FOURTH AMENDMENT TO PARTICIPATION AGREEMENT,
SECOND AMENDMENT TO MASTER LEASE AND LOAN AGREEMENT
THIS FOURTH AMENDMENT dated as of April 11, 2002 (this "Amendment")
amends the Participation Agreement dated as of April 30, 1998 (as previously
amended, the "Participation Agreement") by and among MARYGREEN, LLC, a Delaware
limited liability company, as the Lessee (together with any permitted successors
and assigns, the "Lessee"); TRUSERV CORPORATION, a Delaware corporation, as the
Lessee Agent, Construction Agent and Guarantor (in its capacity as Lessee Agent,
the "Lessee Agent"; in its capacity as Construction Agent, the "Construction
Agent"; and in its capacity as Guarantor, the "Guarantor"); TRUSERV 1998 TRUST,
a Delaware business trust, as the Lessor Trust (the "Lessor Trust"); WILMINGTON
TRUST COMPANY, a Delaware banking corporation, individually as set forth herein
and as Trustee under the Lessor Trust ("Owner Trustee"); BMO GLOBAL CAPITAL
SOLUTIONS, INC., a Delaware corporation formerly known as BMO Leasing (U.S.),
Inc., as a Certificate Holder (together with any permitted successors and
assigns thereto, each a "Certificate Holder" and collectively the "Certificate
Holders"); BMO GLOBAL CAPITAL SOLUTIONS, INC., a Delaware corporation formerly
known as BMO Leasing (U.S.), Inc., as Agent Certificate Holder for the
Certificate Holders (in such capacity, the "Agent Certificate Holder"); BANK OF
MONTREAL, a Canadian banking organization ("BMO"), and the other various
financial institutions as are or may from time to time become lenders (the
"Lenders") under the Loan Agreement; and BMO as Administrative Agent (in such
capacity, the "Administrative Agent") for the Lenders and as Arranger (in such
capacity, the "Arranger"). Terms defined in the Participation Agreement are,
unless otherwise defined herein or the context otherwise requires, used herein
as defined therein.
WHEREAS, the Lessee, the Guarantor, the Lessor Trust, the Owner
Trustee, the Certificate Holders, the Agent Certificate Holder, the Lenders, the
Administrative Agent and the Arranger have entered into the Participation
Agreement; and
WHEREAS, the Lessee and Lessor Trust have entered into the Master Lease
and a prior amendment thereto; and
WHEREAS, the Lessor Trust, the Lenders and the Administrative Agent
have entered into the Loan Agreement and a prior amendment thereto; and
WHEREAS, the parties hereto desire to amend the Participation
Agreement, Appendix A to the Participation Agreement, the Master Lease and the
Loan Agreement as more fully set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Amendment to Participation Agreement and Appendix A.
Effective on (and subject to the occurrence of) the Amendment Effective Date (as
defined below), the Participation Agreement and Appendix A shall be amended in
accordance with this Section:
Section 1.1. Amended and Restatement of Appendix A. Appendix A is
hereby amended and restated in its entirety to read as set forth on Appendix A
attached hereto.
Section 1.2. Adjusted Eurodollar Rate. All references to Adjusted
Eurodollar Rate in the Participation Agreement are hereby deleted and
specifically (i) Section 3.5 shall be amended by placing a period after "Base
Rate" and deleting the remainder of such Section, (ii) Sections 3.6, 13.7, 13.8,
13.9, and 13.10 are hereby deleted and "Intentionally Deleted" inserted in their
place and (iii) Section 4.1 is hereby amended by deleting the first sentence
thereof and replacing it with: "The amount of the Certificate Holder Amounts
outstanding from time to time shall accrue yield ("Yield") at the Yield Rate,
calculated using the actual number of days elapsed and a 365/366 day year
basis."
Section 1.3. Mandatory Prepayments. The following Subsection is hereby
added to the end of Section 4.3(b):
"(iii) Upon receipt of any amounts from the Intercreditor
Agreement, such amounts shall be applied in accordance with Article VII
hereof. Notwithstanding the foregoing provisions of this Section
4.3(b), any payment required to be made by lessee pursuant to this
Section 4.3(b) shall be subject to the provisions of the Intercreditor
Agreement."
Section 1.4. Fees. The following Subsections are hereby added to the
end of Section 4.4:
"(e) Supplemental Funding Fees. The Guarantor shall pay to the
Administrative Agent for the account of each Participant a quarterly
supplemental funding fee equal to 0.4375% of the average daily unpaid
principal amount of such Participant's Loans and Certificate Holder
Amount for each quarter. Such supplemental funding fees shall accrue
from February 28, 2002 to the Termination Date and shall be due and
payable quarterly in arrears on each Scheduled Payment Date; provided
that the first such supplemental funding fee shall accrue from February
28, 2002 through the Closing Date and shall be payable on the Closing
Date.
(f) Annual Fee. On each anniversary of the Amendment Effective
Date until the Obligations shall have been paid in full and the
Participation Agreement terminated, the Company shall pay each
Participant a fee of 0.50% of such Participant's Loans and Certificate
Holder Amount on such date; provided that if the Termination Date is
less than 12 months after any such anniversary date, such annual fee
shall be prorated for the period from such anniversary date through the
Termination Date."
Section 1.5. Section 8.2(b) is amended to (i) insert "or limited
liability company" immediately after the word "corporate" on line three of such
Section 8.2(b) and (ii) insert "or member" immediately after the word
"stockholder" on the fourth line of such Section 8.2(b).
Section 1.6. Section 8.2(e) shall be amended and restated in its
entirety to read as follows:
"(e) Financial Statements. The audited consolidated financial
statements of the Guarantor and its Subsidiaries as at December 31,
2000 and the unaudited consolidated
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financial statements of the Guarantor and its Subsidiaries as at
September 30, 2001, copies of each of which have been delivered to each
Participant, were prepared in accordance with GAAP (subject, in the
case of such unaudited statements, to the absence of footnotes and to
normal year-end adjustments) and present fairly the consolidated
financial condition of the Guarantor and its Subsidiaries as at such
dates and the results of their operations for the periods then ended.
Section 1.7. The following clause shall be added to the end of Sections
8.2(f) and 8.2(x):
"(it being understood that the representation and warranty in
this sentence is made after giving effect to the effectiveness of this
Amendment and the amendments referenced in the Existing Credit
Agreement)."
Section 1.8. The following clause shall be added at the beginning of
Section 8.2(f) and the capital "T" in "There" shall be made lower case:
"Except as specified on Schedule 8.2(f),"
Section 1.9. Section 8.2(g) is amended to add the sentence "Attached
hereto as Schedule 8.2(g) is a list of all real estate owned or leased by
Guarantor and its Subsidiaries as of April 11, 2002".
Section 1.10. The following clause shall be added to Section 8.2(i),
and the capital "T" in "There" shall be made lower-case:
"Except as specified on Schedule 8.2(i),"
Section 1.11. Section 8.2(n) shall be amended and restated in its
entirety to read as follows:
"(n) Disclosure. Neither this Agreement nor any Operative
Document nor any other document, certificate or statement furnished to
the Administrative Agent or any Participant by or on behalf of the
Guarantor in connection herewith contains any untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements contained herein and therein not misleading in
light of the circumstances in which they were made."
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Section 1.12. Section 8.2(y) is amended by deleting "except as set forth
in the Agreements listed in schedule IV attached hereto (as such Schedule IV)
may have been modified from time to time by written supplements thereto
delivered by the Guarantor and accepted in writing by the Required
Participants)" inserting "except as set forth in the agreements listed in
Schedule 8.2(y) attached hereto (as such Schedule 8.2(y) may have been modified
from time to time by written supplements thereto delivered by Guarantor and
accepted in writing by the Required Participants)" immediately after the word
"constitute".
Section 1.13. Section 8.2(z) shall be deleted in its entirety and
replaced with the following:
"Intentionally deleted."
Section 1.14. Amendment to Sections 10.1 and 10.2. Sections 10.1 and
10.2 of the Participation Agreement are amended in their entirety to read as
follows:
"Section 10.1. Affirmative Covenants of the Guarantor. The
Lessee Agent covenants and agrees with the Arranger, the Agent
Certificate Holder, Lessor Trust, Owner Trustee, the Administrative
Agent, the Certificate Holders and the Lenders that, so long as this
Participation Agreement shall remain in effect or the principal or
interest on any Loan, any Certificate Holder Amount or Yield thereon,
or any fees or any other expenses or amounts payable under any
Operative Document shall be unpaid, and until all Commitments shall
have been permanently terminated, unless the Required Participants
shall otherwise consent in writing, the Lessee Agent will:
(a) Financial Statements. The Guarantor shall deliver to the
Administrative Agent, in form and detail reasonably satisfactory to the
Administrative Agent and the Required Participants, with sufficient
copies for each Participant:
(i) as soon as available, but not later than one
hundred twenty (120) days after the end of each fiscal year, a
copy of the audited consolidated balance sheet of the
Guarantor and its Subsidiaries as at the end of such year and
the related consolidated statements of income or operations,
shareholders' equity and cash flows for such year, setting
forth in each case in comparative form the figures for the
previous fiscal year, and accompanied by the opinion of Price
WaterhouseCoopers LLP or another nationally-recognized
independent public accounting firm ("Independent Auditor")
which report (x) shall state that such consolidated financial
statements present fairly the financial position for the
periods indicated in conformity with GAAP applied on a basis
consistent with prior years and (y) shall not be qualified or
limited because of a restricted or limited examination by the
Independent Auditor of any material portion of the Guarantor's
or any Subsidiary's records;
(ii) as soon as available, but not later than sixty
(60) days after the end of each of the first three fiscal
quarters of each fiscal year, a copy of the unaudited
consolidated balance sheet of the Guarantor and its
Subsidiaries as of the end of
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such quarter and the related consolidated statements of
income, shareholders' equity and cash flows for the period
commencing on the first day and ending on the last day of such
quarter, and certified by a Responsible Officer as fairly
presenting, in accordance with GAAP (subject to the absence of
footnotes and ordinary, good faith year-end audit
adjustments), the financial position and the results of
operations of the Guarantor and the Subsidiaries; and
(iii) as soon as available, but not later than 30 days
after the end of each fiscal month (or 60 days after the end
of December of each year), a copy of the financial report
delivered to the Board of Directors of the Guarantor (or, if
no such report is delivered to the Board of Directors of the
Guarantor for any month, a copy of a substantially similar
financial report for such month), including unaudited
consolidated balance sheet of the Guarantor and its
Subsidiaries as of the end of such month and the related
consolidated statements of income and cash flows for the
period commencing on the first day and ending on the last day
of each month, and certified by a Responsible Officer as
fairly presenting, in accordance with GAAP (subject to the
absence of footnotes and ordinary, good faith year-end audit
adjustments), the financial position and the results of
operations of the Guarantor and the Subsidiaries.
(b) Certificates; Other Information. The Guarantor shall
furnish to the Administrative Agent, with sufficient copies for each
Participant:
(i) concurrently with the delivery of the financial
statements referred to in subsection 10.1(a)(i), for the year
ended December 31, 2002 and each year thereafter, to the
extent not prohibited by applicable accounting guidelines a
certificate of the Independent Auditor stating that in making
the examination necessary therefor no knowledge was obtained
of any Event of Default or Unmatured Event of Default, except
as specified in such certificate;
(ii) concurrently with the delivery of the financial
statements referred to in subsections 10.1(a)(i), (ii) and
(iii), a Compliance Certificate executed by a Responsible
Officer together with the calculations necessary to
demonstrate compliance with Sections 10.2(a), 10.2(l),
10.2(n), 10.2(o), 10.2(p) and 10.2(q);
(iii) promptly, copies of all financial statements and
reports that the Guarantor sends to its shareholders, and
copies of all financial statements and regular, periodical or
special reports (including Forms 10K, 10Q and 8K) that the
Guarantor or any Subsidiary may make to, or file with, the
SEC;
(iv) within 90 days after the end of each fiscal year,
a calculation in reasonable detail of Excess Cash Flow for
such fiscal year, substantially in the form of Exhibit O;
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(v) within three Business days after the end of each
week (or more frequently at the request of the Administrative
Agent), a detail of the Borrowing Base Certificate;
(vi) within three Business Days after the 15th and
last day of each month, an Accounts Receivable aging report as
of such day;
(vii) no later than 45 days after the end of each
fiscal quarter, a 12-month forecast (to include forecasted
consolidated balance sheets, income statements and cash flow
statements) for the Guarantor and its Subsidiaries in fiscal
quarter periods;
(viii) concurrently with the execution of any
amendment to the Existing Credit Agreement, the Senior Note
Agreements or the Shelf Note Agreement (each as defined in the
Intercreditor Agreement), a copy of such executed amendment;
(ix) as soon as available, but not later than 15 days
after delivery of the financial report described in Section
10.1(a)(iii) and at the Guarantor's expense, a report from
Zolfo ▇▇▇▇▇▇ (or another consultant acceptable to the
Administrative Agent and the Required Participants) on the
performance of the Guarantor as set forth in such financial
report against the Business Plan;
(x) simultaneously with the delivery thereof under
the Senior Note Agreements (as defined in the Intercreditor
Agreement), copies of all information and notices required to
be given by the Guarantor pursuant to paragraph 5A thereof (or
any successor provision thereto) or any other notice, report
or other written information delivered to any noteholder under
the Senior Note Agreements; and
(xi) promptly, such additional information regarding
the business, financial or corporate affairs of the Guarantor
or any Subsidiary as the Administrative Agent, at the request
of any Participant, may from time to time request.
