EXHIBIT 4.3.2
AMENDMENT NO. 1 TO PARTICIPATION AGREEMENT,
amending and restating Participation Agreement,
dated as of March 1, 1994
among
SMITH'S FOOD & DRUG CENTERS, INC.,
as Lessee,
PMCC LEASING CORPORATION,
as Owner Participant
PHILIP MORRIS CAPITAL CORPORATION,
as Owner Participant Parent,
STATE STREET BANK AND TRUST COMPANY OF CONNECTICUT,
NATIONAL ASSOCIATION,
a national banking association, not in its individual capacity except as
expressly stated herein, but solely as Connecticut Trustee,
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA,
NATIONAL ASSOCIATION,
a national banking association, not in its individual capacity except as
expressly stated herein, but solely as Owner Trustee,
CALIFORNIA-RELCO LIMITED PARTNERSHIP,
as Remainderman Participant,
CALIFORNIA-RELCO LIMITED PARTNERSHIP TRUST,
a Delaware business trust,
as Remainderman,
WILMINGTON TRUST COMPANY,
a Delaware banking corporation, not in its individual capacity except as
expressly stated herein, but solely as Remainderman Trustee, Indenture
Trustee and Pass Through Trustee,
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Initial Noteholder
_________________________
SMITH'S FOOD & DRUG CENTERS, INC.
Leveraged Lease of Eight (8)
Food and Drug Stores and
One (1) Distribution Center
AMENDMENT NO. 1 TO PARTICIPATION AGREEMENT
AMENDMENT NO. 1 TO PARTICIPATION AGREEMENT, amending and
restating that certain Participation Agreement dated as of March 1, 1994,
(this "Agreement") among Smith's Food & Drug Centers, Inc., a Delaware
corporation, as Lessee; PMCC Leasing Corporation, a Delaware corporation,
as Owner Participant; Philip Morris Capital Corporation, a Delaware
corporation, as Owner Participant Parent; State Street Bank and Trust
Company of Connecticut, National Association, a national banking
association, not in its individual capacity except as expressly stated
herein, but solely as Connecticut Trustee; State Street Bank and Trust
Company of California, National Association, a national banking
association, not in its individual capacity except as expressly stated
herein, but solely as Owner Trustee; California-Relco Limited Partnership,
as the Remainderman Participant; California-Relco Limited Partnership
Trust, a Delaware business trust, as the Remainderman; Wilmington Trust
Company, a Delaware banking corporation, not in its individual capacity
except as expressly stated herein, but solely as the Remainderman Trustee;
Wilmington Trust Company, a Delaware banking corporation, not in its
individual capacity except as expressly stated herein, but solely as
Indenture Trustee; Bank of America National Trust and Savings Association,
a national banking association, as the Initial Noteholder; and Wilmington
Trust Company, a Delaware banking corporation, not in its individual
capacity except as expressly stated herein, but solely as Pass Through
Trustee.
WHEREAS, the parties hereto, other than the Connecticut trustee
have entered into the Participation Agreement dated as of December 21, 1993
(the "Original Participation Agreement");
WHEREAS, concurrently with the execution and delivery of the
Original Participation Agreement, the Owner Participant and the Owner
Trustee have entered into the Trust Agreement for the purpose of creating
the Trust, and pursuant to which the Owner Trustee, acting as trustee for
the benefit of the Owner Participant, is authorized, among other things, on
the terms and subject to the conditions set forth herein and in the Trust
Agreement, to (i) acquire and hold the Trust Estate under the Trust
Agreement for the use and benefit of the Owner Participant; (ii) accept as
a contribution from the Owner Participant a portion of the Lessor Purchase
Price for the Improvements on, and the Estate for Years in, the respective
Properties; (iii) execute, issue and deliver on the Closing Date the Series
J Notes to the Initial Noteholder in order to finance the balance of the
Lessor Purchase Price; (iv) purchase the Improvements on, and the Estates
for Years in, the respective Properties from the Lessee by paying on the
Closing Date the Lessor Purchase Price for such Improvements and Estates
for Years; (v) acquire the Option from the Remainderman pursuant to the
Option Agreement by paying the Option Amount; (vi) enter into the Out
Parcel Agreement with the Lessee, the Remainderman and the Indenture
Trustee providing for the reconveyance of certain out parcels to the
Lessee; and (vii) on the Debt Refinancing Date, subject to Section 2.6,
execute, issue and deliver the Refinancing Notes to the Pass Through
Trustee in order to refinance the Series J Notes;
WHEREAS, concurrently with the execution and delivery of the
Original Participation Agreement, the Remainderman Participant and the
Remainderman Trustee have entered into the Remainderman Trust Agreement for
the purpose of creating the Remainderman Trust and pursuant to which the
Remainderman Trustee, acting for the benefit of the Remainderman
Participant, is authorized, among other things, on the terms and subject to
the conditions set forth herein and in the Remainderman Trust Agreement, to
(i) acquire and hold the Remainderman Trust Estate under the Remainderman
Trust Agreement for the use and benefit of the Remainderman Participant;
(ii) accept as a contribution from the Remainderman Participant the
Remainderman Purchase Price for the remainder interest in the respective
Properties subject to the Estate for Years held by the Owner Trustee (each,
a "Remainderman Interest" and collectively, the "Remainderman Interests");
(iii) purchase the Remainderman Interests from the Lessee by paying on the
Closing Date the Remainderman Purchase Price for the Remainderman
Interests; (iv) enter into the Option Agreement with the Owner Trustee and
grant the Owner Trustee the Option; and (v) enter into the Out Parcel
Agreement with the Lessee, the Owner Trustee and the Indenture Trustee
providing for the reconveyance of certain out parcels to the Lessee;
WHEREAS, on the Closing Date, the Lessee has sold (i) the
Improvements and Estates for Years to the Owner Trustee against the receipt
of the Lessor Purchase Price and (ii) the Remainderman Interests to the
Remainderman against receipt of the Remainderman Purchase Price;
WHEREAS, on the Closing Date, the Lessee has leased the
Improvements and Estates for Years from the Owner Trustee on the terms and
subject to the conditions set forth in the Related Leases;
WHEREAS, on the Closing Date, the Owner Trustee and the Indenture
Trustee have entered into the Indenture and the First Supplemental
Indentures pursuant to which the Owner Trustee has authorized and issued
the Series J Notes to the Initial Noteholder, with interest at the rates
provided therein, the proceeds of which have been used on the Closing Date
to finance a portion of the Lessor Purchase Price of the Improvements and
Estates for Years and has granted security to the Indenture Trustee for the
benefit of the Noteholders and the Indenture Trustee has authenticated the
Series J Notes on the terms and subject to the conditions set forth in this
Agreement, the Indenture and the First Supplemental Indentures;
WHEREAS, on the Closing Date, the Lessee and the Pass Through
Trustee have entered into the Pass Through Trust Agreement and, on the Debt
Refinancing Date, will enter into separate Pass Through Trust Supplements,
whereby separate Pass Through Trusts shall be created pursuant to which the
Pass Through Trustee will issue Pass Through Certificates to investors in a
public offering thereof registered under the Securities Act (the "Pass
Through Investors") and shall use the funds received pursuant to the sale
of such Pass Through Certificates to purchase the Refinancing Notes from
the Owner Trustee;
WHEREAS, on the Closing Date, the Owner Participant Parent has
entered into the Owner Participant Parent Guaranty whereby the Owner
Participant Parent will guarantee the obligations of the Owner Participant
hereunder and under the other Transaction Documents to which it is a party;
WHEREAS, the Lessee, the Owner Trustee and the Remainderman have
entered into the Tripartite Agreement;
WHEREAS, the Lessee and the Owner Participant will enter into a
Tax Indemnification Agreement whereby the Lessee has agreed to indemnify
the Owner Participant against certain tax liabilities;
WHEREAS, concurrently with the execution and delivery of this
Owner Participant and the Connecticut Trustee have entered into the
Connecticut Trust Agreement for the purpose of creating the Connecticut
Trust, and pursuant to which the Connecticut Trustee, acting as trustee for
the benefit of the Owner Participant, is authorized, among other things, on
the terms and subject to the conditions set forth herein and in the
Connecticut Trust Agreement, to (i) acquire and hold the Connecticut Trust
Estate under the Connecticut Trust Agreement for the use and benefit of the
Owner Participant; (ii) enter into the Beneficial Interest Transfer
Agreement and the Amendment No. 1 to Trust Agreement; and (iii) accept a
contribution from the Owner Participant which it shall further contribute
to the Owner Trustee as a portion of the Lessor Purchase Price for the
Improvements on, and the Estate for Years in, the Property H and Property
I;
WHEREAS, concurrently with the execution of this Agreement, the
Owner Participant and the Connecticut Trustee are entering into the
Beneficial Interest Transfer Agreement, pursuant to which the Owner
Participant will transfer its beneficial interest in and to the Trust
Agreement with the Owner Trustee and the Trust created thereby to the
Connecticut Trustee in order to satisfy certain conditions necessary to
effect the Debt Refinancing;
WHEREAS, concurrently with the execution of this Agreement, the
Connecticut Trustee and the Owner Trustee are entering into the Amendment
No. 1 to the Trust Agreement;
WHEREAS, pursuant to the Trust Agreement, the Owner Trustee,
acting as trustee for the benefit of the Connecticut Trustee, is
authorized, among other things, on the terms and subject to the conditions
set forth herein and in the Trust Agreement, on the Debt Refinancing Date,
to (i) accept as a contribution from the Connecticut Trustee a portion of
the Lessor Purchase Price for the Improvements on and the Estate for Years
in Property H and any Property I; (ii) execute, issue and deliver the Notes
in respect of Property H and Property I to the Pass Through Trustee in
order to finance the balance of the Lessor Purchase Price for the Related
Lessor Interest; (iii) purchase the Improvements and the Estate for Years
in respect of Property H and Property I from the Lessee by paying on the
Debt Refinancing Date the Lessor Purchase Price for the Related Lessor
Interest; and (iv) acquire the [Subsequent] Option from the Remainderman
pursuant to the [Subsequent] Option Agreement;
WHEREAS, pursuant to the Remainderman Trust Agreement, the
Remainderman Trustee, acting as trustee for the benefit of the Remainderman
Participant, is authorized, among other things, on the terms and subject to
the conditions set forth herein and in the Remainderman Trust Agreement, on
the Debt Refinancing Date, to (i) accept as a contribution from the
Remainderman Participant the Remainderman Purchase Price for the
Remainderman Interest in Property H and Property I; (ii) purchase the
Remainderman Interest in respect of Property H and any Property I from the
Lessee by paying on the Debt Refinancing Date the Remainderman Purchase
Price for the Related Remainderman Interest; and (iii) enter into the
[Subsequent] Option Agreement with the Owner Trustee granting the Owner
Trustee the Related [Subsequent] Option;
WHEREAS, the Lessee desires to sell on the Debt Refinancing Date
(i) the Improvements and Estate for Years in respect of Property H and any
Property I to the Owner Trustee against the receipt of the Related Lessor
Purchase Price and (ii) the Related Remainderman Interest to the
Remainderman against receipt of the Related Remainderman Purchase Price;
WHEREAS, the Lessee desires to lease on the Debt Refinancing Date
the Improvements and Estate for Years in respect of Property H and any
Property I from the Owner Trustee on the terms and subject to the
conditions set forth in the Related Lease;
WHEREAS, on the Debt Refinancing Date, the Owner Trustee and the
Indenture Trustee shall, subject to the conditions set forth herein, enter
into Supplemental Indentures pursuant to which the Owner Trustee will
authorize and issue the Notes in respect of Property H and Property I to
the Pass Through Trustee, with interest at the rates provided therein, the
proceeds of which shall be used on the Debt Refinancing Date to finance a
portion of the Lessor Purchase Price of the Improvements and Estate for
Years in respect of Property H and Property I and grant security to the
Indenture Trustee for the benefit of the Noteholders and the Indenture
Trustee will authenticate the Notes in respect of Property H and Property I
on the terms and subject to the conditions set forth in this Agreement, the
Indenture and the Related Supplemental Indentures;
WHEREAS, on the Debt Refinancing Date, the Owner Trustee and the
Indenture Trustee will enter into Supplemental Indentures pursuant to which
the Owner Trustee will authorize and issue the Refinancing Notes to the
Pass Through Trustee for the benefit of the Pass Through Trusts, with
interest at the rates provided therein, the proceeds of which shall be used
to refinance the Series J Notes and the Indenture Trustee will authenticate
such Refinancing Notes on the terms and subject to the conditions set forth
in this Agreement, the Indenture and the Related Supplemental Indentures;
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto covenant and agree that the Original
Participation Agreement (including Appendix A thereto) shall be amended and
restated in its entirety to read as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, capitalized terms used herein and
not otherwise defined herein shall have the respective meanings ascribed to
them in Appendix A hereto, and the rules of usage set forth in Appendix A
shall apply thereto. As used herein, the term "parties" means,
collectively, the Lessee, the Owner Participant, the Owner Participant
Parent, the Connecticut Trustee, the Owner Trustee, the Remainderman
Trustee, the Remainderman, the Remainderman Participant, the Indenture
Trustee, the Initial Noteholder and the Pass Through Trustee.
ARTICLE II
PARTICIPATION IN THE SALE AND LEASE OF THE PROPERTIES
Section 2.1 Participation and Funding on the Closing Date.
(a) Participation by the Owner Participant and the
Remainderman Participant. Subject to the satisfaction or waiver of the
conditions set forth in Section 3.1 of this Agreement, on the Closing Date,
(1) the Owner Participant shall participate in the payment of (A) the
Lessor Purchase Price for the Improvements and the Estates for Years by
making an equity investment (the "Investment") in the beneficial ownership
of such Improvements and Estates for Years in an amount equal to the
product of the Owner Participant's Percentage and the Lessor Purchase Price
and (B) the Option Amount (the "Investment Amount"), and (2) the
Remainderman Participant shall participate in the payment of the
Remainderman Purchase Price of the Remainderman Interests by making an
equity investment (the "Remainderman Investment") in the beneficial
ownership of the Remainderman Interests in an amount equal to the
Remainderman Purchase Price for the Remainderman Interests (the
"Remainderman Investment Amount").
(b) Participation by the Initial Noteholder. Subject to the
satisfaction or waiver of the conditions set forth in Section 3.1 of this
Agreement, on the Closing Date, the Initial Noteholder shall purchase from
the Owner Trustee, and the Owner Trustee shall issue to the Initial
Noteholder, the Series J Notes having the maturity, principal amount and
interest rate set forth in the First Supplemental Indentures (the "Debt
Financing") for a purchase price equal to the product of the Debt
Percentage and the Lessor Purchase Price for the Improvements and Estates
for Years (the "Debt Financing Amount"), which Debt Financing Amount shall
be set forth in the First Supplemental Indentures.
(c) Funding to the Owner Trustee. Subject to the
satisfaction or waiver of the conditions set forth in Section 3.1 of this
Agreement, at or before 10:00 a.m., New York City time, on the Closing
Date, (i) the Owner Participant shall pay the Investment Amount and (ii)
the Initial Noteholder shall pay the Debt Financing Amount, each in
immediately available funds, by wire transfer to the Owner Trustee's
account at State Street Bank and Trust Company, Boston, MA, ABA #011000028
Account #99003147, Atten: Hartford Group, Reference: Smith's Food, or to
such other account of the Owner Trustee as the Owner Trustee may specify in
writing to the parties hereto at least one Business Day prior to the
Closing Date, to be held in trust by the Owner Trustee for the benefit of
each of the Owner Participant and the Initial Noteholder, respectively (and
not as a part of the Trust Estate) or, with the agreement of the Lessee,
certified or official bank check or checks payable to the order of the
Lessee.
(d) Funding to the Lessee and the Remainderman. (1) Upon
receipt by the Owner Trustee of (i) the Investment Amount and (ii) the Debt
Financing Amount, at or before 10:00 a.m. New York City time on the Closing
Date, (x) the Owner Trustee shall pay (by wire transfer) to the Lessee at
its account as specified by the Lessee in the Notice of Closing an amount
equal to 100% of the Lessor Purchase Price for the Improvements and Estates
for Years in immediately available funds and, (y) simultaneously therewith
and pursuant to the respective Deeds, the Lessee shall transfer title to
all of its right, title and interest in and to the Improvements and Estates
for Years to the Owner Trustee and the Owner Trustee shall take title to,
and accept delivery of, the Related Improvements and Estates for Years.
(2) (A) The Owner Trustee shall pay the Option Amount
to the Remainderman and the Remainderman Participant shall pay the
Remainderman Investment Amount to the Remainderman and (B) upon receipt by
the Remainderman of the Option Amount and the Remainderman Investment
Amount at or before 10:00 a.m. New York City time of the Closing Date,
(i) the Remainderman shall pay (by wire transfer) to the Lessee at its
account specified by the Lessee in the Notice of Closing an amount equal to
100% of the Remainderman Purchase Price for the Remainderman Interests in
immediately available funds, (ii) simultaneously therewith and pursuant to
the Related Remainderman Interest Deeds, the Lessee shall transfer all of
its right, title and interest in and to the Remainderman Interests to the
Remainderman and the Remainderman shall take title to, and accept delivery
of, the Related Remainderman Interests and (iii) the Remainderman shall
grant the Option to the Owner Trustee pursuant to the Option Agreement.
Section 2.2 Time and Place of Closing. The Closing Date shall be
December 29, 1993, or such other Business Day on or prior to December 31,
1993 as the Lessee may select. At least two Business Days prior to the
Closing Date, the Lessee shall deliver the Notice of Closing to the Owner
Participant, the Owner Trustee, the Remainderman, the Remainderman
Participant, the Indenture Trustee and the Initial Noteholder specifying,
among other things, the Closing Date. The Closing shall commence at 10:00
am., New York City time, on the Closing Date, at the offices of Kelley Drye
& Warren, 101 Park Avenue, New York, New York 10178 or at such other place
as the parties may agree upon in writing.
Section 2.3 Instructions to the Owner Trustee and the
Remainderman. (a) The Owner Participant agrees that the payment by the
Owner Participant of its Investment Amount for the Improvements and Estates
for Years in accordance with the terms of Section 2.1(a)(1) hereof shall
constitute, without further act, the authorization and direction by the
Owner Participant to the Owner Trustee to take the actions specified in
Section 4.1 of the Trust Agreement upon the terms and conditions set forth
in the Trust Agreement; and (b) the Remainderman Participant agrees that
the payment by the Remainderman Participant of its Remainderman Investment
Amount for the Remainderman Interests in accordance with the terms of
Section 2.1(a)(2) hereof shall constitute, without further act, the
authorization and direction by the Remainderman Participant to the
Remainderman Trustee to take the actions specified in Section 4.1 of the
Remainderman Trust Agreement upon the terms and conditions set forth in the
Remainderman Trust Agreement.
Section 2.4 Transactions to Occur on the Closing. Subject to the
provisions of Section 2.13 of the Indenture and Article III hereof, on the
Closing Date,
(a) the Lessee (i) by executing and delivering the Deeds and
Remainderman Interest Deeds, shall grant, convey, assign, set over, sell
and deliver to the Owner Trustee and the Remainderman all its right, title
and interest in and to the Improvements and the Estates for Years and the
Remainderman Interests, respectively; (ii) by executing and delivering the
Leases, shall lease each of the Improvements and the Estates for Years;
(iii) by executing and delivering the Tax Indemnification Agreement, shall
agree to indemnify the Owner Participant against certain tax liabilities;
and (iv) by executing and delivering the Pass Through Trust Agreement shall
facilitate the issuance of the Pass Through Certificates to be issued on
the Debt Refinancing Date;
(b) the Owner Trustee by (i) executing and delivering the
Indenture and the First Supplemental Indentures shall grant security for
the Series J Notes, (ii) shall create, issue and, after authentication
thereof by the Indenture Trustee, sell and deliver the Series J Notes to
the Initial Noteholder, against payment of a purchase price equal to the
Debt Financing Amount, and (iii) with the proceeds of the sale of the
Series J Notes and of the Investment shall purchase all right, title and
interest of the Lessee in and to the Improvements and the Estates for Years
against delivery by the Lessee of the Deeds and the Option against delivery
by the Remainderman of an executed original of the Option Agreement;
(c) the Indenture Trustee shall execute and deliver the
Indenture and the First Supplemental Indentures and shall authenticate the
Series J Notes;
(d) the Lessee and the Pass Through Trustee shall enter into
the Pass Through Trust Agreement;
(e) the Owner Participant shall make the Investment,
authorize and direct the Owner Trustee to take the actions specified in
clause (b) above and shall execute and deliver the Tax Indemnification
Agreement;
(f) the Owner Participant Parent shall execute and deliver
the Owner Participant Parent Guaranty;
(g) (i) the Remainderman Participant shall make the
Remainderman Investment and authorize and direct the Remainderman Trustee
to purchase the Remainderman Interests and grant the Option and (ii) the
Remainderman shall purchase all right, title and interest of the Lessee in
and to the Remainderman Interests against delivery by the Lessee of the
Remainderman Interest Deeds and shall grant the Option pursuant to the
Option Agreement;
(h) the Owner Trustee, the Remainderman and the Lessee shall
execute and deliver the Tripartite Agreement;
(i) the Owner Trustee, by executing and delivering each
Lease, shall lease the Improvements and Estates for Years to the Lessee;
and
(j) the Lessee, the Owner Trustee, the Remainderman and the
Indenture Trustee shall execute and deliver the Out Parcel Agreement.
Section 2.5 Refunding.
(a) Refunding of Notes. The Owner Participant, the Owner
Trustee and the Lessee each acknowledge that, so long as the Owner
Participant's Net Economic Return is preserved, it is in their best
interests to effect a reduction in the amounts of the installments of Basic
Rent payable by the Lessee during the Basic Term. Subject to Article VI of
the Indenture, if a Qualified Investment Banking Firm delivers a written
report to the Owner Participant and the Lessee stating that in its
reasonable judgment, based upon the Lessee's credit quality, the prevailing
interest rates for long-term debt, market conditions and prepayment
penalties or Premium, if any, of the Notes, the redemption of either (1)
all of the Outstanding Notes related to a Property or (2) all of the Notes
held in a particular Pass Through Trust and the issuance of Refunding Notes
in replacement therefor will be cost effective, then the Owner Participant
may, or if the Lessee shall have so requested, shall, cause the Owner
Trustee to effect a refunding of all the Outstanding Notes (or any
particular series or subseries thereof) with the proceeds of Refunding
Notes; provided that such refunding shall be subject to the fulfillment, on
or before the Refunding Date, of the conditions set forth below and in
Section 2.5(e), and that no refunding pursuant to this Section 2.5(a) shall
occur if two refundings pursuant to this Section 2.5(a) shall have occurred
(unless the Owner Participant shall have otherwise consented in writing).
Prior to the commencement of any refunding pursuant to this Section 2.5(a),
the Owner Participant must have received a written consent from the Lessee
stating that it approves of all of the terms and conditions of the proposed
refunding. The Debt Refinancing and the alternate refinancing pursuant to
Section 2.7 shall not constitute a refunding of Notes under this
Section 2.5.
(b) Refunding Proceeds. On the Refunding Date, if the
provisions of this Section have been satisfied or waived by the party for
whose benefit such provisions are included, then, subject to the terms and
conditions of the Indenture, the Refunding Notes shall be issued in one or
more series or subseries by the Owner Trustee and authenticated by the
Indenture Trustee under and pursuant to the Indenture, shall be in an
aggregate principal amount (subject to Section 2.5(e)(16)) equal to the
current principal amount of Notes to be refunded as of the date of such
refunding plus all accrued and unpaid interest thereon plus the Transaction
Expenses incurred in connection with the issuance of such Refunding Notes,
shall have a weighted average life-to-maturity and final maturities meeting
the requirements of the first paragraph of Section 2.5(c), shall bear
interest at a fixed rate or fixed rates per annum and shall be payable as
set forth in or determined under the Indenture and the Related Supplemental
Indentures. The proceeds of the sale of such Refunding Notes shall be paid
directly to the Indenture Trustee at the Indenture Trustee's Office in
immediately available funds and applied to the redemption of the
Outstanding Notes (or a particular series or subseries thereof).
(c) Adjustments Under the Leases. In connection with any
refunding of any Outstanding Notes (or a particular series or subseries
thereof), a Qualified Investment Banking Firm referred to in Section 2.5(a)
shall determine the number of series of Refunding Notes to be issued and
the interest rate or rates applicable thereto (which shall reflect actual
market conditions). Based upon such determination, such Qualified
Investment Banking Firm shall determine the principal amount (in an
aggregate principal amount as determined in accordance with Section
2.5(b)), the amortization schedule and the maturities of all series of
Refunding Notes (provided that the Owner Trustee shall have no obligation
to proceed with any such refunding if, in addition to the conditions set
forth in Section 2.5(e), the aggregate weighted average life-to-maturity of
the Refunding Notes immediately following the refunding varies from the
remaining aggregate weighted average life-to-maturity reflected in the debt
amortization schedule for the Notes to be refunded by more than six months
or the final maturity of any Refunding Note is later than the original
final maturity of any Note to be refunded) so as to minimize the amounts of
the installments of Basic Rent payable by the Lessee during the Basic Term,
while preserving the Owner Participant's Net Economic Return.
In the case of any refunding of Outstanding Notes, the adjustment
of the percentages for Basic Rent payable in respect of the period from and
after the Refunding Date and amounts payable in respect of Casualty Value
and Termination Value from and after the Refunding Date pursuant to Section
3 of each Lease shall be effected in such a manner as to provide to the
Lessee, consistent with the requirements of Section 3 of each Lease, the
net savings in interest expense accruing as a result of, and the full
economic benefit of, such refunding.
(d) Cooperation. Each of the Lessee, the Owner Trustee, the
Connecticut Trustee, the Remainderman, the Indenture Trustee, the Initial
Noteholder or the Pass Through Trustee, as the case may be, the Owner
Participant Parent and the Owner Participant agrees that it will cooperate
in connection with any refunding of Outstanding Notes and, if applicable,
the Pass Through Certificates and the issuance of any Refunding Notes
(which may include a public offering of pass through trust certificates or
other similar securities) and that it will enter into such additional
agreements and such supplements or amendments to or consents, if any, under
each of the Transaction Documents as reasonably may be requested by the
Owner Participant to effectuate the same; provided, however, that neither
the Indenture Trustee nor the Pass Through Trustee shall be obligated to
enter into any additional agreements, supplements, amendments or consents
that would be contrary to the Indenture, the Pass Through Trust Agreement
or the Pass Through Trust Supplements or that would adversely affect the
Noteholders.
(e) Conditions to Refunding. In addition to the limitations
set forth in Sections 2.5(a) and 2.5(c), (i) the Owner Trustee shall have
no obligation to proceed with any refunding or refinancing transaction as
contemplated by this Section 2.5 if such transaction would adversely affect
the Owner Participant's rights under the Transaction Documents or result in
any augmentation of its obligations thereunder or if the documentation is
not reasonably satisfactory to the Owner Participant and (ii) the
obligations of the Indenture Trustee, the Owner Trustee, and the Owner
Participant to participate in a refunding of any Outstanding Notes shall be
subject to the fulfillment, on or before the applicable Refunding Date, of
the following conditions precedent (with each instrument, document,
evidence, certificate, opinion or other writing to be in form and substance
reasonably satisfactory to the Indenture Trustee, the Owner Trustee and the
Owner Participant):
(1) Authentication Request, etc. The Owner Trustee shall
have delivered to the Indenture Trustee an Owner Trustee Request,
dated the applicable Refunding Date, authorizing and requesting
the Indenture Trustee to authenticate and deliver any Refunding
Notes to be issued on such date pursuant to Section 2.13 of the
Indenture.
(2) Redemption; Refunding of Notes. (A) The Outstanding
Notes to be refunded shall have been called for redemption and
shall be redeemable on the Refunding Date, (B) on or before the
Refunding Date, the Lessee shall have paid to the Owner Trustee
an amount, which amount shall be deemed to be Supplemental Rent,
equal to accrued interest on the Notes to be refunded from and
including the later of the date thereof and the date to which
interest thereon shall have been paid to but excluding the
applicable Refunding Date and Premium, if any, which amount shall
have been turned over by the Owner Trustee to the Indenture
Trustee to redeem the Notes to be refunded, and (C) the Owner
Trustee shall have executed, and the Indenture Trustee shall have
authenticated and delivered, the Refunding Notes.
(3) No Event of Default. No Special Default, Event of
Default, Indenture Default as described in Sections 8.1(a), (c)
or (d) of the Indenture or Indenture Event of Default shall have
occurred and be continuing, and no Event of Loss shall have
occurred.
(4) Governmental Action. The Lessee shall have obtained or
caused to have been obtained and shall have delivered to the
Owner Participant and the Owner Trustee copies of documents or
other evidence of all Governmental Action required in connection
with the issuance, authentication and sale of any Refunding Notes
or any other related securities such as pass through trust
certificates.
(5) No Adverse Accounting Treatment. The Refunding Notes
shall not cause the transaction effected pursuant to the
respective Leases to be classified (x) by the Owner Participant
as other than a leveraged lease, as defined under then current
GAAP for leveraged leases and (y) by the Lessee as other than an
operating lease in conformity with GAAP.
(6) Documents. The Lessee, the Owner Participant, the
Connecticut Trustee, the Indenture Trustee, the Pass Through
Trustee and the Owner Trustee each shall have received executed
counterparts of such agreements, instruments and documents as are
contemplated or required by this Agreement to be delivered in
connection with the issuance of any Refunding Notes.
(7) Litigation. The Owner Participant, the Indenture
Trustee, the Connecticut Trustee and the Owner Trustee each shall
have received an Officers' Certificate of the Lessee, dated as of
the Refunding Date, to the effect that there is no action, suit
or proceeding pending or, to the knowledge of the Lessee,
threatened, that questions the validity or enforceability of any
Refunding Notes or of any obligation of the Lessee under any of
the Transaction Documents to be executed and delivered or to be
amended in connection with the issuance of any Refunding Notes.
(8) No Violation of Applicable Law. The transactions to be
consummated in connection with the refunding shall not violate
any Applicable Law binding upon the Lessee or any other parties
hereto or relevant to the respective Properties.
(9) Tax Consequences. In the opinion of the Owner
Participant's Tax Counsel, such refunding shall not cause any
adverse Federal, state or local tax consequences to the Owner
Participant (other than consequences for which the Owner
Participant would be indemnified by the Lessee pursuant to the
terms of the Tax Indemnification Agreement, this Agreement or
another written undertaking by the Lessee, if any, to indemnify
the Owner Participant if the Lessee is then Investment Grade (and
if the Lessee is not Investment Grade, in an amount and in a
manner satisfactory to the Owner Participant in its sole
discretion)).
(10) Consents and Approvals. All consents and approvals
related to the Lessee or the Properties or any party hereto
required to effect the issuance of the Refunding Notes shall have
been obtained.
(11) Absence of Liens. After giving effect to the
refunding, if such refunding involves less than all of the
Outstanding Notes, no Lien (other than Permitted Liens) shall
exist upon any of the Properties and the Owner Participant, the
Indenture Trustee and the Pass Through Trustee shall have
received a supplemental title insurance policy or an endorsement
to the then- existing policy, in either case, insuring that the
Liens of the Related Supplemental Indentures continue to
constitute valid, first priority liens on the Related Indenture
Estates, and Officers' Certificate of the Lessee stating that,
the condition of the first clause of this Section 2.5(e)(11) has
been met, which title insurance policy or endorsement and
Officers' Certificate shall be sufficient for purposes of this
Section 2.5(e)(11) to satisfy the condition set forth in this
Section 2.5(e)(11).
(12) Refunding Fee. With respect to any second
refunding, but not to the first refunding hereunder, the Lessee
shall pay to the Owner Participant $20,000 as a refunding fee.
(13) Opinions. The Owner Participant, the Owner
Trustee, the Connecticut Trustee, the Indenture Trustee and the
Pass Through Trustee shall have received favorable opinions of
Owner Participant's Special Counsel, Owner Trustee's Counsel,
Owner Participant's Special Local Counsel, Indenture Trustee's
Counsel, Lessees' Special Counsel and Pass Through Trustee's
Counsel each dated the applicable Refunding Date and addressed to
the Owner Participant, the Connecticut Trustee, the Owner Trustee
and the Indenture Trustee, addressing such matters relating to
the refunding as the Owner Participant, the Connecticut Trustee,
the Owner Trustee or the Indenture Trustee may reasonably
request. The Pass Through Trustee shall have received a
favorable opinion of counsel reasonably satisfactory to the Pass
Through Trustee to the effect that the proposed refunding does
not, and cannot reasonably be expected to, make the Pass Through
Trust an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(14) Representations and Warranties. The
representations and warranties of the Lessee set forth in Section
5.1(a) and, to the extent they pertain to the issuance of the
Refunding Notes or to documents required to be executed or
prepared (including amendments to the Transaction Documents) in
connection with the Refunding Notes, the representations and
warranties set forth in Sections 5.1(b), (c), (d), (e), (h), (k),
(l), (m), (n), (p) and (q) shall be true and correct in all
material respects on and as of the Refunding Date with the same
effect as though made on and as of the Refunding Date, and each
of the Owner Trustee, the Connecticut Trustee, the Indenture
Trustee and the Owner Participant shall have received an
Officers' Certificate of the Lessee, dated as of the Refunding
Date, to such effect and to the effect that no Event of Default
or Event of Loss is in existence, or will exist after taking into
account the refunding.
(15) Information. The Owner Participant, the
Connecticut Trustee, the Owner Trustee and the Indenture Trustee
shall have received such information and copies of such other
documents as any of them may reasonably request in connection
with the refunding.
(16) Maximum Principal Amount. Notwithstanding any
provision contained in this Section 2.5, the aggregate principal
amount of such Refunding Notes as determined in accordance with
applicable tax principles immediately after giving effect to such
funding shall not exceed the lesser of (A) 105% of the aggregate
original principal amount of the Outstanding Notes to be refunded
and (B) 88% of the aggregate Lessor Purchase Price.
(f) Notwithstanding any of the other provisions of this
Section 2.5, if any proposed refunding pursuant to this Section 2.5 is not
completed (including the Owner Participant's election under Section
2.5(a)), then the Pass Through Trustee, the Indenture Trustee, the Owner
Participant Parent, the Remainderman, the Remainderman Participant, the
Owner Participant and the Owner Trustee shall not be liable in any manner
to the Lessee as a result of the provisions of this Section 2.5, except for
such liabilities arising out of or in connection with the bad faith of such
party or failure of such party to cooperate and comply with the provisions
of this Section 2.5.
Section 2.6 Transfer and Refinancing of Series J Notes on the
Debt Refinancing Date.
(a) Transfer of Owner Participant's Beneficial Interest.
Subject to the satisfaction or waiver of the conditions set forth in
Section 3.2 of this Agreement, on the Debt Refinancing Date, the Owner
Participant and the Connecticut Trustee shall (i) execute and deliver the
Beneficial Interest Transfer Agreement, pursuant to which the Owner
Participant shall transfer to the Connecticut Trustee all its right, title
and interest in and to the Trust Agreement and the Trust created by the
Trust Agreement and (ii) execute and deliver the Connecticut Trust
Agreement, pursuant to which the Connecticut Trust shall be formed.
(b) Amendment of Trust Agreement. Subject to the
satisfaction or waiver of the conditions set forth in Section 3.2 of this
Agreement, on the Debt Refinancing Date, the Owner Trustee and the
Connecticut Trustee shall execute and deliver the Amendment No. 1 to the
Trust Agreement, pursuant to which the Connecticut Trustee shall succeed
the Owner Participant as the beneficial owner of the Trust.
(c) Debt Refinancing. Subject to the conditions set forth
in Section 2.6(f), on the Debt Refinancing Date, the Refinancing Notes
shall be duly issued and authenticated in accordance with Section 2.6(c)(1)
and the Related Supplemental Indentures and the Pass Through Certificates
shall be duly issued and authenticated in accordance with the Pass Through
Trust Agreement and the Pass Through Trust Supplements and sold pursuant to
the Underwriting Agreement in principal amounts and having the maturities
and bearing the interest rates equal to those of the Refinancing Notes.
The Pass Through Trustee shall have received, concurrently with the payment
to the Indenture Trustee by the Pass Through Trustee of an amount equal to
the Debt Refinancing Amount (defined below), the Refinancing Notes. In
order to consummate the foregoing, on the Debt Refinancing Date, each of
the Lessee, the Owner Trustee, the Connecticut Trustee, the Owner
Participant the Remainderman, the Initial Noteholder, the Indenture Trustee
and the Pass Through Trustee agrees to take all such actions as may be
reasonably necessary, and the Lessee agrees to use its best efforts, to
effect the refinancing in full of the Series J Notes, including, but not
limited to, the following actions as may be applicable to it.
(1) Subject to the provisions of Section 2.13 and Article 7
of the Indenture, on the Debt Refinancing Date, the Owner Trustee
(i) by executing and delivering each of the Supplemental
Indentures in respect of each series or subseries of Refinancing
Notes shall grant security to the Indenture Trustee for the
benefit of the Noteholders, (ii) shall create, issue and, after
authentication thereof by the Indenture Trustee, sell and deliver
the Refinancing Notes in such series and subseries and having the
maturities, principal amounts and interest rates set forth in the
Related Supplemental Indentures to the Pass Through Trustee,
against payment of a purchase price equal to the Debt Refinancing
Amount, and (iii) with the proceeds of the sale of the
Refinancing Notes shall refund in full all amounts of outstanding
principal and accrued interest on the Series J Notes together
with Premium, if any, and shall pay all Transaction Expenses
incurred in connection with the Debt Refinancing;
(2) the Owner Trustee shall execute and deliver to the
Indenture Trustee an Owner Trustee Request, dated as of the Debt
Refinancing Date, authorizing and requesting the Indenture
Trustee to authenticate and deliver, and the Indenture Trustee
shall thereupon authenticate and deliver, the Refinancing Notes
in an aggregate principal amount equal to the Debt Refinancing
Amount;
(3) the Indenture Trustee shall execute and deliver the
Supplemental Indentures in respect of the Refinancing Notes;
(4) the Lessee shall request that the Pass Through Trustee
execute, authenticate and deliver the Pass Through Certificates,
in an aggregate principal amount equal to the Debt Refinancing
Amount, in accordance with Section 2.01 of the Pass Through Trust
Agreement and the Pass Through Trust Supplements;
(5) the Pass Through Trustee shall execute and deliver each
Pass Through Trust Supplement in respect of the Pass Through
Certificates, shall execute, authenticate and deliver the Pass
Through Certificates to the Pass Through Investors as
contemplated by the Underwriting Agreement, and shall purchase
from the Owner Trustee the Refinancing Notes for a purchase price
equal to the Debt Refinancing Amount; and
(6) the Lessee shall deliver to the parties a certificate
representing and warranting that on the Debt Refinancing Date,
(A) the Registration Statement at the time it becomes effective
and at the time each post-effective amendment thereto becomes
effective does not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading and the final Prospectus either contained in the
Registration Statement or a post-effective amendment thereto
filed pursuant to Rule 424(b) of the Securities Act in connection
with the sale of the Pass Through Certificates will not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading, except that these representations
and warranties do not apply to statements or omissions contained
in the Registration Statement, such final Prospectus or any
Prospectus supplement based upon information furnished to the
Lessee in writing by the Underwriters expressly for the use
therein or to statements or omissions in the statement of
eligibility on Form T-1 of the Pass Through Trustee; (B) the
Registration Statement and each post-effective amendment thereto
filed with the SEC will have become effective prior to any
issuance, sale or delivery of the Pass Through Certificates, and
no stop order suspending the effectiveness of such Registration
Statement shall be in effect, and no proceedings for such purpose
shall be pending before or, to the knowledge of the Lessee,
threatened by the SEC; and (C) the Pass Through Trust Agreement
shall have been qualified under the Trust Indenture Act.
(d) Cooperation. Each of the Lessee, the Owner Trustee, the
Connecticut Trustee, the Remainderman, the Indenture Trustee, the Initial
Noteholder, the Pass Through Trustee, the Owner Participant Parent and the
Owner Participant agrees that it will cooperate in connection with the Debt
Refinancing and that it will enter into such additional agreements and such
supplements or amendments to or consents, if any, under each of the
Transaction Documents as reasonably may be requested by the Lessee to
effectuate the same; provided, however, that neither the Indenture Trustee
nor the Pass Through Trustee shall be obligated to enter into any
additional agreements, supplements, amendments or consents that would be
contrary to the Indenture, the Pass Through Trust Agreement or any Pass
Through Trust Supplement, or that would adversely affect the Noteholders.
(e) Adjustments Under the Leases. In connection with the
Debt Refinancing, a Qualified Investment Banking Firm shall determine the
aggregate principal amount and the interest rate or rates applicable to the
Refinancing Notes (which shall reflect actual market conditions), the
amortization schedule and the maturities of all series of Refinancing Notes
(provided that the Owner Trustee shall have no obligation to proceed with
any such refinancing if, in addition to the conditions set forth in Section
2.6(f), the aggregate weighted average life-to-maturity reflected in the
debt amortization schedule for the Notes to be refinanced by more than six
months or the final maturity of any Refinancing Note is more than six
months later than the original final maturity of any Note to be refunded)
so as to minimize the amounts of the installments of Basic Rent payable by
the Lessee during the Basic Term, while preserving the Owner Participant's
Net Economic Return. The adjustment of the percentages for Basic Rent
payable in respect of the period from and after the Debt Refinancing Date
and amounts payable in respect of Casualty Value and Termination Value from
and after the Debt Refinancing Date pursuant to Section 3 of each Lease
shall be effected in a manner consistent with the requirements of Section 3
of each Lease, the net savings in interest expense accruing as a result of,
and the full economic benefit of, such refinancing.
(e) Conditions to Debt Refinancing. The Debt Refinancing
shall be subject to the fulfillment or waiver of the following conditions:
(1) Authentication Request, etc. The Owner Trustee shall
have delivered to the Indenture Trustee an Owner Trustee Request,
dated the applicable Debt Refinancing Date, authorizing and
requesting the Indenture Trustee to authenticate and deliver the
Refinancing Notes to be issued on such date pursuant to Section
2.13 of the Indenture.
(2) Execution and Authentication. The Owner Trustee shall
have executed, and the Indenture Trustee shall have authenticated
and delivered, the Refinancing Notes.
(3) No Event of Default. No Special Default, Event of
Default, Indenture Default as described in Sections 8.1(a), (c)
or (d) of the Indenture or Indenture Event of Default shall have
occurred and be continuing.
(4) Documents. The Lessee, the Owner Participant, the
Connecticut Trustee, the Indenture Trustee, the Pass Through
Trustee and the Owner Trustee each shall have received executed
counterparts of such agreements, instruments and documents as are
contemplated or required by this Agreement to be delivered, in
connection with the issuance of any Refinancing Notes.
(5) No Violation of Applicable Law. The transactions to be
consummated in connection with the refunding shall not violate
any Applicable Law binding upon the Lessee or any other parties
hereto or relevant to the Properties.
(6) Consents and Approvals. All consents and approvals
related to the Lessee or the Properties or any party hereto
required to effect the issuance of the Refinancing Notes shall
have been obtained.
(7) Opinions. The opinions described on Schedule 1 shall
have been received by the parties, as appropriate, substantially
in the forms attached as Schedule 1, and dated as of the Debt
Refinancing Date. Each of the parties hereto agrees to instruct
its counsel to address each such opinion to the Underwriters in
addition to the other addressees.
(8) Representations and Warranties. (i) The representations
and warranties of the Lessee set forth in Section 5.1(a) and, to
the extent they pertain to the issuance of the Refinancing Notes
or to documents required to be executed or prepared (including
amendments to the Transaction Documents) in connection with the
Refinancing Notes, the representations and warranties set forth
in Sections 5.1(b), (c), (d), (e), (h), (k), (l), (m), (n), (p)
and (q) shall be true and correct in all material respects on and
as of the Debt Refinancing Date with the same effect as though
made on and as of the Debt Refinancing Date, and each of the
Owner Trustee, the Connecticut Trustee, the Indenture Trustee,
the Pass Through Trustee and the Owner Participant shall have
received an Officers' Certificate of the Lessee, dated as of the
Debt Refinancing Date, to such effect and to the effect that no
Event of Default or Event of Loss is in existence, or will exist
after taking into account the Debt Refinancing, and (ii) each of
the representations and warranties of the parties (other than the
Initial Noteholder) set forth in Article V shall be true and
correct in all material respects on and as of the Debt
Refinancing Date with the same effect as though made on and as of
the Debt Refinancing Date.
(9) Maximum Principal Amount. Notwithstanding any provision
contained in this Section 2.6, the aggregate principal amount of
such Refinancing Notes (other than Subsequent Notes) as
determined in accordance with applicable tax principles
immediately after giving effect to the Debt Refinancing shall not
exceed the lesser of (A) 105% of the aggregate original principal
amount of the Outstanding Series J Notes to be refinanced and (B)
88% of the Lessor Purchase Price.
(10) Debt Refinancing Date. The Debt Refinancing Date
shall be January 20, 1994 or such other date as may be agreed by
the Lessee, the Owner Participant, the Owner Trustee, the
Indenture Trustee, the Pass Through Trustee and the Underwriters,
provided, that the Debt Refinancing Date shall be no later than
the Outside Date.
(11) Governmental Action. The Lessee shall have
obtained or caused to have been obtained and shall have delivered
to the Owner Participant, the Connecticut Trustee, and the Owner
Trustee copies of documents or other evidence of all Governmental
Action required in connection with the issuance, authentication
and sale of any Refinancing Notes or any other related securities
such as pass through trust certificates.
(12) No Adverse Accounting Treatment. The Refinancing
Notes shall not cause the transaction effected pursuant to the
Related Leases to be classified (x) by the Owner Participant as
other than a leveraged lease, as defined under then current GAAP
for leveraged leases and (y) by the Lessee as other than an
operating lease in conformity with GAAP.
(13) Tax Consequences. In the opinion of the Owner
Participant's Tax Counsel, the Debt Refinancing shall not cause
any adverse Federal, state or local tax consequences to the Owner
Participant (other than consequences for which the Owner
Participant would be indemnified by the Lessee pursuant to the
terms of the Tax Indemnification Agreement, this Agreement or
another written undertaking by the Lessee, if any, to indemnify
the Owner Participant if the Lessee is then Investment Grade (and
if the Lessee is not Investment Grade, in an amount and in a
manner satisfactory to the Owner Participant in its sole
discretion)).
(14) Absence of Liens. After giving effect to the Debt
Refinancing, no Lien (other than Permitted Liens) shall exist
upon the Properties, and the Owner Participant, the Connecticut
Trustee, the Indenture Trustee and the Pass Through Trustee shall
have received a supplemental title insurance policy or an
endorsement to the then-existing policy, in either case, insuring
that the Liens of the Related Supplemental Indentures constitute
valid, first priority liens on the Related Indenture Estates and
an Officers' Certificate of the Lessee stating that the condition
of the first clause of this Section 2.6(f)(14) has been met,
which title insurance policy or endorsement and Officers'
Certificate shall be sufficient for purposes of this Section
2.6(f)(14) to satisfy the condition set forth in this Section
2.6(f)(14).
(15) Information. The Owner Participant, the
Connecticut Trustee, the Owner Trustee and the Indenture Trustee
shall have received such information and copies of such other
documents as any of them may reasonably request in connection
with the Debt Refinancing.
Section 2.7 Failure to Consummate Debt. (a) Series J Notes
Remain Outstanding. If for any reason the Debt Refinancing shall not occur
prior to the Outside Date, the Series J Notes (or any Refunding Notes as
shall have been issued in accordance with Section 2.5 in respect of the
Series J Notes) shall remain Outstanding in accordance with the terms
thereof and the Related First Supplemental Indentures. After the Outside
Date, the Lessee shall use its best efforts to refinance the Outstanding
Series J Notes (or any Refunding Notes as shall have been issued in
accordance with Section 2.5 in respect of the Series J Notes) on the
earliest possible date and on terms reasonably satisfactory to the Lessee
and the Owner Participant through the issuance of Optional Refinancing
Notes. Any such refinancing shall be concluded as if such refinancing were
being made in accordance with, and subject to, the provisions of Section
2.6(a). The Initial Noteholder or any Affiliate thereof may provide the
refinancing debt on terms reasonably acceptable to it, but shall not be
obligated to provide such refinancing debt.
(b) Cooperation. The Lessee and each of the Owner Participant,
the Owner Participant Parent, the Owner Trustee, the Connecticut Trustee,
the Remainderman, the Initial Noteholder and the Indenture Trustee agrees
to cooperate to effect the refinancing as contemplated by Section 2.7(a)
and to negotiate in good faith to conclude such additional agreements,
documents, or instruments and such supplements, amendments, consents or
waivers in respect of the Transaction Documents as may be reasonably
requested by the Lessee to effect such refinancing, including, without
limitation, any amendment or supplement to this Agreement and the
Indenture. It is agreed that such refinancing debt may take the form of
public, private, institutional or commercial bank debt and the terms of
such refinancing shall reflect then current market terms of public or
private debt, as applicable, in leveraged leases, to borrowers similarly
situated to the Lessee.
(c) Adjustments. If a Trigger Event shall have occurred, the
Lessee and the Owner Trustee shall adjust the Basic Rent, Casualty Value
and Termination Value payable under each Lease as set forth in Annex I
attached hereto; provided, however, in no event shall any adjustment
pursuant to Annex I result in any adverse tax consequences to the Owner
Participant (other than consequences for which the Owner Participant would
be indemnified by the Lessee pursuant to the terms of the Tax
Indemnification Agreement, this Agreement or another written undertaking by
the Lessee, if any, to indemnify the Owner Participant if the Lessee is
then Investment Grade (and, if the Lease is not Investment Grade, in an
amount and in a manner satisfactory to the Owner Participant in its sole
discretion)).
(d) Additional Lessee Covenants. If a Trigger Event shall have
occurred, each of the Lessee covenants and agreements contained in Annex II
attached hereto (the "Additional Lessee Covenants") shall automatically and
without further action be incorporated into and become part of this
Agreement. Each of the parties agrees that references in any other
Transaction Document to the covenants and agreements of the Lessee
contained in Section 6.1 hereof or in this Agreement generally shall be
deemed to include the Lessee covenants and agreements contained in Annex
II. Each of the parties hereby acknowledges and agrees that (i) from the
period commencing on the Closing Date and ending on the Outside Date, the
Lessee shall have no duties or obligations whatsoever to observe or
perform, or take any other actions whatsoever in respect of the Additional
Lessee Covenants and such Additional Lessee Covenants shall not form a part
of this Agreement, (ii) the Lessee shall become obligated to observe and
perform the Additional Lessee Covenants if, and only if, the Trigger Event
shall have occurred, and (iii) upon the occurrence of the Debt Refinancing
or any other refinancing contemplated by this Section 2.7, the Lessee shall
have no duties or obligations whatsoever to observe or perform, or take any
other action whatsoever (contingent or otherwise) in respect of, the
Additional Lessee Covenants and such Additional Lessee Covenants shall
cease to be in force and effect (if then in effect) and shall automatically
and without further action be deleted from this Agreement (if then in
effect), at which time, in any event, this Agreement shall be read as if
this Section 2.7(d) and Annex II had never existed.
(e) Initial Noteholder. The Initial Noteholder shall not assign
any Series J Notes or part thereof or offer any participation in any Series
J Notes, it being the intent that the Initial Noteholder shall be the sole
holder of each Series J Note and all interests therein; provided, however,
that if a Trigger Event shall have occurred, (i) the Initial Noteholder may
assign all of the Series J Notes with the prior written consent of the
Lessee and the Owner Participant, which consent shall not be unreasonably
withheld, and, other than the reissuance of the Series J Notes to reflect
such assignment pursuant to the terms of the Indenture and the First
Supplemental Indentures, no other amendment or modification shall be made
to the Transaction Documents (except as provided below), and (ii) the
Initial Noteholder may offer participation in the Series J Notes, with the
prior written consent of the Lessee and the Owner Participant, which
consent shall not be unreasonably withheld, so long as any such
participation (A) shall not require the reissuance of any Series J Notes,
(B) the Initial Noteholder shall remain the sole Holder of record of each
Series J Note, and (C) none of the parties hereto other than the Initial
Noteholder shall have any duty, obligation or liability whatsoever to any
participant, it being agreed the Initial Noteholder shall remain solely
obligated with respect to any obligations or liabilities of the Initial
Noteholder and shall be the sole person entitled to any of the direct
rights, interests or benefits of the Initial Noteholder in and to the
Transaction Documents. It is agreed that any indemnity available to the
Initial Noteholder shall be available to any permitted assignee of the
Initial Noteholder, provided, that (i) such assignee is a citizen of any
state or commonwealth of the United States or the District of Columbia and
(ii) unless expressly agreed by the Lessee in any required consent, the
Lessee shall only be required to indemnify such assignee only to the extent
it would have had to indemnify the Initial Noteholder.
Section 2.8 Subsequent Leases.
(a) Property H and Property I. The participation, fundings,
transactions and other actions contemplated by Sections 2.1 through 2.4
shall not include any participation, fundings, transactions and other
actions in respect of (i) Property H and Property I, (ii) the Lessor
Interest, the Improvements, Estate for Years, the Remainderman Interest,
the Option, the Lessor Purchase Price, the Remainderman Purchase Price, the
Option Amount, any Series J Notes, or any Supplemental Indenture, in each
case, in respect of Property H and Property I, and (iii) Deed H,
Remainderman Interest Deed H, or Lease H and Deed I, Remainderman Interest
Deed I or Lease I.
(b) Participation, Funding, Instructions to the Owner
Trustee and the Remainderman, and Certain Transactions on the Debt
Refinancing Date. On or prior to the Debt Refinancing Date, each of the
Lessee, the Owner Participant, the Remainderman Participant and the
Indenture Trustee, as applicable, shall use good faith efforts to agree on
the Lessor Purchase Price, Remainderman Purchase Price, Option Amount,
Basic Rent, Casualty Value, Termination Value and Debt Refinancing Amount
with respect to Property H and with respect to any proposed Subsequent
Property. If each such party (acting in its sole discretion) shall agree
to such values and amounts, subject to the satisfaction of the conditions
precedent set forth in Sections 3.3 and 3.4, the provisions of Sections
2.9, 2.10, 2.11 and 2.12 relating to participations, fundings, transactions
and any other actions contemplated thereby shall apply.
Section 2.9 Participation and in respect of Property H and I on
Debt Refinancing Date.
(a) Participation by the Connecticut Trustee and the
Remainderman Participant and the Owner Participant. Subject to the
satisfaction or waiver of the conditions set forth in Section 3.3 of this
Agreement, on the Debt Refinancing Date, (1) the Connecticut Trustee
through the Contribution (as described in clause (3) below) by the Owner
Participant shall participate in the payment of (A) the Lessor Purchase
Price for the Improvements and the Estates for Years in respect of Property
H and Property I by making an equity investment (the "Subsequent
Investment") in the beneficial ownership of such Improvements and Estates
for Years in an amount equal to the product of the Owner Participant's
Percentage and the Related Lessor Purchase Price and (B) the [Subsequent]
Option Amount (the "Subsequent Investment Amount"), (2) the Remainderman
Participant shall participate in the payment of the Remainderman Purchase
Price of the Remainderman Interests in respect of Property H and Property I
by making an equity investment (the "Subsequent Remainderman Investment")
in the beneficial ownership of such Remainderman Interests in an amount
equal to the Remainderman Purchase Price for the Related Remainderman
Interests (the "Subsequent Remainderman Investment Amount"); and, (3) the
Owner Participant shall participate in the payment of (A) the Lessor
Purchase Price for the Improvements and Estates for Years in respect of
Property H and Property I by making an equity investment in the beneficial
ownership of the Connecticut Trust, through which it is making an indirect
equity investment in the beneficial ownership of such Improvements and
Estates for Years, and (B) the participation by the Connecticut Trustee of
the [Subsequent] Option Amount (the "Contribution").
(b) Participation by the Pass Through Trustee. Subject to
the satisfaction or waiver of the conditions set forth in Section 3.3 of
this Agreement, on the Debt Refinancing Date, the Pass Through Trustee
shall purchase from the Owner Trustee, and the Owner Trustee shall issue to
the Pass Through Trustee, the Notes in respect of Property H and Property I
having the maturity, principal amount and interest rate set forth in the
Related Supplemental Indentures (the "Subsequent Debt Financing") for a
purchase price equal to the product of the Debt Percentage and the Lessor
Purchase Price for the Improvements and Estates for Years in respect of
Property H and Property I (the "Subsequent Debt Financing Amount"), which
Subsequent Debt Financing Amount shall be set forth in the Related
Supplemental Indentures.
(c) Funding to the Owner Trustee. Subject to the
satisfaction or waiver of the conditions set forth in Section 3.3 of this
Agreement, at or before 10:00 a.m., New York City time, on the Debt
Refinancing Date, (i) the Connecticut Trustee through the Contribution by
the Owner Participant shall pay the Subsequent Investment Amount and (ii)
the Pass Through Trustee shall pay the Subsequent Debt Financing Amount,
each in immediately available funds, by wire transfer to the Owner
Trustee's account at State Street Bank and Trust Company, Boston, MA, ABA
#011000028 Account #99003147, Atten: Hartford Group, Reference: Smith's
Food, or to such other account of the Owner Trustee as the Owner Trustee
may specify in writing to the parties hereto at least one Business Day
prior to the Closing Date, to be held in trust by the Owner Trustee for the
benefit of each of the Connecticut Trustee and the Pass Through Trustee,
respectively (and not as a part of the Trust Estate) or, with the agreement
of the Lessee, certified or official bank check or checks payable to the
order of the Lessee.
(d) Funding to the Lessee and the Remainderman. (1) Upon
receipt by the Owner Trustee of (i) the Subsequent Investment Amount and
(ii) the Subsequent Debt Financing Amount, at or before 10:00 a.m. New York
City time on the Debt Refinancing Date, (x) the Owner Trustee shall pay (by
wire transfer) to the Lessee at its account as specified by the Lessee in
the Notice of Closing an amount equal to 100% of the Lessor Purchase Price
for the Improvements and Estates for Years in respect of Property H and
Property I in immediately available funds and, (y) simultaneously therewith
and pursuant to the respective Deeds, the Lessee shall transfer title to
all of its right, title and interest in and to the Improvements and Estates
for Years in respect of Property H and Property I to the Owner Trustee and
the Owner Trustee shall take title to, and accept delivery of, such
Improvements and Estates for Years.
(2) (A) The Owner Trustee shall pay the [Subsequent]
Option Amount to the Remainderman and the Remainderman Participant shall
pay the Remainderman Investment Amount to the Remainderman and (B) upon
receipt by the Remainderman of the [Subsequent] Option Amount and the
Subsequent Remainderman Investment Amount at or before 10:00 a.m. New York
City time of the Closing Date, (i) the Remainderman shall pay (by wire
transfer) to the Lessee at its account specified by the Lessee in the
Notice of Closing an amount equal to 100% of the Remainderman Purchase
Price for the Remainderman Interests in respect of Property H and Property
I in immediately available funds, (ii) simultaneously therewith and
pursuant to the Related Remainderman Interest Deeds, the Lessee shall
transfer all of its right, title and interest in and to the Remainderman
Interests in respect of Property H and Property I to the Remainderman and
the Remainderman shall take title to, and accept delivery of, such
Remainderman Interests and (iii) the Remainderman shall grant the
[Subsequent] Option to the Owner Trustee pursuant to the Option Agreement.
Section 2.10 Time and Place of Closing. The Debt Refinancing
Date shall be March , 1994, or such other Business Day on or prior to the
Outside Date, as the Lessee may select. At least two Business Days prior
to the Debt Refinancing Date, the Lessee shall deliver the Notice of
Closing to the Owner Participant, the Owner Trustee, the Remainderman, the
Remainderman Participant, the Indenture Trustee and the Initial Noteholder
specifying, among other things, the Closing Date. The Closing shall
commence at 10:00 am., New York City time, on the Closing Date, at the
offices of Kelley Drye & Warren, 101 Park Avenue, New York, New York 10178
or at such other place as the parties may agree upon in writing.
Section 2.11 Instructions to the Owner Trustee and the
Remainderman. (a) The Owner Participant agrees that Contribution to the
Connecticut Trustee of an amount equal to the Subsequent Investment Amount
in accordance with the terms of Section 2.9(a)(3) hereof shall constitute,
without further act, the authorization and direction by the Owner
Participant to the Connecticut Trustee to take the actions specified in
Section [4.1] of the Connecticut Trust Agreement upon the terms and
conditions set forth in the Connecticut Trust Agreement; (b) The
Connecticut Trustee agrees that the payment by the Owner Participant of its
Subsequent Investment Amount for the Improvements and Estates for Years in
respect of Property H and Property I in accordance with the terms of
Section 2.9(a)(1) hereof shall constitute, without further act, the
authorization and direction by the Connecticut Trustee to the Owner Trustee
to take the actions specified in Section 4.1 of the Trust Agreement upon
the terms and conditions set forth in the Trust Agreement; and (c) the
Remainderman Participant agrees that the payment by the Remainderman
Participant of its Subsequent Remainderman Investment Amount for the
Remainderman Interests in respect of Property H and Property I in
accordance with the terms of Section 2.9(a)(2) hereof shall constitute,
without further act, the authorization and direction by the Remainderman
Participant to the Remainderman Trustee to take the actions specified in
Section 4.1 of the Remainderman Trust Agreement upon the terms and
conditions set forth in the Remainderman Trust Agreement.
Section 2.12 Transactions to Occur on the Debt Refinancing Date.
Subject to the provisions of Section 2.13 of the Indenture and Article III
hereof, on the Debt Refinancing Date,
(a) the Lessee (i) by executing and delivering the Deed H
and Deed I and Remainderman Interest Deed H and Remainderman Interest Deed
I, shall grant, convey, assign, set over, sell and deliver to the Owner
Trustee and the Remainderman all its right, title and interest in and to
the Improvements and the Estates for Years and the Remainderman Interests
in respect of Property H and Property I, respectively; (ii) by executing
and delivering the Lease H and Lease I, shall lease each such Improvement
and the Estate for Years; and (iii) by executing and delivering the Pass
Through Trust Agreement Supplements shall provide for the issuance of the
Pass Through Certificates to be issued on the Debt Refinancing Date;
(b) the Owner Trustee by (i) executing and delivering the
Related Supplemental Indentures shall grant security for the Notes in
respect of Property H and Property I, (ii) shall create, issue and, after
authentication thereof by the Indenture Trustee, sell and deliver the Notes
to the Pass Through Trustee, against payment of a purchase price equal to
the Subsequent Debt Financing Amount, and (iii) with the proceeds of the
sale of such Notes and of the Subsequent Investment shall purchase all
right, title and interest of the Lessee in and to the Improvements and the
Estates for Years in respect of Property H and Property I against delivery
by the Lessee of the Deeds and the [Subsequent] Option against delivery by
the Remainderman of an executed original of the [Subsequent] Option
Agreement;
(c) the Indenture Trustee shall execute and deliver the
Indenture and the Related Supplemental Indentures and shall authenticate
the Notes in respect of Property H and Property I;
(d) the Lessee and the Pass Through Trustee shall enter into
the Pass Through Trust Agreement Supplements;
(e) (i) the Owner Participant shall make the Contribution
and (ii) the Connecticut Trustee shall make the Subsequent Investment,
authorize and direct the Owner Trustee to take the actions specified in
clause (b) above;
(f) [INTENTIONALLY OMITTED]
(g) (i) the Remainderman Participant shall make the
Subsequent Remainderman Investment and authorize and direct the
Remainderman Trustee to purchase the Remainderman Interests in respect of
Property H and Property I and grant the [Subsequent] Option and (ii) the
Remainderman shall purchase all right, title and interest of the Lessee in
and to the Remainderman Interests in respect of Property H and Property I
against delivery by the Lessee of the Related Remainderman Interest Deeds
and shall grant the [Subsequent] Option pursuant to the [Subsequent] Option
Agreement;
(h) the Owner Trustee, the Remainderman and the Lessee shall
execute and deliver the [Subsequent] Tripartite Agreement;
(i) the Owner Trustee, by executing and delivering Lease H
and Lease I, shall lease the Improvements and Estates for Years to the
Lessee; and
(j) the Lessee, the Owner Trustee, the Remainderman and the
Indenture Trustee shall execute and deliver the Out Parcel Agreement.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to Obligations of the Owner
Participant, the Owner Trustee, the Remainderman, the Remainderman
Participant, the Indenture Trustee, the Initial Noteholder and the Pass
Through Trustee on the Closing Date. The obligations of the Owner Trustee,
the Remainderman, the Indenture Trustee, the Owner Participant, the Initial
Noteholder or the Pass Through Trustee to consummate the transactions
contemplated hereby on the Closing Date and the obligations of each of the
Owner Participant, the Remainderman Participant and the Initial Noteholder
to participate in the payment of the Lessor Purchase Price for the Lessor
Interests and the Remainderman Purchase Price for the Remainder Interests,
respectively, on the Closing Date and to make available on the Closing Date
the Investment Amount, the Remainderman Purchase Price, and the Debt
Financing Amount, respectively, shall be subject to the Initial Noteholder,
the Remainderman Participant, or the Owner Participant, as the case may be,
having made such Debt Financing Amount, the Remainderman Purchase Price, or
Investment Amount, available pursuant to Section 2.1(b), (d) or (a), as the
case may be, and the fulfillment to the satisfaction of, or waiver by, each
such party (acting directly or by authorization of its special counsel) on
or prior to the Closing Date of the conditions precedent set forth below.
Notwithstanding the foregoing, (i) the obligations of any party shall not
be subject to such party's own performance or compliance to the extent that
such performance or compliance is reasonably within the control of such
party, (ii) the conditions specified in paragraphs (m), (s), (u) and (x)
need be fulfilled to the reasonable satisfaction of, or waived by, only the
Owner Participant and, solely with respect to (s) and (u), the Indenture
Trustee, (iii) the condition specified in paragraph (j) need be fulfilled
to the reasonable satisfaction of, or waived by, only the Owner Trustee,
the Remainderman, the Initial Noteholder, the Indenture Trustee, and the
Pass Through Trustee, (iv) the condition specified in paragraph (k) need be
fulfilled to the reasonable satisfaction of, or waived by, only the Owner
Participant, the Owner Trustee, the Remainderman, the Initial Noteholder
and the Pass Through Trustee, (v) the condition specified in paragraphs (l)
and (r) need be fulfilled to the reasonable satisfaction of, or waived by,
only the Owner Participant, the Owner Trustee and the Indenture Trustee and
(vi) the conditions specified in paragraph (t) need be fulfilled to the
reasonable satisfaction of only the parties to which the opinions specified
will be addressed.
(a) Notice of Closing; Transaction Documents and Other
Documents. The Owner Participant, the Owner Trustee, the Remainderman,
the Indenture Trustee, the Initial Noteholder and the Pass Through Trustee
shall have received executed counterparts of the Notice of Closing in
accordance with Section 2.2. Each Transaction Document and other
agreement, instrument and document as is contemplated therein to be
delivered on the Closing Date, including the Series J Notes, shall have
been executed and delivered to each of the Owner Participant, the Owner
Trustee, the Remainderman, the Indenture Trustee, the Initial Noteholder
and the Pass Through Trustee, or their respective counsel, each in form and
substance reasonably satisfactory to each of the Owner Participant, the
Owner Trustee, the Remainderman, the Indenture Trustee, the Initial
Noteholder and the Pass Through Trustee; provided that only the Owner
Participant will receive originals or copies of the Tax Indemnification
Agreement and the Tax Opinion, and only the Initial Noteholder shall
receive executed Series J Notes.
(b) Due Authorization, Execution and Delivery. All of the
documents described in Section 3.1(a) shall have been duly authorized,
executed and delivered by the respective parties thereto and shall be in
full force and effect on the Closing Date, and the Owner Participant, the
Owner Trustee, the Remainderman, the Indenture Trustee, the Initial
Noteholder and the Pass Through Trustee shall have received reasonably
satisfactory evidence as to such authorization, execution and delivery.
(c) Issuance, Sale and Delivery of Series J Notes. Each
subseries of the Series J Notes shall have been duly issued and
authenticated in accordance with Section 2.1(b) and the Related First
Supplemental Indentures.
(d) Authentication Requests, etc. The Owner Trustee shall
have delivered to the Indenture Trustee an Owner Trustee Request, dated as
of the Closing Date, authorizing and requesting the Indenture Trustee to
authenticate and, upon further instructions of the Owner Trustee (which may
be oral instructions), to deliver the Series J Notes in a principal amount
equal to the Debt Financing Amount.
(e) No Violation of Applicable Law. The execution, delivery
and performance of the Transaction Documents and the Underwriting Agreement
and the consummation of the transactions contemplated hereby and thereby
shall not violate or conflict with any Applicable Law.
(f) No Default, etc. No Default, Event of Default,
Indenture Default or Indenture Event of Default shall have occurred and be
continuing, and no Event of Loss shall have occurred. No event or
condition shall have occurred which would, with the passage of time or the
giving of notice, or both, constitute an Event of Loss.
(g) Recording and Filing. All recordations or filings
enumerated and described in Schedule 2 shall have been made in the
respective places or offices set forth in such Schedule, and any other
recordations or filings reasonably requested by the Owner Participant shall
have been made in the requested places or offices, and all recording and
filing fees and taxes with respect thereto shall have been paid, and
reasonably satisfactory evidence thereof shall have been delivered to the
Owner Participant, the Owner Trustee, the Indenture Trustee and the Pass
Through Trustee.
(h) Representations and Warranties of the Lessee; No
Default.
