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EXHIBIT 10.71
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PARTICIPATION AGREEMENT
among
▇▇▇ RESEARCH CORPORATION,
as Lessee,
SCOTIABANC INC.,
as Lessor,
THE BANK OF NOVA SCOTIA,
as a Rent Purchaser and as Agent for the Rent Purchasers
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Dated as of January 19, 2000
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT, dated as of January 19, 2000 (this
"Agreement"), is among ▇▇▇ RESEARCH CORPORATION, a Delaware corporation (the
"Lessee"); SCOTIABANC INC., a Delaware corporation, as Lessor (the "Lessor"),
and THE BANK OF NOVA SCOTIA, as a Rent Purchaser (together with the other
financial institutions as may from time to time become Rent Purchasers, the
"Rent Purchasers") and as Agent for the Rent Purchasers (in such capacity, the
"Agent"). Capitalized terms used but not otherwise defined in this Agreement
shall have the meanings set forth in Annex A hereto.
PRELIMINARY STATEMENT
In consideration of the mutual agreements herein contained and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto hereby agree as follows:
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THE RENT PURCHASE
The Rent Purchasers have agreed to purchase from the Lessor an interest
in the Lease Balance ("Rent Purchaser Advances") in an aggregate principal
amount of up to $23,942,935.39 in order for the Lessor to acquire the Land and
Improvements, and to pay other Project Costs. In consideration of the receipt of
the proceeds of such Rent Purchaser Advances, the Lessor does hereby absolutely
sell, assign, transfer and convey unto the Rent Purchasers all of the Lessor's
right, title and interest in and to the interests with respect to the Lease
Balance Debt; provided that this sale is without recourse to the Lessor (except
to the extent of its representations expressly set forth herein).
The sale of the interests in the Lease Balance Debt herein is a
presently effective, absolute and unconditional assignment and transfer of such
interests. As a further inducement to the Rent Purchasers, the Lessor covenants
and agrees not to assert any claim or cause of action against the Rent
Purchasers or seek to recover such interests on the grounds that the agreement
in this Section 1 is a collateral assignment or is given as security for
indebtedness rather than as an absolute present assignment.
The Rent Purchasers shall receive interest on the Rent Purchaser
Advances at the Lease Rate applicable to LIBOR Rent Purchaser Advances or ABR
Rent Purchaser Advances, as the case may be, and shall be entitled to the
benefits of the Pledge Agreement in accordance with their pro rata share of the
Lease Balance together with the Lessor.
On the Funding Date, each Rent Purchaser shall make a payment in respect
of its purchase of the interest being funded by it on such date by making its
Rent Purchaser Advance available to the Agent prior to 12:00 noon New York time
by wire transfer in
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immediately available funds at the account of the Agent at its payment office as
set forth on SCHEDULE 2.6, or at such other account as to which the Agent shall
notify such Rent Purchaser in writing, and the Agent shall forward such amounts
to the Lessor's account at its payment office as set forth on SCHEDULE 2.6, or
such other account as the Lessor may specify in writing, not later than 2:00
p.m. New York time on the same date. In the event a Rent Purchaser shall fail to
make available to the Agent the full amount of such Rent Purchaser Advance by
12:00 noon New York time and unless Agent receives notice from such Rent
Purchaser that it will not make available its pro rata share of the Rent
Purchaser Advance, the Agent may (but shall not be required to) fund such Rent
Purchaser Advance, and the amount of the Rent Purchaser Advance so funded shall
be for the account of such Rent Purchaser. Such Rent Purchaser shall pay to the
Agent on demand the amount of such Advance with interest thereon at a rate equal
to the average federal funds rate for the period from the Funding Date to the
date on which such Rent Purchaser makes such Advance available to the Agent in
immediately available funds at the account referenced above. If such Rent
Purchaser does not make such advance available to the Agent within three (3)
Business Days after the Funding Date, the Agent shall be entitled to recover
such advance with interest thereon at the Overdue Rate, on demand, from the Rent
Purchaser.
Upon the request of a Rent Purchaser, the Lessor agrees that it will
cause a Uniform Commercial Code financing statement or statements covering all
the interests sold to such Rent Purchaser pursuant to this Agreement to be
executed and delivered by the Lessor, as debtor, specifying such Rent Purchaser
as secured party, and such financing statement or statements will be duly filed
in all places necessary to perfect the sale of the interests sold to such Rent
Purchaser pursuant to this Agreement, and all filing and recordation fees
payable in connection therewith will be paid by such Rent Purchaser. Such
financing statements shall state that they are being filed to perfect a sale of
such interests, and that no inference that a security interest has been granted
to such Rent Purchaser shall be made as a result of such filing.
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LESSOR CONTRIBUTIONS
- LESSOR CONTRIBUTIONS. Subject to the terms and conditions of this
Agreement, and in reliance on the representations and warranties of each
of the parties hereto contained herein or made pursuant hereto, on the
Funding Date the Lessor shall contribute ("Lessor Contribution") an
amount equal to the Lessor's Commitment Percentage of the amount of the
aggregate Advance requested by the Lessee prior to the Funding Date. The
aggregate amount of the Lessor Contribution made by the Lessor shall not
exceed the Lessor Commitment as set forth in SCHEDULE 2.1 hereto.
Notwithstanding any other provision hereof, the Lessor shall not be
obligated to make any Advance if, after giving effect thereto, (i) the
aggregate outstanding amounts of the Rent Purchaser Advances and the
Lessor Contribution would exceed the Aggregate Commitment Amount, or
(ii) the Lease Balance would exceed the lesser of (x) 110 percent of the
Project Costs and (y) the
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Fair Market Sales Value of the Property as set forth in the Appraisal of
the Property delivered pursuant to Section 6.2 hereof. Notwithstanding
any other provision hereof, Lessor shall not be obligated to make
available the Lessor Contribution if, after giving effect to the
proposed Lessor Contribution, the outstanding aggregate amount of the
Lessor Contribution would exceed the Lessor Commitment. The Lessor shall
use the Lessor Contribution to pay a portion of the Project Costs
simultaneously and pro rata with the fundings by the Rent Purchasers.
- YIELD.
- The amount of outstanding Rent Purchaser Advances shall accrue interest
as set forth in SECTION 1 hereof. The amount of Lessor contributions
outstanding from time to time shall accrue yield at the Lease Rate
applicable to LIBOR Lessor Contributions or ABR Lessor Contributions, as
the case may be. Such interest and yield are referred to collectively
herein as "Yield".
- Yield shall be calculated using the actual number of days elapsed and on
, when the Lease Rate is based on the Adjusted LIBOR, a 360-day year
basis and, if calculated at the ABR, a 360-day year basis if the ABR is
calculated at the Federal Funds Effective Rate, and a 365-, or, if
applicable, 366-, day year basis if the ABR is calculated at the Base
Rate. If all or any portion of the Lease Balance, any interest or Yield
payable thereon or any other amount payable hereunder shall not be paid
when due (whether at stated maturity, acceleration thereof or
otherwise), such overdue amount shall bear interest at a rate per annum
which is equal to the Overdue Rate. Upon the occurrence, and during the
continuance of an Event of Default, the amount of and, to the extent
permitted by law, interest on (or Yield on) the Lease Balance and any
other amounts owing hereunder or under the other Operative Agreements
shall bear interest, payable on demand, at a per annum rate which is
equal to the Overdue Rate.
- The Lessor shall distribute, in accordance with Section 12.1, the Lessor
Basic Rent, the Debt Basic Rent and all other amounts due with respect
to the Lessor Contribution and Rent Purchaser Advances paid to the
Lessor by the Lessee under the Lease or the other Operative Agreements
from time to time.
- Yield on the outstanding Lessor Contribution and Rent Purchaser Advances
shall be due and payable by the Lessee in cash on each Specified
Interest Payment Date.
- If not repaid sooner, the outstanding aggregate Lessor Contribution and
Rent Purchaser Advances shall be repaid in full on the Maturity Date.
- INTEREST PERIOD SELECTION ELECTIONS. By delivering an Interest Period
Selection Notice to the Lessor with respect to the Lessor Contribution
and to the Agent with respect to Rent Purchaser Advances, respectively,
the Lessee may from time to time during the Term irrevocably select, on
not less than three (3) nor more than five (5) Business Days' notice
(other than the initial Interest Period with respect to the Advance to
be made on the Funding Date, where such Advance is to bear interest at a
rate equal to the ABR and notice may be given on the Funding Date), the
duration for the next succeeding Interest Period; provided, however,
that (a) in the absence of a delivery of an Interest Period
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Selection Notice with respect to any Rent Purchaser Advance or Lessor
Contribution at least three (3) Business Days before the last day of the
then current Interest Period with respect thereto, the Lessee shall be
deemed to have selected a one (1) month Interest Period for such Rent
Purchaser Advance or Lessor Contribution, (b) each such selection shall
be prorated among the applicable outstanding Rent Purchaser Advances and
Lessor Contribution of all Participants, and (c) the outstanding Rent
Purchaser Advances and Lessor Contribution may not be apportioned into
more than five (5) separate Interest Periods pursuant to this Section
2.3 at any one time.
- PREPAYMENTS.
- VOLUNTARY PREPAYMENTS. The Lessee shall have the right to prepay an
amount equal to the aggregate outstanding Lease Balance in whole, but
not in part, pursuant to the exercise of the purchase options permitted
under the Lease without premium or penalty, except for any payments due
pursuant to Section 11.6 below.
- MANDATORY PREPAYMENTS.
- If at any time the sum of the aggregate amount of outstanding Rent
Purchaser Advances and Lessor Contribution shall exceed the Aggregate
Commitment Amount, the Lessee shall immediately make payment on the Rent
Purchaser Advances or Lessor Contribution in an amount sufficient to
eliminate such excess. Payments required to be made hereunder shall be
applied first to ABR Rent Purchaser Advances or ABR Lessor Contributions
and second to LIBOR Rent Purchaser Advances or LIBOR Lessor
Contributions in direct order of their Interest Period maturities.
All amounts payable by the Lessee pursuant to Article 15, 16, 17, 20 or
21 of the Lease shall be applied to the Rent Purchaser Advances and the
Lessor Contribution in the manner set forth in Section 12.
- NOTICE. The Lessee will provide irrevocable notice to the Lessor and the
Agent of any prepayment of the Lessor Contribution or Rent Purchaser
Advances at least three (3) Business Days prior to the date of
prepayment.
- FEES. The Lessee agrees to pay to the Lessor, the Agent and the Rent
Purchasers fees in accordance with the Fee Letter.
- PAYMENTS. All payments (including prepayments) to be made by the Lessee
hereunder and under the Lease, whether on account of the Lessor
Contribution, Rent Purchaser Advances or Yield or interest thereon or
otherwise, shall be made without setoff or counterclaim and shall be
made prior to 10:00 a.m., San Francisco time, on the due date thereof to
the Lessor for the account of the Rent Purchasers and the Lessor, at the
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Lessor's office specified in SCHEDULE 2.6 hereto, in Dollars and in
immediately available funds.
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SUMMARY OF THE TRANSACTIONS
- OPERATIVE AGREEMENTS. On the Closing Date, each of the respective
parties thereto shall execute and deliver this Agreement, the Lease, the
Pledge Agreement and such other documents, instruments, certificates and
opinions of counsel as are required by the terms hereof or agreed to by
the parties hereto.
- PROPERTY ACQUISITION AND LEASE. On the Funding Date and subject to the
terms and conditions of this Agreement, (a) the Lessor will make the
Lessor Contribution in accordance with Section 2 hereof, (b) the Rent
Purchasers will make Rent Purchaser Advances in accordance with Section
5 hereof, (c) the Lessor will acquire the Land and the Improvements, and
(d) the Lessor will simultaneously lease all of its right, title and
interest in the Property to the Lessee.
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THE CLOSING
All documents and instruments required to be delivered on the Closing
Date shall be delivered at the offices of ▇▇▇▇▇▇ Godward LLP, 5 Palo Alto
Square, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other location as
may be determined by the Lessor and the Lessee.
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FUNDING OF ADVANCES
- GENERAL. To the extent funds have been made available to or advanced by
the Lessor as Rent Purchaser Advances and the Lessor Contribution, the
Lessor will make advances of such funds in accordance with the terms and
conditions of this Agreement and the other Operative Agreements in order
to provide sufficient funds to: (i) allow the Lessor, at the direction
of the Lessee, to acquire the Land and the Improvements in accordance
with the terms of this Agreement and the other Operative Agreements;
(ii) allow the Lessor, on behalf of the Lessee, to pay Transaction
Expenses; and (iii) pay all other Project Costs.
- PROCEDURES FOR FUNDING.
- Not less than three (3) Business Days prior to the proposed Funding Date
(other than the Advance to be made on the Funding Date, where such
Advance is to bear interest at a rate equal to the ABR and notice may be
given on the Funding Date), the Lessee shall deliver to the Lessor and
the Agent, a request for Advance and an Interest Period Selection
Notice.
- So long as no Default or Event of Default has occurred and is continuing
and subject to the Lessor and the Agent having each received the
materials required by Section 6.2 on
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the Funding Date (i) the Rent Purchasers shall make Rent Purchaser
Advances to the Lessor in an aggregate amount equal to eighty-eight and
two tenths percent (88.20%) of the funds requested up to an aggregate
principal amount equal to the Available Rent Purchaser Commitments; (ii)
the Lessor shall make the Lessor Contribution in an amount equal to
eleven and eight tenths percent (11.8%) of the funds requested, up to an
amount equal to the Available Lessor Commitment; and (iii) the total
amount of such Rent Purchaser Advances and the Lessor Contribution shall
be paid to the Lessor to pay the Project Costs.
- ALLOCATION OF ADVANCES BETWEEN LAND AND IMPROVEMENTS. In the event the
Fair Market Sales Value of the Land leased pursuant to the Lease as set
forth in the Appraisal is greater than twenty-five percent of the
aggregate Fair Market Sales Value of the Property as set forth in the
Appraisal, Lessor shall determine a separate Land Investment Balance and
Improvements Investment Balance for the Property and the same as of the
Closing Date shall be set forth in Exhibit B to the Lease, and Lessee
shall execute and deliver a separate Lease Supplement for each of the
Land and the Improvements.
- PLEDGED COLLATERAL.
- MANDATORY PLEDGED COLLATERAL. If as of the last day of any Fiscal
Quarter (i) the Lessee's EBITDA equals an amount less than (x) through
the Fiscal Quarter ending December 31, 1999, $92,000,000, (y) from
January 1, 2000 through March 31, 2000, $167,000,000, and (z)
thereafter, $200,000,000, or (ii) the Lessee's Cash Balance equals an
amount less than $200,000,000, provided, that if as of the date six (6)
months prior to the Maturity Date, the Lessee has not refinanced the
Subordinated Notes, there shall be deducted from the Cash Balance at all
times thereafter the principal amount of such outstanding Subordinated
Notes in determining the Cash Balance under this clause (ii), then (x)
in the case of clause (i), on or before the third Business Day (or if
such date is not a Business Day, the next succeeding Business Day) (the
"Deposit Date") following the date on which financial statements are
delivered pursuant to Section 9.3(a)(i) or (ii) hereof until the third
Business Day following the date on which financial statements are
delivered pursuant to Section 9.3(a)(i) or (ii) hereof for the Fiscal
Quarter when the Lessee shall satisfy such tests, and (y) in the case of
clause (ii), on such specified date (also, a "Deposit Date") for so long
as any Obligations remain outstanding or until the third Business Day
following the date on which financial statements are delivered pursuant
to Section 9.3(a)(i) or (ii) hereof for the second consecutive Fiscal
Quarter when the Lessee shall satisfy such tests, the Lessee shall
deliver Pledged Collateral to the Collateral Agent in an amount equal to
100% of the aggregate outstanding Advances plus $300,000. Thereafter,
the Lessee covenants to maintain the Value of the Pledged Collateral at
a level equal to 100% of the aggregate outstanding Advances plus
$300,000, and within two (2) Business Days after receipt of notice from
the Collateral Agent that the Value of the Pledged Collateral is less
than 100% of the aggregate outstanding Advances plus $300,000, the
Lessee shall be obligated to deliver a portion of the Pledged Collateral
in an amount required to maintain the Value of the Pledged Collateral at
a level equal to 100% of the aggregate outstanding Advances plus
$300,000. Each such deposit (collectively, the "Pledge") shall be the
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property of the Collateral Agent and shall be held and administered in
accordance with the Pledge Agreement.