(c) Notices. The Guarantor shall promptly notify the
Administrative Agent promptly after a Responsible Officer obtains knowledge of:
(i) the occurrence of any Event of Default or
Unmatured Event of Default;
(ii) any of the following matters that has resulted
or may reasonably be expected to result in a Material Adverse
Effect: (A) any breach or non-performance of, or any default
under, a Contractual Obligation of the Guarantor or any
Subsidiary; (B) any dispute, litigation, investigation,
proceeding or suspension between the Guarantor or any
Subsidiary and any Governmental
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Authority; or (C) the commencement of, or any material
development in, any litigation or proceeding affecting the
Guarantor or any Subsidiary including pursuant to any
applicable Environmental Law;
(iii) the occurrence of any of the following events
affecting the Guarantor or any ERISA Affiliate (but in no
event more than ten (10) days after a Responsible Officer
obtains knowledge of such event; provided that the Guarantor
shall notify the Administrative Agent and each Participant not
less than ten (10) days before the occurrence of any event
described in clause (B) below), and deliver to the
Administrative Agent a copy of any notice with respect to such
event that is filed with a Governmental Authority and any
notice delivered by a Governmental Authority to the Guarantor
or any ERISA Affiliate with respect to such event:
(A) an ERISA Event;
(B) a contribution failure with respect to a Pension
Plan sufficient to give rise to a Lien under Section
302(f) of ERISA;
(C) a material increase in the Unfunded Pension
Liability of any Pension Plan;
(D) the adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the
Code by the Guarantor or any ERISA Affiliate; or
(E) the adoption of any amendment to a Plan subject to
Section 412 of the Code, if such amendment results in a
material increase in contributions or Unfunded Pension
Liability; and
(iv) any material change in accounting policies or
financial reporting practices by the Guarantor or any of its
consolidated Subsidiaries.
Each notice under this Section shall be accompanied by a
written statement by a Responsible Officer setting forth details of the
occurrence referred to therein, and stating what action the Guarantor
or any affected Subsidiary proposes to take with respect thereto and at
what time. Each notice under subsection 10.1(c)(i) shall describe with
particularity any and all clauses or provisions of this Participation
Agreement or any other Operative Document that have been breached or
violated.
(d) Preservation of Corporate Existence Etc. The Guarantor
shall, and shall cause each Subsidiary to:
(i) preserve and maintain in full force and effect
its corporate existence and good standing under the laws of
its state or jurisdiction of incorporation or formation;
provided, however, that, subject at all times to the
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limits set forth in Section 10.2(d) hereof, the Guarantor
shall be permitted to dissolve any Subsidiary that is not a
Material Subsidiary;
(ii) preserve and maintain in full force and effect
all governmental rights, privileges, qualifications, permits,
licenses and franchises necessary or desirable in the normal
conduct of its business except (A) in connection with
transactions permitted by Section 10.2(e) and sales of assets
permitted by Section 10.2(d) and (B) to the extent the
non-preservation or non-maintenance thereof could not
reasonably be expected to have a Material Adverse Effect;
(iii) use reasonable efforts, in the ordinary course
of business, to preserve its business organization and
goodwill; and
(iv) preserve or renew all of its registered
patents, trademarks, trade names and service marks, the
non-preservation of which could reasonably be expected to have
a Material Adverse Effect.
Notwithstanding the provisions of this Section 10.1(d), the Guarantor
may dissolve or liquidate any Inactive Subsidiary or any Canadian Subsidiary.
(e) Maintenance of Property. The Guarantor shall, and shall
cause each Subsidiary to, maintain and preserve all its property which
is used or useful in its business in good working order and condition,
ordinary wear and tear excepted and make all necessary repairs thereto
and renewals and replacements thereof except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect. The
Guarantor and each Subsidiary shall use the standard of care typical in
the industry in the operation and maintenance of its facilities.
(f) Insurance. The Guarantor shall, and shall cause each
Subsidiary to, maintain with financially sound and reputable insurers,
insurance in such amounts and against such liabilities and hazards as
customarily maintained by the Guarantor in accordance with its
practices, policies and procedures prior to the Documentation Date.
Together with each delivery of financial statements under subsection
10.1(a)(i), the Guarantor will, upon the request of the Administrative
Agent, deliver a certificate of a Responsible Officer specifying the
details of such insurance in effect.
(g) Payment of Obligations. The Guarantor shall, and shall
cause each Subsidiary to, pay and discharge as the same shall become
due and payable all their respective obligations and liabilities,
including:
(i) all material tax liabilities, assessments and
governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by
appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by the Guarantor or such
Subsidiary;
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(ii) all lawful claims which, if unpaid, would by
law become a Lien upon its property; and
(iii) all Debt, as and when due and payable, but
subject to any subordination provisions contained in any
instrument or agreement evidencing such Debt.
(h) Compliance with Laws. The Guarantor shall, and shall
cause each Subsidiary to, comply in all material respects with all
Requirements of Law of any Governmental Authority having jurisdiction
over it or its business (including the Federal Fair Labor Standards
Act), except such as may be contested in good faith or as to which a
bona fide dispute may exist.
(i) Compliance with ERISA. The Guarantor shall, and shall
cause each of its ERISA Affiliates to: (a) maintain each Plan in
compliance in all material respects with the applicable provisions of
ERISA, the Code and other federal or state law; (b) cause each Plan
which is qualified under Section 401(a) of the Code to maintain such
qualification; and (c) make all required contributions to any Plan
subject to Section 412 of the Code.
(j) Inspection of Property and Books and Records. The
Guarantor shall, and shall cause each Subsidiary to, maintain proper
books of record and account, in which full, true and correct entries in
conformity with GAAP consistently applied shall be made of all
financial transactions and matters involving the assets and business of
the Guarantor and such Subsidiary. The Guarantor shall, and shall cause
each Subsidiary to, permit representatives and independent contractors
of the Administrative Agent or any Lender to visit and inspect any of
their respective properties, to examine their respective corporate,
financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss their respective affairs, finances and
accounts with their respective directors, officers, and independent
public accountants, all at the reasonable expense of the Guarantor and
at such reasonable times during normal business hours and as often as
may be reasonably desired, upon reasonable advance notice to the
Guarantor; provided that when an Event of Default exists the
Administrative Agent or any Lender may do any of the foregoing at the
reasonable expense of the Guarantor at any time during normal business
hours without advance notice.
(k) Environmental Laws. The Guarantor shall, and shall cause
each Subsidiary to, conduct its operations and keep and maintain its
property in material compliance with all material Environmental Laws.
(l) Use of Proceeds. The Guarantor shall use the proceeds of
the Loans to acquire the Property and to fund Construction of
Improvements.
(m) Covenant to Secure Obligations Equally. The Guarantor
covenants that, if it or any Subsidiary shall create or assume any Lien
upon any of its property or assets, whether now owned or hereafter
acquired, other than Liens permitted by the provisions of
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Section 10.2(b) (unless prior written consent to the creation or
assumption thereof shall have been obtained pursuant to Section 15.5
hereof), it will make or cause to be made effective provision whereby
the Obligations will be secured by such Lien equally and ratably with
any and all other Debt thereby secured so long as any such other Debt
shall be so secured.
(n) Cooperative Status. The Guarantor covenants that it will
at all times maintain its status as a cooperative for purposes of
Subchapter T of the Code; provided, however, in the event that the Code
or other applicable law is modified after the date hereof and as a
result of such modification the Guarantor is unable to satisfy its
obligations under this Section, then the Required Participants and the
Guarantor shall agree, or in good faith negotiate to agree, to amend
the covenants contained in this Participation Agreement so that the
application of such covenants (following such modification of the Code
or other applicable law and the effect thereof on the Guarantor) will
be substantially the same as prior thereto.
(o) Further Assurances. The Guarantor shall (a) cause all
Subsidiaries to guarantee the obligations of the Guarantor hereunder
pursuant to the Additional Guaranty (and in furtherance of the
foregoing, immediately upon the creation or acquisition of any
Subsidiary, cause such Subsidiary to execute and deliver a counterpart
of the Additional Guaranty together with such other documents,
including resolutions and opinions of counsel, as Administrative Agent
or any Participant may reasonably request) provided that (i) none of
TruServ Specialty Company, LLC nor any Foreign Subsidiary shall have an
obligation to execute a counterpart of the Additional Guaranty and (ii)
neither of Advocate Services, Inc. nor Servistar Paint Company shall
have an obligation to execute a counterpart of the Additional Guaranty
prior to the date which is 180 days following April 11, 2002; and (b)
take, and cause each of the Additional Guarantors to take, such actions
as are necessary or as the Administrative Agent or the Required
Participants may reasonably request from time to time (including the
execution an delivery of security agreements, pledge agreements,
financing statements, mortgages, deeds of trust and other documents,
the filing or recording of any for the foregoing, the delivery of stock
certificates and other collateral with respect to which perfection is
obtained solely by possession, the notation of the Collateral Agent's
Liens on certificates of title for vehicles and the delivery of
opinions of counsel) to ensure that the obligations of the Guarantor
and each Additional Guarantor hereunder and under the Additional
Guaranty, as applicable, are secured by perfected security interests in
substantially all of the personal property of each such entity, and
provided further that neither the Guarantor nor any Additional
Guarantor shall be required to pledge more than 65% of the stock of any
Foreign Subsidiary.
(p) Insurance and Condemnation Proceeds. The Guarantor shall
promptly notify the Administrative Agent of any loss, damage, or
destruction to the Collateral, whether or not covered by insurance.
Section 10.2. Negative Covenants of the Guarantor. The
Guarantor covenants and agrees with the Arranger, the Agent Certificate
Holder, Lessor Trust, Owner Trustee,
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the Administrative Agent, the Certificate Holders and the Lenders that,
so long as this Participation Agreement shall remain in effect or the
principal or interest on any Loan, any Certificate Holder Amount or
Yield thereon, or any fees or any other expenses or amounts payable
under any Operative Document shall be unpaid, and until all Commitments
shall have been permanently terminated, unless the Required
Participants shall otherwise consent in writing:
(a) Fixed Charge Coverage Ratio. The Guarantor will not
permit the Fixed Charge Coverage Ratio as of the end of any fiscal
quarter to be less than the applicable ratio set forth below:
FISCAL QUARTER ENDING ON OR ABOUT RATIO
--------------------------------- -----
March 31, 2002 0.80 to 1
June 30, 2002 0.90 to 1
September 30, 2002 0.90 to 1
December 31, 2002 0.70 to 1
March 31, 2003 0.70 to 1
June 30, 2003 0.70 to 1
September 30, 2003 0.60 to 1
December 31, 2003 0.75 to 1
March 31, 2004 0.70 to 1
June 30, 2004 0.65 to 1
The provisions of this Section shall be subject to change, upon the
sale of the Paint Business (if sold prior to June 30, 2003) or other asset sales
not previously disclosed to the Participants, upon the mutual agreement of the
Guarantor and the Required Participants.
(b) Lien Restrictions. The Guarantor will not and will not
permit any Subsidiary to create, assume or suffer to exist any Lien
upon any of its property or assets, whether now owned or hereafter
acquired (whether or not provision is made for the equal and ratable
securing of the Obligations in accordance with the provisions of
Section 10.1(m)), except:
(i) Liens for taxes not yet due or which are being
actively contested in good faith by appropriate proceedings
and with respect to which the Guarantor or the applicable
Subsidiary maintains adequate reserves,
(ii) Liens incidental to the conduct of its business or
the ownership of its property and assets which were not
incurred in connection with the borrowing of money or the
obtaining of advances or credit,
(iii) Liens on property or assets of a Subsidiary to
secure obligations of such Subsidiary to the Guarantor or
another Subsidiary,
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(iv) Liens in existence on the Amendment Effective
Date and described on Schedule VI,
(v) Liens in respect of capital leases entered into
in connection with, or any Lien arising in connection with,
the acquisition of property, after the date hereof and
attaching only to the property being acquired, if the
Indebtedness secured thereby does not exceed one hundred
percent (100%) of the lesser of (i) the fair market value of
the property acquired at the time of acquisition thereof and
(ii) the total purchase price of the property so acquired,
(vi) other Liens (including Liens arising under
capital leases), in addition to the Liens permitted by clauses
(i) through (iv) above and clauses (vii) through (xi) below,
securing Indebtedness of the Guarantor or any Subsidiary
(other than Indebtedness that constitutes Subordinated Debt);
provided, however, that (i) such Indebtedness is permitted by
the provisions of Section 10.2(c) and (ii) the aggregate
outstanding principal amount of all such Indebtedness (other
than Indebtedness listed on Schedule 10.2(b)(vi)) does not at
any time exceed $25,000,000,
(vii) Liens in favor of the Collateral Agent.
(viii) any interest or title of a lessor in property
subject to any lease other than (A) subject to clause (i)
above, a capital lease, (B) a lease entered into as part of a
sale and leaseback transaction or (C) except for the
transaction contemplated by the Operative Documents or as
permitted by clause (iv) above, a Synthetic Lease,
(ix) any interest of a lessee or a sublessee in
property owned or leased by the Guarantor or any Subsidiary,
(x) any escrow, holdback or similar arrangement in
connection with any sale, lease, transfer or other disposition
of any asset not prohibited hereunder (including any sale of
the Paint Business),
(xi) Liens in favor of Bank of America on cash
collateral securing obligations of the Guarantor or any
Subsidiary under letters of credit issued by, or with respect
to cash management services provided by, Bank of America,
(xii) Liens in respect of mortgages on properties
listed on Schedule 10.2(b) (the "Specified Facilities"), and
(xiii) Liens in favor of Fleet National Bank on cash
collateral securing obligations of the Guarantor or any
Subsidiary with respect to cash management services provided
by Fleet National Bank.
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(c) Debt Restrictions. The Guarantor will not and will
not permit any Subsidiary to create, incur, assume or suffer to exist
any Debt, except:
(i) Senior Funded Debt,
(ii) Subordinated Debt,
(iii) Debt under the Guaranty,
(iv) Short Term Debt of the Guarantor.
(d) Sale of Assets. The Guarantor will not and will not
permit any Subsidiary to sell, lease or transfer or otherwise dispose
of any assets of the Guarantor or any Subsidiary other than in the
ordinary course of business; provided that the Guarantor and its
Subsidiaries may sell, lease, transfer or otherwise dispose of assets
(i) to the extent that such sale, lease, transfer or disposition
relates to a Designated Permitted Asset Sale, (ii) in connection with
the sale and leaseback of distribution centers owned by the Guarantor
or any Subsidiary, (iii) in connection with the dissolution of any
Subsidiary permitted by Section 10.1(d) and (iv) outside the ordinary
course of business so long as (x) the aggregate amount of all assets
sold, leased, transferred or otherwise disposed of outside the ordinary
course of business for the 36 months preceding such proposed sale when
added together, without duplication, with (1) any shares of stock or
Debt of any Subsidiary sold or otherwise disposed of, or with respect
to which the Guarantor or any Subsidiary has parted control of, except
to the Guarantor or another Subsidiary, during such period and (2) any
assets then proposed to be sold outside of the ordinary course of
business do not constitute more than ten percent (10%) of the
consolidated total assets of the Guarantor as of the end of the most
recent fiscal quarter for which the Guarantor has delivered financial
statements pursuant to Section 10.1(a) and (y) any such sale of assets
is not in excess of $2,500,000 per such sale; and provided, further,
that in the case of clauses (i) through (iv) above, all such assets
have been sold, leased, transferred or otherwise disposed of for fair
market value and the Net Disposition Proceeds from such sales shall be
paid to the Collateral Agent for distribution in accordance with the
Intercreditor Agreement.