(i) The representations and warranties of the Lessee
set forth in Section 5.1 and in the other Transaction Documents
shall be true and correct in all material respects on and as of
the Closing Date with the same force and effect as though made on
and as of the Closing Date, and each of the Owner Participant,
the Owner Trustee, the Remainderman, the Indenture Trustee, the
Initial Noteholder and the Pass Through Trustee shall have
received Officers' Certificates of the Lessee, dated as of the
Closing Date, to such effect and to the effect that no Default,
Event of Default or Event of Loss shall have occurred, that no
event or condition shall have occurred which would, with the
passage of time or the giving of notice, or both, constitute an
Event of Loss and that the Lessee has satisfied in all materials
respects each of the conditions required of it prior to the
Closing Date under this Agreement and each other Transaction
Document; and
(ii) each of the Indenture Trustee, the Initial
Noteholder and the Pass Through Trustee shall have received
Officers' Certificates from each of the Owner Trustee, in its
individual and trust capacities, and the Owner Participant to the
effect that no Indenture Default or Indenture Event of Default
attributable to the Owner Trustee, in either its individual and
trust capacities, or the Owner Participant, respectively, has
occurred and is continuing.
(i) Representations and Warranties of the Owner Trustee.
The representations and warranties of the Owner Trustee, individually and
as the Owner Trustee, set forth in Section 5.3 and in the other Transaction
Documents shall be true and correct in all material respects on and as of
the Closing Date with the same force and effect as though made on and as of
the Closing Date, and each of the Owner Participant, the Indenture Trustee,
the Initial Noteholder and the Pass Through Trustee shall have received an
Officers' Certificate of the Owner Trustee, individually and as the Owner
Trustee, dated as of the Closing Date, to such effect and that the Owner
Trustee has performed in all material respects the covenants required to be
performed by it prior to the Closing Date under this Agreement and each
other Transaction Document.
(j) Representations and Warranties of the Owner Participant
and the Owner Participant Parent.
(i) The representations and warranties of the Owner
Participant set forth in Section 5.2 and in the other Transaction
Documents shall be true and correct in all material respects on
and as of the Closing Date with the same force and effect as
though made on and as of the Closing Date, and each of the
Indenture Trustee, the Remainderman, the Owner Trustee, the
Initial Noteholder and the Pass Through Trustee shall have
received an Officers' Certificate of the Owner Participant, dated
as of the Closing Date, to such effect and that the Owner
Participant has satisfied in all material respects each of the
conditions required of it prior to the Closing Date under this
Agreement and each other Transaction Document; and
(ii) the representations and warranties of the Owner
Participant Parent set forth in Section 5.6 and in the other
Transaction Documents shall be true and correct in all material
respects on and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date, and each of
the Indenture Trustee, the Owner Trustee, the Remainderman, the
Initial Noteholder and the Pass Through Trustee shall have
received an Officers' Certificate of the Owner Participant
Parent, dated as of the Closing Date, to such effect and that the
Owner Participant Parent has satisfied in all material respects
each of the conditions required of it prior to the Closing Date
under this Agreement and each other Transaction Document.
(k) Representations and Warranties of the Indenture Trustee.
The representations and warranties of the Indenture Trustee, individually
and as the Indenture Trustee, set forth in Section 5.4 and in the other
Transaction Documents shall be true and correct in all material respects on
and as of the Closing Date with the same force and effect as though made on
and as of the Closing Date, and each of the Owner Participant, the Owner
Trustee, the Remainderman, the Initial Noteholder and the Pass Through
Trustee shall have received an Officers' Certificate of the Indenture
Trustee, individually and as the Indenture Trustee, dated as of the Closing
Date, to such effect and that the Indenture Trustee has complied in all
material respects with each of the conditions required of it prior to the
Closing Date under this Agreement and each other Transaction Document.
(l) Representations and Warranties of the Pass Through
Trustee. The representations and warranties of the Pass Through Trustee,
individually and as the Pass Through Trustee, set forth in Section 5.5 and
in any Transaction Document shall be true and correct in all material
respects on and as of the Closing Date with the same force and effect as
though made on and as of the Closing Date, and the Owner Participant, the
Owner Trustee, the Remainderman and the Indenture Trustee shall have
received an Officers' Certificate of the Pass Through Trustee, individually
and as the Pass Through Trustee, dated as of the Closing Date, to such
effect and that the Pass Through Trustee has complied in all material
respects with each of the conditions required of it prior to the Closing
Date under this Agreement and each other Transaction Document.
(m) Appraisal. On the Closing Date, the Owner Participant
shall have received a written report from the Appraiser, addressed to the
Owner Participant and in form and substance reasonably satisfactory to the
Owner Participant and its counsel, containing an appraisal of each of the
Properties, which written report shall reflect the Appraiser's conclusion
that: (i) the estimated economic useful life of the Improvement on each of
the Properties is at least 133 percent of the period that includes the sum
of the Basic Term and the maximum number of permitted Fixed-Rate Renewal
Terms under Section 12(a) of each Lease; (ii) at the expiration of the
Basic Term and all of the Fixed-Rate Renewal Terms, the Improvement on each
of the Properties will have an estimated residual value in the hands of the
Owner Trustee or another Person, unrelated to the Lessee within the meaning
of Revenue Procedure 75-21, who could lease or purchase such Improvement
from the Owner Trustee for commercial use, equal to at least 20 percent of
the Lessor Purchase Price allocable thereto determined without regard to
inflation or deflation during the period from the Closing Date through the
expiration of the Basic Term and all permitted Fixed-Rate Renewal Terms;
(iii) on the Closing Date, the Fair Market Sales Value of the Lessor
Interest in each of the Properties in the hands of the Owner Trustee is
equal to the Lessor Purchase Price of the Lessor Interests allocable
thereto; (iv) at the expiration of the Basic Term and all of the Fixed-Rate
Renewal Terms, the use of the Properties by the Owner Trustee or by another
Person, unrelated to the Lessee within the meaning of Revenue Procedure 75-
21 will be commercially feasible; (v) the rent holiday is commercially
reasonable for the geographic location in which each of the Improvements is
located; and (vi) such other matters as the Owner Participant shall have
reasonably requested prior to the execution of this Agreement. The written
report of the Appraiser shall also contain a cost segregation analysis
stipulating the relative proportions of Fair Market Sales Value allocated
to land, buildings, site improvements and personal property and the
necessary valuations needed to support the pricing assumptions made by the
Owner Participant in relation to the use of an Estate for Years. The
Appraiser shall also determine the maximum economic useful life of each of
the Properties and shall provide a certificate to the Indenture Trustee to
the effect set forth in clause (iii) above.
(n) Governmental Action. The Remainderman, the Owner
Trustee, Owner Participant, the Indenture Trustee, the Initial Noteholder
and the Pass Through Trustee shall have received copies of documents or
other evidence of all Governmental Action set forth in Schedule 3 or any
additional Governmental Action relating to the Lessee and each of the
Properties required for the consummation by the Lessee of the transactions
contemplated by the Transaction Documents on the Closing Date and for the
use and occupancy of each of the Properties on or prior to the Closing
Date, in form and substance reasonably satisfactory to the Remainderman,
the Owner Trustee, Owner Participant, the Indenture Trustee, the Initial
Noteholder and the Pass Through Trustee.
(o) Consents and Approvals. All approvals or consents set
forth on Schedule 4 or any additional approvals relating to the Lessee and
each of the Properties required for the consummation of the transactions
contemplated hereby and by the other Transaction Documents and the
Underwriting Agreement on the Closing Date shall have been obtained and
shall be in form and substance reasonably satisfactory to the Owner
Participant, the Owner Trustee, the Remainderman, the Indenture Trustee,
the Initial Noteholder and the Pass Through Trustee.
(p) Title and Title Insurance. On the Closing Date, the
Owner Trustee and the Remainderman shall have received from the Title
Underwriter its ALTA Form B-1970, revised 1984, Extended Coverage Owner's
Policy of Title Insurance (the "Owner's Policy"), insuring that (A) the
Owner Trustee owns each of the following interests and estates: good and
marketable fee simple title to each of the Improvements and good and
marketable title to the Estate for Years, subject only to Permitted
Exceptions, in the principal amount of the Lessor Purchase Price, and (B)
the Remainderman owns good and marketable fee simple title to each of the
Remainderman Interests, subject only to Permitted Exceptions, in the
principal amount of the Remainderman Purchase Price, in each case, together
with complete, legible copies of all encumbrances, plats, maps and surveys
of record. The Indenture Trustee shall have received from the Title
Underwriter its ALTA Form B-1970, revised 1984, of Extended Coverage
Lender's Policy of Title Insurance (the "Lender's Policy", which together
with the Owner's Policy shall hereinafter be referred to as the "Title
Policies"), insuring the creation under the Indenture in favor of the
Indenture Trustee of a valid first priority deed of trust against the
Indenture Estate, subject only to Permitted Exceptions in an amount equal
to the Debt Financing Amount, together with complete, legible copies of all
encumbrances and plats of record. The Title Policies shall have an
effective date as of the Closing Date and shall contain the endorsements
listed on Schedule 5. The Owner Trustee, the Remainderman and the
Indenture Trustee also shall have received facultative reinsurance
agreements with direct access agreements in accordance with the 1990 ALTA
Facultative Tertiary Reinsurance Agreement form from such licensed title
insurance companies and in such amounts as are set forth in Schedule 6.
(q) Representations and Warranties of the Remainderman, the
Remainderman Participant and the Remainderman Trustee. The representations
and warranties of each of the Remainderman Participant, the Remainderman
and the Remainderman Trustee set forth in Sections 5.7, 5.8 and 5.9,
respectively, and in the other Transaction Documents shall be true and
correct in all material respects on and as of the Closing Date with the
same force and effect as though made on the Closing Date, and each of the
Owner Participant, the Owner Trustee, the Indenture Trustee, the Initial
Noteholder and the Pass Through Trustee shall have received an Officer's
Certificate of each of the Remainderman Participant, Remainderman and the
Remainderman Trustee dated as of the Closing Date, to such effect and that
each of the Remainderman Participant, Remainderman and the Remainderman
Trustee has satisfied in all material respects each of the conditions
required of it prior to the Closing Date under this Agreement and each
other Transaction Document.
(r) Insurance. Insurance complying with the provisions of
Section 10 of each Lease shall be in full force and effect with respect to
the Properties, and the Owner Participant and the Indenture Trustee shall
have received an Officers' Certificate of the Lessee dated the Closing Date
and setting forth the insurance obtained by the Lessee in accordance with
such Section 10 and stating that such insurance is in full force and effect
and that all premiums then due thereon have been paid and, in the opinion
of the officer signing such certificate, such insurance complies with the
provisions of the Lease. The Owner Participant, the Remainderman and the
Indenture Trustee shall have received certificates evidencing insurance
signed by the insurer or an agent authorized to bind the insurer at least
two Business Days prior to the Closing Date.
(s) Certificates of Occupancy. The Owner Participant shall
have received satisfactory evidence of the issuance of valid temporary or
permanent Certificates of Occupancy for each Property that the Lessee
occupies as of the Closing Date, as well as any other licenses or permits
required to be obtained from the applicable Governmental Authorities with
respect to each Property used and occupied by the Lessee as of the Closing
Date.
(t) Opinions of Counsel. The opinions described on Schedule
7 shall have been received by the parties, as appropriate, substantially in
the forms attached as Schedule 7, and dated as of the Closing Date. In
addition, the Owner Participant shall have received favorable opinions of
Owner Participant's Tax Counsel and Owner Participant's Special Local
Counsel, dated the Closing Date and addressed to the Owner Participant, as
to such federal income tax matters and state tax matters, respectively,
relating to the transactions to be consummated on the Closing Date as the
Owner Participant may reasonably request. Each of the parties hereto
agrees to instruct its counsel to address each such opinion (other than the
tax matters opinions referred to in the preceding sentence) to the
Underwriters in addition to the other addressees.
(u) Environmental Report. Prior to the execution of this
Agreement, the Owner Participant, the Owner Trustee and the Remainderman
shall have received copies of Phase I environmental assessments of each of
the Properties.
(v) Payment of Taxes, etc. All Taxes, charges, fees and
costs, if any, payable on or prior to the Closing Date in connection with
the execution, delivery, recording, filing and performance through the
Closing Date of the Transaction Documents and the documents and instruments
enumerated and described in Schedule 2, or in connection with the issuance
and sale of the Series J Notes or use and occupancy of each of the
Properties and the making by the Owner Participant of the Investment and
the payment by the Remainderman of the Remainderman Purchase Price, shall
have been paid in full.
(w) Closing Date. The Closing Date shall be no later than
December 31, 1993.
(x) No Adverse Accounting Treatment. The transaction to be
effected pursuant to each respective Lease shall be classifiable by the
Owner Participant as a leveraged lease under GAAP for leveraged leases in
effect on the Closing Date.
(y) Investment Grade. The Lessee shall be Investment Grade.
(z) Survey. The Lessee shall have delivered, or shall have
caused to be delivered, to the Owner Trustee, the Remainderman and the
Indenture Trustee an accurate as built "ALTA/ASCM Land Title Survey" of the
Total Parcel (the "Survey") meeting the accuracy requirements of a Class
"A" Survey, as defined by the guidelines of the ALTA/ASCM and certified by
the applicable surveyor to the Lessee, the Owner Trustee, the Owner
Participant, the Indenture Trustee, the Remainderman and the Title
Underwriter, which survey (1) shall include all minimum standard detail
requirements for Class "A" ALTA/ASCM Land Title Surveys and items 1-15
listed on Table 3 thereof, except items 6 and 14 regarding topography and
governmental agency requirements, respectively, and (2) shall be
satisfactory to the Title Underwriter. The Lessee shall also have
delivered, or shall have caused to be delivered, to the Owner Participant,
the Remainderman Participant and the Indenture Trustee a metes and bounds
description of the Properties.
(aa) Other Information. The Owner Participant, the
Remainderman, the Indenture Trustee and the Pass Through Trustee shall have
received such information and copies of such other documents as any of them
may reasonably request.
(bb) Evidence of Authority. The Owner Participant, the
Remainderman, the Indenture Trustee and the Pass Through Trustee shall have
received the following, in each case in form and substance reasonably
satisfactory to it:
(i) A copy of the Certificate of incorporation of the
Lessee certified by the Secretary of State of Delaware, and
copies of the By-Laws of the Lessee and of resolutions of the
board of directors or appropriate committee of the board of the
Lessee, certified by the Secretary of the Lessee, duly
authorizing: (x) the execution, delivery and performance by the
Lessee of this Agreement, the other Transaction Documents and
each other document or instrument required to be executed and
delivered by the Lessee in connection herewith and (y) the
transactions contemplated herein and by the other Transaction
Documents (including the sale of the Lessor Interests to the
Owner Trustee, the sale of the Remainderman Interest to the
Remaindermen and the lease by the Lessee of the Lessor Interests
under the respective Leases).
(ii) Such other documents and evidence with respect to
the Lessee, the Owner Trustee, the Indenture Trustee, the Pass
Through Trustee, or the Owner Participant as the Owner
Participant, the Remainderman, the Indenture Trustee and the Pass
Through Trustee or their respective counsel may reasonably
request in order to establish the authority of such parties to
consummate the transactions contemplated by this Agreement and
the other Transaction Documents to which each such respective
Person is a party and the taking of all corporate proceedings in
connection herewith or therewith.
(cc) Equity Offering. Each of the Owner Participant,
the Indenture Trustee and the Pass Through Trustee shall have received on
or prior to the Closing Date a certificate in the form of Exhibit L from
Morgan Stanley & Co. with respect to offerees as of the equity investment
of the Owner Participant and the manner of offering thereof.
(dd) No Litigation. No action, suit or proceeding shall
be pending or, to the knowledge of a Responsible Officer of the Lessee,
threatened before or by any Governmental Authority, nor shall any order,
judgment or decree have been issued or proposed to be issued by any
Governmental Authority, in each case at the time of the Closing Date, that
questions the validity or enforceability of this Agreement or any other
Transaction Document to which the Lessee is or is to become a party or that
would, if adversely determined, have a material adverse effect on the
ability of the Lessee to perform its respective obligations under the
Transaction Documents to which such Lessee is or is to become a party.
(ee) Change in Tax Law. There shall not have been
enacted, promulgated, issued or proposed during the period commencing on
the date of this Agreement and ending on the Closing Date any change in the
Code, any statute, any regulations, any administrative ruling, procedure,
announcement, guidelines or other official guidance or any judicial
decision that could adversely affect the Owner Participant.
(ff) [INTENTIONALLY OMITTED]
(gg) Owner Participant Parent Guaranty. The Indenture
Trustee shall have received the Owner Participant Parent Guaranty in the
form attached as Exhibit N, duly authorized, executed and delivered by the
Owner Participant Parent, and the Indenture Trustee shall have received
reasonably satisfactory evidence as to such authorization, execution and
delivery as of the Closing Date.
Section 3.2 Conditions Precedent to Obligations of the Lessee on
the Closing Date. The obligations of the Lessee to consummate the
transactions contemplated by this Agreement shall be subject to the
fulfillment to the reasonable satisfaction of, or waiver by, the Lessee,
prior to or on the Closing Date, of the conditions precedent set forth
below. Notwithstanding the foregoing, the respective obligations of the
Lessee shall not be subject to the Lessee's own performance or compliance
to the extent that such performance or compliance is reasonably within the
control of the Lessee.
(a) Authority; Transaction Documents, Closing Documents;
Opinions; and Appraisal. (i) The transactions contemplated by, and the
execution and delivery of, this Agreement and the other Transaction
Documents shall have been approved be the Lessee's executive committee and
duly authorized by the Lessee's board of directors; (ii) the Lessee shall
have received an executed counterpart of each Transaction Document and each
other agreement referred to in Section 3.1(a), and shall have received an
original or copy of each instrument, Officers' Certificate, certificate,
opinion, document or other evidence of Governmental Action, report and
other document referred to in Section 3.1 (other than the opinion of the
Owner Participant's Tax Counsel referred to in Section 3.1(t)), each to be
in form and substance reasonably satisfactory to the Lessee; and (iii) the
Lessee also shall have received a written report from the Appraiser,
addressed to the Lessee, in form and substance reasonably satisfactory to
the Lessee, which report shall reflect the Appraiser's reasonable
conclusion as to the estimated Fair Market Rental Value of the Lessor
Interests in the hands of the Owner Trustee or another Person, unrelated to
the Lessee within the meaning of Revenue Procedure 75-21, who could lease
(or purchase) the Lessor Interests from the Owner Trustee for commercial
use at the expiration of the Basic Term determined without regard to
inflation or deflation during the period from the Closing Date through the
expiration of all permitted Fixed-Rate Renewal Terms.
(b) Due Authorization, Execution and Delivery. All of the
documents described in Section 3.1(a) shall have been duly authorized,
executed and delivered by the respective parties thereto and shall be in
full force and effect on the Closing Date, and the Lessee shall have
received reasonably satisfactory evidence as to such authorization,
execution and delivery.
(c) Representations and Warranties. The representations and
warranties of the Owner Participant set forth in Section 5.2 and in the
other Transaction Documents, of the Owner Trustee, individually and as
Owner Trustee, set forth in Section 5.3 and in the other Transaction
Documents, of the Indenture Trustee, individually and as Indenture Trustee,
set forth in Section 5.4 and in the other Transaction Documents, of the
Pass Through Trustee, individually and as Pass Through Trustee, set forth
in Section 5.5 and in the other Transaction Documents, of the Owner
Participant Parent set forth in Section 5.6 and in the other Transaction
Documents, and of the Remainderman set forth in Section 5.7 and in the
other Transaction Documents shall be true and correct in all material
respects on and as of the Closing Date with the same force and effect as
though made on and as of Closing Date and the Lessee shall have received
appropriate Officers' Certificates of the Owner Participant, the Owner
Participant Parent, the Owner Trustee, the Remainderman, the Indenture
Trustee, and the Pass Through Trustee, both individually and in their roles
as trustees, dated as of the Closing Date, to such effect and that they
have performed in all material respects the covenants required to be
performed by them, respectively, prior to the Closing Date under this
Agreement and each other Transaction Document;
(d) No Violation of Applicable Law. The execution, delivery
and performance of the Transaction Documents and the Underwriting Agreement
and the consummation of the transactions contemplated hereby and thereby
shall not violate any Applicable Law.
(e) Governmental Action. The Lessee shall have received
copies of documents or other evidence of all Governmental Action set forth
in Schedule 3 or any additional Governmental Action required for the
consummation by the Owner Participant and the Owner Participant Parent of
the transactions contemplated hereby and by the other Transaction
Documents.
(f) Accounting Treatment. The Lessee shall have been
advised by its independent public accountants on or before the Closing Date
that, as of the Closing Date, the transactions effected pursuant to each
respective Lease would be classified as an operating lease in conformity
with GAAP.
(g) Consents and Approvals. All approvals and consents set
forth on Schedule 4 or any additional approvals or consents relating to the
Lessee or any of the Properties that are required for the consummation of
the transactions contemplated by the other Transaction Documents shall have
been obtained and shall be in form and substance reasonably satisfactory to
the Lessee.
(h) Opinions of Counsel. The opinions identified on
Schedule 7 shall have been received by the Lessee, substantially in the
forms attached to Schedule 7, and dated as of the Closing Date.
(i) No Default, etc. No Event of Loss shall have occurred
and no event or condition shall have occurred and be continuing that would,
with the passage of time or the giving of notice, or both, constitute an
Event of Loss. To the extent not caused by the action or inaction of the
Lessee, other than that which is beyond the reasonable control of the
Lessee, no Default, Event of Default, Indenture Default or Indenture Event
of Default shall have occurred and be continuing. The Lessee shall have
received Officers' Certificates from each of the Owner Trustee, in its
individual and trust capacities, and the Owner Participant, to the effect
that no Indenture Default or Indenture Event of Default attributable to the
Owner Trustee, in either its individual or trust capacities, or the Owner
Participant, has occurred and is continuing.
(j) Certificates of Occupancy. The Lessee shall have
received valid temporary or permanent Certificates of Occupancy for each of
the Properties that the Lessee occupies as of the Closing Date, as well as
any other licenses or permits required to be obtained from the applicable
Governmental Authorities with respect to the Properties used and occupied
by the Lessee as of the Closing Date.
(k) Closing Date. The Closing Date shall be no later than
December 31, 1993.
(l) Offeree Certificates. The Lessee shall also have
received on or prior to the Closing Date a certificate in the form of
Exhibit L hereto from Morgan Stanley & Co. with respect to the offerees of
the equity investment of the Owner Participant and the manner of offering
thereof.
(m) Other Information. The Lessee shall have received such
other information and copies of such other documents relating to the
transactions to be effected on the Closing Date as the Lessee reasonably
may request (including but not limited to evidence as to the due
authorization, execution and delivery of the Transaction Documents and any
other instruments and agreements contemplated hereby).
(n) Owner Participant Parent Guaranty. The Lessee shall
have received the Owner Participant Parent Guaranty in the form attached as
Exhibit N, duly authorized, executed and delivered by the Owner Participant
Parent, and the Lessee shall have received reasonably satisfactory evidence
as to such authorization, execution and delivery as of the Closing Date.
If (i) the foregoing conditions precedent shall not have been
fulfilled on or prior to the Closing Date (or waived by the Lessee) as
provided above or (ii) the Owner Participant shall not have delivered the
Investment Amount to the Owner Trustee on the Closing Date notwithstanding
the satisfaction of the conditions (other than those within the control of
the Owner Participant) set forth in Section 3.1, the Lessee may, if it so
elects, terminate this Agreement, and this Agreement shall thereupon
terminate and be of no further force and effect except as expressly
provided herein without affecting any parties' obligations, if any.
Promptly following any such termination of this Agreement, the Lessee shall
notify the other parties hereto in writing of such termination.
Error! Bookmark not defined.Section 3.3 Conditions Precedent to
Obligations of the Owner Participant, the Connecticut Trustee, the Owner
Trustee, the Remainderman, the Remainderman Participant, the Indenture
Trustee and the Pass Through Trustee on the Debt Refinancing Date. The
obligations of the Owner Trustee, the Connecticut Trustee, the
Remainderman, the Indenture Trustee, the Owner Participant or the Pass
Through Trustee to consummate the transactions contemplated hereby on the
Debt Refinancing Date and the obligations of each of the Owner Participant,
the Connecticut Trustee, the Remainderman Participant and the Pass Through
Trustee participate in the payment of the Lessor Purchase Price for the
Lessor Interests in respect of Property H and Property I and the
Remainderman Purchase Price for the Remainder Interests in respect of
Property H and Property I, respectively, on the Debt Refinancing Date and
to make available on the Debt Refinancing Date the Subsequent Investment
Amount the Contribution, the Remainderman Purchase Price, and the
Subsequent Debt Financing Amount, respectively, shall be subject to the
Pass Through Trustee, the Remainderman Participant, the Connecticut
Trustee, or the Owner Participant, as the case may be, having made such
Subsequent Debt Financing Amount, the Remainderman Purchase Price, or
Subsequent Investment Amount, available pursuant to Section 2.1(b), (d) or
(a), as the case may be, and the fulfillment to the satisfaction of, or
waiver by, each such party (acting directly or by authorization of its
special counsel) on or prior to the Debt Refinancing Date of the conditions
precedent set forth below. Notwithstanding the foregoing, (i) the
obligations of any party shall not be subject to such party's own
performance or compliance to the extent that such performance or compliance
is reasonably within the control of such party, (ii) the conditions
specified in paragraphs (m), (s), (u) and (x) need be fulfilled to the
reasonable satisfaction of, or waived by, only the Owner Participant and,
solely with respect to (s) and (u), the Indenture Trustee, (iii) the
condition specified in paragraph (j) need be fulfilled to the reasonable
satisfaction of, or waived by, only the Owner Trustee, the Remainderman,
the Indenture Trustee, and the Pass Through Trustee, (iv) the condition
specified in paragraph (k) need be fulfilled to the reasonable satisfaction
of, or waived by, only the Owner Participant, the Connecticut Trustee, the
Owner Trustee, the Remainderman and the Pass Through Trustee, (v) the
condition specified in paragraphs (l) and (r) need be fulfilled to the
reasonable satisfaction of, or waived by, only the Owner Participant, the
Connecticut Trustee, the Owner Trustee and the Indenture Trustee and (vi)
the conditions specified in paragraph (t) need be fulfilled to the
reasonable satisfaction of only the parties to which the opinions specified
will be addressed. The conditions precedent contained in this Section 3.3
shall apply only to the extent the transactions on the Debt Refinancing
Date relate to Property H and Property I.
(a) Notice of Closing; Transaction Documents and Other
Documents. The Owner Participant, the Connecticut Trustee, the Owner
Trustee, the Remainderman, the Indenture Trustee, the Initial Noteholder
and the Pass Through Trustee shall have received executed counterparts of
the Notice of Closing in accordance with Section 2.10. Each Transaction
Document and other agreement, instrument and document as is contemplated
therein to be delivered on the Debt Refinancing Date, including the Notes,
shall have been executed and delivered to each of the Owner Participant,
the Connecticut Trustee the Owner Trustee, the Remainderman, the Indenture
Trustee and the Pass Through Trustee, or their respective counsel, each in
form and substance reasonably satisfactory to each of the Owner
Participant, the Connecticut Trustee the Owner Trustee, the Remainderman,
the Indenture Trustee and the Pass Through Trustee; provided that only the
Pass Through Trustee shall receive executed Refinancing Notes.
(b) Due Authorization, Execution and Delivery. All of the
documents described in Section 3.3(a) shall have been duly authorized,
executed and delivered by the respective parties thereto and shall be in
full force and effect on the Debt Refinancing Date, and the Owner
Participant, the Connecticut Trustee, the Owner Trustee, the Remainderman,
the Indenture Trustee and the Pass Through Trustee shall have received
reasonably satisfactory evidence as to such authorization, execution and
delivery.
(c) Issuance, Sale and Delivery of Notes. Each subseries of
the Notes shall have been duly issued and authenticated in accordance with
Section 2.9(b) and the Related Supplemental Indentures.
(d) Authentication Requests, etc. The Owner Trustee shall
have delivered to the Indenture Trustee an Owner Trustee Request, dated as
of the Debt Refinancing Date, authorizing and requesting the Indenture
Trustee to authenticate and, upon further instructions of the Owner Trustee
(which may be oral instructions), to deliver the Refinancing Notes in a
principal amount equal to the Subsequent Debt Financing Amount.
(e) No Violation of Applicable Law. The execution, delivery
and performance of the Transaction Documents and the Underwriting Agreement
and the consummation of the transactions contemplated hereby and thereby
shall not violate or conflict with any Applicable Law.
(f) No Default, etc. No Default, Event of Default,
Indenture Default or Indenture Event of Default shall have occurred and be
continuing, and no Event of Loss shall have occurred. No event or
condition shall have occurred which would, with the passage of time or the
giving of notice, or both, constitute an Event of Loss.
(g) Recording and Filing. All recordations or filings
enumerated and described in Schedule 2 shall have been made in the
respective places or offices set forth in such Schedule, and any other
recordations or filings reasonably requested by the Owner Participant shall
have been made in the requested places or offices, and all recording and
filing fees and taxes with respect thereto shall have been paid, and
reasonably satisfactory evidence thereof shall have been delivered to the
Owner Participant, the Connecticut Trustee, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee.
(h) Representations and Warranties of the Lessee; No
Default.
(i) The representations and warranties of the Lessee
set forth in Section 5.1 and in the other Transaction Documents
shall be true and correct in all material respects on and as of
the Debt Refinancing Date with the same force and effect as
though made on and as of the Debt Refinancing Date, and each of
the Owner Participant, the Connecticut Trustee, the Owner Debt
Refinancing Trustee, the Remainderman, the Indenture Trustee and
the Pass Through Trustee shall have received Officers'
Certificates of the Lessee, dated as of the Debt Refinancing
Date, to such effect and to the effect that no Default, Event of
Default or Event of Loss shall have occurred, that no event or
condition shall have occurred which would, with the passage of
time or the giving of notice, or both, constitute an Event of
Loss and that the Lessee has satisfied in all materials respects
each of the conditions required of it prior to the Debt
Refinancing Date under this Agreement and each other Transaction
Document; and
(ii) each of the Indenture Trustee and the Pass Through
Trustee shall have received Officers' Certificates from each of
the Owner Trustee and the Connecticut Trustee, in each case, in
its individual and trust capacities, and the Owner Participant to
the effect that no Indenture Default or Indenture Event of
Default attributable to the Owner Trustee, in either its
individual and trust capacities, or the Owner Participant,
respectively, has occurred and is continuing.
(i) Representations and Warranties of the Owner Trustee and
the Connecticut Trustee.
(i) The representations and warranties of the
Owner Trustee, individually and as the Owner Trustee, set
forth in Section 5.3 and in the other Transaction Documents
shall be true and correct in all material respects on and as
of the Debt Refinancing Date with the same force and effect
as though made on and as of the Debt Refinancing Date, and
each of the Owner Participant, the Connecticut Trustee, the
Indenture Trustee, and the Pass Through Trustee shall have
received an Officers' Certificate of the Owner Trustee,
individually and as the Owner Trustee, dated as of the Debt
Refinancing Date, to such effect and that the Owner Trustee
has performed in all material respects the covenants
required to be performed by it prior to the Debt Refinancing
Date under this Agreement and each other Transaction
Document.
(ii) The representations and warranties of the
Connecticut Trustee, individually and as the Connecticut
Trustee, set forth in Section 5.3 and in the other
Transaction Documents shall be true and correct in all
material respects on and as of the Debt Refinancing Date
with the same force and effect as though made on and as of
the Debt Refinancing Date, and each of the Connecticut
Participant, the Connecticut Trustee, the Indenture Trustee,
and the Pass Through Trustee shall have received an
Officers' Certificate of the Connecticut Trustee,
individually and as the Connecticut Trustee, dated as of the
Debt Refinancing Date, to such effect and that the
Connecticut Trustee has performed in all material respects
the covenants required to be performed by it prior to the
Debt Refinancing Date under this Agreement and each other
Transaction Document.
(j) Representations and Warranties of the Owner Participant
and the Owner Participant Parent.
(i) The representations and warranties of the Owner
Participant set forth in Section 5.2 and in the other Transaction
Documents shall be true and correct in all material respects on
and as of the Debt Refinancing Date with the same force and
effect as though made on and as of the Debt Refinancing Date, and
each of the Indenture Trustee, the Remainderman, the Owner
Trustee, the Connecticut Trustee and the Pass Through Trustee
shall have received an Officers' Certificate of the Owner
Participant, dated as of the Debt Refinancing Date, to such
effect and that the Owner Participant has satisfied in all
material respects each of the conditions required of it prior to
the Debt Refinancing Date under this Agreement and each other
Transaction Document; and
(ii) the representations and warranties of the Owner
Participant Parent set forth in Section 5.6 and in the other
Transaction Documents shall be true and correct in all material
respects on and as of the Debt Refinancing Date with the same
force and effect as though made on and as of the Debt Refinancing
Date, and each of the Indenture Trustee, the Owner Trustee, the
Connecticut Trustee, the Remainderman and the Pass Through
Trustee shall have received an Officers' Certificate of the Owner
Participant Parent, dated as of the Debt Refinancing Date, to
such effect and that the Owner Participant Parent has satisfied
in all material respects each of the conditions required of it
prior to the Debt Refinancing Date under this Agreement and each
other Transaction Document.
(k) Representations and Warranties of the Indenture Trustee.
The representations and warranties of the Indenture Trustee, individually
and as the Indenture Trustee, set forth in Section 5.4 and in the other
Transaction Documents shall be true and correct in all material respects on
and as of the Debt Refinancing Date with the same force and effect as
though made on and as of the Debt Refinancing Date, and each of the Owner
Participant, the Owner Trustee, the Connecticut Trustee, the Remainderman
and the Pass Through Trustee shall have received an Officers' Certificate
of the Indenture Trustee, individually and as the Indenture Trustee, dated
as of the Debt Refinancing Date, to such effect and that the Indenture
Trustee has complied in all material respects with each of the conditions
required of it prior to the Debt Refinancing Date under this Agreement and
each other Transaction Document.
(l) Representations and Warranties of the Pass Through
Trustee. The representations and warranties of the Pass Through Trustee,
individually and as the Pass Through Trustee, set forth in Section 5.5 and
in any Transaction Document shall be true and correct in all material
respects on and as of the Debt Refinancing Date with the same force and
effect as though made on and as of the Debt Refinancing Date, and the Owner
Participant, the Owner Trustee, the Connecticut Trustee, the Remainderman
and the Indenture Trustee shall have received an Officers' Certificate of
the Pass Through Trustee, individually and as the Pass Through Trustee,
dated as of the Debt Refinancing Date, to such effect and that the Pass
Through Trustee has complied in all material respects with each of the
conditions required of it prior to the Debt Refinancing Date under this
Agreement and each other Transaction Document.
(m) Appraisal. On the Debt Refinancing Date, the Owner
Participant shall have received a written report from the Appraiser,
addressed to the Owner Participant and in form and substance reasonably
satisfactory to the Owner Participant and its counsel, containing an
appraisal of each of Property H and Property I, which written report shall
reflect the Appraiser's conclusion that: (i) the estimated economic useful
life of the Improvement on each of Property H and Property I is at least
133 percent of the period that includes the sum of the Basic Term and the
maximum number of permitted Fixed-Rate Renewal Terms under Section 12(a) of
each Related Lease; (ii) at the expiration of the Basic Term and all of the
Fixed-Rate Renewal Terms, the Improvement on each of Property H and
Property I will have an estimated residual value in the hands of the Owner
Trustee or another Person, unrelated to the Lessee within the meaning of
Revenue Procedure 75-21, who could lease or purchase such Improvement from
the Owner Trustee for commercial use, equal to at least 20 percent of the
Related Lessor Purchase Price determined without regard to inflation or
deflation during the period from the Debt Refinancing Date through the
expiration of the Basic Term and all permitted Fixed-Rate Renewal Terms;
(iii) on the Debt Refinancing Date, the Fair Market Sales Value of the
Related Lessor Interest in each of Property H and Property I in the hands
of the Owner Trustee is equal to the Related Lessor Purchase Price of the
Related Lessor Interests; (iv) at the expiration of the Basic Term and all
of the Fixed-Rate Renewal Terms, the use of Property H and Property I by
the Owner Trustee or by another Person, unrelated to the Lessee within the
meaning of Revenue Procedure 75-21 will be commercially feasible; (v) the
rent holiday is commercially reasonable for the geographic location in
which each of the Improvements is located; and (vi) such other matters as
the Owner Participant shall have reasonably requested prior to the
execution of this Agreement. The written report of the Appraiser shall
also contain a cost segregation analysis stipulating the relative
proportions of Fair Market Sales Value allocated to land, buildings, site
improvements and personal property and the necessary valuations needed to
support the pricing assumptions made by the Owner Participant in relation
to the use of an Estate for Years. The Appraiser shall also determine the
maximum economic useful life of each of Property H and Property I and shall
provide a certificate to the Indenture Trustee to the effect set forth in
clause (iii) above.
(n) Governmental Action. The Remainderman, the Owner
Trustee, the Connecticut Trustee, Owner Participant, the Indenture Trustee,
and the Pass Through Trustee shall have received copies of documents or
other evidence of all Governmental Action set forth in Schedule 3 or any
additional Governmental Action relating to the Lessee and each of Property
H and Property I required for the consummation by the Lessee of the
transactions contemplated by the Transaction Documents on the Debt
Refinancing Date and for the use and occupancy of each of Property H and
Property I on or prior to the Debt Refinancing Date, in form and substance
reasonably satisfactory to the Remainderman, the Owner Trustee, the
Connecticut Trustee, Owner Participant, the Indenture Trustee and the Pass
Through Trustee.
(o) Consents and Approvals. All approvals or consents set
forth on Schedule 4 or any additional approvals relating to the Lessee and
each of Property H and Property I required for the consummation of the
transactions contemplated hereby and by the other Transaction Documents and
the Underwriting Agreement on the Debt Refinancing Date shall have been
obtained and shall be in form and substance reasonably satisfactory to the
Owner Participant, the Connecticut Trustee, the Owner Trustee, the
Remainderman, the Indenture Trustee and the Pass Through Trustee.
(p) Title and Title Insurance. On the Debt Refinancing
Date, the Owner Trustee and the Remainderman shall have received from the
Title Underwriter its ALTA Form B-1970, revised 1984, Extended Coverage
Owner's Policy of Title Insurance (the "Owner's Policy"), insuring that (A)
the Owner Trustee owns each of the following interests and estates: good
and marketable fee simple title to each of the Improvements and good and
marketable title to the Estate for Years in respect of Property H and
Property I, subject only to Permitted Exceptions, in the principal amount
of the Related Lessor Purchase Price, and (B) the Remainderman owns good
and marketable fee simple title to each of the Remainderman Interests in
respect of Property H and Property I, subject only to Permitted Exceptions,
in the principal amount of the Related Remainderman Purchase Price, in each
case, together with complete, legible copies of all encumbrances, plats,
maps and surveys of record. The Indenture Trustee shall have received from
the Title Underwriter its ALTA Form B-1970, revised 1984, of Extended
Coverage Lender's Policy of Title Insurance (the "Lender's Policy", which
together with the Owner's Policy shall hereinafter be referred to as the
"Title Policies"), insuring the creation under the Indenture in favor of
the Indenture Trustee of a valid first priority deed of trust against the
Indenture Estate, subject only to Permitted Exceptions in an amount equal
to the Subsequent Debt Financing Amount, together with complete, legible
copies of all encumbrances and plats of record. The Title Policies shall
have an effective date as of the Closing Date and shall contain the
endorsements listed on Schedule 5. The Owner Trustee, the Remainderman and
the Indenture Trustee also shall have received facultative reinsurance
agreements with direct access agreements in accordance with the 1990 ALTA
Facultative Tertiary Reinsurance Agreement form from such licensed title
insurance companies and in such amounts as are set forth in Schedule 6.
(q) Representations and Warranties of the Remainderman, the
Remainderman Participant and the Remainderman Trustee. The representations
and warranties of each of the Remainderman Participant, the Remainderman
and the Remainderman Trustee set forth in Sections 5.7, 5.8 and 5.9,
respectively, and in the other Transaction Documents shall be true and
correct in all material respects on and as of the Closing Date with the
same force and effect as though made on the Debt Refinancing Date, and each
of the Owner Participant, the Connecticut Trustee, the Owner Trustee, the
Indenture Trustee and the Pass Through Trustee shall have received an
Officer's Certificate of each of the Remainderman Participant, Remainderman
and the Remainderman Trustee dated as of the Closing Date, to such effect
and that each of the Remainderman Participant, Remainderman and the
Remainderman Trustee has satisfied in all material respects each of the
conditions required of it prior to the Debt Refinancing Date under this
Agreement and each other Transaction Document.
(r) Insurance. Insurance complying with the provisions of
Section 10 of each Related Lease shall be in full force and effect in
respect of Property H and Property I, and the Owner Participant and the
Indenture Trustee shall have received an Officers' Certificate of the
Lessee dated the Debt Refinancing Date and setting forth the insurance
obtained by the Lessee in accordance with such Section 10 and stating that
such insurance is in full force and effect and that all premiums then due
thereon have been paid and, in the opinion of the officer signing such
certificate, such insurance complies with the provisions of the Related
Lease. The Owner Participant, the Remainderman and the Indenture Trustee
shall have received certificates evidencing insurance signed by the insurer
or an agent authorized to bind the insurer at least two Business Days prior
to the Debt Refinancing Date.
(s) Certificates of Occupancy. The Owner Participant shall
have received satisfactory evidence of the issuance of valid temporary or
permanent Certificates of Occupancy for Property H and Property I, as well
as any other licenses or permits required to be obtained from the
applicable Governmental Authorities with respect to Property H and Property
I used and occupied by the Lessee as of the Debt Refinancing Date.
(t) Opinions of Counsel. The opinions described on Schedule
7 shall have been received by the parties, as appropriate, substantially in
the forms attached as Schedule 7, and dated as of the Debt Refinancing
Date. In addition, the Owner Participant shall have received favorable
opinions of Owner Participant's Tax Counsel and Owner Participant's Special
Local Counsel, dated the Debt Refinancing Date and addressed to the Owner
Participant, as to such federal income tax matters and state tax matters,
respectively, relating to the transactions to be consummated on the Debt
Refinancing Date as the Owner Participant may reasonably request. Each of
the parties hereto agrees to instruct its counsel to address each such
opinion (other than the tax matters opinions referred to in the preceding
sentence) to the Underwriters in addition to the other addressees.
(u) Environmental Report. Prior to the execution of this
Agreement, the Owner Participant, the Owner Trustee and the Remainderman
shall have received copies of Phase I environmental assessments of each of
the Properties.
(v) Payment of Taxes, etc. All Taxes, charges, fees and
costs, if any, payable on or prior to the Closing Date in connection with
the execution, delivery, recording, filing and performance through the
Closing Date of the Transaction Documents and the documents and instruments
enumerated and described in Schedule 2, or in connection with the issuance
and sale of the Notes or use and occupancy of Property H and Property I and
the making by the Owner Participant of the Subsequent Investment and the
payment by the Remainderman of the Remainderman Purchase Price, shall have
been paid in full.
(w) Debt Refinancing Date. The Debt Refinancing Date shall
be no later than the Outside Date.
(x) No Adverse Accounting Treatment. The transaction to be
effected pursuant to the Lease in respect of Property H and Property I
shall be classifiable by the Owner Participant as a leveraged lease under
GAAP for leveraged leases in effect on the Debt Refinancing Date.
(y) Investment Grade. The Lessee shall be Investment Grade.
(z) Survey. The Lessee shall have delivered, or shall have
caused to be delivered, to the Owner Trustee, the Remainderman and the
Indenture Trustee an accurate as built "ALTA/ASCM Land Title Survey" of the
Total Parcel (the "Survey") meeting the accuracy requirements of a Class
"A" Survey, as defined by the guidelines of the ALTA/ASCM and certified by
the applicable surveyor to the Lessee, the Owner Trustee, the Connecticut
Trustee, the Owner Participant, the Indenture Trustee, the Remainderman and
the Title Underwriter, which survey (1) shall include all minimum standard
detail requirements for Class "A" ALTA/ASCM Land Title Surveys and items 1-
15 listed on Table 3 thereof, except items 6 and 14 regarding topography
and governmental agency requirements, respectively, and (2) shall be
satisfactory to the Title Underwriter. The Lessee shall also have
delivered, or shall have caused to be delivered, to the Owner Participant,
the Remainderman Participant and the Indenture Trustee a metes and bounds
description of Property H and Property I.
(aa) Other Information. The Owner Participant, the
Remainderman, the Indenture Trustee and the Pass Through Trustee shall have
received such information and copies of such other documents as any of them
may reasonably request.
(bb) Evidence of Authority. The Owner Participant, the
Remainderman, the Indenture Trustee and the Pass Through Trustee shall have
received such other documents and evidence with respect to the Lessee, the
Owner Trustee, the Connecticut Trustee, the Indenture Trustee, the Pass
Through Trustee, or the Owner Participant as the Owner Participant, the
Remainderman, the Indenture Trustee and the Pass Through Trustee or their
respective counsel may reasonably request in order to establish the
authority of such parties to consummate the transactions contemplated by
this Agreement and the other Transaction Documents to which each such
respective Person is a party and the taking of all corporate proceedings in
connection herewith or therewith.
(cc) Equity Offering. Each of the Owner Participant,
the Indenture Trustee and the Pass Through Trustee shall have received on
or prior to the Debt Refinancing Date a certificate in the form of Exhibit
L from Morgan Stanley & Co. with respect to offerees as of the equity
investment of the Owner Participant and the manner of offering thereof.
(dd) No Litigation. No action, suit or proceeding shall
be pending or, to the knowledge of a Responsible Officer of the Lessee,
threatened before or by any Governmental Authority, nor shall any order,
judgment or decree have been issued or proposed to be issued by any
Governmental Authority, in each case at the time of the Debt Refinancing
Date, that questions the validity or enforceability of this Agreement or
any other Transaction Document to which the Lessee is or is to become a
party or that would, if adversely determined, have a material adverse
effect on the ability of the Lessee to perform its respective obligations
under the Transaction Documents to which such Lessee is or is to become a
party.
(ee) Change in Tax Law. There shall not have been
enacted, promulgated, issued or proposed during the period commencing on
the date of this Agreement and ending on the Debt Refinancing Date any
change in the Code, any statute, any regulations, any administrative
ruling, procedure, announcement, guidelines or other official guidance or
any judicial decision that could adversely affect the Owner Participant.
Section 3.4 Conditions Precedent to Obligations of the Lessee on
the Debt Refinancing Date. The obligations of the Lessee to consummate the
transactions contemplated by this Agreement or the Debt Refinancing Date
shall be subject to the fulfillment to the reasonable satisfaction of, or
waiver by, the Lessee, prior to or on the Debt Refinancing Date, of the
conditions precedent set forth below. Notwithstanding the foregoing, the
respective obligations of the Lessee shall not be subject to the Lessee's
own performance or compliance to the extent that such performance or
compliance is reasonably within the control of the Lessee. The conditions
precedent contained in this Section 3.4 shall apply only to the extent the
transactions on the Debt Refinancing Date relate to Property H and Property
I.
(a) Authority; Transaction Documents, Closing Documents;
Opinions; and Appraisal. (i) The Lessee shall have received an executed
counterpart of each Transaction Document and each other agreement referred
to in Section 3.3(a), and shall have received an original or copy of each
instrument, Officers' Certificate, certificate, opinion, document or other
evidence of Governmental Action, report and other document referred to in
Section 3.3 (other than the opinion of the Owner Participant's Tax Counsel
referred to in Section 3.3(t)), each to be in form and substance reasonably
satisfactory to the Lessee; and (ii) the Lessee also shall have received a
written report from the Appraiser, addressed to the Lessee, in form and
substance reasonably satisfactory to the Lessee, which report shall reflect
the Appraiser's reasonable conclusion as to the estimated Fair Market
Rental Value of the Lessor Interests in respect of Property H and Property
I in the hands of the Owner Trustee or another Person, unrelated to the
Lessee within the meaning of Revenue Procedure 75-21, who could lease (or
purchase) such Lessor Interests from the Owner Trustee for commercial use
at the expiration of the Basic Term determined without regard to inflation
or deflation during the period from the Debt Refinancing Date through the
expiration of all permitted Fixed-Rate Renewal Terms.
(b) Due Authorization, Execution and Delivery. All of the
documents described in Section 3.3(a) shall have been duly authorized,
executed and delivered by the respective parties thereto and shall be in
full force and effect on the Debt Refinancing Date, and the Lessee shall
have received reasonably satisfactory evidence as to such authorization,
execution and delivery.
(c) Representations and Warranties. The representations and
warranties of the Owner Participant set forth in Section 5.2 and in the
other Transaction Documents, of the Owner Trustee, individually and as
Owner Trustee, set forth in Section 5.3 and in the other Transaction
Documents, of the Indenture Trustee, individually and as Indenture Trustee,
set forth in Section 5.4 and in the other Transaction Documents, of the
Pass Through Trustee, individually and as Pass Through Trustee, set forth
in Section 5.5 and in the other Transaction Documents, of the Owner
Participant Parent set forth in Section 5.6 and in the other Transaction
Documents, of the Remainderman set forth in Section 5.7 and in the other
Transaction Documents and of the Connecticut Trustee, individually and as
Connecticut Trustee, set forth in Section 5.11 and in the other Transaction
Documents shall be true and correct in all material respects on and as of
the Debt Refinancing Date with the same force and effect as though made on
and as of Debt Refinancing Date and the Lessee shall have received
appropriate Officers' Certificates of the Owner Participant, the Owner
Participant Parent, the Connecticut Trustee, the Owner Trustee, the
Remainderman, the Indenture Trustee, and the Pass Through Trustee, both
individually and in their roles as trustees, dated as of the Debt
Refinancing Date, to such effect and that they have performed in all
material respects the covenants required to be performed by them,
respectively, prior to the Debt Refinancing Date under this Agreement and
each other Transaction Document;
(d) No Violation of Applicable Law. The execution, delivery
and performance of the Transaction Documents and the Underwriting Agreement
and the consummation of the transactions contemplated hereby and thereby
shall not violate any Applicable Law.
(e) Governmental Action. The Lessee shall have received
copies of documents or other evidence of all Governmental Action set forth
in Schedule 3 or any additional Governmental Action required for the
consummation by the Owner Participant and the Owner Participant Parent of
the transactions contemplated hereby and by the other Transaction
Documents.
(f) Accounting Treatment. The Lessee shall have been
advised by its independent public accountants on or before the Closing Date
that, as of the Closing Date, the transactions effected pursuant to each
respective Lease would be classified as an operating lease in conformity
with GAAP.
(g) Consents and Approvals. All approvals and consents set
forth on Schedule 4 or any additional approvals or consents relating to the
Lessee or Property H or Property I that are required for the consummation
of the transactions contemplated by the other Transaction Documents shall
have been obtained and shall be in form and substance reasonably
satisfactory to the Lessee.
(h) Opinions of Counsel. The opinions identified on
Schedule 7 shall have been received by the Lessee, substantially in the
forms attached to Schedule 7, and dated as of the Debt Refinancing Date.
(i) No Default, etc. No Event of Loss in respect of
Property H and Property I shall have occurred and no event or condition
shall have occurred and be continuing that would, with the passage of time
or the giving of notice, or both, constitute an Event of Loss. To the
extent not caused by the action or inaction of the Lessee, other than that
which is beyond the reasonable control of the Lessee, no Default, Event of
Default, Indenture Default or Indenture Event of Default shall have
occurred and be continuing. The Lessee shall have received Officers'
Certificates from each of the Owner Trustee and the Connecticut, in each
case, in its individual and trust capacities, and the Owner Participant, to
the effect that no Indenture Default or Indenture Event of Default
attributable to the Owner Trustee and the Connecticut Trustee, in each
case, in either its individual or trust capacities, or the Owner
Participant, has occurred and is continuing.
(j) Certificates of Occupancy. The Lessee shall have
received valid temporary or permanent Certificates of Occupancy for
Property H and Property I that the Lessee occupies as of the Debt
Refinancing Date, as well as any other licenses or permits required to be
obtained from the applicable Governmental Authorities with respect to the
Properties used and occupied by the Lessee as of the Debt Refinancing Date.
(k) Debt Refinancing Date. The Debt Refinancing Date shall
be no later than the Outside Date.
(l) Offeree Certificates. The Lessee shall also have
received on or prior to the Closing Date a certificate in the form of
Exhibit L hereto from Morgan Stanley & Co. with respect to the offerees of
the equity investment of the Owner Participant and the manner of offering
thereof.
(m) Other Information. The Lessee shall have received such
other information and copies of such other documents relating to the
transactions to be effected on the Debt Refinancing Date as the Lessee
reasonably may request (including but not limited to evidence as to the due
authorization, execution and delivery of the Transaction Documents and any
other instruments and agreements contemplated hereby).
ARTICLE IV
EXTENT OF INTEREST OF NOTEHOLDERS
No Noteholder shall have any further interest in, or other right
with respect to, the Indenture Estate when and if the principal of,
Premium, if any, and interest on all Notes held by such Noteholder and all
other sums payable to such Noteholder under the Indenture and such Notes
shall have been paid in full. The Pass Through Trustee and, by its
acceptance of a Note, any other Noteholder agrees that they will look
solely to the income and proceeds from the Indenture Estate to the extent
available for distribution to such Noteholder as provided for in Article 4
of the Indenture and that none of the Owner Participant, the Owner
Participant Parent or the Owner Trustee shall be directly or indirectly
personally liable to the Pass Through Trustee or any other Noteholder for
any amount payable under the Notes, the Indenture or hereunder, except as
expressly provided in the Transaction Documents.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of the Lessee. The
Lessee represents and warrants to each of the other parties hereto as
follows:
(a) Due Organization. The Lessee is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware. The Lessee has the corporate power and authority to
conduct its business as now conducted, to own or hold under lease its
properties and to enter into and perform its obligations under the
Transaction Documents to which it is or is to become a party. The Lessee
is duly qualified to do business and is in good standing as a foreign
corporation in the State of California. Lessee has not failed to qualify
to do business or to be in good standing in any other jurisdiction where
failure so to qualify or to be in good standing would materially and
adversely affect the business or financial condition of the Lessee or the
ability of the Lessee to perform its obligations under this Agreement or
any other Transaction Document to which it is or is to become a party.
(b) Due Authorization; No Conflict. Each of the Transaction
Documents to which the Lessee is or is to become a party has been duly
authorized by all necessary corporate action on the part of the Lessee and
has been, or on the Closing Date will have been, duly executed and
delivered by such Lessee, and the execution, delivery and performance
thereof by the Lessee does not, and on the Closing Date will not, (i)
require any approval of the stockholders of the Lessee or any approval or
consent of any trustee or holder of any indebtedness or obligation of the
Lessee, other than such consents and approvals as have been, or, on or
prior to the Closing Date, will have been, obtained, (ii) contravene any
Applicable Law binding on the Lessee or the charter or by-laws of the
Lessee or (iii) contravene or result in any breach of or constitute any
default under, or result in the creation of any Lien (other than pursuant
to the Transaction Documents) upon any property of the Lessee under the
Lessee's charter or by-laws, any material indenture, mortgage, loan
agreement, lease or other agreement or instrument to which the Lessee is a
party or by which the Lessee or any of its properties are bound.
(c) Governmental Action. On or prior to the Closing Date,
all Governmental Action set forth on Schedule 3 [(Part I)], together with
that which is otherwise required in connection with the execution, delivery
and performance by the Lessee of the Transaction Documents to which the
Lessee is or is to become a party, has been or will have been obtained,
given or made but for those Governmental Actions set forth on Schedule 3
(Part II) (as identified specifically and with respect to general classes
of Governmental Actions), all of which are either (x) not required on the
Closing Date and cannot be obtained or (y) typically not applied for prior
to the time they are required (and the Lessee has no reason to believe will
not be timely obtained). The sale of the Properties at the Purchase Price
therefor and the payment of Rent under the Leases are consistent in all
material respects with and do not contravene any Governmental Action
specified in Schedule 3 (Part I).
(d) Enforceability. Each of the Transaction Documents to
which the Lessee is or is to become a party constitutes, or, when executed
and delivered by the Lessee, will constitute, the legal, valid and binding
obligation of the Lessee, enforceable against the Lessee in accordance with
the terms thereof, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors', mortgagees' or lessors' rights in general and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(e) Litigation. Except as disclosed in Schedule 8, there is
no action, suit or proceeding pending or, to the knowledge of the Lessee,
threatened against the Lessee before or by any Governmental Authority that
questions the validity or enforceability of this Agreement or any other
Transaction Document to which the Lessee is or is to become a party or that
would, if adversely determined, have a material adverse effect on the
ability of the Lessee to perform its obligations under the Transaction
Documents to which the Lessee is or is to become a party.
(f) Financial Statements. The consolidated balance sheets
of the Lessee and its consolidated subsidiaries as of January 2, 1993 and
October 2, 1993, and the related statements of income and cash flows of the
Lessee and its consolidated subsidiaries for the fiscal year ended January
2, 1993 and the nine months ended October 2, 1993, contained or
incorporated by reference in the Lessee's Annual Report on Form 10-K for
the fiscal year ended January 2, 1993 the Lessee's Quarterly Report on Form
10-Q for the fiscal quarter ended October 2, 1993, respectively, fairly
present the consolidated financial condition of the Lessee and its
consolidated subsidiaries as of such dates and the result of operations of
the Lessee and its consolidated subsidiaries for the periods ended on such
dates, all in accordance with GAAP consistently applied (subject in the
case of the October 2, 1993 financial statements to normal year-end audit
adjustments).
(g) No Material Adverse Change. Since October 2, 1993,
there has been no material adverse change in the financial condition of the
Lessee and its subsidiaries taken as a whole.
(h) No Defaults. No Default or Event of Default has
occurred and is continuing, and no condition exists that constitutes, or
with the giving of notice of lapse of time or both would constitute, an
event of default by the Lessee under any material indenture, mortgage, loan
agreement, lease or other agreement or instrument to which the Lessee is a
party or by which it or any of its properties may be bound. No Event of
Loss has occurred and no event or condition has occurred which would, with
the passage of time or the giving of notice, or both, constitute an Event
of Loss.
(i) Financial Advisors. Except for Morgan Stanley & Co.
Incorporated, Goldman Sachs & Co. and Salomon Brothers Inc, the Lessee has
not retained any broker, finder or financial advisor in connection with the
transactions contemplated by the Transaction Documents.
(j) No Broker. There is no real estate broker or agent to
whom a commission is due as a result of the sale of the Properties.
(k) Liens. On the Closing Date, the Lessee will have
transferred to the Owner Trustee and the Remainderman good and marketable
fee simple title to the Lessor Interests and the Remainderman Interests,
respectively, and a valid and subsisting leasehold estate, in each case
free and clear of all Liens other than Permitted Liens. Upon execution,
acknowledgement, delivery and recordation of the First Supplemental
Indentures by the Owner Trustee and the Indenture Trustee, the First
Supplemental Indentures shall create the valid and perfected first priority
mortgage liens and security interests which they purport to create on, in
and to the Related Indenture Estates free and clear of all Liens other than
Permitted Liens.
(l) Location of Chief Executive Offices. The Chief Executive
Offices (as such term is used in Article 9 of the Uniform Commercial Code)
and the principal place of business of the Lessee and the offices where it
keeps its records concerning the Properties and the transactions
contemplated hereby are located at 1550 South Redwood Road, Salt Lake City,
Utah 84104.
(m) Investment Company. Neither the Lessee nor any
subsidiary of the Lessee is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(n) Securities Act. Except as contemplated by the
Transaction Documents, the Lessee has not offered (and on the Closing Date
will not have offered) any interest in the Properties, the Series J Notes,
the Trust Estate, the Indenture Estate or the Leases, or any similar
securities of the Lessee or the Trust, to, or solicited any offer to
acquire any of the same from, any Person, in violation of Section 5 of the
Securities Act, nor has it authorized any Person to take any such action,
and the Lessee has not taken any action that would subject any interest in
the Properties, the Refinancing Notes, the Trust Estate, the Indenture
Estate or the Leases (other than the Pass Through Certificates) to the
registration requirements of Section 5 of the Securities Act.
(o) [INTENTIONALLY OMITTED]
(p) Environmental Matters. To the best of Lessee's
knowledge, it has complied and is now complying with all Environmental Laws
and the requirements of any permits issued under such Environmental Laws
with respect to each of the Properties. There are no circumstances that
may prevent or interfere with the Lessee's ability to operate and maintain
each of the Properties as contemplated by the Transaction Documents in full
compliance with applicable Environmental Laws. To the best of the Lessee's
knowledge, except as identified in the Environmental Report, there are no
past, pending or threatened Environmental Claims against the Lessee or the
Properties. The Lessee has not used, and does not intend to use any
portion of the Properties, or any modifications thereto, for such purposes
other than (i) as necessary to operate and maintain the Properties and (ii)
in compliance with all applicable Environmental Laws. To the best of the
Lessee's knowledge, except as identified in the Environmental Report,
Hazardous Materials have not at any time been released, deposited or
disposed of on or from the Properties in any way contrary to that which is
allowed or permitted under applicable Environmental Laws. There are no
present or, to the knowledge of a Responsible Officer of the Lessee, past
actions, activities, circumstances, conditions, events or incidents,
including the release, emission, discharge, presence or disposal of
Hazardous Materials, that, in the Lessee's reasonable opinion could (i)
form the basis of an Environmental Claim against the Lessee or any Property
that individually or in the aggregate could have a material adverse effect
on the operations or financial condition of the Lessee, (ii) cause any
Property to be subject to any restrictions on its ownership, occupancy, use
or transferability under any Environmental Law, or (iii) interfere with the
continued operation and maintenance of the Properties. To the best of the
Lessee's knowledge, except as identified in the Environmental Report, there
are not now and never have been any underground storage tanks located at,
on or under the Properties; there is no asbestos contained in, forming part
of, or contaminating any part of the Properties; and no polychlorinated
biphenyls (PCBs) are used, stored, located at or contaminate any part of
the Properties.
(q) ERISA. Assuming that the Owner Participant is not
acquiring its interest in the Trust with assets of any "employee benefit
plan" (or its related trust) as defined in section 3(3) of ERISA or of any
"plan" (or its related trust) as defined in section 4975(a)(1) of the Code,
the execution, delivery and performance by the Lessee of this Participation
Agreement and the other Transaction Documents to which the Lessee is or is
to become a party will not involve any prohibited transaction within the
meaning of section 406 of ERISA or section 4975 of the Code.
(r) Completion. The Improvements located on each of the
Properties have been substantially completed and each of the stores located
on Property B, Property C, Property D, Property E, Property F, Property G,
and Property H have opened for business.
(s) Certificates of Occupancy. The Lessee has received
valid temporary or permanent Certificates of Occupancy for each of the
Properties that the Lessee occupies as of the Closing Date. With respect
to each Property for which the Lessee has obtained only a temporary
Certificate of Occupancy, the Lessee has no knowledge of any condition or
state of facts that could prevent the issuance of a permanent Certificate
of Occupancy in the ordinary course of business with respect to the
applicable Property.
(t) Subdivision. Each of the Properties has been subdivided
in compliance with Applicable Law and constitutes a legally distinct parcel
or parcels that can be independently and validly conveyed and mortgaged.
(u) [INTENTIONALLY OMITTED]
(v) Compliance. After giving effect to the transactions
contemplated by the Transaction Documents, including without limitation,
the due execution, delivery and recordation of the Deeds, the Remainderman
Interest Deeds and the Leases, the ownership of the Improvements and the
Estate for Years by the Owner Trustee and the Remainderman Interest by the
Remainderman, and the use and occupancy of the Properties by the Lessee, in
each case, in the operation of Lessee's Business, shall comply with
Applicable Law, including, without limitation, all applicable zoning and
similar land use laws and regulations, as of the Closing Date, except in
any case where the failure to comply would not have an adverse effect on
the value, utility or remaining useful life of the respective Improvements
except to an insignificant extent or where Applicable Law does not require
the Lessee or the Properties to be in compliance.
EXCEPT TO THE EXTENT EXPRESSLY PROVIDED IN THE TRANSACTION
DOCUMENTS, THE LESSEE DOES NOT MAKE NOR SHALL THE LESSEE BE DEEMED TO HAVE
MADE, AND THE LESSEE HEREBY DISCLAIMS, ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, AS TO THE VALUE, CONDITION, WORKMANSHIP, DESIGN,
MERCHANTABILITY OR FITNESS FOR USE OF ANY OF THE PROPERTIES OR ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO
ANY OF THE PROPERTIES.
(w) Legal Effect. The Deeds are effective under applicable
California law to convey all of Lessee's right, title and interest in the
Improvements and the Estates for Years. The Leases constitute operating
Leases under applicable California law.
(x) Compliance with Negative Covenants. No circumstance exists
that constitutes, or with the lapse of time would constitute, (i) a default
or event of default under any of Lessee's material agreements relating to
indebtedness for money borrowed or (ii) the covenants set forth in Annex
II.
Section 5.2 Representations and Warranties of the Owner
Participant. The Owner Participant represents and warrants to each of the
other parties hereto as follows:
(a) Due Organization. The Owner Participant is a
corporation duly organized, validly existing and in good standing under the
laws of the state of its incorporation, and has the corporate power and
authority to enter into and perform its obligations under the Transaction
Documents to which it is or is to become a party. The Owner Participant is
qualified to do business in the State of California and has not failed to
qualify to do business or to be in good standing in any other jurisdiction
where failure so to qualify or to be in good standing would materially and
adversely affect the Owner Participant's ability to perform its obligations
under this Agreement or any other Transaction Document to which it is or is
to become a party.
(b) Due Authorization; No Conflict. Each of the Transaction
Documents to which the Owner Participant is or is to become a party has
been duly authorized by all necessary corporate action on the part of the
Owner Participant and has been, or on the Closing Date will have been, duly
executed and delivered by the Owner Participant, and the execution,
delivery and performance thereof by the Owner Participant do not, and on
the Closing Date will not, (i) require any approval of the stockholders of
the Owner Participant or any approval or consent of any trustee or holder
of any indebtedness or obligation of the Owner Participant other than such
consents and approvals as have been obtained, (ii) contravene any
Applicable Law binding on the Owner Participant (except no representation
or warranty is made as to any Applicable Law to which the Owner Participant
may be subject because of the activities of the Lessee) or (iii) contravene
or result in any breach of or constitute any default under, or result in
the creation of any Lien upon the Trust Estate under the Owner
Participant's charter or by-laws or any material indenture, mortgage, loan
agreement, lease or other agreement or instrument to which the Owner
Participant is a party or by which the Owner Participant or any of its
properties is bound.
(c) Enforceability. Each of the Transaction Documents to
which the Owner Participant is or is to become a party constitutes, or,
when executed and delivered by the Owner Participant, will constitute, the
legal, valid and binding obligation of the Owner Participant, enforceable
against the Owner Participant in accordance with the terms thereof, except
as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors',
mortgagees' or lessors' rights in general and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(d) Litigation. There is no action, suit or proceeding
pending or, to the knowledge of the Owner Participant, threatened against
the Owner Participant before or by any Governmental Authority that
questions the validity or enforceability of this Agreement or any other
Transaction Document to which the Owner Participant is or is to become a
party or that would, if adversely determined, have a material adverse
effect on the ability of the Owner Participant to perform its obligations
under the Transaction Documents to which the Owner Participant is or is to
become a party.
(e) ERISA. The Owner Participant is not acquiring its
interest in the Trust with the assets of any "employee benefit plan" (or
its related trust) as defined in Section 3(3) of ERISA or with the assets
of any "plan" (or its related trust) as defined in Section 4975(e) (1) of
the Code.
(f) Securities Act. The Owner Participant is acquiring its
interest in the Trust for its own account for investment and not with a
view to any resale or distribution thereof, and if in the future the Owner
Participant should decide to dispose of its interest in the Trust, the
Owner Participant understands that it may do so only in compliance with the
Securities Act and the rules and regulations of the SEC thereunder;
provided, however, that, subject to the provisions of Article VIII and of
the Trust Agreement, the disposition of the Owner Participant's interest in
the Trust shall be at all times within the Owner Participant's control.
Except as contemplated by the Transaction Documents, the Owner Participant
has not offered (and, on the Closing Date, will not have offered) any
interest in the Leases, the Notes, the Pass Through Certificates or any
similar securities of the Lessee or the Trust, to, or solicited any offer
to acquire any of the same from, any Person, nor has it authorized any
Person to take any such action.
(g) No Lessor's Liens. No Lessor's Lien on any of the
Properties, any of the Leases, the Trust Estate or the Indenture Estate
(other than the Lien of the Indenture) attributable to the Owner
Participant is in existence. The execution, delivery and performance by
the Owner Participant of the Transaction Documents to which it is or is to
become a party will not subject the Trust Estate or the Indenture Estate,
or any portion of either thereof, to any such Lessor's Lien.
(h) Financial Advisors. Neither the Owner Participant nor
its Affiliates have retained any broker, finder or financial advisor in
connection with the transactions contemplated by the Transaction Documents
other than Capstar Partners, Inc., the compensation of which shall be the
sole responsibility of, and shall be paid by, the Owner Participant.
(i) Investment Company. The Owner Participant is not an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
Section 5.3 Representations and Warranties of the Owner Trustee.
