Exhibit 10(g)
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MASTER AGREEMENT
Dated as of July 30, 2001
among
ADESA CORPORATION,
as a Guarantor
ADESA CALIFORNIA, INC. AND
CERTAIN SUBSIDIARIES OF
ADESA CORPORATION
THAT MAY HEREAFTER BECOME PARTY HERETO,
as Lessees
ATLANTIC FINANCIAL GROUP, LTD., as Lessor,
CERTAIN FINANCIAL INSTITUTIONS PARTIES HERETO,
as Lenders
and
SUNTRUST BANK, as Agent
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TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS; INTERPRETATION....................................1
ARTICLE II. ACQUISITION, CONSTRUCTION AND LEASE; FUNDINGS;NATURE OF
TRANSACTION....................................................2
SECTION 2.1 Agreement to Acquire, Construct, Fund and
Lease...........................................2
SECTION 2.2 Fundings of Purchase Price and Construction
Costs...........................................2
SECTION 2.3 Funded Amounts and Interest and Yield Thereon;
Unused Fee......................................5
SECTION 2.4 Lessee Owner for Tax Purposes...................6
ARTICLE III. CONDITIONS PRECEDENT; DOCUMENTS................................6
SECTION 3.1 Conditions to the Obligations of the Funding
Parties on each Closing Date....................6
SECTION 3.2 Additional Conditions for the Initial Closing
Date...........................................11
SECTION 3.3 Conditions to the Obligations of Lessee........12
SECTION 3.4 Conditions to the Obligations of the Funding
Parties on each Funding Date...................12
SECTION 3.5 Completion Date Conditions.....................13
SECTION 3.6 Addition of Lessees............................14
ARTICLE IV. REPRESENTATIONS...............................................15
SECTION 4.1 Representations of ADESA and other Lessees.....15
SECTION 4.2 Survival of Representations and Effect of
Fundings.......................................20
SECTION 4.3 Representations of the Lessor..................20
SECTION 4.4 Representations of each Lender.................22
ARTICLE V. COVENANTS OF ADESA, LESSEES AND THE LESSOR....................22
SECTION 5.1 Qualification as to Corporate Status...........22
SECTION 5.2 Further Assurances.............................22
SECTION 5.3 Reporting......................................22
SECTION 5.4 Affirmative Covenants of ADESA.................24
SECTION 5.5 Financial Covenants...........................25
SECTION 5.6 Additional Required Appraisals.................26
SECTION 5.7 Lessor's Covenants.............................26
ARTICLE VI. TRANSFERS BY LESSOR AND LENDERS; DISTRIBUTION OF PAYMENTS
AND PROCEEDS..................................................27
SECTION 6.1 Lessor Transfers...............................27
SECTION 6.2 Lender Transfers...............................27
SECTION 6.3 Distribution and Application of Rent
Payments.......................................29
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SECTION 6.4 Distribution and Application of Purchase
Payment........................................29
SECTION 6.5 Distribution and Application to Funding Party
Balances of Lessee Payment of Recourse
Deficiency Amount Upon Exercise of Remarketing
Option.........................................30
SECTION 6.6 Distribution and Application to Funding
Party Balances of Remarketing Proceeds of
Leased Property................................30
SECTION 6.7 Distribution and Application of Payments
Received When an Event of Default Exists or
Has Ceased to Exist Following Rejection of
the Lease......................................31
SECTION 6.8 Distribution of Other Payments.................32
SECTION 6.9 Timing of Agent Distributions..................32
SECTION 6.10 Release of Leased Properties...................32
ARTICLE VII. INDEMNIFICATION...............................................33
SECTION 7.1 General Indemnification........................33
SECTION 7.2 Environmental Indemnity........................35
SECTION 7.3 Proceedings in Respect of Claims...............36
SECTION 7.4 General Tax Indemnity..........................38
SECTION 7.5 Increased Costs, etc...........................44
SECTION 7.6 End of Term Indemnity..........................47
ARTICLE VIII. MISCELLANEOUS.................................................48
SECTION 8.1 Survival of Agreements.........................48
SECTION 8.2 Documentary Conventions........................49
SECTION 8.3 Expenses.......................................49
SECTION 8.4 Liabilities of the Funding Parties: Sharing
of Payments....................................49
SECTION 8.5 Liabilities of the Agent.......................50
APPENDIX A Definitions and Interpretation
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SCHEDULES
SCHEDULE 2.2 Commitments
SCHEDULE 8.2 Notice Addresses
EXHIBITS
EXHIBIT A Form of Funding Request
EXHIBIT B Form of Assignment of Lease and Rents
EXHIBIT C Form of Security Agreement and Assignment
EXHIBIT D-1 Form of Mortgage
EXHIBIT D-2 Form of Deed of Trust
EXHIBIT E Form of Joinder Agreement
EXHIBIT F Form of Assignment and Acceptance Agreement
EXHIBIT G Forms of Opinions of Counsel
EXHIBIT H Form of Certification of Construction Completion
EXHIBIT I Form of Payment Date Notice
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MASTER AGREEMENT
THIS MASTER AGREEMENT, dated as of July 30, 2001 (as it may be amended
or modified from time to time in accordance with the provisions hereof, this
"MASTER AGREEMENT"), is among ADESA CORPORATION, an Indiana corporation
("ADESA"), as a Guarantor, ADESA CALIFORNIA, INC., a California corporation
("ADESA CALIFORNIA"), and certain other Subsidiaries of ADESA that may hereafter
become parties hereto as lessees pursuant to SECTION 3.6 (individually, a
"LESSEE" and collectively the "LESSEES"), as Lessees, ATLANTIC FINANCIAL GROUP,
LTD., a Texas limited partnership (the "LESSOR"), certain financial institutions
parties hereto as lenders (together with any other financial institution that
becomes a party hereto as a lender, collectively referred to as "LENDERS" and
individually as a "LENDER"), and SUNTRUST BANK, a Georgia state banking
corporation ("SunTrust Bank"), as agent for the Lenders (in such capacity, the
"AGENT").
PRELIMINARY STATEMENT
In accordance with the terms and provisions of this Master Agreement,
the Lease, the Loan Agreement and the other Operative Documents, (i) the Lessor
contemplates acquiring Land and, in certain cases, the Buildings on such Land
identified by ADESA or ADESA California from time to time, and leasing such Land
and Buildings thereon to a Lessee, (ii) ADESA California, as Construction Agent
for the Lessor, wishes, in certain instances, to arrange for the construction of
Buildings on Land for the Lessor and, when completed, the related Lessee wishes
to lease such Buildings from the Lessor as part of the Leased Properties under
the Lease, (iii) ADESA California, in carrying out its duties as agent, wishes
to obtain from Lessor, and the Lessor is willing to provide, funding for the
acquisition of the Land and Buildings, or, in certain instances, the
construction of Buildings, and (iv) the Lessor wishes to obtain, and Lenders are
willing to provide, from time to time, financing of a portion of the funding of
the acquisition of the Land and Buildings and, if applicable, the construction
of the Buildings.
In consideration of the mutual agreements contained in this Master
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; and the rules of interpretation set forth in APPENDIX A
hereto shall apply to this Master Agreement.
ARTICLE II.
ACQUISITION, CONSTRUCTION AND LEASE; FUNDINGS;
NATURE OF TRANSACTION
SECTION 2.1 AGREEMENT TO ACQUIRE, CONSTRUCT, FUND AND LEASE
(a) LAND. Subject to the terms and conditions of this Master
Agreement, with respect to each parcel of Land identified by ADESA or ADESA
California, on the related Closing Date (i) the Lessor agrees to acquire such
interest in the related Land, and any Building thereon, from the applicable
Seller as is transferred, sold, assigned and conveyed to the Lessor pursuant to
the applicable Purchase Agreement or to lease such interest in the related Land,
and any Building thereon, from the applicable Ground Lessor as is leased to the
Lessor pursuant to the applicable Ground Lease, (ii) the Lessor hereby agrees to
lease, or sublease, as the case may be, such Land and any Building thereon to
the related Lessee pursuant to the Lease, and (iii) the related Lessee hereby
agrees to lease, or sublease, as the case may be, such Land, and any Building
thereon, from the Lessor pursuant to the Lease. With respect to each IDB
Property, (i) the applicable Authority may acquire such interest in the related
Land from the applicable Seller as is transferred, sold, assigned and conveyed
to the Authority pursuant to the applicable Purchase Agreement, (ii) the
applicable Authority will lease such Land to the Lessor pursuant to the related
IDB Lease, and (iii) the related Lessee hereby agrees to sublease such Land from
the Lessor pursuant to the Lease (it being understood that any reference in the
Operative Documents to the lease by a Lessee of an IDB Property shall be deemed
to refer to the sublease thereof pursuant to the Lease, if title to such IDB
Property is held by the related Authority).
(b) BUILDING. With respect to each parcel of Land on which a
Building is to be constructed, subject to the terms and conditions of this
Master Agreement, from and after the Closing Date relating to such Land (i) the
Construction Agent agrees, pursuant to the terms of the Construction Agency
Agreement, to construct and install the Building on such Land for the Lessor
prior to the Scheduled Construction Termination Date, (ii) the Lenders and the
Lessor agree to fund the Construction Costs with respect to such Building, (iii)
the Lessor shall lease, or sublease, as the case may be, such Building as part
of such Leased Property to the related Lessee pursuant to the Lease, and (iv)
the related Lessee shall lease, or sublease, as the case may be, such Building
from the Lessor pursuant to the Lease.
SECTION 2.2 FUNDINGS OF PURCHASE PRICE AND CONSTRUCTION COSTS
(a) INITIAL FUNDING AND PAYMENT OF PURCHASE PRICE FOR LAND
AND DEVELOPMENT COSTS ON CLOSING DATE. Subject to the terms and conditions of
this Master Agreement, on the Closing Date for any Land, and any Building
thereon, each Lender shall make available, or arrange to make available, to the
Lessor its initial Loan with respect to such Land, and any Building thereon, in
an amount equal to the product of such Lender's Commitment Percentage times the
purchase price or the ground rent for such Land, and any Building thereon, and
the Construction Costs incurred by the Construction Agent, as agent, through
such Closing Date, which funds the Lessor shall use, together with the Lessor's
own funds in an amount equal to the
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product of the Lessor's Commitment Percentage times the purchase price or ground
rent for the related Land and any Building thereon, and the Construction Costs
incurred by the Construction Agent, as agent for the Lessor, through such
Closing Date, to purchase such Land, and any Building thereon, from the
applicable Seller pursuant to the applicable Purchase Agreement or lease the
Land and any Building thereon, from the applicable Ground Lessor pursuant to the
applicable Ground Lease, as the case may be, and to pay the amount of such
Construction Costs, and the Lessor shall lease, or sublease, as the case may be,
such Land to the related Lessee pursuant to the Lease.
(b) SUBSEQUENT FUNDINGS AND PAYMENTS OF CONSTRUCTION COSTS
DURING CONSTRUCTION TERM. Subject to the terms and conditions of this Master
Agreement, if a Building is to be constructed on Land, on each Funding Date
following the Closing Date for each such parcel of Land until the related
Construction Term Expiration Date, (i) each Lender shall make available, or
arrange to make available, to the Lessor a Loan in an amount equal to the
product of such Lender's Commitment Percentage times the amount of Funding
requested by the Construction Agent for such Funding Date, which funds the
Lessor hereby directs each Lender to pay over, or cause to be paid over, to the
Agent, for distribution to the Construction Agent, as agent for the Lessor, as
set forth in PARAGRAPH (d), and (ii) the Lessor shall pay over to the Agent, for
distribution to the Construction Agent, as agent for the Lessor, its own funds
(which shall constitute a part of, and an increase in, the Lessor's Invested
Amount with respect to such Leased Property) in an amount equal to the product
of the Lessor's Commitment Percentage times the amount of Funding requested by
the Construction Agent for such Funding Date.
(c) AGGREGATE LIMITS ON FUNDED AMOUNTS. The aggregate amount
that the Funding Parties shall be committed to provide, or cause to be provided,
as Funded Amounts under this Master Agreement and the Loan Agreement shall not
exceed (x) with respect to each Leased Property, the costs of purchase (or
ground lease, as the case may be) and construction of such Leased Property and
the related Construction Costs, or (y) $45,000,000 in the aggregate for all
Leased Properties. The aggregate amount that any Funding Party shall be
committed to fund, or cause to be funded, under this Master Agreement and the
Loan Agreement shall not exceed the lesser of (i) such Funding Party's
Commitment and (ii) such Funding Party's Commitment Percentage of the aggregate
Fundings requested under this Master Agreement.
(d) NOTICE, TIME AND PLACE OF FUNDINGS. With respect to each
Funding, a Lessee or the Construction Agent, as the case may be, shall give the
Lessor and the Agent an irrevocable prior telephone (followed within one
Business Day with written) or written notice not later than 11:00 a.m., Atlanta,
Georgia time, at least three Business Days prior to the proposed Closing Date or
other Funding Date, as the case may be, pursuant, in each case, to a Funding
Request in the form of EXHIBIT A (a "FUNDING REQUEST"), specifying the Closing
Date or subsequent Funding Date, as the case may be, the amount of Funding
requested, the Leased Property to which such Funding relates, whether such
Funding shall be a LIBOR Advance or a Base Rate Advance or a combination thereof
and the Rent Period(s) therefor. The Agent shall promptly forward a copy of each
Funding Request to the Lenders (which distribution may be by e-mail or facsimile
transmission). All documents and instruments required to be delivered on
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such Closing Date pursuant to this Master Agreement shall be delivered at the
offices of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, or at such other location as may be determined by the Lessor, the
Construction Agent and the Agent. Each Funding shall occur on a Business Day and
shall be in an amount equal to $100,000 or an integral multiple of $10,000 in
excess thereof, with the exception of the final draw, which may be for such
lesser amount as may be due and owing to fund the balance of the Construction
Costs for the related Leased Property. All remittances made by, or caused to be
made by, any Lender and the Lessor for any Funding shall be made in immediately
available funds by wire transfer to or, as is directed by, the Construction
Agent, with receipt by the Construction Agent not later than 12:00 noon,
Atlanta, Georgia time, on the applicable Funding Date, upon satisfaction or
waiver of the conditions precedent to such Funding set forth in SECTION 3; such
funds shall (1) in the case of the initial Funding on a Closing Date, be used to
pay the purchase price to the applicable Seller, or ground rent to the
applicable Ground Lessor, for the related Land and any Building thereon and pay
Construction Costs related to such Land, and (2) in the case of each subsequent
Funding be paid to the Construction Agent, as agent for the Lessor, for the
payment or reimbursement of Construction Costs incurred through such Funding
Date and not previously paid or reimbursed.
(e) LESSEE'S DEEMED REPRESENTATION FOR EACH FUNDING. Each
Funding Request by a Lessee or the Construction Agent shall be deemed a
reaffirmation of each Lessee's indemnity obligations in favor of the Indemnitees
under the Operative Documents and a representation and warranty to the Lessor,
the Agent and the Lenders that on the proposed Closing Date or Funding Date, as
the case may be, (i) the amount of Funding requested represents amounts owing in
respect of the purchase price or ground rent of the related Land, and any
Building thereon, and Construction Costs in respect of the Leased Property (in
the case of the initial Funding on a Closing Date) or amounts that are then due
to third parties in respect of the Construction, or amounts paid by the
Construction Agent, as agent for the Lessor, to third parties which the
Construction Agent has not previously been reimbursed by a Funding (in the case
of any Funding), (ii) no Event of Default or Potential Event of Default exists,
and (iii) the representations and warranties of ADESA and each Lessee set forth
in SECTION 4.1 are true and correct in all material respects as though made on
and as of such Funding Date, except to the extent such representations or
warranties relate solely to an earlier date, in which case such representations
and warranties shall have been true and correct in all material respects on and
as of such earlier date.
(f) NOT JOINT OBLIGATIONS. Notwithstanding anything to the
contrary set forth herein or in the other Operative Documents, each Lender's and
the Lessor's commitments shall be several, and not joint. In no event shall any
Funding Party be obligated to fund, or cause to be funded, an amount in excess
of such Funding Party's Commitment Percentage of any Funding, or to fund, or
cause to be funded, amounts in the aggregate in excess of such Funding Party's
Commitment.
(g) NON-PRO RATA FUNDINGS. Notwithstanding anything to the
contrary set forth in this Master Agreement, but subject to SECTION 2.2(f)
above, at the Agent's option, Fundings may be made by drawing on the Lessor's
Commitment until such Commitment is fully
4
funded before drawing on the Lenders' Commitments. In such event, when the
Lessor's Commitment is fully funded, the Lenders will fund, or cause to be
funded, on a pro rata basis as among themselves, 100% of the amount of the
Fundings thereafter, PROVIDED that, in no event will the Lessor's Invested
Amount be less than 3.5% of the aggregate Funded Amounts.
SECTION 2.3 FUNDED AMOUNTS AND INTEREST AND YIELD THEREON; UNUSED
FEE
(a) The Lessor's Invested Amount for any Leased Property
outstanding from time to time shall accrue yield ("YIELD") at the Lessor Rate,
computed using the actual number of days elapsed and a 360 day year. If all or a
portion of the principal amount of or Yield on the Lessor's Invested Amounts
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall, without limiting the rights of the Lessor
under the Lease, to the maximum extent permitted by law, accrue Yield at the
Overdue Rate, from the date of nonpayment until paid in full (both before and
after judgment).
(b) Each Lender's Funded Amount for any Leased Property
outstanding from time to time shall accrue interest as provided in the Loan
Agreement.
(c) During the Construction Term, in lieu of the payment of
accrued interest, on each Payment Date, each Lender's Funded Amount in respect
of a Construction Land Interest shall automatically be increased by the amount
of interest accrued and unpaid on the related Loans pursuant to the Loan
Agreement during the Rent Period ending immediately prior to such Payment Date
(except to the extent that at any time such increase would cause such Lender's
Funded Amount to exceed such Lender's Commitment, in which event the related
Lessee shall pay such excess amount to such Lender in immediately available
funds on such Payment Date). Similarly, in lieu of the payment of accrued Yield,
on each Payment Date, the Lessor's Invested Amount in respect of a Construction
Land Interest shall automatically be increased by the amount of Yield accrued on
the Lessor's Invested Amount in respect of such Leased Property during the Rent
Period ending immediately prior to such Payment Date (except to the extent that
at any time such increase would cause the Lessor's Invested Amount to exceed the
Lessor's Commitment, in which event the related Lessee shall pay such excess
amount to the Lessor in immediately available funds on such Payment Date). Such
increases in Funded Amounts may occur without any disbursement of funds by the
Funding Parties, and without the need for delivery of a Funding Request.
(d) Three Business Days prior to the last day of each Rent
Period, ADESA or ADESA California shall deliver (which delivery may be by
facsimile) to the Lessor and the Agent a notice substantially in the form of
EXHIBIT I (each, a "PAYMENT DATE NOTICE"), appropriately completed, specifying
the allocation of the Funded Amounts related to such Rent Period to LIBOR
Advances and Base Rate Advances and the Rent Periods therefor, PROVIDED that no
such allocation to LIBOR Advances shall be in an amount less than $1,000,000.
Each such Payment Date Notice shall be irrevocable. The Agent shall promptly
forward a copy of each Payment Date Notice to the Lenders (which distribution
may be by e-mail or facsimile
5
transmission). If no such notice is given, the Funded Amounts shall be allocated
to a LIBOR Advance with a Rent Period of three (3) months.
(e) ADESA California agrees to pay to the Agent, for the pro
rata benefit of the Funding Parties, an unused fee for each day from the date
hereof until the Lease Termination Date equal to (i) the Fee Percentage TIMES
(ii) the aggregate Commitments, MINUS the Funded Amounts on such day, TIMES
(iii) 1/360. Such fees shall be payable in arrears on each Quarterly Payment
Date and, prior to the Funding Termination Date, may be paid with the proceeds
of Advances.
SECTION 2.4 LESSEE OWNER FOR TAX PURPOSES. With respect to each
Leased Property, it is the intent of the Lessees and the Funding Parties that
for federal, state and local tax purposes and commercial and bankruptcy law
purposes the Lease shall be treated as the repayment and security provisions of
a loan by the Lessor to the Lessees, and that the related Lessee shall be
treated as the legal and beneficial owner entitled to any and all benefits of
ownership of such Leased Property and all payments of Basic Rent during the
Lease Term shall be treated as payments of interest and principal. Each of
Lessor and each Lessee shall report the transactions contemplated by the Lease
consistent with such treatment and shall take no position contrary thereto
unless otherwise required by a determination within the meaning of Section 1313
of the Code or similar provision of state or local law. Nevertheless, each of
Guarantor and each Lessee acknowledges and agrees that neither the Agent, nor
any Funding Party, nor any other Person has made any representations or
warranties concerning the tax, financial, accounting or legal characteristics or
treatment of the Operative Documents and that each of Guarantor and each Lessee
has obtained and relied solely upon the advice of its own tax, accounting and
legal advisors concerning the Operative Documents and the accounting, tax,
financial and legal consequences of the transactions contemplated therein.
ARTICLE III.
CONDITIONS PRECEDENT; DOCUMENTS
SECTION 3.1 CONDITIONS TO THE OBLIGATIONS OF THE FUNDING PARTIES ON
EACH CLOSING DATE. The obligations of the Lessor and each Lender to carry out
their respective obligations under SECTION 2 of this Master Agreement to be
performed on the Closing Date with respect to any Land and any Building thereon
shall be subject to the fulfillment to the satisfaction of, or waiver by, each
such party hereto (acting directly or through its counsel), on or prior to such
Closing Date of the following conditions precedent, PROVIDED that the
obligations of any Funding Party shall not be subject to any conditions
contained in this SECTION 3.1 which are required to be performed by such Funding
Party:
(a) DOCUMENTS. The following documents shall have been
executed and delivered by the respective parties thereto:
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(i) DEED AND PURCHASE AGREEMENT; GROUND LEASE. The
related original Deed duly executed by the applicable Seller
in favor of the Lessor and in recordable form, and copies of
the related Purchase Agreement, assigned to the Lessor (unless
Lessor is the original party thereto), shall each have been
delivered to the Agent by ADESA or the related Lessee, with
copies thereof to each other Funding Party or the related
Ground Lease, duly assigned to the Lessor (unless Lessor is
the original party thereto), shall have been delivered to the
Agent, with copies thereof to each other Funding Party, as
applicable (IT BEING UNDERSTOOD, that each Purchase Agreement
and each Ground Lease shall be reasonably satisfactory in form
and substance to the Lessor and the Lenders).
(ii) LEASE SUPPLEMENT. The original of the related
Lease Supplement, duly executed by the related Lessee and the
Lessor and in recordable form, shall have been delivered to
the Agent by such Lessee.
(iii) MORTGAGE AND ASSIGNMENT OF LEASE AND RENTS.
Counterparts of the Mortgage (substantially in the form of
EXHIBIT D-1 or D-2, as the case may be, attached hereto), duly
executed by the Lessor and in recordable form, shall have been
delivered to the Agent (which Mortgage shall secure all of the
obligations of the Lessor under the Operative Documents to the
Agent unless such mortgage is subject to a tax based on the
amount of indebtedness secured thereby, in which case the
amount secured will be limited to debt of the Lessor in an
amount equal to 125% of the projected cost of acquisition and
construction of such Leased Property); and the Assignment of
Lease and Rents (substantially in the form of EXHIBIT B
attached hereto) in recordable form, duly executed by the
Lessor, shall have been delivered to the Agent by the Lessor.
(iv) SECURITY AGREEMENT AND ASSIGNMENT. If Buildings
are to be constructed on the Land, counterparts of the
Security Agreement and Assignment (substantially in the form
of EXHIBIT C attached hereto), duly executed by the
Construction Agent, with an acknowledgment and consent thereto
satisfactory to the Lessor and the Agent duly executed by the
related General Contractor and the related Architect or
Engineer, as applicable, and complete copies of the related
Construction Contract and the related Architect's Agreement or
Engineer's Agreement certified by the Construction Agent,
shall have been delivered to the Lessor and the Agent (it
being understood and agreed that if no related Construction
Contract, Architect's Agreement or Engineer's Agreement exists
on such Closing Date, such delivery shall not be a condition
precedent to the Funding on such Closing Date, and in lieu
thereof the Construction Agent shall deliver complete copies
of such Security Agreement and Assignment and consents
concurrently with the Construction Agent's entering into such
contracts). If such Leased Property is a Construction Land
Interest, counterparts of the supplement to the Construction
Agency Agreement for such Leased Property,
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duly executed by the Construction Agent and the Lessor, shall
have been delivered to the Agent.
(v) SURVEY. The related Lessee shall have delivered,
or shall have caused to be delivered, to the Lessor and the
Agent, at such Lessee's expense, an accurate survey certified
to the Lessor and the Agent in a form reasonably satisfactory
to the Lessor and the Agent and prepared within one year of
such Closing Date (or such other time period agreed to by the
Lessor and the Agent) by a Person reasonably satisfactory to
the Lessor and the Agent. Such survey shall (1) be acceptable
to the Title Insurance Company for the purpose of providing
extended coverage to the Lessor and a lender's comprehensive
endorsement to the Agent, (2) show no encroachments on such
Land by structures owned by others, and no encroachments from
any part of such Leased Property onto any land owned by
others, and (3) disclose no state of facts reasonably
objectionable to the Lessor, the Agent or the Title Insurance
Company, and be reasonably acceptable to each such Person.
(vi) TITLE AND TITLE INSURANCE. On such Closing Date,
the Lessor shall receive from a title insurance company
reasonably acceptable to the Lessor and the Agent an ALTA
Owner's Policy of Title Insurance issued by such title
insurance company and the Agent shall receive from such title
insurance company an ALTA Mortgagee's Policy of Title
Insurance issued by such title insurance company, in each
case, in the amount of the projected cost of acquisition and
construction of such Leased Property, reasonably acceptable in
form and substance to the Lessor and the Agent, respectively
(collectively, the "TITLE POLICY"). The Title Policy shall be
dated as of such Closing Date, and, to the extent permitted
under Applicable Law, shall include such affirmative
endorsements as the Lessor or the Agent shall reasonably
request.
