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Exhibit 10.1
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PARTICIPATION AGREEMENT
dated as of December 14, 1998
among
FORE SYSTEMS, INC.,
as Lessee, Guarantor and Construction Agent,
WILMINGTON TRUST COMPANY,
not in its individual capacity, but solely as
trustee of BRUSH CREEK BUSINESS TRUST II,
as Lessor and Certificate Trustee,
MELLON FINANCIAL SERVICES CORPORATION #4,
as Certificate Purchaser,
and
MELLON BANK, N.A.,
as Construction Lender
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Construction Program For a
Manufacturing/Office Facility
in Allegheny County, Pennsylvania
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Participation Agreement
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TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS; INTERPRETATION
ARTICLE II. DOCUMENTATION DATE; INITIAL ADVANCE DATE
SECTION 2.1. DOCUMENTATION DATE............................................................................. 3
SECTION 2.2. INITIAL ADVANCE DATE........................................................................... 4
ARTICLE III. FUNDING OF ADVANCES
SECTION 3.1. CERTIFICATE TRUSTEE COMMITMENT................................................................. 4
SECTION 3.2. CERTIFICATE PURCHASER'S COMMITMENT............................................................. 5
SECTION 3.3. CONSTRUCTION LENDER'S COMMITMENT............................................................... 5
SECTION 3.4. PROCEDURES FOR ADVANCES........................................................................ 5
SECTION 3.5. USE OF ADVANCES................................................................................ 6
SECTION 3.6. COLLATERALIZATION.............................................................................. 6
SECTION 3.7. REFINANCING.................................................................................... 6
SECTION 3.8. RESIZING OF TRANCHE A, TRANCHE B AND CERTIFICATE............................................... 9
ARTICLE IV. CERTIFICATE PAYMENTS; CONSTRUCTION LOAN PAYMENTS
SECTION 4.1. CERTIFICATE PAYMENTS........................................................................... 9
SECTION 4.2. CONSTRUCTION LOAN PAYMENTS..................................................................... 10
SECTION 4.3. RENT PAYMENTS.................................................................................. 10
SECTION 4.4. OVERDUE PAYMENTS............................................................................... 11
ARTICLE V. CERTAIN INTENTIONS OF THE PARTIES
SECTION 5.1. NATURE OF TRANSACTION.......................................................................... 11
SECTION 5.2. AMOUNTS DUE UNDER LEASE........................................................................ 12
ARTICLE VI. CONDITIONS PRECEDENT TO INITIAL ADVANCE DATE AND ADVANCES
SECTION 6.1. INITIAL ADVANCE DATE CONDITIONS................................................................ 12
SECTION 6.2. CONDITIONS PRECEDENT TO EACH ADVANCE........................................................... 17
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Page
ARTICLE VII. CONDITIONS TO SUBSTANTIAL COMPLETION
SECTION 7.1. CONDITIONS TO SUBSTANTIAL COMPLETION OF THE PROPERTY.......................................... 20
VIII. ARTICLE REPRESENTATIONS
SECTION 8.1. REPRESENTATIONS OF THE PARTICIPANTS........................................................... 20
SECTION 8.2. REPRESENTATIONS OF THE CERTIFICATE TRUSTEE AND THE TRUST COMPANY.............................. 21
SECTION 8.3. REPRESENTATIONS OF LESSEE..................................................................... 23
SECTION 8.4. REPRESENTATIONS OF LESSEE WITH RESPECT TO EACH ADVANCE........................................ 29
ARTICLE IX. PAYMENT OF CERTAIN EXPENSES
SECTION 9.1. TRANSACTION EXPENSES.......................................................................... 30
SECTION 9.2. BROKERS' FEES AND STAMP TAXES................................................................. 31
SECTION 9.3. LIMITATIONS DURING INTERIM TERM............................................................... 31
ARTICLE X. OTHER COVENANTS AND AGREEMENTS
SECTION 10.1. COVENANTS OF LESSEE........................................................................... 31
SECTION 10.2. RESERVED...................................................................................... 35
SECTION 10.3. FINANCIAL COVENANTS........................................................................... 35
SECTION 10.4. WAIVER OF COVENANTS........................................................................... 35
SECTION 10.5. COVENANT OF THE CERTIFICATE TRUSTEE AND THE PARTICIPANTS...................................... 35
SECTION 10.6. OTHER COVENANTS OF THE CERTIFICATE TRUSTEE AND THE TRUST COMPANY.............................. 35
SECTION 10.7. COVENANT OF CERTIFICATE PURCHASER............................................................. 37
ARTICLE XI. [RESERVED]
ARTICLE XII. TRANSFERS OF PARTICIPANTS' INTERESTS
SECTION 12.1. ASSIGNMENTS................................................................................... 37
SECTION 12.2. PARTICIPATIONS................................................................................ 39
SECTION 12.3. WITHHOLDING TAXES; DISCLOSURE OF INFORMATION; PLEDGE UNDER REGULATION A........................39
ARTICLE XIII. INDEMNIFICATION
SECTION 13.1. GENERAL INDEMNIFICATION....................................................................... 40
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SECTION 13.2. END OF TERM INDEMNITY......................................................................... 48
SECTION 13.3. ENVIRONMENTAL INDEMNITY....................................................................... 49
SECTION 13.4. PROCEEDINGS IN RESPECT OF CLAIMS.............................................................. 50
SECTION 13.5. GENERAL TAX INDEMNITY......................................................................... 52
SECTION 13.6. FUNDING LOSSES................................................................................ 56
SECTION 13.7. REGULATION D COMPENSATION..................................................................... 56
SECTION 13.8. BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR...................................... 57
SECTION 13.9. ILLEGALITY.................................................................................... 57
SECTION 13.10. INCREASED COST AND REDUCED RETURN............................................................. 58
SECTION 13.11. INDEMNITY PAYMENTS IN ADDITION TO LEASE OBLIGATIONS........................................... 59
ARTICLE XIV. MISCELLANEOUS
SECTION 14.1. SURVIVAL OF AGREEMENTS........................................................................ 60
SECTION 14.2. NO BROKER, ETC................................................................................ 60
SECTION 14.3. NOTICES....................................................................................... 60
SECTION 14.4. COUNTERPARTS.................................................................................. 60
SECTION 14.5. AMENDMENTS.................................................................................... 61
SECTION 14.6. HEADINGS, ETC................................................................................. 61
SECTION 14.7. PARTIES IN INTEREST........................................................................... 61
SECTION 14.8. GOVERNING LAW................................................................................. 61
SECTION 14.9. SEVERABILITY.................................................................................. 61
SECTION 14.10. LIABILITY LIMITED............................................................................. 62
SECTION 14.11. FURTHER ASSURANCES............................................................................ 62
SECTION 14.12. SUBMISSION TO JURISDICTION.................................................................... 63
SECTION 14.13. CONFIDENTIALITY............................................................................... 63
SECTION 14.14. NO BAR........................................................................................ 64
SECTION 14.15. WAIVER OF JURY TRIAL.......................................................................... 64
SECTION 14.16. CONSTRUCTION CONSULTANT....................................................................... 64
SECTION 14.17. COOPERATION IN CONNECTION WITH SUBDIVISIONS................................................... 64
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APPENDICES
APPENDIX 1 Definitions and Interpretation
SCHEDULES
SCHEDULE I ADDITIONAL DEBT
SCHEDULE II CHANGE IN NAME OR ENTITY
SCHEDULE III INFORMATION FOR NOTICES
SCHEDULE IV COMMITMENT PERCENTAGES
EXHIBITS
EXHIBIT A Funding Request
EXHIBIT B Form of Lease
EXHIBIT C Form of Certificate
EXHIBIT D Form of Construction Loan Agreement
EXHIBIT E Form of Note
EXHIBIT F Form of Guaranty
EXHIBIT G Form of Pledge and Security Agreement
EXHIBIT H Form of Assignment of Leases and Rents
EXHIBIT I Form of Deed
EXHIBIT J Form of Mortgage
EXHIBIT K Form of Construction Agency Agreement
EXHIBIT L Form of Assignment of Construction Agency Agreement
EXHIBIT M Form of Construction Documents Assignment
EXHIBIT N Responsible Employee's Certificates
EXHIBIT O Construction Certificate
EXHIBIT P Form of Assignment Agreement
EXHIBIT Q Form of Guaranty Agreement
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT, dated as of December 14, 1998, is entered
into by and among FORE SYSTEMS, INC., a Delaware corporation, as Lessee,
Guarantor and Construction Agent; WILMINGTON TRUST COMPANY, not in its
individual capacity, except as expressly stated herein, but solely as trustee of
BRUSH CREEK BUSINESS TRUST II, a Delaware business trust, as Lessor and
Certificate Trustee; MELLON FINANCIAL SERVICES CORPORATION #4, a Pennsylvania
corporation, as the Certificate Purchaser; and MELLON BANK, N.A., a national
banking association ("Mellon"), as Construction Lender,
W I T N E S S E T H:
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WHEREAS, the Lessee is the owner of the fee simple interest in the
Land;
WHEREAS, pursuant to the terms of the Ground Lease, the Lessee has
leased to the Lessor, and the Lessor has leased from the Lessee, the Land;
WHEREAS, pursuant to the terms of the Lease, the Lessor has subleased
to the Lessee, and the Lessee has subleased from the Lessor, the Land;
WHEREAS, the Lessor wishes to finance the development of certain
Improvements on the Land to be used by the Lessee and certain Soft Costs in
connection therewith;
WHEREAS, the Trust under the Trust Agreement has been created for the
purpose of providing financing for the construction of the Improvements on the
Land and certain Soft Costs in connection therewith;
WHEREAS, using Advances from the Lessor, the Lessee, as Construction
Agent, will construct certain Improvements which will be the property of the
Lessor and will become part of the Property subject to the terms of the Lease;
WHEREAS, the Certificate Purchaser is willing to provide as equity a
portion of the funding of the costs of the construction of the Improvements on
the Land and certain Soft Costs in connection therewith up to $1,286,500.00.
WHEREAS, the Construction Lender is willing to provide financing for a
portion of the costs of the construction of the Improvements on the Land and
certain Soft Costs in connection therewith up to $19,213,500.00.
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WHEREAS, to secure such financing, (i) the Lessor, pursuant to the
Lease and subject to the Construction Loan Agreement, will have the benefit of a
lien from the Lessee on all of the Lessee's right, title and interest in and to
the Property, and (ii) the Construction Lender and the Certificate Purchaser
will have the benefit of a Lien (a) from the Lessor on all of the Lessor's
right, title and interest in and to the Property and on all of the Lessor's
rights against the Lessee under the Lease and the Ground Lease, against the
Construction Agent under the Construction Agency Agreement, and against the
Lessee under the Guaranty which liens are more fully described in the Lease and
Mortgage and (b) from the Lessee on all of the Lessee's right, title and
interest in and to the Land and the Lessee's leasehold interest in and to the
Lease;
WHEREAS, the Lessee's obligations under the Operative Documents will be
guaranteed pursuant to the terms of the Guaranty and Guaranty Agreement, which
Guaranty and Guaranty Agreement may be for amounts less than the Lease Balance;
and
WHEREAS, to secure the Lessee's obligations under the Guaranty and the
obligations of Fore Systems Holdings Corp. under the Guaranty Agreement, the
Construction Lender and the Lessor will have a perfected security interest in
the Property and the Collateral Account.
NOW, THEREFORE, in consideration of the mutual agreements contained in
this Participation Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS; INTERPRETATION
Unless the context shall otherwise require, capitalized terms used and
not defined herein shall have the meanings assigned thereto in Appendix 1 hereto
for all purposes hereof; and the rules of interpretation set forth in Appendix 1
hereto shall apply to this Participation Agreement.
ARTICLE II.
DOCUMENTATION DATE; INITIAL ADVANCE DATE
SECTION 2.1. Documentation Date. The documentation date (the
"Documentation Date") shall occur on the earliest date on which all of the
following conditions precedent shall have been satisfied:
(a) Participation Agreement. This Participation Agreement
shall have been duly authorized, executed and delivered by the parties
hereto and shall be in full force and effect.
(b) Certain Transaction Expenses. Counsel for each of the
Lessor, the Lessee, the Certificate Purchaser and the Construction
Lender shall have received, to the extent
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then invoiced, payment in full in cash of all Transaction Expenses
pursuant to Section 3.4 payable to such counsel pursuant to Section
9.1.
(c) Mellon Bank's Facility Fee. The Lessee shall pay to Mellon
Bank a non-refundable, fully-earned facility structuring fee in the
amount of (A) $150,000 plus (B) the greater of (i) $100,000 and (ii)
0.50% of the maximum amount of the Commitment of the Construction
Lender under the Construction Loan Agreement, which will be payable
from the initial Advance pursuant to Section 3.4.
(d) Mellon Leasing Corporation's Fees. The Lessee shall pay to
Mellon Leasing Corporation a fully-earned, non-refundable arranging and
structuring fee in the amount of $350,000, which will be payable from
the initial Advance pursuant to Section 3.4.
SECTION 2.2. Initial Advance Date. The Initial Advance Date (the
"Initial Advance Date") shall occur on the earliest date on or before January
10, 1999 on which all the conditions precedent thereto set forth in Section 6.1
shall have been satisfied or waived by the applicable parties as set forth
therein; provided, however, that if the Initial Advance Date does not occur
prior to January 10, 1999, then this Participation Agreement shall automatically
terminate (except as provided in Section 14.1), the Lessee shall pay in full all
Transaction Expenses not theretofore paid, and each other Operative Document
then executed shall terminate. The Lessee, the Lessor, the Certificate Purchaser
and the Construction Lender shall confirm in writing the occurrence of the
Initial Advance Date.
ARTICLE III.
FUNDING OF ADVANCES
SECTION 3.1. Certificate Trustee Commitment. Subject to the conditions
and terms hereof, the Certificate Trustee shall take the following actions at
the written request of the Lessee from time to time during the Commitment
Period:
(a) the making of Advances (out of funds provided by the
Certificate Purchaser and the Construction Lender) for the purpose of
financing of Soft Costs and the construction of the Improvements on the
Land; and
(b) the subleasing of the Land and the leasing of the
Improvements by the Certificate Trustee as Lessor to the Lessee under
the Lease.
Notwithstanding any other provision hereof, the Certificate Trustee shall not be
obligated to make any Advance if, after giving effect thereto, the aggregate
original amounts of the Loans and the Certificate Amounts would exceed the
Commitments of the Construction Lender and the Certificate Purchaser.
SECTION 3.2. Certificate Purchaser's Commitment. Subject to the
conditions and terms
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hereof, the Certificate Purchaser shall make available to the Lessor at the
request of the Lessee from time to time during the Commitment Period on any
Funding Date an amount (each, a "Certificate Amount") in immediately available
funds equal to three percent (3%) of the amount of the Advance being funded on
such Funding Date; provided, that on the Documentation Date the Certificate
Purchaser shall fund all funds payable to Mellon Bank and Mellon Leasing
Corporation under Section 2.1. Notwithstanding any other provision hereof, the
Certificate Purchaser shall not be obligated to make available any Certificate
Amount to the extent that, after giving effect to the proposed Certificate
Amount, the outstanding aggregate amount of Certificate Amounts would exceed the
Certificate Purchaser's Commitment. No amounts repaid with respect to
Certificate Amounts may be readvanced.
SECTION 3.3. Construction Lender's Commitment. Subject to the
conditions and terms hereof, the Construction Lender shall make Construction
Loans to the Lessor at the request of the Lessee from time to time during the
Commitment Period on any Funding Date (except for the fees to Mellon Bank, N.A.
and Mellon Leasing Corporation, which are included in the initial Advance
pursuant to Section 3.4) in an amount in immediately available funds equal to
ninety-seven percent (97%) of the amount of the Advance being funded on such
Funding Date. Notwithstanding any other provision hereof, the Construction
Lender shall not be obligated to make any Construction Loan to the extent that,
after giving effect to the proposed Construction Loan, the outstanding aggregate
amount of the Construction Loans would exceed the Construction Lender's
Commitment. No amounts repaid with respect to the Construction Loans may be
readvanced.
SECTION 3.4. Procedures for Advances.
(a) With respect to each funding of an Advance, the Lessee
shall give the Certificate Trustee, the Certificate Purchaser and the
Construction Lender prior written notice not later than 10:00 a.m.,
Pittsburgh, Pennsylvania time, three Business Days prior to the
proposed Funding Date, pursuant to a Funding Request substantially in
the form of Exhibit A (a "Funding Request"), specifying the proposed
Funding Date and the amount of Advance requested. Except as the parties
may otherwise agree in writing, Advances shall be made solely to
provide the Construction Agent with funds with which to pay or
reimburse itself for Property Improvements Costs, except that the
Participants shall make Certificate Yield Payment Advances, and
Interest Payment Loans, in accordance with the provisions of Section
4.1 hereof and Section 2.2 of the Construction Loan Agreement, up to
the maximum amounts set forth in such provisions. On the Documentation
Date, the Lessee shall submit an irrevocable Funding Request for the
payment of fees to Mellon Bank and Mellon Leasing Corporation and
Transaction Expenses under Section 2.1.
(b) All remittances made by the Certificate Purchaser and the
Construction Lender for the funding of any Advance shall be made on the
applicable Funding Date in immediately available federal funds by wire
transfer to the account of the Construction Agent specified on the
Construction Agent's signature page hereto, except that a portion of
the initial Advance shall be made (in accordance with instructions to
be included in the
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initial Funding Request) by wire transfer to the Lessee to reimburse
the Lessee for Transaction Expenses as provided in Section 3.4(a).
SECTION 3.5. Use of Advances. Notwithstanding any provision to the
contrary contained in any Operative Document, Advances may be used to fund the
following items to the extent they are included in the Approved Construction
Budget: (i) Project Improvement Costs (including all Soft Costs and costs
related to Site Work), (ii) Transaction Expenses and (iii) fees payable pursuant
to Sections 4.5 and 4.6 of this Participation Agreement, provided, that in no
event may the Advances be used to fund any of the foregoing matters in clauses
(i) and (ii) to the extent any such funding would conflict with any provision of
any Operative Document. Advances may be applied to any of the foregoing,
regardless of whether such costs, fees or expenses were incurred prior to, as of
or after the Documentation Date. Prior to the Base Date, Certificate Yield shall
accrue for the benefit of the Certificate Trustee in accordance with Section
4.1(d) of this Participation Agreement but shall not be paid to the Certificate
Trustee during the Interim Term. Accrued interest under the Construction Loan
shall be paid to the Construction Lender in accordance with Section 2.2 of the
Construction Loan Agreement.
SECTION 3.6. Collateralization. The Lessee shall satisfy the Collateral
Requirement as a condition precedent to each Advance, and shall satisfy the
Collateral Requirement throughout the Lease Term.
SECTION 3.7. Refinancing. So long as (i) no Event of Default shall have
occurred and be continuing, and (ii) the Refinancing Loan Documents shall have
been accepted and delivered by all parties thereto in form and substance
satisfactory to Mellon Bank and Mellon Financial Service Corporation #4 in their
sole discretion,
(a) The Construction Lender covenants and agrees to purchase
the Tranche A Loans, which Tranche A Loans shall bear interest at a
rate per annum equal to the Eurodollar Rate plus 1/2 of 1%, and the
Certificate Purchaser covenants and agrees to purchase the Tranche B
Loans, which Tranche B Loans shall bear interest at a rate per annum
equal to the Treasury Rate plus 2.25%.
(b) The Certificate Purchaser further covenants and agrees
that so long as no Event of Default shall have occurred and be
continuing, the Certificate Purchaser shall purchase a new Certificate,
which Certificate shall be in the original principal amount of no less
than 3% of the aggregate amount of all Advances made to or for the
benefit of the Construction Agent during the Interim Term and shall
bear interest at a rate per annum equal to the Treasury Rate plus
4.00%, so long as all of the following conditions shall have been
satisfied:
(i) the Tranche A Loans shall have been purchased by
Mellon Bank, and the Tranche B Loans shall have been purchased
by the Certificate Purchaser;
(ii) the conditions set forth in Section 6.1(a), (b),
(d), (f), (g), (h), (m), and 6.2(c), (d), (e), (f) and (j)
(and each Lender shall receive an appropriate
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endorsement under clause (j)) shall have been satisfied in
connection with the Refinancing, provided, that all references
in such provisions in Sections 6.1 and 6.2 to the
"Construction Lender" shall be deemed to refer to the
"Lenders" and all references to the "Operative Documents"
shall be deemed to include all documents, agreements and
instruments to be executed in connection with the Refinancing;
(iii) all documents, agreements and instruments to be
executed in connection with the Refinancing shall be legal,
valid and binding in accordance with their terms, and the
Lenders and Certificate Purchaser shall have received a legal
opinion, in form and substance satisfactory to them, to such
effect;
(iv) all documents to be recorded and/or filed in
connection with the Refinancing shall have been properly
recorded or filed;
(v) after giving effect to the Refinancing, no
Default shall exist under any Operative Document; and
(vi) the Lessee, Mellon Bank and Mellon Financial
Services Corporation #4 shall each have approved the proposed
terms of the Refinancing and the Refinancing Loan Documents.
Upon the consummation of the Refinancing, the Tranche A Lenders and the
Tranche B Lender shall succeed to all rights and benefits of the Construction
Lender under the Operative Documents.
(c) Unless a Default or Event of Default shall exist, at the
request and expense of Lessee and subject to the provisions of the Loan
Agreement, Lessor (upon receipt of written instructions from Lessee and
upon compliance with the conditions hereof) shall refinance the Tranche
A Loans by either:
(i) issuing and selling during the Term refunding
notes pursuant to and subject to the restrictions in the
Refinancing Loan Documents with such terms and conditions as
Lessee and the new Tranche A Lender or Lenders may agree upon
and, in connection therewith, use the proceeds of such
issuance and sale to prepay, pursuant to the Refinancing Loan
Documents, all of the Tranche A Loans then outstanding, in
whole but not in part, or
(ii) causing the Tranche A Lender to assign the
Tranche A Loans to a commercial bank, savings and loan
association, savings bank, pension plan, depository
institution, insurance company, branches or agents of foreign
banks, a real estate investment trust or other similar
institution as the Lessee identifies and as a result of such
assignment the Tranche A Lender receives par plus all accrued
interest through the date of such assignment, plus all other
amounts then due and payable to the selling Tranche A Lender,
provided, however, that no refinancing
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pursuant to this Section 3.7(c) shall occur unless and until
all of the following conditions have been satisfied: (a) no
Default or Event of Default shall have occurred and be
continuing; (b) no such refinancing shall increase or decrease
the amount, or shorten or lengthen the maturity, of any
scheduled payment of any outstanding principal amount thereof;
(c) no such refinancing shall increase the principal amount of
indebtedness then outstanding under the Tranche A Loans,
provided that the interest rate charged by the lenders in
connection with any such refinancing may be different from the
interest rate under the Tranche A Loans; (d) no such
refinancing shall contain any covenants or restrictions upon
the Lessee or Lessor or any of their Affiliates which are
materially more burdensome to the Lessee or Lessor or any of
their Affiliates than the undertakings and restrictions
contained in the Operative Documents; (e) no such refinancing
shall create any Liens on any property of the Lessee or any of
its Affiliates except for those Liens created pursuant to the
Security Documents in accordance with the terms of the
Security Documents; provided, however, Lessee or its
Affiliates may pledge additional collateral up to a value of
$5,000,000 to such new lender so long as the pledge of such
additional collateral does not violate the covenants set forth
in Section 10.3; (f) the lenders under such refinancing shall
each execute an agreement, in form and substance satisfactory
to the Lenders, pursuant to which such refinancing lenders
shall agree to be bound by all of the obligations, terms and
conditions of the Construction Loan Agreement to which the
Tranche A Lender is bound and to assume all of the
responsibilities, covenants and agreements of the Tranche A
Lender under the Construction Loan Agreement; (g) no such
refinancing shall impair the Liens, rights or benefits of the
Lenders under the Refinancing Loan Documents, or any documents
or agreements executed in connection therewith (provided, that
this subsection shall not be construed to prohibit such new
Tranche A Lender from taking a first priority mortgage
position as contemplated in the Construction Loan Agreement);
(h) after giving effect to any such refinancing, no Default or
Event of Default shall exist; and (i) Lessee shall cause the
Pledgor under the Pledge and Security Agreement to make an
additional transfer to the Collateral Account (as defined in
the Pledge and Security Agreement) in the amount required
thereunder as a result of the refinancing or refunding. The
parties hereto shall cooperate in the preparation and
execution of any amendments, supplements and other writings
reasonably requested to accomplish such refinancing, including
assignments and/or release instruments, as appropriate. Lessee
shall reimburse Lessor, the Tranche A Lender and Tranche B
Lender for all reasonable costs and expenses (including all
reasonable internal and external costs and fees of the Tranche
A Lender and Tranche B Lender) incurred in connection with any
refinancing of the Tranche A Loans which is consummated
pursuant to this Section 3.7(c).
SECTION 3.8. Resizing of Tranche A, Tranche B and Certificate. The
parties have determined the amounts of Tranche A, Tranche B and the Certificate
based on certain assumptions determined to be reasonable by the parties as of
the Documentation Date. Should
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there be a material change in the Lease Balance (it being agreed that any such
change shall be made only with the consent of the Certificate Purchaser and the
Lenders in each case in their respective sole and absolute discretion) or the
assumptions utilized by the parties as of the Documentation Date that, because
of GAAP, requires a new calculation of Tranche A, Tranche B and the Certificate
to meet the intention of the parties as stated in Section 5.1 and to provide
operating lease treatment for the Lessee in accordance with GAAP, the parties
agree to negotiate in good faith to recalculate the principal amount of Tranche
A, Tranche B and the Certificate such that the Lease may continue to be treated
by the Lessee for financial accounting purposes as an operating lease in
accordance with GAAP so long as any such recalculation does not impose any
additional burdens or risks of any nature on the Lenders, the Certificate
Trustee or the Certificate Purchaser.
ARTICLE IV.
CERTIFICATE PAYMENTS; CONSTRUCTION LOAN PAYMENTS
SECTION 4.1. Certificate Payments.
(a) The amount of the Certificate Amounts outstanding from
time to time shall accrue yield ("Certificate Yield") at the
Certificate Yield Rate, calculated during the Interim Term using the
actual number of days elapsed in a 360 day year, and during the Base
Term using 30 days for each month in a 360 day year. If all or any
portion of the Certificate Amounts, any Certificate Yield payable
thereon or any other amount payable hereunder shall not be paid when
due (whether at stated maturity, acceleration thereof or otherwise),
such overdue amount shall bear interest at a rate per annum which is
equal to the Overdue Rate.
(b) Subject to the provisions of the Operative Documents,
Certificate Amounts shall be repaid on the Expiration Date.
(c) The Certificate Trustee shall, pursuant to the Assignment
of Leases and Rents, direct the Lessee to pay to the Certificate
Trustee for the account of the Certificate Purchaser Basic Rent
(determined on the basis of amounts due in accordance with clauses (a)
and (b) above) and all other amounts due with respect to the
Certificate Amounts payable by the Lessee under the Lease from time to
time, and the Certificate Trustee shall distribute such amounts to the
Certificate Purchaser in accordance with Section 5 of the Construction
Loan Agreement.
(d) On each Scheduled Payment Date prior to the Base Date, the
Certificate Trustee shall be deemed to have requested a payment with
respect to accrued Certificate Yield on outstanding Certificate Amounts
pursuant to Section 3.2 (a "Certificate Yield Payment Advance") in an
amount equal to the lesser of (x) the aggregate amount of Certificate
Yield which has accrued to and including such date and (y) the
Available Certificate Purchaser Commitment. The Funding Date with
respect to any such Certificate
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Yield Payment Advance shall be the relevant Scheduled Payment Date
(provided that the making of a Certificate Amount pursuant to such
payment shall be subject to satisfaction of the applicable conditions
precedent set forth in Section 6.2) and the proceeds of such payment
shall be applied to such accrued Certificate Yield but shall not be
paid to the Certificate Trustee during the Interim Term, and instead
shall be added to the Certificate Amount. On each such Funding Date,
the Certificate Amounts and the Property Improvements Costs shall be
increased by an amount equal to the Certificate Yield Payment Advance
paid on such date with the proceeds of such payment.
SECTION 4.2. Construction Loan Payments.
(a) Each Construction Loan shall accrue interest computed and
payable in accordance with the terms of the Construction Loan
Agreement.
(b) The principal of the Construction Loan shall be repaid in
full on the Construction Loan Expiration Date.
(c) The Certificate Trustee shall, pursuant to the Assignment
of Leases and Rents, direct the Lessee to pay to the Certificate
Trustee the Lender Basic Rent (determined on the basis of amounts due
in accordance with clauses (a) and (b) above) and all other amounts due
with respect to the Construction Loans payable by the Lessee under the
Lease from time to time, and the Certificate Trustee shall distribute
such amounts in accordance with Section 5 of the Construction Loan
Agreement.
