1
EXHIBIT 10.2
PARTICIPATION AGREEMENT
dated as of May 18, 1999
among
MINIMED DEVELOPMENT CORP.
as the Construction Agent and as the Lessee,
MINIMED INC. AND CERTAIN OF ITS SUBSIDIARIES
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as expressly
stated herein, but solely as the Owner Trustee
under the MiniMed Real Estate Trust 1999-1,
THE HOLDERS FROM TIME TO TIME OF CERTIFICATES
ISSUED BY THE AFOREMENTIONED TRUST, as the Certificateholders,
THE LENDERS FROM TIME TO TIME PARTIES HERETO, as the Lenders,
THE REVOLVING CREDIT LENDERS FROM TIME TO TIME PARTIES HERETO,
as the Revolving Credit
Lenders,
THE BANK OF NOVA SCOTIA,
as Documentation Agent,
ING BARING ▇▇▇▇▇▇ ▇▇▇▇ LLC,
as Syndication Agent,
and
ING (U.S.) CAPITAL LLC,
as the Agent for the Lenders and the Revolving Credit Lenders
and as the Collateral Agent for the Owner Trustee,
the Lenders, the Revolving Credit Lenders
and the Certificateholders to the extent of their interests
2
TABLE OF CONTENTS
ARTICLE 1. THE LEASE TRANSACTION
Section 1.1. The Term Loan Facility
Section 1.2. The Certificateholder Advances
ARTICLE 2. REVOLVING CREDIT FACILITY
Section 2.1. The Revolving Credit Facility
ARTICLE 3. SUMMARY OF TRANSACTIONS
Section 3.1. Related Documents
Section 3.2. Property Acquisition
Section 3.3. Construction of Improvements; Commencement of Basic Rent
ARTICLE 4. THE CLOSINGS
Section 4.1. Effective Date
Section 4.2. Effective Date; Fundings
ARTICLE 5. FUNDINGS; CONDITIONS PRECEDENT; REPORTING REQUIREMENTS ON COMPLETION
DATE; THE LESSEE'S DELIVERY OF NOTICES; RESTRICTIONS ON LIENS
Section 5.1. General
Section 5.2. Procedures for Funding
Section 5.3. Conditions Precedent Relating to the Effective Date
Section 5.4. Conditions Precedent Relating to Fundings after the Effective
Date and prior to the Completion Date
Section 5.5. Additional Reporting and Delivery Requirements on Completion Date
Section 5.6. The Construction Agent Delivery of Construction Budget
Modifications
Section 5.7. Restrictions on Liens
Section 5.8 Joinder Agreement Requirements
Section 5.9. Payments
Section 5.10. Modifications of Schedules Reflecting Certificateholder
Commitments and Lender Commitments
Section 5.11. Minimum Size of Fundings
ARTICLE 6. REPRESENTATIONS AND WARRANTIES
Section 6.1. Representations and Warranties of the Borrower
Section 6.2. Representations and Warranties of the Construction Agent and
the Lessee
3
ARTICLE 7. PAYMENT OF CERTAIN EXPENSES
Section 7.1. Payment of Lease Transaction Expenses on or
prior to Completion Date
Section 7.2 Lease Transaction Expenses
Section 7.3. Expenses under Revolving Credit Agreement
ARTICLE 8. OTHER COVENANTS AND AGREEMENTS
Section 8.1. Cooperation with the Construction Agent or the Lessee
Section 8.2. Covenants of the Owner Trustee and the Certificateholders
Section 8.3. Credit Party Covenants, Consent and Acknowledgment
Section 8.4. Sharing of Certain Payments
Section 8.5. Grant of Easements, etc.
Section 8.6. Release of Property, etc.
ARTICLE 9. CREDIT AGREEMENT AND TRUST AGREEMENT
Section 9.1. The Construction Agent's and the Lessee's Credit Agreement Rights
Section 9.2. The Construction Agent's and the Lessee's Trust Agreement Rights
ARTICLE 10. COLLATERAL AGENT
Section 10.1 Appointment and Authorization
Section 10.2 Same Rights as a Lender
Section 10.3 Actions by the Collateral Agent
Section 10.4 Consultation with Experts
Section 10.5 Liability
Section 10.6 Indemnification
Section 10.7 Credit Decision
Section 10.8 Successor Collateral Agent; Removal
Section 10.9 Sharing by Secured Parties
ARTICLE 11. EVENTS OF DEFAULT
Section 11.1 Events of Default
Section 11.2 Default Remedies
Section 11.3 Set-off and Other Remedies
ARTICLE 12. APPLICATION OF PAYMENTS AND PROCEEDS
Section 12.1 Collection and Allocation of Payments and other Accounts
Section 12.2 Application of Proceeds Upon Sale of Property and Equipment
Section 12.3 Application of Proceeds Upon Purchase of Property and
Equipment by Lessee
Section 12.4 Application of Proceeds of Surrender Payment Upon Surrender
of Property and Equipment by Lessee
Section 12.5 Application of Proceeds Upon Exercise of Remedies Upon
4
Event of Default
ARTICLE 13. INDEMNIFICATION
Section 13.1. General Indemnity
Section 13.2. General Tax Indemnity
Section 13.3. Proceedings in Respect of Claims
Section 13.4. EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE,
STRICT LIABILITY, ETC
ARTICLE 14. GENERAL PROVISIONS
Section 14.1 Assignment
Section 14.2 Amendments and Waivers
Section 14.3 Notices
Section 14.4 Cumulative Rights; No Waiver
Section 14.5 Counterparts
Section 14.6 Severability
Section 14.7 Headings
Section 14.8 Termination by Parent
Section 14.9 GOVERNING LAW
Section 14.10 WAIVER OF JURY TRIAL
Section 14.11 Survival of Agreements
Section 14.12 Parties in Interest
Section 14.13 Liability Limited
Section 14.14 Further Assurances
Section 14.15 Financial Reporting/Tax Characterization
Section 14.16 Confidentiality
5
PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT dated as of May 18, 1999 (this "Agreement")
is by and among MINIMED DEVELOPMENT CORP., a Delaware corporation (the "Lessee"
or the "Construction Agent"); the various parties hereto from time to time as
guarantors, individually, a "Guarantor" and collectively, the "Guarantors");
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not
individually (in its individual capacity, the "Trust Company"), except as
expressly stated herein, but solely as the Owner Trustee under the MiniMed Real
Estate Trust 1999-1 (in such capacity the "Owner Trustee" or the "Lessor"); the
various parties hereto from time to time as holders of certificates issued by
the Owner Trustee with respect to the MiniMed Real Estate Trust 1999-1
(individually, a "Certificateholder" and collectively, the
"Certificateholders"); the various parties hereto from time to time as Lenders
(individually, a "Lender" and collectively, the "Lenders"); the various parties
hereto from time to time as Revolving Credit Lenders (individually a "Revolving
Credit Lender" and collectively the "Revolving Credit Lenders"), ING BARING
▇▇▇▇▇▇ ▇▇▇▇ LLC, a Delaware limited liability company, as syndication agent (the
"Syndication Agent"), and ING (U.S.) CAPITAL LLC, a Delaware limited liability
company, as the agent for the Lenders and the Revolving Credit Lenders (in such
capacities, the "Agent") and as the collateral agent for the Owner Trustee,
Lenders, Revolving Credit Lenders and Certificateholders, to the extent of their
interests (in such capacity, the "Collateral Agent"). Capitalized terms used but
not otherwise defined in this Agreement shall have the meanings set forth in
Appendix A hereto.
In consideration of the mutual agreements herein contained and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto hereby agree as follows:
ARTICLE 1. THE LEASE TRANSACTION.
Section 1.1. The Term Loan Facility. Subject to the terms and conditions
of this Agreement and the other Related Documents and in reliance on the
representations and warranties of each of the parties hereto contained herein or
made pursuant hereto or pursuant to the other Related Documents, the Lenders
have agreed to make Advances to the Lessor from time to time in an aggregate
principal amount of up to the aggregate amount of the Lender Commitments in
order for the Lessor to acquire the Property and Equipment, to develop and
construct the improvements and install the Equipment in accordance with the
Construction Agency Agreement and the terms and provisions hereof and for the
other purposes described herein, and in consideration of the receipt of proceeds
of the Advances, the Lessor will issue the Tranche A Term Notes and Tranche B
Term Notes. The Advances shall be made and the Tranche A Term Notes and Tranche
B Term Notes shall be issued pursuant to the Credit Agreement. Pursuant to
Article V of the Credit Agreement and Article 5 of this Agreement, the Advances
will be made to the Lessor from time to time at the request of the Construction
Agent in consideration for the
6
Construction Agent agreeing for the benefit of the Lessor, pursuant to the
Construction Agency Agreement, to acquire the Property and the Equipment, to
construct the improvements and to cause the Lessee to lease the Property and
Equipment, each in accordance with the Construction Agency Agreement and the
other Related Documents. The Obligations of the Lenders under the Credit
Agreement and the other Related Documents are several, and not joint or joint
and several. The Advances and the obligations of the Lessor under the Credit
Agreement shall be secured by the Trust Collateral.
Section 1.2. The Certificateholder Advances. Subject to the terms and
conditions of this Agreement and the other Related Documents and in reliance on
the representations and warranties of each of the parties hereto contained
herein or made pursuant hereto or pursuant to the other Related Documents, on
each date that a Funding is requested to be made in accordance with Article 5
hereof, each Certificateholder shall make a Certificateholder Advance on a pro
rata basis to the Lessor with respect to the MiniMed Real Estate Trust 1999-1
based on its Certificateholder Commitment in an amount in immediately available
funds such that the aggregate of all Certificateholder Advances on such date
shall be three percent (3%) of the amount of the requested Funding on such date;
provided, that no Certificateholder shall be obligated for any Certificateholder
Advance in excess of its pro rata share of the Available Certificateholder
Commitment. The aggregate amount of Certificateholder Advances shall be up to
the aggregate amount of the Certificateholder Commitments. The representations,
warranties, covenants and agreements of the Certificateholders herein and in the
other Related Documents are several, and not joint or joint and several. The
Certificateholder Advances and the obligations of the Lessor under the Trust
Agreement shall be secured by the Trust Collateral.
ARTICLE 2. REVOLVING CREDIT FACILITY.
Section 2.1. The Revolving Credit Facility. Subject to the terms and
conditions of this Agreement and the other Related Documents and in reliance on
the representations and warranties of each of the parties hereto contained
herein or made pursuant hereto or pursuant to the other Related Documents, the
Revolving Credit Lenders have agreed to make Revolving Credit Advances to the
Parent Guarantor from time to time in an aggregate principal amount at any one
time outstanding of up to the aggregate amount of the Revolving Credit
Commitments, for the purposes set forth in the Revolving Credit Agreement. The
Revolving Credit Advances shall be made and the Revolving Credit Notes shall be
issued pursuant to the Revolving Credit Agreement. Pursuant to Article V of the
Revolving Credit Agreement and Article 5 of this Agreement, the Revolving Credit
Advances will be made to the Parent Guarantor from time to time at the request
of the Parent Guarantor in accordance with the provisions of the Revolving
Credit Agreement. The Revolving Credit Advances and the obligations of the
Parent Guarantor under the Revolving Credit Agreement shall be secured by the
MiniMed Collateral.
7
ARTICLE 3. SUMMARY OF TRANSACTIONS.
Section 3.1. Related Documents. On the Effective Date, each of the
respective parties hereto and thereto shall execute and deliver this Agreement,
the Master Lease, the Ground Sublease, the Construction Agency Agreement, the
Credit Agreement, the Revolving Credit Agreement, the Tranche A Term Notes,
Tranche B Term Notes, the Revolving Credit Notes, the Trust Agreement, the
Certificates, the Security Documents, and such other documents, instruments,
certificates and opinions of counsel as agreed to by the parties hereto.
Section 3.2. Property Acquisition. On the Effective Date and subject to
the terms and conditions of this Agreement (a) the Certificateholders will each
make a Certificateholder Advance in accordance with Articles 1 and 5 of this
Agreement and the terms and provisions of the Trust Agreement, (b) the Lenders
will each make Advances in accordance with Articles 1 and 5 of this Agreement
and the terms and provisions of the Credit Agreement, (c) the Lessor, pursuant
to the Ground Sublease, will acquire good and insurable leasehold title to the
Property, will sublease such leasehold title to Lessee pursuant to the Master
Lease, and will grant to the Collateral Agent a Lien on all right, title and
interest of the Lessor in the Property pursuant to the Security Documents, (d)
the Collateral Agent, the Lessee and the Lessor shall execute and deliver the
Master Lease and (e) the Lease Term shall commence with respect to the Property.
Section 3.3. Construction of Improvements; Commencement of Basic Rent.
Fundings will be made with respect to the Improvements to be constructed and the
Equipment to be installed, in each case, pursuant to the terms and conditions of
this Agreement and the Construction Agency Agreement. The Construction Agent
will act as a construction agent on behalf of the Lessor respecting the
construction of the Improvements to be installed and the expenditures related to
the foregoing. The Construction Agent shall promptly notify the Lessor upon
Substantial Completion, and the Lessee shall commence to pay Basic Rent as of
the Rent Commencement Date.
ARTICLE 4. THE CLOSINGS.
Section 4.1. Effective Date. All documents and instruments required to
be delivered on the Effective Date shall be delivered at the offices of King &
▇▇▇▇▇▇▇▇, ▇▇▇▇ Avenue of the Americas, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at such
other location as may be determined by the Lessor, the Collateral Agent and the
Lessee.
Section 4.2. Effective Date; Fundings. The Construction Agent shall
deliver to the Collateral Agent a requisition (a "Requisition") in the form
attached hereto as Exhibit A or in such other form as is satisfactory to the
Collateral Agent, in its reasonable discretion, in connection with (a) the Lease
Transaction Expenses and (b) each request for a Funding pursuant to Section 5.2.
8
ARTICLE 5. FUNDINGS; CONDITIONS PRECEDENT; REPORTING REQUIREMENTS ON
COMPLETION DATE; THE LESSEE'S DELIVERY OF NOTICES; RESTRICTIONS
ON LIENS.
Section 5.1. General. To the extent funds have been advanced to the
Lessor as Advances by the Lenders and as Certificateholder Advances by the
Certificateholders, the Lessor will use such funds from time to time in
accordance with the terms and conditions of this Agreement and the Related
Documents (i) pursuant to the directions of the Construction Agent made in
accordance with the terms of this Agreement, the Construction Agency Agreement
and the other Related Documents, and (ii) to pay Lease Transaction Expenses.
Section 5.2. Procedures for Funding.
(a) Each Funding hereunder shall be made on the twenty-sixth
(26th) day of each calendar month during the Construction Period, provided that
if such day is not a Business Day the date of such Funding shall be the
immediately succeeding Business Day. Not less than three (3) Business Days prior
to the date that a Funding is to be made, the Construction Agent shall deliver
to the Collateral Agent (to be forwarded by the Collateral Agent to the Agent,
the Lenders and the Certificateholders), a Requisition as described in Section
4.2 hereof. Such Requisition, upon receipt by the Collateral Agent, shall
constitute a Notice of Borrowing under the Credit Agreement and a Notice of
Funding under the Trust Agreement and shall constitute a representation and
warranty by the Construction Agent and each other Credit Party that as of the
date of the Funding to which such Requisition relates (i) each of the
representations and warranties set forth in Section 6.2 of this Agreement,
including, without limitation, the Incorporated Representations and Warranties,
are true and correct (unless such relate solely to an earlier point in time),
(ii) each of the conditions precedent to such Funding set forth in Article 5 of
this Agreement are satisfied, and (iii) the Construction Agent has no knowledge
or reasonable expectation that the aggregate costs for the Property shall exceed
the original Construction Budget (or exceed the Construction Budget as modified
in accordance with the Operative Agreements) for the Property or that Completion
for the Property shall not occur on or prior to the Construction Period
Termination Date.
9
(b) Each Requisition shall: (i) be irrevocable, (ii) request a Funding
in an amount that is not in excess of the total aggregate of the Available
Funding Commitment at such time, and (iii) request that the Certificateholders
make Certificateholder Advances and that the Lenders make Advances to the Lessor
for the payment of Property Costs that have previously been incurred or are to
be incurred on the date of such Funding to the extent such were not subject to a
prior Requisition, in each case as specified in the Requisition.
