of
ERISA.
"Requested Funds" shall mean any funds requested by the Lessee or the
Construction Agent, as applicable, in accordance with Section 5 of the
Participation Agreement.
"Requisition" shall have the meaning specified in Section 4.2 of the
Participation Agreement.
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"Responsible Officer" shall mean the Chairman or Vice Chairman of the
Board of Directors, the Chief Executive Officer, the President, any Senior Vice
President or Executive Vice President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer, or any Assistant Treasurer.
"Restoration" shall have the meaning given to such term in Section 15.1(e)
of the Lease.
"Rule 144A" shall mean Rule 144A of the Securities Act.
"S&P" shall mean Standard and Poor's Rating Group, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Sale Date" shall have the meaning given to such term in Section 20.3(a)
of the Lease.
"Sale Notice" shall mean a notice given to the Agent in connection with
the election by the Lessee of its Sale Option.
"Sale Option" shall have the meaning given to such term in Section 20.1 of
the Lease.
"Sale Proceeds Shortfall" shall mean the amount by which the proceeds of a
sale described in Section 22.1 of the Lease are less than the Limited Recourse
Amount with respect to the Property if it has been determined that the Fair
Market Sales Value of the Property at the expiration of the term of the Lease
has been impaired by greater than ordinary wear and tear during the Term of the
Lease.
"Scheduled Interest Payment Date" shall mean (a) as to any Eurodollar
Loan, any ABR Loan and any interest payment pursuant to any Tranche A Note, the
first day of each month, unless such day is not a Business Day and in such case
on the next occurring Business Day and (b) as to all Financings, the date of any
voluntary or involuntary payment, prepayment, return or redemption, and the Cash
Collateral Maturity Date (in the case of Cash Collateral Loans), Maturity Date
or the Expiration Date, as the case may be.
"SEC" means United States Securities and Exchange Commission.
"Second Priority Liens" shall have the meaning given to such term in
Section 3.1 of the Intercreditor Agreement.
"Secured Parties" shall have the meaning given to such term in the
Security Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
"Security Agreement" shall mean the Security Agreement dated as of the
Closing Date between the Borrower and the Agent, for the benefit of the Secured
Parties, and accepted and agreed to by the Lessee.
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"Security Assets" shall have the meaning given to such term in Section 2
of the Security Agreement.
"Security Documents" shall mean the collective reference to the Security
Agreement, the Mortgage Instruments, (to the extent the Lease is construed as a
security instrument) the Lease, the UCC Financing Statements and all other
security documents hereafter delivered to the Agent granting a Lien on any asset
or assets of any Person to secure the obligations and liabilities of the Lessor
under the Note Purchase Agreement, the Tranche B Credit Agreement, the Cash
Collateral Credit Agreement and/or under any of the other Credit Documents.
"Settlement Date" shall mean, with respect to the Called Principal of any
Tranche A Note, the date on which such Called Principal is to be prepaid or has
become or is declared to be immediately due and payable, as the context
requires.
"Soft Costs" shall mean all costs which are ordinarily and reasonably
incurred in relation to the acquisition, development, installation,
construction, improvement and testing of the Property other than Hard Costs,
including without limitation structuring fees, administrative fees, legal fees,
upfront fees, fees and expenses related to appraisals, title examinations, title
insurance, document recordation, surveys, environmental site assessments,
geotechnical soil investigations and similar costs and professional fees
customarily associated with a real estate closing, the fees and expenses of the
Lessor payable or reimbursable under the Operative Agreements and costs and
expenses incurred pursuant to Sections 7.3(a) and 7.3(b) of the Participation
Agreement.
"Source" shall have the meaning given to such term in Section 6.2 of the
Note Purchase Agreement.
"Structural Guarantee" shall mean that certain Structural Guarantee dated
as of September 26, 2001 from the Guarantor in favor of the Beneficiaries.
"Subsidiary" shall mean, as to any Person, any corporation of which at
least a majority of the outstanding stock having by the terms thereof ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person, or by one (1)
or more Subsidiaries, or by such Person and one (1) or more Subsidiaries.