(vii) APPRAISAL. Each Funding Party shall have
received a report of the Appraiser (an "APPRAISAL"), paid for
by Guarantor or the related Lessee, which shall meet the
requirements of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, shall be satisfactory to such
Funding Party and shall state in a manner satisfactory to such
Funding Party the estimated "as vacant" value of such Land and
existing Buildings or any Building to be constructed thereon.
Such Appraisal must show that the "as vacant" value of such
Leased Property (if a Building is to be constructed on the
Land, determined as if the Building had already been completed
in accordance with the related Plans and Specifications and by
excluding from such value the amount of assessments on such
Leased Property) is at least 45% of the total cost of such
Leased Property, including the cost of the trade fixtures,
equipment and personal property related to such Leased
Property and to be funded by the Funding Parties.
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(viii) ENVIRONMENTAL AUDIT AND RELATED RELIANCE
LETTER. The Lessor and the Agent shall have received an
Environmental Audit for such Leased Property, which shall be
conducted in substantial compliance with ASTM standards and
shall not include a recommendation for further investigation
and is otherwise satisfactory to the Lessor and the Agent; and
the firm that prepared the Environmental Audit for such Leased
Property shall have delivered to the Lessor and the Agent a
letter stating that the Lessor, the Agent and the Lenders may
rely upon such firm's Environmental Audit of such Land, IT
BEING UNDERSTOOD that the Lessor's and the Agent's acceptance
of any such Environmental Audit shall not release or impair
the Guarantor's or any Lessee's obligations under the
Operative Documents with respect to any environmental
liabilities relating to such Leased Property.
(ix) EVIDENCE OF INSURANCE. The Lessor and the Agent
shall have received from the related Lessee certificates of
insurance evidencing compliance with the provisions of Article
VIII of the Lease (including the naming of the Lessor, the
Agent and the Lenders as additional insured or loss payee with
respect to such insurance, as their interests may appear), in
form and substance reasonably satisfactory to the Lessor and
the Agent.
(x) UCC FINANCING STATEMENT; RECORDING FEES; TRANSFER
TAXES. Each Funding Party shall have received satisfactory
evidence of (i) the execution and delivery to Agent of a UCC-1
and, if required by applicable law, UCC-2 financing statement
to be filed with the Secretary of State of the applicable
State (or other appropriate filing office) and the county
where the related Land is located, respectively, and such
other Uniform Commercial Code financing statements as any
Funding Party deems necessary or desirable in order to perfect
such Funding Party's interests and (ii) the payment of all
recording and filing fees and taxes with respect to any
recordings or filings made of the related Deed, the Lease, the
related Lease Supplement, the related Mortgage and the related
Assignment of Lease and Rents.
(xi) OPINIONS. An opinion of local counsel for the
related Lessee qualified in the jurisdiction in which such
Leased Property is located, substantially in the form set
forth in EXHIBIT G attached hereto, and containing such other
matters as the parties to whom they are addressed shall
reasonably request, shall have been delivered and addressed to
each of the Lessor, the Agent and the Lenders. To the extent
reasonably requested by the Agent, opinions supplemental to
those delivered under SECTION 3.2(vi) and reasonably
satisfactory to the Agent shall have been delivered and
addressed to each of the Lessor, the Agent and the Lenders.
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(xii) GOOD STANDING CERTIFICATES. The Agent shall
have received good standing certificates for the Lessor and
the related Lessee from the appropriate offices of the state
where the related Land is located.
(xiii) IDB PROPERTY. If such Leased Property is an
IDB Property or is otherwise subject to industrial development
or revenue bonds, the IDB Documentation shall have been
executed by the parties thereto, and shall be in form and
substance reasonably acceptable to the Agent, the Lessor and
the Lenders.
(b) LITIGATION. No action or proceeding shall have been
instituted or, to the knowledge of any Funding Party, threatened nor shall any
governmental action, suit, proceeding or investigation be instituted or
threatened before any Governmental Authority, nor shall any order, judgment or
decree have been issued or proposed to be issued by any Governmental Authority,
to set aside, restrain, enjoin or prevent the performance of this Master
Agreement or any transaction contemplated hereby or by any other Operative
Document or which is reasonably likely to materially adversely affect any Leased
Property or any transaction contemplated by the Operative Documents or which
would reasonably be expected to result in a Material Adverse Effect.
(c) LEGALITY. In the opinion of such Funding Party or its
counsel, the transactions contemplated by the Operative Documents shall not
violate any Applicable Law, and no change shall have occurred or been proposed
in Applicable Law that would make it illegal for such Funding Party to
participate in any of the transactions contemplated by the Operative Documents.
(d) NO EVENTS. (i) No Event of Default, Potential Event of
Default, Event of Loss or Event of Taking relating to such Leased Property shall
have occurred and be continuing, (ii) no action shall be pending or threatened
by a Governmental Authority to initiate a Condemnation or an Event of Taking,
and (iii) there shall not have occurred any event that would reasonably be
expected to have a Material Adverse Effect since December 31, 2000.
(e) REPRESENTATIONS. Each representation and warranty of the
parties hereto or to any other Operative Document contained herein or in any
other Operative Document shall be true and correct in all material respects as
though made on and as of such Closing 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) CUTOFF DATE. No Closing Date shall occur after the
Funding Termination Date.
(g) APPROVAL. Except for the Leased Property located in San
▇▇▇▇▇▇▇ County, California, the Lenders shall have approved such Leased Property
for inclusion in the Lease.
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SECTION 3.2 ADDITIONAL CONDITIONS FOR THE INITIAL CLOSING DATE. The
obligations of the Lessor and each Lender to carry out their respective
obligations under SECTION 2 of this Master Agreement to be performed on the
Initial Closing Date shall be subject to the satisfaction of, or waiver by, each
such party hereto (acting directly or through its counsel), on or prior to the
Initial Closing Date of the following conditions precedent in addition to those
set forth in SECTION 3.1, PROVIDED that the obligations of any Funding Party
shall not be subject to any conditions contained in this SECTION 3.2 which are
required to be performed by such Funding Party:
(i) LOAN AGREEMENT; GUARANTY AGREEMENTS. Counterparts
of the Loan Agreement, duly executed by the Lessor, the Agent
and each Lender shall have been delivered to each of the
Lessor and the Agent. The Note, duly executed by the Lessor,
shall have been delivered to the Agent. The Guaranty
Agreements, duly executed by the respective Guarantors, shall
have been delivered to the Agent.
(ii) MASTER AGREEMENT. Counterparts of this Master
Agreement, duly executed by the parties hereto, shall have
been delivered to each of the parties hereto.
(iii) CONSTRUCTION AGENCY AGREEMENT. Counterparts of
the Construction Agency Agreement, duly executed by the
parties thereto shall have been delivered to each of the
parties hereto.
(iv) LEASE. Counterparts of the Lease, duly executed
by the Lessees party to this Master Agreement on the Initial
Closing Date, and the Lessor, shall have been delivered to
each Funding Party and the original, chattel paper copy of the
Lease shall have been delivered to the Agent.
(v) LESSEE'S RESOLUTIONS AND INCUMBENCY CERTIFICATE,
ETC. Each of the Agent and the Lessor shall have received (x)
a certificate of the Secretary or an Assistant Secretary of
each Lessee party hereto on the Initial Closing Date and each
Guarantor, attaching and certifying as to (i) the Board of
Directors' (or appropriate committee's) resolution duly
authorizing the execution, delivery and performance by it of
each Operative Document to which it is or will be a party,
(ii) the incumbency and signatures of persons authorized to
execute and deliver such documents on its behalf, (iii) its
articles or certificate of incorporation, certified as of a
recent date by the Secretary of State of the state of its
incorporation and (iv) its by-laws, and (y) good standing or
active status certificates for each Lessee party hereto on the
Initial Closing Date and each Guarantor from the appropriate
offices of the states of such Guarantor's or such Lessee's
incorporation and principal place of business.
(vi) OPINIONS OF COUNSEL. The opinions of Ice ▇▇▇▇▇▇,
in-house counsel for ADESA and in-house counsel for Parent,
each dated the Initial Closing Date,
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containing such matters as the parties to whom it is addressed
shall reasonably request, shall have been delivered and
addressed to each of the Lessor, the Agent and the Lenders.
The opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ L.L.P., dated the Initial
Closing Date, containing such matters as the parties to whom
it is addressed shall reasonably request, shall have been
delivered to each of the Agent, the Lenders and ADESA.
(vii) GOOD STANDING CERTIFICATE. The Agent and ADESA
shall have received a good standing certificate for the Lessor
and the General Partner from the appropriate office of the
State of Texas.
(viii) LESSOR'S CONSENTS AND INCUMBENCY CERTIFICATE,
ETC. The Agent and ADESA shall have received a certificate of
the Secretary or an Assistant Secretary of the General Partner
of the Lessor attaching and certifying as to (i) the consents
of the partners of the Lessor duly authorizing the execution,
delivery and performance by it of each Operative Document to
which it is or will be a party, (ii) the incumbency and
signatures of persons authorized to execute and deliver such
documents on its behalf, and (iii) the Partnership Agreement.
SECTION 3.3 CONDITIONS TO THE OBLIGATIONS OF LESSEE. The obligations
of any Lessee to lease a Leased Property from the Lessor are subject to the
fulfillment on the related Closing Date to the satisfaction of, or waiver by,
such Lessee, of the following conditions precedent:
(a) GENERAL CONDITIONS. The conditions set forth in SECTIONS
3.1 and 3.2 that require fulfillment by the Lessor or the Lenders shall have
been satisfied.
(b) LEGALITY. In the opinion of such Lessee or its counsel,
the transactions contemplated by the Operative Documents shall not violate any
Applicable Law, and no change shall have occurred or been proposed in Applicable
Law that would make it illegal for such Lessee to participate in any of the
transactions contemplated by the Operative Documents.
(c) PURCHASE AGREEMENT; GROUND LEASE. The Purchase Agreement
and, if applicable, the Ground Lease and all documents to be delivered under the
Purchase Agreement or Ground Lease, including title insurance, survey and
environmental audit, shall be reasonably satisfactory to such Lessee.
SECTION 3.4 CONDITIONS TO THE OBLIGATIONS OF THE FUNDING
PARTIES ON EACH FUNDING DATE. The obligations of the Lessor and each Lender to
carry out their respective obligations under SECTION 2 of this Master Agreement
to be performed on each Funding Date shall be subject to the fulfillment to the
satisfaction of, or waiver by, each such party hereto (acting directly or
through their respective counsel) on or prior to each such Funding Date of the
following conditions precedent, PROVIDED that the obligations of any Funding
Party shall not be subject to any conditions contained in this SECTION 3.4 which
are required to be performed by such Funding Party:
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(a) FUNDING REQUEST. The Lessor and the Agent shall have
received from the Construction Agent or a Lessee the Funding Request therefor
pursuant to SECTION 2.2(d).
(b) CONDITIONS FULFILLED. As of such Funding Date, the
conditions set forth in SECTIONS 3.1(c) and (d) shall have been satisfied.
(c) REPRESENTATIONS. As of such Funding Date, both before
and after giving effect to the Funding requested by the Construction Agent or a
Lessee on such date, the representations and warranties that the Construction
Agent or such Lessee is deemed to make pursuant to SECTION 2.2(e) shall be true
and correct in all material respects on and as of such Funding Date as though
made on and as of such Funding Date, except to the extent such representations
or warranties relate solely to an earlier date, in which case such
representations and warranties shall have been true and correct in all material
respects on and as of such earlier date.
(d) NO BONDED STOP NOTICE OR FILED MECHANICS LIEN. As of
such Funding Date, and as to any Funded Amount requested for any Leased Property
on such Funding Date, (i) none of the Lessor, the Agent or any Lender has
received (with respect to such Leased Property) a bonded notice to withhold Loan
funds that has not been discharged by the related Lessee or the Construction
Agent, and (ii) no mechanic's liens or materialman's liens have been filed
against such Leased Property that have not been discharged by the related
Lessee, bonded over in a manner reasonably satisfactory to the Agent or insured
over by the Title Insurance Company.
(e) LEASE SUPPLEMENT. If the Funding relates to a Building
that will be leased under a Lease Supplement separate from the Lease Supplement
for the related Land, the original of such separate Lease Supplement, duly
executed by the related Lessee and the Lessor and in recordable form, shall have
been delivered to the Agent.
SECTION 3.5 COMPLETION DATE CONDITIONS. The occurrence of the
Completion Date with respect to any Leased Property shall be subject to the
fulfillment to the satisfaction of, or waiver by, each party hereto (acting
directly or through its counsel) of the following conditions precedent:
(a) CERTIFICATE OF OCCUPANCY. The Construction Agent shall
have furnished to the Agent copies of a certificate or certificates of occupancy
for such Leased Property or other legally equivalent permission to occupy such
Leased Property.
(b) CONSTRUCTION COMPLETION. Any related Construction shall
have been completed substantially in accordance with the related Plans and
Specifications (subject to punch list requirements), the related Deed and all
Applicable Laws, and such Leased Property shall be ready for occupancy and
operation. All fixtures, equipment and other property contemplated under the
Plans and Specifications to be incorporated into or installed in such Leased
Property shall have been substantially incorporated or installed, free and clear
of all Liens except for Permitted Liens.
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(c) CONSTRUCTION AGENT CERTIFICATION. The Construction Agent
shall have furnished the Lessor, the Agent and each Lender with a certification
of the Construction Agent (substantially in the form of EXHIBIT H) that:
(i) all amounts owing to third parties for the
related Construction have been paid in full (other than contingent
obligations for which the Construction Agent, as agent for the Lessor,
has made adequate reserves), and no litigation or proceedings are
pending, or to the best of the Construction Agent's knowledge, are
threatened, against such Leased Property or the Construction Agent or
the related Lessee which could reasonably be expected to have a
Material Adverse Effect;
(ii) all material consents, licenses and permits and
other governmental authorizations or approvals required for such
Construction and operation of such Leased Property have been obtained
and are in full force and effect;
(iii) such Leased Property has available all services
of public facilities and other utilities necessary for use and
operation of such Leased Property for its intended purposes including,
without limitation, adequate water, gas and electrical supply, storm
and sanitary sewerage facilities, telephone, other required public
utilities and means of access between the related Building and public
highways for pedestrians and motor vehicles;
(iv) all material agreements, easements and other
rights, public or private, which are necessary to permit the lawful use
and operation of such Leased Property as the related Lessee intends to
use such Leased Property under the Lease and which are necessary to
permit the lawful intended use and operation of all then intended
utilities, driveways, roads and other means of egress and ingress to
and from the same have been obtained and are in full force and effect
and neither the Construction Agent nor the related Lessee has any
knowledge of any pending modification or cancellation of any of the
same; and the use of such Leased Property does not depend on any
variance, special exception or other municipal approval, permit or
consent that has not been obtained and is in full force and effect for
its continuing legal use;
(v) all of the requirements and conditions set forth
in SECTION 3.5(b) hereof have been completed and fulfilled with respect
to such Leased Property and the related Construction; and
(vi) such Leased Property is in compliance in all
material respects with all applicable zoning laws and regulations.
SECTION 3.6 ADDITION OF LESSEES. After the date hereof, additional
Subsidiaries of ADESA may become Lessees hereunder and under the other Operative
Documents upon satisfaction of the following conditions precedent:
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(a) such Subsidiary and each Guarantor shall have executed
and delivered to the Agent and the Lessor a Joinder Agreement, substantially in
the form of EXHIBIT E;
(b) such Subsidiary shall have delivered to each of the
Agent and the Lessor (x) a certificate of the Secretary or an Assistant
Secretary of such Subsidiary, attaching and certifying as to (i) the Board of
Directors' (or other governing body) resolution duly authorizing the execution,
delivery and performance by it of each Operative Document to which it is or will
be a party, (ii) the incumbency and signatures of persons authorized to execute
and deliver such documents on its behalf, (iii) its articles or certificate of
incorporation or other organizational documents, certified as of a recent date
by the Secretary of State of its incorporation or formation and (iv) its
by-laws, if applicable, and (y) good standing or active status certificates from
the appropriate offices of the States of such Subsidiary's incorporation or
formation and principal place of business;
(c) such Subsidiary shall have delivered an opinion of Ice
▇▇▇▇▇▇, or other counsel to such Subsidiary, addressed to each of the Lessor,
the Agent and the Lenders, substantially in the form of the opinion delivered by
counsel to ADESA on the Initial Closing Date; and
(d) the Agent, the Lessor and the Lenders shall have
received such other documents, certificates and information as any of them shall
have reasonably requested.
ARTICLE IV.
REPRESENTATIONS
SECTION 4.1 REPRESENTATIONS OF ADESA AND OTHER LESSEES. Effective as
of the date of execution hereof, as of each Closing Date and as of each Funding
Date, each of ADESA and each Lessee represents and warrants to each of the other
parties hereto as follows:
(a) ORGANIZATION; CORPORATE POWERS. It (i) is a corporation
duly organized, validly existing under the laws of the State of Indiana, in the
case of ADESA, or of the jurisdiction of its organization, in the case of any
Lessee, for which the most recent required biennial report has been filed with
the office of the Secretary of State of Indiana or which is otherwise in good
standing, as applicable, and no articles of dissolution have been filed in such
office, (ii) is duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction where the failure to be duly qualified and
in good standing would have a Material Adverse Effect and (iii) has all
requisite corporate power and authority to own, operate and encumber its
property and assets and to conduct its business as presently conducted and as
proposed to be conducted in connection with and following the consummation of
the transactions contemplated by the Operative Documents.
(b) AUTHORITY. It has the requisite corporate power and
authority to execute, deliver and perform the Operative Documents executed or to
be executed by it; and the
15
execution, delivery and performance (or recording or filing, as the case may be)
of the Operative Documents, and the consummation of the transactions
contemplated on its part thereby, have been duly approved by its Board of
Directors and no other corporate proceedings on its part are necessary to
consummate the transactions so contemplated.
(c) DUE EXECUTION AND DELIVERY OF OPERATIVE DOCUMENTS. The
Operative Documents executed by it have been duly executed and delivered (or
recorded or filed, as the case may be) by it, and, in each case, constitute its
legal, valid and binding obligation, enforceable against it in accordance with
the respective terms of each such Operative Document, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or limiting creditors' rights generally or by equitable principles
generally.
(d) NO CONFLICT. The execution, delivery and performance by
it of each Operative Document to which it is a party and of each of the
transactions contemplated thereby do not and will not (i) violate any Applicable
Law or Contractual Obligation binding on it the consequences of which violation,
singly or in the aggregate, would have a Material Adverse Effect, (ii) result in
or require the creation or imposition of any Lien whatsoever on any Leased
Property (other than Permitted Liens) or (iii) require any approval of
stockholders which has not been obtained.
(e) GOVERNMENTAL CONSENTS. Except as have been made,
obtained or given, no filing or registration with, consent or approval of,
notice to, with or by any Governmental Authority is required to authorize, or is
required in connection with, the execution, delivery and performance by it of
the Operative Documents to which it is a party, the use of the proceeds of the
Funding made to effect the acquisition of the interest in the Land and the use
of the Leased Property, or the legality, validity, binding effect or
enforceability of any Operative Document.
(f) GOVERNMENTAL REGULATION. It is not an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
(g) REQUIREMENTS OF LAW. It is in compliance with all
Requirements of Law applicable to it and its business, in each case where the
failure to so comply would have a Material Adverse Effect, either individually
or together with other such cases.
(h) RIGHTS IN RESPECT OF THE LEASED PROPERTY. It is not a
party to any contract or agreement to sell any interest in any Leased Property
or any part thereof other than pursuant to this Master Agreement and the Lease.
(i) TAXES. It and its Affiliates have filed all tax returns
that are required to have been filed in any jurisdiction, and have paid all
taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (i) the amount
of which is
16
not individually or in the aggregate Material or (ii) the amount, applicability
or validity of which is currently being contested in good faith by appropriate
proceedings, and as to which there is no imminent threat of forfeiture, and with
respect to which it or a Subsidiary, as the case may be, has established
adequate reserves in accordance with GAAP; it knows of no basis for any other
tax or assessment that could reasonably be expected to have a Material Adverse
Effect; and the charges, accruals and reserves on the books of ADESA and its
Subsidiaries in respect of Federal, state or other taxes for all fiscal periods
are adequate.
(j) USE OF PROCEEDS; MARGIN REGULATIONS. It will apply the
proceeds of the Fundings as set forth in SECTION 2 hereof; no part of the
proceeds from the Fundings will be used, directly or indirectly by it, for the
purpose of buying or carrying any margin stock within the meaning of Regulation
U of the Board of Governors of the Federal Reserve System (12 CFR 207), or for
the purpose of buying or carrying or trading in any securities under such
circumstances as to involve it in a violation of Regulation X of said Board (12
CFR 224) or to involve any broker or dealer in a violation of Regulation T of
said Board (12 CFR 220).
(k) ERISA. It has not incurred any material accumulated
funding deficiency as defined in ERISA and the regulations promulgated
thereunder and no Reportable Event has occurred with respect to any Pension Plan
involving it; neither has the Pension Benefit Guaranty Corporation asserted that
it has incurred any material liability in connection with any such pension plan
nor has any lien attached nor any Person threatened to attach a lien on any of
its property as a result of the failure of it or any of its Affiliates to comply
with ERISA or regulations promulgated thereunder.
(l) SOLVENCY. The transactions contemplated by this Master
Agreement and the other Operative Documents have not been entered into by it in
contemplation of its insolvency nor have such transactions been entered into
with the intent to hinder, delay or defraud its equity holders or its creditors.
(m) DISCLOSURE. Neither this Master Agreement nor any of the
other Operative Documents, nor any certificate or other document furnished to
any other party hereto by it or on its behalf pursuant to any Operative Document
contains, or will contain, as of its date, any untrue statement of a material
fact or omits to state or will omit to state, as of its date, a material fact
necessary in order to make the statements contained herein and therein not
misleading. There are no facts known to it which, individually or in the
aggregate, materially adversely affect, or could reasonably be expected to
materially adversely affect, the condition, business or affairs of ADESA and its
Subsidiaries or their respective properties and assets, taken as a whole, which
have not been disclosed herein or in written materials delivered to any other
party hereto in connection with the negotiation of the Operative Documents.
(n) TITLE TO COLLATERAL. It owns good and marketable title
to all collateral pledged as security for its obligations in connection with the
transactions contemplated by this Master Agreement and the other Operative
Documents free and clear of all liens and encumbrances, except as disclosed in
writing to the Agent and the Funding Parties.
17
(o) OTHER OBLIGATIONS. It is not a party to or bound by any
agreement, contract, instrument or understanding or commitment of any kind or
subject to any corporate or other restriction, the performance or observance of
which by it now or, as far it can reasonably foresee, will have a Material
Adverse Effect, financial or otherwise, upon the assets or business of ADESA and
its Subsidiaries taken as a whole; and neither it nor any other person or party
to a contract or agreement material to its financial condition or operations,
taken as a whole, is in default under any such contract or agreement, and no
event has occurred which, but for the giving of notice or the passage of time,
or both, would constitute a default thereunder.
(p) FINANCIAL STATEMENTS. The consolidated balance sheets of
ADESA and its Subsidiaries as of the quarterly period most recently ended before
the Initial Closing Date and the statements of income for the period then ended,
heretofore furnished to the Agent and each Funding Party, are true and complete,
have been prepared in accordance with GAAP (except for the absence of footnotes
and the lack of year end adjustments) and fairly present in all material
respects the consolidated financial condition of ADESA and its Subsidiaries as
of the date thereof and the results of their operations for the period then
ended. Since the date thereof, there has been no material adverse change in the
financial condition, properties or businesses of ADESA and its Subsidiaries
which has not been disclosed in writing by ADESA to the Agent and each Funding
Party.
(q) HAZARDOUS MATERIALS - LEASED PROPERTIES.
(i) To the Knowledge of the related Lessee, except as
described in the related Environmental Audit, on the Closing
Date for each Leased Property, there are no Hazardous
Materials present at, upon, under or within such Leased
Property or released or transported to or from such Leased
Property (except in compliance in all material respects with
all Applicable Law).
(ii) On the related Closing Date, no Governmental
Actions have been taken or are in process or have been
threatened, which could reasonably be expected to subject such
Leased Property, any Lender or the Lessor to any material
Claims or Liens with respect to such Leased Property under any
Environmental Law or would otherwise have a Material Adverse
Effect.
(iii) The related Lessee has, or will obtain on or
before the date required by Applicable Law, all Environmental
Permits necessary to operate each Leased Property, if any, in
accordance with Environmental Laws and is complying with and
has at all times complied with all such Environmental Permits,
except to the extent the failure to obtain such Environmental
Permits or to so comply would not have a Material Adverse
Effect.
(iv) Except as set forth in the related Environmental
Audit or in any notice subsequently furnished by the related
Lessee to the Agent and approved by the Agent in writing prior
to the respective times that the representations and
18
warranties contained herein are made or deemed made hereunder,
no notice, notification, demand, request for information,
citations, summons, complaint or order has been issued or
filed to or with respect to the related Lessee, no penalty has
been assessed on the related Lessee and no investigation or
review is pending or, to its Knowledge, threatened by any
Governmental Authority or other Person in each case relating
to any Leased Property with respect to any alleged material
violation or liability of the related Lessee under any
Environmental Law. To the Knowledge of the related Lessee, no
material notice, notification, demand, request for
information, citations, summons, complaint or order has been
issued or filed to or with respect to any other Person, no
material penalty has been assessed on any other Person and no
investigation or review is pending or threatened by any
Governmental Authority or other Person relating to any Leased
Property with respect to any alleged material violation or
liability under any Environmental Law by any other Person.
