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PARTICIPATION AGREEMENT
dated as of December 27, 2000
among
TELETECH SERVICES CORPORATION,
as Lessee,
TELETECH HOLDINGS, INC., as
Guarantor,
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
not in its individual capacity, except as expressly
stated herein, but solely as Certificate Trustee,
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not in its individual capacity, except as
expressly stated herein, but solely as
Administrative Agent,
THE FINANCIAL INSTITUTIONS NAMED ON SCHEDULE I HERETO,
as Certificate Holders,
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and
THE FINANCIAL INSTITUTIONS NAMED ON SCHEDULE II HERETO,
as Lenders,
BANC OF AMERICA LEASING & CAPITAL, LLC,
as Arranger
TABLE OF CONTENTS
ARTICLE I DEFINITIONS; INTERPRETATION.............................................................................2
SECTION 1.1. Definitions; Interpretation................................................................2
ARTICLE II DOCUMENT CLOSING DATE; ACQUISITION DATE................................................................3
SECTION 2.1. Effectiveness of Agreement.................................................................3
SECTION 2.2. Acquisition of Land and the Facility; Grants of Liens......................................3
SECTION 2.3. Acquisition Costs..........................................................................3
ARTICLE III FUNDING OF ADVANCE....................................................................................3
SECTION 3.1. Funding....................................................................................3
SECTION 3.2. Advance Date...............................................................................6
SECTION 3.3. Postponement of Advance Date...............................................................7
ARTICLE IV YIELD; INTEREST; COMMITMENT REDUCTION; FEES............................................................7
SECTION 4.1. Yield......................................................................................7
SECTION 4.2. Interest on Loans..........................................................................7
SECTION 4.3. Payments and Prepayments of Loans and Certificate Amounts and Other Amounts................8
SECTION 4.4. Fees.......................................................................................8
SECTION 4.5. Obligations Several........................................................................8
SECTION 4.6. Highest Lawful Rate........................................................................8
ARTICLE V CERTAIN INTENTIONS OF THE PARTIES......................................................................10
SECTION 5.1. Nature of Transaction.....................................................................10
SECTION 5.2. Amounts Due Under Lease...................................................................12
SECTION 5.3. Distribution..............................................................................12
SECTION 5.4. Adjustments...............................................................................16
ARTICLE VI CONDITIONS PRECEDENT TO ADVANCE.......................................................................16
SECTION 6.1. Conditions Precedent to Advance...........................................................16
ARTICLE VII TENANT IMPROVEMENTS..................................................................................23
SECTION 7.1. Tenant Improvements.......................................................................23
ARTICLE VIII REPRESENTATIONS.....................................................................................25
SECTION 8.1. Representations of the Participants.......................................................25
SECTION 8.2. Representations of Lessee and Guarantor...................................................27
SECTION 8.3. Representations of Lessor.................................................................36
SECTION 8.4. Representations and Warranties of Administrative Agent....................................38
ARTICLE IX COVENANTS OF LESSEE AND GUARANTOR.....................................................................40
SECTION 9.1. General Covenants of Lessee and Guarantor.................................................40
SECTION 9.2. Financial Covenants.......................................................................43
SECTION 9.3. Credit Agreement Covenants................................................................44
SECTION 9.4. Coverage Covenant.........................................................................44
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TABLE OF CONTENTS
SECTION 9.5. Deposit Account...........................................................................45
ARTICLE X OTHER COVENANTS AND AGREEMENTS.........................................................................46
SECTION 10.1. Covenants of the Participants, the Administrative Agent and the Bank.....................46
ARTICLE XI REPLACEMENT OF PARTICIPANTS...........................................................................49
SECTION 11.1. Replacement of Participants..............................................................49
SECTION 11.2. Cooperation..............................................................................49
ARTICLE XII TRANSFERS OF PARTICIPANTS' INTERESTS.................................................................50
SECTION 12.1. Assignments..............................................................................50
SECTION 12.2. Participations...........................................................................52
SECTION 12.3. Withholding Taxes; Disclosure of Information; Pledge Under Regulation A..................53
ARTICLE XIII INDEMNIFICATION.....................................................................................54
SECTION 13.1. Indemnification..........................................................................54
SECTION 13.2. Environmental Indemnity..................................................................57
SECTION 13.3. End of Term Indemnity....................................................................58
SECTION 13.4. Proceedings in Respect of Claims.........................................................59
SECTION 13.5. General Tax Indemnity....................................................................61
SECTION 13.6. Gross Up.................................................................................68
ARTICLE XIV CONTINGENT LIBOR AND OTHER COSTS.....................................................................68
SECTION 14.1. LIBO Rate Lending Unlawful...............................................................68
SECTION 14.2. Deposits Unavailable.....................................................................68
SECTION 14.3. Increased Costs, etc.....................................................................69
SECTION 14.4. Funding Losses...........................................................................70
SECTION 14.5. Increased Capital Costs..................................................................71
SECTION 14.6. After Tax Basis..........................................................................72
SECTION 14.7. Funding Office...........................................................................72
ARTICLE XV MISCELLANEOUS.........................................................................................72
SECTION 15.1. Survival of Agreements...................................................................72
SECTION 15.2. No Broker, etc...........................................................................72
SECTION 15.3. Notices..................................................................................73
SECTION 15.4. Counterparts.............................................................................73
SECTION 15.5. Amendments...............................................................................73
SECTION 15.6. Headings, etc............................................................................74
SECTION 15.7. Parties in Interest......................................................................75
SECTION 15.8. GOVERNING LAW............................................................................75
SECTION 15.9. Severability.............................................................................75
SECTION 15.10. Liability Limited........................................................................75
SECTION 15.11. Submission to Jurisdiction...............................................................75
SECTION 15.12. WAIVER OF JURY TRIAL.....................................................................76
SECTION 15.13. Confidentiality..........................................................................76
SECTION 15.14. Limited Liability of Lessor..............................................................77
SECTION 15.15. Limited Liability of Agent...............................................................78
SECTION 15.16. Payment of Transaction Expenses and
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TABLE OF CONTENTS
Other Costs..............................................................................78
SECTION 15.17. Reproduction of Documents................................................................79
SECTION 15.18. Role of Banc of America Leasing & Capital, LLC...........................................80
SECTION 15.19. Deliveries to Participants...............................................................80
ARTICLE XVI ADMINISTRATIVE AGENT.................................................................................80
SECTION 16.1. Appointment..............................................................................80
SECTION 16.2. Delegation of Duties.....................................................................81
SECTION 16.3. Exculpatory Provisions...................................................................81
SECTION 16.4. Reliance by Administrative Agent.........................................................82
SECTION 16.5. Notice of Default........................................................................82
SECTION 16.6. Non-Reliance on Administrative Agent and Other Lenders...................................83
SECTION 16.7. Indemnification..........................................................................83
SECTION 16.8. Administrative Agent in Its Individual Capacity..........................................84
SECTION 16.9. Successor Administrative Agent...........................................................84
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TABLE OF CONTENTS
(continued)
PAGE
SCHEDULES
SCHEDULE I - Certificate Holders' Commitments
SCHEDULE II - Lenders' Commitments
SCHEDULE III - Notice Information, Payment Offices and Applicable Lending Offices
SCHEDULE 6.1(j) - Filings and Recordings
SCHEDULE 7.2(e) - Litigation
SCHEDULE 7.2(g) - ERISA Violations
SCHEDULE 7.2(j) - Material Indebtedness and Other Liabilities
SCHEDULE 7.2(k) - Environmental Violations
EXHIBITS
EXHIBIT A - Form of Advance Request
EXHIBIT B-1 - Form of Officer's Certificate of Lessee
EXHIBIT B-2 - Form of Officer's Certificate of Guarantor
EXHIBIT B-3 - Form of Officer's Certificate of Certificate Trustee
EXHIBIT C-1 - Form of Responsible Officer's Certificate of Lessee
EXHIBIT C-2 - Form of Responsible Officer's Certificate of Guarantor
EXHIBIT D-1 - Form of Opinion of Special Counsel to Certificate Trustee
EXHIBIT D-2 - Form of Opinion of Special Counsel to Lessee and Guarantor
EXHIBIT D-3 - Form of Enforceability/Perfection Opinion of Counsel to Guarantor
EXHIBIT E - Offeree Letter
EXHIBIT F - Lessee Certification
EXHIBIT G - Form of Assignment Agreement
EXHIBIT H - Form of Compliance Certificate
EXHIBIT I - Form of Participant Guarantee
EXHIBIT J - Form of Subordination, Nondisturbance and Attornment Agreement
EXHIBIT K - Description of Certain FF&E
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TABLE OF CONTENTS
(continued)
PAGE
APPENDICES
APPENDIX 1 - Definitions and Interpretation
APPENDIX 2 - Conditions Precedent to Document Closing Date
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT (this "PARTICIPATION AGREEMENT"), dated as
of December 27, 2000, is entered into by and among TELETECH SERVICES
CORPORATION, a Colorado corporation, as Lessee (together with its permitted
successors and assigns in its capacity as Lessee, the "LESSEE"); TELETECH
HOLDINGS, INC., a Delaware corporation, as Guarantor (together with its
permitted successors and assigns in its capacity as Guarantor, "GUARANTOR");
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT, NATIONAL ASSOCIATION, not in
its individual capacity, except as expressly stated herein, but solely as
Certificate Trustee under the Trust Agreement and as Lessor under certain other
Operative Documents (together with its successors and permitted assigns under
the Trust Agreement, in its capacity as either Certificate Trustee or Lessor,
the "LESSOR"); FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its individual
capacity, except as expressly stated herein, but solely as Administrative Agent
("ADMINISTRATIVE AGENT"); the financial institutions named on SCHEDULE I hereto
(together with their respective permitted successors, assigns and transferees,
each a "CERTIFICATE HOLDER" and collectively the "CERTIFICATE HOLDERS"); the
financial institutions listed on SCHEDULE II hereto as Lenders (together with
their permitted successors, assigns and transferees, each as a Lender, a
"LENDER" and collectively the "LENDERS").
W I T N E S S E T H:
A. Lessee, Lessor, Guarantor, the Certificate Holders, the Lenders and
Administrative Agent have entered into this Participation Agreement and are
entering into the other Operative Documents for the purpose of providing
financing for the acquisition of the Land and the Facility and the construction
of the Tenant Improvements to comprise, together with the Land, the "LEASED
PROPERTY".
B. Subject to the terms and conditions of this Participation Agreement
and the other Operative Documents, on the Document Closing Date, among other
things, Lessee and Lessor will enter into the Lease pursuant to which Lessor
agrees to lease to Lessee, and Lessee agrees to lease from Lessor, the Leased
Property pursuant to the Lease.
C. The parties hereto desire that the Trust Agreement be entered into,
executed and delivered for the purpose of establishing the Trust to facilitate
providing financing for the acquisition of the Land and the Facility and the
construction of
the Tenant Improvements, and to hold title to the Leased Property to secure
Lessee's performance under the Operative Documents.
D. To induce the Participants to provide the funds for such financing
and to enter into this Participation Agreement, the Trust Agreement, the Loan
Agreement, each of the other Operative Documents and the transactions
contemplated hereby and thereby, Guarantor desires to, and it is a condition to
the effectiveness of the Overall Transaction that Guarantor, enter into and
deliver the Guarantees for the benefit of the Participants and the additional
persons referred to therein.
E. Subject to the terms and conditions of this Participation Agreement
and the other Operative Documents, the Certificate Holders are willing to
provide to Lessor a portion of the funding of the Financed Costs.
F. Subject to the terms and conditions of this Participation Agreement
and the other Operative Documents, the Lenders are willing to provide loans to
Lessor for the remaining portion of the funding of the Financed Costs.
G. To secure the repayment of the Participants' respective Certificate
Amounts and Loans, the Administrative Agent, on behalf of the Participants, will
have the benefit of a Lien on the Leased Property, the Trust Estate and the
other TeleTech Collateral.
NOW, THEREFORE, in consideration of the mutual agreements contained in
this Participation Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
SECTION I.1. DEFINITIONS; INTERPRETATION. Unless the context shall
otherwise require, capitalized terms used and not defined herein shall have the
meanings assigned thereto in APPENDIX 1 hereto for all purposes hereof; and the
rules of interpretation set forth in APPENDIX 1 hereto shall apply to this
Participation Agreement.
ARTICLE II
DOCUMENT CLOSING DATE; ACQUISITION DATE
SECTION II.1. EFFECTIVENESS OF AGREEMENT. This Participation Agreement
shall be effective as of the earliest date (on or before
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December 27, 2000) (the "DOCUMENT CLOSING DATE") on which all of the
conditions precedent set forth in APPENDIX 2 hereto have been satisfied or
waived by the applicable parties as set forth therein.
SECTION II.2. ACQUISITION OF LAND AND THE FACILITY; GRANTS OF LIENS.
Subject to the terms and conditions of this Participation Agreement, (a) on the
Document Closing Date, Lessor and Lessee shall enter into the Lease pursuant to
which Lessor shall lease the Leased Property to Lessee and Lessee shall lease
the same from Lessor for the Term, and (b) on the Acquisition Date, Lessor shall
acquire a fee simple interest in the Land and the Facility, and Lessee and
Lessor shall record the Lease, the Deed of Trust and the UCC Financing
Statements.
SECTION II.3. ACQUISITION COSTS. Subject to the terms and conditions of
this Participation Agreement, on the Advance Date, the Lessor shall make the
Advance, the proceeds of which shall be used for the payment of Acquisition
Costs (including Transaction Expenses) and Tenant Improvement Costs.
ARTICLE III
FUNDING OF ADVANCE
SECTION III.1. FUNDING.
(a) AMOUNT OF FUNDING. Subject to the terms and conditions of
this Participation Agreement and in reliance on the representations and
warranties of each of the parties hereto contained herein or made pursuant
hereto, upon receipt of the Advance Request, on the Advance Date each
Certificate Holder shall acquire its interest in the Trust Estate and each
Lender shall assist in funding Lessor's Advance, in each case by making
available to Lessor by wire transfer in accordance with the instructions set
forth in the Advance Request an amount in immediately available funds on the
Advance Date equal to such Participant's Commitment Percentage of the aggregate
amount of the requested Advance, provided, however, the Certificate Holders
shall Fund, in the aggregate, 100% of the Arrangement Fee payable to the
Arranger. Such instructions in the Advance Request shall provide that a portion
of the Advance in an amount equal to $5,000,000 shall be wire-transferred to the
Tenant Improvement Account to be held as a reserve for Tenant Improvement Costs
and any Transaction Expenses not yet paid, all of which shall be disbursed in
accordance with the terms of ARTICLE VII. Notwithstanding the foregoing, (i) the
Funding by each Participant on the Advance Date shall not exceed such
Participant's Available Commitment, and (ii) the Advance to be made by Lessor to
Lessee on the Advance Date shall not exceed the Aggregate Commitment Amount. No
amounts paid
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or prepaid with respect to any Certificate Amount or the Loans may be
readvanced.
(b) NOTES AND CERTIFICATES. Each Lender's Loan shall be
evidenced by a separate Note issued to such Lender in the amount of its Loan
Commitment and repayable in accordance with, and with Interest accruing pursuant
to, the terms of the Loan Agreement. The amounts made available by each
Certificate Holder shall be evidenced by a separate Certificate issued by Lessor
to each Certificate Holder in the amount of its Certificate Commitment. Each
Certificate shall accrue Yield at the Yield Rate on the Certificate Amount
thereof, payable as more fully set forth in the Trust Agreement. Each Lender and
Certificate Holder is authorized and entitled to make notations on its
respective Notes and Certificates in accordance with the Loan Documents and the
Trust Agreement, each of which notations, to the extent permitted by law, shall
constitute PRIMA FACIE evidence of the accuracy of the information so noted,
absent manifest error.
(c) ADVANCES, REQUIREMENTS, PROCEDURES AND LIMITATIONS. The
Advance required to be made by Lessor pursuant to the Operative Documents shall
be made by the Participants making a Funding directly to Administrative Agent.
Such Funding by the Participants to Administrative Agent with respect to the
Advance shall be deemed to constitute the required Funding from the Participants
to Lessor, and the corresponding Advance by Administrative Agent (consisting of
(x) an advance to any Person entitled to payments constituting Acquisition
Costs, including Transaction Expenses to be paid on the Advance Date, and (y) an
advance into the Tenant Improvement Account as a reserve for Tenant Improvement
Costs and any remaining Transaction Expenses) shall be deemed to constitute the
required Advance by Lessor. The Advance shall occur on the Acquisition Date,
which shall be a Business Day.
(d) ADVANCES; LIMITATIONS AND LIMITS. In addition to any other
provision hereof, Lessor shall not be obligated to make the Advance, and no
Lender shall be obligated to Fund any Loan and no Certificate Holder shall be
required to Fund any Certificate Amount, if, after giving effect to the Advance,
the aggregate outstanding amount of the Loans and the Certificate Amounts would
exceed the aggregate amount of the Available Commitments immediately prior to
the Advance.
(e) ADDITIONAL ADVANCE REQUIREMENTS AND PROCEDURES. All
remittances made by Certificate Holders and Lenders for the Funding of the
Advance shall be made in immediately available federal funds by wire transfer to
Administrative Agent, on behalf of Lessor, at Administrative Agent's address
referred to in SCHEDULE III hereto prior to 12:00 noon (Salt Lake City time) on
4
the Advance Date specified in the Advance Request; PROVIDED, that if the terms
and conditions for the Advance set forth herein have not been satisfied by 11:00
AM (Salt Lake City time) on the Advance Date, no Participant shall be obligated
to maintain the availability of its funds for the Advance unless such
Participant has received a satisfactory indemnity for the overnight investment
of such funds. Promptly upon Administrative Agent's receipt of such funds from
the Participants, subject to the conditions provided for herein, Administrative
Agent shall wire such funds (x) with respect to the Acquisition Costs (including
Transaction Expenses that are to be paid on the Advance Date), to the Persons
entitled to payment thereof, as Lessee shall have indicated in the Advance
Request, and (y) with respect to Tenant Improvement Costs and any remaining
undistributed funds allocated for Transaction Expenses, to the Tenant
Improvement Account. The Funding by each Certificate Holder and each Lender to
Administrative Agent of its respective portion of the Advance shall constitute
authorization and direction by such party to Administrative Agent to make the
Advance pursuant to this ARTICLE III. The proceeds of the Advance shall be used
solely for (i) payment of the Acquisition Costs, (ii) payment or reimbursement
of Lessee, to the extent amounts have previously been paid by Lessee and Lessee
has not been reimbursed therefore, of the Transaction Expenses), and (iii) the
payment or reimbursement of Lessee of the Tenant Improvement Costs, to the
extent amounts have previously been paid by Lessee and Lessee has not been
reimbursed therefore, from the Tenant Improvement Account. The portion of the
proceeds of the Advance used to pay Acquisition Costs and Tenant Improvement
Costs shall be allocated as follows: (w) $32,168,000 for payment of the purchase
price of the Land and the FF&E under the TCI Purchase Contract, (x) an amount
not to exceed $992,268.35 to pay or reimburse Lessee for Transaction Expenses to
be paid on the Advance Date, (y) an amount not to exceed $5,000,000 to pay or
reimburse Lessee for Tenant Improvement Costs, and (iv) an amount not to exceed
$7,731.65 to pay any Transaction Expenses not paid as of the Advance Date.
(f) TERMINATION OF COMMITMENTS. Notwithstanding anything in
this Participation Agreement to the contrary, the Commitments shall terminate
and Lessor shall not be obligated to make the Advance, and no Participant shall
be obligated to make its Fundings, and the Advance may not occur after 12:00
noon Salt Lake City time on December 29, 2000.
SECTION III.2. ADVANCE DATE.
(a) NOTICE AND CLOSING. At least one (1) Business Day prior to
the Advance Date, Lessee shall deliver to Administrative Agent an irrevocable
written notice substantially in the form of EXHIBIT A (the "ADVANCE REQUEST")
(and Administrative Agent shall
5
promptly forward a copy of the Advance Request to each Participant and
Lessor) setting forth:
(i) the proposed Advance Date which shall be the
Acquisition Date;
(ii) a statement of the amount of the requested Advance
(including a statement of the specific amount thereof, if any, that
will be used to Fund Acquisition Costs (including Transaction Expenses)
and Tenant Improvement Costs);
(iii) a certification by Lessee that: (I) the Advance complies
with the limitations and conditions set forth in SECTION 3.1, and (II)
all conditions set forth in ARTICLE VI hereof to the Advance have been
fully satisfied; and
(iv) wire transfer instructions for the disbursement of the
appropriate amount of funds (i) with respect to Tenant Improvement
Costs, into the Tenant Improvement Account, and (ii) with respect to
the Acquisition Costs (including Transaction Expenses), to such other
Persons as may be entitled thereto.
All documents and instruments required to be delivered on the Document
Closing Date or the Advance Date pursuant to this Participation
Agreement shall be delivered at the offices of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or
at such other location as Administrative Agent and Lessee may agree. On
the scheduled Advance Date, and subject to the satisfaction or waiver
of the conditions set forth in ARTICLE VI, Participants shall Fund the
Advance by wire transfer directly to Administrative Agent.
(b) COMMITMENT. Subject to compliance by Lessee with the
terms of this Participation Agreement and the satisfaction or waiver of the
conditions set forth in this ARTICLE III and in ARTICLE VI, the Participants
shall disburse the respective amounts of their Commitments in accordance with
the requirements of this Participation Agreement.
SECTION III.3. POSTPONEMENT OF ADVANCE DATE. In the event that the
Participants are instructed to make the Funding requested pursuant to the
Advance Request and the Advance Date shall not occur for any reason whatsoever
on the date specified in the Advance Request, Lessee shall pay Administrative
Agent, for the benefit of each Participant, interest on the amount actually
funded by each Lender at the Interest Rate and Yield on the amount funded by
each Certificate Holder at the Yield Rate, less any interest earned on behalf of
the Participants by investing such funded
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amounts; PROVIDED, that this provision shall not be construed to place any
liability or obligation on Administrative Agent to invest such funds or the
amounts of the Fundings in interest-bearing accounts. Such interest and Yield
shall be due and payable by Lessee upon the occurrence of the postponed
Advance Date and such payment shall be an additional condition precedent to
the Advance Date; PROVIDED, HOWEVER, that no additional Advance Request shall
be required to be given if such Advance Date is postponed and thereafter
timely consummated; and PROVIDED, FURTHER, that if such Advance Date shall
not have occurred by the second (2nd) Business Day following the Funding in
respect thereof, then all such interest and Yield shall be due and payable on
such date together with any amounts due pursuant to SECTION 14.4, and
Administrative Agent shall refund to each Participant all amounts funded by
such Participant, all accrued interest and Yield allocable to such
Participant, and any amounts due pursuant to SECTION 14.4.
ARTICLE IV
YIELD; INTEREST; COMMITMENT REDUCTION; FEES
SECTION IV.1. YIELD. The amount of the Certificate Amounts outstanding
from time to time shall accrue Yield at the Yield Rate, calculated using the
actual number of days elapsed and, when the Yield Rate is based on the LIBO
Rate, a 360-day year basis and, otherwise, a 365- (or, if applicable, 366-) day
year basis. If all or any portion of the Certificate Amounts, any Yield payable
thereon or any other amount payable hereunder shall not be paid when due
(whether at stated maturity, acceleration thereof or otherwise), such overdue
amount shall bear interest at a rate per annum which is equal to the Overdue
Rate.
SECTION IV.2. INTEREST ON LOANS. Each Loan shall accrue Interest
computed and payable in accordance with the terms of the Loan Agreement.
SECTION IV.3. PAYMENTS AND PREPAYMENTS OF LOANS AND
CERTIFICATE AMOUNTS AND OTHER AMOUNTS.
(a) Lessor hereby directs Lessee to pay to Administrative
Agent all Rent that is due from time to time (other than Excepted Payments and
other Supplemental Rent payable to third parties, which Lessor hereby directs
Lessee to make directly to the applicable Person entitled thereto). All payments
or other amounts required to be made by Lessee pursuant to any of the Operative
Documents shall be the direct recourse obligations of Lessee.
(b) In the event that Lessee pays the Lease Balance to Lessor
in connection with Lessee's purchase of the Leased Property in accordance with
SECTION 15.1, 16.2(e), 18.1, 18.2 or ARTICLE XIX of the Lease, Lessor will
prepay the entire outstanding principal
7
amount of the Loans and all of the Certificate Amounts. Each of the
Participants hereby acknowledges that its Loans or Certificate Amounts, as
the case may be, may be so prepaid without any prepayment premium (other than
Break Costs, if any).
SECTION IV.4. FEES. Lessee agrees to pay when due the
following described fees (collectively, the "FEES").
(a) OTHER FEES. Lessee also agrees to pay (i) to the Bank, for
its own account, the fees set forth in the Trustee Fee Letter, payable in the
amounts and on the dates set forth therein, (ii) to Administrative Agent, for
its own account, the fees set forth in the Agent Fee Letter, payable in the
amounts and on the dates set forth therein including the Arrangement Fee which
shall be payable on the Advance Date following the Closing Date, and (iii) to
the Arranger, the Arrangement Fee on the Advance Date.
SECTION IV.5. OBLIGATIONS SEVERAL. The obligations of the Participants
hereunder or elsewhere in the Operative Documents shall be several and not
joint; and no Participant shall be liable or responsible for the acts or
defaults of any other party hereunder or under any other Operative Document.
SECTION IV.6. HIGHEST LAWFUL RATE. It is the intention of the
parties hereto to conform strictly to Applicable Laws regarding usury and,
anything herein to the contrary notwithstanding, the obligations of (x)
Lessee to Lessor under this Participation Agreement and the Lease, (y) Lessor
to the Certificate Holders under the Trust Agreement and the Certificates and
to the Lenders under the Loan Agreement and the Notes, and (z) of either
Lessee or Lessor or any other party under any other Operative Document, shall
be subject to the limitation that payments of interest or of other amounts
constituting interest under Applicable Laws shall not be required to the
extent that receipt thereof would be in excess of the Highest Lawful Rate (as
defined below), or otherwise contrary to provisions of law applicable to the
recipient limiting rates of interest which may be charged or collected by the
recipient. Accordingly, if the transactions or the amount paid or otherwise
agreed to be paid for the use, forbearance or detention of money under this
Participation Agreement, the Lease, the Trust Agreement, the Certificates,
the Loan Agreement, the Notes or any other Operative Document would exceed
the Highest Lawful Rate or otherwise be usurious under Applicable Laws
(including the federal and state laws of the United States, or of any other
jurisdiction whose laws may be mandatorily applicable) with respect to the
recipient of any such amount, then, in that event, notwithstanding anything
to the contrary in this Participation Agreement, the Lease, the Trust
Agreement, the Certificates, the Loan Agreement,
8
the Notes or any other Operative Document, it is agreed as follows as to the
recipient of any such amount:
(a) the provisions of this SECTION 4.6 shall govern and
control over any other provision in this Participation Agreement, the Lease, the
Trust Agreement, the Certificates, the Loan Agreement, the Notes and any other
Operative Document and each provision set forth therein is hereby so limited;
(b) the aggregate of all consideration which constitutes
interest under Applicable Laws that is contracted for, charged or received under
this Participation Agreement, the Lease, the Trust Agreement, the Certificates,
the Loan Agreement, the Notes or any other Operative Document shall under no
circumstances exceed the maximum amount of interest allowed by Applicable Laws
(such maximum lawful interest rate, if any, with respect to such recipient
herein called the "HIGHEST LAWFUL RATE"), and all amounts owed under this
Participation Agreement, the Lease, the Trust Agreement, the Certificates, the
Loan Agreement, the Notes and any other Operative Document shall be held subject
to reduction and (i) the amount of interest which would otherwise be payable to
the recipient hereunder and under the Lease, the Trust Agreement, the
Certificates, the Loan Agreement, the Notes and any other Operative Document,
shall be automatically reduced to the amount allowed under Applicable Laws and
(ii) any unearned interest paid in excess of the Highest Lawful Rate shall be
credited to the payor by the recipient (or, if such consideration shall have
been paid in full, refunded to the payor);
(c) all sums paid, or agreed to be paid for the use,
forbearance and detention of the money under this Participation Agreement, the
Lease, the Trust Agreement, the Certificates, the Loan Agreement, the Notes or
any other Operative Document shall, to the extent permitted by Applicable Laws
be amortized, prorated, allocated and spread throughout the full term of such
indebtedness until payment in full so that the actual rate of interest is
uniform throughout the full term thereof;
(d) if at any time the interest, together with any other fees,
late charges and other sums payable pursuant to or in connection with this
Participation Agreement, the Lease, the Trust Agreement, the Certificates, the
Loan Agreement, the Notes and any other Operative Document executed in
connection herewith or therewith, and deemed interest under Applicable Laws
exceeds that amount which would have accrued at the Highest Lawful Rate, the
amount of interest and any such fees, charges and sums to accrue to the
recipient of such interest, fees, charges and sums pursuant to the Operative
Documents shall be limited, notwithstanding anything to the contrary in the
Operative Documents to that amount which
9
would have accrued at the Highest Lawful Rate for the recipient, but any
subsequent reductions, as applicable, shall not reduce the interest to accrue
pursuant to the Operative Documents below the recipient's Highest Lawful Rate
until the total amount of interest payable to the recipient (including all
consideration which constitutes interest) equals the amount of interest which
would have been payable to the recipient (including all consideration which
constitutes interest), PLUS the amount of fees which would have been received
but for the effect of this SECTION 4.6.
ARTICLE V
CERTAIN INTENTIONS OF THE PARTIES
SECTION V.1. NATURE OF TRANSACTION. It is the intention of the
parties that:
(a) the Overall Transaction constitutes an operating lease
from Lessor to Lessee for purposes of Lessee's and Guarantor's financial
reporting, including, without limitation, under Financial Accounting
Standards Board Statement No. 13;
(b) for purposes of all federal and all state and local income
and transfer taxes, and for purposes of bankruptcy, insolvency, conservatorship
and receivership law (including the substantive law upon which bankruptcy,
conservatorship and insolvency and receivership proceedings are based), and real
estate and Uniform Commercial Code purposes:
(i) the Overall Transaction constitutes a financing by the
Participants to Lessee and preserves beneficial ownership in the Leased
Property in Lessee, Lessee will be entitled to all tax benefits
ordinarily available to owners of property similar to the Leased
Property for tax purposes (including, without limitation,
depreciation), and the obligations of Lessee to pay Basic Rent shall be
treated as payments of interest to the Participants, and the payment by
Lessee of any other amounts in respect of the Lease Balance shall be
treated as payments of principal to the Participants;
(ii) the Lease grants a security interest or Lien, as the case
may be, in the Leased Property and the other TeleTech Collateral in
favor of Lessor, and for the benefit of the Participants, to secure
Lessee's payment and performance of the Obligations; and
(iii) the Deed of Trust creates Liens and security interests
in the Mortgaged Property in favor of Administrative
10
Agent for the benefit of all of the Participants to secure Lessee's
payment and performance of the Obligations.
Nevertheless, Lessee and Guarantor acknowledge and agree that none of Lessor,
Administrative Agent, Arranger or any Participant has made any
representations or warranties concerning the tax, accounting or legal
characteristics of the Operative Documents or any aspect of the Overall
Transaction and that Lessee and Guarantor have obtained and relied upon such
tax, accounting and legal advice concerning the Operative Documents and the
Overall Transaction as each of them deems appropriate; provided, however,
none of the Lessor, Administrative Agent, Arranger or any Participant shall
treat the Overall Transaction for federal or state tax purposes other than as
a financing preserving beneficial ownership in the Leased Property in the
Lessee in the manner described in this SECTION 5.1(b).
(c) Specifically, without limiting the generality of CLAUSE
(b), the parties hereto intend and agree that in the event of any insolvency,
conservatorship or receivership proceedings or matters or a petition under the
United States bankruptcy laws, as amended from time to time, or any other
applicable insolvency, conservatorship or receivership laws or statute of the
United States of America or any State or Commonwealth thereof affecting Lessee,
Guarantor, Lessor, the Certificate Holders or the Lenders or any collection
actions, the transactions evidenced by the Operative Documents (including the
Lease) constitute loans made directly to Lessee by the Participants, in each
case as unrelated third party lenders, and that Lessor holds title to the Leased
Property for the benefit of the Participants to secure Lessee's obligations to
repay such loans to the Participants and all other amounts due under any of the
Operative Documents.
SECTION 5.2. AMOUNTS DUE UNDER LEASE. Anything else herein or elsewhere
in the Operative Documents to the contrary notwithstanding, it is the intention
of Lessee, Guarantor, Lessor, the Certificate Holders and the Lenders that: (i)
the amount and timing of installments of Basic Rent due and payable from time to
time from Lessee under the Lease shall be equal to the aggregate payments due
and payable as Interest on the Loans and Yield on the Certificate Amounts on
each Payment Date; (ii) if Lessee elects the Early Termination Option (other
than any partial purchases pursuant to Section 18.1(b) of the Lease), the
Purchase Option or becomes obligated or otherwise elects to purchase the Leased
Property under the Lease, then the Loans, the Certificate Amounts, all Interest,
Yield and Fees and all other obligations of Lessee owing to Lessor and the
Participants shall be paid in full by Lessee; (iii) if Lessee properly elects
the Sale Option with respect to the Leased Property, and subject to ARTICLES XX
and XXI of the Lease, Lessee
11
shall only be required to pay to Administrative Agent the proceeds of the
sale of the Leased Property, the Sale Option Recourse Amount with respect to
the Leased Property and any amounts due pursuant to SECTION 20.2 of the Lease
(which aggregate amounts may be less than the Lease Balance), together with
all other amounts due and payable by Lessee; and (iv) upon an Event of
Default resulting in an acceleration of Lessee's obligation to purchase the
Leased Property under the Lease at any time, the amounts then due and payable
by Lessee under the Lease shall include all amounts necessary to pay in full
the Lease Balance, PLUS, to the extent not included in the Lease Balance, all
other amounts then due from Lessee to the Participants under the Operative
Documents.