"Successor Person" shall have the meaning given to such term in Section
8.3B.1 of the Participation Agreement.
"Supplemental Amounts" shall have the meaning given to such term in
Section 9.18 of the Tranche B Credit Agreement, Section 9.18 of the Cash
Collateral Credit Agreement and Section 22.14 of the Note Purchase Agreement,
respectively.
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"Supplemental Rent" shall mean all amounts, liabilities and obligations
(other than Basic Rent) which the Lessee assumes or agrees to pay to the Lessor,
the Agent, the Primary Financing Parties or any other Person under the Lease or
under any of the other Operative Agreements including without limitation
payments of the Termination Value and the Maximum Residual Guarantee Amount and
all indemnification amounts, liabilities and obligations.
"Tax Affiliate" means, with respect to any corporate Person, any member of
an affiliated group (within the meaning of Section 1504(a) of the Code or any
similar provision of state or local law) in which such Person is a member,
"former Tax Affiliate" means, with respect to any corporate Person, any other
Person that had been but is not currently affiliated (within the meaning of
Section 1504(a) of the Code or any similar provision of state or local law) with
such Person, with respect to the period of their affiliation.
"Taxes" shall have the meaning specified in the definition of
"Impositions".
"Term" shall mean, collectively, the Interim Term and the Basic Term.
"Termination Date" shall have the meaning specified in Section 16.2(a) of
the Lease.
"Termination Event" shall mean (a) with respect to any Pension Plan, the
occurrence of a Reportable Event or an event described in Section 4062(e) of
ERISA, (b) the withdrawal of the Lessee or any ERISA Affiliate from a Multiple
Employer Plan during a plan year in which it was a substantial employer (as such
term is defined in Section 4001(a)(2) of ERISA), or the termination of a
Multiple Employer Plan, (c) the distribution of a notice of intent to terminate
a Plan or Multiemployer Plan pursuant to Section 4041(a)(2) or 4041A of ERISA,
(d) the institution of proceedings to terminate a Plan or Multiemployer Plan by
the PBGC under Section 4042 of ERISA, (e) any other event or condition which
might constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan or Multiemployer Plan, or
(f) the complete or partial withdrawal of the Lessee or any ERISA Affiliate from
a Multiemployer Plan.
"Termination Notice" shall have the meaning specified in Section 16.1 of
the Lease.
"Termination Value" shall mean the sum of (a) the outstanding aggregate
purchase price paid by the Tranche A Note Purchasers for the Tranche A Notes
(minus any amounts then on deposit in the Escrow Account), plus (b) the
outstanding aggregate principal amount of Tranche B Loans, plus (c) the
outstanding aggregate principal amount of Cash Collateral Loans, plus (d) any
accrued and unpaid interest owing to the Tranche A Note Purchasers, the Tranche
B Lenders or the Cash Collateral Lenders under the Tranche A Notes, the Tranche
B Notes and the Cash Collateral Notes, plus (e) with respect to the Tranche B
Lenders and the Cash Collateral Lenders, any amounts payable pursuant to Section
11.4 of the Participation Agreement, and with respect to the Tranche A Note
Purchasers, the Make-Whole Amount, plus (f) to the extent the same is not
duplicative of the amounts payable under clauses (a) through (e) above, all
other Rent and other amounts then due and payable or accrued under the Agency
Agreement, Lease and/or under any other Operative Agreement (including without
limitation amounts under Sections 11.1
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and 11.2 of the Participation Agreement and all costs and expenses referred to
in clause FIRST of Section 22.2 of the Lease).
"Total Capitalization" means, at any date of determination calculated for
the Lessee and its Consolidated Subsidiaries the sum of (i) Net Worth plus (ii)
Funded Indebtedness of the Lessee and its Consolidated Subsidiaries.
"Tranche A Commitments" shall mean the obligation of the Tranche A Note
Purchasers to purchase the Tranche A Notes from the Borrower in an aggregate
principal amount not to exceed the aggregate of the amounts set forth opposite
each Tranche A Note Purchaser's name on Schedule A to the Note Purchase
Agreement; provided, no Tranche A Note Purchaser shall be obligated to purchase
Tranche A Notes in excess of such Tranche A Note Purchaser's share of the
Tranche A Commitments as set forth adjacent to such Tranche A Note Purchaser's
name on Schedule A to the Note Purchase Agreement.