- OPTIONAL PLEDGED COLLATERAL. Notwithstanding the requirements of Section
5.4(a), from time to time, the Lessee may make a deposit of additional
Pledged Collateral to the Collateral Agent in an amount equal to not
less than 100% of the aggregate outstanding Advances in order to have a
lower Applicable Margin apply to the outstanding Advances. In order to
maintain a lower Applicable Margin, the Lessee covenants to maintain the
Value of the Pledged Collateral at a level equal to 100% of the
aggregate outstanding Advances, and within two (2) Business Days after
receipt of notice from the Collateral Agent that the Value of the
Pledged Collateral is less than 100% of the aggregate outstanding
Advances, the Lessee shall deliver a portion of Pledged Collateral in an
amount required to maintain the Value of the Pledged Collateral at a
level equal to 100% of the aggregate outstanding Advances. Each such
deposit shall constitute part of the Pledge, shall be the property of
the Collateral Agent and shall be held and administered in accordance
with the Pledge Agreement.
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CONDITIONS OF THE CLOSING AND ADVANCES
- GENERAL CONDITIONS TO THE CLOSING DATE. The Closing Date is subject to
the satisfaction, immediately prior to or concurrently therewith, of the
following conditions precedent:
- OPERATIVE AGREEMENTS. Each of the Operative Agreements entered into on
the Closing Date or subsequently shall have been duly authorized,
executed, acknowledged and delivered by the parties thereto and shall be
in full force and effect, and no Default shall exist thereunder (both
before and after giving effect to the transactions contemplated by the
Operative Agreements), and the Rent Purchasers and the Lessor shall have
received a fully executed copy of each of the Operative Agreements.
- TAXES. All taxes, fees and other charges in connection with the
execution, delivery, and, where applicable, recording, filing and
registration of the Operative Agreements shall have been paid or
provisions for such payment shall have been made to the reasonable
satisfaction of the Agent and the Lessor.
- GOVERNMENTAL APPROVALS. All necessary (or, in the reasonable opinion of
the Agent, the Lessor and their respective counsel, advisable)
Governmental Actions shall have been obtained or made and be in full
force and effect.
- LITIGATION. No action or proceeding shall have been instituted before
any Governmental Authority, nor shall any order, judgment or decree have
been issued or proposed to be issued by any Governmental Authority (i)
to set aside, restrain, enjoin or prevent the full
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performance of this Agreement, any other Operative Agreement or any of
the transactions contemplated hereby or thereby or (ii) other than as
set forth on Schedule 7.2, which is reasonably likely to have a Material
Adverse Effect.
- LEGAL REQUIREMENTS. In the opinion of the Agent, the Lessor and their
respective counsel, the transactions contemplated by the Operative
Agreements do not and will not violate in any material respect any Legal
Requirements and do not and will not subject the Rent Purchasers or the
Lessor to any adverse regulatory prohibitions or constraints.
- CORPORATE PROCEEDINGS OF THE LESSEE. The Agent and the Lessor shall have
received a copy of the resolutions or minutes, in form and substance
reasonably satisfactory to the Agent and the Lessor, of the Board of
Directors of the Lessee authorizing the execution, delivery and
performance of this Agreement and the other Operative Agreements to
which it is a party, certified by the Secretary or an Assistant
Secretary of the Lessee as of the Closing Date, which certificate shall
be in form and substance reasonably satisfactory to the Agent and the
Lessor and shall state that the resolutions or minutes thereby certified
have not been amended, modified, revoked or rescinded.
- LESSEE INCUMBENCY CERTIFICATE. The Agent and the Lessor shall have
received a certificate of the Lessee, dated the Closing Date, as to the
incumbency and signature of the officers of the Lessee executing any
Operative Agreement reasonably satisfactory in form and substance to the
Agent and the Lessor, executed by the Secretary or any Assistant
Secretary of the Lessee.
- LESSEE'S OFFICER'S CERTIFICATE. The Agent and the Lessor shall each have
received a Certificate of the President or any Vice President of the
Lessee, dated as of the Closing Date, stating that (i) each and every
representation and warranty of the Lessee contained in the Operative
Agreements to which it is a party is true and correct on and as of the
Closing Date; (ii) no Default or Event of Default has occurred and is
continuing under any Operative Agreement; (iii) each Operative Agreement
to which the Lessee is a party is in full force and effect with respect
to it; and (iv) the Lessee has duly performed and complied with all
covenants, agreements and conditions contained herein or in any
Operative Agreement required to be performed or complied with by it on
or prior to the Closing Date.
- GOOD STANDING. The Agent and the Lessor shall have received (i)
Certificates of the Secretaries of State of the State of Delaware and
the State of California dated as of a recent date stating that the
Lessee is a corporation in good legal standing under the laws of such
states, and (ii) Certificates of the Franchise Tax Boards of the State
of Delaware and the State of California dated as of a recent date
stating that the Lessee is in good standing under the laws of such
states.
- LESSEE'S CORPORATE DOCUMENTS. The Agent and the Lessor shall have
received true and complete copies of the certificate or articles of
incorporation and by-laws of the Lessee, certified as of the Closing
Date as complete and correct copies thereof by the Secretary or an
Assistant Secretary of the Lessee.
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- CONSENTS, LICENSES AND APPROVALS. The Agent and the Lessor shall have
received a certificate of the President or a Vice President of the
Lessee stating that any consents, licenses and filings required to
consummate the transaction contemplated by this Agreement are in full
force and effect, and each such consent, authorization and filing shall
be in form and substance reasonably satisfactory to the Agent and the
Lessor.
- LEGAL OPINION. The Agent and the Lessor shall have received the executed
legal opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ White & ▇▇▇▇▇▇▇▇▇, special counsel to the
Lessee.
- ENVIRONMENTAL AUDIT.
- The Lessor and the Agent shall have received not less than ten
(10) days prior to the Funding Date an Environmental Audit with
respect to the Land being acquired on the Funding Date, prepared
by the Environmental Engineer, and the results of the
Environmental Audit shall be in form and substance satisfactory
to the Lessor and the Agent; and
- the Lessor and the Agent shall have received letters from the
Environmental Engineer stating, among other things, that the Rent
Purchasers and the Lessor may rely in all respects on the Environmental
Audit and other environmental reports with respect to the Property which
have been prepared by such firm as if they were addressed to them.
- SURVEY. The Lessor and the Agent shall have received, and the Title
Company shall have received, a survey of the Property being acquired on
the Funding Date, certified to the Lessor and the Title Company in a
manner satisfactory to them, dated as of a date within three (3) months
of the Funding Date, by an independent professionally licensed land
surveyor satisfactory to the Lessor, which survey shall be made in
accordance with the Minimum Standard Detail Requirements for Land Title
Surveys jointly established and adopted by the American Land Title
Association and the American Congress on Surveying and Mapping in 1992,
and, without limiting the generality of the foregoing, there shall be
surveyed and shown on such survey the following: (i) the locations on
such Property of all the buildings, structures and other improvements,
if any, and the established building setback lines; (ii) the lines of
streets abutting such Property; (iii) all access and other easements
appurtenant to such Property; (iv) all roadways, paths, driveways,
easements, encroachments and overhanging projections and similar
encumbrances affecting such Property, whether recorded, apparent from a
physical inspection of the Property or otherwise known to the surveyor;
(v) any encroachments on any adjoining property by the building,
structures and improvements on such Property; and (vi) if such Property
is described as being on a filed map, a legend relating the survey to
said map.
- APPRAISAL. The Lessor and the Agent shall have received an Appraisal of
the Property, which Appraisal shall show as of the Funding Date the Fair
Market Sales Value of the Property, and meet the other applicable
requirements set forth in the definition of the term "Appraisal"
contained in Annex A.
- LIEN SEARCHES. The Lessor and the Agent shall have received the results
of a recent search by a Person reasonably satisfactory to the Lessor and
the Agent, of the Uniform
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Commercial Code, judgement and tax lien filings which may have been
filed in State of California with respect to personal property of the
Lessee, and the results of such search shall be satisfactory to the
Lessor and the Agent.
- REPRESENTATIONS. The representations and warranties of the Lessee and
the Lessor contained herein and in each of the other Operative
Agreements shall be true and correct.
- PERFORMANCE OF AGREEMENTS. The parties hereto and thereto shall have
performed their respective agreements to be performed on or prior to the
Closing Date contained herein and in the other Operative Agreements on
or prior to the Closing Date.
- FEES. The Lessor and the Agent and the Rent Purchasers shall have
received the fees pursuant to the Fee Letter.
- CONDITIONS TO RENT PURCHASERS' AND LESSOR'S OBLIGATIONS TO MAKE RENT
PURCHASER ADVANCES AND LESSOR CONTRIBUTIONS. The agreement of each Rent
Purchaser to make the Rent Purchaser Advance to the Lessor, and of the
Lessor to make the Lessor Contribution is further subject to the
satisfaction, immediately prior to or concurrently with the making of
such Rent Purchaser Advances and Lessor Contribution, of the following
conditions precedent:
- TITLE. Title to the Property being acquired on the Funding Date shall
conform to the representations and warranties set forth in Section
7.2(w).
- TITLE POLICY. The Lessor shall have received an owner's title policy, or
marked up unconditional binder for such insurance, dated the Funding
Date, for the Property being acquired on the Funding Date, insuring the
Lessor that the Lien of the Lease is a first and primary Lien in the
Lessee's interest in the Improvements and the Land; and the Lessor shall
have received evidence reasonably satisfactory to it that all premiums
in respect of such policy have been paid or provision made therefor.
- TITLE DOCUMENTS. The Lessor shall have received a copy of all recorded
documents referred to, or listed as exceptions to title in, the title
policy referred to above.
- INSURANCE. The Lessor and the Agent shall have received evidence in form
and substance satisfactory to them that all of the requirements of
Article 14 of the Lease shall have been satisfied.
- LEASE. The Lessor and the Agent shall have received the Lease
Supplement, executed by the Lessee, and assuming proper recordation of
the Memorandum of Lease, the Lease shall constitute a valid and
perfected first lien on the Property and the Improvements, subject only
to Permitted Exceptions.
- ACTIONS TO PERFECT LIENS. The Lessor shall have received evidence in
form and substance satisfactory to it that all filings, recordings,
registrations and other actions, including, without limitation, the
filing of duly executed financing statements on form
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UCC-1, necessary or, in the opinion of the Lessor and the Agent,
desirable to perfect the Liens created by the Security Documents shall
have been completed.
- BRINGDOWN CERTIFICATE. The Lessor and the Agent shall have received an
Officer's Certificate on behalf of the Lessee dated as of the Funding
Date stating that (i) the representations and warranties of the Lessee
contained herein and in each of the other Operative Agreements are true
and correct in all material respects as of the Funding Date as though
made as of the Funding Date, and (ii) no Default or Event of Default has
occurred and is continuing.
- PERFORMANCE OF AGREEMENTS. The parties hereto and thereto shall have
performed their respective agreements contained herein and in the other
Operative Agreements on or prior to such Funding Date.
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REPRESENTATIONS AND WARRANTIES
- REPRESENTATIONS AND WARRANTIES OF THE LESSOR ON THE CLOSING DATE. The
Lessor represents and warrants to each of the other parties hereto as of
the Closing Date as follows:
- DUE ORGANIZATION, ETC. It is a duly organized and validly existing
corporation in good standing under the laws of the jurisdiction of its
organization and has the power and authority to carry on its business as
now conducted and to enter into and perform its obligations under this
Agreement, each Operative Agreement to which it is a party and each
other agreement, instrument and document executed and delivered by it on
the Closing Date in connection with or as contemplated by each such
Operative Agreement to which it is or will be a party.
- AUTHORIZATION; NO CONFLICT. The execution, delivery and performance of
each Operative Agreement to which it is a party have been duly
authorized by all necessary action on its part and neither the execution
and delivery thereof by the Lessor, nor the consummation of the
transactions contemplated thereby by the Lessor, nor compliance by it
with any of the terms and provisions thereof (i) requires or will
require any approval of (which approval has not been obtained) the
shareholders of, or approval or consent of any trustee or holders of any
indebtedness or obligations of the Lessor, (ii) contravenes or will
contravene any Legal Requirement applicable to or binding on it as of
the date hereof, (iii) does or will contravene or result in any breach
of or constitute any default under its articles of incorporation or
by-laws or equivalent documents, or result in the creation of any Lessor
Lien upon the Property or any part thereof, or (iv) does or will require
any Governmental Action by any Governmental Authority.
- ENFORCEABILITY, ETC. Each Operative Agreement to which it is a party has
been duly executed and delivered by it and constitutes a legal, valid
and binding obligation enforceable against it in accordance with the
terms thereof, subject, in each case, as to enforceability, bankruptcy,
insolvency, reorganization and other similar laws affecting enforcement
of creditor rights generally (insofar as any such law relates to the
bankruptcy, insolvency, reorganization or similar event of the Lessor)
and, as to the
11.
13
availability of specific performance or other injunctive relief, subject
to the discretionary power of a court to deny such relief and to general
equitable principles.
- ERISA. The Lessor is making the Lessor Contribution contemplated to be
made by it hereunder for its own account and with its general corporate
assets in the ordinary course of its business, and no part of such
amount constitutes the assets of any Employee Benefit Plan.
- LITIGATION. No litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or threatened by or
against the Lessor (a) with respect to any of the Operative Agreements
or any of the transactions contemplated hereby or thereby, or (b) which
could reasonably be expected to have a material adverse effect on the
assets, liabilities, operations, business or financial condition of the
Lessor.
- ASSIGNMENT. It has not assigned or transferred any of its right, title
or interest in or under the Lease, any Operative Document or the
Property, except in accordance with the other Operative Agreements.
- NO DEFAULT. The Lessor is not in default under or with respect to any of
its Contractual Obligations in any respect which could have a material
adverse effect on the assets, liabilities, operations, business or
financial condition of the Lessor. No Default or Event of Default
attributable to it has occurred and is continuing.
- USE OF PROCEEDS. The proceeds of the Rent Purchaser Advances and the
Lessor Contribution shall be applied by the Lessor solely in accordance
with the provisions of the Operative Agreements.
- CHIEF PLACE OF BUSINESS. The Lessor's chief place of business, chief
executive office and office where the documents, accounts and records
relating to the transactions contemplated by this Agreement and each
other Operative Agreement are kept are located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
- REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Lessor set forth in the Operative Agreements are true and correct.
The Lessor is in compliance with its respective obligations under the
Operative Agreements.
- CONDITIONS PRECEDENT CONTAINED IN THE OPERATIVE AGREEMENTS. All
conditions precedent contained in this Agreement and in the other
Operative Agreements to be satisfied by the Lessor relating to the
Advances have been satisfied in full.