SECTION V.3. DISTRIBUTION.
(a) Each payment of Basic Rent (and any payment of interest on
overdue installments of Basic Rent) received by Administrative Agent shall be
distributed by Administrative Agent to the Participants, PRO RATA in accordance
with, and for application to, the amount of Interest and Yield then due on the
Loans and the Certificate Amounts, as well as any overdue interest due to each
Lender or Certificate Holder (to the extent permitted by Applicable Laws).
(b) Any payment received by Administrative Agent as a
result of:
(i) the purchase of all of the Leased Property in connection
with Lessee's exercise of its Early Termination Option or the Purchase
Option under SECTION 18.1(a) or 19.1 of the Lease,
(ii) Lessee's compliance with its obligation to purchase (or
cause its designee to purchase) the Leased Property in accordance with
the Lease,
(iii) the payment of the Lease Balance in accordance with
SECTION 15.1 of the Lease, or
(iv) Lessee failing to fulfill one or more of the conditions
to the exercise of the Sale Option and Administrative Agent's receipt
of the Lease Balance from Lessee pursuant to SECTION 20.1 of the Lease,
shall be distributed by Administrative Agent to pay in full the Participant
Balance of each Participant, and any payment received by Administrative Agent as
a result of funds remaining in the Tenant Improvement Account as of the
Expiration Date, shall be distributed pro rata among the Participants.
12
(c) The payment by Lessee of the Sale Option Recourse Amount
to Administrative Agent in accordance with SECTION 20.1 of the Lease upon
Lessee's exercise of the Sale Option shall be distributed by Administrative
Agent in the following amounts and order of priority:
FIRST, on a pro rata basis based on their respective shares of
the Loan Balance, to the Lenders for application to pay in full the
Loan Balance owing to them; and
SECOND, on a pro rata basis based on their respective shares
of the Certificate Balance, to the Certificate Holders to pay in full
the Certificate Balance.
(d) Any payments received by Administrative Agent as Gross
Proceeds from the sale of the Leased Property pursuant to Lessee's exercise of
the Sale Option pursuant to ARTICLE XX of the Lease, together with any payment
made by Lessee as a result of an appraisal pursuant to SECTION 13.3, shall be
distributed by Administrative Agent upon receipt thereof in the following order
of priority:
FIRST, on a pro rata basis based on their respective shares of
the Loan Balance, to the Lenders for application to pay in full the
Loan Balance;
SECOND, on a pro rata basis based on their respective shares
of the Certificate Balance, to the Certificate Holders for application
to pay in full the Certificate Balance; and
THIRD, the balance, if any, shall be promptly distributed to,
or as directed by, Lessee.
(e) All payments of Supplemental Rent received by
Administrative Agent (excluding any amounts payable pursuant to the preceding
provisions of this SECTION 5.3) shall be distributed promptly by Administrative
Agent upon receipt thereof to the Persons entitled thereto pursuant to the
Operative Documents.
(f) Notwithstanding any other provision of this SECTION 5.3,
any Excepted Payment received at any time by Administrative Agent shall be
distributed promptly to the Person entitled to receive such Excepted Payment
pursuant to the Operative Documents.
(g)(i) All payments received and amounts realized by
Administrative Agent as a result of an Event of Default (including any amounts
received by Administrative Agent in connection with (x) any sale of all or any
part of the Leased Property as a result of
13
an Event of Default or (y) any Casualty or Condemnation after the occurrence
and during the continuance of an Event of Default (if not paid to Lessee for
restoration) shall be distributed by Administrative Agent in the following
order of priority:
FIRST, so much of such payments or amounts as shall be
required to pay the then existing or prior Participants the amounts
payable to them pursuant to any expense reimbursement or
indemnification provisions of the Operative Documents shall be
distributed to each such Participant without priority of one over the
other in accordance with the amount of such payment or payments payable
to each such Person;
SECOND, on a pro rata basis based on their respective shares
of the Loan Balance, to the Lenders for application to pay the Loan
Balance in full;
THIRD, on a pro rata basis based on their respective shares of
the Certificate Balance, to the Certificate Holders for application to
pay the Certificate Balance in full; and
FOURTH, the balance, if any, of such payment or amounts
remaining thereafter shall be promptly distributed to, or as directed
by, Lessee.
(ii) During the occurrence and continuance of an Event of
Default, all amounts (other than Excepted Payments) received or
realized by Administrative Agent and otherwise distributable pursuant
to SECTIONS 5.3(a) and 5.3(b) shall be distributed as provided for in
CLAUSE (g)(i) above.
(h)(i) Subject to SECTIONS 5.3(h)(ii) and 5.3(h)(iii), any
payment received by Administrative Agent for which no provision as to the
application thereof is made in the Operative Documents or elsewhere in this
SECTION 5.3 shall be distributed PRO RATA among the Lenders and the Certificate
Holders for application to pay the Loan Balance and the Certificate Balance as
applicable, without priority of one over the other, in the proportion that the
Participant Balance of each bears to the Lease Balance.
(ii) Except as otherwise provided in SECTIONS 5.3(a), 5.3(b)
and 5.3(g)(i), all payments received and amounts realized by
Administrative Agent under the Lease or otherwise with respect to the
Leased Property, or any proceeds thereof, to the extent received or
realized at any time after an indefeasible payment in full of the
Participant Balances of all of the Participants and all other amounts
due and owing to the Participants, shall be distributed forthwith by
Administrative Agent to, or as directed by, Lessee.
14
(iii) Any payment received by Administrative Agent for which
provision as to the application thereof is made in an Operative
Document, but not elsewhere in this SECTION 5.3, shall be distributed
forthwith by Administrative Agent to the Person and for the purpose for
which such payment was made in accordance with the terms of such
Operative Document.
(i) Any amounts payable to Administrative Agent as a result of
a Casualty or Condemnation pursuant to SECTION 14.1 of the Lease shall be
distributed as follows: (x) if a Termination Notice shall have been given, all
amounts that are to be applied to the purchase price of the Leased Property in
accordance with SECTION 15.1(b) of the Lease shall be distributed by
Administrative Agent in accordance with SECTION 5.3(b); or if a Termination
Notice is not given, any proceeds are to be used in accordance with clause (y)
below, and any excess proceeds shall be distributed by Administrative Agent in
accordance with SECTION 5.3(b); and (y) all amounts payable to Lessee for the
restoration or repair of damage caused by such Casualty or Condemnation in
accordance with SECTION 14.1(a) of the Lease shall be distributed to, or as
directed by, Lessee.
(j) To the extent any payment made to any Participant is
insufficient to pay in full the Participant Balance of such Participant, then
each such payment shall first be applied to accrued Interest or Yield, as
applicable, and then to principal outstanding on the Loans or the Certificate
Amounts, as applicable.
SECTION 5.4. ADJUSTMENTS. If any Participant (a "BENEFITTED
PARTICIPANT") shall at any time receive any payment of all or part of its Loan
or Certificate Amount, as applicable, or Interest or Yield thereon, as
applicable, or receive any of the collateral in respect thereof (whether
voluntarily or involuntarily, by setoff, or otherwise), in an amount greater
than the amount to which such Participant was entitled pursuant to SECTION 5.3,
such Participant shall return such amount or collateral to Administrative Agent
for distribution to the Person(s) entitled thereto in accordance with SECTION
5.3; PROVIDED, HOWEVER, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefitted Participant, such excess
payment or benefits, as applicable, shall be returned to the Benefitted
Participant, to the extent of such recovery, but without interest.
ARTICLE VI
CONDITIONS PRECEDENT TO ADVANCE
15
SECTION VI.1. CONDITIONS PRECEDENT TO ADVANCE. The obligations of
Lessor (through Administrative Agent) to make the Advance on the Advance
Date, the obligations of the Certificate Holders to Fund the related
Certificate Amounts on the Advance Date and the obligation of the Lenders to
make the related Funding of their Loans on the Advance Date are subject to
the satisfaction or waiver of each of the following conditions precedent:
(a) RESOLUTIONS AND INCUMBENCY CERTIFICATE, ETC. OF LESSEE AND
GUARANTOR.
(i) Lessee shall have delivered to Administrative Agent (A) a
good standing certificate with respect to Lessee from the Secretary of
State of the State of Colorado issued by such office no earlier than
thirty (30) days prior to the Advance Date and (B) an Officer's
Certificate of Lessee substantially in the form of EXHIBIT B-1,
attaching and certifying as to (1) the corporate authority for the
execution, delivery and performance by Lessee of each Operative
Document to which it is or will be a party, (2) its organizational
documents, (3) its by-laws and (4) the incumbency and signature of
persons authorized to execute and deliver on its behalf the Operative
Documents to which it is a party.
(ii) Guarantor shall have delivered to Administrative Agent
(A) a good standing certificate with respect to Guarantor from the
Office of the Secretary of State of the State of Delaware issued by
such office no earlier than thirty (30) days prior to the Advance Date
and (B) an Officer's Certificate of Guarantor substantially in the form
of EXHIBIT B-2, attaching and certifying as to (1) the corporate
authority for the execution, delivery and performance by Guarantor of
each Operative Document to which it is or will be a party, (2) its
organizational documents, (3) its by-laws and (4) the incumbency and
signature of persons authorized to execute and deliver on its behalf
the Operative Documents to which it is a party.
(b) RESPONSIBLE OFFICER'S CERTIFICATES OF LESSEE AND
GUARANTOR. Administrative Agent shall have received a Responsible Officer's
Certificate of Lessee and Guarantor, in substantially the form of EXHIBITS C-1
AND C-2 attached hereto, dated as of the Advance Date, stating on behalf of
Lessee and Guarantor, respectively, that: (i) each and every representation and
warranty of Lessee and Guarantor contained in each Operative Document to which
it is a party is true and correct on and as of the Document Closing Date, except
to the extent such representation or warranty relates solely to an earlier date,
in which case such certificate shall state that such representation or warranty
shall have been
16
true and correct on and as of such earlier date; (ii) no Default, Event of
Default, Casualty or Condemnation has occurred and is continuing, and each of
Lessee and Guarantor, each after due inquiry and investigation is not aware
of any existing or threatened condemnations, actions, suits or proceedings
with respect to all or any portion of the Leased Property; (iii) each
Operative Document to which Lessee or Guarantor is a party is in full force
and effect with respect to it; and (iv) each of Lessee and Guarantor has duly
performed and complied in all material respects with all covenants contained
herein or in any other Operative Document required to be performed by it on
or prior to the Advance Date.
(c) CERTIFICATE OF LESSOR. Administrative Agent shall have
received (i) a certificate of the Secretary or an Assistant Secretary of Bank
substantially in the form of EXHIBIT B-3 attaching and certifying as to (A) the
corporate authority for the execution, delivery and performance by Bank of each
Operative Document to which it is or will be a party in its individual capacity
or as Lessor, (B) its organizational documents, (C) its by-laws and (D) the
incumbency and signature of persons authorized to execute and deliver on its
behalf the Operative Documents to which it is a party in its individual capacity
or as Lessor and (ii) a certificate as to the authority of the Bank to conduct
banking business and exercise fiduciary powers from the Comptroller of the
Currency.
(d) OPINIONS OF COUNSEL. Administrative Agent and the
Participants shall have received opinions of counsel dated the Advance Date
substantially in the forms of ▇▇▇▇▇▇▇▇ ▇-▇, ▇-▇ and D-3 with respect to the
Operative Documents executed and delivered in connection with the Advance Date
and the perfection and validity of the Administrative Agent's Liens in the
Leased Property and the other TeleTech Collateral. Lessor, Administrative Agent
and the Participants shall also have received opinions of counsel, in form and
content satisfactory to such parties, as to the sufficiency in form of the
Financing Statements to be filed and/or recorded in the State of Colorado and
the State of Connecticut and the location of such filing and recording as is
necessary to perfect the interests of such parties in the collateral described
in such Financing Statements.
(e) ADVANCE REQUEST. Administrative Agent shall have received
a fully executed counterpart of the Advance Request, executed by Lessee in
accordance with SECTION 3.2(a). The delivery of the Advance Request and the
acceptance by Lessee of the proceeds of the Advance shall constitute a
representation and warranty by Lessee that on the Advance Date (both immediately
before and after giving effect to the making of the Advance and the application
of
17
the proceeds thereof), the statements made in SECTION 8.2 are true and
correct as of such date.
(f) TAXES. Any and all taxes, fees and other charges in
connection with the execution, delivery, recording, filing and registration of
the Operative Documents and the acquisition of the Land and the Facility shall
have been paid or provisions for such payment shall have been made by Lessee to
the satisfaction of Administrative Agent.
(g) APPRAISAL AND IMPROVEMENTS MATTERS. Not less than fifteen
(15) days prior to the Advance Date, Lessee shall have delivered to Lessor and
each Participant:
(i) an appraisal (the "APPRAISALS") in form and substance
satisfactory to each of the Participants (by the use of appraisal
methods satisfactory to the Participants) which will set forth the Fair
Market Value of the Leased Property (with an allocation of such amount
to (i) the Land and the Facility and (ii) the Release Parcel) as of the
(A) the Acquisition Date, and (B) last day of the Base Term and each
Lease Renewal Term. The Appraisals shall be prepared in accordance with
FIRREA and be performed by the Appraiser.
(h) ENVIRONMENTAL REVIEW. Not less than five (5) Business Days
prior to the Advance Date, each Participant, Lessor and Administrative Agent
shall have received the Environmental Audit for the Leased Property, which shall
be dated not earlier than November 14, 2000 and addressed to Lessor,
Administrative Agent and each Participant, which shall have been approved by
Lessor and each Participant in each of their sole and absolute discretion.
(i) FILINGS AND RECORDINGS. All filings or recordings
enumerated and described in SCHEDULE 6.1(i), as well as all other filings and
recordings necessary or advisable, including precautionary financing statements
and mortgage filings, reasonably deemed necessary by Administrative Agent to
perfect the rights, titles and interests of Lessor and Administrative Agent for
the benefit of the Participants intended to be created by the Operative
Documents shall have been made in the appropriate places or offices, including
any recordings and filings (including, without limitation, any amended and
restated recordings and filings) necessary to create, perfect, preserve and
protect: (i) Lessor's interest in the Leased Property and any other property and
interests included in the Trust Estate, (ii) first mortgage liens and mortgages
of record on the Mortgaged Property, subject to Permitted Liens, and (iii) a
first priority perfected security interest in all fixtures appurtenant to the
Leased Property, subject to Permitted Liens. All recording and filing fees and
18
taxes with respect to any recordings or filings made pursuant to this SECTION
6.1(i) shall have been paid in full by Lessee or funded with the proceeds of the
Advance to the extent such fees or taxes constitute Transaction Expenses and
sufficient funds from the Advance are available for that purpose after funding
the Acquisition Costs, and satisfactory evidence thereof shall have been
delivered to Lessor and Administrative Agent, or arrangements for such payment
shall have been made by Lessee to the reasonable satisfaction of Administrative
Agent.
(j) TRANSFER DOCUMENTS. Lessor shall have received from the
Seller a warranty deed for the Leased Property (the "DEED"), in conformity with
Applicable Laws and Regulations and appropriate for recording with the
applicable Governmental Authorities, conveying fee simple title to the Leased
Property to Lessor, subject only to Permitted Exceptions.
(k) FIRPTA AFFIDAVIT. The Seller shall have delivered to
Administrative Agent and Lessor (i) a FIRPTA Affidavit in customary form or if
Seller is a "foreign person" as defined in Section 1445 of the Code, evidence
that a portion of the sales price to be paid to Seller has been withheld, if so
required, in accordance with the provisions of the Code and the regulations
thereunder and (ii) any comparable form and affidavits required by any state
with respect to the purchase and sale of the Leased Property.
(l) REQUIREMENTS OF LAW. In the reasonable opinion of Lessor,
Administrative Agent and the Participants and their respective counsel, the
Overall Transaction does not and will not violate in any respect any material
Applicable Law and does not and will not subject any such Person to any material
adverse regulatory prohibitions or constraints.
(m) ADVANCE DATE. The Advance hereunder shall occur on
or prior to December 29, 2000.
(n) REPRESENTATIONS AND WARRANTIES. On the Advance Date, the
representations and warranties of Lessee and Guarantor herein and in each of the
other Operative Documents shall be true and correct in all material respects as
though made on and as of such date, except to the extent such representations or
warranties relate solely to an earlier date, in which case such representations
and warranties shall have been true and correct in all material respects on and
as of such earlier date.
(o) LITIGATION. No action or proceeding shall have been
instituted, nor shall any action or proceeding be threatened, before any
Governmental Authority, nor shall any order, judgment or decree have been issued
or proposed to be issued by any
19
Governmental Authority (i) to set aside, restrain, enjoin or prevent the full
performance of this Participation Agreement, any other Operative Document or
any transaction contemplated as part of the Overall Transaction, (ii) that
questions the validity of the Operative Documents or the rights or remedies
of Lessor, Guarantor, the Administrative Agent or the Participants with
respect to Lessee or the Leased Property under the Operative Documents, or
(iii) which in the reasonable judgment of the Required Participants is
reasonably likely to have a Material Adverse Effect.
(p) SEARCHES. Administrative Agent shall have received a
report (which may be included in the commitment for title insurance prepared by
the Title Insurance Company with respect to the following matters other than
Uniform Commercial Code filings), as of a current date and reasonably acceptable
in form and substance to Administrative Agent, of judgment liens, lis pendens,
and tax lien filings with respect to Lessee and the Leased Property filed of
record in ▇▇▇▇▇▇▇ County, Colorado and Uniform Commercial Code filings for
Lessee filed in the Office of the Secretary of State of the State of Colorado
and in ▇▇▇▇▇▇▇ County, Colorado, as applicable.
(q) SURVEY. Lessee shall have delivered, or shall have caused
to be delivered, to Administrative Agent and to the Title Insurance Company an
ALTA survey of the Land in a form reasonably satisfactory to the Title Insurance
Company (and including any applicable flood zone designation (with property
annotations based on Federal Flood Insurance Rate Maps or the local equivalent)
by scaled map location and graphic plotting) in order to issue the Title
Policies and showing no state of facts unsatisfactory to Administrative Agent.
(r) TITLE AND TITLE INSURANCE. Lessor shall have received from
the Title Insurance Company a current ALTA 1970 owner's policy of title
insurance with respect to the Leased Property, including the Land, the Facility
and the Tenant Improvements (or an irrevocable commitment for the issuance
thereof), reasonably acceptable in form and substance to Administrative Agent
(the "OWNER'S POLICY"), insuring that Lessor has good and indefeasible title to
the Leased Property, subject to other exceptions to title as are reasonably
acceptable to each Participant, in an amount equal to the aggregate Commitments,
together with complete, legible copies of all encumbrances, maps and surveys of
record. Administrative Agent, for the benefit of the Participants, shall have
received from the Title Insurance Company (or an irrevocable commitment for the
issuance thereof), an ALTA 1970 lenders' policy of title insurance (the
"LENDERS' POLICY"; and, together with the Owner's Policy, the "TITLE POLICIES"),
reasonably acceptable in form and substance to
20
Administrative Agent, insuring the Lien of the Deed of Trust as a valid first
priority Lien against the Mortgaged Property, subject to such exceptions to
title as are reasonably acceptable to Administrative Agent, in an amount
equal to the aggregate Commitments, together with complete, legible copies of
all encumbrances and plats of record. The Title Policies shall be dated as of
the Advance Date and, to the extent permitted under Applicable Laws, shall:
(x) contain affirmative endorsements as to mechanics' liens, doing business,
usury, Form 3.0 zoning, Form B-1 comprehensive coverage, encroachments, the
nonviolation of covenants and restrictions, variable rate, survey and
creditor's rights exception revisions and revision of the standard tax
exception, (y) contain endorsements or other assurances acceptable to
Administrative Agent in its sole discretion, regarding the effect of
recharacterization of the Lease and (z) contain such other endorsements as
shall reasonably be requested by Administrative Agent.
(s) INSURANCE. Insurance complying with the provisions of
Article XIII of the Lease shall be in full force and effect as evidenced by
certificates of insurance, broker's reports or insurance binders delivered to
Administrative Agent and Lessor, all in form and substance reasonably
satisfactory to the Participants.
(t) OFFEREE LETTER. Administrative Agent and Lessee shall have
received certificate, substantially in the form of EXHIBIT F, from the Arranger,
dated the Document Closing Date, with respect to offerees of the Notes and the
Certificates (the "OFFEREE LETTER").
(u) EVENT OF DEFAULT; SIGNIFICANT CASUALTY, SIGNIFICANT
CONDEMNATION. There shall not have occurred and be continuing any Event of
Default, and no Event of Default shall have occurred after giving effect to the
making of the Advance requested by the Advance Request, and Lessee shall not
have received a Termination Notice pursuant to SECTION 15.1 of the Lease.
(v) COMMITMENT AMOUNT. After giving effect to the Advance, the
aggregate amount of the Advance shall not exceed the Aggregate Commitment Amount
and the aggregate amount Funded by each Participant shall not exceed the
Available Commitment of such Participant.
(w) NO MATERIAL ADVERSE CHANGE. Immediately prior to, and
after giving effect to, the Advance, there shall have occurred (i) no material
adverse change with respect to the Leased Property or (ii) any change in the
financial condition of Lessee or Guarantor which could reasonably be expected to
have a Material
21
Adverse Effect in the reasonable judgment of the Required Participants.
(x) TRANSACTION EXPENSES. Lessee shall have paid all
applicable Transaction Expenses or such payments shall be made out of the
requested Advance to the extent funds are available for such purpose after
funding all other Acquisition Costs and after funding all Tenant Improvement
Costs into the Tenant Improvement Account.
(y) TENANT IMPROVEMENT ACCOUNT. Administrative Agent shall
have arranged for the establishment of the Tenant Improvement Account maintained
with Administrative Agent.
All documents and instruments required to be delivered on the Advance Date shall
be delivered at the offices of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as may be
determined by Administrative Agent and Lessee.
ARTICLE VII
TENANT IMPROVEMENTS
SECTION VII.1. TENANT IMPROVEMENTS.
(a) COMPLETION OF TENANT IMPROVEMENTS. Lessee shall use the
aggregate amounts Funded on the Advance Date into the Tenant Improvement Account
for Tenant Improvement Costs and Transaction Expenses, as indicated on the
Advance Request, and disbursed to Lessee in accordance with the terms of this
SECTION 7, to reimburse Lessee for the costs actually incurred in connection
with the construction of the Tenant Improvements and any remaining Transaction
Expenses, and Lessee shall construct the Tenant Improvements in accordance with
Applicable Law, the Plans and Specifications prepared therefor and good
engineering and construction practices. The Tenant Improvements including any
change or modification thereof shall comply with the requirements set forth at
Section 10 of the Lease. Lessee shall cause the Completion of the Tenant
Improvements by no later than the Expiration Date.
(b) DISBURSEMENT PROCEDURE. For disbursement of funds from the
Tenant Improvement Account, Lessee shall deliver to Administrative Agent an
officer's certificate, executed by a Responsible Officer of Lessee, stating the
disbursement amount requested from the Tenant Improvement Account, and with a
statement describing (in sufficient detail as is satisfactory to the
Administrative Agent and the Participants) (x) the costs actually incurred in
connection with the construction of the Tenant
22
Improvements, or (y) any Transaction Expenses actually incurred To the extent
Lessee requests a disbursement from the Tenant Improvement Account to pay for
costs and expenses actually incurred in connection with acquiring any FF&E,
Lessee shall deliver, along with the Officer's Certificate referred to above,
a description of the FF&E so acquired by Lessee, and such FF&E shall
automatically constitute a part of the Leased Property covered by the Lease
and the other Operative Documents. Upon Administrative Agent's or any
Participant's request, Lessee shall deliver additional evidence (such as
billing invoices, check stubs, vouchers or receipts) satisfactory to such
parties demonstrating Lessee's actual expenditures for such Tenant
Improvement Costs or Transaction Expenses, as applicable. Promptly after
Administrative Agent's receipt of such materials, satisfactory to
Administrative Agent in all material respects, Administrative Agent shall
advance the appropriate amount of funds to Lessee. Lessee shall pay all costs
associated with the establishment, maintenance or termination of the Tenant
Improvement Account. Administrative Agent shall have a first priority lien on
the amounts in the Tenant Improvement Account until all such amounts are
released to fund the Tenant Improvement Costs. Lessee agrees that the Tenant
Improvement Account shall at all times be under the sole dominion and control
of the Administrative Agent.
(c) LESSEE'S CERTIFICATION. Within fifteen (15) Business Days
following completion of the Tenant Improvements in accordance with the Plans and
Specifications, Lessee shall furnish to Administrative Agent a certification of
Lessee (substantially in the form of Exhibit I) as follows:
(i) the Tenant Improvements have been completed in all
material respects in accordance with the Plans and Specifications, and
the Tenant Improvements, as so completed, and the Leased Property
comply in all material respects with all Applicable Laws.
(ii) the representations and warranties of Lessee with respect
to the Leased Property set forth in SECTION 8.2 are true and correct in
all material respects as of the date of Completion. All amounts owing
to third parties for the Tenant Improvement Costs have been paid in
full (other than contingent obligations for which adequate reserves
have been made).
(d) TENANT IMPROVEMENT PROGRESS INFORMATION. Lessee shall
furnish or cause to be furnished to Lessor or, if requested in lieu thereof,
Administrative Agent, upon request (but, so long as no Event of Default has
occurred and is continuing, not more than once per calendar month) on forms
approved by Administrative
23
Agent, such details concerning the progress of the Tenant Improvements as
Lessor or Administrative Agent, as applicable, shall reasonably require,
including: (i) the costs incurred to date and the percentage of Completion,
and (ii) copies of the Plan and Specifications and any modifications or
changes thereto.
(e) EXCESS CONSTRUCTION COSTS; REMAINING FUNDS. Lessee shall
be responsible for the payment of any costs or expenses to complete the Tenant
Improvements in excess of the Tenant Improvement Costs. On the Expiration Date,
any remaining funds in the Tenant Improvement Account after Lessee has been
reimbursed for those Tenant Improvement Costs and Transaction Expenses it has
actually incurred to that date (for which Lessee has not been previously
reimbursed), shall be automatically disbursed to Administrative Agent to be
distributed to the Participants as a repayment of a portion of the Lease Balance
in accordance with SECTION 5.3(B). Additionally, upon an Event of Default,
Administrative Agent shall have the right to withdraw any and all funds then on
deposit in the Deposit Account for distribution to the Participants as a
repayment of a portion of the Lease Balance in accordance with Section 5.3(g).
(f) PERMITTED INVESTMENTS. So long as no Event of Default has
occurred, the Administrative Agent may invest funds on deposit in the Tenant
Improvement Account in Permitted Investments in accordance with the requests of
Lessee so long as the Administrative Agent has first received an opinion of
counsel, in form and substance reasonably satisfactory to the Administrative
Agent, that the Administrative Agent will have a perfected security interest,
for the benefit of the Participants in the requested Permitted Investments.
Without affecting any other requirements or obligations under this Participation
Agreement with respect to the Tenant Improvement Account or such Permitted
Investments and, subject to the satisfaction of the foregoing opinion
requirement, the Administrative Agent may, and if requested by Lessee will, hold
title to the Permitted Investments, in its capacity as the Administrative Agent.
None of Administrative Agent, Lessor or any Participant shall bear any liability
for any losses on such investments or any penalty arising from the withdrawal of
any such funds, except as the result of acts of gross negligence or willful
misconduct on the part of such party. All income from investment in the Tenant
Improvement Account shall be taxable to the Lessee, and Administrative Agent
shall prepare and distribute to Lessee, as required, Form 1099 or other
appropriate Federal and state income tax forms with respect to such income.
Lessee agrees that the Tenant Improvement Account shall at all times be under
the sole dominion and control of the Administrative Agent.
ARTICLE VIII
24
REPRESENTATIONS
SECTION VIII.1. REPRESENTATIONS OF THE PARTICIPANTS. As of the date
of its execution of this Participation Agreement, each Participant represents
and warrants, severally and only as to itself, to the other Participants,
Lessor, the Administrative Agent, Lessee and Guarantor that:
(a) ERISA. Such Participant is not and will not be making its
Loans or funding Certificate Amounts hereunder, and is not performing its
obligations under the Operative Documents, with the assets of an "employee
benefit plan" (as defined in Section 3(3) of ERISA) which is subject to Title I
of ERISA or a "plan" (as defined in Section 4975(e)(1) of the Code).
(b) STATUS. Such Participant is a commercial bank, branch or
agency of a foreign bank or other similar financial institution, or an Affiliate
thereof.
(c) POWER AND AUTHORITY. Such Participant has the requisite
power and authority to enter into and perform its obligations under the
Operative Documents to which it is a party.
(d) LESSOR LIENS. There are no Lessor Liens attributable to
such Participant upon the Lease or the Leased Property.
(e) ORGANIZATION, ETC. Such Participant is a corporation or
banking association duly organized, validly existing and in good standing under
the laws of the State or jurisdiction of its creation.
(f) INVESTMENT. The Certificate or Note being acquired by such
Participant is being acquired by such Participant for investment and not with a
view to or in connection with the resale or distribution of such interest or any
part thereof, but without prejudice, however, to the right of such Participant
at all times to sell or otherwise dispose of all or any part of such interest
under a registration available under the Securities Act or under an exemption
from such registration available under the Securities Act, it being understood
that (subject to the Securities Act) the disposition by the undersigned of the
Certificate or Note to be purchased by such Participant shall, at all times,
remain entirely within its control.
(g) OFFER OF SECURITIES, ETC. Neither such Participant nor any
Person authorized to act on its behalf has, directly or indirectly, offered to
sell the Notes, the Certificates or any other similar securities (the sale or
offer of which would be
25
integrated with the sale or offer of the Notes or the Certificates), for sale
to, or solicited any offer to acquire any of the same from, any Person.
(h) NO REGISTRATION. Such Participant understands and
acknowledges that (1) neither the Notes and the Certificates nor the Guarantees
have been or will be registered under the Securities Act, in reliance upon the
exemption provided in Section 4(2) of the Securities Act, (2) neither the Notes
and the Certificates nor the Guarantees have been or will be registered or
qualified under the securities or "blue sky" laws of any jurisdiction, (3) the
Notes and the Certificates (including the Guarantees) may be resold (which
resale is not currently contemplated, or otherwise transferred only if so
registered or qualified or if an exemption from registration or qualification is
available, (4) none of Lessee, Lessor or the Administrative Agent is required to
register the Notes or the Certificates, and (5) any transfer must comply with
the provisions of the Operative Documents relating thereto. Such Participant
will comply with all applicable federal and state securities laws in connection
with any subsequent resale of the Notes or the Certificates held by it.
(i) INSTITUTIONAL INVESTOR. Such Participant is a
sophisticated institutional investor and is an "accredited investor" as defined
in paragraph (1), (2), (3) or (7) of Rule 501(a) of the Securities Act, and has
substantial knowledge and experience in financial and business matters and is
capable of evaluating the merits and risks of its investment in the Notes or the
Certificates (and the Guarantees) and is able to bear the economic risk of such
investment for an indefinite period of time. Such Participant has been given all
such information concerning the Notes and the Certificates (and the Guarantees),
the other Operative Documents, the Leased Property, Lessor, Lessee and Guarantor
as it has requested.
(j) LEGEND. Such Participant understands and acknowledges that
the Note or Certificate which it is acquiring will bear a legend as set forth in
the form of Note included in the Loan Agreement or the form of Certificate
included in the Trust Agreement, as applicable.
The making of any Loan or the advancing of any Certificate
Amount on the Advance Date shall constitute an affirmation by the subject
assignee or acquiring Participant of each of the preceding representations and
warranties.
SECTION VIII.2. REPRESENTATIONS OF LESSEE AND GUARANTOR. Each of
Lessee and Guarantor, jointly and severally, represents and warrants to each
of the other parties hereto as of the Document Closing Date and the Advance
Date that:
26
(a) CORPORATE EXISTENCE AND POWER. Each of Lessee and
Guarantor:
(i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation;
(ii) has the corporate power and authority, the legal right
and all governmental licenses, authorizations, consents and approvals
to own its assets, to lease the property (including the Leased
Property) it operates as lessee, to carry on its business and to
execute, deliver and perform its obligations under the Operative
Documents;
(iii) is duly qualified as a foreign corporation and is
licensed and in good standing under the laws of each jurisdiction where
its ownership, lease or operation of property or the conduct of its
business requires such qualification or license; and
(iv) is in compliance with all Requirements of Law;
except in each case referred to in CLAUSE (iii) or (iv) of this SECTION 8.2, to
the extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
(b) CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution,
delivery and performance by Lessee and Guarantor of this Participation Agreement
and each other Operative Document to which such Person is or will be party have
been duly authorized by all necessary corporate action and do not and will not:
(i) contravene the terms of any of Lessee's or Guarantor's
Organic Documents;
(ii) conflict with or result in any breach or
contravention of, or the creation of any Lien (other than
Permitted Liens) under, any document evidencing any obligations to
which Lessee or Guarantor is a party (including any indenture, loan
agreement, mortgage, deed of trust, contract or other agreement) or any
order, injunction, writ, decree or permit of any Governmental Authority
to which Lessee or Guarantor or any of such Person's property is
subject; or
(iii) violate any Applicable Law (including, without
limitation, Regulation U or Regulation X).