(e) Merger. The Guarantor will not and will not permit
any Subsidiary to merge or consolidate with any other Person, except
that Subsidiaries may be merged or consolidated with or into the
Guarantor or any other Subsidiary.
(f) Restrictions on Transactions with Affiliates and
Stockholders. The Guarantor will not and will not permit any Subsidiary
to directly or indirectly, purchase, acquire or lease any property
from, or sell, transfer or lease any property (other than shares of
stock of the Guarantor) to, or otherwise deal with (i) any Affiliate or
Substantial Stockholder, or (ii) any corporation in which an Affiliate,
Substantial Stockholder or the Guarantor (either directly or through
Subsidiaries) owns five percent (5%) or more of the outstanding voting
stock, except that (A) any such Affiliate or Substantial Stockholder
may be
-13-
a director, officer or employee of the Guarantor or any Subsidiary and
may be paid reasonable compensation in connection therewith, (B) the
Guarantor and its Subsidiaries may perform or engage in any of the
foregoing in the ordinary course of business upon terms no less
favorable to the Guarantor or such Subsidiary (as the case may be) than
if no such relationship described in clauses (i) and (ii) above existed
and (C) the Guarantor may sell to or purchase from any such Person
shares of the Guarantor's stock subject to the provisions of Section
10.2.
(g) Issuance of Stock by Subsidiaries. The Guarantor will not
permit any Subsidiary to (either directly, or indirectly by the
issuance of rights or options for, or securities convertible into, such
shares) issue, sell or otherwise dispose of any shares of any class of
its stock (other than directors' qualifying shares) except to the
Guarantor or another Subsidiary.
(h) Compliance with ERISA. The Guarantor will not and will
not permit any Subsidiary to (i) engage in any transaction in
connection with which the Guarantor or any Subsidiary could be subject
to either a civil penalty assessed pursuant to section 502(i) of ERISA
or a tax imposed by section 4975 of the Code, terminate or withdraw
from any Plan (other than a Multiemployer Plan) in a manner, or take
any other action with respect to any such Plan (including, without
limitation, a substantial cessation of operations within the meaning of
section 4062(e) of ERISA), which could result in any liability of the
Guarantor or any Subsidiary to the PBGC, to a trust established
pursuant to section 4041(c)(3)(B)(ii) or (iii) or 4042(i) of ERISA, or
to a trustee appointed under section 4042(b) or (c) of ERISA, (ii)
incur any liability to the PBGC on account of a termination of a Plan
under section 4064 of ERISA, (iii) fail to make full payment when due
of all amounts which, under the provisions of any Plan, the Guarantor
or any Subsidiary is required to pay as contributions thereto, or (iv)
permit to exist any accumulated funding deficiency, whether or not
waived, with respect to any Plan (other than a Multiemployer Plan), if,
in any such case, such penalty or tax or such liability, or the failure
to make such payment, or the existence of such deficiency, as the case
may be, could be reasonably expected to have a material adverse effect
on the Guarantor and its Subsidiaries taken as a whole.
(i) No Change in Subordination Terms, etc. The Guarantor will
not and will not permit any Subsidiary to amend, alter or otherwise
change any provision of any of the subordinated promissory notes now or
hereafter issued by the Guarantor or take any other action (or refrain
from taking an action) which would have the effect of eliminating or
altering in any way the effect of the subordination language appearing
in such subordinated promissory notes or the rights of the
Administrative Agent and the Participants arising as a result thereof.
(j) Nature of Business. The Guarantor will not and will not
permit any Subsidiary to engage in the business of underwriting risks
for insurance purposes, or in any other aspect of insurance related
business other than in the ordinary course of business in accordance
with its practices as of the Amendment Effective Date; or purchase and
sell real estate (other than on an agency basis) for purposes other
than those relating directly to its principal business except for (i)
purchases and sales of store
-14-
locations in the ordinary course of business which in the aggregate for
the Guarantor and its Subsidiaries taken as a whole do not exceed
$10,000,000 during any rolling consecutive five (5) year period and
(ii) sales of the Specified Facilities.
(k) Restricted Investments. The Guarantor will not and
will not permit any Subsidiary to make or permit a Subsidiary to make
any Investment except the Guarantor and any Subsidiary may:
(i) make or permit to remain outstanding loans or
advances to any Subsidiary other than an Inactive
Subsidiary,
(ii) acquire and own stock, obligations or
securities received in settlement of debts (created in
the ordinary course of business) owing to the Guarantor
or any Subsidiary,
(iii) own, purchase or acquire prime commercial
paper, banker's acceptances and certificates of deposit
in United States and Canadian commercial banks (having
combined capital and surplus of not less than U.S.
$100,000,000) and repurchase agreements with respect to
the foregoing, in each case due within one year from
the date of purchase and payable in the United States
in United States Dollars, obligations of the government
of the United States or any agency thereof, and
obligations guaranteed by the government of the United
States,
(iv) make or permit to remain outstanding travel
and other similar advances to officers and employees in
the ordinary course of business,
(v) permit to remain outstanding Investments
existing on the Amendment Effective Date and described
on Schedule VII,
(vi) maintain deposit accounts with Bank of America
containing cash collateral permitted to be held under
Section 10.2(b)(xi),
(vii) maintain deposit accounts with Fleet National
Bank containing cash collateral permitted to be held
under Section 10.2(b)(xiii),
(viii) maintain other deposit accounts with
financial institutions in the ordinary course of
business; provided that the amount maintained in
deposit accounts with financial institutions other than
the Lenders under the Existing Credit Agreement shall
not exceed (A) in the case of any one such account,
$200,000 for more than three (3) consecutive Business
Days; and (B) in the case of all such accounts in the
aggregate, $600,000 for more than two (2) consecutive
Business Days,
(ix) to the extent applicable, make Investments
permitted under Section 10.2(l) below, and
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(x) enter into escrow, seller note, holdback or
similar arrangements in connection with any sale,
lease, transfer or other disposition of any asset not
prohibited hereunder (including any sale of the Paint
Business).
Notwithstanding the foregoing, the Guarantor will not permit the
aggregate amount of Investments in TruServ Specialty Company, LLC to exceed
$1,500,000 at any time.
(l) Restricted Payments. (i) The Guarantor will not and will
not permit any Subsidiary to pay or declare cash dividends or cash
patronage dividends or redeem, purchase or otherwise acquire, or make
any redemptions, purchase, or other acquisition of any of its stock or
apply miscellaneous deductions in lieu of patronage dividends, or make
or permit any Subsidiary to make any Restricted Investment (each a
"Restricted Payment") except the Guarantor or any Subsidiary may pay
cash patronage source dividends in an amount not to exceed 20% (or such
greater percentage as required under the Code) of all patronage source
income; provided that if Adjusted EBITDA for the fiscal year most
recently ended is at least equal to the amount set forth on Schedule
10.2(l) for such fiscal year, the Guarantor may pay cash patronage
source dividends in an amount not to exceed 30% of the patronage source
income attributable to patronage source income other than income
resulting from gains on Asset Sales.
(ii) The Guarantor may not redeem or purchase any
shares of stock except for Hardship Case Payments in an
amount not to exceed $2,000,000 in the aggregate in any
fiscal year.
(m) Use of Proceeds. The Guarantor shall not, and shall not
permit any Subsidiary to, use any portion of the proceeds of any Loan,
directly or indirectly, (i) to purchase or carry Margin Stock, (ii) to
repay or otherwise refinance indebtedness of the Guarantor or others
incurred to purchase or carry Margin Stock, (iii) to extend credit for
the purpose of purchasing or carrying any Margin Stock, or (iv) to
acquire any security in any transaction that is subject to Section 13
or 14 of the Exchange Act.
(n) Interest Coverage Ratio. The Guarantor will not permit the
Interest Coverage Ratio as of the end of any fiscal quarter to be less
than applicable ratios set forth below:
FISCAL QUARTER ENDING ON OR ABOUT RATIO
--------------------------------- -----
March 31, 2002 1.20 to 1
June 30, 2002 1.50 to 1
September 30, 2002 1.70 to 1
December 31, 2002 1.70 to 1
March 31, 2003 1.70 to 1
June 30, 2003 1.75 to 1
September 30, 2003 1.65 to 1
December 31, 2003 1.70 to 1
-▇▇-
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ OR ABOUT RATIO
--------------------------------- -----
March 31, 2004 1.65 to 1
June 30, 2004 1.50 to 1
The provisions of this Section shall be subject to change, upon the
sale of the Paint Business (if sold prior to June 30, 2003) or other asset sales
not presently disclosed to the Participants, upon the mutual agreement of the
Guarantor and the Required Participants.
(o) Minimum Sales. The Guarantor will not permit consolidated
gross sales for the Guarantor and its Subsidiaries to be less than the
following amounts for the following fiscal periods.
FISCAL QUARTER ENDING ON OR ABOUT AMOUNT
--------------------------------- ------
March 31, 2002 $460,000,000
April 30, 2002 $625,000,000
May 31, 2002 $805,000,000
June 30, 2002 $990,000,000
July 31, 2002 $1,200,000,000
August 31, 2002 $1,340,000,000
September 30, 2002 $1,520,000,000
October 31, 2002 $1,670,000,000
November 30, 2002 $1,815,000,000
December 31, 2002 $1,975,000,000
January 31, 2003 $1,965,000,000
February 28, 2003 $1,955,000,000
March 31, 2003 $1,945,000,000
April 30, 2003 $1,930,000,000
May 31, 2003 $1,920,000,000
June 30, 2003 $1,910,000,000
July 31, 2003 $1,900,000,000
August 31, 2003 $1,890,000,000
September 30, 2003 $1,875,000,000
October 31, 2003 $1,870,000,000
November 30, 2003 $1,865,000,000
December 31, 2003 $1,860,000,000
January 31, 2004 $1,850,000,000
February 29, 2004 $1,840,000,000
March 31, 2004 $1,830,000,000
April 30, 2004 $1,820,000,000
May 31, 2004 $1,805,000,000
June 30, 2004 $1,795,000,000
-17-
The minimum consolidated gross sales for each fiscal month of 2002,
beginning with March 2002, shall be calculated on a cumulative basis from
January 1, 2002. The minimum consolidated gross sales for each fiscal month
beginning after fiscal year 2002 shall be calculated on a prior rolling 12-month
basis.
The provisions of this Section shall be subject to change, upon the
sale of the Paint Business (if sold prior to June 30, 2003) or other asset sales
not presently disclosed to the Participants, upon the mutual agreement of the
Guarantor and the Required Participants.
(p) Capital Expenditures. The Guarantor will not permit
Capital Expenditures to be greater than the following amounts in the
following fiscal periods of the Guarantor.
FIRST DAY OF APPLICABLE FISCAL YEAR THROUGH
FISCAL QUARTER ENDING ON OR ABOUT CUMULATIVE AMOUNT
--------------------------------- -----------------
March 31, 2002 $6,400,000
June 30, 2002 $11,200,000
September 30, 2002 $13,600,000
December 31, 2002 $16,000,000
March 31, 2003 $6,400,000
June 30, 2003 $11,200,000
September 30, 2003 $13,600,000
December 31, 2003 $16,000,000
March 31, 2004 $6,400,000
June 30, 2004 $11,200,000
The provisions of this Section shall be subject to change, upon the
sale of the Paint Business (if sold prior to June 30, 2003) or other asset sales
not presently disclosed to the Participants, upon the mutual agreement of the
Guarantor and the Required Participants.
(q) Minimum Adjusted EBITDA. The Company will not permit
Adjusted EBITDA to be less than the following amounts in the following
fiscal periods:
FISCAL PERIOD ENDING ON OR ABOUT AMOUNT
-------------------------------- ------
March 31, 2002 $20,000,000
April 30, 2002 $25,000,000
May 31, 2002 $35,000,000
June 30, 2002 $50,000,000
July 31, 2002 $60,000,000
August 31, 2002 $65,000,000
September 30, 2002 $80,000,000
October 31, 2002 $90,000,000
November 30, 2002 $95,000,000
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FISCAL PERIOD ENDING ON OR ABOUT AMOUNT
-------------------------------- ------
December 31, 2002 $100,000,000
January 31, 2003 $100,000,000
February 28, 2003 $100,000,000
March 31, 2003 $100,000,000
April 30, 2003 $95,000,000
May 31, 2003 $95,000,000
June 30, 2003 $95,000,000
July 31, 2003 $90,000,000
August 31, 2003 $90,000,000
September 30, 2003 $80,000,000
October 31, 2003 $80,000,000
November 30, 2003 $80,000,000
December 31, 2003 $80,000,000
January 31, 2004 $75,000,000
February 29, 2004 $75,000,000
March 31, 2004 $70,000,000
April 30, 2004 $70,000,000
May 31, 2004 $65,000,000
June 30, 2004 $60,000,000
The minimum Adjusted EBITDA for each fiscal month of 2002, beginning
with March 2002, shall be calculated on a cumulative basis from January 1, 2002.
The minimum Adjusted EBITDA for each fiscal month beginning after fiscal year
2002 shall be calculated on a prior rolling 12 month basis. The provisions of
this Section shall be subject to change, upon the sale of the Paint Business (if
sold prior to June 30, 2003) or other asset sales not presently disclosed to the
Lenders, upon the mutual agreement of the Guarantor and the Required
Participants.
(r) Inactive Subsidiaries. The Guarantor will not at any time
permit its Inactive Subsidiaries, taken as a whole, to have more than
$200,000 of assets (based on fair market value) or to generate more
than $5,000 of revenues in any fiscal quarter.