- REPRESENTATIONS AND WARRANTIES OF THE LESSEE ON THE CLOSING DATE AND THE
FUNDING DATE. Subject to SCHEDULE 7.2 hereto, the Lessee represents and
warrants to each of the other parties hereto as of the Closing Date and
the Funding Date as follows:
- ORGANIZATION; POWERS. Each of the Lessee and its Subsidiaries (i) is
duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, (ii) has all requisite power and
authority to own its property and assets and
12.
14
to carry on its business as now conducted and as proposed to be
conducted, (iii) is qualified to do business in every jurisdiction where
such qualification is required, except where the failure so to qualify
would not result in a Material Adverse Effect, and (iv) has the power
and authority to execute, deliver and perform its obligations under each
of the Operative Agreements and each other agreement or instrument
contemplated thereby to which it is or will be a party.
- AUTHORIZATION. The execution, delivery and performance by the Lessee of
each of the Operative Agreements to which it is a party (i) have been
duly authorized by all requisite action, including, if required,
stockholder action on the part of the Lessee and (ii) will not (A)
violate (1) any provision of law, statute, rule or regulation, or of the
certificate or articles of incorporation or other constitutive documents
or by-laws of the Lessee or any Subsidiary, (2) any order of any
Governmental Authority, or (3) any provision of any indenture, agreement
or other instrument to which the Lessee or any Subsidiary is a party or
by which any of them or any of their property is or may be bound,
including, without limitation, the Credit Facility and the Subordinated
Notes, (B) be in conflict with, result in a breach of or constitute
(alone or with notice or lapse of time or both) a default under any such
indenture, agreement or other instrument, or (C) result in the creation
or imposition of any Lien upon or with respect to any property or assets
now owned or hereafter acquired by the Lessee or any Subsidiary except
in accordance with the Operative Agreements.
- ENFORCEABILITY. This Agreement and each of the other Operative
Agreements to which the Lessee is a party has been duly executed and
delivered by the Lessee and constitutes a legal, valid and binding
obligation of the Lessee enforceable against the Lessee in accordance
with its terms, subject, in each case as to enforceability, to
bankruptcy, insolvency, reorganization and other similar laws affecting
enforcement of creditor rights generally (insofar as any such law
relates to the bankruptcy, insolvency, reorganization or similar event
of the Lessee) and, as to the availability of specific performance or
other injunctive relief, subject to the discretionary power of a court
to deny such relief and to general equitable principles.
- GOVERNMENTAL APPROVALS. No action, consent or approval of, registration
or filing with or any other action by any Governmental Authority is or
will be required by the Lessee in connection with the purchase, leasing
or financing of the Property (the "Transactions"), except such as have
been made or obtained and are in full force and effect.
- FINANCIAL STATEMENTS. The consolidated balance sheet of the Lessee and
its Subsidiaries as at June 30, 1999, and the related consolidated
statements of income and cash flows of the Lessee and its Subsidiaries
for the fiscal year then ended, accompanied by an opinion of Ernst &
Young LLP, independent auditors, and the consolidated balance sheet of
the Lessee and its Subsidiaries as at September 30, 1999, and the
related consolidated statements of income and cash flows of the Lessee
and its Subsidiaries for the three (3) months then ended, duly certified
by the chief financial officer of the Lessee, copies of which have been
furnished to the Lessor and the Agent, fairly present, subject, in the
case of said balance sheet as at September 30, 1999, and said statements
of income and cash flows for the three (3) months then ended, to
year-end audit adjustments, the consolidated financial condition of the
Lessee and its Subsidiaries as at such dates and the consolidated
results of the Lessee and its Subsidiaries for the periods ended on such
dates, all in
13.
15
accordance with GAAP consistently applied. Since June 30, 1999, no event
has occurred which could have a Material Adverse Effect.
- NO MATERIAL ADVERSE CHANGE. As of the Closing Date, there has been no
material adverse change in the business, assets, property or condition,
financial or otherwise, of the Lessee and its Subsidiaries since June
30, 1999.
- TITLE TO PROPERTIES; POSSESSION UNDER LEASES.
- Each of the Lessee and its Subsidiaries has good and marketable
title to, or valid leasehold interests in, all its material
properties and assets. All such properties and assets are free
and clear of Liens, other than Liens expressly permitted by any
of the Operative Agreements.
- Each of the Lessee and its Subsidiaries has complied with all
obligations under all leases to which it is a party and all such
leases are in full force and effect. Each of the Lessee and its
Subsidiaries enjoys peaceful and undisturbed possession under all
such leases.
- LITIGATION, COMPLIANCE WITH LAWS.
- There are not any actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or
threatened against the Lessee or any Subsidiary or any business,
property or rights of any such person (A) which involve any
Operative Agreements or the Transactions or (B) to the Lessee's
knowledge, which might have a Material Adverse Effect.
- Neither the Lessee nor any of its Subsidiaries is in violation of
any law, rule or regulation, or in default with respect to any
judgment, writ, injunction or decree of any Governmental
Authority, where such violation or default could reasonably be
anticipated to result in a Material Adverse Effect.
- FEDERAL RESERVE REGULATIONS. Neither the Lessee nor any of its
Subsidiaries is engaged principally in, and does not have as one of its
most important activities, the business of extending credit for the
purpose of purchasing or carrying any margin stock (within the meaning
of Regulation U of the Board), and no part of the proceeds of the
Advances will be used by it to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any
such margin stock or for any purpose that violates, or is inconsistent
with, the provisions of Regulations T, U or X of the Board.
- INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT. Neither the
Lessor nor any of its Subsidiaries is (i) an "investment company" or a
company controlled by an "investment company" within the meaning of the
Investment Company Act, or (ii) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of
1935.
- AGREEMENTS.
14.
16
- Neither the Lessee nor any of its Subsidiaries is a party to any
agreement or instrument or subject to any corporate or other
restriction that has resulted or could reasonably be anticipated
to result in a Material Adverse Effect.
- Neither the Lessee nor any of its Subsidiaries is in default in
any manner under any provision of any indenture or other
agreement or instrument evidencing Indebtedness, or any other
material agreement or instrument to which it is a party or by
which it or any of its properties or assets are or may be bound,
where such default could reasonably be anticipated to result in a
Material Adverse Effect.
- TAX RETURNS. Each of the Lessee and its Subsidiaries has filed or caused
to be filed all Federal, state, local and foreign tax returns required
to have been filed by it and has paid or caused to be paid all taxes
shown to be due and payable on such returns or on any assessments
received by it, except taxes that are being contested in good faith by
appropriate proceedings and for which the Lessee or such Subsidiary
shall have set aside on its books adequate reserves.
- NO MATERIAL MISSTATEMENTS. No information, report, financial statement,
exhibit or schedule furnished by or on behalf of the Lessee to the
Lessor, the Agent or any Rent Purchaser in connection with the
negotiation of any Operative Agreement or included therein or delivered
pursuant thereto contained, contains or will contain any misstatement of
a material fact or omitted, omits or will omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were, are or will be made, not
misleading.
- EMPLOYEE BENEFIT PLANS. Each of the Lessee and its ERISA Affiliates is
in compliance in all material respects with the applicable provisions of
ERISA and the regulations and published interpretations thereunder. No
Reportable Event has occurred as to which the Lessee or any ERISA
Affiliate was required to file a report with the PBGC, and the present
value of all benefit liabilities under each Plan (based on those
assumptions used to fund such Plan) did not, as of the last annual
valuation date applicable thereto, exceed by more than $1,000,000 the
value of the assets of such Plan. Neither the Lessee nor any ERISA
Affiliate has incurred any Withdrawal Liability which remains unpaid and
that could result in a Material Adverse Effect. Neither the Lessee nor
any ERISA Affiliate has received any notification that any Multiemployer
Plan is in reorganization or has been terminated within the meaning of
Title IV of ERISA, and to the best knowledge of the Lessee no
Multiemployer Plan is reasonably expected to be in reorganization or to
be terminated, where such reorganization or termination has resulted or
could reasonably be expected to result, through increases in the
contributions required to be made to such Plan or otherwise, in a
Material Adverse Effect.
- ENVIRONMENTAL MATTERS. To the best of Lessee's knowledge after due
inquiry, the Property is free of contamination from any Release of
Hazardous Substances. Neither the Lessee nor any of its Subsidiaries has
any material contingent liability related to noncompliance with any
Environmental Laws, or related to any Release or threatened Release of a
Hazardous Substance or the generation, use, storage or disposal of
Hazardous Substances associated with the Property. The Lessee and each
Subsidiary is conducting its respective business in compliance with all
applicable Environmental Laws.
15.
17
Neither the Lessee nor any of its Subsidiaries has received notice of
any failure to so comply. The Lessee and its Subsidiaries, at the
Lessee's and its Subsidiaries' facilities, do not manage any hazardous
wastes, hazardous substances, hazardous materials, toxic substances,
toxic pollutants or substances similarly denominated, as those terms or
similar terms are used in the Environmental Laws, in violation of any
such law or any regulations promulgated pursuant thereto. Neither the
Lessee nor any of its Subsidiaries has caused or suffered to occur any
Release with respect to any Hazardous Substance at, under, above or upon
any real property which it owns or leases or to which it transported,
disposed or arranged for disposal of Hazardous Substances that would
result in a Material Adverse Effect. Neither the Lessee nor any of its
Subsidiaries is involved in operations which are reasonably likely to
result in the imposition of any material liability on the Lessee or any
of its Subsidiaries under any Environmental Law, and neither the Lessee
nor any of its Subsidiaries has permitted any tenant or occupant of such
premises to engage in any such activities.
- INSURANCE. The Lessee has obtained insurance coverage covering the
Property which meets the requirements of Section 14.1 of Lease and such
coverage is in full force and effect.
- NATURE OF THE PROPERTY. The Lessee shall use the Property for office,
manufacturing and research and development purposes.
- FLOOD ZONE. No portion of the Property being acquired by the Lessor on
the Funding Date is located in an area identified as a special flood
hazard area by the Federal Emergency Management Agency or other
applicable agency, or if the Property is located in an area identified
as a special flood hazard area by the Federal Emergency Management
Agency or other applicable agency, then flood insurance has been
obtained for such Property in accordance with Section 14.2(b) of the
Lease and in accordance with the National Flood Insurance Act of 1968,
as amended.
- LEGAL REQUIREMENTS. The Property being acquired by the Lessor complies
with all Legal Requirements (including all zoning and land use laws and
Environmental Laws).
- CONSENTS, ETC. All consents, licenses and building permits required by
all Legal Requirements by the time required by such Legal Requirements
for construction, completion, occupancy and operation of the Property
have been or will be obtained and are or will be in full force and
effect.
- SOLVENCY. The fair salable value of Lessee's assets exceeds the fair
value of its liabilities; the Lessee is not left with unreasonably small
capital after consummation of the transactions contemplated by the
Operative Documents; and Lessee is able to pay its debts (including
trade debts) as they mature.
- YEAR 2000. Lessee has reviewed the areas within its business and
operations which could be adversely affected by, and has developed or is
developing a program to address on a timely basis, the "Year 2000
Problem" (that is, the risk that computer applications used by Lessee
may be unable to recognize and properly perform date-sensitive functions
16.
18
involving certain dates prior to, on or after December 31, 1999). Based
on such review and program, the Year 2000 Problem could not reasonably
be expected to have a Material Adverse Effect.
- TITLE TO PROPERTY. As of the Funding Date, the Lessor has a valid fee
interest in the Land, subject only to the Permitted Exceptions. The
Lessor will at all times have good and marketable title to the
Improvements, subject only to Permitted Exceptions.
- PROPERTY-RELATED MATTERS. The Property will comply with all Legal
Requirements (including all applicable zoning and land use laws and
Environmental Laws) and Insurance Requirements. No Improvements on the
Property will encroach in any manner onto any adjoining land (except as
permitted by express written easements or variance) and such
Improvements and the use thereof by the Lessee and its agents,
assignees, employees, invitees, lessees, licensees and tenants will
comply with all applicable Legal Requirements (including all applicable
Environmental Laws and building, planning, zoning and fire codes). There
are no defects to such Improvements including, without limitation, the
plumbing, heating, air conditioning and electrical systems thereof, and
all water, sewer, electric, gas, telephone and drainage facilities and
all other utilities required to adequately service such Improvements for
their intended use will be available pursuant to adequate permits
(including any that may be required under applicable Environmental
Laws). There is no action, suit or proceeding (including any proceeding
in condemnation or eminent domain or under any applicable Environmental
Law) pending or threatened which adversely affects the title to, or the
use, operation or value of, the Property. No fire or other casualty with
respect to the Property has occurred which fire or other casualty
involves an uninsured loss in excess of $500,000. All utilities serving
the Property are located in, and in the future will be located in, and
vehicular access to the Improvements on the Property is provided by,
either public rights-of-way abutting the Property or Appurtenant Rights.
All applicable licenses, approvals, authorizations, consents, permits
(including, without limitation, building, demolition and environmental
permits, licenses, approvals, authorizations and consents), easements
and rights-of-way, including proof of dedication, required for the use
and operation of the Improvements as permitted pursuant to the Lease
have been obtained from the appropriate Governmental Authorities having
jurisdiction or from private parties.
- LEASE REQUIREMENTS. The Improvements will comply with all requirements
and conditions set forth in the Lease and all other conditions and
requirements of the Operative Documents.
-
PAYMENT OF CERTAIN EXPENSES
The Lessee agrees, for the benefit of the Lessor, the Agent and each of
the Rent Purchasers, to:
- TRANSACTION EXPENSES. On the Closing Date and the Funding Date, pay, or
cause to be paid, all fees, expenses and disbursements of each of the
Lessor, the Agent and their respective counsel in connection with the
transactions contemplated by the Operative Agreements and incurred in
connection with the Closing Date and the Funding Date,
17.
19
including all Transaction Expenses, reasonable syndication expenses and
all other expenses in connection with the Closing Date and the Funding
Date, including all expenses relating to the Appraisal, and all fees,
taxes and expenses for the recording, registration and filing of
documents.
- BROKERS' FEES AND STAMP TAXES. Pay or cause to be paid brokers' fees and
any and all stamp, transfer and other similar taxes, fees and excises,
if any, including any interest and penalties, which are payable in
connection with the transactions contemplated by this Agreement and the
other Operative Agreements.
- CERTAIN FEES AND EXPENSES. (a) Pay or cause to be paid (i) all costs and
expenses incurred by the Lessee, the Lessor, the Agent and each Rent
Purchaser in entering into any future amendments or supplements with
respect to any of the Operative Agreements, whether or not such
amendments or supplements are ultimately entered into, or giving or
withholding of waivers of consents hereto or thereto, which have been
requested by the Lessee, and (ii) all costs and expenses incurred by the
Lessor and each Rent Purchaser (A) in connection with any purchase of
all or any portion of Property by the Lessee or any other Person
pursuant to Articles 16, 17, 20 or 21 of the Lease, or (B) in respect of
enforcement of any of their rights and remedies in respect of the
Operative Agreements.
- COMMITMENT FEE. During the Commitment Period, the Lessee agrees to pay
or to cause to be paid to the Lessor for the account of the Lessor and
each Rent Purchaser, respectively, a commitment fee (the "Commitment
Fee") equal to the product of the Commitment for the Lessor and each
Rent Purchaser multiplied by .500% per annum. Such Commitment Fee shall
be calculated on the basis of a year of three hundred sixty (360) days
for the actual days elapsed and shall be payable in arrears on the
Commitment Fee Payment Date. If all or a portion of any such Commitment
Fee shall not be paid when due, such overdue amount shall bear interest,
payable by the Lessee on demand, at the Overdue Rate from the date of
such non-payment until such amount is paid in full.