27
(c) GOVERNMENTAL AUTHORIZATION. No approval, consent,
exemption, authorization, or other action by or notice to, or filing with any
Governmental Authority or any other Person is necessary or required by or in
respect of Lessee or Guarantor in connection with the execution, delivery or
performance by, or enforcement against, Lessee or Guarantor, or the validity or
enforceability of any Operative Document.
(d) BINDING EFFECT. This Participation Agreement and each
other Operative Documents to which Lessee or Guarantor is a party have been or
will be duly executed and delivered on behalf of Lessee or Guarantor, as
applicable, and constitutes the legal, valid and binding obligation of Lessee or
Guarantor to the extent it is a party thereto, enforceable against such Person
in accordance with its respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors' rights generally or by equitable principles relating to
enforceability.
(e) LITIGATION. Except as set forth in SCHEDULE 7.2(e), there
are no actions, suits, proceedings, claims or disputes pending or, to the best
knowledge of Lessee and Guarantor, threatened or contemplated at law, in equity,
in arbitration or before any Governmental Authority against Lessee or Guarantor,
or any of their respective properties:
(i) which purport to affect or pertain to this
Participation Agreement or any other Operative Documents or
the Overall Transaction; or
(ii) as to which (either individually or in the aggregate)
there exists a substantial likelihood of an adverse determination,
which determination could reasonably be expected to have a Material
Adverse Effect. No injunction, writ, temporary restraining order or any
order of any nature has been issued by any court or other Governmental
Authority purporting to enjoin or restrain the execution, delivery or
performance of this Participation Agreement or any other Operative
Document, or directing that the Overall Transaction not be consummated
as herein or therein provided.
(f) NO DEFAULT. No Default or Event of Default exists or would
occur as a result of, or after giving effect to, the Advance or the Overall
Transaction. Neither Lessee nor Guarantor is in default under or with respect to
any contractual obligation in any respect which, individually or together with
all such defaults, could reasonably be expected to have a Material Adverse
Effect, or that would, if such default had occurred after the Document Closing
Date, create an Event of Default.
28
(g) ERISA COMPLIANCE. Except as specifically disclosed
in SCHEDULE 7.2(g),
(i) Each Plan is in compliance in all material respects with
the applicable provisions of ERISA, the Code and other federal or state
law. Each Plan which is intended to qualify under Section 401(a) of the
Code has received a favorable determination letter from the IRS and to
the best knowledge of Guarantor, nothing has occurred which would cause
the loss of such qualifications. Guarantor and each ERISA Affiliate has
made all required contributions to any Plan subject to Section 412 of
the Code, and no application for a funding waiver or an extension of
any amortization period pursuant to Section 412 of the Code has been
made with respect to any Plan.
(ii) There are no pending or, to the best knowledge of
Guarantor, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan which has resulted or
could reasonably be expected to result in a Material Adverse Effect.
There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(iii) (A) No ERISA Event has occurred or is reasonably
expected to occur; (B) the Pension Plans do not have aggregate Unfunded
Pension Liabilities in excess of $1,000,000; (C) neither Guarantor nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of
ERISA); (D) neither Guarantor nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability (and no event has occurred
which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Section 4201 or 4243 of ERISA with
respect to a Multiemployer Plan; and (E) neither Guarantor nor any
ERISA Affiliate has engaged in a transaction that could be subject to
Section 4069 or 4212(c) of ERISA.
(h) TITLE TO PROPERTIES. Each of Lessee and Guarantor has good
title in fee simple to, or a valid leasehold interest in, all real property
necessary or used in the ordinary conduct of its respective businesses, except
for such defects in title as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
29
(i) TAXES. Lessee and Guarantor have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or on their properties, income or assets
otherwise due and payable, expect those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against the Lessee or
Guarantor that would, if made, have a Material Adverse Effect.
(j) FINANCIAL CONDITION. (i) Each of (A) the audited
consolidated financial statements of Guarantor and its subsidiaries as of
December 31, 1999 and the related consolidated statements of income or
operations, shareholders' equity and cash flows for the fiscal year ended on
that date and (B) the unaudited consolidated financial statements of Guarantor
and its subsidiaries as of September 30, 2000 and the related consolidated
statements of income, shareholders' equity and cash flows for the period ended
on that date:
(x) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein;
(y) fairly present the financial position of
Guarantor and its subsidiaries as of the date thereof and
results of operations for the period covered thereby; and
(z) except as specifically disclosed in SCHEDULE
7.2(j), show in accordance with GAAP all material indebtedness and
other liabilities, direct or contingent, of Guarantor and its
consolidated subsidiaries as of the date thereof, including liabilities
for taxes, material commitments and contingent obligations.
(ii) Since December 31, 1999 there has been no Material
Adverse Effect.
(k) ENVIRONMENTAL MATTERS. (i) Except as specifically
disclosed in SCHEDULE 7.2(k), the ongoing operations of Lessee and Guarantor
comply in all respects with all Environmental Laws, except such noncompliance
which would not (if enforced in accordance with Applicable Law) result in
liability in excess of $1,000,000 in the aggregate.
(ii) Except as specifically disclosed in SCHEDULE 7.2(k)
Lessee and Guarantor have obtained all material licenses, permits,
authorization and registrations
30
required under any Environmental Law and necessary for their
respective ordinary course operations ("ENVIRONMENTAL PERMITS"),
all such Environmental Permits are in good standing and Lessee and
Guarantor are in compliance with all material terms and conditions
of such Environmental Permits.
(iii) Except as specifically disclosed in SCHEDULE 7.2(k),
none of Lessee, Guarantor, or any of their respective present property
or operations is subject to any outstanding written order from or
agreement with any Governmental Authority, nor subject to (I) any
judicial or docketed administrative proceeding, respecting any
Environmental Law, Environmental Claim or Hazardous Substance or (II)
any claim, proceeding or written notice from any Person regarding any
Environmental Law, Environmental Claim or Hazardous Substance.
(iv) Except as specifically disclosed in SCHEDULE 7.2(k),
there are no Hazardous Substance or other conditions or circumstances
exiting with respect to any property of Lessee or Guarantor, or arising
from operations prior to the Advance Date of Lessee or Guarantor that
would reasonably be expected to give rise to Environmental Claims with
a potential liability in excess of $5,000,000 in the aggregate for all
such conditions, circumstances and properties. In addition, to Lessee's
and Guarantor's knowledge, (I) neither Lessee nor Guarantor has any
underground storage tanks (x) that are not properly registered or
permitted under applicable Environmental Laws, or (y) that are leaking
or disposing of Hazardous Substance off-site, which in any such case
could reasonably be expected to have a Material Adverse Effect, and
(II) Lessee and Guarantor have met all material notification
requirements under Title III of CERCLA and all other Environmental
Laws.
(l) REGULATED ENTITIES. None of Lessee, Guarantor or any
Person controlling Lessee and Guarantor is an "Investment Company" within the
meaning of the Investment Company Act of 1940. Neither Lessee nor Guarantor is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, any state public utilities code,
or any other Federal or state statute or regulation limiting its ability to
incur Indebtedness.
(m) NO BURDENSOME RESTRICTIONS. Neither Lessee nor Guarantor
is a party to or bound by any Business Obligations, or subject to any
restriction in any charter or other organizational document, or any Requirement
of Law, which could reasonably be expected to have a Material Adverse Effect,
other than any Material
31
Adverse Effect arising as a result of any reduction in billable services
provided by Lessee or Guarantor or any termination of any customer service
agreement (in either case, by parties other than Lessee and Guarantor)
pursuant to any provision included in the Business Obligations.
(n) COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC. Lessee
and Guarantor own or are licensed or otherwise have the right to use all of the
patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective business and the Leased Property, without
infringing upon or violating the legal rights of any other Person. To the best
knowledge of Lessee and Guarantor, no material slogan or other advertising
device, product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by Lessee or Guarantor infringes
upon any rights held by any other Person. No claim or litigation regarding any
of the foregoing is pending or, to Lessee and Guarantor's knowledge, threatened,
and no patent, invention, device, application, principle or any statute, law,
rule, regulation, standard or code is pending or, to the knowledge of Lessee and
Guarantor, proposed, which, in either case, could reasonably be expected to have
a Material Adverse Effect.
(o) FULL DISCLOSURE. None of the representations or warranties
made by Lessee or Guarantor in the Operative Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of Lessee or Guarantor in connection with the Operative
Documents (including the offering and disclosure materials delivered by or on
behalf of Lessee and Guarantor to the Participants prior to the Document Closing
Date), contains any untrue statement of a material fact or omits any material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they are made, not misleading
as of the time when made or delivered.
(p) CHIEF EXECUTIVE OFFICES OF LESSEE. The Lessee's "place of
business" or "chief executive office" (if it has more than one place of
business), as such terms are used in Section 9-103(3) of the UCC, are located at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
(q) SOLVENCY. Each of Lessee and Guarantor is, and after the
making of the Advance and the consummation of the Overall Transaction will be,
Solvent.
32
(r) APPRAISAL DATA. Taken as a whole, the information provided
by Guarantor, Lessee and their Affiliates to the Appraiser was true and correct
in all material respects when provided, and when provided did not omit any
information known to Lessee, Guarantor or any such Affiliate regarding the
title, physical condition, or use of the Leased Property or any of their
Affiliates which Lessee or Guarantor or any of their Affiliates knew or should
reasonably have known was necessary to make the information provided not
materially misleading.
(s) UTILITIES. All water, sewer, electric, gas, telephone and
drainage facilities, all other utilities required to adequately service the
Leased Property for its intended use and means of access between the Facility
and public highways for pedestrians and motor vehicles will be available
pursuant to adequate permits (including any that may be required under
applicable Environmental Laws). No fire or other casualty has occurred. All
utilities serving the Leased Property, or proposed to serve the Leased Property
in accordance with the Plans and Specifications, are or will be located in, and
vehicular access to the Leased Property, including to the Facility, is provided
by, either public rights-of-way abutting the Leased Property or Appurtenant
Rights.
(t) LEASED PROPERTY. The contemplated use of the Leased
Property by Lessee and its agents, assignees, employees, lessees, licenses
and tenants will comply in all material respects with all Applicable Laws
(including, without limitation, all zoning and land use laws and
Environmental Laws) and Insurance Requirements. With respect to the Leased
Property, all material licenses, approvals, authorizations, consents, permits
(including, without limitation, building, demolition and environmental
permits, licenses, approvals, authorizations and consents), easements and
rights-of- way, including proof and dedication, required for (x) the use,
treatment, storage, transport, disposal or disposition of any Hazardous
Substance on, at, under or from the Leased Property, (y) construction of the
Tenant Improvements in accordance with the Plans and Specifications and (z)
the use, occupancy and operation of the Leased Property have either been
obtained from the appropriate Governmental Authorities having jurisdiction or
from private parties, as the case may be, or will be obtained from the
appropriate Governmental Authorities having jurisdiction or from private
parties, as the case may be, prior to commencing any such construction or use
and operation as applicable.
(u) FLOOD HAZARD AREAS. No portion of the Leased Property is
located in an area identified as a special flood hazard area by the Federal
Emergency Management Agency or other applicable Governmental Authority. If the
Leased Property is
33
located in an area identified as a special flood hazard area by the Federal
Emergency Management Agency or other applicable Governmental Authority, then,
to the extent required by Applicable Laws, flood insurance has been obtained
by Lessee in accordance with the National Flood Insurance Act of 1968, as
amended.
(v) OWNERSHIP, NATURE, CONDITION AND USE OF THE LEASED
PROPERTY.
(i) Lessee has the contractual right to acquire the fee
interest in the Leased Property free and clear of all liens other than
Permitted Liens and has the contractual right to, and on the
Acquisition Date will transfer such acquisition rights to Lessor. None
of Guarantor, Lessee or any of their Affiliates is a party to any
contract or agreement to sell, transfer or encumber any interest in the
Leased Property or any part thereof, other than pursuant to this
Participation Agreement and the Lease.
(ii) The Leased Property is located in the State of Colorado,
County of ▇▇▇▇▇▇▇. The Leased Property and any present use and
presently anticipated future use thereof by Lessee and its agents,
assignees, employees, invitees, lessees, licensees and tenants comply
in all material respects with all Applicable Laws (including zoning and
land use laws and Environmental Laws), except for such instances of
non- compliance that would not have, individually or in the aggregate,
a Material Adverse Effect, and Insurance Requirements. No notices,
complaints or orders of violation or non-compliance or liability have
been issued or, to the best knowledge of Lessee and Guarantor,
threatened by any Person with respect to the Leased Property or the
present or intended future use thereof, except for such violations and
instances of non-compliance as could not have, individually or in the
aggregate, a Material Adverse Effect, and neither Lessee nor Guarantor
is aware of any circumstances which could give rise to the issuance of
any such notices, complaints or orders.
(w) PERFECTION OF SECURITY INTEREST; FILINGS. The Lease
constitutes an enforceable, first priority lien of record and perfected security
interest of record in Lessee's interest in the Leased Property in favor of
Lessor, subject to Permitted Liens, as against all Persons, including Lessee and
its creditors. Except for the filings and recordings listed in SCHEDULE 6.1(j)
(which filings or recordings, or arrangements therefor meeting the requirements
specified herein, shall have been duly made on or before the Advance Date
(including the payment of any fees or taxes relating to any of the foregoing)),
no other filings or recordings
34
are necessary to validly and effectively convey to Lessor good and marketable
fee simple title in the Leased Property, and Administrative Agent has a valid
and enforceable first priority Lien for the benefit of the Participants on
the Leased Property and the other TeleTech Collateral free and clear of all
other Liens, other than Permitted Liens. Neither Lessee, Guarantor nor any of
their Affiliates has created, consented to, incurred or suffered to exist any
Lien upon the Leased Property, other than Permitted Liens.
(x) OFFER OF SECURITIES, ETC. Neither Lessee or Guarantor, nor
any Person authorized to act on behalf of either of them, has directly or
indirectly offered the Notes or the Certificates (including the related
Guarantees) or any other similar securities (the sale or offer of which would be
integrated with the sale or offer of the Notes, the Certificates or the
Guarantees), for sale to, or solicited any offer to acquire any of the same
from, any Person other than the Participants and other "accredited investors"
(as defined in the Regulation D of the SEC), each of whom was offered a portion
thereof at private sale for investment.
SECTION VIII.3. REPRESENTATIONS OF LESSOR. The Bank, in its
individual capacity and not as Lessor (except to the extent specifically
provided for below), represents and warrants to each of the other parties
hereto as follows:
(a) CHIEF EXECUTIVE OFFICE. The Bank's chief executive office
or place of business (if it has only one place of business) and the place where
the documents, accounts and records relating to the Overall Transaction are kept
are located at its address set forth in SCHEDULE III.
(b) DUE ORGANIZATION, ETC. The Bank is a national banking
association duly organized and validly existing in good standing under the laws
of the United States and has full corporate power and authority to execute,
deliver and perform its obligations: (i) in its individual capacity under the
Trust Agreement and, to the extent it is a party hereto in its individual
capacity, this Participation Agreement, and (ii) acting as Lessor under the
Trust Agreement, under this Participation Agreement and each other Operative
Document to which it is or will be a party as Lessor.
(c) DUE AUTHORIZATION; ENFORCEABILITY, ETC. This Participation
Agreement and each other Operative Document to which the Bank is or will be a
party have been or will be (to the extent it is to be a party thereto in its
individual capacity), duly authorized, executed and delivered by or on behalf of
the Bank (in its individual capacity) and are, or upon execution and delivery
will be, legal, valid and binding obligations of the Bank (in
35
its individual capacity), enforceable against it in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting creditors' rights generally
and by general equitable principles. The Operative Documents to which Lessor
is a party constitute the legal, valid and binding obligation of Lessor
(acting solely as Lessor under the Trust Agreement, and not in its individual
capacity), except as such enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally
and by general equitable principles.
(d) NO CONFLICT. The execution and delivery by (i) the Bank,
in its individual capacity, of the Trust Agreement and, to the extent it is a
party hereto in its individual capacity, this Participation Agreement and (ii)
the Bank, in its capacity as Lessor, of each Operative Document to which Lessor
is or will be a party, are not and will not be, and the performance by the Bank,
in its individual capacity or as Lessor, as the case may be, of its obligations
under each are not and will not be, inconsistent with the articles of
association or by-laws of the Bank, do not and will not contravene any
Applicable Laws of the United States of America or the State of Connecticut
relating to the banking or trust powers of the Bank and do not and will not
contravene any provision of, or constitute a default under, any indenture,
mortgage, chattel mortgage, deed of trust, lease, conditional sales contract,
loan or credit arrangement or other agreement or instrument to which the Bank is
a party or by which it or its properties may be bound or affected.
(e) NO APPROVALS, ETC. Neither the execution and delivery by
the Bank in its individual capacity or (assuming the due authorization,
execution and delivery of the Trust Agreement by each Certificate Holder) as
Lessor, as the case may be, of any of the Operative Documents to which it is a
party requires the consent or approval of, or the giving of notice to or
registration with, or the taking of any other action in respect of, the United
States of America or the Governmental Authority of Connecticut governing its
banking practices.
(f) LESSOR LIENS. The Leased Property is free and clear of all
Lessor Liens attributable to the Bank and no act or omission by it has occurred
which would give rise to a Lessor Lien attributable to it.
(g) LITIGATION. There is no action, proceeding or
investigation pending or, to the best knowledge of the Bank, threatened against
the Bank or Lessor which questions the validity
36
of any of the Operative Documents, and there is no action, proceeding or
investigation pending or, to the best knowledge of the Bank, threatened which
is likely to result, either in any case or in the aggregate, in any material
adverse change in the ability of the Bank or Lessor to perform its
obligations under the Operative Documents to which it is a party.
(h) SECURITIES ACT. Neither the Bank nor Lessor nor any
Person authorized to act on its behalf has offered or sold any interest in
the Notes or Certificates (including the Guarantees), or in any similar
security relating to the Leased Property, or in any security, the offering of
which for the purposes of the Securities Act would be deemed to be part of
the same offering as the offering of the aforementioned securities, to, or
solicited any offer to acquire any of the same from, any Person other than,
in the case of the Notes, the Lenders, and in the case of the Certificates,
the Certificate Holders, each of whom was offered a portion thereof at
private sale for investment, and neither the Bank nor Lessor nor any Person
authorized to act on its behalf will take any action which would require
registration of the offer or sale of any interest in the Notes or
Certificates (or the Guarantees) pursuant to the provisions of Section 5 of
the Securities Act or any state securities laws.
SECTION VIII.4. REPRESENTATIONS AND WARRANTIES OF ADMINISTRATIVE
AGENT. First Security Bank, National Association, in its individual capacity
and not as Administrative Agent (except as specifically provided for below),
hereby represents and warrants to each of the other parties hereto that:
(a) ORGANIZATION AND AUTHORITY. It is duly organized as a
national banking association under the laws of the United States and has the
power and authority to enter into and perform its obligations under the
Operative Documents.
(b) AUTHORIZATION; BINDING EFFECT. The Operative Documents to
which Administrative Agent is or will be a party have been or will be, on the
date required to be delivered hereby, duly authorized, executed and delivered by
Administrative Agent, and this Participation Agreement is, and such other
Operative Documents are, or, when so executed and delivered by Administrative
Agent will be, valid, legal and binding agreements of Administrative Agent,
enforceable against Administrative Agent in accordance with their respective
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity.
37
(c) NON-CONTRAVENTION. Neither the execution and delivery by
Administrative Agent of the Operative Documents to which it is or will be a
party, either in its individual capacity, or as Administrative Agent, or both,
nor compliance with the terms and provisions thereof, conflicts with, results in
a breach of, constitutes a default under (with or without the giving of notice
or lapse of time or both), or violates any of the terms, conditions or
provisions of: (i) its charter documents or bylaws; (ii) any bond, debenture,
note, mortgage, indenture, agreement, lease or other instrument to which it is
now a party or by which it or its property, either in its individual capacity,
or as Administrative Agent, or both, is bound or affected, where such conflict,
breach, default or violation would be reasonably likely to materially and
adversely affect the ability of Administrative Agent, either in its individual
capacity, or as Administrative Agent, or both, to perform its obligations under
any Operative Document to which it is or will be a party, either in its
individual capacity, or as Administrative Agent, or both; or (iii) any of the
terms, conditions or provisions of any law, rule, regulation, order,
injunction or decree of any federal banking or Utah Governmental Authority
applicable to it in its individual capacity or as Administrative Agent, or both,
where such conflict, breach, default or violation would be reasonably likely to
materially and adversely affect the ability of Administrative Agent, either in
its individual capacity, or as Administrative Agent, or both, to perform its
obligations under any Operative Document to which it is or will be a party.
(d) ABSENCE OF LITIGATION, ETC. There is no litigation
(including derivative actions), arbitration or governmental proceedings pending
or, to the best knowledge of Administrative Agent, threatened against it which
would be reasonably likely to adversely affect Administrative Agent's ability to
perform its obligations under the Operative Documents to which it is or will be
a party.
(e) GOVERNMENTAL APPROVALS. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required by Administrative Agent in connection with the Overall
Transaction, except those which have been made or obtained or will be obtained
on a timely basis in the ordinary course of Administrative Agent's business, and
which are in full force and effect.
ARTICLE IX
COVENANTS OF LESSEE AND GUARANTOR
38
SECTION IX.1. GENERAL COVENANTS OF LESSEE AND GUARANTOR. Each of
Lessee and Guarantor, jointly and severally, covenants and agrees with
Lessor, Administrative Agent and each of the Participants that Lessee and
Guarantor shall comply with the following provisions of this SECTION 9.1,
applicable to it, it being understood that the following covenants are in
addition to, and not by way of limitation of, any covenant set forth in the
Lease or any other Operative Document to which Lessee or Guarantor is a party.
(a) FURTHER ASSURANCES. Each of Lessee and Guarantor, at its
cost and expense, will (i) cause to be promptly and duly taken, executed,
acknowledged and delivered all such further acts, documents and assurances as
Lessor, Administrative Agent or any Participant reasonably may request from time
to time in order to carry out more effectively the intent and purposes of this
Participation Agreement and the other Operative Documents and the Overall
Transaction; and (ii) cause all financing statements (including precautionary
financing statements), fixture filings, mortgages and other documents, to be
recorded or filed at such places and times in such manner, and will take all
such other actions or cause such actions to be taken, as may be necessary or as
may be reasonably requested by the Administrative Agent, any Participant or
Lessor in order to establish, preserve, protect and perfect the title and Lien
of Lessor and/or Administrative Agent in the Leased Property and Lessor's,
Administrative Agent's and/or any Participant's rights under this Participation
Agreement and the other Operative Documents.
(b) LIENS. Lessee shall not, by any act or omission to act,
incur or suffer to exist any Lien on the Leased Property other than Permitted
Liens.
(c) CHANGE OF NAME OR ADDRESS. Lessee and Guarantor shall each
provide Lessor and Administrative Agent thirty (30) days' prior written notice
of any change in name, or the address of its chief executive office (or place of
business if it has only one place of business) or the office where it keeps its
records concerning its accounts and the Leased Property.
(d) FINANCIAL AND OTHER INFORMATION. Lessee and Guarantor
shall furnish, or cause to be furnished, to the Administrative Agent, in form
and detail reasonably satisfactory to the Administrative Agent, with sufficient
copies for Lessor and each Participant:
(i) As soon as available, but not later than the earlier of
(i) five (5) days after the filing thereof with the SEC and (ii) 120
days after the end of each fiscal year (commencing
39
with the fiscal year ended December 31, 2000), a copy of the audited
consolidated balance sheet of Guarantor and its subsidiaries as of
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 ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP or another nationally-recognized independent public
accounting firm ("INDEPENDENT AUDITOR") which report 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. Such opinion shall
not be qualified or limited because of a restricted or limited
examination by the Independent Auditor of any material portion of
Guarantor's or any Subsidiary's records.
(ii) As soon as available, but not later than the earlier of
(i) five (5) days after the filing thereof with the SEC and (ii) 45
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
Guarantor and its subsidiaries as of the end of such quarter and the
related consolidated statements of income, shareholders' equity and
cash flows for the period commencing on the first day and ending on the
last day of such quarter, setting forth in each case in comparative
form the figures for the previous fiscal year and certified by a
Responsible Officer as fairly presenting, in accordance with GAAP
(subject to ordinary, good faith year-end audit adjustments), the
financial position and the results of operations of Guarantor and its
subsidiaries.
(iii) Concurrently with the delivery of the financial
statements referred to in SECTION 9.1(d)(i), a certificate of the
Independent Auditor stating that in making the examination necessary
therefor no knowledge was obtained of any Default or Event of Default,
except as specified in such certificate.
(iv) Concurrently with the delivery of the financial
statements referred to in SECTION 9.1(d)(i) and (d)(ii) a certificate
of the chief financial officer of Guarantor, in the form of EXHIBIT H
hereto, (A) demonstrating, in reasonable detail and with the supporting
calculations, compliance with the financial covenants set forth in
SECTION 9.2 or in the Credit Agreement to the extent incorporated by
reference herein at SECTION 9.3 and (B) stating that no Event of
Default or Default has occurred and is continuing, setting forth
details of such Event of Default or Default and the action that Lessee
or Guarantor, as applicable, have taken and proposes to take with
respect thereto;
40
(v) Concurrently with the delivery of the financial statements
referred to in SECTION 9.1(d)(i), (i) a consolidating income statement
for such year (which need not be audited), and (ii) a budget for the
next succeeding fiscal year.
(vi) Concurrently with the delivery of the financial
statements referred to in SECTION 9.1(d)(ii), a consolidating income
statement for such quarter.
(vii) Promptly, copies of all financial statements and reports
that Guarantor sends to its shareholders and within five (5) days of
filing with the SEC, copies of all financial statements and regular,
periodic or special reports (including Forms 10K, 10Q and 8K) that
Guarantor or any subsidiary may make to, or file with, the SEC.
(viii) Promptly, such additional information regarding the
business, financial or corporate affairs of Guarantor or any subsidiary
as the Administrative Agent, at the request of any Participant, may
from time to time reasonably request.
(ix) Within five Business Days after the occurrence of any
event which constitutes an Event of Default or Default, if such
occurrence is then continuing notice of such occurrence together with a
statement by a Responsible Officer of Guarantor stating the facts with
respect thereto and the actions that the Lessee or Guarantor, as
applicable, have taken or proposed to take with respect thereto;
(x) As soon as possible and in any event within five days
after the commencement of litigation against the Lessee, Guarantor, or
any of Guarantor's Subsidiaries, or the receipt of a notice of default
by the Lessee or Guarantor or any of Guarantor's Subsidiaries, that
could reasonably be expected to have a Material Adverse Effect, notice
of such litigation or notice of default describing in reasonable detail
the facts and circumstances concerning such litigation or default and
Lessee's, Guarantor's or Guarantor's Subsidiary's, as applicable,
proposed actions in connection therewith; and
(xi) Such other information respecting the condition or
operations, financial or otherwise, of Lessee, Guarantor or any
Subsidiary of Guarantor as any Participant through the Administrative
Agent may from time to time reasonably request.
41
(e) RATES. With respect to each determination of Interest and
Yield pursuant to this Participation Agreement, the Loan Agreement, the Trust
Agreement and Basic Rent under the Lease, Lessee acknowledges and agrees to
Sections 2.5, 2.6 and 2.7 of the Loan Agreement, Sections 2.4 and 2.5 of the
Trust Agreement, and SECTIONS 4.1, 4.2 and 4.3 (a) hereof and the applicable
definitions in APPENDIX 1.
(f) OWNERSHIP INTEREST IN LESSEE. Guarantor shall cause Lessee
to remain a directly or indirectly wholly-owned Subsidiary of Guarantor.
SECTION IX.2. FINANCIAL COVENANTS.
(a) DEBT TO EBITDAR RATIO. Guarantor shall not, as of the last
day of any fiscal quarter, permit its Debt to EBITDAR Ratio to be greater than
3.0 to 1.0.
(b) FIXED CHARGE COVERAGE RATIO. Guarantor shall not, as of
the last day of any fiscal quarter, permit its ratio of (a) EBITDAR for the
period of four concurrent fiscal quarters than ending to (b) Fixed Charges for
such four fiscal quarter period to be less than 2.5 to 1.0.
(c) QUARTERLY PROFITABILITY. Guarantor shall have Net Income
for each fiscal quarter of at least $1.00.
(d) LIQUID ASSETS. Guarantor shall not, at any time, permit
its aggregate Liquid Assets to be less than $50,000,000; provided, however, upon
payment in full of the (i) Aggregate Lease Amounts (as defined in the
Construction Agency Agreement) pursuant to SECTION 3.5(c) of the Construction
Agency Agreement, or (ii) Gross Proceeds and Prepaid Rent (as such terms are
defined in the Construction Agency Agreement) pursuant to SECTION 3.5(a) of the
Construction Agency Agreement, Guarantor shall not, at any time thereafter,
permit its aggregate Liquid Assets to be less than $25,000,000.
SECTION IX.3. CREDIT AGREEMENT COVENANTS. Lessee will perform, comply
with and be bound by, for the benefit of Lessor and each Participant, each of
its agreements, covenants and obligations contained in Articles VI, VII and VIII
(other than Sections 6.01, 6.02, 6.03(a), 6.12, 6.13, 7.16, 7.17 and 7.18) of
the Credit Agreement (together with the related definitions and ancillary
provisions) as in effect on the date hereof. The above-specified provisions of
the Credit Agreement are incorporated herein by reference and will be deemed to
continue in effect for the benefit of the Lessor, Administrative Agent and the
Participants until the Expiration Date, without limiting the foregoing, whether
or not the
42
Credit Agreement or any Commitment thereunder remains in effect or the
"Obligations" (as that term is therein defined in the Credit Agreement) are
paid and discharged. For purposes of the foregoing, references to the
provisions of the Credit Agreement incorporated herein by reference (i) to
"Company" shall refer to Guarantor, (ii) "Lender" or "Lenders" shall refer to
Participant or Participants respectively, (iii) "Administrative Agent" shall
refer to Administrative Agent, and (iv) "Agreement" shall refer to this
Participation Agreement.
SECTION IX.4. COVERAGE COVENANT.
(a) PLEDGE OF CONTRACT RIGHTS. In connection with certain
service contracts (the "Service Contracts") between Lessee, Guarantor or any of
their Affiliates and any one of the Top Ten Customers listed in a certified side
letter which Lessee shall deliver to Administrative Agent and the Participants
prior to the Document Closing Date (which list of Top Ten Customers shall be
updated and redelivered to Administrative Agent and the Participants by Lessee
at the end of each calendar year during the Term), as additional security for
Lessee's performance under the Operative Documents, Lessee and Guarantor hereby
pledge and grant a security interest in favor of Administrative Agent (on behalf
of the Participants) in all of Lessee's and Guarantor's (or their Affiliate's)
rights in and to any termination, cancellation or similar fees or any liquidated
damages payable to Lessee, Guarantor, or any of their Affiliates under the
Service Contracts in connection with the early termination or cancellation, for
any reason, of any such Service Contracts. Lessee shall deliver, and shall cause
Guarantor and any of their Affiliates to deliver, any and all necessary UCC
financing statements (and such other documentation reasonably requested by the
Participants) to be delivered to Administrative Agent for purposes of perfecting
Administrative Agent's security interest in the Service Contract rights set
forth above.
(b) PLEDGE OF CASH COLLATERAL. In addition, upon early
termination or cancellation, for any reason, of any of the Service Contracts,
upon receipt thereof, Lessee, Guarantor or their Affiliate shall pledge as cash
collateral, as additional security for Lessee's performance under the Operative
Documents, an amount equal to the termination or cancellation fee or payment
provided for in the applicable Service Contract, or, if such amount is not so
specified in the applicable Service Contract, the amount of any termination or
cancellation fee or payment paid (as a result of negotiation, litigation,
settlement or otherwise) in accordance with the terms of such Service Contract,
which amount shall be immediately deposited into the Deposit Account referred to
in SECTION 9.5. The amount to be pledged by Lessee shall be net of
43
any reasonable out-of-pocket expenses incurred by Lessee, Guarantor or their
Affiliate, as applicable, directly relating to the termination of the
services under such Service Contract so long as such termination does not
result from a breach or failure to act by such Lessee, Guarantor or
Affiliate. Such cash collateral will be released upon Lessee, Guarantor or
their Affiliate, as applicable, entering into another service contract with
aggregate revenues at least equal to or greater than the aggregate revenues
payable under the terminated contract. Notwithstanding any of the foregoing
to the contrary, Lessee shall not be required to deposit or pledge any
applicable termination payments in connection with an early termination or
cancellation of any Service Contract where the amount of such termination or
cancellation payment is less than $1,000,000.
SECTION IX.5. DEPOSIT ACCOUNT. (a) Upon early termination, for any
reason, of any Service Contract between Lessee, Guarantor or their Affiliate and
any one of the Top Ten Customers, Lessee shall establish with Administrative
Agent and thereafter maintain at all times during the Lease Term a deposit
account (the "DEPOSIT ACCOUNT"). The amounts deposited into and held in the
Deposit Account from time to time in accordance with the provisions of SECTION
9.4 shall constitute cash collateral for Lessee's obligations under the
Operative Documents. So long as no Event of Default has occurred, the
Administrative Agent may invest funds on deposit in the Deposit Account in
Permitted Investments in accordance with the requests of Lessee so long as the
Administrative Agent has first received an opinion of counsel, in form and
substance reasonably satisfactory to the Administrative Agent, that the
Administrative Agent will have a perfected security interest, for the benefit of
the Participants in the requested Permitted Investments. Without affecting any
other requirements or obligations under this Participation Agreement with
respect to the Deposit Account or such Permitted Investments and, subject to the
satisfaction of the foregoing opinion requirement, the Administrative Agent may,
and if requested by Lessee will, hold title to the Permitted Investments, in its
capacity as the Administrative Agent. None of Administrative Agent, Lessor or
any Participant shall bear any liability for any losses on such investments or
any penalty arising from the withdrawal of any such funds, except as the result
of acts of gross negligence or willful misconduct on the part of such party. All
income from investment in the Deposit Account shall be taxable to the Lessee,
and Administrative Agent shall prepare and distribute to Lessee, as required,
Form 1099 or other appropriate Federal and state income tax forms with respect
to such income. Except as expressly provided herein, Lessee shall have no right
to withdrawals of amounts in the Deposit Account. No amounts shall be deposited
into the Deposit Account unless and until (and at all times thereafter)
44
Administrative Agent, for the benefit of the Participants, shall have a
perfected, first priority security interest in the Deposit Account and the
Permitted Investments, and Administrative Agent shall have received, at Lessee's
expense, an opinion, in form and substance satisfactory to Administrative Agent,
as to the perfection of such security interest. Lessee agrees that the
Deposit Account shall at all times be under the sole dominion and control of the
Administrative Agent.