(s) Amendments to Financing Agreements; Prepayment of Certain
Indebtedness. The Guarantor will not, and will not permit any
Subsidiary to, amend, modify, supplement or restate any Financing
Agreement (as defined in the Intercreditor Agreement). The Guarantor
will not, and will not permit any Subsidiary to, (i) amend, alter or
otherwise change any provision of any of the notes or other instruments
evidencing any Subordinated Debt now or hereafter issued by the
Guarantor or take any other action (or refrain from taking any action)
which would have the effect of eliminating or altering In any way the
effect of the subordination language appearing in such notes or other
instruments or any agreement relating thereto or the rights of the
holders of such notes or instruments arising as a result thereof except
to the extent of Hardship Case Payments, (ii) make any optional or
voluntary prepayment, in whole or in part, of any Subordinated Debt, or
(iii) make any optional or voluntary prepayment, in
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whole or in part, of any Benefited Obligations, other than (x) optional
or voluntary prepayments, in whole or in part, of the Loans under the
Credit Agreement and (y) optional or voluntary prepayments, in whole or
in part, of the Shelf Obligations, the Obligations and the Senior Note
Obligations, (each as defined in the Intercreditor Agreement) pursuant
to the terms of the Shelf Agreement, the Operative Documents or the
Senior Note Agreements, as applicable (each as defined in the
Intercreditor Agreement). All such optional and voluntary prepayments
described in clause (iii) above shall be made in accordance with the
terms of the Intercreditor Agreement and, in the absence thereof, in
conformance with all of the other terms hereof.
(t) Subordinated Notes. The Guarantor will discontinue the
Variable Denomination Subordinated Floating Rate Demand Notes program
on or before July 31, 2002, and no new TIP Notes will be issued after
the date hereof without the approval of the Administrative Agent.
(u) Chief Executive Officer. Any appointment by the Guarantor
of a chief executive officer will be subject to the consent of the
Required Participants."
Section 1.8. Schedule III, Schedule IV and Exhibit N are hereby deleted
in their entirety and Exhibit O, Schedule 8.2(f), Schedule 8.2(g), Schedule
8.2(i), Schedule 8.2(y), Schedule 10.2(b), Schedule 10.2(l), Schedule VI and
Schedule VII are hereby added to the Agreement in the form attached hereto.
Section 2. Amendment to Master Lease. Effective on (and subject to the
occurrence of) the Amendment Effective Date, the Master Lease shall be amended
in accordance with this Section:
Section 2.1. Section 16.1(d) shall be amended and restated in its
entirety as follows:
"Guarantor shall fail to observe or perform any term,
covenant or condition applicable to it under Section 10.2 of
the Participation Agreement or Article XX of this Agreement;
or"
Section 2.2. Section 16.1(e) shall be amended by replacing "thirty
(30)" with "fifteen (15)".
Section 2.3. Section 16.1(i) shall be amended by adding the phrase "or
any Subsidiary other than an Inactive Subsidiary or a Canadian Subsidiary" after
the following phrase "Guarantor or the Lessee" every time such phrase occurs.
Section 2.4 Section 16.1(m) shall be amended by replacing "$7,000,000"
with "$5,000,000".
Section 2.5 Article IX shall be amended by adding the following
Sections 16.1(r) and 16.1(s) thereto:
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"(r) The Guarantor shall pay any principal amount of
Subordinated Debt (other than, so long as no Event of Default exists or
would result therefrom and the Guarantor has met or exceeded its
Minimum Adjusted EBITDA covenant set forth in Section 10.2(q) of the
Participation Agreement as of the most recent period for which such
covenant is applicable, (i) payments of principal of the Guarantor's
variable denomination floating rate subordinated notes in an aggregate
amount not greater than $2,800,000 after the date hereof and (ii)
payments of principal of other Subordinated Debt in an aggregate amount
not greater than (x) $24,000,000 for the period from January 1, 2002 to
December 31, 2002 and (y) $14,000,000 for the period from January 1,
2003 to December 31, 2003).
(s) The Guarantor fails to retain on the Board of Directors
of the Guarantor (i) at least two outside directors prior to May 31,
2002, (ii) at least four such directors prior to September 1, 2002 and
(iii) at least five such directors prior to November 1, 2002 in
accordance with the bylaws of the Guarantor and its internal policy
designated the "Corporate Governance Policy"."
Section 3. Amendment to Loan Agreement. Effective on (and subject to
the occurrence of) the Amendment Effective Date, the Loan Agreement shall be
amended by deleting any reference therein to "Adjusted Eurodollar Rate" and
specifically (i) Section 2.4(a) shall be amended by deleting the first sentence
thereof and substituting the following in its place. "Each Loan shall bear
interest from the date each respective Advance is made at a rate ("Interest
Rate") equal to the Base Rate." and (ii) the first sentence of Section 2.6 is
hereby deleted in its entirety and replaced with the following: "Interest on the
Loans shall be calculated on the basis of a 365/366 day year for the actual days
elapsed."
Section 4. Representations and Warranties. The Guarantor represents
and warrants to the Administrative Agent and the Participants that, after giving
effect hereto, (a) each representation and warranty (as amended hereby) set
forth in Section 8.2 of the Participation Agreement (except for those set forth
in Sections 8.2(j), 8.2(l) and 8.2(t)), is true and correct as of the date of
the execution and delivery of this Amendment by the Guarantor with the same
effect as if made on such date (except to the extent such representations and
warranties expressly refer to an earlier date, in which case they were true and
correct as of such earlier date), and (b) no Event of Default or Unmatured Event
of Default exists.
Section 5. Effectiveness. The amendments set forth in Section 1 above
shall become effective on the date (the "Amendment Effective Date") when the
Administrative Agent shall have received (a) an upfront fee equal to 1.25% of
the Lease Balance and to the extent then billed, all costs and expenses of the
Administrative Agent in connection with this Amendment (including reasonable
attorneys' fees and charges and all costs, expenses and charges for a field
examination) and (b) each of the following documents, each in form and substance
satisfactory to the Administrative Agent:
(a) counterparts of this Amendment executed by the Guarantor,
the Lessee and the Required Participants;
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(b) a certificate of the secretary or an assistant secretary
of the Guarantor and the Lessee as to:
(i) resolutions of the Board of Directors or Board
of Managers authorizing the execution and delivery of this
Amendment and the performance by the Guarantor and the Lessee
of their respective obligations under the Participation
Agreement and the Operative Documents, as amended hereby, and
(ii) the incumbency and signatures of those of its
officers authorized to execute and deliver this Amendment;
(c) an opinion of counsel for the Guarantor and the Lessee, in
form and substance satisfactory to the Administrative Agent; and
(d) such other documents as the Administrative Agent or any
Participant may reasonably request.
Section 6. Miscellaneous.
Section 6.1. Continuing Effectiveness, etc. As herein amended, the
Participation Agreement shall remain in full force and effect and is hereby
ratified and confirmed in all respects. After the Amendment Effective Date, all
references in the Participation Agreement and the other Operative Documents to
"Participation Agreement", or similar terms shall refer to the Participation
Agreement, as amended hereby.
Section 6.2. Counterparts. This Amendment may be executed in any number
of counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original but all such counterparts
shall together constitute one and the same Amendment.
Section 6.3. Governing Law. This Amendment shall be a contract made
under and governed by the laws of the State of Illinois.
Section 6.4. Successors and Assigns. This Amendment shall be binding
upon the Lessee, the Guarantor, the Lessor Trust, the Owner Trustee, the
Certificate Holders, the Agent Certificate Holder, the Lenders, the
Administrative Agent and the Arranger and their respective successors and
assigns, and shall inure to the benefit of the Lessee, Guarantor the Lessor
Trust, the Owner Trustee, the Certificate Holders, the Agent Certificate Holder,
the Lenders and the Administrative Agent and the respective successors and
assigns of the Lessor Trust, the Owner Trustee, the Certificate Holders, the
Agent Certificate Holder, the Lenders and the Administrative Agent.
Section 6.5. Participation of Guaranty. By execution of this Amendment,
Guarantor hereby restates, ratifies and reaffirms in full its obligations under
the Guaranty.
-22-
Section 7.1. Waiver. Subject to the occurrence of the Amendment
Effective Date, the Administrative Agent, the Owner Trustee, the Lessor Trust,
the Lenders and the Certificate Holders waive any Default or Event of Default
arising from non-compliance with the financial covenants in Section 10.2 of the
Participation Agreement and the Defaults and Events of Default specifically
disclosed in the letter of even date herewith from the Guarantor to the
Administrative Agent regarding Events of Default existing on the date hereof.
Except as specifically set forth in the preceding sentence, nothing contained
herein shall be construed as a waiver of or consent to any other violation of
the Operative Documents or any other Default or Event of Default under the
Operative Documents.
-23-
Delivered at Chicago, Illinois, as of the day and year first above
written.
TRUSERV CORPORATION, as Lessee Agent,
Construction Agent and Guarantor
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its Vice President
▇▇▇▇ ▇▇▇▇▇, LLC, as Lessee
By: TruServ Corporation,
its sole member
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its Vice President
BMO GLOBAL CAPITAL SOLUTIONS, INC.,
formerly known as BMO Leasing
(U.S.), Inc., as Agent Certificate
Holder and as a Certificate Holder
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Its President
BANK OF MONTREAL, as Administrative
Agent, Arranger and as a Lender
By /s/ ▇▇▇▇▇▇▇ ▇. TURF
Its Director
-24-
WILMINGTON TRUSTCOMPANY, not in its
individual capacity, except as
expressly provided herein, but
solely as Owner Trustee
By /s/ ▇. ▇▇▇▇▇▇
Title: Senior Financial Services
Officer
TRUSERV 1998 TRUST, as Lessor Trust
By: Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
By /s/ ▇. ▇▇▇▇▇▇
Title: Senior Financial Services
Officer
-25-
EXHIBIT O
EXCESS CASH FLOW CALCULATION
1. Adjusted Cash Flow $_______________
2. Negative Adjusted Working Capital Change $_______________
3. Positive Adjusted Working Capital Change $_______________
4. Excess Cash Flow ((line 1 + line 2 minus line 3) multiplied by 80%) $_______________
AMENDED AND RESTATED
APPENDIX A
TO PARTICIPATION AGREEMENT
A. Interpretation. In each Operative Document, unless a clear contrary
intention appears:
(i) the singular number includes the plural number and vice
versa;
(ii) reference to any Person includes such Person's successors
and assigns but, if applicable, only if such successors and assigns are
permitted by the Operative Documents, and reference to a Person in a
particular capacity excludes such Person in any other capacity or
individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement, document or instrument
(including any Operative Document) means such agreement, document or
instrument as amended or modified and in effect from time to time in
accordance with the terms thereof and, if applicable, the terms of the
other Operative Documents, and reference to any promissory note
includes any promissory note which is an extension or renewal thereof
or a substitute or replacement therefor;
(v) reference to any Requirement of Law means such
Requirement of Law as amended, modified, codified, replaced or
reenacted, in whole or in part, and in effect from time to time,
including rules and regulations promulgated thereunder, and reference
to any section or other provision of any Requirement of Law means that
provision of such Requirement of Law from time to time in effect and
constituting the substantive amendment, modification, codification,
replacement or reenactment of such section or other provision;
(vi) reference in any Operative Document to any Article,
Section, Appendix, Schedule or Exhibit means such Article or Section
thereof or Appendix, Schedule or Exhibit thereto;
(vii) "hereunder," "hereof, "hereto" and words of similar
import shall be deemed references to an Operative Document as a whole
and not to any particular Article, Section or other provision thereof;
(viii) "including" (and with correlative meaning "include")
means including without limiting the generality of any description
preceding such term; and
(ix) with respect to any rights and obligations of the parties
under the Operative Documents, all such rights and obligations shall be
construed to the extent permitted by Applicable Law.
-2-
B. Computation of Time Periods. Unless otherwise specified in any
Operative Document, for purposes of computation of periods of time under the
Operative Documents, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding."
C. Accounting Terms and Determinations. Unless otherwise specified
herein, all accounting terms used therein shall be interpreted, all accounting
determinations thereunder shall be made, and all financial statements required
to be delivered thereunder shall be prepared in accordance with GAAP, applied on
a basis consistent (except for changes concurred in by the Guarantor's
independent public accountants) with the most recent audited consolidated
financial statements of the Guarantor and its Subsidiaries delivered to the
Participants.
D. Conflict in Operative Documents. If there is any conflict between
any Operative Documents, such Operative Documents shall be interpreted and
construed, if possible, so as to avoid or minimize such conflict but, to the
extent (and only to the extent) of such conflict, the Participation Agreement
shall prevail and control.
E. Legal Representation of the Parties. The Operative Documents were
negotiated by the parties with the benefit of legal representation and any rule
of construction or interpretation otherwise requiring the Operative Documents to
be construed or interpreted against any party shall not apply to any
construction or interpretation hereof or thereof.
F. Defined Terms. Unless a clear contrary intention appears, terms
defined herein have the respective indicated meanings when used in each
Operative Document.
G. Incorporation By Reference. Each of the terms set forth in the
Existing Credit Agreement, and used in the Operative Documents, including
defined terms within definitions, and not defined herein shall be incorporated
herein by reference as if set forth herein, provided that (a) any reference
therein to (i) Agreement shall mean Participation Agreement, (ii) Company shall
mean Guarantor, and (iii) Agent and Lenders shall mean Administrative Agent and
the Participants, (b) such other changes shall be deemed made therein to conform
to the terms of the Operative Documents, (c) no change, modification, amendment
or waiver of any such definition shall be binding upon the Administrative Agent
or the Participants unless they agree thereto in writing and (d) such
incorporation by reference shall survive any termination or cancellation of the
Existing Credit Agreement. If there is any conflict between defined terms set
forth in the Existing Credit Agreement, to the extent incorporated by reference
herein, and the Operative Documents, the Existing Credit Agreement definition
shall prevail.
"Account" means the account identified by the Administrative Agent into
which all payments by the Lessee Agent or any Lessee under the Operative
Documents shall be made. The Account shall be specified on Schedule II to the
Participation Agreement, as such Schedule may from time to time be amended,
supplemented, amended and restated or otherwise modified.
"Acquisition Date" is defined in Section 6.1 of the Participation
Agreement.
-3-
"Additional Guaranty" shall mean the Guaranty executed by various
Subsidiaries pursuant to the Existing Credit Agreement.
"Administrative Agent" means BMO in its capacity as Administrative
Agent, and any successors or assigns thereto in such capacity.
"Advance" means an advance of funds to the Construction Agent pursuant
to Article III of the Participation Agreement.