-
OTHER COVENANTS AND AGREEMENTS
- COOPERATION WITH THE LESSEE. The Lessor, the Agent and the Rent
Purchasers shall, to the extent reasonably requested by the Lessee (but
without assuming additional liabilities on account thereof), at the
Lessee's expense, cooperate with the Lessee in connection with its
covenants contained herein or in any of the Operative Agreements,
including, without limitation, at any time and from time to time, upon
the request of the Lessee, to promptly and duly execute and deliver any
and all such further instruments, documents and financing statements
(and continuation statements related thereto) as the Lessee may
reasonably request in order to perform such covenants. The Lessor agrees
that, to the extent it shall obtain actual knowledge of the occurrence
of a Default caused by the Lessor or any of its Affiliates, it shall
promptly notify the Lessee describing the same in reasonable detail.
- COVENANTS OF THE LESSOR. The Lessor hereby agrees as to itself that so
long as this Agreement is in effect:
18.
20
- DISCHARGE OF LIENS. The Lessor will not create or permit to exist at any
time, and will, at its own cost and expense, promptly take such action
as may be necessary duly to discharge, or to cause to be discharged, all
Lessor Liens on the Property attributable to it or any of its
Affiliates; provided, however, that the Lessor shall not be required to
so discharge any such Lessor Lien while the same is being contested in
good faith by appropriate proceedings diligently prosecuted so long as
such proceedings shall not involve any material danger of impairment of
the Liens of the Security Documents or of the sale, forfeiture or loss
of, and shall not interfere with the use or disposition of, the Property
or title thereto or any interest therein or the payment of Rent.
- CHANGE OF CHIEF PLACE OF BUSINESS. The Lessor shall give prompt notice
to the Lessee and the Agent if the Lessor's chief place of business or
chief executive office, or the office where the records concerning the
accounts or contract rights relating to the Property are kept, shall
cease to be located at the address set forth on SCHEDULE 2.1 hereto or
if it shall change its name.
- OPERATIVE DOCUMENTS. Neither Lessor nor Agent shall:
- Modify this Section 9.2 without the consent of all of the Rent
Purchasers;
- increase the aggregate amount of any Rent Purchaser's Commitment,
increase the aggregate amount of any Advances required to be made
by a Rent Purchaser pursuant to its Commitments, or extend the
Term without the consent of such Rent Purchaser;
- extend the due date for any scheduled repayment of principal of
any Rent Purchaser's Advance or reduce the principal amount of or
rate of interest on any Rent Purchaser's Advance or extend the
date on which interest or fees are payable in respect of such
Rent Purchaser's Advance, in each case, without the consent of
such Rent Purchaser;
- reduce the percentage set forth in the definition of "Majority
Rent Purchasers" or any requirement hereunder that any particular
action be taken by all Rent Purchasers without the consent of all
Rent Purchasers;
- except as otherwise expressly provided in this Agreement or
another Operative Agreement, release all or any substantial part
of the Collateral under the Operative Agreements, in either case
without the consent of all Rent Purchasers; or
- without the prior written consent of Majority Rent Purchasers,
execute any other waiver, modification or amendment of the
Operative Agreements, except a waiver, modification or amendment
that the Lessee requests pursuant to express provisions of the
Operative Agreements and that the Lessor believes in good faith
it must execute to satisfy the requirements of the Operative
Agreements.
- COVENANTS OF THE LESSEE. The Lessee hereby agrees that so long as this
Agreement is in effect:
19.
21
- INFORMATION. The Lessee will deliver to the Lessor and the Agent:
- as soon as available and in any event within one hundred (100)
days after the end of each fiscal year of the Lessee a statement
of financial position of the Lessee and its consolidated
subsidiaries as of the end of such fiscal year and the related
consolidated statements of income, shareholder's equity and cash
flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all
reported on by independent accountants of nationally recognized
standing, together with an Officer's Certificate from the chief
financial officer of the Lessee substantially containing a
computation of, and showing compliance with, each of the
financial ratios and restrictions contained in this Section 9.3
and stating that no Default or Event of Default has occurred or
is continuing or, if any Default or Event of Default has occurred
and is continuing, describing it and the steps, if any, being
taken to cure it;
- as soon as available and in any event within fifty (50) days
after the end of each of the first three (3) quarters of each
fiscal year of the Lessee, an unaudited consolidated statement of
financial position of the Lessee as of the end of such period and
the related consolidated statements of income, shareholders'
equity and cash flows for such period and for the portion of the
Lessee's fiscal year ended at the end of such period, setting
forth in each case in comparative form the figures for the same
period in the previous fiscal year, together with an Officer's
Certificate of the chief financial officer of the Lessee or other
officer responsible for the financial affairs of the Lessee
containing a computation of, and showing compliance with, each of
the financial ratios and restrictions contained in this Section
9.3 and stating that no Default or Event of Default has occurred
or is continuing or, if any Default or Event of Default has
occurred and is continuing, describing it and the steps, if any,
being taken to cure it;
- promptly after the filing thereof, if applicable, copies of all
reports on Forms 10-K, 10-Q and 8-K (or their equivalents),
prospectuses and registration statements which the Lessee shall
have filed with the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended;
- if and when any member of the ERISA Group (1) gives or is
required to give notice to the PBGC of any "reportable event" (as
defined in Section 4043 of ERISA) with respect to any Plan which
might constitute grounds for a termination of such Plan under
Title IV or ERISA, or knows that the plan administrator of any
Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event
given or required to be given to the PBGC; (2) receives notice of
complete or partial withdrawal liability under Title IV of ERISA
or notice that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such notice; (3)
receives notice from the PBGC under Title IV of ERISA of an
intent to terminate, impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or appoint a trustee
to administer any Plan, a copy of such notice; (4) applies for a
waiver of the minimum funding standard under Section 412 of the
Code, a copy of such application; (5) gives notice of intent to
terminate any Plan under Section 4041(c)
20.
22
of ERISA, a copy of such notice and other information filed with
the PBGC; (6) gives notice of withdrawal from any Plan pursuant
to Section 4063 of ERISA, a copy of such notice; or (7) fails to
make any payment or contribution to any Plan or Multiemployer
Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted
or could result in the imposition of a Lien or the posting of a
bond or other security, a certificate of the chief financial
officer or the chief accounting officer of the Lessee setting
forth details as to such occurrence and action, if any, which the
Lessee or applicable member of the ERISA Group is required or
proposes to take;
- promptly after the occurrence of any Default or Event of Default,
notice thereof in writing by an authorized officer of the Lessee,
together with information regarding the steps, if any, being
taken or proposed to be taken to cure it;
- at least ten (10) Business Days prior to the expiration of any
policy of insurance required by Section 14 of the Lease,
confirmation of renewal;
- within three days of the end of each month during which Lessee is
required to maintain Pledged Collateral pursuant to Section
5.4(a)(ii) hereof, a written certification of the Chief Financial
Officer of Lessee as to Lessee's Cash Balance at the end of such
month; and
- from time to time such additional information regarding the
Lessee or the Property as the Lessor or the Agent, at the request
of the Lessor or any Rent Purchaser, may reasonably request.
- COMPLIANCE WITH LAWS. The Lessee will, and will cause its Subsidiaries
to, comply in all material respects with all applicable laws,
ordinances, rules, regulations, orders and requirements of governmental
authorities (including, without limitation, Environmental Laws and ERISA
and the rules and regulations thereunder) except where the necessity of
compliance therewith is contested in good faith by appropriate
proceedings and such contest is not reasonably likely to result in a
Material Adverse Effect.
- FURTHER ASSURANCES. The Lessee shall take or cause to be taken from time
to time all action necessary to assure during the Term that title to the
Property remains in the Lessor as contemplated by Section 12.1 of the
Lease, that the Lessor holds a perfected Lien on the Property securing
the Lease Balance as contemplated by Section 7.1 of the Lease, and that
the Lessor and the Agent for the benefit of the Rent Purchasers hold a
perfected Lien on the Pledged Collateral securing the Obligations.
- EXISTENCE; FRANCHISES; BUSINESSES. Except as otherwise expressly
permitted in this Agreement, the Lessee shall, and shall cause each
Subsidiary to (i) maintain in full force and effect its separate
existence and all rights, licenses, leases and franchises reasonably
necessary to the conduct of its business, and (ii) continue doing
business as a whole in the substantially the same types of business in
which they were engaged on the Closing Date.
- BOOKS AND RECORDS. The Lessee shall, and shall cause each Subsidiary to,
maintain its books and records in accordance with GAAP, and permit the
Lessor and the Agent to
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make or cause to be made inspections and audits of any books, records
and papers of the Lessee and its Subsidiaries and to make extracts
therefrom at all such reasonable times and as often as any such Person
may reasonably require.
- FUNDAMENTAL CHANGES. The Lessee shall not, nor shall it permit any
Subsidiary to, enter into any merger, consolidation or amalgamation,
where it is not the surviving entity, or liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution); convey, sell, assign,
transfer or otherwise dispose of all or substantially all of the
property, business or assets of the Lessee and its Subsidiaries;
provided, however, that if (i) at least thirty (30) days prior to the
consummation of such transaction the Lessee shall have furnished to the
Lessor and the Agent an Officer's Certificate of the chief financial
officer of the Lessee that no Default or Event of Default shall occur
after giving effect thereto, and (ii) no Default or Event of Default
shall have occurred before or after giving effect thereto, then:
- any Subsidiary of the Lessee may be merged or consolidated with
or into the Lessee (provided, however, that the Lessee shall be
the continuing or surviving corporation) or with or into any one
or more wholly-owned Subsidiaries of the Lessee (provided,
however, that the wholly-owned Subsidiary or Subsidiaries shall
be the continuing or surviving corporation); and
- any wholly-owned Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Lessee or any other wholly-owned
Subsidiary of the Lessee.
- LIENS. The Lessee shall not create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
- any Lien existing on property of the Lessee on the Funding Date
and set forth in SCHEDULE 9.3 securing Indebtedness outstanding
on such date;
- any Lien created under any Operative Document;
- Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty;
- carrier's, warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course
of business which are not delinquent or remain payable without
penalty;
- Liens (other than any Lien imposed by ERISA) consisting of
pledges or deposits required in the ordinary course of business
in connection with workers' compensation, unemployment insurance
and other social security legislation;
- Liens on the property of the Lessee securing (A) the
non-delinquent performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, (B)
contingent obligations on surety and appeal bonds, and (C) other
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non-delinquent obligations of a like nature; in each case,
incurred in the ordinary course of business;
- Liens arising solely by virtue of any statutory or common law
provisions relating to banker's liens, rights of set-off or
similar rights and remedies as to deposit accounts or other funds
maintained with a depository institution; provided, however, that
(A) such deposit account is not a dedicated cash collateral
account and is not subject to restrictions against access by the
Lessee in excess of those set forth by regulations promulgated by
the Board, and (B) such deposit account is not intended by the
Lessee or any Subsidiary to provide collateral to the depository
institution;
- Permitted Liens; and
- Liens otherwise permitted under the Credit Facility as of the
Closing Date.
- INTENTIONALLY OMITTED.
- FINANCIAL COVENANTS OF LESSEE. The Lessee and its Subsidiaries shall
maintain, on a consolidated basis, all of the following financial
covenants. The Lessee agrees and understands that (except as expressly
provided herein) all covenants under this Section 9.3(i) shall be
subject to compliance as measured as of the last day of each Fiscal
Quarter.
- MINIMUM QUICK RATIO. Maintain a Quick Ratio of not less than 1.35
to 1.0.
- MAXIMUM SENIOR INDEBTEDNESS RATIO. Maintain a Senior Indebtedness
Ratio of not greater than 0.25 to 1.0.
- MINIMUM TANGIBLE NET WORTH. Maintain Tangible Net Worth on any
date of determination (such date to be referred to herein as a
"determination date") which occurs after December 27, 1998 (such
date to be referred to herein as the "base date") to be less than
the sum on such determination date of the following: (A)
$350,000,000; plus (B) Seventy-five percent (75%) of the sum of
the Lessee's consolidated quarterly net income (ignoring any
quarterly losses) for each quarter ending after the base date
through and including the quarter ending immediately prior to the
determination date; plus (C) one hundred percent (100%) of the
Net Issuance Proceeds of all Equity Securities issued by the
Lessee and its Subsidiaries during the period commencing on the
base date and ending on the determination date; plus (D) one
hundred percent (100%) of the aggregate decrease in the total
liabilities of the Lessee and its Subsidiaries resulting from
conversions of convertible Subordinated Indebtedness or other
liabilities of the Lessee and its Subsidiaries into Equity
Securities of the Lessee and its Subsidiaries during the period
commencing on the base date and ending on the determination date.
- MINIMUM DEBT SERVICE COVERAGE RATIO. Maintain a Debt Service
Coverage Ratio of not less than the ratio set forth opposite such
period below:
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Through December 26, 1999 1.50 to 1.00
December 27, 1999 - March 26, 2000 1.75 to 1.00
March 27, 2000 - June 25, 2000 2.00 to 1.00
June 26, 2000 - September 24, 2000 2.75 to 1.00
Thereafter 3.00 to 1.00
-
TRANSFER OF INTEREST
- ASSIGNMENTS. Each Participant may, after consultation with, and, so long
as no Default or Event of Default then exists, the agreement of, the
Lessee (such agreement not to be unreasonably withheld and provided that
no agreement by Lessee shall be required in the case of an assignment to
an Eligible Rent Purchaser), assign all or a portion of its rights and
obligations hereunder pursuant to an assignment agreement substantially
in the form of EXHIBIT B (an "Assignment and Acceptance") to one or more
Persons, with respect to Rent Purchaser Commitments and Rent Purchaser
Advances or the Lessor Commitment and Lessor Contribution, provided that
each such assignment shall be of a constant, not varying, percentage of
all of the assigning Participant's rights and obligations under the
Operative Agreements. In the case of assignments made by a Rent
Purchaser, any such assignment shall (a) be to an Eligible Rent
Purchaser and (b) be in a minimum aggregate amount of $5,000,000 of its
Rent Purchaser Commitment (or the balance of such Rent Purchaser
Commitment, if less) and the aggregate remaining Rent Purchaser
Commitment of the assigning Rent Purchaser shall, after giving effect to
the proposed assignment, be at least $5,000,000 or if less, zero. In the
case of assignments made by Lessor, any such assignment shall (a) be to
an Eligible Lessor and (b) be in a minimum aggregate amount of
$1,000,000 of its Lessor Commitment (or the balance of such Lessor
Commitment, if less) and the aggregate remaining Lessor Commitment of
the assigning Lessor shall, after giving effect to the proposed
assignment, be at least $1,000,000 or if less, zero. Any assignment
hereunder shall be effective upon delivery to the Lessor of written
notice of the assignment together with a transfer fee of $3,500 payable
by the assignor Participant or the assignee Participant to the Agent for
its own account. The assigning Participant will give prompt notice to
the Agent and the Lessee of any such assignment. Upon the effectiveness
of any such assignment (and after notice to and agreement of the Lessee
and the Lessor, as provided herein), the assignee shall become a "Rent
Purchaser" or "Lessor," as the case may be, for all purposes of the
Operative Agreements and, to the extent of such assignment, the
assigning Participant shall be relieved of its obligations hereunder to
the extent of the Advances or Lessor Contribution, as the case may be,
and Commitment components being assigned. The Lessee shall not be
responsible for any costs or expenses incurred by any Participant in
connection with an assignment of all or any of its rights and
obligations in connection with an assignment pursuant to this Section
10.1.