(b) Upon the termination of the Lease, provided that all amounts
payable by Lessee hereunder or under the other Operative Documents have been
paid in full, any amounts remaining in the Deposit Account shall be released to
Lessee. Without affecting Administrative Agent's or any Participant's rights in
the Deposit Account or the amount on deposit therein, Lessee may direct
Administrative Agent or Participant to apply any funds to any Obligation of
Lessee, including the obligation to pay any amounts under the Operative
Documents.
SECTION IX.6. ADDITIONAL OPINIONS. 5 days to do opinion regarding
Holdings;
___ days to have Lessee cause to be delivered, at their exp, an opin, in form
suff, regarding custom rems. If can get, will coop to adjust Op Docs to bring in
any other custom rems.(a) Upon early termination, for any reason, of any Service
Contract between Lessee, Guarantor
ARTICLE X
OTHER COVENANTS AND AGREEMENTS
SECTION X.1. COVENANTS OF THE PARTICIPANTS, THE ADMINISTRATIVE AGENT
AND THE BANK.
(a) LESSOR LIENS. Each of the Participants (severally and not
jointly with any other Participants), the Administrative Agent and the Bank
hereby agrees that so long as this Participation Agreement is in effect it:
(i) will not create, incur, assume or suffer to exist any
Lessor Lien attributable to it upon the Lease or the Leased Property
(other than as contemplated by any of the Operative Documents); and
(ii) will remove any Lessor Lien created or incurred by it and
use its best efforts to remove any Lessor Lien attributable to it
assumed or suffered to exist by it upon the Lease or the Leased
Property (other than the Deed of Trust and such other Liens as are
contemplated by any of the Operative
45
Documents); PROVIDED, HOWEVER, that any action taken pursuant to
this CLAUSE (ii) shall not limit Lessee's rights or remedies under
any of the Operative Documents. In the event of any Lessor Lien
attributable to Bank, in addition to complying with its obligations
under this CLAUSE (ii), Bank will cause restitution to be made to
the Trust Estate in the amount of any diminution of the value
thereof as a result of such Lessor Lien.
(b) TRUST AGREEMENT. Without prejudice to any right under the
Trust Agreement of Bank to resign as Lessor, or the Certificate Holders' rights
under the Trust Agreement to remove Lessor, each of the Certificate Holders
hereby agrees with Lessee (so long as no Event of Default shall have occurred
and be continuing), the Lenders and the Administrative Agent (i) not to
terminate or revoke the trust created by the Trust Agreement, except as
permitted by the Trust Agreement, prior to the later of the Expiration Date or
the payment in full of the obligations under the Notes and Certificates, (ii)
not to amend, supplement, terminate or revoke or otherwise modify any provision
of the Trust Agreement prior to the Expiration Date in such a manner as to
materially and adversely affect the rights of any such party, (iii) except as
otherwise expressly authorized under the Operative Documents, not to withdraw
from the Trust Estate any funds other than amounts payable to it by
Administrative Agent as distributions of Basic Rent and Supplemental Rent
(including Excepted Payments) without the prior written consent of each such
party and (iv) to comply with all of the terms of the Trust Agreement applicable
to it, the nonperformance of which would adversely affect such party.
(c) SUCCESSOR CERTIFICATE TRUSTEE. Lessor or any successor may
resign or be removed by the Participants as Certificate Trustee, a successor
Certificate Trustee may be appointed, and a corporation may become Lessor under
the Trust Agreement, only in accordance with the provisions of the Trust
Agreement. Notwithstanding anything to the contrary contained in this
Participation Agreement or the Trust Agreement, so long as no Event of Default
shall be continuing, the appointment of a successor Certificate Trustee shall be
subject to the consent of Lessee (such consent not to be unreasonably withheld
or delayed).
(d) INDEBTEDNESS; OTHER BUSINESS. Bank agrees that it, in its
capacity as Lessor, shall not, on behalf of the Trust, contract for, create,
incur or assume any Indebtedness, or enter into any business or other activity,
other than pursuant to or under the Operative Documents and, for the benefit of
Lessee, Administrative Agent and the Lenders, Bank agrees in such capacity to be
bound by Section 1.2(b) and Article III of the Trust Agreement.
46
(e) CHANGE OF PRINCIPAL PLACE OF BUSINESS. Bank agrees that
it, in its capacity as Lessor, shall give prompt notice to the Certificate
Holders, Lessee and Administrative Agent, if Lessor's principal place of
business or chief executive office (if it has more than one place of business),
or the office where the records concerning the accounts or contract rights
relating to the Overall Transaction are kept, shall cease to be located at the
address in the State of Connecticut set forth on SCHEDULE III, or if it shall
change its name or identity.
(f) ACCEPTANCE OF PROVISIONS OF LEASE. The Participants, the
Administrative Agent and Lessor hereby acknowledge and accept the provisions of
Sections 13.4 and 21.1 of the Lease.
(g) DEPRECIATION. Prior to the Expiration Date and during the
continuance of the Sale Option Period, neither Lessor nor any Participant shall
claim any federal or state tax attributes or benefits (including depreciation)
relating to the Leased Property unless required to do so by an appropriate
taxing authority or after a clearly applicable change in Applicable Laws or as a
protective response to a proposed adjustment by a Governmental Authority;
PROVIDED, HOWEVER, that if an appropriate taxing authority shall require Lessor
or any Participant to claim any such federal or state tax attributes or
benefits, such Person shall promptly notify Lessee thereof and shall permit
Lessee to contest such requirement in a manner similar to the contest rights
provided in, and subject to any applicable limitation to a contest contained in,
SECTION 13.5(b).
(h) INSOLVENCY PROCEEDINGS. Each of the Participants, Lessor,
in its individual capacity, and the Administrative Agent, in its respective
individual capacity, and Lessee covenants as to itself, not jointly with any
other Person, that it shall not (i) commence any action, proceeding or other
case with respect to Lessor under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, arrangement, winding up, liquidation, dissolution, composition
or other relief with respect to indebtedness, (ii) seek appointment of a
receiver, trustee, custodian or other similar official with respect to Lessor
and for all or any substantial benefit of the creditors of Lessor, or (iii) take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in this CLAUSE (i), except in each
case, as expressly permitted pursuant to the Loan Agreement upon the occurrence
of a Loan Event of Default.
47
(i) RELEASE OF DOCUMENTS. Administrative Agent hereby agrees
that, upon a sale of the Leased Property pursuant to Section 20.1 of the Lease
and payment of all amounts due and owing from Lessee under the Operative
Documents or repayment in full of all Loans and Certificate Amounts and all
other amounts due and owing from Lessee under the Operative Documents to
Administrative Agent and the Participants, Administrative Agent shall promptly
execute and deliver to Lessee a release of the Deed of Trust and releases of all
other Liens created by the Operative Documents, and termination statements for
any financing statements relating to the Leased Property which are then of
record naming Administrative Agent as secured party or assignee thereof.
ARTICLE XI
REPLACEMENT OF PARTICIPANTS
SECTION XI.1. REPLACEMENT OF PARTICIPANTS. Lessee or Arranger, acting
at the direction of the Required Participants and with the approval of Lessee,
may replace (a) any Certificate Holder or any Lender that breaches its
obligation under SECTION 3.1 or 3.2, as the case may be, to fund a Certificate
Amount or make a Loan, or (b) any Certificate Holder or Lender with respect to
which, (i) the right to pay Interest or Yield by reference to the LIBO Rate
shall be suspended under SECTION 14.1 or 14.2, or (ii) there are or would be any
claim for reimbursement or compensation under SECTION 14.3(a) or 14.5.
SECTION XI.2. COOPERATION. Administrative Agent and Lessor hereby agree
to cooperate with Lessee, at Lessee's sole cost and expense if Lessee is acting
pursuant to SECTION 11.1, in Lessee's efforts to arrange one or more Replacement
Participants as contemplated by this SECTION 11.2.
ARTICLE XII
TRANSFERS OF PARTICIPANTS' INTERESTS
SECTION XI.1. ASSIGNMENTS.
(a) All or any part of the interest of any Lender in, to or
under this Participation Agreement, the other Operative Documents, the Leased
Property or the Notes may be assigned or transferred by such Lender at any time
to any Person; PROVIDED, HOWEVER, that (i) each assignment or transfer shall
comply with all applicable securities laws; (ii) each assignment or transfer
shall consist of a transfer of equivalent portions of such Lender's Notes
and equivalent portions of such Lender's rights and obligations under the Loan
Agreement; (iii) unless both parties to the
48
assignment are Participants immediately prior to giving effect to the
assignment, each assignment or transfer of Loans shall be in a minimum
aggregate amount of $10,000,000 (or if less, the entire amount of such
Participant's Commitment) and $1,000,000 integral multiples in excess thereof
(or such Participant's entire Commitment); (iv) each such assignment shall be
to an Eligible Assignee; (v) unless the assignee or transferee is a then
existing Participant, or a then existing lender under the Credit Agreement,
or an Event of Default has occurred and is continuing, the transferee or
assignee shall be a Person consented to in writing by Lessee, such consent
not to be unreasonably withheld or delayed; (vi) Administrative Agent shall
have received from the assignee/transferee or the assignor/transferor a
transfer fee in the amount of $2,500; and (vii) each assignee or transferee
shall (A) comply, as of the date of the transfer, with the delivery
requirements of SECTION 12.3(a); (B) acknowledge in writing, addressed and
delivered to each of the Persons then party to this Participation Agreement,
that the obligations to be performed from and after the date of such transfer
or assignment under this Participation Agreement and all other Operative
Documents are its obligations, including the obligations imposed by this
SECTION 12.1(a) (and the transferor and transferee Participant shall deliver
to Lessee, Administrative Agent and Lessor an Assignment Agreement, in
substantially the form of EXHIBIT I and an Investor's Letter in substantially
the form of SCHEDULE II to EXHIBIT I, each executed by the assignee or
transferee); and (C) represent and warrant to Lessor, Administrative Agent,
each Participant and Lessee in writing each of the representations and
warranties as set forth in SECTION 8.1 and that:
(w) it has the requisite power and authority to accept
such assignment or transfer;
(x) it will not transfer any Note unless the proposed
transferee makes the foregoing representations and covenants;
(y) it will not take any action with respect to such
Note that would violate any applicable securities laws; and
(z) it will not assign or transfer any interest in its
Note except in compliance with this SECTION 12.1.
Any transfer or assignment made in violation of the above requirements shall not
be effective against the other parties to this Participation Agreement until
such requirements are satisfied.
(b) Any Certificate Holder may assign or transfer all or any
part of its interest in, to and under this Participation Agreement, the other
Operative Documents and the Leased Property at any time to any Person; PROVIDED,
HOWEVER, that (i) unless the
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assignee or transferee is a then existing Participant or a then existing
lender under the Credit Agreement or an Event of Default has occurred and is
continuing, the assignee or transferee shall be a Person consented to in
writing by Lessee, such consent not to be unreasonably withheld or delayed;
(ii) each such assignment shall be of a constant, and not a varying,
percentage of all such rights and obligations, (iii) unless both parties to
the assignment are Participants immediately prior to giving effect to the
assignment, the amount of the commitment of the assigning Certificate Holder
being assigned pursuant to each such assignment shall not be less than
$10,000,000 (or if less, the entire amount of such Participant's Commitment)
and shall be an integral multiple of $1,000,000 (or such Participant's entire
commitment), (iv) each such assignment shall be to an Eligible Assignee, (v)
the Administrative Agent shall have received from assignee/transferee or the
assignor/transferor a transfer fee in the amount of $2,500; PROVIDED,
HOWEVER, that only one fee need be paid if transfers under both SECTION
12.1(a) and 12.1(b) are made concurrently, (vi) each assignment or transfer
shall comply with all applicable securities laws; and (vii) each assignee or
transferee shall (A) comply, as of the date of the transfer, with the
delivery requirements of SECTION 12.3(a); (B) acknowledge in writing,
addressed and delivered to each of the Persons then party to this
Participation Agreement, that the obligations to be performed from and after
the date of such transfer or assignment under this Participation Agreement
and all other Operative Documents are its obligations, including the
obligations imposed by this SECTION 12.1(b) (and the transferor and
transferee Certificate Holder shall deliver to Lessee, Lessor and
Administrative Agent an Assignment Agreement, in substantially the form of
EXHIBIT I and an Investor's Letter in substantially the form of SCHEDULE II
to EXHIBIT I, executed by the assignee or transferee) and (C) represent and
warrant to Lessor, Administrative Agent, each Participant and Lessee as set
forth in SECTION 8.1 and that:
(v) it has the requisite power and authority to accept
such assignment or transfer and to engage in the Overall
Transaction;
(w) it will not take any action with respect to its
Certificate that would violate any applicable securities laws;
(x) it will not assign or transfer any Certificate
except in compliance with this SECTION 12.1(b); and
(y) it will not transfer any Certificate unless the
proposed transferee makes the foregoing representations and
covenants.
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Any transfer or assignment made in violation of the above requirements shall not
be effective against the other parties to this Participation Agreement until
such requirements are satisfied.
SECTION XII.2. PARTICIPATIONS. Any Participant may at any time sell to
one or more commercial banks or other Persons (each of such commercial banks and
other Persons being herein called a "SUB- PARTICIPANT") participating interests
in all or a portion of its rights and obligations under this Participation
Agreement, the other Operative Documents, or its Notes or Certificates
(including, without limitation, all or portion of the Rent owing to it);
PROVIDED, HOWEVER, that:
(a) no participation contemplated in this SECTION 12.2
shall relieve such Participant from its obligations hereunder or under any
other Operative Document;
(b) such Participant shall remain solely responsible for
the performance of its Commitment and such other obligations;
(c) Lessee shall continue to deal solely and directly with
such Participant in connection with such Participant's rights and obligations
under this Participation Agreement and each of the other Operative Documents;
(d) each such Sub-Participant will make representations and
warranties to the Participant that are consistent with SECTION 8.1, MUTATIS
MUTANDIS;
(e) no Sub-Participant, unless such Sub-Participant is an
Affiliate of such Participant, or is itself a Participant, shall be entitled to
have any right to vote or grant or withhold consents or otherwise to require
such Participant or Lessee to take or refrain from taking any action hereunder
or under any other Operative Document;
(f) no Sub-Participant shall be entitled to the benefits of
ARTICLE XIV in excess of the right of the Participant selling the relevant
participating interest; and
(g) unless such Sub-Participant is an existing Participant,
such participation shall be subject to the consent of Lessee, not to be
unreasonably withheld or delayed; PROVIDED, HOWEVER, that no consent shall be
required during the existence and continuation of an Event of Default.
SECTION XII.3. WITHHOLDING TAXES; DISCLOSURE OF INFORMATION; PLEDGE
UNDER REGULATION A.
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(a) If any Participant or any assignee of, or Sub-
Participant in, any Note or Certificate (each such assignee or Sub-
Participant, a "TRANSFEREE") is organized under the laws of any jurisdiction
other than the United States or any State thereof, then such Participant or
Transferee, as applicable, shall (as a condition precedent to acquiring or
participating in any Loan or Certificate and as a continuing obligation to
Lessor and Lessee) (i) furnish to Lessor, Administrative Agent and Lessee in
duplicate, for each taxable year of such Participant or Transferee during the
Term, a properly completed and executed copy of either Internal Revenue
Service Form W-8 ECI or Internal Revenue Service Form 1001 and Internal
Revenue Service Form W-8 BEN and Internal Revenue Service Form W-8 BEN or
Internal Revenue Service Form W-8 or Internal Revenue Form W-9 and any
additional form (and such other form) as is necessary to claim complete
exemption from United States withholding taxes on all payments hereunder, and
(ii) provide to Lessor, Administrative Agent and Lessee a new Internal
Revenue Service Form W-8 ECI or Internal Revenue Service Form 1001 and
Internal Revenue Service Form W-8 BEN or Internal Revenue Service Form W-8
BEN or Internal Revenue Service Form W-8 or Internal Revenue Service Form W-9
and any such additional form (or any successor form or forms) upon the
expiration or obsolescence of any previously delivered form and comparable
statements in accordance with applicable United States laws and regulations
and amendments duly executed and completed by such Participant or Transferee,
and to comply from time to time with all applicable United States laws and
regulations with regard to such withholding tax exemption. By its acceptance
of a participation or assignment of a Participant's Note or Certificate, each
Transferee shall be deemed bound by the provisions set forth in this ARTICLE
XII. No Participant or Transferee that fails to comply with the requirements
of this SECTION 12.3(a) shall be entitled to the benefit of any tax indemnity
for gross-up of payments in respect of withholding taxes pursuant to SECTION
13.4 OR 13.5.
(b) Subject to SECTION 15.13 hereof, any Participant,
Administrative Agent or Lessor may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this ARTICLE
XII, disclose to the assignee or participant or proposed assignee or participant
any information relating to Lessee, Guarantor, their Affiliates and the Leased
Property.
(c) Anything in this ARTICLE XII to the contrary
notwithstanding, any Participant may, without the consent of Lessee, assign and
pledge all or any portion of the Notes or Certificates held by it to any Federal
Reserve Bank, the United States Treasury or to any other financial institution
as collateral security pursuant to Regulation A of the F.R.S. Board and any
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operating circular issued by the Federal Reserve System and/or the Federal
Reserve Bank or otherwise, but no such assignment shall relieve any Participant
of its obligations hereunder.
ARTICLE XIII
INDEMNIFICATION
SECTION 13.1. INDEMNIFICATION.
(a) GENERAL INDEMNIFICATION. Whether or not any of the
transactions contemplated hereby shall be consummated, Lessee shall pay and
assume liability for, and does hereby agree to indemnify, protect, defend, save
and keep harmless each Indemnitee from and against any and all Claims that may
be imposed on, incurred by or asserted against such Indemnitee (whether because
of action or omission by such Indemnitee), whether or not such Claim is covered
by any other indemnification under this ARTICLE XIII or such Indemnitee shall
also be indemnified as to any such Claim by any other Person, and whether or not
such Claim arises or accrues after the Expiration Date,
in each case under this SECTION 13.1(a), in any way arising out of or
relating to:
A. any of the Operative Documents or any of the
transactions contemplated thereby or any investigation,
litigation or proceeding in connection therewith, and any
amendment, modification or waiver in respect thereof;
B. the Leased Property, including the Land, the
Facility and the Tenant Improvements or any part thereof or
interest therein;
C. the purchase, mortgaging, design, construction,
preparation, installation, inspection, delivery, non-delivery,
acceptance, rejection, purchase, ownership, possession, rental, lease,
sublease, repossession, maintenance, repair, alteration, modification,
addition or substitution, storage, transfer of title, redelivery, use,
financing, refinancing, operation, condition, sale (including, without
limitation, any sale or other transfer pursuant to the Lease), return
or other disposition of all or any part of any interest in the Leased
Property, including the Land and the Facility or the imposition of any
Lien (or incurring of any liability to refund or pay over any amount as
a result of any Lien) thereon, including: (i) Claims or penalties
arising from any violation of law or in tort (strict liability or
otherwise), including Claims made by invitees of Lessee or any
assignee,
53
or any sublessor of either thereof, or by any other person
entering on the Leased Property, (ii) any Claim resulting from or
related to latent or other defects, whether or not discoverable, (iii)
any Claim resulting from or related to the acquisition of the Leased
Property or any construction of the Tenant Improvements or use thereof,
(iv) any Claim based upon a violation or alleged violation of the terms
of any restriction, easement, condition or covenant or other matter
affecting title to the Leased Property, (v) the making of any
Modifications in violation of any standards imposed by any insurance
policies required to be maintained by Lessee pursuant to the Lease
which are in effect at any time with respect to the Leased Property or
any part thereof, (vi) any Claim for patent, trademark or copyright
infringement, or (vii) Claims arising from any public improvements with
respect to the Leased Property resulting in any change or special
assessments being levied against the Leased Property or any plans to
widen, modify or realign any street or highway adjacent to the Leased
Property, or any Claim for utility "tap-in" fees;
D. the offer, issuance, sale, transfer or delivery of
the Certificates and Notes;
E. the breach or alleged breach by Lessee or Guarantor
of any covenant, representation or warranty made by it or
deemed made by it in any Operative Document or any document or
agreement relating to the construction of the Tenant
Improvements or any certificate delivered by it;
F. the transactions contemplated hereby or by any other
Operative Document, in respect of the application of Parts 4
and 5 of Subtitle B of Title I of ERISA and any prohibited
transaction described in Section 4975(c) of the Code;
G. the retaining or employment of any broker, finder or
financial advisor by Lessee or Guarantor to act on its behalf
in connection with this Participation Agreement;
H. any other agreement entered into or assumed by Lessee or
Guarantor in connection with the Leased Property, including the Tenant
Improvements, the Facility and the Land or by Lessor in the purchase of
the Land and the Facility (including, in connection with each of the
matters described in this SECTION 13.1 to which this indemnity shall
apply, matters based on or arising from the negligence of any
Indemnitee);
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I. any failure to subdivide the Leased Property to
create the Release Parcel in connection with the reacquisition
rights set forth in the Deed or the Meridian Deed; or
J. any right of first negotiation contained in the
Meridian Deed.
It is expressly understood and agreed that the indemnity provided for herein
shall survive the expiration or termination of and shall be separate and
independent from any remedy under the Lease or any other Operative Document.
(b) EXCLUSIONS FROM INDEMNITIES; LIMITATIONS ON LESSOR
INDEMNITIES.
(i) Notwithstanding the foregoing provisions of this ARTICLE
XIII, Lessee shall not be obligated to indemnify an Indemnitee under
SECTION 13.1(a) for any Claim to the extent that such Claim is, or is
attributable to: (A) the gross negligence or willful misconduct of such
Indemnitee; (B) the breach by such Indemnitee of its representations
and warranties in SECTION 8.1, 8.3 or 8.4 as the case may be, or the
breach by such Indemnitee of its covenants as set forth in this
Participation Agreement or in any other Operative Document to which
such Indemnitee is a party; and (C) any Claim resulting from the
imposition of any Lessor Lien that such Indemnitee is responsible for
discharging under the Operative Documents; PROVIDED, HOWEVER, that
nothing in the foregoing clauses (A) through (C) shall be deemed to
exclude or limit (x) any Claim that any Indemnitee may have under any
Operative Document or Applicable Laws for damages from Lessee for
breach by Lessee of its representations, warranties or covenants made
or deemed made by it in any Operative Document or (y) any remedy under
or claim for or right to damages pursuant to Article XVI of the Lease.
SECTION 13.2. ENVIRONMENTAL INDEMNITY. Without limitation of the other
provisions of this ARTICLE XIII, Lessee hereby agrees to indemnify, hold
harmless and defend each Indemnitee from and against any and all Claims, losses,
damages, liabilities, fines, penalties, charges, administrative and judicial
proceedings (including informal proceedings) and orders, judgments, remedial
action, requirements, enforcement actions of any kind, and all reasonable and
documented costs and expenses incurred in connection therewith (including
reasonable and documented attorneys' and/or paralegals' fees and expenses),
including all costs incurred in connection with any investigation or monitoring
of the condition of the Leased Property or any clean-up, remedial, removal or
55
restoration work by any Governmental Authority, arising in whole or in part, out
of:
(a) the presence on, under or around the Leased Property or
any portion thereof of any Hazardous Substance, or any releases or
discharges of any Hazardous Substance on, under, from, onto or around
the Leased Property or any portion thereof,
(b) any activity, including, without limitation, construction
(including construction of the Tenant Improvements), carried on or
undertaken on or off the Leased Property or any portion thereof, and
whether by Lessee or any of its Affiliates or any predecessor in title
or any employees, agents, sublessees, contractors or subcontractors of
Lessee, any of its Affiliates or any predecessor in title, or any other
Persons (including such Indemnitee), in connection with the handling,
treatment, removal, storage, decontamination, clean-up, transport or
disposal of any Hazardous Substance that at any time are located or
present on, under or around, or that at any time migrate, flow,
percolate, diffuse or in any way move onto or under the Leased Property
or any portion thereof,
(c) loss of or damage to any property or the environment
arising from, or in any way related to, the Leased Property or Lessee
or any of its Affiliates (including, without limitation, clean-up
costs, response costs, remediation and removal costs, cost of
corrective action, costs of financial assurance, fines and penalties
and natural resource damages), or death or injury to any Person, and
all expenses associated with the protection of wildlife, aquatic
species, vegetation, flora and fauna, and any mitigative action
required by or under Environmental Laws, in each case arising from, or
in any way related to, the Leased Property, Lessee, any of its
Affiliates or the Overall Transaction or any portion thereof,
(d) any claim concerning lack of compliance with Environmental
Laws, or any act or omission causing an environmental condition that
requires remediation or would allow any Governmental Authority to
record a Lien against the Leased Property or any portion thereof, or
(e) any residual contamination on or under any of the Leased
Property, or affecting any natural resources, and any contamination of
any property or natural resources arising in connection with the
generation, use, handling, storage, transport or disposal of any such
Hazardous Substance, in each case arising from, or in any way related
to, the Leased
56
Property, Lessee, any of its Affiliates, or the Overall Transaction or
any portion thereof, and irrespective of whether any of such activities
were or will be undertaken in accordance with Applicable Laws.
SECTION XIII.3. END OF TERM INDEMNITY. If (a) Lessee elects the Sale
Option and (b) after paying to Administrative Agent, for the benefit of the
Participants, any amounts due under Articles XX and XXI of the Lease, the Lease
Balance shall not have been reduced to zero, then Lessee shall promptly pay an
amount equal to the shortfall to Administrative Agent on the Expiration Date to
the extent that an appraisal report conforming to the requirements of this
SECTION 13.3 indicates that such shortfall is due to any of the following
events, circumstances or conditions, whether or not permitted under the Lease:
(i) the failure to maintain the Leased Property as required by the Lease and the
other Operative Documents, and in at least as good a condition as it was in on
the date of Completion, ordinary wear and tear excepted; (ii) the carrying out
of or the failure to undertake any improvements or Modifications (including the
Tenant Improvements) by Lessee whether or not permitted pursuant to the
Operative Documents, ordinary wear and tear excepted; (iii) the existence of any
environmental condition at or affecting the Leased Property, whether or not such
condition existed on the Advance Date; (iv) any defect, exception, easement,
restriction or other encumbrance on or title to the Leased Property within the
power of Lessee to control or affect, whether or not created or existing on the
Advance Date, (v) the dependence of the Leased Property on any improvement or
facility not fully located on the Leased Property; (vi) any restoration or
rebuilding carried out by Lessee or any sublessee; (vii) any use of the Leased
Property or any part thereof by Lessee or any sublessee other than as an office
building, or (viii) the existence of the reacquisition rights and the right of
first negotiation set forth in the Meridian Deed (even though such rights were
in existence prior to the Document Closing Date), or (ix) any other cause or
condition within the power of Lessee to control or affect, other than ordinary
wear and tear. For purposes of making the determination provided for in this
SECTION 13.3, Lessor may request, and Lessee shall thereupon provide not less
than 15 Business Days prior to the consummation of the sale of the Leased
Property, at Lessee's sole cost and expense, a report from an appraiser selected
by the Required Participants and reasonably approved by Lessee, in form and
substance satisfactory to the Required Participants and using approved methods
satisfactory to the Required Participants, concerning the extent to which the
fact that the actual Fair Market Value of the Leased Property as of the
Expiration Date is less than the Fair Market Value anticipated for such date in
the Appraisals are due to any of the factors enumerated in the preceding
sentence hereof.
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SECTION XIII.4. PROCEEDINGS IN RESPECT OF CLAIMS. With respect to
any amount that Lessee is requested by an Indemnitee to pay by reason of
SECTION 13.1(a) or 13.2, such Indemnitee shall, if so requested by Lessee and
prior to any payment, submit such additional information to Lessee as Lessee
may reasonably request and which is in the possession of such Indemnitee to
substantiate properly the requested payment.
In case any action, suit or proceeding shall be brought against any
Indemnitee, such Indemnitee shall notify Lessee of the commencement thereof,
and Lessee shall be entitled, at its expense, to participate in, and, to the
extent that Lessee desires to, assume and control the defense thereof through
its own counsel, which shall be subject to the reasonable approval of the
Required Participants, on behalf of the Indemnitee; PROVIDED, HOWEVER, that
Lessee shall have acknowledged in writing its obligation to fully indemnify
such Indemnitee in accordance with the terms of the Operative Documents in
respect of such action, suit or proceeding, and, at the request of the
Indemnitee, Lessee shall keep such Indemnitee fully appraised of the status
of such action, suit or proceeding and shall provide such Indemnitee with all
information with respect to such action, suit or proceeding as such
Indemnitee shall reasonably request. Lessee must indicate its election to
assume such defense by written notice to the Indemnitee within ninety (90)
days following receipt of Indemnitee's notice of the Claim, or in the case of
a third party claim which requires a shorter time for response then within
such shorter period as specified in the Indemnitee's notice of Claim,
PROVIDED that such Indemnitee has given Lessee notice thereof. Lessee shall
not be entitled to assume and control the defense of any such action, suit or
proceeding if and to the extent that, (A) in the reasonable opinion of such
Indemnitee, (x) such action, suit or proceeding involves any risk of
imposition of criminal liability or any material risk of imposition of
material civil liability on such Indemnitee or will involve a material risk
of the sale, forfeiture or loss of, or the creation of any Lien (other than a
Permitted Lien) on the Leased Property or any part thereof unless, in the
case of civil liability, Lessee shall have posted a bond or other security
reasonably satisfactory to the relevant Indemnitees in respect to such risk
or (y) the control of such action, suit or proceeding would involve an actual
or potential conflict of interest, (B) such proceeding involves Claims not
fully indemnified by Lessee which Lessee and the Indemnitee have been unable
to sever from the indemnified Claim(s), or (C) an Event of Default has
occurred and is continuing. The Indemnitee may participate in a reasonable
manner at its own expense and with its own counsel in any proceeding
conducted by Lessee in accordance with the foregoing. Lessee shall not enter
into any settlement or other
58
compromise with respect to any Claim which is entitled to be indemnified
under SECTION 13.1 or 13.2, as applicable, without the prior written consent of
the Indemnitee, which consent shall not be unreasonably withheld or delayed in
the case of a money settlement not involving an admission of liability of such
Indemnitee.
Each Indemnitee shall supply Lessee with such information and documents
reasonably requested by Lessee as are necessary or advisable for Lessee to
participate in any action, suit or proceeding to the extent permitted by SECTION
13.1 or 13.2, as applicable, and Lessee shall reimburse the Indemnitee for the
reasonable out-of-pocket expenses of supplying such information and documents.
Unless an Event of Default shall have occurred and be continuing, no Indemnitee
shall enter into any settlement or other compromise with respect to any Claim
which is entitled to be indemnified under SECTION 13.1 or 13.2, as applicable,
without the prior written consent of Lessee, which consent shall not be
unreasonably withheld, unless such Indemnitee waives its right to be indemnified
under SECTION 13.1 or 13.2, as applicable, with respect to such Claim, does not
admit any criminal liability or civil liability on behalf of Lessee in
connection with such Claim, and uses reasonable efforts to advise Lessee on the
status of proceedings from time to time during the pendency of such Claim.
Upon payment in full of any Claim by Lessee pursuant to SECTION 13.1 or
13.2, as applicable, to or on behalf of an Indemnitee, Lessee, without any
further action, shall be subrogated to any and all claims that such Indemnitee
may have relating thereto (other than claims in respect of insurance policies
maintained by such Indemnitee at its own expense), and such Indemnitee shall
execute such instruments of assignment and conveyance, evidence of claims and
payment and such other documents, instruments and agreements as may be necessary
to preserve any such claims and otherwise cooperate with Lessee and give such
further assurances as are necessary or advisable to enable Lessee vigorously to
pursue such claims.
Any amount payable to an Indemnitee pursuant to SECTION 13.1 or 13.2
shall be paid to such Indemnitee promptly upon receipt of a written demand
therefor from such Indemnitee, accompanied by a written statement describing in
reasonable detail the basis for such indemnity and the computation of the amount
so payable.
SECTION XIII.5. GENERAL TAX INDEMNITY.
(a) INDEMNIFICATION. Without limitation on the rights of any
Indemnitee under any other indemnification set forth in this ARTICLE XIII,
Lessee shall pay and assume liability for, and does hereby agree to indemnify,
protect, defend and hold harmless, each
59
Tax Indemnitee and the Leased Property from and against any and all
Impositions on an After Tax Basis.