SECTION 4.3. Rent Payments. The Lessee may, at any time and from time
to time, designate one or more (but in no event more than three) separate
accounts or credit facilities (including the Mellon Revolver) in one or more
financial institutions to be debited directly by the Certificate Trustee on each
Scheduled Payment Date for the payment of Basic Rent under the Lease. Lessee may
designate the priority from time to time of debiting of such accounts or credit
facilities by written notice to the Certificate Trustee no later than fifteen
(15) Business Days prior to any Scheduled Payment Date. Nothing contained herein
shall limit Lessee's obligation to pay Basic Rent under the Lease. The
Certificate Trustee, the Construction Lender and the Certificate Purchaser
acknowledge that the Lessee has the right to prepay Rent in minimum amounts of
$100,000 and integrals of $10,000 at any time, upon thirty days prior written
notice, together with a Make-Whole Premium. The Lessee acknowledges and agrees
that a Make-Whole Premium shall be payable in connection with each and every
prepayment of the principal component of Rent prior to the Expiration Date
except for a prepayment to the extent arising solely from a Significant Casualty
or a Significant Condemnation, and that such prepayment shall be applied as
provided in Section 5.1(b) of the Construction Loan Agreement or the Refinancing
Loan Documents, as applicable.
SECTION 4.4. Overdue Payments. The Certificate Trustee, the
Construction Lender and the Certificate Purchaser acknowledge that the Lessee
shall have no liability with respect to overdue payments of Loans and
Certificate Amounts so long as the Lessee has timely paid Rent in
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accordance with Article III of the Lease, or such amounts are otherwise
accounted for pursuant to Section 4.1(d).
ARTICLE V.
CERTAIN INTENTIONS OF THE PARTIES
SECTION 5.1. Nature of Transaction.
(a) The parties hereto intend that (i) for financial
accounting purposes with respect to the Lessee, the Lessor will be
treated as the sublessor of the Land under the Lease and the owner and
the lessor of the Improvements and the Lessee will be treated as the
sublessee of the Land under the Lease and the lessee of the
Improvements and (ii) for all other purposes, including federal and all
state and local income tax purposes, state real estate and commercial
law and bankruptcy purposes, (A) the Lease will be treated as a
financing arrangement, (B) the Lessor, the Certificate Purchaser and
the Lenders will be deemed lenders making loans to the Lessee in an
amount equal to the sum of the Certificate Amounts and the outstanding
principal amount of the Loans, which loans are secured by the Property
and (C) the Lessee will be treated as the owner of the Property and
will be entitled to all tax benefits ordinarily available to an owner
of property like the Property for such tax purposes. Nevertheless, the
Lessee acknowledges and agrees that neither the Certificate Trustee,
the Certificate Purchaser nor any Lender have made any representations
or warranties to the Lessee concerning the tax, accounting or legal
characteristics of the Operative Documents and that the Lessee has
obtained and relied upon such tax, accounting and legal advice
concerning the Operative Documents as it deems appropriate.
(b) Specifically, without limiting the generality of
subsection (a) of this Section 5.1, the parties hereto intend and agree
that in the event of any insolvency or receivership proceedings or a
petition under the United States bankruptcy laws or any other
applicable insolvency laws or statute of the United States of America
or any State or Commonwealth thereof affecting the Lessee, the Lessor,
the Certificate Purchaser or the Lenders or any collection actions, the
transactions evidenced by the Operative Documents shall be regarded as
loans made by the Certificate Trustee, the Certificate Purchaser and
the Lenders as unrelated third party lenders of the Lessee.
SECTION 5.2. Amounts Due Under Lease. Anything else herein or elsewhere
to the contrary notwithstanding, it is the intention of the Lessee, the
Certificate Trustee, the Certificate Purchaser and the Lenders that: (i) the
amount and timing of installments of Basic Rent due and payable from time to
time from the Lessee under the Lease shall be equal to the aggregate payments
due and payable with respect to amortization of principal of, and interest on,
the Loans, and with respect to Certificate Yield on the Certificate Amounts on
each Payment Date (to the extent such interest is not funded by additional
Interest Payment Loans); (ii) if the Lessee elects the Purchase Option or
becomes obligated to purchase the Property (which is subject to the
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Lease) under the Lease (whether upon the occurrence of a Lease Event of Default
or otherwise), the Loans, the Certificate Amounts, the Make-Whole Premium, all
interest and Certificate Yield thereon and all other obligations of the Lessee
owing to the Certificate Trustee, the Certificate Purchaser and the Lenders
shall be paid in full by the Lessee; and (iii) if the Lessee properly elects the
Remarketing Option, the Lessee shall only be required to pay to the Certificate
Trustee the Gross Proceeds from Improvements, the Termination Rental Amount and
any amounts due pursuant to Section 9.1 and Article XIII of this Participation
Agreement and Sections 20.1 and 20.2 of the Lease (which aggregate amounts may
be less than the Lease Balance).
ARTICLE VI.
CONDITIONS PRECEDENT TO INITIAL ADVANCE DATE AND ADVANCES
SECTION 6.1. Initial Advance Date Conditions. The occurrence of the
Initial Advance Date is subject to the occurrence of the Documentation Date and
the satisfaction of the following conditions precedent:
(a) Trust Agreement; Redemption of Certificate; Operative
Documents; No Default. The Trust Agreement shall have been duly
authorized, executed and delivered by the parties thereto, shall be
in form and substance satisfactory to the Certificate Purchaser, and
shall be in full force and effect, and the Certificate shall have been
validly issued to the Certificate Purchaser pursuant to the Trust
Agreement. Each of the Operative Documents shall have been duly
authorized, executed and delivered by the parties thereto in
substantially the forms attached hereto as Exhibits B through M,
P and Q, respectively, and, if not so attached, in form and substance
satisfactory to the parties hereto, and shall be in full force and
effect. No Default or Event of Default shall exist under any of the
Operative Documents to which the Lessee is a party (either before or
after giving effect to the transactions contemplated by the Operative
Documents), no "Default" or "Event of Default" as such terms are
defined in the Lease shall exist, and the Certificate Trustee, the
Construction Lender and the Certificate Purchaser shall each have
received a fully executed copy of each of the Operative Documents
(other than (A) the Note and the Lease, of which the Construction
Lender shall receive the originals and the Lessor and the Certificate
Purchaser shall receive specimens, and (B) the Certificate, of which
the Certificate Purchaser shall receive the original and the
Certificate Trustee, Lessee and the Construction Lender shall receive
specimens). The Operative Documents (or memoranda thereof), any
supplements thereto and any financing statements in connection
therewith required under the Uniform Commercial Code shall have been
recorded, registered and filed, if necessary, in such manner as to
enable the title insurance company to issue the title insurance
policies referred to in clause (k) below.
(b) Taxes. All taxes, fees and other charges in connection
with the execution, delivery, recording, filing and registration of the
Operative Documents shall have been paid or provisions for such payment
shall have been made to the satisfaction of the Certificate Trustee,
the Certificate Purchaser and the Construction Lender.
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(c) Opinions of Counsel. Each of (i) ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, special counsel to the Lessee, and (ii) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger
shall have issued to the Certificate Trustee, the Certificate Purchaser
and the Construction Lender his/her opinion in form and scope mutually
satisfactory to the Certificate Trustee, the Certificate Purchaser and
the Construction Lender.
(d) Governmental Approvals. All necessary (or, in the
reasonable opinion of the Certificate Trustee, the Certificate
Purchaser, the Construction Lender or any of their respective counsel,
advisable) Governmental Actions, in each case required by any
Requirement of Law, shall have been obtained or made and be in full
force and effect.
(e) Litigation. No action or proceeding shall have been
instituted, nor shall any action or proceeding be threatened, before
any Governmental Authority, nor shall any order, judgment or decree
have been issued or proposed to be issued by any Governmental Authority
(i) to set aside, restrain, enjoin or prevent the full performance of
this Participation Agreement, any other Operative Document or any
transaction contemplated hereby or thereby or (ii) which is reasonably
likely to materially and adversely affect the Lessee.
(f) Requirements of Law. In the reasonable opinion of the
Certificate Trustee, the Certificate Purchaser, the Construction Lender
and their respective counsel, the transactions contemplated by the
Operative Documents do not and will not violate in any respect any
Requirement of Law and do not and will not subject the Certificate
Trustee, the Certificate Purchaser or the Construction Lender to any
material adverse regulatory prohibitions or constraints.
(g) Responsible Employee's Certificates. The Certificate
Trustee, the Certificate Purchaser and the Construction Lender shall
each have received a Responsible Employee's Certificate of the Lessee
(as Lessee, Guarantor and Construction Agent) in substantially the form
of Exhibit N attached hereto, dated as of the Initial Advance Date,
stating that (i) each and every representation and warranty of such
Person contained in each Operative Document to which it is a party is
true and correct in all material respects on and as of the Initial
Advance Date; (ii) no Default or Event of Default has occurred and is
continuing under any Operative Document to which it is a party with
respect to such Person; (iii) each Operative Document to which such
Person is a party is in full force and effect with respect to it; and
(iv) such Person has duly performed and complied with all covenants,
agreements and conditions contained herein or in any Operative Document
required to be performed or complied with by it on or prior to the
Initial Advance Date.
(h) Resolutions and Incumbency Certificate, etc. The Lessee
shall have delivered to the Certificate Trustee, the Certificate
Purchaser and the Construction Lender (i) a certificate of its
Secretary or an Assistant Secretary attaching and certifying as to (A)
the resolutions of the Board of Directors duly authorizing the
execution, delivery and performance by it of each Operative Document to
which it is or will be a party, (B) its
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certificate of incorporation and by-laws, and (C) the incumbency and
signature of persons authorized to execute and deliver on its behalf
the Operative Documents to which it is a party and (ii) a certificate
of good standing with respect to it issued by the Secretary of State of
its State of incorporation.
(i) Environmental Audit. The Certificate Trustee, the
Certificate Purchaser and the Construction Lender shall have received
an Environmental Audit for the Property in form and substance
acceptable to each of them, and shall have received a report from
▇▇▇▇▇▇ & Associates describing the corrective actions required to be
taken by the Lessee to remediate any Hazardous Substances and any
violations, or potential violations, of Environmental Law identified in
the Phase I environmental report previously prepared for the Land and
delivered to the Construction Lender, which report shall be in form and
substance satisfactory to the Construction Lender.
(j) Appraisal. The Certificate Trustee, the Certificate
Purchaser and the Construction Lender shall have received an Appraisal
of the Property, which Appraisal shall (i) show that as of the Base
Date the value of the Lessor's interest in the Improvements to be
constructed thereon in accordance with the Plans and Specifications
shall not be less than 100% of the aggregate Commitments of the
Certificate Purchaser and the Construction Lender and (ii) show the
Fair Market Sales Value as of the end of the Base Term of the Lessor's
interest in the Improvements to be constructed thereon in accordance
with the Plans and Specifications shall be no less than [$14,500,000.]
(k) Survey and Title Insurance. The Lessee shall have
delivered to the Certificate Trustee, the Certificate Purchaser and the
Construction Lender an ALTA/1992 (Urban) Survey of the Property
prepared by a licensed surveyor and meeting the Minimum Standard Detail
Requirements for ALTA/ASCM Land Title Surveys as adopted by the
American Land Title Association/American Society and American Congress
on Surveying and Mapping in 1992 certified to the Certificate Trustee,
the Construction Lender and the title company and otherwise in form
reasonably acceptable to the Construction Lender, and an ALTA owner's
and lender's title commitment for an insurance (together with a title
insurance policy issued pursuant to such commitment, and containing no
additional exclusions or exceptions from the commitment, which shall be
delivered promptly after the Initial Advance Date) policy covering the
Property in favor of the Certificate Trustee, the Lessee and the
Construction Lender, and a leasehold policy in favor of the Lessee,
each such policy to be dated as of the Initial Advance Date and in an
amount not less than the aggregate Commitments of the Construction
Lender and Certificate Purchaser and to be reasonably satisfactory to
the Participants with comprehensive, survey, variable rate, access and
such other endorsements requested by the Participants to the extent
available in the Commonwealth of Pennsylvania.
(l) Recordation. Each of the Construction Lender and the
Certificate Purchaser shall have received evidence reasonably
satisfactory to it that each of the Deed, the Ground Lease or a
memorandum thereof, the Lease or a memorandum thereof, the
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Mortgage and the Assignment of Leases and Rents shall have been or are
being recorded with the appropriate Governmental Authorities in the
order in which such documents are listed in this clause (and the
issuance of the title insurance policies in clause (k) above shall be
satisfactory evidence of the foregoing), and the UCC Financing
Statements with respect to the Property shall have been or are being
filed with the appropriate Governmental Authorities.
(m) Evidence of Property Insurance. The Certificate Trustee,
the Construction Lender and the Certificate Purchaser shall have
received evidence of insurance with respect to the Property required to
be maintained pursuant to the Lease, setting forth the respective
coverages, limits of liability, carrier, policy number and period of
coverage.
(n) Initial Advance Date. The Initial Advance Date shall occur
on or prior to January 10, 1999.
(o) [Reserved]
(p) Certificate Trustee's Resolutions and Incumbency
Certificate, etc. The Lessee, the Construction Lender and the
Certificate Purchaser shall have received a certificate of the
Secretary or an Assistant Secretary of the Certificate Trustee
attaching and certifying as to (i) the resolutions of the Board of
Directors duly authorizing the execution, delivery and performance by
the Certificate Trustee of each Operative Document to which it is or
will be a party, (ii) its articles of association, certified as of a
recent date by an appropriate officer of Trust Company, (iii) its
by-laws and (iv) the incumbency and signature of persons authorized to
execute and deliver on its behalf the Operative Documents to which it
is a party.
(q) Architect's Statement of Professional Opinion. The
Certificate Trustee, the Construction Lender and the Certificate
Purchaser shall have received a statement of professional opinion from
the Architect, in form and scope satisfactory to the Certificate
Trustee, the Construction Lender and the Certificate Purchaser,
certifying that (i) the Property as improved in accordance with the
Plans and Specifications and the contemplated use thereof by the Lessee
will comply with Requirements of Law (including zoning and land use
laws and Environmental Laws) and (ii) the Plans and Specifications have
been prepared in accordance with applicable Requirements of Law
(including applicable Environmental Laws and building, planning, zoning
and fire codes) and upon completion of the Improvements in accordance
with the Plans and Specifications, such Improvements on the Property
will not encroach in any manner onto any adjoining land to the best of
the Architect's knowledge based on information received (except as
permitted by express written easements or as insured by appropriate
title insurance). The Plans and Specifications, the contracts with the
Prime Contractor and a complete and detailed breakdown, on a line item
basis, of the costs (prepared by others) of constructing the
Improvements in accordance with the Plans and Specifications, together
with evidence of all matters described in the Architect's statement of
professional opinion described in this
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paragraph, shall have been reviewed and approved by the Construction
Lender.
(r) Custody Agreement. The Lessee shall have executed and
delivered the Custody Agreement to the Construction Lender.
(s) Recognition of Assignment. The Architect and the Prime
Contractor shall have each executed written instruments reasonably
satisfactory to the Certificate Trustee, the Certificate Purchaser and
the Construction Lender pursuant to which each of the Architect and the
Prime Contractor shall have agreed to perform its obligations under the
Construction Documents to which it is a party for the benefit of the
Certificate Trustee or the Construction Lender, when and if the
Certificate Trustee or the Construction Lender shall exercise their
rights under the Construction Documents Assignment.
(t) Approval of Prime Contractor. The Construction Lender
shall have reviewed and approved a credit report issued by the bonding
company for the Construction with respect to the Prime Contractor,
which report shall be satisfactory to the Construction Lender in all
respects.
(u) Fees. The Certificate Trustee and the Participants shall
have received all fees payable on the Documentation Date and the
Initial Advance Date pursuant to this Participation Agreement (which
fees shall be included in the initial Advance).
All documents and instruments required to be delivered on the Initial Advance
Date shall be delivered at the offices of Mellon Bank, One Mellon Bank Center,
Pittsburgh, Pennsylvania, or at such other location as may be determined by the
Certificate Trustee, the Certificate Purchaser, the Construction Lender and the
Lessee.
SECTION 6.2. Conditions Precedent to each Advance. The obligations of
the Certificate Trustee to make an Advance on a Funding Date (including the
Initial Advance), the obligation of the Certificate Purchaser to make any
related Certificate Amount available on such Funding Date and the obligation of
the Construction Lender to make any related Construction Loans on such Funding
Date, are subject to satisfaction or waiver of the following conditions
precedent:
(a) Funding Request. The Construction Lender, the Certificate
Purchaser and the Certificate Trustee shall have received a fully
executed counterpart of the applicable Funding Request, executed by the
Lessee, in accordance with Section 3.4.
(b) Construction Certificate. With respect to any Property
Improvements Costs to be paid or reimbursed using the proceeds of such
Advance, (i) the Construction Lender shall have received, at least ten
(10) days prior to the applicable Funding Date, a Construction
Certificate in the form of Exhibit O hereto, together with all
attachments thereto, and (ii) the property inspectors and consultants
employed by the Construction Lender to inspect the Improvements shall
have inspected and approved all of the work performed to such date in
connection with the Property and the Improvements, and
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arrangements shall have been made to reimburse the Construction Lender
for the reasonable costs and expenses incurred in connection with such
inspection and approval, including the internal costs and expenses of
the Construction Lender, its employees and consultants.
(c) Accuracy of Representations and Warranties. On the
applicable Funding Date the representations and warranties of the
Lessee contained herein and in each of the other Operative Documents
shall be true and correct in all material respects as though made on
and as of such date, except to the extent such representations or
warranties relate solely to an earlier date, in which case such
representations and warranties shall have been true and correct in all
material respects on and as of such earlier date.
(d) Performance of Agreements. The Lessee shall have performed
its agreements contained herein and in the other Operative Documents to
be performed by it on or prior to such date.
(e) No Default. There shall not have occurred and be
continuing any Event of Default under the Lease and no Default or Event
of Default under the Lease will have occurred after giving effect to
the making of the Advance requested by such Funding Request.
(f) Commitment Amount. After giving effect to the applicable
Advance, the aggregate amount of all Advances shall not exceed the
aggregate of the Commitments with respect to any party which has been
requested to make an Advance.
(g) Cost of Completion. The Certificate Purchaser and the
Construction Lender shall have received a Certificate from the Prime
Contractor, in form and scope satisfactory to each of them, certifying
that after giving effect to the applicable Advance (or if the
Certificate is given pursuant to Section 3.3.1 hereof, then after
giving effect to the reduction of the Commitments), the estimated as
yet unpaid cost to the Construction Agent of completing the
Construction pursuant to the Construction Documents will not exceed the
Available Commitments net of any portion of the Available Commitments
that shall be allocated for Interest Payment Loans and Certificate
Yield Payment Advances, and all such Construction is capable of
attaining Substantial Completion by the Outside Completion Date and is
proceeding in accordance with the schedule for Construction approved by
the Participants prior to the Initial Advance Date, which schedule is
attached as Schedule 3 to the Construction Agency Agreement.
(h) Building Permits. All building permits required by any
Governmental Authority in connection with the Construction for which
the applicable Advance is being made shall have been obtained.
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Participation Agreement
22
(i) Architect's Statement of Professional Opinion. The
Certificate Trustee, the Construction Lender and the Certificate
Purchaser shall have received a statement of professional opinion from
the Architect, in form and scope satisfactory to the Certificate
Trustee, the Construction Lender and the Certificate Purchaser, stating
that (i) the Property is being improved in a good and workmanlike
manner and in accordance with the Plans and Specifications, and the
contemplated use thereof by the Lessee will comply with Requirements of
Law (including all zoning and land use laws and Environmental Laws),
(ii) the progress of the construction is such that Substantial
Completion of the Improvements can occur on or prior to the Outside
Completion Date (and specifying the stage and percentage of completion
which has been achieved by each of the various trades engaged in the
construction of the Improvements), and the Construction is proceeding
in accordance with the schedule for construction approved by the
Participants prior to the Initial Advance Date, and (iii) the amount of
the Advance is not greater than the actual value of the materials
incorporated into the Improvements and the work and labor performed in
connection therewith.
(j) Title Policy Endorsement. The Construction Lender and the
Certificate Trustee shall have received on the date of such Advance an
endorsement to the title policy delivered pursuant to the Lease (i)
indicating that since the date of the preceding Advance there has been
no change in the state of title (except changes approved by the
Construction Lender), (ii) updating the title policy to the date of
such Advance, and (iii) increasing the coverage of the title policy by
an amount equal to such Advance if the title policy does not by its own
terms provide for such an increase.
(k) Contractor Receipts. On or prior to the date of each
Advance the Lessor shall have received (i) receipts with respect to any
invoice which is the subject of such Advance and which is in excess of
Fifty Thousand Dollars ($50,000) from the Prime Contractor and all
subcontractors engaged in the construction of the Improvements
evidencing that all sums previously advanced for Property Improvement
Costs have been expended for such Property Improvement Costs and that
no further amounts are owing with respect to such previously invoiced
Property Improvement Costs and (ii) copies of all documents required to
be submitted by the Lessee as of such date pursuant to the terms of the
contracts with the Prime Contractor.
(l) Maintenance of Collateral. The Lessee shall on the date of
such Advance have satisfied the Collateral Requirement.
(m) Commitment Period. No Advance shall be made after the
termination of the Commitment Period.
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23
ARTICLE VII.
CONDITIONS TO SUBSTANTIAL COMPLETION
SECTION 7.1. Conditions to Substantial Completion of the Property.
Substantial Completion shall be deemed to have occurred for purposes of the
Operative Documents at such time as the Construction, including Tenant
Improvement Work, shall have been substantially completed in accordance with the
Plans and Specifications and all Applicable Law, and the Property shall be ready
for occupancy and operation, as evidenced by certificates of the Architect, the
Prime Contractor and the Construction Agent and the issuance by the appropriate
Governmental Authority of certificates of occupancy for the Facility
contemplated by the Plans and Specifications, all in form and substance
reasonably satisfactory to the Lessor.
VIII. ARTICLE
REPRESENTATIONS
SECTION 8.1. Representations of the Participants. As of the Initial
Advance Date, each Participant represents and warrants to the Lessor, the other
Participants, and the Lessee that:
(a) ERISA. Such Participant is not and will not be making its
Construction Loans or funding its Certificate Amounts hereunder, and is
not performing its obligations under the Operative Documents, with the
assets of an "employee benefit plan" (as defined in Section 3(3) of
ERISA) which is subject to Title I of ERISA, or "plan" (as defined in
Section 4975(e)(1) of the Code).
(b) Status. Such Participant is a commercial bank, savings and
loan association, savings bank, pension plan, depository institution,
insurance company, branch or agency of a foreign bank or other similar
financial institution, or an Affiliate thereof.
(c) Power and Authority. Such Participant has the requisite
power and authority to enter into and perform under the Operative
Documents to which it is a party.
(d) Corporate Status. Such Participant (i) is a duly organized
and validly existing corporation in good standing under the laws of its
state of incorporation and (ii) has duly qualified and is authorized to
do business and is in good standing in all jurisdictions where the
failure to do so might have a material adverse effect on it or its
properties.
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Participation Agreement
24
(e) Corporate Power and Authority. Such Participant has the
corporate power and authority to execute, deliver and carry out the
terms and provisions of the Operative Documents to which it is or will
be a party and has taken all necessary corporate action to authorize
the execution, delivery and performance of the Operative Documents to
which it is a party and has duly executed and delivered each Operative
Document required to be executed and delivered by it and, assuming the
due authorization, execution and delivery thereof on the part of each
other party thereto, each such Operative Document constitutes a legal,
valid and binding obligation enforceable against it in accordance with
its terms, except as the same may be limited by insolvency, bankruptcy,
reorganization or other laws relating to or affecting the enforcement
of creditors' rights or by general equitable principles.
(f) Lessor Liens. The Property is free and clear of all Lessor
Liens attributable to it.
SECTION 8.2. Representations of the Certificate Trustee and the Trust
Company. The Certificate Trustee and the Trust Company (solely as to Paragraphs
(a)(i), (b) and (c) only as to the agreements to which the Trust Company is a
party, (d), (e), (f) and (g), and only as to the Trust Company) represent and
warrant to the Lessee and the Participants that:
(a) Corporate Status. The Trust Company (i) is a duly
organized and validly existing banking corporation in good standing
under the laws of the State of Delaware and (ii) the Certificate
Trustee has duly qualified and is authorized to do business and is in
good standing in all jurisdictions where the failure to do so might
have a material adverse effect on it or its properties.
(b) Corporate Power and Authority. The Certificate Trustee and
the Trust Company each has the corporate power and authority to
execute, deliver and carry out the terms and provisions of the
Operative Documents to which it is or will be a party and has taken all
necessary corporate action to authorize the execution, delivery and
performance of the Operative Documents to which it is a party and has
duly executed and delivered each Operative Document required to be
executed and delivered by it and, assuming the due authorization,
execution and delivery thereof on the part of each other party thereto,
each such Operative Document constitutes a legal, valid and binding
obligation enforceable against it in accordance with its terms, except
as the same may be limited by insolvency, bankruptcy, reorganization or
other laws relating to or affecting the enforcement of creditors'
rights or by general equitable principles.
(c) No Violation. Neither the execution, delivery and
performance by the Certificate Trustee or the Trust Company of the
Operative Documents to which it is or will be a party nor compliance
with the terms and provisions thereof, nor the consummation by the
Certificate Trustee or the Trust Company of the transactions
contemplated therein (i) will result in a violation by the Certificate
Trustee or the Trust Company respectively of any applicable provision
of any law, statute, rule, regulation,
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order, writ, injunction or decree of any court or governmental
instrumentality having jurisdiction over the Certificate Trustee, the
Trust Company or the Property that would adversely affect (x) the
validity or enforceability of the Operative Documents to which the
Certificate Trustee or the Trust Company is a party, or the title to,
or value or condition of, the Property, or (y) the consolidated
financial position, business, prospects or consolidated results of
operations of the Certificate Trustee or the Trust Company or the
ability of the Certificate Trustee or the Trust Company to perform its
obligations under the Operative Documents, (ii) violate or result in
any breach which would constitute a default under, or (other than
pursuant to the Operative Documents) result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any
of the property or assets of the Certificate Trustee or the Trust
Company pursuant to the terms of any indenture, loan agreement or other
agreement for borrowed money to which the Certificate Trustee or the
Trust Company is a party or by which it or any of its property or
assets is bound or to which it may be subject (other than Permitted
Liens), or (iii) will violate any provision of the certificate of
incorporation or by-laws of the Certificate Trustee.
(d) No Approvals, etc. Neither the execution and delivery by
Trust Company or (assuming the due authorization, execution and
delivery of the Trust Agreement by the Certificate Purchaser)
Certificate Trustee, as the case may be, of any of the Operative
Documents to which it is a party requires the consent or approval of,
or the giving of notice to or registration with, or the taking of any
other action in respect of, any Governmental Authority or other body
governing its banking practices.
(e) Litigation. There is no action, proceeding or
investigation pending or threatened against Trust Company or
Certificate Trustee which questions the validity of the Operative
Documents, and there is no action, proceeding or investigation pending
or threatened which is likely to result, either in any case or in the
aggregate, in any material adverse change in the ability of Trust
Company or Certificate Trustee to perform its obligations under the
Operative Documents to which it is a party.
(f) Lessor Liens. The Property is free and clear of all Lessor
Liens attributable to it.
(g) Securities Act. Neither Trust Company nor Certificate
Trustee nor anyone authorized to act on its behalf has, directly or
indirectly, in violation of Section 5 of the Securities Act or any
state securities laws, offered or sold any interest in the Note, the
Certificate, the Property or the Lease, or 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 securities or leases, or solicited any
offer to acquire any of the aforementioned securities or leases.
SECTION 8.3. Representations of Lessee. The Lessee represents and
warrants to the Lessor, the Certificate Purchaser and the Construction Lender
that the representations and
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warranties of the Lessee under the "Operative Documents" as such term is defined
in the Existing Lease are true and correct in all material respects, and:
(a) Corporate Status. The Lessee (i) is a duly organized and
validly existing corporation in good standing under the laws of the
State of Delaware and (ii) has duly qualified and is authorized to do
business and is in good standing in all jurisdictions where the failure
to do so might have a material adverse effect on it or its properties.
(b) Corporate Power and Authority. The Lessee has the
corporate power and authority to execute, deliver and carry out the
terms and provisions of the Operative Documents to which it is or will
be a party and has taken all necessary corporate action to authorize
the execution, delivery and performance of the Operative Documents to
which it is a party and has duly executed and delivered each Operative
Document required to be executed and delivered by it and, assuming the
due authorization, execution and delivery thereof on the part of each
other party thereto, each such Operative Document constitutes a legal,
valid and binding obligation enforceable against it in accordance with
its terms, except as the same may be limited by insolvency, bankruptcy,
reorganization or other laws relating to or affecting the enforcement
of creditors' rights or by general equitable principles.
(c) No Violation. Neither the execution, delivery and
performance by the Lessee of the Operative Documents to which it is or
will be a party nor compliance with the terms and provisions thereof,
nor the consummation by the Lessee of the transactions contemplated
therein (i) result or will result in a violation by the Lessee of any
Applicable Law applicable to it or the Property, (ii) violate or result
in any breach which would constitute a default under, or (other than
pursuant to the Operative Documents) result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any
of the property or assets of the Lessee pursuant to the terms of any
indenture, loan agreement or other agreement for borrowed money to
which the Lessee is a party or by which it or any of its property or
assets is bound or to which it may be subject (other than Permitted
Liens), or (iii) will violate any provision of the certificate of
incorporation or by-laws of the Lessee.
(d) Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of the Lessee, threatened (i) that are
reasonably likely to have a material adverse effect on the Property or
on the businesses, prospects, operations, financial condition or assets
of the Lessee or (ii) that question the validity of the Operative
Documents or the rights or remedies of the Lessor, the Certificate
Purchaser or the Construction Lender with respect to the Lessee or the
Property under the Operative Documents.