"Affiliate" means, as to any Person any other Person which directly or
indirectly is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of such other Person, whether
through the ownership of voting securities, membership interests, by contract,
or otherwise. A Person that is or was a Member, Substantial Stockholder or
material customer shall not be deemed an Affiliate solely on account of such
status.
"After Tax Basis" means, with respect to any payment to be received,
the amount of such payment increased so that, after deduction of the amount of
all taxes required to be paid by the recipient (less any tax savings realized
and the present value of any tax savings projected to be realized by the
recipient as a result of the payment of the indemnified amount) with respect to
the receipt by the recipient of such amounts, such increased payment (as so
reduced) is equal to the payment otherwise required to be made.
"Agent Certificate Holder" means BMO Leasing (U.S.), Inc., a Delaware
corporation, together with its successors permitted pursuant to Section 14.12 of
the Participation Agreement.
"Aggregate Commitment Amount" means, on any date, $40,000,000 as such
amount may be reduced from time to time pursuant to Section 4.3(a) of the
Participation Agreement.
"ALTA" is defined in Section 6.1(p) of the Participation Agreement.
"Amendment Effective Date" is defined in Section 5 of the Fourth
Amendment to Participation Agreement, Second Amendment to Master Lease and Loan
Agreement.
"Applicable Law" means all Federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions affecting the Property, the Improvements or the
demolition, construction, use or alteration thereof, whether now or hereafter
enacted and in force, including any that require repairs, modifications or
alterations in or to the Property or in any way limited the use and enjoyment
thereof (including all building, zoning and fire codes and the Americans with
Disabilities Act of 1990, 42 U.S.C. S 1201 et seq. and any other similar
federal, state or local laws or ordinances and the regulations promulgated
thereunder) and any that may relate to environmental requirements (including all
Environmental Laws), and all permits, certificates of occupancy, licenses,
authorizations and regulations relating thereto, and all covenants, agreements,
restrictions and encumbrances contained in any instruments which are either of
record or known to the Guarantor or the Lessee
-4-
affecting the Property, the Appurtenant Rights and any easements, licenses or
other agreements entered into pursuant to Section 11.2 of the Master Lease.
"Appraisal" means an appraisal of the Fair Market Sales Value of the
Property, which Appraisal complies in all material respects with all of the
provisions of the Financial Institutions Reform, Recovery and Enforcement Act of
1989, as amended, the rules and regulations adopted pursuant thereto, and all
other applicable Requirements of Law, and is addressed to the Administrative
Agent, the Agent Certificate Holder and the Guarantor. Each Appraisal shall be
prepared by an MAI appraiser selected by the Administrative Agent and the Agent
Certificate Holder, and such appraiser shall be reasonably acceptable to the
Guarantor.
"Appraiser" means the appraiser which prepared an Appraisal of the
Property or such other Person selected by the Administrative Agent and the Agent
Certificate Holder.
"Appurtenant Rights" means, with respect to the Land, (i) all
agreements, easements, rights of way or use, rights of ingress or egress,
privileges, appurtenances, tenements, and other rights and benefits at any time
belonging or pertaining to the Land or the Improvements thereon, including,
without limitation, the use of any streets, ways, alleys, vaults or strips of
land adjoining, abutting, adjacent or contiguous to the Land and (ii) all
permits, licenses and rights, whether or not of record, appurtenant to the Land.
"Arranger" means BMO, in its capacity as arranger.
"Arranger's Fee Letter" means that certain fee letter dated as of
February 11, 2002.
"As-Built Appraisal" means an Appraisal of the Property appraising the
Fair Market Sales Value of the Property as built in accordance with the Plans
and Specifications therefor.
"Assigned Lease" is defined in Section 2(a) of the Assignment of Lease
and Rent.
"Assignment of Lease and Rent" means the Assignment of Lease and Rent
dated as of April 30, 1998, from the Lessor Trust, as assignor, to the
Administrative Agent for the benefit of the Lenders, as assignee, as the same
may be amended, supplemented, amended and restated or otherwise modified from
time to time.
"Assignment of Lease and Rent Supplement" means each supplement to the
Assignment of Lease and Rent executed by the Lessor Trust in favor of the
Administrative Agent, substantially in the form of Exhibit A thereto.
"Available Commitments" means the sum of the Available Loan Commitments
and the Available Certificate Holder Commitments.
"Available Certificate Holder Commitment" means, at any time, an amount
equal to the excess, if any, of (x) the aggregate amount of the Certificate
Holder Commitments, minus (y) the aggregate Certificate Holder Amounts
outstanding.
-5-
"Available Loan Commitment" means, at any time, an amount equal to the
excess, if any, of (x) the aggregate amount of the Loan Commitments, minus (y)
the aggregate principal amount of all Loans outstanding.
"Bankruptcy Code" is defined in Section 5.1(e) of the Loan Agreement.
"Base Rate" means, for any day, the rate per annum equal to the Prime
Rate plus 3.25% per annum with respect to the Interest Rate and plus 3.60% per
annum with respect to Yield or Yield Rate. For purposes of determining the Base
Rate for any day, changes in the Prime Rate shall be effective on the date of
each such change.
"Base Rate Loan/Certificate Holder Amount" means a Loan or Certificate
Holder Amount, as the case may be, bearing interest at the Base Rate.
"Basic Lease Term" is defined in Section 2.3 of the Master Lease.
"Basic Rent" means the sum of (i) the Lender Basic Rent and (ii) the
Certificate Holder Basic Rent, calculated as of the applicable date on which
Basic Rent is due.
"▇▇▇▇ of Sale" is defined in Section 6.1(j) of the Participation
Agreement.
"BMO" means Bank of Montreal.
"Borrower Default" is defined in Section 5.3 of the Loan Agreement.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in Chicago, Illinois are authorized or required by law
to close, except that, when used in connection with a Eurodollar Loan or
Eurodollar Certificate Holder Amount, such day shall also be a day on which
dealings between banks are carried on in U.S. dollar deposits in London,
England.
"Casualty" means any damage or destruction of all or any portion of the
Property as a result of a fire, flood, earthquake or other casualty.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, 42 U.S.C.Sections 601 et seq., as amended by
the Superfund Amendments and Reauthorization Act of 1986.
"Certificate" is defined in Section 10.2 of the Trust Agreement.
"Certificate Holder Amount" is defined in Section 3.2 of the
Participation Agreement.
"Certificate Holder Balance" means, as of any date of determination, an
amount equal to the sum of the outstanding Certificate Holder Amounts together
with all accrued and unpaid Yield thereon.
-6-
"Certificate Holder Basic Rent" means the sum of (a) the amount of
accrued Yield due on the Certificate Holder Amounts, determined in accordance
with Section 4.1 of the Participation Agreement as of any Payment Date and
excluding (i) any interest at the applicable Overdue Rate on any installment of
Certificate Holder Basic Rent not paid when due and (ii) any fine, penalty,
interest or cost assessed or added under any agreement with a third party for
nonpayment or late payment of Certificate Holder Basic Rent and (b) any Fixed
Rent due under the Lease Supplement with respect to the Certificate Holder
Amounts after giving effect to any prepayment of Fixed Rent.
"Certificate Holder Commitment" means the Commitment of each
Certificate Holder in the amount set forth on Schedule I of the Participation
Agreement, as such Schedule may be amended, supplemented, amended and restated,
reduced or otherwise modified from time to time (including, without limitation,
pursuant to Section 3.7 of the Participation Agreement).
"Certificate Holders" means, collectively, each of the Persons that are
or may from time to time become identified as a "Certificate Holder" party to
the Participation Agreement.
"Certificate of Amendment" means a certificate of amendment to the
Certificate of Trust filed with the Delaware Secretary of State.
"Certificate of Cancellation" means a certificate of cancellation of
the Certificate of Trust filed with the Delaware Secretary of State.
"Certificate of Trust" means the Certificate of Trust filed with the
Delaware Secretary of State pursuant to which the Lessor Trust elects to be
governed by the Delaware Business Trust Act.
"Certifying Party" is defined in Section 22.1 of the Master Lease.
"Claims" means any and all obligations, liabilities, losses, actions,
suits, judgments, penalties, fines, claims, demands, settlements, costs and
expenses (including, without limitation, reasonable legal fees and expenses) of
any nature whatsoever.
"Code" means the Internal Revenue Code of 1986 and regulations
promulgated thereunder.
"Commitment" means (i) as to any Lender, its Loan Commitment, and (ii)
as to any Certificate Holder, its Certificate Holder Commitment.
"Commitment Fees" is defined in Section 4.4(c) of the Participation
Agreement.
"Commitment Percentage" means, with respect to any Participant, the
percentage set forth opposite such Participant's name under the heading
"Commitment Percentage" on Schedule I to the Participation Agreement, as such
Schedule may be amended, supplemented, amended and restated or otherwise
modified from time to time (including, without limitation, pursuant to Section
3.7 of the Participation Agreement).
-7-
"Commitment Period" means the period from and including the Acquisition
Date to but not including the date occurring on the earlier of (i) the
Commitment Termination Date, (ii) the date on which the sum of the Loan Balance
and the Certificate Holder Balance equals the Aggregate Commitment Amount, (iii)
the date of Completion of the applicable Construction, (iv) the Outside
Completion Date and (v) the date on which the Commitments shall terminate as
provided in the Operative Documents; provided, however, that in the event that
any Commitment Period would end after the Commitment Termination Date, such
Commitment Period shall end on such Commitment Termination Date.
"Commitment Termination Date" means the Interim Termination Date.
"Completion" means such time as the conditions set forth in Section 6.3
of the Participation Agreement are satisfied with respect thereto.
"Completion Certificate" is defined in 6.3(d) of the Participation
Agreement.
"Completion Date" means, the date on which Completion for the Property
has occurred, as certified in the Completion Certificate.
"Compliance Certificate" is attached to the Participation Agreement as
Exhibit M.
"Condemnation" means any condemnation, requisition, confiscation,
seizure or other taking or sale of the use, access, occupancy, easement rights
or title to the Property or any part thereof, wholly or partially (temporarily
or permanently), by or on account of any actual or threatened eminent domain,
proceeding or other taking of action by any Person having the power of eminent
domain, including an action by a Governmental Authority to change the grade of,
or widen the streets adjacent to, the Property or alter the pedestrian or
vehicular traffic flow to the Property so as to result in change in access to
the Property, or by or on account of an eviction by paramount title or any
transfer made in lieu of any such proceeding or action. A "Condemnation" shall
be deemed to have occurred on the earliest of the dates that use, occupancy or
title vests in the condemning authority.
"Construction" means, with respect to the Property, the construction
and installation of all Improvements thereon contemplated by the Plans and
Specifications.
"Construction Agency Agreement" means the Construction Agency
Agreement, dated as of April 30, 1998, between the Lessor Trust and the
Construction Agent, as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time.
"Construction Agency Agreement Assignment" means the Construction
Agency Agreement Assignment, dated as of April 30, 1998, made by the Lessor
Trust, as assignor, in favor of the Administrative Agent on behalf of the
Lenders, as assignee, as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time.
-8-
"Construction Agency Agreement Default" means any event or condition
which, with the lapse of time or the giving of notice, or both, would constitute
a Construction Agency Agreement Event of Default.
"Construction Agency Agreement Event of Default" is defined in Section
5.1 of the Construction Agency Agreement.
"Construction Agency Agreement Supplement" means any duly executed and
delivered Supplement to the Construction Agency Agreement substantially in the
form attached to the Construction Agency Agreement as Exhibit A thereto.
"Construction Agent" means the Lessee Agent, as construction agent
under the Construction Agency Agreement.
"Construction Costs" means the fees, expenses, costs and other items
related to the development and construction of the Property and specified below:
(a) the costs of development, architectural and engineering
services related to the Property, including the costs of preparation of
studies, surveys, reports, tests, plans and specifications;
(b) the costs of legal, accounting and other services related
to the Property;
(c) the fees and charges incurred in connection with securing
all Governmental Actions required to be taken, given or obtained in
connection with the development, construction, ownership, financing,
maintenance or operation of the Property;
(d) any title fees, premiums and escrow costs and other
expenses relating to title insurance and title closings contemplated by
the Operative Documents;
(e) all expenses relating to all Environmental Audits;
(f) fees and other expenses relating to Appraisals;
(g) the costs incurred in connection with the acquisition,
construction, improvement, rehabilitation or extension of the
Improvements comprising a part of the Property and the provision of the
necessary services and utilities thereto, including the cost of
Equipment;
(h) interest on the Loans and Yield on the Certificate Holder
Amounts during the Construction Period;
(i) any sales, use, property, real or personal, tangible or
intangible taxes incurred in connection with the Property;
-9-
(j) any other items included in the construction budget,
including, to the extent included in the As-Built Appraisal,
pre-opening or start-up costs prior to resident admissions for such
items as labor, utilities and advertising or promotion;
(k) any other costs and expenses incurred in connection with
the acquisition, construction, development and equipping of the
Property; and
(l) such other items as the Participants may approve in
writing.
"Construction Documents" is defined in Section 2.5 of the Construction
Agency Agreement.
"Construction Documents Assignment" means the Construction Documents
Assignment, dated as of April 30, 1998, made by the Construction Agent in favor
of the Lessor Trust, as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time.
"Construction Fee" means the reasonable fee of Construction Agent for
supervising Construction as approved by the Participants.
"Construction Period" means, with respect to the Property, the period
commencing on the commencement of construction on the Property and ending on the
earlier of (i) the Completion Date and (ii) the Outside Completion Date.
"Contract Rents" is defined in Section 2(b) of the Assignment of Lease
and Rent.
"Contracts" is defined in Section 2(b) of the Assignment of Lease and
Rent.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its property is bound.
"Deed" means a special warranty deed with respect to the real property
comprising the Property, in conformity with Applicable Law and appropriate for
recording with the applicable Governmental Authorities, conveying fee simple
title to such real property to the Agent Certificate Holder, subject only to
Permitted Property Liens.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"Defaulting Participant" means, at any time, any Participant that, at
such time (a) has failed to make an Advance of a Loan or Certificate Holder
Amount, as the case may be, required pursuant to the terms of the Participation
Agreement, (b) has failed to pay to the Administrative Agent, the Agent
Certificate Holder, any Lender, or any Lessor an amount owed by such Participant
pursuant to the terms of the Operative Documents, or (c) has been declared
insolvent
-10-
or has become subject to a bankruptcy or insolvency proceeding or to a receiver,
trustee or similar official.
