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EXHIBIT 4-M
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PARTICIPATION AGREEMENT
dated as of April 30, 1998
among
MARYGREEN, LLC,
as Lessee
TRUSERV CORPORATION,
as Lessee Agent, Construction Agent and Guarantor,
TRUSERV 1998 TRUST,
as Lessor Trust
WILMINGTON TRUST COMPANY,
individually and as Owner Trustee under
TRUSERV 1998 TRUST,
BMO LEASING (U.S.), INC.,
as Agent Certificate Holder and Certificate Holder,
as Certificate Holder
BANK OF MONTREAL,
as Lender,
and
BANK OF MONTREAL,
as Administrative Agent and Arranger
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TABLE OF CONTENTS
SECTION HEADING PAGE
Parties.......................................................................1
Recitals......................................................................1
ARTICLE I DEFINITIONS; INTERPRETATION.............................2
ARTICLE II DOCUMENTATION DATE......................................2
Section 2.1. Documentation Date......................................2
ARTICLE III FUNDING OF ADVANCES.....................................5
Section 3.1. Advances................................................5
Section 3.2. Certificate Holders'Commitments.........................6
Section 3.3. Lenders'Commitments.....................................6
Section 3.4. Procedures for Advances.................................6
Section 3.5. Interest Rate; Yield Rate...............................7
Section 3.6. Interest Period Selection/Continuation/
Conversion Elections..................................7
Section 3.7. Voluntary Commitment Terminations.......................8
ARTICLE IV YIELD; INTEREST; FEES...................................8
Section 4.1. Yield...................................................8
Section 4.2. Interest on Loans.......................................9
Section 4.3. Prepayments.............................................9
Section 4.4. Fees....................................................9
Section 4.5. Place and Manner of Payments...........................10
Section 4.6. Pro Rata Treatment.....................................11
Section 4.7. Sharing of Payments....................................11
ARTICLE V CERTAIN INTENTIONS OF THE PARTIES......................12
Section 5.1. Nature of Transaction..................................12
Section 5.2. Amounts Due Under the Lease............................12
ARTICLE VI CONDITIONS PRECEDENT: ACQUISITION DATE;
FUNDING DATES..........................................13
Section 6.1. Acquisition Date.......................................13
Section 6.2. Funding Dates..........................................17
Section 6.3. Conditions to Completion Date..........................19
ARTICLE VII DISTRIBUTIONS..........................................19
Section 7.1. Basic Rent.............................................19
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Section 7.2. Purchase Payments by the Lessee Agent and
the Lessees..........................................19
Section 7.3. Payment of Loan Balance................................20
Section 7.4. Sales Proceeds of Remarketing of the Property..........20
Section 7.5. Supplemental Rent......................................21
Section 7.6. Distribution of Payments after Lease Event
of Default...........................................21
Section 7.7. Other Payments.........................................23
Section 7.8. Casualty and Condemnation Amounts......................24
Section 7.9. Order of Application...................................24
Section 7.10. Payments to Account....................................24
ARTICLE VIII REPRESENTATIONS........................................24
Section 8.1. Representations of the Participants....................24
Section 8.2. Representations of the Lessee and the Guarantor........25
Section 8.3. Representations with Respect to each Funding
Date and the Acquisition Date........................31
Section 8.4. Warranties and Representations of the Owner Trustee....32
Section 8.5. Warranties and Representations of the Lessor Trust.....33
ARTICLE IX PAYMENT OF CERTAIN EXPENSES............................34
Section 9.1. Transaction Expenses...................................34
Section 9.2. Brokers'Fees and Stamp Taxes...........................35
Section 9.3. Loan Agreement and Related Obligations.................35
ARTICLE X OTHER COVENANTS AND AGREEMENTS.........................35
Section 10.1. Affirmative Covenants of the Guarantor.................35
Section 10.2. Negative Covenants of the Guarantor....................40
Section 10.3. Affirmative Covenant of the Agent Certificate Holder...44
Section 10.4. Covenants of the Owner Trustee and Lessor Trust........44
ARTICLE XI RENEWALS; REPLACEMENT OF PARTICIPANTS..................46
Section 11.1. Extensions of Maturity Date and Expiration Date;
Replacement of Participants..........................46
Section 11.2. Replacement of Defaulting Participant..................48
ARTICLE XII TRANSFERS OF PARTICIPANTS'INTERESTS....................48
Section 12.1. Assignments............................................48
Section 12.2. Participations.........................................48
Section 12.3. Withholding Taxes; Disclosure of
Information; Pledge Under Regulation A...............49
ARTICLE XIII INDEMNIFICATION........................................50
Section 13.1. General Indemnification................................50
Section 13.2. End of Term Indemnity..................................52
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Section 13.3. Environmental Indemnity................................53
Section 13.4. Proceedings in Respect of Claims.......................54
Section 13.5. General Tax Indemnity..................................55
Section 13.6. Indemnity Payments in Addition to Lease Obligations....58
Section 13.7. Eurodollar Rate Lending Unlawful.......................58
Section 13.8. Deposits Unavailable...................................59
Section 13.9. Increased Costs, etc...................................59
Section 13.10. Funding Losses.........................................61
Section 13.11. Capital Adequacy.......................................61
ARTICLE XIV THE AGENT CERTIFICATE HOLDER...........................62
Section 14.1. Appointment and Authorization..........................62
Section 14.2. Delegation of Duties...................................63
Section 14.3. Agent Certificate Holder and Affiliates................63
Section 14.4. Action by Agent Certificate Holder.....................63
Section 14.5. Consultation with Experts..............................63
Section 14.6. Exculpatory Provisions.................................63
Section 14.7. Reliance on Communications.............................63
Section 14.8. Notice of Default......................................64
Section 14.9. Non-Reliance on Agent Certificate Holder
and Other Participants...............................64
Section 14.10. Indemnification........................................65
Section 14.11. Failure to Act.........................................65
Section 14.12. Resignation and Removal................................65
Section 14.13. Distributions..........................................66
Section 14.14. Rights of Lessee Agent.................................66
ARTICLE XV MISCELLANEOUS..........................................66
Section 15.1. Survival of Agreements.................................66
Section 15.2. No Broker, Etc.........................................67
Section 15.3. Notices................................................67
Section 15.4. Counterparts...........................................67
Section 15.5. Amendments, Etc........................................67
Section 15.6. Headings, Etc..........................................68
Section 15.7. Parties in Interest....................................68
Section 15.8. GOVERNING LAW..........................................69
Section 15.9. Severability...........................................69
Section 15.10. Liability Limited......................................69
Section 15.11. Further Assurances.....................................69
Section 15.12. SUBMISSION TO JURISDICTION.............................70
Section 15.13. Setoff.................................................70
Section 15.14. WAIVER OF JURY TRIAL...................................70
Section 15.15. No Participant Responsible for Other Participants......70
Section 15.16. Recourse during Construction...........................71
Section 15.17. No Recourse to Owner Trustee; Agent Certificate
Holder; Certificate Holders..........................71
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Appendix A -- Definitions
Schedule I -- Commitments
Schedule II -- Notice Information, Wire Instructions and
Funding Offices
Schedule III -- Commitment Fees; Certificate Holder Margin and
Loan Margin
Schedule IV -- Schedule of Restrictive Agreements
Schedule V -- Schedule of Liens
Schedule VI -- Schedule of Investments
Schedule VII -- Form of Subordinated Note
Exhibit A-1 -- Form of Legal Opinion of In-House Counsel
to Lessee Agent
Exhibit A-2 -- Form of Legal Opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇, LLP
Exhibit A-3 -- Form of Legal Opinion of Morris, James,
Hitchens & ▇▇▇▇▇▇▇▇
Exhibit B -- Form of Funding Request
Exhibit C -- Form of Interest Period
Selection/Continuation/Conversion Notice
Exhibit D-1 -- Form of Officer's Certificate - Lessee/Guarantor
Exhibit D-2 -- Form of Secretary's Certificate - Lessee/Guarantor
Exhibit D-3 -- Form of Officer's Certificate - Owner Trustee
Exhibit D-4 -- Form of Secretary's Certificate- Owner Trustee
Exhibit D-5 -- Form of Responsible Officer's Certificate -
Lessee/Guarantor
Exhibit E -- Intentionally Omitted
Exhibit F -- Form of Assignment Agreement
Exhibit G -- Form of Local Counsel Opinion
Exhibit H -- Form of Completion Certificate
Exhibit I -- Form of Construction Agency Agreement
Exhibit J -- Form of Construction Agency Agreement Assignment
Exhibit K -- Form of Construction Documents Assignment
Exhibit L -- Intentionally Omitted
Exhibit M -- Form of Compliance Certificate
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT (this "Participation Agreement"), dated as
of April 30, 1998, is entered into by and among MARYGREEN, LLC, a Delaware
limited liability company, as the Lessee (together with any permitted successors
and assigns, the "Lessee"); TRUSERV CORPORATION, a Delaware corporation, as the
Lessee Agent, Construction Agent and Guarantor (in its capacity as Lessee Agent,
the "Lessee Agent"; in its capacity as Construction Agent, the "Construction
Agent"; and in its capacity as Guarantor, the "Guarantor"); TRUSERV 1998 TRUST,
a Delaware business trust, as the Lessor Trust (the "Lessor Trust"); WILMINGTON
TRUST COMPANY, a Delaware banking corporation, individually as set forth herein
and as Trustee under the Lessor Trust ("Owner Trustee"); BMO LEASING (U.S.),
INC., a Delaware corporation, as a Certificate Holder (together with any
permitted successors and assigns thereto, each a "Certificate Holder" and
collectively the "Certificate Holders"); BMO LEASING (U.S.), INC., as Agent
Certificate Holder for the Certificate Holders (in such capacity, the "Agent
Certificate Holder"); BANK OF MONTREAL, a Canadian banking organization ("BMO"),
and the other various financial institutions as are or may from time to time
become lenders (the "Lenders") under the Loan Agreement; and BMO as
Administrative Agent (in such capacity, the "Administrative Agent") for the
Lenders and as Arranger (in such capacity, the "Arranger").
WITNESSETH:
WHEREAS, on the Acquisition Date, the Lessor Trust will either (a)
purchase from one or more third parties designated by the Construction Agent, or
(b) lease pursuant to a ground lease, parcels of Land, together with any
Improvements thereon;
WHEREAS, the Lessee Agent, as Construction Agent will construct
Improvements or additional Improvements on such Land which will be the property
of the Lessor Trust and will become part of the Property;
WHEREAS, the Lessor Trust desires to lease the respective Property to
the Lessee, and the Lessee desires to lease the Property from the Lessor Trust;
WHEREAS, the Certificate Holders are willing to provide a portion of
the funding of the costs of the acquisition of the Land, all Improvements
thereon and the construction of additional Improvements;
WHEREAS, the Lenders are willing to provide the remaining portion of
the funding of the costs of the acquisition of the Land, all Improvements
thereon and the construction of additional Improvements; and
WHEREAS, to secure such financing (a) the Certificate Holders will have
the benefit of (i) the Guaranty from the Guarantor, and (ii) a first priority
Lien on the Property and (b) the Lenders will have the benefit of (i) the
Guaranty from the Guarantor, (ii) a Lien on the Agent Certificate Holder's
right, title and interest in the Property, and (iii) an assignment of certain of
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the Agent Certificate Holder's rights against the Lessee under the Lease and
against the Construction Agent under the Construction Agency Agreement;
NOW THEREFORE, in consideration of the mutual agreements contained in
this Participation Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Unless the context shall otherwise require, capitalized terms used and
not defined herein shall have the meanings assigned thereto in Appendix A hereto
for all purposes hereof (as such Appendix A may be amended, supplemented,
amended and restated or otherwise modified from time to time, "Appendix A to
this Participation Agreement"); and the rules of interpretation set forth in
Appendix A to this Participation Agreement shall apply to this Participation
Agreement.
ARTICLE II
DOCUMENTATION DATE
Section 2.1. Documentation Date. The Documentation Date (the
"Documentation Date") shall be deemed to have occurred and all rights and
obligations of the parties to the Operative Documents (each subject to any
conditions specified therein) shall be in effect, upon satisfaction or waiver of
each of the following conditions precedent:
(a) Participation Agreement. This Participation Agreement
shall have been duly authorized, executed and delivered by the
parties hereto.
(b) Master Lease. The Master Lease shall have been duly
authorized, executed and delivered by the parties thereto.
(c) Construction Agency Agreement. The Construction Agency
Agreement shall have been duly authorized, executed and delivered by
the parties thereto.
(d) Construction Agency Agreement Assignment; Construction
Documents Assignment. The Construction Agency Agreement Assignment and
the Construction Documents Assignment shall have been duly authorized,
executed and delivered by the parties thereto.
(e) Loan Agreement and Notes. The Loan Agreement and each
Lender's Note shall have been duly authorized, executed and delivered
by the parties thereto.
(f) Assignment of Lease and Rent. The Assignment of Lease and
Rent shall have been duly authorized, executed and delivered by the
Lessor Trust, as assignor, to the Administrative Agent, as assignee,
and the Assignment of Lease and Rent shall have been consented to and
acknowledged by the Lessee.
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(g) Guaranty. The Guaranty shall have been duly authorized,
executed and delivered by the Guarantor.
(h) Trust Agreement. The Trust Agreement and each Certificate
shall have been duly authorized, executed and delivered by the parties
thereto.
(i) Fees. The Administrative Agent and each Participant, as
applicable, shall have received all fees then due and payable pursuant
to Section 4.4.
(j) Certain Transaction Expenses. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, as
counsel for the Agent Certificate Holder and Administrative Agent,
shall have received, to the extent then invoiced, payment in full in
cash of all Transaction Expenses payable to such counsel pursuant to
Section 9.1.
(k) Corporate Documents; Certificates; Acceptance Letter. The
Lessee and the Guarantor shall have delivered, or shall each have
caused to be delivered, to the Administrative Agent, the Agent
Certificate Holder, each Lender and each Certificate Holder the
following:
(i) Articles of Incorporation; Articles of
Organization. Copies of its articles of incorporation or
articles of organization, as the case may be, certified to
be true and complete as of a recent date by the appropriate
governmental authority of the jurisdiction of their
respective incorporation or existence.
(ii) Resolutions. Copies of resolutions or other
authority documentation of Guarantor's Board of Directors
and the Lessee's managing member(s) approving and adopting
the Operative Documents, the transactions contemplated
therein and authorizing execution and delivery thereof,
certified by its secretary or assistant secretary or, as the
case may be, its manager as of the Documentation Date to be
true and correct and in full force and effect as of such
date and evidence of corporate authority of the Guarantor
and the Lessee with respect to the Operative Documents and
the transactions contemplated therein.
(iii) Bylaws. A copy of Guarantor's bylaws certified
by its secretary or assistant secretary and a copy of the
Lessee's operating agreement certified by its manager as of
the Documentation Date to be true and correct and in full
force and effect as of such date.
(iv) Good Standing. Copies of certificates of good
standing, existence or its equivalent, certified as of a
recent date by the appropriate governmental authorities of
the jurisdiction of its incorporation or existence, for
Lessee and Guarantor.
(v) Opinions of Counsel. Opinions of in-house counsel
for Lessee and Guarantor and ▇▇▇▇▇▇▇, Baetjer and ▇▇▇▇▇▇,
LLP, addressed to the Administrative Agent, the Agent
Certificate Holder, the Lessor Trust, the Owner
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Trustee, each of the Lenders and each of the Certificate
Holders, covering the matters set forth respectively in
Exhibits A-1 and A-2.
(vi) Officer's and Secretary's Certificate. An Officer's
Certificate (or, as the case may be, Member's Certificate)
substantially in the form of Exhibit D-1, dated the
Documentation Date and Secretary's Certificate (or, as the
case may be, Member's Certificate) substantially in the form
of Exhibit D-2, dated the Documentation Date.
(m) Corporate Documents; Certificates; Acceptance Letter. The
Owner Trustee shall have delivered, or shall have caused to be
delivered to each of the other parties hereto the following:
(i) Articles of Incorporation. Copies of its articles
of incorporation or charter documents, certified to be true
and complete as of a recent date by the appropriate
governmental authority of the state of its incorporation.
(ii) Resolutions. Copies of resolutions of its Board
of Directors approving and adopting the Operative Documents,
the transactions contemplated therein and authorizing
execution and delivery thereof, certified by its secretary
or assistant secretary as of the Documentation Date to be
true and correct and in full force and effect as of such
date.
(iii) Bylaws. A copy of its bylaws certified by its
secretary or assistant secretary as of the Documentation
Date to be true and correct and in full force and effect as
of such date.
(iv) Good Standing. Copies of certificates of good
standing, existence or its equivalent, certified as of a
recent date by the appropriate governmental authorities of
the state of its incorporation.
(v) Opinions of Counsel. An opinion of Morris,
James, Hitchens & ▇▇▇▇▇▇▇▇, counsel for the Owner Trustee and
the Lessor Trust addressed to each of the parties hereto,
covering the matters set forth in Exhibit A-3.
(vi) Officer's and Secretary's Certificate. An
Officer's Certificate substantially in the form of Exhibit
D-3, dated the Documentation Date and Secretary's
Certificate substantially in the form of Exhibit D-4, dated
the Documentation Date.
(vii) Certificate of Trust. The Certificate of Trust,
certified to be true and complete as of a recent date by the
appropriate governmental authority of the State of Delaware.
(n) Representations and Warranties. On the Documentation
Date, the representations and warranties of each of the parties hereto
contained in Sections 8.1, 8.2,
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8.4 and 8.5 shall be true and correct in all material respects as
though made on and as of such date, except to the extent such
representations or warranties relate solely to an earlier date, in
which case such representations and warranties shall have been true
and correct in all material respects on and as of such earlier date.
(o) No Default. No Default or Event of Default shall have
occurred and be continuing on the Documentation Date unless such
Default or Event of Default shall have been waived in accordance with
the Operative Documents.
(p) Governmental Approvals. All Governmental Actions required
by any Requirement of Law for the purpose of authorizing Lessee,
Guarantor, the Agent Certificate Holder, Owner Trustee, Lessor Trust,
the Administrative Agent and each Participant to enter into the
Operative Documents shall have been obtained or made and be in full
force and effect.
All documents and instruments required to be delivered pursuant to this Section
2.1 shall be delivered at the offices of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other location as may be determined
by the Agent Certificate Holder, the Administrative Agent and the Lessee Agent,
and in such numbers as shall be reasonably requested by the Administrative
Agent.
ARTICLE III
FUNDING OF ADVANCES
Section 3.1. Advances. Subject to the conditions and terms hereof,
the Agent Certificate Holder and Lessor Trust shall take the following actions
on the Acquisition Date at the written request of the Lessee Agent with respect
to the Property:
(a) the Agent Certificate Holder shall make Advances (out of
funds provided by the Certificate Holders and the Lenders) for the
purpose of financing the acquisition of the Land or a leasehold
interest therein (and any existing Improvements thereon) and the
Construction of Improvements thereon and the proceeds of such Advances
shall be made directly to the Construction Agent or to such parties
designated in writing by the Construction Agent to the Agent
Certificate Holder;
(b) the Lessor Trust shall acquire the Land or leasehold
interest therein, and any existing improvements thereon (using funds
provided by the Certificate Holders and the Lenders); and
(c) the Lessor Trust shall lease (or in the case of
leaseholds, sublease) the Land and Improvements to the Lessee under the
Master Lease and the Lease Supplement.
Notwithstanding any other provision hereof, the Agent Certificate Holder shall
not be obligated to make any advance with respect to any Property if, after
giving effect thereto, (i) the aggregate outstanding amounts of the Loans and
the Certificate Holder Amounts would exceed the Aggregate Commitment Amount, or
(ii) the Property Balance would exceed the lesser of
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(x) 110% of the Estimated Improvements Costs plus Land Acquisition Cost and (y)
the Fair Market Sales Value of the Property as set forth in the As-Built
Appraisal thereof delivered pursuant to Section 6.2(b) hereof.
Section 3.2. Certificate Holders' Commitments. Subject to the
conditions and terms hereof, each of the Certificate Holders shall make
available to the Agent Certificate Holder at the request of the Construction
Agent from time to time during the Commitment Period on any Funding Date or on
the Acquisition Date, as appropriate, an amount (relative to such Certificate
Holder, a "Certificate Holder Amount") in immediately available funds equal to
such Certificate Holder's Commitment Percentage of the amount of the Advance
being funded on such Funding Date or Acquisition Date. Notwithstanding any other
provision hereof, no Certificate Holder shall be obligated to make available any
Certificate Holder Amount if, after giving effect to the proposed Certificate
Holder Amount, the outstanding aggregate amount of the Certificate Holder Amount
of such Certificate Holder would exceed such Certificate Holder's Commitment.
Section 3.3. Lenders' Commitments. Subject to the conditions and
terms hereof, each of the Lenders shall make Loans to the Agent Certificate
Holder at the request of the Construction Agent from time to time during the
Commitment Period on any Funding Date or Acquisition Date, as appropriate, an
amount (relative to such Lender, a "Loan") in immediately available funds equal
to such Lender's Commitment Percentage of the amount of the Advance being funded
on such Funding Date or Acquisition Date. Notwithstanding any other provision
hereof, no Lender shall be obligated to make any Loan if, after giving effect to
the proposed Loan, the outstanding aggregate amount of such Lender's Loans would
exceed such Lender's Commitment.
Section 3.4. Procedures for Advances. (a) With respect to each
Advance, the Construction Agent shall give the Agent Certificate Holder and the
Administrative Agent prior written notice pursuant to a Funding Request
substantially in the form of Exhibit B (a "Funding Request"), which Funding
Request shall be delivered not later than 9:00 a.m. (Chicago time), three (3)
Business Days prior to the proposed Acquisition Date or the proposed Funding
Date, specifying: (i) the proposed Acquisition Date or Funding Date, (ii) the
amount of Advance requested, (iii) whether, such Funding Date will also be an
Acquisition Date, and (iv) the requested Interest Period. With respect to any
Funding Request related to the acquisition of the Property (or leasehold
interest therein), in addition to the foregoing, the Construction Agent shall
also specify: (i) the Property to be acquired or leased, (ii) the seller or
ground lessor of the Property and the related Land Acquisition Cost, and (iii)
the Estimated Improvement Costs. Such Loans and Certificate Holder Amounts made
with respect to each Advance shall be Base Rate Loans/Certificate Holder
Amounts, and the duration of the initial Interest Period with respect to such
Advance shall begin on the proposed Acquisition Date or Funding Date and end on
the next succeeding Scheduled Payment Date (the "Initial Interest Period").
Subject to timely delivery of a Funding Request and the other terms and
conditions of the Operative Documents, each Participant shall make its
Commitment Percentage of the requested Advance available to the Agent
Certificate Holder by 1:00 p.m., (Chicago time), on the requested Acquisition
Date or Funding Date. The Agent Certificate Holder and the Administrative Agent
shall calculate the amounts of the Certificate Holder Amounts and the Loans
required to fund the
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requested Advance. No more than one (1) Funding Request shall be made during any
calendar month.
(b) Except as the Participants may otherwise agree in writing, Advances
shall be made solely to provide the Construction Agent with funds with which to
pay any Land Acquisition Costs or to pay or reimburse itself for Property
Improvement Costs, as the case may be.
Section 3.5. Interest Rate; Yield Rate. Each Loan and Certificate
Holder Amount shall accrue interest or Yield, as the case may be, by reference
to the Base Rate or the Adjusted Eurodollar Rate in accordance with Section 3.6.
Section 3.6. Interest Period Selection/Continuation/Conversion
Elections. (a) By delivering an Interest Period
Selection/Continuation/Conversion Notice to the Agent Certificate Holder and
Administrative Agent with respect to Certificate Holder Amounts and Loans,
respectively, the Lessee Agent may from time to time during the Lease Term
irrevocably select, on not less than three (3) nor more than five (5) Business
Days' notice, that all or any portion of the outstanding Loans and Certificate
Holder Amounts be, in the case of Base Rate Loans/Certificate Holder Amounts,
converted into Eurodollar Loans/Certificate Holder Amounts or, in the case of
Eurodollar Loans/Certificate Holder Amounts, converted into Base Rate
Loans/Certificate Holder Amounts or continued as Eurodollar Rate
Loans/Certificate Holder Amounts and, with respect to Eurodollar
Loans/Certificate Holder Amounts, select the duration for the next succeeding
Interest Period; provided, however, that (a) in the absence of a delivery of an
Interest Period Selection/Continuation/Conversion Notice with respect to any
Eurodollar Loan/Certificate Holder Amount at least three (3) Business Days
before the last day of the then current Interest Period with respect thereto,
the Lessee Agent shall be deemed to have selected that such Eurodollar
Loan/Certificate Holder Amount be continued as a Eurodollar Loan/Certificate
Holder Amount on such last day with an Interest Period of one (1) month, (b)
each such conversion or continuation shall be pro rated among the applicable
outstanding Loans and Certificate Holder Amounts of all Participants, (c) no
portion of any Loan or Certificate Holder Amount may be continued as, or
converted into, a Eurodollar Loan/Certificate Holder Amount when any Lease
Default or Lease Event of Default has occurred and is continuing, and (d) the
outstanding Loans and Certificate Holder Amounts may not be apportioned into
more than six (6) separate Loans and Certificate Holder Amounts pursuant to this
Section 3.6 at any one time and each such Eurodollar Loan/Certificateholder
Amount shall be in a minimum amount of $500,000.