The Owner Trustee, as Owner Trustee and, except as to the representations
and warranties set forth in the second sentence of paragraph (c), in
paragraph (e) and the first sentence of paragraph (f) below, in its
individual capacity, represents and warrants to each of the other parties
hereto as follows:
(a) Due Organization. The Owner Trustee is a national
banking association duly organized, validly existing and in good standing
under the federal banking laws of the United States, and has the corporate
power and authority to enter into and perform its obligations (i) under the
Trust Agreement in its individual capacity and, to the extent it is a party
in its individual capacity, this Agreement, each of the Leases, the
Indenture and each of the First Supplemental Indentures and (ii) in its
capacity as Owner Trustee, under this Agreement, each of the Leases, the
Indenture, the First Supplemental Indentures and the other Transaction
Documents to which the Owner Trustee is or is to become a party, and the
Notes.
(b) Due Authorization; No Conflict. The Trust Agreement
and, to the extent the Owner Trustee is a party in its individual capacity,
this Agreement, each of the Leases, the Indenture and each of the First
Supplemental Indentures have been duly authorized by all necessary
corporate action on the part of the Owner Trustee in its individual
capacity and have been duly executed and delivered by the Owner Trustee in
its individual capacity. Assuming the due authorization, execution and
delivery of the Trust Agreement by the Owner Participant, this Agreement,
each of the Leases, the Indenture, each of the First Supplemental
Indentures and each of the other Transaction Documents to which the Owner
Trustee is or is to become a party have been, or on the Closing Date will
have been, duly authorized, executed and delivered by the Owner Trustee.
The execution, delivery and performance by the Owner Trustee in its
individual capacity of the Trust Agreement and, to the extent it is a party
in its individual capacity, this Agreement, each of the Leases and the
Indenture, and the execution, delivery and performance by the Owner Trustee
of this Agreement, each of the Leases, the Indenture and the other
Transaction Documents to which it is or is to become a party and the Notes,
do not, and on each Closing Date will not, (i) require any approval of the
stockholders of the Owner Trustee or any approval or consent of any trustee
or holders of any of the indebtedness or obligations of the Owner Trustee,
(ii) contravene any Applicable Law governing the banking, trust or
fiduciary powers of the Owner Trustee or any order or judgment applicable
to or binding on it, or (iii) contravene or result in any breach of or
constitute any default under the charter or by-laws of the Owner Trustee or
any material indenture, mortgage, loan agreement, lease or other agreement
or instrument to which the Owner Trustee is a party or by which the Owner
Trustee or any of its properties is bound.
(c) Enforceability. The Trust Agreement and, to the extent
that the Owner Trustee is a party in its individual capacity, this
Agreement, each of the Leases and the Indenture constitute the legal, valid
and binding obligation of the Owner Trustee in its individual capacity,
enforceable against the Owner Trustee in its individual capacity in
accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors', mortgagees' or
lessors' rights in general and by general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or
at law). This Agreement, each of the Leases, the Indenture and each of the
other Transaction Documents to which the Owner Trustee is or is to become a
party constitute, or when executed and delivered by the Owner Trustee will
constitute, the legal, valid and binding obligations of the Owner Trustee,
enforceable against the Owner Trustee in accordance with the terms thereof,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors', mortgagees', lessors' rights in general and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(d) Litigation. There is no action, suit or proceeding
pending or, to the knowledge of the Owner Trustee, threatened against the
Owner Trustee (as the Owner Trustee or in its individual capacity) before
or by any Governmental Authority that questions the validity or
enforceability of this Agreement, each of the Leases, the Indenture, the
Trust Agreement or any other Transaction Document to which the Owner
Trustee (as the Owner Trustee or in its individual capacity) is or is to
become a party or that would, if adversely determined, have a material
adverse effect on the ability of the Owner Trustee to perform its
obligations under the Transaction Documents to which the Owner Trustee (as
the Owner Trustee or in its individual capacity) is or is to become a
party.
(e) Notes. Upon execution of any Note to be issued by the
Owner Trustee under the Indenture, authentication thereof by the Indenture
Trustee pursuant to the Indenture and delivery thereof against payment
therefor in accordance with this Agreement and the Indenture, such Note
will be the legal, valid and binding obligation of the Owner Trustee,
enforceable against the Owner Trustee in accordance with the terms thereof,
except as enforceability may be limited by bankruptcy, receivership,
insolvency, reorganization, moratorium and other similar laws affecting the
enforcement of creditors' rights generally.
(f) No Lessor's Liens. No Lessor's Lien attributable to the
Owner Trustee in its trust capacity is in existence. No Lessor's Lien
attributable to State Street Bank and Trust Company of California, National
Association, in its individual capacity is in existence. The execution,
delivery and performance by the Owner Trustee of the Transaction Documents
to which it is or is to become a party will not subject the Trust Estate or
the Indenture Estate, or any portion of either thereof, to any Lessor's
Lien.
(g) Location of Chief Executive Office. The chief executive
office and principal place of business of the Owner Trustee is located at
725 S. Figueroa Street, Los Angeles, California 90017 and the office where
it keeps its records concerning the Properties and the transactions
contemplated hereby is located at 750 Main Street, Hartford, Connecticut
06103.
(h) Securities Act. Except as contemplated by the
Transaction Documents, the Owner Trustee has not offered (and, on the
Closing Date, will not have offered) any interest in the Leases, the Notes,
the Pass Through Certificates or any similar securities of the Lessee or
the Lessor Interests, to, or solicited any offer to acquire any of the same
from, any Person, nor has it authorized any Person to take any such action.
Section 5.4 Representations and Warranties of the Indenture
Trustee. The Indenture Trustee, in its individual capacity (except as to
(c) and (f)) and as Indenture Trustee, represents and warrants to each of
the other parties hereto as follows:
(a) Due Organization. The Indenture Trustee is a Delaware
banking corporation, duly organized, validly existing and in good standing
under the laws of the State of Delaware, and has the corporate power and
authority to enter into and perform its obligations under the Transaction
Documents to which it is or is to become a party.
(b) Due Authorization; No Conflict. Each of the Transaction
Documents to which the Indenture Trustee is or is to become a party (as the
Indenture Trustee or in its individual capacity) has been duly authorized
by all necessary corporate action on the part of the Indenture Trustee and
has been, or on the Closing Date will have been, duly executed and
delivered by the Indenture Trustee (as the Indenture Trustee or in its
individual capacity, as the case may be), and the execution, delivery and
performance thereof do not, and on the Closing Date will not, (i) require
any approval of the stockholders of the Indenture Trustee or any approval
or consent of any trustee or holders of any indebtedness or obligations of
the Indenture Trustee, (ii) contravene any Applicable Law governing the
banking, trust or fiduciary powers of the Indenture Trustee or any order or
judgment applicable to or binding on it, or (iii) contravene or result in
any breach of or constitute any default under the articles of association
or by-laws of the Indenture Trustee, or any material indenture, mortgage,
loan agreement, lease or other agreement or instrument to which the
Indenture Trustee in its individual capacity is a party or by which the
Indenture Trustee in its individual capacity or any of its properties is
bound.
(c) Enforceability. Each of the Transaction Documents to
which the Indenture Trustee is or is to become a party constitutes, or when
executed and delivered by the Indenture Trustee (as the Indenture Trustee
or in its individual capacity, as the case may be) will constitute, the
legal, valid and binding obligation of the Indenture Trustee (as the
Indenture Trustee or in its individual capacity, as the case may be),
enforceable against the Indenture Trustee (as the Indenture Trustee or in
its individual capacity, as the case may be) in accordance with the terms
thereof, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors', mortgagees, or lessors' rights in general and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(d) Litigation. There is no action, suit or proceeding
pending or, to the knowledge of the Indenture Trustee, threatened against
the Indenture Trustee (as the Indenture Trustee or in its individual
capacity) before or by any Governmental Authority that questions the
validity or enforceability of this Agreement or any other Transaction
Document to which the Indenture Trustee is or is to become a party or that
would, if adversely determined, have a material adverse effect on the
ability of the Indenture Trustee to perform its obligations under the
Transaction Documents to which the Indenture Trustee (as the Indenture
Trustee or in its individual capacity) is or is to become a party.
(e) No Indenture Trustee's Liens. No Indenture Trustee's
Lien is in existence. The execution, delivery and performance by the
Indenture Trustee of the Transaction Documents to which it is a party (as
Indenture Trustee or in its individual capacity) will not subject the
Indenture Estate, or any portion thereof, to any Indenture Trustee's Liens.
(f) Securities Act. Except as contemplated by the
Transaction Documents, the Indenture Trustee has not offered (and, on the
Closing Date, will not have offered) any interest in the Notes, the Pass
Through Certificates or any similar securities of the Indenture Estate, to,
or solicited any offer to acquire any of the same from, any Person, nor has
it authorized any Person to take any such action.
Section 5.5 Representations and Warranties of the Pass Through
Trustee. The Pass Through Trustee, in its individual capacity (except as
to (c) and (e)) and as Pass Through Trustee, represents and warrants to
each of the other parties hereto as follows:
(a) Due Organization. The Pass Through Trustee is a
Delaware banking corporation duly organized, validly existing in good
standing under the laws of the State of Delaware, and has the corporate
power and authority to enter into and perform its obligations under the
Pass Through Trust Agreement, the Pass Through Certificates and the other
Transaction Documents to which it is or is to become a party.
(b) Due Authorization; No Conflict. The Pass Through Trust
Agreement, the Pass Through Certificates, and the other Transaction
Documents to which the Pass Through Trustee is or is to become a party (as
the Pass Through Trustee and in its individual capacity) have been, or on
the Closing Date or on the Debt Refinancing Date, as applicable, will have
been, duly authorized by all necessary corporate action on the part of the
Pass Through Trustee and have been, or on the Closing Date or on the Debt
Refinancing Date, as applicable, will have been, duly executed and
delivered by the Pass Through Trustee, and the execution, delivery and
performance thereof do not, and on the Closing Date or on the Debt
Refinancing Date, as the case may be, will not: (i) require any approval
of the stockholders of the Pass Through Trustee or any approval or consent
of any trustee or holders of any of the indebtedness or obligations of the
Pass Through Trustee, (ii) contravene any Applicable Law governing the
banking trust or fiduciary powers of the Pass Through Trustee or any order
or judgment applicable to it, or (iii) contravene or result in any breach
of or constitute any default under the charter or by-laws of the Pass
Through Trustee or any material indenture, mortgage, loan agreement, lease
or other agreement or instrument to which the Pass Through Trustee in its
individual capacity is a party or by which the Pass Through Trustee in its
individual capacity or any of its properties is bound.
(c) Enforceability. The Pass Through Trust Agreement, the
Pass Through Certificates when issued and each of the Transaction Documents
to which the Pass Through Trustee (as the Pass Through Trustee or in its
individual capacity) is or is to become a party constitute, or, when
executed and delivered by the Pass Through Trustee (as the Pass Through
Trustee or in its individual capacity) will constitute, the legal, valid
and binding obligation of the Pass Through Trustee (as the Pass Through
Trustee or in its individual capacity, as the case may be), enforceable
against the Pass Through Trustee (as the Pass Through Trustee or in its
individual capacity) in accordance with the terms thereof, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors',
mortgagees' or lessors' rights in general and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(d) Litigation. There is no action, suit or proceeding
pending or, to the knowledge of the Pass Through Trustee, threatened
against the Pass Through Trustee (as the Pass Through Trustee or in its
individual capacity) before or by any Governmental Authority that questions
the validity or enforceability of this Agreement, the Pass Through Trust
Agreement, the Pass Through Certificates, or any other Transaction Document
to which the Pass Through Trustee is or is to become a party or that would,
if adversely determined, have a material adverse effect on the ability of
the Pass Through Trustee to perform its obligations under the Transaction
Documents to which the Pass Through Trustee (as the Pass Through Trustee or
in its individual capacity) is or is to become a party.
(e) Securities Act. The Pass Through Trustee is
acquiring the Refinancing Notes to be issued to it pursuant to the
Indenture on the Debt Refinancing Date for the purposes of the Pass Through
Trust and not with a view to any resale or distribution thereof, and if in
the future the Pass Through Trustee should decide to dispose of the Pass
Through Trust's interests in the Notes, the Pass Through Trustee
understands that it may do so only in compliance with the Securities Act
and the rules and regulations of the SEC thereunder. Except as
contemplated by the Transaction Documents, the Pass Through Trustee has not
offered (and on the Closing Date or the Debt Refinancing Date, will not
have offered) any interest in the Indenture Estate, the Pass Through
Certificates, the Notes or any similar securities to, or solicited any
offer to acquire any of the same from, any Person, nor has it authorized
any Person to take any such action.
(f) No Pass Through Trustee's Liens. No Pass Through
Trustee's Lien is in existence. The execution, delivery and performance by
the Pass Through Trustee of the Transaction Documents to which it is a
party (as Pass Through Trustee or in its individual capacity) will not
subject any Pass Through Estate, or any portion thereof, to any Pass
Through Trustee's Liens.
Section 5.6 Representations and Warranties of the Owner
Participant Parent. The Owner Participant Parent represents and warrants
to each of the other parties hereto as follows:
(a) Due Organization. The Owner Participant Parent is a
corporation duly organized, validly existing and in good standing under the
laws of the state of its incorporation, and has the corporate power and
authority to enter into and perform its obligations under the Transaction
Documents to which it is or is to become a party. The Owner Participant
Parent has not failed to qualify to do business or to be in good standing
in any other jurisdiction where failure so to qualify or to be in good
standing would materially and adversely affect the Owner Participant
Parent's ability to perform its obligations under this Agreement and the
Owner Participant Parent Guaranty.
(b) Due Authorization; No Conflict. Each of the Transaction
Documents to which the Owner Participant Parent is or is to become a party
has been duly authorized by all necessary corporate action on the part of
the Owner Participant Parent and has been, or on the Closing Date will have
been, duly executed and delivered by the Owner Participant Parent, and the
execution, delivery and performance thereof by the Owner Participant Parent
do not, and on the Closing Date will not, (i) require any approval of the
stockholders of the Owner Participant Parent or any approval or consent of
any trustee or holder of any indebtedness or obligation of the Owner
Participant Parent, (ii) contravene any Applicable Law binding on the Owner
Participant Parent (except no representation or warranty is made as to any
Applicable Law to which the Owner Participant Parent may be subject because
of the activities of the Lessees) or (iii) contravene or result in any
breach of, or constitute any default under, the Owner Participant Parent's
charter or by-laws or any material indenture, mortgage, loan agreement,
lease or other agreement or instrument to which the Owner Participant
Parent is a party or by which the Owner Participant Parent or any of its
properties is bound.
(c) Enforceability. Each of this Agreement and the Owner
Participant Parent Guaranty constitutes, or, when executed and delivered by
the Owner Participant Parent, will constitute, the legal, valid and binding
obligation of the Owner Participant Parent, enforceable against the Owner
Participant Parent in accordance with the terms thereof, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors',
mortgagees' or lessors' rights in general and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(d) Litigation. There is no action, suit or proceeding
pending or, to the knowledge of the Owner Participant Parent, threatened
against the Owner Participant Parent before or by any Governmental
Authority that questions the validity or enforceability of this Agreement
or the Owner Participant Parent Guaranty or that would, if adversely
determined, have a material adverse effect on the ability of the Owner
Participant Parent to perform its obligations under this Agreement or the
Owner Participant Parent Guaranty.
(e) Securities Act. The Owner Participant Parent has not
offered (and, on the Closing Date, will not have offered) any interest in
the Lease, the Notes, the Pass Through Certificates or similar securities
of the Lessee or the Trust, to, or solicited any offer to acquire any of
the same from, any Person, nor has it authorized any Person to take any
such action.
(f) Owner Participant Subsidiary. The Owner Participant is
a direct, wholly-owned Subsidiary of the Owner Participant Parent.
Section 5.7 Representations and Warranties of the Remainderman
Participant. The Remainderman Participant represents and warrants to each
of the other parties hereto as follows:
(a) Due Organization. The Remainderman Participant is a
limited partnership organized, validly existing and in good standing under
the laws of the State of Connecticut and has the power and authority to
enter into and perform its obligations under this Agreement, and the other
Transaction Documents to which the Remainderman Participant is or is to
become a party.
(b) Due Authorization; No Conflict. Each of the Transaction
Documents to which the Remainderman Participant is or is to become a party
has been duly authorized by all necessary corporate action on the part of
the Remainderman Participant and has been duly executed and delivered by
the Remainderman Participant. The execution, delivery and performance by
the Remainderman Participant of this Agreement, and the other Transaction
Documents to which it is or is to become a party do not, and on the Closing
Date will not, (i) require any approval of the partners of the Remainderman
Participant or any approval or consent of any trustee or holders of any of
the indebtedness or obligations of the Remainderman Participant,
(ii) contravene any Applicable Law governing the Remainderman Participant
or any order or judgment applicable to or binding on it, or
(iii) contravene or result in any breach or constitute any default under
the partnership agreement organizing the Remainderman Participant or any
material indenture, mortgage, loan agreement, lease or other agreement or
instrument to which the Remainderman Participant is a party or by which the
Remainderman Participant or any of its properties is bound.
(c) Enforceability. This Agreement and the other
Transaction Documents to which the Remainderman Participant is or is to
become a party constitute the legal, valid and binding obligation of the
Remainderman Participant, enforceable against the Remainderman Participant
in accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors', mortgagees' or
lessors' rights in general and by general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or
at law).
(d) Litigation. There is no action, suit or proceeding
pending or, to the knowledge of the Remainderman Participant, threatened
against the Remainderman Participant before or by any Governmental
Authority that questions the validity or enforceability of this Agreement
or any other Transaction Document to which the Remainderman Participant is
or is to become a party or that would, if adversely determined, have a
material adverse effect on the ability of the Remainderman Participant to
perform its obligations under the Transaction Documents to which the
Remainderman Participant is or is to become a party.
(e) No Remainderman's Liens. No Remainderman's Lien
attributable to the Remainderman Participant is in existence. The
execution, delivery and performance by the Remainderman Participant of the
Transaction Documents to which it is or is to become a party will not
subject the Trust Estate, the Indenture Estate, any of the Properties or
any portion of either thereof to any Remainderman's Liens.
Section 5.8 Representations and Warranties of the Remainderman.
The Remainderman represents and warrants to each of the other parties
hereto as follows:
(a) Due Organization. The Remainderman has been duly formed
and is validly existing in good standing as a statutory business trust
under the laws of the State of Delaware and has the power and authority to
enter into and perform its obligations under this Agreement and the other
Transaction Documents to which the Remainderman is or is to become a party.
(b) Due Authorization; No Conflict. Each of the Transaction
Documents to which the Remainderman is or is to become a party has been
duly authorized by the Remainderman pursuant to the provisions of the
Remainderman Trust Agreement and has been duly executed and delivered by
the Remainderman. The execution, delivery and performance by the
Remainderman of this Agreement and the other Transaction Documents to which
it is or is to become a party do not, and on the Closing Date will not,
(i) contravene any Applicable Law governing the Remainderman or any order
judgment or mortgage applicable to or binding on it or violate any
provision of the Remainderman Trust Agreement, and (ii) require any
Governmental Action of any federal, California or Delaware Governmental
Authority relating to the Remainderman.
(c) Enforceability. This Agreement and the other
Transaction Documents to which the Remainderman is or is to become a party
constitute the legal, valid and binding obligation of the Remainderman,
enforceable against the Remainderman in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors', mortgagees' or lessors' rights in general and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(d) No Remainderman's Liens. No Remainderman's Lien is in
existence. The execution, delivery and performance by the Remainderman of
the Transaction Documents to which it is or is to become a party will not
subject the Remainderman Trust Estate, the Indenture Estate, any of the
Properties or any portion of either thereof to any Remainderman's Liens.
(e) Location of Chief Executive Office. The chief executive
office and principal place of business of the Remainderman and the office
where it keeps its records concerning the Remainder Trust Estate and the
transactions contemplated hereby is located in Wilmington, Delaware.
Section 5.9 Representations and Warranties of the Remainderman
Trustee. The Remainderman Trustee, in its individual capacity (except as
to (c)) represents and warrants to each of the other parties hereto as
follows:
(a) Due Organization. The Remainderman Trustee is a
Delaware banking corporation, duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has the corporate
power and authority to enter into and perform its obligations under the
Transaction Documents to which it is or is to become a party.
(b) Due Authorization; No Conflict. This Agreement and the
Remainderman Trust Agreement have been duly authorized by all necessary
corporate action on the part of the Remainderman Trustee and have been, or
on the Closing Date will have been, duly executed and delivered by the
Remainderman Trustee, and the execution, delivery and performance thereof
do not, and on the Closing Date will not, (i) require any approval of the
stockholders of the Remainderman Trustee or any approval or consent of any
trustee or holders of any indebtedness or obligations of the Remainderman
Trustee, (ii) contravene any Applicable Law governing the banking, trust or
fiduciary powers of the Remainderman Trustee or any order or judgment
applicable to or binding on it, or (iii) contravene or result in any breach
of or constitute any default under the articles of association or by-laws
of the Remainderman Trustee, or any material indenture, mortgage, loan
agreement, lease or other agreement or instrument to which the Remainderman
Trustee in its individual capacity is a party or by which the Remainderman
Trustee in its individual capacity or any of its properties is bound.
(c) Enforceability. This Agreement and the Remainderman
Trust Agreement constitutes the legal, valid and binding obligation of the
Remainderman Trustee, enforceable against the Remainderman Trustee in
accordance with the terms thereof, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors', mortgagees, or lessors' rights in
general and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(d) No Remainderman's Liens. No Remainderman's Lien
attributable to the Remainderman Trustee in its individual capacity is in
existence. The execution, delivery and performance by the Remainderman
Trustee of this Agreement and the Remainderman Trust Agreement will not
subject the Remainderman Estate, or any portion thereof, to any
Remainderman's Liens.
Section 5.10 Representations and Warranties of the Initial
Noteholder. The Initial Noteholder represents and warrants to each of the
other parties hereto as follows:
(a) Due Organization. The Initial Noteholder is a national
banking association duly organized, validly existing in good standing under
the federal banking laws of the United States, and has the corporate power
and authority to enter into and perform its obligations under this
Agreement and the other Transaction Documents to which it is or is to
become a party.
(b) Due Authorization; No Conflict. The Transaction
Documents to which the Initial Noteholder is or is to become a party have
been, or on the Closing Date will have been, duly authorized by all
necessary corporate action on the part of the Initial Noteholder and have
been, or on the Closing Date will have been, duly executed and delivered by
the Initial Noteholder, and the execution, delivery and performance thereof
do not, and on the Closing Date will not: (i) require any approval of the
stockholders of the Initial Noteholder or any approval or consent of any
trustee or holders of any of the indebtedness or obligations of the Initial
Noteholder, (ii) contravene any Applicable Law or any order or judgment
applicable to the Initial Noteholder, or (iii) contravene or result in any
breach of or constitute any default under the charter or by-laws of the
Initial Noteholder or any material indenture, mortgage, loan agreement,
lease or other agreement or instrument to which the Initial Noteholder is a
party or by which the Initial Noteholder or any of its properties is bound.
(c) Enforceability. The Transaction Documents to which the
Initial Noteholder is or is to become a party constitute, or, when executed
and delivered by the Initial Noteholder, will constitute, the legal, valid
and binding obligation of the Initial Noteholder, enforceable against the
Initial Noteholder in accordance with the terms thereof, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors',
mortgagees' or lessors' rights in general and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(d) Litigation. There is no action, suit or proceeding
pending or, to the knowledge of the Initial Noteholder, threatened against
the Initial Noteholder before or by any Governmental Authority that
questions the validity or enforceability of this Agreement, or any other
Transaction Document to which the Initial Noteholder is or is to become a
party or that would, if adversely determined, have a material adverse
effect on the ability of the Initial Noteholder to perform its obligations
under the Transaction Documents to which the Initial Noteholder is or is to
become a party.
(e) Securities Act. The Initial Noteholder is not
acquiring the Series J Notes to be issued to it pursuant to the Indenture
and the First Supplemental Indentures on the Closing Date with a view to
any resale or distribution thereof, and if in the future the Initial
Noteholder should decide to dispose of the Initial Noteholder's interests
in the Series J Notes, the Initial Noteholder understands that it may do so
only in compliance with the Securities Act and the rules and regulations of
the SEC thereunder. Except as contemplated by the Transaction Documents,
the Initial Noteholder has not offered (and on the Closing Date, will not
have offered) any interest in the Indenture Estate or the Series J Notes or
any similar securities to, or solicited any offer to acquire any of the
same from, any Person, nor has it authorized any Person to take any such
action.
(f) ERISA. The Initial Noteholder is not acquiring its
interest in the Series J Notes on the Closing Date with the assets of any
"employee benefit plan" (or its related trust) as defined in Section 3(3)
of ERISA or with the assets of any "plan" (or its related trust) as defined
in Section 4975(e) (1) of the Code.
(g) No Initial Noteholder's Liens. No Initial Noteholder's
Lien is in existence.
Section 5.11 Representations and Warranties of the Connecticut
Trustee. The Connecticut Trustee, as Connecticut Trustee and, except as
to the representations and warranties set forth in the second sentence of
paragraph (c), in paragraph (e) and the first sentence of paragraph (f)
below, in its individual capacity, represents and warrants to each of the
other parties hereto as follows:
(a) Due Organization. The Connecticut Trustee is a national
banking association duly organized, validly existing and in good standing
under the federal banking laws of the United States, and has the corporate
power and authority to enter into and perform its obligations (i) under the
Connecticut Trust Agreement in its individual capacity and, to the extent
it is a party in its individual capacity, this Agreement and the Trust
Agreement, as amended by Amendment No. 1 to Trust Agreement, and (ii) in
its capacity as Connecticut Trustee, under this Agreement and the Trust
Agreement, as amended by Amendment No. 1 to Trust Agreement, and the other
Transaction Documents to which the Connecticut Trustee is or is to become a
party.
(b) Due Authorization; No Conflict. The Connecticut Trust
Agreement and, to the extent the Connecticut Trustee is a party in its
individual capacity, this Agreement and the Trust Agreement, as amended by
Amendment No. 1 to Trust Agreement, have been duly authorized by all
necessary corporate action on the part of the Connecticut Trustee in its
individual capacity and have been duly executed and delivered by the
Connecticut Trustee in its individual capacity. Assuming the due
authorization, execution and delivery of the Connecticut Trust Agreement by
the Connecticut Participant, this Agreement and the Trust Agreement, as
amended by Amendment No. 1 to Trust Agreement, and each of the other
Transaction Documents to which the Connecticut Trustee is or is to become a
party have been, or on the Debt Refinancing Date will have been, duly
authorized, executed and delivered by the Connecticut Trustee. The
execution, delivery and performance by the Connecticut Trustee in its
individual capacity of the Connecticut Trust Agreement and, to the extent
it is a party in its individual capacity, this Agreement and the Trust
Agreement, as amended by Amendment No. 1 to Trust Agreement, and the
execution, delivery and performance by the Connecticut Trustee of this
Agreement and the Trust Agreement, as amended by Amendment No. 1 to Trust
Agreement, and the other Transaction Documents to which it is or is to
become a party do not, and on the Debt Refinancing Date will not, (i)
require any approval of the stockholders of the Connecticut Trustee or any
approval or consent of any trustee or holders of any of the indebtedness or
obligations of the Connecticut Trustee, (ii) contravene any Applicable Law
governing the banking, trust or fiduciary powers of the Connecticut Trustee
or any order or judgment applicable to or binding on it, or (iii)
contravene or result in any breach of or constitute any default under the
charter or by-laws of the Connecticut Trustee or any material indenture,
mortgage, loan agreement, lease or other agreement or instrument to which
the Connecticut Trustee is a party or by which the Connecticut Trustee or
any of its properties is bound.
(c) Enforceability. The Connecticut Trust Agreement and, to
the extent that the Connecticut Trustee is a party in its individual
capacity, this Agreement and the Trust Agreement, as amended by Amendment
No. 1 to Trust Agreement, constitute the legal, valid and binding
obligation of the Connecticut Trustee in its individual capacity,
enforceable against the Connecticut Trustee in its individual capacity in
accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors', mortgagees' or
lessors' rights in general and by general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or
at law). This Agreement and each of the other Transaction Documents to
which the Connecticut Trustee is or is to become a party constitute, or
when executed and delivered by the Connecticut Trustee will constitute, the
legal, valid and binding obligations of the Connecticut Trustee,
enforceable against the Connecticut Trustee in accordance with the terms
thereof, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors', mortgagees', lessors' rights in general and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(d) Litigation. There is no action, suit or proceeding
pending or, to the knowledge of the Connecticut Trustee, threatened against
the Connecticut Trustee (as the Connecticut Trustee or in its individual
capacity) before or by any Governmental Authority that questions the
validity or enforceability of this Agreement, the Connecticut Trust
Agreement, the Trust Agreement, as amended by Amendment No. 1 to Trust
Agreement, or any other Transaction Document to which the Connecticut
Trustee (as the Connecticut Trustee or in its individual capacity) is or is
to become a party or that would, if adversely determined, have a material
adverse effect on the ability of the Connecticut Trustee to perform its
obligations under the Transaction Documents to which the Connecticut
Trustee (as the Connecticut Trustee or in its individual capacity) is or is
to become a party.
(e) No Lessor's Liens. No Lessor's Lien attributable to the
Connecticut Trustee in its trust capacity is in existence. No Lessor's
Lien attributable to State Street Bank and Trust Company of Connecticut,
National Association, in its individual capacity is in existence. The
execution, delivery and performance by the Connecticut Trustee of the
Transaction Documents to which it is or is to become a party will not
subject the Trust Estate or the Indenture Estate, or any portion of either
thereof, to any Lessor's Lien.
(f) Location of Chief Executive Office. The chief executive
office and principal place of business of the Connecticut Trustee and the
office where it keeps its records concerning the Properties and the
transactions contemplated hereby is located at 750 Main Street, Hartford,
Connecticut 06103.
(g) Securities Act. Except as contemplated by the
Transaction Documents, the Connecticut Trustee has not offered (and, on the
Debt Refinancing Date, will not have offered) any interest in the Leases,
the Notes, the Pass Through Certificates or any similar securities of the
Lessee or the Lessor Interests, to, or solicited any offer to acquire any
of the same from, any Person, nor has it authorized any Person to take any
such action.
ARTICLE VI
COVENANTS AND AGREEMENTS
Section 6.1 Covenants and Agreements of the Lessee. The Lessee
covenants and agrees with each of the other parties hereto as follows:
(a) Financial and Other Information. The Lessee shall
deliver to the Owner Participant and the Indenture Trustee (and, in the
case of Sections 6.1(a) (iv) and (vi), to the Owner Trustee) the following
financial and other information:
(i) Within 30 days after the sending or filing thereof,
copies of each Form 10-K (or any form or forms that may be substituted for
the foregoing) which the Lessee files with the SEC; provided, however, that
if at any time the Lessee shall no longer be required to file such report
with the SEC, the Lessee shall deliver as soon as practicable, but in any
event within 120 days after the end of each fiscal year of the Lessee, a
consolidated balance sheet of the Lessee and its subsidiaries as at the end
of such fiscal year and the related consolidated statements of income, cash
flow and retained earnings of the Lessee and its subsidiaries for such
year, audited by such nationally recognized firm of independent public
accountants as the Lessee may from time to time select and accompanied by
an opinion of such accountants to the effect that such consolidated
financial statements fairly represent the financial condition and results
of operations of the Lessee on a consolidated basis in accordance with
GAAP;
(ii) Within 45 days after the sending or filing thereof,
copies of each Form 10-Q (or any form or forms that may be substituted for
the foregoing) which the Lessee files with the SEC; provided, however, that
if at any time the Lessee shall no longer be required to file such
financial statements with the SEC, the Lessee shall deliver unaudited
financial statements of the type theretofore filed, within 90 days after
the end of each of the first three fiscal quarters of its fiscal year;
(iii) Promptly after the same become publicly
available, copies of all reports, filed by it with the SEC or with any
national securities exchange, or distributed to its shareholders, as the
case may be, pursuant to the Securities Exchange Act;
(iv) Within 120 days after the end of each fiscal year
of the Lessee, a certificate of the Lessee signed by any of its President,
Vice Presidents, Comptroller, Treasurer, Chief Financial Officer or any
other Responsible Officer, to the effect that such officer has reviewed or
caused to be reviewed by individuals under his supervision, this Agreement
and the other Transaction Documents to which the Lessee is a party and has
made, or has caused to be made under his supervision, a review of the
transactions contemplated hereby and thereby and the condition of the
Lessee during such preceding fiscal year, and such review does not disclose
the existence during such fiscal year nor does such officer have knowledge
of the existence as at the date of such certificate, of any condition or
event that constitutes a Default or an Event of Default or an Event of Loss
or, if such condition or event existed or exists, specifying the nature and
period of the existence thereof and any action that the Lessee has taken,
is taking or proposes to take with respect thereto;
(v) [INTENTIONALLY OMITTED]
(vi) Within 120 days after the end of each fiscal year
of the Lessee, until satisfaction and discharge of the Indenture, an
Officers' Certificate stating (i) whether or not any recordings, filings or
UCC continuation statements are required to be filed within the next 12
months in order to maintain the Lien of the Indenture or any Supplemental
Indenture and the perfection thereof, and identifying the jurisdictions in
which such filings or recordings are required to be made and (ii) either
that the Lessee has taken or caused to be taken such action in accordance
with Section 6.1(c) with respect to the recording, filing, re-recording and
refiling of the Indenture as is necessary to maintain the Lien of the
Indenture and the Supplemental Indentures and the perfection thereof, and
reciting the details of such action, or stating that no such action is
necessary to maintain such Lien during the next 12 months;
(vii) If at any time financial statements of the
Lessee are made generally publicly available to stockholders or lenders
pursuant to the requirements of federal securities laws or are required to
be provided on a regular basis to financial institutions pursuant to the
terms of the Lessee's credit agreements, copies of the same, promptly
thereafter, to the same extent as made available to the public; and
(viii) Promptly after request, such other information
as to the Properties as from time to time reasonably may be requested by
the Owner Participant or the Indenture Trustee; provided, that under no
circumstances, shall the Lessee be required to disclose any information
concerning its cost of the goods and products sold by it, the pricing of
the goods and products sold by it, and otherwise in connection with the
retail sales of goods and products.
(b) Notice of Certain Events. The Lessee shall deliver to
the Owner Trustee, the Remainderman, the Indenture Trustee and the Owner
Participant, promptly upon the Lessee becoming aware of the existence
thereof, notice specifying any condition that constitutes a Default, an
Event of Default, an Event of Loss, or any occurrence that could, with the
passage of time or giving of notice, or both, constitute an Event of Loss.
(c) Further Assurances. The Lessee shall cause to be
promptly and duly taken, executed, acknowledged, delivered and recorded all
such further acts, documents and assurances as the Owner Participant, the
Owner Trustee, the Remainderman, the Indenture Trustee or the Pass Through
Trustee from time to time may reasonably request in order to carry out more
effectively the intent and purposes of this Agreement and the other
Transaction Documents, and the transactions contemplated hereby and
thereby. The Lessee shall cause the financing statements (and continuation
statements with respect thereto) and the documents enumerated and described
in Schedule 2, and all other documents necessary or reasonably requested in
that connection, to be recorded or filed at such places and times, and in
such manner, and shall take, or shall cause to be taken, all such other
action as may be necessary or reasonably requested by the Owner
Participant, the Owner Trustee, the Connecticut Trustee, the Remainderman
or the Indenture Trustee in order to establish, preserve, protect and
perfect the title of the Owner Trustee to the Lessor Interest and the title
of the Remainderman to the Remainderman Interest and, so long as any Notes
are Outstanding, the validity, perfection and priority of the Lien of the
Indenture Trustee in the properties, rights and interests constituting the
Indenture Estate.
(d) Maintenance of Corporate Existence. etc. At all times,
the Lessee shall maintain its existence as a corporation under the laws of
its jurisdiction of incorporation or reincorporation, except as permitted
by Section 6.1(e). At all times, the Lessee shall qualify and remain
qualified to do business in each jurisdiction where the failure so to
qualify would have a material adverse effect on the business or financial
condition of the Lessee and its subsidiaries taken as a whole, or the
ability of the Lessee to perform its obligations under the Transaction
Documents to which the Lessee is a party.
(e) Consolidation, Merger or Sale. The Lessee shall not
consolidate with any Person, merge into any Person, or convey, transfer,
lease or otherwise dispose of to any Person all or substantially all of its
assets in any single transaction (or series of related transactions),
unless:
(i) the Surviving Lessee shall be a corporation or
organization organized under the laws of the United States of
America, a state or commonwealth thereof or the District of
Columbia and shall have assumed each obligation, and succeeded to
each right, of the Lessee under the Transaction Documents to
which the Lessee is a party;
(ii) the Surviving Lessee, if other than the Lessee,
immediately prior to such transaction, shall execute and deliver
to each of the parties hereto an agreement, in the form of
Exhibit M or otherwise in form and substance reasonably
satisfactory to each of the Owner Participant and the Indenture
Trustee, containing the assumption by the Surviving Lessee of
each obligation of the Lessee under this Agreement and each other
Transaction Document to which, immediately prior to such
transaction, the Lessee was a party;
(iii) immediately after giving effect to such
transaction, the Surviving Lessee, if other than the Lessee,
shall not have a consolidated net worth less than the net worth
of the Lessee immediately prior to such transaction as calculated
using financial statements, as soon as such become available,
prepared in accordance with GAAP;
(iv) no Event of Default shall have occurred and be
continuing before or immediately after giving effect to such
transaction;
(v) the Surviving Lessee shall have delivered to each
of the parties hereto an Officers' Certificate stating that such
transaction complies with all the terms and conditions of this
Section and that all Governmental Action, if any, required in
connection with such transaction have been obtained;
(vi) the Surviving Lessee shall represent and warrant to
the parties, and shall have delivered to each of the parties
hereto an opinion of counsel, in form and substance reasonably
satisfactory to each of the Remainderman the Owner Participant
and the Indenture Trustee, that (w) the Surviving Lessee is a
corporation in good standing in the state of its incorporation
and is qualified to do business in the State of California; (x)
all documents executed and delivered by the Surviving Lessee
pursuant to this Section have been duly authorized, executed and
delivered by the Surviving Lessee and constitute the valid, legal
and binding obligations of the Surviving Lessee; and (y) all of
the Transaction Documents to which the Lessee is a party will,
upon the consummation of such transaction, be the valid, legal
and binding obligations of the Surviving Lessee; and
(vii) such transaction shall not cause any adverse
Federal, state or local tax consequences to the Owner Participant
(other than consequences for which the Owner Participant would be
indemnified by the Lessee pursuant to the terms of the Tax
Indemnification Agreement, this Agreement or another written
undertaking by the Lessee, if any, to indemnify the Owner
Participant if the Lessee is then Investment Grade (and if the
Lessee is not Investment Grade, in an amount and in a manner
satisfactory to the Owner Participant in its sole discretion).
Upon the consummation of such transaction, the Surviving
Lessee, if other than the Lessee immediately prior thereto, shall succeed
to, and be substituted for, and may exercise every right and power of, the
Lessee immediately prior to such transaction under each Transaction
Document to which the Lessee was a party immediately prior to such
transaction, with the same effect as if the Surviving Lessee had been named
herein and therein, and the Lessee shall have no further obligation under
this Agreement or any other Transaction Document.
(f) Certificates of Occupancy. The Lessee shall as promptly
as practicable obtain a permanent Certificate of Occupancy for each
Property for which a permanent Certificate of Occupancy has not been issued
or is not in full force and effect as of the Closing Date.
(g) Notice of Change of Chief Executive Office. The Lessee
shall deliver to the Owner Trustee, the Owner Participant and the Indenture
Trustee prior written notice of any change in the location of the chief
executive office and the office where it keeps its records concerning its
accounts.
(h) Environmental Matters. The Lessee shall comply in all
material respects with all Environmental Laws now or hereafter applicable
(unless exempted or deferred by any applicable Governmental Authority) to
the Lessee or the Properties, or the use, modification, maintenance or
operation thereof, and shall have sole responsibility for the expenses
(including legal and other professional fees and expenses and costs of
investigation) associated with such compliance, except to the extent that
the failure to so comply does not result in any material adverse effect on
the Lessee's ability to perform and observe its obligations hereunder or of
the value or utility of the Property. The Lessee will conduct any
investigation, study, sampling and testing deemed necessary by the Lessee
in its reasonable opinion and undertake any cleanup, removal, remedial or
other action reasonably necessary to remove and clean up or remediate all
Hazardous Materials at or released on or from the Properties, or any
modification thereto, in accordance with all applicable Environmental laws
and Governmental Actions. The Lessee shall provide to the Owner
Participant and the Owner Trustee prompt written notification of (i) any
condition or occurrence at, on, or arising from any Property, or any
modification thereto, that results in material noncompliance with any
Environmental Law or (ii) any pending or threatened material Environmental
Claim against the Lessee, any Property, or any modification thereto. All
such notifications shall describe in reasonable detail the nature of the
claim, investigation, condition, incident or occurrence and the Lessee's
response thereto. In addition, upon the request of the Owner Participant,
the Lessee will provide to the Owner Participant copies of relevant written
communications with any Governmental Authority or any Person relating to
Environmental Claims concerning such Property or the Lessee's operations
thereon.
(i) Cooperation. Upon the request of the Owner Participant
or the Owner Trustee, the Lessee shall cooperate with the Owner Participant
or the Owner Trustee in obtaining the valid and effective issuance, or, as
the case may be, transfer or amendment of all Governmental Action necessary
or, in the reasonable opinion of the Owner Participant, desirable for the
ownership, operation and possession of any Property by the Owner
Participant for the period after the respective Lease Termination Date.
(j) Attornment. In the event of (i) the foreclosure of any
mortgage or deed of trust made by the Lessor covering any Leased Property
(including, without limitation, the Indenture and the Related Supplemental
Indenture), (ii) the giving of a deed in lieu of foreclosure by any Lessor
with respect to such Leased Property, (iii) a transfer of such Leased
Property resulting from the filing of a petition in bankruptcy or other
similar insolvency proceeding by or against the Lessor, or (iv) any other
transfer by the Lessor of title to such Leased Property permitted by the
terms of the Transaction Documents, the Lessee shall, at the request of the
purchaser or transferee, as the case may be, attorn to the purchaser or
other transferee, including the Indenture Trustee, upon any such
foreclosure, sale or transfer, and recognize such purchaser or other
transferee, subject to the next succeeding sentence, as the Lessor under
the Related Lease. The foregoing notwithstanding, such purchaser or other
transferee (i) shall not be liable for prior acts or omissions of the
Lessor (but in no event shall such purchaser or other transferee be
relieved from its obligation to comply with such Lease from and after the
date such purchaser or other transferee acquires its interest), (ii) shall
not be subject to any claims, offsets, defenses or counterclaims, which the
Lessee might have against the Lessor, (iii) shall not be bound by any
prepayment of Rent not actually received by such purchaser or other
transferee, and (iv) shall not be bound by any amendment, modification or
termination of such Lease entered into other than in accordance with such
terms of such Lease.
(k) Operating Lease. The Lessee intends that each Lease be an
operating Lease under California law and agrees that it shall not take any
action inconsistent with such position.
Section 6.2 Covenants and Agreements of the Owner Participant.
The Owner Participant covenants and agrees with each of the other parties
hereto as follows:
(a) No Lessor's Lien. The Owner Participant hereby
unconditionally agrees with and for the benefit of the other parties to
this Agreement that the Owner Participant will not directly or indirectly
create, incur, assume or suffer to exist any Lessor's Liens attributable to
it or any of its Affiliates (excluding for purposes hereof the Owner
Trustee in both its fiduciary and trust capacities) on or against any of
the Properties, the Owner Trustee's interest in the Leases, or any part
thereof or interest therein, and the Owner Participant agrees that it will,
at its own cost and expense (without right to indemnity under this
Agreement), take such action as may be necessary to duly discharge and
satisfy in full any such Lessor's Lien, except for any Lessor's Lien
attributable to the Owner Participant that is being contested by the Owner
Participant in good faith and by appropriate proceedings diligently
conducted, so long as such proceedings do not (i) involve any danger of the
sale, forfeiture or loss of any Property or any part thereof or interest
therein, (ii) interfere with the use, possession or disposition of any
Property or any part thereof or interest therein, (iii) interfere with the
payment of Rent, or (iv) impair the validity, perfection or priority of the
Lien of the Indenture. After the Lease Termination Date, the Owner
Participant may create, incur, assume or suffer to exist any Lessor's Liens
attributable to it or any of its Affiliates on or against a Property or any
part thereof or interest therein. The Owner Participant agrees to
reimburse the Lessee, the Remainderman, the Indenture Trustee, the Initial
Noteholder and the Pass Through Trustee for all legal fees and expenses
that may be incurred by the Lessee, the Remainderman, the Indenture Trustee
and the Pass Through Trustee as a result of the failure of the Owner
Participant to discharge and satisfy any such Lessor's Lien.
(b) Quiet Enjoyment. The Owner Participant acknowledges and
agrees that, unless an Event of Default shall have occurred and be
continuing and the applicable Lease shall have been declared in default
pursuant to Section 16(a) of such Lease, the Lessee shall have the
exclusive rights to possession, control, use and enjoyment of the
Properties and the Owner Participant will not take any action that would
interrupt or interfere with the Lessee's peaceable possession, control, use
and enjoyment of any respective Property in any manner that is not
otherwise prohibited by Section 6(a) of such Lease.
(c) Obligations under the Leases. The Owner Participant
shall pay any expenses for which it may be responsible pursuant to Section
3(f)(ii) of each Lease or the definition of Appraisal Procedure. The Owner
Participant shall provide appropriate instructions to the Owner Trustee and
shall cooperate with the Owner Trustee and the Lessee in connection with
the financing of Modifications pursuant to Section 8(f) of any Lease and
shall otherwise comply with the provisions of Section 8(f). The Owner
Participant acknowledges, and agrees to be bound by, Section 19 of each
Lease, and agrees that it will not specifically instruct the Owner Trustee
to take or omit to take any action in violation of the Owner Participant's
obligations under Sections 3(f), 8 and 19 of the Lease.
(d) Compliance with and Amendment of Trust Agreement and
Connecticut Trust Agreement. The Owner Participant agrees that (i) it
shall comply with all of the terms of the Connecticut Trust Agreement
applicable to it and cause the Owner Trustee to comply with all the Terms
of the Trust Agreement applicable to the Connecticut Trustee and (ii) prior
to the Lease Termination Date, it shall not amend or supplement, or consent
to any amendment of or supplement to, the Connecticut Trust Agreement and
shall not permit the Connecticut Trustee to amend, supplement or consent
to any amendment of or supplement to, the Trust Agreement, in each case
without the prior written consent of the Lessee, unless such amendment or
supplement could not adversely affect the rights or obligations of the
Lessee under this Agreement, the Lease or any other Transaction Document
or, so long as any of the Notes are outstanding, the validity, perfection
or priority of the Lien of the Indenture and the Supplemental Indentures,
or any rights of the Indenture Trustee under the Indenture or the
Supplemental Indentures (in which case the prior written consent of the
Indenture Trustee to such amendment or supplement also must be obtained).
Except as permitted or contemplated by the Transaction Documents, the Owner
Participant agrees that prior to the Lease Termination Date, without the
prior written consent of the Lessee, or so long as there are any
Outstanding Notes or any obligations under the Indenture remain unpaid or
the Lien of the Indenture and the Supplemental Indentures has not been
satisfied and discharged, it will not terminate or revoke the Connecticut
Trust Agreement or permit the Connecticut Trustee to terminate or revoke
the Trust Agreement or the trusts thereby created or cause, suffer or
permit the Connecticut Trustee to transfer any interest in the Lessor
Interests. The Owner Trustee or any successor may resign or be removed by
the Owner Participant, a successor may be appointed and a successor may be
qualified in accordance with Article IX of the Connecticut Trust Agreement.
Notwithstanding anything herein to the contrary, Article VIII of the
Connecticut Trust Agreement may not be amended so long as there are any
Outstanding Notes.
(e) Further Assurances. The Owner Participant shall cause
to be promptly and duly taken, executed, acknowledged, delivered and
recorded all such further acts, documents and assurances as the Lessee or
Indenture Trustee from time to time may reasonably request in order to
carry out more effectively the intent and purposes of this Agreement and
the other Transaction Documents to which it is a party, and the
transactions contemplated hereby and thereby, including, without
limitation, any changes to the form of Ground Lease necessary to ensure
such Ground Lease is enforceable under California law.
(f) [INTENTIONALLY OMITTED]
(g) Removal of Owner Trustee. Upon receipt of an Officers'
Certificate of the Lessee to the effect that the fees of the Owner Trustee
or the Connecticut Trustee, as the case may be, requested by the Owner
Trustee or the Connecticut Trustee as the case may be, are materially
greater than the customary and usual fees for similar services performed in
the same geographic area, the Owner Participant shall pay such excess fees
or, at the expense of the Lessee, remove, or cause to be removed, the Owner
Trustee or the Connecticut Trustee, as the case may be, and substitute or
cause to be substituted a new Owner Trustee or the Connecticut Trustee, as
the case may be, that is reasonably acceptable to the Lessee in accordance
with the provisions of the Trust Agreement.
(h) Lessee's Judgments and Claims. The Owner Participant
agrees that the terms of Section 4 of each Lease do not create any immunity
of the assets or moneys of the Owner Participant from satisfying any
judgments or claims the Lessee may have against the Owner Participant for
any breach of the Owner Participant's obligations to the Lessee under any
of the Transaction Documents.
Section 6.3 Covenants and Agreement of the Owner Trustee.
The Owner Trustee, in its individual capacity as to paragraphs
(a) (to the extent set forth therein), (b) and (d) below, and as Owner
Trustee, as to paragraphs (a) (to the extent set forth therein) (c) and (e)
through (k), covenants and agrees with each of the parties hereto as
follows:
(a) Lessor's Liens. The Owner Trustee, in its trust
capacity with respect to any Lessor's Liens attributable to it in its trust
capacity, and in its individual capacity with respect to any Lessor's Liens
attributable to it, in its individual capacity, hereby unconditionally
agrees with and for the benefit of the parties to this Agreement that the
Owner Trustee will not directly or indirectly create, incur, assume or
suffer to exist any Lessor's Liens attributable to it on or against any
part of the Trust Estate the Connecticut Trust Estate, the Indenture Estate
or the Properties, and the Owner Trustee, in its trust capacity with
respect to any Lessor's Liens attributable to it in its trust capacity, and
in its individual capacity with respect to any Lessor's Liens attributable
to it, in its individual capacity, agrees that it will at its own cost and
expense (without right to indemnity under this Agreement) promptly take
such action as may be necessary to duly discharge and satisfy in full all
such Lessor's Liens attributable to the Owner Trustee or the Connecticut
Trustee. The Owner Trustee, in its trust capacity with respect to any
Lessor's Liens attributable to it in its trust capacity, and in its
individual capacity with respect to any Lessor's Liens attributable to it,
in its individual capacity, hereby indemnifies and holds harmless the
Lessee, the Remainderman, the Indenture Trustee, the Connecticut Trustee,
the Initial Noteholder, the Pass Through Trustee and the Owner Participant
from and against any loss, cost or expense (including reasonable legal fees
and expenses) which may be suffered or incurred by any of them as the
result of the failure of the Owner Trustee to discharge and satisfy any
such Lessor's Lien.
(b) Compliance with and Amendment of Trust Agreement. The
Owner Trustee agrees that (i) it shall comply with all of the terms of the
Trust Agreement applicable to it and (ii) prior to the Lease Termination
Date, it shall not amend or supplement, or consent to any amendment of or
supplement to, the Trust Agreement without the prior written consent of the
Lessee unless such amendment or supplement could not adversely affect the
rights or obligations of the Lessee under this Agreement, each Lease or any
other Transaction Document or, so long as any of the Notes are Outstanding,
the validity, perfection or priority of the Lien of the Indenture or any
rights of the Indenture Trustee under the Indenture (in which case the
prior written consent of the Indenture Trustee to such amendment or
supplement also must be obtained).
(c) Amendments of the Indenture. The Owner Trustee agrees
that, except as otherwise provided herein and in the Indenture, it shall
not amend or supplement, or consent to any amendment of or supplement to,
the Indenture or any Supplemental Indenture unless an Event of Default or a
Special Default has occurred and is continuing or the Owner Trustee is
exercising remedies under Section 16 of each Lease and such amendment or
supplement could not adversely affect the rights or obligations of the
Lessee under this Agreement, the respective Leases or any other Transaction
Document. The Owner Trustee may not optionally redeem any of the Notes
pursuant to Section 6.1 of the Indenture or issue Additional Notes without
the prior written consent of the Lessee.
(d) Change in Chief Executive Office. The Owner Trustee
shall notify the Lessee, the Owner Participant, the Remainderman, the
Initial Noteholder, the Pass Through Trustee, and the Indenture Trustee
promptly after any change in its chief executive office and place of
business or the office where it keeps its records concerning its accounts
relating to the transactions contemplated hereby.
(e) Quiet Enjoyment. The Owner Trustee acknowledges, and
agrees to be bound by, Section [6(a)] of each Lease, and in particular,
that the Lessee shall have the exclusive rights to possession, control, use
and enjoyment of the Properties and the Owner Trustee will not take any
action that would interrupt or interfere with the Lessee's peaceable
possession, control, use and enjoyment of any respective Property in any
manner.
(f) Financing of Modifications or Additions. The Owner
Trustee shall cooperate with the Owner Participant and the Lessee in
connection with the financing of Modifications pursuant to Section 8(f) of
any Lease.
(g) Lessee's Judgments and Claims. The Owner Trustee
acknowledges and agrees that the terms of Section 4 of each Lease do not
create any immunity of the assets or moneys of the Owner Trustee from
satisfying any judgments or claims the Lessee may have against the Owner
Trustee for any breach of the Owner Trustee's obligations to the Lessee
under any of the Transaction Documents.
(h) Further Assurances. The Owner Trustee shall cause to be
promptly and duly taken, executed, acknowledged, delivered and recorded all
such further acts, documents and assurances as the Lessee, the
Remainderman, the Indenture Trustee or the Pass Through Trustee from time
to time may reasonably request in order to carry out more effectively the
intent and purposes of this Agreement, the other Transaction Documents to
which it is a party, and the transactions contemplated hereby and thereby.
(i) [INTENTIONALLY OMITTED]
(j) Indebtedness by Owner Trustee. Prior to the Lease
Termination Date and the discharge of the Indenture pursuant to Section 3.1
thereof, the Owner Trustee in its capacity as Owner Trustee will not incur
any indebtedness for money borrowed or enter into any business or other
activity, except as contemplated hereby and by the other Transaction
Documents.
(k) ERISA. The Owner Trustee agrees that (i) it shall not
permit any ERISA Plan sponsored or maintained by the Owner Trustee, any
ERISA Affiliate or any PTE 90-24 Affiliate thereof to purchase or hold any
Note or Pass Through Certificate, and (ii) neither the Owner Trustee nor
any PTE 90-24 Affiliate thereof shall act in a fiduciary capacity with
respect to the purchase or holding by any ERISA Plan of any Note or Pass
Through Certificate, in either case (i) or (ii) which would constitute a
non-exempt "prohibited transaction" within the meaning of ERISA Section 406
or Code Section 4975.
6.3.1. Covenants and Agreement of the Connecticut Trustee.
The Connecticut Trustee, in its individual capacity as to
paragraphs (a) (to the extent set forth therein), (b) and (d) below, and as
Connecticut Trustee, as to paragraphs (a) (to the extent set forth therein)
(c) and (e) through (k), covenants and agrees with each of the parties
hereto as follows:
(a) Lessor's Liens. The Connecticut Trustee, in its trust
capacity with respect to any Lessor's Liens attributable to it in its trust
capacity, and in its individual capacity with respect to any Lessor's Liens
attributable to it in its individual capacity, hereby unconditionally
agrees with and for the benefit of the parties to this Agreement that the
Connecticut Trustee will not directly or indirectly create, incur, assume
or suffer to exist any Lessor's Liens attributable to it, on or against any
part of the Trust Estate, the Trust, the Connecticut Trust Estate, the
Connecticut Trust, the Indenture Estate or the Properties, and the
Connecticut Trustee, in its trust capacity with respect to any Lessor's
Liens attributable to it in its trust capacity and in its individual
capacity, with respect to any Lessor's Liens attributable to it, in its
individual capacity, agrees that it will at its own cost and expense
(without right to indemnity under this Agreement) promptly take such action
as may be necessary to duly discharge and satisfy in full all such Lessor's
Liens attributable to the Connecticut Trustee. The Connecticut Trustee, in
its trust capacity with respect to any Lessor's Liens attributable to it in
its trust capacity, and in its individual capacity with respect to any
Lessor's Liens attributable to it, in its individual capacity, hereby
indemnifies and holds harmless the Lessee, the Remainderman, the Indenture
Trustee, the Owner Trustee, the Connecticut Trustee, the Initial
Noteholder, the Pass Through Trustee and the Owner Participant from and
against any loss, cost or expense (including reasonable legal fees and
expenses) which may be suffered or incurred by any of them as the result of
the failure of the Owner Trustee to discharge and satisfy any such Lessor's
Lien.
(b) Compliance with and Amendment of the Connecticut Trust
Agreement. The Connecticut Trustee agrees that (i) it shall comply with
all of the terms of the Connecticut Trust Agreement applicable to it and
(ii) prior to the Lease Termination Date, it shall not amend or supplement,
or consent to any amendment of or supplement to, the Connecticut Trust
Agreement without the prior written consent of the Lessee unless such
amendment or supplement could not adversely affect the rights or
obligations of the Lessee under this Agreement, each Lease or any other
Transaction Document or, so long as any of the Notes are Outstanding, the
validity, perfection or priority of the Lien of the Indenture or any rights
of the Indenture Trustee under the Indenture (in which case the prior
written consent of the Indenture Trustee to such amendment or supplement
also must be obtained).
(c) Change in Chief Executive Office. The Connecticut
Trustee shall notify the Lessee, the Owner Participant, the Remainderman,
the Initial Noteholder, the Pass Through Trustee, the Indenture Trustee and
the Owner Trustee promptly after any change in its chief executive office
and place of business or the office where it keeps its records concerning
its accounts relating to the transactions contemplated hereby.
(d) Quiet Enjoyment. The Connecticut Trustee acknowledges,
and agrees to be bound by, Section 6(a) of each Lease, and in particular,
that the Lessee shall have the exclusive rights to possession, control, use
and enjoyment of the Properties and the Connecticut Trustee will not take
any action that would interrupt or interfere with the Lessee's peaceable
possession, control, use and enjoyment of any respective Property in any
manner.
(e) Financing of Modifications or Additions. The Connecticut
Trustee shall cooperate with the Owner Participant and the Lessee in
connection with the financing of Modifications pursuant to Section 8(f) of
any Lease.
(f) Lessee's Judgments and Claims. The Connecticut Trustee
acknowledges and agrees that the terms of Section 4 of each Lease do not
create any immunity of the assets or moneys of the Connecticut Trustee from
satisfying any judgments or claims the Lessee may have against the
Connecticut Trustee for any breach of the Connecticut Trustee's obligations
to the Lessee under any of the Transaction Documents.
(g) Further Assurances. The Connecticut Trustee shall cause
to be promptly and duly taken, executed, acknowledged, delivered and
recorded all such further acts, documents and assurances as the Lessee, the
Remainderman, the Indenture Trustee, the Owner Trustee or the Pass Through
Trustee from time to time may reasonably request in order to carry out more
effectively the intent and purposes of this Agreement, the other
Transaction Documents to which it is a party, and the transactions
contemplated hereby and thereby.
(h) [INTENTIONALLY OMITTED]
(i) Indebtedness by the Connecticut Trustee. Prior to the
Lease Termination Date and the discharge of the Indenture pursuant to
Section 3.1 thereof, the Connecticut Trustee in its capacity as Connecticut
Trustee will not incur any indebtedness for money borrowed or enter into
any business or other activity, except as contemplated hereby and by the
other Transaction Documents.
(j) ERISA. The Connecticut Trustee agrees that (i) it shall
not permit any ERISA Plan sponsored or maintained by the Connecticut
Trustee, any ERISA Affiliate or any PTE 90-24 Affiliate thereof to purchase
or hold any Note or Pass Through Certificate, and (ii) neither the
Connecticut Trustee nor any PTE 90-24 Affiliate thereof shall act in a
fiduciary capacity with respect to the purchase or holding by any ERISA
Plan of any Note or Pass Through Certificate, in either case (i) or (ii)
which would constitute a non-exempt "prohibited transaction" within the
meaning of ERISA Section 406 or Code Section 4975.
Section 6.4 Covenants and Agreement of the Indenture Trustee.
The Indenture Trustee, as the Indenture Trustee and, solely to the extent
provided in clause (a) below, in its individual capacity, covenants and
agrees with each of the other parties hereto as follows:
(a) Indenture Trustee's Liens. The Indenture Trustee hereby
unconditionally agrees with and for the benefit of the parties to this
Agreement that the Indenture Trustee will not directly or indirectly
create, incur, assume or suffer to exist any Indenture Trustee's Lien on or
against any part of the Indenture Estate, and the Indenture Trustee in its
individual capacity agrees that it will at its own cost and expense
(without right to indemnity under this Agreement) promptly take such action
as may be necessary to duly discharge and satisfy in full all such
Indenture Trustee's Liens attributable to it in its individual capacity.
The Indenture Trustee hereby indemnifies and holds harmless the Lessee, the
Remainderman, the Initial Noteholder, the Pass Through Trustee, the Owner
Trustee, the Connecticut Trustee, and the Owner Participant from and
against any loss, cost or expense (including reasonable fees and expenses)
which may be suffered or incurred by any of them as the result of the
failure of the Indenture Trustee to discharge and satisfy any such
Indenture Trustee's Liens created or incurred as a result of any action or
inaction of the Indenture Trustee in its individual capacity.
(b) Quiet Enjoyment. Notwithstanding any other provision of
the Indenture or of any other Transaction Document, the Indenture Trustee
warrants, covenants and agrees that, unless an Event of Default shall have
occurred and be continuing, the Indenture Trustee (i) shall not name the
Lessee as a party in any action or procedures to foreclose the Lien of the
Indenture, unless such joinder shall be required under Applicable Law, and
in which case the Indenture Trustee shall not seek affirmative relief from
the Lessee in such action nor shall any Lease be cut off or terminated nor
the Lessee's possession thereunder be disturbed in any such action or
proceeding, (ii) the Lessee shall have the exclusive rights to possession,
control, use and enjoyment of the Properties and the Indenture Trustee will
not take any other action that would interrupt or interfere with the
Lessee's peaceable possession, control, use and enjoyment of any respective
Property in any manner, and (iii) subject to the next succeeding sentence
of this Section 6.4 (b), the Indenture Trustee will recognize each Lease
and the Lessee's rights thereunder. Upon any acquisition by the Indenture
Trustee or any purchaser at foreclosure or transferee pursuant to a plan of
reorganization under Chapter 11 of the Bankruptcy Code (collectively, a
"Successor Landlord") of the Owner Trustee's interest in any Lease, such
Lease shall continue as a direct Lease between the Successor Landlord and
the Lessee upon all terms, covenants and conditions set forth in such
Lease, except that the Successor Landlord shall not be (A) liable for any
previous act or omission of Lessor under such Lease, (B) subject to any
offsets, claims, defenses or counterclaims the Lessee may have against the
Owner Trustee, (C) bound by any prepayment of Rent not actually received by
Successor Landlord or (D) bound by any amendment to such Lease requiring
the Indenture Trustee's consent unless such consent was obtained.
(c) Further Assurances. The Indenture Trustee shall cause
to be promptly and duly taken, executed, acknowledged and delivered all
such further acts, documents and assurances as the Lessee from time to time
may reasonably request in order to carry out more effectively the intent
and purposes of this Agreement, the other Transaction Documents to which it
is a party, and the transactions contemplated hereby and thereby.
Section 6.5 Covenants and Agreement of the Pass Through Trustee.
The Pass Through Trustee, as the Pass Through Trustee and in its individual
capacity solely to the extent provided in (a), covenants and agrees with
each of the other parties hereto as follows:
(a) Pass Through Trustee's Liens. The Pass Through Trustee
hereby unconditionally agrees with and for the benefit of the parties to
this Agreement that the Pass Through Trustee will not directly or
indirectly create, incur, assume or suffer to exist any Pass Through
Trustee's Liens on or against any part of the Indenture Estate, and the
Pass Through Trustee in its individual capacity agrees that it will at its
own cost and expense (without right to indemnity under this Agreement)
promptly take such action as may be necessary to duly discharge and satisfy
in full any Pass Through Trustee's Liens attributable to it in its
individual capacity. The Pass Through Trustee hereby indemnifies and holds
harmless the Lessee, the Remainderman, the Indenture Trustee, the Pass
Through Trust, the Owner Trustee and the Owner Participant from and against
any loss, cost or expense (including reasonable legal fees and expenses)
which may be suffered or incurred by any of them as the result of the
failure of the Pass Through Trustee to discharge and satisfy any such Pass
Through Trustee's Lien created or incurred as a result of any action or
inaction of the Indenture Trustee in its individual capacity.
(b) Quiet Enjoyment. Notwithstanding any other provision of
the Indenture or of any other Transaction Document, the Pass Through
Trustee warrants, covenants and agrees that, unless an Event of Default
shall have occurred and be continuing, the Pass Through Trustee shall not
(i) name the Lessee as a party in any action or procedures to foreclose the
lien of the Indenture, unless such joinder shall be required under
Applicable Law, and in which case the Pass Through Trustee shall not seek
affirmative relief from the Lessee in such action nor shall the respective
Lease be cut off or terminated nor the Lessee's possession thereunder be
disturbed in any such action or proceeding, (ii) the Lessee shall have the
exclusive rights to possession, control, use and enjoyment of the
Properties and the Owner Participant will not take any other action that
would interrupt or interfere with the Lessee's peaceable possession,
control, use and enjoyment of any respective Property in any manner, and
(iii) subject to the next succeeding sentence of this Section 6.5(b), the
Pass Through Trustee will recognize the Leases and the Lessee's rights
thereunder. Upon any acquisition by the Pass Through Trustee or any
purchaser at foreclosure or transferee pursuant to a plan of reorganization
under Chapter 11 of the Bankruptcy Code (collectively, a "Successor
Landlord") of the Owner Trustee's interest in any Lease, such Lease shall
continue as a direct Lease between the Successor Landlord and the Lessee
upon all terms, covenants and conditions set forth in such Lease, except
that the Successor Landlord shall not be (A) liable for any previous act or
omission of Lessor under such Lease, (B) subject to any offsets, claims,
defenses or counterclaims the Lessee may have against the Owner Trustee,
(C) bound by any prepayment of Rent not actually received by Successor
Landlord or (D) bound by any amendment to such Lease requiring the Pass
Through Trustee's consent unless such consent was obtained.
(c) Further Assurances. The Pass Through Trustee shall
cause to be promptly and duly taken, executed, acknowledged, delivered and
recorded all such further acts, documents and assurances as the Lessee from
time to time may reasonably request in order to carry out more effectively
the intent and purposes of this Agreement, the other Transaction Documents
to which it is a party, and the transactions contemplated hereby and
thereby.
Section 6.6 Covenants and Agreements of the Remainderman
Participant. The Remainderman Participant covenants and agrees with each
of the parties hereto as follows:
(a) Remainderman's Activities and Liens. The Remainderman
Participant hereby unconditionally agrees with and for the benefit of the
parties to this Agreement that the Remainderman will not engage in any
business other than holding the beneficial interest in the Remainderman or
any activity related thereto or directly or indirectly create, incur,
assume or suffer to exist any Remainderman's Liens attributable to it on or
against any part of the Remainderman Trust Estate, the Trust Estate, the
Indenture Estate or the Properties, and the Remainderman Participant agrees
that it will at its own cost and expense (without right to indemnify under
this Agreement) promptly take such action as may be necessary to duly
discharge and satisfy in full all such Remainderman's Liens. The
Remainderman Participant hereby indemnifies and holds harmless the Lessee,
the Indenture Trustee, the Initial Noteholder, the Connecticut Trustee, the
Pass Through Trustee and the Owner Participant from and against any loss,
cost or expense (including reasonable legal fees and expenses) which may be
suffered or incurred by any of them as the result of the failure of the
Remainderman Participant to discharge and satisfy any such Remainderman's
Lien.
(b) Quiet Enjoyment. The Remainder Participant acknowledges
and agrees that, unless an Event of Default shall have occurred and be
continuing and the Leases shall have been declared in default pursuant to
Section 16(a) of such Leases and the Ground Lease shall have been entered
into, the Lessee shall have the exclusive rights to possession, control,
use and enjoyment of the Properties and the Remainderman Participant will
not take any action that would interrupt or interfere with the Lessee's
peaceable possession, control, use and enjoyment of any respective Property
in any manner that is not otherwise prohibited by Section 6(a) of such
Leases.
(c) Lessee's Judgment and Claims. The Remainderman
Participant acknowledges and agrees that the terms of Section 4 of each
Lease do not create any immunity of the assets or moneys of the
Remainderman Participant from satisfying any judgments or claims the Lessee
may have against the Remainderman Participant for any breach of the
Remainderman Participant's obligations to the Lessee under any of the
Transaction Documents.
(d) Further Assurances. The Remainderman Participant shall
cause to be promptly and duly taken, executed, acknowledged, delivered and
recorded all such further acts, documents and assurances as the Lessee, the
Owner Trustee, the Connecticut Trustee, the Indenture Trustee or the Pass
Through Trustee from time to time may reasonably request in order to carry
out more effectively the intent and purposes of this Agreement, the other
Transaction Documents to which it is a party, and the transactions
contemplated hereby and thereby.