"Delaware Business Trust" means a trust that elects to be governed by
the provisions of the Delaware Business Trust Act.
"Delaware Business Trust Act" means the Delaware Business Trust Act,
12 Del. C.Section3801 et seq.
"Documentation Date" is defined in Section 2.1 of the Participation
Agreement.
"Dollars" and "$" mean dollars in lawful currency of the United States
of America.
"Eligible Assignee" means an Eligible Certificate Holder Assignee or an
Eligible Lender Assignee, as the case may be.
"Eligible Certificate Holder Assignee" means any Certificate Holder or
any Affiliate or Subsidiary of a Certificate Holder; and any other commercial
bank, financial institution or "accredited investor" (as defined in Regulation D
of the Securities and Exchange Commission) with combined capital and surplus in
excess of $50,000,000.
"Eligible Lender Assignee" means any Lender or any Affiliate or
Subsidiary of a Lender; and any other commercial bank, financial institution or
"accredited investor" (as defined in Regulation D of the Securities and Exchange
Commission) with combined capital and surplus excess of $50,000,000.
"End of the Term Report" is defined in Section 13.2(a) of the
Participation Agreement.
"Environmental Audit" means a Phase One environmental site assessment
(the scope and performance of which meets or exceeds the then most current ASTM
Standard Practice E1527 for Environmental Site Assessments: Phase One
Environmental Site Assessment Process) of the Property.
"Environmental Laws" means any and all applicable foreign, federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, permits, licenses, authorizations, decrees or other legal
requirement regulating, relating to or imposing liability or standards of
conduct concerning protection of human health or the environment or the use,
storage, recycling, handling, disposal, discharge, transport, treatment or
generation of Hazardous Materials, as now or may at any time be in effect during
the Lease Term, including CERCLA, RCRA, the Clean Air Act, 42 USC Section 7401
et seq., the Toxic Substances Control Act 15 USC Section 2601 et seq. and any
rules and regulations promulgated thereunder.
"Environmental Violation" means, with respect to the Property, any
activity, occurrence or condition that violates or results in non-compliance
with any Environmental Law.
-11-
"Equipment" means equipment, apparatus, fittings and personal property
of every kind and nature whatsoever purchased, leased or otherwise acquired by
the Lessor Trust using the proceeds of the Loans and/or the Certificate Holder
Amounts and now or subsequently attached to, contained in or used or usable in
any way in connection with any operation or letting of the Property, including
but without limiting the generality of the foregoing, all screens, awnings,
shades, blinds, curtains, draperies, artwork, carpets, rugs, storm doors and
windows, shelving, display cases, counters, furniture and furnishings, heating,
electrical, switch gear, uninterrupted power supply, and mechanical equipment,
lighting, switchboards, plumbing, ventilation, air conditioning and air-cooling
apparatus, refrigerating and incinerating equipment, escalators, generators,
elevators, loading and unloading equipment and systems, stoves, ranges, laundry
equipment, cleaning systems (including window cleaning apparatus),
communications systems (including satellite dishes and antennae), sprinkler
systems and other fire prevention and extinguishing apparatus and materials,
security systems, motors, engines, machinery, pipes, pumps, tanks, conduits,
fittings and fixtures of every kind and description.
"Equity Amount" shall have the meaning provided in Section 7.4 of the
Participation Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
regulations promulgated thereunder, as the same may be amended from time to
time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control of the Guarantor (as defined in section 3(9)
of ERISA) which within the meaning of Section 414(b) or (c) of the Code (and
Sections 414(m) and (o) of the Code for purposes of provisions relating to
Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Guarantor or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
substantial cessation of operations which is treated as such a withdrawal; (c) a
complete or partial withdrawal by the Guarantor or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Pension Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Guarantor or any ERISA Affiliate.
"Estimated Improvement Costs" means, as of the Acquisition Date, an
amount equal to the aggregate amount which the Construction Agent in good faith
expects to be expended in order to achieve Completion with respect to
Improvements for the Property, including Construction Costs prior to or during
the Construction Period.
-12-
"Event of Default" means a Lease Event of Default, a Construction
Agency Agreement Event of Default or a Loan Agreement Event of Default.
"Excepted Payments" means:
(a) all indemnity payments (including indemnity payments made
pursuant to Article XIII of the Participation Agreement) to which the
Administrative Agent, the Arranger, the Agent Certificate Holder, any
Lender, any Certificate Holder or any of their respective Affiliates,
agents, officers, directors or employees is entitled;
(b) any amounts (other than Basic Rent or amounts payable by
Lessee Agent or any Lessee pursuant to Section 15.2 of the Master Lease
or Articles XVI, XVIII or XX of the Master Lease) payable under any
Operative Document to reimburse the Administrative Agent, the Arranger,
the Agent Certificate Holder, any Lender, any Certificate Holder or any
of their respective Affiliates (including the reasonable expenses of
the Administrative Agent, the Arranger, the Agent Certificate Holder,
any Lender, any Certificate Holder or such Affiliates incurred in
connection with any such payment) for performing or complying with any
of the obligations of Lessee Agent or any Lessee under and as permitted
by any Operative Document;
(c) any insurance proceeds (or payments with respect to
risks self-insured or policy deductibles) under liability policies,
other than such proceeds or payments payable to Agent Certificate
Holder, Lessor Trust or to the Administrative Agent;
(d) any insurance proceeds under policies maintained by any
Participant;
(e) Transaction Expenses or other amounts or expenses paid or
payable to or for the benefit of the Administrative Agent, the Trust
Company, the Arranger, the Agent Certificate Holder, any Lender or any
Certificate Holder; and
(f) any payments in respect to interest to the extent
attributable to payments referred to in clauses (a) through (e) above.
"Exchange Act" means the Securities Exchange Act of 1934 and
regulations promulgated thereunder.
"Existing Credit Agreement" means that certain Second Amended and
Restated Credit Agreement dated as of April 11, 2002 among Guarantor, Bank of
America, N.A., as Agent and various financial institutions.
"Expiration Date" means, with respect to the Master Lease, the earlier
of the date the Master Lease shall have been terminated in accordance with the
provisions of the Master Lease or any of the other Operative Documents and the
Maturity Date; provided, however, with respect to Article XX of the Master
Lease, the Expiration Date shall be the later of (i) the Maturity Date and (ii)
the Extended Expiration Date.
-13-
"Expiration Date Purchase Obligation" means the Lessee Agent's
obligation, pursuant to Section 18.2 of the Master Lease, to purchase or cause
the Lessee to purchase all (but not less than all) of the Property on the
Expiration Date.
"Extended Expiration Date" is defined in Section 20.3(a) of the Master
Lease.
"Fair Market Sales Value" means, with respect to the Property, the
amount, which in any event shall not be less than zero, that would be paid in
cash in an arm's-length transaction between an informed and willing purchaser
and an informed and willing seller, neither of whom is under any compulsion to
purchase or sell, respectively, for the ownership of the Property. The Fair
Market Sales Value of the Property shall be determined based on the assumption
that, except for purposes of Article XVI of the Master Lease and Section 13.2 of
the Participation Agreement, the Property is in the condition and state of
repair required under Section 9.1 of the Master Lease and the Lessee is in
compliance with the other requirements of the Operative Documents relating to
the condition of the Property.
"Federal Funds Rate" means, for any day or period, as applicable, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100th of it) at
which Federal funds in the amount equal to the principal amount of the related
Loans or Certificate Holder Amounts are offered in the interbank market to BMO
as of 10:00 A.M., Chicago time, on such day for such day or for such period, as
applicable.
"Fixed Rent" means the amounts designated as "Fixed Rent" for the Loans
and Certificate Holder Amounts made in connection with the Lease Supplement, as
set forth on Schedule III to the Lease Supplement (which amounts are intended to
amortize the Loans and Certificate Holder Amounts as such amounts may be
adjusted from time to time in accordance with the Master Lease.
"Fixed Rent Payment Date" means each date set forth under the heading
"Fixed Rent Payment Dates" in Schedule III to the Lease Supplement or, if any
such day is not a Business Day, the next succeeding Business Day.
"Force Majeure Event" means, with respect to the Construction of the
Property, any event (the existence of which was not known and could not have
been discovered through the exercise of due diligence by the Lessee or the
Construction Agent prior to the Acquisition Date) beyond the control of the
Lessee and the Construction Agent, including, but not limited to, strikes,
lockouts, adverse soil conditions, acts of God, adverse weather conditions,
inability to obtain labor or materials, government activities, civil commotion
and enemy action; but excluding any event, cause or condition that results from
the Lessee's or the Construction Agent's financial condition or failure to pay
or any event, cause or condition which could have been avoided or which could be
remedied through the exercise of commercially reasonable efforts or the
expenditure of funds.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
-14-
"Funding Date" means any Business Day on which Advances are made under
the Participation Agreement pursuant to Section 3.4 thereof.
"Funding Office" means the office of each Participant identified on
Schedule II to the Participation Agreement as its funding office.
"Funding Request" is defined in Section 3.4 of the Participation
Agreement.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Governmental Action" means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgments, written
interpretations, decrees, licenses, exemptions, publications, filings, notices
to and declarations of or with, or required by, any Governmental Authority, or
required by any Applicable Law, and shall include, without limitation, all
environmental and operating permits and licenses that are required for the full
use, occupancy, zoning and operation of the Property.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Gross Remarketing Proceeds" is defined in Section 20.2(h) of the
Master Lease.
"Guaranteed Obligations" is defined in Section 2.1(a) of the Guaranty.
"Guaranteed Parties" means the Lessor Trust, the Owner Trustee, the
Lenders, the Certificate Holders, the Administrative Agent and the Agent
Certificate Holder, together with their respective successors and assigns.
"Guarantor" means TruServ Corporation, a Delaware corporation.
"Guaranty" means the Guaranty dated as of April 30, 1998, made by the
Guarantor in favor of each of the Lessor Trust, the Owner Trustee, the Agent
Certificate Holder, each of the Certificate Holders, the Administrative Agent
and each of the Lenders, as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time.
"Hazardous Activity" means any activity, process, procedure or
undertaking that directly or indirectly (i) produces, generates or creates any
Hazardous Material; (ii) causes or results in (or threatens to cause or result
in) the Release of any Hazardous Material into the environment
-15-
(including air, water vapor, surface water, groundwater, drinking water, land
(including surface or subsurface), plant, aquatic and animal life); (iii)
involves the containment or storage of any Hazardous Material; or (iv) would be
regulated as hazardous waste treatment, storage or disposal within the meaning
of any Environmental Law.
"Hazardous Materials" means any hazardous, toxic or dangerous
materials, substances, chemicals, wastes or pollutants that from time to time
are defined by or pursuant to or are regulated under any Environmental Laws,
including asbestos, polychlorinated biphenyls, petroleum, petroleum derivatives
or by-products, other hydrocarbons, urea formaldehyde and any material,
substance, pollutant or waste that is defined as a hazardous waste under RCRA or
defined as a hazardous substance under CERCLA.
"Impositions" means any and all liabilities, losses, expenses and costs
of any kind whatsoever for fees, taxes, levies, imposts, duties, charges,
assessments or withholdings of any nature whatsoever (all of the foregoing being
defined as "Taxes") (including, without limitation, (i) real and personal
property taxes, including personal property taxes on any property covered by the
Master Lease that is classified by Governmental Authorities as personal
property, and real estate or ad valorem taxes in the nature of property taxes;
(ii) sales taxes, use taxes and other similar taxes (including rent taxes and
intangibles taxes); (iii) any excise taxes; (iv) real estate transfer taxes,
conveyance taxes, mortgage taxes, intangible taxes, stamp taxes and documentary
recording taxes and fees; (v) taxes that are or are in the nature of franchise,
income, value added, gross receipts, privilege and doing business taxes, license
and registration fees; and (vi) assessments on the Property, including all
assessments for public improvements or benefits (whether or not such
improvements are commenced or completed within the Lease Term)), and in each
case all interest additions to tax and penalties thereon, which at any time may
be levied, assessed or imposed by any Federal, state or authority upon or with
respect to (a) any Tax Indemnitee, the Property or any part thereof or interest
therein, or the Lessee or any sublessee or user of the Property; (b) the
financing, refinancing, demolition, construction, substitution, subleasing,
assignment, control, condition, occupancy, servicing, maintenance, repair,
ownership, possession, purchase, rental, lease, activity conducted on, delivery,
insuring, use, operation, improvement, transfer, return or other disposition of
the Property or any part thereof or interest therein; (c) the Notes or other
Indebtedness with respect to the Property or any part thereof or interest
therein or transfer thereof; (d) the rentals, receipts or earnings arising from
the Property or any part thereof or interest therein; (e) the Operative
Documents or any payment made or accrued pursuant thereto; (f) the income or
other proceeds received with respect to the Property or any part thereof or
interest therein upon the sale or disposition thereof; (g) any contract
(including the Construction Agency Agreement) relating to the construction,
acquisition or delivery of the Improvements or any part thereof or interest
therein; (h) the issuance of the Notes; or (i) otherwise in connection with the
transactions contemplated by the Operative Documents.
Notwithstanding anything in the first paragraph of this definition
(except as provided in the final paragraph of this definition) the term
"Imposition" shall not mean or include:
(i) Taxes and impositions (other than Taxes that are, or are
in the nature of, sales, use, rental, transfer or property taxes) that
are imposed by any Governmental
-16-
Authority and that are based upon or measured by or with respect to
the net income (including, without limitation, any minimum taxes,
income or capital gains taxes, withholding taxes, items of tax
preference or franchise taxes) and any interest, additions to tax,
penalties or other charges in respect thereof; provided that this
clause (i) shall not be interpreted to prevent a payment from being
made on an After Tax Basis if such payment is otherwise required to be
so made; provided, further, that this clause (i) shall not apply to
any Taxes imposed on the Agent Certificate Holder as a result of its
compliance with the terms of Section 10.3 of the Participation
Agreement following the occurrence and during the continuance of an
Event of Default;
(ii) any Tax or imposition for so long as, but only for so
long as, it is being contested in accordance with the provisions of
Section 13.5(b) of the Participation Agreement, provided that the
foregoing shall not limit the Lessee's obligation under Section 13.5(b)
of the Participation Agreement to advance to such Tax Indemnitee
amounts with respect to Taxes that are being contested in accordance
with Section 13.5(b) of the Participation Agreement or any expenses
incurred by such Tax Indemnitee in connection with such contest;
(iii) Taxes imposed on or with respect to or payable by a Tax
Indemnitee resulting from, or that would not have been imposed but for
the existence of, any Lessor Lien created by or through such Tax
Indemnitee or an affiliate thereof and not caused by acts or omissions
of the Lessee;
(iv) any tax imposed by its express terms in lieu of or in
substitution for a Tax not subject to indemnity pursuant to the
provisions of Section 13.5 of the Participation Agreement.