(b) the Lessee Agent, with respect to any Loans and Certificate Holder
Amounts outstanding during the Interim Lease Term, shall be deemed to have (i)
converted Base Rate Loans/Certificate Holder Amounts into Eurodollar
Loans/Certificate Holder Amounts at the end of the initial Interest Period, (ii)
as of each Scheduled Payment Date (other than the Interim Termination Date),
continued all outstanding Eurodollar Loans/Certificate Holder Amounts as
Eurodollar Loans/Certificate Holder Amounts and (iii) as of each Scheduled
Payment Date (other than the Interim Termination Date) selected an Interest
Period ending on the earlier of the next succeeding Scheduled Payment Date and
the Interim Termination Date.
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Each Interest Period Selection/Continuation/Conversion Notice so delivered or
deemed delivered by the Lessee Agent shall be deemed an effective election by
the Certificate Holders of the method for computing interest on the Loans under
the Loan Agreement.
Section 3.7. Voluntary Commitment Terminations. The Lessee Agent
shall have the right at any time and from time to time upon not less than five
(5) Business Days prior notice to the Agent Certificate Holder and the
Administrative Agent (which shall promptly notify the Lenders) to terminate the
Commitments in whole or in part (but if in part then in a minimum amount of
$5,000,000 or such lesser amount as will terminate the Commitments in full) pro
rata in proportion among the Lenders and the Certificate Holders. No termination
of the Commitments hereunder may be reinstated.
ARTICLE IV
YIELD; INTEREST; FEES
Section 4.1. Yield. (a) The amount of the Certificate Holder Amounts
outstanding from time to time shall accrue yield ("Yield") at the Yield Rate,
calculated using the actual number of days elapsed and, when the Yield Rate is
based on the Adjusted Eurodollar Rate, a 360-day year basis and, if calculated
at the Base Rate, a 360-day year basis if the Base Rate is calculated at the
Federal Funds Rate, and a 365-, or, if applicable, 366-, day year basis if the
Base Rate is calculated at the Prime Rate. If all or any portion of the
Certificate Holder Amounts, any Yield payable thereon or any other amount
payable hereunder shall not be paid when due (whether at stated maturity,
acceleration thereof or otherwise), such overdue amount shall bear interest at a
rate per annum which is equal to the Overdue Rate. Upon the occurrence, and
during the continuance of a Lease Event of Default, the principal of and, to the
extent permitted by law, interest on (or Yield on) the Certificate Holder
Amounts and any other amounts owing hereunder or under the other Operative
Documents shall bear interest, payable on demand, at the Overdue Rate. The
Administrative Agent shall, as soon as practicable, but in no event later than
12:00 (noon), Chicago time, two (2) Business Days before the effectiveness of
each Adjusted Eurodollar Rate, cause to be determined such Adjusted Eurodollar
Rate, the resulting Yield and Basic Rent, and notify the Lessee Agent, each
Certificate Holder and Lender thereof.
(b) The Administrative Agent shall distribute, in accordance with
Article VII, the Certificate Holder Basic Rent and all other amounts due with
respect to the Certificate Holder Amounts paid to the Administrative Agent by
the Lessee under the Lease from time to time.
(c) Yield on outstanding Certificate Holder Amounts made with respect
to each Property shall be paid from Advances by the Certificate Holders deemed
to have been requested by the Lessee Agent pursuant to Section 3.4 on each
Scheduled Payment Date occurring prior to the earlier of the Completion Date and
the Outside Completion Date, and the Property Improvement Costs shall be
increased on the date of each such Advance by an amount equal to such Advance;
provided that if a Completion Certificate is delivered less than three (3)
Business Days prior to a Scheduled Payment Date, solely for purposes of this
clause (c) such Completion Certificate shall not be effective until the day
after such Scheduled Payment Date.
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(d) After the earlier of the Completion Date and the Outside Completion
Date, Yield on outstanding Certificate Holder Amounts made with respect to such
Property shall be due and payable in cash on each Scheduled Payment Date and not
funded pursuant to deemed Advances as referred to in clause (c) above.
(e) If not repaid sooner, the outstanding aggregate Certificate Holder
Amounts shall be repaid in full on the Maturity Date.
Section 4.2. Interest on Loans. (a) Each Loan shall accrue interest
computed and payable in accordance with the terms of the Loan Agreement. Each
Loan shall become due and payable at the dates and times provided under the Loan
Agreement.
(b) The Administrative Agent shall distribute, in accordance with
Article VII, the Lender Basic Rent and all other amounts due with respect to the
Loans paid to the Administrative Agent by the Lessee under the Lease from time
to time.
Section 4.3. Prepayments.
(a) Voluntary Prepayments. The Lessee Agent shall have the right to
prepay an amount equal to the aggregate outstanding Lease Balance in whole, but
not in part, pursuant to the exercise of purchase option permitted under the
Lease, without premium or penalty.
(b) Mandatory Prepayments. (i) If at any time the sum of the aggregate
amount of outstanding Loans and Certificate Holder Amounts shall exceed the
Aggregate Commitment Amount, the Lessee shall immediately make payment on the
Loans or Certificate Holder Amounts in an amount sufficient to eliminate such
excess; provided that the Lessee shall not be required to make such payments if
such excess is attributable to a default by a Lender, Certificate Holder or
Lessor Trust under the Loan Agreement or this Participation Agreement and, with
respect to Lessor Trust, not attributable to a Lease Event of Default. Payments
required to be made hereunder shall be applied to Base Rate Loans/Certificate
Holder Amounts and then to Eurodollar Loans/Certificate Holder Amounts in direct
order of their Interest Period maturities.
(ii) All amounts payable by the Lessee Agent or the Lessee pursuant to
Article XV, XVI, XVIII or XX of the Master Lease shall be applied to the Loans
and the Certificate Holder Amounts in the manner set forth in Article VII
hereof.
(d) Notice. The Lessee Agent will provide notice to the Administrative
Agent of any voluntary prepayment by 10:00 A.M. (Chicago time) at least three
(3) Business Days prior to the date of such voluntary prepayment.
Section 4.4. Fees. The Lessee Agent agrees to pay the fees set
forth in this Section 4.4.
(a) Structuring and Underwriting. The Lessee Agent agrees to pay to the
Arranger the Structuring and Underwriting Fees in accordance with the Arranger's
Fee Letter.
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(b) Administrative Agent's Fees. The Lessee Agent agrees to pay to the
Administrative Agent for its own account the non-refundable Administration Fee
set forth in the Arranger's Fee Letter on each anniversary of the Documentation
Date during the Lease Term and on the Expiration Date.
(c) Commitment Fee. The Lessee Agent agrees to pay to the
Administrative Agent for the account of each Participant, for the period
(including any portion thereof when its Commitment is suspended by reason of the
Lessee's inability to satisfy any condition of Article VI) commencing on the
Documentation Date and continuing through the Interim Termination Date, a
commitment fee (collectively, the "Commitment Fees") with respect to each such
Lender and Certificate Holder, calculated at a rate set forth in Schedule III
attached hereto on such Participant's Commitment Percentage of the average daily
Available Commitments.
The Commitment Fees shall be payable by the Lessee Agent in arrears on
each Quarterly Payment Date, commencing with the first such day following the
Documentation Date, and on the last day of Interim Termination Date. The
Commitment Fees shall be computed on the basis of the actual number of days
(including the first day but excluding the last day) occurring during the period
for which such Commitment Fees are payable over a year of 360 days.
(d) Owner Trustee's Fees. The Lessee Agent agrees to pay to the Owner
Trustee the fees set forth in the letter and exhibit attached thereto from Owner
Trustee to ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ dated March 31, 1998.
Section 4.5. Place and Manner of Payments. Except as otherwise
specifically provided herein, all payments by the Lessee Agent or the Lessee
hereunder, under the Master Lease or under any other Operative Document shall be
made to the Administrative Agent in Dollars in immediately available funds,
without offset, deduction, counterclaim or withholding of any kind, to the
Account in Chicago, Illinois not later than 12:00 p.m. (Noon) (Chicago time) on
the date when due. Payments received after such time shall be deemed to have
been received on the next succeeding Business Day. Administrative Agent shall
send an invoice to Lessee Agent for Basic Rent, Supplemental Rent and other
amounts due hereunder prior to such amounts being due hereunder. The Lessee
Agent or the Lessee shall, at the time it makes any payment under any Operative
Document, specify to the Administrative Agent the Loans and Certificate Holder
Amounts, fees or other amounts payable by the Lessee Agent or the Lessee
hereunder to which such payment is to be applied (and in the event that it fails
so to specify, or if such application would be inconsistent with the terms
hereof, the Administrative Agent shall distribute such payment to the Lenders
and the Certificate Holders in such manner as the Administrative Agent may
determine to be appropriate in respect of obligations owing by Lessee Agent or
the Lessee subject to the terms of Section 4.6). The Administrative Agent will
distribute such payments to such Lenders and Certificate Holders in accordance
with Article VII, if any such payment is received prior to 2:00 p.m. (Chicago
time) on a Business Day in like funds as received prior to such time, and
otherwise the Administrative Agent will distribute such payment to such Lenders
and Certificate Holders on the next succeeding Business Day. Whenever any
payment hereunder shall be stated to be due on a day which is not a Business
Day, the due date thereof shall be extended to the next Business Day (subject to
accrual of interest and fees for the period of such extension), except that in
the case of Eurodollar Loans/Certificate Holder Amounts, if the
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extension would cause the payment to be made in the next following calendar
month, then such payment shall instead be made on the next preceding Business
Day.
Section 4.6. Pro Rata Treatment. Except to the extent otherwise
provided herein, each Advance, each payment or repayment of principal on any
outstanding Loan or Certificate Holder Amount and each payment of interest or
Yield shall be allocated pro rata among the relevant Lenders and Certificate
Holders, as the case may be, in accordance with the respective applicable
Commitments (or, if the Commitments of such Lenders or Certificate Holders have
expired or been terminated, in accordance with the respective principal amounts
of their outstanding Loans or Certificate Holder Amounts, as the case may be).
Section 4.7. Sharing of Payments. The Participants agree among
themselves that, in the event that any Participant shall obtain payment in
respect of any Loan or Certificate Holder Amount or any other obligation owing
to such Participant under the Operative Documents through the exercise of a
right of setoff, banker's lien or counterclaim, or pursuant to a secured claim
under Section 506 of Title 11 of the United States Code or other security or
interest arising from, or in lieu of, such secured claim, received by such
Participant under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Participation Agreement, such Participant shall
promptly purchase from the other Participants a participation in such Loans or
Certificate Holder Amounts and other obligations in such amounts, and make such
other adjustments from time to time, as shall be equitable to the end that all
Participants share such payment in accordance with their respective ratable
shares as provided for in this Participation Agreement. The Participants further
agree among themselves that if payment to a Participant obtained by such
Participant through the exercise of a right of setoff, banker's lien,
counterclaim or other event as aforesaid shall be rescinded or must otherwise be
restored, each Participant which shall have shared the benefit of such payment
shall, by repurchase of a participation theretofore sold, return its share of
that benefit (together with its share of any accrued interest payable with
respect thereto) to each Participant whose payment shall have been rescinded or
otherwise restored. The Lessee Agent and each Lessee agrees that any Participant
so purchasing such a participation may, to the fullest extent permitted by law,
exercise all rights of payment, including setoff, banker's lien or counterclaim,
with respect to such participation as fully as if such Participant were a holder
of such Loan or Certificate Holder Amount or other obligation in the amount of
such participation. Except as otherwise expressly provided herein, if any
Participant, the Agent Certificate Holder or the Administrative Agent shall fail
to remit to the Administrative Agent, the Agent Certificate Holder or any other
Participant an amount payable by such party to the Administrative Agent, the
Agent Certificate Holder or such other Participant pursuant to the Operative
Documents on the date when such amount is due, such payments shall be made
together with interest thereon for each date from the date such amount is due
until the date such amount is paid to the Administrative Agent, the Agent
Certificate Holder or such other Participant at a rate per annum equal to the
Federal Funds Rate. If under any applicable bankruptcy, insolvency or other
similar law, any Participant receives a secured claim in lieu of a setoff to
which this Section 4.7 applies, such Participant shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Participants under this Section 4.7 to share
in the benefits of any recovery on such secured claim.
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ARTICLE V
CERTAIN INTENTIONS OF THE PARTIES
Section 5.1. Nature of Transaction. (a) The parties hereto intend
that (i) for financial accounting purposes with respect to the Lessee, the
Lessor Trust will be treated as the owner and the lessor of the Property and the
Lessee will be treated as the lessee of the Property and (ii) for all other
purposes, including federal and all state and local income tax purposes, state
real estate and commercial law and bankruptcy purposes,
(A) the Lease will be treated as a financing arrangement,
(B) the Certificate Holders and the Lenders will be deemed
lenders making loans to the Lessees in an amount equal to the sum of
the Certificate Holder Amounts and the outstanding principal amount of
the Loans, which amounts are secured by the Properties, and
(C) the Lessee will be treated as the owner of the Property
described in the Lease Supplement and will be entitled to all tax
benefits ordinarily available to an owner of properties like the
Property for such tax purposes. Nevertheless, the Lessee acknowledges
and agrees that neither the Agent Certificate Holder, the
Administrative Agent nor any of the Certificate Holders or Lenders has
made any representations or warranties to the Lessee concerning the
tax, accounting or legal characteristics of the Operative Documents and
that the Lessee has obtained and relied upon such tax, accounting and
legal advice concerning the Operative Documents as it deems
appropriate.
(b) Specifically, without limiting the generality of clause (a) of this
Section 5.1, the parties hereto intend and agree that in the event of any
insolvency or receivership proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency laws or statute of the United
States of America or any state or commonwealth thereof affecting the Lessee
Agent, Lessee, Guarantor, the Lessor Trust, the Owner Trustee, the Certificate
Holders, or the Lenders or any collection actions, the transactions evidenced by
the Operative Documents shall be regarded as loans made by the Certificate
Holders and the Lenders as unrelated third party lenders of the Lessee.
Section 5.2. Amounts Due Under the Lease. Anything herein or elsewhere
to the contrary notwithstanding, it is the intention of Lessee Agent, the
Lessee, the Certificate Holders and the Lenders that except for unindemnified
Taxes: (i) the amount and timing of installments of Basic Rent due and payable
from time to time from the Lessee under the Lease shall be equal to the
aggregate payments due and payable as interest and, to the extent Fixed Rent is
paid, as principal, on the Loans and Yield on the Certificate Holder Amounts on
each Scheduled Payment Date; (ii) if the Lessee Agent elects the Purchase Option
or the Lessee becomes obligated to purchase the Property under the Lease, the
Loans, the Certificate Holder Amounts, and all interest, principal, Yield,
Commitment Fees thereon and all other obligations of the Lessee Agent and the
Lessee owing to the Administrative Agent, the Agent Certificate Holder, the
Certificate Holders and the Lenders shall be due and payable in full by the
Lessee Agent and
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the Lessee, as the case may be, on the date set forth in the Lease; (iii) if the
Lessee Agent properly elects the Remarketing Option, the Lessee Agent shall only
be required to pay to the Administrative Agent from the proceeds of the sale of
the Property, that portion of the Loan Balance and any amounts due pursuant to
Article XIII hereof and Section 20.2 of the Master Lease (which aggregate
amounts may be less than the Lease Balance, with any amount in excess of the
Lease Balance being payable to the Lessee); and (iv) upon an Event of Default
resulting in an acceleration of the Lessee Agent's obligation to purchase the
Property under the Lease, the amounts then due and payable by the Lessee Agent
and the Lessee under the Lease shall include all amounts necessary to pay in
full the Lease Balance, plus all other amounts then due from the Lessee Agent
and the Lessee to the Participants under the Operative Documents.
ARTICLE VI
CONDITIONS PRECEDENT: ACQUISITION DATE; FUNDING DATES
Section 6.1. Acquisition Date. The closing date with respect to the
acquisition of the Land or leasehold interests therein (and the Improvements
thereon, if any) (the "Acquisition Date") shall occur on the date on or after
the Documentation Date on which all the conditions precedent thereto set forth
in this Section 6.1 shall have been satisfied or waived by the applicable
parties as set forth herein. The obligation of the Lessor Trust to acquire the
Land or leasehold interests therein on the Acquisition Date, the obligation of
each Certificate Holder to make available any related Certificate Holder Amount
on the Acquisition Date and the obligation of each Lender to make any related
Loan on the Acquisition Date, are subject to satisfaction or waiver of the
conditions precedent set forth in Section 2.1 and the following conditions
precedent:
(a) Funding Request. Each of the Administrative Agent and the
Agent Certificate Holder shall have received a fully executed
counterpart of the applicable Funding Request in accordance with
Section 3.4. Each of the delivery of a Funding Request and the
acceptance of the proceeds of such Advance shall constitute a
representation and warranty by the Lessee and Guarantor, each as to
itself, that on the applicable Acquisition Date (both immediately
before and after giving effect to the making of such Advance and the
application of the proceeds thereof), the statements made in Section
8.2 are true and correct.
(b) Fees. All fees due and payable pursuant to this
Participation Agreement shall have been paid.
(c) Representations and Warranties. On the Acquisition Date,
the representations and warranties of each party in this Participation
Agreement and in each of the other Operative Documents shall be true
and correct in all material respects as though made on and as of such
date, except to the extent such representations or warranties relate
solely to an earlier date, in which case such representations and
warranties shall have been true and correct in all material respects on
and as of such earlier date; provided that a failure of any party's
representation or warranty to be true and correct on the Acquisition
Date shall not be a condition precedent to such party's performance of
its obligations under the Operative Documents.
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(d) Appraisal. At least ten (10) Business Days prior to the
Acquisition Date, the Agent Certificate Holder and the Administrative
Agent shall have received an Appraisal of the Property, in form and
substance satisfactory to the Administrative Agent and the Agent
Certificate Holder, which Appraisal shall show that the Fair Market
Sales Value of the Land as of the Acquisition Date is not less than the
Land Acquisition Cost for the Property.
(e) Governmental Approvals. All necessary Governmental
Actions required by any Requirement of Law for the purpose of
authorizing the Lessor Trust to acquire the Property shall have been
obtained or made and be in full force and effect.
(f) Responsible Officer's Certificate. The Agent Certificate
Holder and the Administrative Agent shall have received a Responsible
Officer's Certificate of the Lessee and Guarantor, in substantially the
form of Exhibit D-5 attached hereto, addressed to the Administrative
Agent, the Agent Certificate Holder, each Lender and each Certificate
Holder and dated as of the Acquisition Date, stating that (w) to such
Responsible Officer's knowledge the representations and warranties of
the Lessee and the Guarantor contained in the Participation Agreement
and each other Operative Document to which it is a party is true and
correct in all material respects on and as of the Acquisition Date; (x)
to such Responsible Officer's knowledge no Default or Event of Default
has occurred and is continuing under any Operative Document to which it
is a party with respect to the Lessee and the Guarantor; (y) to such
Responsible Officer's knowledge each Operative Document to which the
Lessee and the Guarantor is a party is in full force and effect with
respect to it; and (z) the Lessee and the Guarantor has duly performed
and complied with all conditions contained herein or in any other
Operative Document required to be performed and complied with by it on
or prior to the Acquisition Date.
(g) Evidence of Property Insurance. The Agent Certificate
Holder and the Administrative Agent shall have received evidence that
the insurance maintained by the Lessee with respect to the Property
satisfies the requirements set forth in Article XIII of the Master
Lease, setting forth the respective coverage, limits of liability,
carrier, policy number and period of coverage.
(h) Environmental Audit; Site Report. At least ten (10)
Business Days prior to the Acquisition Date, the Agent Certificate
Holder and the Administrative Agent shall have received (i) an
Environmental Audit and (ii) a physical site report each with respect
to the Property and in form and substance reasonably satisfactory to
the Agent Certificate Holder and the Administrative Agent.
(i) Deed or Ground Lease. The Agent Certificate Holder shall
have received either (i) in the case of Land being acquired from a
third-party Seller, at least one (1) Business Day prior to the
Acquisition Date a copy of the proposed Deed with respect to the
Property (and/or all Improvements located thereon) being purchased on
the Acquisition Date, and on or prior to the Acquisition Date, such
Deed duly executed conveying fee simple title to the Property (and/or
all Improvements located thereon) to
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the Lessor Trust and containing all customary seller's warranties and
subject only to Permitted Property Liens or (ii) in the case of Land
to be leased, at least ten (10) days prior to the Acquisition Date, a
copy of the proposed ground lease, in form and substance satisfactory
to the Agent Certificate Holder, and, on or prior to the Acquisition
Date, such ground lease duly executed by such ground lessor
thereunder, conveying to the Lessor Trust a leasehold interest in the
Land, which Land shall be a separate tax lot and a legal subdivision
under all applicable zoning laws.
(j) ▇▇▇▇ of Sale. On or prior to the Acquisition Date, the
Lessor Trust shall have received a special warranty ▇▇▇▇ of sale (a
"▇▇▇▇ of Sale"), conveying title to the Lessor Trust in any Equipment
comprising part of the Property.
(k) Construction Agency Agreement Supplement. On or prior to
the Acquisition Date, the Construction Agent and the Agent Certificate
Holder and/or Lessor Trust shall have delivered to the Certificate
Holders and the Lenders a Construction Agency Agreement Supplement with
respect to the Property fully executed by the Construction Agent and
the Agent Certificate Holder.
(l) Supplement to Assignment of Lease and Rent. On or prior
to the Acquisition Date, the Agent Certificate Holder and/or Lessor
Trust shall have delivered to the Administrative Agent a supplement to
the Assignment of Lease and Rent with respect to the Property
substantially in the form of Exhibit A thereto, together with a consent
to and acknowledgment of such supplement duly executed by the Lessee in
proper form and substance for recording under Applicable Law and
otherwise effecting the assignments anticipated by the Assignment of
Lease and Rent.
(m) Lease Supplement. On or prior to the Acquisition Date,
the applicable Lessee, the Agent Certificate Holder and/or Lessor Trust
shall have delivered the original counterpart of the Lease Supplement
executed by the Lessee and the Agent Certificate Holder and/or Lessor
Trust with respect to the Property to the Lenders.
(n) Lessor Financing Statements. On or prior to the
Acquisition Date, the Lessee shall have delivered to the Agent
Certificate Holder on behalf of the Lessor Trust all Lessor Financing
Statements relating to the Property as the Agent Certificate Holder or
any other Certificate Holder may reasonably request in order to protect
the interests of the Lessor Trust, the Agent Certificate Holder and
each of the Certificate Holders under the Master Lease relating to the
Property to the extent the Master Lease constitutes a security
agreement.
(o) Recordation of Lessor Mortgage and Lessor Financing
Statements; Search Results. Each of the Participants shall have
received (x) evidence reasonably satisfactory to it that each of (i)
the Lease Supplement and any other instrument constituting a Lessor
Mortgage and (ii) the Lessor Financing Statements relating to such
Property has been, or is being, recorded or filed in a manner
sufficient to properly perfect each of their interests therein and (y)
copies of file search reports from the Uniform Commercial Code filing
officer in the jurisdiction (i) in which the Property is located or
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(ii) in which is located a place of business or the chief executive
office of the Lessee that owns or holds any right, title or interest in
the Property, setting forth the results of such Uniform Commercial Code
file searches.
(p) Property Survey. On or prior to the Acquisition Date, the
Lessee Agent shall have delivered to each of the Agent Certificate
Holder and the Administrative Agent an American Land Title
Association/American Congress on Surveying and Mapping ("ALTA")/1992
(Urban) Survey (or such other standards as are acceptable to the Agent
Certificate Holder and the Administrative Agent) of the Property
certified to the Participants and the title company and otherwise in
form reasonably acceptable to the Participants.
(q) Title Insurance. On or prior to the Acquisition Date, the
Lessee Agent shall have delivered to the Administrative Agent and the
Agent Certificate Holder a commitment to deliver an ALTA extended
owners and lenders title insurance policy covering the Property in
favor of the Lessor Trust and the Administrative Agent, respectively,
such policy to be in the amount not less than the sum of the related
Land Acquisition Cost and the Estimated Improvement Costs and to be
reasonably satisfactory to the Required Lenders and the Required
Certificate Holders with such customary endorsements and affirmative
assurances issued by the title company as a routine matter, to the
extent available in the state where the Property is located if
requested by the Agent Certificate Holder or the Administrative Agent.