(v) Each Leased Property and each portion thereof are
presently in compliance in all material respects with all
Environmental Laws, and, to the Knowledge of the related
Lessee, there are no present or past facts, circumstances,
activities, events, conditions or occurrences regarding such
Leased Property (including without limitation the release or
presence of Hazardous Materials) that would reasonably be
anticipated to (A) form the basis of a material Claim against
such Leased Property, any Funding Party or the related Lessee,
(B) cause such Leased Property to be subject to any material
restrictions on ownership, occupancy, use or transferability
under any Environmental Law, (C) require the filing or
recording of any notice or restriction relating to the
presence of Hazardous Materials in the real estate records in
the county or other appropriate municipality in which such
Leased Property is located, other than notices filed in the
ordinary course of business, or (D) prevent or materially
interfere with the continued operation and maintenance of such
Leased Property as contemplated by the Operative Documents.
(r) LEASED PROPERTY. The present condition of each Leased
Property conforms in all material respects with all conditions or requirements
of all existing permits and approvals issued with respect to such Leased
Property, and the related Lessee's future intended use of such Leased Property
under the Lease does not violate any Applicable Law, except for any such
violations that have not had, and would not have, a Material Adverse Effect. To
the Knowledge of the related Lessee, no material notices, complaints or orders
of violation or non-compliance have been issued or threatened or contemplated by
any Governmental Authority with respect to any Leased Property or any present or
intended future use thereof. All material agreements, easements and other
rights, public or private, which are necessary to permit the lawful use and
operation of each Leased Property as the related Lessee intends to use such
Leased Property under the Lease and which are necessary to permit the lawful
intended use and operation of all presently intended utilities, driveways, roads
and other means of egress and ingress to and from the same have been, or to the
related Lessee's Knowledge will be, obtained
19
and are or will be in full force and effect, and the related Lessee has no
Knowledge of any pending material modification or cancellation of any of the
same.
SECTION 4.2 SURVIVAL OF REPRESENTATIONS AND EFFECT OF FUNDINGS.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in SECTION 4.1 shall survive delivery of the
Operative Documents and every Funding, and shall remain in effect until all of
the Obligations are fully and irrevocably paid.
(b) EACH FUNDING A REPRESENTATION. Each Funding accepted by
a Lessee or the Construction Agent shall be deemed to constitute a
representation and warranty by ADESA and each Lessee to the effect of SECTION
4.1.
SECTION 4.3 REPRESENTATIONS OF THE LESSOR. Effective as of the date
of execution hereof, as of each Closing Date and as of each Funding Date, in
each case, with respect to each of the Leased Properties, the Lessor represents
and warrants to the Agent, the Lenders, ADESA and the Lessees as follows:
(a) SECURITIES ACT. The interest being acquired or to be
acquired by the Lessor in such Leased Property is being acquired for its own
account, without any view to the distribution thereof or any interest therein,
PROVIDED that the Lessor shall be entitled to assign, convey or transfer its
interest in accordance with SECTION 6.1.
(b) DUE ORGANIZATION, ETC. The Lessor is a limited
partnership duly organized and validly existing in good standing under the laws
of Texas and each state in which a Leased Property is located and has full
power, authority and legal right to execute, deliver and perform its obligations
under the Lease, this Master Agreement and each other Operative Document to
which it is or will be a party.
(c) DUE AUTHORIZATION; ENFORCEABILITY, ETC. This Master
Agreement and each other Operative Document to which the Lessor is or will be a
party have been or will be duly authorized, executed and delivered by or on
behalf of the Lessor and are, or upon execution and delivery will be, legal,
valid and binding obligations of the Lessor enforceable against it in accordance
with their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting creditors' rights
generally and by general equitable principles.
(d) NO CONFLICT. The execution and delivery by the Lessor of
the Lease, this Master Agreement and each other Operative Document to which the
Lessor is or will be a party, are not or will not be, and the performance by the
Lessor of its obligations under each are not and will not be, inconsistent with
its Partnership Agreement, do not and will not contravene any Applicable Law
applicable generally to parties providing financing and do not and will not
contravene any provision of, or constitute a default under, any Contractual
Obligation of Lessor, do not and will not require the consent or approval of,
the giving of notice to, the registration
20
with or taking of any action in respect of or by, any Governmental Authority
applicable generally to parties providing financing, except such as have been
obtained, given or accomplished, and the Lessor possesses all requisite
regulatory authority to undertake and perform its obligations under the
Operative Documents.
(e) LITIGATION. There are no pending or, to the knowledge of
the Lessor, threatened actions or proceedings against the Lessor before any
court, arbitrator or administrative agency with respect to any Operative
Document or that would have a material adverse effect upon the ability of the
Lessor to perform its obligations under this Master Agreement or any other
Operative Documents to which it is or will be a party.
(f) LESSOR LIENS. No Lessor Liens (other than those
expressly created by the Operative Documents) exist on any Closing Date on the
Leased Property, or any portion thereof, and the execution, delivery and
performance by the Lessor of this Master Agreement or any other Operative
Document to which it is or will be a party will not subject any Leased Property,
or any portion thereof, to any Lessor Liens (other than those expressly created
by the Operative Documents).
(g) EMPLOYEE BENEFIT PLANS. The Lessor is not and will not
be making its investment 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.
(h) GENERAL PARTNER. The sole general partner of the Lessor
is Atlantic Financial Managers, Inc., and the General Partner is duly organized
and validly existing in good standing under the laws of Texas and each state in
which a Leased Property is located.
(i) FINANCIAL INFORMATION. (A) The unaudited balance sheet
of the Lessor as of December 31, 2000 and the related statements of income,
partners' capital and cash flows for the year then ended, copies of which have
been delivered to the Agent, fairly present, in conformity with sound accounting
principles, the financial condition of the Lessor as of such date and the
results of operations and cash flows for such period.
(B) Since December 31, 2000, there has been no event, act,
condition or occurrence having a material adverse effect upon the financial
condition, operations, performance or properties of the Lessor, or the ability
of the Lessor to perform in any material respect its obligations under the
Operative Documents.
(j) NO OFFERING. The Lessor has not offered the Notes to
any Person in any manner that would subject the issuance thereof to registration
under the Securities Act or any applicable state securities laws.
21
(k) INVESTMENT COMPANY. The Lessor is not an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
SECTION 4.4 REPRESENTATIONS OF EACH LENDER. Effective as of the date
of execution hereof, as of each Closing Date and as of each Funding Date, each
Lender represents and warrants to the Lessor and to the Lessees as follows:
(a) SECURITIES ACT. The interest being acquired or to be
acquired by such Lender in the Funded Amounts is being acquired for its own
account, without any view to the distribution thereof or any interest therein,
PROVIDED that such Lender shall be entitled to assign, convey or transfer its
interest in accordance with SECTION 6.2.
(b) EMPLOYEE BENEFIT PLANS. Such Lender is not and will not
be making its investment 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.
ARTICLE V.
COVENANTS OF ADESA, LESSEES AND THE LESSOR
SECTION 5.1 QUALIFICATION AS TO CORPORATE STATUS. Each of ADESA and
each Lessee shall remain a validly existing corporation, partnership or limited
liability company organized under the laws of its state of formation and shall
qualify and remain qualified to do business in each State in which the Leased
Property leased by such Lessee is located.
SECTION 5.2 FURTHER ASSURANCES. Upon the written request of the
Agent or any Funding Party, each of ADESA and each Lessee, at its own cost and
expense, will cause all financing statements (including precautionary financing
statements), fixture filings and other similar documents to be signed by ADESA
or such Lessee and recorded or filed at such places and times in such manner as
may be necessary or requested by the Agent or such Funding Party to preserve,
protect and perfect the interest of the Agent and the Funding Parties in the
Leased Properties as contemplated by the Operative Documents.
SECTION 5.3 REPORTING.
(a) FINANCIAL STATEMENTS. ADESA shall deliver or cause to
be delivered to the Agent and each Funding Party:
(i) As soon as practicable, and in any event within
forty-five (45) days after the close of each of the first three
quarterly accounting periods in each Fiscal Year, the consolidated
balance sheet of ADESA and its Subsidiaries as at the end of such
quarterly period and the related consolidated statements of operations
for such quarterly
22
period and for the elapsed portion of the current Fiscal Year ended
with the last day of such quarterly period, and setting forth
comparative consolidated figures for the related periods in the prior
Fiscal Year, which financial statements shall be certified by a duly
authorized officer of ADESA that they fairly present in all material
respects the consolidated financial condition of ADESA and its
Subsidiaries as at the dates indicated, subject to changes resulting
from audit and normal year-end adjustments, PROVIDED that so long as
ADESA is subject to informational requirements of the Securities
Exchange Act and in accordance therewith files reports and other
information with the SEC, the Agent and the Funding Parties shall be
deemed to have been furnished with the foregoing reports and forms so
long as such reports and forms are available for electronic access at
the SEC's homepage on the internet;
(ii) As soon as practicable, and in any event within
one hundred twenty (120) days after the end of each Fiscal Year,
consolidated balance sheets of ADESA and its Subsidiaries as at the end
of such Fiscal Year and the related consolidated statements of
earnings, shareholders' equity and changes in cash flows of ADESA and
its Subsidiaries for such Fiscal Year, setting forth in comparative
form the consolidated figures for ADESA and its Subsidiaries for the
previous Fiscal Year, all in reasonable detail and accompanied by a
report thereon of PricewaterhouseCoopers or other independent public
accountants of recognized national standing selected by ADESA which
report shall be unqualified as to the scope of audit and as to the
status of ADESA and its Subsidiaries as a going concern and shall state
that such consolidated financial statements present fairly in all
material respects the financial position of ADESA and its Subsidiaries
as at the dates indicated and the results of their operations and cash
flows for the periods indicated in conformity with GAAP (or, in the
event of a change in accounting principles, such accountants'
concurrence with such change) and that the examination by such
accountants in connection with such consolidated financial statements
has been made in accordance with generally accepted auditing standards,
PROVIDED that so long as ADESA is subject to informational requirements
of the Securities Exchange Act and in accordance therewith files
reports and other information with the SEC, the Agent and the Funding
Parties shall be deemed to have been furnished with the foregoing
reports and forms so long as such reports and forms are available for
electronic access at the SEC's homepage on the internet;
(iii) Together with each delivery of any financial
statements pursuant to CLAUSES (i) and (ii) of this subsection, an
officer's certificate of ADESA, executed by a duly authorized officer
of ADESA, stating (A) that the signer has instituted procedures for the
review of the terms of this Master Agreement and the principal
Operative Documents and the review in reasonable detail of the
transactions and conditions of ADESA and its Subsidiaries taken as a
whole during the accounting period covered by such financial
statements, and that such review has not disclosed the existence,
during or at the end of such accounting period, nor does the signer
have knowledge of the existence as of the date of such officer's
certificate, of any condition or event which constitutes an Event of
Default, or, if any such condition or event existed or exists,
specifying the
23
nature and period of existence thereof and what action ADESA has taken,
is taking and proposes to take with respect thereto, (B) that, to the
best of such officer's knowledge, the financial statements delivered
pursuant to CLAUSE (i) of this subsection present fairly in all
material respects the financial position of ADESA and its Subsidiaries
as at the dates indicated and the results of their operations and cash
flows for the periods indicated in conformity with GAAP, and (C) that
ADESA is in compliance with each of the covenants contained in SECTION
5.5 hereof, and setting out in reasonable detail the data and
calculations upon which the officer bases such statement;
(iv) Promptly, and in any event within five (5)
Business Days after an executive officer of ADESA or any Lessee obtains
knowledge thereof, notice of (A) the occurrence of any event which
constitutes an Event of Default which notice shall specify the nature
thereof, the period of existence thereof and what action ADESA or such
Lessee proposes to take with respect thereto and (B) any litigation or
governmental proceedings pending against ADESA or any Lessee which, if
determined adversely to such Lessee, would have a Material Adverse
Effect on such Lessee's ability to perform under the Operative
Documents; and
(v) With reasonable promptness, such information with
respect to the financial condition of ADESA, any Lessee or any Leased
Property as from time to time may be reasonably requested by the Agent
or any Funding Party; PROVIDED, HOWEVER, that the Agent and each
Funding Party shall keep such information confidential, except in
connection with enforcement or exercise of the Agent's or any Funding
Party's rights under this Master Agreement or the other Operative
Documents, or otherwise available at law or in equity and PROVIDED,
FURTHER, that the Agent and each Funding Party may disclose such
information to the extent necessary to respond to inquiries of bank
regulatory authorities or to comply with legal process or any other
legal disclosure obligations, or to the extent such information has
been made publicly available by parties other than the Agent or any
Funding Party.
(b) OTHER REPORTS. Promptly after the same are available to it,
during any period in which ADESA shall be or become a reporting company under
the Securities Exchange Act, ADESA shall deliver to the Agent and each Funding
Party copies of the annual report of ADESA and each filing made by ADESA or any
Affiliate thereof with the SEC.
SECTION 5.4 AFFIRMATIVE COVENANTS OF ADESA.
(a) COMPLIANCE WITH LAW. ADESA will, and will cause each of its
Subsidiaries to, comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation,
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such
24
licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(b) PAYMENT OF TAXES AND CLAIMS. ADESA will, and will cause each
of its Subsidiaries to, file all tax returns required to be filed in any
jurisdiction and to pay and discharge all taxes shown to be due and payable on
such returns and all other taxes, assessments, governmental charges, or levies
imposed on them or any of their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and before they
have become delinquent and all claims for which sums have become due and payable
that have or might become a Lien on properties or assets of ADESA or any
Subsidiary, provided that neither ADESA nor any Subsidiary need pay any such tax
or assessment or claims if (i) the amount, applicability or validity thereof is
contested by ADESA or such Subsidiary on a timely basis in good faith and in
appropriate proceedings, and ADESA or a Subsidiary has established adequate
reserves therefor in accordance with GAAP on the books of ADESA or such
Subsidiary or (ii) the nonpayment of all such taxes and assessments in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
(c) CORPORATE EXISTENCE. Each of ADESA and each Lessee will at all
times preserve and keep in full force and effect its corporate, partnership or
limited liability company existence. ADESA will at all times preserve and keep
in full force and effect the corporate, partnership or limited liability company
existence of each of its Subsidiaries (unless merged into ADESA or a Subsidiary)
and all rights and franchises of ADESA and its Subsidiaries unless, in the good
faith judgment of ADESA, the termination of or failure to preserve and keep in
full force and effect such corporate existence, right or franchise could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(d) MAINTENANCE OF PROPERTIES. ADESA will and will cause each of
its Subsidiaries to maintain and keep, or cause to be maintained and kept, their
respective properties in good repair, working order and condition (other than
ordinary wear and tear), so that the business carried on in connection therewith
may be properly conducted at all times, provided that this SECTION 5.4(d) shall
not prevent ADESA or any Subsidiary from discontinuing the operation and the
maintenance of any of its properties if such discontinuance is desirable in the
conduct of its business and ADESA has concluded that such discontinuance could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
SECTION 5.5 FINANCIAL COVENANTS. ADESA shall at all times:
(a) MAXIMUM TOTAL FUNDED DEBT TO EBITDA RATIO. Maintain, as of the
last day of each Fiscal Quarter, commencing with the Fiscal Quarter ending
December 31, 2000, a Total Funded Debt to EBITDA Ratio of not greater than
3.75:1.00 for each Fiscal Quarter ending prior to December 31, 2001 and
3.50:1.00 for each Fiscal Quarter ending on or after December 31, 2001.
25
(b) MINIMUM FIXED CHARGE COVERAGE RATIO. Maintain, as of the last
day of each Fiscal Quarter, commencing with the Fiscal Quarter ending December
31, 2000, a Fixed Charge Coverage Ratio of not less than 1.30:1.00.
(c) MINIMUM NET WORTH. Maintain at all times a Net Worth of not
less than $406,806,505 with such minimum amount to be permanently increased at
the end of each Fiscal Quarter, commencing with the Fiscal Quarter ending on
March 31, 2001, by an amount equal to fifty percent (50%) of Net Income for such
Fiscal Quarter; PROVIDED, HOWEVER, in the event that the Consolidated Companies
suffer a net loss for any Fiscal Quarter, Net Income shall be deemed to be $0
for such Fiscal Quarter, so that in no event shall Net Worth at the end of any
Fiscal Quarter be less than that required at the end of the preceding Fiscal
Quarter.
SECTION 5.6 ADDITIONAL REQUIRED APPRAISALS. If, as a result of any
change in Applicable Law after the date hereof, an Appraisal of all or any of
the Leased Properties is required during the Lease Term under Applicable Law
with respect to any Funding Party's interest therein, such Funding Party's
Funded Amount with respect thereto or the Operative Documents, then the related
Lessee shall pay the reasonable cost of such Appraisal.
SECTION 5.7 LESSOR'S COVENANTS. The Lessor covenants and agrees
that, unless the Agent, ADESA and the Lenders shall have otherwise consented in
writing:
(a) the proceeds of the Loans received from the Lenders will
be used by the Lessor solely to acquire the related Leased Property and to pay
the Construction Agent, as agent for the Lessor, or the related Lessee for
Construction Costs. No portion of the proceeds of the Loans will be used by the
Lessor (i) in connection with, whether directly or indirectly, any tender offer
for, or other acquisition of, stock of any corporation with a view towards
obtaining control of such other corporation or (ii) directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any Margin Stock;
(b) it shall not engage in any business or activity, or
invest in any Person, except for activities similar to its activities conducted
on the date hereof, the Transaction and lease transactions similar to the
Transaction;
(c) it will maintain tangible net worth in an amount no less
than the sum of (i) $100,000 PLUS (ii) 3% of its total assets (calculated
assuming no reduction in the value of any leased property from its original cost
to the Lessor) and will at all times be solvent (as defined in the Bankruptcy
Code);
(d) it will deliver to the Agent and ADESA, as soon as
available and in any event within 90 days after the end of each fiscal year, a
balance sheet of the Lessor as of the end of such fiscal year and the related
statements of income, partners' capital and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, prepared in accordance with sound accounting principles, together
with copies of its tax returns,
26
all certified by an officer of the General Partner (and if the Lessor ever
prepares audited financial statements, it shall deliver copies thereof to the
Agent and ADESA);
(e) it will permit the Agent and its representatives to
examine, and make copies from, the Lessor's books and records, and to visit the
offices and properties of the Lessor for the purpose of examining such
materials, and to discuss the Lessor's performance hereunder with any of its, or
its general partner's, officers and employees, in each case during normal
business hours and upon reasonable notice;
(f) it shall not consent to or permit the creation of any
easement or other restriction against any Leased Property other than as
permitted pursuant to Article VI of the Lease; and
(g) it shall not incur or permit to exist, and will promptly
discharge each Lessor Lien and shall indemnify the Lenders and the Lessees for
any loss, cost, expense or diminution in value of any Leased Property resulting
from, or incurred as a result of, such Lessor Liens.
ARTICLE VI.
TRANSFERS BY LESSOR AND LENDERS;
DISTRIBUTION OF PAYMENTS AND PROCEEDS
SECTION 6.1 LESSOR TRANSFERS. The Lessor shall not assign, convey,
encumber or otherwise transfer all or any portion of its right, title or
interest in, to or under any Leased Property or any of the Operative Documents,
except to a Lessee in accordance with the Operative Documents without the prior
written consent of the Lenders and, unless an Event of Default has occurred and
is continuing, ADESA. Any proposed transferee of the Lessor shall make the
representation set forth in SECTION 4.3 to the other parties hereto.
SECTION 6.2 LENDER TRANSFERS
(a) Any Lender may make, carry or transfer Loans at, to or
for the account of, any of its branch offices or the office of an Affiliate of
such Lender.
(b) Each Lender may assign all or a portion of its
interests, rights and obligations under this Master Agreement and the Loan
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it) to any Person; PROVIDED, HOWEVER, that (i) the Agent and,
except during the continuance of a Potential Event of Default or Event of
Default, ADESA must give its prior written consent to such assignment (which
consent shall not be unreasonably withheld or delayed) unless such assignment is
to another Lender or Affiliate of the assigning Lender, (ii) unless such Lender
is assigning all of its Commitment, after giving effect to such assignment, the
Commitment of both the assignor and the assignee is at least $1,000,000 and
(iii) the parties to each such assignment shall execute and deliver to the Agent
an Assignment and Acceptance, and, a processing and recordation fee of $2,500.
Any such
27
assignment of the Loans shall include both the A Loans and the B Loans
of such assigning Lender, on a pro rata basis. From and after the effective date
specified in each Assignment and Acceptance, the assignee thereunder shall be a
party hereto and to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Master
Agreement and the Loan Agreement.
(c) Each Lender may, without the consent of ADESA or any
Lessee, sell participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Master Agreement and the Loan
Agreement (including all or a portion of its Commitments in the Loans owing to
it), PROVIDED, HOWEVER, that (i) no Lender may sell a participation in its
Commitment (after giving effect to any permitted assignment hereunder) in an
amount in excess of fifty percent (50%) of such Commitment (PROVIDED that (1)
sales of participations to an Affiliate of such Lender shall not be included in
such calculation and (2) no such maximum amount shall be applicable to any
participation sold at any time there exists an Event of Default), (ii) such
Lender's obligations under this Master Agreement and the Loan Agreement shall
remain unchanged, (iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iv) the participating
bank or other entity shall not be entitled to any greater benefit than its
selling Lender under the cost protection provisions contained in SECTION 7.5 of
this Master Agreement, and (v) ADESA, each Lessee, the Agent and the other
Lenders shall continue to deal solely and directly with each Lender in
connection with such Lender's rights and obligations under this Master Agreement
and the other Operative Documents, and such Lender shall retain the sole right
to enforce the obligations of Lessor relating to the Loans and to approve any
amendment, modification or waiver of any provisions of this Master Agreement and
the Loan Agreement (except that such Lender may permit the participant to
approve any amendment, modification or waiver which would reduce the principal
of or the interest rate on its Loan, extend the term of such Lender's
Commitment, reduce the amount of any fees to which such participant is entitled
or extend the final scheduled payment date of any Loan, IT BEING UNDERSTOOD that
in all events, the other parties hereto may conclusively rely on such Lender's
approval of any such amendment, modification or waiver and shall have no
obligation to ascertain whether such participant has approved such amendment,
modification or waiver). Any Lender selling a participation hereunder shall
provide prompt written notice to the Agent of the name of such participant.
(d) Any Lender or participant may, in connection with the
assignment or participation or proposed assignment or participation, pursuant to
this Section, disclose to the assignee or participant or proposed assignee or
participant any information relating to ADESA or its Subsidiaries furnished to
such Lender by or on behalf of ADESA. With respect to any disclosure of
confidential, non-public, proprietary information, such proposed assignee or
participant shall agree to use the information only for the purpose of making
any necessary credit judgments with respect to this facility and not to use the
information in any manner prohibited by any law, including without limitation,
the securities laws of the United States. The proposed participant or assignee
shall agree not to disclose any of such information except as permitted by this
Master Agreement. The proposed participant or assignee shall further agree to
return all documents or other written material and copies thereof received from
any Lender, the Agent or
28
any Lessee relating to such confidential information unless otherwise properly
disposed of by such entity.
(e) Any Lender may at any time assign all or any portion of
its rights under this Master Agreement and the Note to a Federal Reserve Bank
without complying with the requirements of PARAGRAPH (b) above; PROVIDED that no
such assignment shall release such Lender from any of its obligations hereunder.
(f) The Lenders hereby acknowledge and agree that the
Lessees shall have the right to the quiet enjoyment of the Leased Properties
pursuant to the Lease, whether or not a Loan Event of Default that is not an
Event of Default has occurred and is continuing, so long as no Event of Default
has occurred and is continuing.
SECTION 6.3 DISTRIBUTION AND APPLICATION OF RENT PAYMENTS.
(a) BASIC RENT. Each payment of Basic Rent (and any payment
of interest on overdue installments of Basic Rent) received by the Agent shall
be distributed pro rata to the Funding Parties to be applied to the amounts of
accrued and unpaid interest (including overdue interest) on the Loans and
accrued and unpaid Yield (including overdue Yield).
(b) SUPPLEMENTAL RENT. Each payment of Supplemental Rent
received by the Agent shall be paid to or upon the order of the Person owed the
same in accordance with the Operative Documents.
(c) PAYMENT DIRECTION. The Lessor hereby irrevocably directs
each Lessee, each Guarantor and the Construction Agent to make all payments
payable by any of them under the Operative Documents to the Agent (as assignee
of the Lessor), other than indemnity payments that are for the account of the
Lessor (which shall be payable directly to the Lessor).
SECTION 6.4 DISTRIBUTION AND APPLICATION OF PURCHASE PAYMENT. With
respect to any Leased Property, the payment by a Lessee of:
(a) the purchase price for a consummated sale of such Leased
Property received by the Agent in connection with such Lessee's exercise of the
Purchase Option or Partial Purchase Option under Section 14.1 of the Lease or
such Lessee's or the Construction Agent's exercise of its option to purchase
such Leased Property under Section 5.3 of the Construction Agency Agreement, or
(b) the payment payable in connection with such Lessee's
compliance with its obligation to purchase the Leased Property in accordance
with Section 14.2 or 14.3 of the Lease, or
(c) the Leased Property Balance therefor in accordance with
Section 10.1 or Section 10.2 of the Lease,
29
shall be distributed by the Agent, as promptly as possible, to the Funding
Parties PRO RATA in accordance with, and for application to, their respective
Funding Party Balances in respect of such Leased Property or Properties
(including both that portion of the A Loans and that portion of the B Loans
allocated to such Leased Property or Properties).