(e) Governmental Approvals. No Governmental Action by any
Governmental Authority having jurisdiction over the Lessee or the
Property is required to authorize or is required in connection with (i)
the execution, delivery and performance by the Lessee of
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any Operative Document to which it is a party, (ii) the Construction
(other than certain permits which shall be obtained prior to any
Construction which relates to or requires such permits) or (iii) the
legality, validity, binding effect or enforceability against the Lessee
of any Operative Document to which it is a party.
(f) Investment Company Act. The Lessee is not an "investment
company" or a company "controlled" by an "investment company," within
the meaning of the Investment Company Act.
(g) Public Utility Holding Company Act. The Lessee is not a
"holding company" or a "subsidiary company", or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company",
within the meaning of the Public Utility Company Act of 1935, as
amended.
(h) Provided Information. The information and materials which
have been provided by the Lessee or any of its Affiliates (or any
Person authorized or employed by any such Person as agent or otherwise)
to the Lessor, the Certificate Purchaser and/or the Construction Lender
in writing prior to the Initial Advance Date, are true and accurate in
all material respects, do not contain an untrue statement of a material
fact, and are not incomplete by omitting to state any fact necessary to
make the statements herein or therein (taken as a whole) not misleading
in light of the circumstances under which such information was
provided.
(i) Taxes. All United States Federal income tax returns and
all other tax returns which are required to have been filed have been
or will be filed by or on behalf of the Lessee by the respective due
dates, including extensions, and all taxes due with respect to the
Lessee pursuant to such returns or pursuant to any assessment received
by the Lessee have been or will be paid. The charges, accruals and
reserves on the books of the Lessee in respect of such taxes or other
governmental charges are, in the opinion of the Lessee, adequate.
(j) Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA
and the Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and
the Code with respect to the Plan. No member of the ERISA Group has (i)
sought a waiver of the minimum funding standard under Section 412 of
the Code in respect of any Plan, (ii) failed to make any contribution
or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit
Arrangement, which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security under ERISA or the Code
or (iii) incurred any liability under Title IV of ERISA other than a
liability to the PBGC for premiums under Section 4007 of ERISA. No Plan
Termination Event has occurred with respect to any Plan or Multiple
Employer Plan. No member of the ERISA Group has any knowledge of any
event that could result in a liability of any such member to the PBGC,
whether
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under a Plan, a Multiemployer Plan, a Multiple Employer Plan, or
otherwise. There have not been any nor are there now existing any
events or conditions that would permit any Plan to be terminated under
circumstances that would cause the lien provided under Section 4068 of
ERISA to attach to the material assets of the Lessee or its ERISA
Affiliates. The value of the Plans' benefits guaranteed under Title IV
of ERISA on the date hereof does not exceed the value of such Plans'
assets allocable to such benefits as of the date of this Participation
Agreement. No "Prohibited Transaction" within the meaning of Section
406 of ERISA exists or will exist upon the execution and delivery of
this Lease or any Operative Document.
(k) Environmental Laws. The Lessee is in compliance with all
Environmental Laws relating to pollution and environmental control in
all jurisdictions in which all real property of the Lessee, including
the Land, are located, other than those the non-compliance with which
would not have a material adverse effect on such real property,
including the Land, or the consolidated results of operations,
business, prospects or consolidated financial position of the Lessee.
(l) Offer of Securities, etc. Neither the Lessee nor any
Person authorized to act on the Lessee's behalf has, directly or
indirectly, offered any interest in the Property or any other interest
similar thereto (the sale or offer of which would be integrated with
the sale or offer of such interest in the Property), for sale to, or
solicited any offer to acquire any of the same from, any Person other
than the Lessor and other "accredited investors" (as defined in
Regulation D of the Securities and Exchange Commission).
(m) Financial Statements.
(i) The Submitted Financial Statements, copies of
which have been delivered to the Lessor, the Certificate
Purchaser and the Construction Lender present fairly in all
material respects, in conformity with generally accepted
accounting principles, the financial position of the Lessee as
of such date and its results of operations and cash flows for
such fiscal year.
(ii) The unaudited consolidated statement of
financial position of the Lessee as of September 30, 1998 and
the related unaudited consolidated statements of income, and
cash flows for the year to date, copies of which have been
delivered to Lessor and the Construction Lender, present
fairly in all material respects, in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with the financial statements
referred to in clause (i) of this subsection (m), the
consolidated financial position of the Lessee as of such date
and its consolidated results of operations and cash flows for
such year-to-date period (subject to normal year-end
adjustments), and as of the Documentation Date there have been
no material adverse changes in the consolidated assets,
liabilities, results of operations or financial condition of
the Lessee from that set forth in such statements.
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(n) Property. The Property as improved in accordance with the
Plans and Specifications and the contemplated use thereof by the Lessee
and its agents, assignees, employees, lessees, licensees and tenants
will comply in all material respects with all Requirements of Law
(including all zoning and land use laws and Environmental Laws) and
Insurance Requirements.
(o) Plans and Specifications. Upon Substantial Completion of
the Construction all water, sewer, electric, gas, telephone and
drainage facilities and all other utilities required to adequately
service the Improvements for their intended use will be available
pursuant to adequate permits (including any that may be required under
applicable Environmental Laws). There is on the Documentation Date no
action, suit or proceeding (including any proceeding in condemnation or
eminent domain or under any Environmental Law) pending or, to the
Lessee's knowledge, threatened with respect to the Lessee, its
Affiliates or the Property which adversely affects the title to, or the
use, operation or value of, the Property, and following the
Documentation Date there will be no action, suit or proceeding
(including any proceeding in condemnation or eminent domain or under
any Environmental Law) pending or, to the Lessee's knowledge,
threatened with respect to the Lessee, its Affiliates or the Property
which materially adversely affects the title to, or the use, operation
or value of, the Property . No fire or other casualty with respect to
the Property has occurred which fire or other casualty has had a
material adverse effect on the Property. Upon Substantial Completion of
the Construction the Property will have available all material services
of public facilities and other utilities necessary for use and
operation of the Property and the other Improvements for their primary
intended purposes including adequate water, gas and electrical supply,
storm and sanitary sewerage facilities, telephone, other required
public utilities and means of access between such Improvements and
public highways for motor vehicles. All utilities serving the Property,
or proposed to serve the Property in accordance with the related Plans
and Specifications, are located in, and vehicular access to the
Improvements on the Property is provided by, either public
rights-of-way abutting the Property or Appurtenant Rights. All
Requirements of Law, easements and rights-of-way, including proof and
dedication, required for (x) the use, treatment, storage, transport,
disposal or disposition of any Hazardous Substance on, at, under or
from the Property during the construction of the Improvements thereon,
and (y) construction of the Improvements in accordance with the Plans
and Specifications and the Construction Agency Agreement have either
been irrevocably obtained from the appropriate Governmental Authorities
having jurisdiction or from private parties, as the case may be, or
will be irrevocably obtained from the appropriate Governmental
Authorities having jurisdiction or from private parties, as the case
may be, prior to commencing any such construction or use and operation,
as applicable.
(p) Title. The Deed is in form and substance sufficient to
convey good and marketable title to the Land in fee simple to the
Lessee, subject only to Permitted Liens. The Ground Lease is in form
and substance sufficient to convey a valid leasehold estate to the
Lessor, subject only to Permitted Liens. The Lessor will at all times
during the Term
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have a valid leasehold estate in the Land and good and marketable title
in fee simple to all Improvements located on the Land, subject only to
Permitted Liens. The Lessee will at all times during the Term have
marketable title in fee simple to the Land subject only to Permitted
Liens.
(q) Insurance. The Lessee has obtained or caused to be
obtained insurance coverage covering the Property which meets in all
respects the requirements of the Lease, and such coverage is in full
force and effect. The Lessee carries insurance with reputable insurers,
or self-insures, in respect of its material assets, in such manner, in
such amounts and against such risks as is customarily maintained by
other Persons of similar size engaged in similar business.
(r) Flood Hazard Areas. Except as otherwise identified on the
survey delivered pursuant to Section 6.1(k), 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. 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 the Property in
accordance with the Lease and in accordance with the National Flood
Insurance Act of 1968, as amended.
(s) Lease. Upon the execution and delivery of the Lease, (i)
the Lessee will have unconditionally accepted the Property demised
thereunder (provided that nothing contained herein shall be deemed a
waiver by the Lessee of any right of action against Persons with
respect to title to and condition of the Property on the Initial
Advance Date other than the Lessor, the Certificate Purchaser and the
Construction Lender) and will have good and marketable title to a valid
and subsisting subleasehold interest in the Land and leasehold interest
in the Improvements, subject only to Permitted Liens, (ii) no right of
offset will exist with respect to any Rent or other sums payable under
the Lease and (iii) no Rent under the Lease will have been prepaid.
(t) Outstanding Debt. Except as set forth on Schedule I, as of
the date hereof, the Lessee has no outstanding Debt for money borrowed,
other than (i) Debt arising or permitted hereunder or under the
Operative Documents, and (ii) Debt reflected on the balance sheets in
the Submitted Financial Statements.
(u) Title to Properties. The Lessee has good and marketable
title to all of its material assets reflected on the balance sheets in
the Submitted Financial Statements, except for such material assets as
have been disposed of in the ordinary course of business, and all such
material assets are free and clear of any Lien, except as reflected in
the Submitted Financial Statements and/or notes thereto or as otherwise
permitted by the provisions hereof or under the Operative Documents,
and except for Permitted Liens. The Lessee has such trademarks,
trademark rights, trade names, trade name rights, franchises,
copyrights, patents, patent rights and licenses as to allow it to
conduct its business as now operated in all material respects, without
known conflict with the rights of others.
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(v) Defaults. The Lessee is not in default under any
instrument evidencing any Debt individually, or in the aggregate, in an
amount in excess of $500,000, or under any material agreement relating
thereto or any indenture, mortgage, deed of trust, security agreement,
lease, franchise or other agreement or other instrument to which any
such Person is a party or by which any such Person or any of its
material assets is subject to or bound including the Mellon Revolver
Facility.
(w) Use of Advances. No part of any Advance will be used
directly or indirectly for the purpose of purchasing or carrying, or
for payment in full or in part of Debt that was incurred for the
purposes of purchasing or carrying, any margin security or margin stock
as such terms are defined in Regulation G, T, V or X of the Board of
Governors of the Federal Reserve System.
(x) Solvency. The Lessee is Solvent.
(y) Leases and Contracts. All material leases to which the
Lessee is a party that relate to the material assets of the Lessee or
the Collateral and all material contracts relating to the ownership by
any such Person of rights or interests in the material assets of any
such Person and the Collateral are in full force and effect, and no
material default has occurred with regard to any such lease or
contract. All rentals and other payments due under any such lease or
contract have been timely paid to the Person entitled to receive such
payment.
(z) [Reserved]
(aa) Condition of Property. The material properties used or to
be used in the continuing operations of the Lessee comply with all
Requirements of Law and with any Appurtenant Rights pertaining to such
properties.
(bb) No Change in Name or Entity. Except as provided in
Schedule II hereto or in the case of a transaction permitted by the
Pledge and Security Agreement which occurs subsequent to the date
hereof, the Lessee has not prior to the date of this Participation
Agreement, changed its name.
(cc) Rights in Respect of the Property. The Lessee is not a
party to any contract or agreement to sell any interest in the Property
or any part thereof other than pursuant to or in accordance with this
Participation Agreement and the Lease.
(dd) Chief Executive Office of Lessee. The principal place of
business and chief executive office, as such terms are used in Section
9-103(3) of the UCC, of the Lessee are each located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
(ee) Zoning. The Property complies in all material respects
with all applicable zoning and subdivision laws, ordinances,
regulations and restrictive covenants, and all requirements thereof
necessary for the use, occupancy and operation of the Property have
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been, or upon the completion of the Facility thereon will be, satisfied
in all material respects, and the current use and intended use under
the Lease of the Property is a conforming use.
(ff) Appraisal Data. The information provided by the Lessee
and its Affiliates to the Appraiser and forming the basis for the
conclusions set forth in each Appraisal, taken as a whole, was true and
correct in all material respects and did not omit any information known
and available to the Lessee necessary to make the information provided
not materially misleading.
SECTION 8.4. Representations of Lessee with Respect to Each Advance.
The Lessee represents and warrants to the Lessor, the Certificate Purchaser and
the Construction Lender as of each Funding Date on which an Advance is made as
follows:
(a) Representations. The representations and warranties of the
Lessee set forth in the Operative Documents (including the
representations and warranties set forth in Section 8.3) and the
"Operative Documents" as such term is defined in the Exiting Lease are
true and correct in all material respects on and as of such Funding
Date, except to the extent such representations or warranties relate
solely to an earlier date, in which case such representations and
warranties shall have been true and correct on and as of such earlier
date. The Lessee is in material compliance with its obligations under
the Operative Documents and there exists no Default or Event of Default
under the Lease, the Guaranty, the Guaranty Agreement, the Construction
Agency Agreement or the Pledge and Security Agreement or any other
Operative Document or the "Operative Documents" as such term is defined
in the Existing Lease to which the Lessee is a party. No Default or
Event of Default by Lessee under the Lease, the Guaranty, the Guaranty
Agreement, the Construction Agency Agreement or the Pledge and Security
Agreement or any other Operative Document to which the Lessee is a
party will occur as a result of, or after giving effect to, the Advance
requested by the Funding Request on such date and in accordance with
the schedule for construction approved by the Participants prior to the
Initial Advance Date.
(b) Improvements. The Construction of the Improvements to date
has been performed in a good and workmanlike manner, substantially in
accordance with the Plans and Specifications and in compliance with all
Insurance Requirements and Requirements of Law, and will be completed
prior to the occurrence of the Outside Completion Date.
(c) Lender's Liens. The Lessee has not permitted Liens to be
placed against the Property or against Lessee's fee ownership interest
in the Land since the recordation of the Mortgage other than Permitted
Liens.
(d) Advance. The amount of the Advance requested represents
interest on Construction Loans and Certificate Yield, Financed
Transaction Costs, and amounts owed by the Lessee or Construction Agent
to third parties in respect of Property Improvements
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Costs incurred prior to the date of such Advance and for which the
Lessee has not previously been reimbursed by an Advance. The conditions
precedent to such Advance and the related Certificate Amount and Loans
set forth in Article VI have been satisfied.
ARTICLE IX.
PAYMENT OF CERTAIN EXPENSES
The Lessee agrees, for the benefit of the Certificate Trustee, the
Certificate Purchaser, Trust Company and the Construction Lender, that:
SECTION 9.1. Transaction Expenses.
(a) The Lessee shall pay, or cause to be paid, from time to
time all Transaction Expenses in respect of the transactions on the
Documentation Date, the Initial Advance Date and each Funding Date on
such date; provided, however, that, if the Lessee has not received
written invoices therefor prior to such date, such Transaction Expenses
shall be paid within ten Business Days after the Lessee has received
written invoices therefor.
(b) The Lessee shall pay or cause to be paid (i) the fee of
Mellon Leasing Corporation as provided in Section 2.1 and all fees and
expenses (other than expenses directly relating to an assignment of any
interest of a Participant pursuant to Section 12.1) of the Certificate
Trustee, the Custodian and any necessary co-trustees (including
reasonable counsel fees and expenses) or any successor Certificate
Trustee or successor Custodian, for acting as Certificate Trustee under
the Trust Agreement and Custodian under the Pledge and Security
Agreement, (ii) all Transaction Expenses incurred by the Certificate
Trustee, the Lenders or the Certificate Purchaser in entering into any
future amendments or supplements with respect to any of the Operative
Documents, whether or not such amendments or supplements are ultimately
entered into, or giving or withholding of waivers of consents hereto or
thereto, in each case which have been requested by or approved by the
Lessee, (iii) all Transaction Expenses incurred by the Certificate
Trustee, the Lessee, the Certificate Purchaser or the Lenders in
connection with any purchase of the Property by the Lessee or other
Person pursuant to Articles XV, XVI, XVIII and XX of the Lease and (iv)
all Transaction Expenses incurred by any of the other parties hereto in
respect of enforcement of any of their rights or remedies against the
Lessee or any Affiliate of the Lessee in respect of the Operative
Documents. Subject to the provisions of Section 9.3, all fees and
expenses referenced in Sections 9.1(a) and (b) payable or incurred
before or during the Interim Term shall be paid through Advances to the
extent they are included in the Approved Construction Budget.
SECTION 9.2. Brokers' Fees and Stamp Taxes. The Lessee shall pay or
cause to be paid any brokers' fees and any and all Impositions, if any,
including any interest and penalties, which are payable in connection with the
transactions contemplated by this Participation Agreement and the other
Operative Documents. During the Interim Term, such fees and Impositions shall be
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payable through Advances to the extent they are specifically included in the
Approved Construction Budget.
SECTION 9.3. Limitations During Interim Term. If at any time there
shall be fees, expenses, Impositions or other amounts which are required to be
paid prior to or during the Interim Term through Advances under this Article IX
or Sections 13.5, 13.7, 13.10 or 14.11 or under any Operative Document, and (i)
such amounts are not included in the Approved Construction Budget or (ii) there
are not sufficient Available Commitments remaining to complete the construction
of the Improvements pursuant to the Construction Documents (net of all
Certificate Yield Payment Advances and Interest Payment Loans), then at such
time an Event of Default shall be deemed to have occurred under the Construction
Agency Agreement. All references to the Approved Construction Budget in the
Operative Documents shall be deemed to include all contingencies therein;
provided that at no time shall any contingency (on a percentage basis of all
contingency amounts) be funded in excess of the percentage of the commitments
funded to such date, and any usage or reallocation of the contingency shall be
subject to the approval of the Construction Lender in its sole and absolute
discretion.
ARTICLE X.
OTHER COVENANTS AND AGREEMENTS
SECTION 10.1. Covenants of Lessee. The Lessee hereby agrees as follows:
(a) Information. The Lessee will deliver, or cause to be
delivered, to each of the Certificate Purchaser and the Construction
Lender:
(i) as soon as available and in any event within 120
days after the end of each fiscal year of the Lessee,
consolidated statements of financial position of the Lessee
and its consolidated subsidiaries as of the end of such fiscal
year and the related consolidated statements of income, and
cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year,
with such consolidated financial statements audited by
PriceWaterhouseCoopers or other "Big Six" accounting firm, or
other independent public accountants of nationally recognized
standing reasonably acceptable to the Construction Lender and
the Certificate Purchaser, without qualification as to going
concern or limitation on the scope of the audit, which
financial statements shall be accompanied by a certificate of
a Vice President or the President of the Lessee certifying
that, as of such date, no Default or Event of Default exists
under any Operative Document to which the Lessee is a party,
and that the Lessee is in compliance with all of its
obligations under the Operative Documents;
(ii) as soon as available and in any event within 60
days after the end of each of the first three quarters of each
fiscal year of the Lessee, a consolidated statement of
financial position of the Lessee as of the end of such quarter
and the
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related consolidated statements of income and cash flows for
such quarter and for the portion of the Lessee's fiscal year
ended at the end of such quarter, which financial statements
shall be accompanied by a certificate of a Vice President or
the President of the Lessee certifying that, as of such date,
no Default or Event of Default exists under any Operative
Document to which the Lessee is a party, and that the Lessee
is in compliance with all of its obligations under the
Operative Documents;
(iii) if and when any member of the ERISA Group (1)
gives or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA) with
respect to any Plan which might constitute grounds for a
termination of such Plan under Title IV or ERISA, or knows
that the plan administrator of any Plan has given or is
required to give notice of any such reportable event, a copy
of the notice of such reportable event given or required to be
given to the PBGC; (2) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that
any Multiemployer Plan is in reorganization, is insolvent or
has been terminated, a copy of such notice; (3) receives
notice from the PBGC under Title IV of ERISA of an intent to
terminate, impose liability (other than for premiums under
Section 4007 of ERISA) in respect of, or appoint a trustee to
administer any Plan, a copy of such notice; (4) applies for a
waiver of the minimum funding standard under Section 412 of
the Code, a copy of such application; (5) gives notice of
intent to terminate any Plan under Section 4041(c) of ERISA, a
copy of such notice and other information filed with the PBGC;
(6) gives notice of withdrawal from any Plan pursuant to
Section 4063 of ERISA, a copy of such notice; or (7) fails to
make any payment or contribution to any Plan or Multiemployer
Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has
resulted or could result in the imposition of a Lien or the
posting of a bond or other security, a certificate of the
chief financial officer or the chief accounting officer of the
Lessee setting forth details as to such occurrence and action,
if any, which the Lessee or applicable member of the ERISA
Group is required or proposes to take;
(iv) as soon as possible and in any event within
three Business Days after the occurrence of each Default or
Event of Default under any Operative Document a statement of
an officer of the Lessee setting forth details of such Default
or Event of Default and the action that the Lessee proposes to
take with respect thereto;
(v) promptly upon any change of the Lessee's
independent public accountants, notification thereof and such
further information as the Construction Lender, the
Certificate Purchaser and the Certificate Trustee may
reasonably request concerning the resignation, refusal to
stand for reappointment after completion of the current audit
or dismissal of such accountants;
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Participation Agreement
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(vi) promptly upon becoming aware thereof, written
notice of the commencement or existence of any proceeding
against the Lessee or any Affiliate of the Lessee by or before
any Governmental Authority with respect to the Property;
(vii) as soon as possible and in any event within ten
days after the occurrence of any violation or alleged
violation of an Environmental Law, a statement of an
authorized officer setting forth the details of such violation
and the action which the Lessee proposes to take with respect
thereto; and
(viii) from time to time such additional information
regarding the business, prospects, properties, condition or
operations, financial or otherwise, of the Lessee, or
regarding the Property or the status of any construction
thereon, as the Certificate Purchaser or the Construction
Lender may reasonably request.
(b) Compliance with Laws. Lessee shall comply in all material
respects with all Applicable Laws with respect to the Property.
(c) Required Transfers. The Lessee will maintain, or cause to
be maintained, Qualified Assets in the amounts, and transfer (or cause
to be transferred) Qualified Assets at the times and to the accounts,
all as provided in the Pledge and Security Agreement.
(d) Payment of Taxes, etc. The Lessee shall pay and discharge
before the same shall become delinquent, (i) all taxes, assessments and
governmental charges or levies imposed upon it or upon its property,
and (ii) all lawful claims that, if unpaid, might by law become a Lien
upon its property, other than those arising from Permitted Liens;
(e) Visitation Rights. Subject to the provisions of Section
14.13 of this Participation Agreement, the Lessee shall permit the
Construction Lender, the Certificate Purchaser and the Certificate
Trustee or any agents or representatives thereof annually (or upon
demand during an Event of Default) to (upon reasonable notice) examine
and make copies of and abstracts from the records and books of account
of, the Lessee (except for any proprietary information which involves
trade secrets of the Lessee) and to discuss the affairs, finances and
accounts of the Lessee with any of its officers. Subject to the
provisions of Section 14.13 of this Participation Agreement, during the
Term, the Lessee shall upon reasonable notice from the Lessor (except
that no notice shall be required if an Event of Default has occurred
and is continuing) permit the Lenders, the Certificate Purchaser and
their respective authorized representatives to inspect the Property
during normal business hours, provided that such inspections shall not
unreasonably interfere with the Lessee's business operations at the
Property.
(f) Keeping of Books. The Lessee shall keep proper books of
record and account, in which full and correct entries shall be made of
all financial transactions and the assets and business of the material
assets of the Lessee.
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(g) Maintenance of Property, etc. The Lessee shall maintain
and preserve all material assets used or useful in the conduct of its
business in good working order and condition.
(h) Maintenance of Insurance. The Lessee shall maintain
insurance coverage covering the Property which meets in all respects
the requirements of Article XIII of the Lease, and such coverage shall
remain in full force and effect. The Lessee shall carry insurance with
reputable insurers, or self-insure, in respect of its material assets,
in such manner, in such amounts and against such risks as is
customarily maintained by other Persons of similar size engaged in
similar business.
(i) Environmental Audit. The Lease shall deliver to the
Certificate Purchaser and the Construction Lender upon the request of
any Participant, on or before January 1 of each calendar year, an
Environmental Audit for the Property, prepared during the last quarter
of the previous calendar year, in form and substance acceptable to each
of them, provided that such Environmental Audit may be an update of the
Environmental Audit delivered during the previous calendar year
pursuant to the terms of this Participation Agreement. During the
continuance of any Lease Event of Default, the Lessee shall deliver to
the Certificate Purchaser and the Construction Lender an Environmental
Audit for the Property within twenty days of demand therefor.
(j) Appraisal. Within sixty days of the three year anniversary
of the Initial Advance Date, and at thirty-six month intervals
thereafter (or upon demand from the Certificate Purchaser or the
Construction Lender during the continuance of an Lease Event of
Default), the Lessee shall deliver to the Certificate Purchaser and the
Construction Lender an Appraisal of the Property, prepared by an
appraiser satisfactory to the Certificate Purchaser and the
Construction Lender and in form and substance reasonably satisfactory
to each of them, showing the Fair Market Sales Value of the fee
interest in the Land and the Lessor's interest in the Improvements,
dated within thirty days of the delivery of such Appraisal.
SECTION 10.2. Reserved.
SECTION 10.3. Financial Covenants.
(a) Fixed Charge Coverage. The Lessee and its Subsidiaries
shall as of the end of each fiscal quarter of the Lessee, for the
period of four (4) consecutive fiscal quarters then ended, maintain a
ratio of Consolidated Available Earnings to Consolidated Fixed Charges
of 1.5 to 1, provided, that during the Interim Term the Lessee shall be
deemed to be in default of the covenants under this Section 10.3 only
if the failure to comply with such covenants shall arise from, be
caused by or relate to, any act or omission of the Lessee, anything
within the reasonable control of the Lessee or anything that could have
been avoided through the use of best efforts by the Lessee. The Lessee
covenants and agrees that it shall use best efforts during the Term to
comply with the covenants in this
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Section 10.3.
(b) Tangible Net Worth. The Tangible Net Worth of the Lessee
shall not at any time be less than $225,000,000.
(c) Limitations on Indebtedness.
(i) The Consolidated Indebtedness of the Lessee and
its Subsidiaries shall not at any time exceed 50% of the Total
Capitalization of the Lessee.
SECTION 10.4. Waiver of Covenants. The covenants of the Lessee
contained in Section 10.3 above may, following the consummation of the
Refinancing, be waived only by a written instrument executed by the Construction
Lender, the Certificate Purchaser and the holders of at least 50% of the then
outstanding principal amount of the Tranche A Loans and the Tranche B Lender (or
its successor), in each case of the foregoing in their respective sole and
absolute discretion.
SECTION 10.5. Covenant of the Certificate Trustee and the Participants.
In the event that the Certificate Trustee or any Participant receives (x)
written notice of any material pending or threatened claim, action or proceeding
involving any Environmental Law or any Release on or in connection with the
Property or (y) written notice from any Governmental Authority relating to the
Property, the Certificate Trustee or such Participant, as the case may be, shall
promptly give notice thereof to the Lessee.
SECTION 10.6. Other Covenants of the Certificate Trustee and the Trust
Company.
(a) Other Activities. The Certificate Trustee (in its capacity
as such) shall not conduct, transact or otherwise engage in, or commit
to transact, conduct or otherwise engage in, any business or operations
other than the entry into, and exercise of rights and performance of
obligations in respect of, the Operative Documents, the Refinancing
Credit Facility Agreements and other activities incidental or related
to the foregoing.
(b) Ownership of Properties; Indebtedness. The Certificate
Trustee (in its capacity as such) shall not own, lease, manage or
otherwise operate any properties or assets other than in connection
with the activities described in clause (a) above, or incur, create,
assume or suffer to exist any indebtedness or other consensual
liabilities or financial obligations other than as may be incurred,
created or assumed or as may exist in connection with the activities
described in clause (a) above (including the Construction Loans, the
Refinancing Credit Facility Agreements and other obligations incurred
by the Certificate Trustee hereunder).
(c) Disposition of Assets. The Certificate Trustee (in its
capacity as such) shall not convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets, whether
now owned or hereafter acquired, except to the extent expressly
contemplated by the Operative Documents, the Refinancing Credit
Facility
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39
Agreements or as otherwise directed in writing by the Participants.
(d) Compliance with the Operative Documents. The Certificate
Trustee and the Trust Company shall at all times observe and perform
all of the covenants, conditions and obligations required to be
performed by them respectively (whether in its capacity as Certificate
Trustee, in its individual capacity or otherwise) under each Operative
Document to which either of them is a party.
(e) Further Assurances. At any time and from time to time,
upon the written request of the Construction Lender, and at the sole
expense of the Lessee, the Certificate Trustee and the Trust Company
will promptly and duly execute and deliver such further instruments and
documents and take such further action as the Construction Lender may
reasonably deem necessary for the purpose of obtaining or preserving
the full benefits of this Participation Agreement and the other
Operative Documents and of the rights and powers herein or therein
granted.
(f) Notices. If on any date the Certificate Trustee shall
obtain actual knowledge of the occurrence of a Default or Event of
Default, the Certificate Trustee will give written notice thereof to
the Construction Lender or Tranche A Lenders and Tranche B Lender
within two Business Days after such date.
(g) Discharge of Liens. The Trust Company will not create or
permit to exist at any time, and the Trust Company will, at its own
expense, promptly take such action as may be necessary to duly
discharge, or cause to be discharged, all Lessor Liens attributable to
it and not resulting from the Operative Documents.