Notwithstanding the foregoing, no exclusion from the definition of
Impositions set forth above shall apply to any Taxes or any increase in Taxes
imposed on a Tax Indemnitee net of any decrease in taxes realized by such Tax
Indemnitee, to the extent that such tax increase or decrease would not have
occurred if on each Funding Date the Agent Certificate Holder had advanced funds
to the Construction Agent in the form of a loan secured by the Property in an
amount equal to the Property Improvement Cost funded on such Funding Date, with
debt service for such loan equal to the Basic Rent payable on each Rent Payment
Date and a principal balance at the maturity of such loan in an amount equal to
the then outstanding amount of the Advances at the end of the term of the Master
Lease, as determined by such Tax Indemnitee, which determination shall be
binding absent manifest error.
"Improvements" means all buildings, structures, fixtures, Equipment and
other improvements of every kind existing at any time and from time to time
(including those constructed pursuant to the Construction Agency Agreement and
those purchased with amounts advanced by the Participants pursuant to the
Participation Agreement) on or under the Land or any parcel of Land to be
acquired pursuant to the terms of the Operative Documents, together with any and
all appurtenances to such buildings, structures or improvements, including
sidewalks, utility pipes, conduits and lines, parking areas and roadways, and
including all Modifications and other additions to or changes in the
Improvements at any time.
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"Indemnitee" means the Trust Company, the Lessor Trust, each Lender,
each Certificate Holder, the Administrative Agent and the Agent Certificate
Holder.
"Independent Auditor" is defined in Section 10.1(a) of the
Participation Agreement.
"Initial Construction Date" means the date of the first Advance made
under the Operative Documents with respect to Construction Costs for the
Property.
"Initial Interest Period" is defined in Section 3.4 of the
Participation Agreement.
"Insurance Requirements" means all terms and conditions of any
insurance policy either required by the Master Lease to be maintained by the
Lessee or required by the Construction Agency Agreement to be maintained by the
Construction Agent, and all requirements of the issuer of any such policy.
"Intercreditor Agreement" means that certain First Amended and Restated
Intercreditor Agreement in the form attached as an exhibit to the Existing
Credit Agreement.
"Interest Rate" is defined in Section 2.4(a) of the Loan Agreement.
"Interim Lease Term" is defined in Section 2.3 Master Lease.
"Interim Termination Date" means the second anniversary of the
Documentation Date.
"Land" means each fee interest or leasehold interest, as the case may
be, in real property described on Schedule I to the Lease Supplement, and
includes all Appurtenant Rights attached thereto.
"Land Acquisition Cost" means the amount of the Advance made available
to the Construction Agent for the purpose of acquiring the portion of the
Property constituting Land, as such amount is set forth in the Funding Request
relating to the acquisition of the Property.
"Lease" means, collectively, the Master Lease and the Lease Supplement.
"Lease Balance" means, as of any date of determination, an amount equal
to the sum of the Loan Balance and the Certificate Holder Balance and all other
amounts owing by the Guarantor or the Lessee under the Operative Documents
(including without limitation, accrued and unpaid Rent and Supplemental Rent, if
any) minus all payments of Fixed Rent made on or prior to such date, if any.
"Lease Default" means any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute a Lease Event of
Default.
"Lease Event of Default" is defined in Section 16.1 of the Master
Lease.
"Lease Rents" is defined in Section 2(a)(i) of the Assignment of Lease
and Rent.
-18-
"Lease Supplement" means the Lease Supplement substantially in the form
of Exhibit A to the Master Lease, executed by the Lessee and the Lessor Trust,
dated as of an Acquisition Date and covering the Property located on the Land
identified on Schedule I thereto, as the same may be amended, supplemented,
amended and restated or otherwise modified from time to time.
"Lease Term" means, with respect to the Property, the period commencing
on (and including) the Acquisition Date for the Property and ending on (but
excluding) the Expiration Date.
"Lender Basic Rent" means, as determined as of any Basic Rent Payment
Date, the sum of (a) interest due on the Loans, determined in accordance with
Section 2.4 of the Loan Agreement and excluding (i) any interest at the
applicable Overdue Rate on any installment of Lender Basic Rent not paid when
due and (ii) any fine, penalty, interest or cost assessed or added under any
agreement with a third party for nonpayment or late payment of Lender Basic Rent
and (b) the Fixed Rent due under the Lease Supplement with respect to the Loans
after giving effect to any prepayment of Fixed Rent.
"Lenders" means, collectively, the various financial institutions that
are or may from time to time become parties to the Loan Agreement as Lenders.
"Lessee" means ▇▇▇▇ ▇▇▇▇▇, LLC, a Delaware limited liability company,
as Lessee under the Lease and the other Operative Documents.
"Lessee Agent" means TruServ Corporation, a Delaware corporation.
"Lessor Financing Statements" means UCC financing statements
appropriately completed and executed for filing in the applicable jurisdiction
in order to protect the Agent Certificate Holder's, Lessor Trust's and the
Lenders' respective interests under the Master Lease and the Lease Supplement to
the extent the Master Lease and Lease Supplement are security agreements.
"Lessor Lien" means any Lien, true lease or sublease or disposition of
title arising as a result of (a) any claim against any Participant not resulting
from the transactions contemplated by the Operative Documents, (b) any act or
omission of any Participant which is not required or permitted by the Operative
Documents or is in violation of any of the terms of the Operative Documents, (c)
any claim against any Participant, with respect to Taxes or Transaction Expenses
against which Lessee Agent is not required to indemnify any Participant, in its
individual capacity, pursuant to Article IX of the Participation Agreement, or
(d) any claim against the Lessor Trust arising out of any transfer by the Agent
Certificate Holder of all or any portion of the interest of the Lessor Trust in
the Property or the Operative Documents other than the transfer of title to or
possession of the Property by the Lessor Trust pursuant to and in accordance
with the Master Lease, the Loan Agreement or the Participation Agreement or
pursuant to the exercise of the remedies set forth in Section 16.2 of the Master
Lease.
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"Lessor Mortgage" means the Lease Supplement and any and all other
security instruments in appropriate recordable form in the relevant jurisdiction
sufficient to grant to the Lessor Trust a first priority Lien on the Property.
"Lessor Trust" means the TruServ 1998 Trust created under and pursuant
to the Trust Agreement.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
(statutory or otherwise) or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention agreement,
any lease in the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction) or
any other type of preferential arrangement for the purpose, or having the
effect, of protecting a creditor against loss or securing the payment or
performance of an obligation.
"Loan Agreement" means the Loan Agreement, dated as of April 30, 1998,
among the Lessor Trust, as borrower thereunder, the Lenders, and the
Administrative Agent, as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time.
"Loan Agreement Default" means any event, act or condition which with
notice or lapse of time, or both, would constitute a Loan Agreement Event of
Default.
"Loan Agreement Event of Default" is defined in Section 5.1 of the Loan
Agreement.
"Loan Balance" means, as of any date of determination, an amount equal
to the sum of the outstanding Loans together with all accrued and unpaid
interest thereon pursuant to the Loan Agreement.
"Loan Commitment" means the Commitment of each Lender in the amount set
forth on Schedule I to the Participation Agreement, as such Schedule may be
amended, supplemented, amended and restated or otherwise modified from time to
time (including, without limitation, pursuant to Section 3.7, the Participation
Agreement).
"Loan Documents" means the Loan Agreement and the Notes.
"Loans" is defined in Section 2.1 of the Loan Agreement.
"Margin Stock" has the meaning given such term under Regulation U of
the F.R.S. Board.
"Marketing Period" means the period commencing on the date 365 days
prior to the Expiration Date and ending on the Expiration Date.
"Master Lease" means the Master Lease and Mortgage, dated as of April
30, 1998, among the Lessor Trust, the Lessee and the Lessee Agent as the same
may be amended, supplemented, amended and restated or otherwise modified from
time to time.
-20-
"Material" and "Materially" mean material to (i) the ability of the
Lessee or Guarantor to perform its obligations under the Operative Documents to
which it is a party, or (ii) the value or condition of the Property.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon the operations, business, properties, condition
(financial or otherwise), or prospects of the Guarantor and its Subsidiaries
taken as a whole, (b) material impairment of the ability of any Lessee or
Guarantor to perform any of its obligations under any Operative Document to
which it is or will be a party or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against the Guarantor or
the Lessee under any Operative Document.
"Material Subsidiary" shall mean at any time any Subsidiary having at
such time either (1) total net revenues (net of earnings and expenses resulting
from transactions with the Guarantor or any Subsidiary) for the period of the
immediately preceding four fiscal quarters equal to or greater than 5% of the
consolidated total net revenues of the Guarantor and its Subsidiaries for such
period determined in accordance with GAAP or (2) total assets (net of any assets
that constitute obligations of the Guarantor or any Subsidiary), as of the last
day of the immediately preceding fiscal quarter, equal to or greater than 5% of
Consolidated Net Worth as of such date, in each case as reflected in the most
recent annual or quarterly financial statements of the Guarantor and its
Subsidiaries.
"Maturity Date" means with respect to the Loans and the Certificate
Holder Amounts, the fifth (5th) anniversary of the Documentation Date, unless
such Maturity Date is extended pursuant to Section 2.7 of the Loan Agreement and
Section 11.1 of the Participation Agreement.
"Member" means any Person which is a stockholder of the Guarantor or
has applied for stock ownership of the Guarantor.
"Modifications" is defined in Section 10.1 of the Master Lease.
"Mortgage Foreclosure Act" is defined in Section 16.4 of the Master
Lease.
"Multiemployer Plan" means any Plan which is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"Net Proceeds" means all amounts received by the Agent Certificate
Holder, the Lessor Trust or any Participant in connection with any Casualty or
Condemnation or any sale of the Property pursuant to the Agent Certificate
Holder's or Lessor Trust's exercise of remedies under Section 16.2 of the Master
Lease or the Lessee Agent's exercise of the Remarketing Option under Article XX
of the Master Lease and all interest earned thereon, less the expense of
claiming and collecting such amounts, including all costs and expenses in
connection therewith for which the Agent Certificate Holder or any Participant
is entitled to be reimbursed pursuant to the Lease.
"Non-Consenting Participant" is defined in Section 11.1(b) of the
Participation Agreement.
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"Notes" is defined in Section 2.2 of the Loan Agreement.
"Obligations" means all obligations (monetary or otherwise) of the
Lessee or the Guarantor arising under or in connection with any of the Operative
Documents.
"Operative Documents" means the following:
(a) the Participation Agreement;
(b) the Master Lease;
(c) the Lease Supplement;
(d) the Loan Agreement;
(e) each Note;
(f) the Assignment of Lease and Rent;
(g) each Deed and ground lease;
(h) the Lessor Mortgages;
(i) the Lessor Financing Statements;
(i) the Construction Agency Agreement;
(k) the Construction Agency Agreement Assignment;
(1) the Construction Documents Assignment;
(m) each Construction Agency Agreement Supplement;
(n) each Assignment of Lease and Rent Supplement;
(o) the Arranger's Fee Letter;
(p) the Guaranty;
(q) the Trust Agreement;
(r) each Certificate; and
(s) each guaranty, security agreement, mortgage or other
document executed in connection with the Intercreditor Agreement which
secures or guaranties the Obligations.
-22-
"Original Executed Counterpart" is defined in Section 26.9 of the
Master Lease.
"Outside Completion Date" means the date occurring on the earlier of
(a) eighteen (18) months after the date the initial Advance is made in respect
of the Property and (b) the Interim Termination Date.
"Overdue Rate" means, with respect to any Loan or Certificate Holder
Amount, the Base Rate or the Adjusted Eurodollar Rate then in effect for such
Loan or Certificate Holder Amount, as the case may be, plus three percent (3%),
in addition to the percentages set forth in the definition of Base Rate.
"Owner Trustee" means Wilmington Trust Company, a Delaware banking
corporation.
"Participant Balance" means, with respect to any Participant as of any
date of determination: (i) with respect to any Lender, an amount equal to the
aggregate outstanding Loans of such Lender, together with all accrued and unpaid
interest thereon or (ii) with respect to any Certificate Holder, an amount equal
to the aggregate outstanding Certificate Holder Amounts of such Certificate
Holder, together with all amounts of accrued and unpaid Yield thereon.
"Participants" means, collectively, each Lender and each Certificate
Holder, and their successors and assigns.
"Participation Agreement" means the Participation Agreement dated as of
April 30, 1998, among the Lessee, the Lessee Agent, Construction Agent, the
Guarantor, the Agent Certificate Holder, the Certificate Holder, the Lenders,
the Administrative Agent, the Arranger, the Owner Trustee and the Lessor Trust
as the same may be amended, supplemented, amended and restated or otherwise
modified from time to time.
"Payment Date" means each Scheduled Payment Date and each date on which
Basic Rent is required to be paid by any Lessee.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA with respect to which the Guarantor or any
ERISA Affiliate may have any liability.