(e) Right of First Offer. If at any time during the Lease
Terms or at a time when the Lessor has rights under the Ground Leases or
the Option Agreements, the Remainderman Participant desires to sell or
transfer its interest in the Remainderman, it shall first offer such
interest to the Lessor on the same terms and conditions as are set forth in
Section 8.2, except that the Lessor must notify the Remainderman
Participant of its decision to accept such offer within 10 Business Days of
receipt of such offer or the Lessor's rights under this Section 6.6 will
terminate.
Section 6.7 Covenants and Agreements of the Remainderman
Trustee. The Remainderman Trustee in its individual capacity covenants and
agrees with each of the parties hereto as follows:
(a) Remainderman's Liens. The Remainderman Trustee hereby
unconditionally agrees with and for the benefit of the parties to this
Agreement that the Remainderman Trustee will not directly or indirectly
create, incur, assume or suffer to exist any Remainderman Trustee's Liens
on or against any part of the Trust Estate, the Indenture Estate or the
Properties, and the Remainderman Trustee agrees that it will at its own
cost and expense (without right to indemnify under this Agreement) promptly
take such action as may be necessary to duly discharge and satisfy in full
all such Remainderman Trustee's Liens attributable to it in its individual
capacity. The Remainderman Trustee hereby indemnifies and holds harmless
the Lessee, the Indenture Trustee, the Connecticut Trustee, the Initial
Noteholder, the Pass Through Trustee, the Owner Trustee and the Owner
Participant from and against any loss, cost or expense (including
reasonable legal fees and expenses) which may be suffered or incurred by
any of them as the result of the failure of the Remainderman Trustee to
discharge and satisfy any such Remainderman Trustee's Lien.
(b) Change in Chief Executive Office. The Remainderman
Trustee shall notify the Lessee, the Owner Participant, the Owner Trustee,
the Pass Through Trustee, and the Indenture Trustee promptly after any
change in its chief executive office and place of business or the office
where it keeps its records concerning its accounts relating to the
transactions contemplated hereby.
Section 6.8 Covenants and Agreements of the Remainderman. The
Remainderman, and the Remainderman Trustee and the Remainderman Participant
with respect to clause (c) below, covenants and agrees with each of the
other parties hereto as follows:
(a) Activities of Remainderman; Existence; Remainderman's
Liens. The Remainderman will engage in no activities or businesses and
will not incur any indebtedness for money borrowed, other than those
contemplated under the Remainderman Trust Agreement and other Transaction
Documents and will maintain its existence as a Delaware business trust for
so long as it shall have any obligations hereunder or under any of the
other Transaction Documents. The Remainderman will keep the Remainderman
Trust Estate free and clear of Remainderman's Liens and shall not, prior to
the termination of any Lease sell, assign, or otherwise transfer its
interest in the Related Remainderman Trust Estate except as contemplated by
the Transaction Documents.
(b) Chief Place of Business of the Remainderman Trust, etc.
The Remainderman agrees that it shall not change its chief place of
business, its chief executive office or the office where it keeps its
records concerning the Remainderman Trust Estate, unless it shall have
given the Owner Participant and the Lessee at least 30 days' prior written
notice of such change.
(c) Bankruptcy Proceedings. None of the Remainderman
Participant, the Remainderman Trustee nor the Remainderman shall
(i) institute, take, or cause to taken, any action
intended to result in the institution against the
Remainderman of any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings
under any federal or state bankruptcy or similar law,
(ii) consent to, or execute any document
specifically acquiescing in the taking by the Remainderman
of, any action which would result in the commencement of any
such proceedings against the Remainderman, or
(iii) execute and document specifically
acquiescing in any such proceedings commenced by others
against the Remainderman.
(d) Quiet Enjoyment. The Remainderman acknowledges and
agrees that, unless an Event of Default shall have occurred and be
continuing and the Leases shall have been declared in default pursuant to
Section 16(a) of such Leases and the Ground Lease shall have been entered
into, the Lessee shall have the exclusive rights to possession, control,
use and enjoyment of the Properties and the Remainderman will not take any
action that would interrupt or interfere with the Lessee's peaceable
possession, control, use and enjoyment of any respective Property in any
manner that is not otherwise prohibited by Section 6(a) of such Leases.
(e) Lessee's Judgment and Claims. The Remainderman
acknowledges and agrees that the terms of Section 4 of each Lease do not
create any immunity of the assets or moneys of the Remainderman from
satisfying any judgments or claims the Lessee may have against the
Remainderman for any breach of the Remainderman's obligations to the Lessee
under any of the Transaction Documents.
(f) Further Assurances. The Remainderman shall cause to be
promptly and duly taken, executed, acknowledged, delivered and recorded all
such further acts, documents and assurances as the Lessee, the Owner
Trustee, the Indenture Trustee or the Pass Through Trustee from time to
time may reasonably request in order to carry out more effectively the
intent and purposes of this Agreement, the other Transaction Documents to
which it is a party, and the transactions contemplated hereby and thereby,
including, without limitation, any changes to the form of Ground Lease
necessary to ensure such Ground Lease is enforceable under California law.
Section 6.9 Covenants and Agreements of the Initial Noteholder.
The Initial Noteholder covenants and agrees with each of the other parties
hereto as follows:
(a) Initial Noteholder's Liens. The Initial Noteholder
hereby unconditionally agrees with and for the benefit of the parties to
this Agreement that the Initial Noteholder will not directly or indirectly
create, incur, assume or suffer to exist any Initial Noteholder's Liens on
or against any part of the Indenture Estate, and the Initial Noteholder
agrees that it will at its own cost and expense (without right to indemnity
under this Agreement) promptly take such action as may be necessary to duly
discharge and satisfy in full any Initial Noteholder's Liens. The Initial
Noteholder hereby indemnifies and holds harmless the Lessee, the
Remainderman Trustee, the Indenture Trustee, the Connecticut Trustee, the
Owner Trustee and the Owner Participant from and against any loss, cost or
expense (including reasonable legal fees and expenses) which may be
suffered or incurred by any of them as the result of the failure of the
Initial Noteholder to discharge and satisfy any such Initial Noteholder's
Lien.
(b) Quiet Enjoyment. Notwithstanding any other provision of
the Indenture or of any other Transaction Document, the Initial Noteholder
warrants, covenants and agrees that, unless an Event of Default shall have
occurred and be continuing, the Initial Noteholder shall not (i) name the
Lessee as a party in any action or procedures to foreclose the Lien of the
Indenture, unless such joinder shall be required under Applicable Law, and
in which case the Initial Noteholder shall not seek affirmative relief from
the Lessee in such action nor shall the respective Lease be cut off or
terminated nor the Lessee's possession thereunder be disturbed in any such
action or proceeding, (ii) the Lessee shall have the exclusive rights to
possession, control, use and enjoyment of the Properties and the Initial
Noteholder will not take any other action that would interrupt or interfere
with the Lessee's peaceable possession, control, use and enjoyment of any
respective Property in any manner, and (iii) subject to the next succeeding
sentence of this Section 6.9(b), the Initial Noteholder will recognize the
Leases and the Lessee's rights thereunder. Upon any acquisition by the
Initial Noteholder or any purchaser at foreclosure or transfer pursuant to
a plan of reorganization under Chapter 11 of the Bankruptcy Code
(collectively, a "Successor Landlord") of the Owner Trustee's interest in
any Lease, such Lease shall continue as a direct Lease between the
Successor Landlord and the Lessee upon all terms, covenants and conditions
set forth in such Lease, except that the Successor Landlord shall not be
(A) liable for any previous act or omission of Lessor under such Lease, (B)
subject to any offsets, claims, defenses or counterclaims the Lessee may
have against the Owner Trustee, (C) bound by any prepayment of Rent not
actually received by Successor Landlord or (D) bound by any amendment to
such Lease requiring the Initial Noteholder's consent unless such consent
was obtained.
(c) Further Assurances. The Initial Noteholder shall cause
to be promptly and duly taken, executed, acknowledged, delivered and
recorded all such further acts, documents and assurances as the Lessee from
time to time may reasonably request in order to carry out more effectively
the intent and purposes of this Agreement, the other Transaction Documents
to which it is a party, and the transactions contemplated hereby and
thereby.
(d) ERISA. The Initial Noteholder agrees that (i) it shall
not permit any ERISA Plan sponsored or maintained by the Initial
Noteholder, any ERISA Affiliate or any PTE 90-24 Affiliate thereof to
purchase or hold any Note, and (ii) neither the Initial Noteholder nor any
PTE 90-24 Affiliate thereof shall act in a fiduciary capacity with respect
to the purchase or holding by any ERISA Plan of any Note, in either case
(i) or (ii) which would constitute a nonexempt "prohibited transaction"
within the meaning of ERISA Section 406 or Code Section 4975.
ARTICLE VII
INDEMNITIES
Section 7.1 General Indemnity. The Lessee agrees, whether or not
any of the transactions contemplated hereby are consummated, to indemnify
and defend and make whole on an After-Tax Basis each Indemnitee against,
and to protect, save and keep harmless each Indemnitee from, any and all
Expenses that may be imposed on, incurred by or asserted against such
Indemnitee in any way relating to or arising out of:
(a) any of the Transaction Documents or any of the
transactions contemplated thereby (including the transactions
contemplated by the Beneficial Interest Transfer Agreement) or by
the Underwriting Agreement, other than Transaction Expenses that
are the responsibility of the Owner Trustee or the Owner
Participant pursuant to Section 10.1 and Expenses incurred by the
Indemnitees in connection with a transfer by the Owner
Participant to which Article VIII applies;
(b) the Properties or the construction, preparation,
installation, inspection, delivery, nondelivery, acceptance,
rejection, purchase, ownership, possession, rental, lease,
sublease, maintenance, repair, storage, transfer of title,
subdivision, redelivery, use, operation, condition, sale, return
or other application or disposition of all or any part of any
interest in the Properties;
(c) the offer, sale, purchase, holding or delivery of the
Notes or Pass Through Certificates or any other securities issued
in connection herewith; or
(d) with respect to the Owner Participant Parent and Owner
Participant only, the application of Parts 4 and 5 of Subtitle B of Title I
of ERISA as a result of the sale of the Pass Through Certificates in
accordance with the Transaction Documents;including, without limitation,
(i) claims or penalties arising from any products liability, negligence
(other than the negligence of any Indemnitee occurring after the
commencement of the Lease Term and while such Indemnitee is present on any
of the Properties) statutory liability or violation of law or in tort
(strict, absolute or otherwise), (ii) Environmental Claims or any
Environmental Liabilities and Costs or other loss or damage to the
Properties or the Environment, or death or injury to any Person, (iii)
latent or other defects, whether or not discoverable; or (iv) any untrue
statement or a material fact contained in any Registration Statement, the
related prospectus, in the form first used by the Underwriters to confirm
sales, or based upon any omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
Notwithstanding the foregoing, the indemnity set forth in this Section 7.1
shall not extend to any Expense imposed on, incurred by or asserted against
any Indemnitee to the extent the same relates to or arises out of one or
more of the following circumstances:
(1) the incorrectness of any representation or the breach of any
warranty, covenant or agreement of such Indemnitee contained in or made
pursuant to this Agreement or any of the other Transaction Documents;
(2) the failure of such Indemnitee to perform or observe any
covenant, agreement or condition on its part (including, without
limitation, the obligation to remove Lessor's Liens, Remainderman's Liens,
Indenture Trustee's Liens or Pass Through Trustee's Liens) required to be
performed or observed in this Agreement or any of the other Transaction
Documents;
(3) (x) the willful misconduct or gross negligence (but not the
ordinary negligence except as otherwise expressly provided herein) of such
Indemnitee or of its Affiliates, successors, assigns, agents, officers,
directors or employees and (y) the violation of Applicable Laws by such
Indemnitee;
(4) the offer, sale or disposition (voluntary or involuntary) by
the Owner Trustee, the Connecticut Trustee or the Owner Participant of all
or any part of its interest in the Trust Estate, the Connecticut Trust
Estate, any of the Properties, the Transaction Documents or any of the
other properties, rights and interests constituting the Trust Estate, or
the Connecticut Trust Estate, other than pursuant to Section 9(c) or 14 of
each Lease or pursuant to the exercise of remedies following the occurrence
of an Event of Default, or in connection with a transfer pursuant to
Section 8.2, or in connection with the transfer pursuant to the Beneficial
Interest Transfer Agreement or by any other Indemnitee of all or any part
of such Indemnitee's interest in the Properties, the Leases, the
Transaction Documents or any of the other properties, rights and interests
constituting the Trust Estate, the Connecticut Trust Estate or the
Indenture Estate, or the Notes, except, in the case of the Indenture
Trustee, any such disposition that occurs as a result of an Event of
Default;
(5) any Tax (except to the extent that an Indemnitee under this
Section 7.1 is required to be reimbursed on an After-Tax Basis), whether or
not the Lessee is required to indemnify for such Tax pursuant to Section
7.2, the Tax Indemnification Agreement or the Pass Through Trust Agreement
(it being understood that Sections 7.2 through 7.6 hereof, the Tax
Indemnification Agreement and Section 7.06 of Pass Through Trust Agreement
exclusively provide for the Lessee's liability with respect to such Taxes);
(6) acts or events that occur after the earlier of (x) the
surrender of possession of any Property pursuant to Section 5(b) of each
Lease or (y) the expiration or earlier termination of the Lease Term
(unless such Expense is directly attributable to events or circumstances
arising prior to such time or is incurred prior to the time that the Lessee
has surrendered the respective Property);
(7) the offer, sale or disposition by or on behalf or for the
account of such Indemnitee of any Notes or Pass Through Certificates or any
similar interest (other than the Owner Participant and the Owner Trustee);
(8) a failure on the part of the Indenture Trustee, the Pass
Through Trustee, the Connecticut Trustee or the Owner Trustee, as the case
may be, to distribute in accordance with the Indenture, any Supplemental
Indenture, the Pass Through Trust Agreement, any Pass Through Trust
Supplement, the Connecticut Trust Agreement or the Trust Agreement, as the
case may be, any amounts received and distributable by it thereunder;
(9) the authorization or giving or withholding of any amendment,
modification, supplement, waiver, termination, approval or consent with
respect to this Agreement or any of the other Transaction Documents other
than such as have been consented to or requested by the Lessee and other
than such as occur while an Event of Default has occurred and is continuing
and which are not given or entered into in violation of any of the
Transaction Documents (other than to the extent that such actions violate
the provisions of the Transaction Documents requiring the consent of the
Lessee);
(10) any Expense that is (x) included in Transaction Expenses and
for which the Owner Trustee or the Owner Participant is responsible
pursuant to Section 10.1 or (y) incurred by any Indemnitee (or any
successor, assign, agent, officer, director or employee of such Indemnitee)
to the extent that such Indemnitee shall have expressly agreed in this
Agreement or any other Transaction Document or otherwise to bear such
Expense without right of reimbursement or indemnity under this Agreement or
any other Transaction Document;
(11) any amount constituting an amount payable by the Owner
Trustee under the Indenture or the Notes resulting from an Indenture Event
of Default or Indenture Default that does not also constitute an Event of
Default or Default;
(12) any Expense that would not have occurred but for the
appointment of a successor Owner Trustee or Connecticut Trustee, as the
case may be, if such appointment was caused by the Owner Participant;
(13) any Expense that constitutes or arises from any Indemnitee's
exercise of its contest rights with respect to a Permitted Lien
attributable to such Indemnitee;
(14) any Expenses relating to or arising out of any Environmental
Liabilities and Costs to the extent that such Expenses are not incurred
pursuant to the requirements of applicable Environmental Laws or in
reasonable response to an Environmental Claim and any Expenses in any way
relating to or arising out of any matter covered by Environmental Laws
relating to events that occurred during the Lease Term to the extent such
Environmental Claim results from the gross negligence or willful misconduct
of the Lessor (or negligence of such Indemnitee while present on any
Property);
(15) any Expense of an Indemnitee relating to or arising from the
inaccuracy, incompleteness or misleading nature of any statement or
representation included in any registration statement issued in connection
with any of an offer, sale or disposition of any Notes, Pass Through
Certificates or similar interest, which statement or representation is
based on written information supplied or made available by such Indemnitee
for inclusion in such registration statement;
(16) any Indenture Event of Default that does not also constitute
an Event of Default;
(17) if such Indemnitee is the Pass Through Trustee or any other
registered holder of a Note, except as expressly provided in the
Transaction Documents, loss of anticipated cash flow or earnings on any
Note resulting from any redemption, prepayment or purchase of such Note or
any increase in the cost to the Indenture Trustee or holder of a Note of
making available, funding or maintaining the loans represented by a Note,
or any reduction in the rate of return on capital of the Indenture Trustee
or holder of a Note, in each case as a result of (x) the introduction of or
any change in or in the interpretation of any Applicable Law or (y) the
compliance with any guideline or request from any central bank (or
comparable agency) or other Governmental Authority (whether or not having
the force of law); and
(18) any Expense of an Indemnitee (x) arising out of its
inability to invest in another transaction or for any other purpose as a
result of such Indemnitee's participation or investment of funds in
connection with the transactions contemplated by this Agreement, or (y) for
which a payment of Stipulated Loss Value or Termination Value paid by the
Lessee in accordance with the terms of the Transaction Documents is
intended, as calculated, to compensate such Indemnitee, provided that this
clause (18) shall only be construed to limit the Lessor's obligations under
this Section 7.1 and not otherwise to limit any damages which any
Indemnitee may be entitled to recover under applicable law for any breach
of any of the Transaction Documents.
Whether or not any of the transactions contemplated hereby are
consummated, except to the extent that any of the items hereinafter
described are Transaction Expenses that are the responsibility of the Owner
Trustee pursuant to Section 10.1, the Lessee shall pay: (a) the fees
(whether ordinary or extraordinary), expenses and disbursements of, and all
other amounts payable to, the Indenture Trustee, as trustee under the
Indenture, with respect to the administration of the Indenture Estate and
of any Pass Through Trustee, Indenture Trustee, co-trustee or additional
trustee appointed pursuant to the Indenture, including the reasonable fees
and expenses of any such Person's counsel, except to the extent such fees,
expenses or disbursements are attributable to an Indenture Event of Default
that is not also an Event of Default; (b) the fees (whether ordinary or
extraordinary), expenses and disbursements of the Owner Trustee (and any co-
trustee or separate trustee), as trustee under the Trust Agreement, with
respect to the administration of the Trust Estate, including the reasonable
fees and expenses of its counsel, except to the extent such fees, expenses
or disbursements are attributable to an Indenture Event of Default that is
not also an Event of Default; (c) the fees (whether ordinary or
extraordinary); expenses and disbursements of the Connecticut Trustee (and
any co-trustee or separate trustee) as trustee under the Connecticut Trust
Agreement with respect to the administration of the Connecticut Trust
Estate, including the reasonable fees and expenses of its counsel, except
to the extent such fees, expenses or disbursements are attributable to an
Indenture Event of Default that is not also an Event of Default; (c) the
fees (whether ordinary or extraordinary); (d) the fees (whether ordinary or
extraordinary), expenses and disbursements of the Remainderman Trustee (and
any co-trustee or separate trustee appointed pursuant to the Remainderman
Trust Agreement), as trustee under the Remainderman Trust Agreement, with
respect to the administration of the Remainderman Trust Estate, including
the reasonable fees and expenses of its counsel, except to the extent such
fees, expenses or disbursements are attributable to an Indenture Event of
Default that is not also an Event of Default; and (e) all reasonable out-of-
pocket costs and expenses incurred by each of the Owner Participant, the
Connecticut Trustee, the Owner Trustee, the Remainderman Participant, the
Remainderman Trustee and the Indenture Trustee in connection with (i) the
entering into or giving or withholding of any proposed amendment,
modification, supplement, waiver, termination, approval or consent
requested by the Lessee or (ii) any Event of Loss or any redemption,
prepayment, refinancing or assumption of the Notes by the Lessee, at the
Lessee's request or attributable to the events specified in Section 2.5
hereof, or Sections 8, 9, 14, 16 or 20 of each Lease, as the case may be;
provided, however, that the Lessee shall not be obligated to pay any such
fees, costs or expenses of an Indemnitee to the extent they relate to or
arise out of any of the circumstances described in clauses (l) through (18)
above with respect to such Indemnitee.
With respect to any amount that the Lessee is requested by an
Indemnitee to pay by reason of this Section 7.1, such Indemnitee shall, if
so requested by the Lessee and prior to any payment, submit such additional
information to the Lessee as the Lessee may reasonably request properly to
substantiate the requested payment. In the case of any Expense indemnified
by the Lessee hereunder which is covered by a policy of insurance
maintained by or for the benefit of the Lessee, each Indemnitee agrees,
subject to the proviso in the second sentence of the next paragraph, to
cooperate with the insurers in the exercise of their rights to investigate,
defend or compromise such Expense as may be required to retain the benefits
of such insurance with respect to such Expense.
In case any action, suit or proceeding shall be brought against
any Indemnitee for which such Indemnitee is entitled to indemnification,
such Indemnitee shall promptly notify the Lessee of the commencement
thereof (but the failure to do so shall not relieve the Lessee of its
obligation to indemnify such Indemnitee except to the extent that the
Lessee is prejudiced as a result of such failure). Subject to the rights
of insurers under policies of insurance maintained by or for the benefit of
Lessee, the Lessee or its insurers shall have the right to investigate, and
the right in its sole discretion to defend or compromise, any Expense for
which indemnification is sought under this Section 7.1, and at the Lessee's
expense, each Indemnitee shall cooperate with all reasonable requests of
the Lessee in connection therewith; provided that the Lessee or the insurer
shall not be entitled to assume and control the defense of any such action,
suit or proceeding if, in the reasonable opinion of such Indemnitee, such
defense or compromise involves the potential imposition of criminal
liability on such Indemnitee or a conflict of interest between such
Indemnitee and the Lessee. Where the Lessee or the insurers under a policy
of insurance undertakes the defense of an Indemnitee with respect to an
Expense, no additional legal fees or expenses of such Indemnitee in
connection with the defense of such Expense shall be indemnified hereunder
unless such fees or expenses were incurred at the request of the Lessee or
such insurers. Subject to the requirements of any policy of insurance, an
Indemnitee shall be entitled, at its own expense, acting through counsel
acceptable to the Lessee, to participate in any action, suit or proceeding
the defense of which has been assumed by the Lessee pursuant to the
preceding provisions, provided, that such party's participation does not,
in the opinion of the independent counsel to the Lessee or its insurers,
interfere with such control; and such participation shall not constitute a
waiver of the indemnification provided in this Section 7.1.
Notwithstanding anything to the contrary contained herein, the Lessee shall
not under any circumstances be liable for the fees and expenses of more
than one counsel for each of (i) the Owner Participant and the Owner
Trustee (and their respective successors and permitted assigns, agents and
servants), and (ii) the Indenture Trustee and the Pass Through Trustee (and
their respective successors and permitted assigns, agents and servants).
Notwithstanding anything in this Section to the contrary, in any action,
suit or proceeding to which any Indemnitee is a party, the Lessee shall not
enter into any settlement or other compromise with respect to any Expense
without the prior written consent of the Indemnitee unless the Lessee
acknowledges in writing reasonably satisfactory to such Indemnitee such
Indemnitee's right to full indemnification under this Section 7.1 with
respect to such Expense. No Indemnitee shall enter into any settlement or
other compromise with respect to any Expense without the prior written
consent of the Lessee unless such Indemnitee waives its rights to be
indemnified under this Section 7.1 with respect to such Expense.
Each Indemnitee shall supply the Lessee with such information and
documents requested by the Lessee as are reasonably necessary or desirable
for the Lessee to participate in any action, suit or proceeding to the
extent permitted by this Section 7.1.
Upon payment in full of any Expense by the Lessee pursuant to
this Section 7.1 to or on behalf of an Indemnitee, the Lessee, without any
further action, shall be subrogated to any and all claims that such
Indemnitee may have in respect thereof (other than claims in respect of
insurance policies maintained by such Indemnitee at its own expense), and
such Indemnitee shall cooperate with the Lessee and give such further
assurances as are reasonably necessary to enable the Lessee vigorously to
pursue such claims. So long as no Event of Default or Special Default has
occurred and is continuing, should an Indemnitee receive any refund,
payment, or insurance proceeds in whole or in part, with respect to any
Expense paid by the Lessee hereunder, it shall promptly pay the amount
refunded, paid or received (but not an amount in excess of the amount the
Lessee or any of its insurers has paid in respect of such Expense) over to
the Lessee.
Nothing in this Section 7.1 shall be construed as a guaranty by
the Lessee of any residual value in any Property or as a guaranty of the
Notes or the Pass Through Certificates.
Section 7.2 General Tax Indemnity. Except as provided in Section
7.3, the Lessee shall pay, and on written demand shall indemnify, protect,
defend and hold each Tax Indemnitee harmless, on an After-Tax Basis, from
and against, any and all Taxes levied or imposed on or with respect to any
Tax Indemnitee, the Lessee, any Property, or any portion thereof or
interest therein, any sublessee or other user thereof or otherwise by any
United States federal government or taxing authority or by any state or
local government or taxing authority or any political subdivision thereof
(or any taxing authority thereof or therein) in connection with or in any
way relating to (a) the construction, preparation, installation,
inspection, delivery, non-delivery, acceptance, rejection, purchase,
ownership, possession, rental, lease, sublease, maintenance, repair,
storage, transfer of title, redelivery, use, operation, condition, sale,
settlement of any insurance claim, mortgaging, pledging, financing,
retirement, abandonment, modification, replacement, transportation,
acquisition, transfer, substitution, control, location, refinancing,
repossession, registration, reregistration, return or other application or
disposition of all or any part of any interest in the Properties, or any
portion thereof or interest therein 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, (b) the payment or receipt of Interim Rent, Basic Rent
or Supplemental Rent or the receipts or earnings arising from or received
with respect to any Property or any part thereof or any interest therein or
any applications or dispositions thereof, (c) any other amount paid or
payable pursuant to any Transaction Document (including, without
limitation, any amounts paid or payable on or with respect to the Notes or
the Pass Through Certificates) or any document related thereto or the
property, income or other proceeds with respect to any of the property held
in the Trust Estate, the Indenture Estate or any Pass Through Trust, (d)
any Property, or any part thereof or any interest therein, (e) all or any
of the Transaction Documents, the Underwriting Agreement, any other
documents contemplated thereby, and amendments, supplements, waivers or
consents thereto, (f) the offer, issuance, sale, purchase, delivery,
refinancing, reoptimization or holding of the Notes or the Pass Through
Certificates or any other securities in connection with or with respect to
the transactions contemplated by the Transaction Documents, (g) Taxes or
liability imposed on the Owner Participant Parent or Owner Participant
only, under Section 4975 of the Code, or Sections 406, 407, 502(i) or
502(l) of ERISA as a result of the sale of the Pass Through Certificates in
accordance with the Transaction Documents, or (h) otherwise with respect to
or in connection with the transactions contemplated by the Transaction
Documents.
If, by reason of any Tax payment made to or for the account of a
Tax Indemnitee by or on behalf of the Lessee pursuant to this Section 7.2,
such Tax Indemnitee actually realizes a reduction as Taxes for which the
Lessee is not required to indemnify such Tax Indemnitee hereunder or under
the Tax Indemnification Agreement and that was not previously taken into
account in computing such payment, such Tax Indemnitee shall promptly pay
on an After-Tax Basis to the Lessee an amount equal to the actual net
reduction in Taxes, if any, realized by such Tax Indemnitee; provided,
however, that (A) such Tax Indemnitee shall not be obligated to make any
payment pursuant to this Section 7.2 if, and for so long as, a Default or
an Event of Default shall have occurred and be continuing and (B) no Tax
Indemnitee shall be obligated to make any payment to the Lessee pursuant to
this Section 7.2 to the extent that the amount of such payment would exceed
(x) the amount of all prior payments paid by or on behalf of the Lessee to
such Tax Indemnitee pursuant to this Section 7.2, less (y) the amount of
all prior payments by such Tax Indemnitee to the Lessee pursuant to this
Section 7.2, but any such excess shall reduce pro tanto any amount that
the Lessee is subsequently obligated to pay pursuant to this Section 7.2.
Each Tax Indemnitee agrees to use its reasonable efforts, and further
agrees to take such actions as the Lessee may reasonably request, to
realize any reduction, tax benefit or other savings that would reduce the
Lessee's indemnity obligation or would be required to be paid by such Tax
Indemnitee to the Lessee as soon as they are available; provided, however,
that (i) no Tax Indemnitee shall be required to take any action which, in
its good faith judgment, would have any adverse tax consequences to it
(other than consequences for which the Tax Indemnitee would be indemnified
by the Lessee pursuant to the terms of the Tax Indemnification Agreement,
this Agreement or another written undertaking by the Lessee, if any, to
indemnify the Tax Indemnitee if the Lessee is then Investment Grade (and if
the Lessee is not Investment Grade, in an amount and in a manner
satisfactory to such Tax Indemnitee in its sole discretion)) and (ii) the
conduct of any proceeding or action hereunder shall be controlled by the
Tax Indemnitee. Any reasonable out-of-pocket costs and expenditures
incurred in pursuing the actions contemplated by the preceding sentence
shall be for the account of Lessee.
If it is later determined that the Tax Indemnitee was not
entitled to such tax benefit, the portion of such tax benefit that is
disallowed, reduced, repaid, lost or recaptured will be treated as Taxes
for which the Lessee must indemnify the Tax Indemnitee pursuant to this
Section 7.2, subject to the contest provisions of Sections 7.4 through
7.11.
Section 7.3 Exclusions from General Tax Indemnity. Section 7.2
shall not apply to:
(a) Taxes imposed on (I) a Tax Indemnitee (other than any
Indenture Trust, the Indenture Trustee or the Indenture Estate) by Subtitle
A of the Code, and any other Taxes (other than any sales, use, property,
license, transfer or rental Taxes or any Taxes in the nature of sales, use,
property, license, transfer or rental Taxes) imposed by any state, local or
foreign government or political subdivision thereof, which are imposed on
or measured by net income (including any minimum taxes or taxes on items of
tax preference); provided, however, that (1) except in the case of the Pass
Through Trusts and the Pass Through Trustee, any such Taxes imposed by and
resulting from the location or use of the Properties in the states of
Louisiana, Ohio, Michigan or Virginia or in any foreign jurisdiction shall
not be excluded Taxes and (2) in the case of the Pass Through Trusts or the
Pass Through Trustee, any Taxes that are imposed as a result of the
exchange of the Notes by the Lessee pursuant to Section 9.1 shall not be
excluded Taxes or (II) any Indenture Trust, the Indenture Trustee or the
Indenture Estate (other than any sales, use, property, license, transfer or
rental Taxes or any Taxes in the nature of sales, use, property, license,
transfer or rental Taxes) based upon or measured by any fees or
compensation received by the Indenture Trustee for services rendered in its
capacity as trustee in connection with the transactions contemplated by the
Transaction Documents;
(b) Taxes (other than any sales, use, property, license,
transfer or rental Taxes, or any Taxes in the nature of sales, use,
property, license, transfer or rental Taxes) imposed by any state, local or
foreign government or political subdivision thereof, which are (i) value
added taxes, intangibles, stamp or similar taxes (other than stamp or
similar transactional taxes as may be imposed on any Indenture Trust, the
Indenture Trustee, the Indenture Estate, any Pass Through Trust or the Pass
Through Trustee on the initial issuance of the Notes or the Pass Through
Certificates), (ii) taxes on doing business, and (iii) taxes imposed on or
measured by gross income, gross or net receipts, capital, net worth and
similar items; provided, however, that any such taxes described herein
which are imposed by any state, local or foreign government or political
subdivision thereof or taxing authority thereof or therein where the
Properties are located shall not be excluded Taxes;
(c) Taxes included in the Purchase Price (if actually paid
by the Lessee);
(d) with respect to the Owner Participant, Taxes that are
the subject of the Tax Indemnification Agreement and for which the Lessee
has indemnified the Owner Participant in full pursuant to the terms
thereof;
(e) any Taxes imposed on a Tax Indemnitee that are a result
of such Tax Indemnitee not being a citizen or resident of, or not being
organized under the laws of, the United States or any political subdivision
thereof;
(f) any Tax that is enacted or adopted by its express terms
as a direct substitute for any Tax that would not have been indemnified
against pursuant to this Article VII;
(g) Taxes imposed on a Tax Indemnitee to the extent that
such Taxes would have been imposed on a Tax Indemnitee in the absence of
the transactions contemplated by the Transaction Documents;
(h) so long as the Owner Trustee is receiving all Basic Rent
without reduction on account of contested Taxes, Taxes that are being
contested in accordance with the provisions of Section 7.4, during the
pendency of such contest;
(i) Taxes imposed on a Tax Indemnitee caused by such Tax
Indemnitee's failure to fulfill its obligations under Section 7.4 if such
failure precludes a Lessee contest, but not if such failure is caused by
the Lessee's failure to satisfy its obligations under Section 7.4;
(j) Taxes that are imposed on any Tax Indemnitee as a result
of the actual gross negligence, or actual willful misconduct of such Tax
Indemnitee or its Affiliate;
(k) Taxes related to any Property that are attributable to
any event occurring after the earliest of (i) the expiration or early
termination of a Lease provided that the Lessee has paid in full all
amounts then due under such Lease, (ii) the return of possession of such
Property to the Lessor, provided in any such case that such Property is
returned in accordance with Section 5(b) of such Lease (but not if such Tax
arises in connection with an act, circumstance or event prior to such
expiration or termination) and (iii) in the case of any Indenture Trust,
the Indenture Trustee, the Indenture Estate, any Pass Through Trust or the
Pass Through Trustee, payment in full of the Notes and the Pass Through
Certificates;
(l) Taxes imposed on a Tax Indemnitee with respect to any
voluntary transfer by such Tax Indemnitee of any interest in the
Properties, or any part thereof or any interest arising under the
Transaction Documents or any Notes, or from any voluntary transfer of any
interest in such Tax Indemnitee or from any involuntary transfer of any of
the foregoing interests resulting from the bankruptcy or insolvency of, or
a foreclosure against the Tax Indemnitee (in each case, other than any such
transfer that occurs while a Default or Event of Default has occurred and
is continuing, or any transfer or other disposition arising in connection
with the exercise of any of the Lessee's rights or obligations under any of
the Transaction Documents);
(m) Taxes imposed on the Connecticut Trust, the Trust, the
Trust Estate, the Connecticut Trust Estate or the Owner Participant (i)
that result from a determination regarding the existence or taxable status
of such Trust respectively, or (ii) that exceed the amounts that would have
been imposed if the transactions contemplated by the Transaction Documents
had been consummated directly by the Owner Participant without such Trust;
(n) any interest, penalties, fines or additions to Tax
attributable to the failure of a Tax Indemnitee to file any return in
accordance with the procedural requirements of Applicable Law and on a
timely basis pursuant to its obligations under Section 7.4, except to the
extent that such failure is caused by the failure of the Lessee to fulfill
its obligations, if any, under Section 7.4 with respect to such return or
claim;
(o) any Taxes (other than any amount required to make a
payment on an After-Tax Basis) imposed on an original Tax Indemnitee or a
transferee or subsequent transferee of an original Tax Indemnitee to the
extent of the excess of such Taxes over the amount of such Taxes that would
have been imposed against the original Tax Indemnitee had there not been a
transfer of the Properties, or any interest therein or in a Tax Indemnitee
or an interest arising under any Transaction Document or any Notes by the
original Tax Indemnitee (other than any such transfer that occurs while a
Default or an Event of Default has occurred and is continuing);
(p) any Taxes imposed on the Remainderman that result from
Remainderman's Liens, any Taxes imposed on the Lessor that result from
Lessor's Liens attributable to it, any Taxes imposed on the Owner
Participant that result from Lessor's Liens attributable to it and any
Taxes imposed on the Indenture Trustee that result from Indenture Trustee's
Liens;
(q) any Tax that would not have been imposed but for (i) an
amendment, modification, consent or waiver to any Transaction Document not
consented to by the Lessee (except for (A) any such amendment,
modification, consent, or waiver while a Default or Event of Default has
occurred and is continuing or (B) any amendment, modification, consent or
waiver required by Applicable Law or required by the Transaction
Documents);
(r) other than with respect to any Tax Indemnitee that is
the Owner Participant, the Trust Estate, the Owner Trustee, or any
Affiliate of any of the foregoing, Taxes imposed against or payable by a
Tax Indemnitee pursuant to Sections 3406 or 4701 of the Code or any other
provision of applicable law requiring a withholding;
(s) Taxes imposed against or payable by a Tax Indemnitee
that would not have been imposed but for any failure of such Tax Indemnitee
or its Affiliate to comply with (x) certification, information,
documentation, reporting or other similar requirements (each being a
"Requirement") concerning the nationality, residence, identity or
connection with the jurisdiction imposing such Taxes, if such compliance is
required by statute or by regulation of the jurisdiction imposing such
Taxes as a precondition to relief or exemption from such Taxes and such a
Tax Indemnitee was eligible to comply with such Requirement (other than
with respect to any Tax Indemnitee that is the Owner Participant, the Trust
Estate, the Owner Trustee, or any Affiliate of any of the foregoing); or
(y) any other Requirements under the tax laws or regulations of the
jurisdiction imposing such Taxes that would establish entitlement to
otherwise applicable relief or exemption from such Taxes if such compliance
by the Tax Indemnitee was timely requested by the Lessee in writing and
such Tax Indemnitee was eligible to comply with such Requirement; provided,
however, that in no event shall any Tax Indemnitee be required to take any
action hereunder which, in its good faith judgment, would have any adverse
tax consequence to it (other than consequences for which the Tax Indemnitee
would be indemnified by the Lessee pursuant to the terms of the Tax
Indemnification Agreement, this Agreement or another written undertaking by
the Lessee, if any, to indemnify the Tax Indemnitee if the Lessee is then
Investment Grade (and if the Lessee is not Investment Grade, in an amount
and in a manner satisfactory to such Tax Indemnitee in its sole
discretion));
(t) other than with respect to any Tax Indemnitee that is
the Owner Participant, the Trust Estate, the Owner Trustee, or any
Affiliate of any of the foregoing, Taxes imposed against or payable by the
Pass Through Trustee, any Noteholder, or the Pass Through Investors or
Taxes imposed in connection with the issuance of the Notes, or the Pass
Through Certificates or resulting from or in respect of the payment of any
interest, principal or any other amount in connection with the Notes or the
Pass Through Certificates (other than those Taxes specifically identified
as exceptions to the exceptions regarding any Indenture Trust, the
Indenture Trustee, the Indenture Estate, any Pass Through Trust or the Pass
Through Trustee in Sections 7.3(a) and 7.3(b)); or
(u) except as provided in Section 7.2(g), Taxes or liability
incurred by any Tax Indemnitee resulting from any prohibited transaction
described in Section 406 or 407 of ERISA or Section 4975(c) of the Code.
Notwithstanding any other provision of this Section 7.3 to the
contrary, the Lessee will indemnify the Owner Trustee, the Trust Estate and
the Owner Participant (and any Affiliate of any of the foregoing) on an
After-Tax Basis for any obligation with respect to United States federal
withholding Taxes imposed on the Owner Trustee or the Owner Participant (or
any Affiliate of either thereof) with respect to the Notes or Pass Through
Certificates (or any debt issued to refinance or refund such Notes or Pass
Through Certificates) or as a result of a claim by the Internal Revenue
Service (the "Service") asserted against the Trust Estate, the Owner
Trustee or the Owner Participant (or any Affiliate of any of the foregoing)
with respect to any such withholding Tax; provided, however, that (A) the
Lessee shall be subrogated to the rights and defenses of the Owner Trustee
and the Owner Participant (and any Affiliate of either thereof) in respect
of such withholding Taxes, including the rights and defenses set forth
under the Transaction Documents, (B) as to claims asserted by the Service,
the Lessee shall have rights comparable, where appropriate, to the rights
set forth in Section 7.4 through 7.11 of this Article VII to require a
contest of the fact and amount of such claims, and (C) the Lessee shall
have no indemnification obligation under this sentence to the extent such
obligation of the Owner Trustee or Owner Participant (or any Affiliate of
either thereof) is caused by (y) the actual gross negligence or actual
willful misconduct of the Owner Trustee or the Owner Participant (or any
Affiliate of either thereof) or (z) a failure of the Owner Trustee or the
Owner Participant (or any Affiliate of either thereof) to fulfill its
obligations described in clause (B) of this proviso but only if such
failure precludes the Lessee's ability to contest the tax.
Notwithstanding any other provision of this Section 7.3 to the
contrary, the Lessee further will indemnify the Owner Trustee, the Trust
Estate, and the Owner Participant (and any Affiliate of either thereof) on
an After-Tax Basis for any obligation with respect to Taxes imposed on the
Pass Through Trust, the Pass Through Trustee or the holders of the Pass
Through Certificates or as a result of a claim by the Service asserted
against the Trust Estate, the Indenture Estate, the Indenture Trustee, the
Owner Trustee or the Owner Participant with respect to Taxes payable by the
Pass Through Trust, the Pass Through Trustee or the holders of the Pass
Through Certificates; provided, however, that (A) the Lessee shall be
subrogated to the rights and defenses of the Owner Trustee and the Owner
Participant (and any Affiliate of any thereof) in respect of such Taxes,
including the rights and defenses set forth under the Transaction
Documents; (B) as to claims asserted by any taxing authority, the Lessee
shall have rights comparable, where appropriate, to the rights set forth in
Section 7.4 through 7.11 of this Article VII to require a contest of the
fact and amount of such claims, and (C) the Lessee shall have no
indemnification obligation under this sentence to the extent such
obligation of the Owner Trustee, the Owner Participant or the Indenture
Trustee (or any Affiliate of any thereof) is caused by (y) the actual gross
negligence or actual willful misconduct of the Owner Trustee or the Owner
Participant (or any Affiliate of any thereof), or (z) a failure of the
Owner Trustee or the Owner Participant (or any Affiliate of any thereof) to
fulfill its obligations described in clause (B) of this proviso but only if
such failure precludes the Lessee's ability to contest the tax.
Section 7.4 Contests
(a) If any proposed adjustment or written claim shall be
made against any Tax Indemnitee, or if any proceeding shall be commenced
against any Tax Indemnitee (including a written notice of such proceeding),
for any Taxes as to which the Lessee may have an indemnity obligation
pursuant to Section 7.2, or if any Tax Indemnitee shall determine that any
Taxes as to which the Lessee may have an indemnity obligation pursuant to
Section 7.2 may be payable, and if the amount of such proposed adjustment,
claim or Tax, plus any related adjustment, claim or Tax with respect to the
transactions contemplated by the Transaction Documents that have been or
could be raised in an audit of such Tax Indemnitee by the taxing authority
in question for any other taxable period (including all future periods) of
such Tax Indemnitee with respect to which an assessment of a Tax deficiency
is not barred by the statute of limitations, would result in an additional
liability for Taxes of such Tax Indemnitee in excess of (x) in the case of
any contest the Lessee is permitted hereunder to conduct in its own name
without the participation of the Tax Indemnitee, $1,000 and (y) in the case
of any other contest, $10,000, then (i) such Tax Indemnitee shall promptly
notify the Lessee in writing of such proposed adjustment, claim, proceeding
or Tax, provided, however, that the failure to notify the Lessee pursuant
to this Section 7.4(a)(i) shall not relieve the Lessee of any obligation to
indemnify the Tax Indemnitee hereunder unless such failure precludes the
Lessee from initiating or continuing the contest of such claim for Taxes;
(ii) if requested in writing to do so by the Lessee, such Tax Indemnitee
shall extend the time by which it is required to respond to any such
proposed adjustment, claim or proceeding if such extension would not
otherwise adversely affect such Tax Indemnitee in any manner for which it
is not indemnified pursuant to this Agreement or any other Transaction
Document; (iii) if not required to do so by Applicable Law, shall not
without the consent of the Lessee take any action (including the payment of
any Tax) with respect to such proposed adjustment, claim, proceeding or Tax
for 30 days (or, if an extension to respond described in clause (ii) has
been obtained, for an additional period of time equal to the length of such
extension) after giving such notice to the Lessee provided, however, that
if the 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 or Tax without the consent of Lessee
(not to be unreasonably withheld) before 10 days from the receipt of such
notice by the Lessee unless the Tax Indemnitee shall be required by law or
regulation to take action prior to the end of such 10 day period; and (iv)
if the Lessee requests in writing within such 30-day or shorter period that
such proposed adjustment, claim or Tax be contested, such Tax Indemnitee
shall at the expense of the Lessee contest or the Lessee may (or at the
request of the Tax Indemnitee shall) contest in good faith in Lessee's
name, if permitted by Applicable Law, provided, however, that the claim can
be segregated procedurally from Tax claims for which the Lessee is not
obligated to indemnify the Tax Indemnitee, or otherwise in the name of such
Tax Indemnitee (upon the written consent of such Tax Indemnitee) the
validity, applicability or amount of the proposed adjustment, claim or Tax,
including determining (1) whether any action shall initially be by way of
judicial or administrative proceedings, or both, (2) whether any such
proposed adjustment, claim or Tax shall be contested by resisting payment
thereof or by paying the same and seeking a refund thereof and (3) the
court or other judicial body before which judicial action, if any, shall be
commenced; provided, however, that, in the case of any contest that is or
is to be controlled by the Lessee: (A) the Tax Indemnitee may retain or
reassert control of any such contest at any time if, in the judgment of
such Tax Indemnitee, there is a possibility that the Lessee's conduct of
such contest could have an adverse impact on the financial or public
relations interest of the Tax Indemnitee and (B) if the Tax Indemnitee
shall not have retained or reasserted control of any such contest, the
Lessee shall consult with and keep reasonably informed the Tax Indemnitee
and its designated counsel with respect to such contest and shall timely
provide the Tax Indemnitee with copies of the relevant portions of all
documents relating to such contest.
(b) A Tax Indemnitee shall not be required, and the Lessee
shall not be permitted, to take or continue any action pursuant to this
Section 7.4 other than the actions described in clauses (i) and (ii) of the
first sentence of Section 7.4(a), and the Lessee shall be required to pay
any such Taxes without contest, unless (i) the Lessee shall have agreed in
writing,to pay and shall pay to the Tax Indemnitee on demand all costs and
out-of-pocket expenses that the Tax Indemnitee may incur in connection with
contesting such proposed adjustment, claim or determination (including
without limitation all costs, expenses, legal and accounting fees and
disbursements); (ii) such Tax is one with respect to which the Lessee has
agreed in writing that it would be required to indemnify the Tax Indemnitee
in the event the contest is unsuccessful unless the contest is ultimately
resolved by a court of competent jurisdiction on a clearly articulated
basis that establishes that there is no basis for indemnification
hereunder; (iii) the action to be taken will not result in any substantial
danger of sale, forfeiture or loss of, or the creation of any lien (other
than a Permitted Lien) on, the Properties or any part thereof or interest
therein or the risk of imposition of any criminal penalties; (iv) no
Default or Event of Default has occurred or is continuing; and (v) the Tax
Indemnitee has been provided with an opinion of tax counsel, selected by
the Lessee and reasonably acceptable to the Tax Indemnitee, which opinion
shall be furnished at the Lessee's sole expense, to the effect that there
is a Reasonable Basis for contesting or appealing such tax claim (or in the
case of any appeal of any adverse judicial decision an opinion of such
counsel to the effect that the Tax Indemnitee more likely than not will
prevail in such appeal). In no event shall any appeal to the United States
Supreme Court be required or permitted hereunder.
Notwithstanding anything contained in this Section 7.4 to the
contrary, no Tax Indemnitee shall be required to contest any tax claim if
the subject matter thereof shall be of a continuing nature and there shall
have been a final adverse determination with respect thereto, unless there
shall have been a change in fact or law, (including, without limitation,
amendments to or adoption of statutes or regulation, administrative rulings
and court decisions) enacted, promulgated or decided after such claim shall
have been so previously decided, and such Tax Indemnitee shall have
received an opinion of counsel, selected by the Lessee and reasonably
acceptable to the Tax Indemnitee, which opinion shall be furnished at the
Lessee's sole expense, to the effect that as a result of such change in
fact or law it is more likely than not that the Tax Indemnitee shall
prevail in the contest of such claim.
(c) If the contest of any adjustment shall involve paying
the additional tax and suing for a refund, the Lessee shall advance to or
pay on behalf of the Tax Indemnitee, on an interest-free basis and at no
additional net after-tax cost to such Tax Indemnitee, the amount of such
additional tax, as well as any related interest, penalties or additions to
tax that are required to be paid with respect thereto. Upon a Final
Determination of any adjustment in respect of which the Lessee shall have
advanced funds to or paid funds on behalf of the Tax Indemnitee or, if
earlier, upon receipt by the Tax Indemnitee of a refund or credit of any
amounts paid by or on behalf of the Tax Indemnitee based on the adjustment
and in respect of which amounts the Lessee shall have previously advanced
funds to or on account of the Tax Indemnitee, then, to the extent such
Final Determination is adverse, the Lessee shall indemnify the Tax
Indemnitee to the extent provided by Section 7.2, and promptly after such
Final Determination the Tax Indemnitee shall repay to the Lessee the funds
advanced by the Lessee pursuant to this paragraph, together with any
related interest received by the Tax Indemnitee as a result of such refund
or credit (fairly attributable to amounts advanced by the Lessee) or saved
by the Tax Indemnitee because the refund or credit (fairly attributable to
amounts advanced by the Lessee) is used as an offset in another taxable
year.
(d) Except as otherwise expressly provided, in the event
Lessee has complied with the foregoing provisions of this Section 7.4, the
Tax Indemnitee shall not be entitled to settle, compromise or pay such Tax
so long as such contest is being prosecuted in good faith.
(e) Notwithstanding anything contained in this Section 7.4,
a Tax Indemnitee shall not be required to contest any claim or permit the
Lessee to contest any claim and may settle any contest without the consent
of the Lessee if such Tax Indemnitee (A) shall waive its right to indemnity
under Section 7.2 with respect to such claim for such Tax (and any claim
made by any taxing authority with respect to other taxable periods that are
based, in whole or in part, upon the resolution of such claim, or the
contest of which is precluded by the resolution of such claim), and (B)
shall pay to the Lessee any amount previously paid or advanced by the
Lessee pursuant to this Section 7.4 with respect to such claim for such Tax
or the contest of such Tax (other than amounts advanced pursuant to clause
(i) of Section 7.4(b)) plus interest on such amounts at the interest rates
specified in Section 6621(a)(1) of the Code.
Section 7.5 Refunds or Credits. If any Tax Indemnitee or any
Affiliate thereof shall receive a refund of (or receive a credit against,
or any other current reduction in, any Tax not indemnified by the Lessee
pursuant to this Article VII) all or any part of any Taxes paid, reimbursed
or advanced by the Lessee pursuant to this Article VII (or would have
received such a refund, credit or reduction but for a counterclaim or other
claim not indemnified by the Lessee hereunder (a "Deemed Refund")),
provided that no Default or Event of Default shall have occurred and be
continuing, within 30 days of such receipt (or, in the case of a Deemed
Refund, within 30 days of the final determination of such Deemed Refund),
the Tax Indemnitee shall pay to the Lessee, an amount equal to the lesser
of (xx) the amount of such refund or credit or Deemed Refund plus or minus
any net tax benefit or cost (taking into account any Taxes incurred by such
Tax Indemnitee by reason of the receipt or accrual of such refund or credit
or Deemed Refund) realized by such Tax Indemnitee as a result of any
payment by such Tax Indemnitee made pursuant to this sentence (including
this clause (xx)) and (yy) the amount of such tax payment, reimbursement or
advance by Lessee to such Tax Indemnitee, it being intended that such Tax
Indemnitee shall retain a net tax benefit pursuant to Sections 7.2 and 7.4
only if the Lessee shall first have been reimbursed for any payments,
reimbursements and advances of taxes by it to such Tax Indemnitee pursuant
to Sections 7.2 and 7.4. If, in addition to such refund, credit or
reduction or Deemed Refund, as the case may be, such Tax Indemnitee shall
actually receive (or would have received but for a counterclaim or other
claim not indemnified by the Lessee hereunder) an amount representing
interest on the amount of such refund, credit or reduction, or Deemed
Refund, as the case may be, such Tax Indemnitee shall pay to the Lessee on
an After-Tax Basis, within 30 days of such receipt or, in the case of a
Deemed Refund, within 30 days of the final determination of such Deemed
Refund, that proportion of such interest that shall be fairly attributable
to Taxes paid, reimbursed or advanced by the Lessee prior to the receipt of
such refund or Deemed Refund. If it is later determined that the Tax
Indemnitee was not entitled to such refund or credit, the portion of such
refund or credit that is disallowed, reduced lost, repaid or recaptured
will be treated as Taxes for which the Lessee must indemnify the Tax
Indemnitee pursuant to Section 7.2, subject to the contest provisions of
Section 7.4 through 7.11.
Section 7.6 Payments. Any Tax indemnifiable under this Article
VII shall be paid directly when due to the applicable taxing authority if
direct payment is permitted. If direct payment to the applicable taxing
authority is not permitted or is otherwise not made, any amount payable to
a Tax Indemnitee pursuant to Section 7.2 shall be paid in immediately
payable funds within 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 the date that the
relevant Taxes are due. No Tax shall be payable to the applicable taxing
authority or the Tax Indemnitee, as the case may be, before any contest to
which the Lessee is entitled under Section 7.4 is concluded. Any payments
made pursuant to Sections 7.2 through 7.5 shall be made directly to the Tax
Indemnitee entitled thereto or the Lessee, as the case may be, in
accordance with Section 13.9. In the event a Tax Indemnitee makes a tax
payment with respect to any such Taxes that are due and payable at the time
of such payment (other than with funds advanced to such Tax Indemnitee on
an interest-free basis by the Lessee pursuant to this Article VII) the
Lessee shall pay to the Tax Indemnitee interest on the amount of such
payment at the Overdue Interest Rate from (i) the date of payment by the
Tax Indemnitee if the Tax Indemnitee notifies the Lessee that such payment
has been made within 5 days of making such payment, or (ii) from the date
the Tax Indemnitee notifies the Lessee of such indemnity payment in all
other cases, in either case to the date of payment by Lessee to the Tax
Indemnitee hereunder. Any amount payable under Sections 7.2 through 7.5
that is not paid when due shall bear interest at the Overdue Interest Rate.
Any amount payable to the Lessee pursuant to the terms of this
Article VII shall not be paid to or retained by the Lessee if at the time
of such payment or retention a Default or an Event of Default shall have
occurred and be continuing. At such time as there shall not be continuing
any such Default or Event of Default, such amount shall be paid to the
Lessee to the extent not previously paid to the Lessee.
Section 7.7 Reports. If any report, return or statement is
required to be filed with respect to any Taxes that are subject to
indemnification under this Article VII, the Lessee shall promptly notify
the appropriate Tax Indemnitee of such requirement and, if the Lessee is
permitted by Applicable Law to do so and has been furnished at the Lessee's
sole expense with such information, not within the control of the Lessee,
as (i) is in such Tax Indemnitee's control, (ii) is reasonably available to
such Tax Indemnitee, (iii) is necessary to file such report, return or
statement, and (iv) has been requested in writing by the Lessee, shall
timely file such report, return or statement with respect to such Taxes
(unless such Tax Indemnitee has notified the Lessee in writing that such
Tax Indemnitee intends to file such report, return or statement); provided,
however, that if the Lessee is not permitted by Applicable Law to file any
such report, return or statement the Lessee will promptly notify the
appropriate Tax Indemnitee that it is not so permitted. If the Lessee is
not permitted by Applicable Law to file any such report, return or
statement, then if the Lessee has been furnished at the Lessee's sole
expense with such information, not within the control of the Lessee, as (i)
is in such Tax Indemnitee's control, (ii) is reasonably available to such
Tax Indemnitee, (iii) is necessary to file such report, return or
statement, and (iv) has been requested in writing by the Lessee, the Lessee
shall, if practicable and if the report, statement or return to be filed
reflects only information in respect of the transactions contemplated by
the Transaction Documents, prepare and furnish to such Tax Indemnitee not
later than 15 days prior to the date such report, statement or return is
required to be filed (determined without regard to extensions) a proposed
form of such report, statement or return for filing by the appropriate Tax
Indemnitee. If the Tax Indemnitee shall have notified the Lessee of its
intention to prepare and file any return, statement or report subject to
this Section 7.7, or in the case of any other return, statement or report
subject to this Section 7.7 required to be prepared and filed by the Tax
Indemnitee, the Lessee, at its expense, shall make available or provide to
such Tax Indemnitee, upon request, such records and information as is
within the Lessee's control or otherwise is reasonably available to the
Lessee to the extent required to prepare such return, statement or report.
With respect to any report, return, or statement that is required to be
filed with respect to any Taxes that are subject to indemnification under
this Article VII, the Lessee shall either show the ownership of the
respective Property in the Owner Trustee and send a copy of such report,
return or statement to the Owner Trustee and the appropriate Tax Indemnitee
or, where not permitted to show such ownership, shall promptly notify the
Owner Participant of such requirement and prepare and deliver to the Owner
Trustee and the appropriate Tax Indemnitee a proposed form of such report,
return or statement reasonably satisfactory to the Owner Trustee within a
reasonable time prior to the time such report, return or statement is to be
filed.
The Lessee shall hold each Tax Indemnitee harmless from and
against all liability arising out of any insufficiency or inaccuracy of any
report, return or statement if such insufficiency or inaccuracy results
from the insufficiency or inaccuracy of any information required to be
supplied by the Lessee in preparing and filing such report, statement or
return.
If no report, statement or return is required to be filed with
respect to a Tax subject to indemnification under this Section 7.7, the
Lessee will promptly notify the Tax Indemnitee of such Tax not later than
30 days prior to the due date for payment of such Tax. Subject to Section
7.6 above, not later than the date any Tax described in the preceding
clause is required to be paid by the Tax Indemnitee, the Lessee will either
(1) if permitted by Applicable Law, pay such Tax directly to the
appropriate taxing authority or (2) pay the Tax Indemnitee the amount of
such Tax in immediately available funds.
Section 7.8 Verification. At the Lessee's request, the amount of
any indemnity payment by the Lessee pursuant to Section 7.2 or any payment
by a Tax Indemnitee to the Lessee pursuant to Section 7.5 shall be verified
using the procedures established in Section 3(f)(ii) of each Lease.
Section 7.9 Survival. The obligations and liabilities arising
under this Article VII shall continue in full force and effect,
notwithstanding the expiration or earlier termination of each Lease and the
other Transaction Documents, until all such obligations have been satisfied
and such liabilities have been paid in full, and shall be binding and inure
to the benefit of the parties to this Agreement and their respective
successors and assigns.
Section 7.10 Forms, etc. Each Tax Indemnitee agrees to furnish
to the Lessee from time to time, at the written request and expense of
Lessee, such duly executed and properly completed forms as may be necessary
or appropriate in order to claim any reduction of or exemption from any
withholding or other Tax imposed by any taxing authority in respect of any
payments otherwise required to be made by Lessee, as the case may be,
pursuant to the Transaction Documents, which reduction or exemption may be
available to such Tax Indemnitee; provided, however, that no Tax Indemnitee
shall have any obligation to comply with any request or take any other
action pursuant to this Section 7.10 if (i) in order to comply with such
request or take such action the Tax Indemnitee would be required to make
any inaccurate statement or (ii) by complying with such request, the Tax
Indemnitee would suffer, in the good faith opinion of such Tax Indemnitee,
any adverse consequences (other than consequences for which the Tax
Indemnitee would be indemnified by the Lessee pursuant to the terms of the
Tax Indemnification Agreement, this Agreement or another written
undertaking by the Lessee, if any, to indemnify the Tax Indemnitee if the
Lessee is then Investment Grade (and if the Lessee is not Investment Grade,
in an amount and in a manner satisfactory to such Tax Indemnitee in its
sole discretion)).
Section 7.11 Non-Parties. If any Tax Indemnitee is not a party
to this Agreement, Lessee may require the Tax Indemnitee to agree in
writing, in a form reasonably acceptable to Lessee, to the terms of this
Article VII, before making any payment to such Tax Indemnitee under Article
VII.
ARTICLE VIII
TRANSFERS OF THE OWNER PARTICIPANT'S INTERESTS;
RIGHT OF FIRST OFFER; AND NO TRANSFER BY OWNER
TRUSTEE OR CONNECTICUT TRUSTEE
Section 8.1 Transfer of Owner Participant's Interest. The Owner
Participant shall not directly or indirectly (whether through the
Connecticut Trustee or otherwise) assign, convey or otherwise transfer
(whether by consolidation, merger, sale of assets or otherwise) any of its
right, title or interest in and to the Properties, the Trust Estate, this
Agreement, the Trust Agreement, the Connecticut Trust Agreement, the
Connecticut Trust Estate, the Tax Indemnification Agreement or any other
Transaction Document and (so long as any Notes are Outstanding) the
Indenture Estate; provided, however, that, after the Closing Date, subject
to fulfillment of the conditions set forth below in this Article VIII, the
Owner Participant (and any Transferee to whom a transfer is duly made
pursuant to this Article VIII) may transfer all or a portion of its right,
title and interest in and to the Properties (at any point in time that the
Connecticut Trust Agreement and the Trust Agreement do not exist), the
Connecticut Trust Estate, this Agreement, the Connecticut Trust Agreement,
the Tax Indemnification Agreement and each other Transaction Document to
which the Owner Participant is a party or by which the Owner Participant is
bound to one or more Transferees. Each such transfer shall be subject to
the fulfillment of the following conditions:
(a) at no time shall there be more than four Owner
Participants and each Owner Participant shall at all times have an interest
in the Lessor Interests and Lessor of at least 20%;
(b) the Transferee (if other than the Lessee) shall at the
time of transfer (i) be a Qualified Institution or (ii) an Affiliate of the
Owner Participant Parent, and if such Affiliate is not a Qualified
Institution, the Owner Participant Parent shall provide a guaranty, in
scope and substance satisfactory to the Lessee, of all of the obligations
of the Transferee under this Agreement and the other Transaction Documents;
(c) the Lessee, the Owner Trustee, the Connecticut Trustee,
the Indenture Trustee, and the Initial Noteholder or the Pass Through
Trustee, as the case may be, shall have received at least 45 days' prior
notice of the proposed transfer, which notice shall specify the name and
address of the proposed transferee;
(d) the Transferee shall have all requisite power and
authority to enter into and perform the obligations of the Owner
Participant under this Agreement and the other Transaction Documents to
which the Owner Participant is a party and, upon giving effect to the
proposed transfer, the Transferee will not be in breach of any covenant,
agreement or condition required to be performed or observed by the Owner
Participant in this Agreement and the other Transaction Documents to which
the Owner Participant is a party;
(e) the Transferee shall have duly authorized, executed and
delivered to the Indenture Trustee, the Owner Trustee, the Initial
Noteholder or the Pass Through Trustee, as applicable, and the Lessee an
agreement, substantially in the form attached hereto as Exhibit O;
(f) the Transferee shall have made the representations and
warranties required to be made by the Owner Participant set forth in
Section 5.2(a) and, assuming that they were made in reference to the
transfer referred to above or to documents required to be executed or
prepared (including amendments to the Transaction Documents) in connection
with the transfer, the representations and warranties set forth in Sections
5.2(b), (c), (d), (e), (f), (g) and (i) shall be true and correct as to the
Transferee as of the effective date of the transfer in all material
respects with the same effect as if made on such date and each of the Owner
Trustee, the Indenture Trustee, the Initial Noteholder or the Pass Through
Trustee, as applicable, and the Lessee shall have received an Officers'
Certificate of the Transferee to such effect;
(g) such transfer shall not violate any provisions of the
Securities Act (and no registration pursuant to such Act or the rules and
regulations thereunder shall be required in connection with such
conveyance) and shall not violate any provision of, or create a
relationship that would be in violation of, any other Applicable Law;
(h) the Transferee shall have duly authorized, executed,
acknowledged, delivered, recorded or caused to be recorded any instrument
requested by the Indenture Trustee or its counsel for the purpose of
affirming or continuing the validity, perfection and priority of the lien
of the Indenture;
(i) for so long as the Lessee is a Lessee under the
respective Leases, neither the Transferee nor any of its Affiliates shall
at the time of proposed transfer be (A) a Person, a substantial part of
whose business is the operation of retail stores, including the sale of
food and/or drug products (the "Lessee's Business"), in the general
geographic area in which the Lessee conducts the Lessee's Business or (B)
otherwise be a Person instituting or threatening to institute any
involuntary or hostile corporate transaction affecting control of the
Lessee ("Adverse Relationship"); provided, however, for the purpose of this
paragraph (i), a Transferee and any of its Affiliates shall not be deemed
to be engaged in the Lessee's Business solely by reason of their ownership
of securities or other interests of any entity engaged in any of the
Lessee's Business so long as either (x) in the case of a Transferee that is
a bank, insurance company, finance subsidiary (similar to the Owner
Participant Parent) or other financial institution, (i) such securities are
held as portfolio investments and (ii) either (A) the consolidated sales of
such entity for its latest fiscal year were less than $100,000,000.00, (B)
such Transferee and its Affiliates do not beneficially own in the aggregate
more than a 25% equity interest in such entity on a fully diluted basis and
such entity is not an Affiliate (other than by virtue of the rights and
powers that arise solely from the ownership of such equity interest) of
such Transferee or any of its Affiliates or (C) the book value of the
interest of the Transferee and its Affiliates in such entity does not
exceed 1% of the consolidated assets of the Transferee and its Affiliates
determined at the end of its latest fiscal year or (y) in all other cases,
(i) such entity is not an Affiliate of such Transferee or any of its
Affiliates and (ii) the Transferee and its Affiliates do not beneficially
own in the aggregate more than a 5% equity interest in such entity on a
fully diluted basis;
(j) the transfer will not result in any adverse tax
consequences to the Owner Participant for which the Lessee is liable under
any Transaction Document other than any such consequence for which the
Lessee has been relieved of its obligation to indemnify; and
(k) the transferring Owner Participant or the Transferee
shall have delivered to the Lessee, the Indenture Trustee, the Owner
Trustee, the Connecticut Trustee, the Initial Noteholder or the Pass
Through Trustee, as the case may be, a favorable opinion of counsel (which
may be in-house counsel) reasonably satisfactory to the Lessee as to the
due authorization, execution, delivery and enforceability of the agreement
referred to in paragraph (e) above, and as to the matters referred to in
paragraphs (d) (except as to breach of covenant, condition or agreement),
(e) and (g) above.
From and after any transfer effected in accordance with this
Article VIII, the Transferee shall be deemed the "Owner Participant" (or,
in the case of a partial transfer, an "Owner Participant") for all purposes
of the Transaction Documents and shall be deemed to have made all of the
Investment, or in the case of a partial transfer, that portion of the
Investment previously made by the Owner Participant to the extent
attributable to the interest transferred to it, and, except as provided in
the last sentence of this paragraph, each reference to the Owner
Participant contained in the Transaction Documents shall be deemed to
include a reference to the Transferee for all purposes. If as a result of
any such transfer there shall be more than one Owner Participant, any
requirement for the consent or approval of, or instructions from, the Owner
Participant under this Agreement or any other Transaction Document shall be
deemed to be satisfied if such consent or approval or instructions are
given by Owner Participants having at least 51% of the aggregate interest
in the Trust Estate. If as a result of any transfer pursuant to this
Article VIII, there is more than one Owner Participant, then the parties
hereto agree that the Trust Agreement shall be amended to reflect the
existence of more than one Owner Participant and the form of any such
amendment shall be reasonably acceptable to the Owner Trustee.
Notwithstanding the foregoing provisions of this Article VIII,
after any transfer effected in accordance with this Article VIII, the
transferring Owner Participant shall not be released from any obligation
arising or accruing prior to such transfer, but shall not be liable for any
obligation arising or accruing after such transfer to the extent of such
transfer. Notwithstanding any transfer effected in accordance with this
Article VIII, the transferring Owner Participant shall nevertheless be
entitled to all benefits accrued and all rights vested or arising with
respect to the period prior to such transfer, including, without
limitation, any right to indemnification under this Agreement or the Tax
Indemnification Agreement, to the exclusion of the Transferee unless the
transferring Owner Participant shall have assigned such benefits and rights
to the Transferee and provided evidence of such assignment in form and
substance satisfactory to the Lessee.
The foregoing restrictions on transfers by the Owner Participant
set forth in this Article VIII shall be of no force or effect after the
latest Lease Termination Date in respect of any Leases that have not
expired or terminated, subject to Section 20 of each Lease. If an Event of
Default described under Sections 15(a), (b) or (f) has occurred and is
continuing, then the foregoing restrictions set forth in clauses (a), (b)
and (j)(x) need not be complied with by the Owner Participant for so long
as such Event of Default continues. If an Event of Default described under
Sections 15(a) or (b) of each Lease has occurred and is continuing (other
than in connection with a bankruptcy, insolvency or similar proceeding) and
the respective Leases have been declared in default or if an Event of
Default as described in Section 15(f) has occurred and is continuing and
the Lessee (or its successors) has moved to reject the Leases under Section
365 of the Bankruptcy Code or has attempted to characterize the Leases as
financing leases and not as leases in a bankruptcy, insolvency or similar
proceeding, then the foregoing restriction under paragraph (i) need not be
complied with by the Owner Participant for so long as such condition
continues.
Notwithstanding anything in this Article VIII to the contrary,
the transfer restriction set forth in this Article VIII shall not apply to
any transfer of stock by the Owner Participant's stockholders or any
Affiliate of the Owner Participant or to or to any transfer to the
Connecticut Trustee of the Owner Participant's beneficial interest in the
Trust in accordance with Section __ hereof.