(h) Trust Agreement. Without prejudice to any right under the
Trust Agreement of the Certificate Trustee to resign, each of the
Certificate Trustee and the Trust Company (a) agrees not to terminate
or revoke the trust created by the Trust Agreement except as permitted
by Article VI of the Trust Agreement, (b) agrees not to amend,
supplement, terminate, revoke or otherwise modify any provision of the
Trust Agreement in any manner which could reasonably be expected to
have an adverse effect on the rights or interests of the Construction
Lender or Lessee hereunder or under the other Operative Documents and
(c) agrees to comply with all of the terms of the Trust Agreement.
(i) No Transfers. Notwithstanding anything to the contrary
contained in the Operative Documents, the Certificate Trustee shall not
pledge, hypothecate, convey, assign, encumber or otherwise transfer (by
operation of law or otherwise) any interest of the Certificate Trustee
in and to the Property, the Ground Lease or the Lease (including any
right to receive Rent or other sums from the Lessee), except as
expressly contemplated by the Operative Documents and the Refinancing
Credit Facility Agreement, and any such pledge, hypothecation,
conveyance, assignment, encumbrance or other transfer not expressly
authorized in accordance with the Operative Documents shall be
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40
void ab initio and of no force and effect.
SECTION 10.7. Covenant of Certificate Purchaser. So long as no Event of
Default shall have occurred and be continuing, (i) the Certificate Purchaser
shall not direct the Trustee to terminate the Trust, pursuant to Article VI of
the Trust Agreement, unless such action does not adversely affect the Lessee or
its rights under the Operative Documents and (ii) until the expiration or sooner
termination of the Term, the Certificate Purchaser shall accept no distributions
from the Trust, other than (A) distributions of Certificate Yield during the
Base Term and any Renewal Term and (B) distributions otherwise expressly
permitted under Article V of the Construction Loan Agreement.
ARTICLE XI.
[RESERVED]
ARTICLE XII.
TRANSFERS OF PARTICIPANTS' INTERESTS
SECTION 12.1. Assignments. All or any part of the interest of any
Participant in, to or under this Participation Agreement, the other Operative
Documents, the Property, the Notes or the Certificate may be assigned or
transferred by such Participant at any time; provided, however, that (i) no
assignment or transfer shall be made during the Interim Term so long as Lessee
is not in Default under the terms of any Operative Document (unless a
Participant's institution is no longer participating in the types of financings
evidenced by the Operative Documents), (ii) each assignment or transfer shall
comply with all applicable securities laws, and (iii) any assignee or transferee
(A) acknowledges that the obligations to be performed from and after the date of
such transfer or assignment under this Participation Agreement and all other
Operative Documents are its obligations, including the obligations imposed by
this Section 12.1 (and the transferor and transferee Participant shall deliver
to the Lessee and the Certificate Trustee an Assignment Agreement, in
substantially the form of Exhibit P hereto, executed by the assignee or
transferee), and (B) further represents and warrants to the Certificate Trustee,
each Participant and the Lessee that:
(i) it will not be acquiring any Note or Certificate,
as the case may be, with the assets of an employee pension
benefit plan (or its related trust) as defined in Section 3(2)
of ERISA, or with the assets of a Plan (or its related trust)
as defined in Section 4975(e)(l) of the Code or with any
assets which are "plan assets" within the meaning of
Department of Labor Regulation Section 2510.3-101, unless the
acquisition qualifies for an exemption from the prohibited
transaction rules under Section 406 of ERISA and Section 4975
of the Code, other than assets allocated to an insurance
company pooled separate account as defined in ERISA Section
3(17) maintained by a lessor which satisfies the requirements
of U.S. Department of Labor Prohibited Transaction Class
Exemption 90-1 with
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41
respect to the transactions contemplated by the Lease in order
for such transactions to be exempt from the prohibitions of
Section 406 of ERISA and Section 4975 of the Code;
(ii) it is a commercial bank, savings and loan
association, savings bank, pension plan, depository
institution, insurance company, branch or agency of a foreign
bank, mutual fund or other similar financial institution, in
each case, having a minimum capital and surplus of
$100,000,000;
(iii) it will not transfer any Note or Certificate,
as the case may be, unless the proposed transferee makes the
foregoing representations and covenants;
(iv) it will not take any action with respect to such
Note or Certificate that would violate any applicable
securities laws;
(v) it will not assign or transfer any interest in
the Note or the Certificate except in compliance with this
Section 12.1; and
(vi) funds used to acquire such interest will not be
derived from the proceeds of non-recourse financing, and the
assignee will not otherwise limit its at-risk equity
investment as a result of hedging arrangements, to the extent
the interest being assigned is an interest in the Certificate.
Notwithstanding anything to the contrary contained in any Operative
Document, the holder of the Note or the Certificate which is assigned or
transferred pursuant to this Section shall pay any municipal, county or state
real estate transfer tax payable in the Commonwealth of Pennsylvania arising
solely as the result of the assignment or transfer of such Certificate.
SECTION 12.2. Participations. Any Participant may without the consent
of the Lessee sell participations to one or more commercial banks, savings and
loan associations, savings banks, pension plans, depository institutions,
insurance companies, branches or agencies of foreign banks, mutual funds or
other similar institutions, in each case, having a minimum capital and surplus
of $100,000,000 (such institutions are hereinafter referred to, collectively, as
"Sub-Participants") in all or a portion of its rights and obligations under this
Participation Agreement, the other Operative Documents or its Note or
Certificate; provided, however, that (i) such Participant's obligations under
this Participation Agreement and the other Operative Documents to which it is a
party shall remain unchanged, (ii) such Participant shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the Sub-Participants shall be entitled to the cost protection and tax
indemnification provisions contained in this Participation Agreement (provided
that no Sub-Participant shall be entitled to receive any greater amount pursuant
to such provisions than the Participant would have been entitled to receive in
respect of the amount of the participation transferred by such transferor
Participant to such Sub-Participant had not such transfer occurred and,
provided, further, that such Sub-Participant shall have fully complied with the
provisions of Section 12.3), (iv) the Lessee, the Certificate Trustee and the
Participants shall continue to deal solely and directly with such Participant
in connection with such
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42
Participant's rights and obligations under this Participation Agreement and the
other Operative Documents to which it is a party and in connection with the cost
protection and tax indemnification provisions of this Participation Agreement
and the other applicable Operative Documents to which any Sub-Participant is
entitled pursuant to this Section 12.2, (v) such Participant shall retain the
sole right and responsibility to enforce the obligations of the Lessee relating
to this Participation Agreement, the Lease and the other Operative Documents,
(vi) each such sale shall be made in the ordinary course of such Participant's
commercial banking business and in compliance with all applicable Laws, (vii)
each Sub-Participant shall comply with the provisions of Section 12.1(vi), and
(viii) such Participant shall retain the sole right to approve any amendment,
modification or waiver of any provision of this Participation Agreement or any
other Operative Document (other than amendments, modifications or waivers
decreasing any Transaction Expenses or other fees payable hereunder or the
amount of principal of or the rate at which interest is payable on the
Construction Loans, or the rate at which Certificate Yield is payable on the
Certificate, extending the Term or increasing any Commitment, in each case in
respect of an obligation in which the relevant participating bank or entity is
participating, or releasing all or substantially all of the Collateral, or the
Lessee from its obligations under the Guaranty).
SECTION 12.3. Withholding Taxes; Disclosure of Information; Pledge
Under Regulation A.
(a) If any Participant (or the assignee of or Sub-Participant
in any Note or Certificate of a Participant, each a "Transferee") is
organized under the laws of any jurisdiction other than the United
States or any State thereof, then such Participant or the Transferee of
such Participant, as applicable, shall (as a condition precedent to
acquiring or participating in such Construction Loan or Certificate and
as a continuing obligation to the Certificate Trustee and the Lessee)
(i) furnish to the Certificate Trustee and the Lessee in duplicate, for
each taxable year of such Participant or Transferee during the term of
the Lease, a properly completed and executed copy of either Internal
Revenue Service Form 4224 or Internal Revenue Service Form 1001 and
Internal Revenue Service Form W-8 or Internal Revenue Service Form W-9
and any additional form (or such other form) as is necessary to claim
complete exemption from United States withholding taxes (wherein such
Transferee claims entitlement to complete exemption from United States
withholding taxes on all payments hereunder), and (ii) provide to the
Certificate Trustee and the Lessee a new Internal Revenue Service Form
4224 or Internal Revenue Service Form 1001 and Internal Revenue Service
Form W-8 or Internal Revenue Service Form W-9 and any such additional
form (or any successor form or forms) upon the expiration or
obsolescence of any previously delivered form and comparable statements
in accordance with applicable United States laws and regulations and
amendments duly executed and completed by such Participant or
Transferee, and to comply from time to time with all applicable United
States laws and regulations with regard to such withholding tax
exemption. By its acceptance of a participation or assignment of a
Participant's Note or Certificate, each Transferee shall be deemed
bound by the provisions set forth in this Article XII.
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43
(b) Subject to Section 14.13, any Participant may, in
connection with any assignment or participation or proposed assignment
or participation pursuant to this Article XII, disclose to the assignee
or participant or proposed assignee or participant, any information
relating to the Lessee.
(c) Anything in this Article XII to the contrary
notwithstanding, any Participant may without the consent of the Lessee
assign and pledge all or any portion of the Note or Certificate held by
it to any Federal Reserve Bank, the United States Treasury or to any
other financial institution as collateral security pursuant to
Regulation A of the Federal Reserve Board and any operating circular
issued by the Federal Reserve System and/or the Federal Reserve Bank or
otherwise.
ARTICLE XIII.
INDEMNIFICATION
SECTION 13.1. A. General Indemnification. The Lessee agrees, commencing
upon the Completion Date and without limitation on the rights of any indemnitee
under Section 13.1B. or 13.1C., whether or not any of the transactions
contemplated hereby shall be consummated, to indemnify, protect, defend, save
and keep harmless each Indemnitee from and against any and all Claims that may
be imposed on, incurred by or asserted against such Indemnitee, whether or not
such Indemnitee shall also be indemnified as to any such Claim by any other
Person, whether or not such Claim is covered by the indemnification under
Section 13.B. or 13.1C. and whether or not such Claim arises or accrues prior to
the Documentation Date, the Initial Advance Date or the Completion Date, and to
assume liability for, and to indemnify, protect, defend, save and keep harmless
each Indemnitee, on an After Tax Basis, from and against, any and all Claims
(including matters based upon or arising from the negligence of the Indemnitee)
that may be imposed on, incurred by or asserted against such Indemnitee (whether
because of action or omission by such Indemnitee or otherwise), whether or not
such Indemnitee shall also be indemnified as to any such Claim by any other
Person and whether or not such Claim arises or accrues prior to the Initial
Advance Date or after the Expiration Date, in any way relating to or arising out
of:
(a) any of the Operative Documents or any of the transactions
contemplated thereby, and any amendment, modification or waiver in
respect thereof;
(b) the Property or any part thereof or interest therein;
(c) the purchase, design, construction, preparation,
installation, inspection, delivery, non-delivery, acceptance,
rejection, ownership, management, possession, operation, rental, lease,
sublease, repossession, maintenance, repair, alteration, modification,
addition or substitution, storage, transfer of title, redelivery, use,
financing, refinancing, disposition, operation, condition, sale
(including any sale pursuant to Section 15.1, 16.2(c), 16.2(e) or 18.3
of the Lease or any sale pursuant to Articles XVIII or XX of the
Lease), return or other disposition of all or any part or any interest
in the Property
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or the imposition of any Lien (or incurring of any liability to refund
or pay over any amount as a result of any Lien) thereon, including: (1)
Claims or penalties arising from any violation of law or in tort
(strict liability or otherwise), (2) latent or other defects, whether
or not discoverable, (3) any Claim based upon a violation or alleged
violation of the terms of any restriction, easement, condition or
covenant or other matter affecting title to the Property, (4) the
making of any Modifications in violation of any standards imposed by
any insurance policies required to be maintained by Lessee pursuant to
the Lease which are in effect at any time with respect to the Property
or any part thereof, (5) any Claim for patent, trademark or copyright
infringement, and (6) Claims arising from any public improvements with
respect to the Property resulting in any change or special assessments
being levied against the Property or any plans to widen, modify or
realign any street or highway adjacent to the Property, or any Claim
for utility "tap-in" fees;
(d) the breach by the Lessee of any covenant, representation
or warranty made by it or deemed made by it in any Operative Document
or any certificate required to be delivered by any Operative Document;
(e) the retaining or employment of any broker, finder or
financial advisor by the Lessee to act on its behalf in connection with
this Participation Agreement;
(f) the existence of any Lien on or with respect to the
Property, the Improvements, any Basic Rent or Supplemental Rent, title
thereto, or any interest therein including any Liens which arise out of
the possession, use, occupancy, construction, repair or rebuilding of
the Property or by reason of labor or materials furnished or claimed to
have been furnished to the Lessee, or any of its contractors or agents
or by reason of the financing of any personalty or equipment purchased
or leased by the Lessee or Modifications constructed by the Lessee,
except Lessor Liens and Liens in favor of the Construction Lender or
the Lessor; or
(g) subject to the accuracy of any Participant's
representation set forth in Section 8.1(a), as to such Participant, the
transactions contemplated by the Lease or by any other Operative
Document, in respect of the application of Parts 4 and 5 of Subtitle B
of Title I of ERISA and any prohibited transaction described in Section
4975(c) of the Code;
provided, however, the Lessee shall not be required to indemnify any Indemnitee
under this Section 13.1 for any of the following: (1) any Claim to the extent
resulting from the willful misconduct or gross negligence of such Indemnitee (or
any Affiliate of such Indemnitee) (it being understood that the Lessee shall be
required to indemnify an Indemnitee even if the ordinary (but not gross)
negligence of such Indemnitee caused or contributed to such Claim) or the breach
of any representation, warranty or covenant of such Indemnitee (or any Affiliate
of such Indemnitee) set forth in any Operative Document, (2) any Claim resulting
from Lessor Liens which the Indemnitee is responsible for discharging under the
Operative Documents, (3) any Claim to the extent attributable to acts or events
occurring after the expiration of the Term or the return or
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remarketing of the Property so long as the Certificate Trustee, the Construction
Lender and the Certificate Purchaser are not exercising remedies against the
Lessee in respect of the Operative Documents, (4) any claim for the payment of
state, county or municipal real estate transfer tax for which Lessee is not
responsible pursuant to Section 12.1 of the Participation Agreement and (5) any
Claim to the extent arising from a breach of representations, warranties or
covenants of an Indemnitee. It is expressly understood and agreed that the
indemnity provided for herein shall survive the expiration or termination of and
shall be separate and independent from any remedy under the Lease or any other
Operative Document. Without limiting the express rights of any Indemnitee under
this Section 13.1, this Section 13.1 shall be construed as an indemnity only and
not a guaranty of residual value of the Property or as a guaranty of the Notes
or the Certificate.
B. (1) General Indemnification by Construction Agent for the
Construction Period. The Construction Agent agrees, without limitation on the
rights of any indemnitee under Section 13.1A. or 13.1C., whether or not any of
the transactions contemplated hereby shall be consummated, to indemnify,
protect, defend, save and keep harmless the Lessor and its successors, assigns,
directors, shareholders, partners, officers, employees and agents (hereinafter
collectively referred to in this Section 13.1B. as the "Indemnitee") from and
against any and all Claims that may be imposed on, incurred by or asserted
against such Indemnitee, whether or not such Indemnitee shall also be
indemnified as to any such Claim by any other Person, whether or not such Claim
is covered by the indemnification under Section 13.A. or 13.1C. and whether or
not such Claim arises or accrues prior to the Documentation Date or the Initial
Advance Date, or after the Completion Date, and to assume liability for, and to
indemnify, protect, defend, save and keep harmless each Indemnitee, on an After
Tax Basis, from and against, any and all Claims (including matters based upon or
arising from the negligence of the Indemnitee) that may be imposed on, incurred
by or asserted against such Indemnitee (whether because of action or omission by
such Indemnitee or otherwise), whether or not such Indemnitee shall also be
indemnified as to any such Claim by any other Person and whether or not such
Claim arises or accrues prior to the Initial Advance Date or after the
Completion Date, in any way relating to or arising out of:
(a) the Construction Agency Agreement or any of the
transactions or obligations provided for therein; any other Operative
Document or any transaction, act or omission thereunder to the extent,
in the case of such other Operative Document or transaction, act or
omission thereunder, such Claim arose during or otherwise relates to
any transaction, act or omission occurring prior to the Completion
Date, including any investigation, litigation or proceeding in
connection with any of the foregoing; the Construction Documents or any
other contracts or agreements entered into or assumed by Construction
Agent with any third party, or the design and construction of the
Improvements or the use, possession or any activity by or conducted
under the supervision of any Construction Agency Person of, at or on
the Property, including: (i) Claims arising from any violation of
Applicable Laws and Regulations, including Environmental Laws, or in
tort (arising under principles of strict liability or otherwise), (ii)
Claims arising from damage to the environment (including investigation
costs, cleanup costs, response costs, remediation and removal costs,
costs of corrective action, costs of financial assurance and
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all other damages, costs, fees and expenses, fines and penalties,
including natural resource damages), or death or injury to any Person
and any and all expenses associated with the protection of wildlife,
aquatic species, vegetation, flora and fauna, and any mitigative action
required under any Environmental Laws, (iii) latent or other defects,
whether or not discoverable by Construction Agent or any Indemnitee, or
(iv) any Claims resulting from the existence or Release of any
Hazardous Materials from or with respect to the construction of the
Improvements or any part thereof.
(b) any of the Operative Documents or any of the transactions
contemplated thereby, and any amendment, modification or waiver in
respect thereof;
(c) the Property or any part thereof or interest therein;
(d) the purchase, design, construction, preparation,
installation, inspection, delivery, non-delivery, acceptance,
rejection, ownership, management, possession, operation, rental, lease,
sublease, repossession, maintenance, repair, alteration, modification,
addition or substitution, storage, transfer of title, redelivery, use,
financing, refinancing, disposition, operation, condition, sale
(including any sale pursuant to Section 15.1, 16.2(c), 16.2(e) or 18.3
of the Lease or any sale pursuant to Articles XVIII or XX of the
Lease), return or other disposition of all or any part or any interest
in the Property or the imposition of any Lien (or incurring of any
liability to refund or pay over any amount as a result of any Lien)
thereon, including: (1) Claims or penalties arising from any violation
of law or in tort (strict liability or otherwise), (2) latent or other
defects, whether or not discoverable, (3) any Claim based upon a
violation or alleged violation of the terms of any restriction,
easement, condition or covenant or other matter affecting title to the
Property, (4) the making of any Modifications in violation of any
standards imposed by any insurance policies required to be maintained
by the Construction Agent pursuant to the Lease which are in effect at
any time with respect to the Property or any part thereof, (5) any
Claim for patent, trademark or copyright infringement, and (6) Claims
arising from any public improvements with respect to the Property
resulting in any change or special assessments being levied against the
Property or any plans to widen, modify or realign any street or highway
adjacent to the Property, or any Claim for utility "tap-in" fees;
(e) the breach by the Construction Agent of any covenant,
representation or warranty made by it or deemed made by it in any
Operative Document or any certificate required to be delivered by any
Operative Document;
(f) the retaining or employment of any broker, finder or
financial advisor by the Construction Agent to act on its behalf in
connection with this Participation Agreement;
(g) the existence of any Lien on or with respect to the
Property, the Improvements, any Basic Rent or Supplemental Rent, title
thereto, or any interest therein including any Liens which arise out of
the possession, use, occupancy, construction, repair
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or rebuilding of the Property or by reason of labor or materials
furnished or claimed to have been furnished to the Construction Agent,
or any of its contractors or agents or by reason of the financing of
any personalty or equipment purchased or leased by the Construction
Agent or Modifications constructed by the Lessee, except Lessor Liens
and Liens in favor of the Construction Lender or the Lessor; or
(h) subject to the accuracy of any Participant's
representation set forth in Section 8.1(a), as to such Participant, the
transactions contemplated by the Lease or by any other Operative
Document, in respect of the application of Parts 4 and 5 of Subtitle B
of Title I of ERISA and any prohibited transaction described in Section
4975(c) of the Code;
provided, however, the Construction Agent shall not be required to indemnify any
Indemnitee under this Section 13.1B. for any of the following: (1) any Claim to
the extent resulting from the willful misconduct or gross negligence of such
Indemnitee (or any Affiliate of such Indemnitee) (it being understood that the
Construction Agent shall be required to indemnify an Indemnitee even if the
ordinary (but not gross) negligence of such Indemnitee caused or contributed to
such Claim) or the breach of any representation, warranty or covenant of such
Indemnitee (or any Affiliate of such Indemnitee) set forth in any Operative
Document, (2) any Claim resulting from Lessor Liens which the Indemnitee is
responsible for discharging under the Operative Documents, (3) any Claim to the
extent attributable to acts or events occurring after the expiration of the Term
or the return or remarketing of the Property so long as the Certificate Trustee,
the Construction Lender and the Certificate Purchaser are not exercising
remedies against the Lessee in respect of the Operative Documents, (4) any claim
for the payment of state, county or municipal real estate transfer tax for which
Lessee is not responsible pursuant to Section 12.1 of the Participation
Agreement, (5) any Claim to the extent arising from a breach of representations,
warranties or covenants of an Indemnitee and (6) any Claim to the extent arising
from an Unrelated Indemnity Event. It is expressly understood and agreed that
the indemnity provided for herein shall survive the expiration or termination of
and shall be separate and independent from any remedy under the Lease or any
other Operative Document. Without limiting the express rights of any Indemnitee
under this Section 13.1B., this Section 13.1B. shall be construed as an
indemnity only and not a guaranty of residual value of the Property or as a
guaranty of the Notes or the Certificate. The limitations on indemnities in this
Article XIII do not in any way limit any claims for damages for any Events of
Default under the Operative Documents.
(2) Notwithstanding any provision set forth in this Participation
Agreement or any of the other Operative Documents, (i) in the event of a
Construction Agency Event of Default arising solely from an Unrelated Event
which is also not caused by an Unrelated Indemnity Event, unless and until the
Completion Date has occurred, Lessee shall not be required to pay more than the
Maximum Guaranteed Amount on a recourse basis with respect to any damages which
relate to or arise from any such Construction Agency Event of Default and (ii)
with respect to each specific instance under the Operative Documents in which
the Lessee is not required to pay more than the Maximum Guaranteed Amount on a
recourse basis with respect to an Event of Default, in calculating any such
payment the Lessee shall be entitled to include any amounts previously
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paid by the Lessee to the Lessor pursuant to other specific instances under the
Operative Documents which expressly provide that the Lessee's obligations
thereunder on a recourse basis are limited to the Maximum Guaranteed Amount, but
shall not be entitled to include any other payments or amounts, it being agreed
that nothing in clause (i) or (ii) above shall limit any Claim, or any payments
or amounts payable, with respect to any indemnity under any Operative Document.
(3) Notwithstanding any provision set forth in this Participation
Agreement or any of the other Operative Documents, in the event of a Lease Event
of Default arising solely from a Construction Agency Event of Default under
Section 5.1(b) of the Construction Agency Agreement, unless and until the
Completion Date has occurred, Lessee shall not be required to pay more than the
Maximum Guaranteed Amount on a recourse basis with respect to any damages which
relate to such Construction Agency Event of Default.
C. General Indemnification by Lessor During the Construction Period.
The Lessor agrees, without limitation on the rights of any indemnitee under
Section 13.1A. or 13.1B., whether or not any of the transactions contemplated
hereby shall be consummated, to indemnify, protect, defend, save and keep
harmless the Certificate Purchaser, the Lenders and their respective successors,
assigns, directors, shareholders, partners, officers, employees and agents
(hereinafter collectively referred to in this Section 13.1C. as the
"Indemnitee") from and against any and all Claims that may be imposed on,
incurred by or asserted against such Indemnitee, whether or not such Indemnitee
shall also be indemnified as to any such Claim by any other Person, whether or
not such Claim is covered by the indemnification under Section 13.A. or 13.1B.
and whether or not such Claim arises or accrues prior to the Documentation Date
or the Initial Advance Date, or after the Completion Date, and to assume
liability for, and to indemnify, protect, defend, save and keep harmless each
Indemnitee, on an After Tax Basis, from and against, any and all Claims
(including matters based upon or arising from the negligence of the Indemnitee)
that may be imposed on, incurred by or asserted against such Indemnitee (whether
because of action or omission by such Indemnitee or otherwise), whether or not
such Indemnitee shall also be indemnified as to any such Claim by any other
Person and whether or not such Claim arises or accrues prior to the Initial
Advance Date or after the Date, in any way relating to or arising out of:
(a) the Construction Agency Agreement or any of the
transactions or obligations provided for therein; any other Operative
Document or any transaction, act or omission thereunder to the extent,
in the case of such other Operative Document or transaction, act or
omission thereunder, such Claim arose during or otherwise relates to
any transaction, act or omission occurring prior to the Completion
Date, including any investigation, litigation or proceeding in
connection with any of the foregoing; the Construction Documents or any
other contracts or agreements entered into or assumed by Construction
Agent with any third party, or the design and construction of the
Improvements or the use, possession or any activity by or conducted
under the supervision of any Construction Agency Person of, at or on
the Property, including: (i) Claims arising from any violation of
Applicable Laws and Regulations, including Environmental Laws, or
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in tort (arising under principles of strict liability or otherwise),
(ii) Claims arising from damage to the environment (including
investigation costs, cleanup costs, response costs, remediation and
removal costs, costs of corrective action, costs of financial assurance
and all other damages, costs, fees and expenses, fines and penalties,
including natural resource damages), or death or injury to any Person
and any and all expenses associated with the protection of wildlife,
aquatic species, vegetation, flora and fauna, and any mitigative action
required under any Environmental Laws, (iii) latent or other defects,
whether or not discoverable by Construction Agent or any Indemnitee, or
(iv) any Claims resulting from the existence or Release of any
Hazardous Materials from or with respect to the construction of the
Improvements or any part thereof.
(b) any of the Operative Documents or any of the transactions
contemplated thereby, and any amendment, modification or waiver in
respect thereof;
(c) the Property or any part thereof or interest therein;
(d) the purchase, design, construction, preparation,
installation, inspection, delivery, non-delivery, acceptance,
rejection, ownership, management, possession, operation, rental, lease,
sublease, repossession, maintenance, repair, alteration, modification,
addition or substitution, storage, transfer of title, redelivery, use,
financing, refinancing, disposition, operation, condition, sale
(including any sale pursuant to Section 15.1, 16.2(c), 16.2(e) or 18.3
of the Lease or any sale pursuant to Articles XVIII or XX of the
Lease), return or other disposition of all or any part or any interest
in the Property or the imposition of any Lien (or incurring of any
liability to refund or pay over any amount as a result of any Lien)
thereon, including: (1) Claims or penalties arising from any violation
of law or in tort (strict liability or otherwise), (2) latent or other
defects, whether or not discoverable, (3) any Claim based upon a
violation or alleged violation of the terms of any restriction,
easement, condition or covenant or other matter affecting title to the
Property, (4) the making of any Modifications in violation of any
standards imposed by any insurance policies required to be maintained
by the Construction Agent pursuant to the Lease which are in effect at
any time with respect to the Property or any part thereof, (5) any
Claim for patent, trademark or copyright infringement, and (6) Claims
arising from any public improvements with respect to the Property
resulting in any change or special assessments being levied against the
Property or any plans to widen, modify or realign any street or highway
adjacent to the Property, or any Claim for utility "tap-in" fees;
(e) the breach by the Construction Agent of any covenant,
representation or warranty made by it or deemed made by it in any
Operative Document or any certificate required to be delivered by any
Operative Document;
(f) the retaining or employment of any broker, finder or
financial advisor by the Construction Agent to act on its behalf in
connection with this Participation Agreement;
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(g) the existence of any Lien on or with respect to the
Property, the Improvements, any Basic Rent or Supplemental Rent, title
thereto, or any interest therein including any Liens which arise out of
the possession, use, occupancy, construction, repair or rebuilding of
the Property or by reason of labor or materials furnished or claimed to
have been furnished to the Construction Agent, or any of its
contractors or agents or by reason of the financing of any personalty
or equipment purchased or leased by the Construction Agent or
Modifications constructed by the Lessee, except Lessor Liens and Liens
in favor of the Construction Lender or the Lessor; or
(h) subject to the accuracy of any Participant's
representation set forth in Section 8.1(a), as to such Participant, the
transactions contemplated by the Lease or by any other Operative
Document, in respect of the application of Parts 4 and 5 of Subtitle B
of Title I of ERISA and any prohibited transaction described in Section
4975(c) of the Code;
provided, however, the Lessor shall not be required to indemnify any Indemnitee
under this Section 13.1C. for any of the following: (1) any Claim to the extent
resulting from the willful misconduct or gross negligence of such Indemnitee (or
any Affiliate of such Indemnitee) (it being understood that the Lessor shall be
required to indemnify an Indemnitee even if the ordinary (but not gross)
negligence of such Indemnitee caused or contributed to such Claim) or the breach
of any representation, warranty or covenant of such Indemnitee (or any Affiliate
of such Indemnitee) set forth in any Operative Document, (2) any Claim resulting
from Lessor Liens which the Indemnitee is responsible for discharging under the
Operative Documents, (3) any Claim to the extent attributable to acts or events
occurring after the expiration of the Term or the return or remarketing of the
Property so long as the Certificate Trustee, the Construction Lender and the
Certificate Purchaser are not exercising remedies against the Lessee in respect
of the Operative Documents, (4) any claim for the payment of state, county or
municipal real estate transfer tax for which Lessee is not responsible pursuant
to Section 12.1 of the Participation Agreement, (5) any Claim to the extent
arising from a breach of representations, warranties or covenants of an
Indemnitee and (6) any Claim to the extent arising from an Unrelated Indemnity
Event. It is expressly understood and agreed that the indemnity provided for
herein shall survive the expiration or termination of and shall be separate and
independent from any remedy under the Lease or any other Operative Document.