(c) Subject to the satisfaction of the conditions precedent set forth in
Sections 5.3 or 5.4, as applicable, on the date on which a requested Funding is
to be made, (i) the Lenders shall make Advances based on their respective Lender
Commitments to the Lessor in an aggregate amount equal to ninety-seven percent
(97%) of the requested Funding specified in the Requisition (with the Tranche A
Lenders making Advances equal to eighty-two percent (82%) of the requested
Funding and the Tranche B Lenders making Advances equal to fifteen percent (15%)
of the requested Funding), up to the aggregate of the Available Lender
Commitment, (ii) the Certificateholders shall make Certificateholder Advances
based on their respective Certificateholder Commitments in an aggregate amount
equal to three percent (3%) of the requested Funding specified in such
Requisition, up to the aggregate of the Available Certificateholder Commitment;
and (iii) the total amount of such Funding made on such date shall (x) be used
by the Lessor to pay Property Costs and Lease Transaction Expenses specified in
such Requisition within ten (10) Business Days of the receipt by the Lessor of
such requested Funding or (y) be advanced by the Lessor on the date of such
requested Funding to the Construction Agent or the Lessee to pay Property Costs
described in such Requisition within ten (10) Business Days of the receipt by
the Lessor of such requested Funding. Notwithstanding that the Related Documents
state that a requested Funding shall be directed to the Lessor, each requested
Funding shall in fact be directed to the Collateral Agent (for the benefit of
the Lessor) and applied by the Collateral Agent (for the benefit of the Lessor)
pursuant to the requirements imposed on the Lessor or the Construction Agent, as
applicable, under the Related Documents.
(d) With respect to a Funding obtained by the Lessor to pay for Property
Costs or Lease Transaction Expenses and not expended by the Lessor for such
purpose on the date of such Funding, such amounts shall be held by the
Collateral Agent on behalf of the Lessor until the applicable payment date.
Section 5.3. Conditions Precedent Relating to the Effective Date. The
obligations (i) of the Lessor, the Agent, the Lenders and the Certificateholders
to enter into the transactions contemplated by this Agreement on the Effective
Date, including, without limitation, the obligation to execute and deliver the
applicable Related Documents to which each is a party on the Effective Date, and
(ii) of the Certificateholders to make Certificateholder Advances and of the
Lenders to make Advances in order to pay Lease Transaction Expenses, in each
case are subject to the satisfaction or waiver of the following conditions
precedent on or prior to the Effective Date (to the extent such conditions
precedent require the delivery of any agreement, certificate, instrument,
10
memorandum, legal or other opinion, appraisal, commitment, title insurance
commitment, lien report or any other document of any kind or type, such shall be
in form and substance reasonably satisfactory to the Collateral Agent):
(a) the correctness of the representations and warranties of the parties
to this Agreement contained herein, in each of the other Related Documents and
each certificate delivered pursuant to any Related Document (including without
limitation the Incorporated Representations and Warranties) on the Effective
Date;
(b) the performance by the parties to this Agreement of their respective
agreements contained herein and in the other Related Documents to be performed
by them on or prior to the Effective Date;
(c) the satisfaction of each of the conditions set forth in Article V of
the Credit Agreement, Article IIIC of the Trust Agreement and Article V of the
Revolving Credit Agreement;
(d) the Collateral Agent shall have received a fully executed
counterpart copy of the Requisition for the Funding to be made on the Effective
Date, appropriately completed;
(e) title to the Property shall conform to the representations and
warranties set forth in Section 6.2(j) hereof;
(f) there shall not have occurred and be continuing any Potential
Default or Event of Default under any of the Related Documents (other than a
Potential Default that would be cured upon application of the proceeds of such
Funding, provided such proceeds are so applied or provision reasonably
satisfactory to the Collateral Agent shall have been made such that such
proceeds will be so applied), and no Potential Default or Event of Default under
any of the Related Documents will have occurred after giving effect to the
Funding requested by such Requisition;
(g) the Construction Agent shall have delivered to the Collateral Agent
title insurance commitments to issue policies respecting the Property in favor
of the Lessor and the Collateral Agent from the Title Company, with such title
exceptions thereto as are reasonably acceptable to the Collateral Agent;
(h) the Construction Agent shall have delivered to the Collateral Agent
the Environmental Site Assessment;
(i) the Construction Agent shall have delivered to the Collateral Agent
the Survey;
11
(j) the Construction Agent shall have delivered to the Collateral Agent
evidence reasonably satisfactory to the Collateral Agent of the various Lease
Transaction Expenses;
(k) the Construction Agent shall have caused to be delivered to the
Collateral Agent the Security Documents, all fully executed and in recordable
form;
(l) with respect to each Funding, the Available Funding Commitment will
be sufficient to pay all amounts payable therefrom (after giving effect to any
increase in the Lender Commitments and the Certificateholder Commitments
pursuant to Section 5.10 hereof).
(m) the Construction Agent shall have caused a lease memorandum (or
short form lease) to be delivered to the Collateral Agent for the Ground
Sublease and the Landlord Waiver;
(n) the Construction Agent shall have delivered to the Collateral Agent
the Construction Budget;
(o) the Construction Agent shall cause (i) Uniform Commercial Code lien
searches, tax lien searches and judgment lien searches regarding the Lessee to
be conducted (and copies thereof to be delivered to the Collateral Agent) in
such jurisdictions as determined by the Collateral Agent by a nationally
recognized search company acceptable to the Collateral Agent and (ii) the liens
referenced in such lien searches which are objectionable to the Collateral Agent
to be either removed or otherwise handled in a manner satisfactory to the
Collateral Agent;
(p) all taxes, fees and other charges in connection with the execution,
delivery, recording, filing and registration of the Related Documents and/or
documents related thereto shall have been paid by or on behalf of the Lessor or
provisions for such payment shall have been made to the satisfaction of the
Collateral Agent;
(q) in the opinion of the Collateral Agent and its counsel, the
transactions contemplated by the Related Documents do not and will not subject
the Collateral Agent, the Lessor or any of the Secured Party to any violation of
Law;
(r) each of the Related Documents to be entered into on such date shall
have been duly authorized, executed and delivered by the parties thereto, and
shall be in full force and effect, and the Collateral Agent shall have received
a fully executed copy of each of the Related Documents;
(s) since the date of the last audited financial statements of Parent
Guarantor, there shall not have occurred any event, condition or state of facts
which shall have or could reasonably be expected to have a Material Adverse
Effect;
12
(t) the Collateral Agent shall have received an Officer's Certificate of
the Lessor dated as of the Effective Date in the form attached hereto as Exhibit
B, stating that (i) each and every representation and warranty of the Lessor
contained in the Related Documents to which it is a party is true and correct on
and as of the Effective Date, (ii) each Related Document to which the Lessor is
a party is in full force and effect with respect to it and (iii) the Lessor has
duly performed and complied with all covenants, agreements and conditions
contained herein or in any Related Document required to be performed or complied
with by it on or prior to the Effective Date;
(u) the Collateral Agent shall have received (i) a certificate of the
Secretary, an Assistant Secretary, Trust Officer or Vice President of the Trust
Company in the form attached hereto as Exhibit C or in such other form as is
acceptable to the Collateral Agent, attaching and certifying as to (A) the
signing resolutions duly authorizing the execution, delivery and performance by
the Lessor of each of the Related Documents to which it is or will be a party,
(B) its articles of association or other equivalent charter documents and its
by-laws, as the case may be, certified as of a recent date by an appropriate
officer of the Trust Company and (C) the incumbency and signature of persons
authorized to execute and deliver on its behalf the Related Documents to which
it is a party and (ii) a good standing certificate from the Office of the
Comptroller of the Currency; and
(v) the Construction Agent shall have caused (i) tax lien searches and
judgment lien searches regarding each Credit Party to be conducted (and copies
thereof to be delivered to the Collateral Agent) in such jurisdictions as
determined by the Collateral Agent by a nationally recognized search company
acceptable to the Collateral Agent and (ii) the liens referenced in such lien
searches which are objectionable to the Collateral Agent to be either removed or
otherwise handled in a manner satisfactory to the Collateral Agent.
Section 5.4. Conditions Precedent Relating to Fundings after the
Effective Date and prior to the Completion Date. The obligations of the
Certificateholders to make Certificateholder Advances and of the Lenders to make
Advances in connection with all requests for Fundings subsequent to the
Effective Date are subject to the satisfaction or waiver of the following
conditions precedent (to the extent such conditions precedent require the
delivery of any agreement, certificate, instrument, memorandum, legal or other
opinion, appraisal, commitment, title insurance commitment, lien report or any
other document of any kind or type, such shall be in form and substance
reasonably satisfactory to the Collateral Agent):
(a) the correctness on the date of such Funding of the representations
and warranties of the parties to this Agreement contained herein, in each of the
other Related Documents and in each certificate delivered pursuant to any
Related Document (including without limitation the Incorporated Representations
and Warranties) as of the date given or made or deemed given or made;
13
(b) the performance by the parties to this Agreement of their respective
agreements contained herein and in the other Related Documents to be performed
by them on or prior to each such date;
(c) the satisfaction of each of the conditions set forth in Section 5.02
of the Credit Agreement and Section 3.02C of the Trust Agreement;
(d) the Collateral Agent shall have received a fully executed
counterpart of the Requisition for such Funding, appropriately completed;
(e) based upon the Construction Budget the Available Funding Commitment
will be sufficient to complete the improvements and to purchase and install the
Equipment in accordance with the Plans and Specifications;
(f) there shall not have occurred and be continuing any Potential
Default or Event of Default under any of the Related Documents (other than a
Potential Default that would be cured upon application of the proceeds of such
Funding, provided such proceeds are so applied or provision reasonably
satisfactory to the Collateral Agent shall have been made such that such
proceeds will be so applied), and no Potential Default or Event of Default under
any of the Related Documents will have occurred after giving effect to such
Funding;
(g) the title insurance policy delivered in connection with the
requirements of Section 5.3(g) shall provide for (or shall be endorsed to
provide for) insurance in an amount at least equal to the maximum total Property
Cost indicated by the Construction Budget, and there shall be no title change or
exception objectionable to the Collateral Agent in its reasonable discretion;
(h) the Construction Agent shall have delivered to the Collateral Agent
copies of all material amendments to and modifications of the Plans and
Specifications;
(i) the Construction Agent shall have delivered to the Collateral Agent
evidence reasonably satisfactory to the Collateral Agent of any Transaction
Expenses and other fees, expenses and disbursements referenced in Section 7.1(b)
that are to be paid with such Funding;
(j) the Construction Agent shall have delivered, or caused to be
delivered to the Collateral Agent, invoices, bills of sale or other documents
reasonably acceptable to the Collateral Agent, in each case with regard to any
Equipment or other components of such Property then being acquired with the
proceeds of such Funding and naming the Lessor as purchaser and transferee;
(k) since the date of the last audited financial statements of Parent
Guarantor, there shall not have occurred any event, condition or state of facts
which shall have or could reasonably be expected to have a Material Adverse
Effect; and
14
(l) in the good faith opinion of the Collateral Agent and its counsel,
the transactions contemplated by the Related Documents do not and will not
subject the Collateral Agent, the Lessor, the Lenders, the Agent or the
Certificateholders to any violation of Law.
Section 5.5. Additional Reporting and Delivery Requirements on
Completion Date. On or prior to the Completion Date, the Construction Agent
shall deliver to the Collateral Agent an Officer's Certificate in the form
attached hereto as Exhibit D or in such other form as is acceptable to the
Collateral Agent specifying (a) the Completion Date, (b) the aggregate Property
Cost, (c) detailed, itemized documentation supporting the asserted Property Cost
and (d) that all representations and warranties of the Construction Agent and
Lessee in each of the Related Documents and each certificate delivered pursuant
thereto (including, without limitation, the Incorporated Representations and
Warranties) are true and correct in all material respects as of the Completion
Date. The Collateral Agent shall have the right to contest the information
contained in such Officer's Certificate. Furthermore, on or prior to the
Completion Date, the Construction Agent shall deliver or cause to be delivered
to the Collateral Agent (unless previously delivered to the Collateral Agent)
originals of the following, each of which shall be in form and substance
acceptable to the Collateral Agent, in its reasonable discretion: (x) a title
insurance endorsement regarding the title insurance policy delivered in
connection with the requirements of Section 5.3(g), but only to the extent such
endorsement is necessary to provide for insurance in an amount at least equal to
the maximum total Property Cost and, if endorsed, the endorsement shall not
include a title change or exception objectionable to the Collateral Agent; (y)
an as-built survey for the Property, (z) insurance certificates respecting the
Property as required hereunder and under the Master Lease.
Section 5.6. The Construction Agent Delivery of Construction Budget
Modifications. The Construction Agent covenants and agrees to deliver to the
Collateral Agent each calendar quarter notification of any and all modifications
to any Construction Budget regarding the Property; provided no Construction
Budget may be increased unless (a) the title insurance policies referenced in
Section 5.3(g) are also modified or endorsed, if necessary, to provide for
insurance in an amount that satisfies the requirements of Section 5.4(g) of this
Agreement and (b) after giving effect to any such increase, the projected
Property Cost is less than or equal to $65,000,000 or such greater amount as the
Total Commitments shall have been increased pursuant to Section 5.10 hereof.
Section 5.7. Restrictions on Liens. On the Effective Date, the
Construction Agent shall cause the Property to be free and clear of all Liens
other than Permitted Liens. On the date the Property is either sold to a third
party in accordance with the terms of the Related Documents or, on the date the
Lessee exercises its right to surrender the Property in accordance with Section
13(b) of the Master Lease, the Lessee shall cause the Property to be free and
clear of all Liens (other than Lessor Liens and such other Liens that are
expressly set forth as title exceptions on the title commitment issued under
Section 5.3(g) with respect to the Property).
15
Section 5.8 Joinder Agreement Requirements. Each Domestic Subsidiary
formed or acquired subsequent to the Effective Date that is not an Inactive
Subsidiary shall become a Subsidiary Guarantor and shall satisfy the following
conditions within thirty (30) days after the formation or acquisition of such
Domestic Subsidiary:
(a) such Domestic Subsidiary shall execute and deliver to the Collateral
Agent a Joinder Agreement in the form attached hereto as Exhibit E;
(b) such Domestic Subsidiary shall have delivered to the Collateral
Agent (x) an Officer's Certificate of such Domestic Subsidiary in the form
attached hereto as Exhibit F, (y) a certificate of the Secretary or an Assistant
Secretary of such Domestic Subsidiary in the form attached hereto as Exhibit G
and (z) good standing certificates from the respective states where such
Domestic Subsidiary is incorporated or organized and where the principal place
of business of such Domestic Subsidiary is located as to its good standing in
each such state;
(c) such Domestic Subsidiary shall have delivered to the Collateral
Agent an opinion of counsel (acceptable to the Collateral Agent) in the form
attached hereto as Exhibit H; and
(d) the Collateral Agent shall have received such other documents,
certificates and information as the Collateral Agent shall have reasonably
requested.
Section 5.9. Payments. All payments of principal of and interest on
Advances, all payments of the amount of any yield on Certificateholder Advances
and other amounts to be made by the Construction Agent or the Lessee under this
Agreement or any other Related Documents (excluding Excepted Payments which
shall be paid directly to the party to whom such payments are owed) shall be
made to the Collateral Agent at the office designated by the Collateral Agent
from time to time in Dollars and in immediately available funds, without setoff,
deduction, or counterclaim. Subject to the definition of "Interest Period" and
"LIBOR Period" in Appendix A attached hereto, whenever any payment under this
Agreement or any other Related Documents shall be stated to be due on a day that
is not a Business Day, such payment may be made on the next succeeding Business
Day, and such extension of time in such case shall be included in the
computation of interest, yield and fees payable pursuant to the Related
Documents.
Section 5.10. Increase in Total Funding Commitments; Modifications of
Schedules Reflecting Certificateholder Commitments and Lender Commitments. In
the event that, at any time the Construction Agent or the Collateral Agent shall
determine that, as a result of any modifications to the Plans and
Specifications, any modifications to the Construction Budget, any delays in
construction of the Improvements or otherwise, the Lessee may deliver to the
Collateral Agent a request to increase the Total Funding Commitments, which
request shall specify the revised Project Cost and the amount by which the Total
Funding Commitments are requested to be increased, and the Collateral Agent
shall promptly forward to all of the Lenders and Certificateholders a copy of
such request. In
16
the event that (a) the Majority Lenders and the Majority Certificateholders
consent to any such increase, and (b) existing Lenders and existing
Certificatholders agree to increase their respective Lender Commitments or
Certificateholder Commitments in an aggregate amount equal to the aggregate
amount of the requested increase or prospective Lenders and prospective
Certificateholders provide to the Agent and the Owner Trustee irrevocable
binding commitments to provide an aggregate amount of Lender Commitments and
Certificateholder Commitments equal to or in excess of the amount of such
increase, then the Lender Commitments or the Certificateholder Commitments shall
be increased by the amount so requested; provided, however, that no increase in
the Lender Commitments shall exceed an amount equal to 97% of the sum of the
amount of such increase in the Lender Commitments plus the amount of any
increase in the Certificateholder Commitments; provided, further, however, that
commitments in amount in excess of the amounts requested are received by the
Agent and the Owner Trustee, the amount of such increase in the Total Funding
Commitment shall be allocated by the Collateral Agent to such existing Lenders
and existing Certificateholders, or such prospective Lenders or prospective
Certificateholders as the Collateral Agent shall determine in its sole and
absolute discretion. To the extent the Certificateholder Commitments or the
Lender Commitments are increased in accordance with the terms of the Related
Documents, then the Collateral Agent shall prepare and distribute an amendment
to the Trust Agreement and the Credit Agreement reflecting such increase which,
in each case, shall be binding and enforceable against all parties (absent
manifest error).