SECTION 6.5 DISTRIBUTION AND APPLICATION TO FUNDING PARTY BALANCES
OF LESSEE PAYMENT OF RECOURSE DEFICIENCY AMOUNT UPON EXERCISE OF REMARKETING
OPTION. With respect to any Leased Property, the payment by a Lessee of the
Recourse Deficiency Amount to the Agent on the Lease Termination Date in
accordance with Section 14.6 or Section 14.7 of the Lease following the Lessees'
exercise of the Remarketing Option, shall be applied by the Agent to the accrued
and unpaid interest on, and the outstanding principal of, the A Loans in respect
of such Leased Property. With respect to any Leased Property, the payment by a
Lessee or the Construction Agent of the Construction Failure Payment with
respect thereto pursuant to the Construction Agency Agreement shall be applied
by the Agent, FIRST to the accrued and unpaid interest on, and the outstanding
principal of, the A Loans in respect of such Leased Property, SECOND to the
accrued and unpaid interest on, and outstanding principal of, the B Loans
related to such Leased Property and THIRD to the accrued and unpaid Yield on,
and outstanding Lessor Invested Amount related to such Leased Property.
SECTION 6.6 DISTRIBUTION AND APPLICATION TO FUNDING PARTY BALANCES
OF REMARKETING PROCEEDS OF LEASED PROPERTY. (a) Any payments received by the
Lessor as proceeds from the sale of any Leased Property sold pursuant to the
Lessees' exercise of the Remarketing Option pursuant to Section 14.6 or 14.7 of
the Lease, shall be distributed (or applied, in the case of CLAUSE THIRD below)
by the Lessor as promptly as possible (it being understood that any such payment
received by the Lessor on a timely basis and in accordance with the provisions
of the Lease shall be distributed on the date received in the funds so received)
in the following order of priority:
FIRST, to the extent not previously deducted from such
proceeds, to the Agent and the Funding Parties as reimbursement for any
and all reasonable remarketing, sale, closing or other transfer costs,
prorations or commissions (including broker fees, appraisal costs,
legal fees and expenses and transfer taxes), paid or incurred by the
Agent or any Funding Party and not reimbursed by the Lessees, PRO RATA
according to the amount of such costs and fees;
SECOND, to the Lenders PRO RATA for application to their B
Loans in respect of all of the Leased Properties, an amount equal to
their B Loans in respect of all of the Leased Properties;
THIRD, to the Lessor for application to the Lessor's Invested
Amounts in respect of all of the Leased Properties, an amount equal to
the Lessor's Invested Amounts in respect of all of the Leased
Properties;
30
FOURTH, to the Funding Parties PRO RATA for application to any
other amount owing to the Funding Parties under the Operative Documents
(including accrued and unpaid interest on the Loans, accrued and unpaid
Yield and any outstanding principal of the A Loans), an amount equal to
such other amounts; and
FIFTH, (i) if sold by a Lessee pursuant to Section 14.6 of the
Lease, the excess, if any, to such Lessee, and (ii) otherwise, the
excess, if any, to the Lessor.
(b) Any payments received by the Lessor as proceeds from the sale
of any Leased Property sold following the payment of the Construction Failure
Payment shall be distributed (or applied, as appropriate) by the Lessor as
promptly as possible (it being understood that any such payment received by the
Lessor on a timely basis and in accordance with the provisions of the
Construction Agency Agreement shall be distributed on the date received in the
funds so received) in the following order of priority:
FIRST, to the Funding Parties or the Agent, as the case may
be, in reimbursement of all reasonable costs, expenses and taxes, if
any, incurred by any of them to complete the construction of such
Leased Property, maintain and insure such Leased Property, remarket
such Leased Property and sell such Leased Property, PRO RATA according
to the amount of such costs, expenses and taxes;
SECOND, to the Funding Parties PRO RATA for application to
their Funding Party Balances in respect to such Leased Property
(including both that portion of the A Loans and that portion of the B
Loans allocated to such Leased Property), an amount equal to such
Funding Party Balances in respect of such Leased Property; and
THIRD, to the Lessor.
SECTION 6.7 DISTRIBUTION AND APPLICATION OF PAYMENTS RECEIVED WHEN
AN EVENT OF DEFAULT EXISTS OR HAS CEASED TO EXIST FOLLOWING REJECTION OF THE
LEASE.
(a) PROCEEDS OF LEASED PROPERTY. Any payments received by
the Lessor or the Agent when an Event of Default exists (or has ceased to exist
by reason of a rejection of the Lease in a proceeding with respect to a Lessee
described in Article XII(f) of the Lease), as
(i) proceeds from the sale of any or all of the
Leased Property sold pursuant to the exercise of the Lessor's
remedies pursuant to Article XIII of the Lease, or
(ii) proceeds of any amounts from any insurer or any
Governmental Authority in connection with an Event of Loss or
Event of Taking
shall if received by the Lessor be paid to the Agent as promptly as possible,
and shall be distributed or applied in the following order of priority prior to
the Release Date:
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FIRST, to the Agent for any amounts reasonably expended by it
in connection with such Leased Property or the Operative Documents and
not previously reimbursed to it;
SECOND, to the Funding Parties PRO RATA for application to
their Funding Party Balances in respect of all of the Leased
Properties, an amount equal to such Funding Party Balances; and
THIRD, to the related Lessee or the Person or Persons
otherwise legally entitled thereto, the excess, if any.
(b) PROCEEDS OF RECOVERIES FROM LESSEE. Any payments
received by any Funding Party when an Event of Default exists (or has ceased to
exist by reason of a rejection of the Lease in a proceeding with respect to a
Lessee described in Article XII(f) of the Lease), from a Lessee as a payment in
accordance with the Lease shall be paid to the Agent as promptly as possible,
and shall then be distributed or applied by the Agent as promptly as possible in
the order of priority set forth in PARAGRAPH (a) above.
SECTION 6.8 DISTRIBUTION OF OTHER PAYMENTS. All payments under
SECTION 7.6 of this Master Agreement shall be made FIRST, to the Funding
Parties, PRO RATA, until their Funding Party Balances have been paid in full,
and SECOND, to the Lessor who shall be entitled to retain all such remaining
amounts. Except as otherwise provided in this SECTION 6, any payment received by
the Lessor which is to be paid to Agent pursuant hereto or for which provision
as to the application thereof is made in an Operative Document but not elsewhere
in this SECTION 6 shall, if received by the Lessor, be paid forthwith to the
Agent and when received shall be distributed forthwith by the Agent to the
Person and for the purpose for which such payment was made in accordance with
the terms of such Operative Document.
SECTION 6.9 TIMING OF AGENT DISTRIBUTIONS. Payments received by the
Agent in immediately available funds before 12:00 p.m. (noon), Atlanta, Georgia
time, on any Business Day shall be distributed to the Funding Parties in
accordance with and to the extent provided in this SECTION 6 on such Business
Day. Payments received by the Agent in immediately available funds after 12:00
p.m. (noon), Atlanta, Georgia time shall be distributed to the Funding Parties
in accordance with and to the extent provided in this SECTION 6 on the next
Business Day.
SECTION 6.10 RELEASE OF LEASED PROPERTIES. (a) If one or more of the
Lessees shall at any time purchase any or all of the Leased Properties pursuant
to Section 13.3 or Article 14 of the Lease, or if any or all of the Leased
Properties shall be sold in accordance with, and the Lessees otherwise satisfy
each of the obligations and conditions set forth in, Section 14.6 of the Lease
in respect thereof, then, upon application of such amounts to prepay the related
Loans pursuant to this Master Agreement and the Loan Agreement and the Agent's
and the Lenders' receipt of all accrued interest and any other payments due and
owing from the Lessees and/or the Lessor to the Agent and the Lenders on such
date in respect thereof, such Leased Property or Properties, as the case may be,
shall be released from the applicable Mortgage and the Assignment of Lease and
Rents, to the extent relating to such Leased Property or Properties.
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(b) Upon the termination of the Lenders' Commitments and the
payment in full of all of the Loans and all other amounts owing by the Lessees
and/or the Lessor hereunder or under any other Operative Document to the Lessor,
the Agent and the Lenders (other than unasserted indemnities), the Leased
Properties shall be released from the Mortgages and Assignments of Lease and
Rents.
(c) Upon request of the Lessor or a Lessee following a
release of any Leased Property described in CLAUSE (a) or (b) above, the Agent
shall, at the sole cost and expense of the Lessees, execute and deliver to the
Lessor or the requesting Lessee such documents as the Lessor or such Lessee
shall reasonably request to evidence such release, including, if requested, a
release of the Assignments of Lease and Rents to the extent relating to such
Leased Property.
ARTICLE VII.
INDEMNIFICATION
SECTION 7.1 GENERAL INDEMNIFICATION. Each of ADESA and each Lessee,
jointly and severally, agrees, whether or not any of the transactions
contemplated hereby shall be consummated, to assume liability for, and to
indemnify, protect, defend, save and hold harmless each Indemnitee, on an
After-Tax Basis, from and against, any and all Claims that may be imposed on,
incurred by or asserted, or threatened to be asserted, against such Indemnitee,
whether or not such Indemnitee shall also be indemnified as to any such Claim by
any other Person (PROVIDED that no Indemnitee shall have the right to double
recovery with respect to any Claim) and whether or not such Claim arises or
accrues prior to any Closing Date or after the Lease Termination Date, or
results from such Indemnitee's negligence, 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; or
(b) the purchase, design, construction, preparation,
installation, inspection, delivery, non-delivery, acceptance, rejection,
ownership, management, possession, operation, rental, lease, sublease,
repossession, maintenance, repair, alteration, modification, addition,
substitution, storage, transfer of title, redelivery, use, financing,
refinancing, disposition, operation, condition, sale (including, without
limitation, any sale pursuant to the Lease), return or other disposition of all
or any part of any interest in any Leased Property or the imposition of any
Lien, other than a Lessor Lien (or incurring of any liability to refund or pay
over any amount as a result of any Lien, other than a Lessor Lien) thereon,
including, without limitation: (i) Claims or penalties arising from any
violation or alleged violation of law or in tort (strict liability or
otherwise), (ii) latent or other defects, whether or not discoverable, (iii) 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
any Leased Property or any part thereof, (iv) the making of any Alterations in
violation of any standards imposed by any insurance policies required to be
maintained by any Lessee pursuant to the Lease which are in effect at any time
with respect to any Leased Property or any part thereof, (v) any Claim for
patent, trademark or
33
copyright infringement, (vi) Claims arising from any public improvements with
respect to any Leased Property resulting in any charge or special assessments
being levied against any Leased Property or any Claim for utility "tap-in" fees,
and (vii) Claims for personal injury or real or personal property damage
occurring, or allegedly occurring, on any Land, Building or Leased Property;
(c) the breach by ADESA or any Lessee of any representation
or warranty made by it or deemed made by it and set forth in any Operative
Document or any certificate required to be delivered by any Operative Document
(without giving effect to any exception in any representation based on the
absence of a Material Adverse Effect or on the absence of Knowledge);
(d) the retaining or employment of any broker, finder or
financial advisor by ADESA or any Lessee to act on its behalf in connection with
this Master Agreement, or the incurring of any fees or commissions to which the
Lessor, the Agent or any Lender might be subjected by virtue of their entering
into the transactions contemplated by this Master Agreement (other than fees or
commissions due to any broker, finder or financial advisor retained by the
Lessor, the Agent or any Lender);
(e) the existence of any Lien (other than a Lessor Lien) on
or with respect to any Leased Property, the Construction, 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 any Leased Property or by reason of labor or materials furnished
or claimed to have been furnished to the Construction Agent, any Lessee, or any
of its contractors or agents or by reason of the financing of any personalty or
equipment purchased or leased by any Lessee or Alterations constructed by any
Lessee, except, in all cases, the Liens described in item (a) of the definition
of Permitted Liens;
(f) the transactions contemplated hereby or by any other
Operative Document, in respect of the application of Parts 4 and 5 of Subtitle B
of Title I of ERISA and any prohibited transaction described in Section 4975(c)
of the Code;
(g) any act or omission by ADESA or any Lessee under any
Purchase Agreement or any other Operative Document, or any breach by ADESA or
any Lessee of any requirement, condition, restriction or limitation in any Deed,
Purchase Agreement, IDB Documentation or Ground Lease; or
(h) any IDB Documentation;
PROVIDED, HOWEVER, neither ADESA nor any Lessee shall be required to indemnify
any Indemnitee under this SECTION 7.1 for any Claim to the extent that such
Claim results from (i) the willful misconduct or gross negligence of such
Indemnitee (other than gross negligence or willful misconduct imputed to such
Indemnitee solely by reason of its interest in any Leased Property), or (ii) any
Claim resulting from Lessor Liens; and, PROVIDED, FURTHER, that with respect
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to each Construction Land Interest, each Lessee's indemnity obligations with
respect to such Leased Property shall be governed solely by Section 3.3 of the
Construction Agency Agreement during the Construction Term therefor. 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 other remedy under this Master Agreement, the Lease or any other
Operative Document.
SECTION 7.2 ENVIRONMENTAL INDEMNITY. In addition to and without
limitation of SECTION 7.1 or Section 3.3 of the Construction Agency Agreement,
each of ADESA and each Lessee, jointly and severally, agrees to indemnify, hold
harmless and defend each Indemnitee, on an After-Tax Basis, from and against any
and all claims (including without limitation third party claims for personal
injury or real or personal property damage), losses (including but not limited
to any loss of value of any Leased Property), damages, liabilities, fines,
penalties, charges, suits, settlements, demands, administrative and judicial
proceedings (including informal proceedings and investigations) and orders,
judgments, remedial action, requirements, enforcement actions of any kind, and
all reasonable costs and expenses actually incurred in connection therewith
(including, but not limited to, reasonable attorneys' and/or paralegals' fees
and expenses), including, but not limited to, all costs incurred in connection
with any investigation or monitoring of site conditions or any clean-up,
remedial, removal or restoration work by any federal, state or local government
agency, arising directly or indirectly, in whole or in part, out of:
(i) the presence on or under any Land of any Hazardous
Materials, or any releases or discharges of any Hazardous Materials on,
under, from or onto any Land,
(ii) any activity, including, without limitation,
construction, carried on or undertaken on or off any Land, and whether
by a Lessee or any predecessor in title or any employees, agents,
contractors or subcontractors of a Lessee or any predecessor in title,
or any other Person, 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 under any Land,
(iii) loss of or damage to any property or the environment
(including, without limitation, clean-up costs, response costs,
remediation and removal costs, cost of corrective action, costs of
financial assurance, fines and penalties and natural resource damages),
or death or injury to any Person, and all expenses associated with the
protection of wildlife, aquatic species, vegetation, flora and fauna,
and any mitigative action required by or under Environmental Laws, in
each case to the extent related to any Leased Property,
(iv) any claim concerning any Leased Property's lack of
compliance with Environmental Laws, or any act or omission causing an
environmental condition on or
35
with respect to any Leased Property that requires remediation or would
allow any governmental agency to record a lien or encumbrance on the
land records, or
(v) any residual contamination on or under any Land, or
affecting any natural resources on any Land, and to any contamination
of any property or natural resources arising in connection with the
generation, use, handling, storage, transport or disposal of any such
Hazardous Materials on or from any Leased Property; in each case
irrespective of whether any of such activities were or will be
undertaken in accordance with applicable laws, regulations, codes and
ordinances;
in any case with respect to the matters described in the foregoing CLAUSES (i)
through (v) that arise or occur
(w) prior to or during the Lease Term,
(x) at any time during which a Lessee or any Affiliate
thereof owns any interest in or otherwise occupies or possesses any
Leased Property or any portion thereof, or
(y) during any period after and during the continuance of
any Event of Default;
PROVIDED, HOWEVER, no Lessee shall be required to indemnify any Indemnitee under
this SECTION 7.2 for any Claim to the extent that such Claim results from the
willful misconduct or gross negligence of such Indemnitee (other than gross
negligence or willful misconduct imputed to such Indemnitee solely by reason of
any action or inaction of the Construction Agent or any Lessee). 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
other remedy under this Master Agreement, the Lease or any other Operative
Document.
SECTION 7.3 PROCEEDINGS IN RESPECT OF CLAIMS. With respect to any
amount that a Lessee is requested by an Indemnitee to pay by reason of SECTION
7.1 or 7.2, such Indemnitee shall, if so requested by such Lessee and prior to
any payment, submit such additional information to such Lessee as such Lessee
may reasonably request and which is in the possession of, or under the control
of, such Indemnitee to substantiate properly the requested payment. In case any
action, suit or proceeding shall be brought against any Indemnitee, such
Indemnitee promptly shall notify ADESA of the commencement thereof (PROVIDED
that the failure of such Indemnitee to promptly notify ADESA shall not affect
ADESA's or any Lessee's obligation to indemnify hereunder except to the extent
that ADESA's or a Lessee's rights to contest are materially prejudiced by such
failure), and such Lessee shall be entitled, at its expense, to participate in,
and, to the extent that such Lessee desires to, assume and control the defense
thereof with counsel reasonably satisfactory to such Indemnitee; PROVIDED,
HOWEVER, that such Indemnitee may pursue a motion to dismiss such Indemnitee
from such action, suit or proceeding with counsel of such Indemnitee's choice at
the Lessees' expense; and PROVIDED
36
FURTHER that a Lessee may assume and control the defense of such proceeding only
if ADESA, if requested to do so by the Indemnitee, shall have acknowledged in
writing its and each Lessee's obligations to fully indemnify such Indemnitee in
respect of such action, suit or proceeding, Lessees shall pay all reasonable
costs and expenses related to such action, suit or proceeding as and when
incurred and the related Lessee shall keep such Indemnitee fully apprised of the
status of such action, suit or proceeding and shall provide such Indemnitee with
all information with respect to such action, suit or proceeding as such
Indemnitee shall reasonably request; and, PROVIDED FURTHER, that no Lessee shall
be entitled to assume and control the defense of any such action, suit or
proceeding if and to the extent that, (A) in the reasonable opinion of such
Indemnitee, (x) such action, suit or proceeding involves any possibility of
imposition of criminal liability or any material risk of civil liability on such
Indemnitee in excess of $5,000,000 or (y) such action, suit or proceeding will
involve a material risk of the sale, forfeiture or loss of, or the creation of
any Lien (other than a Permitted Lien) on any Leased Property or any part
thereof unless the related Lessee or ADESA shall have posted a bond or other
security satisfactory to the relevant Indemnitees in respect to such risk or (z)
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 Lessees which the related Lessee and the Indemnitee have been
unable to sever from the indemnified claim(s), or (C) an Event of Default has
occurred and is continuing. The Indemnitee may participate in a reasonable
manner at its own expense and with its own counsel in any proceeding conducted
by a Lessee in accordance with the foregoing.
If a Lessee fails to fulfill the conditions to such Lessee's assuming
the defense of any Claim after receiving notice thereof on or prior to the later
of (a) the date that is ten (10) days after receiving notice thereof and (b) the
date that is ten (10) days prior to the date that an answer or response is
required, the Indemnitee may undertake such defense, at the Lessees' expense. No
Lessee shall enter into any settlement or other compromise with respect to any
Claim which admits any liability or wrong-doing on part of any Indemnitee or
which is in excess of $5,000,000 which is entitled to be indemnified under
SECTION 7.1 or 7.2 without the prior written consent of the related Indemnitee,
which consent shall not be unreasonably withheld. Unless an Event of Default
shall have occurred and be continuing, no Indemnitee shall enter into any
settlement or other compromise with respect to any claim which is entitled to be
indemnified under SECTION 7.1 or 7.2 without the prior written consent of ADESA,
which consent shall not be unreasonably withheld, unless such Indemnitee waives
its right to be indemnified under SECTION 7.1 or 7.2 with respect to such Claim.
Upon payment in full of any Claim by the Lessees pursuant to SECTION
7.1 or 7.2 to or on behalf of an Indemnitee, the Lessees, 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 reasonably necessary
to preserve any such claims and otherwise cooperate with the Lessees and give
such further assurances as are reasonably necessary or advisable to enable the
Lessees vigorously to pursue such claims.
37
If for any reason the indemnification provided for in SECTION 7.1 or
7.2 is unavailable to an Indemnitee or is insufficient to hold an Indemnitee
harmless, then each of ADESA and each Lessee agrees to contribute to the amount
paid or payable by such Indemnitee as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by such Indemnitee on the one hand and by ADESA and the
Lessees on the other hand but also the relative fault of such Indemnitee as well
as any other relevant equitable considerations. It is expressly understood and
agreed that the right to contribution provided for herein shall survive the
expiration or termination of and shall be separate and independent from any
other remedy under this Master Agreement, the Lease or any other Operative
Document.
The provisions of this SECTION 7.3 shall apply to all Claims for which
a Lessee or the Construction Agent has an indemnity obligation pursuant to any
Operative Document.
SECTION 7.4 GENERAL TAX INDEMNITY. (a) TAX INDEMNITY. Except as
otherwise provided in this SECTION 7.4, each of ADESA and each Lessee, jointly
and severally, shall pay on an After-Tax Basis, and on written demand shall
indemnify and hold each Tax Indemnitee harmless from and against, any and all
fees (including, without limitation, documentation, recording, license and
registration fees), taxes (including, without limitation, income, gross
receipts, sales, rental, use, turnover, value-added, property, excise and stamp
taxes), levies, imposts, duties, charges, assessments or withholdings of any
nature whatsoever, together with any penalties, fines or interest thereon or
additions thereto (any of the foregoing being referred to herein as "TAXES" and
individually as a "TAX" (for the purposes of this SECTION 7.4, the definition of
"Taxes" includes amounts imposed on, incurred by, or asserted against each Tax
Indemnitee as the result of any prohibited transaction, within the meaning of
Section 406 or 407 of ERISA or Section 4975(c) of the Code, arising out of the
transactions contemplated hereby or by any other Operative Document)) imposed on
or with respect to any Tax Indemnitee, any Lessee, ADESA, any Leased Property or
any portion thereof or any Land, or any sublessee or user thereof, by the United
States or by any state or local government or other taxing authority in the
United States in connection with or in any way relating to (i) the acquisition,
financing, mortgaging, construction, preparation, installation, inspection,
delivery, non-delivery, acceptance, rejection, purchase, ownership, possession,
rental, lease, sublease, maintenance, repair, storage, transfer of title,
redelivery, use, operation, condition, sale, return or other application or
disposition of all or any part of any Leased Property or the imposition of any
Lien (or incurrence of any liability to refund or pay over any amount as a
result of any Lien) thereon, (ii) Basic Rent or Supplemental Rent or the
receipts or earnings arising from or received with respect to any Leased
Property or any part thereof, or any interest therein or any applications or
dispositions thereof, (iii) any other amount paid or payable pursuant to the
Note or any other Operative Documents, (iv) any Leased Property, any Land or any
part thereof or any interest therein (including, without limitation, all
assessments payable in respect thereof, including, without limitation, all
assessments noted on the related Title Policy), (v) all or any of the Operative
Documents, any other documents contemplated thereby, any amendments and
supplements thereto, and (vi) otherwise with respect to or in connection with
the transactions contemplated by the Operative Documents. Notwithstanding the
foregoing, during the Construction Term for any Construction Land Interest, (i)
ADESA and the Lessees shall only be obligated to indemnify the Lessor and its
38
Affiliates, successors, permitted assigns, permitted transferees, employees,
officers, directors and agents, with respect to Taxes related to such
Construction Land Interest and (ii) Lessor hereby indemnifies the other Tax
Indemnitees for such Taxes, to the extent that Lessor receives payment therefor
from ADESA or any Lessee.
(b) EXCLUSIONS FROM GENERAL TAX INDEMNITY. SECTION 7.4(a)
shall not apply to:
(i) Taxes on, based on, or measured by or with
respect to net income of the Lessor, the Agent and the Lenders
(including, without limitation, minimum Taxes, capital gains Taxes,
Taxes on or measured by items of tax preference or alternative minimum
Taxes) other than (A) any such Taxes with respect to any Leased
Property or the Transaction that are, or are in the nature of, sales,
use, license, rental or property Taxes, and (B) withholding Taxes
imposed by the United States or any state in which Leased Property is
located (i) on payments with respect to the Notes, to the extent
imposed by reason of a change in Applicable Law occurring after the
date on which Lender became a Lender hereunder or (ii) on Rent, to the
extent the net payment of Rent after deduction of such withholding
Taxes would be less than amounts currently payable with respect to the
Funded Amounts;
(ii) Taxes on, based on, or in the nature of, or
measured by Taxes on doing business and business privilege, franchise,
capital, capital stock, net worth, gross receipts or similar Taxes,
other than (A) any increase in such Taxes imposed on such Tax
Indemnitee by any state in which Leased Property is located, net of any
decrease in such taxes realized by such Tax Indemnitee, to the extent
that such tax increase would not have occurred if on each Funding Date
the Lessor and the Lenders had advanced funds to a Lessee or the
Construction Agent in the form of loans secured by the Leased Property
in an amount equal to the Funded Amounts funded on such Funding Date,
with debt service for such loans equal to the Basic Rent payable on
each Payment Date and a principal balance at the maturity of such loans
in a total amount equal to the Funded Amounts at the end of the Lease
Term, or (B) any Taxes that are or are in the nature of sales, use,
rental, license or property Taxes relating to any Leased Property;
(iii) Taxes that are based on, or measured by, the
fees or other compensation received by a Person acting as Agent (in its
individual capacities) or any Affiliate of any thereof for acting as
trustee under the Loan Agreement;
(iv) Taxes that result from any act, event or
omission, or are attributable to any period of time, that occurs after
the earlier of (A) the expiration of the Lease Term with respect to any
Leased Property and, if such Leased Property is required to be returned
to the Lessor in accordance with the Lease, such return and (B) the
discharge in full of the Lessees' obligations to pay the Lease Balance,
or any amount determined by reference thereto, with respect to any
Leased Property and all other amounts due under the Lease, unless such
Taxes relate to acts, events or matters occurring prior to the earlier
39
of such times or are imposed on or with respect to any payments due
under the Operative Documents after such expiration or discharge;
(v) Taxes imposed on a Tax Indemnitee that result
from any voluntary sale, assignment, transfer or other disposition or
bankruptcy by such Tax Indemnitee or any related Tax Indemnitee of any
interest in any Leased Property or any part thereof, or any interest
therein or any interest or obligation arising under the Operative
Documents, or from any sale, assignment, transfer or other disposition
of any interest in such Tax Indemnitee or any related Tax Indemnitee,
it being understood that each of the following shall not be considered
a voluntary sale: (A) any substitution, replacement or removal of any
of the Leased Property by any Lessee, (B) any sale or transfer
resulting from the exercise by any Lessee of any termination option,
any purchase option or sale option, (C) any sale or transfer while an
Event of Default shall have occurred and be continuing under the Lease,
and (D) any sale or transfer resulting from the Lessor's exercise of
remedies under the Lease;
(vi) any Tax which is being contested in accordance
with the provisions of SECTION 7.4(c), during the pendency of such
contest;
(vii) any Tax that is imposed on a Tax Indemnitee as
a result of such Tax Indemnitee's gross negligence or willful
misconduct (other than gross negligence or willful misconduct imputed
to such Tax Indemnitee solely by reason of its interest in any Leased
Property);
(viii) any Tax that results from a Tax Indemnitee
engaging, with respect to any Leased Property, in transactions
unrelated to the Leased Properties or the transactions contemplated by
the Operative Documents;
(ix) to the extent of any interest, penalties or
additions to tax that result in whole or in part from the failure of a
Tax Indemnitee to file a return or pay a Tax that it is required to
file or pay in a proper and timely manner, unless such failure (A)
results from the transactions contemplated by the Operative Documents
in circumstances where a Lessee did not give timely notice to such Tax
Indemnitee (and such Tax Indemnitee otherwise had no actual knowledge)
of such filing or payment requirement that would have permitted a
proper and timely filing of such return or payment of such Tax, as the
case may be, or (B) results from the failure of a Lessee to supply
information necessary for the proper and timely filing of such return
or payment of such Tax, as the case may be, that was not in the
possession of such Tax Indemnitee; and
(x) any Tax that results from the breach by the
Lessor of its representation and warranty made in SECTION 4.3(g) or the
breach of any Lender of its representation and warranty made in SECTION
4.4(b).