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- PARTICIPATIONS. Each Participant may sell, transfer, grant or assign
participations in all or any part of such Participant's interests and
obligations hereunder; provided, that (a) such selling Participant shall
remain a "Rent Purchaser" or "Lessor", as the case may be, for all
purposes under the Operative Agreements (such selling Participant's
obligations under the Operative Agreements remaining unchanged) and the
sub-participant shall not constitute a Rent Purchaser or a Lessor, as
the case may be, hereunder, (b) no such sub-participant shall have, or
be granted, rights to approve any amendment or waiver relating to the
Operative Agreements except to the extent any such amendment or waiver
would (i) reduce the principal of or rate of interest on or fees in
respect of any Rent Purchaser Advances or the Lessor Contribution in
which the sub-participant is participating, (ii) postpone the date fixed
for any payment of principal (including extension of the Expiration Date
or the date of any mandatory prepayment), interest or fees in which the
sub-participant is participating, or (iii) release all or substantially
all of the collateral or guarantees (except as expressly provided in the
Operative Agreements) supporting any of the Rent Purchaser Advances or
Lessor Contribution or Commitments in which the sub-participant is
participating, and (c) sub-sub-participations by the sub-participant
(except to an Affiliate, parent company or Affiliate of a parent company
of the participant) shall be prohibited. In the case of any such
participation, the sub-participant shall not have any rights under the
Operative Agreements (the sub-participants rights against the selling
Participant in respect of such participation to be those set forth in
the participation agreement with such Participant creating such
participation) and all amounts payable by the Lessee hereunder shall be
determined as if such Participant had not sold such participation;
provided, however, that such sub-participant shall be entitled to
receive additional amounts under Sections 11.2 and 11.6 on the same
basis as if it were a Participant (but only to the extent that the
Participant would have been entitled to receive such additional amounts
with respect to the interest participated had it not sold such
participation). The Lessee shall not be responsible for any costs or
expenses incurred by any Participant in connection with a sale,
transfer, grant or assignment of participations pursuant to this Section
10.2.
- DISCLOSURE OF INFORMATION; PLEDGE UNDER REGULATION A.
- Any Participant may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 10,
disclose to such assignee or participant or proposed assignee or
participant, any information relating to Lessee or the Transactions,
provided, that prior to such disclosure such proposed assignee or
participant shall have agreed in writing to keep any such information
confidential substantially on the terms of Section 10.3(b).
- The Agent, the Rent Purchasers and the Lessor understand that some of
the information and documents furnished to it pursuant to the Operative
Agreements may be confidential and each of them agrees that it will keep
all non-public information, documents and agreements so furnished to it
confidential and will make no disclosure to other Persons of such
information or agreements until it shall have become public, except
disclosure may be made (i) to the extent required in connection with
matters involving operations under or enforcement or amendment of the
Operative Agreements; (ii) to the Rent Purchasers' and the Lessor's
examiners and auditors or in accordance with the Rent Purchasers' or
Lessor's obligations under law or regulations or pursuant to subpoenas
or other process to
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make information available to governmental agencies and examiners or to
others; (iii) to any corporate Affiliate of any Participant so long as
such Affiliate agrees to accept such information or agreement subject
too the restrictions provided in this Section 10.3(b); (iv) to the
Participant's counsel and other professional advisors so long as such
Persons are instructed to keep such information confidential in
accordance with the provisions of this Section 10.3(b); (v) to proposed
assignees and participants in accordance with Section 10.3(a); and (vi)
with the prior written consent of the Lessee.
- Anything in this Section 10 to the contrary notwithstanding, any
Participant may without the consent of Lessee, the Agent, the Rent
Purchasers or the Lessor assign and pledge all or any portion of the
Obligations held by it to any Federal Reserve Bank, the United States
Treasury or to any other financial institution as collateral security
pursuant to Regulation A of the Federal Reserve Board and any operating
circular issued by the Federal Reserve System and/or the Federal Reserve
Bank or otherwise; provided, any payment by Lessee for the benefit of
the assigning or pledging Participant shall be deemed to satisfy the
Lessee's obligations with respect thereto.
-
INDEMNIFICATION
- GENERAL INDEMNITY. The Lessee, whether or not any of the transactions
contemplated hereby shall be consummated, hereby assumes liability for
and agrees to defend, indemnify and hold harmless each Indemnified
Person on an After Tax Basis from and against any Claims which may be
imposed on, incurred by or asserted against an Indemnified Person in any
way relating to or arising or alleged to arise out of (a) the financing,
refinancing, ground lease purchase, acceptance, rejection, ownership,
design, construction, delivery, acceptance, nondelivery, leasing,
subleasing, possession, use, operation, repair, maintenance,
modification, transportation, condition, operation, sale, return,
repossession (whether by summary proceedings or otherwise), or any other
disposition of the Property or any part thereof, (b) any latent or other
defects in any property whether or not discoverable by an Indemnified
Person or the Lessee; (c) a violation of any Legal Requirement or
Requirement of Law, including any violation of Environmental Laws, the
Release, presence or use of Hazardous Substances on, at, under or
emanating from the Property or other loss of or damage relating to the
Property; (d) the Operative Agreements, or any transaction contemplated
thereby; (e) any breach by the Lessee of any of its representations or
warranties under the Operative Agreements or failure by the Lessee to
perform or observe any covenant or agreement to be performed by it under
any of the Operative Agreements; (f) personal injury, death or property
damage relating to the Property, including Claims based on strict
liability in tort; (g) the existence of any Lien on or with respect to
the Property, the Improvements, the Equipment, any Basic Rent or
Supplemental Rent, title thereto, or any interest therein, including any
Liens which arise out of the possession, use, occupancy, construction,
repair or rebuilding of the Property or by reason of labor or materials
furnished or claimed to have been furnished to the Lessee, the Lessor,
or any of their contractors or agents or by reason of the financing of
the Property or any personally or equipment purchased or leased by the
Lessee or Improvements or Modifications constructed by the Lessee,
except Lessor Liens and Liens in favor of the Agent or the Lessor; and
(h) the Transactions contemplated hereby or by any other Operative
Agreement, in respect of the
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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; but in
any event excluding (x) Claims to the extent such Claims arise solely
out of events occurring after the expiration of the Term and after the
Lessee's discharge of all its obligations under the Lease and the other
Operative Agreements or (y) as to any Indemnified Person, any Claim to
the extent resulting from the willful misconduct or gross negligence of
such Indemnified Person. The Lessee shall be entitled to control, and
shall assume full responsibility for the defense of, any Claim;
provided, however, that any Indemnified Person named in such Claim may
retain separate counsel reasonably acceptable to the Lessee at the
expense of the Lessee in the event of and to the extent of an actual
conflict. The Lessee and each Indemnified Person agree to give each
other prompt written notice of any Claim hereby indemnified against but
the giving of any such notice by an Indemnified Person shall not be a
condition to the Lessee's obligations under this Section 11.1, except to
the extent failure to give such notice materially prejudices the
Lessee's rights hereunder. After an Indemnified Person has been fully
indemnified for a Claim pursuant to this Section 11.1, and so long as no
Event of Default shall have occurred and be continuing, the Lessee shall
be subrogated to any right of such Indemnified Person with respect to
such Claim. None of the Indemnified Persons shall settle a Claim without
the consent of the Lessee, which consent shall not be unreasonably
withheld or delayed.
- GENERAL IMPOSITIONS INDEMNITY.
- INDEMNIFICATION. The Lessee shall pay and assume liability for, and does
hereby agree to indemnify, protect and defend the Property and all
Indemnified Persons, and hold them harmless against, all Impositions on
an After Tax Basis.
- PAYMENTS.
- Subject to the terms of Section 11.2(f), the Lessee shall pay or
cause to be paid all Impositions directly to the taxing
authorities where feasible and otherwise to the Indemnified
Person, as appropriate, and the Lessee shall at its own expense,
upon such Indemnified Person's reasonable request, furnish to
such Indemnified Person copies of official receipts or other
satisfactory proof evidencing such payment.
- In the case of Impositions for which no contest is conducted
pursuant to Section 11.2(f) and which the Lessee pays directly to
the taxing authorities, the Lessee shall pay such Impositions
thirty (30) days prior to the latest time permitted by the
relevant taxing authority for timely payment. In the case of
Impositions for which the Lessee reimburses an Indemnified
Person, the Lessee shall do so within twenty (20) days after
receipt by the Lessee of demand by such Indemnified Person
describing in reasonable detail the nature of the Imposition and
the basis for the demand (including the computation of the amount
payable), but in no event shall the Lessee be required to pay
such reimbursement prior to thirty (30) days before the latest
time permitted by the relevant taxing authority for timely
payment. In the case of Impositions for which a contest is
conducted pursuant to Section 11.2(f), the Lessee shall pay such
Impositions or reimburse such Indemnified Person for such
Impositions, to the extent not previously paid or
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reimbursed pursuant to subsection (a), thirty (30) days prior to
the latest time permitted by the relevant taxing authority for
timely payment after conclusion of all contests under Section
11.2(f).
- Impositions imposed with respect to the Property for a billing
period during which the Lease expires or terminates (unless a
Renewal Term is to apply or the Lessee has exercised the Purchase
Option or the Maturity Date Purchase Option with respect to the
Property) shall be adjusted and prorated on a daily basis between
the Lessee and the Lessor, whether or not such Imposition is
imposed before or after such expiration or termination and each
party shall pay or reimburse the other for each party's pro rata
share thereof.
- At the Lessee's request, the amount of any indemnification
payment by the Lessee pursuant to subsection (a) shall be
verified and certified by an independent public accounting firm
mutually acceptable to the Lessee and the Indemnified Person. The
fees and expenses of such independent public accounting firm
shall be paid by the Lessee unless such verification shall result
in an adjustment in the Lessee's favor of 10% or more of the
payment as computed by the Indemnified Person, in which case such
fee shall be paid by the Indemnified Person.
- REPORTS AND RETURNS. (i) The Lessee shall be responsible for preparing
and filing any real and personal property or ad valorem tax returns in
respect of the Property. In case any other report or tax return shall be
required to be made with respect to any obligations of the Lessee under
or arising out of subsection (a) and of which the Lessee has knowledge
or should have knowledge, the Lessee, at its sole cost and expense,
shall notify the relevant Indemnified Person of such requirement and
(except if such Indemnified Person notifies the Lessee that such
Indemnified Person intends to file such report or return) (A) to the
extent required or permitted by and consistent with applicable law, make
and file in its own name such return, statement or report; and (B) in
the case of any other such return, statement or report required to be
made in the name of such Indemnified Person, advise such Indemnified
Person of such fact and prepare such return, statement or report for
filing by such Indemnified Person or, where such return, statement or
report shall be required to reflect items in addition to any obligations
of the Lessee under or arising out of subsection (a), provide such
Indemnified Person at the Lessee's expense with information sufficient
to permit such return, statement or report to be properly made with
respect to any obligations of the Lessee under or arising out of
subsection (a). Such Indemnified Person shall, upon the Lessee's request
and at the Lessee's expense, provide any data maintained by such
Indemnified Person (and not otherwise available to or within the control
of the Lessee) with respect to the Property which the Lessee may
reasonably require to prepare any required tax returns or reports. Each
Indemnified Person agrees to use commercially reasonable efforts to send
to the Lessee a copy of any written request or other notice that the
Indemnified Person receives with respect to any reports or returns
required to be filed with respect to the Property or the transactions
contemplated by the Operative Documents, it being understood that no
Indemnified Person shall have any liability for failure to provide such
copies.
- INCOME INCLUSIONS. If as a result of the payment or reimbursement by the
Lessee of any expenses of any Lessor or the payment of any Transaction
Expenses incurred in
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connection with the transactions contemplated by the Operative
Documents, the Lessor or any Rent Purchaser shall suffer a net increase
in any federal, state or local income tax liability, the Lessee shall
indemnify such Persons (without duplication of any indemnification
required by subsection (a)) on an After Tax Basis for the amount of such
increase. The calculation of any such net increase shall take into
account any current or future tax savings realized or reasonably
expected to be realized by such person in respect thereof, as well as
any interest, penalties and additions to tax payable by the Lessor, the
Lender or such Affiliate, in respect thereof.
- WITHHOLDING TAXES. As between the Lessee on one hand, and any
Participant on the other hand, the Lessee shall be responsible for, and,
subject to the provisions of Sections 11.2(g) and (h), the Lessee shall
indemnify and hold harmless the Participants (without duplication of any
indemnification required by subsection (a)) on an After Tax Basis
against, any obligation for United States or foreign withholding taxes
imposed in respect of payments with respect to the Rent Purchaser
Advances or the Lessor Contribution or with respect to Rent payments
under the Lease or payments of the Termination Value or the Purchase
Option Price (and, if any Participant receives a demand for such payment
from any taxing authority, the Lessee shall discharge such demand on
behalf of such Participant).
- CONTESTS OF IMPOSITIONS.
- If a written claim is made against any Indemnified Person or if
any proceeding shall be commenced against such Indemnified Person
(including a written notice of such proceeding), for any
Impositions, such Indemnified Person shall promptly notify the
Lessee in writing and shall not take action with respect to such
claim or proceeding without the consent of the Lessee for thirty
(30) days after the receipt of such notice by the Lessee;
provided, however, that, in the case of any such claim or
proceeding, if action shall be required by law or regulation to
be taken prior to the end of such 30-day period, such Indemnified
Person shall, in such notice to the Lessee, inform the Lessee of
such shorter period, and no action shall be taken with respect to
such claim or proceeding without the consent of the Lessee before
two days before the end of such shorter period; provided,
further, that the failure of such Indemnified Person to give the
notices referred to in this sentence shall not diminish the
Lessee's obligation hereunder except to the extent such failure
precludes the Lessee from contesting all or part of such claim.
- If, within thirty (30) days of receipt after such notice from the
Indemnified Person (or such shorter period as the Indemnified
Person has notified the Lessee as required by law or regulation
for the Indemnified Person to commence such contest), the Lessee
shall request in writing that such Indemnified Person contest
such Imposition, the Indemnified Person shall, at the expense of
the Lessee, in good faith conduct and control such contest
(including, without limitation, by pursuit of appeals) relating
to the validity, applicability or amount of such Impositions
(provided, however, that (A) if such contest involves a tax other
than a tax on net income and can be pursued independently from
any other proceeding involving a tax liability of such
Indemnified Person, the Indemnified Person, at the Lessee's
request, shall allow the Lessee to conduct and control such
contest
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and (B) in the case of any contest, the Indemnified Person may
request the Lessee to conduct and control such contest) by, in
the sole discretion of the Person conducting and controlling such
contest, (1) resisting payment thereof, (2) not paying the same
except under protest, if protest is necessary and proper, or (3)
if the payment be made, using reasonable efforts to obtain a
refund thereof in appropriate administrative and judicial
proceedings.
- The party controlling any contest shall consult in good faith
with the non-controlling party and shall keep the non-controlling
party reasonably informed as to the conduct of such contest;
provided, that all decisions ultimately shall be made in the sole
discretion of the controlling party. The parties agree that an
Indemnified Person may at any time decline to take further action
with respect to the contest of any Imposition and may settle such
contest if such Indemnified Person shall waive its rights to any
indemnity from the Lessee that otherwise would be payable in
respect of such claim and shall pay to the Lessee any amount
previously paid or advanced by the Lessee pursuant to this
Section 11.2 by way of indemnification or advance for the payment
of an Imposition other than expenses of such contest.