(b) Notwithstanding anything in this Article VII to the
contrary, the Owner Participant shall not authorize, instruct or otherwise
permit the Connecticut Trustee to, and the Connecticut Trustee shall not
directly or indirectly, assign, convey or otherwise transfer (whether by
consolidation, merger, sale of assets or otherwise) any of its right, title
or interest in and to the Properties, the Trust Estate, this Agreement, the
Trust Agreement, the Tax Indemnification Agreement or any other Transaction
Document and (so long as any Notes are Outstanding) the Indenture Estate
without the prior written consent of the Lessee; provided, however, that,
after the Notes shall no longer be Outstanding, the Owner Participant shall
have the right to terminate the Connecticut Trust and direct the
Connecticut Trustee to transfer the Connecticut Trustee's right, title or
interest in and to the Properties, the Trust Estate, this Agreement, the
Trust Agreement, the Tax Indemnification Agreement or any other Transaction
Document to the Owner Participant and to amend, supplement or modify any of
the Transaction Documents or to enter into such other agreements as the
Owner Participant deems reasonably necessary to evidence such transactions,
in each case, in form and substance reasonably satisfactory to the Lessee.
Section 8.2 Right of First Offer.
(a) Grant of Right of First Offer. Subject to Section 5.5 of
the Indenture and Section 8.1 and so long as no Event of Default or Special
Default has occurred and is continuing, if at any time during the Lease
Term (unless the Lease Termination Date results from a termination of the
Lease pursuant to Section 14 or 16) the Lessor desires to sell or assign
all or part of its rights in any of the Lessor Interests or if Owner
Participant desires to sell or assign all or part of its beneficial
interest in the Trust or the Connecticut Trust, as the case may be (as
applicable, the "Selling Party") or the Selling Party receives an
unsolicited offer to purchase its interest, the Selling Party shall, as a
condition to such sale or assignment, first offer the Lessor Interests or
the beneficial interest in the Trust or the Connecticut Trust, as the case
may be (as applicable, the "Offered Interest") to the Lessee at a purchase
price and on such other terms and conditions as the Selling Party would
accept from another Person; provided, that such right of first offer shall
apply solely with respect to the beneficial interest in the Trust or the
Connecticut Trust, as the case may be, only during the period commencing on
the date occurring five (5) years prior to the scheduled expiration of the
Basic Term and ending on the date occurring one (1) year after the
expiration of the Lease Term (including any Renewal Terms) and shall apply
with respect to the Lessor Interests at any time during the Lease Term.
The Lessee may within thirty (30) days of receipt of such offer, elect to
purchase the Offered Interest, whereupon the Lessee shall be bound to
purchase from the Selling Party, and the Selling Party shall be bound to
sell to the Lessee, the Offered Interest on such terms and conditions, plus
any unpaid Rent then owing. If the Lessee does not accept such offer, the
Selling Party, subject to the provisions of this Section 8.2, may sell or
assign its rights in the Offered Interest to another Person for a period of
up to eighteen (18) months from the end of such thirty (30) day period on
terms and conditions that are no less favorable to the Selling Party than
the terms and conditions offered to the Lessee (it being understood that a
"no less favorable" purchase price for the Offered Interest is any purchase
price that exceeds 96% of the purchase price originally offered to the
Lessee). If the Lessee does not accept such offer and the Selling Party
during such eighteen (18) month period desires to sell or assign its rights
in the Offered Interest to another Person on terms and conditions less
favorable (as defined in the preceding sentence) to the Selling Party than
those offered to the Lessee, then the Lessee shall have the right within
twenty (20) days of receipt of notice from the Selling Party of such
proposed sale or assignment to purchase the Selling Party's rights in the
Offered Interest on terms and conditions no less favorable to the Selling
Party than the terms and conditions offered to such other Person (it being
understood that a "no less favorable" purchase price for the Offered
Interest is any purchase price that exceeds 96% of the purchase price
originally offered to the Lessee). If the Lessee does not notify the
Selling Party of its election to purchase the Offered Interest within such
twenty (20) days the Selling Party may thereafter complete the proposed
sale or assignment of its rights in the Offered Interest to such other
Person without any further obligation to the Lessee under this Section 8.2.
Any transfer of a beneficial interest in the Trust to a Person
other than the Lessee must also meet the conditions set forth in this
Section 8.2.
(b) Purchase and Transfer. If the Lessee shall have exercised
any of its purchase rights in Section 8.2(a), the Lessee shall pay for and
purchase the Offered Interest on the terms and conditions required by
Section 8.2(a) and the Selling Party shall transfer to the Lessee, without
recourse or warranty, but free and clear of all Lessor's Liens all the
Selling Party's right, title and interest in the Offered Interest.
(c) Applicability of Right of First Refusal to Certain Leases.
So long as no Event of Default or Special Default has occurred and is
continuing, if the Lessor desires to lease any Lessor Interest or a portion
thereof during the Lease Term and for one year thereafter (i) for a period
that would equal or extend beyond the earlier of the estimated economic
useful life of the Leased Property (as determined by an Appraisal Procedure
conducted at the time the lease is entered into and subject to the rights
of the Remainderman contained in the Option Agreement), (ii) with an option
in the proposed lease to purchase the Leased Property or the specified
portion at a fixed and determinable price that is less than 50% of the
anticipated Fair Market Sales Value of the Leased Property or the specified
portion thereof (as determined by an Appraisal Procedure conducted at the
time the lease is entered into) at the time that the option may be first
exercised or (iii) with an option in the proposed lease to purchase the
Leased Property or the specified portion and on such terms and conditions
(including the relationship of such option price to the anticipated sale
value of the Leased Property at the time of exercise) that, in the
aggregate, make it highly probable that the lessee will exercise such
option, then such transaction shall be subject to the right of first offer
granted in Section 8.2(a) (from and after the Lease Termination Date and
for one year thereafter unless the Lease Termination Date results from a
termination pursuant to Section 14 or Section 16). For the purposes of
Section 8.2(a), the consideration shall be the terms and conditions of the
proposed lease (including the purchase option). A right to purchase the
Leased Property or a portion thereof in a prospective lease shall be valued
as if the prospective lessee has a right to purchase the Leased Property or
a specified portion thereof on the last possible date for the exercise
thereof calculated as of the date of the giving of the notice of the
proposed sale or transfer pursuant to Section 8.2(a). For the purposes of
determining the present value of the purchase price to be paid by the
prospective lessees, a discount rate equal to the yield on United States
Treasury obligations having a maturity (extrapolated, if necessary) co-
terminous with the future payment date plus 75 basis points shall be used.
For the purpose of calculating the present value of the prospective
lessee's rental obligations, a discount rate (applied to the aggregate
amount of all rents due under the prospective lease) equal to the yield on
United States Treasury obligations having a maturity (extrapolated, if
necessary) co-terminous with the date which is the middle of the
prospective lease term plus 75 basis points shall be used.
(d) Savings Clause. Unless terminated sooner by the agreement
of the parties, the right of first refusal granted pursuant to Sections
8.2(a) and 8.2(c) and any other future unvested interest in real property
created under the terms of any Lease shall terminate upon the first
anniversary of the Lease Termination Date in respect of such Lease.
(e) Access to Leased Property. After the Lease Termination
Date, if the Selling Party shall have given the Lessee notice of a right of
first offer pursuant to this Section 8.2, then the Lessor shall afford the
Lessee with reasonable access to each Leased Property upon reasonable
notice (but subject to reasonable restrictions) for the purpose of
inspection and valuation of each such Leased Property.
Section 8.3 No Transfer by Owner Trustee. For so long as the
Lessee is the lessee under each Lease and no Special Default or Event of
Default has occurred and is continuing, the Owner Trustee shall only
directly or indirectly assign, convey, sell, dispose of or otherwise
transfer any of its right, title or interest in and to the Lessor Interests
(other than the grant of security pursuant to the Indenture) in a manner
that complies with Section 8.2. No such transfer shall under any
circumstance be to (A) any Person engaged, or whose Affiliate is engaged,
except in the case of a transfer to an Affiliate of the original Owner
Participant, in the Lessee's Business or (B) otherwise be a Person with
whom the Lessee is involved in an Adverse Relationship; provided, however,
that, no such transferee which is engaged in the Lessee's Business shall
have any right to inspect Lessee's books and records or have any access to
information about the Lessee which is not generally available to the
public. For the purpose of this Section 8.3, a transferee and any of its
Affiliates shall not be deemed to be engaged in the Lessee's Business
solely by reason of their ownership of securities or other interests of any
entity engaged in any of the Lessee's Business either (x) in the case of a
transferee that is a bank, insurance company, finance subsidiary (similar
to the Owner Participant Parent) or other financial institution, (i) such
securities are held as portfolio investments and (ii) either (A) the
consolidated sales of such entity for its latest fiscal year were less than
$100,000,000, (B) such transferee and its Affiliates do not beneficially
own in the aggregate more than a 25% equity interest in such entity on a
fully diluted basis and such entity is not an Affiliate of such transferee
or any of its Affiliates (other than by virtue of the rights and powers
that arise solely from the ownership of such equity interest) or (C) the
book value of the interest of the transferee and its Affiliates in such
entity does not exceed 1% of the consolidated assets of the transferee and
its Affiliates determined at the end of its latest fiscal year or (y) in
all other cases, (i) such entity is not an Affiliate of such transferee or
any of its Affiliates and (ii) the transferee and its Affiliates do not
beneficially own in the aggregate more than a 5% equity interest in such
entity on a fully diluted basis.
ARTICLE IX
OBLIGATIONS OF THE LESSEE;
ADDITIONAL FUNDINGS; AND ENVIRONMENTAL REPORT
Section 9.1 Exchange of Obligation of Owner Trustee by the
Lessee. Upon the conditions and as more fully provided in Section 13.1 or
Section 13.2 of the Indenture, each of the Owner Trustee, the Connecticut
Trustee, the Owner Participant, the Remainderman, the Remainderman
Participant, the Indenture Trustee, the Initial Noteholder and the Pass
Through Trustee agrees that if any Lease is terminated pursuant to Section
14 thereof, the Lessee may elect to exchange new unsecured or secured, as
the case may be, full recourse securities of the Lessee for the Related
Notes by giving notice of such exchange to each such party and each such
party will execute and deliver appropriate documentation (i) releasing the
Owner Trustee, the Connecticut Trustee and the Owner Participant from all
obligations with respect to such Notes and the Properties, or obligations
under such Notes and the Related Supplemental Indentures; (ii) to the
extent provided in the Indenture, releasing the security interest in the
Properties; and (iii) taking all such other actions as are reasonably
necessary to permit such exchange by the Lessee and which do not adversely
affect the Remainderman, the Owner Trustee, the Connecticut Trustee or the
Owner Participant (other than to an insignificant extent).
Section 9.2. Funding of the Costs of Modifications.
(a) At the request of the Lessee, the Owner Participant may
finance any Modifications pursuant to Section 8(f)(i) of any Lease through
an Approved Equity Financing.
(b) If the Lessor finances the cost of any Modification pursuant
to Section 8(f)(iii) of a Lease exclusively by the issuance of one or more
series of Additional Notes under the Indenture, such Supplemental Financing
shall be subject to fulfillment of the following conditions:
(i) the Additional Notes shall have a final maturity date no
later than the final maturity date of all Outstanding Related
Notes, and the weighted average life-to-maturity applicable to
all Outstanding Related Notes after the issuance of the
Additional Notes shall not vary from the remaining weighted
average life-to-maturity reflected in the debt amortization
schedule for the Outstanding Related Notes (immediately prior to
the issuance of such Additional Notes) by more than six months;
(ii) appropriate adjustments to Property Cost and the
percentages for Basic Rent, Casualty Value and Termination Value
shall have been agreed to by the Owner Participant and the Lessee
in accordance with the adjustment provisions of Sections 3(e),
3(f) and 8(f) of such Lease to support the amortization of the
Additional Notes issued in respect of such Supplemental
Financing;
(iii) the Lessee shall have paid to the Lessor an amount
equal to all out-of-pocket costs and expenses reasonably incurred
by the Lessor and the Owner Participant not financed as a part of
such Supplemental Financing;
(iv) such Supplemental Financing shall be permitted by
the Indenture;
(v) no Indenture Event of Default, Event of Default or
Special Default shall have occurred and be continuing;
(vi) the Additional Notes shall not constitute recourse
indebtedness to the Owner Participant as defined under then-
current GAAP for leveraged leases;
(vii) such Supplemental Financing shall not require the
transaction effected pursuant to such Lease to be classified by
the Owner Participant as other than a leveraged lease, under then-
current GAAP for leveraged leases;
(viii) all consents and approvals related to the Lessor,
the Lessee or the Lessor Interests required to effect the
issuance of the Additional Notes shall have been obtained;
(ix) after giving effect to such Supplemental Financing,
no Lien (other than Permitted Liens) shall exist upon the Lessor
Interest and the Owner Participant, the Connecticut Trustee, the
Lessor, the Remainderman and the Indenture Trustee shall have
received an endorsement to the title insurance policy for the
Related Property redating such policy as of the date funds are
advanced pursuant to such Supplemental Financing and increasing
the amount of such policy by the amount of Supplemental Financing
and showing no additional exceptions other than Permitted
Exceptions;
(x) the Owner Participant shall have received such
information and copies of such other documents as the Owner
Participant may reasonably request in connection with such
Supplemental Financing;
(xi) the Owner Participant, the Remainderman, the
Connecticut Trustee and the Lessor shall have received favorable
opinions of Owner Participant's Special Counsel, Owner
Participant's Special Local Counsel, Owner Trustee's Counsel, the
Connecticut Trustee's Counsel, Indenture Trustee's Counsel,
Lessee's Counsel and Lessee's Special Counsel, each dated the
date of such Supplemental Financing and addressed to the Owner
Participant and the Lessor, addressing such matters relating to
the Supplemental Financing as the Owner Participant or the Lessor
may reasonably request;
(xii) the Owner Participant shall have received a
favorable opinion from the Owner Participant's Tax Counsel to the
effect that such Supplemental Financing shall not cause any
adverse tax consequences to the Owner Participant (other than
consequences for which the Owner Participant would be indemnified
by the Lessee pursuant to the terms of the Transaction Documents
or of another written undertaking by the Lessee to indemnify the
Owner Participant if the Lessee is Investment Grade (and if the
Lessee is not Investment Grade, in an amount and in a manner
satisfactory to the Owner Participant in its sole discretion);
(xiii) the representations and warranties of the Lessee
set forth in Section 5.1(a) and, assuming they were made in
reference to the Supplemental Financing or to documents required
to be executed or prepared (including amendments to the
Transaction Documents) in connection with the Supplemental
Financing, the representations and warranties set forth in
Sections 5.1(b), (c), (d), (e), (h), (k), (l), (m), (n), (p) and
(q) shall be true and correct in all material respects on and as
of the date of such Supplemental Financing with the same effect
as though made on and as of the date of such Supplemental
Financing and each of the Lessor, the Indenture Trustee and the
Owner Participant shall have received an Officer's Certificate of
the Lessee, dated as of the date of such Supplemental Financing,
as the case may be, to such effect and to the effect that no
Default or Event of Default is in existence or will exist after
taking into account such Supplemental Financing;
(xiv) the ratio of (A) the aggregate principal amount of
all Outstanding Related Notes, including all Additional Notes
being issued in connection with the Modification, to (B) the sum
of the Fair Market Sales Value of the Related Lessor Interest
(determined prior to such modification) and the cost of the
Modification being financed, is not greater than the higher of
(1) 80% or (2) such ratio immediately prior to the issuance of
such Additional Notes;
(xv) the aggregate principal amount of the Additional
Notes being issued in connection with the Modification shall not
exceed 100% of the cost of such Modification;
(xvi) the Additional Notes shall be Investment Grade and
the rating of any Outstanding Notes immediately prior to the
issuance of such Additional Notes shall be confirmed as
Investment Grade; and
(xvii) the payment of Basic Rent under such Lease shall be
adjusted as provided in such Lease.
If the recording or filing of a supplement to the Related Supplemental
Indenture shall be required or, in the reasonable opinion of either the
Owner Participant or the Indenture Trustee or their respective counsel,
advisable to subject to the Lien of the Related Supplemental Indenture any
Modification, the cost of which was financed in whole or in part with
Additional Notes, then, prior to the advance of funds with respect to such
Modification, the Lessee shall prepare and, after the execution and
delivery thereof by the Lessor and the Indenture Trustee, record or file
such supplement to the Related Supplemental Indenture and such other
instruments as may be necessary to confirm that such Modification or
Addition has become subject to the Lien of the Related Supplemental
Indenture.
Section 9.3 Environmental Report. At the expiration or earlier
termination of the Lease Term of any Lease, the Lessee will cause to be
performed a Phase I Environmental Audit of the Related Leased Property, by
a registered professional environmental engineer reasonably acceptable to
the Lessor, and cause a report of the findings thereof to be issued and
delivered to the Lessee, the Lessor, the Owner Participant, Remainderman
and the Indenture Trustee, and, if recommended by such report, the Lessee
will cause to be performed such additional testing and reporting as is
recommended by such report (such report, together with such additional
report, if any, will be collectively referred to herein as the
"Environmental Report"). The Lessee will cause the Environmental Report to
be delivered to the Lessor, the Remainderman and the Indenture Trustee.
The cost of such Environmental Report shall be borne equally by the Lessee
and the Owner Participant.
ARTICLE X
PAYMENT OF EXPENSES
Section 10.1 Transaction Expenses. Subject to the provisions of
Section 10.3, Lessee, in its sole discretion, may elect to pay all or any
portion of the Transaction Expenses (other than fees and expenses of the
Owner Trustee, Owner Participant counsel fees and the fees of the
Appraiser) directly or to have the Owner Trustee pay, with funds to be
provided by the Owner Participant for that purpose, when due, or reimburse
any Person who has previously paid, all or any portion of Transaction
Expenses; provided, that the Lessee will consider in good faith any
reasonable requests of the Owner Participant regarding which Transaction
Expenses, if any, shall be paid by Lessee. Subject to the provisions of
Section 10.3 and to the extent not paid on the Closing Date, if the Lessee
shall have elected to have the Owner Trustee pay all or any portion of the
Transaction Expenses, the Owner Participant shall provide funds to the
Owner Trustee for the timely payment of Transaction Expenses for which it
has received invoices within 10 days, as applicable, after the Closing
Date. Such invoices shall be approved by the Owner Participant (and
reviewed by the Lessee) before presentation for payment. The Owner
Participant shall provide such funds upon presentation of such invoices
promptly, but in no event later than 10 days after such presentation.
Section 10.2 Post-Closing Expenses. The Lessee shall pay, as
Supplemental Rent, (a) the ongoing fees and out-of-pocket expenses
(including reasonable legal fees and expenses) of or incurred by the Owner
Trustee, the Connecticut Trustee, the Remainderman, the Remainderman
Trustee, the Initial Noteholder, the Pass Through Trustee and the Indenture
Trustee, respectively, provided that such fees are in accordance with the
schedules approved in advanced by the Lessee and that such expenses are
reasonably incurred by the party to be reimbursed in connection with its
performance of its duties under the Transaction Documents and (b) all
reasonable fees and out-of-pocket costs and expenses (including reasonable
legal and other professional fees and expenses) incurred by the Owner
Participant, the Pass Through Trustee, the Initial Noteholder, the Owner
Trustee, the Remainderman Participant, the Remainderman Trustee, and the
Indenture Trustee in connection with (i) any breach of Sections 5.1(w) or
6.1(k), any Default, Event of Default or Trigger Event, (ii) the entering
into or giving or withholding of any amendment, modification, supplement,
waiver, termination, approval, consent or other action with respect to any
Transaction Document done at the request of the Lessee or any refunding or
refinancing pursuant to Sections 2.5, 2.6 or 2.7 or action pursuant to
Section 6.2(c) or (iii) any refunding referred to in Section 2.5 or 2.6 (to
the extent not included in the principal amount of the Refinancing Notes)
provided that the Lessee shall be required to pay, as Supplemental Rent,
the fees and expenses of or incurred by any successor Owner Trustee, the
Connecticut Trustee or co-trustee only if the Lessee has approved the
appointment of such successor Owner Trustee, the Connecticut Trustee or co-
trustee, which approval shall not be unreasonably withheld.
Section 10.3 Lessee's Obligation. Notwithstanding Section 10.1,
in the event the transactions contemplated by Section 2.4 shall not be
consummated for any reason, the Lessee shall pay or cause to be paid, and
shall indemnify, defend and hold harmless the Owner Participant, the
Initial Noteholder, the Remainderman, the Remainderman Participant, the
Remainderman Trustee, the Pass Through Trustee, the Indenture Trustee and
the Owner Trustee and the Connecticut Trustee in respect of all Transaction
Expenses; provided that, if such failure to consummate shall result from a
breach by any party (other than the Lessee) of its obligations under the
Transaction Documents or the failure of such party to negotiate in good
faith, then the Lessee shall not be required to indemnify, defend and hold
harmless such party for such Transaction Expenses incurred by it and such
party shall be solely responsible for all Transaction Expenses incurred by
or attributable to it.
ARTICLE XI
LIABILITY OF THE OWNER TRUSTEE
AND OWNER PARTICIPANT; LIABILITY OF REMAINDERMAN TRUSTEE
Section 11.1 Liabilities of the Owner Trustee and the Owner
Participant. The Lessee, the Pass Through Trustee, the Initial Noteholder,
the Remainderman, the Remainderman Participant, the Remainderman Trustee,
the Owner Participant, the Connecticut Trustee and the Indenture Trustee
each agree that the Owner Trustee in its individual capacity shall have no
personal liability whatsoever to the Lessee, the Pass Through Trustee, the
Initial Noteholder, the Pass Through Trustee, the Remainderman, the Owner
Participant, the Connecticut Trustee or the Indenture Trustee or any of
their respective successors and assigns for any claim based on or in
respect of this Agreement or any of the other Transaction Documents or
arising in any way from the transactions contemplated hereby or thereby;
provided, however, that the Owner Trustee shall be liable in its individual
capacity (a) for its own willful misconduct or gross negligence, and to the
Owner Participant for the breach of its obligations to the Owner
Participant in respect of the Trust Agreement and the Trust, (b) for
liabilities that may result from the incorrectness of any representation or
warranty expressly made by it in its individual capacity in Section 5.3, or
in Section 7.1 of the Trust Agreement or from the failure of the Owner
Trustee to perform the covenants and agreements expressly made by it in its
individual capacity as set forth in Section 6.3 hereof, or (c) for any Tax
based on or measured by any fees, commission or compensation received by it
for acting as trustee in connection with any of the transactions
contemplated by the Transaction Documents. It is understood and agreed
that, except as provided in the preceding proviso: (i) the Owner Trustee
shall have no personal liability under any of the Transaction Documents as
a result of acting pursuant to and consistent with one or another of the
Transaction Documents; (ii) all obligations of the Owner Trustee to Lessee,
the Pass Through Trustee, the Initial Noteholder, the Remainderman, the
Owner Participant and the Indenture Trustee are solely nonrecourse
obligations; (iii) all such personal liability of the Owner Trustee is
expressly waived and released as a condition of, and as consideration for,
the execution and delivery of the Transaction Documents by the Owner
Trustee; and (iv) this Agreement is executed and delivered by the Owner
Trustee solely in the exercise of the powers expressly conferred upon it as
the Owner Trustee under the Trust Agreement. The Owner Participant and the
Connecticut Trustee shall not have any obligation to the Lessee, the Owner
Trustee, the Indenture Trustee, the Remainderman, the Initial Noteholder or
the Pass Through Trustee with respect to the transactions contemplated by
the Transaction Documents except those respective obligations of the Owner
Participant and the Connecticut Trustee expressly set forth in the
Transaction Documents to which it is a party or except as set forth in the
instruments and documents delivered in connection therewith to which it is
a party, and the Owner Participant shall not be liable for performance by
any other party hereto of such other party's obligations under the
Transaction Documents except as otherwise so set forth in the Transaction
Documents to which it is a party. Notwithstanding the foregoing provisions
of this Section 11.1, nothing herein shall be deemed to prevent any party
hereto (other than the Owner Participant and the Connecticut Trustee) from
having recourse to and seeking enforcement against the Trust Estate for
performance and observance of covenants, agreements and conditions required
to be performed or observed by the Owner Trustee in this Agreement and the
other Transaction Documents.
Section 11.2 Liabilities of the Remainderman and the Remainderman
Trustee. It is expressly understood and agreed by the parties hereto that,
except as otherwise expressly provided in this Agreement,
(a) this Agreement is executed and delivered on behalf of
the Remainderman by the Remainderman Trustee, not in its individual
capacity but solely as trustee under the Remainderman Trust Agreement, in
the exercise of the power and authority conferred and vested in it
thereunder;
(b) each of the representations, warranties, undertakings,
covenants and agreements herein made on the part of the Remainderman
Trustee (in its capacity as such) is made and intended not as a personal
representation, undertaking or agreement by Remainderman Trustee but is
made and intended for the purpose of binding only the Remainderman;
(c) under no circumstances shall the Remainderman Trustee be
liable in its individual capacity for the payment of any indebtedness or
expenses of or incurred on behalf of the Remainderman Trust or for the
breach or failure of any obligation, representation, warranty, undertaking
or covenant made or undertaken by the Remainderman Trust under this
Agreement or the other Transaction Documents,
provided that this Section 11.2 shall not limit the ability of any Person
to look to the Remainderman Trust Estate for satisfaction of such liability
or responsibility, to the extend provided in the Transaction Documents.
Error! Bookmark not defined.ARTICLE XII
CHANGE OF SITUS OF OWNER TRUST OR CONNECTICUT TRUST
The Owner Participant agrees that if, at any time, the Trust
Estate, the Owner Trustee, the Connecticut Trust Estate or the Connecticut
Trustee becomes subject to any Taxes for which it is indemnified pursuant
to Section 7.2 hereof and if, as a consequence thereof, the Lessee should
request that the situs of the trust be moved to another state in the United
States from the state in which it is then located, the situs of the trust
will be moved and the Owner Participant will take whatever action may be
reasonably necessary to accomplish such removal; provided that (A) the
rights and obligations under the Transaction Documents of the Owner
Participant shall not be altered as a result of the taking of such action;
(B) the Lien of the Indenture on the Indenture Estate shall not be
adversely affected by such action; (C) no Special Default or Event of
Default has occurred and is continuing and no Event of Loss has occurred;
(D) the Owner Participant shall have received an opinion or opinions of
counsel (reasonably satisfactory to the Owner Participant) in scope, form
and substance reasonably satisfactory to the Owner Participant to the
effect that (I) the Trust or the Connecticut Trust, as the case may be as
thus removed, shall remain a validly established trust, (II) any amendments
to the Trust Agreement or the Connecticut Trust Agreement necessitated by
such removal shall have been duly authorized, executed and delivered by the
parties thereto and shall constitute the valid and binding obligations of
such parties, enforceable in accordance with their terms, (III) such
removal will not result in the imposition of, or increase in the amount of,
any Tax for which the Lessee is not required to indemnify the Owner
Participant pursuant to Section 7.2 hereof (taking into account any
additional indemnification satisfactory to the Owner Participant, the
Lessee agrees to provide in connection with such removal), (IV) such
removal will not result in any loss of Interest Deductions, Amortization
Deductions or Depreciation Deductions, result in any Income Inclusion (as
such terms are defined in the Tax Indemnification Agreement) or any other
adverse tax consequence (other than consequences for which the Owner
Participant would be indemnified by the Lessee pursuant to the terms of the
Transaction Documents or of another written undertaking by the Lessee to
indemnify the Owner Participant if the Lessee is Investment Grade (and if
the Lessee is not Investment Grade, in an amount and in a manner
satisfactory to the Owner Participant in its sole discretion), (V) such
removal has not adversely affected the Lien of the Indenture on the
Indenture Estate and the priority of such lien thereon, (VI) substantially
covering the matters set forth in the opinion of the Owner Trustee's
Counsel and the Connecticut Trustee's Counsel delivered pursuant to Section
3.1(t) and (VII) covering such other matters as the Owner Participant may
reasonably request; and (E) the Lessee shall indemnify and hold harmless
the Owner Participant on an After-Tax Basis against any and all Expenses
incurred by the Owner Trustee, the Connecticut Trustee, the Indenture
Trustee and the Owner Participant in connection with such change of situs.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Notices. All communications, declarations, demands,
consents, directions, approvals, instructions, requests and notices
required or permitted by this Agreement shall be in writing and shall be
deemed to have been duly given or made when delivered by hand, or five
Business Days after being sent by registered mail, return receipt
requested, postage prepaid, on the next Business Day when sent by overnight
courier or when transmitted by means of telecopy or other wire transmission
(with request for assurance of receipt in a manner typical with respect to
communications of that type and followed promptly with the original
thereof) in each case addressed as provided in Schedule 10.
Section 13.2 Counterparts. This Agreement may be executed in
any number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one and the
same instrument.
Section 13.3 Amendments. The provisions of this Agreement may
not be waived, altered, modified, amended, supplemented or terminated in
any manner whatsoever except by written instrument signed by (a) in the
case of a waiver, a corporate officer or authorized signatory of the party
against which enforcement of the waiver is sought and (b) in all other
cases, a corporate officer or authorized signatory of each of the parties
hereto.
Section 13.4 Survival. The representations, warranties,
covenants and agreements of the parties contained in this Agreement shall
survive the participation in the fundings under Section 2.1 of this
Agreement and the occurrence of the transactions contemplated by Section
2.4 of this Agreement, in each case subject to, and in accordance with, the
terms of the Transaction Documents, and shall be and continue in effect
notwithstanding any investigation made by the Owner Participant and the
fact that the Owner Trustee, the Connecticut Trustee, the Remainderman, the
Indenture Trustee, the Initial Noteholder, the Pass Through Trustee, the
Owner Participant Parent or the Owner Participant may waive compliance with
any of the other provisions of this Agreement.
Section 13.5 Headings. The division of this Agreement into
Sections, the provision of a table of contents and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.
Section 13.6 Parties in Interest. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
successors and permitted assigns and each Indemnitee and its successors,
permitted assigns, heirs and legal representatives.
Section 13.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO THE CHOICE OF LAW DOCTRINE OF SUCH STATE.
Section 13.8 Severability. Any provision of this Agreement that
may be determined by competent authority to be 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 13.9 Method of Payment. Except as otherwise provided in
any Transaction Document, all amounts required to be paid by any party to
any other party hereunder or under any of the other Transaction Documents
shall be paid in U.S. dollars in immediately available funds no later than
12:00 noon, local time at the place of receipt, on the date such payment
shall be due and payable and shall be paid to such Person as shall be
entitled to receive such payment at such address as such Person may specify
by notice to the parties hereto. If the date on which any payment is due
and payable is not a Business Day, such payment shall be made as aforesaid
on the next succeeding Business Day, with the same force and effect as if
made on the nominal due date. Payments shall in all events only be made
within the continental United States.
Section 13.10 Intent of. The Owner Trustee and the Lessee intend
that each of the Leases be operating leases under California law.
Section 13.11 Confidential Documents. The Owner Participant, the
Owner Participant Parent, the Remainderman, the Lessee, the Owner Trustee,
the Connecticut Trustee, the Pass Through Trustee and the Indenture Trustee
agree that the Lessee or the Owner Participant may require the execution
and delivery of an appropriate confidentiality agreement reasonably
acceptable to the Lessee, the Owner Participant, the Owner Participant
Parent, the Owner Trustee, the Connecticut Trustee, the Remainderman, the
Pass Through Trustee and the Indenture Trustee prior to the release of or
allowance or access to any documents, agreements or information relating to
the Lessee or the Owner Participant, as the case may be, that are
reasonably designated by the Lessee or the Owner Participants as the case
may be, as confidential or proprietary; provided, however, that nothing
herein or in any such confidentiality agreement shall prevent or be
construed to prevent the Owner Participant, the Owner Participant Parent,
the Remainderman, the Lessee, the Owner Trustee, the Connecticut Trustee,
the Pass Through Trustee, or the Indenture Trustee from disclosing any such
document, agreement or information (a) to any Affiliate of such Person or
to any transferee of such Person (or prospective transferee of such Person)
that agrees to be similarly bound or, at the option of the Lessee or the
Owner Participant, as the case may be, to execute and deliver an
appropriate confidentiality agreement, (b) upon the order of any
Governmental Authority having jurisdiction and authority to issue such
order, (c) that is in the public domain other than through any violation
hereof or of any such confidentiality agreement or through any other action
by such Person, or (d) to the auditors or attorneys of such Person provided
such auditors or attorneys agree to maintain the confidentiality of such
document, agreement or information. In the case of disclosure under clause
(b) of the preceding sentence of this Section 13.11, if permitted by such
Governmental Authority, the Owner Participant, the Owner Participant
Parent, the Remainderman, the Lessee, the Owner Trustee, the Connecticut
Trustee, the Pass Through Trustee, or the Indenture Trustee, as the case
may be, before making such disclosure, shall notify the Lessee or the Owner
Participant, in writing before making any such disclosure.
Each of the parties to this Agreement, for itself and for its
respective Affiliates, undertakes and agrees that, except to the extent
required by Applicable Law, it will not issue or release for external
publication any article, advertising, publicity matter or other information
relating to this Agreement or the other Transaction Documents or to the
transactions contemplated hereby or thereby and mentioning or implying the
identity of any party to the Transaction Documents without the prior
written approval of such party, the Lessee and the Owner Participant. To
the extent not disclosed in the Registration Statement, the parties hereto
also agree to keep confidential all information relating to this Agreement
and the other Transaction Documents.
Section 13.12 Jurisdiction.
(a) Any action or proceeding against any of the parties
hereto relating in any way to this Agreement or the other Transaction
Documents may be brought and enforced in the courts of the State of New
York or of the United States for the Southern District of New York, and the
parties hereto irrevocably consent to the jurisdiction of each such court
in respect of any such action or proceeding. Each of the parties hereto
further irrevocably consents to the service of process in any such action
or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, return receipt requested, to such address as
provided for notices hereunder. The foregoing shall not limit the right of
any party to serve process in any other manner permitted by law or to bring
any action or proceeding, or to obtain execution of any judgment, in any
other jurisdiction.
(b) Each of the parties hereto hereby irrevocably waives any
objection that it may now or hereafter have to the laying of venue of any
action or proceeding arising under or relating to this Agreement or any
other Transaction Document in any court located in the Borough of
Manhattan, City and State of New York, and hereby further irrevocably
waives any claim that a court located in the Borough of Manhattan, City and
State of New York is not a convenient forum for any such action or
proceeding.
(c) Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by applicable United States federal and state
law, all immunity (whether on the basis of sovereignty or otherwise) from
jurisdiction, service of process, attachment (both before and after
judgment) and execution to which it might otherwise be entitled in any
action or proceeding relating in any way to this Agreement or any other
Transaction Document in the courts of the State of New York, of the United
States or of any other country or jurisdiction, and each party hereby
waives any right it might otherwise have to raise or claim or cause to be
pleaded any such immunity at or in respect of any such action or
proceeding.
Section 13.13 No Waiver, Remedies. No failure to exercise and no
delay in exercising on the part of any party to this Agreement of any
right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise thereof, or the exercise of any
other right, power or privilege. The rights and remedies provided in this
Agreement are cumulative and not exclusive of any rights or remedies
provided by law.
Section 13.14 Limitation of Liability. It is expressly
understood and agreed by the parties hereto that (a) except as expressly
provided otherwise herein, this Agreement is executed and delivered by
Wilmington Trust Company, not individually or personally but solely as
Indenture Trustee or Pass Through Trustee, as the case may be, in the
exercise of the powers and authority conferred and vested in it as the
Indenture Trustee or Pass Through Trustee, as the case may be; (b) except
as expressly provided otherwise herein, each of the representations,
undertakings and agreements herein made on the part of the Indenture
Trustee and the Pass Through Trustee is made and intended not as personal
representations, undertakings and agreements by Wilmington Trust Company
but is made and intended for the purpose of binding only the Indenture
Estate or the Pass Through Estate, as the case may be; (c) except as
expressly provided otherwise herein, nothing herein contained shall be
construed as creating any liability on Wilmington Trust Company,
individually or personally, to perform any covenant of the Indenture
Trustee or the Pass Through Trustee, as the case may be, either expressed
or implied contained herein; and (d) under no circumstances shall
Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Indenture Trustee or the Pass Through
Trustee, in each case, solely in its capacity as Indenture Trustee or Pass
Through Trustee, as the case may be, or be liable for the breach or failure
of any obligation, representation, warranty or covenant made or undertaken
by the Indenture Trustee or the Pass Through Trustee, in each case, solely
in its capacity as Indenture Trustee or Pass Through Trustee, as the case
may be, under this Agreement or the other Transaction Documents.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed in New York, New York, by their respective officers
thereunto duly authorized as of the day and year first above written.
SMITH'S FOOD & DRUG CENTERS, INC.
By:
Name:
Title:
PMCC LEASING CORPORATION
By:
Name:
Title:
PHILIP MORRIS CAPITAL CORPORATION
By:
Name:
Title:
STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, NATIONAL ASSOCIATION, not in
its individual capacity (except as
expressly provided herein) but solely as
Owner Trustee under the Trust Agreement
By:
Name:
Title:
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION, not in
its individual capacity (except as
expressly provided herein) but solely as
Connecticut Trustee under the
Connecticut Trust Agreement
By:
Name:
Title:
WILMINGTON TRUST COMPANY, not in its
individual capacity (except as expressly
provided herein) but solely as Indenture
Trustee under the Indenture
By:
Name:
Title:
CALIFORNIA-RELCO LIMITED PARTNERSHIP, as
Remainderman Participant
By:
Name:
Title:
CALIFORNIA-RELCO LIMITED PARTNERSHIP
TRUST, as Remainderman
By Wilmington Trust Company, not in its
individual capacity, but solely as
Remainderman Trustee
By:
Name:
Title:
WILMINGTON TRUST COMPANY, as Remainderman
Trustee
By:
Name:
Title:
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Pass
Through Trustee under the Pass Through
Trust Agreement
By:
Name:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Initial
Noteholder
By:
Name:
Title:
SCHEDULE 1
FORMS OF OPINIONS TO BE DELIVERED ON THE DEBT REFINANCING DATE
The form and substance of opinions to be delivered by the
respective counsel shall be mutually and reasonably agreed upon on or prior
to the Debt Refinancing Date.
SCHEDULE 2
RECORDING AND FILING REQUIREMENTS
The following documents are to be recorded in the Official
Records in the counties in which the properties are located.
The documents are to be recorded in the order in which they are
listed with respect to each property listed below.
Glendora, California (Los Angeles County; Store No. 751)
1. Grant Deed, dated as of December 21, 1993, from Smith's
Food & Drug Centers, Inc. ("Smith's") to State Street Bank and
Trust Company of California, National Association, as Owner
Trustee ("Owner Trustee"), conveying an estate for years in the
land.
2. Grant Deed, dated as of December 21, 1993, from Smith's
to Owner Trustee, conveying a fee simple interest in the
improvements.
3. Grant Deed, dated as of December 21, 1993, from Smith's
to California-Relco Limited Partnership Trust, as Remainderman
("Remainderman"), conveying a remainder interest in the land,
subject to the estate for years.
4. Option Agreement, dated as of December 21, 1993, from
Remainderman to Owner Trustee.
5. Indenture Supplement, Deed of Trust, Assignment of
Leases and Rents and Security Agreement, dated as of December 21,
1993, between Owner Trustee and Wilmington Trust Company, as
Indenture Trustee ("Indenture Trustee").
6. Memorandum of Lease, dated as of December 21, 1993,
between Smith's, as lessee, and Owner Trustee, as lessor.
7. Tripartite Agreement, dated as of December 21, 1993,
among Smith's, Owner Trustee and Remainderman Trustee.
8. Preliminary Change of Ownership Reports with respect to
Documents 1, 2, 3, 5 and 6, above.
LaHabra, California (Orange County; Store No. 724)
1. Grant Deed, dated as of December 21, 1993, from Smith's
to Owner Trustee, conveying an estate for years in the land.
2. Grant Deed, dated as of December 21, 1993, from Smith's
to Owner Trustee, conveying a fee simple interest in the
improvements.
3. Grant Deed, dated as of December 21, 1993, from Smith's
to Remainderman Trustee, conveying a remainder interest in the
land, subject to the estate for years.
4. Option Agreement, dated as of December 21, 1993, from
Remainderman to Owner Trustee.
5. Indenture Supplement, Deed of Trust, Assignment of
Leases and Rents and Security Agreement, dated as of December 21,
1993, between Owner Trustee and Indenture Trustee.
6. Memorandum of Lease, dated as of December 21, 1993,
between Smith's, as lessee, and Owner Trustee, as lessor.
7. Tripartite Agreement, dated as of December 21, 1993,
among Smith's, Owner Trustee and Remainderman Trustee.
8. Preliminary Change of Ownership Reports with respect to
Documents 1, 2, 3, 5 and 6, above.
Riverside, California (Riverside County; Distribution Center)
1. Grant Deed, dated as of December 21, 1993, from Smith's
to Owner Trustee ("Owner Trustee"), conveying an estate for years
in the land.
2. Grant Deed, dated as of December 21, 1993, from Smith's
to Owner Trustee, conveying a fee simple interest in the
improvements.
3. Grant Deed, dated as of December 21, 1993, from Smith's
to Remainderman, conveying a remainder interest in the land,
subject to the estate for years.
4. Option Agreement, dated as of December 21, 1993, from
Remainderman to Owner Trustee.
5. Indenture Supplement, Deed of Trust, Assignment of
Leases and Rents and Security Agreement, dated as of December 21,
1993, between Owner Trustee and Indenture Trustee.
6. Memorandum of Lease, dated as of December 21, 1993,
between Smith's, as lessee, and Owner Trustee, as lessor.
7. Tripartite Agreement, dated as of December 21, 1993,
among Smith's, Owner Trustee and Remainderman Trustee.
8. Preliminary Change of Ownership Reports with respect to
Documents 1, 2, 3, 5 and 6, above.
Pomona, California (Los Angeles County; Store No. 747)
1. Grant Deed, dated as of December 21, 1993, from Smith's
to Owner Trustee, conveying an estate for years in the land.
2. Grant Deed, dated as of December 21, 1993, from Smith's
to Owner Trustee, conveying a fee simple interest in the
improvements.
3. Grant Deed, dated as of December 21, 1993, from Smith's
to Remainderman, conveying a remainder interest in the land,
subject to the estate for years.
4. Option Agreement, dated as of December 21, 1993, from
Remainderman to Owner Trustee.
5. Indenture Supplement, Deed of Trust, Assignment of
Leases and Rents and Security Agreement, dated as of December 21,
1993, between Owner Trustee and Indenture Trustee.
6. Memorandum of Lease, dated as of December 21, 1993,
between Smith's, as lessee, and Owner Trustee, as lessor.
7. Tripartite Agreement, dated as of December 21, 1993,
among Smith's, Owner Trustee and Remainderman Trustee.
8. Preliminary Change of Ownership Reports with respect to
Documents 1, 2, 3, 5 and 6, above.
Bakersfield, California (Kern County; Store No. 711)
1. Grant Deed, dated as of December 21, 1993, from Smith's
to Owner Trustee, conveying an estate for years in the land.
2. Grant Deed, dated as of December 21, 1993, from Smith's
to Owner Trustee, conveying a fee simple interest in the
improvements.
3. Grant Deed, dated as of December 21, 1993, from Smith's
to Remainderman, conveying a remainder interest in the land,
subject to the estate for years.
4. Option Agreement, dated as of December 21, 1993, from
Remainderman to Owner Trustee.
5. Indenture Supplement, Deed of Trust, Assignment of
Leases and Rents and Security Agreement, dated as of December ,
1993, between Owner Trustee and Indenture Trustee.
6. Memorandum of Lease, dated as of December 21, 1993,
between Smith's, as lessee, and Owner Trustee, as lessor.
7. Tripartite Agreement, dated as of December 21, 1993,
among Smith's, Owner Trustee and Remainderman Trustee.
8. Preliminary Change of Ownership Reports with respect to
Documents 1, 2, 3, 5 and 6, above.
Bakersfield, California (Kern County; Store No. 720)
1. Grant Deed, dated as of December 21, 1993, from Smith's
to Owner Trustee ("Owner Trustee"), conveying an estate for years
in the land.
2. Grant Deed, dated as of December 21, 1993, from Smith's
to Owner Trustee, conveying a fee simple interest in the
improvements.
3. Grant Deed, dated as of December 21, 1993, from Smith's
to Remainderman, conveying a remainder interest in the land,
subject to the estate for years.
4. Option Agreement, dated as of December 21, 1993, from
Remainderman to Owner Trustee.
5. Indenture Supplement, Deed of Trust, Assignment of
Leases and Rents and Security Agreement, dated as of December 21,
1993, between Owner Trustee and Indenture Trustee.
6. Memorandum of Lease, dated as of December 21, 1993,
between Smith's, as lessee, and Owner Trustee, as lessor.
7. Tripartite Agreement, dated as of December 21, 1993,
among Smith's, Owner Trustee and Remainderman Trustee.
8. Preliminary Change of Ownership Reports with respect to
Documents 1, 2, 3, 5 and 6, above.
Grover Beach, California (San Luis Obispo County; Store No. 760)
1. Grant Deed, dated as of December 21, 1993, from Smith's
to Owner Trustee, conveying an estate for years in the land.
2. Grant Deed, dated as of December 21, 1993, from Smith's
to Owner Trustee, conveying a fee simple interest in the
improvements.
3. Grant Deed, dated as of December 21, 1993, from Smith's
to Remainderman Trustee, conveying a remainder interest in the
land, subject to the estate for years.
4. Option Agreement, dated as of December 21, 1993, from
Remainderman to Owner Trustee.
5. Indenture Supplement, Deed of Trust, Assignment of
Leases and Rents and Security Agreement, dated as of December 21,
1993, between Owner Trustee and Indenture Trustee.
6. Memorandum of Lease, dated as of December 21, 1993,
between Smith's, as lessee, and Owner Trustee, as lessor.
7. Tripartite Agreement, dated as of December 21, 1993,
among Smith's, Owner Trustee and Remainderman Trustee.
8. Preliminary Change of Ownership Reports with respect to
Documents 1, 2, 3, 5 and 6, above.
Palmdale, California (Los Angeles County, Store No. ___)
1. Grant Deed, dated as of March 1, 1994, from Smith's to
Owner Trustee, conveying an estate for years in the land.
2. Grant Deed, dated as of March 1, 1994, from Smith's to
Owner Trustee, conveying a fee simple interest in the
improvements.
3. Grant Deed, dated as of March 1, 1994, from Smith's to
Remainderman Trustee, conveying a remainder interest in the land,
subject to the estate for years.
4. Option Agreement, dated as of March 1, 1994, from
Remainderman to Owner Trustee.
5. Indenture Supplement, Deed of Trust, Assignment of
Leases and Rents and Security Agreement, dated as of March 1,
1994, between Owner Trustee and Indenture Trustee.
6. Memorandum of Lease, dated as of March 1, 1994, between
Smith's, as lessee, and Owner Trustee, as lessor.
7. Tripartite Agreement, dated as of March 1, 1994, among
Smith's, Owner Trustee and Remainderman Trustee.
8. Preliminary Change of Ownership Reports with respect to
Documents 1, 2, 3, 5 and 6, above.
Hemet, California (Riverside County, Store No. ___)
1. Grant Deed, dated as of March 1, 1994, from Smith's to
Owner Trustee, conveying an estate for years in the land.
2. Grant Deed, dated as of March 1, 1994, from Smith's to
Owner Trustee, conveying a fee simple interest in the
improvements.
3. Grant Deed, dated as of March 1, 1994, from Smith's to
Remainderman Trustee, conveying a remainder interest in the land,
subject to the estate for years.
4. Option Agreement, dated as of March 1, 1994, from
Remainderman to Owner Trustee.
5. Indenture Supplement, Deed of Trust, Assignment of
Leases and Rents and Security Agreement, dated as of March 1,
1994, between Owner Trustee and Indenture Trustee.
6. Memorandum of Lease, dated as of March 1, 1994, between
Smith's, as lessee, and Owner Trustee, as lessor.
7. Tripartite Agreement, dated as of March 1, 1994, among
Smith's, Owner Trustee and Remainderman Trustee.
8. Preliminary Change of Ownership Reports with respect to
Documents 1, 2, 3, 5 and 6, above.
SCHEDULE 3
GOVERNMENTAL ACTION
Certificates of Occupancy in respect of each Leased Property
SCHEDULE 4
CONSENTS AND APPROVALS
None required as of the Closing Date
SCHEDULE 5
[INTENTIONALLY OMITTED]
SCHEDULE 6
[INTENTIONALLY OMITTED]
SCHEDULE 7
FORMS OF OPINIONS TO BE DELIVERED ON THE CLOSING DATE
SEE ATTACHED
SCHEDULE 8
LITIGATION
None
SCHEDULE 9
LESSEE'S PROPERTY
Lessee's Property shall include all trade fixtures, personal
property, machinery, equipment and the like located on or in, or attached
to, any of the Properties except for such property as has been conveyed to
the Owner Trustee pursuant to the Improvements Deeds and all other
fixtures, if any, not included in the Appraisal.
SCHEDULE 10
NOTICES
(1) Lessee:
Smith's Food & Drug Centers, Inc.
1550 South Redwood Road
Salt Lake City, UT 84104
Attn: General Counsel
(2) Owner Participant:
PMCC Leasing Corporation
800 Westchester Avenue
Rye Brook, NY 10573-1031
Attn: Senior Vice President - Lease Financing
(3) Owner Participant Parent:
Philip Morris Capital Corporation
800 Westchester Avenue
Rye Brook, NY 10573-1031
Attn: Senior Vice President - Lease Financing
(4) Owner Trustee:
State Street Bank and Trust Company
of California, National Association
c/o State Street Bank and Trust Company of Connecticut,
National Association
750 Main Street
Hartford, CT 06103
Attn: Corporate Trust Administration
(5) Connecticut Trustee:
State Street Bank and Trust Company
of Connecticut, National Association
750 Main Street
Hartford, CT 06103
Attn: Corporate Trust Administration
(6) Remainderman Participant:
California-Relco Limited Partnership
c/o Relco Inc.
3 Stamford Landing
46 Southfield Avenue
Stamford, CT 06902
(7) Remainderman:
California-Relco Limited Partnership Trust
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attn: Corporate Trust Department
(8) Remainderman Trustee, Indenture Trustee and Pass Through Trustee
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attn: Corporate Trust Department
(9) Initial Noteholder:
Bank of America National Trust and Savings Association
555 California Street
41st Floor
San Francisco, CA 94104
Attn: Credit Products Group
ANNEX I
BASIC RENT, CASUALTY VALUE AND TERMINATION VALUE
ADJUSTMENTS ON OUTSIDE DATE
Pursuant to Section 2.7(c) of the Participation Agreement, if the
Trigger Event shall have occurred, Basic Rent, Casualty Value and
Termination Value under each Lease shall be adjusted as set forth in this
Annex I.
Each adjustment shall take into account the amount of Related
Transaction Expenses and the actual amount and timing of all previous
Transaction Expenses and with respect to the debt portion of the
transaction, that (a) there will be no Debt Refinancing; (b) the assumed
interest rate on the Related Outstanding Notes shall be as follows:
(i) during the period commencing on or after the Closing Date
and ending prior to or on, but excluding, the sixty (60) days
after the Closing Date, LIBOR plus sixty (60) basis points,
(ii) during the period commencing on or after the date sixty
(60) days after the Closing Date and ending prior to or on, but
excluding, the date one hundred twenty (120) days after the
Closing Date, LIBOR plus one hundred twenty (120) basis points,
(iii) during the period commencing on or after the date one
hundred twenty (120) days after the Closing Date and ending
prior to or on, but excluding, the date one hundred eighty (180)
days after the Closing Date, LIBOR plus two hundred forty (240)
basis points,
(iv) during the period commencing on or after the date one
hundred eighty (180) days after the Closing Date and ending
prior to or on, but excluding, the date two hundred seventy
(270) days after the Closing Date, LIBOR plus three hundred
seventy-five (375) basis points,
(v) during the period commencing on or after the date two
hundred seventy (270) days after the Closing Date and ending
prior to or on, but excluding, the date three hundred sixty
(360) days after such date, the higher of LIBOR and the Treasury
Rate applicable to the Series J Notes plus five hundred (500)
basis points,
(vi) during the period commencing on or after the last date of
the last applicable interest period to which clause (v) applies
and ending prior to or on, but excluding, the date three hundred
sixty (360) days after such date, the higher of LIBOR and the
Treasury Rate applicable to the Series J Notes plus six hundred
(600) basis points, and
(vii) during the period commencing on or after the last date of
the last applicable interest period to which clause (vi) applies and ending
prior to or on, but excluding, the date on which the principal amount of
such Series J Notes shall have been paid in full, the higher of LIBOR and
the Treasury Rate applicable to the Series J Notes plus seven hundred (700)
basis points, provided, however, that if on the date occurring 180 days
after the Closing Date, the Series J Notes to be issued shall have received
a rating of lower than "Baa2" from Moody's or a rating of "BBB" from
Standard & Poor's, the margin added in clause (iv) shall be five hundred
(500) basis points, the margin in clause (v) shall be six hundred (600)
basis points, and the margin in clause (vi) shall be seven hundred (700)
basis points; and (c) all interest accrued on the Related Outstanding Notes
shall not accrete into the Relevant Principal Amount of any Notes, such
that the principal amount of the Notes at all times during the transaction
shall be the Outstanding principal amount of the Series J Notes from time
to time.
Each installment of Basic Rent due on a Basic Rent Payment Date
shall be an amount equal to the sum of the Fixed Amount and the Variable
Amount in respect of the Related Property Cost.
As used herein, the following terms shall have the meanings given
below and similar terms with similar meaning shall be incorporated into the
Definitions Appendix of each Transaction Document.
"Fixed Amount" shall mean the product of (A) the Related Property
Cost and (B) the amount set forth under the column entitled "Applicable
Percentage" set forth opposite the relevant Basic Rent Payment Date, in
advance or arrears, all of which shall be set forth on a schedule to be
prepared by a Qualified Investment Banking Firm.
"Treasury Rate" shall mean as of the first day of any interest
period, the yield to maturity of, and resulting form the bidding for, the
most recently auctioned United States Treasury securities with maturities
most closely corresponding to (interpolating between the maturities next
succeeding and next preceding) the remaining maturity of the affected loan
(such yield to be rounded, if necessary, to the nearest 1/100 of 1%) as
displayed on Telerate Page 7677 or, if such service no longer displays any
such quote, as quoted by two reputable dealers in United States Treasury
securities selected by the Initial Noteholder, in either case at
approximately 11:00 a.m. New York time on such day. Interest periods will
be defined by the Lessee and will be for 1, 2, 3 or 6 months or any other
period as mutually agreed.
"Variable Amount" shall mean on any Basic Rent Payment Date, the
aggregate amount of interest due and payable on the Related Outstanding
Notes, as shall have accrued from the preceding Series J Interest Payment
Date (or if there is no preceding Series J Interest Payment Date, the date
on which interest shall have commenced to accrue, to the extent such
interest remains unpaid) to the Series J Interest Payment Date
corresponding to the relevant Basic Rent Payment Date.
ANNEX II
ADDITIONAL LESSEE COVENANTS
Pursuant to Section 2.7(e), if the Trigger Event shall have
occurred, the Lessee shall covenant and agree, as of the Outside Date and
only for so long as any Series J Notes shall be Outstanding, as follows
(covenants and agreements collectively, "Additional Lessee Covenants"):
Section 1.1 Consolidated Tangible Net Worth. After the Outside
Date Lessee will at all times keep and maintain Consolidated Tangible Net
Worth at an amount not less than the sum of (a) $350,000,000 plus (b) 20%
of Consolidated Net Income computed on a cumulative basis for each of the
elapsed fiscal years ending after December 28, 1991; provided that
notwithstanding that Consolidated Net Income for any such elapsed fiscal
year may be a deficit figure, no reduction as a result thereof shall be
made in the sum to be maintained pursuant hereto.
Section 1.2 Limitations on Indebtedness. (a) The Lessee will
not create, assume, guarantee or otherwise incur or in any manner be or
become liable in respect of any Funded Debt and will not permit any
Restricted Subsidiary to, create, assume, guarantee or otherwise incur or
in any manner be or become liable in respect of any Indebtedness, except:
(1) Funded Debt evidenced by the Other BA Notes;
(2) Funded Debt of the Lessee and Indebtedness of
Restricted Subsidiaries outstanding as of December 1, 1993;
(3) additional Funded Debt of the Lessee and Indebtedness
of its Restricted Subsidiaries provided that at the time of creation,
issuance, assumption, guarantee or incurrence thereof and after giving
effect thereto and to the application of the proceeds thereof:
(i) the ratio of Net Income Available for
Fixed Charges for the immediately preceding four
consecutive fiscal quarter period to Pro Forma Fixed
Charges for such four consecutive fiscal quarter period
(assuming such additional Funded Debt to be so created,
issued, assumed, guaranteed or incurred is to be
outstanding for the entirety of such four fiscal quarters)
shall be not less than 1.45 to 1.00;
(ii) in the case of the issuance of any Funded
Debt of the Lessee secured by Liens solely permitted by
Section 1.3(b) or the issuance of Indebtedness of a
Restricted Subsidiary (other than Indebtedness of a
Restricted Subsidiary secured by Liens permitted by Section
1.3(a), the sum of (A) all Funded Debt of the Lessee
secured by Liens solely permitted by Section 1.3(b) and (B)
the aggregate amount of all Indebtedness of Restricted
Subsidiaries incurred in accordance with the provisions of
this clause (ii) would not exceed 10% of Consolidated
Tangible Capitalization; and
(iii) no Default or Event of Default under the
Other BA Agreement would exist;
(4) Subordinated Funded Debt of the Lessee to a Wholly-
owned Restricted Subsidiary; and
(5) Funded Debt of a Restricted Subsidiary to the Lessee or
to another Restricted Subsidiary.
(b) Funded Debt issued or incurred in accordance with the
limitations of Section 1.2(a)(2) may be renewed, extended or refunded
(without any increase in principal amount remaining unpaid at the time of
such renewal, extension or refunding), provided that at the time of such
renewal, extension of refunding and after giving effect thereto (1) no
Default or Event of Default would exist and (2) and the Company would be
permitted by the provisions of Section 1.2(a)(3)(i) to incur at least $1.00
of additional Funded Debt.
(c) The Lessee may acquire any corporation with existing
Indebtedness and designate such corporation as a Restricted Subsidiary,
provided that at the time of acquisition of such corporation and
immediately after giving effect thereto (1) no Default or Event of Default
would exist and (2) the Lessee would be permitted by the provisions of
Section 1.2(a)(3)(i) to incur at least $1.00 of additional Funded Debt.
Section 1.3 Limitation on Liens. The Lessee will not, and will
not permit any Restricted Subsidiary to, create or incur, or suffer to be
incurred or to exist, any Lien on its or their property or assets, whether
now owned or hereafter acquired, or upon any income or profits therefrom,
or transfer any property for the purpose of subjecting the same to the
payment of obligations in priority to the payment of its or their general
creditors, or acquire to agree to acquire, or permit any Restricted
Subsidiary to acquire, any property or assets upon conditional sales
agreements or other title retention devices, except:
(a) Liens created or incurred after December 1, 1992 given to
secure the payment of the purchase price incurred in connection with the
acquisition, construction or improvement of fixed assets useful and
intended to be used in carrying on the business of the Company or a
Restricted Subsidiary, including Liens existing on such fixed assets at the
time of acquisition thereof or at them time of acquisition by the Lessee or
a Restricted Subsidiary of any business entity then owning such fixed
assets, whether or not such existing Liens were given to secure the payment
of the purchase price of the fixed assets to which they attach, so long as
such existing Liens were not incurred, extended or renewed in contemplation
of such acquisition, provided that (1) the Lien shall attach solely to the
fixed assets acquired, purchased, constructed or improved, (2) such Lien
shall have been created or incurred within 270 days of the date of
acquisition or purchase or the date of completion of construction or
improvements, as the case may be, (3) at the time of acquisition,
construction or improvement of such fixed assets, the aggregate amount
remaining unpaid on all Indebtedness secured by Liens on such fixed assets,
whether or not assumed by the Lessee or a Restricted Subsidiary, shall not
exceed an amount equal to the lesser of the total purchase price or fair
market value at the time of acquisition of such fixed assets (as determined
in good faith by the board of directors of the Lessee), and (4) all such
Indebtedness shall have been incurred within the limitations provided in
Section 1.2(a)(3)(i);
(b) Liens created or incurred after December 30, 1992 given to
secure Funded Debt of the Lessee or Indebtedness of any Restricted
Subsidiary in addition to the Liens permitted by the preceding clause (a)
hereof; provided that all of such Indebtedness shall have been incurred
within the limitations provided in Section 1.2 (a)(3)(i), (ii) and (iii).
As used herein, the following terms shall have the meanings given
to such terms as set forth below:
"BA Leases" shall mean any lease of real property (other than a
Capitalized Lease and any lease between the Lessees and a Restricted
Subsidiary or between any Restricted Subsidiaries) regardless of the
duration of the term thereof and any lease of personal property (other than
a Capitalized Lease and any lease between the Lessee and a Restricted
Subsidiary or between any Restricted Subsidiaries) have an original term,
including any period for which the lease may be renewed or extended at the
option of the lessor, of more than three years.
"Capitalized Lease" shall mean any lease the obligation for
Rentals with respect to which is required to be capitalized on a
consolidated balance sheet of the Lessee and its subsidiaries in accordance
with GAAP.
"Consolidated Net Income" for any period shall mean the gross
revenues of the Lessee and its Restricted Subsidiaries for such period less
all expenses and other proper charges (including taxes on income),
determined on a consolidated basis after eliminating earnings or losses
attributable to outstanding minority interests, but excluding in any event:
(a)any gains or losses on the sale or other disposition of
Investments or fixed or capital assets, and any taxes on
such excluded gains and any tax deductions or credits on
accounts of any such excluded losses;
(b)the proceeds of any life insurance policy;
(c)net earnings and losses of any Restricted Subsidiary
accrued prior to the date it became a Restricted
Subsidiary;
(d)net earnings and losses of any corporation (other than a
Restricted Subsidiary); substantially all the assets of
which have been acquired in any manner by the Lessee or any
Restricted Subsidiary, realized by such corporation prior
to the date of such acquisition;
(e)net earnings and losses of any corporation (other than a
Restricted Subsidiary); with which the Lessee or a
Restricted Subsidiary shall have consolidated or which
shall have merged into or with the Lessee or a Restricted
Subsidiary prior to the date of such consolidation or
merger.
(f)net earnings of any business entity (other than a
Restricted Subsidiary) in which the Lessee or any
Restricted Subsidiary has an ownership interest unless such
net earnings shall have actually been received by the
Lessee or such Restricted Subsidiary in the form of cash
distributions;
(g)any portion of the net earnings of any Restricted
Subsidiary which for any reason is unavailable for payment
of dividends to the Lessee or any other Restricted
Subsidiary;
(h)earnings resulting from any reappraisal, revaluation or
write-up of assets;
(i)any deferred or other credit representing any excess of
the equity in any Subsidiary at the date of acquisition
thereof over the amount invested in such Subsidiary;
(j)any gain arising from the acquisition of any Securities
of the Lessee or any Restricted Subsidiary;
(k)any reversal of any contingency reserve, except to the
extent that provision for such contingency reserve shall
have been made from income arising during such period; and
(l)any other extraordinary gain or loss.
"Consolidated Net Worth" shall mean, as of the date of any
determination thereof, the amount of the capital stock accounts (net of
treasury stock, at cost) plus (or minus in the case of a deficit) the
surplus and retained earnings of the Lessee and its Restricted
Subsidiaries.
"Consolidated Tangible Net Worth" shall mean, as of the date of
any determination thereof, the sum of:
(a)Consolidated Net Worth;
Minus
(b)the net book value, after deducting any reserves
applicable thereto, of all items of the following character
which are included in the assets of the Lessee and its
Restricted Subsidiaries, to wit:
(1) the incremental increase in an
asset resulting from any reappraisal, revaluation or
write-up of assets; and
(2) (i) unamortized debt discount and
expense and (ii) goodwill, organization or experimental
expenses, patents, patent applications, permits,
trademarks, trade names, copyrights, licenses, research
and development expenses, franchises and other like
intangibles acquired by the Lessee or any of its
Restricted Subsidiaries after the Closing Date (other
than existing intangibles);
all determined in accordance with GAAP.
"Funded Debt" of any Person shall mean, without duplication, (a)
all Indebtedness of such Person for borrowed money or which has been
incurred in connection with the acquisition of assets in each case having a
final maturity of one or more than one year from the date or origin thereof
(or which is renewable or extendible at the option of the obligor for a
period or periods more than one year from the date of origin), including
all payments in respect thereof that are required to be made within one
year from the date of any determination of Funded Debt, whether or not the
obligation to make such payments shall constitute a current liability of
the obligor under GAAP, (b) all Rentals payable in respect of capitalized
leases of such Person, (c) all Guaranties by such Person and (d) all
letters of credit by such Person (other than letters of credit used to
finance purchases of inventory in the ordinary course of business or used
to finance the cost of construction of improvements to property which
property is otherwise subject to a construction contract).
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing, or in effect
guaranteeing, any Indebtedness, dividend or other obligation of any other
Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred through
an agreement, contingent or otherwise, by such Person: (a) to purchase
such Indebtedness or obligation or any property or assets constituting
security therefor, (b) to advance or supply funds (1) for the purchase or
payment of such Indebtedness or obligation, (2) to maintain working capital
or other balance sheet conditions or otherwise to advance or make available
funds for the purchase or payment of such Indebtedness or obligation, (c)
to lease property or to purchase Securities or other property or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of the primary obligor to make payment of the
Indebtedness or obligation, or (d) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under the Other BA
Agreement, a Guaranty in respect of any Indebtedness for borrowed money
shall be deemed to be Indebtedness equal to the principal amount of such
Indebtedness for borrowed money which has been guaranteed, and a Guaranty
in respect of any other obligation or liability or any dividend shall be
deemed to be Indebtedness equal to the maximum aggregate amount of such
obligation, liability or dividend.
"Indebtedness" of any Person shall mean and include all
obligations of such Person which in accordance with GAAP shall be
classified upon a balance sheet of such Person as liabilities of such
Person, and in any event shall include all (a) obligations of such Person
for borrowed money evidenced by bonds, debentures, notes or similar
Securities or which has been incurred in connection with the acquisition of
property or assets; (b) obligations secured by any Lien upon property,
assets or services owned by such Person, even though such Person has not
assumed or become liable for the payment of such obligations, (c)
obligations created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person,
notwithstanding the fact that the rights and remedies of the seller, lender
or lessor under such agreement in the event of default are limited to
repossession or sale of property, (d) Rentals payable in respect to
Capitalized Leases, (e) letters of credit by such Person (other than
letters of credit used to finance purchases of inventory in the ordinary
course of business or used to finance the cost of construction of
improvements to property which property is otherwise subject to a
construction contract), and (f) Guaranties of obligations of others of the
character referred to in this definition.
"Investments" shall mean all investments, in cash or by delivery
of property made, directly or indirectly, in any Person, whether by
acquisition of shares of capital stock, Indebtedness or other obligations
or Securities or any loan, advance, capital contribution or otherwise.
"Net Income Available for Fixed Charges" for any period shall
mean the sum of (a) Consolidated Net Income during such period plus (to the
extent deducted in determining Consolidated Net Income), (b) all provisions
for any Federal, state or other income taxes made by the Lessee and its
Restricted Subsidiaries during such period and (c) Fixed Charges of the
Lessee and its Restricted Subsidiaries during such period.
"Other BA Agreement" shall mean that certain Note Agreement dated
as of December 15, 1992 by the Lessee with
"Other BA Notes" shall mean the "Notes" under the Other BA
Agreement.
"Pro Forma Fixed Charges" for any period shall mean, as of the
date of any determination thereof, the maximum aggregate amount of Fixed
Charges which would have become payable by the Company and its Restricted
Subsidiaries in such period determined on a pro forma basis giving effect
as of the beginning of such period to the incurrence of any Funded Debt
thereof (including Rentals on Capitalized BA Leases) and the concurrent
retirement of outstanding Funded Debt or termination of any Capitalized BA
Leases thereof.
"Rentals" shall mean and include as of the date of any
determination thereof all fixed payments (including as such all payments
which the lessee is obligated to make to the lessor on termination of a
Lease or surrender of the property) payable by the Lessee or a Restricted
Subsidiary, a lessee or sublessee under a Lease of real or personal
property (less, in the case of any determination of Fixed Charges, any
rents received by the Lessee or such Restricted Subsidiary as sublessor
under any sublease of the same such real or personal property). Fixed
rents under any so-called "percentage leases" shall be computed solely on
the basis of the minimum rents, if any, required to be paid by the lessee
regardless of sales volume or gross revenues.
"Restricted Subsidiary" shall mean such subsidiary (a) 80% or
more (by number of votes) of the Voting Stock of which is legally and
beneficially owned by the Lessee, (b) which conducts substantially all of
its business and has substantially all of its assets within the United
States of America, (c) which is organized under the laws of the United
States or any State thereof and (d) which has not been designated as an
unrestricted subsidiary.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 133, as amended.
"Subordinated Funded Debt" shall mean all unsecured Funded Debt
of the Company which (a) has a final maturity later than May 1, 2010, (b)
is not subject to repayment prior to May 1, 2010, whether by means of a
sinking fund, periodic maturities, required prepayments or other analogous
payment or otherwise, (c) by its express terms prohibits optional
prepayments in whole or in part prior to May 1, 2010 and (d) is at all
times evidenced by a written instrument or instruments containing
subordination provisions substantially in the form set forth in Exhibit F
attached to the Other BA Agreement providing for the subordination thereof
to other Indebtedness of the Company, including, without limitation, the
Other BA Notes, or such other provision as may be approved in writing by
the Holders of not less than 100% in aggregate principal amount of
outstanding Other BA Notes.
"Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled
to elect a majority of the corporate directors (or Persons performing
similar functions).
"Wholly-owned" when used in connection with any Subsidiary shall
mean a Subsidiary of which all of the issued and outstanding shares of
stock (except shares required as directors' qualifying shares) and all
Indebtedness for borrowed money of such Subsidiary shall be owned by the
Lessee and/or one or more of its Wholly-owned Subsidiaries.
Notwithstanding anything to the contrary, the Additional Lessee
Covenants shall be of no force and effect until the Trigger Event shall
have occurred. After any refinancing pursuant to Section 2.7, any
Additional Lessee Covenants then in effect shall cease to be in force and
effect.
To fix the table of contents replace [Center] with nothing and do the same
for the underline and bold.
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS 4
ARTICLE II
PARTICIPATION IN THE SALE AND LEASE OF THE PROPERTIES 5
Section 2.1 Participation and Funding on the Closing Date
5
Section 2.2 Time and Place of Closing 6
Section 2.3 Instructions to the Owner Trustee and the
Remainderman 6
Section 2.4 Transactions to Occur on the Closing Date 6
Section 2.5 Refunding. 8
Section 2.6 Transfer and Refinancing of Series J Notes on the
Debt Refinancing Date 12
Section 2.7 Failure to Consummate Debt Refinancing 17
Section 2.8 Subsequent Leases 19
Section 2.9 Participation and Funding 19
Section 2.10 Time and Place of Closing 21
Section 2.11 Instructions to the Owner Trustee and the
Remainderman 21
Section 2.12 Transactions to Occur on the Debt Refinancing
Date 22
ARTICLE III
CONDITIONS PRECEDENT 23
Section 3.1 Conditions Precedent to Obligations of the Owner
Participant, the Owner Trustee, the Remainderman, the
Remainderman Participant, the Indenture Trustee, the Initial
Noteholder and the Pass Through Trustee on the Closing Date
23
Section 3.2 Conditions Precedent to Obligations of the Lessee
on the Closing Date 31
Section 3.3 Conditions Precedent to Obligations of the Owner
Participant, the Connecticut Trustee, the Owner Trustee, the
Remainderman, the Remainderman Participant, the Indenture
Trustee and the Pass Through Trustee on the Debt Refinancing
Date 33
Section 3.4 Conditions Precedent to Obligations of the Lessee
on the Debt Refinancing Date 41
ARTICLE IV
EXTENT OF INTEREST OF NOTEHOLDERS 43
ARTICLE V
REPRESENTATIONS AND WARRANTIES 44
Section 5.1 Representations and Warranties of the Lessee
44
Section 5.2 Representations and Warranties of the Owner
Participant 48
Section 5.3 Representations and Warranties of the Owner
Trustee 50
Section 5.4 Representations and Warranties of the Indenture
Trustee 52
Section 5.5 Representations and Warranties of the Pass Through
Trustee 53
Section 5.6 Representations and Warranties of the Owner
Participant Parent 54
Section 5.7Representations and Warranties of the Remainderman
Participant 56
Section 5.8Representations and Warranties of the Remainderman
57
Section 5.9 Representations and Warranties of the Remainderman
Trustee 57
Section 5.10 Representations and Warranties of the Initial
Noteholder 58
Section 5.11 Representations and Warranties of the
Connecticut Trustee 60
ARTICLE VI
COVENANTS AND AGREEMENTS 61
Section 6.1 Covenants and Agreements of the Lessee 62
Section 6.2 Covenants and Agreements of the Owner Participant
66
Section 6.3 Covenants and Agreement of the Owner Trustee
68
Section 6.3.1. Covenants and Agreement of the Connecticut
Trustee 70
Section 6.4 Covenants and Agreement of the Indenture Trustee
72
Section 6.5 Covenants and Agreement of the Pass Through
Trustee 73
Section 6.6Covenants and Agreements of the Remainderman
Participant 74
Section 6.7Covenants and Agreements of the Remainderman
Trustee 75
Section 6.8 Covenants and Agreements of the Remainderman
76
Section 6.9 Covenants and Agreements of the Initial Noteholder
77
ARTICLE VII
INDEMNITIES 78
Section 7.1 General Indemnity 78
Section 7.2 General Tax Indemnity 84
Section 7.3 Exclusions from General Tax Indemnity 85
Section 7.4 Contests 90
Section 7.5 Refunds or Credits 92
Section 7.6 Payments 93
Section 7.8 Verification 94
Section 7.9 Survival 95
Section 7.10 Forms, etc 95
Section 7.11 Non-Parties 95
ARTICLE VIII
TRANSFERS OF THE OWNER PARTICIPANT'S INTERESTS;
RIGHT OF FIRST OFFER; AND NO TRANSFER BY OWNER
TRUSTEE OR CONNECTICUT TRUSTEE 95
Section 8.1 Transfer of Owner Participant's Interest 95
Section 8.2 Right of First Offer 99
Section 8.3 No Transfer by Owner Trustee 101
ARTICLE IX
OBLIGATIONS OF THE LESSEE;
ADDITIONAL FUNDINGS; AND ENVIRONMENTAL REPORT 102
Section 9.1 Exchange of Obligation of Owner Trustee by the
Lessee 102
Section 9.2. Funding of the Costs of Modifications 102
Section 9.3 Environmental Report 105
ARTICLE X
PAYMENT OF EXPENSES 105
Section 10.1 Transaction Expenses 105
Section 10.2 Post-Closing Expenses 105
Section 10.3 Lessee's Obligation 106
ARTICLE XI
LIABILITY OF THE OWNER TRUSTEE
AND OWNER PARTICIPANT; LIABILITY OF REMAINDERMAN TRUSTEE 106
Section 11.1 Liabilities of the Owner Trustee and the Owner
Participant 106
Section 11.2 Liabilities of the Remainderman and the
Remainderman Trustee 107
ARTICLE XII
CHANGE OF SITUS OF OWNER TRUST OR CONNECTICUT TRUST
108
ARTICLE XIII
MISCELLANEOUS 108
Section 13.1 Notices 108
Section 13.2 Counterparts 109
Section 13.3 Amendments 109
Section 13.4 Survival 109
Section 13.5 Headings 109
Section 13.6 Parties in Interest 109
Section 13.7 GOVERNING LAW 109
Section 13.8 Severability 109
Section 13.9 Method of Payment 110
Section 13.10 Intent of Parties 110
Section 13.11 Confidential Documents 110
Section 13.12 Jurisdiction 111
Section 13.13 No Waiver, Remedies Cumulative 111
Section 13.14 Limitation of Liability 111
SCHEDULES
Schedule 1 - Form of Opinions to be Delivered on the Debt
Refinancing Date
Schedule 2 - Recordings and Filings
Schedule 3 - Governmental Action
Schedule 4 - Consents and Approvals
Schedule 5 - [RESERVED]
Schedule 6 - [RESERVED]
Schedule 7 - Form of Opinions to be Delivered on Closing
Date
Schedule 8 - Litigation
Schedule 9 - Lessee's Property
Schedule 10 - Notices
EXHIBITS
Exhibit A-1 - Form of Improvements Deed
Exhibit A-2 - Form of Remainderman Interest Deed
Exhibit A-3 - Form of Estate for Years Deed
Exhibit B - Form of Ground Lease
Exhibit C - Form of Lease Agreement
Exhibit D-1 - Form of Trust Agreement
Exhibit D-2 - Form of Remainderman Trust Agreement
Exhibit E - Form of Pass Through Trust Agreement
Exhibit F-1 - Form of Trust Indenture
Exhibit F-2 - Form of First Supplemental Indenture
Exhibit F-3 - Form of Supplemental Indenture
Exhibit G - [RESERVED]
Exhibit H - Form of Notice of Closing
Exhibit I - Form of Beneficial Interest Transfer
Agreement
Exhibit J - Form of Connecticut Trust Agreement
Exhibit K - [RESERVED]
Exhibit L - Form of Morgan Stanley Certificate re
Equity Investment
Exhibit M - Form of Surviving Lessee's Assumption
Agreement
Exhibit N - Form of Owner Participant Parent Guaranty
Exhibit O - Form of Owner Participant Transfer
Agreement
ANNEXES
Annex I - Basic Rent, Casualty Value and Termination
Value Adjustments On Outside Date
Annex II - Additional Lessee Covenants
Appendix A
AMENDED AND RESTATED
DEFINITIONS AND RULES OF USAGE
Section 1.1 Rules of Usage. The following rules of usage shall
apply to the Transaction Documents unless otherwise required by the
context:
(a) Singular words shall connote the plural as well as the
singular, and vice versa (except as indicated), as may be appropriate.
(b) Unless otherwise indicated, references in each
Transaction Document to appendices, articles, schedules, sections or
exhibits are references to appendices, articles, schedules, sections or
exhibits of such document.
(c) The headings, subheadings and table of contents used in
each of the Transaction Documents are solely for convenience of reference
and shall not constitute a part of any such document nor shall they affect
their meaning, construction or effect.
(d) References to any Person shall include such Person, its
successors and permitted assigns.
(e) Each of the parties to the Transaction Documents and
their counsel have reviewed and revised, or requested revisions to, the
Transaction Documents, and the usual rule of construction that any
ambiguities are to be resolved against the drafting party shall be
inapplicable in the construction and interpretation of the Transaction
Documents and any amendments or exhibits thereto.
(f) "or" is not exclusive and "include" and "including" are
not limiting.
(g) "hereby," "herein," "hereof," "hereunder," "this
Agreement" or like words used in any Transaction Document refer to such
Transaction Document, as it may be amended, modified or supplemented from
time to time in accordance with its terms.
Section 1.2 Definitions. As used in the Transaction Documents,
the following terms shall have the respective meanings assigned thereto:
"Accreted Value" shall mean, as to any Refinancing Notes, as at
any date prior to the Commencement Date, an amount equal to the sum of (x)
the Original Issue Price of such Refinancing Notes plus (y) the Original
Issue Discount that shall have accrued on such Refinancing Notes at the
interest rate specified in such Refinancing Notes, on a semi-annual bond
equivalent basis using a 360-day year composed of twelve 30-day months,
during the period from the date of issuance of such Refinancing Notes to
such date of determination.
"Act" when used with respect to any Noteholder shall have the
meaning set forth in Section 1.4 of the Indenture.
"Additional Insured" or "Additional Insureds" shall mean the
Persons specified in Section 10(a) (i) (A) (2) of each Lease.
"Additional Notes" shall mean any additional Notes issued by the
Owner Trustee in order to finance all or a portion of the Supplemental
Financing Amount or the Approved Equity Financing Amount of any
Modification as contemplated by Section 8(f) of each Lease, which Notes
shall be issued, if at all, pursuant to and only in accordance with Section
2.13 of the Indenture.
"Adverse Relationship" shall have the meaning set forth in
Section 8.1(i) of the Participation Agreement.
"Affiliate", with respect to any Person, shall mean 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, the term "control" (including the correlative meanings of the
terms "controlled by" and "under common control with"), as used with
respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management policies of
such Person, whether through the ownership of voting securities or by
contract or otherwise.
"After-Tax Basis" shall mean (a) with respect to any payment to
be received by any Person, the amount of such payment supplemented by a
further payment or payments so that, after deducting from such payments the
amount of all Taxes (net of any current credits or deductions or other Tax
benefits arising therefrom) actually imposed by any Governmental Authority
or taxing authority with respect to such payments, the balance of such
payments shall be equal to the original payment to be received and (b) with
respect to any payment to be made by any Person, the amount of such payment
supplemented by a further payment or payments so that, after increasing
such payment by the amount of any credits or other Tax benefits realized
under the laws of any Governmental Authority or taxing authority resulting
from the making of such payment, the sum of such payments (net of such
credits or benefits) shall be equal to the original payment to be made;
provided, that in the case of PMCC Leasing Corporation, Philip Morris
Capital Corporation or any Affiliate of Philip Morris Capital Corporation,
for the purposes of this definition, it shall be assumed that federal
income taxes are payable by such Person at the highest marginal federal
income tax rate applicable to corporations in effect from time to time and
that state and local income taxes are payable by such Person at the highest
marginal Virginia income tax rate applicable to corporations from time to
time.
"Amendment No. 1 to Trust Agreement" shall mean the [Amendment
No. 1 to Trust Agreement] dated as of March 1, 1994 among [the Owner
Participant,] the Connecticut Trustee and the Owner Trustee, amending and
supplementing the Trust Agreement substantially in the form of Exhibit [*]
to the Participation Agreement.
"Amortization Deductions" shall have the meaning set forth in
Section 2(e) of the Tax Indemnification Agreement.
"Applicable Law" shall mean all applicable laws, Environmental
Laws, statutes, treaties, rules, codes, ordinances, regulations, permits,
certificates, orders, interpretations, licenses and permits of 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.
"Appraisal" shall mean the written appraisal delivered by the
Appraiser pursuant to Section 3.1(m) of the Participation Agreement.
"Appraisal Procedure" shall mean a procedure (specified below)
whereby two independent appraisers, one appointed by the Lessor and one by
the Lessee, shall agree upon the value, period, amount or determination
then the subject of an appraisal. If either the Lessor or the Lessee shall
determine that a value, period, amount or determination to be determined
under the respective Leases or any other Transaction Document cannot timely
be established by agreement, such party shall appoint its appraiser and
give notice thereof to the other party, which shall appoint its appraiser
within 10 days thereafter. If such other party does not appoint its
appraiser within such 10-day period, the determination of the first
appraiser made within 30 days after the failure to appoint shall be
conclusive and binding on the Lessor and the Lessee. If within 30 days
after appointment of the second of the two appraisers, such appraisers are
unable to agree upon the value, period, amount or determination in
question, they jointly shall appoint a third appraiser within 10 days
thereafter, or, if they do not do so, either the Lessor or the Lessee may
request the American Arbitration Association, or any organization successor
thereto, to appoint the third appraiser from a panel of MAI appraisers with
at least five years' experience in the valuation of properties similar to
the Property. The decision of the third appraiser shall be given within 30
days after his appointment. The value, period, amount or determination to
be determined shall be the average of the two closest appraised values,
periods, amounts or determinations, as the case may be, and shall be
conclusive and binding on the Owner Participant, the Lessor and the Lessee.
The obligation to pay the fees and expenses of appraisers incurred in
connection with any Appraisal Procedure relating to any transaction
contemplated by any provision of each Lease or any other Transaction
Document shall be divided equally between the Lessor and the Lessee.
"Appraiser" shall mean Deloitte & Touche.
"Approved Equity Financing" shall mean an equity financing by the
Owner Participant of a Modification effected pursuant to Section 8(f)(i) of
any Lease.
"Assigned Payments" shall have the meaning set forth in the
"Granting Clause" of the Related Supplemental Indenture.
"Assumptions" shall mean the Pricing Assumptions and the Tax
Assumptions.
"Authenticating Agent" shall mean any Person authorized to
authenticate and deliver Notes of any series on behalf of the Indenture
Trustee pursuant to Section 9.10 of the Indenture.
"Authorized Agent" shall mean any Paying Agent, Note Registrar or
Authenticating Agent.
"Authorized Officer" shall mean, with respect to the Indenture
Trustee, the Pass Through Trustee and the Remainderman Trustee, any officer
in the Corporate Trust Administration of the Indenture Trustee, Pass
Through Trustee or Remainderman Trustee, as the case may be, who shall be
duly authorized by appropriate corporate action to authenticate a Note or
to execute any Transaction Document, and shall mean, with respect to the
Owner Trustee and the Connecticut Trustee, any officer of the Owner Trustee
in its corporate Trust Administration department who shall be duly
authorized by appropriate corporate action to deliver an Owner Trustee
Request or to execute any Transaction Document.
"Average Life Date" shall mean, with respect to each Note to be
redeemed or purchased, the date that follows the Redemption Date by a
period equal to the Remaining Weighted Average Life at the Redemption Date
of such Note.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act of 1978,
as amended and as the same may be further amended, and any other Applicable
Law with respect to bankruptcy, insolvency or reorganization that is
successor thereto.
"Basic Rent" shall have the meaning set forth in Section 3(b) of
each Lease.
"Basic Rent Payment Dates" shall have the meanings set forth on
Schedule 1 to each Lease.
"Basic Term" shall have the meaning set forth in Section 2(b)
(ii) of each Lease.
"Basic Term Commencement Date" shall have the meaning specified
in Schedule 1 of each Lease.
"Basic Term Termination Date" shall have the meaning specified in
Schedule 1 of each Lease.
"Beneficial Interest Transfer Agreement" shall mean the
[Beneficial Interest Transfer Agreement] dated as of March 1, 1994 between
the Owner Participant and the Connecticut Trustee, substantially in the
form attached hereto as Exhibit B.
"Board Resolution" shall mean a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Lessee to have been duly
adopted by the Board of Directors or any committee thereof and to be in
full force and effect on the date of such certification, and delivered to
the Indenture Trustee.
"Break Funding Costs" shall mean with respect to any Series J
Note as to which the interest rate set forth in such Series J Note is
determined on the basis of the LIBOR or IBOR, as the case may be, the
amount, if any, required to compensate the Holder of such Series J Note for
any losses, costs or expenses which it may incur as the direct result of
the prepayment, purchase or acceleration of such Series J Note held by it
on a date other than the next scheduled Series J Interest Payment Date
therefor, which amount shall be deemed to be equal to the excess, if any,
of (a) the amount of interest which otherwise would have accrued on the
principal amount so prepaid, purchased or accelerated to the next scheduled
Series J Interest Payment Date therefor at the interest rate therefor over
(b) the interest component of the amount such Holder could have received on
the next relevant Series J Interest Payment Date from leading banks in the
London interbank market on Dollar deposits in an amount comparable to such
principal amount made on the date of such prepayment, purchase or
acceleration for a period equal to the balance of such interest period,
commencing on the previous Series J Interest Payment Date and ending on,
but excluding, the next scheduled Series J Interest Payment Date therefor.
"Business Day" shall mean any day other than a Saturday or Sunday
or other day on which banks in New York, New York or the city in which the
Indenture Trustee's Office is located are authorized or required to be
closed, and so long as the Series J Notes are Outstanding, London, England,
or, if no Note is Outstanding, the city in which the principal corporate
trust office of the Owner Trustee and Connecticut Trustee is located;
provided that, if such term is used with respect to payments to or from the
Lessee, it shall also exclude any other day in which banks in Los Angeles,
California are authorized or required to be closed.
"Casualty" shall mean an event by which any Property or any
substantial portion thereof is damaged, lost or destroyed by fire, theft,
flood, water damage, collapse, earthquake, windstorm, hail, lightning,
explosion, falling objects or other casualty.
"Casualty Value" shall mean the sum of the Lessor Casualty Value
and the Remainderman Casualty Value.
"Casualty Value Date" shall mean the last day of each month
during the Lease Term.
"Closing" shall mean the transactions that shall occur on the
Closing Date or the Debt Refinancing Date, as applicable.
"Closing Date" shall mean December 29, 1993 or such other date on
or prior to December 31, 1993 selected by the Lessee in accordance with
Section 2.2 of the Participation Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commencement Date" shall mean, with respect to each of the
Refinancing Notes, the date designated as such in the Related Supplemental
Indenture.
"Condemnation" shall mean a condemnation, confiscation, seizure,
requisition or other taking or sale of the use, occupancy or title to any
Property or any portion thereof in, by or on account of any actual or
threatened eminent domain proceeding or other action by Governmental
Authority or other Person having the power of eminent domain, or a failure
of title with respect to any Property.
"Connecticut Trust" shall mean the trust created by the
Connecticut Trust Agreement.
"Connecticut Trust Agreement" shall mean the Trust Agreement
dated as of March 1, 1994 between the Owner Participant and State Street
Bank and Trust Company of Connecticut, National Association, substantially
in the form of Exhibit [*] to the Participation Agreement, as the same may
be amended, modified or supplemented from time to time in accordance with
the provisions thereof and of the Indenture and the Participation
Agreement.
"Connecticut Trustee" shall mean State Street Bank and Trust
Company of Connecticut, National Association, not in its individual
capacity except as expressly provided in the Participation Agreement and
any other Transaction Document, but solely as Connecticut Trustee under the
Connecticut Trust Agreement, and each successor as Connecticut Trustee and
each separate trustee and co-trustee thereunder.
"Connecticut Trustee's Counsel" shall mean Bingham, Dana & Gould,
or such other counsel as shall be selected by the Connecticut Trustee.
"Connecticut Trust Estate" shall have the meaning set forth in
the Connecticut Trust Agreement.
"Contribution" shall have the meaning set forth in Section
2.9(a)(3) of the Participation Agreement.
"Consumer Price Index" shall mean the Consumer Price Index
published by the Bureau of Labor Statistics of the United States Department
of Labor for "All Urban Consumers" in the table entitled "Consumer Price
Index: United States City Average", or any successor index thereto, All
Items (1982-84=100) for the month and year in question.
"Cost Recovery Deductions" shall have the meaning set forth in
Section 2(c) of the Tax Indemnification Agreement.
"Cost Threshold" shall mean (i) if Lessee is Investment Grade, an
amount equal to Two Million Dollars ($2,000,000) in respect of each of the
Leases other than Lease A, and an amount equal to Five Million Dollars
($5,000,000) in respect of Lease A, and (ii) if Lessee is not Investment
Grade, an amount equal to Five Hundred Thousand Dollars ($500,000) in
respect of each of the Leases other than Lease A, and an amount equal to
One Million Dollars ($1,000,000) in respect of Lease A, in each case
increased by an amount equal to the increase in the Consumer Price Index.
"Debt Financing" shall have the meaning set forth in Section
2.1(b) of the Participation Agreement.
"Debt Financing Amount" shall have the meaning set forth in
Section 2.1(b) of the Participation Agreement.
"Debt Percentage" shall mean 80%.
"Debt Refinancing" shall mean the refinancing of the Outstanding
Series J Notes on the Debt Refinancing Date in accordance with Section 2.6
of the Participation Agreement and Section 7.2 of the Indenture.
"Debt Refinancing Amount" shall mean the sum of (i) the
Outstanding principal and accrued but unpaid interest on the Series J
Notes, (ii) the product of the New Debt Percentage and the Lessor Purchase
Price for each Subsequent Property and (iii) all Transaction Expenses
incurred in connection with the Debt Refinancing.
"Debt Refinancing Date" shall have the meaning set forth in
Section 2.6(d)(10) of the Participation Agreement.
"Deed" shall mean any Improvement Deed or Estate for Years Deed
or both, as the context may require.
"Deeds" shall mean all Improvement Deeds and Estate for Years
Deeds.
"Deemed Refund" shall have the meaning set forth in Section 7.5
of the Participation Agreement.
"Default" shall mean an event or condition that, with the giving
of notice or lapse of time, or both, would constitute an Event of Default.
"Defaulted Installment" shall have the meaning set forth in
Section 2.8 of the Indenture.
"Defaulted Interest" shall have the meaning set forth in Section
2.8 of the Indenture.
"Directive" shall mean an instrument in writing executed in
accordance with the terms and provisions of the Indenture by the
Noteholders, or their duly authorized agents or attorneys-in-fact,
representing a Majority in Interest of the Noteholders, directing the
Indenture Trustee to take or refrain from taking the action specified in
such instrument or otherwise advising the Indenture Trustee; provided,
however, that each Holder of Notes then Outstanding, or its duly authorized
agent or attorney-in-fact, shall be entitled to direct the Indenture
Trustee only with respect to the aggregate unpaid principal amount of Notes
(or portion thereof) issued and Outstanding that are registered in the name
of such Noteholder and that are certified by such Noteholder or its duly
authorized agent or attorney-in-fact to be (a) held by it for its own
account and not pledged as collateral for any of its obligations or (b)
pledged as collateral for one or more of its obligations, or obligations
with respect to which it is acting as trustee under a related indenture,
but in respect of which it has received a directive, satisfactory in form
and substance to the Indenture Trustee, given by the Holder or Holders of a
proportionate interest in the obligations secured by such Notes in
accordance with the instrument governing such obligations. More than one
directive can be given by a registered Noteholder or its duly authorized
agent or attorney-in-fact pursuant to clause (b) of the preceding sentence,
and such directives may be contradictory or inconsistent, so long as each
directive to take or refrain from taking the action specified therein or
otherwise advising the Indenture Trustee meets the requirements of said
clause (b).
"Dollar" or "$" shall mean the lawful currency of the United
States of America.
"Environment" means navigable waters, waters of the contiguous
zone, ocean waters, natural resources, surface waters, ground water,
drinking water supply, land surface, subsurface strata, ambient air, both
inside and outside of buildings and structures, and plant and animal life
on earth.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, proceedings, executory decrees,
judgments, demands, demand letters, orders, directives, claims (including
claims involving liability in tort), liens or notices of noncompliance or
violation relating to any Environmental Law or permit issued under any such
Environmental Law, or arising from the presence or release into the
environment of Hazardous Materials (hereinafter "claims") including,
without limitation, claims by any governmental or regulatory authority or
by any third party for enforcement, cleanup, removal, response, remedial or
other actions or damages, contribution, indemnification, cost recovery,
compensation or injunctive relief pursuant to any Environmental Law.
"Environmental Report" shall have the meaning set forth in
Section 9.3 of the Participation Agreement.
"Environmental Laws" shall mean all federal, state, and local
laws, statutes, ordinances, now or hereafter in effect, and in each case as
amended, and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment,
relating to the regulation and protection of human health, safety and the
Environment, including, without limitation, laws and regulations relating
to emissions, discharges, releases or threatened releases of Hazardous
Materials or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials.
"Environmental Liabilities and Costs" means all Expenses, whether
direct or indirect, known or unknown, current or potential, absolute or
contingent, matured or unmatured, past, present or future, imposed by,
under or pursuant to Environmental Laws or with respect to any
Environmental Claims, including, without limitation, all Expenses related
to Remedial Actions, property damage, and all reasonable fees,
disbursements and expenses of counsel, experts, personnel and consultants
based on, arising out of or otherwise in respect of:
(i) the ownership or operation of the Properties or any
Modifications; and
(ii) environmental conditions on, under, above, or about the
Properties or any Modifications; and
(iii) expenditures necessary to cause the Properties or any
Modifications to be in compliance with any and all requirements of
Environmental Laws;
including, without limitation, all permits, licenses or
other authorizations issued under or pursuant to such Environmental Laws,
and reasonably necessary to make full economic use of the property, assets,
equipment and facilities, all costs in connection with any Remedial Action,
costs in connection with financial assurance, fines, penalties, natural
resource damages, costs in connection with the protection of wildlife,
aquatic species and vegetation and costs of any mitigative action required
under applicable Environmental Laws.
"Equity Interest Rate" shall mean the rate of interest publicly
announced by Citibank, N.A., in New York, New York from time to time as its
"prime rate" for United States Dollar loans plus 2 percent.
"Equity Payment and Transfer Amount" shall have the meaning set
forth in Section 9.2(a) of the Participation Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended and as the same may be further amended, or any comparable
successor federal statute.
"ERISA Affiliate" shall mean any entity treated as a single
employer with any Person pursuant to Code Section 414(b), (c), (m) or (o).
"ERISA Plan" shall mean an employee benefit plan (or its related
trust) subject to Part 4 of Subtitle B of Title I of ERISA or a "plan" (or
its related trust) within the meaning of Code section 4975(e) (1).
"Estate for Years" shall mean the estate for years granted by the
Lessee to the Owner Trustee in the Land, for a term of approximately 25
years, which term shall expire on the Estate for Years Expiration Date and,
without further modification, shall mean all such estates for years.
"Estate for Years Deed" shall mean any of Estate for Years Deed
A, Estate for Years Deed B, Estate for Years Deed C, Estate for Years Deed
D, Estate for Years Deed E, Estate for Years Deed F, Estate for Years Deed
G, Estate for Years Deed H, Estate for Years Deed I, or any Subsequent
Estate for Years Deed, as the context may require.
"Estate for Years Deed A" shall mean the Deed, dated the Closing
Date, between the Lessee, as seller, and the Owner Trustee, as buyer,
substantially in the form of Exhibit A-2 to the Participation Agreement
covering the Estate for Years in respect of Property A as described in
Exhibit A thereto.
"Estate for Years Deed B" shall mean the Deed, dated the Closing
Date, between the Lessee, as seller, and the Owner Trustee, as buyer,
substantially in the form of Exhibit A-2 to the Participation Agreement
covering the Estate for Years in respect of Property B as described in
Exhibit A thereto.
"Estate for Years Deed C" shall mean the Deed, dated the Closing
Date, between the Lessee, as seller, and the Owner Trustee, as buyer,
substantially in the form of Exhibit A-2 to the Participation Agreement
covering the Estate for Years in respect of Property C as described in
Exhibit A thereto.
"Estate for Years Deed D" shall mean the Deed, dated the Closing
Date, between the Lessee, as seller, and the Owner Trustee, as buyer,
substantially in the form of Exhibit A-2 to the Participation Agreement
covering the Estate for Years in respect of Property D as described in
Exhibit A thereto.
"Estate for Years Deed E" shall mean the Deed, dated the Closing
Date, between the Lessee, as seller, and the Owner Trustee, as buyer,
substantially in the form of Exhibit A-2 to the Participation Agreement
covering the Estate for Years in respect of Property E as described in
Exhibit A thereto.
"Estate for Years Deed F" shall mean the Deed, dated the Closing
Date, between the Lessee, as seller, and the Owner Trustee, as buyer,
substantially in the form of Exhibit A-2 to the Participation Agreement
covering the Estate for Years in respect of Property F as described in
Exhibit A thereto.
"Estate for Years Deed G" shall mean the Deed, dated the Closing
Date, between the Lessee, as seller, and the Owner Trustee, as buyer,
substantially in the form of Exhibit A-2 to the Participation Agreement
covering the Estate for Years in respect of Property G as described in
Exhibit A thereto.
"Estate for Years Deed H" shall mean the Deed, dated the Debt
Refinancing Date, between the Lessee, as seller, and the Owner Trustee, as
buyer, substantially in the form of Exhibit A-2 to the Participation
Agreement covering the Estate for Years respect of Property H as described
in Exhibit A thereto.
"Estate for Years Deed I" shall mean the Deed, dated the Debt
Refinancing Date, between the Lessee, as seller, and the Owner Trustee, as
buyer, substantially in the form of Exhibit A-2 to the Participation
Agreement covering the Estate for Years respect of Property I as described
in Exhibit A thereto.
"Estate for Years Deeds" shall mean Estate for Years Deed A,
Estate for Years Deed B, Estate for Years Deed C, Estate for Years Deed D,
Estate for Years Deed E, Estate for Years Deed F, Estate for Years Deed G,
Estate for Years Deed H, Estate for Years Deed I and all Subsequent Estate
for Years Deeds, collectively.
"Estate for Years Expiration Date" shall mean December 30, 2018.
"Event of Default" shall have the meaning set forth in Section 15
of each Lease.
"Event of Loss" shall mean a Condemnation if (i) an entire
Property is taken in a Condemnation, (ii) a portion of a Property is taken
in a Condemnation and, in the Lessee's reasonable opinion, such
Condemnation would significantly interfere with the value, use or remaining
useful life of such Property, (iii) if there is a failure of title with
respect to a Property and in the Lessee's reasonable opinion such failure
of title would significantly interfere with the value, use or remaining
useful life of such Property or (iv) a Condemnation either (x) for a period
of time extending beyond the Lease Term or (y) for a period of time longer
than 10 years, in either such case so as to interfere materially, in
Lessee's reasonable opinion, with the use or operation of the Property.
Event of Loss shall also mean a Casualty if, in any one occurrence, the
cost of repairs of such Casualty would be 40% or more of the Fair Market
Sales Value of the Improvements and the Lessee determines in its reasonable
discretion that the Property is no longer suitable for use in its business.
"Excepted Payments" shall mean:
(a) all indemnity payments (including, without limitation,
payments under Sections 7.1 and 7.2 of the Participation
Agreement, Section 8.1 of the Trust Agreement, Section 8.1 of the
Connecticut Trust Agreement and the Tax Indemnification
Agreement, whether made by adjustment to Basic Rent or otherwise)
to which the Owner Trustee in its individual capacity, the
Connecticut Trustee in its individual capacity, the Owner
Participant or any of their respective Affiliates (or the
respective successors, assigns, agents, officers, directors or
employees of the Owner Trustee, the Connecticut Trustee or the
Owner Participant) is entitled under the Transaction Documents;
(b) any amounts other than Basic Rent payable under any
Transaction Document to reimburse the Owner Trustee, the
Connecticut Trustee, the Owner Participant or any of their
respective Affiliates (including the reasonable expenses of the
Owner Trustee, the Connecticut Trustee and the Owner Participant
incurred in connection with any such payment) for performing or
complying with any of the obligations of the Lessee under and as
permitted by any Transaction Document;
(c) any amount payable to the Owner Participant by any
Transferee as the purchase price of the Owner Participant's
interest in the Trust Estate (or a portion thereof);
(d) any insurance proceeds (or payments with respect to
risks self-insured or policy deductibles) under liability
policies other than such proceeds or payments payable to the
Owner Trustee, the Connecticut Trustee or the Indenture Trustee
in its individual or trust capacity;
(e) any insurance proceeds under policies maintained by the
Owner Trustee, the Connecticut Trustee or the Owner Participant
and not required to be maintained by the Lessee under any Lease;
(f) any amounts payable to the Owner Trustee, the
Connecticut Trustee or the Owner Participant pursuant to Section
9.2(a) of the Participation Agreement;
(g) any amounts payable to the Owner Trustee by the Lessee
under Section 3(c)(v) of any Lease; and
(h) any payments in respect of interest to the extent
attributable to payments referred to in clauses (a) through (g)
above.
"Excepted Rights" shall mean (a) all rights with respect to
Excepted Payments of the Person entitled thereto; provided, however, that
the rights of the Owner Trustee to receive payments from the Lessee
pursuant to Section 3(c)(v) of each Lease shall not constitute an Excepted
Right; and (b) all rights and privileges expressly reserved to the Owner
Trustee, the Connecticut Trustee or the Owner Participant with the
Indenture Trustee pursuant to the Indenture for the periods specified in
the Indenture.
"Exchange Date" shall have the meaning set forth in Section 13.1
or 13.2 of the Indenture, as the case may be.
"Expenses" shall mean liabilities, obligations, losses (excluding
loss of anticipated profits), damages, penalties, claims (including
Environmental Claims), actions, suits, judgments, out-of-pocket costs,
expenses and disbursements (including reasonable legal fees and expenses,
allocated costs of in-house counsel and reasonable consultants' fees and
expenses) of any kind and nature whatsoever, whether or not subject to
litigation; provided, however, that "Expenses" shall in no circumstances
include ordinary and usual operating or overhead expenses, including
internal legal costs.
"Fair Market Renewal Term" shall mean the term of any renewal of
a Lease by the Lessee pursuant to Section 12(b) of such Lease at the end of
any Renewal Term.
"Fair Market Rental Value" shall mean with respect to any Leased
Property, the value, which shall not in any event be less than zero, that
would be obtained in an arm's-length transaction for cash between an
informed and willing lessee and an informed and willing lessor, neither of
whom (i) is an Affiliate of the Lessor, Owner Participant or the Lessee, or
(ii) is under any compulsion to lease, for the use of the Leased Property
for a given period, and taking into account (x) the rights of the Lessor as
purchaser under the Related Deeds conveying the Related Estate for Years
and Improvements, and (y) the credit quality of the prospective tenant to
the extent that consideration of credit quality customarily is considered
in establishing rent for similar commercial space. In determining Fair
Market Rental Value for each semi-annual period during any Fair Market
Renewal Term, it shall be assumed that any Nonseverable Modifications which
resulted in an increase in the rentable square footage of the Leased
Property and which were not financed by an Approved Equity Financing or a
Supplemental Financing, each as contemplated by Section 8(f) of the Related
Lease, were never constructed. The Fair Market Rental Value of any Leased
Property shall be determined on the assumption that: (a) such Leased
Property is in the condition and state of repair required under Section
8(a) of the Related Lease; (b) the Lessee is in compliance with the
requirements of the Transaction Documents; and (c) during such lease
period, Basic Rent will be payable in equal semiannual installments in
arrears.
"Fair Market Sales Value" shall mean, with respect to any Leased
Property, the value, which shall not in any event be less than zero, that
would be obtained in an arm's-length transaction for cash between an
informed and willing purchaser and an informed and willing seller, neither
of whom (i) is an Affiliate of the Lessor, Owner Participant or the Lessee
or (ii) is under any compulsion to purchase or sell, respectively, the
Leased Property, taking into account the rights of the Lessor as purchaser
under the Related Deeds. Except pursuant to Section 16 of the Related
Lease, the Fair Market Sales Value of such Leased Property, shall be
determined on the assumption that: (a) such Leased Property is in the
condition and state of repair required under Section 8(a) of the Related
Lease and (b) the Lessee is in compliance with the requirements of the
Transaction Documents.
"Final Determination", with respect to a Tax indemnified under
Section 7.2 of the Participation Agreement, which Tax is subject to contest
thereunder, shall have the meaning set forth in clauses (i) through (iii)
of the definition of "Final Determination" contained in Section 16 of the
Tax Indemnification Agreement.
"First Supplemental Indenture" shall mean each Deed of Trust,
Assignment of Leases and Rents, Security Agreement and Fixture Filing,
containing a Supplemental Indenture, to the Indenture, dated as of the
Closing Date, between the Owner Trustee and the Indenture Trustee,
providing for the issuance of the Series J Notes.
"Fixed-Rate Renewal Basic Rent" shall mean, for each six-month
period during a Fixed-Rate Renewal Term, if any, an amount of rent equal to
90% of the average annual Basic Rent during the Basic Term of each Leased
Property subject to such Fixed-Rate Renewal Term.
"Fixed-Rate Renewal Term" shall mean the term of any renewal of
any Lease by the Lessee pursuant to Section 12(a) of such Lease at the end
of the Basic Term or any Renewal Term, as the case may be.
"GAAP" shall mean generally accepted accounting principles.
"Governmental Action" shall mean all permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, decrees, licenses, exemptions, publications, filings, notices to
and declarations of or with any Governmental Authority and shall include,
without limitation, all environmental and operating permits and licenses
that are required for the use, occupancy, zoning and operation of the
Properties.
"Governmental Authority" shall mean any federal, state, county,
municipal or other United states federal, state or local governmental
authority, agency, board, body, instrumentality, court or quasi-
governmental authority.
"Granting Clause Documents" shall mean the Deeds, the Option
Agreement and each Lease.
"Ground Lease" shall have the meaning given to such term in
Section 1 of the Option Agreement.
"Hazardous Materials" shall mean (a) any radioactive materials,
asbestos in any form that is or could become friable, oil or petroleum
products in any form, urea formaldehyde foam insulation, polychlorinated
biphenyls and transformers or other equipment that contain polychlorinated
biphenyls, and radon gas; and (b) any chemicals, materials or substances
which are now or hereafter become defined as, or included in that
definition of, "hazardous wastes", "hazardous substances", "extremely
hazardous substances", "toxic substances", "toxic" or "hazardous
pollutants", "hazardous" or "toxic materials" or words of similar import
under the Resource Conservation and Recovery Act of 1980, as amended, the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, or any other Environmental Laws.
"IBOR" shall mean, with respect to any Series J Note, the rate of
interest per annum (rounded upward to the nearest 1/100 of one percent)
determined by the Initial Noteholder as the rate at which Dollar deposits
for a period (to be selected by the Lessee), would be offered to major
banks in the offshore Dollar interbank market upon their request at or
about 11:00 a.m. (New York time) one Business Day before the commencement
of any applicable interest period in respect of the Series J Notes.
"Improvement Deed" shall mean any of Improvement Deed A,
Improvement Deed B, Improvement Deed C, Improvement Deed D, Improvement
Deed E, Improvement Deed F, Improvement Deed G, Improvement Deed H,
Improvement Deed I, or any Subsequent Improvement Deed, as the context may
require.
"Improvement Deed A" shall mean the Deed, dated the Closing Date,
between the Lessee, as seller, and the Owner Trustee, as buyer,
substantially in the form of Exhibit A-1 to the Participation Agreement
covering the improvement portion of the Lessor Interest in respect of
Property A described in Exhibit A thereto.
"Improvement Deed B" shall mean the Deed, dated the Closing Date,
between the Lessee, as seller, and the Owner Trustee, as buyer,
substantially in the form of Exhibit A-1 to the Participation Agreement
covering the portion of the Lessor Interest in respect of Property B
described in Exhibit A thereto.
"Improvement Deed C" shall mean the Deed, dated the Closing Date,
between the Lessee, as seller, and the Owner Trustee, as buyer,
substantially in the form of Exhibit A-1 to the Participation Agreement
covering the portion of the Lessor Interest in respect of Property C
described in Exhibit A thereto.
"Improvement Deed D" shall mean the Deed, dated the Closing Date,
between the Lessee, as seller, and the Owner Trustee, as buyer,
substantially in the form of Exhibit A-1 to the Participation Agreement
covering the portion of the Lessor Interest in respect of Property D
described in Exhibit A thereto.
"Improvement Deed E" shall mean the Deed, dated the Closing Date,
between the Lessee, as seller, and the Owner Trustee, as buyer,
substantially in the form of Exhibit A-1 to the Participation Agreement
covering the portion of the Lessor Interest in respect of Property E
described in Exhibit A thereto.
"Improvement Deed F" shall mean the Deed, dated the Closing Date,
between the Lessee, as seller, and the Owner Trustee, as buyer,
substantially in the form of Exhibit A-1 to the Participation Agreement
covering the portion of the Lessor Interest in respect of Property F
described in Exhibit A thereto.
"Improvement Deed G" shall mean the Deed, dated the Closing Date,
between the Lessee, as seller, and the Owner Trustee, as buyer,
substantially in the form of Exhibit A-1 to the Participation Agreement
covering the portion of the Lessor Interest in respect of Property G
described in Exhibit A thereto.
"Improvement Deed H" shall mean the Deed, dated the Debt
Refinancing Date, between the Lessee, as seller, and the Owner Trustee, as
buyer, substantially in the form of Exhibit A-1 to the Participation
Agreement covering the portion of the Lessor Interest in respect of
Property I described in Exhibit A thereto.
"Improvement Deed I" shall mean the Deed, dated the Debt
Refinancing Date, between the Lessee, as seller, and the Owner Trustee, as
buyer, substantially in the form of Exhibit A-1 to the Participation
Agreement covering the portion of the Lessor Interest in respect of
Property I described in Exhibit A thereto.
"Improvement Deeds" shall mean Improvement Deed A, Improvement
Deed B, Improvement Deed C, Improvement Deed D, Improvement Deed E,
Improvement Deed F, Improvement Deed G, Improvement Deed H, and all
Subsequent Improvement Deeds, collectively.
"Improvements" shall mean all buildings, facilities, all the
personal property, fixtures, improvements or other structures located on or
in or attached to, whether currently or in the future, any of the
Properties, and all substitutions and replacements thereof.
"Indemnitees" shall mean the Owner Participant, the Owner
Participant Parent, State Street Bank and Trust Company of California,
National Association (in its individual capacity and as Owner Trustee),
State Street Connecticut, Wilmington Trust Company (in its individual
capacity, as Remainderman Trustee, as Indenture Trustee and as Pass Through
Trustee), the Trust, the Trust Estate, the Connecticut Trust Estate, the
Indenture Trusts, the Indenture Estate, the Pass Through Trusts, the
Remainderman, the Remainderman Trust Estate, the Remainderman Trustee (and
any duly appointed co-trustee), the Remainderman Participant, any
Noteholder, any Affiliate of any of the foregoing and their respective
successors, assigns, agents, officers, directors and employees.
"Indenture" shall mean the Trust Indenture and Security Agreement
dated as of December 21, 1993, between the Owner Trustee and the Indenture
Trustee, substantially in the form of Exhibit F to the Participation
Agreement, as the same may be amended, modified or supplemented from time
to time in accordance with the provisions thereof, including, without
limitation, each Supplemental Indenture.
"Indenture Default" shall mean an event which, after giving of
notice or lapse of time, or both, would become an Indenture Event of
Default.
"Indenture Estate", with respect to any Lessor Interest, shall
have the meaning set forth in the "Granting Clause" of the Related
Supplemental Indenture or the aggregate of Indenture Estate [Series A],
Indenture Estate [Series B], Indenture Estate [Series C, ]Indenture Estate
[Series D], Indenture Estate [Series E], Indenture Estate [Series F],
Indenture Estate [Series G], Indenture Estate [Series H], Indenture Estate
[Series I], and any Subsequent Indenture Estate, as the context may
require.
"Indenture Estate [Series A]" shall have the meaning set forth in
the "Granting Clause" of any Related Supplemental Indenture covering the
Lessor Interest in respect of Property A and Lease A .
"Indenture Estate [Series B]" shall have the meaning set forth in
the "Granting Clause" of any Related Supplemental Indenture covering the
Lessor Interest in respect of Property B and Lease B.
"Indenture Estate [Series C]" shall have the meaning set forth in
the "Granting Clause" of any Related Supplemental Indenture covering the
Lessor Interest in respect of Property C and Lease C.
"Indenture Estate [Series D]" shall have the meaning set forth in
the "Granting Clause" of any Related Supplemental Indenture covering the
Lessor Interest in respect of Property D and Lease D.
"Indenture Estate [Series E]" shall have the meaning set forth in
the "Granting Clause" of any Related Supplemental Indenture covering the
Lessor Interest in respect of Property E and Lease E .
"Indenture Estate [Series F]" shall have the meaning set forth in
the "Granting Clause" of any Related Supplemental Indenture covering the
Lessor Interest in respect of Property F and Lease F.
"Indenture Estate [Series G]" shall have the meaning set forth in
the "Granting Clause" of any Related Supplemental Indenture covering the
Lessor Interest in respect of Property G and Lease G.
"Indenture Estate [Series H]" shall have the meaning set forth in
the "Granting Clause" of any Related Supplemental Indenture covering the
Lessor Interest in respect of Property H and Lease H.
"Indenture Estate [Series I]" shall have the meaning set forth in
the "Granting Clause" of any Related Supplemental Indenture covering the
Lessor Interest in respect of Property I and Lease I.
"Indenture Event of Default" shall mean with respect to any
Supplemental Indenture any of the events specified in Section 8.1 of the
Indenture.
"Indenture Trust" means each trust created by a Supplemental
Indenture.
"Indenture Trustee" shall mean Wilmington Trust Company, a
Delaware banking corporation, not in its individual capacity except as
otherwise expressly provided in the Participation Agreement, but solely as
Indenture Trustee under the Indenture, and each successor trustee and co-
trustee thereunder.
"Indenture Trustee's Counsel" shall mean Richards, Layton &
Finger or such other counsel as shall be selected by the Indenture Trustee.
"Indenture Trustee's Liens" shall mean Liens against the
Indenture Estate that result from acts of, or any failure to act by, or as
a result of claims against, the Indenture Trustee, in its individual and
fiduciary capacity, unrelated to the transactions contemplated by the
Transaction Documents or that are in breach of any covenant or agreement of
the Indenture Trustee, in its individual and fiduciary capacity, set forth
in any of the Transaction Documents, unless such action or failure to act
is consented to by the Lessee or is a result of the occurrence or
continuance of an Event of Default.
"Indenture Trustee's Office" shall mean the office of the
Indenture Trustee located at Wilmington, Delaware, or such other office as
may be designated by the Indenture Trustee to the Owner Trustee and each
holder of an Outstanding Note under the Indenture.
"Independent Insurance Broker" shall mean Marsh & McLennan, Inc.,
Johnson & Higgins or another reputable insurance broker of comparable
reputation, reasonably acceptable to the Owner Participant, the Owner
Trustee and the Indenture Trustee.
"Independent Investment Banker" shall mean an independent
investment banking institution of national standing appointed by the Lessee
(who shall be reasonably acceptable to the Owner Participant) on behalf of
the Owner Trustee; provided that if the Indenture Trustee shall not have
received written notice of such an appointment at least 10 days prior to
the applicable redemption date or if an Indenture Event of Default shall
have occurred and be continuing, "Independent Investment Banker" shall mean
such an institution appointed by the Indenture Trustee. The fees and
expenses of any such Independent Investment Banker shall be paid by the
Lessee.
"Initial Noteholder" shall mean Bank of America National Bank and
Savings Association, a national banking association.
"Initial Noteholder's Counsel" shall mean Peter Fuad, General
Counsel of the Initial Noteholder.
"Initial Noteholder's Lien" shall mean Liens against the
Indenture Estate that result from acts of, or any failure to act by, or as
a result of claims against the Initial Noteholder unrelated to the
transactions contemplated by the Transaction Documents or that is in breach
of any covenant or any agreement of the Initial Noteholder set forth in any
of the Transaction Documents to which it is a party, unless such action or
failure to act is consented to by the Lessee or is a result of the
occurrence or continuance of an Event of Default.
"Installment Payment Amount" shall mean, with respect to any
Outstanding Note, the amount of the installment payment of principal due
and payable on each Installment Payment Date other than the Stated Maturity
thereof, which amount shall be set forth in the Related Supplemental
Indenture.
"Installment Payment Date" shall mean each date on which an
Installment Payment Amount is due and payable on any Outstanding Note, as
set forth in the Related Supplemental Indenture, and the date Basic Rent is
due under the Related Lease.
"Installment Payment Percentage" shall mean, with respect to any
Outstanding Note and each Installment Payment Date, the percentage set
forth in the Related Supplemental Indenture.
"Institutional Investor" shall mean a corporate finance company,
a securities company, a bank, trust company or savings and loan
association, an insurance company, a collective investment fund, endowment,
foundation, educational institution, real estate investment trust or any
other Person organized under the laws of the United States or any state or
political subdivision thereof which is generally recognized in the
financing or real estate field as an institutional investor or which owns
other real properties which are net leased to major United States
corporations, provided that such Person is not reputed to engage in
unlawful or unethical practices.
"Interest Deductions" shall have the meanings set forth in
Section 2(d) of the Tax Indemnification Agreement.
"Interest Payment Date" shall mean any date on which a payment of
interest in respect of the Refinancing Notes is due and payable as may be
further specified in a Related Supplemental Indenture.
"Interim Rent" shall have the meaning set forth in Section 3(a)
of each Lease.
"Interim Rent Payment Date" shall have the meaning given to such
term in Section 1 of each Lease.
"Interim Term" shall have the meaning set forth in Section
2(b)(i) of each Lease.
"Investment" shall have the meaning set forth in Section 2.1(a)
of the Participation Agreement.
"Investment Amount" shall have the meaning set forth in Section
2.1(a) of the Participation Agreement.
"Investment Grade" shall mean a credit rating of not lower that
"Baa3" from Moody's or "BBB-" from Standard & Poor's, provided, that if at
the time in question the Lessee has not been assigned a credit rating from
Moody's or Standard & Poor's, "Investment Grade" shall mean a credit rating
of not lower than "2" from the National Association of Insurance Carriers.
"IRS" or "Service" shall mean the Internal Revenue Service of the
United States Department of the Treasury or any successor agency.
"Land" shall mean the land underlying each of the Properties.
"Lease" shall mean any of Lease A, Lease B, Lease C, Lease D,
Lease E, Lease F, Lease G, Lease H, Lease I, or any Subsequent Lease, as
the context may require.
"Lease A" shall mean the Lease Agreement dated as of December 21,
1993, between the Lessor and the Lessee, substantially in the form of
Exhibit C to the Participation Agreement, in respect of the Lessor Interest
relating to Property A, as the same may be amended, modified or
supplemented from time to time in accordance with the provisions thereof.
"Lease B" shall mean the Lease Agreement dated as of December 21,
1993, between the Lessor and the Lessee, substantially in the form of
Exhibit C to the Participation Agreement, in respect of the Lessor Interest
relating to Property B, as the same may be amended, modified or
supplemented from time to time in accordance with the provisions thereof.
"Lease C" shall mean the Lease Agreement dated as of December 21,
1993, between the Lessor and the Lessee, substantially in the form of
Exhibit C to the Participation Agreement, in respect of the Lessor Interest
relating to Property C, as the same may be amended, modified or
supplemented from time to time in accordance with the provisions thereof.
"Lease D" shall mean the Lease Agreement dated as of December 21,
1993, between the Lessor and the Lessee, substantially in the form of
Exhibit C to the Participation Agreement, in respect of the Lessor Interest
relating to Property D, as the same may be amended, modified or
supplemented from time to time in accordance with the provisions thereof.
"Lease E" shall mean the Lease Agreement dated as of December 21,
1993, between the Lessor and the Lessee, substantially in the form of
Exhibit C to the Participation Agreement, in respect of the Lessor Interest
relating to Property E, as the same may be amended, modified or
supplemented from time to time in accordance with the provisions thereof.
"Lease F" shall mean the Lease Agreement dated as of December 21,
1993, between the Lessor and the Lessee, substantially in the form of
Exhibit C to the Participation Agreement, in respect of the Lessor Interest
relating to Property F, as the same may be amended, modified or
supplemented from time to time in accordance with the provisions thereof.
"Lease G" shall mean the Lease Agreement dated as of December 21,
1993, between the Lessor and the Lessee, substantially in the form of
Exhibit C to the Participation Agreement, in respect of the Lessor Interest
relating to Property G, as the same may be amended, modified or
supplemented from time to time in accordance with the provisions thereof.
"Lease H" shall mean the Lease Agreement dated as of the Debt
Refinancing Date, between the Lessor and the Lessee, substantially in the
form of Exhibit C to the Participation Agreement, in respect of the Lessor
Interest relating to Property H, as the same may be amended, modified or
supplemented from time to time in accordance with the provisions thereof.
"Lease I" shall mean the Lease Agreement dated as of the Debt
Refinancing Date, between the Lessor and the Lessee, substantially in the
form of Exhibit C to the Participation Agreement, in respect of the Lessor
Interest relating to Property I, as the same may be amended, modified or
supplemented from time to time in accordance with the provisions thereof.
"Leased Property" shall have the meaning set forth in the
recitals of each Lease.
"Leases" shall mean Lease A, Lease B, Lease C, Lease D, Lease E,
Lease F, Lease G, Lease H, Lease I, and all Subsequent Leases,
collectively.
"Lease Term" shall mean, with respect to a Lease, each Lease, any
of the Leases, or all of the Leases, as the context may require, the
Interim Term, Basic Term and, if the respective Lease is renewed pursuant
to Section 12 of such Lease, each Renewal Term.
"Lease Termination Date" shall mean, with respect to a Lease,
each Lease, any of the Leases, or all of the Leases, as the context may
require, the last day of the Lease Term or, if earlier, the date the
respective Lease is terminated in accordance with the terms of such Lease.
"Lessee" shall mean Smith's Food & Drug Centers, Inc., a Delaware
corporation, and its successors and assigns.
"Lessee Person" shall have the meaning set forth in Section 16 of
the Tax Indemnification Agreement.
"Lessee's Business" shall have the meaning set forth in Section
8.1(i) of the Participation Agreement.
"Lessee's Counsel" shall mean the general counsel or an associate
general counsel of Lessee or other counsel reasonably satisfactory to the
Owner Participant.
"Lessee's Property" shall have the meaning set forth in Schedule
9 to the Participation Agreement.
"Lessee's Request" shall mean a written request signed in the
name of the Lessee by a Responsible Officer of the Lessee.
"Lessee's Special Counsel" shall mean Kelley Drye & Warren or
such other counsel as shall be selected by the Lessee.
"Lessee's Tax Counsel" shall mean Kelley Drye & Warren or such
other nationally recognized tax counsel selected by the Lessee and
reasonably acceptable to the Owner Participant.
"Lessor" shall mean the Owner Trustee, as lessor, under each
Lease, and, to the extent permitted under the Trust Agreement, Amendment
No. 1 to Trust Agreement and the other Transaction Documents, its
successors and assigns as lessor under each such Lease.
"Lessor Casualty Value" shall mean, as of any Casualty Value Date
(i) during the Basic Term, the product of the Lessor Purchase Price and the
Casualty Value percentage set forth opposite such Casualty Value Date in
Schedule 2 to each Lease; and (ii) during any Fair Market Renewal Term or
Fixed-Rate Renewal Term, an amount calculated by amortizing the Lessor
Casualty Value as of the Basic Term Termination Date on a straight-line
basis from the first day of such Renewal Term to the end of the then
estimated useful life of the respective Improvements, provided, that in no
event will the Lessor Casualty Value be lower than 20% of the Lessor
Purchase Price.
"Lessor Interest" shall mean, with respect to any Property, the
Improvements on, the Estate for Years in, and the Option with respect to,
such Property.
"Lessor Interests" shall mean, collectively, the Lessor Interest
in respect of each of the Related Properties.
"Lessor's Liens" shall mean any Lien arising as a result of (i)
claims against or affecting the Lessor (in its individual capacity or as
Owner Trustee), the Connecticut Trustee, the Owner Participant or any
Affiliate thereof not related to the transactions contemplated by the
Transaction Documents; (ii) any act or omission of the Lessor (in its
individual capacity or as Owner Trustee), the Connecticut Trustee, the
Owner Participant or any Affiliate thereof that is not related to the
transactions contemplated by the Transaction Documents or that is in breach
of any covenant or agreement of such Person set forth in any of the
Transaction Documents, unless such action or failure to act is consented to
by the Lessee or is a result of the occurrence or continuance of an Event
of Default; and (iii) Taxes imposed against the Lessor (in its individual
capacity or as Owner Trustee), the Connecticut Trustee the Owner
Participant or any Affiliate thereof or the Trust Estate or Connecticut
Trust Estate that are not indemnified against by the Lessee pursuant to the
Participation Agreement or the Tax Indemnification Agreement.
"Lessor Purchase Price" shall mean the amount set forth on
Schedule 1 of the Related Lease.
"Lessor Termination Value" shall mean, as of any Termination
Value Date (i) during the Basic Term, the product of the Lessor Purchase
Price and Termination Value percentage set forth opposite such Termination
Value Date in Schedule 3 to each Lease; and (ii) during any Renewal Term,
an amount equal to the present value, computed at 7.9%, of the Fixed-Rate
Renewal Basic Rent payable for the remainder of the Renewal Term in
question.
"LIBOR" shall mean, with respect to any Series J Note, the
arithmetic mean (rounded up, if necessary, to the nearest multiple of 1/16
of 1%) of the offered rates for deposits in Dollars for a 30 or 60 day
period, as selected by the Lessee, applicable during the period commencing
on the previous Series J Interest Payment Date and ending on, but
excluding, the next scheduled Series J Interest Payment Date which appear
on the Telerate LIBOR Page at approximately 11:00 A.M., London time, on the
second Business Day prior to the commencement of each such interest period
(the "Interest Determination Date"). "Telerate LIBOR PAGE," as used
herein, means the display designated as Page 3975 on the Telerate Service
(or such other page as may replace such page on that service for the
purpose of displaying London interbank offered rates of major banks, or, if
such display is not available at any such time, a comparable display of
London interbank offered rates of major banks as may be available from a
similar source). If fewer than two offered rates are provided, LIBOR for
such applicable interest period shall be the rate quoted by the Reference
Bank at approximately 11:00 a.m. New York City time; provided, however,
that if no rates are quoted (whether by the Reference Bank or otherwise),
LIBOR for such applicable interest period shall be the same rate determined
in the immediately preceding interest period for LIBOR.
"Lien" shall mean any mortgage, deed of trust, pledge, security
interest, encumbrance, lien, easement, restriction, servitude or charge of
any kind encumbering the Properties other than Permitted Exceptions,
including, without limitation, any irrevocable license, conditional sale or
other title retention agreement, any lease in the nature thereof or the
filing of, or agreement to execute as "debtor", any financing or
continuation statement under the Uniform Commercial Code of any
jurisdiction or any federal, state or local lien imposed pursuant to any
Environmental Law.
"Loss" shall have the meaning set forth in Section 5 of the Tax
Indemnification Agreement.
"MAI" shall mean a certified member of the American Institute of
Real Estate Appraisers or successor organization.
"Majority in Interest of Noteholders" shall mean Noteholders of a
particular series of Notes holding a majority in principal amount of all
Outstanding Notes of such series of Notes under the Related Supplemental
Indenture at the time of any such determination.
"Maturity", when used with respect to any Note, shall mean the
date on which the principal of, and Premium, if any, on, such Note becomes
due and payable as therein or in the Indenture provided, whether at the
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise.
"Memorandum of Lease" shall mean any memorandum of lease recorded
pursuant to Section 21(n) of any Lease with respect to a Related Property.
"Modification" shall mean (a) any alteration, improvement or
modification to any Improvement, other than original, substitute or
replacement parts incorporated into such Improvement, and (b) the addition,
betterment, expansion or enlargement of any Improvement or the construction
of a new building or other structure on the Property (whether or not
attached to the existing Improvements) or the replacement of any such
property with other property.
"Moody's" shall mean Moody's Investors Service, Inc., and any
successor that issues nationally accepted securities ratings.
"Morgan Stanley & Co." shall mean Morgan Stanley & Co.
Incorporated in its capacity as a Qualified Investment Banking Firm.
"Net Economic Return" shall mean the Owner Participant's
anticipated (a) net after-tax yield on its Investment plus Transaction
Expenses to the extent paid by the Owner Participant, and (b) total net
after-tax cash flows per Dollar of Investment resulting from the
transactions described in and contemplated by the Transaction Documents and
preserving its anticipated annual net after-tax cash flows during the first
five years following an adjustment to Basic Rent pursuant to Section 3(e)
of each Lease within a range of 95% to 105% of amounts originally
anticipated for any year in such period, so long as anticipated total net
after-tax cash flows per Dollar of Investment are preserved for such
period.
"New Debt Percentage" shall mean the amount set forth as such in
the Supplemental Indenture related to any Subsequent Property.
"Nonseverable Modification" shall mean any Modification that is
not a Severable Modification.
"Note Register" shall have the meaning set forth in Section 2.6
of the Indenture.
"Note Registrar" shall mean any Person acting as Note Registrar
pursuant to Section 2.6 of the Indenture.
"Noteholders" or "Holders" shall mean the registered owners from
time to time of the Outstanding Notes.
"Notes" shall mean the Series J Notes, the Refinancing Notes, any
Refunding Notes, any Optional Refinancing Notes and any Additional Notes.
"Notice of Closing" shall mean, with respect to the Closing Date,
a notice from the Lessee, substantially in the form of Exhibit H to the
Participation Agreement, setting forth, among other things, the Closing
Date, the Purchase Price, the Option Amount, payment instructions with
respect to the disposition of the proceeds of the Purchase Price, and the
respective amount of the Owner Participant's Investment and the proceeds
from the sale of the Notes to be issued, authenticated and sold on the
Closing Date.
"Obsolescence Redemption Date" shall mean if any Notes are
Outstanding on the Termination Date, the date that is three Business Days
after such Termination Date, or if such date is not a Business Day, the
next Business Day thereafter.
"Offered Interest" shall have the meaning given to such term in
Section 8.2 of the Participation Agreement.
"Officers' Certificate" shall mean (a) in the case of State
Street Bank and Trust Company of California, National Association, in its
individual capacity or as Owner Trustee, State Street Connecticut and
Wilmington Trust Company, in its individual capacity or as Indenture
Trustee, a certificate signed by any Authorized Officer of such Person and
(b) in the case of any other Person, a certificate signed by the President
or any Vice President and by the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of such Person.
"Opinion of Counsel" shall mean a written opinion of counsel for
any Person either expressly referred in the Indenture or otherwise
reasonably satisfactory to the Indenture Trustee which may include, without
limitation, counsel to the Owner Trustee, the Connecticut Trustee, the
Owner Participant or the Lessee, whether or not such counsel is an employee
of any of them.
"Option" shall have the meaning given to such term in Section 1
of the Option Agreement.
"Option Agreement" shall mean with respect to Properties A-G, the
Option Agreement dated as of December 21, 1993 and, with respect to
Properties H and I, the Option Agreement dated as of March 1, 1994, in each
case between the Owner Trustee and the Remainderman, or any Subsequent
Option Agreement.
"Option Amount" shall mean, with respect to Properties A through
G, $484,579, with respect to Properties H and I, $____________, and, with
respect to any Subsequent Property, the amount as shall be agreed to by the
Owner Participant, the Remainderman Participant and the Lessee and set
forth in the applicable Subsequent Option Agreement.
"Optional Refinancing Notes" shall mean any series of Notes that
are issued by the Owner Trustee pursuant to Supplemental Indentures as
contemplated by Section 2.7 of the Participation Agreement to refinance the
Related Series J Notes.
"Original Issue Discount" of any Refinancing Note shall mean the
difference between the Relevant Principal Amount and the Original Issue
Price of Refinancing Note as set forth on the face thereof.
"Original Issue Price" when used with respect to any Refinancing
Note, shall mean the initial issue price at which such Refinancing Note is
sold as set forth on the face thereof.
"Original of the Lease" or "Originals of the Leases" shall mean
the fully executed counterpart of a Lease or the Leases, as the case may
be, marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" pursuant
to Section 21(f) of each Lease and containing the receipt of the Indenture
Trustee.
"Other Lease" or "Other Leases" shall mean when used in any one
Lease, any other Lease in respect of a Property not covered by such Lease
or any other Leases in respect of Properties not covered by such Lease, as
the case may be.
"Other Note" or "Other Notes" shall mean, when used with respect
to any series of Notes, any Note or Notes, as the case may be, not issued
pursuant to the Related Supplemental Indenture.
"Other Property" or "Other Properties" shall mean when used in
any one Lease, any Property other than the Related Property subject to such
Lease or any Properties other than the Related Property subject to such
Lease, as the case may be.
"Other Supplemental Indenture" or "Other Supplemental Indentures"
shall mean, when used with respect to any Supplemental Indenture, any
Supplemental Indenture or Supplemental Indentures, as the case may be,
other than such Supplemental Indenture.
"Out Parcel Agreement" shall mean, with respect to Properties A-
G, the Out-Parcel and Lot Line Adjustment Agreement dated as of December
21, 1993 and, with respect to Properties H and I, the Out Parcel Agreement
dated as of March 1, 1994, in each case among the Lessee, the Owner
Trustee, the Remainderman and the Indenture Trustee [, or any Subsequent
Out Parcel Agreement].
"Outside Date" shall mean the tenth monthly anniversary of the
Closing Date.
"Outstanding", when used with respect to Notes, shall mean, as of
the date of determination, all such Notes theretofore issued, authenticated
and delivered under the Indenture, except (a) Notes theretofore canceled by
the Indenture Trustee or delivered to the Indenture Trustee for
cancellation, (b) Notes or portions thereof for the payment of which the
Indenture Trustee holds (and has notified the Noteholders thereof that it
holds) in trust for that purpose an amount sufficient to make full payment
thereof when due and (c) Notes in exchange for, or in lieu of, which other
Notes have been issued, authenticated and delivered pursuant to the
Indenture; provided, however, that any Note owned by the Lessee or any
Affiliate thereof shall be disregarded and deemed not to be outstanding for
the purpose of any Directive, but not for any other purpose.
"Overdue Interest Rate" shall mean the weighted average rate per
annum of interest payable with respect to overdue payments of principal on
the Outstanding Notes, computed as set forth in such Notes.
"Owner Participant" shall mean PMCC Leasing Corporation, a
Delaware corporation, its successors and, to the extent permitted by the
Trust Agreement, the Connecticut Trust Agreement and the Participation
Agreement, its assign or assigns. If, at any time, there is more than one
Owner Participant, then the term "Owner Participant" shall refer
collectively to all such Owner Participants.
"Owner Participant Parent", shall mean Philip Morris Capital
Corporation, a Delaware corporation, and its successors and assigns.
"Owner Participant Parent Guaranty" shall mean the Guaranty by
the Owner Participant Parent of the Owner Participant's obligations, dated
as of December 21, 1993, substantially in the form of Exhibit N to the
Participation Agreement, as amended and restated by the Amended and
Restated Guaranty by the Owner Participant dated as of March 1, 1994
substantially in the form of Exhibit [*] to the Participation Agreement.
"Owner Participant's Percentage" shall mean 20%.
"Owner Participant's Special Counsel" shall mean Hunton &
Williams or such other counsel as shall be selected by the Owner
Participant.
"Owner Participant's Special Local Counsel" shall mean Freshman,
Marantz, Orlowski, Cooper & Klein or such other counsel as shall be
selected by the Owner Participant.
"Owner Participant's Tax Counsel" shall mean Hunton & Williams or
another nationally recognized tax counsel selected by the Owner Participant
and reasonably acceptable to the Lessee.
"Owner Trustee" shall mean State Street Bank and Trust Company of
California, National Association, not in its individual capacity except as
otherwise expressly provided in the Participation Agreement and any other
Transaction Document, but solely as Owner Trustee under the Trust
Agreement, and each successor as Owner Trustee and each separate trustee
and co-trustee thereunder.
"Owner Trustee Request" shall mean a written request signed in
the name of the Owner Trustee by an Authorized Officer thereof.
"Owner Trustee's Counsel" shall mean Bingham, Dana & Gould, or
such other counsel as shall be selected by the Owner Trustee.
"Participation Agreement" shall mean the Participation Agreement
dated as of December 21, 1993, among the Lessee, the Owner Participant, the
Owner Participant Parent, the Owner Trustee, the Remainderman Participant,
the Remainderman, the Remainderman Trustee, the Indenture Trustee, the
Initial Noteholder and the Pass Through Trustee, as amended and restated by
the Amended and Restated Participation Agreement dated as of March 1, 1994,
among the Lessee, the Owner Participant, the Owner Participant Parent, the
Owner Trustee, the Remainderman Participant, the Remainderman, the
Remainderman Trustee, the Indenture Trustee, the Initial Noteholder and the
Pass Through Trustee and the Connecticut Trustee, as the same may be
amended, modified or supplemented from time to time in accordance with the
provisions thereof.