(b) CONTESTS. If any claim shall be made against any Tax Indemnitee or
if any proceeding shall be commenced against any Tax Indemnitee (including a
written notice of such proceeding) for any Imposition as to which Lessee may
have an indemnity obligation pursuant to this SECTION 13.5, or if any Tax
Indemnitee shall determine that any Imposition for which Lessee may have an
indemnity obligation pursuant to this SECTION 13.5 may be payable, such Tax
Indemnitee shall promptly (and in any event, within thirty (30) days) notify
Lessee in writing (PROVIDED that failure to so notify Lessee within thirty (30)
days shall not alter such Tax Indemnitee's rights under this SECTION 13.5,
except to the extent such failure precludes or materially adversely affects the
ability to conduct a contest of any indemnified Taxes) and shall not take any
action with respect to such claim, proceeding or Imposition without the written
consent of Lessee (such consent not to be unreasonably withheld or unreasonably
delayed) for thirty (30) days after the receipt of such notice by Lessee;
PROVIDED, HOWEVER, that in the case of any such claim or proceeding, if such Tax
Indemnitee shall be required by law or regulation to take action prior to the
end of such 30-day period, such Tax Indemnitee shall in such notice to Lessee,
so inform Lessee, and such Tax Indemnitee shall not take any action with respect
to such claim, proceeding or Imposition without the consent of Lessee (such
consent not to be unreasonably withheld or unreasonably delayed) for ten (10)
days after the receipt of such notice by Lessee, unless the Tax Indemnitee shall
be required by law or regulation to take action prior to the end of such 10-day
period, in which case Tax Indemnitee shall promptly notify Lessee.
Lessee shall be entitled for a period of thirty (30) days from receipt
of such notice from the Tax Indemnitee (or such shorter period as the Indemnitee
has notified Lessee is required by law or regulation for the Tax Indemnitee to
commence such contest), to request in writing that such Tax Indemnitee contest
such Imposition, at Lessee's expense. If (x) such contest can be pursued in the
name of Lessee and independently from any other proceeding involving an
Imposition for which Lessee has not agreed to indemnify such Tax Indemnitee, (y)
such contest must be pursued in the name of the Tax Indemnitee, but can be
pursued independently from any other proceeding involving an Imposition for
which Lessee has not agreed to indemnify such Tax Indemnitee or (z) the Tax
Indemnitee so requests, then Lessee shall be permitted to control the contest of
such claim PROVIDED, that in order to take control of the contest, Lessee must
first acknowledge in writing its obligation to indemnify for the Imposition
which is the subject of the contest if the outcome thereof is adverse, and
PROVIDED,
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FURTHER, that in determining the application of CLAUSES (x) and (y) of the
preceding sentence, each Tax Indemnitee shall take any and all reasonable
steps to segregate claims for any Taxes for which Lessee indemnifies
hereunder from Taxes Lessee is not obligated to indemnify hereunder, so that
Lessee can control the contest of the former. In all other claims requested
to be contested by Lessee, the Tax Indemnitee shall control the contest of
such claim, acting through counsel reasonably acceptable to Lessee. In no
event shall Lessee be permitted to contest (or the Tax Indemnitee required to
contest) any claim (A) if such Tax Indemnitee provides Lessee with a legal
opinion of independent counsel that such action, suit or proceeding involves
a material risk of imposition of criminal liability or will involve a
material risk of the sale, forfeiture or loss of, or the creation of any Lien
(other than a Permitted Lien) on the Leased Property or any part thereof
unless Lessee shall have posted and maintained a bond or other security
reasonably satisfactory to the relevant Tax Indemnitee in respect to such
risk, (B) if an Event of Default has occurred and is continuing, unless
Lessee shall have posted and maintained a bond or other security reasonably
satisfactory to the relevant Tax Indemnitee in respect of the Impositions
subject to such claim and all expenses for which Lessee is responsible
hereunder reasonably foreseeable in connection with the contest of such
claim, (C) unless Lessee shall have agreed to pay and shall pay to such Tax
Indemnitee on demand all reasonable out-of-pocket costs, losses and expenses
that such Tax Indemnitee may incur in connection with contesting such
Imposition, including all reasonable legal, accounting and investigatory fees
and disbursements, or (D) if such contest shall involve the payment of the
Impositions prior to the contest, unless Lessee shall provide to the Tax
Indemnitee an interest-free advance in an amount equal to the Imposition that
the Tax Indemnitee is required to pay (with no additional net after-tax costs
(including Taxes) to such Tax Indemnitee). In addition, for Tax
Indemnitee-controlled contests and claims contested in the name of the Tax
Indemnitee in a public forum, no contest shall be required: (A) unless, in
the case of an income tax, the amount of the potential indemnity (taking into
account all similar or logically related claims that have been or could be
raised in any audit involving such Indemnitee for which Lessee may be liable
to pay an indemnity under this SECTION 13.5) exceeds $50,000 and (B) unless,
if requested by the Tax Indemnitee, Lessee shall have provided to the
Indemnitee an opinion of counsel selected by Lessee (which may be in-house
counsel, except that in the case of income taxes indemnified hereunder such
opinion shall be that of independent tax counsel selected by the Tax
Indemnitee and reasonably acceptable to Lessee) that a reasonable basis
exists to contest such claim. In no event shall a Tax Indemnitee be required
to appeal an adverse judicial determination to the United States Supreme
Court.
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The party conducting the contest shall consult in good faith with the
other party and its counsel with respect to the contest of such claim for
Impositions (or claim for refund) but the decisions regarding what actions to be
taken shall be made by the controlling party in its sole judgment, PROVIDED,
HOWEVER, that if the Tax Indemnitee is the controlling party and Lessee
recommends the acceptance of a settlement offer made by the relevant
Governmental Authority and such Tax Indemnitee rejects such settlement offer
then the amount for which Lessee will be required to indemnify such Tax
Indemnitee with respect to the Taxes subject to such offer shall not exceed the
amount which it would have owed if such settlement offer had been accepted. In
addition, the controlling party shall keep the noncontrolling party reasonably
informed as to the progress of the contest, and shall provide the noncontrolling
party with a copy of (or appropriate excerpts from) any reports or claims issued
by the relevant auditing agent or taxing authority to the controlling party
thereof, in connection with such claim or the contest thereof.
Each Tax Indemnitee shall supply Lessee with such
information and documents reasonably requested by Lessee as are necessary or
advisable for Lessee to participate in any action, suit or proceeding to the
extent permitted by this SECTION 13.5(b), and Lessee shall promptly reimburse
such Tax Indemnitee for the reasonable out-of-pocket expenses of supplying
such information and documents. Unless an Event of Default shall have
occurred and be continuing, no Tax Indemnitee shall enter into any settlement
or other compromise or fail to appeal an adverse ruling with respect to any
claim which is entitled to be indemnified under this SECTION 13.5 (and with
respect to which contest is required under this SECTION 13.5(b)) without the
prior written consent of Lessee (such consent not to be unreasonably
withheld), unless such Tax Indemnitee waives its right to be indemnified
under this SECTION 13.5 with respect to such claim.
Notwithstanding anything contained herein to the contrary, a
Tax Indemnitee will not be required to contest (and Lessee shall not be
permitted to contest) a claim with respect to any Imposition if (i) such Tax
Indemnitee shall waive its right to indemnification under this SECTION 13.5 with
respect to such claim (and any claim with respect to such year or any other
taxable year, the contest of which is materially adversely affected as a result
of such waiver) or (ii) such Imposition is the sole result of a claim of a
continuing and consistent nature, which claim has previously been resolved
against the relevant Tax Indemnitee (unless a change in law or facts has
occurred since such prior adverse resolution and Lessee provides an opinion of
independent tax counsel to the effect that it is more likely than not that such
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change in law or facts will result in a favorable resolution of the claim at
issue).
(c) PAYMENTS. (i) TO, OR FOR THE ACCOUNT OF, A TAX
INDEMNITEE. Any Imposition indemnifiable under this SECTION 13.5 shall be
paid directly when due to the applicable taxing authority if direct payment
is practicable and permitted. If direct payment to the applicable taxing
authority is not permitted or is otherwise not made, any amount payable to
Tax Indemnitee pursuant to this SECTION 13.5 shall be paid within thirty (30)
days after receipt of a written demand therefor from such Tax Indemnitee
(accompanied by a written statement describing in reasonable detail the
amount so payable), but not before two Business Days prior to the date that
the relevant Taxes are due. Any payments made to a Tax Indemnitee pursuant to
this SECTION 13.5 shall be made directly to the Tax Indemnitee entitled
thereto in immediately available funds at such bank or to such account as
specified by the Tax Indemnitee in written directions to Lessee, or, if no
such direction shall have been given, by check of Lessee payable to the order
of the Tax Indemnitee by certified mail, postage prepaid at its address as
set forth in this Participation Agreement. Upon the request of any Tax
Indemnitee with respect to an Imposition that Lessee is required to pay
directly to the taxing authority, Lessee shall furnish to such Tax Indemnitee
the original or a certified copy of a receipt for Lessee's payment of such
Imposition or such other evidence of payment as is reasonably acceptable to
such Tax Indemnitee.
(ii) TO LESSEE. (x) If any Tax Indemnitee shall actually
realize a Tax benefit (whether by way of deduction, credit, allocation or
apportionment or otherwise) with respect to a Tax not indemnifiable hereunder
which would not have been realized but for any Tax with respect to which Lessee
has reimbursed or indemnified such Tax Indemnitee pursuant to the Operative
Documents, which benefit was not previously taken into account in determining
the amount of Lessee's payment to such Tax Indemnitee, such Tax Indemnitee shall
pay to Lessee an amount equal to the amount of such Tax benefit, increased by
any actual Tax savings realized by such Tax Indemnitee and net of any additional
Taxes actually borne by such Tax Indemnitee as a result of such payment (I.E.,
on a "GROSSED-UP BASIS"); PROVIDED, HOWEVER, that no payment shall be made as
long as an Event of Default is continuing; PROVIDED, FURTHER, however, that no
Tax Indemnitee shall be required to pay to Lessee any Tax benefit to the extent
such payment would be greater than the amount of such Taxes in respect of which
the reimbursement or indemnification was paid by Lessee, reduced by all prior
payments by such Tax Indemnitee under this SECTION 13.5(c)(ii)(x) in respect of
such amount; any payment to Lessee which is so limited shall, to the extent of
such unpaid excess, be carried over and shall be available to offset any future
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obligations of Lessee under this SECTION 13.5. If such repaid Tax benefit is
thereafter lost, the additional Tax payable shall be treated as a Tax
indemnifiable hereunder without regard to the exclusions set forth in clauses
(i) through (ix) of the definition of Impositions.
(y) Upon receipt by a Tax Indemnitee of a refund or
credit of all or part of any Taxes paid or indemnified against by Lessee, which
refund or credit was not previously taken into account in determining the amount
of Lessee's payment to such Tax Indemnitee, such Tax Indemnitee shall pay to
Lessee, on a Grossed- Up Basis, an amount equal to the amount of such refund or
credit, plus any interest received by or credited to such Tax Indemnitee with
respect to such refund; PROVIDED, HOWEVER, that no such payment shall be made as
long as an Event of Default is continuing; PROVIDED, FURTHER, however, that no
Tax Indemnitee shall be required to pay to Lessee any refund or credit to the
extent such refund or credit is greater than the amount of Taxes in respect of
which payment or indemnification was made by Lessee, reduced by all prior
payments by such Tax Indemnitee under this SECTION 13.5(c)(ii)(y) in respect of
such amount. If such repaid refund or credit is thereafter lost, the additional
Tax payable shall be treated as a Tax indemnifiable hereunder without regard to
the exclusions set forth in clauses (i) through (ix) of the definition of
Impositions.
(z) The Tax Indemnitee will, at Lessee's expense,
pursue refunds and tax benefits that would result in any such payments to
Lessee, but only if the Tax Indemnitee has been notified in writing by Lessee
that such refunds or tax benefits are available and should be pursued.
(d) REPORTS. In the case of any report, return or statement
required to be filed with respect to any Impositions that are subject to
indemnification under this SECTION 13.5 and of which Lessee has knowledge,
Lessee shall promptly notify the Tax Indemnitee of such requirement and, at
Lessee's expense (i) if Lessee is permitted (unless otherwise requested by
the Tax Indemnitee) by Applicable Laws, timely file such report, return or
statement in its own name or (ii) if such report, return or statement is
required to be in the name of or filed by such Tax Indemnitee or the Tax
Indemnitee otherwise requests that such report, return or statement be filed
in the name of or by such Tax Indemnitee, Lessee shall prepare such report,
return or statement for filing by such Tax Indemnitee in such manner as shall
be reasonably satisfactory to such Tax Indemnitee and send the same to the
Tax Indemnitee for filing no later than ten (10) days prior to the due date
therefor. In any case in which the Tax Indemnitee will file any such report,
return or statement, Lessee shall, upon
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written request of such Tax Indemnitee, provide such Tax Indemnitee with such
information as is reasonably necessary to allow the Tax Indemnitee to file
such report, return or statement.
(e) WITHHOLDING TAXES.
(i) Lessor or its agent shall withhold any Taxes required by
Applicable Laws to be withheld on any payment to any Participant,
except to the extent that the Participant has furnished such
information to Lessor or its agent as shall be sufficient under
Applicable Laws to entitle such Person to an exemption from withholding
Taxes. The amount payable to Lessor, any Participant or any
Sub-Participant shall be reduced by the amount of any withholding Taxes
required to be withheld by Lessor or its agent pursuant to the
preceding sentence and, except to the extent set forth in SECTION 13.3,
Lessee and Lessor shall have no liability or obligation to the
Participants with respect to any such withholding Taxes. In accepting
and carrying out its duties with respect to withholding Taxes pursuant
to this SECTION 13.5(e), Lessor shall act as the duly authorized agent
of Lessee to act on behalf of Lessee under the withholding provisions
of Chapter 3 of the Code. Lessee shall file notice of such appointment
in accordance with applicable Treasury regulations order Code Section
1441. Such agency shall terminate in the event that Applicable Laws are
amended so as to release Lessee of the obligation to withhold Taxes
with respect to payments made by Lessee to Lessor under the Lease and
in any event upon termination or expiration of the Lease.
(ii) If and to the extent Lessor or its agent has in good
faith attempted to comply with its obligation to withhold Taxes in
accordance with CLAUSE (i) and a claim regarding withholding Taxes is
made against Lessor or its agent, as between Lessee and Lessor (or its
agent), Lessee shall be responsible for, and Lessee shall indemnify and
hold harmless Lessor (and its agent) (without duplication of any
indemnification required by SUBSECTION (a)) on an After Tax Basis
against, such claim to the extent, but only to the extent, Lessor or
its agent has actually paid funds to a taxing authority with respect to
such withholding taxes or receives a demand for such payment from any
taxing authority, but subject to the provisions of SECTION 13.5(b).
(iii) Each Participant agrees to reimburse Lessor or its agent
for any withholding Taxes for which Lessor or its agent becomes liable
and to reimburse Lessee for any Taxes other than those for which Lessee
is liable pursuant to SECTION 13.3
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or other amounts paid by Lessee pursuant to CLAUSE (ii) hereof.
(iv) For purposes of determining whether withholding Taxes
apply to payments under the Lease, it shall be assumed that the Lease
constitutes a loan for United States Federal income tax purposes (as is
the parties' intention).
SECTION XIII.6. GROSS UP. If an Indemnitee shall not be entitled to a
corresponding and equal deduction with respect to any payment or Tax which
Lessee is required to pay or reimburse under any other provision of this ARTICLE
XIII (each such payment or reimbursement under this ARTICLE XIII, an "original
payment") and which original payment constitutes income to such Indemnitee when
accrued or received, then Lessee shall pay to, or for the account of, such
Indemnitee on demand the amount of such original payment on an After Tax Basis.
ARTICLE XIV
CONTINGENT LIBOR AND OTHER COSTS
SECTION XIV.1. LIBO RATE LENDING UNLAWFUL. If any Participant shall
determine (which determination shall, upon notice thereof to Lessee and the
Participants, be conclusive and binding on Lessee) that any change in or in the
interpretation of any law after the date hereof makes it unlawful, or any
central bank or other Governmental Authority asserts that it is unlawful, for
such Participant to make available, continue or maintain any Loan or Certificate
Amount that bears Interest or Yield based upon the LIBO Rate, as the case may
be, the obligation of such Participant to make available, continue or maintain
any such Loan or Certificate Amount, as the case may be, shall, upon such
determination, forthwith be suspended until such Participant shall notify Lessee
and Lessor that the circumstances causing such suspension no longer exist and,
to the extent required by any such introduction of or change in or in the
interpretation of any law, all Loans or Certificate Amounts, as the case may be,
of such Participant shall automatically bear Interest or accrue Yield at the
Alternate Base Rate either (a) on the last day of the then current Interest
Period applicable to such Loan or Certificate Amount, as the case may be, if
such Participant may lawfully continue to maintain and fund such Loan or
Certificate Amount, or (b) immediately if such Participant shall determine that
it may not lawfully continue to maintain and fund such Loan or Certificate
Amount, as the case may be, to such day thereto or sooner, if required by such
law or assertion.
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SECTION XIV.2. DEPOSITS UNAVAILABLE. If after the date hereof the
Administrative Agent shall have determined, in good faith, that for any reason:
(a) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to Participants in the
relevant market; or
(b) adequate and reasonable means do not exist for ascertaining the
LIBO Rate applicable to Participants' Loans or Certificate Amounts or that the
LIBO Rate applicable to Loans or Certificate Amounts for any Interest Period
does not adequately and fairly reflect the cost to Participants of funding any
Loan or Certificate Amount,
then, upon notice from Administrative Agent to Lessee and the other
Participants, (i) the obligations of the Participants to make available Loans or
Certificate Amounts, as the case may be, shall be suspended and (ii) each
outstanding Loan or Certificate Amount, as the case may be, shall begin to bear
Interest or accrue Yield at the Alternate Base Rate on the last day of the then
current Interest Period applicable thereto.
SECTION XIV.3. INCREASED COSTS, ETC. (a) If any Participant reasonably
determines that, after the date hereof, any change in, or the adoption,
effectiveness, interpretation, reinterpretation or phase-in of, any law or
regulation, directive, guideline, decision or request (whether or not having the
force of law) of any court, central bank, regulator or other Governmental
Authority increases or would increase the cost to any Participant (including
cost increase through the establishment or increase by the FRB of any reserve
requirements) of, or reduces or would reduce the amount of any sum receivable
by, such Participant in respect of, making available, continuing or maintaining
(or of its obligation to make available, continue or maintain) or prevents or
would prevent any Participant from being legally entitled to a complete
exemption from withholding as described in SECTION 12.3 with respect to, any
Loans or Certificate Amounts, as the case may be, Lessee agrees to reimburse
such Participant for each such increased cost or reduced amount when applicable
to such Participant or its parent, as applicable (on an After Tax Basis). Such
Participant shall promptly notify Lessor and Lessee in writing of the occurrence
of any such event, such notice to state, in reasonable detail, the reasons
therefor and the calculation of the additional amount required fully to
compensate such Participant for such increased cost or reduced amount. Such
additional amounts shall be payable by Lessee as Supplemental Rent directly to
such Participant within five (5) days of its receipt of such notice. A statement
of a Participant as to any such additional amount or amounts (including
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calculations thereof in reasonable detail) shall, in the absence of manifest
error, be conclusive and binding on Lessee; PROVIDED, HOWEVER, that upon
request, Lessee shall be entitled to review and verify non-confidential
information of any Participant related to the determinations set forth in such
statement of such Participant and discuss such non-confidential information and
determinations with such Participant. In determining such amount, each
Participant shall use any method of averaging or attribution that it (in its
reasonable discretion) shall deem applicable.
(b) Lessee shall pay to each Participant, as long as such
Participant shall be required under regulations of the FRB to maintain reserves
with respect to liabilities or assets consisting of or including Eurocurrency
funds or deposits, additional costs on the unpaid principal amount of each such
Participant's Loan or the Certificate Amount of such Participant's Certificate,
as applicable, equal to the actual costs of such reserves allocated to such Loan
by the Participant (as determined by the Participant in good faith, which
determination shall be conclusive in the absence of manifest error), which
additional costs amount shall be payable on each Payment Date as Supplemental
Rent, provided that Lessee shall have received at least 15 days prior written
notice of such additional costs from such Participant. If a Participant fails to
give notice 15 days prior to the relevant Payment Date, such Supplemental Rent
shall be payable 15 days from the Lessee's receipt of such notice. A statement
of such Participant as to any such additional amount or amounts (including
calculations thereof in reasonable detail) shall be presumed correct and binding
on Lessee absent manifest error; PROVIDED, HOWEVER, that upon request, Lessee
shall be entitled to review and verify non-confidential information of any
Participant related to the determinations set forth in such statement of such
Participant and discuss such non- confidential information and determinations
with such Participant. In determining such amount, such Participant shall use
its standard practice in determining such amount, and, in the absence of such
standard practice, may use any reasonable method of averaging and attribution
that it shall deem applicable.
SECTION XIV.4. FUNDING LOSSES. In the event any Participant shall
incur any loss or out-of-pocket expense (including any Break Costs, any loss
or out-of-pocket expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Participant to make
available, continue or maintain any portion of the principal amount of any
Loan or Certificate Amount, as the case may be and any fees payable to
terminate the deposits from which such funds were obtained) as a result of:
(a) any conversion or repayment or prepayment of the principal
amount of any Loans or Certificate Amounts, as the case
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may be, on a date other than the scheduled last day of the Interest Period
applicable thereto; or
(b) any Loans or Certificate Amounts, as the case may be, not
being made in accordance with the Advance Request therefor (unless such failure
to make such Loans or fund such Certificate Amounts, as the case may be,
constitutes a breach by the applicable Participant of its obligations under
ARTICLE III), then, upon the written notice of such Participant to Lessee (with
a copy to Lessor), Lessee shall, within five (5) days of its receipt thereof,
pay directly to such Participant as Supplemental Rent such amount (determined on
the basis of such Participant's standard practices) as will reimburse such
Participant for such loss or out-of-pocket expense (excluding loss of the
Applicable Certificate Holder Margin and Applicable Lender Margin). Such written
notice (which shall include calculations in sufficiently reasonable detail to
indicate the incurrence and amount of such loss and out-of-pocket expense) shall
be presumed correct and binding on Lessee absent manifest error.
SECTION XIV.5. INCREASED CAPITAL COSTS. If, after the date hereof, any
change in, or the adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other Governmental Authority affects or would affect the amount of capital
required or expected to be maintained by any Participant or any Person
controlling such Participant, and such Participant reasonably determines that
the rate of return on its or such controlling Person's capital as a consequence
of its Commitment or the Loans or Certificate Amounts, as the case may be, made
available by such Participant is reduced to a level below that which such
Participant or such controlling Person could have achieved but for the
occurrence of any such circumstance, then, in any such case upon notice from
time to time by such Participant to Lessee, Lessee shall immediately pay
directly to such Participant or such controlling Persons, as Supplemental Rent,
additional amounts sufficient to compensate such Participant or such controlling
Persons for such reduction in rate of return. A statement of such Participant as
to any such additional amount or amounts (including calculations thereof in
reasonable detail) shall be presumed correct and binding on Lessee absent
manifest error; PROVIDED, HOWEVER, that upon request, Lessee shall be entitled
to review and verify non-confidential information of any Participant related to
the determinations set forth in such statement of such Participant and discuss
such non-confidential information and determinations with such Participant. In
determining such amount, such Participant shall use its standard practice in
determining such amount, and, in the absence of such standard practice, may use
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any reasonable method of averaging and attribution that it shall deem
applicable.
SECTION 14.6. AFTER TAX BASIS. Lessee shall pay all amounts
owing under this ARTICLE XIV on an After Tax Basis.
SECTION 14.7. FUNDING OFFICE. If Lessee is required to pay additional
amounts to or for the account of any Participant pursuant to SECTIONS 14.1, 14.2
or 14.3, to the extent applicable, then such Participant will agree to use
reasonable efforts to change the jurisdiction of its Applicable Lending Office
so as to eliminate or reduce any such additional payment which may thereafter
accrue if such change, in the reasonable judgment of such Participant, is not
otherwise disadvantageous to such Participant.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1. SURVIVAL OF AGREEMENTS. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Documents, and the parties' obligations under any and all thereof,
shall survive the execution and delivery and the termination or expiration of
this Participation Agreement and any of the other Operative Documents, the
transfer of the interest in the Leased Property as provided herein or in any
other Operative Documents (and shall not be merged into any deed, ground lease
or any other conveyance or transfer document), any disposition of any interest
of Lessor in the Leased Property, the purchase and sale of the Notes or
Certificates, payment therefor and any disposition thereof, and shall be and
continue in effect notwithstanding any investigation made by any party hereto or
to any of the other Operative Documents and the fact that any such party may
waive compliance with any of the other terms, provisions or conditions of any of
the Operative Documents.
SECTION 15.2. NO BROKER, ETC. Except for Lessee's dealing with Banc of
America Leasing & Capital, LLC, as Arranger, each of the parties hereto
represents to the others that it has not retained or employed any arranger,
broker, finder or financial advisor to act on its behalf in connection with this
Participation Agreement, nor has it authorized any arranger, broker, finder or
financial adviser retained or employed by any other Person so to act, nor has it
incurred any fees or commissions to which Lessor, Administrative Agent or any
Participant might be subjected by virtue of their entering into the Overall
Transaction. Any party who is in breach of this representation shall indemnify
and hold
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the other parties harmless from and against any liability arising out of such
breach of this representation.
SECTION XV.3. NOTICES. Unless otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be deemed to have been duly given and shall be
effective: (i) in the case of notice by letter, the earlier of when delivered
to the addressee by hand or courier if delivered on a Business Day and, if
not delivered on a Business Day, the first Business Day thereafter or on the
third Business Day after depositing the same in the mails, registered or
certified mail, postage prepaid, return receipt requested, (ii) in the case
of a prepaid delivery to a reputable national overnight air courier service,
on the Business Day following such date of delivery, and (iii) in the case of
notice by facsimile or bank wire, when receipt is confirmed if delivered on a
Business Day and, if not delivered on a Business Day, the first Business Day
thereafter, addressed as provided on SCHEDULE III hereto, or to such other
address as any of the parties hereto may designate by written notice.
SECTION XV.4. COUNTERPARTS. This Participation Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION XV.5. AMENDMENTS. The Operative Documents or any of the terms
thereof may be terminated (except as specifically contemplated herein), amended,
supplemented, waived or modified only with the written agreement or consent of
Lessor, Administrative Agent, Lessee and the Required Participants; PROVIDED,
HOWEVER, that SECTION 15.18 hereof may not be terminated, amended, supplemented,
waived or modified without the written agreement or consent of the Arranger; and
PROVIDED, FURTHER, that such termination, amendment, supplement, waiver or
modification shall require the written agreement or consent of each Participant
(or, in the case of CLAUSE (b) below, each Certificate Holder) if such
termination, amendment, supplement, waiver or modification would:
(a) modify any of the provisions of this SECTION 15.5, change
the definition of "Required Participants" or modify or waive any
provision of an Operative Document requiring action by each
Participant;
(b) change the definition of "Required Certificate Holders" or
modify or waive any provision of an Operative Document requiring action
by each Certificate Holder;
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(c) amend, modify, waive or supplement any of the provisions
of SECTIONS 4.1, 4.2, or 5.3 hereof or Section 2.5, 2.6, 2.7 or 2.8 of
the Loan Agreement;
(d) reduce, modify, amend or waive any fees or indemnities in
favor of any Participant, including without limitation amounts payable
pursuant to ARTICLE XIII (except that any Person may consent to any
reduction, modification, amendment or waiver of any indemnity payable
to it);
(e) modify, postpone, reduce or forgive, in whole or in part,
any payment of Rent (other than pursuant to the terms of the Operative
Documents), any Loan or Certificate Amount, the Lease Balance, the Loan
Balance, Sale Option Recourse Amount, any Fees, amounts due pursuant to
Section 20.2 of the Lease, Interest or Yield (except that any Person
may consent to any modification, postponement, reduction or forgiveness
of any payment of any Commitment Fee payable to it) or, subject to
CLAUSE (c) above, any other amount payable under the Lease or this
Participation Agreement, or modify the definition or method of
calculation of any Rent (other than pursuant to the terms of the
Operative Documents), Loans or Certificate Amounts, Lease Balance, Loan
Balance, Certificate Balance, Participant Balance, Sale Option Recourse
Amount, any Fees, Participant Balance or any other definition which
would affect the amounts advanced or which are payable under the
Operative Documents;
(f) consent to any assignment of the Lease by Lessee,
releasing Lessee from its obligations in respect of the payments of
Rent, Loan Balance, Certificate Balance or Lease Balance or changing
the absolute and unconditional character of such obligations; or
(g) release of any Lien granted by Lessee or Lessor under the
Operative Documents, except as provided in the Operative Documents.
SECTION XV.6. HEADINGS, ETC. The Table of Contents and headings of the
various Articles and Sections of this Participation Agreement are for
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof.
SECTION XV.7. PARTIES IN INTEREST. Except as expressly provided in
SECTION 12.1 or elsewhere herein, none of the provisions of this Participation
Agreement is intended for the benefit of any Person except the parties hereto.
Lessee shall not assign or transfer any of its rights or obligations under the
Operative Documents without the prior written consent of the
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Required Participants. Except as provided in SECTION 10.1(b) and (c), Lessor
shall not assign or transfer any of its rights or obligations under the
Operative Documents without the prior written consent of Lessee and the
Required Participants.
SECTION XV.8. GOVERNING LAW. THIS PARTICIPATION AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY THE INTERNAL LAW OF THE STATE OF COLORADO WITHOUT REGARD
TO CONFLICTS OF LAW PRINCIPLES.
SECTION XV.9. SEVERABILITY. Any provision of this Participation
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION XV.10. LIABILITY LIMITED. No Participant shall have any
obligation to any other Participant or to Lessee, Guarantor, Lessor or
Administrative Agent with respect to the Overall Transaction, except those
obligations of such Participant expressly set forth in the Operative Documents,
including any liability any such Participant may have with respect to any
inaccuracy or breach of the representations and warranties of such Participant
expressly set forth herein, or except as set forth in the instruments delivered
in connection therewith, and no Participant shall be liable for performance by
any other party hereto of such other party's obligations under the Operative
Documents, except as otherwise so set forth.
SECTION XV.11. SUBMISSION TO JURISDICTION. Each party hereto
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Participation Agreement or any other Operative
Document, or for recognition and enforcement of any judgment in respect thereof,
to the non-exclusive general jurisdiction of the United States District Court
for the District of Colorado, and appellate courts from any thereof;
(b) consents that any such action or proceedings may be
brought to such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered
or certified mail (or any substantially similar form of mail),
73
postage prepaid, to such party at its address set forth on SCHEDULE III or at
such other address of which the other parties hereto shall have been notified
pursuant to SECTION 15.3; and
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction.
SECTION XV.12. WAIVER OF JURY TRIAL. THE PARTIES HERETO VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS PARTICIPATION AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
ANY OF THE PARTIES HERETO AND THERETO. THE PARTIES HERETO HEREBY AGREE THAT THEY
WILL NOT SEEK TO CONSOLIDATE ANY SUCH LITIGATION WITH ANY OTHER LITIGATION IN
WHICH A JURY TRIAL HAS NOT OR CANNOT BE WAIVED. THE PROVISIONS OF THIS SECTION
15.12 HAVE BEEN FULLY NEGOTIATED BY THE PARTIES HERETO AND SHALL BE SUBJECT TO
NO EXCEPTIONS. LESSEE AND GUARANTOR EACH ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER
PROVISION OF EACH OTHER OPERATIVE DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTICIPANTS ENTERING INTO THIS
PARTICIPATION AGREEMENT AND EACH OTHER OPERATIVE DOCUMENT.
SECTION XV.13. CONFIDENTIALITY. Each party hereto agrees to take and to
cause its Affiliates to take normal and reasonable precautions, in accordance
with such party's customary procedures for handling confidential information of
this nature, and exercise due care to maintain the confidentiality of all
information identified as "nonpublic", "confidential" or "secret" by Lessee or
Guarantor and provided to it by Lessee or Guarantor, or by the Administrative
Agent on Lessee's or Guarantor's behalf, under this Agreement or any other
Operative Document, and neither it nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of this
Participation Agreement and the other Documents or in connection with other
business now or hereafter existing or contemplated with the Lessee or Guarantor;
except to the extent such information (a) was or becomes generally available to
the public other than as a result of disclosure by such party or its Affiliates,
or (b) was or becomes available on a non-confidential basis from a source other
Lessee or Guarantor, provided that such source is not bound by a confidentiality
agreement with the Lessee or Guarantor known to such party; PROVIDED, HOWEVER,
that any party may disclose such information (i) at the request or pursuant to
any requirement of any Governmental Authority to which such party is subject or
in connection with an examination of such Lender by any such authority; (ii)
pursuant to
74
subpoena or other court process; (iii) when required to do so in accordance
with the provisions of any applicable Requirement of Law; (iv) to the extent
reasonably required in connection with any litigation or proceeding to which
the Administrative Agent, any Participant, Lessor or their respective
Affiliates may be party; (v) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Operative
Document; (vi) to such party independent auditors and other professional
advisors, provided that such Person is informed of the confidential nature of
such information and the obligation to keep such information confidential
pursuant to the terms and subject to the conditions of this SECTION 15.13;
(vii) to any participant or assignee, actual or potential, provided that such
Person agrees in writing to keep such information confidential to the same
extent required of the parties hereunder; (viii) as to any party or its
Affiliate, as expressly permitted under the terms of any other document or
agreement regarding confidentiality to which the Lessee or Guarantor is party
or is deemed party with such party or such Affiliate; (ix) to its Affiliates;
and (x) to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that required access
to information about such party's investment portfolio in connection with
ratings issued with respect to such party.