Without limiting the express rights of any Indemnitee under this Section 13.1C.,
this Section 13.1C. shall be construed as an indemnity only and not a guaranty
of residual value of the Property or as a guaranty of the Notes or the
Certificate. The obligations of the Lessor under this Section 13.1C. shall be
limited to net amounts which the Lessor receives under Section 13.1B. which are
not distributed with respect to indemnity obligations under Section 13.1B.
above. To the extent the Lessor receives insufficient funds under Section 13.1B.
to satisfy the indemnity obligations under Section 13.1B. and 13.1C., then such
amounts received under Section 13.1B. shall be distributed pro rata to the
Certificate Purchaser and the Lenders under Section 13.1B. and 13.1C. based on
the ratio of the outstanding Certificate Amount and Loans of each such
Participant.
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SECTION 13.2. End of Term Indemnity.
(a) If the Lessee elects the Remarketing Option and there
would, after giving effect to the proposed remarketing transactions, be
a Shortfall Amount, then prior to the Expiration Date and as a
condition to the Lessee's right to complete the remarketing of the
Property pursuant to Section 20.1 of the Lease, the Lessee shall cause
to be delivered to the Lessor at least 120 days prior to the Expiration
Date, at the Lessee's sole cost and expense, a report from the
Appraiser in form and substance satisfactory to the Participants (the
"End of the Term Report") which shall state the appraiser's conclusions
as to the reason for any decline in the Fair Market Sales Value of any
of the Property subject to the Lease from that anticipated for such
date in the Appraisal delivered on the Initial Advance Date.
(b) If the Lessee elects the Remarketing Option, then on or
prior to the Expiration Date the Lessee shall pay to the Lessor an
amount (not to exceed the Shortfall Amount) equal to the sum of (x) the
excess, if any, of the Fair Market Sales Value determined by the
foregoing appraisal procedure of the Improvements over the Gross
Proceeds, plus (y) the portion of the Shortfall Amount that the End of
the Term Report demonstrates was the result of a decline in the Fair
Market Sales Value of the Improvements due to
(i) extraordinary use, failure to maintain, to
repair, to restore, to rebuild or to replace, failure to
comply with all Applicable Laws, failure to use, workmanship,
method of installation or removal or maintenance, repair,
rebuilding or replacement, (excepting in each case ordinary
wear and tear), or
(ii) any change to the Plans and Specifications as
submitted to the appraiser for the Appraisal after the Initial
Advance Date, or any Modification made to, or any rebuilding
of, the Property or any part thereof by the Lessee, or
(iii) the existence of any Hazardous Activity,
Hazardous Substance or Environmental Violations, or
(iv) any restoration or rebuilding carried out by the
Lessee, or
(v) any condemnation of any portion of the Property
pursuant to Article XIV of the Lease, or
(vi) any use of the Property or any part thereof by
the Lessee other than as a first class suburban office
building and/or manufacturing facility, or
(vii) any grant, release, dedication, transfer,
annexation or amendment made pursuant to Section 11.2 of the
Lease, or
(viii) the failure of the Lessor to have good and
marketable title to the
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leasehold interest in the Land demised under the Ground Lease
and the ownership interest in the Improvements, in each case
free and clear of all Liens (excluding Permitted Liens), or
(ix) the existence of any sublease relating to the
Property that shall survive the Expiration Date.
SECTION 13.3. Environmental Indemnity. Without limitation of the other
provisions of this Article XIII, the Lessee hereby agrees to indemnify, hold
harmless and defend each Indemnitee from and against any and all claims
(including third party claims for personal injury or real or personal property
damage), losses, damages, liabilities, fines, penalties, charges, administrative
and judicial proceedings (including informal proceedings) and orders, judgments,
remedial action, requirements, enforcement actions of any kind, and all
reasonable and documented costs and expenses incurred in connection therewith
(including but not limited to, reasonable and documented attorneys' and/or
paralegals' fees and expenses), including but not limited to, all costs incurred
in connection with any investigation or monitoring of site conditions or any
clean-up, remedial, removal or restoration work by any federal, state or local
government agency, arising in whole or in part, out of
(a) the presence on or under the Property of any Hazardous
Substances, or any releases or discharges of any Hazardous Substances
on, under, from or onto the Property,
(b) any activity, including construction, carried on or
undertaken on or off the Property, and whether by the Lessee or any
predecessor in title or any employees, agents, contractors or
subcontractors of the Lessee or any predecessor in title, or any other
Persons (including such Indemnitee), in connection with the handling,
treatment, removal, storage, decontamination, clean-up, transport or
disposal of any Hazardous Substances that at any time are located or
present on or under or that at any time migrate, flow, percolate,
diffuse or in any way move onto or under the Property,
(c) loss of or damage to any property or the environment
(including clean-up costs, response costs, remediation and removal
costs, cost of corrective action, costs of financial assurance, fines
and penalties and natural resource damages), or death or injury to any
Person, and all expenses associated with the protection of wildlife,
aquatic species, vegetation, flora and fauna, and any mitigative action
required by or under Environmental Laws,
(d) any claim concerning lack of compliance with Environmental
Laws, or any act or omission causing an environmental condition that
requires remediation or would allow any Governmental Authority to
record a Lien on the land records, or
(e) any residual contamination on or under the Land, or
affecting any natural resources, and to any contamination of any
property or natural resources arising in connection with the
generation, use, handling, storage, transport or disposal of any such
Hazardous Substances, and irrespective of whether any of such
activities were or will be
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undertaken in accordance with applicable laws, regulations, codes and
ordinances;
provided, however, the Lessee shall not be required to indemnify any Indemnitee
under this Section 13.3 for (1) any Claim to the extent resulting from the
willful misconduct or gross negligence of such Indemnitee, or any Affiliate of
such Indemnitee (it being understood that, unless the applicable Indemnitee was
in possession of the Property and caused the Claim, the Lessee shall be required
to indemnify an Indemnitee even if the ordinary (but not gross) negligence of
such Indemnitee, or any Affiliate of such Indemnitee, caused or contributed to
such Claim) or (2) any Claim to the extent attributable to acts or events
occurring after the expiration of the Term or the return or remarketing of the
Property so long as the Certificate Trustee, the Construction Lender and the
Certificate Purchaser are not exercising remedies against the Lessee in respect
of the Operative Documents. It is expressly understood and agreed that the
indemnity provided for herein shall survive the expiration or termination of and
shall be separate and independent from any remedy under the Lease or any other
Operative Document.
SECTION 13.4. Proceedings in Respect of Claims. With respect to any
amount that the Lessee is requested by an Indemnitee to pay by reason of Section
13.1 or 13.3, such Indemnitee shall, if so requested by the Lessee and prior to
any payment, submit such additional information to the Lessee as the Lessee may
reasonably request and which is in the possession of such Indemnitee to
substantiate properly the requested payment.
In case any action, suit or proceeding shall be brought against any
Indemnitee, such Indemnitee shall notify the Lessee of the commencement thereof,
and the Lessee shall be entitled, at its expense, to participate in, and, to the
extent that the Lessee desires to, assume and control the defense thereof;
provided, however, that the Lessee shall have acknowledged in writing its
obligation to fully indemnify such Indemnitee in respect of such action, suit or
proceeding, and, at the request of the Indemnitee, provided collateral security
satisfactory to the Indemnitee, and, the Lessee shall keep such Indemnitee fully
apprised of the status of such action, suit or proceeding and shall provide such
Indemnitee with all information with respect to such action, suit or proceeding
as such Indemnitee shall reasonably request, and provided, further, that the
Lessee shall not be entitled to assume and control the defense of any such
action, suit or proceeding if and to the extent that, (A) in the reasonable
opinion of such Indemnitee, (x) such action, suit or proceeding involves any
risk of imposition of criminal liability or any material risk of imposition of
material civil liability on such Indemnitee or will involve a material risk of
the sale, forfeiture or loss of, or the creation of any Lien (other than a
Permitted Lien) on the Property or any part thereof unless, in the case of civil
liability, the Lessee shall have posted a bond or other security satisfactory to
the relevant Indemnitees in respect to such risk or (y) the control of such
action, suit or proceeding would involve an actual or potential conflict of
interest, (B) such proceeding involves Claims not fully indemnified by the
Lessee which the Lessee and the Indemnitee have been unable to sever from the
indemnified Claim(s), or (C) an Event of Default under the Lease has occurred
and is continuing. The Indemnitee may participate in a reasonable manner at its
own expense and with its own counsel in any proceeding conducted by the Lessee
in accordance with the foregoing. The Lessee shall not enter into any settlement
or other compromise with respect to any Claim which is entitled to be
indemnified under Section 13.1 or 13.3 without the prior written
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54
consent of the Indemnitee which consent shall not be unreasonably withheld or
delayed in the case of a money settlement not involving an admission of
liability of such Indemnitee.
Each Indemnitee shall supply the Lessee with such information and
documents reasonably requested by the Lessee as are necessary or advisable for
the Lessee to participate in any action, suit or proceeding to the extent
permitted by Section 13.1 or 13.3, and Lessee shall reimburse the Indemnitee for
the reasonable out-of-pocket expenses of supplying such information and
documents. Unless a Lease Event of Default shall have occurred and be
continuing, no Indemnitee shall enter into any settlement or other compromise
with respect to any Claim which is entitled to be indemnified under Section 13.1
or 13.3 without the prior written consent of the Lessee, which consent shall not
be unreasonably withheld, unless such Indemnitee waives its right to be
indemnified under Section 13.1 or 13.3 with respect to such Claim, does not
admit any criminal liability or civil liability on behalf of the Lessee in
connection with such Claim, and uses reasonable efforts to advise the Lessee on
the status of proceedings from time to time during the pendency of such Claim.
Upon payment in full of any Claim by the Lessee pursuant to Section
13.1 or 13.3 to or on behalf of an Indemnitee, the Lessee, without any further
action, shall be subrogated to any and all claims that such Indemnitee may have
relating thereto (other than claims in respect of insurance policies maintained
by such Indemnitee at its own expense), and such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be necessary to preserve
any such claims and otherwise cooperate with the Lessee and give such further
assurances as are necessary or advisable to enable the Lessee vigorously to
pursue such claims.
Any amount payable to an Indemnitee pursuant to Section 13.1 or 13.3
shall be paid to such Indemnitee promptly upon receipt of a written demand
therefor from such Indemnitee, accompanied by a written statement describing in
reasonable detail the basis for such indemnity and the computation of the amount
so payable.
SECTION 13.5. General Tax Indemnity.
(a) Indemnification. The Lessee shall pay and assume liability
for, and does hereby agree to indemnify, protect and defend the
Property and all Tax Indemnitees, and hold them harmless against, all
Impositions on an After Tax Basis.
(b) Contests. If any claim shall be made against any Tax
Indemnitee or if any proceeding shall be commenced against any Tax
Indemnitee (including a written notice of such proceeding) for any
Imposition as to which the Lessee may have an indemnity obligation
pursuant to this Section 13.5, or if any Tax Indemnitee shall determine
that any Imposition to which the Lessee may have an indemnity
obligation pursuant to this Section 13.5 may be payable, such Tax
Indemnitee shall promptly (and in any event, within 20 days) notify the
Lessee in writing (provided that failure to so notify the Lessee within
20 days shall not alter such Tax Indemnitee's rights under this Section
13.5 except to the
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55
extent such failure precludes or materially adversely affects the
ability to conduct a contest of any indemnified Taxes) and shall not
take any action with respect to such claim, proceeding or Imposition
without the written consent of the Lessee (such consent not to be
unreasonably withheld or unreasonably delayed) for 30 days after the
receipt of such notice by the Lessee; provided, however, that in the
case of any such claim or proceeding, if such Tax Indemnitee shall be
required by law or regulation to take action prior to the end of such
30-day period, such Tax Indemnitee shall in such notice to the Lessee,
so inform the Lessee, and such Tax Indemnitee shall not take any action
with respect to such claim, proceeding or Imposition without the
consent of the Lessee (such consent not to be unreasonably withheld or
unreasonably delayed) for 10 days after the receipt of such notice by
the Lessee unless the Tax Indemnitee shall be required by law or
regulation to take action prior to the end of such 10-day period.
The Lessee shall be entitled for a period of 30 days from receipt of
such notice from the Tax Indemnitee (or such shorter period as the Tax
Indemnitee has notified the Lessee is required by law or regulation for the Tax
Indemnitee to commence such contest), to request in writing that such Tax
Indemnitee contest the imposition of such Tax, at the Lessee's expense. If (x)
such contest can be pursued in the name of the Lessee and independently from any
other proceeding involving a Tax liability of such Tax Indemnitee for which the
Lessee has not agreed to indemnify such Tax Indemnitee, (y) such contest must be
pursued in the name of the Tax Indemnitee, but can be pursued independently from
any other proceeding involving a Tax liability of such Tax Indemnitee for which
the Lessee has not agreed to indemnify such Tax Indemnitee or (z) the Tax
Indemnitee so requests, then the Lessee shall be permitted to control the
contest of such claim, provided that in the case of a contest described in
clause (y), if the Tax Indemnitee determines in good faith that such contest by
the Lessee could have a material adverse impact on the business or operations of
the Tax Indemnitee and provides a written explanation to the Lessee of such
determination, the Tax Indemnitee may elect to control or reassert control of
the contest, and provided, that by taking control of the contest, Lessee
acknowledges that it is responsible for the Imposition ultimately determined to
be due by reason of such claim, and provided, further, that in determining the
application of clauses (x) and (y) of the preceding sentence, each Tax
Indemnitee shall take any and all reasonable steps to segregate claims for any
Taxes for which the Lessee indemnifies hereunder from Taxes for which the Lessee
is not obligated to indemnify hereunder, so that the Lessee can control the
contest of the former. In all other claims requested to be contested by the
Lessee, the Tax Indemnitee shall control the contest of such claim, acting
through counsel reasonably acceptable to the Lessee. In no event shall the
Lessee be permitted to contest (or the Tax Indemnitee required to contest) any
claim, (A) if such Tax Indemnitee provides the Lessee with a legal opinion of
independent counsel that such action, suit or proceeding involves a material
risk of imposition of criminal liability or will involve a material risk of the
sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted
Lien) on the Property or any part of any thereof unless the Lessee shall have
posted and maintained a bond or other security satisfactory to the relevant Tax
Indemnitee in respect to such risk, (B) if an Event of Default has occurred and
is continuing unless the Lessee shall have posted and maintained a bond or other
security satisfactory to the relevant Tax Indemnitee in respect of the Taxes
subject to such claim and any and all expenses for which the Lessee is
responsible hereunder reasonably
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foreseeable in connection with the contest of such claim, (C) unless the Lessee
shall have agreed to pay and shall pay, to such Tax Indemnitee on demand all
reasonable out-of-pocket costs, losses and expenses that such Tax Indemnitee may
incur in connection with contesting such Imposition including all reasonable
legal, accounting and investigatory fees and disbursements, or (D) if such
contest shall involve the payment of the Tax prior to the contest, unless the
Lessee shall provide to the Tax Indemnitee an interest-free advance in an amount
equal to the Imposition that the Indemnitee is required to pay (with no
additional net after-tax costs to such Tax Indemnitee). In addition for Tax
Indemnitee controlled contests and claims contested in the name of the Tax
Indemnitee in a public forum, no contest shall be required: (A) unless the
amount of the potential indemnity (taking into account all similar or logically
related claims that have been or could be raised in any audit involving such Tax
Indemnitee for which the Lessee may be liable to pay an indemnity under this
Section 13.5(b)) exceeds $500,000 and (B) unless, if requested by the Tax
Indemnitee, the Lessee shall have provided to the Tax Indemnitee an opinion of
counsel selected by the Lessee (which may be in-house counsel) (except, in the
case of income taxes indemnified hereunder which shall be an opinion of
independent tax counsel selected by the Tax Indemnitee and reasonably acceptable
to the Lessee) that a reasonable basis exists to contest such claim. In no event
shall a Tax Indemnitee be required to appeal an adverse judicial determination
to the United States Supreme Court.
The party conducting the contest shall consult in good faith with the
other party and its counsel with respect to the contest of such claim for Taxes
(or claim for refund) but the decisions regarding what actions to be taken shall
be made by the controlling party in its sole judgement, provided, however, that
if the Tax Indemnitee is the controlling party and the Lessee recommends the
acceptance of a settlement offer made by the relevant Governmental Authority and
such Tax Indemnitee rejects such settlement offer then the amount for which the
Lessee will be required to indemnify such Tax Indemnitee with respect to the
Taxes subject to such offer shall not exceed the amount which it would have owed
if such settlement offer had been accepted. In addition, the controlling party
shall keep the noncontrolling party reasonably informed as to the progress of
the contest, and shall provide the noncontrolling party with a copy of (or
appropriate excerpts from) any reports or claims issued by the relevant auditing
agents or taxing authority to the controlling party thereof, in connection with
such claim or the contest thereof.
Each Tax Indemnitee shall supply the Lessee with such information and
documents reasonably requested by the Lessee as are necessary or advisable for
the Lessee to participate in any action, suit or proceeding to the extent
permitted by this Section 13.5(b), and the Lessee shall promptly reimburse such
Indemnitee for the reasonable out-of-pocket expenses of supplying such
information and documents. No Tax Indemnitee shall enter into any settlement or
other compromise or fail to appeal an adverse ruling with respect to any claim
which is entitled to be indemnified under this Section 13.5 (and with respect to
which contest is required under this Section 13.5(b)) without the prior written
consent of the Lessee, unless such Tax Indemnitee waives its right to be
indemnified under this Section 13.5 with respect to such claim.
Notwithstanding anything contained herein to the contrary, a Tax
Indemnitee will not be required to contest (and the Lessee shall not be
permitted to contest) a claim with respect to the
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imposition of any Tax if such Tax Indemnitee shall waive its right to
indemnification under this Section 13.5 with respect to such claim (and any
claim with respect to such year or any other taxable year the contest of which
is materially adversely affected as a result of such waiver).
(c) Payments. Any Imposition indemnifiable under this Section
13.5 shall be paid directly when due to the applicable taxing authority
if direct payment is practicable and permitted. If direct payment to
the applicable taxing authority is not permitted or is otherwise not
made, any amount payable to a Tax Indemnitee pursuant to Section 13.5
shall be paid within thirty (30) days after receipt of a written demand
therefor from such Tax Indemnitee accompanied by a written statement
describing in reasonable detail the amount so payable, but not before
two Business Days prior to the date that the relevant Taxes are due.
Any payments made pursuant to this Section 13.5 shall be made directly
to the Tax Indemnitee entitled thereto or the Lessee, as the case may
be, in immediately available funds at such bank or to such account as
specified by the payee in written directions to the payor, or, if no
such direction shall have been given, by check of the payor payable to
the order of the payee by certified mail, postage prepaid at its
address as set forth in this Participation Agreement. Upon the request
of any Tax Indemnitee with respect to a Tax that the Lessee is required
to pay, the Lessee shall furnish to such Tax Indemnitee the original or
a certified copy of a receipt for the Lessee's payment of such Tax or
such other evidence of payment as is reasonably acceptable to such Tax
Indemnitee.
(d) Reports. In the case of any report, return or statement
required to be filed with respect to any Taxes that are subject to
indemnification under this Section 13.5 and of which the Lessee has
knowledge, the Lessee shall promptly notify the Tax Indemnitee of such
requirement and, at the Lessee's expense (i) if the Lessee is permitted
(unless otherwise requested by the Tax Indemnitee) by Applicable Law,
timely file such report, return or statement in its own name or (ii) if
such report, return or statement is required to be in the name of or
filed by such Tax Indemnitee or the Tax Indemnitee otherwise requests
that such report, return or statement be filed in the name of or by
such Tax Indemnitee, the Lessee shall prepare such report, return or
statement for filing by such Tax Indemnitee in such manner as shall be
satisfactory to such Tax Indemnitee and send the same to the Tax
Indemnitee for filing no later than 15 days prior to the due date
therefor. In any case in which the Tax Indemnitee will file any such
report, return or statement, the Lessee shall, upon written request of
such Tax Indemnitee, provide such Tax Indemnitee with such information
as is reasonably necessary to allow the Tax Indemnitee to file such
report, return or statement.
(e) Withholding Taxes.
(i) The Lessor or its agent shall withhold any Taxes
required by Applicable Law to be withheld on any payment to
the Certificate Trustee, the Certificate Purchaser, any other
Participant or Sub-Participant or the Construction Lender,
except to the extent that the Certificate Trustee, the
Certificate Purchaser,
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any other Participant or Sub-Participant or the Construction
Lender has furnished such information to the Lessor or its
agent as shall be sufficient under Applicable Law to entitle
such Person to an exemption from withholding Taxes. Except to
the extent set forth in Section 13.10, the amount payable to
the Certificate Trustee, the Certificate Purchaser, any other
Participant or Sub-Participant and the Construction Lender
shall be reduced by the amount of any withholding Taxes
required to be withheld by the Lessor or its agent pursuant to
the preceding sentence, and the Lessee and the Lessor shall
have no liability or obligation to the Certificate Trustee,
the Certificate Purchaser or the Construction Lender with
respect to any such withholding Taxes.
(ii) If and to the extent the Lessor or its agent has
in good faith attempted to comply with its obligation to
withhold Taxes in accordance with clause (i) and a claim
regarding withholding Taxes is made against the Lessor or its
agent, as between the Lessee and the Lessor or its agent, the
Lessee shall be responsible for, and the Lessee shall
indemnify and hold harmless the Lessor (without duplication of
any indemnification required by subsection (a)) on an After
Tax Basis against, such claim to the extent, but only to the
extent, the Lessor or its agent has actually paid funds to a
taxing authority with respect to such withholding taxes or
receives a demand for such payment from any taxing authority.
(iii) Each Participant agrees to reimburse the Lessor
or its agent for any withholding Taxes for which the Lessor or
its agent becomes liable and to reimburse the Lessee for any
Taxes or other amounts paid by the Lessee pursuant to clause
(ii) hereof.
(iv) For purposes of this Section 13.5(e), it shall
be assumed that the Lease constitutes a loan for United States
Federal income tax purposes (as is the parties' intention).
Subject to the provisions of Section 9.3, all amounts
referenced in this Section 13.5 payable or incurred during the
Interim Term shall be paid through Advances to the extent they
are included in the Approved Construction Budget.
SECTION 13.6. Funding Losses. If any payment or prepayment of principal
or conversion of interest rate with respect to any Construction Loan is made on
any day other than the last day of an Interest Period applicable thereto, or if
the Lessor fails to borrow any Construction Loan after notice has been given to
any Participant in accordance with Article III or IV, the Lessee shall reimburse
each Participant within fifteen (15) days after demand for any resulting loss or
expense incurred by it, including any loss incurred in obtaining, liquidating or
employing deposits from third parties, but excluding loss of margin for the
period after any such payment, prepayment, conversion or failure to borrow,
provided that such Participant shall have delivered to the Lessee a certificate
as to the amount of such loss or expense, which certificate shall be conclusive
in the absence of manifest error, and provided, further, that such loss shall in
no event exceed the interest on the Construction Loans which would have been
payable for the
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balance of such Interest Period less the Applicable Margin. Such Participant
will, at the request of the Lessee, furnish such additional information
concerning the determination of such loss as the Lessee may reasonably request.
This Section 13.6 shall also be for the benefit of the Certificate Purchaser for
the period that the Certificate Yield Rate is determined in respect of the
Eurodollar Rate and shall be applied to such Certificate Purchaser as if the
outstanding Certificate Amount were Construction Loans.
SECTION 13.7. Regulation D Compensation. For so long as any Participant
is required to maintain reserves against "Eurocurrency liabilities" (or any
other category of liabilities which include deposits by reference to which the
interest on Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of such Participant to
United States residents), and, as a result, the cost to such Participant (or its
Funding Office) of making or maintaining its Construction Loans or Certificate
Amount is increased, then such Participant may require the Lessee to pay,
contemporaneously with each payment of interest on the Construction Loans or
Certificate, an additional amount on the related Construction Loan or
Certificate Amount of such Participant at a rate per annum up to but not
exceeding the excess of (i) (A) the applicable Eurodollar Rate divided by (B)
one minus the Eurocurrency Reserve Requirements and (ii) the applicable
Eurodollar Rate. Any Participant wishing to require payment of such additional
amount (x) shall so notify the Lessee in which case such additional interest on
the Construction Loans or Certificate Amount of such Participant shall be
payable to such Participant at the place indicated in such notice with respect
to each Interest Period commencing at least three Business Days after the giving
of such notice and (y) shall furnish to the Lessee at least five Business Days
prior to each date on which interest is payable on the Construction Loans or
Certificate an officer's certificate setting forth the amount to which such
Participant is then entitled under this Section (which shall be consistent with
such Participant's good faith estimate of the level at which the related
reserves are maintained by it). Each such certificate shall be accompanied by
such information as the Lessee may reasonably request as to the computation set
forth therein. Subject to the provisions of Section 9.3, all amounts referenced
in this Section 13.7 payable or incurred during the Interim Term shall be paid
through Advances to the extent they are included in the Approved Construction
Budget.
SECTION 13.8. Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period:
(a) deposits in dollars (in the applicable amounts) are not
being offered to the Construction Lender or the Certificate Purchaser
in the relevant market for such Interest Period, or
(b) the Construction Lender or the Certificate Purchaser
advises the Certificate Trustee that the Eurodollar Rate as determined
by the Construction Lender or the Certificate Purchaser will not
adequately and fairly reflect the cost to the Construction Lender or
the Certificate Purchaser of funding its Construction Loans or
Certificate Amount, as the case may be, for such Interest Period,
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the Certificate Trustee shall forthwith give notice thereof to the
Lessee, whereupon until the Construction Lender or the Certificate
Purchaser notifies the Certificate Trustee and the Lessee that the
circumstances giving rise to such suspension no longer exist, (i) the
obligations of the Construction Lender or the Certificate Purchaser, as
the case may be, to make Construction Loans or Certificate Amounts
shall be suspended and (ii) each outstanding Construction Loan or
Certificate shall begin to bear interest at the Alternate Base Rate on
the last day of the then current Interest Period applicable thereto.
SECTION 13.9. Illegality. If, on or after the date of this
Participation Agreement, the adoption of any applicable law, rule or regulation,
or any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any
Participant (or its Funding Office) with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for the Construction Lender or the
Certificate Purchaser (or its Funding Office) to make, maintain or fund its
Construction Loans or Certificate Amounts and the Construction Lender or the
Certificate Purchaser shall so notify the Certificate Trustee, the Certificate
Trustee shall forthwith give notice thereof to the other Participants and the
Lessee, whereupon the Construction Lender or the Certificate Purchaser shall, if
practicable, with the consent of the Lessee (which consent shall not
unreasonably be withheld), designate a different Funding Office if such
designation will avoid the illegality or impossibility and will not, in the
judgment of the Construction Lender or the Certificate Purchaser, be otherwise
disadvantageous to the Construction Lender or the Certificate Purchaser, and if
it will be disadvantageous to the Construction Lender or impractical to
designate a different Funding Office, the Construction Loan or Certificate
Amounts will automatically convert into an Alternate Base Rate Construction Loan
or Certificate on the Scheduled Payment Date applicable to such Loan or
investment if the Construction Lender or the Certificate Purchaser may lawfully
continue to maintain and fund such Loan or investment to such day or (b)
immediately if the Construction Lender or Certificate Purchaser shall determine
that it may not lawfully continue to maintain and fund such Construction Loan or
Certificate Amount to such day. If such notice is given the Lessee shall be
entitled upon its request to a reasonable explanation of the factors underlying
such notice.
SECTION 13.10. Increased Cost and Reduced Return.
(a) In the event that the adoption of any applicable law, rule
or regulation, or any change therein or in the interpretation or
application thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof or compliance by any Participant with any request or directive
after the date hereof (whether or not having the force of law) of any
such authority, central bank or comparable agency:
(i) does or shall subject such Participant to any
additional tax of any kind whatsoever with respect to the
Operative Documents or any Loan or Certificate Amount made by
it, or change the basis or the applicable rate of
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taxation of payments to such Participant of principal,
interest or any other amount payable hereunder (except for the
imposition of or change in any tax on or measured by the
overall net income of such Participant (other than any such
tax imposed by means of withholding));
(ii) does or shall impose, modify or hold applicable
any reserve, special deposit, insurance assessment, compulsory
loan or similar requirement against assets held by, or
deposits or other liabilities in or for the account of,
advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of such Participant
which are not otherwise included in determination of the rate
of interest on or, as applicable, the Certificate Yield Rate
with respect to, Construction Loans, Refinancing Loans or the
Certificate Amount; or
(iii) does or shall impose on such Participant any
other condition;
and the result of any of the foregoing is to increase the cost to such
Participant of making or maintaining such Loans or Certificate Amount or to
reduce any amount receivable hereunder or under any Note or Certificate with
respect thereto, then in any such case, the Lessee shall promptly pay such
Participant, upon its demand, any additional amounts necessary to compensate
such Participant for such increased cost or reduced amount receivable which such
Participant deems to be material as determined by such Participant with respect
to its Refinancing Loans, Construction Loans or Certificate Amount.