Section 5.11. Minimum Size of Fundings. The Certificateholders and the
Lenders shall have no obligation to make Advances or Certificateholder Advances
unless comprising requested Fundings equal to or exceeding the lesser of (a)
$250,000, (b) the amount of the Available Funding Commitments, or (c) the amount
of the Final Advance.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES.
Section 6.1. Representations and Warranties of the Borrower. As of the
Effective Date and the date of each Funding, the Trust Company in its individual
capacity and as the Owner Trustee, as indicated, represents and warrants to each
of the other parties hereto as follows, provided, that the representations in
the following paragraphs (g), (j) and (k) are made solely in its capacity as the
Owner Trustee:
(a) It is a national banking association and is duly organized and
validly existing and in good standing under the laws of the United States of
America and has the power and authority to enter into and perform its
obligations under the Trust Agreement and (assuming due authorization, execution
and delivery of the Trust Agreement by the Certificateholders) has the corporate
and trust power and authority to act as the Owner Trustee and to enter into and
perform the obligations under each of the other Related Documents to which the
Trust Company or the Owner Trustee, as the case may be, is or will be a party
and each other agreement, instrument and document to be executed and
17
delivered by it in connection with or as contemplated by each such Related
Document to which the Trust Company or the Owner Trustee, as the case may be, is
or will be a party;
(b) The execution, delivery and performance of each Related Document to
which it is or will be a party, either in its individual capacity or (assuming
due authorization, execution and delivery of the Trust Agreement by the
Certificateholders) as the Owner Trustee, as the case may be, has been duly
authorized by all necessary action on its part and neither the execution and
delivery thereof, nor the consummation of the transactions contemplated thereby,
nor compliance by it with any of the terms and provisions thereof (i) does or
will require any approval or consent of any trustee or holders of any of its
indebtedness or obligations, (ii) does or will contravene any law, rule,
regulation, license, judgment, order or decree of any government, governmental
body or court and relating to its banking or trust powers, (iii) does or will
contravene or result in any breach of or constitute any default under, or result
in the creation of any Lien upon any of its property under, (A) its charter or
by-laws, or (B) any indenture, mortgage, chattel mortgage, deed of trust,
conditional sales contract, bank loan or credit agreement or other agreement or
instrument to which it is a party or by which it or its properties may be bound
or affected, which contravention, breach, default or Lien under clause (B) would
materially and adversely affect its ability, in its individual capacity or as
the Owner Trustee, to perform its obligations under the Related Documents to
which it is a party or (iv) does or will require any Governmental Action by any
government or governmental or public body or authority regulating its banking or
trust powers;
(c) The Trust Agreement and, assuming the Trust Agreement is the legal,
valid and binding obligation of the Certificateholders, each other Related
Document to which the Trust Company or the Owner Trustee, as the case may be, is
or will be a party have been, or on or before the Effective Date will be, duly
executed and delivered by the Trust Company or the Owner Trustee, as the case
may be, and the Trust Agreement and each such other Related Document to which
the Trust Company or the Owner Trustee, as the case may be, is a party
constitutes, or upon execution and delivery will constitute, a legal, valid and
binding obligation enforceable against the Trust Company or the Owner Trustee,
as the case may be, in accordance with the terms thereof;
(d) There is no action or proceeding pending or, to its knowledge,
threatened to which it is or will be a party, either in its individual capacity
or as the Owner Trustee, before any Governmental Authority that, if adversely
determined, would materially and adversely affect its ability, in its individual
capacity or as the Owner Trustee, to perform its obligations under the Related
Documents to which it is a party or would question the validity or
enforceability of any of the Related Documents to which it is or will become a
party;
(e) It has not assigned or transferred any of its right, title or
interest in or under the Master Lease, the Construction Agency Agreement or its
interest in any Property or any portion thereof, except in accordance with the
Related Documents;
(f) No Potential Default of Event of Default under the Related Documents
attributable to it has occurred and is continuing;
18
(g) Neither the Owner Trustee nor any Person authorized by the Owner
Trustee to act on its behalf has offered or sold any interest in the Trust
Estate or the Certificates, Tranche A Notes or Tranche B Notes, or in any
similar security relating to the Property, or in any security the offering of
which for the purposes of the Securities Act would be deemed to be part of the
same offering as the offering of the aforementioned securities to, or solicited
any offer to acquire any of the same from, any Person other than, in the case of
the Tranche A Notes and Tranche B Notes, the Agent, and neither the Owner
Trustee nor any Person authorized by the Owner Trustee to act on its behalf will
take any action which would subject, as a direct result of such action alone,
the issuance or sale of any interest in the Trust Estate or the Notes to the
provisions of Section 5 of the Securities Act or require the qualification of
any Related Document under the Trust Indenture Act of 1939, as amended;
(h) The Owner Trustee's principal place of business, chief executive
office and office where the documents, accounts and records relating to the
transactions contemplated by this Agreement and each other Related Document are
kept are located at ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇;
(i) The Owner Trustee is not engaged principally in, and does not have
as one (1) of its important activities, the business of extending credit for the
purpose of purchasing or carrying any margin stock (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System of the
United States), and no part of the proceeds of the Loans or the
Certificateholder Advances will be used by it to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any such margin stock or for any purpose that violates, or is inconsistent with,
the provisions of Regulations T, U, or X of the Board of Governors of the
Federal Reserve System of the United States;
(j) The Owner Trustee is not an "investment company" or a company
controlled by an "investment company" within the meaning of the Investment
Company Act;
(k) Each Property is free and clear of all Lessor Liens attributable to
the Trust Company; and
(l) The Owner Trustee is a party to no documents, instruments or
agreements other than the Related Documents to which it is a party and any other
documents delivered by the Owner Trustee in connection with the Related
Documents.
Section 6.2. Representations and Warranties of the Construction Agent
and the Lessee. As of the Effective Date, the date of each Funding, the date
each Domestic Subsidiary becomes a Credit Party and the Rent Commencement Date,
each Credit Party represents and warrants to each of the other parties hereto
that:
19
(a) The Incorporated Representations and Warranties are true and correct
(unless such relate solely to an earlier point in time);
(b) Each Credit Party (i) is duly organized, validly existing and in
good standing under the laws of the state of its incorporation, (ii) has the
corporate power, authority and legal right to own or operate its properties or
to lease the properties it operates and to conduct the business in which it is
currently engaged, and (iii) is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification, except where such failure to qualify could not have a Material
Adverse Effect.
(c) Each Credit Party has the corporate power, authority and legal right
to make, deliver and perform this Agreement and the other Related Documents to
which it is a party and has taken on necessary corporate action to authorize the
execution, deliver and performance of this Agreement and the other Related
Documents to which it is a party. No consent of any other Person (including,
without limitation, the stockholders and creditors of any Credit Party), and no
authorization of, notice to, or other act by any governmental authority, agency
or instrumentality is required in connection with (i) the execution, delivery,
performance, validity or enforceability of this Agreement or any other Related
Document to which such Credit Party is a party, (ii) the acquisition of,
construction of the Improvements on and installation of the Equipment at the
Property in accordance with the Plans and Specifications, the completion of
construction of the Improvements and the occupancy of and the operation leasing
and subleasing of the Property, except as has been or will be obtained in order
to satisfy the obligations of any Credit Party hereunder or under any other
Related Document, or (iii) any Advance, Certificateholder Advance or Revolving
Credit Advance made pursuant to the terms of the Related Documents. This
Agreement and the other Related Documents to which such Credit Party is a party
have been duly executed and delivered by such Credit Party, and this Agreement
and the other Related Documents to which such Credit Party is a party constitute
the legal, valid and binding obligation of such Credit Party, enforceability
against such Credit Party in accordance with its terms, except that such
enforceability may be limited by bankruptcy and other similar laws affecting the
rights of creditors generally or by general principles of equity.
(d) The execution, delivery and performance by each Credit Party of this
Agreement and the other Related Documents to which it is a party will not
violate any provision of any existing Law or regulation applicable to such
Credit Party or any award, order or decree applicable to such Credit Party of
any court, arbitrator or governmental authority or the articles or certificate
of incorporation or by-laws of such Credit Party, or of any security issued by
such Credit Party or of any mortgage, indenture, lease, contract or other
agreement or undertaking to which such Credit Party is a party or by which such
Credit Party or any of its properties or assets may be bound.
20
(e) Upon the execution and delivery of the Master Lease, (i) the Lessee
will have unconditionally accepted the Property subject to the Master Lease and
will have a valid and subsisting leasehold interest in the Property, subject
only to the Permitted Liens, and (ii) no offset will exist with respect to any
Rent or other sums payable under the Master Lease;
(f) Except as otherwise contemplated by the Related Documents, the
Construction Agent has not used the proceeds of any Advance or Certificateholder
Advance for any purpose other than the acquisition, installation and testing of
the Equipment, the design, permitting and construction of the Improvements in
accordance with the Plans and Specifications and the payment of Lease
Transaction Expenses; as of the date of each Funding the Construction Agent has
no knowledge or reasonable expectation that the aggregate costs for the Property
shall exceed the original Construction Budget (or exceed the Construction Budget
as modified in accordance with the Operative Agreements) for the Property or
that Completion for the Property shall not occur on or prior to the Construction
Period Termination Date;
(g) All information furnished by each Credit Party or its Subsidiaries
to the Collateral Agent, the Agent, the Owner Trustee, any Revolving Credit
Lender, any Lender or any Certificateholder for purposes of or in connection
with this Agreement or the transactions contemplated hereby is, true and
accurate in every material respect on the date as of which such information is
dated or certified, and such information, taken as a whole, does not omit to
state any material fact necessary to make such information, taken as a whole,
not misleading;
(h) The principal place of business, chief executive office and office
of the Construction Agent and the Lessee where the documents, accounts and
records relating to the transactions contemplated by this Agreement and each
other Related Document are kept are located at ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the states of formation and the chief executive offices of
each other Credit Party are located at the places set forth in Exhibit I;
(i) Each Credit Party is in all material respects in compliance with its
obligations under the Related Documents and there exists no Potential Default or
Event of Default under any of the Related Documents which is continuing and
which has not been cured within any cure period expressly granted under the
terms of the applicable Related Document or otherwise waived in accordance with
the applicable Related Document. No Potential Default or Event of Default will
occur under any of the Related Documents as a result of, or after giving effect
to, any Funding requested by a Requisition on the date of each Funding;
(j) The Lessor has good and insurable leasehold title to and a valid
leasehold interest in the Property enforceable against North Campus - University
Park Development Corporation and the Board of Trustees of California State
University, in accordance with the terms of Ground Sublease and the Landlord
Waiver, subject only to Permitted Liens;
21
(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, or if the Property is located in an area identified as a
special flood hazard area by the Federal Emergency Management Agency or other
applicable agency, then flood insurance has been obtained for the Property in
accordance with Section 10 of the Master Lease and in accordance with the
National Flood Insurance Act of 1968, as amended;
(l) The Property complies with all requirements for insurance set forth
in Section 10 of the Master Lease;
(m) The Property complies with all Legal Requirements as of such date
(including without limitation all zoning and land use laws and Environmental
Requirements), except to the extent that failure to comply therewith,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect;
(n) All utility services and facilities necessary for the construction
of the improvements on and the installation of the Equipment at the Property in
accordance with the Plans and Specifications, and thereafter for the operation
and use of the Property, (including without limitation gas, electrical, water
and sewage services and facilities) are available or will be constructed prior
to the Completion Date;
(o) At all times during the Construction Period and as of the Completion
Date, the acquisition, installation and testing of the Equipment and
construction of the Improvements on the Property shall have been performed in a
good and workmanlike manner, in accordance with the Plans and Specifications;
(p) (i) The Security Documents create, as security for the Secured
Obligations (as such term is defined in the Security Documents), valid and
enforceable Liens on all of the Collateral, in favor of the Collateral Agent,
for the benefit of the Secured Parties, as their respective interests appear in
the Related Documents. Upon recordation of the Security Documents in the real
estate recording office identified by the Credit Parties, the Lien created by
the Security Documents in the real property described therein shall be a
perfected first priority mortgage Lien on all of Lessor's right, title and
interest in the Property and Equipment in favor of the Collateral Agent, for the
benefit of the Secured Parties, as their respective interests appear in the
Related Documents. To the extent that the security interests in the portion of
the Collateral comprised of personal property can be perfected by filing in the
filing offices identified by the Credit Parties, upon filing of the Financing
Statements in such filing offices, the security interests created by the
Security Documents shall be perfected security interests in such personal
property in favor of the Collateral Agent, for the benefit of the Secured
Parties, as their respective interests appear in the Related Documents, subject
only to Permitted Liens;
(ii) The Trust Security Documents create, as security for the
obligations of the Lessor under the Related Documents, valid and enforceable
Liens on the Collateral described in the Trust Security Documents, in favor of
the Collateral Agent, and
22
such Liens are subject to no other Liens other than Liens that are expressly set
forth as title exceptions on the title commitment issued under Section 5.3(e)
with respect to the Property.
(iii) Upon recordation of the memorandum of the Master Lease and
the memorandum of the Ground Sublease (or, in either case, a short form Master
Lease or Ground Sublease) in the real estate recording office identified by the
Construction Agent or the Lessee, the Lien created by the Master Lease in the
leasehold estate described therein shall be a perfected first priority mortgage
Lien on such leasehold estate in favor of the Lessor and the Collateral Agent as
the Lessor's assignee, for the benefit of the Agent, the Lenders, the
Certificateholders and the Owner Trustee, as their respective interests appear
in the Related Documents. To the extent that the security interests in the
portion of the Property comprised of personal property can be perfected by the
filing of the Lessor Financing Statements, upon filing of the Lessor Financing
Statements in the appropriate filing offices, the security interest created by
the Master Lease shall be a perfected security interest in such personal
property, subject only to Permitted Liens, in favor of the Lessor and the
Collateral Agent as the Lessor's assignee, for the benefit of the Agent, the
Lenders, the Certificateholders and the Owner Trustee, as their respective
interests appear in the Related Documents;
(q) The Plans and Specifications for the Property have been prepared in
accordance with all applicable Legal Requirements (including without limitation
all applicable Environmental Requirements and building, planning, zoning and
fire codes), except to the extent the failure to comply therewith, in the
aggregate, shall not have and could not reasonably be expected to have a
Material Adverse Effect. Upon completion of the Improvements for the Property in
accordance with the Plans and Specifications, such Improvements will be within
any and all building restriction lines and will not encroach in any manner onto
any adjoining land (except as permitted by express written easements, which have
been approved by the Collateral Agent if such approval is required under any of
the Related Documents);
(r) As of the Completion Date, the Property shall be improved in
accordance with the Plans and Specifications and in a good and workmanlike
manner and shall be operational;
(s) Each Domestic Subsidiary that is not an Inactive Subsidiary has
executed this Agreement in its capacity as a Subsidiary Guarantor; and
(t) The software and the hardware operated by each Credit Party are
capable of providing or being adapted to provide the ability to process dates or
store data within the twenty-first century or between the twentieth and
twenty-first century, or otherwise operate without error with respect to
twenty-first century dates in substantially the same manner and with the same
functionality as such software records, stores processes and presents such data
as of the date hereof ("Y2K Compliance"). All adaptations and replacements of
software and hardware required to achieve full Y2K Compliance will be
23
completed on or before September 30, 1999, except where a failure to achieve
full Y2K Compliance will not have a Materially Adverse Effect.
ARTICLE 7. PAYMENT OF CERTAIN EXPENSES.
Section 7.1. Payment of Lease Transaction Expenses on or prior to
Completion Date.