"Pass Through Certificate" shall mean any Pass Through
Certificate issued pursuant to the Pass Through Trust Agreement, as
supplemented by a Pass Through Trust Supplement, as contemplated by, or
otherwise in connection with, the Participation Agreement.
"Pass Through Estate" shall have the meaning set forth in each
Pass Through Trust Supplement.
"Pass Through Investors" shall have the meaning set forth in the
recitals to the Participation Agreement.
"Pass Through Trust" shall mean each Pass Through Trust created
pursuant to a Pass Through Trust Supplement.
"Pass Through Trust Agreement" shall mean the Pass Through Trust
Agreement, dated as of December 21, 1993, between the Lessee and the Pass
Through Trustee, substantially in the form of Exhibit E to the
Participation Agreement, as the same may be amended, modified or
supplemented from time to time in accordance with the provisions thereof.
"Pass Through Trust Supplement" shall mean a supplement to the
Pass Through Trust Agreement in connection with the purchase of certain
Notes and the issuance of Related Pass Through Certificates.
"Pass Through Trustee" shall mean Wilmington Trust Company, not
in its individual capacity except as expressly provided otherwise in the
Participation Agreement but solely in its capacity as trustee under the
Pass Through Trust Agreement, and such other person that may from time to
time be acting as successor trustee under the Pass Through Trust Agreement.
"Pass Through Trustee's Counsel" shall mean Richards, Layton &
Finger, or such other counsel as shall be selected by the Pass Through
Trustee.
"Pass Through Trustee's Liens" shall mean Liens against the
Indenture Estate that result from acts of, or any failure to act by, or as
a result of claims against the Pass Through Trustee, in its individual and
fiduciary capacity, unrelated to the transactions contemplated by the
Transaction Documents or that is in breach of any covenant or any agreement
of the Pass Through Trustee, in its individual and fiduciary capacity, set
forth in any of the Transaction Documents to which it is a party, unless
such action or failure to act is consented to by the Lessee or is a result
of the occurrence or continuance of an Event of Default.
"Paying Agent" shall mean any Person acting as Paying Agent
pursuant to Section 5.2 of the Indenture.
"Permitted Exceptions" shall mean with respect to each Property,
the Related Estate for Years, Option, Supplemental Indenture and Lease and
those exceptions to title listed on Schedule B-II to the policy of owner's
and lender's title insurance delivered pursuant to Section 3.1(p) of the
Participation Agreement and approved by the Owner Trustee and the Indenture
Trustee.
"Permitted Investments" shall mean bonds, notes and other
obligations of the United States of America and securities unconditionally
guaranteed as to the payment of principal and interest by the United States
of America or any agency thereof having the full faith and credit of the
United States of America, and having maturities, when acquired, of not more
than six months or such lesser time as is necessary for payment of any
amounts pursuant to the Indenture.
"Permitted Liens" shall mean:
(a) the respective rights and interests of the parties to
the Transaction Documents, as provided in the Transaction
Documents;
(b) the rights of any sublessee or assignee under a
sublease or an assignment permitted by the terms of each Lease or
the Participation Agreement;
(c) Lessor's Liens, Connecticut Trustee's Liens, Indenture
Trustee's Liens, Remainderman's Liens, the Initial Noteholder's
Liens and Pass Through Trustee's Liens, in each case, excluding
any such Lien attributable to such party;
(d) Liens for Taxes that either are not yet due and payable
or are being contested in good faith and by appropriate
proceedings diligently conducted in accordance with Section 8(i)
of each Lease;
(e) materialmen's, mechanics', workmen's, repairmen's,
employees', carriers', warehousemen's and other like Liens
relating to the construction or repair of Improvements or in
connection with any Modification or otherwise for amounts that
either relate to payment obligations that are not more than 30
days past due or are being contested in good faith by appropriate
proceedings in accordance with procedures similar to the
requirement of Section 8(i) of each Lease;
(f) Liens of any of the types referred to in clause (e)
above that have been bonded for the full amount in dispute and
discharged of record (or as to which other security arrangements
satisfactory to the Lessor have been made);
(g) Liens arising out of judgments or awards with respect
to which appeals or other proceedings for review are being
prosecuted in good faith and for the payment of which adequate
reserves have been provided as required by GAAP or other
appropriate provisions have been made so long as such proceedings
have the effect of staying the execution of such judgments of
awards and is in accordance with Section 8(i) of each Lease;
(h) Permitted Exceptions;
(i) Liens on the Severable Modifications, title to which is
retained by the Lessee as provided in Section 8(e) of each Lease
and Liens on Lessee's Property;
(j) Liens arising pursuant to Section 20 of each Lease; and
(k) other Liens that do not, individually or in the
aggregate, impair the use of any of the Properties or adversely
affect the value thereof except to an insignificant extent.
"Person" shall mean any individual, partnership, corporation.
limited liability company, trust, unincorporated association or joint
venture, a government or any department or agency thereof, or any other
entity.
"Place of Payment" shall mean the city in which the Indenture
Trustee's Office is located.
"Pre-Commencement Date Period" shall mean, with respect to the
Refinancing Notes, the period commencing on the Debt Refinancing Date and
ending on and including the day immediately preceding the Commencement
Date.
"Premium" shall mean, (a) with respect to any Series J Notes,
Break Funding Costs; and (b) with respect to any Refinancing Notes to be
redeemed, the excess, if any, of (i) the sum of the present values of all
the remaining scheduled payments of principal and interest from the date of
such redemption to the Stated Maturity of such Refinancing Notes discounted
semiannually on each Installment Payment Date at a rate equal to the
Treasury Rate, based on a 360-day year of twelve 30-day months, over (ii)
the aggregate unpaid principal amount of such Refinancing Notes plus
accrued but unpaid interest on such Refinancing Notes (but not any accrued
interest in default), as determined by an Independent Investment Banker as
of the third Business Day prior to the Redemption Date for such Refinancing
Notes; provided, however, if such redemption occurs on or after the Premium
Termination Date for such Refinancing Notes, the Premium shall be zero;
provided further, however, that in no event shall the aggregate of all
amounts accrued or paid pursuant to any Refinancing Notes or any related
document that, under Applicable Laws, constitute or may be deemed to
constitute interest on the indebtedness evidenced by such Refinancing Notes
ever exceed the maximum nonusurious rate of interest permitted by whichever
of applicable federal or state laws permits the lower interest rate.
"Premium" when used with references to any other series of Notes, shall
include break-funding costs due upon a payment of such Notes prior to their
Stated Maturity.
"Premium Termination Date" shall have the meaning set forth in
each Supplemental Indenture.
"Pricing Assumptions" shall mean the assumptions set forth in
Schedule 4 to each Lease.
"Properties" shall mean any of Property A, Property B, Property
C, Property D, Property E, Property F, Property G, Property H, Property I,
all Substitute Parcels and all Subsequent Properties, collectively.
"Property" shall mean any of Property A, Property B, Property C,
Property D, Property E, Property F, Property G, Property H, Property I, or
any Subsequent Property, as the context may require, and any Substitute
Parcel.
"Property A" shall mean the Improvements, Estate for Years and
Remainderman Interest described in, and conveyed, respectively by,
Improvement Deed A, Estate for Years Deed A and Remainderman Interest Deed
A and any Modifications, title to which shall have vested in the Property
Owner.
"Property B" shall mean the Improvements, Estate for Years and
Remainderman Interest described in, and conveyed, respectively by,
Improvement Deed B, Estate for Years Deed B and Remainderman Interest Deed
B and any Modifications, title to which shall have vested in the Property
Owner.
"Property C" shall mean the Improvements, Estate for Years and
Remainderman Interest described in, and conveyed, respectively by,
Improvement Deed C, Estate for Years Deed C and Remainderman Interest Deed
C and any Modifications, title to which shall have vested in the Property
Owner.
"Property D" shall mean the Improvements, Estate for Years and
Remainderman Interest described in, and conveyed, respectively by,
Improvement Deed D, Estate for Years Deed D and Remainderman Interest Deed
D and any Modifications, title to which shall have vested in the Property
Owner.
"Property E" shall mean the Improvements, Estate for Years and
Remainderman Interest described in, and conveyed, respectively by,
Improvement Deed E, Estate for Years Deed E and Remainderman Interest Deed
E and any Modifications, title to which shall have vested in the Property
Owner.
"Property F" shall mean the Improvements, Estate for Years and
Remainderman Interest described in, and conveyed, respectively by,
Improvement Deed F, Estate for Years Deed F and Remainderman Interest Deed
F and any Modifications, title to which shall have vested in the Property
Owner.
"Property G" shall mean the Improvements, Estate for Years and
Remainderman Interest described in, and conveyed, respectively by,
Improvement Deed G, Estate for Years Deed G and Remainderman Interest Deed
G and any Modifications, title to which shall have vested in the Property
Owner.
"Property H" shall mean the Improvements, Estate for Years and
Remainderman Interest described in, and conveyed, respectively by,
Improvement Deed H, Estate for Years Deed H and Remainderman Interest Deed
H and any Modifications, title to which shall have vested in the Property
Owner.
"Property I" shall mean the Improvements, Estate for Years and
Remainderman Interest described in, and conveyed, respectively by,
Improvement Deed I, Estate for Years Deed I and Remainderman Interest Deed
I and any Modifications, title to which shall have vested in the Property
Owner.
"Property Cost" shall mean with respect to a particular Property,
the sum of the Related Lessor Purchase Price and the Related Remainderman
Purchase Price.
"Property Owner" shall mean the Owner Trustee in respect of the
Lessor Interest and the Remainderman in respect of the Remainderman
Interest, and their respective successors as record owners of the
Properties.
"Prospectus" shall mean each prospectus contained in the
Registration Statement at the time it becomes effective and at the time
that any post effective amendment thereto becomes effective and each
prospectus filed pursuant to Rule 424(b) under the Securities Act in
connection with any sale of the Pass Through Certificates, as the same may
be supplemented.
"PTE 90-24 Affiliate" shall mean an "affiliate" as defined in
Prohibited Transaction Exemption 90-24.
"Qualified Accounting Firm" shall have the meaning set forth in
Section 3(f)(ii) of each Lease.
"Qualified Institution" shall mean a corporation that is
organized under the laws of the United States of America, a state or
commonwealth thereof or the District of Columbia and having a net worth of
at least $75 million determined using financial statements prepared in
accordance with GAAP.
"Qualified Investment Banking Firm" shall mean Morgan Stanley &
Co. Incorporated or another reputable national investment banking firm of
equal national and international reputation, reasonably acceptable to the
Owner Participant.
"Reasonable Basis" for a position shall exist if tax counsel may
properly advise reporting such position on a tax return in accordance with
Formal Opinion 85-352 issued by the Standing committee on Ethics and
Professional Responsibility off the American Bar Association.
"Record Date" shall have the meaning set forth in Section 2.8 of
the Indenture.
"Redemption Date", when used with respect to any Note or portion
thereof to be redeemed, shall mean the date or dates fixed for such
redemption by or pursuant to the Indenture.
"Redemption Price", when used with respect to any Note or portion
thereof to be redeemed, shall mean the price at which such Note or portion
thereof is to be redeemed, determined as of the applicable Redemption Date,
pursuant to Section 6.1 of the Indenture or pursuant to the applicable
Supplemental Indenture.
"Reference Bank" shall mean BA Securities, Inc., a national
banking corporation.
"Refinancing Notes" shall mean any series of Notes that are
issued by the Owner Trustee pursuant to Supplemental Indentures on the Debt
Refinancing Date to refinance the Related Series J Notes or any Subsequent
Notes.
"Refunding Date" shall mean any date on which one or more series
of Refunding Notes are issued.
"Refunding Notes" shall mean any series of Notes that are issued
by the Owner Trustee pursuant to Supplemental Indentures on any Refunding
Date to refund, in whole or in part, the Related Outstanding Notes.
"Registration Statement" shall mean the Registration Statement on
Form S-3 (File No. 33-53378), including any amendments or supplements
thereto and including all exhibits and schedules thereto and all documents
incorporated in such registration statement by reference, filed with the
SEC under the Securities Act in connection with the offer, issuance and
sale of the Pass Through Certificates at the time such registration
statement becomes effective and at the time that each post-effective
amendment thereto becomes effective.
"Regulations" shall mean the income tax regulations issued,
published or promulgated from time to time under the Code.
"Related" shall mean with respect to (i) any Lessor Interest (or
Leased Property), the related Property, Lease, Deed, Remainderman Interest
Deed, Remainderman Interest (or Remainderman Trust Estate), the Option (or
Option Agreement), Note, Supplemental Indenture, Indenture Estate,
Transaction Documents, Transaction Expenses, Property Cost, Lessor Purchase
Price, Remainderman Purchase Price, or Noteholder, as the context may
require, any Property, the related Lessor Interest (or Leased Property),
Lease, Deed, Remainderman Interest Deed, Remainderman Interest (or
Remainderman Trust Estate), the Option (or Option Agreement), Note,
Supplemental Indenture, Indenture Estate, Transaction Documents,
Transaction Expenses, Property Cost, Lessor Purchase Price, Remainderman
Purchase Price, or Noteholder, as the context may require, (iii) any Lease,
the related Lessor Interest (or Leased Property), Property, Deed,
Remainderman Interest Deed, Remainderman Interest (or Remainderman Trust
Estate), the Option (or Option Agreement), Note, Supplemental Indenture,
Indenture Estate, Transaction Documents, Transaction Expenses, Property
Cost, Lessor Purchase Price, Remainderman Purchase Price, or Noteholder, as
the context may require, (iv) any Remainderman Interest Deed, the related
Lessor Interest (or Leased Property), Property, Lease, Deed, Remainderman
Interest (or Remainderman Trust Estate), the Option (or Option Agreement),
Note, Supplemental Indenture, Indenture Estate, Transaction Documents,
Transaction Expenses, Property Cost, Lessor Purchase Price, Remainderman
Purchase Price, or Noteholder, as the context may require, (v) any
Remainderman Interest (or Remainderman Trust Estate), the related Lessor
Interest (or Leased Property), Property, Lease, Deed, Remainderman Interest
Deed, Option (or Option Agreement), Note, Supplemental Indenture, Indenture
Estate, Transaction Documents, Transaction Expenses, Property Cost, Lessor
Purchase Price, Remainderman Purchase Price, or Noteholder, as the context
may require, (vi) any Option (or Option Agreement), the related Lessor
Interest (or Leased Property), Property, Lease, Deed, Remainderman Interest
Deed, Remainderman Interest (or Remainderman Trust Estate), Note,
Supplemental Indenture, Indenture Estate, Transaction Documents,
Transaction Expenses, Property Cost, Lessor Purchase Price, Remainderman
Purchase Price, or Noteholder, as the context may require, (vii) any Note,
the related Lessor Interest (or Leased Property), Property, Lease, Deed,
Remainderman Interest Deed, Remainderman Interest (or Remainderman Trust
Estate), the Option (or Option Agreement), Supplemental Indenture,
Indenture Estate, Transaction Documents, Transaction Expenses, Property
Cost, Lessor Purchase Price, Remainderman Purchase Price, or Noteholder, as
the context may require, (viii) any Supplemental Indenture, the related
Lessor Interest (or Leased Property), Property, Lease, Deed, Remainderman
Interest Deed, Remainderman Interest (or Remainderman Trust Estate), the
Option (or Option Agreement), Note, Indenture Estate, Transaction
Documents, Transaction Expenses, Property Cost, Lessor Purchase Price,
Remainderman Purchase Price, or Noteholder, as the context may require,
(ix) any Indenture Estate, the related Lessor Interest (or Leased
Property), Property, Lease, Deed, Remainderman Interest Deed, Remainderman
Interest (or Remainderman Trust Estate), Option (or Option Agreement),
Note, Supplemental Indenture, Transaction Documents, Transaction Expenses,
Property Cost, Lessor Purchase Price, Remainderman Purchase Price, or
Noteholder, as the context may require, (x) any Transaction Documents, the
related Lessor Interest (or Leased Property), Property, Lease, Deed,
Remainderman Interest Deed, Remainderman Interest (or Remainderman Trust
Estate), Option (or Option Agreement), Note, Supplemental Indenture,
Indenture Estate, Transaction Documents, Transaction Expenses, Property
Cost, Lessor Purchase Price, Remainderman Purchase Price, or Noteholder, as
the context may require, (xi) any Transaction Expenses, the related Lessor
Interest (or Leased Property), Property, Lease, Deed, Remainderman Interest
Deed, Remainderman Interest (or Remainderman Trust Estate), Option (or
Option Agreement), Note, Supplemental Indenture, Indenture Estate,
Transaction Documents, Transaction Expenses, Property Cost, Lessor Purchase
Price, Remainderman Purchase Price, or Noteholder, as the context may
require, (xii) any Property Cost, the related Lessor Interest (or Leased
Property), Property, Lease, Deed, Remainderman Interest Deed, Remainderman
Interest (or Remainderman Trust Estate), the Option (or Option Agreement),
Note, Supplemental Indenture, Indenture Estate, Transaction Documents,
Transaction Expenses, Property Cost, Lessor Purchase Price, Remainderman
Purchase Price, or Noteholder, as the context may require, (xiii) any
Lessor Purchase Price, the related Lessor Interest (or Leased Property),
Property, Lease, Deed Remainderman Interest Deed, Remainderman Interest (or
Remainderman Trust Estate), the Option (or Option Agreement), Note,
Supplemental Indenture, Indenture Estate, Transaction Documents,
Transaction Expenses, Property Cost, Remainderman Purchase Price, or
Noteholder, as the context may require, (xiv) any Remainderman Purchase
Price, the related Lessor Interest (or Leased Property), Property, Lease,
Deed Remainderman Interest Deed, Remainderman Interest (or Remainderman
Trust Estate), Option (or Option Agreement), Note, Supplemental Indenture,
Indenture Estate, Transaction Documents, Transaction Expenses, Property
Cost, Lessor Purchase Price, Remainderman Purchase Price, or Noteholder, as
the context may require, and (xv) any Noteholder, the related Lessor
Interest (or Leased Property), Property, Lease, Deed, Remainderman Interest
Deed, Remainderman Interest (or Remainderman Trust Estate), the Option (or
Option Agreement), Note Supplemental Indenture, Indenture Estate,
Transaction Documents, Transaction Expenses, Property Cost, Lessor Purchase
Price, or Remainderman Purchase Price, as the context may require.
"Release" shall mean any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor Environment or into or out of any
property, including the movement of Hazardous Materials through or in the
air, soil, surface water, ground water or property.
"Release Parcel" shall have the meaning set forth in the Out
Parcel Agreement.
"Relevant Principal Amount" when used with respect to a
Refinancing Note, shall have the meaning specified thereof in such
Refinancing Note.
"Remainder Term" shall have the meaning given to such term in
Section 2(b) of the Option Agreement.
"Remainderman" shall mean the California-Relco Limited
Partnership Trust created by the Remainderman Trust Agreement.
"Remainderman Casualty Value" shall mean as of any Casualty Value
Date (i) during the Basic Term, the Remainderman Casualty Value set forth
opposite such Casualty Value Date in Schedule 2 to each Lease; and (ii)
during any Renewal Term, the Remainderman Casualty Value as of the Basic
Term Termination Date.
"Remainderman Interest" and "Remainderman Interests" shall have
the meanings set forth in the recitals to the Participation Agreement.
"Remainderman Interest Deed" shall mean any of Remainderman
Interest Deed A, Remainderman Interest Deed B, Remainderman Interest Deed
C, Remainderman Interest Deed D, Remainderman Interest Deed E, Remainderman
Interest Deed F, Remainderman Interest Deed G, Remainderman Interest Deed
H, Remainderman Interest Deed I, or any Subsequent Remainderman Interest
Deed, as the context may require.
"Remainderman Interest Deed A" shall mean the Remainderman
Interest Deed, dated the Closing Date, between the Lessee, as seller, and
the Remainderman, as buyer, substantially in the form of Exhibit A-3 to the
Participation Agreement covering the portion of the Remainderman Interest
in respect of Property A as described in Exhibit A thereto.
"Remainderman Interest Deed B" shall mean the Remainderman
Interest Deed, dated the Closing Date, between the Lessee, as seller, and
the Remainderman, as buyer, substantially in the form of Exhibit A-3 to the
Participation Agreement covering the portion of the Remainderman Interest
in respect of Property B as described in Exhibit A thereto.
"Remainderman Interest Deed C" shall mean the Remainderman
Interest Deed, dated the Closing Date, between the Lessee, as seller, and
the Remainderman, as buyer, substantially in the form of Exhibit A-3 to the
Participation Agreement covering the portion of the Remainderman Interest
in respect of Property C as described in Exhibit A thereto.
"Remainderman Interest Deed D" shall mean the Remainderman
Interest Deed, dated the Closing Date, between the Lessee, as seller, and
the Remainderman, as buyer, substantially in the form of Exhibit A-3 to the
Participation Agreement covering the portion of the Remainderman Interest
in respect of Property D as described in Exhibit A thereto.
"Remainderman Interest Deed E" shall mean the Remainderman
Interest Deed, dated the Closing Date, between the Lessee, as seller, and
the Remainderman, as buyer, substantially in the form of Exhibit A-3 to the
Participation Agreement covering the portion of the Remainderman Interest
in respect of Property E as described in Exhibit A thereto.
"Remainderman Interest Deed F" shall mean the Remainderman
Interest Deed, dated the Closing Date, between the Lessee, as seller, and
the Remainderman, as buyer, substantially in the form of Exhibit A-3 to the
Participation Agreement covering the portion of the Remainderman Interest
in respect of Property F as described in Exhibit A thereto.
"Remainderman Interest Deed G" shall mean the Remainderman
Interest Deed, dated the Closing Date, between the Lessee, as seller, and
the Remainderman, as buyer, substantially in the form of Exhibit A-3 to the
Participation Agreement covering the portion of the Remainderman Interest
in respect of Property G as described in Exhibit A thereto.
"Remainderman Interest Deed H" shall mean the Remainderman
Interest Deed, dated the Closing Date, between the Lessee, as seller, and
the Remainderman, as buyer, substantially in the form of Exhibit A-3 to the
Participation Agreement covering the portion of the Remainderman Interest
in respect of Property H as described in Exhibit A thereto.
"Remainderman Interest Deed I" shall mean the Remainderman
Interest Deed, dated the Closing Date, between the Lessee, as seller, and
the Remainderman, as buyer, substantially in the form of Exhibit A-3 to the
Participation Agreement covering the portion of the Remainderman Interest
in respect of Property I as described in Exhibit A thereto.
"Remainderman Interest Deeds" shall mean Remainderman Interest
Deed A, Remainderman Interest Deed B, Remainderman Interest Deed C,
Remainderman Interest Deed D, Remainderman Interest Deed E, Remainderman
Interest Deed F, Remainderman Interest Deed G, Remainderman Interest Deed
H, Remainderman Interest Deed I, and all Subsequent Remainderman Interest
Deeds, collectively.
"Remainderman Investment" shall have the meaning set forth in
Section 2.1(a) of the Participation Agreement.
"Remainderman Investment Amount" shall have the meaning set forth
in Section 2.1(a) of the Participation Agreement.
"Remainderman Participant" shall mean California - Relco Limited
Partnership, a Connecticut limited partnership.
"Remainderman Purchase Price" for each Remainderman Interest
shall mean the amount set forth on Schedule 1 of the Participation
Agreement.
"Remainderman Termination Value" shall mean, as of any
Termination Value Date (i) during the Basic Term, the Remainderman
Termination Value set forth opposite such Termination Value Date in
Schedule 3 to each Lease and (ii) during any Renewal Term, the Remainderman
Termination Value as of the Basic Term Termination Date.
"Remainderman Trustee" shall mean Wilmington Trust Company, a
Delaware banking corporation, not in its individual capacity, but solely as
the Remainderman Trustee under the Remainderman Trust Agreement.
"Remainderman Trust Agreement" shall mean the Remainderman
Business Trust Agreement dated as of December 21, 1993 between the
Remainderman Participant and Wilmington Trust Company, substantially in the
form of Exhibit D-2 to the Participation Agreement, as the same may be
amended, modified or supplemented from time to time in accordance with the
provisions thereof and the Participation Agreement, including, without
limitation, the Supplemental Trust Agreement (Individual).
"Remainderman Trust Estate" shall have the meaning set forth in
Section 1.01 of the Remainderman Trust Agreement.
"Remainderman's Liens" shall mean any Lien arising as a result of
(i) claims against or affecting the Remainderman, the Remainderman Trustee,
the Remainderman Participant or any Affiliate thereof not related to the
transactions contemplated by the Transaction Documents; (ii) any act or
omission of the Remainderman, the Remainderman Trustee, the Remainderman
Participant or any Affiliate thereof that is not related to the
transactions contemplated by the Transaction Documents or that is in breach
of any covenant or agreement of such Person set forth in any of the
Transaction Documents, unless such action or failure to act is consented to
by the Lessee or is a result of the occurrence or continuance of an Event
of Default; and (iii) Taxes imposed against the Remainderman, the
Remainderman Trustee, the Remainderman Participant or any Affiliate thereof
or the Remainderman Interest in respect of any of the Properties that are
not indemnified against by the Lessee pursuant to the Participation
Agreement.
"Remaining Weighted Average Life" shall mean, for any Refinancing
Note, at the Redemption Date of such Refinancing Note, the number of days
equal to the quotient obtained by dividing (a) the sum of the products
obtained by multiplying (i) the amount of each then remaining scheduled
payment of principal, including the payment due on the Stated Maturity of
such Refinancing Note, by (ii) the number of days from and including the
Redemption Date to but excluding the regularly scheduled dates of each such
scheduled payment of principal by (b) the then unpaid principal amount of
such Refinancing Note.
"Remedial Action" means all actions, whether voluntary or
involuntary, reasonably necessary to comply with applicable Environmental
Laws, to (a) clean up, remove, treat, cover or in any other way adjust
Hazardous Materials in the indoor or outdoor Environment; (b) prevent or
control the Release of Hazardous Materials so that they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor Environment; or (c) perform remedial studies, investigations,
restoration and post-remedial studies, investigations and monitoring on,
about or in any real property.
"Reminder Notice" shall have the meaning given to such term in
Section 2(b) of the Option Agreement.
"Renewal Option" shall mean an option to renew any Lease for a
Renewal Term pursuant to Section 12 of such Lease.
"Renewal Term" shall mean the Fixed-Rate Renewal Term(s), if any,
and any and all Fair Market Renewal Terms.
"Rent" shall mean Basic Rent and Supplemental Rent.
"Responsible Officer" shall mean, with respect to the subject
matter of any representation, warranty, covenant, agreement or obligation
of any party contained in any Transaction Document, the President, or any
Vice President, Assistant Vice President, Treasurer, Assistant Treasurer or
other officer who in the normal performance of his operational
responsibility would have knowledge of such matter and the requirements
with respect thereto.
"Sale Proceeds" or "Sales Proceeds" shall mean, with respect to
any sale of any Property or any part thereof by the Lessor to any Person,
the gross proceeds of such sale paid in cash, less all reasonable costs and
expenses incurred by the Lessor, the Indenture Trustee, the Remainderman
and/or the Owner Participant in connection therewith.
"SEC" shall mean the Securities and Exchange Commission of the
United States of America, as from time to time constituted, created under
the Securities Exchange Act, or if at any time such commission is not
existing and performing the duties assigned to it as of the Closing Date
under the Trust Indenture Act, then the body performing such duties at such
time.
"Securities Act" shall mean the Securities Act of 1933, as
amended and as the same may be further amended, or any comparable successor
Applicable Law.
"Securities Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended and as the same may be further amended, or any
comparable successor Applicable Law.
"Selling Party" shall have the meaning given to such term in
Section 8.2(a) of the Participation Agreement.
"Series J Commencement Date" shall mean the date on which the
Series J Notes are issued pursuant to the Related First Supplemental
Indenture.
"Series J Interest Payment Date" shall have the meaning with
respect to a Series J Note set forth in the Related First Supplemental
Indenture.
"Series J Notes" shall mean the "Series J Notes" issued in such
subseries as set forth in, and substantially in the form of Exhibit A to,
the Related First Supplemental Indentures to be issued pursuant to Article
2 of the Indenture by the Owner Trustee and authenticated by the Indenture
Trustee on the Closing Date to finance a portion of the Lessor Purchase
Price.
a "series of Notes" shall mean (i) with respect to the Series J
Notes, each Series J Note issued pursuant to a First Supplemental Indenture
and (ii) with respect to all other Notes, all Notes issued pursuant to a
particular Supplemental Indenture.
"Severable Modifications" shall mean any Modification that can be
removed from a Property without materially diminishing the value, utility
or remaining useful life of such Property as compared to such value,
utility or remaining useful life immediately prior to such Modification
being made.
"Similar Building" shall have the meaning set forth in Section
10(a)(i)(A) of each Lease.
"Special Default" shall mean a Default with respect to Section
15(a), (b) or (f) of each Lease.
"Standard & Poor's" shall mean Standard & Poor's Corporation and
any successor that issues nationally accepted securities ratings.
"Stated Maturity" when used with respect to any Note, shall mean
the date specified in such Note as the fixed date on which the final
payment of principal of such Note is due and payable.
"State Tax Rate" shall mean the combined state and local rate
specified by the Owner Participant in the Pricing Assumptions.
"Subsequent Debt Financing" shall have the meaning set forth in
Section 2.9(b) of the Participation Agreement.
"Subsequent Debt Financing Amount" shall have the meaning set
forth in Section 2.9(b) of the Participation Agreement.
"Subsequent Estate for Years Deeds" shall mean any deeds between
the Lessee, as seller, and the Owner Trustee, as buyer, substantially in
the form of Exhibit A-3 to the Participation Agreement covering the Estate
for Years in respect of any Subsequent Property as described in Exhibit A
attached thereto.
"Subsequent Improvement Deeds" shall mean any deeds between the
Lessee, as seller, and the Owner Trustee, as buyer, substantially in the
form of Exhibit A-2 to the Participation Agreement covering the
Improvements in respect of any Subsequent Property as described in Exhibit
A attached thereto.
"Subsequent Indenture Estate", with respect to any Lessor
Interest, shall have the meaning set forth for the term "Indenture Estate"
in the "Granting Clause" of the Supplemental Indenture related to any
Subsequent Property.
"Subsequent Investment" shall have the meaning set forth in
Section 2.9(a)(1) of the Participation Agreement.
"Subsequent Investment Amount" shall have the meaning set forth
in Section 2.9(a)(1) of the Participation Agreement.
"Subsequent Lease" shall mean the lease of any Lessor Interest in
respect of any Subsequent Property.
"Subsequent Notes" shall mean any Notes issued by the Owner
Trustee on the Debt Refinancing Date in respect of any Subsequent Property.
"Subsequent Option Agreement" shall mean any option agreement,
entered into in respect of a Subsequent Property, substantially similar to
the Option Agreement dated as of December 21, 1993.
"Subsequent Out Parcel" shall mean any out-parcel and lot line
adjustment agreement, entered into in respect of any Subsequent Property.
"Subsequent Property" shall mean any Property purchased by the
Owner Trustee and the Remainderman on the Debt Refinancing Date.
"Subsequent Remainderman Interest Deed" shall mean any deeds
between the Lessee, as seller, and the Remainderman, as buyer,
substantially in the form of Exhibit A-3 to the Participation agreement
covering the portion of the Remainderman Interest in respect of any
Subsequent Property as described in Exhibit A thereto.
"Subsequent Remainderman Investment" should have the meaning set
forth in Section 2.9(a)(2) of the Participation Agreement.
"Subsequent Remainderman Investment Amount" should have the
meaning set forth in Section 2.9(a)(2) of the Participation Agreement.
"Subsequent Supplemental Indenture" shall mean any Supplemental
Indenture relating to a Subsequent Property.
"Subsidiary" shall mean, for any Person, any corporation,
partnership, limited liability company or other entity of which at least a
majority of the securities or other ownership interests having by the terms
thereof ordinary voting power to elect a majority of the board of directors
or other persons performing similar functions of such corporation,
partnership or other entity (irrespective of whether or not at the time
securities or other ownership interests of any other class or classes of
such corporation, partnership or other entity shall have or might have
voting power by reason of the happening of any contingency) is at the time
directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more subsidiaries
of such Person.
"Substitute Deeds" shall have the meaning set forth in Section
14(d) of each Lease.
"Substitute Lease" shall have the meaning set forth in Section
14(d) of each Lease.
"Substitute Lease Memo" shall have the meaning set forth in
Section 14(d) of each Lease.
"Substitute Parcel" shall have the meaning set forth in Section
14(d) of each Lease.
"Substitute Supplemental Indenture" shall have the meaning set
forth in Section 14(d) of each Lease.
"Substitution Documents" shall mean, collectively, the Substitute
Deeds, the Substitute Lease, the Substitute Lease Memo, the Substitute
Supplemental Indenture and any other documents or agreements in connection
with a substitution of properties pursuant to Section 14(d) of each Lease.
"Supplemental Financing" shall mean a financing of Modifications
effected pursuant to Section 8(f) of each Lease.
"Supplemental Indenture" shall mean any Deed of Trust, Assignment
of Leases and Rents, Security Agreement and Fixture Filing, containing a
Supplemental Indenture, to the Indenture.
"Supplemental Rent" shall have the meaning set forth in Section
3(c) of each Lease.
"Supplemental Trust Agreement (Individual)" shall mean the
Supplemental Trust Agreement (Individual) dated as of December 22, 1993
among the Remainderman Trustee, the Remainderman Participant and William J.
Wade.
"Surviving Lessee" shall mean the Person formed by any
consolidation with the Lessee or into which the Lessee shall be merged or
the Person that shall acquire by conveyance, transfer or lease all or
substantially all of the assets of the Lessee in a single transaction or in
a series of related transactions as permitted under Section 6.1(e) of the
Participation Agreement.
"Surviving Lessee's Assumption Agreement" shall mean the
Surviving Lessee's Assumption Agreement, between the Lessee and the
Surviving Lessee, substantially in the form of Exhibit M to the
Participation Agreement.
"Tax" or "Taxes" shall mean any and all fees (including, without
limitation, documentation, recording, license and registration fees), taxes
(including, without limitation, net income, net receipts, franchise, value
added, ad valorem, gross income, gross receipts, sales, use, excise,
transfer, rental, property (personal and real, tangible and intangible),
and stamp taxes) levies, imposts, duties, charges, assessments or
withholding of any nature whatsoever, general or special, ordinary or
extraordinary, together with any and all penalties, fines, additions to
tax, interest thereon and other charges.
"Tax Affiliate" shall have the meaning set forth in Section 16 of
the Tax Indemnification Agreement.
"Tax Assumptions" shall mean the assumptions set forth in Section
2 of the Tax Indemnification Agreement.
"Tax Indemnification Agreement" shall mean the Tax
Indemnification Agreement dated as of December 21, 1993 between the Lessee
and the Owner Participant, as the same may be amended, modified or
supplemented from time to time in accordance with the provisions thereof.
"Tax Indemnitee" shall mean the Owner Participant, the Owner
Participant Parent, State Street Bank and Trust Company of California,
National Association (in its individual capacity and in its capacity as
Owner Trustee), State Street Connecticut, Wilmington Trust Company (in its
individual capacity and in its capacity as Remainderman Trustee (and any co-
trustee appointed pursuant to the Remainderman Trust Agreement), Indenture
Trustee and as Pass Through Trustee), the Trust, the Trust Estate, any
Indenture Trust, the Indenture Estate, any Pass Through Trust, the
Remainderman, the Remainderman Trust Estate, the Initial Noteholder and any
Affiliate of any of the foregoing and their respective permitted successors
or assigns.
"Termination Date" shall have the meaning specified in Section
14(a) of each Lease.
"Termination Notice" shall have the meaning specified in Section
14(a) of each Lease.
"Termination Value" shall mean the sum of the Lessor Termination
Value and the Remainderman Termination Value.
"Termination Value Date" shall mean the first day of each month
during the Lease Term.
"Transaction Documents" shall mean the Participation Agreement,
each of the Leases, each Memorandum of Lease, the Ground Lease, the Trust
Agreement, the Connecticut Trust Agreement, the Beneficial Interest
Transfer Agreement, [the Amended Tax Indemnification Agreement,] the
Remainderman Trust Agreement, the Out Parcel Agreement, the Pass Through
Trust Agreement, the Indenture, each Supplemental Indenture when executed
and delivered, each of the Notes when executed, authenticated and
delivered, each Pass Through Trust Supplement when executed and delivered,
the Pass Through Certificates when executed, authenticated and delivered,
the Tax Indemnification Agreement, the Owner Participant Parent Guaranty,
the Tripartite Agreement, the Option Agreement, each of the Deeds and each
of the Remainderman Interest Deeds.
"Transaction Expenses" shall mean the reasonable fees and out-of-
pocket expenses, disbursements and costs (each of which shall be evidenced
by appropriate bills or invoices) incurred by the parties to the
Participation Agreement in connection with the preparation, execution and
delivery of the Transaction Documents and the consummation of the
transactions provided for therein on the Closing Date, the Refunding Date,
or the Debt Refinancing Date, as applicable, including, without limitation:
(a) the reasonable fees and disbursements of the Owner
Participant's Special Counsel, the Owner Participant's Special
Local Counsel, the Underwriter's Special Counsel, the Owner
Trustee's Counsel, Connecticut Trustee's Counsel, the Indenture
Trustee's Counsel, the Initial Noteholder's In-House Counsel
(allocated to the transactions contemplated by the Participation
Agreement), the Pass Through Trustee's Counsel and the Lessee's
Special Counsel, for their services rendered in connection with
the execution and delivery of the Transaction Documents;
(b) the reasonable fees and disbursements of the Lessee's
independent public accountants for their services rendered in
connection with the transactions contemplated hereby;
(c) the initial (but not the ongoing) fees and expenses of
the Owner Trustee, the Indenture Trustee and the Pass Through
Trustee;
(d) all stenographic, printing, reproduction and other
reasonable out-of-pocket expenses (other than investment banking
or brokerage fees, except as provided in clause (i) below)
incurred in connection with the execution and delivery of the
Transaction Documents and all other agreements, documents or
instruments prepared in connection therewith;
(e) the fees and expenses of the Appraiser;
(f) the reasonable fees and disbursements of surveyors and
engineers engaged pursuant to the Transaction Documents,
including environmental and other reports;
(g) the reasonable fees and expenses of the Underwriters
under the Underwriting Agreement;
(h) SEC registration fees and rating agency costs;
(i) the reasonable out-of-pocket costs of the Owner
Participant (including actual computer costs) in an amount up to
$15,000;
(j) Taxes and fees incurred in the recording of any
Transaction Document or other instrument, document or certificate
contemplated by or required under a Transaction Document, any
title insurance search fees, commitment fees or premiums and any
other search fees for reports required under or contemplated by
the Transaction Documents; and
(k) the fee payable to the Initial Noteholder in an amount
equal to $234,083.00;
BUT EXCLUDING, HOWEVER, any fees and expenses of financial or other
advisors to parties other than the Lessee.
"Transfer" shall mean the transfer by the Lessor to the Lessee or
their designee, by instruments of transfer and conveyance substantially
similar to those delivered by the Lessee to the Lessor at closing and
otherwise reasonably satisfactory in form and substance to the Lessor and
the Lessee, of all the Lessor's right, title and interest in and to the
Lessor Interests, the Leases, the Deeds, and all proceeds of insurance or
condemnation of all or any part of the foregoing on an "as is, where is,
with all faults" basis, free and clear of all Lessor's Liens (but subject
to the Lien of the Indenture if and to the extent it attaches) and free and
clear of the Owner Participant's beneficial interest therein but otherwise
without recourse, representation or warranty.
"Transferee" shall mean any Person to whom the Owner Participant
has assigned, conveyed or otherwise transferred (whether by consolidation,
merger, sale of assets or otherwise) any of its right, title and interest
in and to the Lessor Interest, the Connecticut Trust Estate, the Trust
Estate, the Participation Agreement, the Tax Indemnification Agreement or
any other Transaction Document or any proceeds therefrom, pursuant to
Article VIII of the Participation Agreement.
"Treasury Rate" shall mean, with respect to each Refinancing Note
to be redeemed, a per annum rate (expressed as a semiannual equivalent and
as a decimal and, in the case of United States Treasury bills, converted to
a bond equivalent yield) determined to be the per annum rate equal to the
semiannual yield to maturity of United States Treasury securities maturing
on the Average Life Date (as defined below) of such Refinancing Note, as
determined by interpolation between the most recent weekly average yield to
maturity for two series of United States Treasury securities (A) one
maturing as close as possible to, but earlier than, the Average Life Date
of such Refinancing Note and (B) the other maturing as close as possible
to, but later than, the Average Life Date of such Refinancing Note, in each
case as published in the most recent H.15(519) (or, if a weekly average
yield to maturity for United States Treasury securities maturing on the
Average Life Date of such Refinancing Note is reported in the most recent
H.15(519), as published in H.15(519)). For purposes hereof: "H.15(519)"
means, statistical Release H.15(519), selected Interest Rates," or any
successor publication, published by the Board of Governors of the Federal
Reserve system; "the most recent H.15(519)" means the latest H.15(519)
which is published prior to 12:00 noon New York city time on the third
Business Day prior to the applicable Redemption Date; and "Average Life
Date" means, with respect to the redemption of a Refinancing Note, the date
that follows the applicable Redemption Date by a period equal to the
Remaining Weighted Average Life of such Refinancing Note.
"Trigger Event" shall mean the failure to refinance the
Outstanding Series J Notes as contemplated by the Debt Refinancing on or
prior to the Outside Date, unless, as of the Outside Date, an alternate
refinancing, as contemplated in Section 2.7 of the Participation Agreement,
has been arranged on or prior to the Outside Date and, in the sole opinion
of the Initial Noteholder, is reasonably likely to occur on or prior to
December 31, 1994, in which case, the "Trigger Event" shall mean the
failure to refinance the Outstanding Series J Notes on or prior to December
31, 1994 for any reason whatsoever.
"Tripartite Agreement" shall mean, with respect to Properties A-
G, the Tripartite Agreement dated as of December 21, 1993 and, with respect
to Properties H and I, the Tripartite Agreement dated as of March 1, 1994,
in either case, among the Owner Trustee, the Remainderman and the Lessee.
"Trust" shall mean the trust created by the Trust Agreement.
"Trust Agreement" shall mean the Trust Agreement dated as of
December 21, 1993, between the Owner Participant and State Street Bank and
Trust Company of California, National Association, substantially in the
form of Exhibit D-___ to the Participation Agreement, as amended by the
Amendment No. 1 to Trust Agreement dated as of March 1, 1994, between State
Street California and State Street Connecticut, as the same may be amended,
modified or supplemented from time to time in accordance with the
provisions thereof and of the Indenture and the Participation Agreement.
"Trust Estate" shall have the meaning set forth in Section 2.1(b)
of the Trust Agreement.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939,
as amended and as the same may be further amended, or any comparable
successor Applicable Law.
"Trustee's Expenses" shall mean any and all liabilities,
obligations, costs, compensation, fees, expenses and disbursements
(including, without limitation, reasonable legal fees and expenses) of any
kind and nature whatsoever (other than such amounts as are included in
Transaction Expenses) which may be imposed on, incurred by or asserted
against the Indenture Trustee or any of its respective agents, servants or
personal representatives, in any way relating to or arising out of the
Indenture, the Indenture Estate, the Participation Agreement or the Leases,
or any document contemplated thereby, or the performance or enforcement of
any of the terms thereof, or in any way relating to or arising out of the
administration of the Indenture Estate or the action or inaction of the
Indenture Trustee under the Indenture; provided, however, that such amounts
shall not include any Taxes or any amount expressly excluded from the
Lessee's indemnity obligation pursuant to Section 7.3 of the Participation
Agreement.
"UCC" or "Uniform Commercial Code" shall mean the Uniform
Commercial Code as in effect in any applicable jurisdiction.
"Underwriters" shall mean Morgan Stanley & Co. Incorporated,
Goldman, Sachs & Co. and Salomon Brothers Inc.
"Underwriters' Special Counsel" shall mean Shearman & Sterling.
"Underwriting Agreement" shall mean the Underwriting Agreement,
dated as of a date on or prior to the Debt Refinancing Date, between the
Lessee and the Underwriters relating to the sale of the Refinancing Notes.
Exhibit A-1
Form of
IMPROVEMENTS DEED
[Set forth as Exhibit 4.3.7 to this Form 8-K]
Exhibit A-2
Form of
REMAINDERMAN INTEREST DEED
[Set forth as Exhibit 4.3.9 to this Form 8-K]
Exhibit A-3
Form of
ESTATE FOR YEARS DEED
[Set forth as Exhibit 4.3.8 to this Form 8-K]
Exhibit B
Form of
GROUND LEASE
DATED AS OF __________, ____
BY AND BETWEEN
CALIFORNIA-RELCO LIMITED PARTNERSHIP TRUST,
A DELAWARE BUSINESS TRUST,
AS GROUND LESSOR,
AND
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA,
NATIONAL ASSOCIATION,
NOT IN ITS INDIVIDUAL CAPACITY EXCEPT AS EXPRESSLY
STATED HEREIN, BUT SOLELY AS OWNER TRUSTEE,
AS GROUND LESSEE.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01. General Definitions 2
Section 1.02. Additional Rental 2
Section 1.03. Basic Ground Lease Rent 2
Section 1.04. Commencement Date 2
Section 1.05. Environmental 2
Section 1.06. Ground Lease Rent 2
Section 1.07. Ground Lease Term 2
Section 1.08. Ground Lease Year 2
Section 1.09. Ground Lessee's Default 3
Section 1.l0. Ground Lessor's Default 5
Section 1.11. Leasehold Mortgage 5
Section 1.12. Leasehold Mortgagee 5
Section 1.13 Participation Agreement 5
Section 1.14. Real Estate Taxes 5
Section 1.15. Rent Payment Date 6
Section 1.16. Similar Property 6
Section 1.17. Sublease 6
Section 1.18. Sublessee 6
ARTICLE II
GRANTING CLAUSE
Section 2.01. Grant 6
Section 2.02. Description of the Demised Premises 7
Section 2.03. Early Termination 7
ARTICLE III
RENTAL PAYMENTS
Section 3.01. Basic Ground Lease Rent 8
Section 3.02. Interest 8
Section 3.03. Method of Payment 8
Section 3.04. Intentionally Deleted 8
Section 3.05. Intentionally Deleted 8
ARTICLE IV
TAXES
Section 4.01. Real Estate Taxes 9
Section 4.02. Failure to Make Payment 9
Section 4.03. The Ground Lessee's Right to Contest 9
ARTICLE V
CONDEMNATION AND CASUALTY
Section 5.01. Termination upon an Event of Loss 10
Section 5.02. Application of Payment upon an Event of Loss 11
Section 5.03. Partial Taking Not Constituting an
Event of Loss 11
Section 5.04. Temporary Taking Not Constituting an
Event of Loss 12
ARTICLE VI
USE OF THE DEMISED PREMISES
Section 6.01. Use of The Demised Premises 12
ARTICLE VII
IMPROVEMENTS
Section 7.01. Improvements 12
Section 7.02. Free From Liens 13
Section 7.03. Reversion of Title to Improvements 13
ARTICLE VIII
INSURANCE
Section 8.01. Reconstruction Obligation 14
Section 8.02. Insurance 14
Section 8.03. Failure to Provide Insurance 14
Section 8.04. Indemnity 15
Section 8.05. Distribution of Property Insurance Proceeds 15
Section 8.06. Intentionally Deleted 16
ARTICLE IX
SURRENDER
Section 9.01. Surrender 16
ARTICLE X
ASSIGNMENT; SUBLETTING
Section 10.01. By the Ground Lessor 17
Section 10.02. By the Ground Lessee 18
ARTICLE XI
FINANCING
Section 11.01. The Ground Lessee's Right to Obtain Financing 18
Section 11.02. Limitations on Financing 19
Section 11.03. Certificates 19
Section 11.04. Notification of the Ground Lessor 19
Section 11.05. Rights Leasehold Mortgagee 20
Section 11.06. New Lease 21
Section 11.07. Consent to Modification 22
Section 11.08. Intentionally Deleted 22
ARTICLE XII
REMEDIES
Section 12.01. Default by the Ground Lessee 22
Section 12.02. Default by the Ground Lessor 23
Section 12.03. No Waiver 23
Section 12.04. Force Majeure 23
ARTICLE XIII
WARRANTIES
Section 13.01. Quiet Enjoyment 24
Section 13.02. Ground Lessor Indemnity 24
Section 13.03. Covenants of the Ground Lessor 24
Section 13.04. Covenants of the Ground Lessee 25
ARTICLE XIV
NET LEASE
Section 14.01. Net Lease 25
ARTICLE XV
LIMITED LIABILITY
Section 15.01. Limited Liability 25
Section 15.02. Intentionally Deleted 27
Section 15.03. Intentionally Deleted .27
ARTICLE XVI
ENVIRONMENTAL
Section 16.01. Environmental . 27
ARTICLE XVII
MISCELLANEOUS
Section 17.01. No Agency or Partnership 28
Section 17.02. Estoppel Certificates 28
Section 17.03. Headings 29
Section 17.04. Notice 29
Section 17.05. Governing Law 29
Section 17.06. Memorandum of Lease and Recordation 29
Section 17.07. Severability of Provisions 30
Section 17.08. Amendment 30
Section 17.09. Multiple Counterparts 30
Section 17.10. Successors and Assigns 30
Section 17.11. Attorneys' Fees 30
Section 17.12. Attornment and Non-Disturbance 30
Section 17.13. Non-Merger 31
Section 17.14. Inspection 31
Section 17.15. Further Assurances and Cooperation .31
Section 17.16. Perpetuities Savings Clause 32
ARTICLE XVIII
THE SUBLEASE
Section 18.01 The Sublease 32
SCHEDULE OF EXHIBITS
EXHIBIT A - LEGAL DESCRIPTION
EXHIBIT B - BASIC GROUND LEASE RENT
GROUND LEASE
THIS GROUND LEASE (this "Ground Lease") dated as of ________,
____, between CALIFORNIA-RELCO LIMITED PARTNERSHIP TRUST, as ground lessor
(the "Ground Lessor") and STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, NATIONAL ASSOCIATION, not in its individual capacity, except as
expressly set forth herein, but solely as Owner Trustee under the Trust
Agreement dated December 21, 1993, as ground lessee (the "Ground Lessee").
RECITALS
WHEREAS, the Ground Lessee held an estate for years in the land
described in Exhibit A attached hereto ("the Demised Premises"), which is
the land beneath certain improvements and other fixtures and structures
constructed on the Demised Premises (together with all other improvements
hereinafter constructed on the Demised Premises, the "Improvements"), which
expired as of the date hereof; and
WHEREAS, the Ground Lessor has succeeded to the interest and is
now the owner of fee simple title to the Demised Premises; and
WHEREAS, the Ground Lessor and the Ground Lessee entered into an
Option Agreement dated as of December 21, 1993 (as the same may be amended
from time to time, the "Option Agreement") whereby the Ground Lessor
granted to the Ground Lessee, among other things, an option to enter into a
ground lease of the Demised Premises upon the expiration of the Ground
Lessee's estate for years in the Demised Premises; and
WHEREAS, the Ground Lessee desires to lease the Demised Premises
from the Ground Lessor and the Ground Lessor agrees to lease the Demised
Premises to the Ground Lessee on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Ground Lessor and the
Ground Lessee, intending to be legally bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. General Definitions. For the purposes of this
Ground Lease, capitalized terms used in this Ground Lease and not otherwise
defined in this Article I or otherwise in this Ground Lease shall have the
meanings assigned to them in Appendix A to the Participation Agreement
(hereinafter defined), and the rules of usage set forth in Appendix A shall
apply thereto.
Section 1.02. Additional. "Additional Rental" means all payments
due from the Ground Lessee to the Ground Lessor under this Ground Lease,
other than under Section 3.02 and other than Basic Ground Lease Rent.
Section 1.03. Basic Ground Lease Rent. "Basic Ground Lease Rent"
for the first forty-one and one-half (41 1/2) years of the Ground Lease Term
shall be as set forth in Exhibit B attached hereto. The Basic Ground Lease
Rent for each five (5) year period following the forty-one and one half
(41 1/2) year anniversary of the Commencement Date shall be determined for the
first such five (5) year period and on every fifth (5th) anniversary
thereafter to an amount equal to the Fair Market Rental Value of the
Demised Premises as determined by the Appraisal Procedure (with "Ground
Lessor" substituted for "Lessor" and "Ground Lessee" substituted for
"Lessee" in the definition thereof).
Section 1.04. Commencement Date. "Commencement Date" means the
date of this Ground Lease.
Section 1.05.. "Environmental" means of or concerning the
Environment.
Section 1.06. Ground Lease Rent. "Ground Lease Rent" means all
payments due from the Ground Lessee to the Ground Lessor under the terms
and provisions of this Ground Lease including Basic Ground Lease Rent and
Additional Rental.
Section 1.07. Ground Lease Term. "Ground Lease Term" means the
entire term of this Ground Lease, which shall begin on the Commencement
Date and end on the date which is the seventy-fifth (75th) anniversary of
the last day of the month on which the Commencement Date occurs, subject to
the earlier termination of this Ground Leased in accordance with the
provisions hereof.
Section 1.08. Intentionally Deleted.
Section 1.09. Ground Lessee's Default. "Ground Lessee's Default"
means the occurrence of any one or more of the following events:
(a) default by the Ground Lessee in the payment of any
Ground Lease Rent as and when the same shall be due and payable,
and the failure of the Ground Lessee to cure such default within
thirty (30) days after delivery of a written notice from the
Ground Lessor to the Ground Lessee specifying such default and
requesting that it be remedied;
(b) default by the Ground Lessee in the observance or
performance of any of the other covenants, agreements, or
obligations to be performed by the Ground Lessee under the terms
and provisions of this Ground Lease, and the failure of the Ground
Lessee to cure such default within sixty (60) days after delivery
of written notice from the Ground Lessor to the Ground Lessee
specifying such default and requesting that it be remedied;
provided, that if such default is capable of being remedied and is
not so remedied within such sixty (60) day period, no Ground
Lessee's Default shall be deemed to have occurred if the Ground
Lessee or its sublessee commences actions to remedy such default
within such sixty (60) day period and thereafter diligently and
continuously pursues such remedial actions until such default is
cured; and
(c) the commencement by the Trust (provided its trustee is the
Ground Lessee) of a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under
bankruptcy, insolvency or other similar law now or hereafter in effect, or
the seeking of the appointment (other than by a receiver appointed in
connection with the exercise of remedies by a Leasehold Mortgagee) of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, or the consent by the Trust (provided
its trustee is the Ground Lessee) to any such relief or to the appointment
of or taking of possession by any such official in an involuntary case or
other proceeding commenced against it, or the making of a general
assignment for the benefit of creditors, or the taking of any action to
authorize any of the foregoing; or a decree or order for relief being
entered by a court having jurisdiction over the Trust (provided its trustee
is the Ground Lessee) in any involuntary case under any bankruptcy,
insolvency or other similar law now or hereafter in effect or appointing
(other than by a receiver appointed in connection with the exercise of
remedies by a Leasehold Mortgagee) a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, or ordering the winding-up or liquidation of the affairs of
either of them, and such decree or order shall remain undismissed or
unstayed for a period of one hundred eighty (180) consecutive days;
provided, however, that (i) none of the foregoing events or conditions set
forth in clauses (a) or (b) in this Section 1.09 shall constitute a Ground
Lessee's Default if such event or condition results from any failure on the
part of the Ground Lessor or the Sublessee, as applicable, to perform or
observe or have performed or observed any covenant, condition, agreement,
obligation, representation or warranty under this Ground Lease or the
Sublease, or results from any default by the Ground Lessor or the
Sublessee, as applicable, under any of the Transaction Documents, and (ii)
none of the foregoing events or conditions set forth in clauses (a) or (b)
in this Section 1.09 shall constitute a Ground Lessee's Default so long as
any Ground Lessor's Default caused by the Ground Lessor or the Sublessee
has occurred and is continuing under this Ground Lease, or any Event of
Default or Default caused by the Ground Lessor or the Sublessee has
occurred and is continuing under the Sublease or any default caused by the
Ground Lessor or the Sublessee has occurred and is continuing under any of
the other Transaction Documents (it being understood and agreed that the
Owner Trustee and any assignee of the Owner Trustee of this Ground Lease
(other than an assignment in connection with a Transfer to the Sublessee or
its designee pursuant to the Sublease) shall not be required to cure or
remedy any such event occurring or condition existing on or prior to the
Lease Termination Date provided that the Owner Trustee or its assignee
shall have assigned to the Ground Lessor any right the Owner Trustee may
have against the Sublessee for the Sublessee's failure to have performed
the Ground Lessee's obligations under this Ground Lease). Moreover, if
after diligent effort, a dismissal or relief from stay described in Section
1.09(c) has not been obtained within such one hundred eighty (180) day
period, and this Ground Lease has been validly terminated (by
disaffirmance, rejection or otherwise), the Ground Lessor, upon prompt
request by the Owner Participant, shall provide a new ground lease (and if
necessary, shall reconvey the Improvements) to the Owner Participant, an
affiliate of the Owner Participant or the Owner Participant's designee
under the same terms as this Ground Lease for the then balance of the
Ground Lease Term, provided no other Ground Lessee's Default has occurred
and is continuing, the grant of such new ground lease is not prohibited by
any Applicable Law and such designee is acting as trustee for the Owner
Participant in an arrangement similar to that which exists under the Trust
or under a similar arrangement with the Owner Participant.
Section 1.10. Ground Lessor's Default. "Ground Lessor's Default"
means a default by the Ground Lessor in the observance or performance of
any of the covenants, agreements or obligations to be performed by the
Ground Lessor hereunder and the failure of the Ground Lessor to cure such
default within sixty (60) days after delivery of a written notice from the
Ground Lessee to the Ground Lessor specifying such default and requesting
that it be remedied, provided that if such default is capable of being
remedied but is not capable of being remedied within such sixty (60) day
period, no Ground Lessor's Default shall be deemed to have occurred if the
Ground Lessor commences actions to remedy such default within such sixty
(60) day period and thereafter diligently and continuously pursues such
remedial actions until such default is cured.
Section 1.11. Leasehold Mortgage. "Leasehold Mortgage" shall
have the meaning assigned in Section 11.01.
Section 1.12. Leasehold Mortgagee. "Leasehold Mortgagee" shall
have the meaning assigned in Section 11.04.
Section 1.13. Participation Agreement. "Participation Agreement"
shall mean the Participation Agreement dated as of December 21, 1993 among
the Ground Lessor, the Ground Lessee, the Owner Participant, the Sublessee,
the Owner Participant Parent, the Remainderman Participant, the Indenture
Trustee, the Initial Noteholder and the Pass Through Trustee, as the same
may be amended, modified or supplemented from time to time in accordance
with the provisions thereof.
Section 1.14. Real Estate Taxes. "Real Estate Taxes" means any
and all ad valorem taxes, special assessments and other governmental
charges of any kind or character which may, at any time during the Ground
Lease Term, be assessed against the Demised Premises and the Improvements
or any part thereof (including any Taxes, assessments or other governmental
charges which may be levied or assessed against the Demised Premises and
the Improvements or any part thereof in the future, whether similar or
dissimilar to currently existing ad valorem taxes, assessments and
governmental charges, including, but not limited to, Taxes assessed against
the Ground Lessor relating to the receipt of Ground Lease Rent described
below) by any state, city county or municipal taxing authority having
jurisdiction thereof; in all cases inclusive of penalties and interest.
The term "Real Estate Taxes" shall not include any income taxes imposed
against the Ground Lessor or against the Ground Lease Rent under any
current or future laws of the United States, any state or any political
subdivision or taxing authority thereof any sales, excise, use or similar
taxes payable by the Ground Lessor; any corporate franchise tax or similar
tax or fee payable by the Ground Lessor; nor any other tax or charge
payable by the Ground Lessor unless and to the extent that such tax or
taxes are a substitute, in whole or in part, for the imposition of current
Real Estate Taxes and otherwise fully comply with the definition thereof.
Section 1.15. Rent Payment Date. "Rent Payment Date" shall have
the meaning assigned in Section 3.01.
Section 1.16. Similar Property. "Similar Property" shall have the
meaning assigned in Section 8.02.
Section 1.17. Sublease. "Sublease" means the Lease Agreement
dated as of December 21, 1993 by and between the Ground Lessee, as lessor,
and Sublessee, as lessee, leasing the Demised Premises, as the same may be
amended, modified or supplemented from time to time in accordance with the
provisions thereof.
Section 1.18. Sublessee. "Sublessee" shall mean Smith's Food &
Drug Centers, Inc., and its successors and assigns under the Sublease.
ARTICLE II
GRANTING CLAUSE
Section 2.01. Grant. In consideration of the obligation of the
Ground Lessee to pay Ground Lease Rent, and upon and in consideration of
the other terms, covenants and conditions set forth in this Ground Lease,
the Ground Lessor does hereby lease, demise and let unto the Ground Lessee,
and the Ground Lessee does hereby take and lease from the Ground Lessor,
the Demised Premises and all easements and rights that are appurtenant to
the fee interest in the Demised Premises, TO HAVE AND TO HOLD the Demised
Premises and all such easements and rights that are appurtenant to the fee
interest in the Demised Premises, for the Ground Lease Term, subject to
Permitted Liens and to the earlier termination of this Ground Lease as
hereinafter set forth. It is the express intention of the Ground Lessor
and the Ground Lessee that: (x) this Ground Lease and the Demised Premises,
which is the subject of this Ground Lease, does not include the
Improvements, inasmuch as at all times during the Ground Lease Term, the
Improvements, which are owned by the Ground Lessee, are and shall be the
property of the Ground Lessee and shall not be conveyed, transferred or
assigned unless such conveyance, transfer or assignment shall be to a
person, corporation or other entity to whom this Ground Lease is being
transferred or assigned simultaneously therewith in compliance with the
provisions of Article X (Assignment; Subletting) hereof, and at all such
times the holder of the leasehold interest of the Ground Lessee under this
Ground Lease shall be the owner of said Improvements. Any attempted
conveyance, transfer, or assignment of the Improvements, whether
voluntarily or by operation of law or otherwise, to any person, corporation
or other entity shall be void and of no effect whatever unless such
conveyance, transfer or assignment shall be to a person, corporation or
other entity to whom this Ground Lease is being transferred or assigned
simultaneously therewith in compliance with the provisions of said Article
X. Similarly, so long as the Improvements or any part thereof shall remain
on the Demised Premises, any attempted transfer or assignment of the
leasehold interest of the Ground Lessee under this Ground Lease shall be
void and of no effect whatever unless such transfer or assignment shall be
to a person, corporation or other entity to whom the Improvements are being
conveyed, transferred or assigned simultaneously therewith.
Section 2.02. Description of the Demised Premises. The Demised
Premises is described in Exhibit A attached hereto and made a part hereof.
Section 2.03. Early Termination. At any time on or following the
Lease Termination Date, upon one hundred eighty (180) days' prior written
notice from the Ground Lessee to the Ground Lessor, the Ground Lessee may
terminate this Ground Lease and surrender the Demised Premises in
accordance with the provisions of this Ground Lease to the Ground Lessor,
whereupon all of the Ground Lessee's obligations in respect of this Ground
Lease shall terminate, except to the extent that such obligations are
expressly set forth herein to survive the expiration or termination of the
Ground Lease and except that the Ground Lessee shall pay a pro rata portion
of the Basic Ground Lease Rent for the period from the last Rent Payment
Date to the termination date of this Ground Lease.
ARTICLE III
RENTAL PAYMENTS
Section 3.01. Basic Ground Lease RentDuring the Ground Lease
Term, Basic Ground Lease Rent shall be payable by the Ground Lessee to the
Ground Lessor in equal semi-annual installments, which semi-annual
installments shall be payable in arrears on the second (2nd) day of each
January and July (each a "Rent Payment Date") during the Ground Lease Term.
Section 3.02. Interest. Upon the occurrence of a Ground Lessee's
Default under Section 1.09 (except for nonpayment of Additional Rental),
the Ground Lessor shall be entitled to collect from the Ground Lessee
interest on the unpaid Ground Lease Rent from the date when due until the
date paid at a rate per annum equal to the Overdue Interest Rate (the
"Default Rate"). In the event that any Additional Rental is not paid when
due and remains unpaid for a period of ten (10) Business Days after written
notice of such failure to pay is delivered to the Ground Lessee, the Ground
Lessor shall be entitled to collect from the Ground Lessee interest thereon
from the date such written notice is delivered to Ground Lessee until the
date paid at a rate per annum equal to the Default Rate.
Section 3.03. Method of Payment. Each payment of Ground Lease
Rent shall be made in immediately available funds no later than 12:00 noon
local time at the place of receipt and shall be paid to the Ground Lessor
at its address specified in Schedule I to the Participation Agreement, or
at any other address in the continental United States so given to the
Ground Lessee in the manner provided in Section 17.04 of this Ground Lease.
Nonetheless, the Ground Lessee shall be accorded a one (1) day grace period
should it fail to cause Ground Lease Rent to be received as described in
the immediately preceding sentence if such failure could not have been
reasonably anticipated and corrected. Any payment that is due on either a
day that is not a Business Day or a day on which banks in the place of
receipt are not generally open for business may instead be made on the next
succeeding day that is both a Business Day and a day on which banks in the
place of receipt are generally open for business; and, notwithstanding
Section 3.02, no interest shall accrue for the intervening period, nor in
respect of any payments made in compliance with the above described one (1)
day grace period.
Section 3.04. Intentionally Deleted.
Section 3.05. Intentionally Deleted.
ARTICLE IV
TAXES
Section 4.01. Real Estate Taxes. In addition to Basic Ground
Lease Rent, the Ground Lessee shall pay as Additional Rental during the
Ground Lease Term, all Real Estate Taxes, which amount shall be remitted to
the collecting agency(ies), before the date on which such Real Estate Taxes
become delinquent and the Ground Lessee shall promptly supply the Ground
Lessor with tax bills for such Real Estate Taxes paid. The Ground Lessor
and the Ground Lessee agree to take such steps as may be required to cause
statements or bills for Real Estate Taxes to be sent directly to the Ground
Lessee or as the Ground Lessee directs. Should any Real Estate Tax be
payable in installments, rather than as a lump-sum payment, the Ground
Lessee may, at its option, pay such Real Estate Tax in installments
provided that (i) such installment payments be permitted under Applicable
Law or Governmental Action, (ii) the Lien for such unpaid Real Estate Tax
not be susceptible of foreclosure by the collecting agency so long as the
installments are timely made and (iii) any such installments becoming due
before the end of the Ground Lease Term shall be paid prior to the end of
the Ground Lease Term. If less than a full twelve (12) month period of a
tax year is included within the Ground Lease Term, the Ground Lessee's
liability for payment of Real Estate Taxes shall be prorated on a per diem
basis for such partial tax year.
Section 4.02. Failure to Make Payment. If the Ground Lessee does
not pay Real Estate Taxes in accordance with the terms of this Ground
Lease, on or before the date the same becomes delinquent, or fails to
notify the Ground Lessor of its intention to contest the same prior to such
delinquency or, in the event of such contest, fails to pay such contested
item in accordance with the provisions of Section 4.03, the Ground Lessor
may (but shall not be obligated to), at its election, pay such item
together with any interest, fees or penalties due thereon, and the amount
so paid by the Ground Lessor shall be repayable to it by the Ground Lessee
on written demand therefore delivered to the Ground Lessee.
Section 4.03. The Ground Lessee's Right to Contest. At any time
after the Lease Termination Date, the Ground Lessee (or its sublessee) may
in good faith and at its sole cost and expense (in its own name or in the
name of the Ground Lessor, or both, as the Ground Lessee (or its sublessee)
may determine appropriate) contest the validity or amount of the Real
Estate Taxes, in which event, to the extent permitted by Applicable Law,
the payment thereof may be deferred during the pendency of such contest.
If a deferral of any Real Estate Taxes is not permitted in connection with
a protest, appeal or other challenge, then the Ground Lessee shall pay all
Real Estate Taxes in accordance with the terms of this Ground Lease as if a
protest, appeal or other challenge had not been initiated while preserving
its protest rights. If requested by the Ground Lessee, the Ground Lessor
will join the Ground Lessee (or its sublessee) as a party to any such
contest; provided, however, that the Ground Lessor shall not be obligated
to incur any expense in connection therewith. Nothing herein contained
shall be construed to authorize the Ground Lessee to allow or to permit a
Lien for Real Estate Taxes that (x) involves any danger of the foreclosure,
forfeiture or loss of the Improvements or the Demised Premises or any part
thereof or interest therein or any substantial danger of the sale of the
Improvements or any parts thereof or interest therein, (y) interferes with
the use, possession or disposition of the Improvements or the Demised
Premises or any part thereof or interest therein, or (z) interferes with
the payment of Ground Lease Rent. The Ground Lessee shall indemnify and
hold the Ground Lessor harmless from and against any loss, cost, expense
(including court costs and reasonable attorney's fees) or liability
resulting from or as a result of the Ground Lessee's instituting or
pursuing any such contest.
ARTICLE V
CONDEMNATION AND CASUALTY
Section 5.01. Termination upon an Event of Loss.
(a) If, during the Ground Lease Term and when the Sublease
is in effect, the Ground Lessee has received written notice from the
Sublessee that the Sublessee has declared an Event of Loss and the Ground
Lessee has given written notice to the Ground Lessor that the Ground Lessee
intends to terminate this Ground Lease, this Ground Lease shall terminate
on the Lease Termination Date, and all the obligations of Ground Lessee
hereunder, including its obligation to pay Ground Lease Rent, arising after
the occurrence of such Event of Loss shall terminate.