The Administrative Agent and Agent Certificate Holder shall also
receive such reinsurance agreements as they may reasonably request.
(r) No Default. There shall not have occurred and be
continuing any Default or Event of Default under any of the Operative
Documents, and no Default or Event of Default under any of the
Operative Documents will have occurred after giving effect to the
acquisition of the Property.
(s) Opinion of Counsel and of Local Counsel to the Lessee.
The Agent Certificate Holder and the Administrative Agent shall have
received (i) an opinion of counsel qualified with respect to the laws
of the jurisdiction in which the Property is situated, addressed to the
Lessor Trust, the Administrative Agent, the Agent Certificate Holder,
each Lender and each Certificate Holder, substantially in the form of
Exhibit G and (ii) if requested by the Agent Certificate Holder and the
Administrative Agent, opinions from such other counsel and covering
such issues as they may reasonably request.
(t) Approval of Proposed Acquisition. The Property shall have
been disclosed to and approved by the Agent Certificate Holder and the
Administrative Agent prior to the six (6) month anniversary of the
Documentation Date.
All documents and instruments required to be delivered pursuant to this Section
6.1 shall be delivered at the offices of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
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60603, or at such other location as may be determined by the Agent Certificate
Holder, the Administrative Agent and the Lessee Agent.
Section 6.2. Funding Dates. The obligations of the Agent Certificate
Holder to make Advances on each Funding Date occurring after the Acquisition
Date, the obligation of the Certificate Holders to make available any related
Certificate Holder Amount on such Funding Date, and the obligation of the
Lenders to make available any related Loan on such Funding Date, are subject to
satisfaction or waiver of the following conditions precedent:
(a) Funding Request. Each of the Administrative Agent and the
Agent Certificate Holder shall have received a fully executed
counterpart of the applicable Funding Request in accordance with
Section 3.4. Each of the delivery of the Funding Request and the
acceptance of the proceeds of such Advance shall constitute a
representation and warranty by the Lessee Agent that on the Funding
Date (both immediately before and after giving effect to the making of
such Advance and the application of the proceeds thereof), the
statements made in Section 8.3 are true and correct in all material
respects as though made on and as of such date, except to the extent
such statements relate solely to an earlier date, in which case such
statements shall have been true and correct in all material respects on
and as of such earlier date.
(b) As-Built Appraisal. At least ten (10) Business Days prior
to (i) the Initial Construction Date, the Agent Certificate Holder and
the Administrative Agent shall have received an As-Built Appraisal of
the Property, in form and substance satisfactory to the Administrative
Agent and the Agent Certificate Holder, which As-Built Appraisal shall
show that as of each of the Completion Date, the last day of the Basic
Lease Term and the last day of any Renewal Term for the Property, the
Fair Market Sales Value of the Land and the Improvements to be
constructed thereon in accordance with the Plans and Specifications
shall not be less than 100% of the sum of the Land Acquisition Cost and
Estimated Improvement Costs and (ii) the Funding Date in the event the
Property Balance, after giving effect to such Advance, would be greater
than the Fair Market Sales Value for any date indicated in the As-Built
Appraisal delivered under clause (i) and subject to Section 3.1 of the
Construction Agency Agreement, a subsequent As-Built Appraisal which
shall show that as of each of the Completion Date, the last day of the
Basic Lease Term and the last day of any Renewal Term, the Fair Market
Sales Value shall not be less than the Property Balance after giving
effect to such Advance. In the event such subsequent As-Built Appraisal
shall show that the Fair Market Sales Value as of any of the Completion
Date, the last day of the Basic Lease Term or the last day of any
Renewal Term shall be less than the Property Balance after giving
effect to such Advance, the Lessee shall promptly remit to the
Administrative Agent the difference between the Property Balance as of
the Funding Date and the smallest of the Fair Market Sales Value of the
Property as of the Completion Date, the last day of the Basic Lease
Term and the last day of any Renewal Term as determined in such
subsequent As-Built Appraisal. The Administrative Agent shall apply
such remitted amounts pursuant to Section 7.7(a) hereof.
(c) [Intentionally Omitted]
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(d) Fees. All fees due and payable pursuant to this
Participation Agreement shall have been paid.
(e) Representations and Warranties. On the applicable Funding
Date, the representations and warranties of Lessee and the Lessee Agent
in this Participation Agreement and in each of the other Operative
Documents shall be true and correct in all material respects as though
made on and as of such date, except to the extent such representations
or warranties relate solely to an earlier date, in which case such
representations and warranties shall have been true and correct in all
material respects on and as of such earlier date.
(f) Litigation. On the applicable Funding Date, there shall
not be any actions, suits or proceedings pending or, to the knowledge
of Lessee and the Guarantor, threatened with respect to the Lessee or
the Guarantor (i) that are reasonably likely to have a Material Adverse
Effect, or (ii) that could reasonably be expected to have a material
adverse effect on the title to, or the use, operation or value of, the
Property which is the subject of the current Advance.
(g) No Default. There shall not have occurred and be
continuing any Lease Default or Lease Event of Default, and no Lease
Default or Lease Event of Default will have occurred after giving
effect to the making of the Advance requested by such Funding Request.
(h) Available Commitments. After giving effect to the
applicable Advance, the conditions set forth in Sections 3.2 and 3.3
shall not be violated.
(i) Construction Costs. After giving effect to the applicable
Advance, the estimated as yet unpaid cost to the Construction Agent of
completing the Construction pursuant to the Construction Documents
shall not exceed the Available Commitments, net of any portion of the
Available Commitments that shall be allocated for Advances deemed to
have been requested pursuant to Section 4.1(c).
(j) Taxes. All taxes, fees and other charges to be paid in
connection with the execution, delivery, recording, filing and
registration of the Operative Documents in connection with such Advance
shall have been paid or provisions for such payment shall have been
made by the Lessee or the Lessee Agent to the reasonable satisfaction
of the Agent Certificate Holder, the Administrative Agent, the
Certificate Holders and the Lenders.
(k) Construction Budget. At least ten (10) Business Days
prior to the Initial Construction Date, the Construction Agent shall
have delivered a construction budget to the Administrative Agent and
Agent Certificate Holder in such detail with respect to the
Construction as the Administrative Agent and Agent Certificate Holder
may reasonably request, and such construction budget shall be
reasonably satisfactory to the Administrative Agent and the Agent
Certificate Holder.
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Section 6.3. Conditions to Completion Date. The Completion Date with
respect to the Property shall be deemed to have occurred for purposes of the
Operative Documents on the earliest date on which each of the following events
shall have occurred:
(a) the Construction shall have been substantially completed
in accordance with the Plans and Specifications and all Applicable
Law;
(b) the Property shall be ready for occupancy and operation
in accordance with the Plans and Specifications, and all appropriate
Governmental Action (including the issuance by the appropriate
Governmental Authority of a permanent certificate of occupancy) shall
have been taken for the occupancy and operation of the Property;
(c) the Lessee Agent shall have provided to the
Administrative Agent and the Agent Certificate Holder an updated title
report and policies for the Property in form and substance reasonably
satisfactory to each of the Administrative Agent and the Agent
Certificate Holder; and
(d) the Agent Certificate Holder, the Administrative Agent,
the Certificate Holders and the Lenders shall have received a
Completion Certificate from the Construction Agent substantially in the
form of Exhibit H hereto (a "Completion Certificate").
ARTICLE VII
DISTRIBUTIONS
Section 7.1. Basic Rent. Each payment of Basic Rent (and any payment
of interest on overdue installments of Basic Rent) received by the
Administrative Agent shall be distributed by the Administrative Agent to the
Certificate Holders and the Lenders pro rata in accordance with, and for
application to, the Lender Basic Rent and Certificate Holder Basic Rent then
due, as well as any overdue interest or Yield due to the Certificate Holders or
the Lenders (to the extent permitted by Applicable Law).
Section 7.2. Purchase Payments by the Lessee Agent and the Lessees.
Any payment received by the Administrative Agent as a result of:
(a) the purchase of the Property in connection with the
exercise of the Purchase Option under Section 18.1 of the Master Lease,
or compliance with the obligation to purchase (or cause its designee to
purchase) all of the Property in accordance with Section 18.2 or 18.3
of the Master Lease, or
(b) compliance with the obligation to purchase all of the
Property in accordance with Section 16.2(f) of the Master Lease, or
(c) [Intentionally Omitted]
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(d) the payment of any portion of the Property Balance in
accordance with Section 15.1 of the Master Lease or Section 4.3(a) of
the Participation Agreement, or
(e) the payment of the Property Balance in accordance with
Section 5.3 of the Construction Agency Agreement
shall be distributed by the Administrative Agent to the Certificate Holders and
the Lenders pro rata without priority of one over the other, in the proportion
that the Participant Balance of each of the Lenders and the Certificate Holders
bears to the aggregate of all of the Participant Balances.
Section 7.3. Payment of Loan Balance. In accordance with Section
20.2(f) of the Master Lease upon the exercise of the Remarketing Option, the
payment of the Loan Balance to the Administrative Agent shall be distributed to
the Lenders for application to pay in full the Participant Balance of each
Lender.
Section 7.4. Sales Proceeds of Remarketing of the Property. Any
payments received by the Administrative Agent as proceeds from the sale of the
Properties sold pursuant to the exercise of the Remarketing Option pursuant to
Article XX of the Master Lease, together with any payment made as a result of an
appraisal pursuant to Section 13.2, shall be distributed by the Administrative
Agent in the funds so received in the following order of priority:
first, to the Certificate Holders in an amount equal to (x)
the aggregate Certificate Holder Balance minus (y) 3% of the sum of (i)
the largest principal amount outstanding of Certificate Holder Amounts
at any one time prior to the distribution hereunder and (ii) the
largest principal amount outstanding of Loans at any one time prior to
the distribution hereunder (such amount under clause (y), the "Equity
Amount"), shall be distributed to the Certificate Holders for
application to the Participant Balance of each Certificate Holder, pro
rata among the Certificate Holders without priority of one over the
other in the proportion that the Participant Balance of each such
Certificate Holder bears to the aggregate Participant Balances of all
Certificate Holders and, in the case where the amounts so distributed
shall be insufficient to pay in full as aforesaid, then pro rata among
the Certificate Holders without priority of one over the other in the
proportion that the Participant Balance of each such Certificate Holder
bears to the aggregate Participant Balances of all Certificate Holders;
second, to the extent not previously paid as required by
Section 7.3 hereof, an amount equal to the Loan Balance shall be
distributed to the Lenders as set forth in Section 7.3;
third, an amount equal to the Equity Amount shall be
distributed to the Certificate Holders for application to pay in full
the Participant Balance of each Certificate Holder, pro rata among the
Certificate Holders without priority of one over the other in the
proportion that the Participant Balance of each such Certificate Holder
bears to the aggregate Participant Balances of all Certificate Holders,
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fourth, the balance, if any, shall be promptly paid to the
Certificate Holders to be distributed as provided in Section 20.2(h) of
the Lease.
Section 7.5. Supplemental Rent. All payments of Supplemental Rent
received by the Administrative Agent (excluding any amounts payable pursuant to
the preceding provisions of this Article VII) shall be distributed promptly by
the Administrative Agent upon receipt thereof to the Persons entitled thereto
pursuant to the Operative Documents.
Section 7.6. Distribution of Payments after Lease Event of Default.
(a) During the continuance of a Lease Event of Default and subject to clause (b)
below, all proceeds from the sale of the Property shall be distributed by the
Administrative Agent in the following order of priority:
first, so much of such payment or amount as shall be required
to pay or reimburse the Administrative Agent and the Agent Certificate
Holder for any tax, fees, expense, indemnification or other loss
incurred by the Administrative Agent or the Agent Certificate Holder
(to the extent incurred in connection with any duties as the
Administrative Agent or Agent Certificate Holder, as the case may be),
shall be distributed to the Administrative Agent and the Agent
Certificate Holder without priority of one over the other for their own
accounts in accordance with the amount of such payment or amount
payable to such Person;
second, so much of such payments or amounts as shall be
required to pay the Lenders and the Certificate Holders the amounts
payable to them pursuant to any expense reimbursement or
indemnification provisions of the Operative Documents shall be
distributed to each such Lender and Certificate Holder without priority
of one over the other in accordance with the amount of such payment or
payments payable to each such Person;
third, to the Certificate Holders in an amount equal to the
aggregate Certificate Holder Balance minus the Equity Amount shall be
distributed to the Certificate Holders for application to the
Participant Balance of each Certificate Holder, pro rata among the
Certificate Holders without priority of one over the other in the
proportion that the Participant Balance of each such Certificate Holder
bears to the aggregate Participant Balances of all Certificate Holders
and, in the case where amounts so distributed shall be insufficient to
pay in full as aforesaid, then pro rata among the Certificate Holders
without priority of one over the other in the proportion that the
Participant Balance of each such Certificate Holder bears to the
aggregate Participant Balances of all Certificate Holders;
fourth, to the Lenders for application to pay in full the Loan
Balance, pro rata among the Lenders without priority of one over the
other in the proportion that the Participant Balance of each such
Lender bears to the aggregate Participant Balances of all Lenders and,
in the case where the amounts so distributed shall be insufficient to
pay in full as aforesaid, then pro rata among the Lenders without
priority of one over the other
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in the proportion that the Participant Balance of each such Lender
bears to the aggregate Participant Balances of all Lenders;
fifth, an amount equal to the Equity Amount shall be
distributed to the Certificate Holders for application to pay in full
the Participant Balance of each Certificate Holder, pro rata among the
Certificate Holders without priority of one over the other in the
proportion that the Participant Balance of each such Certificate Holder
bears to the aggregate Participant Balance of all Certificate Holders;
sixth, the balance, if any, of such payment or amounts
remaining thereafter shall be promptly distributed to, or as directed
by, the Lessee Agent.
(b) All payments received and amounts realized by the Administrative
Agent in connection with any Casualty or Condemnation during the continuance of
a Lease Event of Default shall be distributed by the Administrative Agent as
follows:
(i) in the event that the Agent Certificate Holder (at the
direction of the Certificate Holders) and the Administrative Agent
elect to pay all or a portion of such amounts to the appropriate Lessee
for the repair of damage caused by such Casualty or Condemnation in
accordance with Section 14.1(a) of the Master Lease, then such amounts
shall be distributed to the Lessee, and
(ii) in the event that the Agent Certificate Holder (at the
direction of the Certificate Holders) and the Administrative Agent
elect to apply all or a portion of such amounts to the purchase price
of the related Property in accordance with Section 14.1(a) and Article
XV of the Master Lease, then such amounts shall be distributed in
accordance with clause (a).
(c) During the continuance of a Lease Event of Default during which
recourse is limited by Section 26.11 of the Master Lease and Section 15.16 of
this Participation Agreement, all payments received and amounts realized with
respect to the relevant Properties by the Administrative Agent shall be
distributed by the Administrative Agent as follows:
first, so much of such payment or amount as shall be required
to pay or reimburse the Administrative Agent and the Agent Certificate
Holder for any tax, fees, expense, indemnification or other loss
incurred by the Administrative Agent or the Agent Certificate Holder
(to the extent incurred in connection with any duties as the
Administrative Agent or Agent Certificate Holder, as the case may be),
shall be distributed to the Administrative Agent and the Agent
Certificate Holder without priority of one over the other for their own
accounts in accordance with the amount of such payment or amount
payable to such Person;
second, so much of such payments or amounts as shall be
required to pay the Lenders and the Certificate Holders the amounts
payable to them pursuant to any expense reimbursement or
indemnification provisions of the Operative Documents shall be
distributed to each such Lender and Certificate Holder without priority
of one over the
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other in accordance with the amount of such payment or payments
payable to each such Person;
third, to the Lenders for application to pay in full the Loan
Balance, pro rata among the Lenders without priority of one over the
other in the proportion that the Participant Balance of each such
Lender bears to the aggregate Participant Balances of all Lenders and,
in the case where the amounts so distributed shall be insufficient to
pay in full as aforesaid, then pro rata among the Lenders without
priority of one over the other in the proportion that the Participant
Balance of each such Lenders bears to the aggregate Participant
Balances of all Lenders;
fourth, to the Certificate Holders in an amount equal to the
aggregate Certificate Holder Balance minus the Equity Amount shall be
distributed to the Certificate Holders for application to the
Participant Balance of each Lessor, pro rata among the Certificate
Holders without priority of one over the other in the proportion that
the Participant Balance of each such Certificate Holder bears to the
aggregate Participant Balances of all Certificate Holders and, in the
case where the amounts so distributed shall be insufficient to pay in
full as aforesaid, then pro rata among the Certificate Holders without
priority of one over the other in the proportion that the Participant
Balance of each such Certificate Holder bears to the aggregate
Participant Balances of all Certificate Holders;
fifth, an amount equal to the Equity Amount shall be
distributed to the Certificate Holders for application to pay in full
the Participant Balance of each Certificate Holder, pro rata among the
Certificate Holders without priority of one over the other in the
proportion that the Participant Balance of each such Certificate Holder
bears to the aggregate Participant Balance of all Certificate Holders;
sixth, the balance, if any, of such payment or amounts
remaining thereafter shall be promptly distributed to, or as directed
by, the Lessee Agent.
Section 7.7. Other Payments. (a) Except as otherwise provided in
Sections 7.1, 7.2, 7.6 and clause (b) below, any payment received by the
Administrative Agent for which no provision as to the application thereof is
made in the Operative Documents or elsewhere in this Article VII (including any
balance remaining after the application in full of amounts to satisfy any
expressed provision) shall be distributed pro rata among the Lenders and the
Certificate Holders without priority of one over the other, in the proportion
that the Participant Balance of each bears to the aggregate of all the
Participant Balances.
(b) Except as otherwise provided in Sections 7.1, 7.2 and 7.6, all
payments received and amounts realized by the Administrative Agent or the Agent
Certificate Holder under the Master Lease or otherwise with respect to the
Properties to the extent received or realized at any time after the indefeasible
payment in full of the Participant Balances of all of the Lenders and the
Certificate Holders and any other amounts due and owing to the Lenders or the
Certificate Holders, shall be distributed forthwith by the Administrative Agent
or the Agent Certificate Holder, as the case may be, in the order of priority
set forth in Section 7.6(a).
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(c) Except as otherwise provided in Sections 7.1 and 7.2, any payment
received by the Administrative Agent or the Agent Certificate Holder for which
provisions as to the application thereof is made in an Operative Document but
not elsewhere in this Article VII shall be distributed forthwith by the Agent
Certificate Holder or the Administrative Agent to the Person and for the purpose
for which such payment was made in accordance with the terms of such Operative
Document.
Section 7.8. Casualty and Condemnation Amounts. Subject to Section
7.6(b), any amounts payable to the Administrative Agent as a result of a
Casualty or Condemnation pursuant to Section 14.1 of the Master Lease and the
Assignment of Lease and Rent shall be distributed as follows:
(a) all amounts payable to the Lessee for the repair of
damage caused by such Casualty or Condemnation in accordance with
Section 14.1(a) of the Master Lease shall be distributed to the Lessee,
and
(b) all amounts that are to be applied to the purchase price
of the Property in accordance with Section 14.1(a) and Article XV of
the Master Lease shall be distributed by the Administrative Agent to
the Lenders and the Certificate Holders pro rata without priority of
one over the other, in the proportion that the Participant Balance of
each bears to the aggregate of all of the Participant Balances.
Section 7.9. Order of Application. To the extent any payment made to
any Lender or any Certificate Holder pursuant to Sections 7.2, 7.3, 7.4, 7.6 or
7.7 is insufficient to pay in full the Participant Balance of such Lender or
Certificate Holder, then each such payment shall first be applied to accrued
interest or Yield and then to principal on the Loans or the Certificate Holder
Amounts, as applicable.
Section 7.10. Payments to Account. All payments made to the
Administrative Agent pursuant to the Operative Documents shall be made to the
Account.
ARTICLE VIII
REPRESENTATIONS
Section 8.1. Representations of the Participants. Each Participant
represents and warrants to each other Participant, the Agent Certificate Holder,
the Administrative Agent and the Lessee that:
(a) ERISA. Such Participant is not and will not be making its
Loans or funding its Certificate Holder Amounts hereunder, and is not
performing its obligations under the Operative Documents, with the
assets of an "employee benefit plan" (as defined in Section 3(3) of
ERISA) which is subject to Title I of ERISA, or "plan" (as defined in
Section 4975(e)(1) of the Code).
(b) Status. Such Participant meets at least one of the
definitions (other than as a "Certificate Holder" or a "Lender") of the
term "Eligible Assignee."
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(c) Securities. Each Participant is participating in the
Transactions for its own account and not with a view toward
redistribution; provided that disposition of its rights hereunder shall
remain in its control and the foregoing shall not affect the ability of
any Participant to assign or sell participations in its rights in
accordance with the Operative Documents.
Section 8.2. Representations of the Lessee and the Guarantor. Each of
the Lessee, the Lessee Agent and the Guarantor hereby represents and warrants to
each Participant, the Lessor Trust, the Owner Trustee, the Agent Certificate
Holder and the Administrative Agent, as to itself, that:
(a) Lessee and Guarantor Organization; Powers. The Lessee is
a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware and Guarantor is
a corporation duly organized, validly existing and in good standing
under the laws of Delaware; the Lessee and Guarantor, (i) has all
requisite power and authority to own its property and assets and to
carry on its business as now conducted and as proposed to be conducted,
(ii) is qualified to do business in every jurisdiction where such
qualification is required, except where the failure so to qualify would
not result in a Material Adverse Effect, (iii) has the corporate power
and authority to execute, deliver and perform its obligations under
each of the Operative Documents and each other agreement or instrument,
if any, contemplated thereby to which it is or will be a party
hereunder, and (iv), with respect to Guarantor, has its chief executive
office located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(b) Authorization. The execution, delivery and performance by
Lessee Agent, Lessee and Guarantor of each of the Operative Documents
to which it is a party (i) have been duly authorized by all requisite
corporate and, if required, stockholder action and (ii) will not (A)
violate (x) any provision of law, statute, rule or regulation, or of
the certificate or articles of incorporation or other constitutive
documents or bylaws of Lessee Agent, Lessee or Guarantor, (y) any
order, writ, ruling, injunction or decree of any Governmental Authority
binding on it or (z) any provision of any indenture, agreement or other
instrument to which Lessee Agent, Lessee or Guarantor is a party or by
which either of them, or any of their property is or may be bound
except for violations which, in the case of clauses (y) and (z), would
not have a Material Adverse Effect, (B) be in conflict with, result in
a breach of or constitute (alone or with notice or lapse of time or
both) a default under any such indenture, agreement or other instrument
except for breaches or defaults which would not have a Material Adverse
Effect or (C) result in the creation or imposition of (or the
obligation to create or impose) any Lien upon or with respect to any
property or assets now owned or hereafter acquired by Lessee Agent,
Lessee or Guarantor except pursuant to the Operative Documents.
(c) Enforceability. (i) This Participation Agreement has been
duly executed and delivered by the Lessee and Guarantor and
constitutes, and each other Operative Document to which Lessee Agent,
Lessee or Guarantor is a party when executed and delivered by such
party will constitute, a legal, valid and binding obligation of Lessee
Agent, Lessee or Guarantor enforceable against it in accordance with
its terms, except as
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such enforceability may be limited by (A) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and (B) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(ii) If the transactions are treated as creating a
secured loan to Lessee, as is the intent of the parties
hereto, each of the Lessor Financing Statements, the Lessor
Mortgage and the Lease Supplements, if any, creates, or upon
their execution, will create valid security interests in and
mortgage liens on the Property purported to be covered
thereby, which security interests and mortgage liens are, and
will remain to the extent appropriate UCC continuation filings
are made, perfected security interests and mortgage liens,
prior to all Liens other than Permitted Property Liens.
(d) Governmental and Other Approvals. No action, consent or
approval of, registration or filing with or any other action by any
Governmental Authority or any third party is or will be required in
connection with the activities of Lessee Agent, Lessee and Guarantor
pursuant to the Transactions or the enforceability of any Operative
Document against either Lessee Agent, Lessee or Guarantor to which
Lessee Agent, Lessee or Guarantor is a party, except such as have been
made or obtained and are in full force and effect.