(a) The Lessor agrees to pay or cause to be paid on the Effective Date,
all Lease Transaction Expenses, including, without limitation, all reasonable
fees, expenses and disbursements of counsel for the Lessor, the Collateral Agent
and the Agent in connection with the transactions contemplated by the Related
Documents, the initial fees and expenses of the Owner Trustee due and payable on
the Effective Date, all fees, taxes and expenses for the recording, registration
and filing of documents and all other reasonable fees, expenses and
disbursements incurred in connection the execution and delivery of the Related
Documents and the consummation of the transactions to be consummated on the
Effective Date; provided, however, the Lessor shall pay such amounts described
in this Section 7.1(a) only to the extent (i) such amounts are properly
described in a Requisition delivered on or before the Effective Date, (ii) funds
are made available by the Lenders and the Certificateholders in connection with
such Requisition in an amount sufficient to allow such payment and (iii) if any
such amounts relate to the Revolving Credit Agreement or the Revolving Credit
Notes, the portion thereof that is reasonably allocable to the Revolving Credit
Agreement and Revolving Credit Notes is deducted or excluded therefrom. On the
Effective Date after delivery and receipt of the Requisition referenced in
Section 4.2 hereof and satisfaction of the other conditions precedent for such
date, the Certificateholders shall make Certificateholder Advances and the
Lenders shall make Advances to the Lessor to pay for the Lease Transaction
Expenses referenced in this Section 7.1(a).
(b) Assuming no Event of Default or Potential Default (other than a
Potential Default that would be cured upon application of the proceeds of such
Funding, provided such proceeds are so applied or provision reasonably
satisfactory to the Collateral Agent shall have been made such that such
proceeds will be so applied) shall have occurred and be continuing, the Lessor
agrees on the date of any Funding and on the Completion Date to pay or cause to
be paid all Lease Transaction Expenses including, without limitation, all
reasonable fees, expenses and disbursements of counsel for the Lessor, the
Collateral Agent and the Agent in connection with the transactions contemplated
by the Related Documents and billed in connection with such Funding or the
Completion Date, all amounts described in Section 7.1(a) of this Agreement which
have not been previously paid, the fees and reasonable out-of-pocket expenses of
the Trust Company, all fees, expenses and disbursements incurred with respect to
the various items referenced in Sections 5.3, 5.4 and 5.5 (including, without
limitation, any premiums for title insurance policies and charges for any
updates to such policies) and all other reasonable fees, expenses and
disbursements in connection with such Funding or the Completion Date including,
without limitation, all expenses relating to and all fees, taxes and expenses
for
24
the recording, registration and filing of documents; provided, however, the
Lessor shall pay such amounts described in this Section 7.1(b) only if (i) such
amounts are properly described in a Requisition delivered on the applicable
date, (ii) funds are made available by the Lenders and the Certificateholders in
connection with such Requisition in an amount sufficient to allow such payment
and (iii) if any such amounts relate to the Revolving Credit Agreement or the
Revolving Credit Notes, the portion thereof that is reasonably allocable to the
Revolving Credit Agreement and Revolving Credit Notes is deducted or excluded
therefrom. On the Effective Date, on the date of any Funding or the Completion
Date, after delivery of the applicable Requisition and satisfaction of the other
conditions precedent for such date, the Certificateholders shall make
Certificateholder Advances and the Lenders shall make Advances to the Lessor to
pay for the Lease Transaction Expenses referenced in this Section 7.1(b).
Section 7.2. Lease Transaction Expenses. Each of the following, if due
and payable prior to the Completion Date, shall constitute Lease Transaction
Expenses payable by the Lessor to the extent provided in this Section 7.1
hereof: (a) the $5,000 initial fee payable to the Trust Company (for its
individual account) on the Effective Date, the $5,000 annual fee payable to the
Trust Company (for its individual account) on the Effective Date and on each
anniversary thereof, and all reasonable expenses of the Owner Trustee and any
co-trustees (including without limitation reasonable counsel fees and expenses)
or any successor owner trustee or co-trustee, for acting as the owner trustee
under the Trust Agreement, (b) all reasonable costs and expenses incurred by the
Credit Parties, the Collateral Agent, the Syndication Agent, the Agent and the
Lessor in connection with the negotiation, preparation, execution and delivery
of the Related Documents and matters incidental to the financing provided under
the Credit Agreement and the Trust Agreement (including, without limitation, all
reasonable fees and expenses of counsel to the Credit Parties, the Collateral
Agent, the Agent, the Syndication Agent and the Lessor and any consultants or
other experts retained by any of the foregoing in connection therewith), (c) all
reasonable costs and expenses incurred by the Credit Parties, the Collateral
Agent, the Agent, the Syndication Agent and the Lessor in connection with the
initial syndication of the Lender Commitments and the Certificateholder
Commitments (including, without limitation, the reasonable fees and expenses of
counsel to the Credit Parties, the Collateral Agent, the Agent, the Syndication
Agent and the Lessor and any consultants or other experts retained by any of the
foregoing in connection therewith), (d) all reasonable costs and expenses
incurred by the Credit Parties, the Collateral Agent, the Agent and the Lessor
in entering into any future amendments, modifications, supplements, restatements
or replacements with respect to any of the Related Documents, whether or not
such amendments, modifications, supplements, restatements or replacements are
ultimately entered into, or giving or withholding of waivers or consents hereto
or thereto (including, without limitation, all reasonable fees and expenses of
counsel to the Credit Parties, the Collateral Agent, the Agent and the Lessor
and any consultants or other experts retained by the any of the foregoing in
connection therewith), (e) all reasonable costs and expenses incurred by the
Collateral Agent, the Agent, the Lenders, the Certificateholders and the Lessor
in connection with any exercise of remedies under any Related Document or any
purchase of the Property by the Construction Agent, the Lessee
25
or any third party (including, without limitation, all reasonable fees and
expenses of counsel to any of the foregoing and any consultants or other experts
retained by any of the foregoing in connection therewith), and (f) all
reasonable costs and expenses incurred by the Collateral Agent, the Agent, the
Lenders, the Certificateholders or the Lessor in connection with any transfer or
conveyance of the Property, whether or not such transfer or conveyance is
ultimately accomplished (including, without limitation, the reasonable fees and
expenses of counsel to the Collateral Agent, the Agent, the Lenders, the
Certificateholders and the Lessor and any consultants or other experts retained
by any of the foregoing in connection therewith). All Lease Transaction Expenses
payable after the Completion Date shall be paid or caused to be paid by the
Lessee.
Section 7.3. Expenses under Revolving Credit Agreement. MiniMed agrees
to pay (a) all cost and expenses of the Revolving Credit Lenders and the Agent
in connection with negotiation, preparation, execution and delivery of the
Revolving Credit Agreement and the Revolving Credit Notes, (b) all reasonable
costs and expenses incurred by the Collateral Agent, the Agent and the
Syndication Agent in connection with the initial syndication of the Revolving
Credit Commitments, (c) all reasonable costs and expenses incurred by the
Revolving Credit Lenders and the Agent in connection with any future amendments,
modifications, supplements, restatements or replacements with respect to the
Revolving Credit Agreement or in the Revolving Credit Notes, whether or not such
amendments, modifications, supplements, restatements or replacements are
ultimately entered into, or giving or withholding of waivers or consents hereto
or thereto, (d) all reasonable costs and expenses incurred by the Revolving
Credit Lenders and the Agent in connection with any exercise of remedies under
the Revolving Credit Agreement, Revolving Credit Notes or any of the Security
Documents, in each of the cases described in clauses (a) through (d) inclusive,
including, without limitation, all reasonable fees and expenses of counsel to
the Agent and, in the case of clause (d) above, the Revolving Credit Lenders,
and any consultants or other experts retained by the Agent from time to time in
connection therewith.
26
ARTICLE 8. OTHER COVENANTS AND AGREEMENTS.
Section 8.1. Cooperation with the Construction Agent or the Lessee. The
Certificateholders, the Lenders, the Lessor (at the direction of the Majority
Secured Parties), the Agent and the Collateral Agent shall, at the expense of
and to the extent reasonably requested by the Construction Agent or the Lessee
(but without assuming additional liabilities on account thereof and only to the
extent such is acceptable to the Certificateholders, the Lenders, the Lessor (at
the direction of the Majority Secured Parties), the Agent and the Collateral
Agent in their reasonable discretion), cooperate with the Construction Agent or
the Lessee in connection with the Construction Agent or the Lessee satisfying
its obligations contained under the Related Documents including without
limitation at any time and from time to time, promptly and duly executing and
delivering any and all such further instruments, documents and financing
statements (and continuation statements related thereto).
Section 8.2. Covenants of the Owner Trustee and the Certificateholders.
Each of the Owner Trustee and the Certificateholders hereby agrees that so long
as this Agreement is in effect:
(a) Neither the Owner Trustee (in its trust capacity or in its
individual capacity) nor any Certificateholder will create or permit to exist at
any time, and each of them will, at its own cost and expense, promptly take such
action as may be necessary duly to discharge, or to cause to be discharged, all
Lessor Liens on the Property attributable to it; provided, however, that the
Owner Trustee and the Certificateholders shall not be required to so discharge
any such Lessor Lien while the same is being contested in good faith by
appropriate proceedings diligently prosecuted so long as such proceedings shall
not materially and adversely affect the rights of the Lessee under the Master
Lease and the other Related Documents or involve any material danger of
impairment of the Liens of the Security Documents or of the sale, forfeiture or
loss of, and shall not interfere with the use or disposition of, the Property or
title thereto or any interest therein or the payment of Rent;
(b) Without prejudice to any right under the Trust Agreement of the
Owner Trustee to resign (subject to the requirement set forth in the Trust
Agreement that such resignation shall not be effective until a successor shall
have agreed to accept such appointment), or the Certificateholders' rights under
the Trust Agreement Collateral to remove the Trust Company acting as the Owner
Trustee (after consent to such removal by the Agent as provided in the Trust
Agreement), each of the Owner Trustee and the Certificateholders hereby agrees
with the Lessee and the Collateral Agent (i) not to terminate or revoke the
trust created by the Trust Agreement except as permitted by Article VIII of the
Trust Agreement, (ii) not to amend, supplement, terminate or revoke or otherwise
modify any provision of the Trust Agreement in such a manner as to adversely
affect the rights of any such party without the prior written consent of such
party and (iii)
27
to comply with all of the terms of the Trust Agreement, the nonperformance of
which would adversely affect such party;
(c) The Trust Company or any successor may resign or be removed by the
Certificateholders as the Owner Trustee, a successor Owner Trustee may be
appointed and become the Owner Trustee under the Trust Agreement, only in
accordance with the provisions of Article IX of the Trust Agreement;
(d) The Trust Company, in its capacity as the Owner Trustee under the
Trust Agreement, and not in its individual capacity, shall not contract for,
create, incur or assume any Indebtedness, or enter into any business or other
activity or enter into any contracts or agreements, other than pursuant to or
under the Related Documents;
(e) No Certificateholder will instruct the Owner Trustee to take any
action in violation of the terms of any Related Document;
(f) No Certificateholder nor the Owner Trustee shall (i) commence any
case, proceeding or other action with respect to the Owner Trustee under any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, arrangement, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or
(ii) seek appointment of a receiver, trustee, custodian or other similar
official with respect to the Owner Trustee or for all or any substantial benefit
of the creditors of the Owner Trustee; and neither any Certificateholder nor the
Owner Trustee shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in this
paragraph;
(g) The Owner Trustee shall give prompt notice to the Lessee and the
Collateral Agent if the Owner Trustee's principal place of business or chief
executive office, or the office where the records concerning the accounts or
contract rights relating to the Property are kept, shall cease to be located at
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, or if it shall change its
name;
(h) The Owner Trustee shall take or refrain from taking such actions and
grant or refrain from granting such approvals with respect to the Related
Documents or the Property, in each case as directed in writing by the Collateral
Agent (until such time as the Advances are paid in full, and then by the
Majority Certificateholders); provided, however, that notwithstanding the
foregoing provisions of this subparagraph (h) the Owner Trustee acknowledges,
covenants and agrees that it shall act or refrain from acting, regarding each
matter requiring the consent of a particular Secured Party without the consent
of such Secured Party or the consent of all Secured Parties with the consent of
all such Secured Parties as provided in Section 14.2, until it has received the
approval of each Lender and each Certificateholder and each Revolving Credit
Lender affected by such matter; and
Section 8.3. Credit Party Covenants, Consent and Acknowledgment.
28
(a) Each Credit Party acknowledges and agrees that the Owner Trustee,
pursuant to the terms and conditions of the Security Documents, shall create
Liens respecting the various personal property, fixtures and real property
described therein in favor of the Collateral Agent. Each Credit Party hereby
irrevocably consents to the creation, perfection and maintenance of such Liens
until such Liens are subject to release in accordance with this Agreement and
the other Related Documents. Each Credit Party shall, to the extent reasonably
requested by any of the other parties hereto, cooperate with the other parties
in connection with their covenants herein or in the other Related Documents and
shall from time to time duly execute and deliver any and all such future
instruments, documents and financing statements (and continuation statements
related thereto) as any other party hereto may reasonably request.
(b) The Lessor hereby instructs each Credit Party, and each Credit Party
hereby acknowledges and agrees, that until such time as the Advances and the
Certificateholder Advances are paid in full and the Liens evidenced by the
Security Documents have been released (i) any and all Rent (excluding Excepted
Payments which shall be payable to each Person entitled thereto) and any and all
other amounts of any kind or type under any of the Related Documents due and
owing or payable to any Person shall instead be paid directly to the Collateral
Agent (excluding Excepted Payments which shall be payable to each Person
entitled thereto) or as the Collateral Agent may direct from time to time for
allocation and distribution in accordance with the procedures set forth in
Article 12 hereof, (ii) all rights of the Lessor under the Master Lease shall be
exercised by the Collateral Agent and (iii) each Credit Party shall cause all
notices, certificates, financial statements, communications and other
information which are delivered, or are required to be delivered, to the
Collateral Agent for the benefit of the Lessor.
(c) No Credit Party shall consent to or permit any amendment, supplement
or other modification of the terms or provisions of any Related Document except
in accordance with Section 14.2 of this Agreement.
(d) Each Credit Party hereby covenants and agrees that, except for
amounts payable as Basic Rent, any and all payment obligations owing from time
to time under the Related Documents (other than the Revolving Credit Agreement
and the Revolving Credit Notes) by any Credit Party or the Lessor to the
Collateral Agent, the Agent, any Lender, any Certificateholder or the Lessor
shall (without further action) be deemed to be Additional Rent obligations
payable by the Lessee and guaranteed by the other Credit Parties in accordance
with the terms and conditions of this Agreement and the other Related Documents.
(e) At any time the Lessor or the Collateral Agent is entitled under the
Related Documents to possession of the Property or Equipment or any component
thereof, each of the Construction Agent and the Lessee hereby covenants and
agrees, at its own cost and expense, to assemble and make the same available to
the Collateral Agent (on behalf of the Lessor).
29
(f) The Lessee hereby covenants and agrees that as of the Completion
Date the Property Cost for the Property shall be not greater than $65,000,000 or
such greater amount to which the Total Funding Commitments shall have been
increased in accordance with Section 5.10 hereof.
(g) The Lessee hereby covenants and agrees that it shall give prompt
notice to the Collateral Agent if the Lessee's principal place of business or
chief executive office, or the office where the records concerning its accounts
or contract rights are kept, shall cease to be located at ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or if it shall change its name.
(h) Until all the obligations of the Credit Parties under the Related
Documents (other than indemnity claims unasserted as of the Expiration Date)
have been finally and indefeasibly paid and satisfied in full, the Lender
Commitments and the Certificateholder Commitments terminated and the Lease Term
and all Renewal Terms have expired or been terminated, then unless consent has
been obtained from the Majority Secured Parties, the Parent Guarantor and the
Lessee will furnish or cause to be furnished to each Certificateholder, each
Lender, the Agent and the Collateral Agent at their respective addresses
specified in Section 14.3 of this Agreement, or such other office as may be
designated by any such Certificateholder, Lender, Agent or the Collateral Agent
from time to time, contemporaneously with the delivery of the financial
information required to be delivered pursuant to Section 13(e)(i) or (ii) of the
Parent Guaranty, a compliance certificate duly executed by a Responsible Officer
of the Parent Guarantor in the form of Exhibit J.
(i) The Lessee hereby covenants and agrees that the rights of the Lessee
under this Agreement and the Master Lease shall not impair or in any way
diminish the obligations of the Construction Agent or the rights of the Lessor
under the Construction Agency Agreement.
(j) Each Credit Party hereby covenants and agrees to cause each Domestic
Subsidiary formed or acquired after the Effective Date that is not an Inactive
Subsidiary shall comply with the provisions of Section 5.8.