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(c) 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 Taxes as to which the
Lessees may have an indemnity obligation pursuant to SECTION 7.4, or if any Tax
Indemnitee shall determine that any Taxes as to which the Lessees may have an
indemnity obligation pursuant to SECTION 7.4 may be payable, such Tax Indemnitee
shall promptly notify ADESA. ADESA shall be entitled, at its expense, to
participate in, and, to the extent that ADESA desires to, assume and control the
defense thereof; PROVIDED, HOWEVER, that ADESA, shall have acknowledged in
writing its and each Lessee's obligation to fully indemnify such Tax Indemnitee
in respect of such action, suit or proceeding if the contest is unsuccessful;
and, PROVIDED FURTHER, that ADESA shall not be entitled to assume and control
the defense of any such action, suit or proceeding (but the Tax Indemnitee shall
then contest, at the sole cost and expense of ADESA and the Lessees, on behalf
of ADESA with representatives reasonably satisfactory to ADESA or a Lessee) if
and to the extent that, (A) in the reasonable opinion of such Tax Indemnitee,
such action, suit or proceeding (x) involves any risk of imposition of criminal
liability or any material risk of civil liability in excess of $5,000,000 on
such Tax Indemnitee or (y) will involve a material risk of the sale, forfeiture
or loss of, or the creation of any Lien (other than a Permitted Lien) on any
Leased Property or any part thereof unless ADESA or a Lessee shall have posted a
bond or other security satisfactory to the relevant Tax Indemnitees in respect
to such risk, (B) such proceeding involves Claims not fully indemnified by the
Lessees which ADESA and the Tax Indemnitee have been unable to sever from the
indemnified claim(s), (C) an Event of Default has occurred and is continuing,
(D) such action, suit or proceeding involves matters which extend beyond or are
unrelated to the Transaction and if determined adversely could be materially
detrimental to the interests of such Tax Indemnitee notwithstanding
indemnification by the Lessees or (E) such action, suit or proceeding involves
the federal or any state income tax liability of the Tax Indemnitee. With
respect to any contests controlled by a Tax Indemnitee, (i) if such contest
relates to the federal or any state income tax liability of such Tax Indemnitee,
such Tax Indemnitee shall be required to conduct such contest only if ADESA
shall have provided to such Tax Indemnitee an opinion of independent tax counsel
selected by the Tax Indemnitee and reasonably satisfactory to ADESA stating that
a reasonable basis exists to contest such claim or (ii) in the case of an appeal
of an adverse determination of any contest relating to any Taxes, an opinion of
such counsel to the effect that such appeal is more likely than not to be
successful, PROVIDED, HOWEVER, such Tax Indemnitee shall in no event be required
to appeal an adverse determination to the United States Supreme Court. The Tax
Indemnitee may participate in a reasonable manner at its own expense and with
its own counsel in any proceeding conducted by ADESA in accordance with the
foregoing.
Each Tax Indemnitee shall, at ADESA's and the Lessees' expense, supply
ADESA with such information and documents in such Tax Indemnitee's possession as
are reasonably requested by ADESA and are necessary or advisable for ADESA to
participate in any action, suit or proceeding to the extent permitted by this
SECTION 7.4. Unless an Event of Default shall have occurred and be continuing,
no Tax Indemnitee shall enter into any settlement or other compromise with
respect to any Claim which is entitled to be indemnified under this SECTION 7.4
without the prior written consent of ADESA, which consent shall not be
unreasonably withheld,
41
unless such Tax Indemnitee waives its right to be indemnified under this SECTION
7.4 with respect to such Claim.
Notwithstanding anything contained herein to the contrary, (a) a Tax
Indemnitee will not be required 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 7.4 with respect to such claim (and any
related claim with respect to other taxable years the contest of which is
precluded as a result of such waiver) and (b) no Tax Indemnitee shall be
required to contest any claim if the subject matter thereof shall be of a
continuing nature and shall have previously been decided adversely, unless there
has been a change in law which in the opinion of Tax Indemnitee's counsel
creates substantial authority for the success of such contest. Each Tax
Indemnitee and ADESA shall consult in good faith with each other regarding the
conduct of such contest controlled by either.
(d) REIMBURSEMENT FOR TAX SAVINGS. If (x) a Tax Indemnitee
shall obtain a credit or refund of any Taxes paid by or assessed against ADESA
or any Lessee pursuant to this SECTION 7.4 or (y) by reason of the incurrence or
imposition of any Tax for which a Tax Indemnitee is indemnified hereunder or any
payment made to or for the account of such Tax Indemnitee by ADESA or any Lessee
pursuant to this SECTION 7.4, such Tax Indemnitee at any time realizes a
reduction in any Taxes for which the Lessees are not required to indemnify such
Tax Indemnitee pursuant to this SECTION 7.4, which reduction in Taxes was not
taken into account in computing such payment by ADESA or any Lessee to or for
the account of such Tax Indemnitee, then such Tax Indemnitee shall promptly pay
to ADESA (xx) the amount of such credit or refund, together with the amount of
any interest received by such Tax Indemnitee on account of such credit or refund
or (yy) an amount equal to such reduction in Taxes, as the case may be; PROVIDED
that no such payment shall be made so long as an Event of Default shall have
occurred and be continuing (but shall be paid promptly after all Events of
Default have been cured) and, PROVIDED, FURTHER, that the amount payable to
ADESA by any Tax Indemnitee pursuant to this SECTION 7.4(d) shall not at any
time exceed the aggregate amount of all indemnity payments made by ADESA and the
Lessees under this SECTION 7.4 to such Tax Indemnitee with respect to the Taxes
which gave rise to the credit or refund or with respect to the Tax which gave
rise to the reduction in Taxes less the amount of all prior payments made to
ADESA by such Tax Indemnitee under this SECTION 7.4(d). Each Tax Indemnitee
agrees to act in good faith to claim such refunds and other available Tax
benefits, and take such other actions as may be reasonable to minimize any
payment due from ADESA or the Lessees pursuant to this SECTION 7.4. The
disallowance or reduction of any credit, refund or other tax savings with
respect to which a Tax Indemnitee has made a payment to ADESA and the Lessees
under this SECTION 7.4(d) shall be treated as a Tax for which ADESA and the
Lessees are obligated to indemnify such Tax Indemnitee hereunder without regard
to SECTION 7.4(b) hereof.
(e) PAYMENTS. Any Tax indemnifiable under this SECTION 7.4
shall be paid by ADESA or a Lessee 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 7.4 shall be paid within
thirty (30) days after receipt of a written demand therefor from such Tax
Indemnitee
42
accompanied by a written statement describing in reasonable detail the amount so
payable, but not before the date that the relevant Taxes are due. Any payments
made pursuant to SECTION 7.4 shall be made to the Tax Indemnitee entitled
thereto or ADESA, as the case may be, in immediately available funds at such
bank or to such account as specified by the payee in written directions to the
payor, or, if no such direction shall have been given, by check of the payor
payable to the order of the payee by certified mail, postage prepaid at its
address as set forth in this Master Agreement. Upon the request of any Tax
Indemnitee with respect to a Tax that ADESA and the Lessees are required to pay,
ADESA shall furnish to such Tax Indemnitee the original or a certified copy of a
receipt for ADESA's or a Lessee's payment of such Tax or such other evidence of
payment as is reasonably acceptable to such Tax Indemnitee.
(f) REPORTS. If ADESA or any Lessee knows of any report,
return or statement required to be filed with respect to any Taxes that are
subject to indemnification under this SECTION 7.4, such Lessee shall, if such
Lessee is permitted by Applicable Law, timely file such report, return or
statement (and, to the extent permitted by Applicable Law, show ownership of the
applicable Leased Property in such Lessee); PROVIDED, HOWEVER, that if such
Lessee is not permitted by Applicable Law or does not have access to the
information required to file any such report, return or statement, such Lessee
will promptly so notify the appropriate Tax Indemnitee, in which case Tax
Indemnitee will file such report. In any case in which the Tax Indemnitee will
file any such report, return or statement, the related Lessee shall, upon
written request of such Tax Indemnitee, prepare such report, return or statement
for filing by such Tax Indemnitee or, if such Tax Indemnitee so requests,
provide such Tax Indemnitee with such information as is reasonably available to
such Lessee.
(g) VERIFICATION. At ADESA's request, the amount of any
indemnity payment by a Lessee or any payment by a Tax Indemnitee to ADESA
pursuant to this SECTION 7.4 shall be verified and certified by an independent
public accounting firm selected by ADESA and reasonably acceptable to the Tax
Indemnitee. Unless such verification shall disclose an error in ADESA's favor of
5% or more of the related indemnity payment, the costs of such verification
shall be borne by ADESA; otherwise, such costs shall be borne by the related Tax
Indemnitee. In no event shall ADESA or any Lessee have the right to review the
Tax Indemnitee's Tax returns or receive any other confidential information from
the Tax Indemnitee in connection with such verification. The Tax Indemnitee
agrees to cooperate with the independent public accounting firm performing the
verification and to supply such firm with all information reasonably necessary
(including, without limitation, copies of such Tax Indemnitee's Tax returns) to
permit it to accomplish such verification, PROVIDED that the information
provided to such firm by such Tax Indemnitee shall be for its confidential use.
The parties agree that the sole responsibility of the independent public
accounting firm shall be to verify the amount of a payment pursuant to this
Master Agreement and that matters of interpretation of this Master Agreement are
not within the scope of the independent accounting firm's responsibilities.
43
SECTION 7.5 INCREASED COSTS, ETC.
(a) ILLEGALITY. Notwithstanding any other provision herein,
if any change in any Requirement of Law or in the interpretation or application
thereof shall make it unlawful for any Funding Party to make or maintain LIBOR
Advances as contemplated by this Master Agreement, (a) the commitment of such
Funding Party hereunder to continue LIBOR Advances as such and convert Funded
Amounts to LIBOR Advances shall forthwith be cancelled and (b) such Funding
Party's Funded Amounts then outstanding as LIBOR Advances, if any, shall be
converted automatically to Base Rate Advances on the respective last days of the
then current Rent Periods with respect to such Funded Amounts or within such
earlier period as required by law. If any such conversion of a LIBOR Advance
occurs on a day which is not the last day of the then current Rent Period with
respect thereto, each of ADESA and each Lessee, jointly and severally, shall pay
to such Funding Party such amounts, if any, as may be required pursuant to
SECTION 7.5(f).
(b) REQUIREMENTS OF LAW. In the event that Eurocurrency
Reserve Requirements or any change in any Requirement of Law or in the
interpretation or application thereof or compliance by any Funding Party with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Funding Party to any tax of any kind
whatsoever with respect to this Master Agreement, any Note or any LIBOR
Advance made by it, or change the basis of taxation of payments to such
Funding Party in respect thereof (except for taxes covered by SECTION
7.5(d) and changes in franchise taxes or the rate of tax on the overall
net income of such Funding Party);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Funding Party which is not
otherwise included in the determination of the LIBOR Rate; or
(iii) shall impose on such Funding Party any other condition;
and the result of any of the foregoing is to increase the cost to such Funding
Party, by an amount which such Funding Party deems to be material, of making,
converting into, continuing or maintaining LIBOR Advances or to reduce any
amount receivable hereunder in respect thereof then, in any such case, each of
ADESA and each Lessee, jointly and severally, shall promptly pay such Funding
Party, upon its demand, any additional amounts necessary to compensate such
Funding Party for such increased cost or reduced amount receivable. If any
Funding Party becomes entitled to claim any additional amounts pursuant to this
subsection in relation to such outstanding LIBOR Advances, it shall promptly
notify ADESA, through the Agent, of the event by reason of which it has become
so entitled. A certificate as to any additional amounts payable
44
pursuant to this subsection submitted by such Funding Party, through the Agent,
to ADESA in good faith and setting forth in reasonable detail the calculation of
such amounts shall be conclusive in the absence of manifest error. The
provisions of this PARAGRAPH (b) shall survive the termination of this Master
Agreement and the Lease and the payment of the Notes and all other amounts
payable under the Operative Documents.
(c) CAPITAL ADEQUACY. In the event that any Funding Party or
corporation controlling such Funding Party shall have determined that any change
in any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Funding Party or such corporation with
any request or directive regarding capital adequacy (whether or not having the
force of law) from any Governmental Authority made subsequent to the date hereof
does or shall have the effect of reducing the rate of return on such Funding
Party's capital as a consequence of its obligations hereunder to a level below
that which such Funding Party could have achieved but for such change or
compliance (taking into consideration such Funding Party's policies with respect
to capital adequacy) by an amount deemed by such Funding Party to be material,
then from time to time, after submission by such Funding Party in good faith to
ADESA (with a copy to the Agent) of a written request therefor setting forth in
reasonable detail the calculation of such amount (which request shall be
conclusive in the absence of manifest error), each of ADESA and each Lessee,
jointly and severally, shall pay to such Funding Party such additional amount or
amounts as will compensate such Funding Party for such reduction to the extent
imposed generally on other lessees or borrowers with whom such Funding Party has
similar lease or credit arrangements (but in the case of outstanding Base Rate
Advances, without duplication of any amounts already covered by such Funding
Party by reason of an adjustment in the applicable Base Rate). The provisions of
this PARAGRAPH (c) shall survive the termination of this Master Agreement and
the Lease and the payment of the Notes and all other amounts payable under the
Operative Documents.
(d) TAXES. Subject to SECTION 7.5(e), all payments made by a
Lessee under the Lease and the other Operative Documents shall be made free and
clear of, and without deduction or withholding for or on account of, any present
or future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding, in the case of
the Agent and each Funding Party, net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Agent or such Funding Party, as the
case may be, as a result of a present or former connection between the
jurisdiction of the government or taxing authority imposing such tax and the
Agent or such Funding Party (excluding a connection arising solely from the
Agent or such Funding Party having executed, delivered or performed its
obligations or received a payment under, or enforced, this Master Agreement or
any other Operative Document) or any political subdivision or taxing authority
thereof or therein (all such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions and withholdings being hereinafter called "WITHHOLDING
TAXES"). If any Withholding Taxes are required to be withheld from any amounts
payable to the Agent or any Funding Party hereunder or under any other Operative
Document, the amounts so payable to the Agent or such Funding Party (so long as
such Funding Party is in compliance with SECTION 7.5(e), as appropriate) shall
be increased to the
45
extent necessary to yield to the Agent or such Funding Party (after payment of
all Withholding Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in the Operative Documents. Whenever any
Withholding Taxes are payable by a Lessee, as promptly as possible thereafter
such Lessee shall send to the Agent for its own account or for the account of
such Funding Party, as the case may be, a certified copy of an original official
receipt received by such Lessee showing payment thereof. If a Lessee fails to
pay any Withholding Taxes when due to the appropriate taxing authority or fails
to remit to the Agent the required receipts or other required documentary
evidence, each of ADESA and each Lessee, jointly and severally, shall indemnify
the Agent and the Funding Parties for any incremental taxes, interest or
penalties that may become payable by the Agent or any Funding Party as a result
of any such failure. The agreements in this subsection shall survive the
termination of this Master Agreement and the Lease and the payment of the Notes
and all other amounts payable under the Operative Documents.
(e) TAX FORMS. Each Lender to this Master Agreement on the
Initial Closing Date that is not incorporated under the laws of the United
States of America or a state thereof agrees that, on or prior to the Initial
Closing Date, it will deliver to ADESA and the Agent two duly completed copies
of (i) United States Internal Revenue Service Form W-8BEN or W-8ECI or successor
applicable form, as the case may be, and (ii) an Internal Revenue Service Form
W-9 or successor applicable form. Each such Lender also agrees to deliver to
ADESA and the Agent two further copies of the said Form W-8BEN or W-8ECI and
Form W-9, or successor applicable forms or other manner of certification, as the
case may be, on or before the date that any such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form previously delivered by it to ADESA, and such extensions or renewals
thereof as may reasonably be requested by ADESA or the Agent, unless in any such
case an event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Funding Party from duly completing and delivering any such form
with respect to it and such Funding Party so advises ADESA and the Agent. Such
Lender shall certify (i) in the case of a Form W-8BEN or W-8ECI, that it is
entitled to receive payments under the Operative Documents without deduction or
withholding of any United States federal income taxes and (ii) in the case of a
Form W-9, that it is entitled to an exemption from United States backup
withholding tax.
(f) BREAKAGE COSTS. Each of ADESA and each Lessee, jointly
and severally, agrees to indemnify each Funding Party and to hold each Funding
Party harmless from any loss or expense which such Funding Party may sustain or
incur as a consequence of (a) default by a Lessee in payment when due of the
principal amount of or interest on any LIBOR Advance, (b) default by a Lessee in
making a borrowing or conversion after such Lessee or the Construction Agent has
given (or is deemed to have given) a notice in accordance with this Master
Agreement, (c) default by a Lessee in making any prepayment of LIBOR Advances
after such Lessee has given a notice thereof in accordance with the provisions
of the Operative Documents or (d) the making of a prepayment, payment or
conversion, of LIBOR Advances on a day which is not the last day of a Rent
Period with respect thereto, including, without limitation, in each
46
case, any such loss (other than non-receipt of the Applicable Margin or, without
duplication, anticipated profits) or expense arising from the reemployment of
funds obtained by it or from fees payable to terminate the deposits from which
such funds were obtained (it being understood that any such calculation will be
made on notional amounts as the Funding Parties are not required to show that
they matched deposits specifically). A certificate as to any additional amounts
payable pursuant to this subsection submitted by such Funding Party, through the
Agent, to ADESA in good faith shall be conclusive in the absence of manifest
error. The provisions of this PARAGRAPH (f) shall survive the termination of
this Master Agreement and the Lease and the payment of the Notes and all other
amounts payable under the Operative Documents.
(g) ACTION OF AFFECTED FUNDING PARTIES. Each Funding Party
agrees to use reasonable efforts (including reasonable efforts to change the
booking office for its Loans) to avoid or minimize any illegality pursuant to
SECTION 7.5(a) or any amounts which might otherwise be payable pursuant to
SECTION 7.5(c) or (d); PROVIDED, HOWEVER, that such efforts shall not cause the
imposition on such Funding Party of any additional costs or legal or regulatory
burdens reasonably deemed by such Funding Party to be material and shall not be
deemed by such Funding Party to be otherwise contrary to its policies. In the
event that such reasonable efforts are insufficient to avoid all such illegality
or all amounts that might be payable pursuant to SECTION 7.5(c) or (d), then
such Funding Party (the "AFFECTED FUNDING PARTY") shall use its reasonable
efforts to transfer to any other Funding Party (which itself is not then an
Affected Funding Party) its Loans and Commitment, subject to the provisions of
SECTION 6.2; PROVIDED, HOWEVER, that such transfer shall not be deemed by such
Affected Funding Party, in its sole discretion, to be disadvantageous to it or
contrary to its policies. In the event that the Affected Funding Party is
unable, or otherwise is unwilling, so to transfer its Loans and Commitment,
ADESA may designate an alternate lender (reasonably acceptable to the Agent) to
purchase the Affected Funding Party's Loans and Commitment, at par and including
accrued interest, and, subject to the provisions of SECTION 6.2, the Affected
Funding Party shall transfer its Commitment to such alternate lender and such
alternate lender shall become a Funding Party hereunder. Any fee payable to the
Agent pursuant to SECTION 6.2 in connection with such transfer shall be for the
account of ADESA and the Lessees.
(h) CONSTRUCTION LAND INTERESTS. Any amounts payable by the
Lessees pursuant to this SECTION 7.5 with respect to Construction Land Interests
during the Construction Term therefor shall be paid with the proceeds of
Advances.
SECTION 7.6 END OF TERM INDEMNITY. In the event that at the end of
the Lease Term for the Leased Properties: (i) the related Lessee elects the
option set forth in Section 14.6 of the Lease, and (ii) after the Lessor
receives the sales proceeds from the Leased Properties under Section 14.6 or
14.7 of the Lease, together with Lessees' payment of the Recourse Deficiency
Amount, the Lessor shall not have received the entire Lease Balance, then,
within 90 days after the end of the Lease Term, the Lessor or the Agent may
obtain, at Lessees' sole cost and expense, a report from the Appraiser (or, if
the Appraiser is not available, another appraiser reasonably satisfactory to the
Lessor or the Agent, as the case may be, and approved by ADESA,
47
such approval not to be unreasonably withheld) in form and substance reasonably
satisfactory to the Lessor and the Agent (the "REPORT") to establish the reason
for any decline in value of the Leased Properties from the Lease Balance. The
Lessees, jointly and severally, shall promptly reimburse the Lessor for the
amount equal to such decline in value to the extent that the Report indicates
that such decline was due to:
(v) during the time while any property was a Leased
Property, extraordinary use, failure to maintain, to repair, to
restore, to rebuild or to replace as required by the Operative
Documents, failure to comply with all Applicable Laws, failure to use
good workmanship with respect to work performed after the Closing Date
related to such Leased Property, method of installation or removal or
maintenance, repair, rebuilding or replacement, or any other cause or
condition resulting in the Building failing to be of the type and
quality contemplated by the Appraisal (excepting in each case ordinary
wear and tear) that arose from an act or a failure to act of a Lessee,
or
(w) any Alteration made to, or any rebuilding of, any Leased
Property or any part thereof by any Lessee, or
(x) any restoration or rebuilding carried out by any Lessee
or any condemnation of any portion of any Leased Property pursuant to
Article X of the Lease, or
(y) any use of any Leased Property or any part thereof by
any Lessee other than as permitted by the Lease, or any act or omission
constituting a breach of any requirement, condition, restriction or
limitation set forth in the related Deed, related Ground Lease or the
related Purchase Agreement, or
(z) the existence or compliance with any IDB Documentation.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.1 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 Master Agreement and any of the
Operative Documents, the transfer of any Land to the Lessor as provided herein
(and shall not be merged into any Deed), any disposition of any interest of the
Lessor in any Leased Property, the purchase and sale of the Note, payment
therefor and any disposition thereof and shall be and continue in effect
notwithstanding any investigation made by any party hereto or to any of the
other Operative Documents and the fact that any such party may waive compliance
with any of the other terms, provisions or conditions of any of the Operative
Documents.
48
SECTION 8.2 DOCUMENTARY CONVENTIONS. The Documentary Conventions
shall apply to this Master Agreement.
SECTION 8.3 EXPENSES. Whether or not the transactions herein
contemplated are consummated, each of ADESA and the Lessees, jointly and
severally, agrees to pay, as Supplemental Rent, all actual, reasonable and
documented out-of-pocket costs and expenses of the Lessor, the Agent and the
Lenders in connection with the preparation, execution and delivery of the
Operative Documents and the documents and instruments referred to therein and
any amendment, waiver or consent relating thereto (including, without
limitation, the reasonable fees and disbursements of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇) and
of the Lessor, the Agent and the Lenders in connection with endeavoring to
enforce the Operative Documents and the documents and instruments referred to
therein (including, without limitation, the reasonable fees actually incurred
and disbursements of counsel for the Lessor, the Agent and the Lenders), unless
such enforcement action is finally denied by a court on the merits. All
references in the Operative Documents to "attorneys' fees" or "reasonable
attorneys fees" shall mean reasonable attorneys' fees actually incurred, without
regard to any statutory definition thereof. Notwithstanding the foregoing, all
such costs and expenses related to the any Construction Land Interest shall be
paid with the proceeds of Advances (subject to the conditions set forth in this
Master Agreement).
SECTION 8.4 LIABILITIES OF THE FUNDING PARTIES: SHARING OF PAYMENTS.