(e) Financial Statements. The Guarantor has heretofore
furnished to the Administrative Agent, the Agent Certificate Holder and
each Participant with the following financial statements, identified by
a principal financial officer of the Guarantor: (i) a consolidated
balance sheet of the Guarantor and its Subsidiaries as at fiscal year
end in each of the three fiscal years of the Guarantor most recently
completed prior to the date as of which this representation is made or
repeated to such Participant (other than fiscal years completed within
ninety (90) days prior to such date for which audited financial
statements have not been released) and consolidated statements of
operations and cash flows and a consolidated statement of capital stock
and retained earnings of the Guarantor and its Subsidiaries for each
such year, all reported on by Ernst & Young LLP (or any other
independent public accounting firm of recognized national standing) and
(ii) a consolidated balance sheet of the Guarantor and its Subsidiaries
as at the end of the quarterly period (if any) most recently completed
prior to such date and after the end of such fiscal year (other than
quarterly periods completed within 60 days prior to such date for which
financial statements have not been released) and the comparable
quarterly period in the preceding fiscal year and consolidated
statements of operations and cash flows and a consolidated statement of
capital stock and retained earnings for the period from the beginning
of the fiscal years in which such quarterly periods are included to the
end of such quarterly period, prepared by the Guarantor. Such financial
statements (including any related schedules and/or notes) are true and
correct in all material respects (subject, as to interim statements, to
changes resulting from audits and year-end adjustments), have been
prepared in accordance with GAAP consistently followed throughout the
periods involved and show all liabilities, direct and contingent, of
the Guarantor and its Subsidiaries required to be shown in accordance
with such principles.
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The balance sheets fairly present the condition of the Guarantor and
its Subsidiaries as at the dates thereof, and the statements of
operations, capital stock and retained earnings and cash flows fairly
present the results of the operations of the Guarantor and its
Subsidiaries and their cash flows for the periods indicated. There has
been no material adverse change in the business, property or assets,
condition (financial or otherwise, operations or prospects of the
Guarantor and its Subsidiaries taken as a whole since the end of the
most recent fiscal year for which such audited financial statements
have been furnished.
(f) No Material Adverse Change. There has been no material
adverse change in the business, financial position, results of
operations or prospects of the Guarantor since the date of the most
recent financial statements described in Section 8.2(e) hereof.
(g) Title to Properties. The Guarantor has and each of its
Subsidiaries has good and indefeasible title to its respective real
properties (other than properties which it leases) and good title to
all of its other respective properties and assets, including the
properties and assets reflected in the most recent audited balance
sheet referred to in Section 8.2(e) (other than properties and assets
disposed of in the ordinary course of business), subject to no Lien of
any kind except Liens permitted by Section 10.2(b). All leases
necessary in any material respect for the conduct of the respective
businesses of the Guarantor and its Subsidiaries are valid and
subsisting and are in full force and effect.
(h) Single Purpose, Single Asset, No Subsidiaries. Lessee is
a single purpose entity, wholly owned by Guarantor, whose sole purpose
is the leasing, subleasing and ownership of the Property and related
purposes and whose sole asset is the leasehold interest in the
Property. Lessee has no Subsidiaries.
(i) Litigation; Compliance with Laws. There is no action,
suit, investigation or proceeding pending or, to the knowledge of the
Guarantor, threatened against the Guarantor or any of its Subsidiaries,
or any properties or rights of the Guarantor or any of its
Subsidiaries, by or before any court, arbitrator or administrative or
governmental body which could be reasonably expected to result in any
material adverse change in the business, property or assets, condition
(financial or otherwise) or operations of the Guarantor and its
Subsidiaries taken as a whole or the ability of the Guarantor to
perform its obligations under the Operative Documents or the
Transactions.
(j) Federal Reserve Regulations. (i) Neither Lessee Agent nor
Lessee is engaged in the business of extending credit for the purpose
of purchasing or carrying Margin Stock.
(ii) No part of the proceeds of any Advance will be
used by the Lessee, whether directly or indirectly, and
whether immediately, incidentally or ultimately, (A) to the
purchase or carry Margin Stock or to extend credit to others
for the purpose of purchasing or carrying Margin Stock or to
refund indebtedness originally incurred for such purpose, or
(B) for any purpose which entails a
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violation of, or which is inconsistent with the provisions
of the Regulations of the F.R.S. Board, including Regulation
G, U or X.
(k) Governmental Regulation. Neither Lessee Agent nor Lessee
is an "investment company" or a company "controlled" by an "investment
company" as defined in, or subject to regulation under, the Investment
Company Act of 1940 or (ii) subject to regulation under the Public
Utility Holding Company Act of 1935.
(l) Use of Proceeds. The proceeds of each Advance will be
used only for the purpose of financing the acquisition of Land or
leasehold interests therein (and Improvements existing thereon, if any)
and, the payment of Property Improvement Costs incurred in connection
therewith.
(m) Tax Returns. The Guarantor has and each of its
Subsidiaries has filed all federal, state and other income tax returns
which, to the best knowledge of the officers of the Guarantor and its
Subsidiaries, are required to be filed, and each has paid all taxes as
shown on such returns and on all assessments received by it to the
extent that such taxes have become due, except such taxes (i) as are
being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP or (ii)
the non-payment of which (a) could not be reasonably expected to have a
material adverse effect on the business, condition (financial or
otherwise) or operations of the Guarantor and its Subsidiaries taken as
a whole and (b) does not result in the creation of any Lien other than
Liens permitted by Section 10.2(b) hereof.
(n) No Misstatements. Neither the Operative Documents nor any
other document, certificate or statement furnished to the Participant
by or on behalf of the Guarantor in connection herewith contains any
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein and therein
not misleading. there is no fact peculiar to the Guarantor or any of
its Subsidiaries which materially adversely affects or in the future
may (so far as the Guarantor can now foresee) materially adversely
affect the business, property or assets, condition (financial or
otherwise or operations of the Guarantor or any of the Subsidiaries and
which has not been set forth in the Operative Documents.
(o) ERISA. No accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), whether or not
waived, exists with respect to any Plan (other than a Multiemployer
Plan). No liability to the PBGC has been or is expected by the
Guarantor or any ERISA Affiliate to be incurred with respect to any
Plan (other than a Multiemployer Plan) by the Guarantor, any Subsidiary
or any ERISA Affiliate which is or would be materially adverse to the
business, property or assets, condition (financial or otherwise) or
operations of the Guarantor and its Subsidiaries taken as a whole.
Neither the Guarantor, any Subsidiary nor any ERISA Affiliate has
incurred or presently expects to incur any withdrawal liability under
Title IV of ERISA with respect to any Multiemployer Plan which is or
would be materially adverse to the business, property or assets,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries taken as a whole. The execution and delivery of the
Operative
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Documents and the consummation of the Transactions will be exempt from
or will not involve any transaction which is subject to the
prohibitions of section 406 of ERISA and will not involve any
transaction in connection with which a penalty could be imposed under
Section 502(i) of ERISA or a tax could be imposed pursuant to section
4975 of the Code.
(p) Environmental Compliance. The Guarantor and is
Subsidiaries and all of their respective properties and facilities have
complied at all times and in all respects with all applicable foreign,
federal, state, local and regional statutes, laws, ordinances and
judicial or administrative orders, judgments, rulings and regulations
relating to protection of the environment except, in any such case,
where failure to so comply could not reasonably be expected to result
in a material adverse effect on the business, condition (financial or
otherwise) or operations of the Guarantor and its Subsidiaries taken as
a whole or the ability of the Guarantor to perform its obligations
under the Operative Documents.
(q) Offer of Securities, etc. Neither Lessee Agent nor any
Person authorized to act on its behalf has, directly or indirectly,
offered any interest in the Property or any other interest similar
thereto (the sale or offer of which would be integrated with the sale
or offer of such interest in the Property), for sale to, or solicited
any offer to acquire any of the same from, any Person other than each
initial Participant and the Administrative Agent, the Agent Certificate
Holder and other "accredited investors" (as defined in Regulation D of
the Securities and Exchange Commission).
(r) Property. The Property as improved in accordance with the
Plans and Specifications and the contemplated use thereof by the Lessee
and its agents, assignees, employees, lessees, sublessees, licensees,
tenants and subtenants shall be in material compliance with all
Requirements of Law (including, without limitation, all zoning and land
use laws and Environmental Laws) and Insurance Requirements, except for
such Requirements of Law as it shall be contesting in good faith by
appropriate proceedings. There is no action, suit or proceeding
(including any proceeding in condemnation or eminent domain or under
any Environmental Law) pending or, to the best of its knowledge,
threatened with respect to it, or the Property which materially
adversely affects the title to, or the use, operation or value of, the
Property except as has been previously disclosed to the Agent
Certificate Holder and Administrative Agent in writing.
(s) Plans and Specifications. Upon completion of construction
for the Property, all water, sewer, electric, gas (if applicable),
telephone and drainage facilities and all other utilities required to
adequately service the applicable Improvements for the Property's
intended use will be available pursuant to adequate permits (including
any that may be required under applicable Environmental Laws). No fire
or other casualty with respect to the Property has occurred which fire
or other casualty has had a Material Adverse Effect on the Property.
Upon completion of construction for the Property, the Property will
have available all Material services of public facilities and other
utilities necessary for use and operation of the Property for its
intended purpose including, without limitation, adequate water, gas and
electrical supply, storm and sanitary sewerage
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facilities, telephone, other required public utilities and means of
legal access between the Property and public streets and sidewalks.
All utilities serving the Property or proposed to serve the Property
in accordance with the Plans and Specifications are located in, and
access to the Property is provided by, either public rights-of-way
abutting the Property or Appurtenant Rights. All Material licenses,
approvals, authorizations, consents, permits (including, without
limitation, building, demolition and environmental permits, licenses,
approvals, authorizations and consents), easements and rights-of-way,
including proof and dedication, required for (x) the use, treatment,
storage, transport, disposal or disposition of any Hazardous Material
on, at, under or from the Property during the construction of the
Improvements thereon, and (y) construction of the Improvements on the
Property in accordance with the Plans and Specifications and the
Construction Agency Agreement have either been irrevocably obtained
from the appropriate Governmental Authorities having jurisdiction or
from private parties, as the case may be, or will be irrevocably
obtained from the appropriate Governmental Authorities having
jurisdiction or from private parties, as the case may be, prior to
commencing any such construction or use and operation, as applicable.
Prior to any Advance with respect of the Land or Improvements, the
Lessee has obtained (or will obtain prior to the Completion Date) all
appropriate Governmental Action, and has and will keep in full force
and effect, all material operating permits necessary to allow for the
Property to be operated in accordance with its intended use.
(t) Deed. With respect to the acquisition by purchase of the
Property on the Acquisition Date, the Deed will be sufficient to convey
good and marketable title to the Property (subject to the Permitted
Property Liens) to the Lessor Trust. With respect to the acquisition by
ground lease of the Property on the Acquisition Date, the ground lease
will be sufficient to convey good and marketable leasehold title to the
Property (subject to Permitted Property Liens) to the Lessor Trust.
(u) Insurance. Lessee will, on or before the Acquisition
Date, have obtained insurance coverage covering the Property which
meets the requirements of the Master Lease, and such coverage is in
full force and effect.
(v) Flood Hazard Areas. Except as otherwise identified on the
applicable survey delivered pursuant to Section 6.1(p), no portion of
the Property will be located within an area identified as a special
flood hazardous area by the Federal Emergency Management Agency.
(w) Solvency. The Guarantor and the Lessee are Solvent.
(x) Outstanding Debt. Neither the Guarantor nor any of its
Subsidiaries has outstanding any Debt except as permitted by Section
10.2(c). There exists no default under the provisions of any instrument
evidencing Debt of the Guarantor or any of its Subsidiaries in an
amount greater than $250,000 or of any agreement relating thereto.
(y) Conflicting Agreements and Other Matters. Neither the
Guarantor nor any of its Subsidiaries is a party to any contract or
agreement or subject to any charter or
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other corporate restriction which materially and adversely affects its
business, property or assets, condition (financial or otherwise) or
operations. None of the execution and delivery of this Participation
Agreement or any other Operative Document, the making of the Loans or
the fulfillment of or compliance with the terms and provisions hereof
and of the other Operative Documents will conflict with, or result in
a breach of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the
creation of any Lien upon any of the properties or assets of the
Guarantor or any of its Subsidiaries pursuant to, the charter or
by-laws of the Guarantor or any of its Subsidiaries, any award of any
arbitrator or any agreement (including any agreement with
stockholders), instrument, order, judgment, decree, statute, law, rule
or regulation to which the Guarantor or any of its Subsidiaries is
subject. Neither the Guarantor nor any of its Subsidiaries is a party
to, or otherwise subject to any provision contained in, any instrument
evidencing Indebtedness of the Guarantor or such Subsidiary, any
agreement relating thereto or any other contract or agreement
(including its charter) which limits the amount of, or otherwise
imposes restrictions on the incurring of, Debt of the Guarantor of the
type that the Obligations constitute except as set forth in the
agreements listed in Schedule IV attached hereto (as such Schedule IV)
may have been modified from time to time by written supplements
thereto delivered by the Guarantor and accepted in writing by the
Required Participants).
Section 8.3. Representations with Respect to each Funding Date and the
Acquisition Date. The Lessee and the Guarantor each represents and warrants to
the Administrative Agent, the Lessor Trust, the Owner Trustee, the Agent
Certificate Holder and each Participant as of each Funding Date and the
Acquisition Date, as to itself, as follows:
(a) Representations and Warranties. Its representations and
warranties set forth in Section 8.2 are true and correct in all
material respects on and as of such Funding Date and the Acquisition
Date, as the case may be, except to the extent such representations or
warranties relate solely to an earlier date, in which case such
representations and warranties shall have been true and correct on and
as of such earlier date. It is in compliance with its obligations under
the Operative Documents and there exists no Lease Default or Lease
Event of Default. No Lease Default or Lease Event of Default will occur
as a result of, or after giving effect to, the Advance requested by the
Funding Request on such date.
(b) Improvements. The Construction of the Improvements has,
to the best knowledge of Lessee Agent and the Lessee, been performed in
a good and workmanlike manner, substantially in accordance with the
Plans and Specifications therefor in all material respects and in
compliance with all Insurance Requirements and Requirements of Law.
(c) Liens. Neither Lessee Agent nor Lessee has permitted any
Liens to be placed against the Property other than Permitted Property
Liens.
(d) Advance. The amount of the Advance requested represents
amounts advanced or to be advanced by the Construction Agent to third
parties (except for the
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Construction Agent Fee) in connection with Land Acquisition Costs or
Property Improvement Costs. With respect to each Advance, the
conditions precedent to such Advance and the related Certificate
Holder Amounts and Loans set forth in Article VI have been satisfied.
Section 8.4. Warranties and Representations of the Owner Trustee.
Wilmington Trust Company warrants and represents in its individual capacity
notwithstanding the provisions of Section 15.19 hereof or any similar provision
of any other Operative Document, that:
(a) Wilmington Trust Company
(i) is a banking corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware and has the capacity to act as trustee of
a trust which owns real property located in the State of
Maryland;
(ii) has the corporate power and authority to enter
into and perform its obligations under the Trust Agreement and
this Participation Agreement; and
(iii) has full right, power and authority under the
Trust Agreement to enter into and perform its obligations, as
Owner Trustee on behalf of the Lessor Trust, under the
Operative Documents.
(b) There are no actions or proceedings pending, or to the
knowledge of Wilmington Trust Company, threatened, against or affecting
Wilmington Trust Company in or before any Governmental Authority which,
if adversely determined, would materially and adversely affect the
Trust Estate or would call into question the right, power and authority
of Wilmington Trust Company to enter into or perform the Trust
Agreement and each Operative Documents to which it is a party.
(c) The Trust Estate will be free and clear of any liens and
encumbrances which result from claims against Wilmington Trust Company
in its individual capacity. Wilmington Trust Company, in its individual
capacity, has not by affirmative act, conveyed any interest in the
Trust Estate to any Person or subjected the Trust Estate to any Lien,
and will not do so by affirmative act.
(d) The Trust Agreement and (insofar as it is entering into
this Participation Agreement in its individual capacity) this
Participation Agreement have been duly authorized by all necessary
corporate action on the part of Wilmington Trust Company, have been
duly executed and delivered by Wilmington Trust Company and constitute
the valid and binding obligations of Wilmington Trust Company
enforceable against Wilmington Trust Company in accordance with the
terms thereof, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally
and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
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(e) Neither any relationship between Wilmington Trust Company
and any other Person, nor any circumstance in connection with the
execution and delivery of the Trust Agreement or this Participation
Agreement, is such as to require a consent, approval or authorization
of, or filing, registration or qualification with, any Governmental
Authority on the part of Wilmington Trust Company in connection with
the execution and delivery of the Trust Agreement or this Participation
Agreement other than as contemplated by the Operative Documents.
(f) The execution and delivery of the Trust Agreement and
this Participation Agreement and compliance by Wilmington Trust Company
with all of the provisions thereof do not and will not contravene any
federal law of the United States of America or any law of the State of
Delaware regulating the banking or trust activities or business of
Wilmington Trust Company, or any order of any Governmental Authority
applicable to or binding on Wilmington Trust Company or its articles of
association or its by-laws.
(g) The Operative Documents to which Owner Trustee is a party
have been duly executed and delivered by the Owner Trustee and the
Operative Documents to which Lessor Trust is a party have been duly
executed and delivered by Owner Trustee on behalf of Lessor Trust.
(h) Both Wilmington Trust Company's chief executive office
and the place where its active records concerning the Project and the
Lessor Trust are kept are located in Wilmington, Delaware.
Section 8.5. Warranties and Representations of the Lessor Trust. The
Lessor Trust warrants and represents that:
(a) The Lessor Trust is a Delaware Business Trust duly formed
by a valid, binding and effective declaration of trust by Agent
Certificate Holder and the Owner Trustee and the filing of a
certificate of trust with the Delaware Secretary of State pursuant to
the laws of the State Delaware and has all requisite power and
authority under the Trust Agreement to execute and deliver, and to
perform its obligations under, the Operative Documents to which it is a
party.
(b) The Operative Documents to which it is, or will be, a
party are duly authorized pursuant to the Trust Agreement and such
Operative Documents have been duly executed and delivered by the Lessor
Trust, and constitute, and each other Operative Document to which
Lessor Trust is a party when executed and delivered by Lessor Trust
will constitute, the valid and binding obligations of the Lessor Trust
enforceable against the Lessor Trust in accordance with the respective
terms thereof, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally
and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
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(c) The Lessor Trust is not in violation of any term of any
of the Operative Documents.
(d) Neither the execution and delivery of the Operative
Documents, the consummation of the transactions contemplated thereby
nor the fulfillment of or compliance with the provisions thereof nor
any circumstance in connection with the issuance of the Certificates
will require consent, approval, authorization, filing, registration or
qualification under or conflict with or violate any Applicable Law
having jurisdiction over the Lessor Trust or any of the Property of the
Lessor Trust, except as contemplated by the Operative Documents.
(e) The Lessor Trust has not by affirmative act conveyed any
interest in the Trust Estate to any Person or subjected the Trust
Estate to any Lien except pursuant to the Operative Documents, and will
not do so by affirmative act.
(f) On the date hereof, the Lessor Trust is "located" (as
defined in ss.9-103(3)(d) of the Uniform Commercial Code) at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
(g) Neither the Lessor Trust nor any Person authorized by the
Lessor Trust to act on its behalf has offered or sold any interest in
the Lease, or in any similar security relating to the Property, or in
any security the offering of which for the purposes of the Securities
Act would be deemed to be part of the same offering as the offering of
the aforementioned securities to, or solicited any offer to acquire any
of the same from, any Person other than the Agent Certificate Holder,
Administrative Agent and the Participants, and neither the Lessor Trust
nor any Person authorized by the Lessor Trust to act on its behalf will
take any action which would subject the issuance or sale of any
interest in the Lease or the Property to the provisions of Section 5 of
the Securities Act or require the qualification of any Operative
Document under the Trust Indenture Act of 1939, as amended.
(h) The Lessor Trust is a single purpose entity whose sole
purpose is the leasing and ownership of the Property and related
purposes and whose sole asset will be the Property and ancillary
rights.
ARTICLE IX
PAYMENT OF CERTAIN EXPENSES
The Lessee Agent agrees, for the benefit of the Arranger, the Lessor
Trust, the Owner Trustee, the Trust Company, the Agent Certificate Holder, the
Administrative Agent, the Certificate Holders and the Lenders, that:
Section 9.1. Transaction Expenses. (a) The Lessee Agent shall pay, or
cause to be paid, from time to time all Transaction Expenses in respect of the
transactions on the Documentation Date, the Acquisition Date and each Funding
Date to the extent provided herein; provided, however, that, if the Lessee Agent
has not received written invoices therefor at least two
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(2) Business Days prior to such date, such Transaction Expenses shall be paid
within thirty (30) days after the Lessee Agent has received written invoices
therefor.
(b) The Lessee Agent shall pay or cause to be paid (i) all Transaction
Expenses incurred by the Agent Certificate Holder, Lessor Trust, Owner Trustee,
the Trust Company, the Administrative Agent or the Arranger in entering into any
future amendments or supplements with respect to any of the Operative Documents,
whether or not such amendments or supplements are ultimately entered into, or
giving or withholding of waivers or consents hereto or thereto, in each case
which have been requested by or approved by the Lessee Agent, (ii) all
Transaction Expenses incurred by the Arranger, the Agent Certificate Holder,
Lessor Trust, Owner Trustee, the Trust Company, the Administrative Agent, the
Lenders or the Certificate Holders in connection with the purchase of the
Property by Lessee or other Person pursuant to Articles XVIII and XXI of the
Master Lease and (iii) after the occurrence and during the continuance of a
Lease Event of Default or a Construction Agency Event of Default, all
Transaction Expenses incurred by any of the Participants, the Agent Certificate
Holder, Lessor Trust, Owner Trustee, the Trust Company, the Administrative Agent
or the Arranger in respect of enforcement of any of their rights or remedies
against the Lessee or the Lessee Agent/Guarantor in respect of the Operative
Documents.
Section 9.2. Brokers' Fees and Stamp Taxes. The Lessee Agent shall pay
or cause to be paid any brokers' fees and any and all stamp, transfer and other
similar taxes, fees and excise, if any, including any interest and penalties,
which are payable in connection with the transactions contemplated by this
Participation Agreement and the other Operative Documents.
Section 9.3. Loan Agreement and Related Obligations. If a Lease Event
of Default has occurred and is continuing, the Lessee Agent shall pay, without
duplication of any other obligation of any Lessee or the Lessee Agent to pay any
such amount under the Operative Documents, before the due date thereof, all
costs, expenses and other amounts (other than principal and interest on the
Loans which are payable to the extent otherwise required by the Operative
Documents) required to be paid by the Agent Certificate Holder, Lessor Trust,
Owner Trustee, the Trust Company, Administrative Agent or any of the Lenders or
Certificate Holders under the Loan Agreement and the Assignment of Lease and
Rent and the Construction Agency Agreement Assignment.
ARTICLE X
OTHER COVENANTS AND AGREEMENTS
Section 10.1. Affirmative Covenants of the Guarantor. The Lessee Agent
covenants and agrees with the Arranger, the Agent Certificate Holder, Lessor
Trust, Owner Trustee, the Administrative Agent, the Certificate Holders and the
Lenders that, so long as this Participation Agreement shall remain in effect or
the principal or interest on any Loan, any Certificate Holder Amount or Yield
thereon, or any fees or any other expenses or amounts payable under any
Operative Document shall be unpaid, and until all Commitments shall have been
permanently terminated, unless the Required Participants shall otherwise consent
in writing, the Lessee Agent will:
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(a) Financial Statements. The Guarantor shall deliver to the
Administrative Agent, in form and detail reasonably satisfactory to the
Administrative Agent and the Required Participants, with sufficient copies for
each Participant:
(i) as soon as available, but not later than one hundred
twenty (120) days after the end of each fiscal year, a copy of the
audited consolidated balance sheet of the Guarantor and its
Subsidiaries as at the end of such year and the related consolidated
statements of income or operations, shareholders' equity and cash flows
for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, and accompanied by the opinion of
Ernst & Young or another nationally-recognized independent public
accounting firm ("Independent Auditor") which report (x) shall state
that such consolidated financial statements present fairly the
financial position for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years and (y) shall not be
qualified or limited because of a restricted or limited examination by
the Independent Auditor of any material portion of the Guarantor's or
any Subsidiary's records; and
(ii) as soon as available, but not later than sixty (60) days
after the end of each of the first three fiscal quarters of each fiscal
year, a copy of the unaudited consolidated balance sheet of the
Guarantor and its Subsidiaries as of the end of such quarter and the
related consolidated statements of income, shareholders' equity and
cash flows for the period commencing on the first day and ending on the
last day of such quarter, and certified by a Responsible Officer as
fairly presenting, in accordance with GAAP (subject to ordinary, good
faith year-end audit adjustments), the financial position and the
results of operations of the Guarantor and the Subsidiaries.