(k) Each Credit Party shall promptly notify the Collateral Agent, or
cause the Collateral Agent to be promptly notified, upon such Credit Party
gaining knowledge of the occurrence of any Potential Default or Event of
Default. In any event, such notice shall be provided to the Collateral Agent
within ten (10) days of when such Credit Party gains such knowledge.
(l) Until all of the obligations under the Related Documents, other than
indemnity claims unasserted as of the Final Date, have been finally and
indefeasibly paid and satisfied in full and the Lender Commitments and the
Certificateholder Commitments terminated, each Credit Party will observe,
perform and comply with all of the provisions,
30
terms, covenants and obligations to be so observed, performed or complied with
by or on behalf of such Credit Party under the other Related Documents.
(m) The Lessee shall perform any and all obligations of the Lessor
under, and cause the Lessor to otherwise remain in full compliance with, the
terms and provisions of the Ground Sublease, if any; provided, however, that the
Lessee shall not be obligated to perform any obligations of the Lessor that are
not reasonably capable of being performed solely due to the gross negligence or
willful misconduct of the Lessor, the Agent or the Collateral Agent.
Section 8.4. Sharing of Certain Payments. Except for Excepted Payments,
the parties hereto acknowledge and agree that all payments due and owing by any
Credit Party to the Lessor under the Master Lease or any of the other Related
Documents shall be made by any Credit Party directly to the Collateral Agent as
more particularly provided in Section 12.1 hereof. The Lessor, the
Certificateholders, the Lenders the Agent, the Collateral Agent and the Credit
Parties acknowledge the terms of Section 12.1 of this Agreement regarding the
allocation of payments and other amounts made or received from time to time
under the Related Documents and agree that all such payments and amounts are to
be allocated as provided in Section 12 of this Agreement.
Section 8.5. Grant of Easements, etc. The Collateral Agent, the Agent,
the Lenders and the Certificateholders hereby agree that, so long as no Event of
Default or Potential Default shall have occurred and be continuing, the Lessor,
the Certificateholders, the Lenders, the Agent and the Collateral Agent hereby
consent to the following actions by Lessee, in the name and stead of Owner
Trustee, but at Lessee's sole cost and expense: (i) the grant of easements and
other rights in the nature of easements with respect to the Property (prior to
the Lien of the Deed of Trust) with respect to the use, repair, renovation or
maintenance of the Property; (ii) the release (free and clear of the Lien of the
Lien of the Deed of Trust) existing easements or other rights in the nature of
easements which are for the benefit of the Property, (iii) the execution and
delivery to any Person of any instrument appropriate to confirm or effect such
grants or releases, and (iv) filing and processing or execution and deliver, to
any Person of such other documents or materials in connection with the
acquisition, development, construction, testing or operation of the Property,
including without limitation reciprocal easement agreements, construction
contracts, operating agreements, development agreements, plats, replats or
subdivision documents; provided, that in each case the Lessee shall have
delivered to the Owner Trustee an officer's certificate stating that: (A) such
grant, release, dedication, transfer, filing or processing does not materially
impair the value or useful life of the Property and is reasonably necessary or
beneficial to the construction, use, maintenance, alteration, renovation,
restoration or improvement of the Property; and (B) the Lessee shall pay and
perform all obligations of the Owner Trustee under such grant, release,
dedication, transfer, filing or processing. Without limiting the effectiveness
of the foregoing, provided that no Event of Default or Potential Default shall
have occurred and be continuing, the Owner Trustee shall, upon request of the
Lessee, and at the Lessee's sole cost and expense, execute and deliver any
instrument necessary or appropriate to
31
confirm any such grant, release, dedication or transfer to any Person permitted
under this Section 8.5.
Section 8.6. Release of Property, etc. If the Lessee shall at any time
purchase the Property pursuant to the Master Lease, or the Construction Agent
shall purchase any Property pursuant to the Construction Agency Agreement, then,
upon satisfaction by the Owner Trustee of its obligation to repay the Advances,
Certificateholder Advances and all other amounts owing to the Lenders and the
Certificateholders under the Related Documents, the Collateral Agent is hereby
authorized and directed to release such Property from the Liens created by the
Related Documents to the extent of its interest therein. In addition, upon the
termination of the Lender Commitments and the Certificateholder Commitments and
the payment in full of the Advances, the Certificateholder Advances and all
other amounts owing by the Owner Trustee and the Lessee hereunder or under any
other Related Document, the Collateral Agent is hereby authorized and directed
to release all of the Property from the Liens created by the Related Documents
to the extent of its interest therein. Upon request of the Owner Trustee
following any such release the Collateral Agent shall, at the sole cost and
expense of the Lessee, execute and deliver to the Owner Trustee and the Lessee
such documents, and shall take such other actions as are reasonably necessary or
advisable, as the Owner Trustee or the Lessee shall reasonably request to
evidence such release.
ARTICLE 9. CREDIT AGREEMENT AND TRUST AGREEMENT.
Section 9.1. The Construction Agent's and the Lessee's Credit Agreement
Rights. Notwithstanding anything to the contrary contained in the Credit
Agreement, the Agent, the Lenders, the Certificateholders, the Lease and
Construction Agent, the Credit Parties and the Owner Trustee hereby agree that,
unless a Potential Default or Event of Default has occurred and is continuing,
the Construction Agent or the Lessee, as the case may be, shall have the
following rights:
(a) the right to designate an account to which amounts funded
under the Credit Agreement shall be credited pursuant to Section 2.03(c)
of the Credit Agreement;
(b) the right to terminate or reduce the Lender Commitments
pursuant to Section 4.05(a) of the Credit Agreement or to request an
increase of the Lender Commitments pursuant to Section 4.05(b) of the
Credit Agreement;
(c) the right to exercise the conversion and continuation
options pursuant to Section 2.03 of the Credit Agreement; and
32
(d) the right to consent to any assignment by a Lender to the
extent the Lessor has the right to consent to any such assignment
pursuant to Section 11.01(a) of the Credit Agreement.
Section 9.2. The Construction Agent's and the Lessee's Trust Agreement
Rights. Notwithstanding anything to the contrary contained in the Trust
Agreement, the Credit Parties, the Owner Trustee and the Certificateholders
hereby agree that, unless a Potential Default or Event of Default has occurred
and is continuing, the Construction Agent or the Lessee, as the case may be,
shall have the following rights:
(a) the right to designate an account to which amounts funded
under the Related Documents shall be credited pursuant to Section
3.03(c) of the Trust Agreement;
(b) the right to terminate or reduce the Certificateholder
Commitments pursuant to Section 3.05B(a) of the Trust Agreement or to
request an increase of the Certificateholder Commitments pursuant to
Section 3.05B(b) of the Trust Agreement;
(c) the right to exercise the conversion and continuation
options pursuant to Section 3.03(a) of the Trust Agreement; and
(d) the right to consent to any assignment by a
Certificateholder, to the extent that the Lessor has the right to
consent to any such assignment pursuant to Section 11.08 of the Trust
Agreement.
ARTICLE 10. THE COLLATERAL AGENT
Section 10.1. Appointment and Authorization. Each of the Lessor, the
Lenders, the Certificateholders, the Revolving Credit Lenders and the Agent
appoints ING (U.S.) Capital LLC to act as collateral agent in connection
herewith and with the Lien and other rights and remedies granted for the benefit
of the Secured Parties pursuant to the Security Documents, and authorizes the
Collateral Agent to take such action as agent on its behalf and to exercise such
powers under this Agreement and the Related Documents as are delegated to the
Collateral Agent by the terms hereof or thereof, together with all such powers
as are reasonably incidental thereto. The Collateral Agent is further appointed
to provide notices under the Related Documents on behalf of the Owner Trustee
(as determined by the Collateral Agent, in its reasonable discretion), to
receive notices under the Related Documents on behalf of the Owner Trustee and
(subject to Section 9.2) to take such other action under the Related Documents
on behalf of the Owner Trustee as the Collateral Agent shall determine in its
reasonable discretion from time to time. The Collateral Agent hereby accepts
such appointments.
33
Section 10.2. Same Rights as a Lender. The Collateral Agent and its
affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Lessor or any Credit Party or any affiliate of the
foregoing as if it were not the Collateral Agent hereunder.
Section 10.3. Actions by the Collateral Agent. The obligations of the
Collateral Agent hereunder are only those expressly set forth herein and in the
other Related Documents. As to any matters not expressly provided for by this
Agreement, the Collateral Agent shall not be required to exercise any discretion
or take any action on behalf of the Secured Parties, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority Secured Parties,
and such instructions shall be binding upon all Secured Parties; provided,
however, that the Collateral Agent shall not be required to take any action
which exposes the Collateral Agent to personal liability or which is contrary to
this Agreement or applicable law. The Collateral Agent agrees to give to each
Secured Party prompt notice of each notice given to it by the Lessor or any
Credit Party pursuant to the terms of this Agreement or the Related Documents.
Without limiting the generality of the foregoing, the Collateral Agent shall not
be required to take any action with respect to any Potential Default or Event of
Default, except as expressly provided in this Article 10.
Section 10.4. Consultation with Experts. The Collateral Agent may
consult with legal counsel (who may be counsel for the Lessor or any Credit
Party), independent public
accountants and other experts selected by it and, as between the Collateral
Agent and the Secured Parties, shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
Section 10.5. Liability. Neither the Collateral Agent nor any of its
directors, officers, agents or employees shall be liable to any Secured Party
for any action taken or not taken by it in connection herewith or with any
Related Document (a) with the consent or at the request of the Majority Secured
Parties or (b) in the absence of its own gross negligence or willful misconduct.
Neither the Collateral Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into
or verify: (i) any statement, warranty or representation made by the Lessor or
any Credit Party in connection with this Agreement or any Related Document; (ii)
the performance or observance of any of the covenants or agreements of the
Lessor or the Credit Parties herein or in any Related Document; (iii) the
satisfaction of any condition specified in Article 5, except receipt of items
required to be delivered to the Collateral Agent; or (iv) as between the
Collateral Agent and the Secured Parties, the validity, effectiveness or
genuineness of this Agreement, any Related Document or any other instrument or
writing furnished in connection herewith. The Collateral Agent shall not incur
any liability by acting in reliance upon any notice, consent, certificate,
statement or other writing (which may be a bank wire, facsimile, telex or
similar writing) reasonably believed by it to be genuine or to be signed by the
proper party or parties.
Section 10.6. Indemnification. Each of the Lenders, the
Certificateholders and the Revolving Credit Lenders shall, ratably in accordance
with its Commitment Percentage,
34
indemnify the Collateral Agent (to the extent not reimbursed by the Credit
Parties) on demand from and against any and all costs, expenses (including
counsel fees and disbursements), claims, demands, actions, losses or liabilities
(except such as result from the Collateral Agent's own gross negligence or
willful misconduct) that the Collateral Agent may suffer or incur in connection
with this Agreement or any Related Document or any action taken or omitted by
the Collateral Agent hereunder or thereunder. The obligations of each of the
Lenders, the Certificateholders and the Revolving Credit Lenders set forth in
this Section 10.6 shall survive any termination of this Agreement.
Section 10.7. Credit Decision. Each Secured Party acknowledges that it
has, independently and without reliance upon the Collateral Agent or any other
Secured Party, and based on such financial statements and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Secured Party also acknowledges that
it will, independently and without reliance upon the Collateral Agent or any
other Secured Party, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking any action permitted to be taken or omitted under this
Agreement and the Related Documents.
Section 10.8. Successor Collateral Agent; Removal. (a) The Collateral
Agent may resign at any time by giving written notice thereof to the Secured
Parties and the Lessor, provided that no such resignation shall take effect
until a successor collateral agent has been appointed and agreed to act as such
under this Agreement. Upon any such resignation, the Majority Secured Parties
shall appoint a successor to the Collateral Agent.
(b) Upon the written request of Lenders, Certificateholders and
Revolving Credit Lenders holding not less than 80% of the Total Funding
Commitment or, if all Funding Commitments have been terminated, not less than
80% of the aggregate amount of all Outstanding Advances, Revolving Credit
Advance and Certificateholder Advances, and provided that immediately upon the
effectiveness of such resignation, such Lenders, Certificateholders and
Revolving Credit Lenders appoint a successor to the Collateral Agent, the
Collateral Agent shall resign and effective immediately upon such resignation,
the Collateral Agent shall no longer be the Collateral Agent under this
Agreement and the successor to the Collateral Agent so appointed shall
immediately and thereafter become the Collateral Agent.
(c) The decision of the Majority Secured Parties shall be binding upon
all of the Secured Parties. After any retiring Collateral Agent's resignation
hereunder as Collateral Agent, the provisions of this Article 10 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Collateral Agent.
Section 10.9. Sharing by Secured Parties. (a) If any Secured Parties
shall obtain any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) on account of any Secured Obligation owed
to it in excess of the amount it would otherwise be entitled to receive pursuant
to the provisions of Article 12 of this
35
Agreement (or, if such provisions are not applicable at the time of receipt of
such payment, in excess of its ratable share based upon the amounts then owing,
of payments on account of like Obligations obtained by all Secured Parties, such
Secured Parties shall immediately so notify (the "Information Notice") the
Collateral Agent. Promptly upon its receipt of an Information Notice from any
Secured Parties, the Collateral Agent shall notify (the "Sharing Notice") all of
the Secured Parties (based upon information contained in all Information Notices
received by the Collateral Agent from the Secured Parties) of the amount or
amounts (the "Excess Payment") received by one or more of the Secured Parties in
excess of its or their ratable share of payments received by all of the Secured
Parties on account of the Obligations. Within two Business Days of the giving of
a Sharing Notice by the Collateral Agent, each Secured Parties which has
received an Excess Payment (each, an "Excess Secured Parties") shall purchase
from Secured Parties which have not received an Excess Payment (each, a "Deficit
Secured Parties") such participations in the Obligations, as the case may be,
owed to each Deficit Secured Parties as shall be necessary to cause such Excess
Secured Parties to share its Excess Payment ratably with each Deficit Secured
Parties; provided, however, that if all or any portion of such Excess Payment is
thereafter recovered from an Excess Secured Parties, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
(b) Each Credit Party agrees that any Secured Parties so purchasing a
participation from another Secured Parties pursuant to this Section 10.9 may
exercise all its rights of payment with respect to such participation as fully
as if such Secured Parties were the direct creditor of the Borrower in the
amount of such participation. If under any applicable bankruptcy, insolvency or
other similar law, any Secured Parties receives a secured claim in lieu of a
set-off to which this Section 10.9 would apply, such Secured Parties shall, to
the extent practicable, exercise its rights in respect of such secured claim in
a manner consistent with the rights of the Secured Parties entitled under this
Section 10.9 to share in the benefits of any recovery on such secured claim.
ARTICLE 11 EVENTS OF DEFAULT
Section 11.1. Events of Default. If any one or more of the following
events (an "Event of Default") shall occur and be continuing, the Collateral
Agent on behalf of the Secured Parties shall be entitled to exercise the
remedies set forth in Section 11.2 hereof and in the Related Documents.