SECTION XV.14. LIMITED LIABILITY OF LESSOR. The parties hereto agree
that Bank shall have no personal liability whatsoever to Lessee, Guarantor, the
Certificate Holders, the Lenders, Administrative Agent or any of their
respective successors and assigns for any Claim based on or in respect of this
Participation Agreement or any of the other Operative Documents or arising in
any way from the Overall Transaction; PROVIDED, HOWEVER, that Bank shall be
liable in its individual capacity: (a) for its own willful misconduct or gross
negligence (or negligence in the handling of funds), (b) for liabilities that
may result from the inaccuracy or incorrectness of any representation or
warranty made by it in its individual capacity or as Lessor in this
Participation Agreement or in any certificate or document delivered pursuant
hereto, or from the failure of Bank to perform the covenants and agreements set
forth in SECTION 9.1 hereof, whether as to itself or as Lessor, or any other
breach by Bank of any of its other covenants or obligations under any of the
Operative Documents (regardless of whether such covenants and agreements concern
Bank, as such, or Bank acting as Lessor), or (c) for any Tax based on or
measured by any fees, commission or compensation received by it for actions
contemplated by the Operative Documents.
SECTION XV.15. LIMITED LIABILITY OF AGENT. The parties hereto agree
that Administrative Agent, in its individual capacity, shall have no personal
liability whatsoever to Lessee, Guarantor
75
the Certificate Holders, the Lenders, any other agent, Lessor or any of their
respective successors and assigns for any Claim based on or in respect of
this Participation Agreement or any of the other Operative Documents or
arising in any way from the Overall Transaction; PROVIDED, HOWEVER, that
Administrative Agent shall be liable in its individual capacity: (a) for its
own willful misconduct or gross negligence (or negligence in the handling of
funds) and, to each Participant for the breach of its obligations to such
Participant in respect of the Operative Documents and the Leased Property,
(b) for liabilities that may result from the incorrectness of any
representation or warranty expressly made by it in this Participation
Agreement, whether in its individual capacity, or as Administrative Agent, or
from its failure to perform the covenants and agreements set forth in this
Participation Agreement or any other Operative Document, or (c) for any Tax
based on or measured by any fees, commission or compensation received by it
for actions contemplated by the Operative Documents. It is understood and
agreed that, except as provided in the preceding proviso, Administrative
Agent shall have no personal liability under any of the Operative Documents
as a result of acting pursuant to and consistent with any of the Operative
Documents.
SECTION XV.16. PAYMENT OF TRANSACTION EXPENSES AND OTHER COSTS.
(a) TRANSACTION EXPENSES AND CONTINUING EXPENSES. As and when
any portion of Transaction Expenses becomes due and payable, including the
continuing fees, expenses and disbursements (including reasonable counsel fees)
of Lessor, as Lessor under the Lease, Borrower under the Loan Agreement, and as
trustee under the Trust Agreement, with respect to the administration of the
Trust Estate and each agent under the Operative Documents, such Transaction
Expenses shall be paid by Lessee as Supplemental Rent.
(b) PAYMENT BY ADVANCE. Subject to the other provisions of
this SECTION 15.16 and without limiting the application of SECTION 15.16(a), all
Transaction Expenses incurred prior to the Advance shall be paid by Lessee on
the Advance Date and, subject to the limitations at SECTION 3.1, Lessee may seek
reimbursement for Transaction Expenses paid by Lessee to the extent there are
funds available for such purpose after funding all Acquisition Costs.
(c) AMENDMENTS, SUPPLEMENTS AND APPRAISAL. Without limitation
of the foregoing, Lessee agrees to pay to the Participants, Lessor and
Administrative Agent all costs and expenses (including reasonable legal fees and
expenses of special counsel to Administrative Agent and Lessor and a single
document counsel for the Participants) incurred by any of them in connection
76
with: (i) the considering, evaluating, investigating, negotiating and entering
into or giving or withholding of any amendments or supplements or waivers or
consents with respect to any Operative Document; (ii) any Casualty, Condemnation
or termination of the Lease or any other Operative Document; (iii) the
negotiation and documentation of any restructuring or "workout", whether or not
consummated, of any Operative Document; (iv) the enforcement of the rights or
remedies against Lessee or Guarantor under the Operative Documents or (v) any
transfer by Lessor or a Participant of any interest in the Operative Documents
during the continuance of an Event of Default.
SECTION XV.17. REPRODUCTION OF DOCUMENTS. This Participation Agreement,
all documents constituting an Appendix, Schedule or Exhibit hereto, and all
documents relating hereto received by a party hereto, including, without
limitation: (a) consents, waivers and modifications that may hereafter be
executed; (b) documents received by the Participants or Lessor in connection
with the receipt and/or acquisition of the Leased Property; and (c) financial
statements, certificates, and other information previously or hereafter
furnished to Lessor, Administrative Agent or any Participant may be reproduced
by the party receiving the same by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. Each of the parties
hereto agrees and stipulates that, to the extent permitted by law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such party in the
regular course of business) and that, to the extent permitted by law, any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
▇▇▇▇▇▇▇ ▇▇.▇▇. ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ LEASING & CAPITAL, LLC. Each
party hereto acknowledges hereby that it is aware of the fact that Banc of
America Leasing & Capital, LLC has acted as an "arranger" with respect to the
Overall Transaction. The parties hereto acknowledge and agree that Arranger
and its Affiliates, including Bank of America, National Association, have not
made any representations or warranties concerning, and that they have not
relied upon Arranger as to, the tax, accounting or legal characterization or
validity of (i) the Operative Documents or (ii) any aspect of the Overall
Transaction. The parties hereto acknowledge and agree that Arranger has no
duties, express or implied, under the Operative Documents in its capacity as
Arranger. The parties hereto further agree that SECTION 4.4(b)(III), SECTION
16.6, the first proviso in the first sentence of SECTION 15.5, SECTION
15.15(a) to the extent of its application to Arranger, and this SECTION 15.18
are for the express benefit of Arranger, and
77
Arranger shall be entitled to rely thereon as if it were a party hereto and
such Sections and Subsections, to the extent applicable to Arranger, shall
not be amended or waived without the written consent of Arranger.
SECTION XV.19. DELIVERIES TO PARTICIPANTS. Lessee may fulfill its
obligations hereunder and under each of the other Operative Documents to
provide any item (other than any notices) to any Participant by providing
sufficient copies of such item directly to Administrative Agent, along with
the costs of postage, with instructions to Administrative Agent to deliver
such item to such Participant.
ARTICLE XVI
ADMINISTRATIVE AGENT
SECTION XVI.1. APPOINTMENT. Each Participant hereby irrevocably
designates and appoints Administrative Agent as the agent of such Participant
under this Participation Agreement and the other Operative Documents, and each
such Participant irrevocably authorizes Administrative Agent, in such capacity,
to take such action on its behalf under the provisions of this Participation
Agreement and the other Operative Documents and to exercise such powers and
perform such duties as are expressly delegated to Administrative Agent by the
terms of this Participation Agreement and the other Operative Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Participation
Agreement, Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth herein and in the other Operative Documents, or
any fiduciary relationship with any Participant or any other party to the
Operative Documents, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Participation
Agreement or any other Operative Document or otherwise exist against
Administrative Agent.
SECTION XVI.2. DELEGATION OF DUTIES. Administrative Agent may execute
any of its duties under this Participation Agreement and the other Operative
Documents by or through agents or attorneys-in- fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties.
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care.
SECTION XVI.3. EXCULPATORY PROVISIONS. Neither Administrative Agent (in
its capacity as such) nor any of its
78
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall
be (a) liable for any action lawfully taken or omitted to be taken by it or
such Person under or in connection with this Participation Agreement or any
other Operative Document, except for its or such Person's own willful
misconduct or gross negligence (or negligence in the handling of funds) or
(b) responsible in any manner to any of the Participants or any other party
to the Operative Documents for any recitals, statements, representations or
warranties made by Lessor, Lessee or Guarantor or any officer thereof
contained in this Participation Agreement or any other Operative Document or
in any certificate, report, statement or other document referred to or
provided for in, or received by Administrative Agent under or in connection
with, this Participation Agreement or any other Operative Document, or for
the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Participation Agreement or any other Operative Document
or for any failure of Lessor, Lessee or Guarantor to perform its obligations
hereunder or thereunder. Administrative Agent shall not be under any
obligation to any Lender or any other party to the Operative Documents to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Participation Agreement or
any other Operative Document, or to inspect the properties, books or records
of Lessor, Lessee or Guarantor.
SECTION XVI.4. RELIANCE BY ADMINISTRATIVE AGENT.
Administrative Agent shall be entitled to rely, and shall be fully protected
in relying, upon any Note, Certificate, writing, resolution, notice, consent,
certificate, affidavit, letter, facsimile message, statement, order or other
document or other written communication believed by it in good faith to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including
counsel to Lessor or Lessee), independent accountants and other experts
selected by Administrative Agent. Administrative Agent may deem and treat the
payee of any Note or Certificate as the owner thereof for all purposes unless
a written notice of assignment, negotiation or transfer thereof shall have
been filed with Administrative Agent. Administrative Agent shall be fully
justified in failing or refusing to take any action under this Participation
Agreement or any other Operative Document unless it shall first receive the
advice or concurrence of the Required Participants, or it shall first be
indemnified to its satisfaction by the applicable Participants against any
and all liability and expense which may be incurred by it by reason of taking
or continuing to take any such action. Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Participation Agreement and the other Operative Documents in accordance with
a request of the Required
79
Participants, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Participants and all future
holders of the applicable Notes or Certificates. Wherever in the Operative
Documents the consent or approval of Administrative Agent is required, such
consent or approval may be given by Administrative Agent only upon its
receipt of such consent or approval from the Required Participants.
SECTION 16.5. NOTICE OF DEFAULT. Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default unless Administrative Agent has received notice from a Participant or
Lessor referring to this Participation Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that Administrative Agent receives such a notice, Administrative Agent
shall promptly give notice thereof to the Participants, Lessor and Lessee.
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be directed by the Required Participants; PROVIDED,
HOWEVER, that unless and until Administrative Agent shall have received such
directions, Administrative Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Participants.
SECTION 16.6. NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Participant expressly acknowledges that neither Administrative Agent nor
the Arranger, nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or Affiliates, has made any representations or
warranties to it and that no act by Administrative Agent or the Arranger
hereinafter taken, including any review of the affairs of Lessor, Lessee or
Guarantor, shall be deemed to constitute any representation or warranty by
Administrative Agent or the Arranger to any Participant. Each Participant
represents to Administrative Agent and the Arranger that it has, independently
and without reliance upon Administrative Agent, Administrator, the Arranger or
any other Participant, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of Lessor, Lessee and Guarantor and made its own decision to
enter into this Participation Agreement. Each Participant also represents that
it will, independently and without reliance upon Administrative Agent, the
Arranger or any other Participant, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Participation Agreement and the other Operative Documents, and to make such
investigation as it deems necessary to
80
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of Lessor, Lessee and Guarantor. Except for
notices, reports and other documents expressly required to be furnished to
the Participants by Administrative Agent hereunder, neither Administrative
Agent nor the Arranger shall have any duty or responsibility to provide any
Participant with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of Lessor, Lessee or Guarantor which may come into the
possession of Administrative Agent, the Arranger or any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
SECTION XVI.7. INDEMNIFICATION. Except as provided in SECTION 16.4
hereunder, Administrative Agent agrees to look solely to Lessee under ARTICLE
XIII, and not to any other party hereto, for any claim for indemnification which
may arise hereunder or under any other Operative Document.
SECTION XVI.8. ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. Each
Participant acknowledges that First Security Bank, National Association is
acting as Administrative Agent hereunder. First Security Bank, National
Association and its Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory,
underwriting or other business with Lessor, Lessee and their Affiliates as
though it was not Administrative Agent hereunder and under the other
Operative Documents and without notice to or consent of the Participants.
Each Participant acknowledges that, pursuant to such activities, First
Security Bank, National Association or its Affiliates may receive information
regarding Lessee, Lessor or their Affiliates (including information that may
be subject to confidentiality obligations in favor of Lessee, Lessor or their
Affiliates) and acknowledges that such Persons shall be under no obligation
to provide such information to them.
SECTION XVI.9. SUCCESSOR ADMINISTRATIVE AGENT. Subject to the
appointment and acceptance of a successor Administrative Agent as provided
below, Administrative Agent may resign at any time by giving notice thereof to
each Participant or may be removed at any time by written notice from the
Required Participants, such resignation or removal to be effective only upon
appointment of a successor as herein provided and such successor's acceptance of
such appointment. Upon any such resignation or removal, the Required
Participants at the time of the resignation or removal shall have the right to
appoint (so long as no Event of Default attributable to its or Guarantor's
action or failure to act has occurred and is continuing, with the prior written
consent of
81
Lessee) a successor Administrative Agent which shall be a commercial
bank organized under the laws of the United States of America or any State
thereof or under the laws of another country which is doing business in the
United States of America and having a combined capital, surplus and undivided
profits of at least $500,000,000. If, within 30 calendar days after the retiring
Administrative Agent's giving of notice of resignation or receipt of a written
notice of removal, a successor Administrative Agent is not so appointed and does
not accept such appointment, then the retiring or removed Administrative Agent
may appoint a successor Administrative Agent and transfer to such successor
Administrative Agent all rights and obligations of the retiring Administrative
Agent. Such successor Administrative Agent shall be a commercial bank organized
under the laws of the United States of America or any State thereof or under the
laws of another country which is doing business in the United States of America
and having a combined capital, surplus and undivided profits of at least
$500,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Administrative Agent, and the
term "Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the retiring or removed Administrative Agent shall
be discharged from duties and obligations as Administrative Agent thereafter
arising hereunder and under any related document without any other or further
act or deed on the part of such former Administrative Agent or any of the
parties to this Participation Agreement or any holders of the Notes or the
Certificates. If the retiring Administrative Agent does not appoint a successor,
Lessee (so long as no Event of Default attributable to its or Guarantor's
actions or failures to act has occurred and is continuing) may do so, or any
Participant shall be entitled to apply to a court of competent jurisdiction for
such appointment, and in any such case the successor so appointed shall act
until such time, if any, as a successor shall have been appointed as above
provided. After any retiring Administrative Agent's resignation as
Administrative Agent, all of the provisions of this ARTICLE XVI shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Participation Agreement and the other Operative
Documents.
[END OF PAGE]
[SIGNATURE PAGES FOLLOW]
82
PARTICIPATION AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
TELETECH SERVICES CORPORATION, as Lessee
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
TELETECH HOLDINGS, INC., as Guarantor
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Treasurer
S-1
PARTICIPATION AGREEMENT
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL
ASSOCIATION, not in its individual
capacity, except as expressly stated
herein, but solely as Certificate
Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇. Ring
-------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Ring
-----------------------------------------
Title: Assistant Vice President
----------------------------------------
S-2
PARTICIPATION AGREEMENT
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual
capacity, except as expressly stated
herein, but solely as Administrative
Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Title: Vice President
----------------------------------------
S-3
PARTICIPATION AGREEMENT
CERTIFICATE HOLDERS:
SECURITY PACIFIC LEASING CORPORATION, as
Certificate Holder
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: VP
---------------------------------------
S-4
PARTICIPATION AGREEMENT
▇▇▇▇▇ FARGO BANK, N.A., as Certificate
Holder
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Title: Vice President
---------------------------------------
S-5
PARTICIPATION AGREEMENT
BANK HAPOALIM B.M., as Certificate Holder
By: /s/ ▇. ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Title: S.V.P. and Branch Manager
---------------------------------------
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Title: First Vice President
---------------------------------------
S-6
PARTICIPATION AGREEMENT
LENDERS:
BANC OF AMERICA LEASING AND CAPITAL, LLC,
as Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Title: VP
---------------------------------------
S-7
PARTICIPATION AGREEMENT
▇▇▇▇▇ FARGO BANK, N.A., as Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Title: Vice President
---------------------------------------
S-8
PARTICIPATION AGREEMENT
BANK HAPOALIM B.M., as Lender
By: /s/ ▇. ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Title: S.V.P.
---------------------------------------
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Title: First Vice President
---------------------------------------
S-9
APPENDIX 1
TO
PARTICIPATION AGREEMENT
----------------------------------------------------------
TeleTech 2000 Lease Financing
----------------------------------------------------------
DEFINITIONS AND INTERPRETATION
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 all genders;
(iv) reference to any agreement (including any Operative
Document), document or instrument 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 Applicable Laws means such Applicable
Laws 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 Applicable Laws means that provision of such
Applicable Laws from time to time in effect and constituting the
substantive amendment, modification, codification, replacement or
reenactment of such section or other provision;
1
(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) relative to the determination of any period of time,
"from" means "from and including" and "to" means "to but excluding".
B. ACCOUNTING TERMS. In each Operative Document, unless expressly
otherwise provided, accounting terms shall be construed and interpreted, and
accounting determinations and computations shall be made, in accordance with
GAAP.
C. CONFLICT IN OPERATIVE DOCUMENTS. If there is any conflict between
any Operative Documents, such Operative Document shall be interpreted and
construed, if possible, so as to avoid or minimize such conflict, but, to the
extent (and only to the extent) of such conflict, if it is one of the Operative
Documents involved in such conflict, the Participation Agreement shall prevail
and control.
D. LEGAL REPRESENTATION OF THE PARTIES. The Operative Documents were
negotiated by each of the parties with the benefit of legal representation and
any rule of construction or interpretation otherwise requiring the Operative
Document to be construed or interpreted against any party shall not apply to any
construction or interpretation hereof or thereof.
E. DEFINED TERMS. Unless a clear contrary intention appears, each term
defined herein has the meaning indicated for such term below when used in any
Operative Document.
"ACCELERATION" is defined in Section 6.2(a) of the Loan Agreement.
"ACQUISITION COSTS" means the cost required to be paid for the
acquisition of the Land and Facility pursuant to the Purchase Contract,
including all related Transaction Expenses.
2
"ACQUISITION DATE" means the date that a Deed is recorded granting to
Lessor a fee title interest in the Land and Facility.
"ADMINISTRATIVE AGENT" means First Security Bank, National Association,
or any successor pursuant to the terms of the Operative Documents.
"ADVANCE" means the advance by Certificate Trustee to Lessee of amounts
Funded by the Participants pursuant to Article III of the Participation
Agreement (including, without limitation, all Acquisition Costs, all Transaction
Expenses and all amounts funded into the Tenant Improvement Account).
"ADVANCE DATE" means any Business Day on which the Advance is made
under the Participation Agreement in accordance with Section 3.2 thereof.
"ADVANCE REQUEST" is defined in Section 3.2(a) of the Participation
Agreement.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person. For purposes of this definition, "control",
when used with respect to any Person, means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"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 (including any Taxes payable by reason of inclusion of such amount in
income otherwise excluded from the definition of Impositions, and assuming for
this purpose that the recipient of such payment is subject to taxation at the
highest Federal and applicable state and local marginal rates applicable to
widely held corporations for the year in which such income is taxable) required
to be paid by the recipient (less any tax savings realized, utilizing the same
tax rate assumptions as set forth in the immediately preceding parenthetical
phrase, and the present value of any tax savings projected, utilizing the same
tax rate assumptions as set forth in the immediately preceding parenthetical
phrase, 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
3
amounts, such increased payment (as so reduced) is equal to the payment
otherwise required to be made.
"AGENT FEE LETTER" means the fee letter between Lessee and
Administrative Agent in connection with the Overall Transaction.
"AGGREGATE COMMITMENT AMOUNT" means Thirty Eight Million One Hundred
Sixty Eight Thousand Dollars ($38,168,000).
"ALTERNATE BASE RATE" means, on any date with respect to any Loan or
Certificate Amount, a fluctuating rate of interest per annum equal to the
Federal Funds Effective Rate most recently determined by the Administrative
Agent, PLUS 0.50% per annum PLUS the Applicable Lender Margin or Applicable
Certificate Holder Margin, as the case may be. If the Federal Funds Effective
Rate changes from time to time after the Document Closing Date, the Alternate
Base Rate shall be automatically increased or decreased, if appropriate and as
the case may be, without notice to the Lessee or the Lessor, as of the effective
time of each change.
"APPLICABLE CERTIFICATE HOLDER MARGIN" means, at any time of
determination of the LIBO Rate or the Alternate Base Rate, the rate per annum,
expressed in "basis points", set forth below opposite the Debt to EBITDAR Ratio
then in effect:
PRICING LEVEL DEBT TO EBITDAR RATIO APPLICABLE CERTIFICATE HOLDER MARGIN
I greater than or equal to 300 bps
2.5:1.0
II less than 2.5:1.0 and greater 275 bps
than or equal to 2.0:1.0
III less than 2.0:1.0 and greater 250 bps
than or equal to 1.0:1.0
IV less than 1.0:1.0 and greater 225 bps
than or equal to 0.5:1.0
4
V less than 0.5:1.0 200 bps
The Debt to EBITDAR Ratio shall be calculated by Guarantor as of the
end of each fiscal quarter, commencing the fiscal quarter ended December 31,
2000, and shall be reported to the Administrative Agent pursuant to a compliance
certificate executed by the chief financial officer of Guarantor and delivered
pursuant to Section 8.1(d)(iv) of the Participation Agreement. The Applicable
Certificate Holder Margin shall be adjusted, if necessary, on the third Business
Day after the delivery of such certificate, with such adjustment to apply to all
Interest Periods then outstanding and beginning thereafter until the next
adjustment date; PROVIDED, that if such certificate, together with the financial
statements to which such certificate relates, is not delivered to the
Administrative Agent by the fifth Business Day after the date on which the
related financial statements are due to be delivered to the Administrative Agent
pursuant to Sections 8.1(d)(i) and (ii) of the Participation Agreement, then,
from such fifth Business Day until the third Business Day after delivery of such
certificate, the Applicable Certificate Holder Margin shall be equal to 275 bps.
From the Document Closing Date until adjusted as described above, the Applicable
Certificate Holder Margin shall be equal to 250 bps.
"APPLICABLE LAWS" at any time means all then existing laws, rules,
regulations (including Environmental Laws) statutes, treaties, codes,
ordinances, permits, orders and licenses of and interpretations by any
Governmental Authority, and judgments, decrees, injunctions, writs, orders or
like action of any court, arbitrator or other administrative, judicial or
quasi-judicial tribunal or agency of competent jurisdiction (including those
pertaining to health, safety or the environment (including, without limitation,
wetlands) and those pertaining to the construction, use or occupancy of the
Leased Property), and any enforceable restrictive covenant or deed restriction
or easement of record encumbering the Leased Property, in each case applicable
to the subject matter being addressed.
"APPLICABLE LENDER MARGIN" means, at any time of determination of the
LIBO Rate or the Alternate Base Rate, the rate per annum, expressed in "basis
points", set forth below opposite the Debt to EBITDAR Ratio then in effect:
PRICING LEVEL DEBT TO EBITDAR RATIO APPLICABLE LENDER MARGIN
5
I greater than or equal to 2.5:1.0 200 bps
II less than 2.5:1.0 and greater 175 bps
than or equal to 2.0:1.0
III less than 2.0:1.0 and greater 150 bps
than or equal to 1.0:1.0
IV less than 1.0:1.0 and greater 125 bps
than or equal to 0.5:1.0
V less than 0.5:1.0 100 bps
The Debt to EBITDAR Ratio shall be calculated by Guarantor as of the
end of each fiscal quarter, commencing the fiscal quarter ended December 31,
2000, and shall be reported to the Administrative Agent pursuant to a compliance
certificate executed by the chief financial officer of Guarantor and delivered
pursuant to Section 8.1(d)(iv) of the Participation Agreement. The Applicable
Lender Margin shall be adjusted, if necessary, on the third Business Day after
the delivery of such certificate, with such adjustment to apply to all Interest
Periods then outstanding and beginning thereafter until the next adjustment
date; PROVIDED, that if such certificate, together with the financial statements
to which such certificate relates, is not delivered to the Administrative Agent
by the fifth Business Day after the date on which the related financial
statements are due to be delivered to the Administrative Agent pursuant to
Sections 8.1(d)(i) and (ii) of the Participation Agreement, then, from such
fifth Business Day until the third Business Day after delivery of such
certificate, the Applicable Lender Margin shall be equal to 175 bps. From the
Document Closing Date until adjusted as described above, the Applicable Lender
Margin shall be equal to 150 bps.
"APPLICABLE LENDING OFFICE" means, for each Participant, the office of
such Participant set forth as the Applicable Lending Office for such Participant
on Schedule III to the Participation Agreement, or such other office of such
Participant (or of an Affiliate of such Participant) as such Participant may
from time
6
to time specify to the Administrative Agent and Lessee by written
notice as the office from which its Loans or Certificate Amounts, as applicable,
accruing Interest or Yield, as applicable, at the LIBO Rate are made available
and maintained.
"APPRAISAL" is defined in Section 6.1(g)(iii) of the Participation
Agreement.
"APPRAISED VALUE" means, with respect to the Leased Property as of any
date of determination, the Fair Market Value of the Leased Property as set forth
in the Appraisal therefor.
"APPRAISER" means Integra ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company.
"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, hereditaments and other rights and
benefits at any time belonging or pertaining to the Leased Property, 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.
"ARRANGEMENT FEE" means the fee payable to Arranger pursuant to the
Arrangement Fee Letter.
"ARRANGEMENT FEE LETTER" means that certain letter agreement dated
October 31, 2000, relating to arrangement of the Overall Transaction, between
Arranger and Lessee.
"ARRANGER" means Banc of America Leasing & Capital, LLC, a Delaware
limited liability company.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement substantially in
the form of Exhibit N to the Participation Agreement.
"ASSIGNMENT OF LEASES" means that certain Assignment of Leases and
Rents of even date with the Participation Agreement, executed by Lessor in favor
of Administrative Agent.
"AUTHORIZED OFFICER" means any officer in the Corporate Trust
Department of Certificate Trustee who shall be duly authorized to execute the
Operative Documents.
7
"AVAILABLE COMMITMENT" means (i) with respect to each Certificate
Holder, the sum of (A) its Certificate Commitment, over (B) its aggregate
Certificate Amounts outstanding, and (ii) with respect to each Lender, the sum
of (A) its Loan Commitment, over (B) its aggregate Loans outstanding.
"BANK" means State Street Bank and Trust Company of Connecticut,
National Association, a national banking association, in its individual
capacity, or any successor trustee permitted pursuant to the Participation
Agreement and the Trust Agreement, in such successor trustee's individual
capacity.
"BANK REGULATORY AUTHORITY" means the F.R.S. Board, the Comptroller of
the Currency, the FDIC and all other relevant bank regulatory authorities
(including, without limitation, relevant state bank regulatory authorities).
"BANKRUPTCY CODE" means the Bankruptcy Reform Act of 1978, as amended.
"BASE TERM" is defined in Section 2.3 of the Lease.
"BASIC RENT" means for any Payment Date on which Basic Rent is due, an
amount equal to the sum of the aggregate amount of Interest and Yield payable
under the Operative Documents on such date on the Notes and the Certificates in
respect of the applicable Interest Period.
"BENEFITTED LENDER" is defined in Section 9.6 of the Loan Agreement.
"BORROWER" means Certificate Trustee, in its capacity as borrower under
the Loan Agreement.
"BREAK COSTS" means an amount equal to the amount, if any, required to
compensate any Certificate Holder or any Lender for any losses but excluding the
loss of the Applicable Lender Margin or Applicable Certificate Holder Margin on
such amounts which would have accrued following a payment by Lessee of Lease
Balance if such payment had not been made (including, without limitation, any
loss, cost or expense incurred by reason of the liquidation or reemployment of
deposits or funds acquired by any Certificate Holder or any Lender to fund its
obligations under the Operative Documents) it may reasonably incur as a result
of (x) the Lessee's payment of Basic Rent other than on a Payment Date, (y) the
Advance not being made on the date specified therefor in the Advance Request or
(z) as a result of any conversion of the LIBO
8
Rate pursuant to and in accordance with the Operative Documents. A statement
as to the amount of such losses, prepared in good faith and in reasonable
detail and submitted by any Certificate Holder or any Lender, as the case may
be, to the Lessee, shall be presumed correct absent demonstrable error.
"BUSINESS DAY" means (i) each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banks in Salt Lake City, Utah, Denver,
Colorado or San Francisco, California are generally authorized or obligated, by
law or executive order, to close and (ii) relative to any determination of the
LIBO Rate, any day which is a Business Day under CLAUSE (i) and is also a day on
which dealings in Dollars are carried on in the London interbank eurodollar
market.
"BUSINESS OBLIGATIONS" means all advances, debts, liabilities,
obligations, covenants and duties arising under any Loan Document (as defined in
the Credit Agreement) owing by Guarantor to any Lender, the Administrative
Agent, or any Indemnified Person under the Credit Agreement, whether direct or
indirect (including those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising.
"CASH EQUIVALENTS" means investments maturing within one year from the
date of investment in (a) certificates of deposits, Eurodollar time deposits,
other interest bearing deposits or accounts and repurchase agreements with high
quality United States commercial banks having a combined capital and surplus of
at least $500,000,000, (b) certificates of deposits, other interest bearing
accounts or deposits and demand deposits with other United States banks, which
deposits and accounts are in amounts fully insured by the FDIC, (c) obligations
issued or unconditionally guaranteed by the United States government or issued
by an agency thereof, (d) direct obligations issued by any State of the United
States or any political subdivision thereof which have the highest short-term or
long-term rating obtainable from Standard & Poor's Ratings Group or ▇▇▇▇▇'▇
Investors Services, Inc. on the date of investment, (e) commercial paper rated
A-1 or better by Standard & Poor Ratings Group or P-1 or better by ▇▇▇▇▇'▇
Investors Services, Inc. or (f) money market mutual funds investing in
investments of the types described in clauses (a) through (e).
"CASUALTY" means any damage to or destruction of all or any portion of
the Leased Property as a result of a fire or other casualty.
9
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, 42 U.S.C. ▇▇.▇▇. 9601 ET SEQ., as amended.
"CERTIFICATE" is defined in Section 2.1 of the Trust Agreement.
"CERTIFICATE AMOUNT" means, with respect to any Certificate Holder as
of any date of determination, the aggregate amount advanced by such Certificate
Holder for the purchase of Certificates pursuant to Section 3.1 of the
Participation Agreement, net of any distributions (other than distributions of
Yield) with respect thereto.
"CERTIFICATE BALANCE" means, as of any date of determination, an amount
equal to the sum of the outstanding Certificate Amounts of all Certificate
Holders, together with all accrued and unpaid Yield thereon.
"CERTIFICATE COMMITMENT" means the Commitment of each Certificate
Holder to make available Certificate Amounts in an aggregate principal amount
not to exceed the amount set forth on Schedule I of the Participation Agreement.
"CERTIFICATE HOLDER" has the meaning set forth in the preamble to the
Trust Agreement.
"CERTIFICATE REGISTER" is defined in Section 2.8(a) of the Trust
Agreement.
"CERTIFICATE TRUSTEE" or "TRUSTEE" means State Street Bank and Trust
Company of Connecticut, National Association, a national banking association,
not in its individual capacity, but solely as trustee under the Trust Agreement,
together with any individual trustee or co-trustee appointed pursuant to the
terms of the Trust Agreement.
"CHANGE OF CONTROL" means (a) any acquisition by any Person, or two or
more Persons acting in concert, including without limitation any acquisition
effected by means of any transaction contemplated by Section 7.03 of the Credit
Agreement as incorporated by reference at Section 8.3 of the Participation
Agreement, of beneficial ownership (within the meaning of Rule 13d-3 of the SEC
under the Exchange Act) of 25% or more of the outstanding shares of voting stock
of Guarantor or (b) during any period of 25 consecutive calendar months,
commencing on the date
10
of the Credit Agreement, the ceasing of those individuals (the "Continuing
Directors") who either (i) were directors of Guarantor on the first day of
each such period or (ii) subsequently became directors of Guarantor and whose
actual election or initial nomination for election subsequent to that date
was approved by a majority of the Continuing Directors then on the board of
directors of Guarantor, to constitute a majority of the board of directors of
Guarantor.
"CLAIMS" means any and all obligations, liabilities, losses, actions,
suits, judgments, penalties, fines, claims, demands, settlements, costs and
expenses (including reasonable legal fees and expenses) of any nature
whatsoever.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute thereto.
"COMMITMENT" means (i) as to any Lender, its Loan Commitment, and (ii)
as to any Certificate Holder, its Certificate Commitment.
"COMMITMENT PERCENTAGE" means, as to any Participant, the percentage
set forth opposite such Participant's name under the heading "Commitment
Percentage" on Schedule I, with respect to the Certificate Holders, or Schedule
II, with respect to the Lenders, to the Participation Agreement.
"COMPLETION" means, with respect to the Tenant Improvements, the
substantial completion of the Tenant Improvements on behalf of Lessor in
accordance with the Plans and Specifications and in compliance in all material
respects with all Applicable Laws and Insurance Requirements, as determined in
the reasonable judgment of Lessee and the satisfaction by Lessee of each of the
requirements of Section 7.1 of the Participation Agreement.
"COMPLETION CERTIFICATE" means the certificate delivered by Lessee
pursuant to Section 7.1(b) of the Participation Agreement.
"CONDEMNATION" means any condemnation, requisition, confiscation,
seizure or other taking or sale of the use, access, occupancy, easement
rights or title to the Leased 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
Leased Property or alter the pedestrian or vehicular
11
traffic flow to the Leased Property so as to result in change in access to
the Leased 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 AGENCY AGREEMENT" means the Construction Agency
Agreement, dated as of June 22, 2000, between Lessor and Lessee, as
construction agent, in connection with certain real property located in
Arapahoe County, Colorado.