(b) If any Participant shall have determined that, after the
date hereof, the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital
adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on capital of such Participant
(or any entity directly or indirectly controlling such Participant) as
a consequence of such Participant's obligations under the Operative
Documents to a level below that which such Participant (or any entity
directly or indirectly controlling such Participant) could have
achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an
amount deemed by such Participant to be material, then from time to
time, within 15 days after demand by such Participant (with a copy to
the Certificate Trustee), the Lessee shall pay to such Participant such
additional amount or amounts as will compensate such Participant (or
its Parent) for such reduction.
(c) Each Participant will promptly notify the Lessee and the
Certificate Trustee of any event of which it has knowledge, occurring
after the date hereof, which will entitle such Participant to
compensation pursuant to this Section and will, if practicable, with
the consent of the Lessee (which consent shall not unreasonably be
withheld), designate a
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different Funding Office or take any other reasonable action if such
designation or action will avoid the need for, or reduce the amount of,
such compensation and will not, in the judgment of such Participant, be
otherwise disadvantageous to such Participant. A certificate of any
Participant claiming compensation under this Section and setting forth
in reasonable detail its computation of the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error. In determining such amount, such Participant may use
any reasonable averaging and attribution methods. Subject to the
provisions of Section 9.3, all amounts referenced in this Section 13.10
payable or incurred during the Interim Term shall be paid through
Advances to the extent they are included in the Approved Construction
Budget.
SECTION 13.11. Indemnity Payments in Addition to Lease Obligations. The
Lessee acknowledges and agrees that the Lessee's obligations to make indemnity
payments under this Section 13 are separate from, in addition to, and do not
reduce, the Lessee's obligation to pay under the Lease the Lease Balance.
ARTICLE XIV.
MISCELLANEOUS
SECTION 14.1. Survival of Agreements. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Documents, and the parties' obligations under any and all thereof,
shall survive the execution and delivery of this Participation Agreement, the
transfer of the Property to the Certificate Trustee, the construction of any
Improvements, any disposition of any interest of the Certificate Trustee in the
Property or any Improvements or any interest of the Certificate Purchaser in the
Trust and the payment of the Notes and any disposition thereof, the Expiration
Date, and the payment in full in cash of the Lease Balance, and the termination
of the Operative Documents, and shall be and continue in effect notwithstanding
any investigation made by any party and the fact that any party may waive
compliance with any of the other terms, provisions or conditions of any of the
Operative Documents.
SECTION 14.2. No Broker, etc. Each of the parties hereto represents to
the others that it has not retained or employed any broker, finder or financial
adviser to act on its behalf in connection with this Participation Agreement or
the transactions contemplated herein, nor has it authorized any broker, finder
or financial adviser retained or employed by any other Person so to act. Any
party who is in breach of this representation shall indemnify and hold the other
parties harmless from and against any liability arising out of such breach of
this representation.
SECTION 14.3. Notices. Unless otherwise specifically provided herein,
all notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to any
Person shall be given in writing by United States mail, by nationally recognized
courier service, by hand or by facsimile and any such notice shall become
effective five Business days after being deposited in the mails, certified or
registered with
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appropriate postage prepaid or one Business Day after delivery to a nationally
recognized courier service specifying overnight delivery or, if delivered by
hand, when received, or, if transmitted by facsimile, when transmitted (upon
electronic confirmation thereof) and shall be directed to the address or
facsimile number of such Person as indicated on Schedule III. From time to time
any party may designate a new address for purposes of notice hereunder by
written notice to each of the other parties hereto in accordance with this
Section.
SECTION 14.4. Counterparts. This Participation Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 14.5. Amendments. The provisions of this Participation
Agreement may from time to time be amended, modified or waived, provided that
such amendment, modification or waiver is in writing and consented to by the
Lessee, the Certificate Trustee, the Construction Lender and the Certificate
Purchaser; provided further, however, that the covenants contained in Section
10.3 of this Participation Agreement may be waived as set forth in Section 10.4.
Neither any Operative Document nor any of the terms thereof may be terminated
(except upon payment in full of the Lease Balance plus Make-Whole Premiums, if
any, or effective exercise and consummation of the Remarketing Option in
accordance with Article XX of the Lease and payment in full of all amounts due
in accordance therewith), amended, supplemented, waived or modified without the
written agreement or consent of each party thereto and, regardless of whether
the Construction Lender and the Certificate Purchaser are parties thereto, the
Construction Lender and the Certificate Purchaser; provided, however, that no
such termination, amendment, supplement, waiver or modification that would
increase the obligations of the Lessee thereunder or deprive the Lessee of any
of its rights thereunder, or otherwise adversely affect the Lessee, shall be
effective against the Lessee without the written agreement or consent of the
Lessee, which consent shall not be unreasonably withheld or delayed.
SECTION 14.6. Headings, etc. The Table of Contents and headings of the
various Articles and Sections of this Participation Agreement are for
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof.
SECTION 14.7. Parties in Interest. Except as expressly provided herein,
none of the provisions of this Participation Agreement are intended for the
benefit of any Person except the parties hereto. The Lessee shall not assign or
transfer any of its rights or obligations under the Operative Documents without
the prior written consent of the Certificate Trustee, the Construction Lender
and the Certificate Purchaser, which may be withheld in the sole discretion of
any of the foregoing parties.
SECTION 14.8. GOVERNING LAW. THIS PARTICIPATION AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY THE LAW OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES.
SECTION 14.9. Severability. Any provision of this Participation
Agreement that is
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prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 14.10. Liability Limited.
(a) It is expressly understood and agreed by the parties
hereto that (a) this Participation Agreement is executed and delivered
by Wilmington Trust Company, not individually or personally, except as
expressly stated herein, but solely as Certificate Trustee of Brush
Creek Business Trust II, a statutory Delaware business trust created
under the Trust Agreement, in the exercise of the powers and authority
conferred and vested in it under the Trust Agreement, (b) each of the
representations, undertakings and agreements herein made by the
Certificate Trustee on the part of the Trust or Certificate Trustee is
made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company, except as expressly stated
herein, but is made and intended for the purpose of binding only the
Trust or Certificate Trustee and (c) except as expressly stated herein,
under no circumstances shall Wilmington Trust Company be personally
liable for the payment of any indebtedness or expenses of the Trust or
Certificate Trustee or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by
the Certificate Trustee or the Trust under this Participation Agreement
or the other Operative Documents.
(b) No Participant shall have any obligation to any other
Participant or to the Lessee, the Certificate Trustee, the Certificate
Purchaser or the Construction Lender with respect to transactions
contemplated by the Operative Documents, except those obligations of
such Participant expressly set forth in the Operative Documents or
except as set forth in the instruments delivered in connection
therewith, and no Participant shall be liable for performance by any
other party hereto of such other party's obligations under the
Operative Documents except as otherwise so set forth.
SECTION 14.11. Further Assurances. The parties hereto shall promptly
cause to be taken, executed, acknowledged or delivered, at the sole expense of
the Lessee, all such further acts, conveyances, documents and assurances as the
other parties may from time to time reasonably request in order to carry out and
effectuate the intent and purposes of this Participation Agreement, the other
Operative Documents, and the transactions contemplated hereby and thereby
(including the preparation, execution and filing of any and all Uniform
Commercial Code financing statements and other filings or registrations which
the parties hereto may from time to time request to be filed or effected);
provided, however, that the Lessee shall not be required to pay expenses
pursuant to this Section to the extent arising from a breach or alleged breach
by the Construction Lender or the Certificate Purchaser of any agreement entered
into in connection with the assignment or participation of any Loan or
Certificate Amount. The Lessee, at its own expense and without need of any prior
request from any other party, shall take such action as may be necessary
(including any action specified in the preceding sentence), or (if
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the Certificate Trustee shall so request) as so requested, in order to maintain
and protect all security interests provided for hereunder or under any other
Operative Document. Subject to the provisions of Section 9.3, all amounts
referenced in this Section 14.11 payable or incurred during the Interim Term
shall be paid through Advances to the extent they are included in the Approved
Construction Budget.
SECTION 14.12. SUBMISSION TO JURISDICTION. THE LESSEE, THE CONSTRUCTION
LENDER, THE CERTIFICATE PURCHASER AND THE CERTIFICATE TRUSTEE HEREBY SUBMIT TO
THE FULLEST EXTENT PERMITTED BY LAW TO THE NONEXCLUSIVE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA AND OF ANY
COURT OF THE COMMONWEALTH OF PENNSYLVANIA FOR PURPOSES OF ALL LEGAL PROCEEDINGS
ARISING OUT OF OR RELATING TO THE OPERATIVE DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY. THE LESSEE, THE CONSTRUCTION LENDER, THE CERTIFICATE
PURCHASER AND THE CERTIFICATE TRUSTEE IRREVOCABLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH ANY OF THE FOREGOING MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.
SECTION 14.13. Confidentiality. The Certificate Trustee, the
Certificate Purchaser and the Construction Lender represent, warrant, covenant
and agree that they will maintain the confidentiality of any written or oral
information provided under or referenced in the Operative Documents by or on
behalf of the Lessee that has been identified by its source as confidential
("Confidential Information"), subject to the Certificate Trustee's, the
Certificate Purchaser's and the Construction Lender's (a) obligation to disclose
any such Confidential Information pursuant to applicable law or pursuant to an
order under applicable laws and regulations or pursuant to a subpoena or other
legal process (but only after 10 days prior notice to the Lessee (unless during
such 10-day period the Certificate Trustee, the Certificate Purchaser or the
Construction Lender shall be subject to criminal liability, or material civil
liability for which the Lessee has not agreed to indemnify the relevant party)
and an opportunity to challenge such order or subpoena during such period), (b)
right to disclose any such Confidential Information to its bank examiners,
Affiliates, auditors, counsel and other professional advisors but only on a need
to know basis in connection with the Operative Documents and only if such
Persons are similarly bound in a separate writing to the provisions of this
Section 14.13, (c) right to disclose any such Confidential Information in
connection with any litigation or dispute involving the Participants and the
Lessee or any of its Subsidiaries and Affiliates and (d) right to provide such
information to Participants, Sub-Participants, prospective Sub-Participants to
which sales of participating interests are permitted pursuant to this
Participation Agreement and prospective assignees to which assignments of
interest are permitted pursuant to this Participation Agreement, but only if
such Participants, Sub-Participant, prospective Sub-Participant or prospective
assignee agrees in writing to maintain the confidentiality of such information
on terms substantially similar to those
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of this Section as if it were a "Participant" party hereto. Notwithstanding the
foregoing, any such information supplied to a Participant, Sub-Participant,
prospective Sub-Participant or prospective assignee under this Participation
Agreement shall cease to be Confidential Information if it is or becomes known
to such Person by other than unauthorized disclosure, or if it becomes a matter
of public knowledge.
SECTION 14.14. No Bar. Subject to Section 14.10, nothing set forth
herein or in any other Operative Document shall bar, limit, preclude, prevent,
stay or otherwise adversely affect the right or ability of any party hereto to
bring and pursue any action against any other party hereto for any breach or
alleged breach of its obligations hereunder or under any other Operative
Document.
SECTION 14.15. WAIVER OF JURY TRIAL. EACH OF THE LESSEE, THE
CERTIFICATE TRUSTEE, THE CERTIFICATE PURCHASER AND THE CONSTRUCTION LENDER
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THE OPERATIVE DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 14.16. Construction Consultant. The Construction Lender shall,
from time to time, be entitled to hire a Construction Consultant upon the
submission by the Construction Lender of a certificate to the Lessee describing
in detail the work, information, services or other monitoring which the
Construction Consultant has been retained to provide. The Lessee shall promptly
reimburse the Construction Lender for the reasonable fees of the Construction
Consultant, which amounts shall be payable through Advances to the extent
provided in the Approved Construction Budget.
SECTION 14.17. Cooperation in Connection with Subdivisions.
Construction Lender and Certificate Purchaser acknowledge that Lessee intends to
develop as many as two additional buildings (the "Additional Buildings") on the
Land in the future, and that such development may require shifting of lot lines,
resubdivisions or similar land use actions to effect such development.
Construction Lender, the Tranche A Lender, the Tranche B Lender and Certificate
Purchaser, and each of their successors and assigns, hereby agree to take such
further actions and execute and deliver such further documents as may be
required to effect such lot line changes or subdivision modifications in
connection with the development and leasing of the Additional Buildings so long
as (i) the Base Term of the Lease has commenced and no Default shall then exist
under any Operative Document, and such matters do not impair the value, utility
or remaining useful life of the Property, which shall be confirmed by an
appraisal of the Property, in form and substance satisfactory to the Lenders and
the Certificate Purchaser, performed by an appraiser selected by the Lenders and
the Certificate Purchaser, (ii) such matters are reasonably necessary in
connection with the development of the Additional Buildings, (iii) such matters
will not cause the Property or any portion thereof to fail to comply in any
respect with the provisions of the Lease or any other Operative Document or any
Requirements of Law (including, without limitation, all applicable zoning,
planning, building and subdivision ordinances, all applicable restrictive
covenants and all
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applicable architectural approval requirements), or otherwise cause a Default
under any Operative Document, (iv) all governmental consents or approvals
required prior to such matters have been obtained, and all filings required
prior to such action have been made, (v) such matters will not result in any
down-zoning of the Property or any portion thereof or a material reduction in
the maximum density or development rights available to the Property under all
Requirements of Law, (vi) the Lessee shall remain obligated under this Lease and
under any instrument executed by the Lessee consenting to the assignment of the
Lessor's interest in this Lease as security for indebtedness, in each such case
in accordance with their terms, as though such matters had not been effected,
and the obligations of the Lessee, the Construction Agent and each Guarantor,
and the rights and benefits of each Participant as against the Lessee,
Construction Agent and Guarantor, under any Operative Document shall not be
impaired, (vii) the Lessor and the Lenders shall receive endorsements to the
existing title policy and a revised Survey insuring Lessor's and Lenders' right,
title and interest in and to the Property, (viii) Lessee, Construction Agent and
each Guarantor shall take sure further acts and execute such further documents
as shall be reasonably requested by the Lessor or any Lender in connection with
this Section 14.17. Such additional actions of the Lessor, Construction Lender,
Tranche A Lender and Tranche B Lender may include, without limitation, (i) the
execution or consent to a resubdivision of the Land to accommodate the
Additional Buildings as positioned on one or more separately subdivided parcels,
(ii) execution and delivery of easements and rights of way necessary or
desirable for parking and traffic flow in the office complex, (iii) execution
and delivery of easements for utilities and other similar services to the
Additional Buildings, and (iv) the release of property on which Additional
Buildings and appurtenant land (including grading areas and parking areas) and
improvements will be developed from the liens, encumbrances and restrictions of
the Ground Lease (and any memorandum thereof), the Lease (and any memorandum
thereof), the Mortgage and the other Operative Documents.
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Participation Agreement
68
IN WITNESS WHEREOF, the parties hereto have caused this
Participation Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
Attest: FORE SYSTEMS, INC., as Lessee, Guarantor
and Construction Agent
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------- -------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Title: SR. VP & CHIEF FINANCIAL OFFICER
----------------------------------
Account Information
for Advances:
S-1
Participation Agreement
69
Attest: WILMINGTON TRUST COMPANY not in its
individual capacity, except as expressly
stated herein, but solely as Certificate
Trustee
/s/ Illegible By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------- -------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
Title: ASSISTANT VICE PRESIDENT
----------------------------------
Remittance Instructions for the
Construction Lender and the Certificate
Purchaser:
S-2
Participation Agreement
70
Attest: MELLON FINANCIAL SERVICES
CORPORATION #4, as Certificate Purchaser
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------- -------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Title: VICE PRESIDENT
----------------------------------
S-3
Participation Agreement
71
Attest: MELLON BANK, N.A., as the Construction
Lender
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------- -------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: VICE PRESIDENT
----------------------------------
S-4
Participation Agreement
72
APPENDIX 1
to Participation Agreement
Definitions and Interpretation
73
Exhibit 10.1
APPENDIX 1
to
Participation Agreement,
Lease, Construction Loan Agreement and Mortgage
(Construction Program for a
Manufacturing/Office Facility
in Allegheny County, Pennsylvania)
----------------------------------
DEFINITIONS AND INTERPRETATION
A. Interpretation. In each Operative Document, unless a clear contrary
intention appears:
(i) the singular number includes the plural number and vice
versa;
(ii) reference to any Person includes such Person's successors
and assigns but, if applicable, only if such successors and assigns are
permitted by the Operative Documents, and reference to a Person in a
particular capacity excludes such Person in any other capacity or
individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement (including any Operative
Document), document or instrument means such agreement, document or
instrument (including the Plans and Specifications) as amended or
modified and in effect from time to time in accordance with the terms
thereof and, if applicable, the terms of the other Operative Documents
and reference to any promissory note includes any promissory note which
is an extension or renewal thereof or a substitute or replacement
therefor;
(v) reference to any Applicable Law means such Applicable Law
as amended, modified, codified, replaced or reenacted, in whole or in
part, and in effect from time to time, including rules and regulations
promulgated thereunder and reference to any section or other provision
of any Applicable Law means that provision of such Applicable Law from
time to time in effect and constituting the substantive amendment,
modification, codification, replacement or reenactment of such section
or other provision;
(vi) reference in any Operative Document to any Article,
Section, Appendix, Schedule or Exhibit means such Article or Section
thereof or Appendix, Schedule or Exhibit thereto;
(vii) "hereunder", "hereof", "hereto" and words of similar
import shall be deemed references to an Operative Document as a whole
and not to any particular Article, Section or other provision thereof;
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74
(viii) "including" (and with correlative meaning "include")
means including without limiting the generality of any description
preceding such term;
(ix) relative to the determination of any period of time,
"from" means "from and including" and "to" means "to but excluding";
and
(x) reference to the Certificate Trustee refers to the
Certificate Trustee acting on behalf of the Trust and is intended to be
binding on the Trust as a separate legal entity.
B. Accounting Terms. In each Operative Document, unless expressly
otherwise provided, accounting terms shall be construed and interpreted, and
accounting determinations and computations shall be made, in accordance with
GAAP.
C. Conflict in Operative Documents. If there is any conflict between
any Operative Documents, such Operative Document shall be interpreted and
construed, if possible, so as to avoid or minimize such conflict but, to the
extent (and only to the extent) of such conflict, the Participation Agreement
shall prevail and control.
D. Legal Representation of the Parties. The Operative Documents were
negotiated by the parties with the benefit of legal representation and any rule
of construction or interpretation otherwise requiring the Operative Document to
be construed or interpreted against any party shall not apply to any
construction or interpretation hereof or thereof.
E. Defined Terms. Unless a clear contrary intention appears, terms
defined herein have the respective indicated meanings when used in each
Operative Document.
"Acceleration" is defined in Section 6 of the Construction Loan
Agreement.
"Account" is defined in Section 5.1 of the Construction Loan Agreement.
"Actual Loss" means the all-in costs and expenses incurred by Lessor,
and any other damages incurred by Lessor (except in connection with an Unrelated
Indemnity Event) under the Operative Documents and under Applicable Laws, less
the value of the Property as determined after an Event of Default by (i) a sale
of the Property, (ii) the re-leasing of the Property or (iii) the Appraiser. The
Lessor shall in its sole discretion determine which of the methods described in
clauses (i), (ii) or (iii) above that Lessor elects to use to determine Actual
Loss. Furthermore, if the Lessor elects the method described in clause (iii)
above, then upon a later sale or releasing of the Property (which sale or
re-leasing shall occur within a reasonable time following the method in clause
(iii)) pursuant to clauses (i) or (ii) above, the Actual Loss shall be
recalculated based on such amounts and any appropriate adjustments shall be made
as provided in the Operative Documents.
"Advance" means an advance of funds by the Lessor to the Construction
Agent pursuant to Article III of the Participation Agreement.
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75
"Affiliate" means, when used with respect to any Person, any other
Person directly or indirectly Controlling or Controlled by or under direct or
indirect common Control with such Person.
"After Tax Basis" means, with respect to any payment to be received,
the amount of such payment increased so that, after deduction of the amount of
all taxes required to be paid by the recipient (less any tax savings actually
realized) with respect to the receipt by the recipient of such amounts, such
increased payment (as so reduced) is equal to the payment otherwise required to
be made.
"Alternate Base Rate" means, for any period, an interest rate per annum
equal to the sum of (i) the Federal Funds Effective Rate most recently
determined by the Lender plus .50% and (ii) the Applicable Margin or Certificate
Margin, as the case may be. If the aforesaid rate changes from time to time
after the date of the Construction Loan Agreement, the Alternate Base Rate shall
be automatically increased or decreased, if appropriate and as the case may be,
without notice to the Lessee or the Lessor, as of the effective time of each
change, provided that the Lender shall endeavor to notify the Lessor of any such
change but shall have no liability for any failure to do so.
"Applicable Law" means all existing and future applicable laws, rules,
regulations (including Environmental Laws) statutes, treaties, codes,
ordinances, permits, certificates, orders and licenses of and interpretations
by, any Governmental Authority, and applicable judgments, decrees, injunctions,
writs, orders or like action of any court, arbitrator or other administrative,
judicial or quasi-judicial tribunal or agency of competent jurisdiction
(including those pertaining to health, safety or the environment (including
wetlands) and those pertaining to the construction, use or occupancy of the
Property) and any restrictive covenant or deed restriction or easement of record
affecting the Property or any other material asset of the Lessee.
"Applicable Margin" means at any time with respect to Eurodollar Rate
Construction Loans, 1/2 of 1%.
"Appraisal" means an appraisal, prepared by Barone, Murtha, Shonberg &
Associates, Inc. or another reputable appraiser selected by the Lenders and
approved by the Certificate Purchaser, of the Land and Improvements on an
as-built basis in accordance with the Plans and Specifications, to be delivered
pursuant to Section 6.1(j) of the Participation Agreement.
"Appraiser" means an independent MAI appraiser having no less then
three (3) years of experience appraising real property in Western Pennsylvania,
selected by the Lessor.
"Approved Construction Budget" means the budget attached as Schedule 2
to the Construction Agency Agreement.
"Approved Construction Schedule" means the schedule attached as
Schedule 3 to the Construction Agency Agreement.
"Appurtenant Rights" means (i) 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 or the Improvements, including the use of any streets, ways, alleys,
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APPENDIX 1
76
vaults or strips of land adjoining, abutting, adjacent or contiguous to the Land
and (ii) all permits, licenses and rights, whether or not of record, appurtenant
to the Land.
"Architect" means, collectively, Studios Architecture, and any other
reputable additional or substitute architect engaged from time to time by the
Lessee in connection with the construction of the Improvements. Any requirement
in any Operative Document that a certificate of the Architect be delivered shall
be satisfied by delivery of certificate(s) from one or more of the foregoing so
long as such certificates collectively satisfy the requirements set forth in
such Operative Documents.
"Assignment of Construction Agency Agreement" means the Construction
Agency Agreement Assignment, dated as of the Initial Advance Date, from the
Certificate Trustee to the Lender.
"Assignment of Leases and Rents" means the Assignment of Leases and
Rents and Assignment of Open End Mortgage, dated as of the Documentation Date,
from the Certificate Trustee, as assignor, to the Lenders, as assignees.
"Available Certificate Purchaser Commitment" means an amount equal to
the excess, if any, of (a) the amount of the Certificate Purchaser Commitment
over (b) the aggregate original amount of the Certificate Amounts.
"Available Commitments" means the Available Lenders Commitment and the
Available Certificate Purchaser Commitment.
"Available Lenders Commitment" means at any time, an amount equal to
the excess, if any, of (a) the amount of the Construction Loan Commitment over
(b) the aggregate original principal amount of all Construction Loans.
"Bankruptcy Code" is defined in Section 6(f) of the Loan Agreement.
"Base Date" means the Construction Period Termination Date.
"Base Term" is defined in Section 2.3 of the Lease.
"Basic Rent" means, the sum of (i) the Lenders Basic Rent and (ii) the
Certificate Purchaser Basic Rent, calculated as of the applicable date on which
Basic Rent is due.
"Benefit Arrangement" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan
and which is maintained or otherwise contributed to by any member of the ERISA
Group.
"Board" means the Board of Governors of the Federal Reserve System of
the United States (or any successor).
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banks in Wilmington, Delaware or Pittsburgh,
Pennsylvania or (if interest or Certificate
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APPENDIX 1
77
Yield is being determined by reference to the Eurodollar Rate) London, England
are generally authorized or obligated, by law or executive order, to close.
"Capital Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is, or is required to be, accounted for as a capital lease
on the balance sheet of that Person.
"Capitalized Lease Obligations" means all obligations under Capital
Leases of any Person, in each case taken at the amount thereof accounted for as
liabilities in accordance with GAAP.
"Casualty" means any damage or destruction of all or any portion of the
Property as a result of a fire or other casualty.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, 42 U.S.C. sections 9601 et. seq., as amended by the
Superfund Amendments and Reauthorization Act of 1986.
"Certificate" means the certificate issued under the Trust Agreement,
substantially in the form of Exhibit A thereto, and any and all certificates
issued in replacement or exchange therefor.
"Certificate Amount" is defined in Section 3.2 of the Participation
Agreement.
"Certificate Balance" means as of any date of determination an amount
equal to the sum of the outstanding Certificate Amounts together with all
accrued and unpaid Certificate Yield thereon.
"Certificate Margin" means at any time with respect to Certificate
Amounts, 4%.
"Certificate Purchaser" means Mellon Financial Services Corporation #4,
a Pennsylvania corporation.
"Certificate Purchaser Basic Rent" means the sum of (i) amounts due
with respect to the Certificate Amounts and (ii) the amount of accrued
Certificate Yield due on the Certificate Amounts, in each case determined in
accordance with Section 4.1 of the Participation Agreement as of any Payment
Date and excluding any interest at the applicable Overdue Rate on any
installment of Certificate Purchaser Basic Rent not paid when due and any fine,
penalty, interest or cost assessed or added under any agreement with a third
party for nonpayment or late payment of Certificate Purchaser Basic Rent.
"Certificate Register" is defined in Section 2.4 of the Trust
Agreement.
"Certificate Trustee" means Wilmington Trust Company, a banking
corporation organized in the State of Delaware, not in its individual capacity,
but solely as trustee of Brush Creek Business Trust II, a statutory Delaware
business trust created under the Trust Agreement, and any successor or
replacement Certificate Trustee expressly permitted under the Operative
Documents.
"Certificate Yield" is defined in Section 4.1(a) of the Participation
Agreement.
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APPENDIX 1
78
"Certificate Yield Payment Advance" is defined in Section 4.1(d) of the
Participation Agreement.
"Certificate Yield Rate" means, (i) for the period from and including
the Initial Advance Date until the Construction Period Termination Date, the
Eurodollar Rate and thereafter, the yield calculated with reference to the rate
given (a) on the USD Screen of Bloomberg Financial Markets Service (the
"Service") at 11:00 a.m. Eastern standard time three Business Days prior to such
date, or if such rate is unavailable, then (b) by the Statistical Release No.
H.15 (519) then most recently published by the F.R.S. Board prior to such date
(the "Statistical Release") as the yield, in either case, of a hypothetical U.S.
Treasury security with a remaining term equal to the remaining term to maturity
(rounded to the nearest month) of the Certificate (assuming that the Certificate
will mature on December 31, 2007), provided, if no maturity exactly corresponds
to the remaining assumed term to maturity of the Certificate, yields for the two
published maturities most closely corresponding to such maturity shall be
selected by (x) reference to the Service, or if such Service is unavailable,
then (y) the Statistical Release, and the yield shall be interpolated from such
yields on a straight-line basis, rounding in each period to the nearest month,
plus (ii) the Certificate Margin.
"Certifying Party" is defined in Section 22.1 of the Lease.
"Claims" means any and all obligations, liabilities, losses, actions,
suits, judgments, penalties, fines, claims, demands, settlements, costs and
expenses (including reasonable legal fees and expenses) of any nature
whatsoever.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute thereto.
"Collateral" means all of the Trust Estate now owned or hereafter
acquired, upon which a Lien is purported to be created by the Security
Documents.
"Collateral Account" is defined in Section 2 of the Pledge and Security
Agreement.
"Collateral Requirement" is defined in Section 2(e)(ii) of the Pledge
and Security Agreement.
"Collateral Value" has the meaning attributed to it in the Pledge and
Security Agreement.
"Commitment" means (i) with respect to the Lenders, the obligation of
the Lenders to make Construction Loans to the Certificate Trustee at the request
of the Lessee in an aggregate principal amount not to exceed the amount set
forth opposite each Lender's name on Schedule IV to the Participation Agreement,
as such amount may be reduced from time to time in accordance with the
provisions of the Construction Loan Agreement, (ii) with respect to the
Certificate Purchaser, the obligation of the Certificate Purchaser to make
available Certificate Amounts to the Certificate Trustee at the request of the
Lessee in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth opposite the Certificate Purchaser's name on
Schedule IV to the Participation Agreement, (and (iii) with respect to the
Certificate Trustee, the obligation of the Certificate Trustee to make Advances
(to the extent the Certificate Trustee receives Certificate Amounts,
Construction Loans and Refinancing Loans).