(a) Any representation or warranty made or deemed made by any Credit
Party in this Agreement, any Related Document to which it is a party, or any
certificate, financial statement or other document delivered pursuant hereto or
thereto shall not be Accurate and Complete on any date as of which made or
deemed made; or
(b) (i) The Lessee shall fail to pay Basic Rent and such failure shall
continue for more than five (5) Business Days after such payment is due pursuant
to Section 7 of the
36
Master Lease, or (ii) any Credit Party shall default in the payment when due of
any other amount payable to any Secured Party hereunder or under any Related
Document to which it is a party, and the failure to pay such other amount
referred to in this clause (ii) shall continue for 10 days after receipt of
notice thereof; or
(c) Any Credit Party shall fail to perform or observe any covenant or
obligation contained in Section 8.3 of this Agreement and, if such covenant or
obligation shall be contained in subsections (h), (l) or (m) of Section 8.3 of
this Agreement (other than, in the case of subsection (m) of Section 8.3, the
failure by the Lessee to make any payment under the Ground Sublease or any other
failure by the Lessee that could permit the Ground Sublessor to terminate the
Ground Sublease within thirty (30) days after the occurrence thereof), such
failure shall continue for 30 days after the Lessee becomes aware of such
failure; or
(d) Any Credit Party shall fail to perform or observe any other covenant
or obligation of such Credit Party the performance or observance of which is
owed to any Secured Party hereunder, and such failure shall continue for 30 days
after such Credit Party becomes aware of such failure (other than any failure
described in Subsection 11.1(b) or (c) above); provided that if such failure is
of such a nature that it is not capable of being cured within such 30-day
period, and the Lessee promptly commences appropriate steps to cure such failure
within such 30-day period and continues to pursue such cure with diligence and
good faith thereafter, unless the Collateral Agent or the Majority Secured
Parties determine that such delay could reasonably be expected to have a
Material Adverse Effect, such 30-day period shall be extended to 90 days; or
(e) Any Credit Party shall default in the payment when due of any
principal of or premium (if any) or interest on any Indebtedness (other than
Indebtedness owing to any Secured Party) of $1,000,000 or more and such default
shall continue beyond any applicable grace period, or shall fail to observe or
perform any terms of any instrument pursuant to which any such Indebtedness was
created or of any mortgage, indenture or other agreement relating thereto if the
effect of such failure is to cause or permit the acceleration of such
Indebtedness and such failure shall not have been waived pursuant thereto; or
(f) The entry of a decree or order for relief in respect of any Credit
Party by a court having jurisdiction in the premises, or the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of such Credit Party or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, in an
involuntary case under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or state bankruptcy, insolvency or
other similar law; or the commencement against any Credit Party of an
involuntary case under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or state bankruptcy, insolvency or
other similar law, and the continuance of any such case unstayed and in effect
for a period of 60 consecutive days; or
37
(g) The commencement by any Credit Party of a voluntary case under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or state bankruptcy, insolvency or other similar law, or the
consent by it to the entry of an order for relief in an involuntary case under
any such law or the consent by it to the appointment of or taking possession by
a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of such Credit Party or of any substantial part of its
property, or the making by it of a general assignment for the benefit of
creditors, or the failure of any Credit Party generally to pay its debts as such
debts become due or the taking of any corporate action in furtherance of any of
the foregoing; or
(h) An "Event of Default" shall occur under Section 18 of the Master
Lease or Section 5.01 of the Construction Agency Agreement or an "Event of
Default" shall occur under the Credit Agreement, the Revolving Credit Agreement
or any Security Document; or
(i) One or more final judgments for the payment of money shall be
rendered against any Credit Party in an aggregate amount in excess of $1,000,000
and the same shall remain undischarged for a period of 30 days during which
execution of such judgment shall not be effectively stayed; or
(j) The Master Lease, the Construction Agency Agreement, the Guaranties,
or any of the Security Documents shall cease to be in full force and effect
(except for any termination of the Construction Agency Agreement or Master Lease
in accordance with its terms not due to the occurrence of a default thereunder).
Section 11.2. Default Remedies. If any Event of Default shall occur and
be continuing, then and in every such event, and at any time thereafter during
the continuance of such Event of Default, the Collateral Agent may, and at the
request of the Majority Secured Parties shall, by written notice to each Credit
Party and each Secured Party, take one or more of the following actions: (a)
terminate the Commitments, the Certificateholder Commitments and the Revolving
Credit Commitments, and (b) declare the Obligations to be forthwith due and
payable, whereupon (subject to the limitations set forth in the Construction
Agency Agreement and the Master Lease) the Obligations shall become forthwith
due and payable together with all other amounts payable by the Credit Parties
under this Agreement and the other Related Documents, without presentment,
demand, protest or any other notice of any kind, all of which are expressly
waived; provided, however, that if any of the Events of Default set forth in
paragraphs (f) or (g) of Section 11.1 hereof shall occur with respect to any
Credit Party, then without any notice to any Credit Party or any other act by
the Collateral Agent or any other Person (i) the Commitments, the
Certificateholder Commitments and the Revolving Credit Commitments shall
immediately become terminated, and (ii) the Obligations shall become forthwith
due and payable, all without presentment, demand, protest or notice of any kind,
all of which are expressly waived. In the event of a declaration by the
Collateral Agent pursuant to clause (b) above, the Collateral Agent may enforce
its rights hereunder and under any other instrument or agreement delivered in
connection herewith and take any other action
38
to which it is entitled hereunder, thereunder, or by law, whether for the
specific performance of any covenant or agreement contained in this Agreement,
in any such instrument or agreement or to enforce payment as provided herein,
therein, or by law.
Section 11.3. Set-off. (a) Each Secured Party is hereby authorized at
any time and from time to time, upon the occurrence and during the continuance
of any Event of Default, without prior notice to any Credit Party, to the
fullest extent permitted by law, to set-off and apply any and all balances,
credits, deposits (general or special, time or demand, provisional or final
including certificates of deposit whether matured or unmatured), accounts or
monies at any time held and other indebtedness at any time owing by such Secured
Party at any of its branches or affiliates to or for the account of such Credit
Party, including the Collateral Account and any Permitted Investments held
therein, against any and all of the amounts owing by the Credit Parties under
this Agreement or the Related Documents, whether or not (i) such Secured Party
shall have made any demand hereunder or thereunder, (ii) the Collateral Agent
shall have declared any or all of the Secured Obligations to be due and payable
or (iii) any of such Secured Obligations shall be contingent or unmatured. The
rights of Secured Parties under this Section 11.3 are in addition to, and do not
derogate from or impair, other rights and remedies (including, without
limitation, other rights of set-off) which the Secured Parties may have.
(b) Each Secured Party agrees that if it shall, by exercising any right
of set-off or counterclaim or otherwise receive payment of a proportion of the
aggregate amount due to it which is greater than the amount it would otherwise
have received had such amount been deposited in the Collateral Account and
disbursed by the Collateral Agent for application in accordance with Article 12,
the Secured Party receiving such proportionately greater payment shall purchase
participations in the Obligations held by the other Secured Parties and such
other adjustments shall be made, as may be required so that all such payments of
Obligations held by the Secured Parties shall be shared by the Secured Parties
in accordance with the priorities set forth in Article 12 of this Agreement.
Each Credit Party agrees, to the fullest extent it may effectively do so under
applicable law, that any holder of a participation in any Obligation, whether or
not acquired pursuant to the foregoing arrangements, may exercise rights of
set-off or counterclaim and other collection rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of such Credit Party in the amount of such participation.
ARTICLE 12. APPLICATION OF PAYMENTS AND PROCEEDS
Section 12.1. Collection and Allocation of Payments and Other Amounts.
(a) Each Credit Party has agreed pursuant to Section 5.9 and otherwise
in accordance with the terms of this Agreement to pay to (i) the Collateral
Agent any and all Rent (excluding Excepted Payments) and any and all other
amounts of any kind or type under any of the Related Documents due and owing or
payable to any Person and (ii) each Person entitled thereto, the Excepted
Payments. Promptly after receipt, the Collateral
39
Agent shall deposit into the Collateral Account and shall disburse such amounts
in accordance with this Section 12.1, such amounts received from any Credit
Party.
(b) Payments and other amounts received by the Collateral Agent from
time to time in accordance with the terms of subparagraph (a) shall be applied
and allocated as follows:
(i) Any such payment or amount identified as or deemed to be
Basic Rent shall be allocated and disbursed by the Collateral Agent
first, ratably to the Lenders and the Certificateholders for application
to the payment of interest on the Advances and thereafter the principal
of the Advances then due and payable and to the payment of accrued yield
on the Certificates and thereafter any portion of the Certificateholder
Advances then due and payable; and second, if no Potential Default or
Event of Default has occurred and is continuing to such Person or
Persons as the Lessee may designate; provided, that if a Potential
Default or Event of Default has occurred and is continuing, such excess
(if any) shall instead be held by the Collateral Agent until the earlier
of (A) the first date thereafter on which no Potential Default or Event
of Default shall be continuing (in which case such payments or returns
shall then be made to such other Person or Persons as the Lessee may
designate), (B) the Final Date (in which case such amounts shall be
applied and allocated in the manner contemplated by the applicable
provisions of this Article 12) and (C) the date of any Acceleration (in
which case such amounts shall be applied and allocated in the manner set
forth in Section 12.5 hereof).
(ii) If on any date the Collateral Agent or the Lessor shall
receive any amount in respect of (A) any Casualty or Condemnation
pursuant to Sections 15 or 16 of the Master Lease (excluding any
payments in respect thereof which are payable to the Lessee in
accordance with the Master Lease), or (B) any payment required to be
made or elected to be made by the Construction Agent to the Lessor
pursuant to the terms of the Construction Agency Agreement, then in each
case, the Lessor shall be required to pay such amount received (1) if no
Acceleration has occurred, to prepay the outstanding principal balance
of the Advances and the outstanding amount of the Certificateholder
Advances, on a pro rata basis, or (2) if an Acceleration has occurred,
to apply and allocate such proceeds in accordance with Section 12.5
hereof.
(iii) An amount equal to any such payment identified as
Additional Rent shall be applied and allocated by the Collateral Agent
to the payment of any amounts then owing to the Collateral Agent, the
Lenders, the Certificateholders and the other parties to the Related
Documents (or any of them) (other than any such amounts payable pursuant
to the preceding provisions of this Section 12.1) as shall be determined
by the Collateral Agent in its reasonable discretion;
40
(iv) The Collateral Agent in its reasonable judgment shall
identify the nature of each payment or amount received by the Collateral
Agent and apply and allocate each such amount in the manner specified
above.
(c) Each Secured Party hereby agrees that (i) it shall not exercise any
rights or remedies against any Credit Party or its property, including, without
limitation, any right of set-off or counterclaim, whether granted pursuant to
any Related Document, arising at law or in equity or otherwise, without the
prior written consent of the Majority Secured Parties, and (ii) the Collateral
Agent shall be the sole party entitled to exercise rights and remedies against
the Lessor; provided, however, that nothing herein shall be deemed to preclude
or prohibit the acceleration of the maturity of any of the Obligations as
provided in the Related Documents.
Section 12.2. Application of Proceeds Upon Sale of Property and
Equipment. Upon the sale of the Property and Equipment pursuant to Section 12(a)
of the Master Lease, all Cash Proceeds from such sale, together with all other
amounts payable by any Credit Party in connection with such sale in accordance
with the provisions of Section 12 of the Master Lease, shall be paid to the
Collateral Agent for deposit into the Collateral Account and shall be disbursed
by the Collateral Agent to the respective Secured Parties set forth below for
application to the Obligations of such Secured Parties in the following order of
priority:
(a) First, to the Collateral Agent, the Agent and the Owner Trustee, an
amount equal to all Additional Amounts then due and payable by the Credit
Parties consisting of all losses, damages, costs and expenses incurred and
sustained by the Collateral Agent, the Agent or the Owner Trustee in connection
with such sale of the Property and Equipment;
(b) Second, to the Collateral Agent, the Agent and the Owner Trustee, an
amount equal to all other Additional Amounts then due and payable by the Credit
Parties consisting of all other accrued and unpaid fees and expenses of the
Collateral Agent, the Agent and the Trust Company due and payable by the Credit
Parties under the Related Documents;
(c) Third, to the respective Secured Parties owed such amounts, an
amount equal to all other Additional Amounts then due and payable by the Credit
Parties under the Related Documents; and
(d) Fourth, to the Tranche A Lenders, the Tranche B Lenders and the
Certificateholders, an amount equal to the outstanding principal amount of the
Tranche A Notes and Tranche B Notes, together with accrued and unpaid interest
thereon, plus the outstanding amount of Certificates, together with accrued and
unpaid yield thereon; provided, however, that if upon the sale of the Property
and Equipment, the provisions of Section 12(b)(iii) of the Master Lease shall
apply, the amounts to be applied pursuant to this clause (d) shall be applied in
the following order of priority:
41
(i) First, to the Tranche A Lenders, an amount equal to the
outstanding principal amount of Tranche A Term Notes, together with
accrued and unpaid interest thereon;
(ii) Second, to the Tranche B Lenders, an amount equal to the
outstanding principal amount of Tranche B Term Notes, together with
accrued and unpaid interest thereon; and
(iii) Third, to the Certificateholders, an amount equal to the
outstanding amount of the Certificates, together with accrued and unpaid
yield thereon.
Section 12.3. Application of Proceeds Upon Purchase of Property and
Equipment by Lessee. Upon the exercise by the Lessee of its option to purchase
the Property and Equipment pursuant to Section 13(a) of the Master Lease or
pursuant to Section 12 of the Master Lease, the Lessee shall pay to the
Collateral Agent for deposit into the Collateral Account the purchase price
payable in connection with the Lessee's purchase of the Property and Equipment
as set forth in the Master Lease, and the Collateral Agent shall disburse such
proceeds to the Secured Parties for application to the Obligations in the order
of priority set forth in Section 12.2 of this Agreement.
Section 12.4. Application of Proceeds of Surrender Payment Upon
Surrender of Property and Equipment by Lessee. Upon the exercise by the Lessee
of its option to surrender the Property and Equipment in accordance with Section
13(b) of the Master Lease, (a) the Lessee shall pay to the Collateral Agent for
deposit into the Collateral Account the Surrender Payment, and the Collateral
Agent shall disburse such Surrender Payment to the Tranche A Lenders for
application by the Tranche A Lenders (i) first, to all Additional Amounts then
due and payable by the Credit Parties in respect of the Tranche A Term Notes,
(ii) second, to accrued and unpaid interest on the Tranche A Term Notes, and
(iii) third, to the outstanding principal amount of Tranche A Term Notes, and
(b) upon the sale by the Collateral Agent or the Lessor of the Property and
Equipment, or any portion thereof, the Cash Proceeds from the sale of such
Property and Equipment shall be deposited in the Collection Account and shall be
disbursed by the Collateral Agent to the following Secured Parties for
application to the Obligations of such Secured Parties in the following order of
priority:
(a) First, to the Collateral Agent, the Agent and the Owner Trustee, an
amount equal to all Additional Amounts consisting of all losses, damages, costs
and expenses sustained or incurred by Collateral Agent, the Agent or the Owner
Trustee by reason of the sale of such Property and Equipment;
(b) Second, to the Collateral Agent, the Agent and the Owner Trustee, an
amount equal to all other Additional Amounts then due and payable by the Credit
Parties to the Collateral Agent, the Agent or the Owner Trustee in accordance
with the terms of the Related Documents;
42
(c) Third, to the Tranche B Lenders and the Certificateholders, an
amount equal to all other Additional Amounts then due and payable by the Credit
Parties to the Tranche B Lenders and the Certificateholders;
(d) Fourth, to the Tranche B Lenders, an amount equal to the outstanding
principal amount of all Tranche B Notes, together with accrued and unpaid
interest thereon; and
(e) Fifth, to the Certificateholders, an amount equal to the aggregate
outstanding amount of Certificates, together with accrued and unpaid yield
thereon.
Section 12.5. Application of Proceeds Upon Exercise of Remedies Upon
Event of Default. Upon the exercise of any rights or remedies by the Collateral
Agent or any Secured Party upon the occurrence of an Event of Default and
Acceleration, whether such remedies are provided for in the Related Documents,
are available at law or in equity or otherwise:
(a) to the extent that the Collateral Agent or such Secured Party shall
have realized any Trust Proceeds, such Trust Proceeds shall be deposited in the
Collateral Account and the Collateral Agent shall disburse such Trust Proceeds
to the following Secured Parties for application to the Obligations of such
Secured Parties in the following order of priority:
(i) first, to the Collateral Agent, the Agent and the Owner
Trustee, an amount equal to all Additional Amounts then due and payable
consisting of the costs and expenses of the Collateral Agent, the Agent
and the Lessor incurred in connection with the enforcement of the
Related Documents and the realization of such Trust Proceeds;
(ii) second, to the Collateral Agent, the Agent and the Trust
Company, an amount equal to all other Additional Amounts then due and
payable under the Related Documents and consisting of accrued and unpaid
fees and expenses of the Collateral Agent, the Agent and the Trust
Company (after giving effect to the application of all MiniMed Proceeds
to the payment thereof in accordance with clause (b)(ii) of this Section
12.5);
(iii) third, to the Tranche B Lenders and the
Certificateholders, an amount equal to all other Additional Amounts then
due and payable by the Credit Parties under the Related Documents to the
Tranche B Lenders and the Certificateholders;
(iv) fourth, to the Tranche B Lenders, an amount equal to the
outstanding principal amount of the Tranche B Notes, together with
accrued and unpaid interest thereon; and
43
(v) fifth, to the Certificateholders, an amount equal to the
outstanding amount of all Certificates, together with accrued and unpaid
yield thereon; and
(b) to the extent that the Collateral Agent or such Secured Party shall
have realized any MiniMed Proceeds (including, without limitation, any proceeds
realized in respect of the right of the Lessee to receive excess Trust Proceeds
upon satisfaction in full of all Obligations described in clause (a) above), the
Collateral Agent or such Secured Party shall deposit such MiniMed Proceeds in
the Collateral Account and the Collateral Agent shall disburse such MiniMed
Proceeds to the following Secured Parties for the application to the Obligations
of such Secured Parties in the following order of priority:
(i) First, to the Collateral Agent, the Agent and the Owner
Trustee, an amount equal to all Additional Amounts then due and payable
under the Related Documents consisting of all costs and expenses
incurred by the Collateral Agent, the Agent and the Owner Trustee with
respect to enforcement of the Related Documents and realization of the
MiniMed Proceeds;
(ii) Second, to the Collateral Agent, the Agent and the Owner
Trustee, an amount equal to all other Additional Amounts then due and
payable under the Related Documents consisting of accrued and unpaid
fees and expenses of the Collateral Agent, the Agent and the Owner
Trustee;
(iii) Third, to the Tranche A Lenders and the Revolving Credit
Lenders, an amount equal to all other Additional Amounts then due and
payable to the Revolving Credit Lenders and the Revolving Credit Lenders
under the Related Documents respectively Tranche A Notes and the
Revolving Credit Notes (to be applied pro rata based upon the
outstanding principal amounts of the Tranche A Notes and Revolving
Credit Notes);
(iv) Fourth, to the Tranche A Lenders and the Revolving Credit
Lenders, an amount equal to the aggregate outstanding principal amount
of Tranche A Notes and Revolving Credit Notes, together with accrued and
unpaid interest thereon (to be applied pro rata to such Obligations
based upon the outstanding principal amounts of the Tranche A Notes and
Revolving Credit Notes);
(v) Fifth, to the Tranche B Notes and Certificateholders, an
amount equal to all other Additional Amounts then due and payable to the
Tranche B Lenders and Certificateholders pursuant to the Related
Documents (to be applied pro rata based upon the respective outstanding
amounts thereof); and
(vi) Sixth, to the Tranche B Lenders and the Certificateholders,
an amount equal to the outstanding principal amount of the Tranche B
Notes and the outstanding amount of the Certificates, together with
accrued and unpaid interest
44
on the Tranche B Notes and accrued and unpaid yield on the Certificates
to be applied pro rata to such Obligations based upon the outstanding
amounts thereof).