"CONTINGENT OBLIGATION" means, as to any Person, any direct or
indirect liability of that Person (without duplication), whether or not
contingent, with or without recourse, (a) with respect to any Indebtedness,
lease, dividend, letter of credit or other obligation (the Primary
OBLIGATIONS") of another Person (the Primary OBLIGOR"), including any
obligation of that Person (i) to purchase, repurchase or otherwise acquire
such primary obligations or any security therefor, (ii) to advance or provide
funds for the payment or discharge of any such primary obligation, or to
maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item,
level of income or financial condition of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation or (iv) otherwise to assure
or hold harmless the holder of any such primary obligation against loss in
respect thereof (each a "GUARANTY OBLIGATION"); (b) with respect to any
Surety Instrument issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings or payments; (c) to
purchase any materials, supplies or other property from or to obtain the
services of another Person if the relevant contract or other related document
or obligation requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of whether delivery
of such materials, supplies or other property is ever made or tendered, or
such services are ever performed or tendered; or (d) in respect of any Swap
Contract. The amount of any Contingent Obligation shall, in the case of
Guaranty Obligations be deemed equal to the stated or determinable amount of
the primary obligation in respect of which such Guaranty Obligation is made
or, if not stated or if indeterminable, the maximum reasonably anticipated
liability in respect thereof and in the case of other Contingent Obligations
shall be equal to the maximum reasonably anticipated liability in respect
thereof.
12
"CONTINGENT RENT" means amounts payable to any Participant pursuant to
Article XIII of the Participation Agreement.
"CONTROLLED GROUP" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Lessee, are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.
"CORPORATE TRUST DEPARTMENT" means the principal corporate trust office
of Bank, located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Corporate
Trust Administration, or at such other office at which the corporate trust
business of Bank shall be administered which Bank shall have specified by notice
in writing to Lessee, Guarantor, Administrative Agent, each Certificate Holder,
each Agent and each Lender.
"CREDIT AGREEMENT" means the Amended and Restated Revolving Credit
Agreement dated as of March 24, 2000 (as the same may be amended from time to
time), among Teletech Holdings, Inc., as the Borrower, the Banks from time to
time party thereto, and Bank of America National Trust and Savings Association,
as Administrative Agent for the Banks, and the Co-Agents party thereto.
"DEBT" means as of the end of any fiscal quarter an amount equal to the
sum of (a) all Indebtedness as of such date and (b) five (5) times Rental
Expenses for the period of four fiscal quarters then ended, in each case of the
Guarantor and its Subsidiaries on a consolidated basis.
"DEBT TO EBITDAR RATIO" means as of the end of any fiscal quarter, the
ratio of Debt calculated as of such date to EBITDAR for the period of four
concurrent fiscal quarters then ended.
"DEED" is defined at Section 6.1(j) of the Participation Agreement.
"DEED OF TRUST" means the Deed of Trust, Security Agreement and Fixture
Filing Statement of even date with the Participation Agreement, executed by
Lessor and Lessee, in favor of the Administrative Agent.
"DEED OF TRUST TRUSTEE" means the Public Trustee of ▇▇▇▇▇▇▇ County,
Colorado.
13
"DEFAULT" or "LEASE DEFAULT" means any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event
of Default.
"DEPOSIT ACCOUNT" is defined in Section 9.5 of the Participation
Agreement.
"DOCUMENT CLOSING DATE" is defined in Section 2.1 of the Participation
Agreement.
"DOLLARS" and "$" mean dollars in lawful currency of the United States
of America.
"EARLY TERMINATION OPTION" means the Lessee's option to purchase the
Leased Property in accordance with the provisions of Section 18.1 of the Lease.
"EBITDAR" means for any period for the Guarantor and its Subsidiaries
on a consolidation basis determined in accordance with GAAP the sum of (a) the
Net Income (or net loss) for such period, PLUS (b) all amounts treated as
expenses for depreciation and interest and the amortization of intangibles of
any kind to the extent deducted in the determination of such Net Income (or net
loss), PLUS ( c) all accrued taxes on or measured by income to the extent
included in the determination of such Net Income (or net loss), LESS (d) any
nonrecurring gains (or PLUS any nonrecurring losses resulting from or incurred
directly as a consequence of the sale or closure of any operating facilities by
the Guarantor and its Subsidiaries), PLUS Rental Expenses for such period.
"ELIGIBLE ASSIGNEE" means a commercial bank, other financial
institution or other Person having a combined capital and surplus of at least
$250,000,000, or any Subsidiary of such a commercial bank, financial institution
or Person, provided that such commercial bank, financial institution or Person
furnishes a guaranty with respect to such Subsidiary's obligations under the
Operative Documents.
"ENVIRONMENTAL AUDIT" means a Phase One environmental site assessment
(the scope and performance of which meets or exceeds ASTM Standard Practice
E1527-93 Standard Practice for Environmental Site Assessments: Phase One
Environmental Site Assessment Process) of the Leased Property and any additional
environmental assessments requested by the Required Participants in good faith,
including, without limitation, a Phase II
14
environmental site assessment if recommended by the Phase I environmental
site assessment.
"ENVIRONMENTAL LAW" at any time, means any applicable Federal, state,
county or local law, statute, ordinance, rule, regulation, license, permit,
authorization, approval, covenant, criteria having the effect of law, guideline
having the effect of law, administrative or court order, judgment, decree,
injunction, code or requirement or any agreement with a Governmental Authority
theretofore enacted or promulgated:
(x) relating to pollution (or the cleanup, removal,
remediation or encapsulation thereof, or any other response thereto),
or the regulation or protection of human health, safety or the
environment, including air, water, vapor, surface water, groundwater,
drinking water, land (including surface or subsurface), plant, aquatic
and animal life, or
(y) concerning exposure to, or the use, manufacture,
containment, storage, recycling, treatment, generation, discharge,
emission, release or threatened release, transportation, processing,
handling, labeling, containment, production, distribution, disposal or
remediation of any Hazardous Substance, Hazardous Condition or
Hazardous Activity.
in each case as amended and as then in effect, and any common law or
equitable doctrine (including, without limitation, injunctive relief and tort
doctrines such as negligence, nuisance, trespass and strict liability) that
may impose liability or obligations for injuries (whether personal or
property) or damages due to or threatened as a result of the presence of,
exposure to, or ingestion of, any Hazardous Substance. At any time,
Environmental Laws include, but are not limited to, CERCLA; the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 ET SEQ.; the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251 ET SEQ.; the Clean
Air Act, 42 U.S.C. Section 7401 ET SEQ.; the National Environmental Policy
Act, 42 U.S.C. Section 4321; the Refuse Act, 33 U.S.C. Section 401 ET SEQ.; the
Hazardous Materials Transportation Act of 1975, 49 U.S.C. Sections 1801-1812;
the Toxic Substances Control Act, 15 U.S.C. Section 2601 ET SEQ.; the Federal
Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section 136 ET SEQ.; the
Safe Drinking Water Act, 42 U.S.C. Section 300f ET SEQ., each as amended and
as then in effect, and their state and local counterparts or equivalents,
including any regulations promulgated thereunder.
15
"ENVIRONMENTAL VIOLATION" means any activity, occurrence or condition
at the Leased Property that violates any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA AFFILIATE" means an entity which is under common control with
Guarantor within the meaning of Section 4001(a)(14) of ERISA, or is a member of
a group which includes Guarantor and which is treated as a single employer under
Sections 414(b) or (c) of the Code.
"ERISA EVENT" means (i) with respect to any Plan, the occurrence of a
Reportable Event or the substantial cessation of operations (within the meaning
of Section 4062(e) of ERISA); (ii) the withdrawal by Guarantor or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it was a
substantial employer (as such term is defined in Section 4001(a)(2) of ERISA),
or the termination of a Multiple Employer Plan; (iii) the distribution of a
notice of intent to terminate or the actual termination of a Plan pursuant to
Section 4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under Section 4042 of
ERISA; (v) any event or condition which might constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (vi) the complete or partial withdrawal of Guarantor or
any ERISA Affiliate from a Multiemployer Plan; (vii) the conditions for
imposition of a Lien under Section 302(f) of ERISA exist with respect to any
Plan; or (vii) the adoption of an amendment to any Plan requiring the provision
of security to such Plan pursuant to Section 307 of ERISA.
"EVENT OF DEFAULT" means a Lease Event of Default.
"EXCEPTED PAYMENTS" means:
(a) all indemnity payments and Contingent Rent (including
indemnity payments and other amounts paid pursuant to Articles XII or
XIII of the Participation Agreement) to which Lessor, any Certificate
Holder or any of
16
their respective Affiliates, agents, officers, directors or
employees is entitled;
(b) any amounts (other than Basic Rent or amounts payable by
Lessee pursuant to Section 15.2 or Articles XVI, XVIII or XX of the
Lease) payable under any Operative Document to reimburse Lessor, any
Certificate Holder or any of their respective Affiliates (including the
reasonable expenses of Lessor, any Certificate Holder or such
Affiliates incurred in connection with any such payment) for performing
or complying with any of the obligations of Lessee under and as
permitted by any Operative Document;
(c) any amount payable to any Certificate Holder by any
transferee permitted under the Operative Documents of the interest of
any Certificate Holder as the purchase price of the Certificate
Holder's interest (or a portion thereof);
(d) any insurance proceeds (or payments with respect to
self-insured risks or policy deductibles) under liability policies,
other than such proceeds or payments payable to any Participant,
Administrative Agent or Lessor;
(e) any insurance proceeds under policies maintained by Lessor
or any Participant in accordance with Section 13.4 of the Lease;
(f) Transaction Expenses or other amounts or expenses paid or
payable to or for the benefit of Lessor or any Participant;
(g) all right, title and interest of Lessor to the Leased
Property or any portion thereof or any other property to the extent any
of the foregoing has been released from the Liens of the Deed of Trust
pursuant to the terms thereof following the payment of the Loan
Balance; and
(h) any payments in respect of interest to the extent
attributable to payments referred to in CLAUSES (a) through (g) above.
"EXCESS SALES PROCEEDS" means the excess, if any, of (i) the aggregate
of all proceeds received by Lessor in connection with any sale of the Leased
Property pursuant to Lessor's exercise of remedies under Section 16.2 of the
Lease (net of all costs and expenses incurred by Lessor or any Participant in
connection
17
therewith), over (ii) the Purchase Amount actually paid by Lessee.
"EXPIRATION DATE" means the last day of the Lease Term or any other
date on which the Lease is terminated, including pursuant to Article XIV, XV or
XVIII of the Lease.
"FACILITY" means the building and related Improvements located on the
Land on the Acquisition Date, and all other Improvements located on the Land
from time to time.
"FAIR MARKET VALUE" means with respect to the Leased Property or any
portion thereof, as of the date of the determination, the fair market value
(which in any event shall not be less than zero) as determined by an independent
appraiser chosen by Certificate Trustee or Administrative Agent (at the
direction of the Required Participants) and reasonably acceptable to Lessee that
would be obtained in an arm's-length transaction between an informed and willing
buyer (other than a buyer currently in possession) and an informed and willing
seller, under no compulsion to buy or sell, and neither of which is related to
Certificate Trustee, Administrative Agent, Lessee, Guarantor or any Affiliate
thereof, for the purchase of the Leased Property or any portion thereof, as
applicable. Such fair market value shall be calculated as the value for the use
of the Leased Property, assuming, in the determination of such fair market
value, that the Leased Property is in the condition and repair required to be
maintained by the terms of the Lease.
"FDIC" means Federal Deposit Insurance Corporation and any Governmental
Authority succeeding to any of its principal functions.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day,
the average of quotations for such day on such transaction received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"FEE LETTERS" means, collectively, the Arrangement Fee Letter, the
Trustee Fee Letter and the Agent Fee Letter, and each a "FEE LETTER".
18
"FEES" is defined in Section 4.4 of the Participation Agreement.
"FF&E" shall mean all furniture, fixtures and equipment of every kind
now or hereafter existing on, or used in connection with, the operation or
maintenance of the Land at any time, including, without limitation, the items
referred to on EXHIBIT K attached to the Participation Agreement.
"FINANCED COSTS" means the Acquisition Costs (including Transaction
Expenses) and Tenant Improvement Costs to be funded with the Advance.
"FIRREA" means the Financial Institutions Reform, Recovery and
Enforcement Act of 1989.
"FISCAL QUARTER" means any quarter of a Fiscal Year.
"FISCAL YEAR" means any period of twelve consecutive calendar months
ending on a December 31; references to a Fiscal Year with a number corresponding
to any calendar year (E.G., the "1997 Fiscal Year") refer to the Fiscal Year
ending on December 31st of such calendar year.
"FIXED CHARGES" means with respect to the Guarantor and its
Subsidiaries on a consolidated basis as of any date of determination (a)
interest expenses paid or accrued on outstanding Indebtedness for the period for
four concurrent fiscal quarters ending on the date of determination PLUS (b)
principal payments on Indebtedness which are required to be made for the next
succeeding twelve months, PLUS Rental Expenses incurred during the period of
four concurrent fiscal quarters ending on the date of determination.
"FIXTURES" means all real estate fixtures relating to the Improvements,
including all components thereof, located in or on the Improvements, together
with all replacements, modifications, alterations and additions thereto.
"F.R.S. BOARD" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"FUND," "FUNDED" or "FUNDING" means each funding by a Participant of a
portion of the principal under its Note or a portion of its Certificate Amount
(as the case may be) constituting a portion of the Advance as described in
Article III of the Participation Agreement.
19
"GAAP" means U.S. generally accepted accounting principles
(including principles of consolidation), in effect from time to time,
including as set forth in the opinions, statements and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accounts and the Financial Accounting Standards Board.
"GENERAL INDEMNITEE" or "TAX INDEMNITEE" means each Participant,
Certificate Trustee (in its individual capacity, in its capacity as trustee and
in its capacity as Lessor), Administrative Agent (in its individual capacity and
as agent or Administrator), the Arranger, any additional, separate or co-trustee
or co-agent appointed in accordance with the terms of the Trust Agreement or the
Participation Agreement, and the respective Affiliates, successors, permitted
assigns, permitted transferees, contractors, employees, officers, directors,
shareholders, partners, participants, representatives and agents of each of the
foregoing Persons; PROVIDED, HOWEVER, that in no event shall Lessee or any of
its Affiliates be a General Indemnitee or Tax Indemnitee.
"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 Laws, 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 Leased Property.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GROSSED-UP BASIS" is defined in Section 12.5(c)(ii) of the
Participation Agreement.
"GROSS PROCEEDS" is defined in Section 20.1(l) of the Lease.
"GUARANTEED RESIDUAL AMOUNT" means, as of any date of determination,
the product obtained by multiplying (A) the aggregate amounts Funded by the
Participants as of the Advance Date, including the Acquisition Costs (and
Transaction Expenses) and (B) 82.51%.
20
"GUARANTEES" means the Lessee Guarantee and the Participant Guarantee.
"GUARANTOR" means Teletech Holdings, Inc., in its capacity as Guarantor
under the Guarantees and the other Operative Documents.
"GUARANTY OBLIGATION" has the meaning specified in the definition of
"Contingent Obligation."
"HAZARDOUS ACTIVITY" means any activity, process, procedure or
undertaking that directly or indirectly (i) produces, generates or creates any
Hazardous Substance; (ii) causes or results in (or threatens to cause or result
in) the release of any Hazardous Substance into the environment (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 Substance; or (iv) would be regulated as hazardous
waste treatment, storage or disposal within the meaning of any Environmental
Law.
"HAZARDOUS CONDITION" means any condition at the Leased Property that
violates or threatens to violate, or that results in or threatens noncompliance
with, any Environmental Law, including any release in excess of any cleanup
standards promulgated under Environmental Laws.
"HAZARDOUS SUBSTANCE" means any substance, waste or material which is
toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous by listing characteristic or definition under
any Environmental Law, including petroleum, crude oil or any fraction thereof,
petroleum derivatives, by-products and other hydrocarbons and is or becomes
regulated by any Governmental Authority, including any agency, department,
commission, board or instrumentality of the United States or the State of
Colorado or any political subdivision of either of the foregoing and also
including asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls
("PCBs") and radon gas.
"HIGHEST LAWFUL RATE" is defined in Section 4.6(b) of the Participation
Agreement.
"IMPOSITIONS" means any and all liabilities, losses, expenses and costs
of any kind whatsoever for fees, taxes,
21
levies, imposts, duties, charges, assessments or withholdings ("TAXES")
(including (i) real and personal property taxes, including personal property
taxes on any property covered by the 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) 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 Leased Property, including assessments for public
improvements or benefits, provided such improvements are commenced or
completed within the Term), and in each case interest, additions to tax and
penalties thereon, which may be levied, assessed or imposed by any Federal,
state or local authority upon or with respect to (a) (i) the Leased Property
or any part thereof or interest therein, or the Lessee or any sublessee or
user of the Leased Property or (ii) any Tax Indemnitee with respect to, in
connection with, or on account of, subclause (i) of this clause (a); (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 Leased Property or any part thereof or interest therein;
(c) the Notes or Certificates or other indebtedness with respect to the
Leased Property or any part thereof or interest therein or transfer thereof;
(d) the rentals, receipts or earnings arising from the Leased 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 Leased Property or any part thereof or interest therein
upon the sale or disposition thereof; (g) any contract relating to the
construction, acquisition or delivery of Improvements or any part thereof or
interest therein to or at the Leased Property (h) the issuance of the Notes
and Certificates; or (i) otherwise in connection with the Overall Transaction.
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, value added, rental,
22
transfer, property or ad valorem taxes) that are imposed by any
Governmental Authority and that are based upon or measured
by gross or net income or gross or net receipts
(including minimum taxes or taxes on, measured by or in the
nature of capital, net worth, excess profits, items of tax preference,
capital stock, franchise, business privilege or doing business taxes),
for any taxes in the nature of intangibles tax, and ad valorem tax or a
property tax imposed on the holding or owning of a Note of Certificate;
PROVIDED that this CLAUSE (i) shall not be interpreted to prevent a
payment from being made on an After Tax Basis if such payment is
otherwise required to be so made;
(ii) any Tax or imposition to the extent, but only to such
extent, it relates to any act, event or omission that occurs, or
relates to a period, after the termination of the Lease (but not any
Tax or imposition that relates to any period prior to the termination
of the Lease with respect to the Leased Property to which such Tax or
imposition relates);
(iii) 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 12.4 of the Participation Agreement, PROVIDED that the
foregoing shall not limit the Lessee's obligation under Section 12.4 of
the Participation Agreement to advance to such Tax Indemnitee amounts
with respect to Taxes or impositions that are being contested in
accordance with Section 12.4 of the Participation Agreement or any
expenses incurred by such Tax Indemnitee in connection with such
contest;
(iv) any Taxes or impositions imposed upon a Tax Indemnitee
with respect to any voluntary transfer, sale, financing or other
voluntary disposition of any interest in the Leased Property or any
part thereof, or any interest therein or any interest or obligation
under the Operative Documents or any Note or Certificate, or from any
sale, assignment, transfer or other disposition of any interest in a
Tax Indemnitee (other than any transfer in connection with (1) the
exercise by the Lessee of its Early Termination Option or any
termination option or other purchase of the Leased Property by the
Lessee or the exercise by Lessee of the Sale Option, (2) the occurrence
of an Event of Default, (3) a Casualty or Condemnation affecting the
Leased Property, or (4) any assignment, sublease, modification or
addition of or to the Leased Property by the Lessee);
23
(v) any Taxes or impositions imposed on a Tax Indemnitee, to
the extent such Tax Indemnitee actually receives a credit (or otherwise
has a reduction in a liability for Taxes) in respect thereof against
Taxes that are not indemnified under the Participation Agreement (but
only to the extent such credit is not taken into account in calculating
the indemnity payment on an After Tax Basis);
(vi) any Taxes or impositions imposed against or payable by a
Tax Indemnitee resulting from, or that would not have been imposed but
for, the gross negligence or willful misconduct of such Tax Indemnitee;
(vii) Taxes imposed on or payable by a Tax Indemnitee to the
extent such Taxes would not have been imposed but for a breach by the
Tax Indemnitee or any Affiliate thereof of any representations,
warranties or covenants set forth in the Operative Documents (unless
such breach is caused by the Lessee's breach of its representations,
warranties or covenants set forth in the Operative Documents);
(viii) Taxes to the extent resulting from such Tax
Indemnitee's failure to comply with the provisions of Section 12.4 of
the Participation Agreement, which failure precludes the ability to
conduct a contest pursuant to Section 12.4 of the Participation
Agreement (unless such failure is caused by the Lessee's breach of its
obligations); and
(ix) Taxes resulting from the failure of any party to
comply with Section 11.3(a) other than as the result of an increased
cost described in Section 13.3.
Notwithstanding the foregoing, the exclusions from the definition of Impositions
set forth in CLAUSES (i), (ii) and (iv) above shall not apply (but the other
exclusions shall apply) to any Taxes or any increase in Taxes imposed on any
Indemnitee net of any decrease in Taxes realized by such Indemnitee, to the
extent that any such Tax increase or decrease would not have occurred if on the
Advance Date the Participants had advanced funds directly to Lessee in the form
of a loan by such Participant to Lessee secured by the Leased Property in an
amount equal to the amounts funded on the Advance Date, with debt service for
such loan equal to the Basic Rent payable on each Payment Date and a principal
balance at the maturity of such loan in an amount equal
24
to the then outstanding amount of Participant Balances at the end of the
Lease Term.
"IMPROVEMENTS" means any and all buildings, FF&E, Fixtures and
improvements located on the Land from time to time, including the Tenant
Improvements and other improvements hereafter erected on the Land or to the
Facility by Lessee as permitted by the Lease, and including, but not limited to,
mechanical, electrical, HVAC and other building systems attached to any
buildings or improvements presently existing or to be constructed on the Land or
to the Facility.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables entered into the ordinary course of business on ordinary terms); (c)
all Contingent Obligations with respect to Surety Instruments; (d) all
obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses; (e) all indebtedness or other obligations
created or arising under any conditional sale, lease or other title retention
agreement or incurred as financing, in either case with respect to property
acquired by the Person (even though the rights and remedies of the seller or
bank under such agreement in the event of default are limited to repossession or
sale of such property); (f) all Capitalized Lease Obligations; (g) all
indebtedness referred to in clauses (a) through (f) above secured by (or for
which the holder of such indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such indebtedness (with the amount
of such Indebtedness to be equal to the lesser of the face amount thereof and
the fair market value of the property made subject to such Lien); and (h) all
Guaranty Obligations in respect of indebtedness or obligations of others of the
kinds referred to in clauses (a) through (g) above. For all purposes of this
Agreement, (x) the Indebtedness of any Person shall include all recourse
Indebtedness of any partnership or joint venture or limited liability company in
which such Person is a general partner or a joint venturer or a member and as to
which such Person is directly liable and (y) the amount of any Indebtedness of
any Person which respect to the creditor may, by its terms, have only limited
recourse to the assets of the obligor, shall be
25
equal to the lesser of the face amount thereof and the fair market value of
the assets to which recourse may be obtained.
"INDEMNITEE" means any of a General Indemnitee or a Tax Indemnitee, as
applicable.
"INITIAL ENVIRONMENTAL AUDIT" means the Phase I Environmental Site
Assessment dated November 20, 2000, prepared by CH Environmental, LLC.
"INSOLVENCY EVENT" means the occurrence of any one or more of the
following events:
(a) (i) Lessee, Guarantor or any of Guarantor's Subsidiaries
shall generally fail to pay, or admit in writing its inability to pay,
its debts as they become due, or shall voluntarily commence any case or
proceeding or file any petition under any bankruptcy, insolvency or
similar law or seeking dissolution, liquidation or reorganization or
the appointment of a receiver, trustee, custodian or liquidator for
itself or a substantial portion of its property, assets or business or
to effect a plan or other arrangement with its creditors, or shall file
any answer admitting the jurisdiction of the court and the material
allegations of any involuntary petition filed against it in any
bankruptcy, insolvency or similar case or proceeding, or shall be
adjudicated bankrupt, or shall make a general assignment for the
benefit or creditors, or shall consent to, or acquiesce in the
appointment of, a receiver, trustee, custodian or liquidator for itself
or a substantial portion of its property, assets or business, or (ii)
corporate action shall be taken by Lessee, Guarantor or any of
Guarantor's Subsidiaries for the purpose of effectuating any of the
foregoing; or
(b) involuntary proceedings or an involuntary petition shall
be commenced or filed against Lessee, Guarantor or any of Guarantor's
Subsidiaries under any bankruptcy, insolvency or similar law or seeking
the dissolution, liquidation or reorganization of it or the appointment
of a receiver, trustee, custodian or liquidator for it or of a
substantial part of the property, assets or business of Lessee,
Guarantor, or any of its Subsidiaries or any writ, judgment, warrant of
attachment, execution or similar process shall be issued or levied
against a substantial part of the property, assets or business of
Lessee, Guarantor or any of Guarantor's Subsidiaries and such
proceedings or petition
26
shall not be dismissed, or such writ, judgment,
warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded, within ninety (90) days after
commencement, filing or levy, as the case may be.
"INSPECTING PARTIES" is defined in Section 4.2(a) of the Lease.
"INSURANCE REQUIREMENTS" means all terms and conditions of any
insurance policy required by the Lease to be maintained by the Lessee.
"INTEREST" means the interest accruing on the Loans as computed and
payable in accordance with the terms of the Loan Agreement (including, without
limitation, in accordance with Section 2.6 of the Loan Agreement).
"INTEREST PERIOD" means, with respect to any Loan or Certificate Amount
bearing Interest or Yield by reference to either the LIBO Rate or the Alternate
Base Rate, all or any portion of the period from and including a Scheduled
Payment Date to but excluding the next succeeding Scheduled Payment Date during
which such Loan or Certificate Amount bears interest by reference to such rate.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended, together with the rules and regulations promulgated thereunder.
"INVESTOR'S LETTER" is defined at Section 2.8(a) of the Trust
Agreement.
"KNOWLEDGE" means, with respect to Lessee or any of its
Affiliates, the actual knowledge of any of the following persons: (i) with
respect to facts or occurrences relating to the Leased Property, officers of
Lessee or any of its Affiliates regularly engaged in supervising operations of
Lessee under the Operative Documents with respect to the Leased Property, and
(ii) with respect to facts or occurrences unrelated to the Leased Property, any
Responsible Officer of Lessee or such Affiliate.
"LAND" is defined in the Recital to the Lease.
"LEASE" means the Lease and Deed of Trust as of December 27, 2000 by
and among Lessor and Lessee.
27
"LEASE BALANCE" means, as of any date of determination, an amount equal
to the sum (without duplication) of the Loan Balance, the Certificate Balance,
all other amounts owing by Lessee under the Operative Documents (including
accrued and unpaid Supplemental Rent, if any).
"LEASE EVENT OF DEFAULT" or "EVENT OF DEFAULT" is defined in Section
16.1 of the Lease.
"LEASE RENEWAL TERM" is defined in Section 19.1(a) of the Lease.
"LEASED PROPERTY" means collectively the Land and the Facility.
"LEASED PROPERTY RECORDS" means those maintenance and other records
relating to the Leased Property in the possession of Lessee.
"LENDER FINANCING STATEMENTS" means UCC financing statements
appropriately completed and executed by, among others, Lessee or Guarantor for
filing in the applicable jurisdiction in order to perfect a security interest in
favor of the Administrative Agent for the benefit of the Participants in the
Teletech Collateral.
"LENDERS" means, collectively, the financial institutions that are or
may from time to time become parties to the Loan Agreement.
"LENDERS' POLICY" is defined in Section 6.1(n) of the Participation
Agreement.
"LESSEE" means Teletech Services Corporation, in such capacity under
the Operative Documents.
"LESSEE GUARANTEE" means the Lessee Guarantee dated as of December 27,
2000, given by Guarantor in favor of Administrative Agent and each Participant.
"LESSEE RELATED EVENT" is defined in Section 14.1(e) of the Lease.
"LESSOR" means Certificate Trustee, as Lessor under the Lease.
"LESSOR FINANCING STATEMENTS" means UCC financing statements
appropriately completed and executed for filing in the applicable
28
jurisdiction in order to protect the Lessor's interest under the Lease to the
extent the Lease is a security agreement.
"LESSOR LIEN" means any Lien, true lease or sublease or disposition of
title arising as a result of (a) any claim against Lessor, Bank, Administrative
Agent or any Participant not resulting from or related to the Overall
Transaction, (b) any act or omission of Lessor, Bank, Administrative Agent or
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 Lessor, Bank, Administrative Agent or any Participant with respect to
Taxes or Transaction Expenses against which Lessee is not required to indemnify
Lessor, Bank, any Agent or any Participant, in its individual capacity, pursuant
to Article XII of the Participation Agreement, (d) any claim against Lessor,
Bank, or Administrative Agent arising out of any transfer by Lessor of all or
any portion of the interest of Lessor in the Leased Property or the Operative
Documents other than the transfer of title to or possession of the Leased
Property by Lessor pursuant to and in accordance with the Lease, the Loan
Agreement or the Participation Agreement or pursuant to the exercise of the
remedies set forth in Section 16.2 of the Lease, or (e) any claim against any
Participant arising out of any transfer by such Participant of any Note or
Certificate, or any interest therein, other than in accordance with the
Participation Agreement.
"LIBO RATE" means with respect to any Interest Period at any time, the
applicable London interbank offered rate for deposits in U.S. dollars appearing
on Telerate Page 3750 as of 11:00 a.m. (London time) two (2) Business Days prior
to the first day of such Interest Period, and having a maturity approximately
equal to such Interest Period; or if no London interbank offered rate of such
maturity then appears on Telerate Page 3750, then the rate equal to the London
interbank offered rate for deposits in U.S. dollars maturing immediately before
or immediately after such maturity, whichever is higher, as determined by the
Administrative Agent from Telerate Page 3750; or if Telerate Page 3750 is not
available, the applicable LIBO Rate for the relevant Interest Period shall be
the rate determined by the Administrative Agent to be the arithmetic average of
the rates at which Bank of America, National Association offers to place
deposits in U.S. dollars with first-class banks in the London interbank market
at approximately 11:00 a.m. (London time) two (2) Business Days prior to the
first day of such Interest Period, in the approximate amount of Bank of America,
National Association's relevant portion of the aggregate outstanding
29
principal amount of the Notes and Certificate Amounts and having a maturity
approximately equal to such Interest Period.
"LIEN" means any mortgage, deed of trust, pledge, security interest,
encumbrance, lien, easement, declaration or servitude of any kind, including any
irrevocable license, conditional sale or other title retention agreement, any
lease in the nature thereof, and the filing of or agreement to give any
financing statement or, when used with reference to the Leased Property, any
other right of or arrangement with any creditor to have its claim satisfied out
of any specified property or asset with the proceeds therefrom prior to the
satisfaction of the claims of the general creditors of the owner thereof,
whether or not filed or recorded.
"LIQUID ASSETS" means, with respect to Guarantor and its Subsidiaries
on a consolidated basis as of any date of determination, the aggregate amount of
(a) non-restricted cash, PLUS (b) Cash Equivalents PLUS (c) Marketable
Securities PLUS (d) availability under secured and/or unsecured lines of credit.
"LOAN" is defined in Section 2.1 of the Loan Agreement.
"LOAN AGREEMENT" means the Loan Agreement, dated as of December 27,
2000, between Lessor, as Borrower thereunder, Administrative Agent and the
Lenders.
"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 6.1 of the Loan
Agreement.
"LOAN BALANCE" means, as of any date of determination, an amount equal
to the sum of the outstanding Loans of all Lenders, together with all accrued
and unpaid Interest thereon.
"LOAN COMMITMENT" means the Commitment of each Lender to make Loans to
the Borrower on the Advance Date in an aggregate principal amount not to exceed
the amount set forth on Schedule II to the Participation Agreement.
"LOAN DOCUMENTS" means the Loan Agreement and the Notes.
"MARKETABLE SECURITIES" means any of the following:
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(i) direct obligations of the United States of America
(including obligations issued or held in book-entry form on the books
of the Department of the Treasury of the United States of America) or
other obligations the timely payment of the principal of and interest
on which are fully and unconditionally guaranteed by the United States
of America;
(ii) interest-bearing deposit accounts (which may be
represented by certificates of deposit) in national, state or foreign
commercial banks whose outstanding long-term debt is rated at least A
by Standard & Poor's or A2 by Moody's;
(iii) commercial paper issued by any corporation which is
rated at least A-1 or the equivalent by Standard & Poor's or at least
P-1 or the equivalent by Moody's;
(iv) repurchase agreements with banking institutions and
securities dealers recognized as primary dealers by the Federal Reserve
Bank of New York whose outstanding long-term and short-term debt is
rated at least A or the equivalent by Standard & Poor's or at least A2
or the equivalent by Moody's; and
(v) money market funds having a rating in the highest
investment category by Standard & Poor's or Moody's at the time of
acquisition.
"Material", "material", "Materially" and "materially" mean material to
or which could reasonably be expected to materially impair (i) the consolidated
financial condition of Guarantor or Lessee, (ii) the ability of Lessee or
Guarantor to perform its obligations under the Operative Documents to which it
is a party, or (iii) the value or condition of the Leased Property.
"MATERIAL ADVERSE EFFECT" means, with respect to Lessee or Guarantor, a
materially adverse effect on (i) the operations, businesses, properties or
financial conditions of the Guarantor or Guarantor and its Subsidiaries taken as
a whole (ii) the ability of Lessee or Guarantor to carry on their respective
businesses or from meeting their respective current and anticipated obligations
on a timely basis, including their performance under the Operative Documents and
to avoid any Event of Default, (iii) the validity or enforceability of any of
the Operative Documents, or any rights or remedies under any thereof, (iv) the
existence or perfection of any Lien granted by the Lessee, Guarantor or Lessor
under the Operative Documents or (v) the use or the Fair Market Value of the
Leased Property.