"Permitted Property Liens" means, with respect to the Property, any of
the following:
(i) the respective rights and interests of the parties to the
Operative Documents as provided in the Operative Documents;
(ii) the rights of any sublessee under a sublease permitted by
the terms of the Master Lease;
-23-
(iii) Liens for Taxes that either are not yet subject to
interest or penalties or are being contested in accordance with the
provisions of Section 12.1 of the Master Lease;
(iv) Liens arising by operation of law, materialmen's,
mechanics', workers', repairmen's, employees', carriers',
warehousemen's and other like Liens relating to the construction of the
Improvements or in connection with any Modifications or arising in the
ordinary course of business for amounts that either are not more than
sixty (60) days past due or are being diligently contested in good
faith by appropriate proceedings, so long as such proceedings satisfy
the conditions for the continuation of proceedings to contest Taxes set
forth in Section 12.1 of the Master Lease;
(v) Liens of any of the types referred to in clause (iv)
above that have been bonded for not less than the full amount in
dispute (or as to which other security arrangements satisfactory to the
Agent Certificate Holder have been made), which bonding (or
arrangements) shall comply with applicable Requirements of Law, and has
effectively stayed any execution or enforcement of such Liens;
(vi) Liens arising out of judgments or awards with respect to
which appeals or other proceedings for review are being prosecuted in
good faith and for the payment of which adequate reserves have been
provided as required by GAAP or other appropriate provisions have been
made, so long as such proceedings have the effect of staying the
execution of such judgments or awards and satisfy the conditions for
the continuation of proceedings to contest Taxes set forth in Section
12.1 of the Master Lease;
(vii) easements, rights of way and other encumbrances on title
to real property pursuant to Section 11.2 of the Master Lease;
(viii) Lessor Liens;
(ix) Liens created by the Lessee with the consent of the
Required Participants; and
(x) Liens described on the title insurance policy delivered
with respect to such Property pursuant to Section 6.1(q) of the
Participation Agreement, other than Liens described in clause (iv) or
(vi) above that are not removed within forty (40) days of their
discovery by Lessee Agent or the Lessee.
"Person" means any natural person, corporation, trust, joint venture,
association, company, partnership or government, or any agency or political
subdivision thereof.
"Plan" shall mean any employee pension benefit plan (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Guarantor or any ERISA
Affiliate.
-24-
"Plans and Specifications" means, with respect to the Property, the
plans and specifications for the Construction thereof, as more particularly
described in Schedule 2 to the Construction Agency Agreement Supplement.
"Prime Rate" refers to that interest rate so denominated and set by the
Administrative Agent from time to time as an interest rate basis for borrowings.
The Prime Rate is but one of several interest rate bases used by the
Administrative Agent. The Administrative Agent lends at interest rates above and
below the Prime Rate.
"Property" means (i) the Lessor Trust's interest in the Land, as lessee
or as owner in fee simple thereof, (ii) all of the Improvements at any time
located on or under the Land and (iii) the Equipment at any time located on or
under the Land.
"Property Balance" means the Lease Balance.
"Property Cost" means, with respect to the Property, the sum of the
Land Acquisition Cost and the Property Improvement Costs for the Property.
"Property Improvement Costs" means the aggregate amount of Advances
made to or at the direction of the Construction Agent for the purpose of paying
Construction Costs and the Transaction Expenses relating to such funding and
construction, as such amount is set forth in the Funding Request relating
thereto.
"Purchase Notice" means an irrevocable written notice by the Lessee
Agent delivered to the Agent Certificate Holder pursuant to Section 18.1 of the
Master Lease, notifying the Agent Certificate Holder of the Lessee Agent's
intention to exercise its option pursuant to such Section, and identifying the
proposed purchase date therefor.
"Purchase Option" means the Lessee Agent's option to purchase all (but
not less than all) of the Property in accordance with the provisions of Section
18.1 of the Master Lease.
"Purchase Option Price" is defined in Section 18.1 of the Master Lease.
"Qualified Land" means each parcel of Land which has a Land Acquisition
Cost that equals or exceeds 25% of the sum of (x) such Land Acquisition Cost
plus (y) the Estimated Improvement Costs of the Property consisting of the Land
and the Improvements thereon.
"Quarterly Payment Date" means the last day of each July, October,
January and April or, if any such day is not a Business Day, the next succeeding
Business Day.
"RCRA" means the Resource Conservation and Recovery Act of 1976, as
amended by the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C.
Sections 6901 et seq.
"Release" means any release, pumping, pouring, emptying, injecting,
escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal or
emission of a Hazardous Material.
-25-
"Remarketing Option" is defined in Section 20.1 of the Master Lease.
"Renewal Term" is defined in clause (a) of Section 11.1 of the
Participation Agreement.
"Rent" means, collectively, the Basic Rent and the Supplemental Rent,
in each case payable under the Master Lease.
"Rents" is defined in Section 2(b) of the Assignment of Lease and Rent.
"Replacement Participant" is defined in Section 11.1(b) of the
Participation Agreement.
"Reportable Event" means any of the events described in Section 4043(c)
of ERISA other than any such event for which the 30-day notice requirement under
ERISA has been waived in regulations issued by the PBGC.
"Requesting Party" is defined in Section 22.1 of the Master Lease.
"Required Certificate Holders" means, at any time, Certificate Holders
having Commitments representing at least 66-2/3% of the aggregate Certificate
Holder Commitments or, for purposes of acceleration pursuant to Section 16.2 of
the Master Lease or in the event that the Certificate Holder Commitments have
been terminated, Certificate Holders representing at least 66-2/3% of the
aggregate Certificate Holder Amount outstanding; provided however that if any
Certificate Holder shall be a Defaulting Participant at such time, then there
shall be excluded from the definition of "Required Certificate Holders" such
Defaulting Participant's Commitments, or after termination of the Commitments,
the amount of the Certificate Holder Amount owing to such Defaulting
Participant.
"Required Lenders" means, at any time, Lenders having Commitments
representing at least 66-2/3% of the aggregate Loan Commitments or, for purposes
of acceleration pursuant to Section 5.2(a)(ii)(y) of the Loan Agreement or in
the event that the Loan Commitments have been terminated, Lenders representing
at least 66-2/3% of the aggregate principal amount of Loans outstanding;
provided, however, that if any Lender shall be a Defaulting Participant at such
time, then there shall be excluded from the determination of "Required Lenders"
such Defaulting Participant's Commitments, or after termination of the
Commitments, the principal balance of the Loans owing to such Defaulting
Participant.
"Required Modification" is defined in Section 10.1 of the Master Lease.
"Required Participants" means at any time Participants representing
66-2/3% of the aggregate Commitments of the Lenders and Certificate Holders, or
if such Commitments shall have been terminated, Participants representing at
least 66-2/3% of the aggregate of Loans and Certificate Holder Amounts
outstanding; provided, however, that any Defaulting Participant's Commitments,
Loans or Certificate Holder Amounts, as the case may be, shall be excluded
therefrom.
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"Requirement of Law" means, as to any Person (a) the partnership
agreement, certificate of incorporation, bylaws, operating agreement or other
organizational or governing documents of such Person, and (b) all Federal,
state, county, municipal and other governmental statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions affecting the
Property, the Improvements or the demolition, Construction, use or alteration
thereof, whether now or hereafter enacted and in force, including any that
require repairs, modifications or alterations in or to the Property or in any
way limit the use and enjoyment thereof (including all building, zoning and fire
codes and the Americans with Disabilities Act of 1990, 42 U.S.C. S 1201 et seq.
and any other similar federal, state or local laws or ordinances and the
regulations promulgated thereunder) and any that may relate to environmental
requirements (including all Environmental Laws), and all permits, certificates
of occupancy, licenses, authorizations and regulations relating thereto, and all
covenants, agreements, restrictions and encumbrances contained in any
instruments which are either of record or known to Lessee Agent or the Lessee
affecting the Property, the Appurtenant Rights and any easements, licenses or
other agreements entered into pursuant to Section 11.2 of the Master Lease.
"Responsible Officer" of any Person means the chief executive officer,
chief operating officer, chief financial officer, treasurer or chief accounting
officer of the Guarantor, general counsel of the Guarantor or any other officer
of the Guarantor involved principally in its financial administration or its
controllership function.
"Responsible Officer's Certificate" means a certificate signed by any
Responsible Officer in substantially the form of Exhibit D-5 to the
Participation Agreement, which certificate shall certify as true and correct the
subject matter being certified to in such certificate.
"Restated Certificate of Trust" means any restated Certificate of Trust
as required by Section 3810(b) or (c) of the Delaware Business Trust Act.
"Restricted Investments" shall mean any Investment prohibited by
Section 10.2(k).
"Restricted Payment" is defined in Section 10.2(l) of the Participation
Agreement.
"Scheduled Payment Date" means:
(a) as to any Base Rate Loan/Certificate Holder Amount, each
Quarterly Payment Date and the Maturity Date; provided, however, that
if any such day is not a Business Day, then the "Scheduled Payment
Date" shall be the immediately succeeding Business Day; and
(b) as to Fixed Rent, on each Fixed Rent Payment Date.
"SEC" means the Securities and Exchange Commission or any Governmental
Authority succeeding to any of its principal functions.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
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"Shared Rights" is defined in Section 2(a) of the Assignment of Lease
and Rent.
"Shortfall Amount" means, as of the Expiration Date, an amount equal to
(i) the Lease Balance, minus (ii) that portion of the Loan Balance received by
the Administrative Agent from the Lessee pursuant to Section 20.2(f) of the
Master Lease, minus (iii) the aggregate amount of the highest, binding, written,
unconditional, irrevocable offer to purchase the Property obtained by the Lessee
Agent pursuant to Section 20.2(a) of the Master Lease; provided, however, that
if the sale of the Property to the Person submitting such offer is not
consummated on or prior to the Expiration Date, then the term "Shortfall Amount"
shall mean an amount equal to (i) the Lease Balance, minus (ii) the Loan Balance
received by the Administrative Agent pursuant to Section 20.2(f) of the Master
Lease.
"Significant Casualty" means a Casualty that in the reasonable, good
faith judgment of the Administrative Agent and the Agent Certificate Holder (a)
renders the Property unsuitable for continued use as property of the type of the
Property immediately prior to such Casualty, or (b) is so substantial in nature
that restoration of the Property to substantially its condition as it existed
immediately prior to such Casualty would be impracticable or impossible.
"Significant Condemnation" means (a) a Condemnation that involves a
taking of the Lessor Trust's entire title to the Land, or (b) a Condemnation
that in the reasonable, good faith judgment of the Administrative Agent and the
Agent Certificate Holder (i) renders the Property unsuitable for continued use
as property of the type of such Property immediately prior to such Condemnation,
or (b) is so substantial in nature that restoration of the related property to
substantially its condition as it existed immediately prior to such Condemnation
would be impracticable or impossible.
"Solvent" means with respect to any Person on a particular date, that
on such date (i) the fair value of the property of such Person is greater than
the total amount of liabilities, including, without limitation, contingent
liabilities of such Person, (ii) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (iii) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (iv) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (v) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such Person is engaged. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability taking into account any
subrogation and contribution rights.
"Structuring and Underwriting Fee" is defined in the Arranger's Fee
Letter.
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"Supplemental Rent" means all amounts, liabilities and obligations
(other than Basic Rent) which the Lessee or the Lessee Agent, as applicable,
assumes or agrees to pay to the Administrative Agent, any Participant or any
other Person under the Master Lease, or under any of the other Operative
Documents, including, without limitation, Commitment Fees, the Certificate
Holder Balance, the Loan Balance, the Shortfall Amount, amounts due pursuant to
Section 13.2 of the Participation Agreement and payments pursuant to Sections
15.2 of the Master Lease and Articles XVIII and XX of the Master Lease.
"Tax Indemnitee" means each Lender, each Certificate Holder, the Owner
Trustee, the Lessor Trust, the Administrative Agent and the Agent Certificate
Holder.
"Taxes" is defined in the definition of Impositions.
"Termination Date" is defined in Section 15.2 of the Master Lease.
"Termination Notice" is defined in Section 15.1 of the Master Lease.
"Transaction Expenses" means all costs and expenses incurred in
connection with the preparation, execution and delivery of the Operative
Documents and the transactions contemplated by the Operative Documents including
without limitation:
(a) subject to the fee letters of counsel, if applicable, the
reasonable fees, out-of-pocket expenses and disbursements of ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇, special counsel for the Administrative Agent and Arranger,
Agent Certificate Holder and Certificate Holders, and such reasonable
fees, expenses and disbursements of counsel for the Lessee Agent and
Owner Trustee, in negotiating the terms of the Operative Documents and
the other transaction documents, preparing for the closing under, and
rendering opinions in connection with, such transactions and in
rendering other services customary for counsel representing parties to
transactions of the types involved in the transactions contemplated by
the Operative Documents;
(b) the reasonable fees, out-of-pocket expenses and
disbursements of special counsel for the Administrative Agent,
Arranger, Owner Trustee, Agent Certificate Holder and Certificate
Holders in connection with (1) the transactions contemplated to occur
on each Funding Date and the Acquisition Date, (2) any amendment,
supplement, waiver or consent with respect to any Operative Documents
requested or approved by Lessee Agent, and (3) any enforcement of any
rights or remedies against Lessee Agent, Guarantor or the Lessee in
respect of the Operative Documents that arise after a Lease Event of
Default;
(c) any and all Taxes and fees incurred in recording,
registering or filing any Operative Document or any other transaction
document, any deed, declaration, mortgage, security agreement, notice
or financing statement with any public office, registry or governmental
agency required by the Operative Documents in connection with the
transactions contemplated by the Operative Documents.
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(d) all reasonable out-of-pocket expenses, disbursements and
costs of the Administrative Agent, Arranger, Owner Trustee and the
Agent Certificate Holder paid or incurred in connection with the
transactions contemplated by the Operative Documents (including without
limitation the transactions contemplated to occur on each Funding Date
and Acquisition Date);
(e) all title fees, premiums and escrow costs and other
expenses relating to title insurance and the closing contemplated by
the Operative Documents;
(f) all reasonable expenses relating to property surveys and
Environmental Audits; and
(g) all reasonable fees and other expenses relating to
Appraisals.
"Transactions" shall mean the transactions contemplated under the
Participation Agreement and each of the other Operative Documents.
"Transferee" is defined in Section 12.3 of the Participation Agreement.
"Trust Agreement" means the Trust Agreement dated as of April 30, 1998
between the Agent Certificate Holder and the Owner Trustee.
"Trust Company" means Wilmington Trust Company in its individual
capacity.
"Trust Estate" is defined in Section 2.2 of the Trust Agreement.
"Trust Expenses" is defined in Section 6.1 of the Trust Agreement.
"Unfunded Pension Liability" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA over the current value of
that Plan's assets determined in accordance with the assumptions used in funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
"Uniform Commercial Code" and "UCC" means the Uniform Commercial Code
as in effect in any applicable jurisdiction.
"Unmatured Event of Default" means any event or circumstance which,
with the giving of notice, the lapse of time, or both, would (if not cured or
otherwise remedied during such time) constitute an Event of Default.
"Yield" is defined in Section 4.1(a) of the Participation Agreement.
"Yield Rate" means the Base Rate.
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