(a) No Funding Party shall have any obligation to any other Funding Party or to
the Guarantor or any Lessee with respect to the transactions contemplated by the
Operative Documents except those obligations of such Funding Party expressly set
forth in the Operative Documents or except as set forth in the instruments
delivered in connection therewith, and no Funding Party 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. No Lender shall have
any obligation or duty to ADESA or any Lessee, any other Funding Parties or any
other Person with respect to the transactions contemplated hereby except to the
extent of the obligations and duties expressly set forth in this Master
Agreement or the Loan Agreement.
(b) If any Funding Party shall obtain any payment (whether voluntary or
involuntary, or through the exercise of any right of set-off or otherwise) on
account of the Advances made by it in excess of its ratable share of payments on
account of the Advances obtained by all the Funding Parties, such Funding
Parties shall forthwith purchase from the other Funding Parties such
participations in the Advances owed to them as shall be necessary to cause such
purchasing Funding Party to share the excess payment ratably with each of them,
PROVIDED, HOWEVER, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Funding Party, such purchase from each
Funding Party shall be rescinded and such Funding Party shall repay to the
purchasing Funding Party the purchase price to the extent of such Funding
Party's ratable share (according to the proportion of (i) the amount of the
participation purchased from such Funding Party as a result of such excess
payment to (ii) the total amount of such excess payment) of such recovery
together with an amount equal to such Funding Party's ratable share (according
to the proportion of (i) the amount of such Funding Party's required repayment
to (ii) the total amount so recovered from the purchasing Funding Party) of any
interest or other
49
amount paid or payable by the purchasing Funding Party in respect of the total
amount so recovered. Each Funding Party agrees that any Funding Party so
purchasing a participation from another Funding Party pursuant to this SECTION
8.4 may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off) with respect to such participation as
fully as if such Funding Party were the direct creditor of such Funding Party in
the amount of such participation.
SECTION 8.5 LIABILITIES OF THE AGENT. The Agent shall have no duty,
liability or obligation to any party to this Master Agreement with respect to
the transactions contemplated hereby except those duties, liabilities or
obligations expressly set forth in this Master Agreement or the Loan Agreement,
and any such duty, liability or obligations of the Agent shall be as expressly
limited by this Master Agreement or the Loan Agreement, as the case may be. All
parties to this Master Agreement acknowledge that the Agent is not, and will not
be, performing any due diligence with respect to documents and information
received pursuant to this Master Agreement or any other Operative Agreement
including, without limitation, any Environmental Audit, Title Policy or survey.
The acceptance by the Agent of any such document or information shall not
constitute a waiver by any Funding Party of any representation or warranty of
ADESA or any Lessee even if such document or information indicates that any such
representation or warranty is untrue.
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IN WITNESS WHEREOF, the parties hereto have caused this Master
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written
ADESA CORPORATION, as a Guarantor
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Chief
Financial Officer
ADESA CALIFORNIA, INC., as a Lessee
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Treasurer
MASTER AGREEMENT S-1
ATLANTIC FINANCIAL GROUP, LTD., as
Lessor
By: Atlantic Financial Managers, Inc.,
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name Printed: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President
MASTER
S-2 AGREEMENT
SUNTRUST BANK, as Agent and as a
Lender
By: /s/ W. ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name Printed: W. ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------
Title: Vice President
-------------------------------
MASTER
S-3 AGREEMENT
LASALLE BANK NATIONAL ASSOCIATION, as
a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
Name Printed: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------
Title: Commercial Loan Officer
-------------------------------
MASTER
S-4 AGREEMENT
▇▇▇▇▇▇ TRUST AND SAVINGS BANK, as a
Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name Printed: ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Title: Vice President
------------------------------
MASTER
S-5 AGREEMENT
APPENDIX A
to
Master Agreement
DEFINITIONS, INTERPRETATION AND DOCUMENTARY CONVENTIONS
A. INTERPRETATION. In each Operative Document, unless a clear
contrary intention appears:
(i) the singular number includes the plural number and
VICE VERSA;
(ii) reference to any Person includes such Person's
successors and assigns but, if applicable, only if such successors and
assigns are permitted by the Operative Documents;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement (including any Operative
Document), document or instrument means such agreement, document or
instrument as amended, supplemented, waived, restated or modified and
in effect from time to time in accordance with the terms thereof and,
if applicable, the terms of the other Operative Documents and reference
to any promissory note includes any promissory note which is an
extension or renewal thereof or a substitute or replacement therefor;
(v) reference to any Applicable Law means such Applicable
Law as amended, waived, restated, modified, codified, replaced or
reenacted, in whole or in part, and in effect from time to time,
including rules and regulations promulgated thereunder and reference to
any section or other provision of any Applicable Law means that
provision of such Applicable Law from time to time in effect and
constituting the substantive amendment, modification, codification,
replacement or reenactment of such section or other provision;
(vi) reference in any Operative Document to any ARTICLE,
SECTION, APPENDIX, SCHEDULE or EXHIBIT means such ARTICLE or SECTION
thereof or APPENDIX, SCHEDULE or EXHIBIT thereto;
(vii) "hereunder", "hereof", "hereto" and words of similar
import shall be deemed references to an Operative Document as a whole
and not to any particular ARTICLE, SECTION, paragraph or other
provision of such Operative Document;
(viii) "including" (and with correlative meaning "include")
means including without limiting the generality of any description
preceding such term;
(ix) "or" is not exclusive; and
(x) relative to the determination of any period of time,
"from" means "from and including" and "to" means "to but excluding".
B. ACCOUNTING TERMS. In each Operative Document, unless
expressly otherwise provided, accounting terms shall be construed and
interpreted, and accounting determinations and computations shall be made, in
accordance with GAAP.
C. CONFLICT IN OPERATIVE DOCUMENTS. If there is any conflict
between any Operative Documents, each such Operative Document shall be
interpreted and construed, if possible, so as to avoid or minimize such conflict
but, to the extent (and only to the extent) of such conflict, the Master
Agreement shall prevail and control.
D. LEGAL REPRESENTATION OF THE PARTIES. The Operative Documents
were negotiated by the parties with the benefit of legal representation and any
rule of construction or interpretation otherwise requiring any Operative
Document to be construed or interpreted against any party shall not apply to any
construction or interpretation hereof or thereof.
E. DEFINED TERMS. Unless a clear contrary intention appears,
terms defined herein have the respective indicated meanings when used in each
Operative Document.
"A LOAN" means with respect to any Leased Property, the principal
portion of the related Loans equal to the Recourse Deficiency Amount for such
Leased Property.
"ACQUISITION" means any transaction or series of related transactions
for the purpose of, or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interest, membership interest, or equity of any Person, or
otherwise causing any Person to become a Subsidiary, or (c) a merger or
consolidation of, or any other combination with, another Person (other than a
Person that is a Subsidiary), provided that ADESA or a Subsidiary is the
surviving entity.
"ADDITIONAL INSURED" means each of the Agent, each Lender and Lessor.
"ADDRESS" means with respect to any Person, its address set forth in
SCHEDULE I hereto or such other address as it shall have identified to the
parties to the Master Agreement in writing in the manner provided for the giving
of notices thereunder.
"ADESA" means ADESA Corporation, an Indiana corporation.
"ADESA CALIFORNIA" means ADESA California, Inc., a California
corporation.
-2-
"ADJUSTED LIBO RATE" shall mean, with respect to each Rent Period for a
LIBOR Advance, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined pursuant to the following formula:
Adjusted LIBO Rate = LIBOR
-------------------------------
1.00 - LIBOR Reserve Percentage
As used herein, LIBOR Reserve Percentage shall mean, for any Rent Period for a
LIBOR Advance, the reserve percentage (expressed as a decimal) equal to the then
stated maximum rate of all reserves requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) applicable to
any member bank of the Federal Reserve System in respect of Eurocurrency
liabilities as defined in Regulation D (or against any successor category of
liabilities as defined in Regulation D).
"ADVANCE" means a LIBOR Advance or a Base Rate Advance.
"AFFILIATE" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with the Person specified. For purposes
of this definition, the term "CONTROL" (including the correlative meanings of
the terms "CONTROLLED BY" and "UNDER COMMON CONTROL WITH"), as used with respect
to any Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management policies of such Person, whether
through the ownership of voting securities or by contract or otherwise.
"AFTER-TAX BASIS" means (a) with respect to any payment to be received
by an Indemnitee (which, for purposes of this definition, shall include any Tax
Indemnitee), the amount of such payment supplemented by a further payment or
payments so that, after deducting from such payments the amount of all Taxes
(net of any current credits, deductions or other Tax benefits arising from the
payment by the Indemnitee of any amount, including Taxes, for which the payment
to be received is made) imposed currently on the Indemnitee by any Governmental
Authority or taxing authority with respect to such payments, the balance of such
payments shall be equal to the original payment to be received and (b) with
respect to any payment to be made by any Indemnitee, the amount of such payment
supplemented by a further payment or payments so that, after increasing such
payment by the amount of any current credits or other Tax benefits realized by
the Indemnitee under the laws of any Governmental Authority or taxing authority
resulting from the making of such payments, the sum of such payments (net of
such credits or benefits) shall be equal to the original payment to be made;
PROVIDED, HOWEVER, for the purposes of this definition, and for purposes of any
payment to be made to an Indemnitee or by an Indemnitee on an after-tax basis,
it shall be assumed that (i) federal, state and local taxes are payable at the
highest combined marginal federal and state statutory income tax rate (taking
into account the deductibility of state income taxes for federal income tax
purposes) applicable to corporations from time to time and (ii) such Indemnitee
or the recipient of such payment from an Indemnitee has sufficient income to
utilize any deductions, credits (other than foreign tax credits,
-3-
the use of which shall be determined on an actual basis) and other Tax benefits
arising from any payments described in CLAUSE (b) of this definition.
"AGENT" means SunTrust Bank, a Georgia banking corporation, in its
capacity as agent under the Master Agreement and the Loan Agreement.
"ALTERATIONS" means, with respect to any Leased Property, fixtures,
alterations, improvements, modifications and additions to such Leased Property.
"AMORTIZATION" shall mean, for any period, amortization expense of the
Consolidated Companies determined on a consolidated basis in accordance with
GAAP.
"APPLICABLE LAW" means, each as and to the extent applicable: all laws
(including Environmental Laws), rules, regulations (including proposed,
temporary and final income tax regulations), statutes, treaties, codes,
ordinances, permits, certificates, orders and licenses of any Governmental
Authority, judgments, decrees, injunctions, writs, and orders or like action of
any court, arbitrator or other administrative, judicial or quasi-judicial
tribunal or agency of competent jurisdiction (including those pertaining to
health, safety or the environment (including wetlands) and those pertaining to
the construction, use or occupancy of any Leased Property).
"APPLICABLE MARGIN" shall mean, for any day, (i) with respect to Base
Rate Advances, the applicable rate per annum set forth below under the captions
"Base Rate Advances," and (ii) with respect to LIBOR Advances, the applicable
rate per annum set forth below under the captions "LIBOR Advances," as the case
may be, based upon the ratings by ▇▇▇▇▇'▇ and S&P, respectively, applicable on
such date to the Index Debt:
---------------------- -------------------- --------------------
INDEX DEBT BASE RATE LIBOR ADVANCES
ADVANCES
---------------------- -------------------- --------------------
Category 1 0.00% 0.875%
---------------------- -------------------- --------------------
Category 2 0.00% 1.00%
---------------------- -------------------- --------------------
Category 3 0.25% 1.375%
---------------------- -------------------- --------------------
Category 4 0.75% 1.875%
---------------------- -------------------- --------------------
Category 5 1.25% 2.25%
---------------------- -------------------- --------------------
For purposes of the foregoing, (i) if either ▇▇▇▇▇'▇ or S&P shall not
have in effect a rating for the Index Debt (other than by reason of the
circumstances referred to in the last sentence of this definition), then such
rating agency shall be deemed to have established a rating in Category 5; (ii)
if the ratings established or deemed to have been established by ▇▇▇▇▇'▇ and
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S&P for the Index Debt shall fall within different Categories, the Applicable
Margin shall be based on the higher of the two ratings, PROVIDED that if the
difference in such ratings is more than two notches, then the Category that is
one Category below the highest rating shall apply; and (iii) if the ratings
established or deemed to have been established by ▇▇▇▇▇'▇ and S&P for the Index
Debt shall be changed (other than as a result of a change in the rating system
of ▇▇▇▇▇'▇ or S&P), such change shall be effective as of the earlier of (i) the
date on which it is first announced by the applicable rating agency and (ii) the
date on which ADESA gives notice of such change to the Agent. For the purposes
hereof, ADESA shall be required to notify the Agent of such change immediately
upon gaining knowledge of such change. Each change in the Applicable Margin
shall apply during the period commencing on the effective date of such change
and ending on the date immediately preceding the effective date of the next such
change. If the rating system of ▇▇▇▇▇'▇ or S&P shall change, or if either such
rating agency shall cease to be in the business of rating corporate debt
obligations, ADESA and the Lenders shall negotiate in good faith to amend this
definition to reflect such changed rating system or the unavailability of
ratings from such rating agency and, pending the effectiveness of any such
amendment, the Applicable Margin shall be determined by reference to the rating
most recently in effect prior to such change or cessation.
"APPRAISAL" is defined in Section 3.1 of the Master Agreement.
"APPRAISER" means an MAI appraiser reasonably satisfactory to the
Agent.
"ARCHITECT" means with respect to any Leased Property the architect
engaged in connection with the construction of the related Building, if any, who
may be an employee of the General Contractor for such Leased Property.
"ARCHITECT'S AGREEMENT" means, with respect to any Leased Property, the
architectural services agreement, if any, between the related Lessee and the
related Architect.
"ASSIGNMENT OF LEASE AND RENTS" means, with respect to any Leased
Property, the Assignment of Lease and Rents, dated as of the related Closing
Date, from the Lessor to the Agent, substantially in the form of Exhibit B to
the Master Agreement.
"AUTHORITY" means a development or similar authority of any state,
county or municipality that is an issuer of Bonds.
"AWARD" means any award or payment received by or payable to the Lessor
or a Lessee on account of any Condemnation or Event of Taking (less the actual
costs, fees and expenses, including reasonable attorneys' fees, incurred in the
collection thereof, for which the Person incurring the same shall be reimbursed
from such award or payment).
"B LOAN" means with respect to any Leased Property, the excess of the
principal of the Loans related to such Leased Property over the Recourse
Deficiency Amount for such Leased Property.
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"BANKRUPTCY CODE" means the Bankruptcy Reform Act of 1978, as amended.
"BASE RATE" means (with any change in the Base Rate to be effective as
of the date of change of either of the following rates) the higher of (i) the
rate which the Agent publicly announces from time to time as its prime lending
rate, as in effect from time to time, and (ii) the Federal Funds Rate, as in
effect from time to time, PLUS one-half of one percent (0.50%) per annum. The
Agent's prime lending rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged to customers; the Agent may
make commercial loans or other loans at rates of interest at, above or below the
Agent's prime lending rate. The Base Rate is determined daily.
"BASE RATE ADVANCE" means that portion of the Funded Amount bearing
interest at the Base Rate.
"BASE LEASE TERM" means, with respect to any Leased Property, (a) the
period commencing on the Completion Date for such Leased Property (or the
Closing Date, if such Leased Property is not a Construction Land Interest) and
ending on July 30, 2006 or (b) such shorter period as may result from earlier
termination of the Lease as provided therein.
"BASIC RENT" means, for any Lease Term, the rent payable pursuant to
Section 3.1 of the Lease, determined in accordance with the following: each
installment of Basic Rent payable on any Payment Date shall be in an amount
equal to the sum of (A) the aggregate amount of Lender Basic Rent payable on
such Payment Date, PLUS (B) the aggregate amount of Lessor Basic Rent payable on
such Payment Date.
"BONDS" means industrial revenue or development bonds issued by a
state, county or municipal authority in connection with any Leased Property.
"BUILDING" means, with respect to any Leased Property, (i) the
buildings, structures and improvements located or to be located on the related
Land, along with all fixtures used or useful in connection with the operation of
such Leased Property, including all furnaces, boilers, compressors, elevators,
fittings, pipings, connectives, conduits, ducts, partitions, equipment and
apparatus of every kind and description now or hereafter affixed or attached or
used or useful in connection with the Building, (ii) all equipment and other
personal property financed by the Lessor and/or the Lenders and (iii) all
Alterations (including all restorations, repairs, replacements and rebuilding of
such buildings, improvements and structures) thereto (but in each case excluding
trade fixtures financed other than by the Lessor or the Lenders).
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which banks are required or authorized to be closed for business in Atlanta,
Georgia and, if the applicable Business Day relates to a LIBOR Advance, on which
trading is not carried on by and between banks in the London interbank market.
-6-
"CAPITAL LEASE" shall mean, as applied to any Person, any lease of any
asset by that Person as lessee which, in accordance with GAAP, is or should be
accounted for as a capital lease on the balance sheet of that Person.
"CASUALTY" means an event of damage or casualty relating to all or part
of any Leased Property that does not constitute an Event of Loss.
"CATEGORY 1" means A- or higher by S&P or A3 or higher by ▇▇▇▇▇'▇.
"CATEGORY 2" means BBB+ or higher by S&P or Baa1 or higher by ▇▇▇▇▇'▇
(but not Category 1).
"CATEGORY 3" means BBB or higher by S&P or Baa2 or higher by ▇▇▇▇▇'▇
(but not Category 1 or Category 2).
"CATEGORY 4" means BBB- or higher by S&P or Baa3 or higher by ▇▇▇▇▇'▇
(but not Category 1, Category 2 or Category 3).
"CATEGORY 5" means lower than BBB- by S&P and lower than Baa3 by
▇▇▇▇▇'▇.
"CLAIMS" means liabilities, obligations, damages, losses, demands,
penalties, fines, claims, actions, suits, judgments, proceedings, settlements,
utility charges, costs, expenses and disbursements (including, without
limitation, reasonable legal fees and expenses) of any kind and nature
whatsoever.
"CLOSING DATE" means, with respect to each parcel of Land, the date on
which such Land is acquired by the Lessor pursuant to a Purchase Agreement or
such Land is leased to the Lessor pursuant to a Ground Lease and the initial
Funding occurs with respect to such Land under the Master Agreement.
"CODE" or "TAX CODE" means the Internal Revenue Code of 1986, as
amended from time to time and any successor statute.
"COMMITMENT" means as to each Funding Party, its obligation to make
Fundings as investments in each Leased Property, or to make Loans to the Lessor,
in an aggregate amount not to exceed at any one time outstanding the amount set
forth for such Funding Party on Schedule 2.2 to the Master Agreement (as it may
be adjusted from time to time pursuant to Section 6 of the Master Agreement).
"COMMITMENT PERCENTAGE" means as to any Funding Party, at a particular
time, the percentage of the aggregate Commitments in effect at such time
represented by such Funding Party's Commitment, as such percentage is shown for
such Funding Party on Schedule 2.2 to the Master Agreement (as it may be
adjusted from time to time pursuant to Section 6 of the Master Agreement).
-7-
"COMPLETION DATE" with respect to any Leased Property that is a
Construction Land Interest means the Business Day on which the conditions
specified in Section 3.5 of the Master Agreement have been satisfied or waived
with respect to such Leased Property.
"CONDEMNATION" means any condemnation, requisition, confiscation,
seizure, permanent use or other taking or sale of the use, occupancy or title to
any Leased Property or any part thereof in, by or on account of any actual
eminent domain proceeding or other action by any Governmental Authority or other
Person under the power of eminent domain or any transfer in lieu of or in
anticipation thereof, which in any case does not constitute an Event of Taking.
A Condemnation shall be deemed to have "occurred" on the earliest of the dates
that use is prevented or occupancy or title is taken.
"CONSOLIDATED COMPANIES" shall mean, collectively, ADESA and all of its
Subsidiaries, if any, and "Consolidated Company" shall mean, individually, ADESA
or any of its Subsidiaries, if any.
"CONSOLIDATED LEASE EXPENSE" shall mean rental expense under Operating
Leases of the Consolidated Companies on a consolidated basis for the applicable
period, as determined in accordance with GAAP. Except as expressly provided
otherwise, the applicable period shall be for the four consecutive Fiscal
Quarters ending as of the date of determination.
"CONSTRUCTION" means, with respect to any Leased Property, the
construction of the related Building pursuant to the related Plans and
Specifications.
"CONSTRUCTION AGENCY AGREEMENT" means the Construction Agency
Agreement, dated as of July 30, 2001, between ADESA California and the Lessor.
"CONSTRUCTION AGENT" means ADESA California in its capacity as
construction agent pursuant to the Construction Agency Agreement.
"CONSTRUCTION BUDGET" is defined in Section 2.4 of the Construction
Agency Agreement.
"CONSTRUCTION CONDITIONS" means the conditions set forth in Section 3.5
of the Master Agreement.
"CONSTRUCTION CONTRACT" means, with respect to any Leased Property,
that certain construction contract, if any, between the related Lessee or the
Construction Agent and a General Contractor for the Construction of the related
Building, which contract shall be assigned to the Lessor, and such assignment
shall be consented to by such General Contractor, pursuant to an assignment of
such construction contract substantially in the form of the Security Agreement
and Assignment set forth as Exhibit D to the Master Agreement.
"CONSTRUCTION COSTS" means, with respect to any Leased Property, all
costs of acquisition or ground lease, as applicable, of the related Land, all
closing, development and transaction costs
-8-
related thereto, including fees, costs and expenses of attorneys, architects,
surveyors, engineers, title and other insurance companies, appraisers and
environmental firms, all costs of Construction, and all interest and Yield
accrued on the Funded Amounts related to such Leased Property during the
Construction Term therefor.
"CONSTRUCTION FAILURE EVENT" is defined in Section 5.1 of the
Construction Agency Agreement.
"CONSTRUCTION FAILURE PAYMENT" means, with respect to any Leased
Property and as of any date of calculation, an amount equal to (i) 100% of the
related Raw Land Cost, plus (ii) the excess of (A) 89.9% of the Project Costs
(exclusive of Raw Land Cost) incurred as of the date of calculation, minus (B)
the sum of (1) Force Majeure Losses incurred with respect to such Leased
Property during the Construction Term, and (2) the Present Value of any payments
(other than Unrestricted Indemnification Amounts) paid or payable by the
Construction Agent under the Operative Documents that the Construction Agent is
legally required to pay as of the date of calculation (PROVIDED that such
payments shall not include any amounts that are payable by the Construction
Agent that require the approval or consent but have not been approved or
consented to by the Agent in accordance with Section 3.4 of the Construction
Agency Agreement) that have not been reimbursed as of the date of calculation.
"CONSTRUCTION FORCE MAJEURE DECLARATION" is defined in Section 3.4 of
the Construction Agency Agreement.
"CONSTRUCTION FORCE MAJEURE EVENT" means, with respect to any Leased
Property:
(a) an act of God arising after the related Closing Date, or
(b) any change in any state or local law, regulation or other
legal requirement arising after such Closing Date and relating
to the use of the Land or the construction of a building on
the Land, or
(c) strikes, lockouts, labor troubles, unavailability of materials
(including delays in delivery), riots, insurrections or other
causes beyond a Lessee's control
which prevents the Construction Agent from completing the Construction prior to
the Scheduled Construction Termination Date and which could not have been
avoided or which cannot be remedied by the Construction Agent through the
exercise of all commercially reasonable efforts or the expenditure of funds and,
in the case of (b) above, the existence or potentiality of which was not known
to and could not have been discovered prior to such Closing Date through the
exercise of reasonable due diligence by the Construction Agent.
"CONSTRUCTION LAND INTEREST" means each parcel of Land on which the
related Lessee intends to build a Building and for which the Completion Date has
not yet occurred.
-9-
"CONSTRUCTION TERM" means, with respect to any Leased Property, the
period commencing on the related Closing Date and ending on the related
Construction Term Expiration Date, or such shorter period as may result from
earlier termination of the Lease as provided therein.
"CONSTRUCTION TERM EXPIRATION DATE" means, with respect to any Leased
Property, the earliest of the following:
(a) the related Completion Date,
(b) the date on which the aggregate Funded Amounts equal the
Commitments, and
(c) the related Scheduled Construction Termination Date.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision
of any Securities issued by that Person or any indenture, mortgage, deed of
trust, contract, undertaking, agreement, instrument or other document to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject (including, without limitation, any
restrictive covenant affecting any of the properties of such Person).
"CURRENCY CONTRACTS" shall mean any forward contracts, futures
contracts, foreign exchange contracts, currency swap agreements, and other
similar agreements and arrangements entered into by any Consolidated Company
designed to protect any Consolidated Company against fluctuations in foreign
exchange rates.
"DEED" means, with respect to any Land, a general warranty deed (or, if
the related Title Policy is acceptable to the related Lessee and the Agent, a
special or limited warranty deed, provided that unless consented to by the
related Lessee, the Lessor and the Agent, such deed is not the equivalent of a
quit-claim deed in the applicable jurisdiction), dated on or before the
applicable Closing Date, from the applicable Seller to the Lessor, conveying
such Land.
"DEFAULT" means an Event of Default or a Potential Event of Default.
"DEPRECIATION" shall mean, for any period, depreciation expense of the
Consolidated Companies determined on a consolidated basis in accordance with
GAAP.
"DOCUMENTARY CONVENTIONS" means the provisions set forth in PARAGRAPH F
of this Appendix A.
"EBITDA" shall mean, for any period (which period, for the purposes of
calculating the Total Funded Debt to EBITDA Ratio, shall be four Fiscal
Quarters), an amount equal to the sum of (i) Net Income (Loss) for such period
PLUS (ii) to the extent deducted in determining Net Income (Loss) for such
period, (A) Interest Expense, (B) Income Taxes, (C) Depreciation, (D)
Amortization and (E) all other non-cash charges determined on a consolidated
basis in
-10-
accordance with GAAP, in each case for such period; PROVIDED, HOWEVER, that with
respect to any Person, or substantially all of the assets of a Person, that
becomes a Subsidiary of, or was merged with or consolidated into, or acquired
by, a Consolidated Company in accordance with the terms of the Master Agreement
during such period, "EBITDA" shall also include the EBITDA of such Person or the
EBITDA attributable to such assets during such period as if such Person or
assets were acquired as of the first day of such period.