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"MATERIAL ENVIRONMENTAL CONDITION" is defined in Section 14.3 of the
Lease.
"MATURITY DATE" means, the fourth anniversary of the Document Closing
Date; PROVIDED, HOWEVER, that if the Expiration Date has been extended in
accordance with Article XIX of the Lease, then the Maturity Date shall be the
last day of the then current Lease Renewal Term.
"MERIDIAN DEED" means that certain Special Warranty Deed executed by
Meridian Associates East, a Colorado general partnership, in favor of Seller,
recorded on October 22, 1997 in the official records of ▇▇▇▇▇▇▇ County,
Colorado, in book 1476, page 1465, as amended by that certain Amendment to
Special Warranty Deed, executed by Meridian Associates East and Seller to be
recorded concurrently with the Deed.
"MODIFICATIONS" is defined in Section 10.1 of the Lease.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor agency
thereto.
"MORTGAGED PROPERTY" means, as applicable, the property and rights and
interests defined as "Mortgaged Property" in the Deed of Trust.
"NET INCOME" means for any period, the net income for the Guarantor and
its Subsidiaries on a consolidated basis determined in accordance with GAAP.
"NET PROCEEDS" means all "Mounts received by Lessor in connection with
any Casualty or Condemnation or any sale of the Leased Property pursuant to
Lessor's exercise of remedies under Section 16.2 of the Lease or the Lessee's
exercise of the Sale Option under the Lease, and all interest earned thereon,
less the reasonable expense of claiming and collecting such amounts, including
all reasonable costs and expenses in connection therewith for which Lessor,
Administrative Agent or any Participant is entitled to be reimbursed pursuant to
the Lease.
"NONELIGIBLE COMMITMENT PERCENTAGE" means, as to each of the
Certificate Holders, the percentage set forth opposite each such Certificate
Holder's name under the heading "Noneligible Commitment Percentage" on Schedule
I to the Participation Agreement (as such schedule may be amended from time to
time in accordance with the Participation Agreement).
32
"NONSEVERABLE" shall describe a Modification or part of a Modification
which cannot be readily removed from the Leased Property without causing
material damage to or materially impairing the value of the Leased Property.
"NOTES" is defined in Section 2.3 of the Loan Agreement.
"OBLIGATIONS" means all obligations (monetary or otherwise) of the
Lessee arising under or in connection with any of the Operative Documents.
"OFFEREE LETTER" is defined in Section 6.1(q) of the Participation
Agreement.
"OPERATIVE DOCUMENTS" means the following:
(a) the Participation Agreement;
(b) the Lease;
(c) the Loan Agreement;
(d) the Notes;
(e) the Certificates;
(f) the Deed of Trust;
(g) the Assignment of Leases and Rents;
(h) the Trust Agreement;
(i) the Participant Guarantee;
(j) the Lessee Guarantee;
(j) the Pledge Agreement;
(k) the Trustee Parent Guarantee; and
(l) the Fee Letters.
"ORGANIC DOCUMENT" means, relative to any Person, its certificate or
articles of incorporation, its by-laws and all shareholder agreements, voting
trusts and similar arrangements applicable to any of its authorized shares of
capital stock.
"OVERALL TRANSACTION" means all the transactions and activities
referred to in or contemplated by the Operative Documents.
"OVERDUE RATE" means, the Alternate Base Rate plus 2.0% per annum.
"OWNER'S POLICY" is defined at Section 6.1(n) of the Participation
Agreement.
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"PARTICIPANT BALANCE" means, with respect to any Participant as of any
date of determination: (i) with respect to any Lender, the Loan Balance or (ii)
with respect to any Certificate Holder, the Certificate Balance.
"PARTICIPANTS" means, collectively, the Certificate Holders and the
Lenders.
"PARTICIPATION AGREEMENT" means the Participation Agreement, dated as
of December 27, 2000, among Teletech Services Corporation, as Lessee; Teletech
Holdings, Inc., as Guarantor; State Street Bank and Trust Company of
Connecticut, National Association, not in its individual capacity, except as
expressly set forth therein, but solely as Certificate Trustee; the financial
institutions listed on Schedule I thereto, as Certificate Holders; the financial
institutions listed on Schedule II thereto, as Lenders; and First Security Bank,
National Association, as Administrative Agent.
"PARTICIPANT GUARANTEE" means the Participant Guarantee dated as of
December 27, 2000 given by Guarantor, substantially in the Form of Exhibit G to
the Participation Agreement.
"PAYMENT DATE" means (a) any Scheduled Payment Date and (b) any date on
which Interest is payable pursuant to Section 2.6(c)(ii) of the Loan Agreement
in connection with any prepayment of the Loans.
"PAYMENT DEFAULT" means the failure of Lessee to make any payment of
(i) Basic Rent when due and such failure shall continue for a period of three
(3) Business Days or (ii) any amounts due pursuant to Section 15.1, 18.1, 18.2,
19.1(a) or 20.1 of the Lease when due.
"PAYMENT OFFICE" means the office of each Participant and the
Administrative Agent identified on Schedule III to the Participation Agreement
as its Payment Office.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"PENSION PLAN" means a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which
Lessee, Guarantor or any corporation, trade or business that is, along with the
Lessee or
34
Guarantor, a member of a Controlled Group, may have liability,
including any liability by reason of having been a substantial employer within
the meaning of section 4063 of ERISA at any time during the preceding five
years, or by reason of being deemed to be a contributing sponsor under section
4069 of ERISA.
"PERIL" is defined in Section 13.1(b) of the Lease.
"PERMITTED ASSIGNEE" is defined in Section 2.1 of the Loan Agreement.
"PERMITTED EXCEPTIONS" means the exceptions set forth in the Owner's
Policy and the Lender's Policy on the Advance Date and accepted by the
Participants pursuant to Section 6.1(t) of the Participation Agreement.
"PERMITTED INVESTMENT" means (i) full faith and credit obligations of
the United States of America, or fully guaranteed as to interest and principal
by the full faith and credit of the United States of America, maturing in not
more than one year from the date such investment is made, (ii) certificates of
deposit having a final maturity of not more than one year after the date of
issuance thereof of a Participant or of any other commercial bank incorporated
under the laws of the United States of America or any state thereof or the
District of Columbia, which bank is a member of the Federal Reserve System and
has a combined capital and surplus of not less than $500,000,000 and with a
senior unsecured debt credit rating of at least "A" by Moody's and "A" by S&P,
(iii) commercial paper of the Participants having a remaining term until
maturity of not more than 180 days from the date such investment is made, (iv)
commercial paper of companies, banks, trust companies or national banking
associations (in each case excluding Lessee and its Affiliates) incorporated or
doing business under the laws of the United States or one of the States thereof,
in each case having a remaining term until maturity of not more than 180 days
from the date such investment is made and rated at least "P-1" by Moody's or at
least "A-1" by S&P and (v) repurchase agreements maturing within one year with
any financial institution having combined capital and surplus of not less than
$500,000,000 with any of the obligations described in CLAUSES (i) through (iv)
as collateral so long as title to the underlying obligations pass to
Administrative Agent and such underlying securities shall be segregated in a
custodial or trust account for the benefit of Administrative Agent.
"PERMITTED LIENS" means any of the following:
35
(i) the respective rights and interests of the parties to the
Operative Documents as provided in the Operative Documents (including,
without limitation, the Deed of Trust);
(ii) Liens (other than Liens created or imposed under ERISA)
for Taxes that either are not yet delinquent or are being contested in
accordance with the provisions of Section 12.1 of the Lease;
(iii) Liens arising by operation of law, materialmen's,
mechanics', workers', repairmen's, employees', carriers',
warehousemen's and other like Liens relating to the Leased Property or
arising in the ordinary course of business, PROVIDED that such Liens
secure only amounts not yet due and payable or, if due and payable, are
unfiled and no other action has been taken to enforce the same or are
being contested in good faith by appropriate proceedings for which
adequate reserves determined in accordance with GAAP have been
established (and as to which the property subject to any such Lien is
not yet subject to foreclosure, sale or loss on account thereof);
(iv) Liens of any of the types referred to in CLAUSE (iii)
above that have been bonded for not less than the full amount in
dispute (or as to which other security arrangements reasonably
satisfactory to Lessor 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;
(v) Lessor Liens;
(vi) Liens created with the consent of the Required
Participants;
(vii) Liens described on the title insurance policy delivered
with respect to the Leased Property pursuant to Section 6.1(p) of the
Participation Agreement, other than Liens described in CLAUSE (iii)
above that are not removed within 40 days of their origination;
"PERMITTED USE" means the possession by Lessee in compliance with
Applicable Laws in all material respects and all applicable Insurance
Requirements; provided, however, Lessee shall not make any modification except
as permitted at Section 10.1 of the Lease.
36
"PERSON" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization, Governmental Authority or any other entity.
"PLAN" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which Guarantor or any of
its Subsidiaries or any ERISA Affiliate is (or, if such plan were terminated at
such time, would enter Section 4069 of ERISA be deemed to be) an "employer"
within the meaning of Section 3(5) of ERISA.
"PLANS AND SPECIFICATIONS" means the plans and specifications for the
construction of the Tenant Improvements, delivered or to be delivered to
Administrative Agent, as may be reasonably approved in writing by Administrative
Agent.
"PLEDGE AGREEMENT" means the Pledge and Assignment of Deposit Account,
dated as of December 27, 2000, by and among Certificate Trustee, Lessee and
Administrative Agentbetween Lessor, as Borrower thereunder, Administrative Agent
and the Lenders.
"PURCHASE AMOUNT" means, as of any date of determination, the sum of
(a) the aggregate sum of the outstanding principal amount of the Loans of all of
the Lenders and the outstanding Certificate Amounts of all of the Certificate
Holders, PLUS (b) all accrued but unpaid Interest and Yield, PLUS (c) all other
sums then due and payable under the Operative Documents by Lessee, including
without limitation all Supplemental Rent and any amounts due and owing pursuant
to Articles XII and XIII of the Participation Agreement.
"PURCHASE NOTICE" means an irrevocable written notice by the Lessee
delivered to Lessor pursuant to Section 18.1 of the Lease, notifying Lessor of
the Lessee's intention to exercise its Early Termination Option, and the
proposed purchase date therefor.
"PURCHASE OPTION" is defined in Section 19.1(b) of the Lease.
"RECOURSE DEFICIENCY AMOUNT" means, with respect to the exercise of the
Sale Option, the difference between (X) the Purchase Amount at the last day of
any Renewal Term in which such Sale Option was elected and (Y) the product
obtained by multiplying 17.494% by the Appraised Value of the Leased Property
37
as of the first day of the Renewal Term in which the Sale Option was elected.
"REGULATION T, U, OR X" means Regulation T, U or X, respectively, of
the F.R.S. Board as from time to time in effect and any successor to all or a
portion thereof.
"RELEASE" means any release, pumping, pouring, emptying, injecting,
escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal or
emission of a Hazardous Substance into the environment, including, without
limitation, ambient air, surface water, ground water or land.
"RELEASE PARCEL" is defined in Section 18.1(d) of the Lease.
"RENEWAL OPTION" is defined in Section 19.1(a) of the Lease.
"RENT" means, collectively, the Basic Rent and the Supplemental Rent,
in each case payable under the Lease.
"RENTAL EXPENSES" means, for any period, the sum of the aggregate
payments of the Guarantor and its Subsidiaries on a consolidated basis under
noncancellable agreements to rent or Lease any real or personal property
(exclusive of agreements to rent or lease real or personal property which are
not cancelable at the option of the lessee without penalty within a three month
period), all as determined on a consolidation basis for the Guarantor and its
Subsidiaries in accordance with GAAP.
"REPLACEMENT PARTICIPANT" is defined in Section 11.2(b) of the
Participation Agreement.
"REPORTABLE EVENT" means any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the notice requirement has been
waived by regulation.
"REQUIRED CERTIFICATE HOLDERS" means, at any time, Certificate Holders
holding more than 66.7% of the aggregate outstanding Certificate Amounts.
"REQUIRED MODIFICATION" is defined in Section 10.1(i) of the Lease.
"REQUIRED PARTICIPANTS" means, as of the date of determination,
Participants having aggregate investments in the Overall Transaction (as
measured by the outstanding principal amount of the Notes and the Certificate
Amounts then outstanding)
38
equal to at least 66.7% of the aggregate total of all such investments.
"REQUIREMENTS OF LAW" means the requirements of all Federal, state,
county, municipal and other governmental statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions affecting the Leased
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 Leased 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. ss. 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 Lessee affecting the
Leased Property, the Appurtenant Rights and any easements, licenses or other
agreements entered into pursuant to Section 11.2 of the Lease.
"RESPONSIBLE OFFICER" means, relative to Lessee or Guarantor, each of
its officers responsible for the Leased Property whose signature and incumbency
or position shall have been certified to the Participants, and the Chairman or
Vice Chairman of the Board of Directors, the Chairman or Vice Chairman of the
Executive Committee of the Board of Directors, the President, any Senior Vice
President or Executive Vice President, any Vice President, the Secretary, the
Treasurer and any Assistant Treasurer of the Lessee or Guarantor, as the case
may be.
"RESPONSIBLE OFFICER'S CERTIFICATE" means a certificate signed by any
Responsible Officer.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor agency thereto.
"SALE OPTION" is defined in Section 19.1(c) of the Lease.
"SALE OPTION RECOURSE AMOUNT" means either (i) if the Sale Option is
elected during the Base Term, the Guaranteed Residual Amount, or (ii) if the
Sale Option is elected during a Renewal
39
Term, then either (x) the Guaranteed Residual Amount or (y) the Recourse
Deficiency Amount, whichever is designated in a written notice by Lessor,
acting at the direction of the Required Participants, to Lessee prior to the
Expiration Date; PROVIDED, HOWEVER, that if Lessor fails to give such notice,
Lessor shall be deemed to have notified Lessee that the Recourse Deficiency
Amount shall be the designated "Sales Recourse Amount".
"SCHEDULED PAYMENT DATE" means, as to any Loan or Certificate Amount,
the twenty-eighth (28th) day of every third month or if such twenty-eighth day
is not a Business Day, the immediately succeeding Business Day.
"SEC" means the Securities and Exchange Commission or its successors or
other such body performing duties now assigned to it.
"SECURITIES ACT" means the Securities Act of 1933, as amended, together
with the rules and regulations promulgated thereunder.
"SELLER" means TCI Realty, LLC, a Delaware limited liability company.
"SIGNIFICANT CASUALTY" means a Casualty that either (a) renders the
Leased Property unsuitable for continued use as property of the type of the
Leased Property immediately prior to such Casualty and, if the remaining Lease
Term is more than one (1) year, the Leased Property cannot reasonably be
restored to substantially its condition as existed immediately prior to such
Casualty within one (1) year of the occurrence of such Casualty or (b) is so
substantial in nature that restoration of the Leased Property to substantially
its condition as existed immediately prior to such Casualty would be
impracticable or impossible. The determination of whether a Significant Casualty
has occurred shall be made in the reasonable, good faith judgment of Lessee,
PROVIDED, HOWEVER, that if Lessee fails to notify Lessor in writing within 10
days of Lessee's or Guarantor's having actual knowledge of the occurrence of a
Casualty, then such determination shall be made by Lessor.
"SIGNIFICANT CONDEMNATION" means (a) a Condemnation that involves a
taking of Lessor's entire title to the Land, or (b) a Condemnation that (i)
renders the Leased Property unsuitable for continued use as property of the type
of the Leased Property immediately prior to such Condemnation or (ii) is such
that restoration of the Leased Property to substantially its condition
40
as existed immediately prior to such Condemnation would be impracticable or
impossible. The determination of whether a Significant Condemnation has
occurred shall be made in the reasonable, good faith judgment of Lessee,
PROVIDED, HOWEVER, that if Lessee fails to notify Lessor in writing within 10
days of Lessee's or Guarantor's having actual knowledge of the occurrence of
a Condemnation, then such determination shall be made by Lessor.
"SINGLE EMPLOYER PLAN" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"SNDA" means that certain Subordination, Nondisturbance and Attornment
Agreement, executed, or to be executed, by Administrative Agent, Lessor, Lessee
and Seller, in the form of Exhibit J to the Participation Agreement.
"SOLVENT" or "SOLVENCY" means, with respect to any Person as of a
particular date, that on such date (i) 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, (ii) such Person
does not intend to, and does not reasonably believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature in their ordinary course, (iii) such Person is not engaged in a business
or a transaction, and is not about to engage in a 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 or is to engage, (iv) the fair value of the property of
such Person is greater than the total amount of liabilities, including
contingent liabilities, of such Person and (v) the present fair salable 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. 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.
"SUB-PARTICIPANT" is defined in Section 11.2 of the Participation
Agreement.
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"SUBSIDIARY" of a Person means, any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than 50% of the voting stock, membership interests or other equity
interests (in the case of Persons other than corporations) is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Guarantor.
"SUPPLEMENTAL RENT" means all amounts, liabilities and obligations
(other than Basic Rent) which Lessee assumes or agrees or is otherwise is
obligated to pay under the Lease or any other Operative Document (whether or not
designated as Supplemental Rent) to Certificate Trustee, any Agent, any
Participant or any other Person, including, without limitation, Commitment Fees,
Break Costs, any Sales Option Recourse Amount, any Lease Balance and any
Contingent Rent.
"SURETY INSTRUMENTS" means all letters of credit (including standby and
commercial), banker's acceptances, bank guaranties, shipside bonds, surety bonds
and similar instruments.
"SWAP CONTRACT" means any agreement, whether or not in writing,
relating to any transaction that is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap or
option, bond, note or ▇▇▇▇ option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option or any other, similar
transaction (including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise clearly requires
any master agreement relating to or governing any or all of the foregoing.
"TAXES" is defined in the definition of Impositions.
"TAX INDEMNITEE" or "GENERAL INDEMNITEE" means each Participant, the
Certificate Trustee (in its individual capacity, in its capacity as trustee and
in its capacity as Lessor), each Agent (in its individual capacity and as agent
or Administrator), the Arranger, any additional, separate or co-trustee or
co-agent appointed in accordance with the terms of the Trust Agreement or the
Participation Agreement, and the respective Affiliates, successors, permitted
assigns, permitted transferees, contractors, employees, officers, directors,
shareholders, partners, participants, representatives and agents of each of the
42
foregoing Persons; PROVIDED, HOWEVER, that in no event shall Lessee or any of
its Affiliates be a Tax Indemnitee or General Indemnitee.
"TCI PURCHASE CONTRACT" means that certain Contract dated as of
December __,2000, between Lessee and Seller.
"TCI SUBLEASE" shall have the meaning set forth in Section 6.2 of the
Lease.
"TELETECH COLLATERAL" means all of Lessee's and Guarantor's right,
title and interest in (i) the Leased Property, (ii) all FF&E (iii) the Deposit
Account and all monies therein, (iv) contracts, contract rights and general
intangibles directly relating to the Leased Property, (v) the Tenant Improvement
Account and all monies therein, and (vi) the proceeds of any of the foregoing.
"TELETECH EVENT OF DEFAULT" means the occurrence of any one or more of
the following events, whether any such event shall be voluntary or involuntary
or come about or be effected by operation of law or pursuant to or in compliance
with any judgment, decree or order of any court or any order, rule or regulation
of any Governmental Authority:
(a) Lessee or Guarantor shall default in the performance or
observance of any term, covenant, condition or agreement on its part to
be performed or observed under (i) Sections 8.1(d)(ix), 8.1(d)(x), 8.2
or 8.3 (to the extent such Section 8.3 applies to Article VII of the
Credit Agreement) of the Participation Agreement or (ii) any other
portion of Section 8.1 or 8.3 of the Participation Agreement and such
default shall have continued unremedied for a period of thirty (30)
Days;
(b) any representation or warranty by Lessee or Guarantor in
any Operative Document or in any certificate or document delivered to
Lessor, or any Participant pursuant to any Operative Document shall
have been incorrect in any material respect when made, deemed made or
reaffirmed, as the case may be;
(c) the occurrence of an Insolvency Event;
(d) (i) Guarantor or any Subsidiary (A) fails to make any
payment in respect of any Indebtedness or Contingent Obligation (other
than in respect of Swap Contracts), having
43
an aggregate principal amount (including undrawn committed
or available amounts and including amounts owing to all
creditors under any combined or syndicated credit arrangement)
of more than $2,500,000 when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise)
giving effect to applicable grace periods; or (B) fails to perform or
observe any other condition or covenant, or any other event shall occur
or condition exist, under any agreement or instrument relating to any
such Indebtedness or Contingent Obligation. If the effect of such
failure, event or condition is to cause, or to permit the holder or
holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or Administrative Agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause such
Indebtedness to be declared to be due and payable or to be required to
be repurchased prior to its stated maturity, or such Contingent
Obligation to become payable or cash collateral in respect thereof to
be demanded: or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (1)
any event of default under such Swap Contract as to which Guarantor or
any Subsidiary is the Defaulting Party (as defined in such Swap
Contract) or (2) any Termination Event (as so defined), as to which
Guarantor or any Subsidiary is an Affected Party (as so defined), and,
in either event, the Swap Termination Value owed by Guarantor or such
Subsidiary as a result thereof is greater than $1,000,000; or
(e) (i) An ERISA Event shall occur with respect to a Pension
Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Company or any ERISA Affiliate
under Title IV of ERISA to such Pension Plan or Multiemployer Plan or
to the PBGC in an aggregate amount for all such Pension Plans and
Multiemployer Plans in excess of $1,000,000; or (ii) the aggregate
amount of Unfunded Pension Liability among all Pension Plans and
Multiemployer Plans at any time exceeds $1,000,000 (determined, in
respect of Multiemployer Plans, by reference to the Unfunded Pension
Liability for which Guarantor or any ERISA Affiliate may be liable; or
(iii) Guarantor or any ERISA Affiliate shall fail to pay when due,
after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of
ERISA under a Multiemployer Plan in an aggregate amount in excess of
$1,000,000; or
44
(f) One or more non-interlocutory judgments, non-interlocutory
orders, decrees or arbitration awards is entered against Guarantor or
any Subsidiary involving in the aggregate a liability (to the extent
not covered by independent third-party insurance as to which the
insurer does not dispute coverage) as to any single or related series
of transactions, incidents or conditions of $1,000,000 or more, and the
same shall remain unsatisfied, unvacated and unstayed pending appeal
for a period of 30 days after the entry thereof; or
(g) Any non-monetary judgment, order or decree is entered
against Guarantor or any Subsidiary which does or would reasonably be
expected to have a Material Adverse Effect, and there shall be any
period of 30 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; or
(h) There occurs any Change of Control; or
(i) Any Governmental Authority revokes or fails to renew any
material license, permit or franchise of Guarantor or any Subsidiary,
or Guarantor or any Subsidiary for any reason loses any material
license, permit or franchise, or Guarantor or any Subsidiary suffers
the imposition of any restraining order, escrow, suspension or impound
of funds in connection with any proceeding (judicial or administrative)
with respect to any material license, permit or franchise; or
(j) There occurs a Material Adverse Effect.
"TENANT IMPROVEMENT ACCOUNT" shall mean an account established with
Administrative Agent pursuant to Section 6.1(y) of the Participation Agreement
for the receipt of amounts Funded by the Participants to be Advanced to Lessee
for the construction of the Tenant Improvements pursuant to the terms of the
Operative Documents.
"TENANT IMPROVEMENTS" means (1) planning, preparation, installation and
completion of one or more additional surface parking lot(s) on the Leased
Property; (2) planning, preparation, installation and completion of such
alterations, if any, to the roadways, entries and exits to the Leased Property
as may be necessary to enable Lessee to comply with the terms of the REA
described in the special warranty deed delivered to Lessor
45
pursuant to the TCI Purchase Contract, (3) planning, preparation,
installation and completion of such interior reconfiguration and improvement
of the Facility as may be necessary or convenient to Lessee in the conduct of
its business, including the purchase and installation of additional FF&E, and
if determined by Lessee to be necessary, the expansion and/or relocation of
the Facility data center.
"TENANT IMPROVEMENT COSTS" means the amounts required to construct the
Tenant Improvements in accordance with the Operative Documents.
"TERM" is defined in Section 2.3 of the Lease.
"TERMINATION DATE" is defined in Sections 15.2(a) and 16.2(e) of the
Lease.
"TERMINATION NOTICE" is defined in Section 15.1 of the Lease.
"TITLE INSURANCE COMPANY" means Chicago Title Insurance Company of
Colorado, Inc.
"TITLE POLICIES" means the Owner's Policy and the Lenders' Policy.
"TOP TEN CUSTOMERS" means the top ten customers of Lessee, Guarantor,
or any of their Affiliates based on the aggregate revenues generated by the
service contracts entered into by Lessee, Guarantor, or any of their Affiliates
with such customers, as such customers are listed on a certified side letter
delivered by Lessee to Administrative Agent and the Participants prior to the
Document Closing Date, as updated from time to time in accordance with Section
9.4 of the Participation Agreement.
"TRANSACTION EXPENSES" means all reasonable 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) the reasonable fees and expenses of (i) ▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇,(ii) ▇▇▇▇▇▇ Godward LLP, and (iii) ▇▇▇▇▇▇ ▇▇▇▇▇▇ (it being
understood that Lessee will not be obligated to pay any other legal
fees and expenses for any additional counsel for any Participant);
46
(b) all Fees, including the Arrangement Fee;
(c) Arranger's reasonable costs and expenses, including the
reasonable allocated time charges of internal counsel to the Arranger;
(d) the initial and ongoing fees and reasonable expenses of
the Certificate Trustee, Administrative Agent, and their special
counsel;
(e) all applicable appraisal fees and reasonable expenses;
(f) search fees, recording fees and filing fees incurred in
connection with Lien searches and the filing of UCC financing
statements, memoranda of lease, and any and all mortgages or deeds of
trust, including fees and expenses of the title company;
(g) costs and expenses for the surveyor of the Land;
(h) any other reasonable out-of-pocket expenses of any party
to the Operative Documents incurred in connection with the consummation
of the Overall Transaction on the Document Closing Date including
premiums for the Title Policies; and
(i) all reasonable expenses relating to any environmental
reports, including the Initial Environmental Audit and any other
Environmental Audit.
"TRANSFEREE" is defined in Section 11.3(a) of the Participation
Agreement.
"TRUST" means the trust created by the Trust Agreement.
"TRUST AGREEMENT" means the Trust Agreement (Teletech Trust No.
2000-B), dated as of December 27, 2000, between Bank and the Certificate
Holders.
"TRUSTEE" or "CERTIFICATE TRUSTEE" means State Street Bank and Trust
Company of Connecticut, National Association, a national banking association,
not in its individual capacity, but solely as trustee under the Trust Agreement,
together with any individual trustee or co-trustee appointed pursuant to the
terms of the Trust Agreement.
47
"TRUSTEE FEE LETTER" means the Fee Agreement between Bank and Lessee.
"TRUSTEE PARENT GUARANTEE" means the Trustee Parent Guarantee dated as
of December 27, 2000, given by State Street Bank and Trust Company in favor of
Lessee, Guarantor and the Participants.
"TRUST ESTATE" means all estate, right, title and interest of
Certificate Trustee in, to and under the Leased Property, the Trust Agreement,
the Lease, and all of the other Operative Documents, including (i) all amounts
(other than Excepted Payments) of Rent and other payment due or to become due of
any kind for or with respect to the Leased Property or payable under any of the
foregoing, (ii) any or all payments or proceeds received by Certificate Trustee
after the termination of the Lease with respect to the Leased Property as the
result of the sale, Lease or other disposition thereof and (iii) proceeds of the
Loans and the investments in the Certificates, all of which, together with any
other moneys, proceeds or property at any time are received by Certificate
Trustee under or in connection with the Operative Documents.
"UCC FINANCING STATEMENTS" means collectively the Lender Financing
Statements and Lessor Financing Statements.
"UNIFORM COMMERCIAL CODE" and "UCC" means the Uniform Commercial Code
as in effect in each applicable jurisdiction.
"U.S." means the United States of America.
"VOTING STOCK" means, with respect to any Person, capital stock issued
by such Person, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
"YIELD" means, with respect to each Interest Period (a) the Yield Rate
for such Interest Period multiplied by (b) the aggregate Certificate Amounts
outstanding.
"YIELD RATE" means, with respect to any Interest Period, the sum of the
LIBO Rate for such Interest Period, plus the Applicable Certificate Holder
Margin, or (ii) if any Certificate Amounts bear interest at the Alternate Base
Rate for such Interest Period, the Alternate Base Rate.
48
APPENDIX 1
to
PARTICIPATION AGREEMENT
-----------------------
(TeleTech Trust No. 2000-B)
DEFINITIONS
APPENDIX 2
to
PARTICIPATION AGREEMENT
-----------------------
(TeleTech Trust No. 2000-B)
CONDITIONS PRECEDENT TO DOCUMENT CLOSING DATE
(a) AUTHORIZATION, EXECUTION AND DELIVERY OF DOCUMENTS; NO DEFAULT.
The Participation Agreement, the Lease, the Memorandum of Lease, the
Guarantees, the Deed or Trust, the Trust Agreement, the Fee Letters, the
Certificates, the Loan Agreement and the Notes shall have been duly
authorized, executed and delivered by each of the other parties thereto,
shall (to the extent the form and substance thereof shall not be prescribed
hereby) be in form and substance satisfactory to each Participant and an
executed counterpart of each thereof (except for the Certificates and the
Notes, originals of which shall only be delivered to the applicable
Participant, and for each Fee Letter, originals and copies of which shall
only be delivered to the parties thereto) shall have been received by each of
the Participants, the Agents and Lessor. Each Participant shall have received
an original, duly executed Note and Certificate registered in such
Participant's name. Each of the Operative Documents listed in this CLAUSE (A)
shall be in full force and effect as to all other parties and no Default,
Event of Default, Loan Agreement Default or Loan Agreement Event of Default
shall have occurred or be continuing.
(b) LITIGATION. No action or proceeding shall have been instituted or
threatened, nor shall any governmental action be instituted or threatened before
any Governmental Authority, nor shall any order, judgment or decree have been
issued or proposed to be issued by any Governmental Authority, to set aside,
restrain, enjoin or prevent the performance of this Participation Agreement or
any transaction contemplated hereby or by any other Operative Document or which
is reasonably likely, in the sole opinion of the Required Participants, to be
expected to have a Material Adverse Effect.
(c) LEGALITY, ETC. In the opinion of each Participant, the Overall
Transaction shall not violate any Applicable Laws and no change shall have
occurred or been proposed in Applicable Laws that would make it uneconomic or
illegal for any party to any Operative Document to participate in any of the
transactions contemplated by the Operative Documents or otherwise would
prohibit the consummation of any transaction contemplated by the Operative
Documents or expand the duties, obligations and risks of such Participant.
(d) GOVERNMENTAL APPROVALS. All necessary (or, in the reasonable
opinion of Lessor or Administrative Agent (for the Required Participants),
advisable) Governmental Actions, in each case required by any Applicable Laws,
shall have been obtained or made and be in full force and effect.
(e) REQUIREMENTS OF LAW. In the reasonable opinion of Lessor, the
Agents and the Required Participants, the Overall Transaction does not and will
not violate any Applicable Laws and does not and will not subject Lessor, any
Agent or any Participant to any adverse regulatory prohibitions or constraints.
(f) LIABILITY INSURANCE. Lessee shall have provided evidence reasonably
satisfactory to Lessor, the Agents and the Participants that Lessee has obtained
or caused to be obtained, and that there is in place and effective, liability
insurance in accordance with and pursuant to the terms of Section 13.1(a) of the
Lease and the other terms and conditions of Article XIII of the Lease applicable
thereto.
All documents and instruments required to be delivered on the Document
Closing Date shall be delivered at the offices of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other
location as Administrative Agent and Lessee may agree.
SCHEDULE I
TO
PARTICIPATION AGREEMENT
CERTIFICATE HOLDERS' COMMITMENTS
CERTIFICATE HOLDER COMMITMENT PERCENTAGE
PERCENTAGE*
Bank Hapoalim B.M. $ 301,557.40 .790079%
▇▇▇▇▇ Fargo Bank, N.A. $ 603,114.80 1.580158%
Security Pacific
Leasing Corporation $ 725,367.80 1.900461%
Total Certificate
Holders' Commitments: $ 1,630,040.01 4.270698%
Total Loan Commitments: $36,537,959.99 95.729302%
Total Commitments: $38,168,000.00 100.000000%
--------
* Notwithstanding the percentages set forth above in this Schedule I or
anything else in the Operative Documents to the contrary, the
Certificate Holders shall Fund, in the aggregate, 100% of the
Arrangement Fee payable to the Arranger, with each Certificate Holder
Funding its pro rata portion of such Fee based on its percentage share
of the total Certificate Holders' Commitments.
SCHEDULE II
TO
PARTICIPATION AGREEMENT
LENDERS' COMMITMENTS
COMMITMENT
LENDER COMMITMENT PERCENTAGE
Bank Hapoalim B.M. $ 6,759,522.60 17.709921%
▇▇▇▇▇ Fargo Bank, N.A. $13,519,045.20 35.419842%
Banc of America Leasing and
Capital, LLC $16,259,392.19 42.599539%
Total Loan Commitments: $36,537,959.99 95.729302%
Total Certificate
Holders' Commitments: $ 1,630,040.01 4.270698%
Total Commitments: $38,168,000.00 100.000000%
** Notwithstanding the percentages set forth above in this Schedule II or
anything else in the Operative Documents to the contrary, the
Certificate Holders shall Fund, in the aggregate, 100% of the
Arrangement Fee payable to the Arranger, with each Certificate Holder
Funding its pro rata portion of such Fee based on its percentage share
of the total Certificate Holders' Commitments.