- Notwithstanding the foregoing provisions of this Section 11.2, an
Indemnified Person shall not be required to take any action and
the Lessee shall not be permitted to contest any Impositions in
its own name or that of the Indemnified Person unless (A) the
Lessee shall have agreed to pay in writing and shall pay to such
Indemnified Person on demand and on an After Tax Basis all
reasonable costs, losses and expenses that such Indemnified
Person actually incurs in connection with contesting such
Impositions, including, without limitation, all reasonable legal,
accounting and investigatory fees and disbursements and the
contested claim if ultimately required to be paid, (B) in the
case of a claim that must be pursued in the name of an
Indemnified Person (or an Affiliate thereof), the amount of the
potential indemnity exceeds $50,000, (C) the Indemnified Person
shall have reasonably determined that the action to be taken will
not result in any material danger of sale, forfeiture or loss of
the Property or the Defeasance Deposit Collateral, or any part
thereof or interest therein, will not interfere with the payment
of Rent, and will not result in risk of criminal liability, (D)
if such contest shall involve the payment of the Imposition prior
to the contest, the Lessee shall provide to the Indemnified
Person an interest-free advance in an amount equal to the
Imposition that the Indemnified Person is required to pay (with
no additional net after-tax cost to such Indemnified Person), (E)
the Lessee shall have provided to such Indemnified Person an
opinion of independent tax counsel selected by the Lessee and
reasonably satisfactory to the Indemnified Person stating that a
reasonable basis exists to contest such claim (or, in the case of
an appeal of an adverse determination, an opinion of such counsel
to the effect that the position asserted in such appeal will more
likely than not prevail), and (F) no Event of Default shall have
occurred and be continuing. In no event shall an Indemnified
Person be required to appeal an adverse judicial determination to
the United States Supreme Court. In addition, an Indemnified
Person shall not be required to contest any claim in its name (or
that of an Affiliate) if the subject matter thereof shall be of a
continuing nature and shall have previously been decided
adversely by a court of competent jurisdiction pursuant to the
contest provisions of this Section 11.2,
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unless there shall have been a change in law (or interpretation
thereof) and the Indemnified Person shall have received, at the
Lessee's expense, an opinion of independent tax counsel selected
by the Indemnified Person and reasonably acceptable to the Lessee
stating that as a result of such change in law (or interpretation
thereof), it is more likely than not that the Indemnified Person
will prevail in such contest.
- DOCUMENTATION OF WITHHOLDING STATUS. Each Participant (or any successor
thereto or Transferee thereof) that is organized under the laws of a
jurisdiction outside of the United States of America shall:
- on or before the date it becomes a party to any Operative
Agreement, deliver to the Lessee any certificates, documents or
other evidence that shall be required by the Code or Treasury
Regulations issued pursuant thereto to establish its exemption
from United States Federal withholding requirements, including
(A) two (2) valid, duly completed, original copies of Internal
Revenue Service Form 1001 or Form 4224 or successor applicable
form, properly and duly executed, certifying in each case that
such party is entitled to receive payments pursuant to the
Operative Documents without deduction or withholding of United
States Federal income taxes, and (B) a valid, duly completed,
original copy of Internal Revenue Service Form W-8 or Form W-9 or
applicable successor form, properly and duly executed, certifying
that such party is entitled to an exemption from United States of
America backup withholding tax; and
- or before the date that any such form described above expires or
becomes obsolete, or after the occurrence of any event requiring
a change in the most recent such form previously delivered to the
Lessee, deliver to the Lessee two (2) further valid, duly
completed, original copies of any such form or certification,
properly and duly executed.
- LIMITATION ON TAX INDEMNIFICATION. The Lessee shall not be required to
indemnify any Indemnified Person, or to pay any increased amounts to any
Indemnified Person or tax authority with respect to any Impositions
pursuant to this Section 11.2 to the extent that (i) any obligation to
withhold, deduct, or pay amounts with respect to Tax existed on the date
such Indemnified Person became a party to any Operative Agreement (and,
in such case, the Lessee may deduct and withhold such Tax from payments
pursuant to the Operative Agreements), or (ii) such Indemnified Person
fails to comply with the provisions of Section 11.2(g) (and, in such
case, the Lessee may deduct and withhold all Taxes required by law as a
result of such noncompliance from payments made by the Lessee pursuant
to the Operative Agreements). With respect to any Transferee of any
Participant (including a transfer resulting from any change in the
designation of the lending office of a Participant), the Transferee
shall not be entitled to any greater payment or indemnification under
this Section 11.2 than the transferor would have been entitled to.
- LIBOR LENDING UNLAWFUL. Notwithstanding any other provision herein, if
the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof occurring after the Closing Date
shall make it unlawful for any Participant to make, continue or maintain
LIBOR Rent Purchaser Advances or LIBOR Lessor Contributions as
contemplated by the Operative Agreements, (a) such Participant shall
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promptly give written notice of such circumstances to the Lessee, the
Lessor and the Rent Purchasers (which notice shall be withdrawn whenever
such circumstances no longer exist), (b) such Participant shall
undertake reasonable efforts to propose a money rate comparable to LIBOR
(the "LIBOR Alternative"), (c) the commitment of such Rent Purchaser or
Lessor, as the case may be, hereunder to make, continue or maintain
LIBOR Rent Purchaser Advances or LIBOR Lessor Contributions shall
forthwith be canceled and, until such time as it shall no longer be
unlawful for such Participant to make, continue or maintain LIBOR Rent
Purchaser Advances or LIBOR Lessor Contributions, such Participant shall
then have a commitment only to make or maintain Rent Purchaser Advances
or the Lessor Contributions based on ABR or the LIBOR Alternative, if
any, when a LIBOR Rent Purchaser Advance or LIBOR Lessor Contribution is
requested and (d) such Participant's Rent Purchaser Advances and Lessor
Contributions then outstanding as LIBOR Rent Purchaser Advances or LIBOR
Lessor Contributions, if any, shall be converted automatically to Rent
Purchaser Advances or Lessor Contributions based on ABR or the LIBOR
Alternative, if any, on the respective last days of the then current
Interest Periods with respect to such Rent Purchaser Advances and Lessor
Contributions or within such earlier period as required by law. If any
such conversion of LIBOR Rent Purchaser Advances or LIBOR Lessor
Contributions occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Lessee shall pay to
such Participant such amounts, if any, as may be required pursuant to
Section 11.6. In any such case, interest and principal (if any) shall be
payable contemporaneously with the related LIBOR Rent Purchaser Advances
or LIBOR Lessor Contributions of the other Participants.
- DEPOSITS UNAVAILABLE. If any of the Participants shall have determined
that:
- Dollar deposits in the relevant amount and for the relevant Interest
Period are not available to the Participant in its relevant market; or
- by reason of circumstances affecting the Participant's relevant market,
adequate means do not exist for ascertaining the interest rate or Yield,
as the case may be, applicable to such Participant's LIBOR Rent
Purchaser Advances or LIBOR Lessor Contributions;
then, upon notice from such Participant to the Lessee and the other
Participants, (x) the obligations of the Participants to make or continue any
Rent Purchaser Advances or the Lessor Contributions as, or to convert any Rent
Purchaser Advances or the Lessor Contribution into, LIBOR Rent Purchaser
Advances or LIBOR Lessor Contributions shall be suspended, and (y) each
outstanding LIBOR Rent Purchaser Advance or LIBOR Lessor Contribution shall
automatically convert into an Rent Purchaser Loan or Lessor Contribution based
on ABR or the LIBOR Alternative, if any, on the last day of the current Interest
Period applicable thereto.
- INCREASED COSTS, ETC.
- If the adoption of or any change in a Requirement of Law or in the
interpretation or application thereof applicable to any Participant, or
compliance by any Participant with any request or directive (whether or
not having the force of law) from any central bank or
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other Governmental Authority, in each case made subsequent to the
Closing Date (or, if later, the date on which such Participant becomes a
Participant):
- shall subject such Participant to any tax of any kind whatsoever
with respect to any LIBOR Rent Purchaser Advances or LIBOR Lessor
Contributions made, continued or maintained by it or its
obligation to make, continue or maintain LIBOR Rent Purchaser
Advances or LIBOR Lessor Contributions, or change the basis of
taxation of payments to such Participant in respect thereof; or
- 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,
Rent Purchaser Advances and the Lessor Contribution, advances or
other extensions of credit by, or any other acquisition of funds
by, any office of such Participant which is not otherwise
included in the determination of the Adjusted LIBOR Rate
hereunder; or
- shall impose on such Participant any other condition (excluding
any Tax of any kind) whatsoever in connection with the Operative
Agreements;
and the result of any of the foregoing is to increase the cost to such
Participant, by an amount which such Participant reasonably deems to be
material, of making, continuing or maintaining LIBOR Advances or LIBOR Lessor
Contributions or to reduce any amount receivable hereunder in respect thereof,
then, in any such case, upon notice to the Lessee from such Participant, through
the Lessor or the Agent, in accordance herewith, the Lessee shall pay such
Participant any additional amounts necessary to compensate such Participant for
such increased cost or reduced amount receivable; provided, that, in any such
case, the Lessee may elect to convert the LIBOR Rent Purchaser Advances or LIBOR
Lessor Contributions made by such Participant hereunder to Rent Purchaser
Advances or Lessor Contributions based on ABR or the LIBOR Alternative, if any,
by giving the Lessor and the Agent at least one (1) Business Day's notice of
such election, in which case the Lessee shall promptly pay to such Participant,
upon demand, without duplication, such amounts, if any, as may be required
pursuant to Section 11.6. All payments required by this Section 11.5 shall be
made by the Lessee within ten (10) Business Days after demand by the affected
Participant. The Lessee shall not be obligated to reimburse any Participant for
any increased cost or reduced return incurred more than one hundred eighty (180)
days after the date that such Participant receives actual notice of such
increased cost or reduced return unless such Participant gives notice thereof to
the Lessee in accordance with this Section 11.5 during such one hundred eighty
(180) day period. If any Participant becomes entitled to claim any additional
amounts pursuant to this subsection, it shall provide prompt notice thereof to
the Lessee, through the Lessor, certifying (x) that one of the events described
in this clause (a) has occurred and describing in reasonable detail the nature
of such event, (y) as to the increased cost or reduced amount resulting from
such event, and (z) as to the additional amount demanded by such Participant and
a reasonably detailed explanation of the calculation thereof (including the
method by which such Participant allocated such amounts to the Lessee). Such a
certificate as to any additional amounts payable pursuant to this clause
submitted by such Participant, through the Lessor, to the Lessee shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Rent Purchaser Advances and
the Lessor Contribution and all other amounts payable hereunder.
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- Each Participant shall use its reasonable efforts to reduce or eliminate
any claim for compensation pursuant to this Section 11.5, including,
without limitation, a change in the office of such Participant at which
its obligations related to this Agreement are maintained if such change
will avoid the need for or reduce the amount of, such compensation and
will not, in the reasonable judgment of such Participant, be otherwise
disadvantageous to it. If any such claim for compensation shall not be
eliminated or waived, the Lessee shall have the right to replace the
affected Participant with a new financial institution that shall succeed
to the rights of such Participant under this Participation Agreement;
provided, that such Participant shall not be replaced hereunder until it
has been paid in full such claim and all other amounts owed to it
hereunder.
- FUNDING LOSSES. The Lessee agrees to indemnify each Indemnified Person
and to hold each Indemnified Person harmless from any loss or expense
which such Indemnified Person may sustain or incur (other than through
such Person's own gross negligence or willful misconduct) as a
consequence of (a) default by the Lessee in making a borrowing of or
continuation of Rent Purchaser Advances or the Lessor Contribution which
are LIBOR Rent Purchaser Advances or LIBOR Lessor Contributions after
the Lessee has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Lessee in making any
prepayment of a Rent Purchaser Advance or the Lessor Contribution which
is a LIBOR Rent Purchaser Advance or a LIBOR Lessor Contribution after
the Lessee has given a notice thereof in accordance with the provisions
of this Agreement, or (c) the making of a prepayment of Rent Purchaser
Advances or the Lessor Contribution which are LIBOR Rent Purchaser
Advances or LIBOR Lessor Contributions on a day which is not the last
day of an Interest Period with respect thereto. This covenant shall
survive the termination of this Agreement or any other Operative
Agreement and the payment of the Rent Purchaser Advances, the Lessor
Contribution and all other amounts payable under the Operative
Agreements.
- CAPITAL ADEQUACY.
- If the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Participant with any
request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable
agency, in each case made subsequent to the Closing Date, has or will
have the effect of reducing the rate of return on any Participant's or
its parent company's capital by an amount such Participant reasonably
deems to be material, as a consequence of its commitments or obligations
hereunder to a level below that which such Participant or its parent
company could have achieved but for such adoption, effectiveness, change
or compliance (taking into consideration such Participant's or its
parent company's policies with respect to capital adequacy), then, upon
notice from such Participant, the Lessee shall pay to such Participant
such additional amount or amounts as will compensate such Participant
and its parent company for such reduction (it being understood that such
parent company shall not be reimbursed to the extent its subsidiary
Participant is reimbursed by the Lessee in connection with the same or a
similar law, rule, regulation, change, request or directive applicable
to such Participant). All payments required by this Section 11.7 shall
be made by the Lessee within ten (10) Business Days
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after demand by the affected Participant. The Lessee shall not be
obligated to reimburse any Participant for any reduced return incurred
more than one hundred eighty (180) days after the date that such
Participant receives actual notice of such reduced return unless such
Participant gives notice thereof to the Lessee in accordance with this
Section 11.7 during such one hundred eighty (180) day period. If any
Participant becomes entitled to claim any additional amounts pursuant to
this Section 11.7, it shall provide prompt notice thereof to the Lessee,
through the Lessor and the Agent, certifying (i) that one of the events
described in this clause (a) has occurred and describing in reasonable
detail the nature of such event, (ii) as to the increased cost or
reduced amount resulting from such event and (iii) as to the additional
amount demanded by such Participant and a reasonably detailed
explanation of the calculation thereof. Such a certificate as to any
additional amounts payable pursuant to this clause submitted by such
Participant, through the Lessor, to the Lessee shall be conclusive in
the absence of manifest error. This covenant shall survive the
termination of this Agreement and the other Operative Agreements and the
payment of the Rent Purchaser Advances, the Lessor Contribution and all
other amounts payable hereunder and thereunder.
- Each Participant shall use its commercially reasonable efforts to reduce
or eliminate, any claim for compensation pursuant to this Section 11.7,
including, without limitation, a change in the office of such
Participant at which its obligations related to the Operative Agreements
are maintained if such change will avoid the need for, or reduce the
amount of, such compensation and will not, in the reasonable judgment of
such Participant, be otherwise disadvantageous to it. If any such claim
for compensation shall not be eliminated or waived, the Lessee shall
have the right to replace the affected Participant with a new financial
institution that shall succeed to the rights of such Participant under
the Operative Agreements; provided, however, that such Participant shall
not be replaced hereunder until it has been paid in full such claim and
all other amounts owed to it hereunder.
-
DISTRIBUTION
- BASIC RENT. Each payment of Basic Rent (and any payment of interest on
overdue installments of Basic Rent) received by the Lessor shall be
distributed by the Lessor to the Lessor and the Agent for the Rent
Purchasers pro rata in accordance with, and for application to the Basic
Rent then due, as well as any overdue interest or Yield due to the
Lessor or the Rent Purchasers (to the extent permitted by applicable
law).