"ENGINEER" means, with respect to any Leased Property, the engineer
engaged in connection with the construction of the related Building, if any, who
may be an employee of the General Contractor for such Leased Property.
"ENGINEER'S AGREEMENT" means, with respect to any Leased Property the
engineering services agreement, if any, between the Construction Agent, in its
capacity as agent for Lessor, and the related Engineer.
"ENVIRONMENTAL AUDIT" means, with respect to each parcel of Land, a
Phase I Environmental Assessment and, if recommended in such Phase I
Environmental Assessment, a Phase II Environmental Assessment, dated no more
than six months prior to the related Closing Date, by an environmental services
firm satisfactory to the Agent.
"ENVIRONMENTAL LAWS" means and include the Resource Conservation and
Recovery Act of 1976, (RCRA) 42 U.S.C. Sections 6901-6987, as amended by the
Hazardous and Solid Waste Amendments of 1984, the Comprehensive Environmental
Response, Compensation and Liability Act, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. Sections 9601-9657, (CERCLA), the
Hazardous Materials Transportation Act of 1975, 49 U.S.C. Sections 1801-1812,
the Toxic Substances Control Act, 15 U.S.C. Sections 2601-2671, the Clean Air
Act, 42 U.S.C. Sections 7401 et seq., the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. Sections 136 et seq., and all similar federal, state
and local environmental laws, ordinances, rules, orders, statutes, decrees,
judgments, injunctions, codes and regulations, and any other federal, state or
local laws, ordinances, rules, codes and regulations, and any other federal,
state or local laws, ordinances, rules, codes and regulations relating to the
environment, human health or natural resources or the regulation or control of
or imposing liability or standards of conduct concerning human health, the
environment, Hazardous Materials or the clean-up or other remediation of any
Leased Property, or any part thereof, as any of the foregoing may have been from
time to time amended, supplemented or supplanted.
"ENVIRONMENTAL PERMITS" means all permits, licenses, authorizations,
certificates and approvals of Governmental Authorities required by Environmental
Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time and any successor statute.
"ERISA AFFILIATE" shall mean any corporation or trade or business that
is a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as
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ADESA or is under common control (within the meaning of Section 414(c) of the
Code) with ADESA.
"EVENT OF DEFAULT" means any event or condition designated as an "Event
of Default" in Article XII of the Lease.
"EVENT OF LOSS" is defined in Section 10.1 of the Lease.
"EVENT OF TAKING" is defined in Section 10.2 of the Lease.
"FAIR MARKET SALES VALUE" means, with respect to any Leased Property or
any portion thereof, the fair market sales value as determined by an independent
appraiser chosen by the Agent, and, unless an Event of Default has occurred,
reasonably acceptable to the related Lessee, that would be obtained in an
arm's-length transaction between an informed and willing buyer (other than a
lessee currently in possession) and an informed and willing seller, under no
compulsion, respectively, to buy or sell and neither of which is related to the
Lessor or the related Lessee, for the purchase of such Leased Property. Such
fair market sales value shall be calculated as the value for such Leased
Property, assuming, in the determination of such fair market sales value, that
such Leased Property is in the condition and repair required to be maintained by
the terms of the Lease (unless such fair market sales value is being determined
for purposes of Section 13.1 of the Lease and except as otherwise specifically
provided in the Lease or the Master Agreement, in which case this assumption
shall not be made).
"FEDERAL FUNDS RATE" means for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with member banks of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of Atlanta, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent.
"FEE PERCENTAGE" shall mean, for any day, the applicable rate per annum
set forth below based upon the ratings by ▇▇▇▇▇'▇ and S&P, respectively,
applicable on such date to the Index Debt:
----------------------------- --------------------------
INDEX DEBT FEE PERCENTAGE
----------------------------- --------------------------
Category 1 0.125%
----------------------------- --------------------------
Category 2 0.125%
----------------------------- --------------------------
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----------------------------- --------------------------
Category 3 0.175%
----------------------------- --------------------------
Category 4 0.25%
--------------------------------------------------------
Category 5 0.50%
----------------------------- --------------------------
For purposes of the foregoing, (i) if either ▇▇▇▇▇'▇ or S&P shall not
have in effect a rating for the Index Debt (other than by reason of the
circumstances referred to in the last sentence of this definition), then such
rating agency shall be deemed to have established a rating in Category 5; (ii)
if the ratings established or deemed to have been established by ▇▇▇▇▇'▇ and S&P
for the Index Debt shall fall within different Categories, the Fee Percentage
shall be based on the higher of the two ratings, PROVIDED that if the difference
in such ratings is more than two notches, then the Category that is one Category
below the highest rating shall apply; and (iii) if the ratings established or
deemed to have been established by ▇▇▇▇▇'▇ and S&P for the Index Debt shall be
changed (other than as a result of a change in the rating system of ▇▇▇▇▇'▇ or
S&P), such change shall be effective as of the earlier of (i) the date on which
it is first announced by the applicable rating agency and (ii) the date on which
ADESA gives notice of such change to the Agent. For the purposes hereof, ADESA
shall be required to notify the Agent of such change immediately upon gaining
knowledge of such change. Each change in the Fee Percentage shall apply during
the period commencing on the effective date of such change and ending on the
date immediately preceding the effective date of the next such change. If the
rating system of ▇▇▇▇▇'▇ or S&P shall change, or if either such rating agency
shall cease to be in the business of rating corporate debt obligations, ADESA
and the Lenders shall negotiate in good faith to amend this definition to
reflect such changed rating system or the unavailability of ratings from such
rating agency and, pending the effectiveness of any such amendment, the Fee
Percentage shall be determined by reference to the rating most recently in
effect prior to such change or cessation.
"FINAL RENT PAYMENT DATE" with respect to any Leased Property is
defined in Section 13.1(e) of the Lease.
"FINANCIAL OFFICER" shall mean the chief financial officer, principal
accounting officer, treasurer or controller of ADESA whose signature and
incumbency shall have been certified to the Agent and the Funding Parties from
time to time. Unless otherwise specified, all references to a Financial Officer
herein shall mean a Financial Officer of ADESA.
"FISCAL QUARTER" shall mean a fiscal quarter of ADESA.
"FIXED CHARGE COVERAGE RATIO" shall mean, as of any date of
determination, the ratio of (a) the sum of (i) EBITDA measured for the four
consecutive Fiscal Quarters ending on such date, or if such date of
determination is not the last day of any Fiscal Quarter, then ending immediately
prior to such date of determination, plus (ii) Consolidated Lease Expense, to
(b) the sum of (i) the current maturities of all Long Term Indebtedness
scheduled during the four
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consecutive Fiscal Quarters immediately following the Fiscal Quarter in which
such date occurs, PLUS (ii) Consolidated Lease Expense, PLUS (iii) Interest
Expense measured for the four consecutive Fiscal Quarters ending on such date,
or if such date of determination is not the last day of any Fiscal Quarter, then
ending immediately prior to such date of determination.
"FORCE MAJEURE LOSSES" means, with respect to any Leased Property and
as of any date of calculation, the loss incurred by the Lessor in connection
with a Construction Force Majeure Event with respect to which a Construction
Force Majeure Declaration has been made, measured by the sum of (i) the lower of
(A) the insurance proceeds paid with respect thereto plus the related deductible
amount and (B) the reduction in Fair Market Sales Value of the Leased Property
as a result of the Construction Force Majeure Event as set forth in an
Appraisal, plus (ii) other direct costs incurred by the Lessor or by the
Construction Agent that the Lessor has consented to in accordance with Section
3.4 of the Construction Agency Agreement in connection with such Construction
Force Majeure Event to the extent such costs are not covered by insurance;
PROVIDED that insurance proceeds shall be used in such calculation only to the
extent the event giving rise to the loss can be remediated for an amount equal
to the resulting insurance proceeds plus the deductible; PROVIDED, FURTHER, that
it is expressly understood and agreed that Force Majeure Losses shall not
include the costs of repairing damage occasioned not as a result of the
Construction Force Majeure Event, but as a result of the Construction Agent's
failure to take all reasonable steps to minimize the damages caused by such
Construction Force Majeure Event.
"FUNDED AMOUNT" means, as to the Lessor, the Lessor's Invested Amounts,
and, as to each Lender, the outstanding principal amount of such Lender's Loans.
"FUNDING" means any funding by the Funding Parties pursuant to Section
2.2 of the Master Agreement.
"FUNDING DATE" means each Closing Date and each other date on which a
Funding occurs under Section 2 of the Master Agreement.
"FUNDING PARTIES" means the Lessor and the Lenders, collectively.
"FUNDING PARTY BALANCE" means, with respect to any Leased Property, (i)
for the Lessor as of any date of determination, an amount equal to the sum of
the outstanding related Lessor's Invested Amount, all accrued and unpaid Yield
on such outstanding related Lessor's Invested Amount, all unpaid related fees
owing to the Lessor under the Operative Documents, and all other related amounts
owing to the Lessor by the Lessees under the Operative Documents, and (ii) for
each Lender as of any date of determination, an amount equal to the sum of the
outstanding principal of such Lender's related Loans, all accrued and unpaid
interest thereon, all unpaid related fees owing to such Lender under the
Operative Documents, and all other related amounts owing to such Lender by the
Lessees under the Operative Documents.
"FUNDING REQUEST" is defined in Section 2.2 of the Master Agreement.
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"FUNDING TERMINATION DATE" means the earliest of (i) the date that is
two years after the Initial Closing Date and (ii) the termination of the
Commitments pursuant to Section 5.2 of the Loan Agreement.
"FUTURE VALUE" means, with respect to any component of the Recourse
Deficiency Percentage, the accreted value of such component as of the end of the
Base Lease Term, that is giving effect to the time value of money using the
Implicit Rate.
"GAAP" shall mean generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination.
"GENERAL CONTRACTOR" with respect to any Leased Property means the
general contractor therefor selected by the Construction Agent.
"GENERAL PARTNER" means Atlantic Financial Managers, Inc., a Texas
corporation.
"GOVERNMENTAL ACTION" means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgments, decrees,
licenses, exemptions, publications, filings, notices to and declarations of or
with, or required by, any Governmental Authority, or required by any Applicable
Law and shall include, without limitation, all citations, environmental and
operating permits and licenses that are required for the use, occupancy, zoning
and operation of any Leased Property.
"GOVERNMENTAL AUTHORITY" shall include the country, the state, county,
city and political subdivisions in which any Person or such Person's Property is
located or which exercises valid jurisdiction over any such Person or such
Person's Property, and any court, agency, department, commission, board, bureau
or instrumentality of any of them, including monetary authorities which
exercises valid jurisdiction over any such Person or such Person's Property.
Unless otherwise specified, all references to Governmental Authority herein
shall mean a Governmental Authority having jurisdiction over, where applicable,
ADESA, the Subsidiaries or any of their Property or the Agent or any Funding
Party.
"GOVERNMENTAL REQUIREMENT" shall mean any law, statute, code,
ordinance, order, determination, rule, regulation, judgment, decree, injunction,
franchise, permit, certificate, license, authorization or other directive or
requirement, including Environmental Laws and occupational, safety and health
standards or controls, of any Governmental Authority.
"GROUND LEASE" means, with respect to any Land, the ground lease
between the related Ground Lessor and the Lessor pursuant to which a leasehold
estate is conveyed in the Land to the Lessor.
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"GROUND LESSOR" means, as to any Land, the ground lessor of such Land.
"GUARANTOR" means the Parent, in its capacity as guarantor under the
Guaranty Agreement to which it is a party and ADESA, in its capacity as
guarantor under the Guaranty Agreement to which it is a party.
"GUARANTY" shall mean any contractual obligation, contingent or
otherwise, of a Person with respect to any Indebtedness or other obligation or
liability of another Person, including without limitation, any such
Indebtedness, obligation or liability directly or indirectly guaranteed,
endorsed, co-made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly liable,
including contractual obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase, or otherwise acquire such Indebtedness,
obligation or liability or any security therefor, or any agreement to provide
funds for the payment or discharge thereof (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income, or other financial condition, or to make any
payment other than for value received. The amount of any Guaranty shall be
deemed to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which guaranty is made or, if not so stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"GUARANTY AGREEMENT" means each of the Guaranties, dated as of July 30,
2001, by the Parent and ADESA, respectively, in favor of the Funding Parties.
"HAZARDOUS MATERIAL" means any substance, waste or material which is
toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous, including petroleum, crude oil or any fraction
thereof, petroleum derivatives, by products and other hydrocarbons, or which is
or becomes regulated under any Environmental Law by any Governmental Authority,
including any agency, department, commission, board or instrumentality of the
United States, any jurisdiction in which a Leased Property is located or any
political subdivision thereof and also including, without limitation, asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls ("PCBs") and radon
gas.
"IDB DOCUMENTATION" means the Bonds, each IDB Lease and all other
agreements, documents, contracts and instruments entered into in connection with
any Bonds or IDB Property.
"IDB PROPERTY" means each Leased Property that is the subject of Bonds.
"IDB LEASE" means a lease between the Lessor and an Authority with
respect to a Leased Property.
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"IMPLICIT RATE" means the weighted average of the Lessor Rate and the
rate at which interest on the Lenders' Loans is capitalized, each as in effect
on the date of calculation based on the outstanding Funded Amounts.
"INCOME TAXES" shall mean, for any period, any provision made by any of
the Consolidated Companies in respect of such period for income taxes or other
taxes payable by any Consolidated Company in respect of its income or profits.
"INDEBTEDNESS" of any Person shall mean, without duplication (a) all
obligations of such Person for borrowed money; (b) all obligations of such
person evidenced by bonds, debentures, notes, drafts, bankers' acceptances or
other similar instruments, (c) all obligations of such Person to pay the
deferred purchase price of property or services (other than trade accounts
payable incurred in the ordinary course of business that are not past due by
more than ninety (90) days), (d) all obligations of such Person under leases
required to be capitalized under GAAP, (e) all obligations or liabilities of
others secured by any Lien upon property owned by such Person whether or not
such obligation or liability is assumed, (f) all obligations of such Person
under Interest Rate Contracts or Currency Contracts, (g) all obligations of such
Person in respect of letters of credit issued for its account (including all
contingent reimbursement obligations, whether or not any draws under such
letters of credit have been presented for payment) and all drafts, bankers
acceptances or similar instruments issued in connection therewith, (h) all
Guaranties of such Person of the type of Indebtedness described above, but
excluding all items of shareholders' equity or capital stock or surplus or
general contingency or deferred tax reserves), (i) the purchase price for any
asset leased to such Person pursuant to a Synthetic Lease that such Person would
have to pay to acquire the asset at the end of the term of the Synthetic Lease,
and (j) all other obligations and liabilities of such Person that are required
by GAAP to be shown as liabilities on a balance sheet for such Person (other
than reserves required under GAAP).
"INDEMNITEE" means the Agent (in its individual capacity and in its
capacity as Agent), each Lender and the Lessor, and their respective Affiliates,
successors, permitted assigns, permitted transferees, employees, officers,
directors and agents; PROVIDED, HOWEVER, that in no event shall any Lessee or
the Guarantor be an Indemnitee.
"INDEX DEBT" means senior, unsecured, long-term indebtedness for
borrowed money of the Parent that is not guaranteed by any other Person or
subject to any other credit enhancement.
"INITIAL CLOSING DATE" means the Closing Date for the first Leased
Property acquired by the Lessor.
"INTEREST EXPENSE" shall mean, for any period, all interest expense of
the Consolidated Companies (including without limitation, interest expense
attributable to capitalized leases in accordance with GAAP, all capitalized
interest, all commissions, discounts and other fees and charges owed with
respect to bankers acceptance financing, and total interest expense (whether
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shown as interest expense or as loss and expenses on sale of receivables) under
a receivables purchase facility) determined on a consolidated basis in
accordance with GAAP.
"INTEREST RATE CONTRACTS" shall mean any forward contracts, future
contracts, interest rate exchange agreements, interest rate cap agreements,
interest rate collar agreements, and other similar agreements and arrangements
entered into by any Consolidated Company designed to protect any Consolidated
Company against fluctuations in interest rates.
"INVESTMENT" in any Person shall mean: (a) the acquisition of capital
stock, bonds, notes, debentures, partnership, or other ownership interests,
other securities, or Indebtedness of such Person; (b) any deposit with, or loan
or other extension of credit to, such Person; (c) any Guarantee of Indebtedness
or other liabilities of such Person; and (d) any amount committed to be lent to
such Person.
"KNOWLEDGE" means the actual knowledge of any executive officer of the
related Lessee, or of any other officer or employee of the related Lessee that
is primarily responsible for the construction, operation or management of the
related Leased Property or the Transaction.
"JOINDER AGREEMENT" means an agreement substantially in the form of
Exhibit E to the Master Agreement pursuant to which a Subsidiary of ADESA shall
become a Lessee.
"LAND" means the land described in Appendix B to the related Lease
Supplement.
"LEASE" means the Master Lease Agreement, dated as of July 30, 2001,
among the Lessees and the Lessor, together with each Lease Supplement.
"LEASE BALANCE" means, with respect to all of the Leased Properties, as
of any date of determination, an amount equal to the aggregate sum of the
outstanding Funded Amounts of all Funding Parties, all accrued and unpaid
interest on the Loans, all accrued and unpaid Yield on the Lessor's Invested
Amounts, all unpaid fees owing to the Funding Parties under the Operative
Documents, and all other amounts owing to the Funding Parties by any Lessee
under the Operative Documents.
"LEASE SUPPLEMENT" is defined in Section 2.2 of the Lease.
"LEASE TERM" with respect to any (i) Leased Property that is a
Construction Land Interest, means the period from the Closing Date for such
Leased Property to the Completion Date for such Leased Property (or such shorter
period as may result from earlier termination of the Lease as provided therein)
PLUS the Base Lease Term therefor and (ii) any other Leased Property, the Base
Lease Term therefor.
"LEASE TERMINATION DATE" means the last day of the Lease Term.
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"LEASED PROPERTY" means Land and the related Building(s). For purposes
of the Lease, "Leased Property" means the Land identified in a Lease Supplement
to the Lease and the Buildings related thereto, unless the context provides
otherwise.
"LEASED PROPERTY BALANCE" means, with respect to any Leased Property,
as of any date of determination, an amount equal to the aggregate sum of the
outstanding related Funded Amounts of all Funding Parties, all accrued and
unpaid interest on the related Loans, all accrued and unpaid Yield on the
related Lessor's Invested Amounts, all related unpaid fees owing to the Funding
Parties under the Operative Documents, and all other amounts owing to the
Funding Parties by the related Lessee under the Operative Documents.
"LENDER BASIC RENT" means, for any Rent Period under the Lease, the
aggregate amount of interest accrued on the Loans pursuant to Section 2.4 of the
Loan Agreement during such Rent Period.
"LENDERS" means such financial institutions as are, or who may
hereafter become, parties to the Loan Agreement as lenders to the Lessor.
"LENDING OFFICE" for each Lender means the office such Lender
designates in writing from time to time to ADESA and the Agent.
"LESSEE" is defined in the preamble to the Master Agreement. The
"related" Lessee with respect to any Leased Property means the Lessee that is a
party to the Lease Supplement for such Leased Property or that is leasing such
Leased Property, as the case may be.
"LESSOR" is defined in the preamble to the Master Agreement.
"LESSOR BASIC RENT" means, for any Rent Period, the aggregate amount of
Yield accrued and unpaid on the Lessor's Invested Amounts under Section 2.3(a)
of the Master Agreement during such Rent Period.
"LESSOR LIENS" means Liens on or against any Leased Property, the
Lease, any other Operative Document or any payment of Rent (a) which result from
any act or omission of, or any Claim against, the Lessor, or any Person claiming
through the Lessor unrelated to the transactions contemplated by the Operative
Documents or from Lessor's failure to perform as required under the Operative
Documents or (b) which result from any Tax owed by the Lessor, or any Person
claiming through the Lessor, except any Tax for which a Lessee is obligated to
indemnify (including, without limitation, in the foregoing exception, any
assessments with respect to any Leased Property noted on the related Title
Policy or assessed in connection with any construction or development by a
Lessee or the Construction Agent).
"LESSOR RATE" is defined in the Lessor Side Letter.
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"LESSOR SIDE LETTER" means the letter agreement, dated as of July 30,
2001, between ADESA and the Lessor.
"LESSOR'S INVESTED AMOUNT" means the amounts funded by the Lessor
pursuant to Section 2 of the Master Agreement that are not proceeds of Loans by
a Lender, as such amount may be increased during the related Construction Term
pursuant to Section 2.3(c) of the Master Agreement.
"LIBOR" means, for any Rent Period, with respect to LIBOR Advances the
offered rate for deposits in U.S. Dollars, for a period comparable to the Rent
Period and in an amount comparable to such Advances, appearing on the Telerate
Screen Page 3750 as of 11:00 A.M. (London, England time) on the day that is two
London Business Days prior to the first day of the Rent Period. If two or more
of such rates appear on the Telerate Screen Page 3750, the rate for that Rent
Period shall be the arithmetic mean of such rates. If the foregoing rate is
unavailable from the Telerate Screen for any reason, then such rate shall be
determined by the Agent from the Reuters Screen LIBO Page or, if such rate is
also unavailable on such service, then on any other interest rate reporting
service of recognized standing designated in writing by the Agent to ADESA and
the other Lenders; in any such case rounded, if necessary, to the next higher
1/100 of 1.0%, if the rate is not such a multiple.
"LIBOR ADVANCE" means that portion of the Funded Amount bearing
interest at a rate based on the Adjusted LIBO Rate.
"LIEN" shall mean any mortgage, pledge, security interest, lien,
charge, hypothecation, assignment, deposit arrangement, title retention,
preferential right, trust or other arrangement having the practical effect of
the foregoing and shall include the interest of a vendor or lessor under any
conditional sale agreement, capitalized lease or other title retention
agreement.
"LIMITED EVENT OF DEFAULT" means an Event of Default under PARAGRAPH
(e), (j) or (k) of Article XII of the Lease, solely if the breach of the related
covenant, representation or warranty was based on a subjective interpretation of
the term "diligently," "Material Adverse Effect," "material" or "diligently."
"LOAN" shall have the meaning specified in Section 2.1 of the Loan
Agreement.
"LOAN AGREEMENT" means the Loan Agreement, dated as of July 30, 2001,
among the Lessor, the Agent and the Lenders.
"LOAN DOCUMENTS" means the Loan Agreement, the Note, the Assignments of
Lease and Rents, the Mortgages and all documents and instruments executed and
delivered in connection with each of the foregoing.
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"LOAN EVENT OF DEFAULT" means any of the events specified in Section
5.1 of the Loan Agreement, PROVIDED that any requirement for the giving of
notice, the lapse of time, or both, or any other condition, event or act has
been satisfied.
"LOAN POTENTIAL EVENT OF DEFAULT" means any event, condition or failure
which, with notice or lapse of time or both, would become a Loan Event of
Default.
"LONG TERM INDEBTEDNESS" shall mean (a) all Indebtedness which at the
time of incurrence or issuance, has a final maturity or term greater than one
year or which is renewable at the option of the obligor thereof for a term of
greater than one year from the date of original incurrence or issuance or (b)
Indebtedness which at the time of incurrence or issuance has a final maturity or
term of less than one year and which is intended to be repaid out of proceeds of
other Long Term Indebtedness.
"LOSS PROCEEDS" is defined in Section 10.6 of the Lease.
"MARGIN REGULATIONS" means Regulations T, U and X of the Board of
Governors of the Federal Reserve System, as the same may be in effect from time
to time.
"MARGIN STOCK" shall have the meaning set forth in Regulation U of the
Board of Governors of the Federal Reserve System as the same may be amended or
interpreted from time to time.
"MASTER AGREEMENT" means the Master Agreement, dated as of July 30,
2001, among ADESA, as a Guarantor, the Lessees, the Lessor, the Agent and the
Lenders.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, assets, operations or condition, financial or otherwise, of ADESA and
its Subsidiaries taken as a whole, or of the Parent, (b) the ability of the
Parent, ADESA or any Lessee to perform any of its respective obligations under
the Operative Documents to which it is a party, (c) the rights of or benefits
available to the Funding Parties under the Operative Documents, (d) the value,
utility or useful life of any Leased Property or (e) the priority, perfection or
status of the Agent's or any Funding Party's interest in any Leased Property or
in the Lease, the Guaranty or the Construction Agency Agreement.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"MORTGAGE" means, with respect to any Leased Property, that certain
mortgage, deed of trust or security deed, dated as of the related Closing Date,
by the Lessor to the Agent, substantially in the form of Exhibit D-1 or D-2, as
applicable, attached to the Master Agreement, with such modifications as are
satisfactory to the Lessor and the Agent in conformity with Applicable Law to
assure customary remedies in favor of the Agent in the jurisdiction where the
Leased Property is located.
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"MULTIEMPLOYER PLAN" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by ADESA or any
ERISA Affiliate and which is covered by Title IV of ERISA.
"NET INCOME (LOSS)" shall mean, for any period, the net income (or
loss), after deducting all operating expenses, provisions for taxes and reserves
(including reserves for deferred income tax) and all other proper deductions, of
the Consolidated Companies for such period (taken as a single accounting period)
determined on a consolidated basis in conformity with GAAP, including any income
or loss of any Person accrued prior to the date such Person becomes a Subsidiary
of any Consolidated Company or is merged into or consolidated with any
Consolidated Company or all or substantially all of such Person's assets are
acquired by any Consolidated Company, but excluding therefrom (to the extent
otherwise included therein) (i) any extraordinary items, and (ii) any equity
interest of the Consolidated Companies in the unremitted earnings of any Person
that is not a Subsidiary.