(b) Certificates; Other Information. The Guarantor shall furnish to the
Administrative Agent, with sufficient copies for each Participant:
(i) concurrently with the delivery of the financial
statements referred to in subsection 10.1(a)(i), a certificate of the
Independent Auditor stating that in making the examination necessary
therefor no knowledge was obtained of any Event of Default or Unmatured
Event of Default, except as specified in such certificate;
(ii) concurrently with the delivery of the financial
statements referred to in subsections 10.1(a)(i) and (ii), a Compliance
Certificate executed by a Responsible Officer;
(iii) promptly, copies of all financial statements and reports
that the Guarantor sends to its shareholders, and copies of all
financial statements and regular, periodical or special reports
(including Forms 10K, 10Q and 8K) that the Guarantor or any Subsidiary
may make to, or file with, the SEC; and
(iv) promptly, such additional information regarding the
business, financial or corporate affairs of the Guarantor or any
Subsidiary as the Administrative Agent, at the request of any
Participant, may from time to time request.
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(c) Notices. The Guarantor shall promptly notify the Administrative
Agent and each Participant promptly after a Responsible Officer obtains
knowledge of:
(i) the occurrence of any Event of Default or Unmatured
Event of Default;
(ii) any of the following matters that has resulted or may
reasonably be expected to result in a Material Adverse Effect: (A) any
breach or non-performance of, or any default under, a Contractual
Obligation of the Guarantor or any Subsidiary; (B) any dispute,
litigation, investigation, proceeding or suspension between the
Guarantor or any Subsidiary and any Governmental Authority; or (C) the
commencement of, or any material development in, any litigation or
proceeding affecting the Guarantor or any Subsidiary including pursuant
to any applicable Environmental Law;
(iii) the occurrence of any of the following events affecting
the Guarantor or any ERISA Affiliate (but in no event more than ten
(10) days after such event; provided that the Guarantor shall notify
the Administrative Agent and each Participant not less than ten (10)
days before the occurrence of any event described in clause (B) below),
and deliver to the Administrative Agent and each Participant a copy of
any notice with respect to such event that is filed with a Governmental
Authority and any notice delivered by a Governmental Authority to the
Guarantor or any ERISA Affiliate with respect to such event:
(A) an ERISA Event;
(B) a contribution failure with respect to a Pension
Plan sufficient to give rise to a Lien under Section 302(f) of
ERISA;
(C) a material increase in the Unfunded Pension
Liability of any Pension Plan;
(D) the adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the code
by the Guarantor or any ERISA Affiliate; or
(E) the adoption of any amendment to a Plan subject
to Section 412 of the Code, if such amendment results in a
material increase in contributions or Unfunded Pension
Liability; and
(iv) any material change in accounting policies or financial
reporting practices by the Guarantor or any of its consolidated
Subsidiaries.
Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating what action the Guarantor or any affected
Subsidiary proposes to take with respect thereto and at what time. Each notice
under subsection 10.1(c)(i) shall describe with particularity any and all
clauses
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or provisions of this Participation Agreement or any other Operative Document
that have been breached or violated.
(d) Preservation of Corporate Existence Etc. The Guarantor shall, and
shall cause each Subsidiary to:
(a) preserve and maintain in full force and effect its
corporate existence and good standing under the laws of its state or
jurisdiction of incorporation or formation; provided, however, that,
subject at all times to the limits set forth in Section 10.2(d) hereof,
the Guarantor shall be permitted to dissolve any Subsidiary that is not
a Material Subsidiary;
(b) preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business
except (i) in connection with transactions permitted by Section 10.2(e)
and sales of assets permitted by Section 10.2(d) and (ii) to the extent
the non-preservation or non-maintenance thereof could not reasonably be
expected to have a Material Adverse Effect;
(c) use reasonable efforts, in the ordinary course of
business, to preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of
which could reasonably be expected to have a Material Adverse Effect.
(e) Maintenance of Property. The Guarantor shall, and shall cause each
Subsidiary to, maintain and preserve all its property which is used or useful in
its business in good working order and condition, ordinary wear and tear
excepted and make all necessary repairs thereto and renewals and replacements
thereof except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect. The Guarantor and each Subsidiary shall use the
standard of care typical in the industry in the operation and maintenance of its
facilities.
(f) Insurance. The Guarantor shall, and shall cause each Subsidiary to,
maintain with financially sound and reputable insurers, insurance in such
amounts and against such liabilities and hazards as customarily maintained by
the Guarantor in accordance with its practices, policies and procedures prior to
the Documentation Date. Together with each delivery of financial statements
under subsection 10.1(a)(i), the Guarantor will, upon the request of any
Participant, deliver a certificate of a Responsible Officer specifying the
details of such insurance in effect.
(g) Payment of Obligations. The Guarantor shall, and shall cause each
Subsidiary to, pay and discharge as the same shall become due and payable all
their respective obligations and liabilities, including:
(i) all tax liabilities, assessments and governmental charges
or levies upon it or its properties or assets, unless the same are
being contested in good faith by
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appropriate proceedings and adequate reserves in accordance with GAAP
are being maintained by the Guarantor or such Subsidiary;
(ii) all lawful claims which, if unpaid, would by law become a
Lien upon its property; and
(iii) all indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any instrument or
agreement evidencing such Indebtedness.
(h) Compliance with Laws. The Guarantor shall, and shall cause each
Subsidiary to, comply in all material respects with all Requirements of Law of
any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
(i) Compliance with ERISA. The Guarantor shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.
(j) Inspection of Property and Books and Records. The Guarantor shall,
and shall cause each Subsidiary to, maintain proper books of record and account,
in which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Guarantor and such Subsidiary. The Guarantor shall,
and shall cause each Subsidiary to, permit representatives and independent
contractors of the Administrative Agent or any Participant to visit and inspect
any of their respective properties, to examine their respective corporate,
financial and operating records, and make copies thereof or abstracts therefrom,
and to discuss their respective affairs, finances and accounts with their
respective directors, officers, and independent public accountants, all at the
reasonable expense of the Guarantor and at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Guarantor; provided that when an Event of Default exists
the Administrative Agent or any Participant may do any of the foregoing at the
reasonable expense of the Guarantor at any time during normal business hours
without advance notice.
(k) Environmental Laws. The Guarantor shall, and shall cause each
Subsidiary to, conduct its operations and keep and maintain its property in
material compliance with all material Environmental Laws.
(l) Use of Proceeds. The Guarantor shall use the proceeds of the Loans
to acquire the Property and to fund Construction of Improvements.
(m) Covenant to Secure Obligations Equally. The Guarantor covenants
that, if it or any Subsidiary shall create or assume any Lien upon any of its
property or assets, whether now owned or hereafter acquired, other than Liens
permitted by the provisions of Section 10.2(b)
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(unless prior written consent to the creation or assumption thereof shall have
been obtained pursuant to Section 15.5 hereof), it will make or cause to be made
effective provision whereby the Obligations will be secured by such Lien equally
and ratably with any and all other Debt thereby secured so long as any such
other Debt shall be so secured.
(n) Cooperative Status. The Guarantor covenants that it will at all
times maintain its status as a cooperative for purposes of Subchapter T of the
Code; provided, however, in the event that the Code or other applicable law is
modified after the date hereof and as a result of such modification the
Guarantor is unable to satisfy its obligations under this Section, then the
Required Participants and the Guarantor shall agree, or in good faith negotiate
to agree, to amend the covenants contained in this Participation Agreement so
that the application of such covenants (following such modification of the Code
or other applicable law and the effect thereof on the Guarantor) will be
substantially the same as prior thereto.
Section 10.2. Negative Covenants of the Guarantor. The Guarantor
covenants and agrees with the Arranger, the Agent Certificate Holder, Lessor
Trust, Owner Trustee, the Administrative Agent, the Certificate Holders and the
Lenders that, so long as this Participation Agreement shall remain in effect or
the principal or interest on any Loan, any Certificate Holder Amount or Yield
thereon, or any fees or any other expenses or amounts payable under any
Operative Document shall be unpaid, and until all Commitments shall have been
permanently terminated, unless the Required Participants shall otherwise consent
in writing, the Guarantor will:
(a) Fixed Charge Coverage Ratio. The Guarantor will not permit the
Fixed Charge Coverage Ratio to be less than 1.50 to 1.00, in each case
determined at the end of each fiscal quarter for the four (4) consecutive fiscal
quarter period then ending.
(b) Lien Restrictions. The Guarantor will not and will not permit any
Subsidiary to create, assume or suffer to exist any Lien upon any of its
property or assets, whether now owned or hereafter acquired (whether or not
provision is made for the equal and ratable securing of the Obligations in
accordance with the provisions of Section 10.1(m)), except:
(i) Liens for taxes not yet due or which are being actively
contested in good faith by appropriate proceedings,
(ii) Liens incidental to the conduct of its business or the
ownership of its property and assets which were not incurred in
connection with the borrowing of money or the obtaining of advances or
credit,
(iii) Liens on property or assets of a Subsidiary to secure
obligations of such Subsidiary to the Guarantor or another Subsidiary,
(iv) Liens in existence on the Documentation Date and
described on Schedule VI,
(v) Liens in respect of capital leases entered into in
connection with, or any Lien arising in connection with, the
acquisition of property, after the date hereof and
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attaching only to the property being acquired, if the Indebtedness
secured thereby does not exceed one hundred percent (100%) of the
lesser of (i) the fair market value of the property acquired at the
time of acquisition thereof and (ii) the total purchase price of the
property so acquired, and
(vi) other Liens (including Liens arising under capital
leases), in addition to the Liens permitted by clauses (a) through (d)
above, securing Indebtedness of the Guarantor or any Subsidiary (other
than Indebtedness that constitutes Subordinated Debt); provided,
however, that (i) such Indebtedness is permitted by the provisions of
Section 10.2(c) and (ii) the aggregate outstanding principal amount of
all such Indebtedness does not at any time exceed an amount equal to
ten percent (10%) of the consolidated total assets of the Guarantor.
(c) Debt Restrictions. The Guarantor will not and will not permit any
Subsidiary to create, incur, assume or suffer to exist any Debt, except:
(i) Senior Funded Debt in existence as of the
Documentation Date,
(ii) Subordinated Debt,
(iii) Senior Funded Debt (including any Short Term Debt to be
included in the computation of Senior Funded Debt pursuant to clause
(iv) below) of the Guarantor, so long as the aggregate principal amount
of all consolidated Senior Funded Debt does not exceed at any time an
amount equal to fifty percent (50%) of Consolidated Capitalization, and
(iv) Short Term Debt of the Guarantor, provided that there
shall have been a period of at least thirty (30) consecutive days
within the twelve (12) month period immediately preceding the date of
determination during which the aggregate principal amount of Short Term
Debt of the Guarantor outstanding as of the close of business on any
day during such twelve month period did not exceed an amount equal to
the amount of Funded Debt which would have been permitted as additional
Funded Debt under clause (iii) of this Section 10.2(c) as of the close
of business on such day, and provided further that an amount equal to
the largest balance of such Short Term Debt outstanding on any day of
such thirty (30) day period shall be included in all computations of
Senior Funded Debt under clause (iii) above until such Short Term Debt
has been repaid in full, and
For purposes of this Section 10.2(c), Debt represented by the Loans and
Certificate Holder Amounts shall be considered Short Term Debt.
(d) Sale of Assets. The Guarantor will not and will not permit any
Subsidiary to sell, lease or transfer or otherwise dispose of any assets of the
Guarantor or any Subsidiary other than in the ordinary course of business (which
shall be deemed to include the planned sale of up to eight distribution
facilities); provided that the Guarantor and its Subsidiaries may sell, lease,
transfer or otherwise dispose of assets outside the ordinary course of business
so long as the
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aggregate amount of all assets sold, leased, transferred or otherwise disposed
of outside the ordinary course of business during the most recent thirty-six
(36) month rolling period when added together, without duplication, with (a) any
shares of stock or Debt of any Subsidiary sold or otherwise disposed of, or with
respect to which the Guarantor or any Subsidiary has parted control of, except
to the Guarantor or another Subsidiary, during such period and (b) any assets
then proposed to be sold outside of the ordinary course of business do not
constitute more than ten percent (10%) of the consolidated total assets of the
Guarantor as of the end of the most recent fiscal quarter for which the
Guarantor has delivered financial statements pursuant to Section 10.1(a).
(e) Merger. The Guarantor will not and will not permit any Subsidiary
to merge or consolidate with any other Person, except that Subsidiaries may be
merged into the Guarantor or any other Subsidiary and the Guarantor may merge
with another Person, provided that the Guarantor is the surviving corporation
and no Event of Default or Default shall exist either immediately before or
after such merger; provided, however, that any Subsidiary that is not a Material
Subsidiary shall be allowed to merge or consolidate with any Person but subject
at all times to the limits set forth in Section 10.2(d) hereof.
(f) Restrictions on Transactions with Affiliates and Stockholders. The
Guarantor will not and will not permit any Subsidiary to directly or indirectly,
purchase, acquire or lease any property from, or sell, transfer or lease any
property (other than shares of stock of the Guarantor) to, or otherwise deal
with (i) any Affiliate or Substantial Stockholder, or (ii) any corporation in
which an Affiliate, Substantial Stockholder or the Guarantor (either directly or
through Subsidiaries) owns five percent (5%) or more of the outstanding voting
stock, except that (A) any such Affiliate or Substantial Stockholder may be a
director, officer or employee of the Guarantor or any Subsidiary and may be paid
reasonable compensation in connection therewith (B) the Guarantor and its
Subsidiaries may perform or engage in any of the foregoing in the ordinary
course of business upon terms no less favorable to the Guarantor or such
Subsidiary (as the case may be) than if no such relationship described in
clauses (i) and (ii) above existed and (C) the Guarantor may sell to or purchase
from any such Person shares of the Guarantor's stock subject to the provisions
of Section 10.2.
(g) Issuance of Stock by Subsidiaries. The Guarantor will not permit
any Subsidiary to (either directly, or indirectly by the issuance of rights or
options for, or securities convertible into, such shares) issue, sell or
otherwise dispose of any shares of any class of its stock (other than directors'
qualifying shares) except to the Guarantor or another Subsidiary; provided,
however, ▇▇▇▇▇▇ Canada Hardware may issue and sell shares of its stock in the
ordinary course of business consistent with its practices as of April 13, 1992.
(h) Compliance with ERISA. The Guarantor will not and will not permit
any Subsidiary to engage in any transaction in connection with which the
Guarantor or any Subsidiary could be subject to either a civil penalty assessed
pursuant to section 502(i) of ERISA or a tax imposed by section 4975 of the
Code, terminate or withdraw from any Plan (other than a Multiemployer Plan) in a
manner, or take any other action with respect to any such Plan (including,
without limitation, a substantial cessation of operations within the meaning of
section 4062(f) of ERISA), which could result in any liability of the Guarantor
or any Subsidiary to the PBGC, to a trust
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established pursuant to section 4041(c)(3)(B)(ii) or (iii) or 4042(i) of ERISA,
or to a trustee appointed under section 4042(b) or (c) of ERISA, incur any
liability to the PBGC on account of a termination of a Plan under section 4064
of ERISA, fail to make full payment when due of all amounts which, under the
provisions of any Plan, the Guarantor or any Subsidiary is required to pay as
contributions thereto, or permit to exist any accumulated funding deficiency,
whether or not waived, with respect to any Plan (other than a Multiemployer
Plan), if, in any such case, such penalty or tax or such liability, or the
failure to make such payment, or the existence of such deficiency, as the case
may be, could be reasonably expected to have a material adverse effect on the
Guarantor and its Subsidiaries taken as a whole.
(i) No Change in Subordination Terms, etc. The Guarantor will not and
will not permit any Subsidiary to amend, alter or otherwise change any provision
of any of the subordinated promissory notes now or hereafter issued by the
Guarantor or take any other action (or refrain from taking an action) which
would have the effect of eliminating or altering in any way the effect of the
subordination language appearing in such subordinated promissory notes or the
rights of the Administrative Agent and the Participants arising as a result
thereof.
(j) Nature of Business. The Guarantor will not and will not permit any
Subsidiary to engage in the business of underwriting risks for insurance
purposes, or in any other aspect of insurance related business other than in the
ordinary course of business in accordance with its practices as of the
Documentation Date; or purchase and sell real estate (other than on an agency
basis) for purposes other than those relating directly to its principal business
except for purchases and sales of store locations in the ordinary course of
business which in the aggregate for the Guarantor and its Subsidiaries taken as
a whole do not exceed $10,000,000 during any rolling consecutive five (5) year
period.
(k) Restricted Investments. The Guarantor will not and will not permit
any Subsidiary to make or permit a Subsidiary to make any Investment except the
Guarantor and any Subsidiary may:
(i) make or permit to remain outstanding loans or advances
to any Subsidiary,
(ii) own, purchase or acquire stock, obligations or
securities of a Subsidiary or of a corporation which immediately after
such purchase or acquisition will be a Subsidiary,
(iii) acquire and own stock, obligations or securities
received in settlement of debts (created in the ordinary course of
business) owing to the Guarantor or any Subsidiary,
(iv) own, purchase or acquire prime commercial paper,
banker's acceptances and certificates of deposit in United States and
Canadian commercial banks (having combined capital and surplus of not
less than U.S. $100,000,000) and repurchase agreements with respect to
the foregoing, in each case due within one year from the date of
purchase and payable in the United States in United States dollars,
obligations of the
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government of the United States or any agency thereof, and obligations
guaranteed by the government of the United States,
(v) make or permit to remain outstanding travel and other
similar advances to officers and employees in the ordinary course of
business,
(vi) permit to remain outstanding Investments existing on
the Documentation Date and described on Schedule VI, and
(vii) to the extent applicable, make Investments permitted
under Section 10.2(l) below.
(l) Restricted Payments. The Guarantor will not and will not permit any
Subsidiary to pay or declare cash dividends, cash patronage dividends or
dividends on any class of its stock (other than dividends in kind) or redeem,
purchase or otherwise acquire, or make any redemptions, purchase, or other
acquisition of any of its stock or apply miscellaneous deductions in lieu of
patronage dividends, or make or permit any Subsidiary to make any Restricted
Investment (each a "Restricted Payment") except to the extent that the aggregate
amount of all such Restricted Payments made after December 28, 1996 shall not
exceed an amount equal to the sum of (i) $25,000,000 plus (ii) 100% (or minus
100% in the case of a deficit) of Consolidated Net Earnings for the period
(taken as one accounting period) commencing on December 29, 1996 and terminating
at the end of the last fiscal quarter preceding the date of any proposed
Restricted Payment.
(m) Use of Proceeds. The Guarantor shall not, and shall not permit any
Subsidiary to, use any portion of the proceeds of any Loan, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Guarantor or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
Section 10.3. Affirmative Covenant of the Agent Certificate Holder.
The Agent Certificate Holder covenants and agrees with the Arranger, the Lessee
Agent, the Administrative Agent and the Lenders that, so long as this
Participation Agreement shall remain in effect or the principal or interest on
any Loan, or any fees or any other expenses or amounts payable under any
Operative Document to the Administrative Agent or the Lenders shall be unpaid,
unless the Required Lenders shall otherwise consent in writing, the Agent
Certificate Holder will, upon the written request of the Required Lenders after
the occurrence and during the continuance of an Event of Default, qualify to do
business in every jurisdiction where such qualification is necessary for the
Agent Certificate Holder to exercise its remedies under the Master Lease, if it
becomes the lessor thereunder, or any other Operative Document.
Section 10.4. Covenants of the Owner Trustee and Lessor Trust. Each
of the Owner Trustee and Lessor Trust hereby agrees that so long as this
Participation Agreement is in effect:
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(a) Discharge of Liens. Each of the Lessor Trust and the
Owner Trustee, in its individual capacity, will not create or permit to
exist at any time, and will, at its own cost and expense, promptly take
such action as may be necessary duly to discharge, or to cause to be
discharged, all Lessor Liens on the Property attributable to it or any
of its Affiliates; provided, however, that the Owner Trustee (in its
individual capacity) and Lessor Trust shall not be required to so
discharge any such Lessor Lien while the same is being contested in
good faith by appropriate proceedings diligently prosecuted so long as
such proceedings shall not involve any material danger of impairment of
the Liens of the Operative Documents or of the sale, forfeiture or loss
of, and shall not interfere with the use, value, marketability or
disposition of, the Property or title thereto or any interest therein
or the payment of Rent.
(b) Trust Agreement. Without prejudice to any right under the
Trust Agreement of the Owner Trustee to resign, or the Certificate
Holders' right under the Trust Agreement to remove the institution
acting as trustee, the Owner Trustee hereby agrees with the Lessee
Agent and each Lessee and the Administrative Agent (i) not to terminate
or revoke the trust created by the Trust Agreement except as permitted
by the Trust Agreement or unless consented to by all of the parties to
this Participation Agreement, (ii) not to amend, supplement, terminate
or revoke or otherwise modify any provision of the Trust Agreement
without the prior written consent of any party hereto adversely
affected by such amendment and (iii) to comply with all of the terms of
the Trust Agreement, the nonperformance of which would adversely affect
such party.
(c) Successor Trust Company. The Owner Trustee or any
successor may resign or be removed by the Certificate Holders as
trustee, a successor Owner Trustee may be appointed, and a corporation
may become the Owner Trustee under the Trust Agreement, only in
accordance with the provisions of Article VIII of the Trust Agreement
and with the consent of the Lessee, which consent shall not be
unreasonably withheld or delayed.
(d) Indebtedness; Other Business. The Lessor Trust shall not
contract for, create, incur or assume any indebtedness, or enter into
any business or other activity, other than pursuant to or under the
Operative Documents.
(e) No Violation. The Agent Certificate Holder will not
instruct the Lessor Trust to take any action in violation of the terms
of any Operative Document.
(f) No Voluntary Bankruptcy. The Lessor Trust shall not (i)
commence any case, proceeding or other action under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, arrangement, winding-up,
liquidation, dissolution, composition or other relief with respect to
the Lessor Trust or such Certificate Holder's or the Lessor Trust's
debts, or (ii) seek appointment of a receiver, trustee, custodian or
other similar official for the Lessor Trust or for all or any
substantial benefit of the Lessor Trust's creditors; and the Lessor
Trust shall not take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth
in this paragraph.
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(g) Change of Chief Place of Business. The Lessor Trust shall
give prompt notice to the Lessee Agent and the Agent Certificate Holder
if the Lessor Trust's chief place of business or chief executive
office, or the office where the records concerning the accounts or
contract rights relating to the Property are kept, shall cease to be
located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ or if it shall change its name.
(h) Operative Documents. None of the Lenders, the Lessor
Trust, the Lessee Agent, the Lessee, the Administrative Agent, the
Agent Certificate Holder nor the Participants shall consent to or
permit any amendment, supplement, waiver or other modification of the
terms and provisions of the Loan Agreement, the Notes, the
Certificates, or the Operative Documents, in each case without the
prior written consent of the Lessee Agent.
(i) Disposition of Assets. The Lessor Trust shall not convey,
sell, lease, assign, transfer or otherwise dispose of any of its
property, business or assets, whether now owned or hereafter acquired,
except to the extent expressly authorized by the Operative Documents.
(j) Compliance with Operative Documents. The Lessor Trust
shall at all times observe and perform all of the covenants, conditions
and obligations required to be performed by it under each Operative
Document to which it is a party.
(k) Books and Records; Financial Statements; Bank Accounts.
The Lessor Trust and each Certificate Holder each covenants and agrees
to maintain separate books and records. The Lessor Trust and Agent
Certificate Holder each covenant and agree to maintain its own bank
account in its own name. To the extent that financial statements are
prepared or issued by the Lessor Trust and any Certificate Holder, each
of the Lessor Trust and each such Certificate Holder covenants and
agrees to maintain separate financial statements from those financial
statements which may be prepared or issued by any of them.
(l) Separate Existence. The Lessor Trust covenants and agrees
not to merge or consolidate with, or transfer any of its assets or
properties to any Person. The Owner Trustee covenants and agrees not to
commingle its assets and funds with those assets and funds of the
Lessor Trust. The Lessor Trust covenants and agrees to conduct its own
business in its own name.