"Tranche A Mortgage Instruments" means each deed of trust and any other
instrument executed by the Borrower and the Lessee in favor of the Agent (for
the benefit of the Tranche A Note Purchasers) and evidencing a Lien on the
Property, in form and substance reasonably acceptable to the Tranche A Note
Purchasers.
"Tranche A Non-GAAP Interest Expense" shall mean, for any Interest Period
during the Construction Period, the interest payable pursuant to the Tranche A
Notes on that portion of the Tranche A Proceeds then remaining in the Escrow
Account minus any income earned from the investment of Tranche A Proceeds in
Cash Equivalents pursuant to Section 5.12 of the Participation Agreement.
"Tranche A Note" shall have the meaning given to it in Section 1 of the
Note Purchase Agreement.
"Tranche A Note Purchasers" shall mean the several institutional investors
from time to time party to the Note Purchase Agreement that commit to purchase
or otherwise hold from time to time the Tranche A Notes.
"Tranche A Obligations" means the collective reference to all obligations,
now existing or hereafter arising, owing by the Borrower and/or the Lessee
and/or any of their affiliates to the Tranche A Note Purchasers under or
pursuant to the Operative Agreements whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred, which may
arise under, out of, or in connection with the Participation Agreement, the Note
Purchase Agreement, the Lease Agreement, the Agency Agreement, the Tranche A
Notes or any of the other Operative Agreements, whether on account of principal,
advanced amounts, interest, Make-Whole Amount, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
reasonable fees and disbursements of counsel to the Agent or to the Tranche A
Note Purchasers) that are required to be paid by the Borrower and/or the Lessee
pursuant to the terms of the Operative Agreements.
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"Tranche A Proceeds" shall mean the proceeds from the sale of the Tranche
A Notes to the Tranche A Note Purchasers pursuant to the Tranche A Commitment.
"Tranche B Commitments" shall mean the obligation of the Tranche B Lenders
to make the Tranche B Loans to the Lessor in an aggregate principal amount at
any one time outstanding not to exceed the aggregate of the amounts set forth
opposite each Tranche B Lender's name on Schedule 2.1 to the Tranche B Credit
Agreement, as such amount may be increased or reduced from time to time in
accordance with the provisions of the Operative Agreements; provided, no Tranche
B Lender shall be obligated to make Tranche B Loans in excess of such Tranche B
Lender's share of the Tranche B Commitments as set forth adjacent to such
Tranche B Lender's name on Schedule 2.1 to the Tranche B Credit Agreement.
"Tranche B Credit Agreement" shall mean the Tranche B Credit Agreement,
dated as of the Closing Date, among the Borrower, the Agent and the Tranche B
Lenders, as specified therein.
"Tranche B Credit Agreement Default" shall mean any event or condition
which, with the lapse of time or the giving of notice, or both, would constitute
a Tranche B Credit Agreement Event of Default.
"Tranche B Credit Agreement Event of Default" shall mean any event or
condition defined as an "Event of Default" in Section 6 of the Tranche B Credit
Agreement.
"Tranche B Eurodollar Loans" shall mean Tranche B Loans the rate of
interest applicable to which is based upon the Eurodollar Rate.
"Tranche B Lenders" shall mean First Union National Bank and shall include
the several banks and other financial institutions from time to time party to
the Tranche B Credit Agreement that commit to make the Tranche B Loans.
"Tranche B Loan" shall mean the loans made pursuant to the Tranche B
Commitments.
"Tranche B Mortgage Instruments" means each deed of trust and any other
instrument executed by the Borrower and the Lessee in favor of the Agent (for
the benefit of the Tranche B Lenders) and evidencing a Lien on the Property, in
form and substance reasonably acceptable to the Tranche B Lenders.