- PURCHASE PAYMENTS BY THE LESSEE. Any payment received by the Lessor as a
result of:
- the purchase of the Property in connection with the exercise of the
Purchase Option or Maturity Date Purchase Option under Section 20.1 or
20.2 of the Lease; or
- compliance with the obligation to purchase the Property in accordance
with Section 17.2 of the Lease; or
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- the payment of the Termination Value in accordance with Section 16.1 of
the Lease shall be distributed by the Lessor to the Lessor and the Rent
Purchasers in the following order of priority:
First, to the Rent Purchasers, pro rata, to pay the Lease
Balance Debt; and
Second, to the Lessor to pay the Lease Balance Equity.
- PAYMENT OF LEASE BALANCE DEBT. In accordance with Section 21.1 of the
Lease upon the exercise of the remarketing option, the payment of the
Maximum Residual Guarantee Amount received by the Lessor shall be
distributed to the Agent on behalf of the Rent Purchasers for
application to pay in full the Participant Balance of each Rent
Purchaser, pro rata among the Rent Purchasers without priority of one
over the other in the proportion that the Participant Balance of each
such Rent Purchaser bears to the aggregate Participant Balances of all
Rent Purchasers.
- SALES PROCEEDS OF REMARKETING OF PROPERTY. Any payments received by the
Lessor as proceeds from the sale of the Property sold pursuant to the
exercise of the remarketing option pursuant to Article 21 of the Lease,
together with any payment made as a result of an appraisal pursuant to
Section 21.3 of the Lease, shall be distributed by the Lessor in the
funds so received in the following order of priority:
First, to cover the costs and expenses of such sale;
Second, to the extent not previously paid as required by Section
12.3 hereof, an amount equal to the amount of the Lease Balance Debt remaining
unpaid shall be distributed to the Rent Purchasers, pro rata, as set forth in
Section 12.3;
Third, an amount equal to the aggregate Lease Balance Equity
shall be distributed to the Lessor for application to the Participant Balance of
the Lessor; and
Fourth, the balance, if any, shall be promptly paid to the
Lessee.
- SUPPLEMENTAL RENT. All payments of Supplemental Rent received by the
Lessor (excluding any amounts payable pursuant to the preceding
provisions of this Section 12) shall be distributed promptly by the
Lessor upon receipt thereof to the Persons entitled thereto pursuant to
the Operative Agreements.
- DISTRIBUTION OF PAYMENTS AFTER EVENT OF DEFAULT.
- During the continuance of an Event of Default and subject to clause (b)
below, all proceeds received by the Lessor from the sale of the Property
shall be distributed by the Lessor in the following order of priority:
First, so much of such payment or amount as shall be required to
pay or reimburse the Lessor and the Agent for any tax, fees, expense,
indemnification or other
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loss incurred by the Lessor or the Agent (to the extent incurred in connection
with any duties as the Lessor or as the Agent), shall be distributed to the
Lessor for its own account in accordance with the amount of such payment or
amount payable to such Person;
Second, so much of such payments or amounts as shall be required
to pay the Rent Purchasers and the Lessor the amounts payable to them pursuant
to any expense reimbursement or indemnification provisions of the Operative
Documents shall be distributed to each such Rent Purchaser and the Lessor
without priority of one over the other in accordance with the amount of such
payment or payments payable to each such Person;
Third, to the Rent Purchasers for application to pay in full the
Lease Balance Debt, pro rata among the Rent Purchasers without priority of one
over the other in the proportion that the Participant Balance of each such Rent
Purchaser bears to the aggregate Participant Balances of all Rent Purchasers
and, in the case where the amounts so distributed shall be insufficient to pay
in full as aforesaid, then pro rata among the Rent Purchasers without priority
of one over the other in the proportion that the Participant Balance of each
such Rent Purchaser bears to the aggregate Participant Balances of all Rent
Purchasers;
Fourth, to the Lessor in an amount equal to the aggregate Lease
Balance Equity shall be distributed to the Lessor for application to the
Participant Balance of the Lessor; and
Fifth, the balance, if any, of such payment or amounts remaining
thereafter shall be promptly distributed to, or as directed by, the Lessee.
- All payments received and amounts realized by the Lessor in connection
with any Casualty or Condemnation during the continuance of an Event of
Default shall be distributed by the Lessor as follows:
- in the event that the Lessor elects to pay all or a portion of
such amounts to the Lessee for the repair of damage caused by
such Casualty or Condemnation, then such amounts shall be
distributed to the Lessee; and
- in the event that the Lessor elects to apply all or a portion of
such amounts to the purchase price of the Property, then such
amounts shall be distributed in accordance with clause (a) above.
- OTHER PAYMENTS.
- Except as otherwise provided in Sections 12.1, 12.2, 12.6 and clause (b)
below, any payment received by the Lessor for which no provision as to
the application thereof is made in the Operative Agreements or elsewhere
in this Section 12 (including any balance remaining after the
application in full of amounts to satisfy any expressed provision) shall
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be distributed pro rata among the Rent Purchasers and the Lessor without
priority of one over the other, in the proportion that the Participant
Balance of each bears to the aggregate of all the Participant Balances.
- Except as otherwise provided in Sections 12.1, 12.2 and 12.6, all
payments received and amounts realized by the Lessor under the Lease or
otherwise with respect to the Property to the extent received or
realized at any time after the indefeasible payment in full of the
Participant Balances of all of the Rent Purchasers and the Lessor and
any other amounts due and owing to the Rent Purchasers or the Lessor,
shall be distributed forthwith by the Lessor, in the order of priority
set forth in Section 12.6(a).
- Except as otherwise provided in Sections 12.1 and 12.2, any payment
received by the Lessor for which provisions as to the application
thereof is made in an Operative Agreement but not elsewhere in this
Section 12 shall be distributed forthwith by the Lessor to the Person
and for the purpose for which such payment was made in accordance with
the terms of such Operative Agreement.
- CASUALTY AND CONDEMNATION AMOUNTS. Subject to Section 12.6(b), any
amounts payable to and received by the Lessor as a result of a Casualty
or Condemnation pursuant to Section 15.1 of the Lease shall be
distributed as follows:
- all amounts payable to and received by the Lessee for the repair of
damage caused by such Casualty or Condemnation in accordance with
Section 15.1(a) of the Lease shall be distributed to the Lessee; and
- all amounts that are to be applied to the purchase price of the Property
in accordance with Article 16 of the Lease shall be distributed by the
Lessor upon receipt thereof to the Rent Purchasers and the Lessor in the
following order of priority:
First, to the Rent Purchasers, pro rata, to pay the Lease
Balance Debt; and
Second, to the Lessor to pay the Lease Balance Equity.
- ORDER OF APPLICATION. To the extent any payment made to any Rent
Purchaser or the Lessor pursuant to Sections 12.2, 12.3, 12.4, 12.6 or
12.7 is insufficient to pay in full the Participant Balance of such Rent
Purchaser or the Lessor, then each such payment shall first be applied
to accrued Yield and then to principal on the Rent Purchaser Advances or
the Lessor Contributions, as applicable.
-
THE LESSOR
- DELEGATION OF DUTIES. The Lessor may execute any of its duties hereunder
or under the other Operative Agreements by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning
all matters pertaining to such duties. The Lessor shall not be
responsible for the negligence or misconduct of any agents or attorneys
in fact selected by it with reasonable care.
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- ACTION BY LESSOR. The obligations of the Lessor hereunder and under the
other Operative Agreements are only those expressly set forth herein and
therein. Without limiting the generality of the foregoing, the Lessor
shall not be required to take any action with respect to any Default or
Event of Default, except as expressly provided herein and in the other
Operative Agreements.
- CONSULTATION WITH EXPERTS. The Lessor may consult with legal counsel
(who may be counsel for the Lessee, a Rent Purchaser or any Affiliate of
any of them), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
- EXCULPATORY PROVISIONS. Neither the Lessor nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be
responsible for or have any duty to ascertain, inquire into or verify
(a) any statement, warranty or representation made in connection with
the Operative Agreements; (b) the performance or observance of any of
the covenants or agreements of the Lessee; (c) the satisfaction of any
condition precedent specified herein or in any other Operative
Agreement; (d) the validity, effectiveness or genuineness of any of the
Operative Agreements or any other instrument or writing furnished in
connection herewith or therewith; (e) the use of the proceeds of any
Advance; (f) the existence of any Default or Event of Default; or (g)
the properties, books or records of the Lessee.
- RELIANCE ON COMMUNICATIONS. The Lessor shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram,
telecopy, telex or teletype message, statement, order or other document
or conversation reasonably believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons and
upon advice and statements of legal counsel (including, without
limitation, counsel to the Lessee, independent accountants and other
experts selected by the Lessor). The Lessor may deem and treat the Rent
Purchasers as the owners of their respective interests hereunder and
under the other Operative Agreements for all purposes unless a written
notice of assignment, negotiation or transfer thereof shall have been
filed with the Lessor in accordance with Section 10 of this Agreement.
The Lessor, acting in its capacity as Lessor, shall be fully justified
in failing or refusing to take any action under this Agreement or under
any of the other Operative Agreements unless it shall first receive such
advice or concurrence of the Rent Purchasers as it deems appropriate or
it shall first be indemnified to its satisfaction by the Rent Purchasers
against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Lessor shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder or under any of the other Operative Agreements in accordance
with a request of the Rent Purchasers and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the
Rent Purchasers (including their successors and assigns).
- NOTICE OF DEFAULT. The Lessor shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder
unless the Lessor has received notice from a Rent Purchaser or the
Lessee referring to the Operative Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of
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default." In the event that the Lessor receives such a notice, the
Lessor shall give prompt notice thereof to the Rent Purchasers. The
Lessor shall (subject to Section 9.2) take such action with respect to
such Default or Event of Default as shall be directed by the Majority
Rent Purchasers; provided that unless and until the Lessor shall have
received such directions, the Lessor may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to
such Default or Event of Default as it shall deem advisable or in the
best interest of the Rent Purchasers except to the extent that this
Agreement expressly requires that such action be taken, or not be taken,
only with the consent or upon the authorization of the Majority Rent
Purchasers or all Rent Purchasers.
- NON-RELIANCE ON LESSOR AND OTHER PARTICIPANTS. Each Rent Purchaser
expressly acknowledges that neither the Lessor (other than in its role
as Participant) nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by the Lessor or any affiliate thereof
hereafter taken, including any review of the affairs of the Lessee,
shall be deemed to constitute any representation or warranty by the
Lessor to any Participant. Each Participant represents to the Lessor
that it has, independently and without reliance upon the Lessor or any
other Participant, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Lessee and made its own decision
to make its proportionate share of the Rent Purchaser Advances hereunder
and under the other Operative Agreements and enter into this
Participation Agreement and the other Operative Agreements. Each
Participant also represents that it will, independently and without
reliance upon the Lessor or any other Participant, and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Participation Agreement, and to
make such investigation as it deems necessary to inform itself as to the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of Lessee. Except for notices, reports
and other documents expressly required to be furnished to the
Participants by the Lessor hereunder, the Lessor shall not have any duty
or responsibility to provide any Participant with any credit or other
information concerning: the business, operations, assets, property,
financial or other conditions, prospects or creditworthiness of Lessee
which may come into the possession of the Lessor or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
- FAILURE TO ACT. Except for action expressly required of the Lessor
hereunder, the Lessor shall in all cases be fully justified in failing
or refusing to act hereunder unless it shall be indemnified to its
satisfaction by the Rent Purchasers against any and all liability and
expense which may be incurred by it by reason of taking or continuing to
take any such action.
- DISTRIBUTIONS. The Lessor shall, as promptly as practicable, distribute
to each Participant its appropriate portion, if any, of payments
received (in good, collected funds) by the Lessor from the Lessee for
the account of the Participants or of any such payments so received for
the account of such Participant.
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-
THE AGENT
- APPOINTMENT AND AUTHORIZATION; "AGENT". Each Rent Purchaser hereby
irrevocably (subject to Section 14.9) appoints, designates and
authorizes the Agent to take such action on its behalf under the
provisions of this Agreement and each other Operative Document and to
exercise such powers and perform such duties as are expressly delegated
to it by the terms of this Agreement or any other Operative Document,
together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in
this Agreement or in any other Operative Document, the Agent shall not
have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary
relationship with any Rent Purchaser, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be
read into this Agreement or any other Operative Document or otherwise
exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market
custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.
- DELEGATION OF DUTIES. The Agent may execute any of its duties under this
Agreement or any other Operative Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Agent
shall not be responsible for the negligence or misconduct of any agent
or attorney-in-fact that it selects with reasonable care.
- LIABILITY OF AGENT. Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates
(collectively, the "Agent-Related Persons") shall (a) be liable for any
action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Operative Document or the
transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or (b) be responsible in any manner to any of the
Rent Purchasers for any recital, statement, representation or warranty
made by the Lessee or any Subsidiary or Affiliate of the Lessee, or any
officer thereof, contained in this Agreement or in any other Operative
Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Operative Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Operative Document, or for any failure of
the Lessee or any other party to any Operative Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be
under any obligation to any Rent Purchaser to ascertain or to inquire as
to the observance or performance of any of the agreements contained in,
or conditions of, this Agreement or any other Operative Document, or to
inspect the properties, books or records of the Lessee or any of the
Lessee's Subsidiaries or Affiliates.
- RELIANCE BY AGENT.
41.
43
- The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate,
affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including
counsel to the Lessee), independent accountants and other experts
selected by the Agent. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Operative
Document unless it shall first receive such advice or concurrence of the
Majority Rent Purchasers as it deems appropriate and, if it so requests,
it shall first be indemnified to its satisfaction by the Rent Purchasers
against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall
in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Operative Document in accordance with
a request or consent of the Majority Rent Purchasers and such request
and any action taken or failure to act pursuant thereto shall be binding
upon all of the Rent Purchasers.
- For purposes of determining compliance with the conditions specified in
Sections 6.1 and 6.2, each Rent Purchaser that has executed this
Agreement shall be deemed to have consented to, approved or accepted or
to be satisfied with, each document or other matter either sent by the
Agent to such Rent Purchaser for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by
or acceptable or satisfactory to the Rent Purchaser.
- NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with
respect to defaults in the payment of principal, interest and fees
required to be paid to the Agent for the account of the Rent Purchasers,
unless the Agent shall have received written notice from a Rent
Purchaser or the Lessee referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default." The Agent will notify the Rent Purchasers of its receipt of
any such notice. The Agent shall take such action with respect to such
Default or Event of Default as may be requested by the Majority Rent
Purchasers in accordance with Section 13.6 hereof; provided, however,
that unless and until the Agent has received any such request, the Agent
may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as
it shall deem advisable or in the best interest of the Rent Purchasers.
- CREDIT DECISION. Each Rent Purchaser acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and
that no act by the Agent hereinafter taken, including any review of the
affairs of the Lessee and its Subsidiaries, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to
any Rent Purchaser. Each Rent Purchaser represents to the Agent that it
has, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition
and credit worthiness of the Lessee and its Subsidiaries, and all
applicable Rent Purchaser regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this
Agreement. Each Rent Purchaser also represents that it will,
independently and without reliance upon any Agent-Related Person and
based on
42.
44
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Operative
Documents, and to make such investigations as it deems necessary to
inform itself as to the business, prospects, operations, property,
financial and other condition and credit worthiness of the Lessee.
Except for notices, reports and other documents expressly herein
required to be furnished to the Rent Purchasers by the Agent, the Agent
shall not have any duty or responsibility to provide any Rent Purchaser
with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or credit worthiness
of the Lessee which may come into the possession of any of the
Agent-Related Persons.