ARTICLE XI
RENEWALS; REPLACEMENT OF PARTICIPANTS
Section 11.1. Extensions of Maturity Date and Expiration Date;
Replacement of Participants. (a) So long as the Lessee Agent has not elected the
Remarketing Option on behalf of the Lessee, the Lessee Agent may, not earlier
than one (1) year after the Completion Date and not later than one (1) year
prior to the Maturity Date, direct a written request to the Owner Trustee, the
Agent Certificate Holder and the Administrative Agent that the Expiration Date
then
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in effect under the Master Lease be extended to the date occurring one (1)
year after such Expiration Date and concurrently therewith request that the
Administrative Agent and the Agent Certificate Holder direct a written request
to the Certificate Holders and the Lenders that the applicable Maturity Date be
extended to the same date (each such additional year, a "Renewal Term"). In no
event may the Expiration Date or the Maturity Date be extended more than two (2)
times pursuant to this Section 11.1(a). Each Participant may grant or deny its
consent to a Renewal Term in its sole discretion by notifying the Administrative
Agent and the Agent Certificate Holder in writing (with a copy to the Lessee
Agent); provided, however, that any Participant that fails to respond to such
request for a Renewal Term within sixty (60) days after its receipt thereof
shall be deemed to have denied such request for a Renewal Term. Nothing
contained in this Section 11.1 shall impair any extension of the Expiration Date
to any Extended Expiration Date pursuant to Section 20.3 of the Lease.
(b) In connection with a written request of the Lessee Agent for a
Renewal Term, upon the request of the Lessee Agent, the Administrative Agent and
the Agent Certificate Holder shall be permitted to replace any non-consenting
Participant and any Participant that fails to respond to the Administrative
Agent's and the Agent Certificate Holder's written request for a Renewal Term
within the time period specified in clause (a) above (each, a "Non-Consenting
Participant") with a replacement bank or other financial institution (a
"Replacement Participant") satisfactory to the Lessee Agent, the Certificate
Holders and the Lenders, with such replacement to be effective as of the
Expiration Date and Maturity Date in effect prior to the requested Renewal Term;
provided, however, that (i) such replacement does not conflict with any
Requirement of Law, (ii) the Replacement Participant shall purchase from the
Non-Consenting Participant (A) at par, all Loans, in the case of a Lender, and
all Certificate Holder Amounts, in the case of a Certificate Holder, (B) all
accrued interest, in the case of a Lender, and all accrued Yield, in the case of
a Certificate Holder, and (C) all other amounts owing to such Non-Consenting
Participant on or prior to the date of replacement, in each case, (iii) the
Lessee Agent shall be liable to such Non-Consenting Participant under Section
13.10 if any Loan or Certificate Holder Amount, as the case may be, owing to
such Non-Consenting Participant shall be prepaid (or purchased) at the request
of the Lessee Agent other than on the last day of the Interest Period or
Interest Periods relating thereto, (iv) such replacement shall be made in
accordance with the provisions of Article XII (provided that the Lessee Agent or
the relevant Replacement Participant shall be obligated to pay the Transaction
Expenses arising in connection therewith), and (v) the Replacement Participant
shall have agreed to be subject to all of the terms and conditions of the
applicable Operative Documents (including the extension of the Maturity Date
contemplated by the relevant request for a Renewal Term and the related
extension). The Administrative Agent and the Agent Certificate Holder hereby
agree to cooperate with the Lessee Agent in its efforts to arrange one or more
Replacement Participants as contemplated by this Section 11.1(b).
(c) Any Renewal Term and extension of the Maturity Date and the
Expiration Date as contemplated by Section 11.1(a) shall be effective only upon
the consent of all Participants after giving effect to the provisions of Section
11.1(b). Except as otherwise provided in this Article XI, all other terms of the
Operative Documents shall remain unchanged and with the same force and effect
(including the Certificate Holder Margin and Loan Margin), and there shall not
be any additional structuring or underwriting fee in connection with such
Renewal Term.
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Section 11.2. Replacement of Defaulting Participant. The Lessee Agent
shall have the right (but not the obligation) to require any Defaulting
Participant to assign and delegate in accordance with Section 12.1 all of such
Lender's or Certificate Holder's total Loans or Certificate Holder Amounts, as
the case may be, and Commitment, if any, to any other financial institution
selected by the Lessee Agent that, in each case, is willing to accept such
assignment and delegation and shall be satisfactory to the Administrative Agent
and the Agent Certificate Holder.
ARTICLE XII
TRANSFERS OF PARTICIPANTS' INTERESTS
Section 12.1. Assignments. Each Participant may, with the prior written
consent of the Lessee Agent, the Administrative Agent and the Agent Certificate
Holder (which consents shall not be unreasonably withheld, provided that Lessee
consent shall not be required after and during the continuance of a Lease
Default) assign all or a portion of its rights and obligations hereunder
pursuant to an assignment agreement substantially in the form of Exhibit F to
one or more Eligible Lender Assignees, with respect to Lender Commitments and
Loans, and/or Eligible Certificate Holder Assignees with respect to Certificate
Holder Commitments and Certificate Holder Amounts, each such assignment shall be
of a constant, not varying, percentage of all of the assigning Participant's
rights and obligations under the Operative Documents. In the case of assignments
made by a Lender, any such assignment shall be in a minimum aggregate amount of
$10,000,000 of its Loan Commitment (or the balance of such Loan Commitment, if
less). In the case of assignments made by a Certificate Holder, any such
assignment shall be in a minimum aggregate amount of $3,000,000 of its
Certificate Holder Commitment (or the balance of such Certificate Holder
Commitment, if less). Any assignment hereunder shall be effective upon delivery
to the Administrative Agent and the Agent Certificate Holder of written notice
of the assignment together with a transfer fee of $3,500 payable by the assignor
Participant or the assignee Participant to the Administrative Agent for its own
account. The assigning Participant will give prompt notice to the Administrative
Agent of any such assignment. Upon the effectiveness of any such assignment (and
after notice to and consent of the Lessee, the Administrative Agent and the
Agent Certificate Holder, as provided herein), the assignee shall become a
"Lender" or "Certificate Holder", as the case may be, for all purposes of the
Operative Documents (including all representations, warranties and covenants
which will all be deemed made and agreed to by such assignee) and, to the extent
of such assignment, the assigning Participant shall be relieved of its
obligations hereunder to the extent of the Loans or Certificate Holder Amounts,
as the case may be, and Commitment components being assigned. The Administrative
Agent agrees that upon notice of any such assignment and surrender of the
appropriate Note or Notes, it will promptly provide to the assigning Lender and
to the assignee separate promissory notes in the amount of their respective
interests substantially in the form of the original Note (but with notation
thereon that it is given in substitution for and replacement of the original
Note or any replacement notes thereof). The Lessee Agent shall not be
responsible for any costs or expenses incurred by any Participant in connection
with an assignment of all or any of its rights and obligations in connection
with an assignment pursuant to this Section 12.1.
Section 12.2. Participations. Each Participant may sell, transfer, grant
or assign participations in all or any part of such Participant's interests and
obligations hereunder;
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provided that (i) such selling Participant shall remain a "Lender" or
"Certificate Holder", as the case may be, for all purposes under the Operative
Documents (such selling Participant's obligations under the Operative Documents
remaining unchanged) and the sub-participant shall not constitute a Lender or a
Certificate Holder, as the case may be, hereunder, (ii) no such sub-participant
shall have, or be granted, rights to approve any amendment or waiver relating to
the Operative Documents except to the extent any such amendment or waiver would
(A) reduce the principal of or rate of interest on or fees in respect of any
Loans or Certificate Holder Amounts in which the sub-participant is
participating, (B) postpone the date fixed for any payment of principal
(including extension of the Expiration Date or the date of any mandatory
prepayment), interest or fees in which the sub-participant is participating, or
(C) release all or substantially all of the collateral or guarantees (except as
expressly provided in the Operative Documents) supporting any of the Loans or
Certificate Holder Amounts or Commitments in which the sub-participant is
participating, (iii) sub-sub-participations by the sub-participant (except to an
Affiliate, parent company or Affiliate of a parent company of the
sub-participant) shall be prohibited and (iv) written notice of each such
participation is given to the Lessee Agent. In the case of any such
participation, the sub-participant shall not have any rights under the Operative
Documents (the sub-participant's rights against the selling Participant in
respect of such participation to be those set forth in the participation
agreement with such Participant creating such participation) and all amounts
payable by the Lessee Agent hereunder shall be determined as if such Participant
had not sold such participation; provided, however, that such sub-participant
shall be entitled to receive additional amounts under Sections 13.5, 13.10 and
13.11 on the same basis as if it were a Participant (but only to the extent that
the Participant would have been entitled to receive such additional amounts with
respect to the interest participated had it not sold such participation). The
Lessee Agent shall not be responsible for any costs or expenses incurred by any
Participant in connection with a sale, transfer, grant or assignment of
participations pursuant to this Section 12.2.
Section 12.3. Withholding Taxes; Disclosure of Information; Pledge Under
Regulation A. (a) If any Participant (or the assignee of or subparticipant of a
Participant, each a "Transferee") is organized under the laws of any
jurisdiction other than the United States or any state thereof, then such
Participant or the Transferee of such Participant, as applicable, shall (as a
condition precedent to acquiring or participating in such Loan or Certificate
Holder Amount and as a continuing obligation to the Certificate Holder and the
Lender) (i) furnish to each of the Administrative Agent, the Agent Certificate
Holder and the Lessee in duplicate, for each taxable year of such Participant or
Transferee during the term of the Lease, a properly completed and executed copy
of either Internal Revenue Service Form 4224 or Internal Revenue Service Form
1001 and Internal Revenue Service Form W-8 or Internal Revenue Service Form W-9
and any additional form (or such other form) as is necessary to claim complete
exemption from United States withholding taxes (wherein such Transferee claims
entitlement to complete exemption from United States withholding taxes on all
payments hereunder), and (ii) provide to each of the Administrative Agent, the
Agent Certificate Holder and the Lessee Agent a new Internal Revenue Service
Form 4224 or Internal Revenue Service Form 1001 and Internal Revenue Service
Form W-8 or Internal Revenue Service Form W-9 and any such additional form (or
any successor form or forms) upon the expiration or obsolescence of any
previously delivered form and comparable statements in accordance with
applicable United States laws and regulations and amendments duly executed and
completed by such Participant or Transferee, and to comply from
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time to time with all applicable United States laws and regulations with regard
to such withholding tax exemption. By its acceptance of a participation or
assignment hereunder, each Transferee shall be deemed bound by the provisions
set forth in this Article XII.
(b) Any Participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Article
XII, disclose to such assignee or participant or proposed assignee or
participant, any information relating to Lessee Agent, any Lessee, the Guarantor
or the Transactions, subject to appropriate confidentiality requirements
relating to such information.
(c) Anything in this Article XII to the contrary notwithstanding, any
Participant may without the consent of Lessee Agent, the Administrative Agent or
the Agent Certificate Holder, assign and pledge all or any portion of the Notes
held by it to any Federal Reserve Bank, the United States Treasury or to any
other financial institution as collateral security pursuant to Regulation A of
the F.R.S. Board and any operating circular issued by the Federal Reserve System
and/or the Federal Reserve Bank or otherwise; provided, any payment by Lessee
Agent or Guarantor for the benefit of the assigning or pledging Participant
shall be deemed to satisfy the Lessee Agent's, such Lessee's or the Guarantor's
obligations with respect thereto.
ARTICLE XIII
INDEMNIFICATION
Section 13.1. General Indemnification. The Lessee Agent agrees whether
or not any of the transactions contemplated hereby shall be consummated (unless
such failure to consummate is due to the breach of any obligation under any
Operative Document by any party other than Lessee or Guarantor), to assume
liability for, and to indemnify, protect, defend, save and keep harmless each
Indemnitee, on an After Tax Basis, from and against any and all Claims that may
be imposed on, incurred by or asserted against such Indemnitee (whether because
of action or omission by such Indemnitee or otherwise), whether or not such
Indemnitee shall also be indemnified as to any such Claim by any other Person
and whether or not such Claim arises or accrues prior to the Acquisition Date or
after the Expiration Date, in any way relating to or arising out of:
(a) any of the Operative Documents or any of the
transactions contemplated thereby, and any amendment, modification or
waiver in respect thereof;
(b) the Properties or any part thereof or interest therein;
(c) the purchase, design, construction, preparation,
installation, inspection, delivery, nondelivery, acceptance, rejection,
ownership, management, possession, operation, rental, lease, sublease,
repossession, maintenance, repair, alteration, modification, addition
or substitution, storage, transfer of title, redelivery, use, financing
or refinancing by the Lessee, disposition, operation, condition, sale
(including without limitation, any sale pursuant to Section 16.2(d) or
16.2(f) of the Master Lease or any sale pursuant to Article XV, XVIII
or XX of the Master Lease), return or other disposition of all or any
part or any interest in the Property or the imposition of any Lien
except Lessor
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Liens and Liens in favor of the Lenders, Lessor Trust or the
Certificate Holders (or incurring of any liability to refund or pay
over any amount as a result of any such Lien) thereon, including,
without limitation: (1) Claims or penalties arising from any violation
of law or in tort (on the basis of strict liability or otherwise), (2)
latent or other defects, whether or not discoverable, (3) any Claim
based upon a violation or alleged violation of the terms of any
restriction, easement, condition or covenant or other matter affecting
title to the Property, (4) the making of any Modifications in
violation of any standards imposed by any insurance policies required
to be maintained by Lessee Agent or Lessee pursuant to the Lease which
are in effect at any time with respect to the Property or any part
thereof, (5) any Claim for patent, trademark or copyright infringement
with respect to the Property, and (6) Claims arising from any public
improvements with respect to the Property resulting in any change or
special assessments being levied against the Property or any plans to
widen, modify or realign any street or highway adjacent to the
Property, or any Claim for utility "tap-in" fees;
(d) the breach by Lessee Agent or Lessee or Guarantor of any
covenant, representation or warranty made by it in any Operative
Document or any certificate required to be delivered by it by any
Operative Document;
(e) the retaining or employment of any broker, finder or
financial advisor by Lessee Agent or any Lessee to act on its behalf in
connection with this Participation Agreement or any other Operative
Document;
(f) the existence of any Lien on or with respect to the
Property, the Improvements, any Basic Rent or Supplemental Rent, title
thereto, or any interest therein including any Liens which arise out of
the possession, use, occupancy, construction, repair or rebuilding of
the Property or by reason of labor or materials furnished or claimed to
have been furnished to the Lessee, or any of its contractors or agents
or by reason of the financing of any personalty or equipment purchased
or leased by the Lessee or Modifications constructed by the Lessee,
except Lessor Liens and Liens in favor of the Lenders or the
Certificate Holders;
(g) subject to the accuracy of any Participant's
representation set forth in Section 8.1(a), as to such Participant, the
transactions contemplated by the Lease or by any other Operative
Document, in respect of the application of Parts 4 and 5 of Subtitle B
of Title I of ERISA and any prohibited transaction described in Section
4975(c) of the Code.
Provided, however, that the Lessee Agent shall not be required to indemnify any
Indemnitee under this Section 13.1 for any of the following: (1) any Claim to
the extent resulting from the willful misconduct or gross negligence of any
Indemnitee (it being understood that the Lessee Agent shall be required to
indemnify an Indemnitee even if the ordinary (but not gross) negligence of such
Indemnitee caused or contributed to such Claim) or the breach of any
representation, warranty or covenant of such Indemnitee set forth in any
Operative Document, (2) any Claim resulting from Lessor Liens, (3) any Claim
arising from a breach or alleged breach by any Lender or any Certificate Holder
of any Operative Document or any agreement entered
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into in connection with the assignment or participation of any Loan or
Certificate Holder Amount, (4) any Claim arising in respect to the Property to
the extent attributable to acts or events occurring in the period after the
Lessee ceases to lease the Property from the Lessor Trust under the related
Lease, provided that the facts supporting such Claim occur after such period and
(5) without limiting any other provision of this Participation Agreement, any
Claim for Taxes except to the extent arising by reason of Section 13.1(g). It is
expressly understood and agreed that the indemnity provided for herein shall
survive the expiration or termination of and shall be separate and independent
from any remedy under the Lease or any other Operative Document. Without
limiting the express rights of any Indemnitee under this Section 13.1, this
Section 13.1 shall be construed as an indemnity only and not a guaranty of
residual value of the Property or as a guaranty of the Notes.
Section 13.2. End of Term Indemnity. (a) If the Lessee Agent elects (on
behalf of the Lessee) the Remarketing Option and there would, after giving
effect to the proposed remarketing transaction, be a Shortfall Amount, then
prior to the Expiration Date and as a condition to the Lessee Agent's right to
complete the remarketing of the Property pursuant to Article XX of the Master
Lease, the Lessee shall cause to be delivered to the Agent Certificate Holder at
least one hundred twenty (120) days prior to the Expiration Date, at the Lessee
Agent's sole cost and expense, a report from the Appraiser in form and substance
satisfactory to the Agent Certificate Holder, the Administrative Agent and the
Participants (the "End of the Term Report") which shall state the appraiser's
conclusions as to the reason for any decline in the Fair Market Sales Value of
the Property from that anticipated for such date in the As-Built Appraisal
delivered with respect to the Property or any Improvements to the Property.
(b) On or prior to the Expiration Date the Lessee Agent shall pay to
the Agent Certificate Holder for the account of each of the Certificate Holders
an amount (not to exceed the Shortfall Amount) equal to the portion of the
Shortfall Amount that the End of the Term Report demonstrates was the result of
a decline in the Fair Market Sales Value of the Property due to:
(i) extraordinary use; failure to maintain, repair, restore,
rebuild or replace; failure to comply with all applicable laws; failure
to use; workmanship; method of installation or removal or maintenance,
repair, rebuilding or replacement (excepting in each case ordinary wear
and tear and except as otherwise provided in the Lease); or
(ii) any change(s) to the Plans and Specifications or any
Modification made to, or any rebuilding of, the Property or any part
thereof by the Lessee, the Construction Agent or any sublessee, in each
case not in compliance with the Operative Documents or;
(iii) contamination at the Property resulting from any
Hazardous Activity, Hazardous Materials or Environmental Violations
other than as disclosed to the Certificate Holders in writing in
connection with the Acquisition Date, the indemnity for which shall not
exceed the cost of the remediation thereof, or
(iv) any restoration or rebuilding carried out by the Lessee
Agent or the Lessee or Construction Agent, or
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(v) any condemnation of any portion of the Property pursuant
to Article XIV of the Master Lease, or
(vi) any use of the Property or any part thereof by the
Lessee other than as distribution facility as contemplated by the
Appraisal, or
(vii) any grant, release, dedication, transfer, annexation or
amendment made pursuant to Section 11.2 of the Master Lease, or
(viii) the failure of the Lessor Trust to have good and
marketable title to the Property free and clear of all Liens (other
than Permitted Property Liens), or
(ix) the existence of any sublease relating to the Property
that shall survive the Expiration Date.
The indemnity set forth in this Section 13.2 is not a guaranty of the residual
value or Certificate Holder Amount with respect to the Property.
Section 13.3. Environmental Indemnity. Without limitation of the other
provisions of this Article XIII, Lessee and Guarantor hereby agree to indemnify,
hold harmless and defend each Indemnitee from and against any and all claims
(including, without limitation, third party claims for personal injury or real
or personal property damage), losses, damages, liabilities, fines, penalties,
charges, administrative and judicial proceedings, judgments, remedial actions,
requirements, enforcement actions of any kind, and all reasonable and documented
costs and expenses incurred in connection therewith (including but not limited
to reasonable and documented attorneys' and/or paralegals' fees and expenses and
costs incurred in connection with any investigation or monitoring of site
conditions or any clean-up, remedial, removal or restoration work with respect
to the Property undertaken or required by any federal, state or local
Governmental Authority), arising or asserted under any Environmental Laws, and
arising in whole or in part, out of:
(a) the presence on or under the Property of any Hazardous
Materials, or any Releases of any Hazardous Materials on, under,
from or at the Property;
(b) any activity, including, without limitation,
construction, carried on or undertaken on or off the Property, whether
by the Lessee (or any predecessor in title) or any employees, agents,
contractors or subcontractors of the Lessee (or any predecessor in
title), or in connection with the handling, treatment, removal,
storage, decontamination, clean-up, transport or disposal of any
Hazardous Materials that at any time are located or present on or under
or that at any time migrate, flow, percolate, diffuse or in any way
move onto or off the Property;
(c) with respect to any Hazardous Materials at the Property,
loss of or damage to any property or the environment (including,
without limitation, clean-up costs, response costs, remediation and
removal costs, costs of corrective action, costs of financial
assurance, fines and penalties and natural resource damages), or death
or injury
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to any Person, and all expenses associated with the protection of
wildlife, aquatic species, vegetation, flora and fauna, and any
mitigative action required by or under Environmental Laws; or
(d) any noncompliance with Environmental Laws, or any act or
omission causing an environmental condition at the Property that
requires remediation or causing any Governmental Authority to record a
Lien pursuant to Environmental Laws on the land record of the Property;
or
(e) any residual contamination on or under the Property,
including any contamination affecting any natural resources, and any
contamination of any property or natural resources arising in
connection with the generation, use, handling, storage, transport or
disposal of any Hazardous Material associated with the Property, and
irrespective of whether any of such activities were or will be
undertaken in accordance with applicable laws, regulations, codes and
ordinances;
provided, however, that the Lessees and Guarantor shall not be required to
indemnify any Indemnitee under this Section 13.3 for any Claim to the extent
resulting from the willful misconduct or gross negligence of such Indemnitee
arising in respect to the Property to the extent attributable to acts or events
occurring in the period after the Lessee ceases to lease the Property from the
Lessor Trust under the related Lease Supplement, provided that the facts
supporting such Claim occur after such period. It is expressly understood and
agreed that the indemnity provided for herein shall survive the expiration or
termination of the Lease Term with respect to any Claim based on facts or
circumstances arising prior to or during the Lease Term, and shall be separate
and independent from any remedy under the Lease or any other Operative Document.
Section 13.4. Proceedings in Respect of Claims. In case any action,
suit or proceeding shall be brought against any Indemnitee in respect of Claims
indemnifiable under Sections 13.1 or 13.3, such Indemnitee shall notify the
Lessee Agent of the commencement thereof, and the Lessee Agent shall be
entitled, at the Lessee Agent's expense, to participate in, and, to the extent
that the Lessee Agent desires to, assume and control the defense thereof;
provided, however, that the Lessee Agent shall have acknowledged in writing its
obligation to fully indemnify such Indemnitee in respect of such action, suit
or proceeding, and the Lessee Agent shall keep such Indemnitee fully apprised
of the status of such action, suit or proceeding and shall provide such
Indemnitee with all information with respect to such action, suit or proceeding
as such Indemnitee shall reasonably request, and provided, further, that the
Lessee Agent shall not be entitled to assume and control the defense of any
such action, suit or proceeding if and to the extent that, (A) in the
reasonable opinion of such Indemnitee's counsel, (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 Property Lien) on the Property or any part thereof
unless, in the case of civil liability only, the Lessee Agent shall have agreed
in writing to be responsible for such risk or (y) the control of such action,
suit or proceeding would involve an actual or potential conflict of interest,
(B) such proceeding involves Claims not fully indemnified by the Lessee Agent
which the Lessee Agent and the Indemnitee have been unable to sever from the
indemnified claim(s), or (C) an Event of Default under the
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Lease has occurred and is continuing. The Indemnitee will join in the Lessee
Agent's efforts to sever such action. The Indemnitee may participate at its own
expense and with its own counsel in any proceeding conducted by the Lessee Agent
in accordance with the foregoing. The Lessee Agent shall not enter into any
settlement or other compromise with respect to any Claim which is entitled to be
indemnified under Section 13.1 or 13.3 without prior written consent of the
Indemnitee, which consent shall not be unreasonably withheld in the case of a
money settlement not involving an admission of liability of such Indemnitee.
Each Indemnitee shall at the expense of the Lessee Agent supply the
Lessee Agent with such information and documents reasonably requested by the
Lessee Agent as are necessary or advisable for the Lessee Agent to participate
in any action, suit or proceeding to the extent permitted by Section 13.1 or
13.3.
Upon payment in full of any Claim by the Lessee Agent pursuant to
Section 13.1 or 13.3 to or on behalf of an Indemnitee, the Lessee Agent, without
any further action, shall be subrogated to any and all claims that such
Indemnitee may have relating thereto (other than claims in respect of insurance
policies maintained by such Indemnitee at its own expense), and such Indemnitee
shall execute such instruments of assignment and conveyance, evidence of claims
and payment and such other documents, instruments and agreements as may be
necessary to preserve any such claims and otherwise cooperate with the Lessee
Agent and give such further assurances as are necessary or advisable to enable
the Lessee Agent vigorously to pursue such claims.
Any amount payable to an Indemnitee pursuant to Section 13.1 or 13.3
shall be paid to such Indemnitee promptly upon receipt of a written demand
therefor from such Indemnitee, accompanied by a written statement describing in
reasonable detail the basis for such indemnity and the computation of the amount
so payable.
Section 13.5. General Tax Indemnity. (a) Indemnification. The Lessee
Agent shall pay and assume liability for, and does hereby agree to indemnify,
protect and defend the Property and all Tax Indemnitees, and hold them harmless
against, all Impositions on an After Tax Basis.