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APPENDIX 1
79
"Commitment Percentage" means, as to any Participant, the percentage
set forth opposite such Participant's name under the heading "Commitment
Percentage" on Schedule IV to the Participation Agreement.
"Commitment Period" means the period from and including the Initial
Advance Date to the date immediately preceding the Base Date or such earlier
date on which the Commitments shall terminate as provided in the Operative
Documents.
"Completion Date" means the date Substantial Completion occurs.
"Condemnation" means any condemnation, requisition, confiscation,
seizure or other taking (or sale in lieu thereof) of the use, access, occupancy,
material 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 an action by a Governmental
Authority to change the grade of, or widen the streets adjacent to, the Property
or alter the vehicular traffic flow to the Property so as to result in a
material adverse change in access to such Property, or by or on account of an
eviction by paramount title or any transfer made in lieu of any such proceeding
or action. A "Condemnation" shall be deemed to have occurred on the earliest of
the dates that use, occupancy or title vests in the condemning authority.
"Confidential Information" is defined in Section 14.13 of the
Participation Agreement.
"Consolidated Available Earnings" means, for any period, the
Consolidated EBITR for such period.
"Consolidated EBITR", means for any period, Consolidated Net Income for
such period, before giving effect to any extraordinary gains or losses
calculated pursuant to GAAP for such period, plus, to the extent deducted in the
calculation of Consolidated Net Income for such period, the sum of (i) Federal,
State, local and foreign income taxes for such period, (ii) Consolidated
Interest Expense and (iii) Consolidated Rental Expense.
"Consolidated Fixed Charges" means, for any period, the sum of (i)
Consolidated Interest Expense plus (ii) Consolidated Rental Expense for such
period.
"Consolidated Funded Indebtedness" means, to the extent the following
would be reflected on a balance sheet of the Lessee and its Subsidiaries on a
consolidated basis prepared in accordance with GAAP, the principal amount or
principal equivalent of all Debt of the Lessee and its Subsidiaries having a
final maturity of more than one year from the date of determination (or which is
renewable or extendable at the option of the obligor for a period of more than
one year from the date of determination), excluding Consolidated Short-Term
Funded Indebtedness.
"Consolidated Indebtedness" means, at any time, the sum of all
Consolidated Funded Indebtedness and Consolidated Short Term Funded Indebtedness
at such time.
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"Consolidated Interest Expense" means, for any period, the gross
consolidated interest expense of the Lessee and its Subsidiaries for such
period.
"Consolidated Net Income (or Loss)" means, for any period, the
consolidated net earnings (or loss) after taxes of the Lessee and its
Subsidiaries for such period, but excluding all nonrecurring items separately
stated in computing income from continuing operations.
"Consolidated Rental Expense" means, for any period, all payment
obligations of the Lessee and its Subsidiaries accrued during such period under
agreements for rent, lease, hire or use of any real or personal property,
including obligations in the nature of operating leases but excluding Capital
Lease Obligations.
"Consolidated Shareholders' Equity" means, as of any date of
determination, all amounts (without duplication) which, in accordance with GAAP,
would be included under shareholder's equity on a consolidated balance sheet of
the Lessee and its Subsidiaries.
"Consolidated Short Term Funded Indebtedness" means all or the portion
of Debt with a maturity of less than one year from the date of determination.
"Construction" means the construction and installation of all
Improvements contemplated by the Plans and Specifications.
"Construction Agency Agreement" means the Construction Agency
Agreement, dated as of the Initial Advance Date, between the Certificate Trustee
and the Construction Agent.
"Construction Agency Agreement Event of Default" means a "Construction
Agency Agreement Event of Default" as defined in Section 5.1 of the Construction
Agency Agreement.
"Construction Agency Person" means the Lessee, the Construction Agent,
the Architect, the Guarantor, the Prime Contractor, any other contractor or
subcontractor or other Person directly or indirectly performing work or
providing services or materials on the Property, or relating to the Construction
or the Property, through and including the period ending on the Completion Date
(regardless of when such Person commenced performing such work or providing such
services or materials, including any period prior to the Documentation Date),
and all of their respective officers, directors, shareholders, partners,
employees, agents, consultants (on the Property), service-providers (on the
Property), successors and assigns.
"Construction Agent" means Fore Systems, Inc., as construction agent
under the Construction Agency Agreement.
"Construction Breakage Costs" shall mean any costs or expenses incurred
by Lessor or any Participant in connection with the termination of any of the
Construction Documents following the occurrence of a Construction Agency Event
of Default.
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"Construction Consultant" means such consulting engineer as the
Construction Lender may select to monitor the Construction on behalf of the
Construction Lender, the Certificate Purchaser and the Lessor.
"Construction Costs" shall mean the amounts required to construct the
Improvements (including Soft Costs) and to pay Transaction Costs in accordance
with the Plans and Specifications and the Operative Documents.
"Construction Documents" is defined in Section 2.6 of the Construction
Agency Agreement.
"Construction Documents Assignment" means the Assignment of
Construction Documents that is attached to the Construction Agency Agreement as
Exhibit A.
"Construction Lender" means Mellon Bank, N.A., a national banking
association, in its capacity as lender under the Construction Loan Agreement.
"Construction Loan" is defined in Section 2.1 of the Construction Loan
Agreement.
"Construction Loan Agreement" means the Construction Loan Agreement,
dated as of the Initial Advance Date, among the Certificate Trustee, as
borrower, and the Lenders.
"Construction Loan Agreement Default" means any event, act or condition
which with notice or lapse of time, or both, would constitute a Construction
Loan Agreement Event of Default.
"Construction Loan Agreement Event of Default" is defined in Section
6.1(a) of the Construction Loan Agreement.
"Construction Loan Balance" means as of any date of determination an
amount equal to the principal amounts outstanding under the Construction Loans.
"Construction Loan Commitment" means the Commitment of the Lenders in
the amount set forth on Schedule I to the Participation Agreement.
"Construction Loan Documents" means the Construction Loan Agreement,
the Notes and the Security Documents.
"Construction Loan Expiration Date" is defined in Section 2.3 of the
Construction Loan Agreement.
"Construction Period" means the period commencing on the Initial
Advance Date and ending on the Construction Period Termination Date.
"Construction Period Termination Date" means the earlier of (i) the
date on which Substantial Completion has occurred with respect to the
construction of the Facility, and (ii) March 31, 2000.
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"Control" means (including the correlative meanings of the terms
"controlled by" and "under common control with"), as used with respect to any
Person, the possession directly or indirectly, of the power to direct or cause
the direction of the management policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
"Custodian" means Mellon Bank, in its capacity as custodian under the
Custody Agreement.
"Custody Agreement" has the meaning attributed to it in the Pledge and
Security Agreement.
"Debt" means, for any Person, (i) all indebtedness of such Person for
borrowed money or for the deferred purchase price of property or services, (ii)
all obligations of such Person under any conditional sale or other title
retention agreement relating to property purchased by such Person, (iii) all
indebtedness for borrowed money or for the deferred purchase price of property
or services secured by (or for which the holder of such indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on any
property owned by such Person, whether or not such indebtedness has been
assumed, (iv) all obligations of such Person as lessee under leases that have
been or should be, in accordance with GAAP, recorded as Capital Leases, (v) all
obligations of such Person under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clause (i) through (iv) above,
and (vi) all current or past due liabilities of such Person in respect of
unfunded vested benefits under plans covered by Title IV of ERISA.
"Deed" means a special warranty deed with respect to the real property
comprising the Property, in conformity with Applicable Law and appropriate for
recording with the applicable Governmental Authorities, conveying fee simple
title to such real property to the Lessee, subject only to Permitted Liens and
substantially in the form of Exhibit I to the Participation Agreement.
"Default" means any event or condition which, with the lapse of time or
the giving of notice, or both, would constitute an Event of Default.
"Default Completion Costs" shall mean any and all costs of any kind or
description incurred by any Participant or the Lessor in completing the
construction of the Improvements following a Construction Agency Event of
Default in excess of those set forth in the Approved Construction Budget,
including, without limitation, costs of removal and restoration of defective
work, shut down and startup costs for any party under any of the Construction
Documents, redesign, rebidding, repermitting and other costs incurred in
connection with any revision of the Plans and Specifications, construction
supervision costs, carry during any period of delay in the completion of the
Improvements beyond the Outside Completion Date, legal fees incurred in
connection with the negotiation, enforcement, termination or any other action or
proceeding in connection with any of the Construction Documents or any of the
foregoing.
"Documentation Date" is defined in Section 2.1 of the Participation
Agreement.
"Dollars" and "$" mean dollars in lawful currency of the United States
of America.
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"Eligible Project Costs" shall mean, as of any date of determination,
the aggregate amount of Construction Costs accrued, and following a Construction
Agency Event of Default, any Default Completion Costs or Construction Breakage
Costs which may become payable that are properly capitalized in accordance with
GAAP, or which are incurred, at any time prior to the Completion Date, whether
or not paid, in each case which are properly capitalized in accordance with
GAAP, but excluding (i) all Certificate Yield which is capitalized during the
Interim Term pursuant to the Operative Documents, (ii) all Transaction Expenses
other than Transaction Expenses properly capitalized in accordance with GAAP,
and (iii) any payments under Sections 13.5, 13.7, 13.10 and 14.11 of the
Participation Agreement to the extent such amounts are included in the Approved
Construction Budget under the heading "Eligible Project Costs Reimbursables".
Attached to the Construction Agency Agreement as Schedule 2 is the Approved
Construction Budget, which details the Eligible Project Costs.
"End of the Term Report" is defined in Section 13.2(a) of the
Participation Agreement.
"Environmental Audit" means a Phase One environmental site assessment
(the scope and performance of which meets or exceeds ASTM Standard Practice
E1527-93 Standard Practice for Environmental Site Assessments:
Phase One Environmental Site Assessment Process) of the Property.
"Environmental Law" means, whenever enacted or promulgated, any
applicable Federal, state, county or local law, statute, ordinance, rule,
regulation, license, permit, authorization, approval, covenant, criteria,
guideline, administrative or court order, judgment, decree, injunction, code or
requirement or any agreement with a Governmental Authority:
(x) relating to pollution (or the cleanup, removal,
remediation or encapsulation thereof, or any other response thereto),
or the regulation or protection of human health, safety or the
environment, including air, water, vapor, surface water, groundwater,
drinking water, land (including surface or subsurface), plant, aquatic
and animal life, or
(y) concerning exposure to, or the use, containment, storage,
recycling, treatment, generation, discharge, emission, Release or
threatened Release, transportation, processing, handling, labeling,
containment, production, disposal or remediation of any Hazardous
Substance, Hazardous Condition or Hazardous Activity,
in each case as amended and as now or hereafter in effect, and any common law or
equitable doctrine (including injunctive relief and tort doctrines such as
negligence, nuisance, trespass and strict liability) that may impose liability
or obligations for injuries (whether personal or property) or damages due to or
threatened as a result of the presence of, exposure to, or ingestion of, any
Hazardous Substance, whether such common law or equitable doctrine is now or
hereafter recognized or developed. Applicable laws include, but are not limited
to, CERCLA; the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
section 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. section
1251 et seq.; the Clean Air Act, 42 U.S.C. sections 7401 et seq.; the National
Environmental Policy Act, 42 U.S.C. section 4321; the Refuse Act, 33 U.S.C.
sections 401 et seq.; the Hazardous Materials Transportation Act of 1975, 49
U.S.C. sections 1801-1812; the Toxic Substances Control Act, 15 U.S.C. sections
2601 et seq.; the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
sections 136 et seq.; the Safe Drinking Water Act, 42 U.S.C. sections 300f et
seq., each as
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amended and as now or hereafter in effect, and their state and local
counterparts or equivalents, including any regulations promulgated thereunder.
"Environmental Violation" means any activity, occurrence or condition
that violates or results in non-compliance in any material respect with any
Environmental Law.
"Equipment" means all screens, awnings, shades, blinds, curtains,
draperies, carpets, storm doors and windows, heating, electrical, and mechanical
equipment, lighting, plumbing, ventilation, air conditioning and air-cooling
apparatus, refrigerating, and incinerating equipment, escalators, elevators,
window cleaning apparatus, underground sprinkler systems and other fire
prevention and extinguishing apparatus and materials and security systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time or any successor Federal statute.
"ERISA Affiliate" means each entity required to be aggregated with the
Lessee pursuant to the requirements of Section 414(b) or (c) of the Code.
"ERISA Group" means Fore Systems, Inc., a Delaware corporation, and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with Fore
Systems, Inc., are treated as a single employer under Section 414 of the Code.
"Eurocurrency Reserve Requirements" means, for any day the percentage
(expressed as a decimal, rounded upward to the nearest 1/100 of 1%), as
determined in good faith by the Construction Lender (which determination shall
be conclusive), which is in effect on such day as prescribed by the Board
representing the maximum reserve requirement (including, without limitation,
supplemental, marginal and emergency reserve requirements) with respect to
eurocurrency funding (currently referred to as "Eurocurrency liabilities") of a
member bank in the Federal Reserve System. The Eurodollar Rate shall be adjusted
automatically as of the effective date of each change in the Eurocurrency
Reserve Requirements.
"Eurodollar Rate" means with respect to each day during the applicable
Interest Period, the rate per annum determined by the Construction Lender by
dividing (the resulting quotient to be rounded upward to the nearest 1/100 of
1%) (a) the rate of interest (which shall be the same for each day in such
Interest Period) determined in good faith by the Construction Lender in
accordance with its usual procedures (which determination shall be conclusive)
to be the average of the rates per annum for deposits in Dollars offered to
major money center banks in the London interbank market at approximately 11:00
a.m., London time, two Business Days prior to the first day of such Interest
Period for delivery on the first day of such Interest Period in amounts
comparable to the proposed Construction Loan (or, if there are no such
comparable amounts actively traded, the smallest amounts actively traded) and
having maturities comparable to such Interest Period, by (b) a number equal to
1.00 minus the Eurocurrency Reserve Requirements. The "Eurodollar Rate" may also
be expressed by the following formula:
[average of the rates offered to major money ]
[center banks in the London interbank market ]
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Eurodollar Rate =[as determined by the Construction Lender as set forth above]
[1.00 - Eurocurrency Reserve Requirements ]
"Event of Default" means a Lease Event of Default, a Construction
Agency Agreement Event of Default, or a Loan Agreement Event of Default.
"Excepted Payments" means:
(a) all indemnity payments (excluding indemnity payments made
pursuant to Section 13.2 of the Participation Agreement) to which the
Certificate Trustee, Trust Company, Lenders, the Certificate Purchaser
or any of their respective Affiliates, agents, officers, directors or
employees is entitled;
(b) any amounts (other than Basic Rent or amounts payable by
Lessee pursuant to Section 15.2 or Articles XVI, XVIII or XX of the
Lease) payable under any Operative Document to reimburse the
Certificate Trustee, Trust Company, the Certificate Purchaser or any of
their respective Affiliates (including the reasonable expenses of the
Certificate Trustee, Trust Company, the Certificate Purchaser or such
Affiliates incurred in connection with any such payment) for performing
or complying with any of the obligations of the Lessee under and as
permitted by any Operative Document;
(c) any amount payable to the Certificate Purchaser by any
transferee permitted under the Operative Documents of the interest of
the Certificate Purchaser as the purchaser thereof (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 to the Lender or the Certificate
Purchaser;
(e) any insurance proceeds under policies maintained by the
Certificate Trustee, Trust Company or the Certificate Purchaser;
(f) Transaction Expenses or other amounts or expenses paid or
payable to or for the benefit of the Certificate Trustee, Trust Company
or the Certificate Purchaser;
(g) all right, title and interest of the Certificate Purchaser
or the Certificate Trustee to the Property or any portion thereof or
any other property to the extent any of the foregoing has been released
from the Liens of the Mortgage, the Assignment of Lease and Rents and
the Construction Agency Agreement Assignment pursuant to the terms
thereof following the payment of the Loan Balance;
(h) all proceeds from Collateral (as defined in the Pledge and
Security Agreement) held in the Collateral Account; and
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(i) any payments in respect of interest to the extent
attributable to payments referred to in clauses (a) through (h) above.
"Excess Proceeds" means the excess, if any, of the aggregate of all
awards, compensation or insurance proceeds payable in connection with a Casualty
or Condemnation over the sum of the Lease Balance paid by the Lessee pursuant to
Articles XIV and XV of the Lease with respect to such Casualty or Condemnation,
and all proceeds received by the Lessor in connection with any sale of the
Property pursuant to the Lessor's exercise of remedies under Section 16.2 of the
Lease or the Lessee's exercise of the Remarketing Option under Article XX of the
Lease over the amounts owing by Lessee under the Operative Documents at such
time.
"Existing Lease" means that certain Lease and Open End Mortgage dated
as of December 13, 1995, between Lessor and Lessee.
"Expiration Date" means October 31, 2007, or the scheduled expiration
of the then current Renewal Term, if any.
"Expiration Date Purchase Obligation" means the Lessee's obligation,
pursuant to Section 18.2 of the Lease, to purchase all (but not less than all)
of the Improvements on the Expiration Date.
"Facility" means the manufacturing/office building to be constructed on
the Land pursuant to the Construction Agency Agreement as shown on the Plans and
Specifications.
"Fair Market Sales Value" means the amount, which in any event shall
not be less than zero, that would be paid in cash in an arm's-length transaction
between an informed and willing purchaser and an informed and willing seller,
neither of whom is under any compulsion to purchase or sell, respectively, for
the ownership of all of the Property or the Improvements (without regard to the
Land), as applicable. The Fair Market Sales Value of the Improvements shall be
determined based on the assumption that, except for purposes of Article XVI of
the Lease and Section 13.2 of the Participation Agreement, the Improvements are
in the condition and state of repair required under Section 9.1 of the Lease and
the Lessee is in compliance with the other requirements of the Operative
Documents.
"Fixtures" means all fixtures relating to the Improvements, including
all components thereof, located in or on the Improvements, together with all
replacements, modifications, alterations and additions thereto.
"Force Majeure Event" means any event (the existence of which was not
known and would not reasonably have been expected to be discovered through the
exercise of commercially reasonable due diligence by the Lessee or the
Construction Agent, taking into account the contemplated use of the Land and the
Construction, prior to the Initial Advance Date) beyond the control of the
Lessee, the Construction Agent and any Construction Agency Person, including,
but not limited to, strikes, lockouts, adverse soil conditions, acts of God,
adverse weather conditions, inability to obtain labor or materials, government
activities, civil commotion and enemy action; but excluding any event, cause or
condition that results from the Construction Agent's or any Construction Agency
Person's financial condition or failure to pay or any
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event, cause or condition which could have been avoided or which could be
remedied through the exercise of commercially reasonable efforts or the
commercially reasonable expenditure of funds.
"Funding Date" means the tenth Business Day of any calendar month.
"Funding Office" means the office of each Participant identified on
Schedule VI to the Participation Agreement as its Funding Office.
"Funding Request" is defined in Section 3.4(a) of the Participation
Agreement.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time consistently applied in
accordance with a Person's past accounting practices or concurred in by such
Person's independent certified public accountants certifying the relevant
audited financial statements.
"Governmental Action" means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgments, written
interpretations, decrees, licenses, exemptions, publications, filings, notices
to and declarations of or with, or required by, any Governmental Authority, or
required by any Applicable Law, and shall include all environmental and
operating permits and licenses that are required for the full use, occupancy,
zoning and operation of the Property.
"Governmental Authority" means 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.
"Gross Proceeds" means the gross proceeds from the sale of the Property
in accordance with Section 20.1 of the Lease without deduction for any
marketing, closing, legal or other costs, prorations or commissions.
"Gross Proceeds from Improvements" means the portion of the Gross
Proceeds allocable to the Improvements, which amount shall be determined based
upon the relative cost of the Improvements to the cost of the Land and
Improvements.
"Ground Lease" means the Ground Lease, dated as of the date hereof, by
and between Fore Systems, Inc., as landlord, and the Certificate Trustee, as
Tenant.
"Guarantor" means FORE Systems, Inc., a Delaware corporation, as
guarantor under the Guaranty, and FORE Systems Holding Corporation, a Delaware
corporation, as guarantor under the Guaranty Agreement.
"Guaranty" means the Guaranty, dated as of the Date, made by the
Guarantor in favor of the Lenders and the Certificate Purchaser.
"Guaranty Agreement" means the Guaranty Agreement, dated as of the
Initial Advance Date, made by FORE Systems Holding Corporation and Lessee in
favor of the Lenders and the Certificate Purchaser.
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"Hazardous Activity" means any activity, process, procedure or
undertaking that directly or indirectly (i) produces, generates or creates any
Hazardous Substance; (ii) causes or results in (or materially threatens to cause
or result in) the Release of any Hazardous Substance into the environment
(including air, water vapor, surface water, groundwater, drinking water, land
(including surface or subsurface), plant, aquatic and animal life); (iii)
involves the containment or storage of any Hazardous Substance; or (iv) would be
regulated as hazardous waste treatment, storage or disposal within the meaning
of any Environmental Law.
"Hazardous Condition" means any condition that violates or threatens to
violate, or that results in or threatens noncompliance with, any Environmental
Law.
"Hazardous Substance" means any of the following: (i) any petroleum or
petroleum product, explosives, radioactive materials, asbestos,
ureaformaldehyde, polychlorinated biphenyls, lead and radon gas; (ii) 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 defined
under any Environmental Law; or (iii) 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" means any and all liabilities, losses, expenses and costs
of any kind whatsoever for fees, taxes, levies, imposts, duties, charges,
assessments or withholdings of any nature whatsoever ("Taxes") (including (i)
real and personal property taxes, including personal property taxes on any
property covered by the Lease that is classified by Governmental Authorities as
personal property, and real estate or ad valorem taxes in the nature of property
taxes; (ii) sales taxes, use taxes and other similar taxes (including rent taxes
and intangibles taxes); (iii) any excise taxes; (iv) real estate transfer taxes,
conveyance taxes, mortgage taxes, intangible taxes, stamp taxes and documentary
recording taxes and fees; (v) taxes that are or are in the nature of franchise,
income, value added, gross receipts, privilege and doing business taxes, license
and registration fees; and (vi) assessments on the Property, including all
assessments for public improvements or benefits, whether or not such
improvements are commenced or completed within the Term), and in each case all
interest, additions to tax and penalties thereon, which at any time may be
levied, assessed or imposed by any Federal, state or local authority upon or
with respect to (a) any Tax Indemnitee, the Property or any part thereof or
interest therein, or the Lessee or any sublessee or user of the Property; (b)
the financing, refinancing, demolition, construction, substitution, subleasing,
assignment, control, condition, occupancy, servicing, maintenance, repair,
ownership, possession, purchase, rental, lease, activity conducted on, delivery,
insuring, use, operation, improvement, transfer, return or other disposition of
such Property or any part thereof or interest therein; (c) the Notes or other
indebtedness with respect to the Property or any part thereof or interest
therein or transfer thereof; (d) the rentals, receipts or earnings arising from
the Property or any part thereof or interest therein; (e) the Operative
Documents or any payment made or accrued pursuant thereto; (f) the income or
other proceeds received with respect to the Property or any part thereof or
interest therein upon the sale or disposition thereof; (g) any contract
(including the Construction Agency Agreement) relating to the construction,
acquisition or delivery of the Improvements or any part thereof or interest
therein; (h) the issuance of the Notes; or (i) otherwise in connection with the
transactions contemplated by the Operative Documents.
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Notwithstanding anything in the first paragraph of this definition
(except as provided in the final paragraph of this definition) the term
"Imposition" shall not mean or include:
(i) Taxes and impositions (other than Taxes that are, or are
in the nature of, sales, use, rental or property taxes) that are
imposed by any Governmental Authority and that are based upon or
measured by the gross or net income or gross or net receipts (including
any minimum taxes, withholding taxes or taxes on, measured by or in the
nature of capital, net worth, excess profits, items of tax preference,
capital stock, franchise, business privilege or doing business taxes);
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) any Tax or imposition to the extent, but only to such
extent, it relates to any act, event or omission that occurs, or
relates to a period, after the termination of the Lease (but not any
Tax or imposition that relates to any period prior to the termination
of the Lease with respect to the Property to which such Imposition
relates);
(iii) any Tax or imposition for so long as, but only for so
long as, it is being contested in accordance with the provisions of
Section 13.5(b) of the Participation Agreement, provided that the
foregoing shall not limit the Lessee's obligation under Section 13.5(b)
of the Participation Agreement to advance to such Tax Indemnitee
amounts with respect to Taxes that are being contested in accordance
with Section 13.5(b) of the Participation Agreement or any expenses
incurred by such Tax Indemnitee in connection with such contest;
(iv) any Taxes or impositions imposed upon a Tax Indemnitee
with respect to any voluntary transfer, sale, financing or other
voluntary disposition of any interest in the Property or any part
thereof, or any interest therein or any interest or obligation under
the Operative Documents or any Note or Certificates, or from any sale,
assignment, transfer or other disposition of any interest in a Tax
Indemnitee or any Affiliate thereof, (other than any transfer in
connection with (1) the exercise by the Lessee of its Purchase Option
or any termination option or other purchase of the Property by the
Lessee, (2) the occurrence of a Lease Event of Default or a Loan
Agreement Event of Default, (3) a Casualty or Condemnation affecting
the Property, or (4) any sublease, modification or addition to the
Property by the Lessee);
(v) any Taxes or impositions imposed on a Tax Indemnitee, to
the extent such Tax Indemnitee actually receives a credit (or otherwise
has a reduction in a liability for Taxes) in respect thereof against
Taxes that are not indemnified under the Participation Agreement (but
only to the extent such credit is not taken into account in calculating
the indemnity payment on an After Tax Basis);
(vi) any Taxes imposed against or payable by a Tax Indemnitee
resulting from, or that would not have been imposed but for, the gross
negligence or willful misconduct of such Tax Indemnitee;
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(vii) Taxes imposed on or payable by a Tax Indemnitee to the
extent such Taxes would not have been imposed but for a breach by the
Tax Indemnitee or any Affiliate thereof of any representations,
warranties or covenants set forth in the Operative Documents (unless
such breach is caused by the Lessee's breach of its representations,
warranties or covenants set forth in the Operative Documents);
(viii) Taxes to the extent resulting from such Tax
Indemnitee's failure to comply with the provisions of Section 13.5(b)
of the Participation Agreement, which failure precludes or materially
adversely affects the ability to conduct a contest pursuant to Section
13.5(b) of the Participation Agreement (unless such failure is caused
by the Lessee's breach of its obligations);
(ix) Taxes which are included in Property Improvements Cost if
and to the extent actually paid by Construction Agent;
(x) Taxes imposed on or with respect to or payable as a result
of activities of a Tax Indemnitee or Affiliate thereof unrelated to the
transactions contemplated by the Operative Documents;
Notwithstanding the foregoing, the exclusions from the definition of Impositions
set forth in clauses (i), (ii), (iv), and (x) (to the extent that any such tax
is imposed by its express terms in lieu of or in substitution for a Tax set
forth in clauses (i), (ii), (iv), and (x)) above shall not apply (but the other
exclusions shall apply) to any Taxes or any increase in Taxes imposed on a Tax
Indemnitee net of any decrease in taxes realized by such Tax Indemnitee, to the
extent that such tax increase or decrease would not have occurred if on each
Funding Date the Lessor and the Lender had advanced funds to the Lessee in the
form of a loan secured by the Property in an amount equal to the Property
Improvement Cost funded on such Funding Date, with debt service for such loan
equal to the Basic Rent payable on each Scheduled Payment Date and a principal
balance at the maturity of such loan in an amount equal to the then outstanding
amount of the Loans and Certificate purchaser Amounts at the end of the term of
the Lease.
"Improvement Costs" shall for purposes of the definition of "Soft
Costs" mean the maximum amount of up to Fourteen Million, Two Hundred Ten
Thousand and xx/100 Dollars ($14,210,000.00) adjusted from time to time solely
as provided in the Construction Agency Agreement.
"Improvements" means the Site Work, Facility, Fixtures, Equipment, and
other improvements of every kind existing at any time and from time to time
(including those constructed pursuant to the Construction Agency Agreement and
those purchased with amounts advanced by the Participants pursuant to the
Participation Agreement) on or under the Land, together with any and all
appurtenances to such buildings, structures or improvements, including
sidewalks, utility pipes, conduits and lines, parking areas and roadways, and
including all Modifications and other additions to or changes in the
Improvements at any time.
"Indemnitee" means the Certificate Trustee, in its individual and its
trust capacity, the Lenders, the Certificate Purchaser, their respective
Affiliates and their respective successors, assigns, directors, shareholders,
partners, officers, employees and agents.
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"Initial Advance Date" is defined in Section 2.2 of the Participation
Agreement.
"Initial Collateral" has the meaning attributed to it in the Pledge and
Security Agreement.
"Insurance Requirements" means all terms and conditions of any
insurance policy either required by the Lease to be maintained by the Lessee or
required by the Construction Agency Agreement to be maintained by the
Construction Agent, and all requirements of the issuer of any such policy.
"Interest Payment Construction Loan" is defined in Section 2.2 of the
Construction Loan Agreement.