"Tranche B Note" shall have the meaning given to it in Section 2.2 of the
Tranche B Credit Agreement.
"Tranche B Obligations" means the collective reference to all obligations,
now existing or hereafter arising, owing by the Borrower and/or the Lessee
and/or any of their affiliates to the Tranche B Lenders under or pursuant to the
Operative Agreements whether direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter incurred, which may arise under, out
of, or in connection with the Participation Agreement, the Tranche B Credit
Agreement, the Lease Agreement, the Agency Agreement, the Tranche B Notes, or
any of the
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other Operative Agreements, whether on account of principal, advanced amounts,
interest, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all reasonable fees and disbursements
of counsel to the Agent or to the Tranche B Lenders) that are required to be
paid by the Borrower and/or the Lessee pursuant to the terms of the Operative
Agreements.
"Transaction Expenses" shall mean all Soft Costs and all other costs and
expenses incurred in connection with the preparation, execution and delivery of
the Operative Agreements and the transactions contemplated by the Operative
Agreements including without limitation all costs and expenses described in
Section 7 of the Participation Agreement and the following:
(a) the reasonable fees, out-of-pocket expenses and disbursements of
▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇ PLLC and ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, as counsel to the Financing
Parties, and of counsel to the Lessee in negotiating the terms of the
Operative Agreements and the other transaction documents, preparing for
the closings under, and rendering opinions in connection with, such
transactions and in rendering other services customary for counsel
representing parties to transactions of the types involved in the
transactions contemplated by the Operative Agreements, but excluding in
all cases the fees, expenses and disbursements of counsel to any
individual Tranche A Note Purchaser or Tranche B Lender or Cash Collateral
Lender;
(b) the reasonable fees, out-of-pocket expenses and disbursements of
accountants for the Lessee in connection with the transaction contemplated
by the Operative Agreements;
(c) any and all other reasonable fees, charges or other amounts
payable to the Primary Financing Parties, the Agent, the Escrow Agent or
the Lessor which arises under any of the Operative Agreements;
(d) any other reasonable fees, out-of-pocket expenses, disbursements
or costs of any party to the Operative Agreements or any of the other
transaction documents; and
(e) any and all Taxes and fees incurred in recording or filing any
Operative Agreement or any other transaction document, any deed,
declaration, mortgage, security agreement, notice or financing statement
with any public office, registry or governmental agency in connection with
the transactions contemplated by the Operative Agreements.
"Tribunal" shall mean any state, commonwealth, federal, foreign,
territorial, or other court or government body, subdivision agency, department,
commission, board, bureau or instrumentality of a governmental body.
"Type" shall mean, as to any Tranche B Loan or any Cash Collateral Loan,
whether it is an ABR Loan or a Eurodollar Loan.
"UCC Financing Statements" shall mean collectively the Primary Financing
Party Financing Statements and the Lessor Financing Statements.
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"Unfunded Liability" shall mean, with respect to any Plan, at any time,
the amount (if any) by which (a) the present value of all accrued benefits under
such Plan exceeds (b) the fair market value of all Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plan, but only to the extent that such excess represents a potential liability
of the Lessee or any member of the Controlled Group to the PBGC or such Plan
under Title IV of ERISA.
"Uniform Commercial Code" and "UCC" shall mean the Uniform Commercial Code
as in effect in any applicable jurisdiction.
"U.S. Person" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"U.S. Taxes" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"Voting Stock" means capital stock issued by a corporation, or equivalent
interests in any other Person, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even if the right so to
vote has been suspended by the happening of such a contingency.
"Wholly-Owned Entity" shall mean a Person all of the shares of capital
stock or other ownership interest of which are owned by a referent Person and/or
one of such referent Person's wholly-owned Subsidiaries or other wholly-owned
entities.
"Withdraw Liability" shall have the meaning given to such term under Part
I of Subtitle E of Title IV of ERISA.
"Withholdings" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"Work" shall mean the furnishing of labor, materials, components,
furniture, furnishings, fixtures, appliances, machinery, equipment, tools,
power, water, fuel, lubricants, supplies, goods and/or services with respect to
the Property.
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