(b) Contests. If any claim shall be made against any Tax Indemnitee or
if any proceeding shall be commenced against any Tax Indemnitee (including a
written notice of such proceeding) for any Imposition as to which the Lessee
Agent may have an indemnity obligation pursuant to this Section 13.5, or if any
Tax Indemnitee shall determine that any Imposition to which the Lessee Agent may
have an indemnity obligation pursuant to this Section 13.5 may be payable, such
Tax Indemnitee shall promptly (and in any event, within thirty (30) days) notify
the Lessee Agent in writing (provided that failure to so notify the Lessee Agent
within thirty (30) days shall not alter such Tax Indemnitee's rights under this
Section 13.5 except to the extent such failure precludes or materially adversely
affects the ability to conduct a contest of any Impositions) and shall not take
any action with respect to such claim, proceeding or Imposition without the
written consent of the Lessee Agent (such consent not to be unreasonably
withheld or unreasonably delayed) for thirty (30) days after the receipt of such
notice by the Lessee Agent; provided, however, that in the case of any such
claim or proceeding, if such Tax Indemnitee shall be required by law or
regulation to take action prior to the end of such thirty (30) day period,
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such Tax Indemnitee shall in such notice to the Lessee Agent, so inform the
Lessee and such Tax Indemnitee shall not take any action with respect to such
claim, proceeding or Imposition without the consent of the Lessee Agent (such
consent not to be unreasonably withheld or unreasonably delayed) for 10 days
after the receipt of such notice by the Lessee Agent unless such Tax Indemnitee
shall be required by law or regulation to take action prior to the end of such
ten (10) day period.
The Lessee Agent shall be entitled for a period of thirty (30) days
from receipt of such notice from such Tax Indemnitee (or such shorter period as
such Tax Indemnitee has notified the Lessee Agent is required by law or
regulation for such Tax Indemnitee to commence such contest), to request in
writing that such Tax Indemnitee contest the imposition of such Tax, at the
Lessee Agent's expense. If (x) such contest can be pursued in the name of the
Lessee Agent and independently from any other proceeding involving a Tax
liability of such Tax Indemnitee for which the Lessee Agent has not agreed to
indemnify such Tax Indemnitee, (y) such contest must be pursued in the name of
such Tax Indemnitee, but can be pursued independently from any other proceeding
involving a Tax liability of such Tax Indemnitee for which the Lessee Agent has
not agreed to indemnify such Tax Indemnitee or (z) such Tax Indemnitee so
requests, then the Lessee Agent shall be permitted to control the contest of
such claim, provided that in the case of a contest described in clause (y), if
such Tax Indemnitee determines reasonably and in good faith that such contest by
the Lessee Agent could have a material adverse impact on the business or
operations of such Tax Indemnitee and provides a written explanation to the
Lessee Agent of such determination, such Tax Indemnitee may elect to control or
reassert control of the contest, and provided that by taking control of the
contest, the Lessee Agent acknowledges that it is responsible for the Imposition
ultimately determined to be due by reason of such claim, and provided, further,
that in determining the application of clauses (x) and (y) above, each Tax
Indemnitee shall take any and all reasonable steps to segregate claims for any
Taxes for which the Lessee Agent indemnifies hereunder from Taxes for which the
Lessee Agent is not obligated to indemnify hereunder, so that the Lessee Agent
can control the contest of the former. In all other claims requested to be
contested by the Lessee Agent, such Tax Indemnitee shall control the contest of
such claim, acting through counsel reasonably acceptable to the Lessee Agent. In
no event shall the Lessee Agent be permitted to contest (or such Tax Indemnitee
required to contest) any claim, (A) if such Tax Indemnitee provides the Lessee
Agent with a legal opinion of counsel reasonably acceptable to the Lessee Agent
that such action, suit or proceeding involves a risk of imposition of criminal
liability or will involve a material risk of the sale, forfeiture or loss of, or
the creation of any Lien (other than a Permitted Lien) on the Property or any
part thereof unless, with respect to civil liability only, the Lessee Agent
shall have agreed in writing to be responsible for such risk, (B) if an Event of
Default has occurred and is continuing, (C) unless the Lessee Agent shall have
agreed to pay and shall pay, to such Tax Indemnitee on demand all reasonable
out-of-pocket costs, losses and expenses that such Tax Indemnitee may incur in
connection with contesting such Imposition including all reasonable legal,
accounting and investigatory fees and disbursements, or (D) if such contest
shall involve the payment of the Tax prior to the contest, unless the Lessee
Agent shall provide to such Tax Indemnitee an interest-free advance in an amount
equal to the Imposition that the Indemnitee is required to pay (with no
additional net after-tax costs to such Tax Indemnitee). In addition for Tax
Indemnitee controlled contests and claims contested in the name of such Tax
Indemnitee in a public forum, no contest shall be required: (A) unless the
amount of the potential indemnity (taking into account all
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similar or logically related claims that have been or could be raised in any
audit involving any or all such Tax Indemnitees with respect to any period for
which the Lessee Agent may be liable to pay an indemnity under this Section
13.5(b)) exceeds $100,000 and (B) unless, if requested by such Tax Indemnitee,
the Lessee Agent shall have provided to such Tax Indemnitee an opinion of
counsel selected by the Lessee Agent (which may be in-house counsel) that a
reasonable basis exists to contest such claim. In no event shall a Tax
Indemnitee be required to appeal an adverse judicial determination to the United
States Supreme Court.
The party conducting the contest shall consult in good faith with the
other party and its counsel with respect to the contest of such claim for Taxes
(or claim for refund) but the decisions regarding what actions are to be taken
shall be made by the controlling party in its sole judgment, provided, however,
that if such Tax Indemnitee is the controlling party and the Lessee Agent
recommends the acceptance of a settlement offer made by the relevant
Governmental Authority and such Tax Indemnitee rejects such settlement offer
then the amount for which the Lessee will be required to indemnify such Tax
Indemnitee with respect to the Taxes subject to such offer shall not exceed the
amount which it would have owed if such settlement offer had been accepted. In
addition, the controlling party shall keep the non-controlling party reasonably
informed as to the progress of the contest, and shall provide the noncontrolling
party with a copy of (or appropriate excerpts from) and reports or claims issued
by the relevant auditing agents or taxing authority to the controlling party
thereof, in connection with such claim or the contest thereof.
Each Tax Indemnitee shall, at the Lessee's expense, supply the Lessee
Agent with such information and documents reasonably requested by the Lessee
Agent as are necessary or advisable for the Lessee Agent to participate in any
action, suit or proceeding to the extent permitted by this Section 13.5(b).
Notwithstanding anything in this Section 13.5(b) to the contrary, no Tax
Indemnitee shall enter into any settlement or other compromise or fail to appeal
an adverse ruling with respect to any claim which is entitled to be indemnified
under this Section 13.5 (and with respect to which contest is required under
this Section 13.5(b)) without the prior written consent of the Lessee Agent,
unless such Tax Indemnitee waives its right to be indemnified under this Section
13.5 with respect to such claim pursuant to the next paragraph.
Notwithstanding anything contained herein to the contrary, a Tax
Indemnitee will not be required to contest or continue to contest (and the
Lessee Agent shall not be permitted to contest or continue to contest) a claim
with respect to the imposition of any Tax if such Tax Indemnitee shall waive its
right to indemnification under this Section 13.5 with respect to such claim (and
any claim with respect to such year or any other taxable year the contest of
which is materially adversely affected as a result of such waiver) and returns
to the Lessee Agent all amounts previously advanced to the Indemnitee with
respect to the contest of such claim.
(c) [Intentionally omitted]
(d) Payments. Any Imposition indemnifiable under this Section 13.5
shall be paid directly when due to the applicable taxing authority if direct
payment is practicable and permitted. If direct payment to the applicable taxing
authority is not permitted or is otherwise not made, any amount payable to a Tax
Indemnitee pursuant to Section 13.5 shall be paid within
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thirty (30) days after receipt of a written demand therefor from such Tax
Indemnitee accompanied by a written statement describing in reasonable detail
the amount so payable, but not prior to the date that the relevant Taxes are
due. Any payments made pursuant to this Section 13.5 shall be made directly to
such Tax Indemnitee entitled thereto or the Lessee Agent, as the case may be, in
immediately available funds at such bank or to such account as specified by the
payee in written directions to the payor, or, if no such direction shall have
been given, by check of the payor payable to the order of the payee by certified
mail, postage prepaid at its address as set forth in Schedule II hereto. Upon
the request of any Tax Indemnitee with respect to a Tax that the Lessee Agent is
required to pay, the Lessee Agent shall furnish to such Tax Indemnitee the
original or a certified copy of a receipt for the Lessee Agent's payment of such
Tax or such other evidence of payment as is reasonably acceptable to such Tax
Indemnitee.
(e) Reports. In the case of any report, return or statement required to
be filed with respect to any Taxes that are subject to indemnification under
this Section 13.5 and of which the Lessee Agent has knowledge, the Lessee Agent
shall promptly notify such Tax Indemnitee of such requirement and, at the Lessee
Agent's expense (i) if the Lessee Agent is permitted by Applicable Law, timely
file such report, return or statement in its own name or (ii) if such report,
return or statement is required to be in the name of or filed by such Tax
Indemnitee, prepare and finish such statement for filing by such Tax Indemnitee
in such manner as shall be satisfactory to such Tax Indemnitee and send the same
to such Tax Indemnitee for filing no later than fifteen (15) days prior to the
due date therefor. In any case in which such Tax Indemnitee will file any such
report, return or statement, the Lessee Agent shall, upon written request of
such Tax Indemnitee, provide such Tax Indemnitee with such information as is
reasonably necessary to allow such Tax Indemnitee to file such report, return or
statement.
(f) [Intentionally omitted]
(g) Tax Ownership. Each Tax Indemnitee represents and warrants that it
will not, prior to the termination of the Master Lease, claim ownership of (or
any tax benefits, including depreciation, with respect to) the Property for any
income tax purposes (unless required to do so by a Governmental Authority), it
being understood that the Lessee is and will remain the owner of the Property
for such income tax purposes until the termination of the Master Lease.
Section 13.6. Indemnity Payments in Addition to Lease Obligations. The
Lessee Agent acknowledges and agrees that the Lessee Agent's obligations to make
indemnity payments under this Article XIII are separate from, in addition to,
and do not reduce, the Lessee Agent's or the Lessee's obligations to pay any
amounts owing from time to time under the Lease.
Section 13.7. Eurodollar Rate Lending Unlawful. Notwithstanding any
other provision herein, if the adoption of or any change in any Requirement of
Law or in the interpretation or application thereof occurring after the
Documentation Date shall make it unlawful for any Participant to make, continue
or maintain Eurodollar Loans/Certificate Holder Amounts as contemplated by the
Operative Documents, (i) such Participant shall promptly give written notice of
such circumstances to the Lessee Agent, the Certificate Holder Agent and the
Administrative Agent (which notice shall be withdrawn whenever such
circumstances no longer exist), (ii) the commitment of such Lender or
Certificate Holder, as the case may be, hereunder
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to make, continue or maintain Eurodollar Loans/Certificate Holder Amounts shall
forthwith be canceled and, until such time as it shall no longer be unlawful for
such Participant to make, continue or maintain Eurodollar Loans/Certificate
Holder Amounts, such Participant shall then have a commitment only to make or
maintain Base Rate Loans/Certificate Holder Amounts when Eurodollar
Loans/Certificate Holder Amounts are requested and (c) such Participant's Loans
and Certificate Holder Amounts then outstanding as Eurodollar Loans/Certificate
Holder Amounts, if any, shall be converted automatically to Base Rate
Loans/Certificate Holder Amounts on the respective last days of the then current
Interest Periods with respect to such Loans and Certificate Holder Amounts or
within such earlier period as required by law. If any such conversion of
Eurodollar Loans/Certificate Holder Amounts occurs on a day which is not the
last day of the then current Interest Period with respect thereto, the Lessee
Agent shall pay to such Participant such amounts, if any, as may be required
pursuant to Section 13.10. In any such case, interest and principal (if any)
shall be payable contemporaneously with the related Eurodollar Loans/Certificate
Holder Amounts of the other Participants so affected.
Section 13.8. Deposits Unavailable. If any of the Participants shall
have determined that:
(i) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to such Participant in
its relevant market; or
(ii) by reason of circumstances affecting such Participant's
relevant market, adequate means do not exist for ascertaining the
interest rate or Yield, as the case may be, applicable to such
Participant's Eurodollar Loans/Certificate Holder Amounts;
then, upon notice from such Participant to the Lessee Agent, the Certificate
Holder Agent, the Administrative Agent and the other Participants, (x) the
obligations of such Participant to make or continue any Loans or Certificate
Holder Amounts as, or to convert any Loans or Certificate Holder Amounts into
Eurodollar Loans/Certificate Holder Amounts shall be suspended, and (y) each
outstanding Eurodollar Loan/Certificate Holder Amount held by such Participant
shall automatically convert into a Base Rate Loan/Certificate Holder Amount on
the last day of the current Interest Period applicable thereto.
Section 13.9. Increased Costs, etc. (a) If the adoption of or any
change in a Requirement of Law or in the interpretation or application thereof
applicable to any Participant, or compliance by any Participant with any request
or directive (whether or not having the force of law) from any central bank or
other Governmental Authority, in each case made subsequent to the Documentation
Date (or, if later, the date on which such Participant becomes a Participant):
(i) shall subject such Participant to any tax of any kind
whatsoever with respect to any Eurodollar Loans/Certificate Holder
Amounts made, continued or maintained by it or its obligation to make,
continue or maintain Eurodollar Loans/Certificate Holder Amounts, or
change the basis of taxation of payments to such Participant in respect
thereof (except for excluded Impositions, any changes in taxes measured
by or imposed upon the overall gross or net income, franchise or other
taxes (imposed in lieu of such net income tax), of such Participant or
its applicable lending office, branch, or any affiliate thereof); or
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(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of,
Loans and Certificate Holder Amounts, loans or other extensions of
credit by, or any other acquisition of funds by, any office of such
Participant which is not otherwise included in the determination of the
Adjusted Eurodollar Rate hereunder; or
(iii) shall impose on such Participant any other condition
(excluding any Tax of any kind) whatsoever in connection with the
Operative Documents;
and the result of any of the foregoing is to increase the cost to such
Participant, by a material amount, of making, continuing or maintaining
Eurodollar Loans/Certificate Holder Amounts or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, upon notice to the Lessee
Agent from such Participant, through the Administrative Agent and/or the Agent
Certificate Holder, in accordance herewith, the Lessee Agent shall pay such
Participant any additional amounts necessary to compensate such Participant for
such increased cost or reduced amount receivable; provided that, in any such
case, the Lessee Agent may elect to convert the Eurodollar Loans/Certificate
Holder Amounts made by such Participant hereunder to Base Rate Loans/Certificate
Holder Amounts by giving the Administrative Agent at least one (1) Business
Day's notice of such election, in which case the Lessee Agent shall promptly pay
to such Participant, upon demand, without duplication, such amounts, if any, as
may be required pursuant to Section 13.10. All payments required by this Section
13.9(a) shall be made by the Lessee within ten (10) Business Days after demand
by the affected Participant. The Lessee Agent shall not be obligated to
reimburse any Participant for any increased cost or reduced return incurred more
than one hundred eighty (180) days after the date that such Participant receives
actual notice of such increased cost or reduced return unless such Participant
gives notice thereof to the Lessee Agent in accordance with this Section 13.9
during such one hundred eighty (180) day period. If any Participant becomes
entitled to claim any additional amounts pursuant to this subsection, it shall
provide prompt notice thereof to the Lessee Agent, through the Administrative
Agent and/or the Agent Certificate Holder, certifying (x) that one of the events
described in this clause (a) has occurred and describing in reasonable detail
the nature of such event, (y) as to the increased cost or reduced amount
resulting from such event and (z) as to the additional amount demanded by such
Participant and a reasonably detailed explanation of the calculation thereof
(including the method by which such Participant allocated such amounts to the
Lessee Agent). Such a certificate as to any additional amounts payable pursuant
to this clause submitted by such Participant, through the Administrative Agent
and/or the Agent Certificate Holder, to the Lessee Agent shall be conclusive in
the absence of manifest error. This covenant shall survive the termination of
this Participation Agreement and the payment of the Loans and Certificate Holder
Amounts and all other amounts payable hereunder.
(b) Each Participant shall use its reasonable efforts to reduce or
eliminate any unlawfulness or claim for compensation pursuant to Sections 13.7,
13.8 or 13.9(a), including, without limitation, a change in the office of such
Participant at which its obligations related to this Participation Agreement are
maintained if such change will cure the unlawfulness or avoid the need for, or
reduce the amount of, such compensation and will not, in the reasonable judgment
of such Participant, be otherwise disadvantageous to it. If any such claim of
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unlawfulness or for compensation shall not be eliminated or waived, the Lessee
Agent shall have the right to replace the affected Participant with a new
financial institution that shall succeed to the rights of such Participant under
this Participation Agreement; provided, however, that such Participant shall not
be replaced hereunder until it has been paid in full such claim and all other
amounts owed to it hereunder.
Section 13.10. Funding Losses. The Lessee Agent agrees to indemnify each
Indemnitee and to hold each Indemnitee harmless from any loss or expense which
such Indemnitee may sustain or incur (other than through such Person's own gross
negligence or willful misconduct) as a consequence of (a) default by the Lessee
Agent (or any Lessee) in making a borrowing of Loans or Certificate Holder
Amounts which are Eurodollar Loans/Certificate Holder Amounts after Lessee has
given a notice requesting the same in accordance with the provisions of this
Participation Agreement, (b) default by the Lessee Agent (or any Lessee) in
making any prepayment of a Loan or Certificate Holder Amount which is a
Eurodollar Loan/Certificate Holder Amount after the Lessee has given a notice
thereof in accordance with the provisions of this Participation Agreement, or
(c) the making of a prepayment of Loans or Certificate Holder Amounts which are
Eurodollar Loans/Certificate Holder Amounts on a day which is not the last day
of an Interest Period with respect thereto. This covenant shall survive the
termination of this Participation Agreement or any other Operative Document and
the payment of the Loans, Certificate Holder Amounts and all other amounts
payable under the Operative Documents.
Section 13.11. Capital Adequacy. (a) If the adoption of any applicable
law, rule or regulation regarding capital adequacy, or any change therein, or
any change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Participant with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, in each case made
subsequent to the Documentation Date has or will have the effect of reducing the
rate of return on any Participant's or its parent company's capital by a
material amount, as a consequence of its commitments or obligations hereunder to
a level below that which such Participant or its parent company could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Participant's or its parent company's policies with respect
to capital adequacy), then, upon notice from such Participant, the Lessee Agent
shall pay to such Participant such additional amount or amounts as will
compensate such Participant and its parent company for such reduction (it being
understood that such parent company shall not be reimbursed to the extent its
subsidiary Participant is reimbursed by the Lessee Agent in connection with the
same or a similar law, rule, regulation, change, request or directive applicable
to such Participant). All payments required by this Section 13.11 shall be made
by the Lessee Agent within ten (10) Business Days after demand by the affected
Participant. The Lessee Agent shall not be obligated to reimburse any
Participant for any reduced return incurred more than one hundred eighty (180)
days after the date that such Participant receives actual notice of such reduced
return unless such Participant gives notice thereof to the Lessee Agent in
accordance with this Section 13.11 during such one hundred eighty (180) day
period. If any Participant becomes entitled to claim any additional amounts
pursuant to this clause, it shall provide prompt written notice thereof to the
Lessee, through the Administrative Agent and/or the Agent Certificate Holder,
certifying (x) that one of the events described in this clause (a) has
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occurred and describing in reasonable detail the nature of such event, (y) as to
the increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Participant and a reasonably detailed
explanation of the calculation thereof. Such a certificate as to any additional
amounts payable pursuant to this clause submitted by such Participant, through
the Administrative Agent and/or the Agent Certificate Holder, to the Lessee
Agent shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Participation Agreement and the other Operative
Documents and the payment of the Loans, Certificate Holder Amounts and all other
amounts payable hereunder and thereunder.
(b) Each Participant shall use its commercially reasonable efforts to
reduce or eliminate, any claim for compensation pursuant to this Section 13.11,
including, without limitation, a change in the office of such Participant at
which its obligations related to the Operative Documents are maintained if such
change will avoid the need for, or reduce the amount of, such compensation and
will not, in the reasonable judgment of such Participant, be otherwise
disadvantageous to it. If any such claim for compensation shall not be
eliminated or waived, the Lessee Agent shall have the right to replace the
affected Participant with a new financial institution that shall succeed to the
rights of such Participant under the Operative Documents; provided, however,
that such Participant shall not be replaced hereunder until it has been paid in
full such claim and all other amounts owed to it hereunder.
ARTICLE XIV
THE AGENT CERTIFICATE HOLDER
Section 14.1. Appointment and Authorization. Each Certificate Holder
irrevocably appoints and authorizes BMO Leasing (U.S.), Inc. as Agent
Certificate Holder (in such capacity as Agent Certificate Holder hereunder and
under the other Operative Documents, the "Agent Certificate Holder") of such
Certificate Holder to enter into the Operative Documents on behalf of such
Certificate Holder and to act as specified herein and in the other Operative
Documents, and each such Certificate Holder hereby authorizes the Agent
Certificate Holder as agent for such Certificate Holder, to take such action on
its behalf under the provisions of this Participation Agreement and the other
Operative Documents and to exercise such powers and perform such duties as are
expressly delegated by the terms hereof and thereof, together with such other
powers as are reasonably incidental thereto (including, without limitation, the
execution and delivery, or causing Lessor Trust to execute and deliver, from
time to time in accordance with the provisions and terms hereof of Lease
Supplements, Construction Agency Agreement Supplements, Assignment of Lease and
Rent Supplements and the various other documents, conveyances, terminations,
assignments and instruments contemplated herein to be delivered by the Agent
Certificate Holder on behalf of the Certificate Holders). Each action taken by
the Agent Certificate Holder under any Operative Document shall be deemed to be
on behalf of each the Certificate Holders, unless otherwise indicated.
Notwithstanding any provision to the contrary elsewhere herein or in the other
Operative Documents, the Agent Certificate Holder shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Certificate Holder, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this
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Participation Agreement or any of the other Operative Documents, or shall
otherwise exist against the Agent Certificate Holder.
Section 14.2. Delegation of Duties. The Agent Certificate Holder may
execute any of its duties hereunder or under the other Operative Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent Certificate Holder
shall not be responsible for the negligence or misconduct of any agents or
attorneys in fact selected by it with reasonable care.
Section 14.3. Agent Certificate Holder and Affiliates. The Agent
Certificate Holder shall have the same rights and powers under this
Participation Agreement and under the other Operative Documents as any other
Certificate Holder, and may exercise or refrain from exercising the same as
though it were not the Agent Certificate Holder.
Section 14.4. Action by Agent Certificate Holder. The obligations of the
Agent Certificate Holder hereunder and under the other Operative Documents are
only those expressly set forth herein and therein. Without limiting the
generality of the foregoing, the Agent Certificate Holder shall not be required
to take any action with respect to any Default or Event of Default, except as
expressly provided herein and in the other Operative Documents.
Section 14.5. Consultation with Experts. The Agent Certificate Holder
may consult with legal counsel (who may be counsel for Lessee Agent, the Lessee,
Guarantor, a Participant, the Administrative Agent, or any Affiliate of any of
them), independent public accountants and other experts selected by it and 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 14.6. Exculpatory Provisions. Neither the Agent Certificate
Holder nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates shall be responsible for or have any duty to ascertain, inquire
into or verify (a) any statement, warranty or representation made in connection
with the Operative Documents; (b) the performance or observance of any of the
covenants or agreements of Guarantor, Lessee Agent or the Lessee; (c) the
satisfaction of any condition precedent specified herein or in any other
Operative Document; (d) the validity, effectiveness or genuineness of any of the
Operative Documents or any other instrument or writing furnished in connection
herewith or therewith; (e) the use of the proceeds of the Advance; (f) the
existence of any Default or Event of Default; or (g) the properties, books or
records of Guarantor or the Lessee.
Section 14.7. Reliance on Communications. The Agent Certificate Holder
shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to
Lessee, Guarantor, independent accountants and other experts selected by the
Agent Certificate Holder with reasonable care). The Agent Certificate Holder may
deem and treat the Participants as the owners of their respective interests
hereunder and under the other Operative Documents for all
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purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Agent Certificate Holder in accordance with
Section 12.1 of the Participation Agreement. The Agent Certificate Holder,
acting in its capacity as Agent Certificate Holder, shall be fully justified in
failing or refusing to take any action under this Participation Agreement or
under any of the other Operative Documents unless it shall first receive such
advice or concurrence of the Certificate Holders as it deems appropriate or it
shall first be indemnified to its satisfaction by the Participants against any
and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent Certificate Holder shall in all
cases be fully protected in acting, or in refraining from acting, hereunder or
under any of the other Operative Documents in accordance with a request of the
Certificate Holders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Participants (including their
successors and assigns).