"NET WORTH" shall mean, as of any date, total stockholders' equity of
ADESA and its Subsidiaries determined on a consolidated basis.
"NOTE" means the note issued by the Lessor under the Loan Agreement,
and any and all notes issued in replacement or exchange therefor in accordance
with the provisions thereof.
"OBLIGATIONS" means all indebtedness (whether principal, interest, fees
or otherwise), obligations and liabilities of each Guarantor and each Lessee to
the Funding Parties (including without limitation all extensions, renewals,
modifications, rearrangements, restructures, replacements and refinancings
thereof, whether or not the same involve modifications to interest rates or
other payment terms of such indebtedness, obligations and liabilities), whether
arising under any of the Operative Documents or otherwise, and whether now
existing or hereafter created, absolute or contingent, direct or indirect, joint
or several, secured or unsecured, due or not due, contractual or tortious,
liquidated or unliquidated, arising by operation of law or otherwise, or
acquired by Funding Parties outright, conditionally or as collateral security
from another, including but not limited to the obligation of each Guarantor and
each Lessee to repay future advances by the Funding Parties, whether or not made
pursuant to commitment and whether or not presently contemplated by each
Guarantor or any Lessee and the Funding Parties under the Operative Documents.
"OBLIGOR" means each Lessee, the Construction Agent and each Guarantor.
"OFFICER'S CERTIFICATE" of a Person means a certificate signed by the
Chairman of the Board, the President, any Vice President, any Senior Vice
President, any Administrative Vice President, the Treasurer, any Assistant
Treasurer, the Controller or the Secretary of such Person, signing alone.
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"OPERATING LEASE" shall mean, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the lessee at
any time) of any asset which is not a Capital Lease other than any such lease in
which that Person is the lessor.
"OPERATIVE DOCUMENTS" means the Master Agreement, the Guaranty
Agreements, the Purchase Agreements, the Deeds, the Lease, each Security
Agreement and Assignment, the Loan Agreement, the Assignments of Lease and
Rents, the Mortgages, the Note, the Ground Leases, the Joinder Agreements, the
IDB Documentation, the Construction Agency Agreement, and the other documents
delivered in connection with the transactions contemplated by the Master
Agreement.
"OVERDUE RATE" means the lesser of (a) the highest interest rate
permitted by Applicable Law and (b) an interest rate per annum (calculated on
the basis of a 365-day (or 366-day, if appropriate) year equal to 2.0% above the
Base Rate in effect from time to time or, in the case of Yield, 2% above the
Lessor Rate.
"PARENT" means ALLETE Inc., a Minnesota corporation.
"PARTIAL PURCHASE OPTION" is defined in Section 14.1(b) of the Lease.
"PARTNERSHIP AGREEMENT" means the Agreement of Limited Partnership of
Atlantic Financial Group, Ltd., dated as of February 28, 1996, among the General
Partner and the persons listed on Schedule A thereto as limited partners.
"PAYMENT DATE" means the last day of each Rent Period.
"PBGC" means the Pension Benefit Guaranty Corporation, or any entity
succeeding to any or all of its functions.
"PERMITTED INVESTMENTS" means: (a) direct obligations of the United
States of America, or of any agency thereof, or obligations guaranteed as to
principal and interest by the United States of America, or of any agency
thereof, in either case maturing not more than 90 days from the date of
acquisition thereof; (b) certificates of deposit issued by any Lender or by any
bank or trust company organized under the laws of the United States of America
or any state thereof whose short-term unsecured debt is rated A-1 or better or
P-1 by S&P or Moody's, respectively, and having capital, surplus and undivided
profits of at least $500,000,000, maturing not more than 90 days from the date
of acquisition thereof; (c) commercial paper rated A-1 or better or P-1 by S&P
or Moody's, respectively, maturing not more than one month from the date of
acquisition thereof; (d) commercial paper of any Lender (or any Affiliate
thereof located in the United States of America) that is rated A-1 or better or
P-1 by S&P or Moody's, respectively, maturing not more than one month from the
date of acquisition thereof; (e) repurchase agreements entered into with any
Lender or with any bank or trust company satisfying the conditions of CLAUSE (b)
hereof that is secured by any obligation of the type described in CLAUSES
-23-
(a) through (d) of this definition; and (f) money market funds acceptable to the
Required Lenders.
"PERMITTED LEASE BALANCE" means, with respect to any Leased Property
and calculated as of any date, (i) the Leased Property Balance with respect to
such Leased Property as of the date of such calculation, MINUS (ii) Force
Majeure Losses with respect to such Leased Property, PLUS (iii) the amount of
insurance proceeds applied towards the remediation of such Force Majeure Losses.
For purposes of this definition, Leased Property means the Raw Land and/or the
Building subject to a particular Lease Supplement.
"PERMITTED LIEN" means: (a) Liens for Taxes not assessed or, if
assessed, not yet due and payable, or are being contested in good faith by
appropriate proceedings; (b) repairman's, mechanic's, carrier's or other similar
Liens arising in the ordinary course of business or by operation of law securing
obligations that are not more than 30 days overdue, which have been bonded or
which are being contested in good faith by appropriate proceedings; (c) Lessor
Liens; (d) Liens of subleases permitted by the Lease; (e) Liens arising out of
judgments or awards with respect to which appeals or other proceedings for
review are being prosecuted in good faith and for which adequate provisions have
been made; (f) easements, rights of way and other encumbrances on title to real
property to the extent permitted by the Lease; and (g) Liens described on the
Title Policy delivered in connection with the related Leased Property on the
Closing Date therefor, but only if, in the case of Liens being contested as
described in CLAUSE (a), (b) or (e) above, (i) adequate reserves have been
provided by the related Lessee for the payment of the Taxes or other
obligations; and (ii) such proceedings, or the continued existence of such Lien,
do not give rise to any substantial likelihood of the sale, forfeiture or other
loss of the related Leased Property or any interests therein, or any likelihood
of criminal liability on the part of the Agent or any Funding Party.
"PERSON" means an individual, corporation, company, partnership,
limited liability company, joint venture, voluntary association, trust,
unincorporated organization or government or any agency, instrumentality or
political subdivision thereof or any other form of entity.
"PLAN" shall mean an "employee pension benefit plan" within the meaning
of Section 3(2) of ERISA other than a Multiemployer Plan.
"PLANS AND SPECIFICATIONS" means with respect to any Building the final
plans and specifications for such Building, which may be standard forms for
buildings of that type, and, if applicable, referred to by the Appraiser in the
Appraisal, as such Plans and Specifications may be hereafter amended,
supplemented or otherwise modified from time to time.
"POTENTIAL EVENT OF DEFAULT" means any event, condition or failure
which, with notice or lapse of time or both, would become an Event of Default.
"PRESENT VALUE" with respect to any payment to be made in the future
means the amount of such payment, discounted to present value as of the date of
calculation employing a discount
-24-
rate equal to the Implicit Rate, and, with respect to any payment made prior to
the date of such calculation means the amount of such payment, plus interest on
such amount calculated at the Implicit Rate for such Leased Property.
"PROJECT COSTS" means, as of any date and with respect to any Leased
Property, those portions, in the aggregate, of the Funded Amount for such Leased
Property as of such date that, when expended by the Lessor, were, or would have
been, capitalized by Lessor in accordance with GAAP. For purposes of calculating
the Construction Failure Payment, "Project Costs" shall also include other costs
related to Construction paid to third parties other than the Funding Parties as
described in EITF 97-10. For purposes of calculating the Recourse Deficiency
Percentage, as used in this definition, Leased Property means the Raw Land
and/or the Building subject to a particular Lease Supplement.
"PROPERTY" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"PURCHASE AGREEMENT" means with respect to any Land, the purchase
agreement or option agreement, as the case may be, with the Seller for the
conveyance of such Land to the Lessor.
"PURCHASE OPTION" is defined in Section 14.1(a) of the Lease.
"QUARTERLY PAYMENT DATE" means the last Business Day of each March,
June, September and December of each year.
"RATING AGENCY" means either Moody's or S&P.
"RAW LAND" means, with respect to any Leased Property, the parcel of
land described in the related Lease Supplement, excluding any improvements
thereon.
"RAW LAND COST" means, with respect to any Leased Property, the
acquisition cost of the Raw Land.
"RECOURSE DEFICIENCY AMOUNT" means, with respect to any Leased
Property, calculated as of the Completion Date, in the case of Leased Properties
that shall have been subject to the Construction Agency Agreement, or the
Closing Date, in the case of all other Leased Properties, for such Leased
Property, the result of (A) the Recourse Deficiency Percentage times (B) the
Project Costs for such Leased Property; PROVIDED, HOWEVER, that, if Raw Land is
leased pursuant to a separate Lease Supplement, the Recourse Deficiency Amount
with respect to such Leased Property shall equal the Raw Land Cost with respect
to such Raw Land. For purposes of this definition, Leased Property means the Raw
Land and/or the Building subject to a particular Lease Supplement.
"RECOURSE DEFICIENCY PERCENTAGE" means, with respect to any Leased
Property, the percentage set forth in the related Lease Supplement calculated as
follows and expressed as a
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percentage: (a) the Future Value of: ((i) 89.9% of (x) the estimated Project
Cost (estimated as of the Closing Date for such Leased Property based upon the
Construction Budget as of such date) or (y) the actual Project Cost in the case
of Leased Properties not subject to the Construction Agency Agreement, less (ii)
the Present Value, as of such date, of any "minimum lease payments" with respect
to such Leased Property as such term is used in Section 7(d) of Financial
Accounting Standard No. 13 (excluding for purposes of this calculation the
Recourse Deficiency Amount)), divided by (b) such estimated or actual Project
Cost, as the case may be.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be amended or
supplemented from time to time.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REGULATIONS" means the income tax regulations promulgated from time to
time under and pursuant to the Code.
"RELEASE" means the release, deposit, disposal or leak of any Hazardous
Material into or upon or under any land or water or air, or otherwise into the
environment, including, without limitation, by means of burial, disposal,
discharge, emission, injection, spillage, leakage, seepage, leaching, dumping,
pumping, pouring, escaping, emptying, placement and the like.
"RELEASE DATE" means, with respect to any Leased Property, the earlier
of (i) the date that the Lease Balance has been paid in full, and (ii) the date
on which the Agent gives written notice to the Lessor that the Lenders release
any and all interest they may have in such Leased Property, and all proceeds
thereof, and any rights to direct, consent or deny consent to any action by the
Lessor with respect to such Leased Property.
"REMARKETING OPTION" is defined in Section 14.6 of the Lease.
"RENT" means Basic Rent and Supplemental Rent, collectively.
"RENT PERIOD" means, in the case of Base Rate Advances, the period
from, and including, a Quarterly Payment Date to, but excluding, the next
succeeding Quarterly Payment Date and (y) in the case of LIBOR Advances:
(1) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such
LIBOR Advance and ending one, two or three months thereafter,
as selected by ADESA in its Funding Notice or Payment Date
Notice, as the case may be, given with respect thereto; and
(2) thereafter, each period commencing on the last day of the next
preceding Rent Period applicable to such LIBOR Advance and
ending one, two or three months
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thereafter, as selected by ADESA by irrevocable notice to the
Agent in its related Payment Date Notice;
PROVIDED that:
(a) The initial Rent Period for any Funding shall commence on
the Funding Date of such Funding and each Rent Period occurring
thereafter in respect of such Funding shall commence on the day on
which the next preceding Rent Period expires;
(b) If any Rent Period would otherwise expire on a day which
is not a Business Day, such Rent Period shall expire on the next
succeeding Business Day, PROVIDED that if any Rent Period in respect of
LIBOR Advances would otherwise expire on a day that is not a Business
Day but is a day of the month after which no further Business Day
occurs in such month, such Rent Period shall expire on the next
preceding Business Day;
(c) Any Rent Period in respect of LIBOR Advances which begins
on a day for which there is no numerically corresponding day in the
calendar month at the end of such Rent Period shall, subject to
PARAGRAPH (d) below, expire on the last Business Day of such calendar
month;
(d) No Rent Period shall extend beyond the Lease Termination
Date; and
(e) At any one time, there shall be no more than five (5) Rent
Periods.
"REPORT" is defined in Section 7.6 of the Master Agreement.
"REPORTABLE EVENT" means any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the post-event notice requirement
is waived.
"REQUIRED FUNDING PARTIES" means, at any time, Funding Parties holding
an aggregate outstanding principal amount of Funded Amounts equal to at least
66-2/3% of the aggregate outstanding principal amount of all Funded Amounts.
"REQUIRED LENDERS" means, at any time, Funding Parties holding an
aggregate outstanding principal amount of Loans equal to at least 66-2/3% of the
aggregate outstanding principal amount of all Loans.
"REQUIREMENT OF LAW" means, as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
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"RESPONSIBLE OFFICER" means the Chairman or Vice Chairman of the Board
of Directors, the Chairman or Vice Chairman of the Executive Committee of the
Board of Directors, the President, any Senior Vice President or Executive Vice
President, any Vice President, any Administrative Vice President, the Secretary,
any Assistant Secretary, the Treasurer, or any Assistant Treasurer.
"REUTERS SCREEN" means, when used in connection with any designated
page and LIBOR, the display page so designated on the Reuters Monitor Money
Rates Service (or such other page as may replace that page on that service for
the purpose of displaying rates comparable to LIBOR).
"S&P" means Standard & Poor's Ratings Service, a division of The
▇▇▇▇▇▇-▇▇▇▇ Corporation.
"SCHEDULED CONSTRUCTION TERMINATION DATE" means with respect to any
Building eighteen (18) months after the Closing Date for the related Land,
subject to the occurrence of a Construction Force Majeure Event, but in no event
later than the Lease Termination Date.
"SEC" means the United States Securities and Exchange Commission, or
any successor Governmental Authority.
"SECURITIES" means any stock, shares, voting trust certificates, bonds,
debentures, notes or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities", or any certificates of interest, shares, or
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"SECURITY AGREEMENT AND ASSIGNMENT" means, with respect to any Leased
Property, the Security Agreement and Assignment (Construction Contract,
Architect's Agreement, Permits, Licenses and Governmental Approvals, and Plans,
Specifications and Drawings) from the Construction Agent to the Lessor,
substantially in the form of Exhibit C to the Master Agreement.
"SELLER" means as to any Leased Property, the seller thereof to the
Lessor on the related Closing Date.
"SUBSIDIARY" shall mean, with respect to any Person, any corporation or
other entity (including, without limitation, partnerships, joint ventures, and
associations) regardless of its jurisdiction of organization of formation, at
least a majority of the total combined voting power of all classes of voting
stock or other ownership interests of which shall, at the time as of which
-28-
any determination is being made, be owned by such Person, either directly or
indirectly through one or more other Subsidiaries.
"SUNTRUST BANK" is defined in the preamble to the Master Agreement.
"SUPPLEMENTAL RENT" means any and all amounts, liabilities and
obligations other than Basic Rent which a Lessee assumes or agrees or is
otherwise obligated to pay under the Lease or any other Operative Document
(whether or not designated as Supplemental Rent) to the Lessor, the Agent, any
Lender or any other party, including amounts under Article XVI of the Lease, and
indemnities and damages for breach of any covenants, representations, warranties
or agreements, and all overdue or late payment charges in respect of any Funded
Amount.
"SYNTHETIC LEASE" shall mean a so-called "synthetic" lease that is not
treated as a capital lease under GAAP, but that is treated as a financing under
the Code.
"TAX" or "TAXES" is defined in Section 7.4 of the Master Agreement.
"TAX CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time and any successor statute.
"TAX INDEMNITEE" means the Lessor, the Agent, each Lender and their
respective Affiliates, successors, permitted assigns, permitted transferees,
employees, officers, directors and agents thereof, PROVIDED, HOWEVER, that in no
event shall any Lessee or any Guarantor be a Tax Indemnitee.
"TELERATE" means, when used in connection with any designated page and
LIBOR, the display page so designated on the Dow ▇▇▇▇▇ Telerate Service (or such
other page as may replace that page on that service for the purpose of
displaying rates comparable to LIBOR).
"TITLE INSURANCE COMPANY" means the company that has or will issue the
title policies with respect to a Leased Property, which company shall be
reasonably acceptable to the Agent.
"TITLE POLICY" is defined in Section 3.1 of the Master Agreement.
"TOTAL FUNDED DEBT" shall mean all outstanding Indebtedness of the
Consolidated Companies measured on a consolidated basis.
"TOTAL FUNDED DEBT TO EBITDA RATIO" shall mean, as of any date of
determination, the ratio of (i) Total Funded Debt as of such date to (ii) EBITDA
measured for the four Fiscal Quarter period ending on such date, or if such date
is not the last day of any Fiscal Quarter, then ending immediately prior to such
date.
"TRANSACTION" means all the transactions and activities referred to in
or contemplated by the Operative Documents.
-29-
"UCC" means the Uniform Commercial Code of Georgia, as in effect from
time to time.
"UNRESTRICTED ENVIRONMENTAL INDEMNIFICATION AMOUNTS" means, with
respect to any Leased Property, any Unrestricted Indemnification Amounts of the
type described in subpart (i)(D) of the definition of Unrestricted
Indemnification Amounts.
"UNRESTRICTED INDEMNIFICATION AMOUNTS" means, with respect to any
Leased Property (i) any amounts payable by the Construction Agent with respect
to such Leased Property pursuant to (A) Section 3.3(ii) of the Construction
Agency Agreement, (B) Section 3.3(iii) of the Construction Agency Agreement, (C)
that portion of Section 3.3(i) of the Construction Agency Agreement within the
parenthetical phrase within such Section 3.3(i) relating to Claims for personal
injury or damage to property, or (D) any provision of any Operative Document
requiring indemnification for Claims arising from environmental conditions with
respect to such Leased Property and (ii) any other amounts that EITF 97-10
allows a Lessee to pay that are capitalizable under GAAP and are not required to
be included in the calculation of a Lessee's maximum guaranty amount under EITF
97-10.
"YIELD" is defined in Section 2.3 of the Master Agreement.
F. DOCUMENTARY CONVENTIONS. The following provisions shall be
applicable to each Operative Document.
SECTION 1. NOTICES. All notices, requests, demands or other
communications to or upon the respective parties to each agreement to which the
Documentary Conventions apply shall be addressed to such parties at the
addresses therefor as set forth in SCHEDULE I hereto, or such other address as
any such party shall specify to the other parties hereto, and shall be deemed to
have been given (i) the Business Day after being sent, if sent by overnight
courier service; (ii) the Business Day received, if sent by messenger; (iii) the
day sent, if sent by facsimile and confirmed electronically or otherwise during
business hours of a Business Day (or on the next Business Day if otherwise sent
by facsimile and confirmed electronically or otherwise); or (iv) three Business
Days after being sent, if sent by registered or certified mail, postage prepaid.
SECTION 2. COUNTERPARTS. Each agreement to which the Documentary
Conventions apply may be executed by the parties thereto in separate
counterparts (including by facsimile), 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 3. AMENDMENTS. No Operative Document nor any of the terms
thereof may be terminated, amended, supplemented, waived or modified with
respect to the Lessees or any Funding Party, except (a) in the case of a
termination, amendment, supplement, waiver or modification to be binding on the
Lessees, with the written agreement or consent of ADESA, and (b) in the case of
a termination, amendment, supplement, waiver or modification to be
-30-
binding on the Funding Parties, with the written agreement or consent of the
Required Funding Parties; PROVIDED, HOWEVER, that
(x) notwithstanding the foregoing provisions of this SECTION
3, the consent of each Funding Party affected thereby shall be required
for any amendment, modification or waiver:
(i) amending, modifying, waiving or supplementing
any of the provisions of Section 6 of the Master Agreement or
the representations of such Funding Party in SECTION 4.2 or
4.3 of the Master Agreement or this SECTION 3 or changing the
definition of "REQUIRED FUNDING PARTIES" or "REQUIRED
LENDERS";
(ii) increasing the Commitment of such Funding
Party or reducing any amount payable to such Funding Party
under the Operative Documents or extending the time for
payment of any such amount, including, without limitation, any
Rent, any Funded Amount, any fees, any indemnity, the Leased
Property Balance, the Lease Balance, any Funding Party
Balance, Recourse Deficiency Amount, interest or Yield; or
(iii) consenting to any assignment of the Lease or
the extension of the Lease Term, releasing any of the
collateral assigned to the Agent pursuant to any Mortgage and
any Assignment of Lease and Rents (but excluding a release of
any rights that the Agent may have in any Leased Property, or
the proceeds thereof as contemplated in the definition of
"Release Date"), releasing any Lessee from its obligations in
respect of the payments of Rent and the Lease Balance,
releasing any Guarantor from its obligations under the
Guaranty Agreement to which it is a party or the other
Operative Documents or changing the absolute and unconditional
character of any such obligation;
(y) no such termination, amendment, supplement, waiver or
modification shall, without the written agreement or consent of the
Lessor, the Agent and the Required Lenders, be made to the Lease or the
Construction Agency Agreement; and
(z) subject to the foregoing CLAUSES (x) and (y), so long as
no Event of Default has occurred and is continuing, the Lessor, the
Agent and the Lenders may not amend, supplement, waive or modify any
terms of the Loan Agreement, the Mortgages and the Assignments of Lease
and Rents without the consent of ADESA (such consent not to be
unreasonably withheld or delayed); PROVIDED that in no event may the
Loan Agreement be amended so as to increase the amount of Basic Rent
payable by any Lessee without the consent of ADESA.
SECTION 4. HEADINGS, ETC. The Table of Contents and headings of the
various Articles and Sections of each agreement to which the Documentary
Conventions apply are for
-31-
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof.
SECTION 5. PARTIES IN INTEREST. Except as expressly provided therein,
none of the provisions of any agreement to which the Documentary Conventions
apply is intended for the benefit of any Person except the parties thereto and
their respective successors and permitted assigns.
SECTION 6. GOVERNING LAW. EACH AGREEMENT TO WHICH THE DOCUMENTARY
CONVENTIONS APPLY HAS BEEN DELIVERED IN, AND SHALL IN ALL RESPECTS BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES.
SECTION 7. SEVERABILITY. Any provision of each agreement to which the
Documentary Conventions apply 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 8. SUBMISSION TO JURISDICTION; WAIVERS. Each party to an
agreement to which the Documentary Conventions apply hereby irrevocably and
unconditionally:
(i) submits for itself and its property in any legal action
or proceeding relating to the Master Agreement or any other Operative
Document, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the
State of Georgia sitting in ▇▇▇▇▇▇ County, Georgia, the courts of the
United States of America for the Northern District of Georgia, and
appellate courts from any thereof; PROVIDED that this provision shall
not limit a party's right to remove such legal action or proceeding
from a Georgia state court to a Federal court sitting in the Northern
District of Georgia.
(ii) consents that any such action or proceedings may be
brought to such courts, and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
court or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such party at its address set forth in SCHEDULE I hereto or
at such other address of which the other parties hereto shall have been
notified pursuant to SECTION 1; and
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(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law.
EACH PARTY TO EACH AGREEMENT TO WHICH THE DOCUMENTARY CONVENTIONS APPLY
HEREBY IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO
SUCH AGREEMENT, ANY OTHER OPERATIVE DOCUMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREBY.
SECTION 9. NO ORAL AGREEMENTS. THE OPERATIVE DOCUMENTS EMBODY THE
ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES AND SUPERSEDE ALL OTHER
AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT
MATTER THEREOF. THE OPERATIVE DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES OR ANY COURSE OF PRIOR DEALINGS. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
SECTION 10. CONSTRUCTION. No agreement to which the Documentary
Conventions apply shall be construed more strictly against any one party, it
being recognized that all parties have contributed substantially and materially
to the preparation and negotiations of the Operative Documents.
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SCHEDULE I
ADDRESSES FOR NOTICES
ADESA or any Lessee: ADESA Corporation
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇; copy to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax No.: 317/▇▇▇-▇▇▇▇
Lessor: Atlantic Financial Group, Ltd.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax No.: 214/▇▇▇-▇▇▇▇
Lenders: SunTrust Bank
MC 1106
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇ ▇▇▇▇▇▇
Fax No.:407/▇▇▇-▇▇▇▇
with a copy to:
SunTrust Capital Markets, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ 2400
MC 3951
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No.: 404/▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Trust and Savings Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Fax No.: 312/▇▇▇-▇▇▇▇
LaSalle Bank National Association
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
Fax No.: 317/▇▇▇-▇▇▇▇
SCHEDULE 2.2
AMOUNT OF EACH FUNDING PARTY'S COMMITMENT
Lessor Commitment Percentage: 3.5%
Lessor Commitment: $1,575,000
Lender Commitment Percentages:
SunTrust Bank 32.1667%
▇▇▇▇▇▇ Trust and Savings Bank 32.1667%
LaSalle Bank National Association 32.1667%
Lender Commitments:
SunTrust Bank $14,475,000
▇▇▇▇▇▇ Trust and Savings Bank $14,475,000
LaSalle Bank National Association $14,475,000
SCHEDULE 8.2
ADDRESSES FOR NOTICES
ADESA or any Lessee: ADESA Corporation
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Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇; copy to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax No.: 317/▇▇▇-▇▇▇▇
Lessor: Atlantic Financial Group, Ltd.
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Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax No.: 214/▇▇▇-▇▇▇▇
Lenders: SunTrust Bank
MC 1106
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Attn: ▇▇ ▇▇▇▇▇▇
Fax No.:407/▇▇▇-▇▇▇▇
with a copy to:
SunTrust Capital Markets, Inc.
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MC 3951
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Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No.: 404/▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Trust and Savings Bank
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Attn: ▇▇▇▇ ▇▇▇▇▇▇
Fax No.: 312/▇▇▇-▇▇▇▇
LaSalle Bank National Association
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Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
Fax No.: 317/▇▇▇-▇▇▇▇