"Interest Period" means, with respect to any Construction Loan and on
and prior to the Refinancing, the Certificate:
(a) initially, the period commencing on the funding with
respect to such Construction Loan and Certificate and ending on the
tenth Business Day of the next succeeding month; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Loan and Certificate
and ending any month from one, two, three, six, nine and twelve months
thereafter;
provided that, the foregoing provisions relating to Interest Periods are subject
to the following:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(ii) any Interest Period that would otherwise extend beyond
the Construction Loan Expiration Date shall end on the Construction
Loan Expiration Date;
(iii) the Lessee shall select Interest Periods so as not to
require a payment or prepayment of any Construction Loan during an
Interest Period for such Construction Loan; and
(iv) any Interest Period in respect of a Certificate shall end
on the date the Refinancing is consummated.
"Interim Term" is defined in Section 2.3 of the Lease.
"Investment Company Act" means the Investment Company Act of 1940, as
amended, together with the rules and regulations promulgated thereunder.
"Land" means the parcel of real property described on Exhibit A to the
Lease and all Appurtenant Rights attached thereto.
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"Lease" means the Lease and Open End Mortgage, dated as of the Initial
Advance Date, between the Lessor and the Lessee.
"Lease Balance" means, as of any date of determination, an amount equal
to the sum of the Loan Balance and the Certificate Balance.
"Lease Default" means 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" is defined in Section 16.1 of the Lease.
"Lenders" means collectively, the Construction Lender together with its
successors and assigns from time to time including the Tranche A Lenders and the
Tranche B Lenders in connection with the Refinancing.
"Lenders Basic Rent" means, as determined as of any Payment Date, the
sum of (i) amounts due with respect to scheduled repayments of the principal of
the Loans and (ii) the interest due on the Loans, excluding any interest at the
applicable Overdue Rate on any installment of Basic Rent not paid when due and
any fine, penalty, interest or cost assessed or added under any agreement with a
third party for nonpayment or late payment of Basic Rent.
"Lenders Financing Statements" means UCC financing statements
appropriately completed and executed for filing in the applicable jurisdiction
in order to perfect a security interest in favor of the Lenders in the Equipment
located on the Property or in any Improvements on the Property.
"Lessee" means Fore Systems, Inc., a Delaware corporation, as lessee or
mortgagor under the Lease.
"Lessor" means the Certificate Trustee.
"Lessor Financing Statements" means UCC financing statements
appropriately completed and executed for filing in the applicable jurisdiction
in order to protect the Lessor's interest under the Lease to the extent the
Lease is a security agreement.
"Lessor Lien" means any Lien against the Property, the Trust Estate,
the Lease or any payment of Rent as a result of (a) any act of or Claim against
the Lessor, Trust Company or any Participant not resulting from the transactions
contemplated by the Operative Documents, or (b) any Claim against the Lessor,
Trust Company or any Participant, with respect to Taxes against which Lessee is
not required to indemnify Lessor, Trust Company or any Participant, in its
individual capacity, pursuant to Article IX of the Participation Agreement.
"Lien" means any mortgage, deed of trust, pledge, security interest,
encumbrance, lien, easement, servitude or charge of any kind, including any
irrevocable license, conditional sale or other title retention agreement, any
lease in the nature thereof, or any other right of or arrangement with any
creditor to have its claim satisfied out of any specified property or asset with
the proceeds therefrom prior to the satisfaction of
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the claims of the general creditors of the owner thereof, whether or not filed
or recorded, or the filing of, or agreement to execute as "debtor", any
financing or continuation statement under the Uniform Commercial Code of any
jurisdiction or any federal, state or local lien imposed pursuant to any
Environmental Law.
"Loan Agreement Default" means any event or condition which with notice
or lapse of time, or both, would constitute a Loan Agreement Event of Default.
"Loan Agreement Event of Default" means a Construction Loan Agreement
Event of Default or an event of default under a Refinancing Credit Facility
Agreement.
"Loan Agreements" means collectively the Construction Loan Agreement
and the Refinancing Credit Facility Agreements, or any of them.
"Loan Balance" means as of any date of determination the sum of the
Construction Loan Balance and, following the Refinancing, the Refinancing Loan
Balance.
"Loan Documents" means, collectively, the Construction Loan Documents
and the Refinancing Loan Documents.
"Loans" means, collectively, the Construction Loans and, following the
Refinancing, the Refinancing Loans.
"Make-Whole Premium" means as at any date a payment with respect to the
Certificate, a Tranche A Loan or Tranche B Loan is made prior to [Insert Date of
Scheduled Termination of Base Term] the excess, if any, of (i) the present value
as at the payment date (determined using a discount rate equal to the Reference
Treasury Yield plus 50 basis points) of the sum of the remaining principal of
the Loan or Certificate Amounts being prepaid and the amount of interest or
yield (exclusive of interest or yield accrued to the date of prepayment) that
would have been payable in respect of the principal or Certificate Amount being
prepaid if such prepayment had not been made, over (ii) the aggregate principal
amount of the Certificate or such Loan then to be so prepaid. To the extent that
the Reference Treasury Yield plus the 0.50% at the time of determination of the
Make-Whole Premium is equal to or higher than the Certificate Yield Rate or the
interest rate on the Loan being prepaid, whichever is applicable, the Make-Whole
Premium shall be zero.
"Marketable Collateral" means, at any time, any Debt instrument issued
by the United States Treasury maturing not more than three (3) years after such
time or any certificates of deposit issued by Mellon Bank or investments in
Dreyfus Treasury Prime Cash Management or such other money market mutual fund
which invests solely in U.S. Treasury Securities acceptable to Mellon Bank.
"Marketing Period" means the period commencing on the date 365 days
prior to the Expiration Date and ending on the Expiration Date.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $1,000,000.
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"Maximum Guaranteed Amount" means 89.95% of Eligible Project Costs.
"Mellon Bank" is defined in the preamble to the Participation
Agreement.
"Mellon Prime Rate" means the interest rate per annum announced from
time to time by Mellon Bank as its prime rate. The Mellon Prime Rate may be
greater or less than other interest rates charged by Mellon Bank to other
borrowers and is not solely based or dependent upon the interest rate which
Mellon Bank may charge any particular borrower or class of borrowers.
"Mellon Revolver Facility" means the Revolving Line of Credit
Agreement, dated as of September 30, 1997, between Mellon Bank and the Lessee.
"Modifications" is defined in Section 10.1(a) of the Lease.
"Mortgage" means the Mortgage, dated as of the Initial Advance Date
made by the Certificate Trustee in favor of the Lender and satisfactory in form
and substance to the Lender in order to create a first priority mortgage lien on
the Property.
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"Net Proceeds" means all amounts paid in connection with any Casualty
or Condemnation or any sale of the Property pursuant to Lessor's exercise of
remedies under Section 16.2 of the Lease or the Lessee's exercise of the
Remarketing Option under Article XX of the Lease, and all interest earned
thereon, less the expense of claiming and collecting such amounts, including all
costs and expenses in connection therewith for which the Lender or the Lessor is
entitled to be reimbursed pursuant to the Lease.
"Note" is defined in Section 2.3 of the Construction Loan Agreement.
"Obligations" means all obligations and liabilities of the Lessee, the
Construction Agent, each Guarantor and each other obligor under the Operative
Documents, the Refinancing Loan Documents and the Swap Agreement (including,
with respect to the Swap Agreement, all rights of the Lessor thereunder).
"Operative Documents" means the following:
(a) the Participation Agreement;
(b) the Lease;
(c) the Trust Agreement;
(d) the Certificate;
(e) the Construction Loan Agreement;
(f) the Note;
(g) the Guaranty;
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(h) the Pledge and Security Agreement;
(i) the Assignment of Leases and Rents;
(j) the Deed;
(k) the Mortgage;
(l) the Construction Agency Agreement;
(m) the Assignment of Construction Agency Agreement;
(n) the Construction Documents Assignment;
(o) the Guaranty Agreement;
(p) the Ground Lease;
(q) the Memorandum of Ground Lease..
"Original Executed Counterpart" is defined in Section 26.10 of the
Lease.
"Outside Completion Date" means March 31, 2000.
"Overdue Rate" means the lesser of (x) the maximum interest rate then
permitted under applicable law and (y) the greater of (A) 12% per annum and (B)
the Mellon Prime Rate plus 4%.
"Participants" means the Lenders and the Certificate Purchaser,
collectively.
"Participation Agreement" means the Participation Agreement, dated as
of the Documentation Date, among the Lessee, as Lessee, Guarantor, and
Construction Agent, the Trust Company, the Certificate Trustee, the Certificate
Purchaser, and the Lender.
"Payment Date" means (a) any Scheduled Payment Date, (b) any date on
which interest or principal is payable pursuant to Section 2.6(c)(ii) of the
Construction Loan Agreement in connection with any prepayment of the
Construction Loans and any date on which a Refinancing Credit Facility Agreement
is prepaid in whole or in part.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Liens" means with respect to the Property:
(i) the respective rights and interests of the parties to the
Operative Documents as provided in the Operative Documents;
(ii) the rights of any sublessee or assignee under a sublease
or an assignment expressly permitted by the terms of the Lease;
(iii) Liens for Taxes that either are not yet due or are being
contested in accordance with the provisions of Section 12.1 of the
Lease;
(iv) Liens arising by operation of law, materialmen's,
mechanics', workers', repairmen's, employees', carriers',
warehousemen's and other like Liens relating to the construction of the
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Improvements or in connection with any Modifications or arising in the
ordinary course of business for amounts not to exceed $500,000 that
either are not more than 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 12.2 of the Lease;
(v) Liens of any of the types referred to in clause (iv) above
that have been bonded for not less than the full amount in dispute (or
as to which other security arrangements satisfactory to the Lessor have
been made), which bonding (or arrangements) shall comply with
applicable Requirements of Law, and has effectively stayed any
execution or enforcement of such Liens;
(vi) Liens arising out of judgments or awards with respect to
which appeals or other proceedings for review are being prosecuted in
good faith and for the payment of which adequate reserves have been
provided as required by GAAP or other appropriate provisions have been
made, so long as such proceedings have the effect of staying the
execution of such judgments or awards and satisfy the conditions for
the continuation of proceedings to contest set forth in Section 12.1 of
the Lease;
(vii) easements, rights of way and other encumbrances on title
to real property pursuant to Section 11.2 of the Lease;
(viii) Lessor Liens;
(ix) Liens created by the Lessee with the consent of the
Lessor; and
(x) Liens described on the title insurance policy and
consented to by Mellon delivered pursuant to Section 6.1(k) of the
Participation Agreement other than Liens described in clause (iv) or
(vi) above that are not removed within 30 days of their origination.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
governmental authority or any other entity.
"Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group for employees of
any member of the ERISA Group or (ii) has at any time within the preceding five
years been maintained, or contributed to, by any Person which was at such time a
member of the ERISA Group for employees of any Person which was at such time a
member of the ERISA Group.
"Plans and Specifications" means the plans and specifications for the
Construction, as more particularly described in Exhibit B to the Construction
Agency Agreement.
"Pledge and Security Agreement" means the Pledge and Security
Agreement, dated as of the Initial Advance Date, among FORE Systems Holding
Corporation, the Lenders, the Certificate Trustee and Mellon Bank, as custodian
thereunder.
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"Prime Contractor" means, collectively, ▇▇▇▇▇▇▇ Incorporated and Penn
Transportation or such other Person who shall, with the prior written consent of
the Lenders and the Certificate Purchaser, have been designated by the Lessee to
act as the prime contractors for purposes of the Construction.
"Property" means the Land and all of the Improvements at any time
located on or under the Land.
"Property Improvements Cost" means out-of pocket costs of the
Construction Agent incurred and properly payable under the Construction Agency
Agreement in accordance with the Operative Documents, including all Soft Costs
and all costs allocable to Site Work.
"Purchase Notice" is defined in Section 18.1 of the Lease.
"Purchase Option" is defined in Section 18.1 of the Lease.
"Purchase Option Price" is defined in Section 18.1 of the Lease.
"Qualified Assets" is defined in Section 2(e) of the Pledge and
Security Agreement.
"Reference Treasury Yield" means, relative to any prepayment of the
Tranche A Loans, Tranche B Loans and Certificates, the yield calculated with
reference to the rate given (i) on the USD screen of Bloomberg Financial Markets
Service at 11:00 a.m., Eastern standard time three Business Days prior to the
date of such prepayment, or if such rate is unavailable then (ii) by the
Statistical Release No. H.15 (519) then most recently published by the F.R.S.
Board three Business Days prior to the date of such prepayment, as the yield, in
either case, of a hypothetical U.S. Treasury security with a remaining term
equal to the weighted average remaining term to maturity (rounded to the nearest
month) of the Loan or Certificate being prepaid in whole or in part. If no
maturity exactly corresponds to the weighted average remaining term to maturity
of the Tranche A Loans, Tranche B Loans or Certificates, yields for two
published maturities most closely corresponding to such weighted average shall
be selected in the Statistical Release and the yield shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding in each period
to the nearest month.
"Refinancing" means the refinancing of the Construction Loan Balance on
or prior to the Base Date pursuant to the Refinancing Loan Documents, which
shall be in form and substance satisfactory to Mellon Bank and Mellon Financial
Service Corporation #4 in its sole discretion.
"Refinancing Credit Facility Agreements" means the loan agreements,
credit facilities or other similar extensions of credit entered into by the
Lessor, as borrower, with Mellon Bank and Mellon Financial Services Corporation
#4, in form and substance satisfactory to such entities in their sole discretion
pursuant to one or more such agreements, the proceeds of which are used to repay
in full the Construction Loan Balance and all other amounts owing under the
Construction Loan Agreement.
"Refinancing Loan Balance" means as of the date of determination an
amount equal to the sum of the principal amounts outstanding under the
Refinancing Credit Facility Agreements.
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"Refinancing Loan Documents" means the Refinancing Credit Facility
Agreements, the notes evidencing the Lessor's obligations thereunder and any
mortgages, deeds of trust, security agreements, assignments or the similar
agreements securing the Lessor's obligations under any Refinancing Credit
Facility Agreement.
"Refinancing Loans" means the Tranche A Loan or Tranche B Loan or both.
"Release" means any release, pumping, pouring, emptying, injecting,
escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal or
emission of a Hazardous Substance that constitutes an Environmental Violation.
"Remarketing Option" is defined in Section 20.1 of the Lease.
"Remarketing Payments" means any of the following: Gross Proceeds from
Improvements, the Termination Rental Amount and any payment made by Lessee
pursuant to Section 13.2 of the Participation Agreement.
"Renewal Option" is defined in Section 19.1 of the Lease.
"Renewal Term" is defined in Section 19.1 of the Lease.
"Rent" means, collectively, the Basic Rent and the Supplemental Rent,
in each case payable under the Lease.
"Requesting Party" is defined in Section 22.1 of the Lease.
"Required Modification" is defined in Section 10.1(a) of the Lease.
"Required Participants" means those Participants holding an aggregate
of 51% of the outstanding Loans and Certificate Amounts.
"Requirements of Law" means all Federal, state, county, municipal and
other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions affecting the Property, the Improvements or
the demolition, construction, use or alteration thereof, whether now or
hereafter enacted and in force, including any that require repairs,
modifications or alterations in or to the Property or in any way limit the use
and enjoyment thereof (including all building, zoning and fire codes and the
Americans with Disabilities Act of 1990, 42 U.S.C. section 1201 et. seq. and any
other similar Federal, state or local laws or ordinances and the regulations
promulgated thereunder) and any that may relate to environmental requirements
(including all Environmental Laws), and all permits, certificates of occupancy,
licenses, authorizations and regulations relating thereto, and all covenants,
agreements, restrictions and encumbrances contained in any instruments which are
either of record or known to the Lessee affecting the Property, the Appurtenant
Rights and any easements, licenses or other agreements entered into pursuant to
Section 11.2 of the Lease.
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"Responsible Employee" means the Chief Executive Officer, Treasurer, or
Chief Financial Officer of the Construction Agent.
"Responsible Employee's Certificate" means a certificate signed by any
Responsible Employee, which certificate shall certify as true and correct the
subject matter being certified to in such certificate.
"Scheduled Payment Date" means the tenth Business Day of each calendar
month during the Interest Period and the last day of each Interest Period, and
any date on which a payment is due under a Refinancing Credit Facility
Agreement. Each Scheduled Payment Date following the Refinancing should fall on
the same date as each "Scheduled Payment Date" as such term is defined in the
Existing Lease.
"Securities Act" means the Securities Act of 1933, as amended, together
with the rules and regulations promulgated thereunder.
"Security Documents" means the collective reference to the Mortgage,
the Assignment of Leases and Rents and the Construction Agency Agreement
Assignment, the Guaranty, the Pledge and Security Agreement, and all other
security documents hereafter delivered to the Lenders granting a Lien on any
asset or assets of any Person to secure the obligations and liabilities of the
Certificate Trustee under any of the Loan Agreements and/or under any of the
other Loan Documents.
"Shortfall Amount" means, as of the Expiration Date, the amount that
the Lease Balance will exceed the Loan Balance upon the completion of a sale of
the Improvements pursuant to Article XX of the Lease.
"Significant Casualty" means (x) the actual or constructive total loss
of the Facility or damage to the Facility to an extent rendering repair
impractical or uneconomical, in any case as reasonably determined in good faith
and as certified to the Participants by the Board of Directors of the Lessee or
(y) damage to the Facility which results in an insurance settlement on the basis
of a total loss or a constructive total loss (including title insurance
proceeds) in respect of a total loss of the Facility.
"Significant Condemnation" means (a) a Condemnation that involves a
taking of Lessor's entire title to the Land, or (b) a Condemnation that in the
good faith judgment of the Lessee, as certified to the Participants by the Board
of Directors of the Lessee, either (i) renders the Facility unsuitable for
continued use as property of the type of the Facility or (ii) is such that
restoration of the Facility to substantially its condition as existed
immediately prior to such Condemnation would be impracticable or impossible.
"Site Work" shall mean all work necessary in connection with the
development of the Land and the construction of the Improvements, including, but
not limited to, site planning services, grading (including obtaining any
necessary slope easement rights from adjacent land owners and installation and
proper compaction, reinforcement, and seeding of such slopes), pedestrian and
vehicular connections, landscaping, seeding, and planting, storm drainage,
utility connections, tap-ins, and extensions, installation of all utility lines,
any required off-site improvements not to exceed $50,000.00 coordination and
securing of local site utility approvals, securing appropriate zoning approvals,
installation, paving, striping, and lighting of all parking areas, installation
and lighting of all pedestrian walkways and circulation areas, all as shown on
the Plans and Specification submitted by the Lessee.
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"Site Work Costs" shall for purposes of the definition of "Soft Costs"
mean the maximum amount of One Million, Five Hundred Eighty-Five Thousand and
xx/100 Dollars ($1,585,000.00)
"Soft Costs" shall mean all costs contained in the Approved
Construction Budget, of whatever kind or nature, of performing the Site Work and
the construction of the Improvements (other than the purchase price for the Land
and Lessee's costs in connection with the acquisition of the Land, such as the
cost of title insurance, the Improvement Costs, and the Site Work Costs), but
including Transaction Expenses, engineering costs for Site Work, costs of
architects and engineers with respect to inspection of the Construction and the
issuance of certificates as provided in the Operative Documents, and sums
expended by the Lessee prior to the date hereof properly allocated to or
otherwise included in Soft Costs.
"Solvent" means with respect to any Person on a particular date, that
on such date (i) the fair value of the property of such Person is greater than
the total amount of liabilities, including contingent liabilities, of such
Person, (ii) the present fair saleable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (iii) such Person is
able to realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal course
of business, (iv) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature, and (v) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which
such Person is engaged. In computing the amount of contingent liabilities at any
time, it is intended that such liabilities will be computed at the amount which,
in light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability taking into account any subrogation and contribution rights.
"Submitted Financial Statements" means the financial statements of Fore
Systems, Inc. for the fiscal year ended in 1997 which were audited by
PriceWaterhouseCoopers, copies of which have been delivered to the Lender.
"Sub-Participant" is defined in Section 12.2 of the Participation
Agreement.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, trust or estate of which (or in which) more than 50% of:
(a) the outstanding capital stock having Voting Power to elect
a majority of the Board of Directors of such corporation (irrespective
of whether at the time capital stock of any other class or classes of
such corporation shall or might having Voting Power upon the occurrence
of any contingency),
(b) the interest in the capital or profits of such partnership
or joint venture, or
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(c) the beneficial interest of such trust or estate, is at the
time directly or indirectly owned by such Person, by such Person and
one or more of its Subsidiaries or by one or more of such Person's
Subsidiaries.
"Substantial Completion" means such time as the conditions set forth in
Article VII of the Participation Agreement are satisfied with respect to any
Facility.
"Subtenant" is defined in Section 6.2 of the Lease.
"Supplemental Rent" means any and all amounts, liabilities and
obligations (other than Basic Rent) which the Certificate Trustee agrees or is
otherwise obligated to pay under the Loan Agreement, the Trust Agreement, the
Ground Lease or any other Operative Document (whether or not designated as
Supplemental Rent) to the Lender, the Certificate Purchaser, or any other
Person, including Make-Whole Premiums, indemnities and damages for breach of any
covenants, representations, warranties or agreements, or any other amounts
designated as Supplemental Rent under the Operative Documents.
"Swap Agreement" means any agreement among Lessee, Lessor and/or one or
more third parties which has the effect of fixing the Treasury Rate and/or
Eurodollar Rate for the Term.
"Tangible Net Worth" means, as of any date of determination, all
amounts (without duplication) which, in accordance with GAAP, would be included
under shareholder's equity on a balance sheet of the Lessee and its
Subsidiaries, excluding intangible assets such as patents, copyrights,
trademarks, franchises and goodwill.
"Tax Indemnitee" means the Lessor, the Certificate Purchaser, the
Certificate Trustee, Trust Company and each Participant.
"Taxes" is defined in the definition of Impositions.
"Tenant Improvement Work" means the performance of finish work for the
Improvements to make such Improvements ready for occupancy by the Lessee.
"Term" is defined in Section 2.3 of the Lease.
"Termination Date" means the earlier of (i) the date as defined in
Section 15.2(a) and 16.2(e) of the Lease, and (ii) [the "Termination Date" as
such term is defined in the Existing Lease.]
"Termination Notice" is defined in Section 15.1 of the Lease.
"Termination Rental Amount" means an amount equal to 79.44758% of the
aggregate amount of Advances made by Lessor on each Funding Date; provided,
however, in the event Lessee is required to make a Supplemental Rent payment in
accordance with Section 5.3(h) of the Construction Agency Agreement, the
principal amounts of the Tranche A Loans, Tranche B Loans and the Certificate
Amount shall be recalculated, such that the Lease may be treated as an operating
lease under Statement of Financial Accounting Standards No. 13, to account for
any such Supplemental Rent payment and any
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Certificate Yield paid in connection therewith (minus any interest earned on
the Money Market Account, as defined in Section 5.1(d) of the Construction Loan
Agreement) being minimum lease payments at the inception of the Base Term, with
such Supplemental Rent not being in excess of an amount that would cause the
Termination Rental Amount as recalculated minus the present value of Certificate
Yield payable thereon (plus any interest earned on the Money Market Account) to
be less than zero, and the Termination Rental Amount shall equal the principal
amount of the Tranche A Loans, as recalculated, and; provided, further, in the
event of an Unrelated Indemnity Event, the Termination Rental Amount and all
Basic Rent related to the Unrelated Indemnity Event shall be calculated based on
the aggregate amount of Advances made by Lessor, but shall not include sums
advanced by Lessor for or related to the Unrelated Indemnity Event.
"Total Assets" means such term as it appears in the Submitted Financial
Statements with respect to any Person, and in subsequent audited financial
statements of such entity, determined in accordance with those generally
accepted accounting principles applied in the preparation of the Submitted
Financial Statements.
"Total Capitalization" means the principal amount of all Consolidated
Indebtedness plus Consolidated Shareholders' Equity.
"Tranche A Lenders" means Mellon Bank.
"Tranche A Loans" means any Refinancing Loan other than a Tranche B
Loan.
"Tranche B Lender" means Mellon Financial Services Corporation #4, a
Pennsylvania corporation.
"Tranche B Loans" means any Refinancing Loan made by the Tranche B
Lender.
"Transaction Expenses" means all costs and expenses in connection with
the preparation, execution and delivery of the Operative Documents, the
Refinancing Loan Documents and the transactions contemplated by the Operative
Documents and the Refinancing Loan Documents including:
(a) the reasonable fees, out-of-pocket expenses and
disbursements of counsel, local counsel and special counsel for each of
the Lessor, the Certificate Purchaser, the Certificate Trustee, the
Lenders, the Lessee in negotiating the terms of the Operative Documents
and the other transaction documents, preparing for the closing 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 Documents, and the Refinancing Loan Documents and the
reasonable initial fees and expenses of the Lessor;
(b) the reasonable fees, out-of-pocket expenses and
disbursements of any law firm or other external counsel to each of the
Lessor, the Certificate Purchaser, the Certificate Trustee, and the
Lenders in connection with (1) any amendment, supplement, waiver or
consent with respect to any Operative Documents requested or approved
by the Lessee, (2) any enforcement of any rights or remedies against
the Lessee or the Guarantor in respect of the Operative Documents and
(3) the Refinancing;
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(c) fees relating to residual value insurance obtained by the
Lessor or any Participant, not to exceed $3,000;
(d) any and all Taxes and fees incurred in recording,
registering or filing any Operative Document, Refinancing Loan Document
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 Documents or the Refinancing
Loan Documents, unless the Operative Documents or the Refinancing Loan
Documents expressly provide that such Taxes or fees are required to be
paid by a Person other than the Lessee;
(e) any title fees, premiums and escrow costs and other
expenses relating to title insurance and the closings contemplated by
the Operative Documents or the Refinancing Loan Documents, and any
expenses incurred by the Construction Lender for analysis of the
construction costs and inspection of the Property in connection with
the Advances, and all premiums for insurance during the Construction
Period;
(f) all expenses relating to all Environmental Audits and
appraisals prepared from time to time under the Operative Documents or
the Refinancing Loan Documents;
(g) all fees relating to Lenders' Construction Consultant;
(h) the initial and ongoing fees and reasonable expenses of
the Certificate Trustee and its special counsel;
(i) any other reasonable out-of-pocket fees and expenses
incurred by any Participant in connection with the negotiation and
consummation of the transactions contemplated by the Operative
Documents or the Refinancing Loan Documents;
(j) fees payable by the Lessee under Sections 4.5 and 4.6 of
the Participation Agreement; and
(k) all other fees, costs and expenses payable by Lessee under
the Operative Documents (except in connection with a Default or Event
of Default) not otherwise included as Soft Costs, to the extent amounts
are included in the Approved Construction Budget under the heading
"Eligible Project Costs Reimbursables".
"Transferee" is defined in Section 12.3 of the Participation Agreement.
"Treasury Rate" means, relative to the Tranche B Loans, the yield
calculated with reference to the rate given (i) on the USD screen of Bloomberg
Financial Markets Service at 11:00 a.m., Eastern standard time three (3)
Business Days prior to the date the Tranche B Lender advances its Tranche B
Loan, or if such rate is unavailable then (ii) by the Statistical Release No.
H.15 (519) then most recently published by the F.R.S. Board three (3) Business
Days prior to the date the Tranche B Lender advances its Tranche B Loan, as the
yield, in either case, of a hypothetical U.S. Treasury security with an
interpolated rate, using
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the most actively traded five year and ten year U.S. Treasury securities, with
a weighted average remaining term of eight years.
"Trigger Event" is defined in Section 2.7 of the Construction Agency
Agreement.
"Trust" means Brush Creek Business Trust II, a statutory Delaware
business trust.
"Trust Agreement" means the Amended and Restated Trust Agreement, dated
as of the Documentation Date, between the Certificate Purchaser and Trust
Company.
"Trust Company" means the institution serving as Certificate Trustee or
any successor financial institution acting as Certificate Trustee under the
Operative Documents, in each case in its individual capacity.
"Trust Estate" is defined in Section 1.2(b) of the Trust Agreement.
"UCC Financing Statements" means collectively the Lender Financing
Statements and the Lessor Financing Statements.
"Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the present value of all benefits under such Plan
exceeds (ii) the fair market value of all Plan assets allocable to such benefits
(excluding any accrued but unpaid contributions), 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 a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"Uniform Commercial Code" and "UCC" means the Uniform Commercial Code
as in effect in any applicable jurisdiction.
"Unrelated Event" means any Construction Agency Event of Default
relating to Construction other than a Construction Agency Event of Default
resulting from (i) the Willful Act or Omission of any Construction Agency
Person, (ii) acts described in Section 16.1(g) or (h) of the Lease, (iii)
fraudulent acts of any Construction Agency Person, (iv) illegal acts of any
Construction Agency Person or (v) application of funds by any Construction
Agency Person except as expressly permitted by the Operative Documents and
which, in the case of clause (i) above, could not have been avoided or remedied
by the exercise of commercially reasonable efforts by any Construction Agency
Person, assuming the availability of Commitments.
"Unrelated Indemnity Event" means an event arising from or related to
an act or omission of any Person other than a Construction Agency Person which
occurs notwithstanding the compliance by all Construction Agency Persons with
the provisions of the Operative Documents.
"Voting Power" means, with respect to securities issued by any Person,
the combined voting power of all securities of such person which are issued and
outstanding at the time of determination and which are entitled to vote in the
election of directors of such Person, other than securities having such power
only by reason of the happening of a contingency.
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"Willful Act or Omission" means an act or omission of any Construction
Agency Person which is not the direct result of a Force Majeure Event.
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