Section 14.8. Notice of Default. The Agent Certificate Holder shall not
be deemed to have knowledge or notice of the occurrence of any Default or Event
of Default hereunder unless the Agent Certificate Holder has received notice
from a Participant or any Lessee or Guarantor referring to the Operative
Document, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent Certificate Holder
receives such a notice, the Agent Certificate Holder shall give prompt notice
thereof to the Participants. The Agent Certificate Holder shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Required Certificate Holders.
Section 14.9. Non-Reliance on Agent Certificate Holder and Other
Participants. Each Participant expressly acknowledges that neither the Agent
Certificate Holder (other than in its role as Participant) nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representations or warranties to it and that no act by the Agent Certificate
Holder or any affiliate thereof hereafter taken, including any review of the
affairs of the Lessee or Guarantor, shall be deemed to constitute any
representation or warranty by the Agent Certificate Holder to any Participant.
Each Participant represents to the Agent Certificate Holder that it has,
independently and without reliance upon the Agent Certificate Holder or any
other Participant, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial, and other conditions, prospects and
creditworthiness of any Lessee and Guarantor and made its own decision to make
its proportionate share of the Advances hereunder and under the other Operative
Documents and enter into this Participation Agreement and the other Operative
Documents. Each Participant also represents that it will, independently and
without reliance upon the Agent Certificate Holder or any other Participant, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Participation Agreement, and to make such
investigation as it deems necessary to inform itself as to the business, assets,
operations, property, financial and other conditions, prospects and
creditworthiness of Lessee and Guarantor. Except for notices, reports and other
documents expressly required to be furnished to the Participants by the Agent
Certificate Holder hereunder, the Agent Certificate Holder shall not have any
duty or responsibility to provide any Participant with any credit or other
information concerning the business, operations, assets, property, financial or
other conditions, prospects or creditworthiness of the Lessee or Guarantor which
may come into the
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possession of the Agent Certificate Holder or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
Section 14.10. Indemnification. The Certificate Holders agree to
indemnify the Agent Certificate Holder in its capacity as such (to the extent
not reimbursed by the Lessee or Guarantor and without limiting the obligation of
the Lessee and Guarantor to do so, to the extent set forth herein or in the
other Operative Documents to which the Lessee or the Guarantor is a party),
ratably according to their respective Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including without limitation at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against the Agent
Certificate Holder in its capacity as such in any way relating to or arising out
of this Participation Agreement or the other Operative Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent
Certificate Holder under or in connection with any of the foregoing; provided
that no Certificate Holder shall be liable for the payment of any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the gross negligence or
willful misconduct of the Agent Certificate Holder. If any indemnity furnished
to the Agent Certificate Holder for any purpose shall, in the opinion of the
Agent Certificate Holder, be insufficient or become impaired, the Agent
Certificate Holder may call for additional indemnity and cease, or not commence,
to do the acts indemnified against until such additional indemnity is furnished.
The agreements in this Section shall survive the payment in full of the
Obligations and all other amounts payable hereunder and under the other
Operative Documents.
Section 14.11. Failure to Act. Except for action expressly required of
the Agent Certificate Holder hereunder, the Agent Certificate Holder shall in
all cases be fully justified in failing or refusing to act hereunder unless it
shall be indemnified to its satisfaction by the Certificate Holders against any
and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
Section 14.12. Resignation and Removal. The Agent Certificate Holder may
resign at any time upon at least thirty (30) days prior notice to Lessee Agent
and the Participants, and may be removed for cause at any time by vote of the
Required Certificate Holders and notice to the retiring Agent Certificate
Holder, the Administrative Agent and the Lessee Agent. In the event of any such
resignation or removal, the Required Certificate Holders shall as promptly as
practicable (but with five (5) Business Days' prior written notice being given
to Lessee Agent) appoint a successor Agent Certificate Holder, provided that
such successor Agent Certificate Holder shall be approved by Lessee Agent,
Administrative Agent, and, unless an Event of Default is continuing, be approved
by the Lessee Agent (which approval shall not be unreasonably withheld or
delayed) and, if the Lessee has not responded within such five (5) Business Day
period, Lessee Agent shall be deemed to have approved such new Agent Certificate
Holder. If no successor Agent Certificate Holder shall have been so appointed
and shall have accepted such appointment within thirty (30) days after either
the retiring Agent Certificate Holder's giving of notice of resignation or the
Required Certificate Holders' vote to remove the retiring Agent Certificate
Holder, then the retiring Agent Certificate Holder may, on
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behalf of the Certificate Holders, appoint a successor Agent Certificate Holder,
which shall be a commercial bank organized under the laws of the United States
of America or of any State thereof or under the laws of another country that is
doing business in the United States and having a combined capital, surplus and
undivided profits of at least $100,000,000, or a wholly owned subsidiary of such
bank. Upon its acceptance of its appointment, such successor Agent Certificate
Holder shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent Certificate Holder, and the retiring
Agent Certificate Holder shall be discharged from all further duties and
obligations as Agent Certificate Holder under this Participation Agreement and
under the other Operative Documents. After any retiring Agent Certificate
Holder's resignation or removal hereunder as Agent Certificate Holder, the
provisions of this Participation Agreement and of the other Operative Documents
shall continue to inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent Certificate Holder under this Participation
Agreement. No resignation or renewal of the Agent Certificate Holder may become
effective until a successor Agent Certificate Holder has been appointed as
provided above.
Section 14.13. Distributions. The Agent Certificate Holder shall, as
promptly as practicable, distribute to each Participant its appropriate portion,
if any, of payments received (in good, collected funds) by the Agent Certificate
Holder from the Lessee, Lessee Agent or Guarantor for the account of the
Participants or of any such payments so received for the account of such
Participant.
Section 14.14. Rights of Lessee Agent. Except where Lessee Agent is
expressly referenced in this Article XIV or Article VII or in the Lease, (w) the
Agent Certificate Holder shall act solely as agent of the Certificate Holders
and does not assume and shall not be deemed to have assumed any obligation or
relationship of agency or trust with or for Lessee Agent, (x) this Article XIV
is for the benefit of the Agent Certificate Holder and the Participants only,
(y) Lessee Agent shall have no right to enforce any part of this Article XIV and
shall have no rights as third party beneficiary or otherwise therein, and (z)
this Article XIV may be amended by the approval of Agent Certificate Holder and
the Required Participants, without any need to obtain the approval of Lessee
Agent.
ARTICLE XV
MISCELLANEOUS
Section 15.1. Survival of Agreements. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Documents, and the parties' obligations under any and all thereof,
shall survive the execution and delivery of this Participation Agreement, the
transfer of the Property to the Lessor Trust, the construction of any
Improvements, any disposition of any interest of the Lessor Trust, Agent
Certificate Holder or any Participant in the Property or any Improvements and
the payment of the Notes and Certificates and any disposition thereof, and shall
be and continue in effect to the extent set forth in such Operative Documents
notwithstanding any investigation made by any party and the fact that any party
may waive compliance with any of the other terms, provisions or conditions of
any of the Operative Documents. Except as otherwise expressly set forth herein
or in the other
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Operative Documents, the indemnities of the parties provided for in the
Operative Documents shall survive the expiration or termination of any thereof.
Section 15.2. No Broker, Etc. Each of the parties hereto represents to
the others that it has not retained or employed any broker, finder or financial
adviser (other than Insignia Group and KNLB) to act on its behalf in connection
with this Participation Agreement or the transactions contemplated herein or in
the other Operative Documents nor has it authorized any broker, finder or
financial adviser (other than Insignia Group and KNLB) retained or employed by
any other Person so to act. In the event that any party retains any other
broker, finder or financial advisor, such party will promptly notify the other
parties in writing of such broker, finder or financial advisor. Any party which
is in breach of this representation shall indemnify and hold the other parties
harmless from and against any liability arising out of such breach of this
representation.
Section 15.3. Notices. Unless otherwise specifically provided herein,
all notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to any
Person shall be given in writing by United States mail, by nationally recognized
courier service, by hand or by facsimile, and any such notice shall become
effective (i) if delivered by United States mail, five (5) Business Days after
being deposited in the mail, certified or registered with appropriate postage
prepaid, (ii) if delivered by a nationally recognized courier service, upon
delivery to the intended recipient, (iii) if delivered by hand, when received or
(iv) if delivered by facsimile, when transmitted (upon electronic confirmation
thereof) provided that any facsimile transmitted after 5:00 P.M. (recipient
time) shall be deemed to have been received on the next Business Day, and shall
be directed to the address or facsimile number of such Person as indicated on
Schedule II. From time to time any party may designate a new address or
facsimile number for purposes of notice hereunder by written notice to each of
the other parties hereto in accordance with this Section.
Section 15.4. Counterparts. This Participation Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 15.5. Amendments, Etc. Neither any Operative Document nor any of
the terms thereof may be terminated (except upon payment in full of the Lease
Balance or effective exercise and consummation of the Remarketing Option in
accordance with Article XX of the Master Lease and payment in full of all
amounts due in accordance therewith), amended, supplemented, waived or modified
without the written agreement or consent of each party thereto and the Lessee
Agent's consent with respect to amendments, supplements, waivers and
modifications in the Loan Agreement, Notes, Trust Agreement and Certificates
and, regardless of whether the Lenders and the Certificate Holders are parties
thereto, the Required Participants; provided, however, that:
(a) no such termination, amendment, supplement, waiver or
modification shall without written agreement or consent of each
Participant:
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(i) modify any of the provisions of this Section 15.5,
change the definition of "Required Participants" or modify
or waive any provision of any Operative Document requiring
action by the foregoing;
(ii) amend, modify, waive or supplement any of the
provisions of Section 2.5, 2.6 or 2.7 of the Loan Agreement;
(iii) reduce, modify, amend or waive any fees or
indemnities in favor of any Participant, including without
limitation amounts payable pursuant to Article XIII (except
that any Person may consent to any reduction, modification,
amendment or waiver of any indemnity payable to it);
(iv) modify, postpone, reduce or forgive, in whole or
in part, any payment of Rent (other than pursuant to the terms
of any Operative Document), any Loan or Certificate Holder
Amount, the Lease Balance, the Loan Balance, Commitment Fees
and any other fee payable hereunder, amounts due pursuant to
Section 20.2 of the Master Lease, interest or Yield (except
that any Person may consent to any modification, postponement,
reduction or forgiveness of any payment of any fee payable to
it) or, subject to subclause (iii) above, any other amount
payable under the Lease or this Participation Agreement, or
modify the definition or method of calculation of Rent (other
than pursuant to the terms of any Operative Document), Loans
or Certificate Holder Amounts, Lease Balance, Loan Balance,
Commitment Fees, Shortfall Amount, Property Improvement Costs,
Estimated Improvement Costs, Participant Balance, or any other
definition which would affect the amounts to be advanced or
which are payable under the Operative Documents; or
(v) consent to any assignment of the Master Lease or
the Lease Supplement by any Lessee, releasing Lessee from its
obligations in respect of the payments of Rent, Loan Balance
or Lease Balance or changing the absolute and unconditional
character of such obligations.
(b) no such termination, amendment, supplement, waiver or
modification that would increase the obligations of Lessee or Guarantor
thereunder or deprive Lessee or Guarantor of any of its rights
thereunder shall be effective against Lessee or Guarantor without its
written agreement or consent.
Section 15.6. Headings, Etc. The Table of Contents and headings of the
various Articles and Sections of this Participation Agreement are for
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof.
Section 15.7. Parties in Interest. Except as expressly provided herein,
none of the provisions of this Participation Agreement is intended for the
benefit of any Person except the parties hereto. Neither the Lessee Agent, the
Lessee nor Guarantor shall assign or transfer any of its rights or obligations
under the Operative Documents except in accordance with the terms and conditions
thereof.
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Section 15.8. GOVERNING LAW. THIS PARTICIPATION AGREEMENT AND THE OTHER
OPERATIVE DOCUMENTS (EXCEPT AS OTHERWISE PROVIDED IN ANY OPERATIVE DOCUMENT) AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF
ILLINOIS.
Section 15.9. Severability. Any provision of this Participation
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 15.10. Liability Limited. (a) The parties hereto agree that
except as specifically set forth herein or in any other Operative Document, no
Certificate Holder or Owner Trustee shall have any personal liability whatsoever
to any Participant or their respective successors and assigns for any claim
based on or in respect hereof or any of the other Operative Documents or arising
in any way from the transactions contemplated hereby or thereby and recourse, if
any, shall be solely had against such Certificate Holder's interest in the
Lessor Trust; provided, however, that each Certificate Holder and Owner Trustee
shall be liable in its individual capacity (a) for its own willful misconduct or
gross negligence, (b) breach of any of its representations, warranties or
covenants under the Operative Documents, (c) with respect to Certificate
Holders, for any Tax based on or measured by any fees, commission or
compensation received by a Certificate Holder for acting as a Certificate Holder
as contemplated by the Operative Documents, or (d) any Lessor Liens attributable
to it. It is understood and agreed that, except as provided in the preceding
sentence: (i) no Certificate Holder or Owner Trustee shall have any personal
liability under any of the Operative Documents as a result of acting pursuant to
and consistent with any of the Operative Documents; (ii) all obligations of each
Certificate Holder and Owner Trustee to any Lender are solely nonrecourse
obligations except to the extent that such Certificate Holder or Owner Trustee
has received payment from others (including, without limitation, obligations
with respect to the Loans); and (iii) all such personal liability of any
Certificate Holder and Owner Trustee is expressly waived and released as a
condition of, and as consideration for, the execution and delivery of the
Operative Documents by such Certificate Holder and Owner Trustee.
(b) No Participant shall have any obligation to any other Participant
or to Lessee Agent, the Lessee, the Certificate Holders or the Lenders with
respect to transactions contemplated by the Operative Documents, except those
obligations of such Participant expressly set forth in the Operative Documents
or except as set forth in the instruments delivered in connection therewith, and
no Participant shall be liable for performance by any other party hereto of such
other party's obligations under the Operative Documents except as otherwise so
set forth.
Section 15.11. Further Assurances. The parties hereto shall promptly
cause to be taken, executed, acknowledged or delivered, at the sole expense of
the Lessee Agent, 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 preserve the security interests and liens (and the priority thereof)
intended to be created pursuant to this Participation Agreement, the other
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Operative Documents, and the transactions thereunder (including, without
limitation, the preparation, execution and filing of any and all Uniform
Commercial Code financing statements and other filings or registrations which
the parties hereto may from time to time request to be filed or effected). The
Lessee Agent, at its own expense and upon prior request from any other party,
shall take such action as may be reasonably necessary (including any action
specified in the preceding sentence), or as so requested, in order to maintain
and protect all security interests provided for hereunder or under any other
Operative Document.
Section 15.12. SUBMISSION TO JURISDICTION. EACH PARTY HERETO HEREBY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE NORTHERN DISTRICT OF ILLINOIS FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING
OUT OF OR RELATING TO THIS PARTICIPATION AGREEMENT OR ANY OF THE OTHER OPERATIVE
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
Section 15.13. Setoff. The Lenders and the Certificate Holders shall,
upon the occurrence of any Lease Event of Default or Construction Agency
Agreement Event of Default, have the right to appropriate and, subject to
Section 4.7, apply to the payment of Lessee Agent's obligations under the Lease,
the Construction Agency Agreement and the other Operative Documents as security
for the payment of such obligations, any and all balances, credits, deposits,
accounts or moneys of Lessee Agent then or thereafter maintained with any Lender
or any Certificate Holder. The rights of the Lenders and the Certificate Holders
under this Section are in addition to other rights and remedies (including other
rights of setoff under applicable law or otherwise) which such Person may have.
Section 15.14. WAIVER OF JURY TRIAL. THE PARTIES HERETO VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS PARTICIPATION AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
ANY OF THE PARTIES HERETO. THE PARTIES HERETO HEREBY AGREE THAT THEY WILL NOT
SEEK TO CONSOLIDATE ANY SUCH LITIGATION WITH ANY OTHER LITIGATION IN WHICH A
JURY TRIAL HAS NOT OR CANNOT BE WAIVED. THE PROVISIONS OF THIS SECTION 15.14
HAVE BEEN FULLY NEGOTIATED BY THE PARTIES HERETO AND SHALL BE SUBJECT TO NO
EXCEPTIONS. EACH OF GUARANTOR, LESSEE AGENT AND THE LESSEE ACKNOWLEDGES AND
AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH OF THE AGENT
CERTIFICATE HOLDER, THE OWNER TRUSTEE, THE LESSOR TRUST, THE ADMINISTRATIVE
AGENT, THE ARRANGER AND EACH OF THE PARTICIPANTS ENTERING INTO THIS
PARTICIPATION AGREEMENT AND EACH SUCH OTHER OPERATIVE DOCUMENT.
Section 15.15. No Participant Responsible for Other Participants. The
obligations of each Participant under this Participation Agreement and the other
Operative Documents are several
-70-
76
and not joint; and, in the event of a failure by a Participant to perform any of
its obligations hereunder or under any other Operative Document, neither the
Agent Certificate Holder nor the Administrative Agent nor any other Participant
(other than the defaulting Participant) shall have any liability as a
consequence thereof.
Section 15.16. Recourse during Construction. Notwithstanding any
provision herein to the contrary, prior to the Completion Date if no
Construction Agency Agreement Event of Default described in clauses (a), (b) or
(c) of Section 5.1 of the Construction Agency Agreement has occurred, so long as
the Lessee and the Lessee Agent relinquish their interests therein and conveys
possession of the Property and all Improvements and Modifications to the Agent
Certificate Holder as contemplated by Section 20.3(b)(ii) of the Master Lease
with the affidavit and certificate contemplated by Section 20.3(b)(i) of the
Master Lease, the maximum recovery on a recourse basis from the Lessee (and any
guarantor of the Lessee, including the Guarantor) for such Property shall be
limited to 89.99% of the Property Cost; provided that the Lessee acknowledges
and agrees that Certificate Holders shall be entitled to recover 100% of the
Lease Balance from their interest as owner or mortgagee, as the case may be, of
the Property and provided further that nothing contained in this Section 15.16
limits the obligations of Guarantor with respect to indemnification under
Article XIII hereof except to the extent that such indemnification relates to
the payment of Construction Costs.
Section 15.17. No Recourse to Owner Trustee; Agent Certificate Holder;
Certificate Holders. Notwithstanding any provision to the contrary, the
obligations, representations, warranties and agreements of the Lessor Trust
hereunder and under the Certificates, the other Operative Documents and any
other certificate, instrument or document executed in connection herewith or
therewith, and any other document supplemental hereto or thereto, shall be
deemed obligations and agreements of the Lessor Trust, and not of Wilmington
Trust Company in its individual capacity, Agent Certificate Holder or any
Certificate Holder, or any shareholder, officer, agent or employee of Wilmington
Trust Company in its individual capacity or Agent Certificate Holder or any
Certificate Holder, and the shareholders, officers, agents and employees of
Wilmington Trust Company in its individual capacity or Agent Certificate Holder
any Certificateholder shall not be liable personally hereon or thereon or be
subject to any personal liability or accountability based upon or in respect
hereof or thereof or of any transaction contemplated hereby or thereby.
-71-
77
IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
TRUSERV CORPORATION, as Lessee Agent
By
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Its Executive Vice President and
Chief Financial Officer
▇▇▇▇ ▇▇▇▇▇, LLC, as Lessee
By: TruServ Corporation,
its sole member
By
---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Its Executive Vice President
and Chief Financial Officer
BMO LEASING (U.S.), INC., as Agent
Certificate Holder and as a
Certificate Holder
By
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its Vice President
BANK OF MONTREAL, as Administrative
Agent, Arranger and as a Lender
By
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its Managing Director
78
WILMINGTON TRUST COMPANY, not in its
individual capacity, except as
expressly provided herein, but solely
as Owner Trustee
By
-------------------------------------
Name:
-------------------------------
Title:
-------------------------------
TRUSERV 1998 TRUST, as Lessor Trust
By: Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
By
---------------------------
Name:
----------------------
Title:
---------------------
79
SCHEDULE I
TO PARTICIPATION AGREEMENT
COMMITMENTS
COMMITMENT
PARTICIPANT COMMITMENT PERCENTAGE
LENDERS
Bank of Montreal $33,700,000 84.25%
CERTIFICATE HOLDERS
BMO Leasing (U.S.), Inc. $6,300,000 15.75%
TOTAL $40,000,000 100%
80
SCHEDULE II
TO PARTICIPATION AGREEMENT
Notice Information, Wire Instructions and Funding Offices,
AGENT CERTIFICATE HOLDER:
BMO LEASING (U.S.), INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
Bank: ▇▇▇▇▇▇ Trust and Savings Bank
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Account Name: BMO Leasing
Account Number: 124-8566
Ref: TruServ Synthetic Lease
ADMINISTRATIVE AGENT:
BANK OF MONTREAL
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions for the Account:
Bank: ▇▇▇▇▇▇ Trust and Savings Bank
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Account Name: Bank of Montreal
Account Number: 124-8566
Ref: TruServ Synthetic Lease
81
CERTIFICATE HOLDER:
BMO LEASING (U.S.), INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
Bank: ▇▇▇▇▇▇ Trust and Savings Bank
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Account Name: BMO Leasing
Account Number: ▇▇▇▇▇▇▇
Ref: TruServ Synthetic Lease
LENDERS:
BANK OF MONTREAL
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
Bank: ▇▇▇▇▇▇ Trust and Savings Bank
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Account Name: Bank of Montreal
Account Number: 124-8566
Ref: TruServ Synthetic Lease
LESSEE AGENT AND GUARANTOR:
TruServ Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
II-2
82
With a copy to:
TruServ Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Wire Transfer Instructions:
Bank: ▇▇▇▇▇▇ Trust and Savings Bank
ABA Number: ▇▇▇-▇▇▇-▇▇▇
Account Name: TruServ Corporation
Account Number: ▇▇▇-▇▇▇-▇
OWNER TRUSTEE:
Wilmington Trust Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
II-3
83
SCHEDULE III
TO PARTICIPATION AGREEMENT
COMMITMENT FEES; CERTIFICATE HOLDER MARGIN
AND LOAN MARGIN
Commitment Fees with respect to the Loans and Certificate Holder
Amounts on any day, shall be calculated using the percentage set forth below
opposite the applicable Fixed Charge Coverage Ratio of Guarantor in effect for
such day for the Available Loan Commitment and Available Certificate Holder
Commitment:
FIXED CHARGE COVERAGE RATIO COMMITMENT FEE
--------------------------- --------------
Less than 2.00 to 1.00 .15%
Equal to or greater than 2.00 to 1.00 but less than .125%
2.75 to 1.00
Equal to or greater than 2.75 to 1.00 .10%
"Certificate Holder Margin" means, with respect to any Certificate
Holder Amount which is a Eurodollar Loan/Certificate Holder Amount, the
percentage set forth below opposite the Fixed Charge Coverage Ratio in effect
for such date:
FIXED CHARGE COVERAGE RATIO CERTIFICATE
HOLDER MARGIN
-------------
Less than 2.00 to 1.00 .85%
Equal to or greater than 2.00 to 1.00, .775%
but less than 2.75 to 1.00
Equal to or greater than 2.75 to 1.00 .725%
"Loan Margin" means, with respect to any Loan which is a Eurodollar
Loan/Certificate Holder Amount, the percentage set forth below opposite the
Fixed Charge Coverage Ratio in effect for such date :
FIXED CHARGE COVERAGE RATIO LOAN MARGIN
Less than 2.00 to 1.00 .50%
Equal to or greater than 2.00 to 1.00, .425%
but less than 2.75 to 1.00
Equal to or greater than 2.75 to 1.00 .375%
84
SCHEDULE IV
RESTRICTIVE AGREEMENTS
▇▇▇▇▇▇ & Company $50,000,000 Private Shelf Agreement dated as of
December 29, 1995 (as amended by Amendment No. 1 thereto dated June 24, 1997)
with The Prudential Insurance Company of America and the other entities from
time to time party thereto.
85
SCHEDULE V
LIENS
CAPITAL LEASES CAPITALIZED VALUE ESTIMATED OBLIGATION
Transportation Equipment
Lessors of Tractors & Trailers
Security Pacific $ 266,139.13 $ 253,362.80
Norlease, Inc. $3,115,550.75 $2,495,710.49
Met Life $4,652,584.89 $2,226,092.50
------------- -------------
TOTAL $8,034,274.77 $4,975,165.79
============= =============
86
SCHEDULE VI
INVESTMENTS
None.
87
SCHEDULE VII
FORM OF SUBORDINATED NOTE