ARTICLE 13. INDEMNIFICATION.
Section 13.1. General Indemnity. Whether or not any of the transactions
contemplated hereby shall be consummated, the Indemnity Provider hereby assumes
liability for and agrees to defend, indemnify and hold harmless each Indemnified
Person on an After Tax Basis from and against any Claims, which may be imposed
on, incurred by or asserted against an Indemnified Person by any third party,
including without limitation Claims arising from the negligence of an
Indemnified Person (but not to the extent such Claims arise from the gross
negligence or willful misconduct of such Indemnified Person itself, as
determined by a court of competent jurisdiction, as opposed to gross negligence
or willful misconduct imputed to such Indemnified Person) in any way relating to
or arising or alleged to arise out of the execution, delivery, performance or
enforcement of this Agreement, the Master Lease or any other Related Document or
on or with respect to the Property or any component thereof, including without
limitation Claims in any way relating to or arising or alleged to arise out of
(a) the financing, refinancing, purchase, acceptance, rejection, ownership,
design, construction, refurbishment, development, delivery, acceptance,
nondelivery, leasing, subleasing, possession, use, occupancy, operation,
maintenance repair, modification, transportation, condition, sale, return,
repossession (whether by summary proceedings or otherwise), or any other
disposition of the Property or any part thereof, including without limitation
the acquisition, holding or disposition of any interest in the Property, Master
Lease or agreement comprising a portion of any thereof; (b) any latent or other
defects in the Property or any portion thereof whether or not discoverable by an
Indemnified Person or the Indemnity Provider; (c) a violation of Environmental
Requirements, Environmental Damages or other loss of or damage to any property
or the environment relating to the Property, the Master Lease, the Construction
Agency Agreement or the Indemnity Provider; (d) the Related Documents or any
transaction contemplated thereby; (e) any breach by the Indemnity Provider of
any of its representations or warranties under the Related Documents to which
the Indemnity Provider is a party or failure by the Indemnity Provider to
perform or observe any covenant or agreement to be performed by it under any of
the Related Documents; (f) the transactions contemplated hereby or by any other
Related Document, in respect of the application of Parts 4 and 5 of Subtitle B
of Title I of ERISA; and (g) personal injury, death or property damage,
including without limitation Claims based on strict or absolute liability in
tort. Notwithstanding anything to the contrary set forth herein, during the
Construction Period the Lessee shall not be obligated under any of the Related
Documents to indemnify any Person with respect to any cost arising from third
party damage claims other than those third party damage claims caused by or
resulting from the actions or failure to act by the Lessee or any of its agents,
employees, consultants, contractors or subcontractors (or any one else under the
control of the Lessee or such Persons), while the Lessee is in possession or
control of the Property.
45
Section 13.2. General Tax Indemnity.
(a) The Indemnity Provider shall pay and assume liability for, and does
hereby agree to indemnify, protect and defend the Property and Equipment and all
Indemnified Persons, and hold them harmless against, all Impositions on an After
Tax Basis, and all payments pursuant to the Related Documents shall be made free
and clear of and without deduction for any and all present and future
Impositions.
(b) Notwithstanding anything to the contrary in Section 13.2(a) hereof,
the following shall be excluded from the indemnity required by Section 13.2(a):
(i) Impositions (other than Impositions that are, or are in the
nature of, sales, use, rental, value added, transfer or property taxes)
that are imposed on a Indemnified Person (other than the Lessor, the
Owner Trustee and the Trust Estate) by the United States federal
government that are based on or measured by the net income (including
without limitation taxes based on capital gains and minimum taxes) of
such Person; provided, that this clause (i) shall not be interpreted to
prevent a payment from being made on an After Tax Basis if such payment
is otherwise required to be so made;
(ii) Impositions (other than Impositions that are, or are in the
nature of, sales, use, rental, value added, transfer or property taxes)
that are imposed on any Indemnified Person (other than the Lessor, the
Owner Trustee and the Trust Estate) by any state or local jurisdiction
or taxing authority within any state or local jurisdiction and that are
based upon or measured by the net income (including without limitation
taxes based on capital gains and minimum taxes) of such Person; provided
that such Impositions shall not be excluded under this subparagraph (ii)
to the extent such Impositions would have been imposed had the location,
possession or use of the Property in, the location or the operation of
the Lessee in, or the Lessee's making payments under the Related
Documents from, the jurisdiction imposing such Impositions been the sole
connection between such Indemnified Person and the jurisdiction imposing
such Impositions; provided, however, that the Indemnity Provider shall
not have any obligation to indemnify any Indemnified Person for any
unitary tax obligations of the Indemnified Person beyond that portion of
such tax obligation directly attributable to the payments received under
the Related Documents; provided, further, that this clause (ii) shall
not be interpreted to prevent a payment from being made on an After Tax
Basis if such payment is otherwise required to be so made; and
(iii) any Imposition to the extent it relates to any act, event
or omission that occurs after the termination of the Master Lease and
redelivery or sale of the Property in accordance with the terms of the
Master Lease (but not any Imposition that relates to such termination,
redelivery or sale, or to any period prior to such termination,
redelivery or sale); and
46
(c) (i) The Indemnity Provider shall pay or cause to be paid all
Impositions directly to the taxing authorities where feasible and otherwise to
the Indemnified Person, as appropriate, and the Indemnity Provider shall at its
own expense, upon such Indemnified Person's reasonable request, furnish to such
Indemnified Person copies of official receipts or other satisfactory proof
evidencing such payment.
(ii) In the case of Impositions which the Indemnity Provider
pays directly to the taxing authorities, the Indemnity Provider shall pay such
Impositions prior to the latest time permitted by the relevant taxing authority
for timely payment. In the case of Impositions for which the Indemnity Provider
reimburses an Indemnified Person, the Indemnity Provider shall do so within
thirty (30) days after receipt by the Indemnity Provider of demand by such
Indemnified Person describing in reasonable detail the nature of the Imposition
and the basis for the demand (including without limitation the computation of
the amount payable), accompanied by receipts or other reasonable evidence of
such demand. In the case of Impositions for which a contest is conducted, the
Indemnity Provider shall pay such Impositions or reimburse such Indemnified
Person for such Impositions, to the extent not previously paid or reimbursed
pursuant to Section 13.2(a), prior to the latest time permitted by the relevant
taxing authority for timely payment after conclusion of such contests.
(d) The Indemnity Provider shall be responsible for preparing and filing
any real and personal property or ad valorem tax returns in respect of the
Property and Equipment and any other tax returns required for the Owner Trustee
respecting the transactions described in the Related Documents. In case any
other report or tax return shall be required to be made with respect to any
obligations of the Indemnity Provider under or arising out of Section 13.2(a)
and of which the Indemnity Provider has knowledge or should have knowledge, the
Indemnity Provider, at its sole cost and expense, shall notify the relevant
Indemnified Person of such requirement and (except if such Indemnified Person
notifies the Indemnity Provider that such Indemnified Person intends to prepare
and file such report or return) (A) to the extent required or permitted by and
consistent with applicable legal requirements, make and file in the Indemnity
Provider's name such return, statement or report; and (B) in the case of any
other such return, statement or report required to be made in the name of such
Indemnified Person, advise such Indemnified Person of such fact and prepare such
return, statement or report for filing by such Indemnified Person or, where such
return, statement or report shall be required to reflect items in addition to
any obligations of the Indemnity Provider under or arising out of Section
13.2(a), provide such Indemnified Person at the Indemnity Provider's expense
with information sufficient to permit such return, statement or report to be
properly made with respect to any obligations of the Indemnity Provider under or
arising out of Section 13.2(a).
(e) As between the Indemnity Provider on one hand, and each Secured
Party on the other hand, the Indemnity Provider shall be responsible for, and
the Indemnity Provider shall indemnify and hold harmless each Secured Party
(without duplication of any indemnification required by Section 13.2(a)) on an
After Tax Basis against, any obligation
47
for United States or foreign withholding taxes or similar levies, imposts,
charges, fees, deductions or withholdings (collectively, "Withholdings") imposed
in respect of the interest payable on the Advances or Revolving Credit Advances
or the yield payable on the Certificateholder Advances or with respect to any
other payments under the Related Documents (all such payments being referred to
herein as "Exempt Payments" to be made without deduction, withholding or set
off) (and, if any Secured Party receives a demand for such payment from any
taxing authority or a Withholding is otherwise required with respect to any
Exempt Payment, the Indemnity Provider shall discharge such demand on behalf of
such Secured Party); provided, however, that the obligation of the Indemnity
Provider under this Section 13.2(e) shall not apply to:
(i) any Lender that has failed to comply with the requirements
of Section 11.13 of the Credit Agreement, or
(ii) any Certificateholder that has failed to comply with the
requirements of Section 11.15 of the Trust Agreement, or
(iii) any Revolving Credit Lender that has failed to comply with
the provisions Section 11.11 of the Revolving Credit Agreement;
if in any such case compliance would have avoided such Withholdings.
(f) The Indemnity Provider shall be entitled for a period of 30 days
from receipt of notice from such Indemnified Person (or such shorter period as
such Indemnified Person has notified the Indemnity Provider is required by law
or regulation for such Indemnified Person to commence such contest), to request
in writing that such Indemnified Person contest such Imposition, at the
Indemnity Provider's expense. If the Indemnity Provider shall have posted a bond
or other security satisfactory to the relevant Indemnified Person in the amount
of such Imposition and (x) such contest can be pursued in the name of the
Indemnity Provider and independently from any other proceeding involving an
Imposition liability of such Indemnified Person for which the Indemnity Provider
has not agreed to indemnify such Indemnified Person, (y) such contest must be
pursued in the name of such Indemnified Person, but can be pursued independently
from any other proceeding involving an Imposition liability of such Indemnified
Person for which the Indemnity Provider has not agreed to indemnify such
Indemnified Person, then the Indemnity Provider shall be permitted to control
the contest of such claim, provided that in the case of a contest described in
clause (y), if such Indemnified Person determines in good faith that such
contest by the Indemnity Provider could have a material adverse impact on the
business or operations of such Indemnified Person, such Indemnified Person may
elect to control or reassert control of the contest, and provided, that by
taking control of the contest, the Indemnity Provider acknowledges that it is
responsible for the Imposition ultimately determined to be due. In no event
shall the Indemnity Provider be permitted to contest (or such Indemnified Person
required to contest) any claim (A) if such Indemnified Person provides the
Indemnity Provider with a legal opinion of counsel reasonably acceptable to the
Indemnity Provider that such action, suit or proceeding
48
involves a risk of imposition of criminal liability or will involve a material
risk of the sale, forfeiture or loss of, of the creation of any Lien (other than
a Permitted Lien) on the Property, (B) if an Event of Default has occurred and
is continuing, (C) unless the Indemnity Provider shall have agreed to pay and
shall pay, to such Indemnified Person on demand all reasonable out-of-pocket
costs, losses and expenses that such Indemnified Person may incur in connection
with contesting such Imposition including all reasonable legal, accounting and
investigatory fees and disbursements (and any retainer or deposit in respect of
such costs, losses and expenses which such Indemnified Person deems to be
appropriate), or (D) if such contest shall involve the payment of the Imposition
prior to the contest, unless the Indemnity Provider shall have paid such
Imposition on behalf of the Indemnified Party at no cost to the Indemnified
Party and with no additional net after-tax costs to such Indemnified Person. In
addition no Indemnified Person shall be required to contest any Imposition in a
public forum (A) unless the amount of the Imposition exceeds $75,000 and (B)
unless the Indemnity Provider shall have provided to such Indemnified Person an
opinion of independent tax counsel selected by such Indemnified Person and
reasonably acceptable to the Indemnity Provider that a reasonable basis exists
to contest such claim. In no event shall an Indemnified Person be required to
appeal an adverse judicial determination. 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 Impositions (or claim for refund) but the decisions
regarding what actions to be taken shall be made by the controlling party in its
sole judgment. Each Indemnified Person shall, at the Indemnity Provider's
expense, supply the Indemnity Provider with such information and documents
reasonably requested by the Indemnity Provider as are necessary or advisable for
the Indemnity Provider to participate in any action, suit or proceeding.
(g) If any Indemnified Person receives any refunds or credits for any
Imposition that are attributable to amounts paid by an Indemnity Provider
pursuant to this Section 13.2, as determined by such Indemnified Person in its
good faith discretion, such Indemnified Person shall pay such amounts, without
interest, to the Indemnity Provider provided that if any such refund or credit
is subsequently disallowed, the Indemnity Provider shall return such amounts
(including any interest or penalties owed by the Indemnified Person) with
respect thereto, to such Indemnified Person.
Section 13.3. Proceedings in Respect of Claims.
(a) With respect to any amount that the Indemnity Provider is requested
by an Indemnified Person to pay by reason of Section 13.1 or Section 13.2, such
Indemnified Person shall, if so requested by the Indemnity Provider, submit such
additional information to the Indemnity Provider as the Indemnity Provider may
reasonably request and which is in the possession of such Indemnified Person to
substantiate properly the requested payment.
(b) In case any action, suit or proceeding shall be brought against any
Indemnified Person, such Indemnified Person shall notify the Indemnity Provider
of the commencement thereof, and the Indemnity Provider shall be entitled, at
the Indemnity
49
Provider's expense, to participate in a reasonable manner in, and, to the extent
that the Indemnity Provider desires to, assume and control the defense of such
action, suite or proceeding; provided, however, that the Indemnity Provider
shall have acknowledged in writing its obligation to fully indemnify such
Indemnified Person in respect of such action, suit or proceeding and shall have
posted a bond or other security satisfactory to the relevant Indemnified Person
in an amount equal to the maximum aggregate liability to which such Indemnified
Person may be subject; provided, further, that the Indemnity Provider shall not
be entitled to assume and control the defense of any such action, suit or
proceeding if and to the extent that (1) in the reasonably opinion of such
Indemnified Person (x) such action, suit or proceeding involves any risk of
imposition of criminal liability or will involve a 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 or (y) the control of such action, suit or
proceeding would involve an actual or potential conflict of interest, (2) such
proceeding involves claims not fully indemnified by the Indemnity Provider which
the Indemnity Provider and the Indemnified Persons have been unable to sever
from the indemnified claim(s), or (3) an Event of Default has occurred and is
continuing. In the event the Indemnity Provider assumes the defense of any such
action, suit or proceeding as described above, (i) the Indemnity Provider shall
keep such Indemnified Person fully apprised of the status of such action, suit
or proceeding and shall provide such Indemnified Person with all information
with respect to such action, suit or proceeding as such Indemnified Person shall
reasonably request, (ii) the Indemnified Person may participate in a reasonable
manner at its own expense and with its own counsel in any proceeding conducted
by the Indemnity Provider in accordance with the foregoing, and (iii) the
Indemnity Provider shall not enter into any settlement or other compromise with
respect to any claim against which an Indemnified Person is entitled to be
indemnified under Section 13.1 or Section 13.2 without the prior written consent
of such Indemnified Person, which consent shall not be unreasonably withheld in
the case of a money settlement not involving an admission of liability of such
Indemnified Person and resulting in the unconditional release and satisfaction
of all claims against and liability of such Indemnified Person.