- INDEMNIFICATION OF AGENT. Whether or not the transactions contemplated
hereby are consummated, the Rent Purchasers shall indemnify upon demand
the Agent-Related Persons (to the extent not reimbursed by or on behalf
of the Lessee and without limiting the obligation of the Lessee to do
so), pro rata, from and against any and all Indemnified Liabilities;
provided, however, that no Rent Purchaser shall be liable for the
payment to the Agent-Related Persons of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence or
willful misconduct. Without limitation of the foregoing, each Rent
Purchaser shall reimburse the Agent upon demand for its ratable share of
any costs or out-of-pocket expenses (including fees and disbursements of
any law firm or internal or external counsel) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations,
legal proceedings or otherwise) of, or legal advice in respect of rights
or responsibilities under, this Agreement, any other Operative Document,
or any document contemplated by or referred to herein, to the extent
that the Agent is not reimbursed for such expenses by or on behalf of
the Lessee. The undertaking in this Section 14.7 shall survive the
termination of this Agreement and the resignation or replacement of the
Agent.
- AGENT IN INDIVIDUAL CAPACITY. The Bank of Nova Scotia and its Affiliates
may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any
kind of lending, trust, financial advisory, underwriting or other
business with the Lessee and its Subsidiaries and Affiliates as though
The Bank of Nova Scotia were not the Agent hereunder and without notice
to or consent of the Rent Purchasers. The Rent Purchasers acknowledge
that, pursuant to such activities, The Bank of Nova Scotia or its
Affiliates may receive information regarding the Lessee or its
Affiliates (including information that may be subject to confidentiality
obligations in favor of the Lessee or such Subsidiary) and acknowledge
that the Agent shall be under no obligation to provide such information
to them. With respect to its Rent Purchaser Commitment, The Bank of Nova
Scotia shall have the same rights and powers under this Agreement as any
other Rent Purchaser and may exercise the same as though it were not the
Agent, and the terms "Rent Purchaser" and "Rent Purchasers" include The
Bank of Nova Scotia in its individual capacity.
- SUCCESSOR AGENT. The Agent may resign as Agent upon thirty (30) days'
notice to the Rent Purchasers. If the Agent resigns under this
Agreement, the Majority Rent Purchasers shall appoint from among the
Rent Purchasers a successor agent for the Rent Purchasers. If no
successor agent is appointed prior to the effective date of the
resignation of the
43.
45
Agent, the Agent may appoint, after consulting with the Rent Purchasers
and the Lessee, a successor agent from among the Rent Purchasers. Upon
the acceptance of its appointment as successor agent hereunder, such
successor agent shall succeed to all the rights, powers and duties of
the retiring Agent and the term "Agent" shall mean such successor agent
and the retiring Agent's appointment, powers and duties as the Agent
shall be terminated. After any retiring Agent's resignation hereunder as
the Agent, the provisions of this Section 14 and Sections 11.1 and 11.2
shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Agent under this Agreement. If no successor
agent has accepted appointment as Agent by the date which is thirty (30)
days following a retiring Agent's notice of resignation, the retiring
Agent's resignation shall nevertheless thereupon become effective and
the Rent Purchasers shall perform all of the duties of the Agent
hereunder until such time, if any, as the Majority Rent Purchasers
appoint a successor agent as provided for above.
-
MISCELLANEOUS
- SURVIVAL OF AGREEMENTS. The representations, warranties, covenants,
indemnities and agreements of the parties provided for in the Operative
Agreements, and the parties' obligations under any and all thereof,
shall survive the execution and delivery of this Agreement, any
disposition of any interest of the Lessor in the Property or the
Improvements, the payment of the Rent Purchaser Advances and any
disposition thereof and shall be and continue in effect notwithstanding
any investigation made by any party and the fact that any party may
waive compliance with any of the other terms, provisions or conditions
of any of the Operative Agreements. Except as otherwise expressly set
forth herein or in other Operative Agreements, the indemnities of the
parties provided for in the Operative Agreements shall survive the
expiration or termination of any thereof.
- NO BROKER, ETC. Each of the parties hereto represents to the others that
it has not retained or employed any broker, finder or financial adviser
to act on its behalf in connection with this Agreement, nor has it
authorized any broker, finder or financial adviser retained or employed
by any other Person so to act except as set forth on SCHEDULE 15.2
hereto. Any party who is in breach of this representation or who has
retained or employed a broker, finder or financial advisor shall
indemnify and hold the other parties harmless from and against any
liability arising out of such breach of this representation, retainage
or employment.
- NOTICES. Unless otherwise specifically provided herein, all notices,
consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to
any Person shall be given in writing by nationally recognized courier
service and any such notice shall become effective one (1) Business Day
after delivery to a nationally recognized courier service specifying
overnight delivery and shall be directed to the address of such Person
as indicated:
If to the Lessee, to it at:
▇▇▇ Research Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇.
▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Treasurer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Lessor, to it at:
Scotiabanc Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Managing Director
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Agent, to it at:
The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Rent Purchaser, to it at such address as may be
specified on SCHEDULE 2.1 or otherwise in writing to the other parties hereto.
From time to time any party may designate a new address for purposes of
notice hereunder by notice to each of the other parties hereto.
- COUNTERPARTS. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
- AMENDMENTS AND TERMINATION. Neither this Agreement nor any of the terms
hereof may be terminated, amended, supplemented, waived or modified
except by an instrument in writing signed by the party against which the
enforcement of the termination, amendment, supplement, waiver or
modification shall be sought. This Agreement may be terminated by an
agreement signed in writing by the parties hereto.
- HEADINGS, ETC. The Table of Contents and headings of the various
Sections and Subsections of this Agreement are for convenience of
reference only and shall not modify, define, expand or limit any of the
terms or provisions hereof.
- PARTIES IN INTEREST. Except as expressly provided herein, none of the
provisions of this Agreement are intended for the benefit of any Person
except the parties hereto.
45.
47
- GOVERNING LAW; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK. THE LESSEE, THE AGENT, THE RENT PURCHASERS AND THE
LESSOR EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER OPERATIVE DOCUMENTS, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR ANY PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE. THE LESSEE, THE AGENT, THE RENT
PURCHASERS AND THE LESSOR EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING
THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO
A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER
OPERATIVE DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER OPERATIVE DOCUMENTS.
- SEVERABILITY. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
- LIABILITY LIMITED.
- The parties hereto agree that except as specifically set forth herein or
in any other Operative Agreement, the Lessor shall have no personal
liability whatsoever to any Participant or their respective successors
and assigns for any claim based on or in respect hereof or any of the
other Operative Agreements or arising in any way from the transactions
contemplated hereby or thereby and recourse, if any, shall be solely had
against the Lessor's interest in the Property; provided, however, that
the Lessor shall be liable in its individual capacity (i) for its own
willful misconduct or gross negligence, (ii) breach of any of its
representations, warranties or covenants under the Operative Agreements,
or (c) for any Tax based on or measured by any fees, commission or
compensation received by it for acting as a Lessor as contemplated by
the Operative Agreements. It is understood and agreed that, except as
provided in the preceding sentence: (i) the Lessor shall have no
personal liability under any of the Operative
46.
48
Agreements as a result of acting pursuant to and consistent with any of
the Operative Agreements; (ii) all obligations of the Lessor to any Rent
Purchaser are solely nonrecourse obligations except to the extent that
the Lessor has received the proceeds to the Rent Purchaser Advances);
and (iii) all such personal liability of the Lessor is expressly waived
and released as a condition of, and as consideration for, the execution
and delivery of the Operative Agreements by the Lessor.
- No Participant shall have any obligation to any other Participant or to
Lessee, the Lessor or the Rent Purchasers with respect to transactions
contemplated by the Operative Agreements, except those obligations of
such Participant expressly set forth in the Operative Agreements or
except as set forth in the instruments delivered in connection
therewith, and no Participant shall be liable for performance by any
other party hereto of such other party's obligations under the Operative
Agreements except as otherwise so set forth.
- FURTHER ASSURANCES. The parties hereto shall promptly cause to be taken,
executed, acknowledged or delivered, at the sole expense of the Lessee,
all such further acts, conveyances, documents and assurances as the
other parties may from time to time reasonably request in order to carry
out and effectuate the intent and purposes of this Agreement, the other
Operative Agreements and the transactions contemplated hereby and
thereby (including, without limitation, the preparation, execution and
filing of any and all Uniform Commercial Code financing statements and
other filings or registrations which the parties hereto may from time to
time request to be filed or effected). The Lessee, at its own expense,
shall take such action as may be reasonably requested in order to
maintain and protect all security interests provided for hereunder or
under any other Operative Agreement.
- SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
-
RENEWALS
- EXTENSIONS OF MATURITY DATE AND EXPIRATION DATE. So long as the Lessee
has not elected the remarketing option, and no Default or Event of
Default shall then exist, the Lessee may, not earlier than one (1) year
before the Maturity Date, direct a written request to the Lessor and the
Agent that the Expiration Date then in effect under the Lease be
extended on terms mutually agreeable to Lessor, Agent and Lessee. Any
such renewal term (each, a "Renewal Term") shall be effective only upon
the consent of all Participants and each Participant may grant or deny
its consent to a renewal of the Lease in its sole discretion.
47.
49
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.
▇▇▇ RESEARCH CORPORATION,
as Lessee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Title: Treasurer
-------------------------------
[PARTICIPATION AGREEMENT]
50
SCOTIABANC INC.,
as Lessor
By: /s/ F.C.H. ▇▇▇▇▇
-------------------------------
Name: F.C.H. ▇▇▇▇▇
-------------------------------
Title: Senior Manager, Loan Operations
-------------------------------
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
as Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Title: Director
------------------------
THE BANK OF NOVA SCOTIA,
as a Rent Purchaser
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Title: Director
------------------------
[PARTICIPATION AGREEMENT]
52
SCHEDULE 2.1
LESSOR COMMITMENT
Amount of Lessor
Name and Address of Lessor Commitment
---------------------------- ----------------
Scotiabanc Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ $3,203,249.86
RENT PURCHASER COMMITMENT
Amount of Rent
Name and Address of Rent Purchaser Purchaser Commitment
---------------------------------- --------------------
The Bank of Nova Scotia
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ $23,942,935.39
53
SCHEDULE 2.6
Payment Instructions
FOR THE BANK OF NOVA SCOTIA:
The Bank of Nova Scotia
New York Agency
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇
ABA # ▇▇▇▇▇▇▇▇▇
Credit Account # ▇▇▇▇▇▇▇
BNS San Francisco -- Loan Service
Reference -- ▇▇▇ Research Corporation
FOR SCOTIABANC INC.:
The Bank of Nova Scotia
New York Agency
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇
ABA # ▇▇▇▇▇▇▇▇▇
Credit Account # ▇▇▇▇▇▇▇
Scotiabanc Inc.
Reference -- ▇▇▇ Research Corporation
54
SCHEDULES
Schedule 2.1 Lessor Commitment and Rent Purchaser Commitments
Schedule 2.6 Payment Instructions
Schedule 7.2 Exceptions to Representations and Warranties of the Lessee
Schedule 15.2 Brokers, Finders and Financial Advisors
EXHIBITS
Exhibit A Form of Pledge Agreement
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Officer's Certificate
55
TABLE OF CONTENTS
PAGE
----
SECTION 1 THE RENT PURCHASE...................................................1
SECTION 2 LESSOR CONTRIBUTIONS................................................2
2.1 Lessor Contributions...................................................2
2.2 Yield..................................................................2
2.3 Interest Period Selection Elections....................................3
2.4 Prepayments............................................................4
2.5 Fees...................................................................4
2.6 Payments...............................................................4
SECTION 3 SUMMARY OF THE TRANSACTIONS.........................................4
3.1 Operative Agreements...................................................4
3.2 Property Acquisition and Lease.........................................4
SECTION 4 THE CLOSING.........................................................5
SECTION 5 FUNDING OF ADVANCES.................................................5
5.1 General.................................................................5
5.2 Procedures for Funding.................................................5
5.4 Pledged Collateral.....................................................6
SECTION 6 CONDITIONS OF THE CLOSING AND ADVANCES..............................7
6.1 General Conditions to the Closing Date.................................7
6.2 Conditions to Rent Purchasers' and Lessor's Obligations to
Make Rent Purchaser Advances and Lessor Contributions..................9
SECTION 7 REPRESENTATIONS AND WARRANTIES.....................................10
7.1 Representations and Warranties of the Lessor on the Closing Date......10
7.2 Representations and Warranties of the Lessee on the Closing Date
and the Funding Date..................................................12
SECTION 8 PAYMENT OF CERTAIN EXPENSES........................................17
8.1 Transaction Expenses..................................................17
8.2 Brokers' Fees and Stamp Taxes.........................................17
8.3 Certain Fees and Expenses.............................................17
8.4 Commitment Fee........................................................17
SECTION 9 OTHER COVENANTS AND AGREEMENTS.....................................18
9.1 Cooperation with the Lessee...........................................18
9.2 Covenants of the Lessor...............................................18
9.3 Covenants of the Lessee...............................................19
SECTION 10 TRANSFER OF INTEREST..............................................23
10.1 Assignments...........................................................23
10.2 Participations........................................................24
10.3 Disclosure of Information; Pledge Under Regulation A. ................24
SECTION 11 INDEMNIFICATION...................................................25
11.1 General Indemnity.....................................................25
i.
56
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
11.2 General Impositions Indemnity....................................26
11.3 LIBOR Lending Unlawful...........................................30
11.4 Deposits Unavailable.............................................31
11.5 Increased Costs, etc.............................................31
11.6 Funding Losses...................................................33
11.7 Capital Adequacy.................................................33
SECTION 12 DISTRIBUTION.....................................................34
12.1 Basic Rent.......................................................34
12.2 Purchase Payments by the Lessee..................................34
12.3 Payment of Lease Balance Debt....................................34
12.4 Sales Proceeds of Remarketing of Property........................35
12.5 Supplemental Rent................................................35
12.6 Distribution of Payments after Event of Default..................35
12.7 Other Payments...................................................36
12.8 Casualty and Condemnation Amounts................................36
12.9 Order of Application.............................................37
SECTION 13 THE LESSOR.......................................................37
13.1 Delegation of Duties.............................................37
13.2 Action by Lessor.................................................37
13.3 Consultation with Experts........................................37
13.4 Exculpatory Provisions...........................................37
13.5 Reliance on Communications.......................................38
13.6 Notice of Default................................................38
13.7 Non-Reliance on Lessor and Other Participants....................38
13.8 Failure to Act...................................................39
13.9 Distributions....................................................39
SECTION 14 THE AGENT........................................................39
14.1 Appointment and Authorization; "Agent"...........................39
14.2 Delegation of Duties.............................................39
14.3 Liability of Agent...............................................40
14.4 Reliance by Agent................................................40
14.5 Notice of Default................................................40
14.6 Credit Decision..................................................41
14.7 Indemnification of Agent.........................................41
14.8 Agent in Individual Capacity.....................................42
14.9 Successor Agent..................................................42
SECTION 15 MISCELLANEOUS....................................................42
15.1 Survival of Agreements...........................................42
15.2 No Broker, etc...................................................42
ii.
57
TABLE OF CONTENTS
(CONTINUED)
PAGE
15.3 Notices.............................................. 43
15.4 Counterparts......................................... 44
15.5 Amendments and Termination........................... 44
15.6 Headings, etc........................................ 44
15.7 Parties in Interest.................................. 44
15.8 Governing Law; Waiver Of Jury Trial.................. 44
15.9 Severability......................................... 44
15.10 Liability Limited.................................... 45
15.11 Further Assurances................................... 45
15.12 Successors and Assigns............................... 45
SECTION 16 RENEWALS........................................... 45
16.1 Extensions of Maturity Date and Expiration Date...... 45
iii.