(c) Each Indemnified Person shall at the expense of the Indemnity
Provider supply the Indemnity Provider with such information and documents
reasonably requested by the Indemnity Provider as are necessary or advisable for
the Indemnity Provider to participate in any action, suit or proceeding to the
extent permitted by Section 13.1 or Section 13.2.
(d) Upon payment in full of any claim by the Indemnity Provider pursuant
to Section 13.1 or Section 13.2 to or on behalf of an Indemnified Person and to
the extent permitted under applicable law, the Indemnity Provider, without any
further action, shall be subrogated to any and all claims that such Indemnified
Person may have relating thereto (other than claims in respect of insurance
policies maintained by such Indemnified Person at its own expense and claims
that are not independent or severed from claims not indemnified hereunder), and
such Indemnified Person 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
50
otherwise cooperate with the Indemnity Provider and give such further assurances
as are necessary or advisable to enable the Indemnity Provider to pursue such
claims.
(e) Any amount payable to an Indemnified Person pursuant to Section 13.1
or Section 13.2 shall be paid to such Indemnified Person promptly upon receipt
of a written demand therefor from such Indemnified Person, accompanied by a
written statement describing in reasonable detail the basis for such indemnity
and the computation of the amount so payable.
(f) Notwithstanding anything in this Article 13 to the contrary, no
Indemnified Person shall be obligated to provide any information or documents to
the Indemnity Provider (whether in connection with any action, suit or
proceeding or otherwise) if such information or documents consist of or contain
any confidential information or any information or documents which the
Indemnified Person believes, based upon the advice of counsel, could prejudice,
compromise or waive its attorney-client privilege, its right to assert the
attorney-work product doctrine or any other legal or equitable privilege.
Section 13.4. EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE, STRICT
LIABILITY, ETC. WITHOUT LIMITING THE GENERALITY OF THE INDEMNIFICATION
PROVISIONS OF ANY AND ALL OF THE RELATED DOCUMENTS, EACH PERSON PROVIDING
INDEMNIFICATION OF ANOTHER PERSON UNDER ANY RELATED DOCUMENT HEREBY FURTHER
EXPRESSLY RELEASES EACH BENEFICIARY OF ANY SUCH INDEMNIFICATION FROM ALL CLAIMS
FOR LOSS OR DAMAGE, DESCRIBED IN ANY RELATED DOCUMENT, CAUSED BY ANY ACT OR
OMISSION ON THE PART OF ANY SUCH BENEFICIARY ATTRIBUTABLE TO THE ORDINARY
NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OR STRICT LIABILITY OF ANY SUCH
BENEFICIARY, AND INDEMNIFIES, EXONERATES AND HOLDS EACH SUCH BENEFICIARY FREE
AND HARMLESS FROM AND AGAINST ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS,
CLAIMS, LOSSES, COSTS, LIABILITIES, DAMAGES AND EXPENSES (INCLUDING WITHOUT
LIMITATION ATTORNEY'S FEES AND EXPENSES), DESCRIBED ABOVE, INCURRED BY ANY SUCH
BENEFICIARY (IRRESPECTIVE OF WHETHER ANY SUCH BENEFICIARY IS A PARTY TO THE
ACTION FOR WHICH INDEMNIFICATION UNDER THIS AGREEMENT OR ANY OTHER RELATED
DOCUMENT IS SOUGHT) ATTRIBUTABLE TO THE ORDINARY NEGLIGENCE (WHETHER SOLE OR
CONTRIBUTORY) OR STRICT LIABILITY OF ANY SUCH BENEFICIARY.
ARTICLE 14. GENERAL PROVISIONS
Section 14.1. Assignment. (a) No Credit Party may assign its rights or
obligations under this Agreement or any Related Documents without the prior
written consent of the Majority Secured Parties, which consent may be given or
withheld in the
51
sole and absolute discretion of the Secured Parties; provided, however, that the
Parent Guarantor may assign its rights and delegate its obligations under this
Agreement and the Related Documents to any Person that is the surviving
corporation of a merger or consolidation permitted under Section 14(j) of the
Parent Guaranty.
(b) Any Lender, Certificateholder or Revolving Credit Lender may assign
all or a part of its rights and obligations under this Agreement and may grant,
on a participating basis but not as a party to this Agreement, a participation
or participations in all or any part of such Secured Party's rights and benefits
under this Agreement to the extent permitted by and in accordance with, (i) in
the case of the Lenders, the provisions of the Credit Agreement, (ii) in the
case of the Certificateholders, the provisions of the Trust Agreement, and (iii)
in the case of the Revolving Credit Lenders, the provisions of the Revolving
Credit Agreement.
Section 14.2. Amendments and Waivers. Any provision of this Agreement or
any Related Document may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by each of the Credit Parties and the
Majority Secured Parties (and, if the rights, obligations or duties of the Trust
Company, Collateral Agent, Agent or Syndication Agent are affected thereby, by
the Trust Company, Collateral Agent, Agent or Syndication Agent, respectively);
provided, further, that no such amendment or waiver shall, unless approved by
all the Revolving Credit Lenders, Lenders and Certificateholders, (a) change the
definition of Majority Secured Parties, (b) amend this Section 14.2, (c) release
all or any substantial portion of the Collateral, (d) reduce the amount or
postpone the time fixed for the payment of any amount payable under the
Construction Agency Agreement or the Master Lease (including, without
limitation, purchase price, rent, additional rent and all other amounts of any
kind whatsoever) or (e) impair the absolute and unconditional nature of the
Construction Agent's obligations under the Construction Agency Agreement or the
Lessee's obligations under the Master Lease; provided, further, however, that no
such amendment or waiver shall, unless approved by each Secured Party directly
affected thereby, (a) increase the amount of any obligation of such Secured
Party to make Advances, Certificateholder Advances or Revolving Credit Advances,
as the case may be, or subject such Secured Party to any additional obligation,
(b) reduce the principal of or rate of interest on any Advance or Revolving
Credit Advance or the amount of or the rate of yield on any Certificateholder
Advance or the rate at which any fees are payable to any such Secured Party
under any Related Document, (c) postpone the date fixed for any payment of
principal of or interest on any Advance or Revolving Credit Advance or the
amount of or yield on any Certificateholder Advance, or the amount of any fees
payable to such Secured Party under any Related Document; provided, further,
however, that the Lessor and Assignee (as such term is used in the Master Lease)
may not elect to proceed with any sale of the Property and Equipment pursuant to
Section 12(a) of the Master Lease resulting in Cash Proceeds less than the
Termination Value plus amounts due under paragraph (c) of Section 12 of the
Master Lease without the prior written consent of each of the Term Note B
Lenders and each of the Certificateholders. Any amendment or waiver made
pursuant to and in
52
accordance with this Section 14.2 shall be binding upon the Secured Parties upon
delivery of an executed or conformed copy of such waiver to the Secured Parties.
Section 14.3. Notices. All notices, requests, demands and other
communications to any party hereunder shall be in writing (including telex,
telecopier or similar writing) and shall be given to such party at its address
or telecopier number set forth below or such other address, telex or telecopier
number as such party may hereafter specify by notice to the other parties listed
below. Any notice, request, demand or other communication sent by telex or
telecopier shall be promptly confirmed with a copy of such notice sent by
courier or by first class mail.
If to the Collateral Agent,ING
(U.S.) Capital LLC Agent or
Syndication Agent: ▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ Attention: Chief Credit
Officer Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With copies of each such notice to be simultaneously given, delivered or served
to the following addresses:
ING (U.S.) Capital LLC
Atlanta ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
King & Spalding
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to a Lender: At the address set
forth on the signature pages of the
Credit Agreement or in the
assignment agreement pursuant to
which such Lender became a party to
the Credit Agreement and this
Agreement
If to a Certificateholder: At the address set forth on the
signature pages of the Trust
Agreement or in the assignment
agreement pursuant to which such
53
Certificateholder became a party to
the Trust Agreement and this
Agreement
If to a Revolving Credit At the address set forth on the
signature pages of the Lender:
Revolving Credit Agreement or in the
assignment agreement pursuant to
which such Revolving Credit Lender
became a party to the Revolving
Credit Agreement and this Agreement
If to the Owner Trustee: First Security Bank, National
Association
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Parent Guarantor: MiniMed Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy of each such notice to be simultaneously given, delivered or served
to the following served to the following address:
▇▇▇▇▇▇▇ Phleger & ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Lessee or other MiniMed Inc.
Credit Party: ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
54
With a copy of each such notice to be simultaneously given, delivered or served
to the following served to the following address:
▇▇▇▇▇▇▇ Phleger & ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Each such notice, request or other communication shall be effective when
actually received.
Section 14.4 Cumulative Rights; No Waiver. The rights, powers and
remedies of the Secured Parties hereunder are cumulative and in addition to all
rights, powers and remedies provided under any and all agreements between any
Credit Party and any Secured Party relating hereto, at law, in equity or
otherwise. Neither any delay nor any omission by any Secured Party to exercise
any right, power or remedy shall operate as a waiver thereof, nor shall a single
or partial exercise thereof preclude any other or further exercise thereof or
any exercise of any other right, power or remedy.
Section 14.5 Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto on separate counterparts, each
of which counterparts, when executed and delivered, shall be deemed an original
and all of which counterparts, taken together, shall constitute one and the same
Agreement.
Section 14.6 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 14.7 Headings. The Article and Section headings in this
Agreement are for convenience of reference only and shall not affect the
interpretation hereof.
Section 14.8. Termination by Parent Guarantor. The Parent Guarantor may
terminate this Agreement upon not less than 30 days' prior written notice to the
Collateral Agent at any time; provided, however, that on the date specified by
the Parent Guarantor for termination (a) there shall not be any Obligations then
outstanding and (b) all amounts then due and payable to the Secured Parties
under this Agreement or the Related Documents shall have been paid in full. No
termination of this Agreement, for whatever reason, shall affect the obligations
and liabilities of the Credit Parties hereunder which arose prior to such
termination or any Secured Party's rights, powers and remedies with respect
thereto. Upon any such termination all Commitments of the Secured Parties under
the Related Documents shall terminate and any obligation of any Secured Party to
make Advances, Certificateholder Advances or Revolving Credit Advances shall
cease.
55
Section 14.9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 14.10. WAIVER OF JURY TRIAL. THE PARTIES HERETO KNOWINGLY,
VOLUNTARILY AND EXPRESSLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ENFORCING OR DEFENDING ANY RIGHTS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE BORROWER
ACKNOWLEDGES THAT THE PROVISIONS OF THIS SECTION 14.10 HAVE BEEN BARGAINED FOR
AND THAT IT HAS BEEN REPRESENTED BY COUNSEL IN CONNECTION THEREWITH.
Section 14.11. Survival of Agreements. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the Related
Documents, and the parties' obligations under any and all thereof, shall survive
the execution and delivery of this Agreement, the transfer of the Property to
the Owner Trustee, the construction of the Improvements on and the installation
of Equipment at the Property, Substantial Completion, any disposition of any
interest of the Owner Trustee in the Property or the Equipment or any interest
of the Certificateholders in the Trust Estate, or any disposition of any
interest of the Lenders in the Notes or of the Revolving Credit
Lenders in the Revolving Credit Notes, 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 Related Documents. Except as otherwise expressly set forth herein
or in other Related Documents, the indemnities of the parties provided for in
the Related Documents shall survive the repayment of the Secured Obligations and
the expiration or termination of any of the Related Documents.
Section 14.12. Parties in Interest. Except as expressly provided herein,
none of the provisions of this Agreement are intended for the benefit of any
Person except the parties hereto.
Section 14.13. Liability Limited. Each of the Secured Parties and each
of the Credit Parties acknowledge and agree that the Owner Trustee is entering
into this Agreement and the other Related Documents to which it is a party
(other than the Trust Agreement and except to the extent otherwise expressly
provided in this Agreement or any other Related Document), solely in its
capacity as trustee under the Trust Agreement and not in its individual
capacity, and that the Trust Company shall not be liable or accountable under
any circumstances whatsoever in its individual capacity for or on account of any
statements, representations, warranties, covenants or obligations stated to be
those of the Owner Trustee, except for its own gross negligence or willful
misconduct and as otherwise expressly provided herein or in the other Related
Documents.
56
Section 14.14. 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 Agreement, the other Related
Documents and the transactions contemplated hereby and thereby (including
without limitation the preparation, execution and filing of any and all Uniform
Commercial Code financing statements, filings of Security Documents and other
filings or registrations which the parties hereto may from time to time request
to be filed or effected). The Lessee, at its own expense and without need of any
prior request from any other party, shall take such action as may be necessary
(including without limitation any action specified in the preceding sentence),
or as so requested by the Owner Trustee or the Collateral Agent, in order to
maintain and protect all security interests provided for hereunder or under any
other Related Document. In addition, in connection with the sale or other
disposition of the Property and Equipment or any portion thereof, the Lessee
agrees to execute such instruments of conveyance as may be reasonably required
in connection therewith.
Section 14.15. Financial Reporting/Tax Characterization. Each of the
Credit Parties agrees to obtain advice from, and to consult and rely exclusively
on, its own accountants and tax counsel regarding the financial reporting
treatment and the tax characterization of the transactions described in the
Related Documents. Each of the Credit Parties further acknowledges and agrees
that Lessee shall not rely upon any statement of any Secured Party or any of its
respective Affiliates or Subsidiaries regarding any such financial reporting
treatment or tax characterization and that no Secured Party has made any
representation as to such financial reporting treatment or tax characterization.
Section 14.16. Confidentiality. Each of the Certificateholders, Lenders,
Revolving Credit Lenders, Agent, Syndication Agent, Collateral Agent and Lessor
shall hold all non-public, proprietary or confidential information (which has
been identified as such by MiniMed) obtained pursuant to the requirements of
this Agreement or any of the other Related Documents in confidence in accordance
with its reasonable and customary procedures for handling confidential
information of this nature and in accordance with safe and sound lending
practices; provided however, that any Certificateholder, Lender, Revolving
Credit Lender, the Agent, the Syndication Agent, the Collateral Agent and the
Lessor may make disclosure of any such information to its examiners, Affiliates,
outside auditors, counsel, consultants, appraisers and other professional
advisors in connection with this Agreement and the other Related Documents or as
reasonably required by any proposed transferee or participant in connection with
a contemplated transfer of any Certificate, Note, Revolving Credit Note or
participation therein or as required or requested by any Governmental Authority
or representative thereof or in connection with the enforcement of this
Agreement or any of the other Related Documents or pursuant to legal process;
provided, however, that any such proposed transferee or participant shall have
agreed in writing for the benefit of MiniMed to be bound by the terms of this
Section 14.16.
57
[signature pages follow]
58
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.
CONSTRUCTION AGENT
AND LESSEE: MINIMED DEVELOPMENT CORP., as the
Construction Agent and as the Lessee
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
GUARANTORS: MINIMED INC, as the
Parent Guarantor
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
EACH OF THE SUBSIDIARIES OF THE
PARENT GUARANTOR LISTED ON
SCHEDULE 1 HERETO, as the Subsidiary
Guarantors
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
59
OWNER TRUSTEE AND
LESSOR: FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually,
except as expressly stated herein,
but solely as the Owner Trustee
under the MiniMed Real Estate Trust
1999-1
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
SYNDICATION AGENT: ING BARING ▇▇▇▇▇▇ ▇▇▇▇ LLC, as the
Syndication Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
COLLATERAL AGENT, AGENT, REVOLVING CREDIT LENDER, LENDER AND CERTIFICATEHOLDER
ING (U.S.) CAPITAL LLC, as Collateral Agent, Agent, Revolving Credit Lender,
Lender and Certificateholder
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
60
CIBC, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Agent
THE BANK OF NOVA SCOTIA
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇▇
Title: Relationship Manager
▇▇▇▇▇▇▇ ▇▇▇▇▇ BUSINESS FINANCIAL
SERVICES INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Senior Credit Officer
SANWA BANK CALIFORNIA
By: /s/ ▇▇▇ ▇. ▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇
Title: Vice President
61
COMERICA WEST INCORPORATED
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
CITY NATIONAL BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
SCOTIA BANK, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Relationship Manager