(b) If, during the Ground Lease Term and following the Lease
Termination Date, the Ground Lessee notifies the Ground Lessor that an
Event of Loss has occurred and that it intends to terminate this Ground
Lease, this Ground Lease shall terminate on the earlier of (i) the next
Rent Payment Date hereunder following such Event of Loss or (ii) the tenth
(10th) day following such Event of Loss, and all the obligations of the
Ground Lessee hereunder (other than those set forth in Article IX (b)),
including its obligation to pay Ground Lease Rent, arising after the
occurrence of such Event of Loss shall terminate.
Section 5.02. Application of Payment upon an Event of Loss.
(a) Any amount received at any time by the Ground Lessor or
the Ground Lessee from any Governmental Authority or other Person as a
result of the occurrence of an Event of Loss under the circumstances
described in Section 5.01(a) shall be applied in accordance with the
provisions of the Sublease and the other Transaction Documents (and shall
be paid over by the recipient to the Persons entitled thereto under the
Sublease and other Transaction Documents).
(b) Any such amount received by the Ground Lessor or the
Ground Lessee as a result of the occurrence of an Event of Loss with
respect to the Demised Premises of the type described in the first sentence
of the definition of "Event of Loss" (with "Ground Lessor," "Ground Lessee"
and the "Ground Lease" substituted for "Lessor," "Lessee" and the "Lease"
in the definition thereof) under the circumstances described in Section
5.01(b) shall be allocated in accordance with the Ground Lessor's and the
Ground Lessee's respective interests in the affected property based upon
the relative Fair Market Sales Values (and shall be paid over by the
recipient to the Persons entitled thereto).
Section 5.03. Partial Taking Not Constituting an Event of Loss.
If, during the Ground Lease Term, only a part of the Demised Premises is
taken for any public or quasi-public use or purpose by virtue of eminent
domain or by private sale in lieu thereof (which taking does not constitute
an Event of Loss) and the remainder is suitable for use by the Ground
Lessee for the Ground Lessee's purposes, this Ground Lease shall remain in
full force and effect as to that portion of the Demised Premises not taken,
but the Basic Ground Lease Rent payable to the Ground Lessor hereunder
shall be reduced during the unexpired portion of the Ground Lease Term
proportionately. Any amount received at any time by the Ground Lessor or
the Ground Lessee from any Governmental Authority or other Person as a
result of the occurrence of any such event shall be applied (i) in
accordance with the terms of the Sublease and the other Transaction
Documents (and shall be paid over by the recipient to the Persons entitled
thereto under the Sublease and the other Transaction Documents) if such
event occurs on or prior to the Lease Termination Date, or (ii) if such
event occurs after the Lease Termination Date, in the same manner as is
specified in Section 5.02(b) above.
Section 5.04. Temporary Taking Not Constituting an Event of Loss.
If all or only a part of the Demised Premises is taken for any public or
quasi-public use or purpose by virtue of eminent domain or by private sale
in lieu thereof (which taking does not constitute an Event of Loss) for a
definite or indefinite period which is less than the then unexpired portion
of the Ground Lease Term, this Ground Lease shall remain in full force and
effect and the Basic Ground Lease Rent payable to the Ground Lessor
hereunder shall not be reduced. Any amount received at any time by the
Ground Lessor or the Ground Lessee from any Governmental Authority or other
Person as a result of the occurrence of any such event shall be applied (i)
in accordance with the provisions of the Sublease and the other Transaction
Documents (and shall be paid over by the recipient to the Persons entitled
thereto under the Sublease and the other Transaction Documents) if such
event occurs on or prior to the Lease Termination Date, or (ii) as follows
if such event occurs after the Lease Termination Date (and shall be paid
over by the recipient to the Persons entitled thereto):
(A) first, to the Leasehold Mortgagee, if any, to the extent
required by the Leasehold Mortgage; and
(B) second, the balance, if any, remaining after the allocation
provided in clause (A) to the Ground Lessee.
ARTICLE VI
USE OF THE DEMISED PREMISES
Section 6.01. Use of the Demised Premises. The Ground Lessee
may, during the Ground Lease Term, use the Demised Premises for any use
permitted by Applicable Law which is not a public or private nuisance. Use
of the Improvements are not and shall not be governed by this Ground Lease.
ARTICLE VII
IMPROVEMENTS
Section 7.01.. The Ground Lessee shall have the right to remove,
repair, replace, modify, maintain and rebuild the Improvements, and
construct new improvements on the Demised Premises, subject to the
provisions of the Sublease.
Section 7.02. Free From Liens. The Ground Lessee covenants and
agrees that during the Ground Lease Term, the Demised Premises will be free
and clear of all Liens, excepting Permitted Liens, such mortgage Lien or
Liens as are expressly permitted under the provisions of this Ground Lease
and such Liens that are caused by the Ground Lessor or to which the Ground
Lessor has consented. Following the Lease Termination Date, the Ground
Lessee will protect, indemnify, defend and hold harmless the Ground Lessor
from and against all bills, claims, Liens and rights to Liens for labor and
materials and architects', contractors' and subcontractors' claims (other
than bills, claims, Liens and rights to Liens for labor and materials and
architects', contractors' and subcontractors' claims for providing work or
materials on behalf of the Ground Lessor) and all other fees, claims and
expenses incident to any construction of or to the Improvements. The Ground
Lessee will conform to and observe all Applicable Laws; provided that the
Ground Lessee may in good faith contest any such Applicable Law so long as
such contest or noncompliance does not involve (A) any danger of (1)
foreclosure, forfeiture or loss of the Improvements or the Demised Premises
or (2) criminal or civil liability being imposed on the Ground Lessor or
(B) any substantial danger of (1) the sale of, or the creation of any Lien
(other than a Permitted Lien) on, the Improvements or the Demised Premises,
(2) material civil liability being imposed on the Ground Lessor or (3) the
extension of the ultimate imposition of such Applicable Law beyond the last
day of the Ground Lease Term. The Ground Lessee shall provide the Ground
Lessor with notice of any contest of the type described in clause (A) above
in detail sufficient to enable the Ground Lessor to ascertain whether such
contest may have any material adverse effect of the type described in the
above proviso. NOTICE IS HEREBY GIVEN THAT THE GROUND LESSOR IS NOT AND
SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE
FURNISHED TO THE GROUND LESSEE, OR TO ANYONE HOLDING THE DEMISED PREMISES
OR ANY PART THEREOF THROUGH OR UNDER THE GROUND LESSEE, AND THAT NO
MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL
ATTACH TO OR AFFECT THE INTEREST OF THE GROUND LESSOR IN AND TO THE DEMISED
PREMISES OR ANY PART THEREOF.
Section 7.03. Reversion of Title to Improvements. Title to and
ownership of all portions of the Improvements on the Demised Premises which
have not theretofore been removed from the Demised Premises by the Ground
Lessee in accordance with Section 7.01 shall, upon expiration or valid
termination of this Ground Lease, revert to and vest in the Ground Lessor.
No further deed or instrument shall be necessary to confirm vesting in the
Ground Lessor of title to the Improvements. At the expiration or valid
termination of this Ground Lease, the parties, at the Ground Lessor's sole
cost and expense, will execute (i) a recordable instrument confirming such
termination and (ii) any instrument reasonably requested by the Ground
Lessor confirming that title to the Improvements has vested in the Ground
Lessor.
ARTICLE VIII
INSURANCE
Section 8.01. Reconstruction Obligation. In no event shall the
Ground Lessor have any liability or responsibility whatsoever for
rebuilding, reconstructing or replacing any portion of the Improvements
Section 8.02. Insurance. So long as the Sublease is in effect,
during the Ground Lease Term the Ground Lessee shall maintain or cause to
be maintained by the Sublessee such insurance as is required under the
Sublease. From and after the Lease Termination Date, the Ground Lessee
shall maintain (a) comprehensive general liability insurance covering
claims arising out of the ownership, operation, maintenance, condition or
use of the Demised Premises and Improvements, in such amounts as is
generally maintained by an owner/operator of a Similar Property
(hereinafter defined), and (b) with respect to the Demised Premises and the
Improvements, property insurance coverage in such amounts, on such terms
and insuring against such risks as are customarily obtained and maintained
by an owner or operator of a property similar in size and use to the
Demised Premises, as improved, occupied by entities engaged in the Ground
Lessee's business (a "Similar Property"). All such insurance required to
be maintained by the Ground Lessee hereunder shall name the Ground Lessor
as an additional insured thereunder.
Section 8.03. Failure to Provide Insurance. The Ground Lessee
agrees that if, at any time following the Lease Termination Date, it does
not keep and maintain (or cause to be kept and maintained) insurance, as
required hereunder, in full force and effect, or fails to provide the
Ground Lessor with appropriate evidence thereof, the Ground Lessor may (but
shall have no obligation to) notify the Ground Lessee of such failure, and
if the Ground Lessee does not deliver to the Ground Lessor within ten (10)
days after delivery of such notice, certificates showing all such insurance
to be in full force and effect, the Ground Lessor may, at the Ground
Lessor's option, procure the necessary insurance to comply with the
provisions hereof and pay the premiums therefor, in which event the Ground
Lessee will, upon written demand therefore delivered to the Ground Lessee,
immediately reimburse and pay the Ground Lessor any amount so paid or
expended in the payment of the insurance premiums required herein and
specified in such notice.
Section 8.04. Indemnity. The Ground Lessor shall not be liable
to the Ground Lessee or to the Ground Lessee's agents, servants, employees,
customers or invitees for any damage to person or property caused by any
act, omission or neglect of the Ground Lessee, its agents, servants or
employees, nor shall the Ground Lessor be liable for any loss, cost,
expense or claim arising out of the ownership of the Demised Premises or
operation of the Improvements, except to the extent such claims are based
upon the willful acts or gross negligence of the Ground Lessor, and the
Ground Lessee agrees to indemnify and hold the Ground Lessor harmless from
any such claims or liabilities. The Ground Lessee shall not be liable to
the Ground Lessor or to the Ground Lessor's agents, servants, employees,
customers or invitees for any damage to person or property caused by any
act, omission or neglect of the Ground Lessor, its agents, servants or
employees, and the Ground Lessor agrees to indemnify and hold the Ground
Lessee harmless from any such claims or liabilities.
Section 8.05. Distribution of Property Insurance Proceeds.
During the Ground Lease Term, all proceeds from property insurance policies
shall be distributed in accordance with the following order of priority:
(a) During Term of the Sublease. So long as the Sublease
is in effect, all such proceeds shall be distributed in
accordance with the terms of the Sublease and the other
Transaction Documents.
(b) From and After Lease Termination Date. After the Lease
Termination Date, and provided that the terms and provisions of
the Sublease and/or the Tripartite Agreement do not apply, all
such proceeds shall be distributed as follows:
(i) To the Leasehold Mortgagee, if any, to the
extent required by the Leasehold Mortgage;
(ii) If in connection with a termination of this
Ground Lease, to the Ground Lessor in an amount equal to the cost
of the performance of the Ground Lessee's obligations under
clause (b) of Article IX hereof; and
(iii) To the Ground Lessee, the remainder of said
proceeds.
Section 8.06. Intentionally Deleted.
ARTICLE IX
SURRENDER
Section 9.01. Surrender. The Ground Lessee shall, at the end of
the Ground Lease Term or upon any termination of this Ground Lease at any
other time, deliver up and surrender the Demised Premises to the Ground
Lessor free and clear of any Permitted Liens and as follows:
(a) In the event that the termination of the Ground Lease
occurs within twenty-four (24) months following the Lease Termination Date,
then the Ground Lessee may surrender the Demised Premises and the
Improvements remaining thereon in no worse a condition than that in which
the Sublessee surrendered the Demised Premises and Improvements to the
Ground Lessee as lessor under the Sublease.
(b) In all other events, the Ground Lessee shall surrender
the Demised Premises and the Improvements remaining thereon on such date in
compliance with all material Applicable Laws; provided, however, that the
Ground Lessee shall have no obligation to comply with any Applicable Law
that pertains to a condition of the Demised Premises or Improvements
remaining thereon which existed on the Lease Termination Date (unless (i)
the Demised Premises and the Improvements thereon in the absence of such
compliance and assuming such improvements remain unused and unoccupied,
would constitute a clear and present danger to health or safety, or (ii)
any removal by the Ground Lessee of building systems or other portions of
the Improvements shall have caused material structural damage to the
Improvements) and provided further, however, if the Lease Termination
occurs as a result of a Casualty Event, then the delivery to the Ground
Lessor of insurance proceeds under Section 8.05 hereof shall satisfy the
Ground Lessee's obligations under this Section 9.01(b)). The Demised
Premises and the Improvements shall be so surrendered without any payment
or allowance whatsoever by the Ground Lessor on account of or for the
Improvements at the time of the surrender, or for the contents thereof or
appurtenances hereto.
ARTICLE X
ASSIGNMENT; SUBLETTING
Section 10.01. By the Ground Lessor. The Ground Lessor may sell
or assign its fee simple title to the Demised Premises, in each case
subject and subordinate to this Ground Lease and the other Transaction
Documents to which the Ground Lessor is a party or which encumber the
Demised Premises, to any Person and assign its rights and delegate its
obligations under this Ground Lease to such Person without the consent of
the Ground Lessee; provided, that such sale or assignment is not prohibited
under the Transaction Documents. Before any such sale or assignment shall
become effective, the Ground Lessor shall provide the Ground Lessee with
the following:
(A) a representation and warranty by such Person that this
Ground Lease and, prior to the Lease Termination Date, any other
Transaction Documents to which the Ground Lessor is a party will,
upon the consummation of the sale or assignment, be the valid,
legal and binding obligations of such Person; and
(B) an opinion of counsel (which counsel may be an employee
of such Person or an Affiliate thereof), addressed to the Ground
Lessee, in form and substance reasonably satisfactory to each of
the Owner Participant and any Leasehold Mortgagee, that (i) such
Person is a corporation or other legal entity in good standing in
the state of its incorporation or formation and is qualified to
do business in the State of California and (ii) this Ground Lease
and, prior to the Lease Termination Date, any other Transaction
Documents to which the Ground Lessor is a party will, upon the
consummation of the sale or assignment, be the valid, legal and
binding obligations of such Person.
The Ground Lessor may grant a mortgage secured by its fee
simple interest in the Demised Premises without the consent of the Ground
Lessee, but subject and subordinate in any case to this Ground Lease and
any other Transaction Documents to which the Ground Lessor is a party.
Before any such mortgage shall become effective, however, the Ground Lessor
shall deliver to the Ground Lessee an agreement of the mortgagee under such
mortgage (in a form reasonably satisfactory to the Ground Lessee) to the
effect that (i) in the event of a foreclosure under such mortgage (or any
transfer in lieu thereof), such mortgagee will not, so long as no Ground
Lessee's Default exists and is continuing, disturb the Ground Lessee's (or
its sublessee's) use or possession of the Demised Premises or the
Improvements on Demised Premises and will assume all the obligations of the
Ground Lessor under this Ground Lease, and (ii) such mortgage encumbers and
is only secured by the Ground Lessor's reversionary interest in the Demised
Premises (and not the Improvements).
Section 10.02. By the Ground Lessee. Subject to the provisions
of Section 2.01 hereof, at any time, from time to time, during the Ground
Lease Term, the Ground Lessee, in addition to its rights under Article XI
hereof, may sell or, assign its interest in this Ground Lease, or sublet
the Demised Premises, in whole or in part, to any Person, subject to the
Sublease, so long as the same shall be in effect, and provided that any
such sale or assignment is not prohibited under the Transaction Documents.
In addition to any Ground Lessor's consent that may be required by the
Sublease during the term of the Sublease, and before any such sublet or
assignment shall become effective, the Ground Lessee shall provide the
Ground Lessor with the following:
(A) a representation and warranty by such Person that this
Ground Lease, and prior to the Lease Termination Date, any other
Transaction Documents to which the Ground Lessee is a party will,
upon the assignment, be the valid, legal and binding obligations
of such Person; and
(B) an opinion of counsel (which counsel may be an employee
of such Person or an Affiliate thereof), addressed to the Ground
Lessor, in form and substance reasonably satisfactory to the
Ground Lessor that (i) such Person is a corporation or other
legal entity in good standing in the state of its incorporation
or formation and is qualified to do business in the State of
California and (ii) this Ground Lease and prior to the Lease
Termination Date, any other Transaction Documents to which the
Ground Lessee is a party will, upon the assignment, be the valid,
legal and binding obligations of such Person.
ARTICLE XI
FINANCING
Section 11.01. The Ground Lessee's Right to Obtain Financing.
Subject to Section 11.02 below, the Ground Lessee shall have the right,
without the Ground Lessee's prior consent, to mortgage or further encumber
its leasehold estate hereunder (any such mortgage being a "Leasehold
Mortgage"), provided that any such mortgage or encumbrance is not
prohibited under the Transaction Documents.
Section 11.02. Limitations on Financing. The Ground Lessee's
rights to obtain such financing and refinancing shall be subject to the
following conditions:
(a) No Ground Lessee's Default under this Ground Lease
shall have occurred and be continuing.
(b) Any instrument evidencing such financing or refinancing
shall provide that the Ground Lessor shall not be liable for the
payment of such indebtedness or the performance of any of the
covenants contained in the documents securing payment thereof,
and that in the event of default in payment or performance
thereof, the holder of such indebtedness will not look to the
Ground Lessor's interest in the Demised Premises for satisfaction
of the indebtedness thereby secured.
(c) No mortgage now or hereafter a lien upon this Ground
Lease shall extend to or affect the reversionary interest and
estate of the Ground Lessor in and to the Demised Premises and
the Improvements, or in any manner attach to or affect the Ground
Lessor's interest in the Demised Premises and the Improvements.
Section 11.03. Certificates. The Ground Lessor shall, from time
to time during the Ground Lease Term, upon request of the Ground Lessee and
on not less than thirty (30) days prior written notice, deliver to the
Ground Lessee and any Leasehold Mortgagee so requesting, a statement in
writing confirming that the mortgage held by said Leasehold Mortgagee
constitutes a "Leasehold Mortgage" pursuant to the terms of this Article
XI.
Section 11.04. Notification of the Ground Lessor. If the Ground
Lessee shall grant a Leasehold Mortgage and shall provide the Ground Lessor
with notice thereof specifying the name and address of the holder of such
Leasehold Mortgage (a "Leasehold Mortgagee"), then the Ground Lessor, upon
giving the Ground Lessee a notice of (i) default, (ii) termination or
proposed termination, (iii) a matter on which the Ground Lessor may claim
or base a default, (iv) consent to an assignment or subletting or (v) any
other matter which could materially and adversely affect the rights or
obligations of the Ground Lessor or the Ground Lessee, shall at the same
time also give such notice to the Leasehold Mortgagee or the notice given
shall be deemed ineffective as to the Leasehold Mortgagee and the Ground
Lessee. In the case of a default notice, such notice shall set forth with
particularity those defaults being claimed at that time.
Section 11.05. Rights of a Leasehold Mortgagee.
(a) A Leasehold Mortgagee shall have the right, but
not any obligation, to perform any term, covenant, condition or agreement
of this Ground Lease and to remedy any default by the Ground Lessee
hereunder within the time limits set forth in this Ground Lease (and such
additional time (x) as is reasonably required to cure any non-monetary
Ground Lessee' s Default which is capable of cure, proceeding with
diligence, and (y) if possession of the Premises is required to cure such
default, as is reasonably required to obtain possession of the Premises and
to cure such default) and the Ground Lessor will accept such performance.
(b) If a Ground Lessee's Default shall occur which would
otherwise entitle the Ground Lessor to terminate this Ground Lease, the
Ground Lessor shall have no right to terminate this Ground Lease unless,
following the expiration of the period of time given the Ground Lessee to
cure such default, the Ground Lessor shall give the Leasehold Mortgagee
additional written notice of the Ground Lessee's Default and the Leasehold
Mortgagee shall have sixty (60) days following its receipt of such notice
to remedy any such default (and such additional time (x) as is reasonably
required to cure any non-monetary Ground Lessee's Default which is capable
of cure, proceeding with diligence, and (y) if possession of the Demised
Premises is required to cure such default, as is reasonably required to
obtain possession of the Demised Premises and to cure such default) and the
Ground Lessor will accept such performance. In the event that the
Leasehold Mortgagee fails to cure any Ground Lessee's Default in the manner
or within the time period herein provided, the Ground Lessor shall provide
the Leasehold Mortgagee with written notice of the Ground Lessor's intent
to terminate this Ground Lease at least sixty (60) days in advance of the
proposed effective date of such termination. The Leasehold Mortgagee, in
addition to its right as described above to cure defaults by the Ground
Lessee, shall have the right to postpone the date on which this Ground
Lease would terminate as a result of the Ground Lessee's default in
accordance with said notice by (a) giving Ground Lessor written notice
within such sixty (60) day period of the Leasehold Mortgagee's election to
postpone the date on which this Ground Lease would terminate, and (b)
proceeding with due diligence (i) to cure all defaults, if any, from the
date of the Ground Lessee's Default then existing which may be cured by the
payment of a sum of money, (ii) to initiate and pursue steps to acquire the
Demised Premises by foreclosure of its Leasehold Mortgage or otherwise and
(iii) after obtaining possession of the Demised Premises, to cure any other
then existing default of the Ground Lessee susceptible of being cured by
the Leasehold Mortgagee from the date of the Ground Lessee's Default. In
the case of a default which is personal to the Ground Lessee and which
cannot be cured by the Leasehold Mortgagee, the Ground Lessor's right to
terminate this Ground Lease on account thereof shall be deemed to be waived
so long as all other defaults are cured by the Leasehold Mortgagee as
provided in this Ground Lease.
Section 11.06. New Lease. If within sixty (60) days (as such
period may be extended while diligent efforts to cure are proceeding)
following Leasehold Mortgagee's receipt of notice pursuant to Section
11.05(b) above of the Ground Lessor's intention to terminate this Ground
Lease, the Leasehold Mortgagee shall deliver to the Ground Lessor a written
request for a new ground lease of the Demised Premises, then the Ground
Lessor shall promptly enter into a new ground lease of the Demised Premises
with such Leasehold Mortgagee or its designee effective as of the date of
actual termination of Ground Lessee's rights under this Ground Lease on the
same terms as this Ground Lease, provided, that (i) the Ground Lessor
receives, at or prior to the execution of such new ground lease, payment of
any Ground Lease Rent due from the date of the Ground Lessee's Default to
the date of the delivery of the new ground lease (to the extent any such
Ground Lease Rent would be due if this Ground Lease were not terminated)
and (ii) the Ground Lessor receives an undertaking in writing that,
promptly following the delivery of the new ground lease, such Leasehold
Mortgagee or its designee will perform or cause to be performed all of the
other covenants and agreements contained in this Ground Lease on the Ground
Lessee's part to be performed from the date of the Ground Lessee's Default
(except to the extent (i) the Ground Lessee shall have performed the same
prior to the date of delivery of such new ground lease, (ii) performance is
not required pursuant to Section 11.05 hereof or (iii) such covenants and
agreements cannot reasonably, with the exercise of due diligence, be
performed by such Leasehold Mortgage or its designee). A new ground lease
shall (a) be effective as of the date of the termination of the Ground
Lessee's rights under this Ground Lease as such remainder existed
immediately prior to termination, (b) require the same Ground Lease Rent
and other charges to be paid as were payable under this Ground Lease, (c)
include the same terms, covenants, conditions and agreements as are
contained in this Ground Lease (as modified hereby), (d) have the same
priority as this Ground Lease, and (e) provide that the ground lessee under
such any ground lease shall be liable to perform the obligations imposed on
the ground lessee by such new ground lease only during the time period that
such party is the ground lessee of the Demised Premises. In the event that
the Leasehold Mortgagee fails to provide a written response to the Ground
Lessor's notice of intent to terminate this Ground Lease or sign and
deliver the new ground lease tendered by the Ground Lessor as provided for
in this Section 11.06 within the applicable sixty (60) day period, this
Ground Lease shall terminate on the date provided for in the Ground
Lessor's notice of intent to terminate.
If in any instance more than one Leasehold Mortgagee exercise its
right to obtain a new lease pursuant to this Section 11.06, then only the
Leasehold Mortgagee holding the lien of the highest priority shall be
entitled to the new lease free and clear of the rights of all other
lienors.
Section 11.07. Consent to Modification. The Ground Lessor will
not accept any surrender, agree to the cancellation, or enter into any
modification, of this Ground Lease without the prior written consent
thereto of any Leasehold Mortgagee of which the Ground Lessor has been
given notice by the Ground Lessee. Without limiting the generality of the
foregoing, no termination under Section 365(h) of the Bankruptcy Code shall
be effective against the Leasehold Mortgagee without the prior written
consent of the Leasehold Mortgagee.
Section 11.08. Intentionally Deleted.
ARTICLE XII
REMEDIES
Section 12.01. Default by the Ground Lessee. Upon the
occurrence of a Ground Lessee's Default, and following the expiration of
all applicable notice, grace and cure periods, the Ground Lessor shall have
only the following rights, exercisable at any time thereafter so long as
such Ground Lessee's Default remains uncured (the Ground Lessor expressly
agrees that the rights enumerated in this Section 12.01 shall constitute
the sole remedies of the Ground Lessor and hereby waives the benefit of,
and covenants not to exercise, any other right or remedy that may be
available to the Ground Lessor at law, in equity, or otherwise):
(a) At all times that the Sublease is in effect, to
enforce, by all proper, equitable and legal suits and other
means, its rights hereunder, including, but not limited to, the
collection of Ground Lease Rent, without reentering or resuming
possession of the Demised Premises and without terminating this
Ground Lease;
(b) To cure any default by the Ground Lessee and recover
any sums so expended, which sums shall constitute Additional
Rental; or
(c) After the Lease Termination Date, to (i) terminate this
Ground Lease and all of the Ground Lessee's rights hereunder, and
to enforce such termination by an action in ejectment, or similar
legal action, and (ii) enforce, by all proper, equitable and
legal suits and other means, its rights hereunder.
Section 12.02. Default by the Ground Lessor. Upon the
occurrence of a Ground Lessor's Default, and following the expiration of
all applicable notice, grace and cure periods, the Ground Lessee shall be
entitled to cure such default and recover any sums so reasonably expended,
together with interest thereon from the date expended at a rate per annum
equal to the Default Rate directly from the Ground Lessor, and to seek
injunctive or other equitable relief and to exercise any remedy; provided,
however, it is expressly agreed that the rights enumerated in this Section
12.02 shall be the Ground Lessee's sole remedies and the Ground Lessee
hereby waives the benefit of, and covenants not to exercise, any other
right or remedy which may be available to the Ground Lessee at law or in
equity.
Section 12.03. No Waiver. No waiver by the Ground Lessor or the
Ground Lessee of any default or breach of any covenant, condition or
stipulation herein contained shall be treated as a waiver of any subsequent
default or breach of the same or any other covenant, condition or
stipulation hereof.
Section 12.04. Force Majeure. It is expressly understood and
agreed that if the curing of any Ground Lessor's Default or any Ground
Lessee's Default (other than failure to pay Ground Lease Rent), or the
performance of any other covenant, agreement, obligation or undertaking
herein contained is delayed by reason of war, riot or civil commotion, acts
of God, governmental restrictions or regulations, fire or other casualty,
strikes, shortages of labor or material, or any circumstances beyond the
control of the party obligated or permitted under the terms hereof to do or
perform the same, regardless of whether or not any such circumstance is
similar to any of those enumerated above, the Ground Lessee and the Ground
Lessor shall be excused from doing or performing the same during such
period of delay.
ARTICLE XIII
WARRANTIES AND COVENANTS
Section 13.01. Quiet Enjoyment. The Ground Lessor hereby
warrants to the Ground Lessee that the peaceable possession, use and
enjoyment of the Demised Premises shall not be disturbed by the Ground
Lessor or by any other Person acting at the direction of or claiming under
or through the Ground Lessor, and in the event that this Ground Lease shall
terminate, the Sublease shall continue in full force and effect as a direct
lease between the Ground Lessor, as lessor, and Sublessee, as lessee.
Section 13.02. Ground Lessor Indemnity. The Ground Lessor shall
indemnify and hold harmless the Ground Lessee against any violation of the
warranty set forth in Section 13.01 above.
Section 13.03. Covenants of the Ground Lessor. The Ground
Lessor hereby covenants and agrees with the Ground Lessee that:
(a) The Ground Lessor will not, at any time during the
Ground Lease Term, represent to any Person or otherwise claim
that the Ground Lessor is a partner of the Ground Lessee for any
tax purpose;
(b) The Ground Lessor does not now, and will not at any
time during the Ground Lease Term, claim, for federal, state or
local income tax purposes, any of the depreciation expense
allowable with respect to the Improvements at any time during the
Ground Lease Term;
(c) The Ground Lessor will not, at any time during the
Ground Lease Term, carry the Improvements, or any portion
thereof, or any interest therein, as an asset of the Ground
Lessor on its books and records, and will not show the
Improvements or any portion thereof or any interest therein as an
asset on any balance sheet, statement of financial condition or
other financial statement of any nature; and
(d) During the Ground Lease Term, the Ground Lessor shall
not take or omit to take any action that will cause the Ground
Lessee's ownership, use or occupancy of the Improvements or use
and occupancy of the Demised Premises to violate Applicable Law.
Section 13.04. Covenants of the Ground Lessee. From and after
the Lease Termination Date, and except as otherwise provided herein, the
Ground Lessee covenants and agrees to abide by, perform, satisfy and
otherwise fulfill all of the duties and obligations with respect to the
Demised Premises which are created or arise under Applicable Law, the
Permitted Exceptions, and any other encumbrance affecting title to the
Demised Premises to which the Ground Lessee shall have specifically
consented in writing.
ARTICLE XIV
NET LEASE
Section 14.01. Net Lease. This is a net lease and all costs of
maintenance and repair to the Demised Premises and insurance required
hereunder and all impositions and charges, including all utility charges,
of every kind and nature whatsoever payable during the Ground Lease Term
with respect to the Demised Premises and the Improvements shall be at the
sole cost and expense of the Ground Lessee, and except for damages caused
by the Ground Lessor or any of its agents, servants or employees, the
Ground Lessor shall have no obligation to pay the costs of maintenance or
repair to the Demised Premises, or insurance required hereunder or any
imposition or utility charge or other charge with respect to the Demised
Premises, and shall not be obligated to make any improvements, repairs,
alterations, additions or replacements whatsoever to the Improvements or
the Demised Premises.
ARTICLE XV
LIMITED LIABILITY
Section 15.01. Limited Liability. The Ground Lessee agrees to
look solely to the Ground Lessor's interest in the Demised Premised and
Improvements, if any, for the recovery of any judgment from the Ground
Lessor, it being agreed that the Ground Lessor, and if the Ground Lessor is
a partnership, its partners, whether general or limited, and, if the Ground
Lessor is a corporation, its officers, directors or shareholders, shall
never be personally liable for any such judgment.
Wilmington Trust Company is entering into this Ground Lease not
in its individual capacity, but solely as Remainderman Trustee under the
Business Trust Agreement dated as of December 21, 1993 (the "Remainderman
Trust Agreement") between Wilmington Trust Company and California-Relco
Limited Partnership. Each of the representations, warranties, covenants
and agreements made by the Ground Lessor herein are made solely for the
purpose of binding the Remainderman, and Wilmington Trust Company in its
individual capacity shall have no liability whatsoever with respect
thereto.
State Street Bank and Trust Company of California, National
Association is entering into this Ground Lease solely as Owner Trustee
under the Trust Agreement dated as of December 21, 1993 (the "Trust
Agreement"), and not in its individual capacity except as expressly stated
herein. Accordingly, except as stated herein, each of the representations,
warranties, undertakings and agreements herein made on the part of the
Owner Trustee as the Ground Lessee (and not in its individual capacity) is
made and intended not as a personal representation, warranty, undertaking
or agreement by or for the purpose or with the intention of binding State
Street Bank and Trust Company of California, National Association
personally, but is made and intended for the purpose of binding only the
Trust Estate (as defined in the Trust Agreement). Except as expressly
stated herein, no personal liability or responsibility is assumed hereunder
by or shall at any time be enforceable against State Street Bank and Trust
Company of California, National Association or any successor in trust on
account of any action taken or omitted to be taken or any representation,
warranty, undertaking or agreement hereunder of the Owner Trustee (in its
fiduciary capacity); provided, however, that (a) the Ground Lessor or any
person acting by, through or under any Ground Lessor, making a claim
hereunder, may look to the Trust Estate for satisfaction of the same and
(b) State Street Bank and Trust Company of California, National Association
or its successor in trust, as applicable, shall be personally liable for
its own gross negligence, willful misconduct or bad faith in the
performance of its duties as Owner Trustee or otherwise and for its breach
of its covenants undertakings, representations and warranties contained
herein, to the extent such were made in its individual capacity. If a
successor owner trustee is appointed in accordance with the terms of the
Trust Agreement, such successor owner trustee, without any further act,
shall succeed to all the rights, duties, immunities and obligations of the
Ground Lessee hereunder and the predecessor owner trustee shall be released
from all further duties and obligations hereunder.
Section 15.02. Intentionally Deleted.
Section 15.03. Intentionally Deleted.
ARTICLE XVI
ENVIRONMENTAL
Section 16.01. Environmental. The Ground Lessee will, subject
to the exceptions set forth in the next sentence, protect, indemnify and
hold harmless the Ground Lessor from and against, and on demand shall pay
or reimburse the Ground Lessor for, any and all Environmental Liabilities
and Costs of any nature whatsoever resulting from occurrences or conditions
arising on or after the Lease Termination Date and suffered or incurred by
the Ground Lessor in connection with the ownership or operation of the
Demised Premises or as the result of this Ground Lease. The foregoing
indemnity shall, subject to the exceptions set forth below: (a) survive the
termination of this Ground Lease; (b) survive the transfer of any or all
right, title and interest in and to the Ground Lease (or any portion
thereof) by the Ground Lessor or Ground Lessee or any Person; (c) extend to
and include (but not be limited to) damages to Persons or property damage
arising under any statutory or common law tort or other legal theory,
including, without limitation, damages for the maintenance of a public or
private nuisance at the Demised Premises or for the carrying on of any
abnormally dangerous activity at the Demised Premises (or any portion
thereof); (d) not be limited in amount; (e) not be affected by any action
or failure to act on the part of any Governmental Authority; and (f) not be
affected by any investigation or actual or constructive knowledge of the
Ground Lessor; provided, however, that the Ground Lessee shall not be
obligated to indemnify or hold Ground Lessor harmless for (i) Environmental
Liabilities and Costs arising out of any act or omission by or on behalf of
Ground Lessor (but only to the extent such Environmental Liabilities and
Costs were not reasonably attributable to a condition existing at the time
of the Ground Lessor's recovery of possession of the Demised Premises),
(ii) Environmental Liabilities and Costs arising out of any occurrence or
condition arising prior to the Lease Termination Date for which the
Sublessee is required to indemnify the Ground Lessee or the Owner
Participant pursuant to the Participation Agreement, (iii) any gross
negligence or willful misconduct by or on behalf of the Ground Lessor (but
the exclusion in this clause (iii) shall not apply to the extent such gross
negligence or willful misconduct by or on behalf of the Ground Lessor was
imputed by law to the Ground Lessor from Owner Participant or the Ground
Lessee), or (iv) the material breach by the Ground Lessor of any of its
representations, warranties or obligations under the Ground Lease or any of
the other Transaction Documents.
ARTICLE XVII
MISCELLANEOUS
Section 17.01. No Agency or Partnership. Nothing herein
contained shall be deemed or construed by the parties hereto, nor by any
third party, as creating the relationship of principal and agent or of
partnership or of joint venture between the parties hereto, it being
understood and agreed that no provision contained herein, nor any acts of
the parties hereto, shall be deemed to create any relationship between the
parties hereto other than the relationship of ground lessor and ground
lessee.
Section 17.02. Estoppel Certificates.
(a) The Ground Lessee agrees, at any time and from time to
time, upon not less than thirty (30) days' prior written notice from the
Ground Lessor, to execute, acknowledge and deliver to the Ground Lessor a
statement in writing (i) certifying that this Ground Lease is unmodified
and in full force and effect (or if there have been modifications, that
this Ground Lease is in full force and effect as modified and stating the
modifications hereto); (ii) stating the dates to which the Ground Lease
Rent and other charges hereunder have been paid by the Ground Lessee; (iii)
stating whether or not the Ground Lessee has knowledge that the Ground
Lessor is in default in the performance of any covenant, agreement or
condition contained in this Ground Lease, and, if the Ground Lessor has
knowledge of such a default, specifying each such default; and (iv) stating
the address to which notices to the Ground Lessee shall be sent. Prior to
the commencement of or during the Ground Lease Term, the Ground Lessor
shall, if requested by the Ground Lessee, deliver an estoppel certificate,
in the substance and form described above, relative to the status of this
Ground Lease and any underlying Leasehold Mortgage.
(b) The Ground Lessor agrees, at any time and from time to
time, upon not less than thirty (30) days' prior written notice from the
Ground Lessee, to execute, acknowledge and deliver to the Ground Lessee a
statement in writing (i) certifying that this Ground Lease is unmodified
and in full force and effect (or if there have been modifications, that
this Ground Lease is in full force and effect as modified and stating the
modifications hereto); (ii) stating the dates to which the Basic Ground
Lease Rent and other charges hereunder have been paid by the Ground Lessee;
(iii) stating whether or not the Ground Lessor has knowledge that the
Ground Lessee is in default in the performance of any covenant, agreement
or condition contained in this Ground Lease, and, if the Ground Lessor has
knowledge of such a default, specifying each such default; and (iv) stating
the address to which notices to the Ground Lessor shall be sent. If so
requested by the Ground Lessee, the Ground Lessor shall also address such
estoppel certificates to lenders, partners investors or others with a bona
fide business purpose requesting the same.
Section 17.03. Headings. The division of this Ground Lease into
sections, the provision of table of contents and the insertion of headings
are for convenience of reference only and shall not affect the construction
or interpretation of this Ground Lease.
Section 17.04. Notice. All communications, declarations,
demands and notices provided for in this Ground Lease shall be in writing
and shall be given in the manner and addressed as set forth in the
Participation Agreement. So long as the Sublease remains in effect, a copy
of any notice required to be given by either party hereto shall be given to
Sublessee, and a copy of any notice received by any party hereto from
Sublessee shall be given to the other party hereto, and a copy of any
notice required to be given by the Ground Lessee to Sublessee under the
Sublease shall be given to the Ground Lessor.
Section 17.05. Governing Law. This Ground Lease shall be
governed by and construed in accordance with the laws of the State of
California without regard to conflicts of laws principles.
Section 17.06. Memorandum of Lease and Recordation. Each of the
parties hereto will, promptly upon request of the other, execute a notice
or memorandum of this Ground Lease. A memorandum of this Ground Lease may
be recorded by either party hereto. The party causing or requiring the
recordation of such memorandum shall pay all recordation, transfer or other
tax or fee incident to such recordation.
Section 17.07. Severability of Provisions. Any provision of
this Ground Lease that may be determined by competent authority to be
prohibited or unenforceable in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the
extent permitted by Applicable Law, the Ground Lessee and the Ground Lessor
hereby waive any provision of law that renders any provision hereof
prohibited or unenforceable in any respect.
Section 17.08. Amendment. The provisions of this Ground Lease
may not be waived, altered, modified, amended, supplemented or terminated
in any manner whatsoever except by written instrument signed by the Ground
Lessor and the Ground Lessee.
Section 17.09. Multiple Counterparts. This Ground Lease may be
executed in a number of identical counterparts, each of which constitutes
an original, but all of which together shall constitute one and the same
agreement; provided, however, that in making proof of this Ground Lease, it
shall not be necessary for any party hereto to produce or account for more
than one such counterpart.
Section 17.10. Successors and Assigns. This Ground Lease shall
be binding upon and inure to the benefit of the Ground Lessor and the
Ground Lessee, and their respective permitted administrations, successors
and assigns, except as otherwise limited or specifically qualified in this
Ground Lease.
Section 17.11. Attorneys' Fees. In the event of any action or
proceeding brought by either party under this Ground Lease against the
other party, the prevailing party in such action or proceeding shall be
entitled to recover from the other party all costs or expenses (including
reasonable attorneys' fees) incurred by reason of such action or
proceeding.
Section 17.12. Attornment and Non-Disturbance. From time to
time at the request of the Ground Lessee, the Ground Lessor shall execute
and deliver to the Ground Lessee for the benefit of any tenant in the
Improvements attornment and non-disturbance agreements in form and
substance reasonably satisfactory to the Ground Lessor, under which the
Ground Lessor, as applicable, shall agree to recognize the lease of any
such tenant and to permit such tenant to remain in occupancy of its
premises within the Improvements notwithstanding any default hereunder by
the Ground Lessee, so long as such tenant is not in default under the lease
covering its premises within the Improvements and the tenancy of such
tenant does not extend beyond the Ground Lease Term (calculated without
regard to terminations resulting from a Ground Lessee's Default). Any such
agreement shall provide that such tenant is obligated to attorn to the
Ground Lessor if this Ground Lease is terminated under the terms hereof and
to recognize the Ground Lessor as the landlord under the lease with such
tenant covering its premises within the Improvements. The issuance of any
such agreement shall in no way release or diminish the Ground Lessee's
duties and obligations under this Ground Lease.
Section 17.13. Non-Merger. There shall be no merger of this
Ground Lease, the Demised Premises or the Improvements with the fee estate
in and to the Demised Premises, by reason of the fact that this Ground
Lease, or the Improvements, or any interest in any of them, may at any time
be held directly or indirectly by or for the account of any Person who
shall own the fee estate in and to the Demised Premises, or any portion
thereof, and no such merger shall occur unless and until all persons at the
time having any interest in the fee estate and all persons having any
interest in this Ground Lease, the leasehold estate, or the Improvements,
including the holder of any mortgage upon the fee estate in and to the
Demised Premises, shall join in a written instrument effecting such merger.
Section 17.14. Inspection. Upon not less than five (5) Business
Days' notice to the Ground Lessee, the Ground Lessor and its authorized
representatives shall have the right, at its own expense (and subject, in
each event, to Applicable Law, then existing leases as to the Improvements,
and the Ground Lessee's reasonable procedures), to inspect the Demised
Premises and the books and records of the Ground Lessee relating to the
Demised Premises and the Improvements and the operation thereof, and to
make copies of and extracts therefrom (other than copies of and extracts
from proprietary data and information).
Section 17.15. Further Assurances and Cooperation. The Ground
Lessor and the Ground Lessee each agree to cause to be promptly and duly
taken, executed, acknowledged and delivered all such further acts,
documents and assurances as the other party from time to time may
reasonably request in order to carry out more effectively the intent and
purposes of this Ground Lease. Upon request of the Ground Lessee, the
Ground Lessor shall cooperate with the Ground Lessee in obtaining the valid
and effective issuance or transfer or amendment, as the case may be, of all
Governmental Actions necessary, or in the reasonable opinion of the Ground
Lessee desirable, for the ownership, operation and possession of the
Demised Premises (or any property purported to be covered by this Ground
Lease) by the Ground Lessee or any transferee, lessee or assignee thereof.
Section 17.16 Perpetuities Savings Clause. If any option or
other provision under this Ground Lease would, in the absence of the
limitation imposed by this Section 17.16, be invalid or unenforceable as
being in violation of the rule against perpetuities or any other rule of
law relating to the vesting of an interest in property or the suspension of
the power of alienation of property, then such option or other provision
shall be exercisable only during the period which shall end twenty (20)
years and six (6) months after the date of death of the last survivor of
the descendants of Joseph P. Kennedy (deceased father of the late
President, John F. Kennedy) alive on the date of the execution and delivery
of this Ground Lease.
ARTICLE XVIII
THE SUBLEASE
Section 18.01 The Sublease. Notwithstanding any other provision
of this Ground Lease to the contrary, as long as the Sublease is in effect
and has not expired or been terminated, to the extent that any term,
condition or covenant contained in this Ground Lease is inconsistent with
any term, condition or covenant contained in the Sublease, the terms,
conditions and covenants contained in the Sublease shall govern as though
such terms, conditions and covenants were contained herein, and compliance
with the terms, covenants and conditions of the Sublease by Sublessee shall
be deemed to constitute full compliance with the terms, conditions and
covenants contained in this Ground Lease, so that no default of the Ground
Lessee shall exist hereunder so long as the Sublease has not been
terminated.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Ground Lease to be duly executed by an officer thereunto duly authorized as
of the date and year first above written.
GROUND LESSOR
CALIFORNIA-RELCO LIMITED PARTNERSHIP TRUST
By: Wilmington Trust Company,
not in its individual capacity but solely as
Remainderman Trustee
By:
Name:
Title:
GROUND LESSEE
STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, not in its individual capacity, but
solely as Owner Trustee
By:
Name:
Title:
State of New York )
) SS.:
County of New York )
On December ___, 1993 before me, _____________________, Notary
Public, personally appeared, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal
SIGNATURE [seal]
State of New York )
) SS.:
County of New York )
On December ___, 1993 before me,
____________________________, Notary Public, personally appeared,
personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
Witness my hand and official seal
SIGNATURE [seal]
EXHIBIT A
[insert description of the Demised Premises]
EXHIBIT B
[insert Basic Ground Lease Rent]
Exhibit C
Form of
LEASE AGREEMENT
[Set forth as Exhibit 4.3.3 to this Form 8-K]
EXHIBIT D-1
TRUST AGREEMENT
dated as of December 21, 1993
between
PMCC LEASING CORPORATION,
as Owner Participant,
and
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA,
NATIONAL ASSOCIATION,
as Owner Trustee
SMITH'S FOOD & DRUG CENTERS, INC.
Leveraged Lease of Six (6)
Food and Drug Stores and
One (1) Distribution Center
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
ARTICLE II
AUTHORITY TO EXECUTE AND PERFORM VARIOUS DOCUMENTS;
DECLARATION OF TRUST BY STATE STREET
SECTION 2.01. Authority To Execute and Perform Various
Documents. 2
SECTION 2.02. Declaration of Trust by State Street 2
ARTICLE III
PAYMENTS
SECTION 3.01. Payments from Trust Estate Only. 3
SECTION 3.02. Method of Payment 3
ARTICLE IV
DISTRIBUTIONS
ARTICLE V
DUTIES OF THE OWNER TRUSTEE
SECTION 5.01. Notice of Certain Events
4
SECTION 5.02. Action upon Instructions
5
SECTION 5.03. Indemnification
5
SECTION 5.04. No Duties Except as Specified in Trust
Agreement or Instructions 5
SECTION 5.05. No Action Except Under Specified
Documents or Instructions 6
SECTION 5.06. Absence of Duties
6
ARTICLE VI
THE OWNER TRUSTEE
SECTION 6.01. Acceptance of Trust and Duties
6
SECTION 6.02. Furnishing of Documents
7
SECTION 6.03. No Representations or Warranties as to
the Lessor Interest in Respect of Any of
the Properties or Transaction Documents 7
SECTION 6.04. No Segregation of Moneys; No Interest
8
SECTION 6.05. Reliance; Advice of Counsel
8
SECTION 6.06. Not Acting in Individual Capacity
8
SECTION 6.07. Books and Records; Tax Returns
9
ARTICLE VII
INDEMNIFICATION OF THE OWNER TRUSTEE
BY THE OWNER PARTICIPANT
SECTION 7.01. The Owner Participant To Indemnify
State Street 9
SECTION 7.02. Compensation and Expenses
10
ARTICLE VIII
TERMINATION OF TRUST AGREEMENT
SECTION 8.01. Termination of Trust Agreement
10
SECTION 8.02. Termination at Option of the Owner
Participant 11
SECTION 8.03. Actions by the Owner Trustee upon
Termination 11
SECTION 8.04. Bankruptcy of the Owner Participant
11
ARTICLE IX
SUCCESSOR OWNER TRUSTEES, CO-OWNER TRUSTEES
AND SEPARATE OWNER TRUSTEES
SECTION 9.01. Resignation of the Owner Trustee;
Appointment of Successor 12
SECTION 9.02. Co-Trustees and Separate Trustees
13
SECTION 9.03. Notice 13
ARTICLE X
SUPPLEMENTS AND AMENDMENTS
SECTION 10.01. Supplements and Amendments 14
SECTION 10.02. Limitation on Amendments
14
ARTICLE XI
TRANSFER OF INTEREST OF THE OWNER PARTICIPANT
SECTION 11.01. Transfer of Interest of the Owner
Participant 14
SECTION 11.02. Transferee's Agreement 15
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. No Legal Title to Trust Estate in the
Owner Participant 15
SECTION 12.02. Sale of Lessor Interest in Respect of
Any of the Properties by the Owner
Trustee is Binding 15
SECTION 12.03. Limitations on Rights of Others 16
SECTION 12.04. Notices 16
SECTION 12.05. Severability 16
SECTION 12.06. Limitation on the Owner Participant's
Liability 16
SECTION 12.07. Separate Counterparts; Dating 16
SECTION 12.08. Successors and Assigns 16
SECTION 12.09. Headings 16
SECTION 12.10. GOVERNING LAW 17
SECTION 12.11. Administration of Trust 17
SECTION 12.12. Performance by the Owner Participant 17
SECTION 12.13. Conflict with Transaction Documents 17
SECTION 12.14. No Implied Waiver 17
TRUST AGREEMENT
TRUST AGREEMENT dated as of December 21, 1993 (this "Trust
Agreement"), between PMCC Leasing Corporation, a Delaware corporation (the
"Owner Participant"), and State Street Bank and Trust Company of
California, National Association ("State Street").
WHEREAS, the Owner Participant desires to form the Trust created
hereby for the purpose of purchasing the Improvements on and Estate for
Years in each of the Properties from Smith's Food & Drug Centers, Inc., a
Delaware corporation (the "Lessee"), acquiring the Option from the
Remainderman and carrying out certain transactions contemplated by the
Transaction Documents; and
WHEREAS, State Street is willing to act as trustee hereunder (in
such capacity, with its permitted successors and assigns, the "Owner
Trustee") and to accept the Trust created hereby;
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained and of other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
DEFINITIONS
For purposes of this Trust Agreement, capitalized terms used in
this Trust Agreement and not otherwise defined in this Trust Agreement
shall have the meanings assigned to them in Appendix A to that certain
Participation Agreement dated as of December 21, 1993 (the "Participation
Agreement"), among the Lessee, the Owner Participant, Philip Morris Capital
Corporation, as Owner Participant Parent, the Owner Trustee, California-
Relco Limited Partnership Trust, as Remainderman, California-Relco Limited
Partnership, as Remainderman Participant, Wilmington Trust Company, a
Delaware banking corporation, not in its individual capacity except as
expressly stated therein, but solely as Remainderman Trustee, Wilmington
Trust Company, a Delaware banking corporation, not in its individual
capacity except as expressly stated therein, but solely as Indenture
Trustee, Bank of America National Trust and Savings Association, as Initial
Noteholder, and Wilmington Trust Company, a Delaware banking corporation,
not in its individual capacity except as expressly stated therein, but
solely as Pass Through Trustee. Unless otherwise indicated, references in
this Trust Agreement to articles, sections, paragraphs, clauses,
appendices, schedules and exhibits are to the same contained in this Trust
Agreement.
AUTHORITY TO EXECUTE AND PERFORM VARIOUS
DOCUMENTS;
DECLARATION OF TRUST BY STATE STREET
SECTION 2.01. Authority To Execute and Perform Various
Documents. The Owner Participant hereby authorizes and directs the Owner
Trustee (i) to execute and deliver, as trustee for and on behalf of the
Owner Participant, each Transaction Document to which the Owner Trustee is
a party and, pursuant to the terms of the Indenture, to execute, issue and
deliver to the Initial Noteholder on the Closing Date the Series J Notes
and to the Pass Through Trustee on the Debt Refinancing Date the
Refinancing Notes (each such Transaction Document and such Notes to be in
the form approved by the Owner Participant), (ii) to execute and deliver
all other agreements, instruments and certificates contemplated by the
documents referred to in clause (i) above, (iii) to take whatever action
shall be required to be taken by the Owner Trustee by the terms of, and
exercise its rights and perform its duties under, each of the documents,
agreements, instruments and certificates referred to in clauses (i) and
(ii) above as set forth in such documents, agreements and certificates, and
(iv) subject to the terms of this Trust Agreement, to take such other
action in connection with the foregoing as the Owner Participant may from
time to time direct.
SECTION 2.02. Declaration of Trust by State Street.
State Street hereby declares that it will hold the estate, right, title and
interest in and to the Lessor Interest in respect of each of the
Properties, the Transaction Documents and any other property contributed by
the Owner Participant, including, without limitation, all funds advanced to
the Owner Trustee by the Owner Participant, all proceeds from the sale of
the Notes, all installments and other payments of Rent, insurance proceeds
and condemnation awards, Termination Values, Casualty Values, indemnity or
other payments of any kind, but specifically (i) including all property
included in the Indenture Estate and (ii) excluding all Excepted Payments
and Excepted Rights (collectively, the "Trust Estate"), as Owner Trustee
upon the trusts set forth herein and for the use and benefit of the Owner
Participant; subject, however, to the lien and security interest on the
Trust Estate granted to the Indenture Trustee for the use and benefit of
the Noteholders as provided in the Indenture.
PAYMENTS
SECTION 3.01. Payments from Trust Estate Only. All payments to
be made by the Owner Trustee under this Trust Agreement shall be made only
from the income and proceeds from the Trust Estate and only to the extent
that the Owner Trustee shall have received income or proceeds from the
Trust Estate to make such payments in accordance with the terms hereof,
except as specifically provided in Section 6.01. The Owner Participant
agrees that it will look solely to the income and proceeds from the Trust
Estate to the extent available for payment as herein provided and that,
except as specifically provided herein,
State Street shall not be liable to the Owner Participant for any amounts
payable under this Trust Agreement and shall not be subject to any
liability under this Trust Agreement.
SECTION 3.02. Method of Payment. All amounts payable to the
Owner Participant pursuant to this Trust Agreement shall be paid or caused
to be paid by the Owner Trustee to, or for the account of, the Owner
Participant, or its nominee, by transferring such amount in immediately
available funds to a banking institution or banking institutions with bank
wire transfer facilities for the account of the Owner Participant or as
otherwise instructed in writing from time to time by the Owner Participant.
All amounts payable to the Indenture Trustee pursuant to Article IV below
shall be paid to the Indenture Trustee in the manner specified in the
Indenture.
DISTRIBUTIONS
Subject to the terms and requirements of the Transaction
Documents, all payments and amounts received by
State Street as Owner Trustee or on its behalf shall be distributed
forthwith upon receipt in the following order of priority: first, so much
of such payment or amount as shall be required to pay or reimburse it for
any fees, compensation or expenses (including reasonable attorneys' fees
and expenses) not otherwise paid or reimbursed to State Street as to which
State Street is entitled to be paid or reimbursed hereunder shall be
retained by the Owner Trustee and forthwith remitted to State Street; and,
second, the balance, if any, of such payment or amount remaining thereafter
shall be distributed to the Owner Participant; provided, however, that in
the event that the Indenture shall have been discharged, the Owner Trustee
shall in all events pay any amounts due and payable under the Lease prior
to making any distribution to the Owner Participant; provided, however,
that during the occurrence and continuance of a Lease Event of Default, any
such payment which would be required to be made to the Lessee pursuant to
the terms of the Lease shall be held and invested by the Owner Trustee
pursuant to Section 9(h) of the Lease as further security for the
obligations of the Lessee under the Lease, and at such time as there shall
not be continuing any Lease Event of Default, such payment shall be made to
the Lessee.
Anything in this Article IV or elsewhere in this Trust Agreement
to the contrary notwithstanding, any Excepted Payment received at any time
by the Owner Trustee shall be distributed promptly to the Person entitled
to receive such Excepted Payment.
DUTIES OF THE OWNER TRUSTEE
SECTION 5.01. Notice of Certain Events. In the event the Owner
Trustee shall have knowledge of any Default, Event of Default, Indenture
Default, Indenture Event of Default or Event of Loss, the Owner Trustee
shall give prompt telephonic notice thereof followed by written
confirmation to the Owner Participant, the Lessee, the Remainderman Trustee
and the Indenture Trustee unless such Default, Event of Default, Indenture
Default, Indenture Event of Default or Event of Loss no longer exists
before the giving of such notice. Subject to the provisions of Section
5.03, the Owner Trustee shall take or refrain from taking such action, not
inconsistent with the provisions of the Transaction Documents, with respect
thereto as the Owner Participant shall direct by written instructions to
the Owner Trustee. If the Owner Trustee shall have given the Owner
Participant notice of any event and shall not have received written
instructions as above provided within 30 days after mailing notice of such
event to the Owner Participant, the Owner Trustee may, but shall be under
no duty to, and shall have no liability for its failure or refusal to, take
or refrain from taking any action with respect thereto, not inconsistent
with the provisions of the Transaction Documents, as the Owner Trustee
shall deem advisable and in the best interests of the Owner Participant.
For all purposes of this Trust Agreement, in the absence of actual
knowledge of an officer in the Corporate Trust Administration Department of
State Street, the Owner Trustee shall be deemed not to have knowledge of
any Default, Event of Default, Indenture Default, Indenture Event of
Default or Event of Loss unless such officer of the Owner Trustee receives
notice thereof given by or on behalf of the Owner Participant, the Lessee,
the Indenture Trustee or any Noteholder.
SECTION 5.02. Action upon Instructions. Subject to the
provisions of Sections 5.01 and 5.03, upon the written instructions of the
Owner Participant, the Owner Trustee will take or refrain from taking such
action or actions, not inconsistent with the provisions of the Transaction
Documents, as may be specified in such instructions.
SECTION 5.03. Indemnification. The Owner Trustee shall not be
required to take or refrain from taking any action under this Trust
Agreement or any other Transaction Document (other than the actions
specified in the first sentence of Section 5.01 and in the last sentence of
Section 5.04) unless
State Street shall have been indemnified by the Lessee or, if State Street
reasonably believes such indemnity to be inadequate, by the Owner
Participant, in manner and form reasonably satisfactory to State Street,
against any liability, fee, cost or expense (including reasonable
attorneys' fees and expenses) that may be incurred or charged in connection
therewith, other than such as may result from the willful misconduct or
gross negligence of the Owner Trustee; and, if the Owner Participant shall
have directed the Owner Trustee to take or refrain from taking any action
under any Transaction Document, the Owner Participant agrees to furnish
such indemnity by a written undertaking of indemnification and, in
addition, to pay the reasonable compensation of State Street for the
services performed or to be performed by the Owner Trustee pursuant to such
direction. The Owner Trustee shall not be required to take any action
under any Transaction Document if State Street shall reasonably determine,
or shall have been advised by counsel, that such action is likely to result
in personal liability for which State Street has not been and will not be
adequately indemnified or is contrary to the terms hereof or of any
Transaction Document to which the Owner Trustee is a party or is otherwise
contrary to law.
SECTION 5.04. No Duties Except as Specified in Trust Agreement
or Instructions. The Owner Trustee shall not have any duty or obligation
to manage, control, use, make any payment in respect of, register, record,
insure, inspect, sell, dispose of or otherwise deal with the Lessor
Interest in respect of each of the Properties or any other part of the
Trust Estate, or to otherwise take or refrain from taking any action under
or in connection with any Transaction Document to which the Owner Trustee
is a party, except as expressly provided by the terms of this Trust
Agreement or in written instructions from the Owner Participant received
pursuant to Section 5.01, 5.02 or 6.07; and no implied duties or
obligations shall be read into this Trust Agreement against the Owner
Trustee. State Street nevertheless agrees that it will, at its own cost
and expense, promptly take all action as may be necessary to discharge any
Lessor's Liens arising by, through or under it on any part of the Trust
Estate.
SECTION 5.05. No Action Except Under Specified Documents or
Instructions. State Street agrees that it will not manage, control, use,
sell, dispose of or otherwise deal with the Lessor Interest in respect of
each of the Properties or any other part of the Trust Estate except (i) as
required by the terms of the Transaction Documents, (ii) in accordance with
the powers granted to, or the authority conferred upon, it pursuant to this
Trust Agreement or (iii) in accordance with the express terms hereof or
with written instructions from the Owner Participant pursuant to
Section 5.01, 5.02 or 6.07.
SECTION 5.06. Absence of Duties. Except in accordance with
written instructions furnished pursuant to Section 5.01, 5.02 or 6.07, and
without limitation of the generality of Section 5.04, the Owner Trustee
shall not have any duty to (i) file, record or deposit any Transaction
Document or any other document, or to maintain any such filing, recording
or deposit or to refile, rerecord or redeposit any such document,
(ii) obtain insurance on the Lessor Interest in respect of each of the
Properties or effect or maintain any such insurance, other than to receive
and forward to the Owner Participant any notices, policies, certificates or
binders furnished to the Owner Trustee pursuant to the Lease,
(iii) maintain the Lessor Interest in respect of each of the Properties,
(iv) pay or discharge any Tax or any Lien owing with respect to or assessed
or levied against any part of the Trust Estate, except as provided in the
last sentence of Section 5.04, other than to forward notice of such Tax or
Lien received by the Owner Trustee to the Owner Participant, (v) confirm,
verify, investigate or inquire into the failure to receive any reports or
financial statements of the Lessee, (vi) inspect the Lessor Interest in
respect of each of the Properties at any time or ascertain or inquire as to
the performance or observance of any of the covenants of the Lessee or any
other Person under any Transaction Document with respect to the Lessor
Interest in respect of each of the Properties, or (vii) manage, control,
use, sell, dispose of or otherwise deal with the Lessor Interest in respect
of each of the Properties or any part thereof or any other part of the
Trust Estate, except as provided in Section 5.05.
THE OWNER TRUSTEE
SECTION 6.01. Acceptance of Trust and Duties.
State Street accepts the trust hereby created and agrees to perform the
same, but only upon the terms of this Trust Agreement. State Street agrees
to receive, manage and disburse all moneys constituting part of the Trust
Estate actually received by it as Owner Trustee in accordance with the
terms of this Trust Agreement. State Street shall not be answerable or
accountable under any circumstances, except for (i) its own willful
misconduct or gross negligence, (ii) the inaccuracy of any of its
representations or warranties contained in Section 6.03 of this Trust
Agreement or Section 5.3 of the Participation Agreement, (iii) its failure
to perform obligations expressly undertaken by it in the last sentence of
Section 5.04
of this Trust Agreement, (iv) Taxes based on or measured by any fees,
commissions or compensation received by it for acting as Owner Trustee in
connection with any of the transactions contemplated by the Transaction
Documents, (v) its failure to use ordinary care to receive, manage and
disburse moneys actually received by it in accordance with the terms
hereof, and (vi) any other claims, amounts or taxes otherwise excluded from
the Lessee's indemnity obligations pursuant to Section 7.1 or 7.3 of the
Participation Agreement (disregarding for purposes of this clause (vi)
Sections 7.1(6) and 7.3(k) of the Participation Agreement).
SECTION 6.02. Furnishing of Documents. The Owner Trustee will
furnish to the Owner Participant, promptly upon receipt thereof, duplicates
or copies of all reports, notices, requests, demands, opinions,
certificates, financial statements and any other instruments or writings
furnished to the Owner Trustee hereunder or under the Transaction
Documents, unless by the express terms of any Transaction Document a copy
of the same is required to be furnished by some other Person directly to
the Owner Participant, or the Owner Trustee shall have determined that the
same has already been furnished to the Owner Participant.
SECTION 6.03. No Representations or Warranties as to the Lessor
Interest in Respect of Any of the Properties or Transaction Documents.
State Street makes (i) NO REPRESENTATION OR WARRANTY, EITHER EXPRESS OR
IMPLIED, AS TO THE TITLE, VALUE, CONDITION, DESIGN, OPERATION,
MERCHANTABILITY OR FITNESS FOR USE OF THE LESSOR INTEREST IN RESPECT OF ANY
OF THE PROPERTIES OR ANY OTHER REPRESENTATION, EXPRESS OR IMPLIED, WITH
RESPECT TO THE LESSOR INTEREST IN RESPECT OF ANY OF THE PROPERTIES
WHATSOEVER, except that State Street hereby represents, warrants and
covenants to the Owner Participant that it will comply with the last
sentence of Section 5.04, and (ii) no representation or warranty as to the
validity or enforceability of any Transaction Document or as to the
correctness of any statement made by a Person other than State Street or
the Owner Trustee contained in any thereof, except that State Street
represents, warrants and covenants to the Owner Participant that this Trust
Agreement has been and each of the other Transaction Documents which
contemplates execution thereof by the Owner Trustee and the Notes has been
or will be executed and delivered by its officers who are, or will be, duly
authorized to execute and deliver documents on its behalf, and this
Agreement and each of the other Transaction Documents to which the Owner
Trustee is a party constitute the legal, valid and binding obligation of
State Street, enforceable against it in accordance with their terms, except
as such terms may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the rights of creditors and by
general principles of equity.
SECTION 6.04. No Segregation of Moneys; No Interest. Except as
otherwise provided herein or in any of the Transaction Documents, moneys
received by the Owner Trustee hereunder need not be segregated in any
manner, except to the extent required by law, and may be deposited under
such general conditions as may be prescribed by law, and neither State
Street nor the Owner Trustee shall be liable for any interest thereon,
except as may be agreed to by State Street or the Owner Trustee.
SECTION 6.05. Reliance; Advice of Counsel.
State Street shall not incur any liability to any Person in acting upon any
signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed by
it to be genuine and believed by it in good faith to be signed by the
proper party or parties. State Street may accept and rely upon a certified
copy of a resolution of the board of directors or other governing body of
any corporate party as conclusive evidence that such resolution has been
duly adopted by such body and that the same is in full force and effect.
As to any fact or matter the manner of ascertainment of which is not
specifically prescribed herein,
State Street may for all purposes hereof rely on an Officers' Certificate
of the relevant party, as to such fact or matter, and such certificate
shall constitute full protection to State Street for any action taken or
omitted to be taken by it in good faith in reliance thereon. In the
administration of the trusts hereunder, State Street may execute any of the
trusts or powers hereof and perform its powers and duties hereunder
directly or through agents or attorneys and may consult with counsel,
accountants and other skilled Persons to be selected and employed by it,
and State Street shall not be liable for anything done, suffered or omitted
in good faith by it in accordance with the advice or opinion of any such
counsel, accountants or other skilled Persons and not contrary to this
Trust Agreement.
SECTION 6.06. Not Acting in Individual Capacity. All Persons
having any claim against State Street or the Owner Trustee by reason of the
transactions contemplated by the Transaction Documents shall look only to
the Trust Estate (or a part thereof, as the case may be) for payment or
satisfaction thereof, except as specifically provided in this Article VI
and except to the extent that State Street shall otherwise expressly agree
in any Transaction Document to which it is a party.
SECTION 6.07. Books and Records; Tax Returns. The Owner Trustee
shall be responsible for the keeping of all appropriate books and records
relating to the receipt and disbursement of all moneys that it may receive
or be entitled to hereunder or under any other Transaction Document. At
the request and expense of the Owner Participant, the Owner Trustee shall
file an application with the Internal Revenue Service for a taxpayer
identification number with respect to the trust created hereby and prepare
or cause to be prepared and sign and/or file the Federal fiduciary tax
return with respect to Taxes due and payable by the trust created hereby in
connection with the transactions contemplated hereby or by any other
Transaction Document; provided, however, that the Owner Trustee shall send
a copy of the completed return to the Owner Participant not more than 60
nor less than 10 days prior to the due date of the return. The Owner
Participant, upon request by the Owner Trustee, shall furnish the Owner
Trustee with all such information as may be reasonably required from the
Owner Participant in connection with the preparation of such tax returns.
The Owner Trustee shall keep copies of all returns delivered to or filed by
it.
INDEMNIFICATION OF THE OWNER TRUSTEE
BY THE OWNER PARTICIPANT
SECTION 7.01. The Owner Participant To Indemnify
State Street. The Owner Participant agrees to assume liability for, and to
indemnify and hold harmless State Street from and against, any and all
liabilities, obligations, indemnity obligations, losses (excluding loss of
anticipated profits), damages, claims, actions, suits, judgments, out-of-
pocket costs, expenses and disbursements (including legal and consultants'
fees and expenses) of any kind and nature whatsoever (collectively, the
"Expenses") which may be imposed on, incurred by or asserted at any time
against State Street or the Owner Trustee (but only if and to the extent
State Street is not indemnified for such Expenses by the Lessee or any
other Person within a reasonable time after demand therefor) in any way
relating to or arising out of the Trust Estate, any of the properties
included therein, the administration of the Trust Estate or any action or
inaction of the Owner Trustee hereunder or under the Transaction Documents,
except only that the Owner Participant shall not be required to indemnify
State Street for Expenses arising or resulting from any of the matters
described in the last sentences of Sections 5.04 and 6.01. The indemnities
contained in this Section 7.01 shall survive the termination of this Trust
Agreement.
SECTION 7.02. Compensation and Expenses. State Street shall
receive as compensation for its services hereunder such ordinary fees as
are fair, reasonable and customary for the performance of such services and
as may heretofore and from time to time hereafter be agreed upon between
the Owner Participant and State Street. State Street shall be entitled to
be reimbursed for its reasonable expenses (including reasonable attorneys'
fees) incurred in the performance of its duties as Owner Trustee hereunder
and to be compensated reasonably for any extraordinary services rendered
hereunder. The Owner Participant agrees promptly to compensate or
reimburse State Street for any fees and expenses not otherwise paid or
reimbursed by the Lessee pursuant to Section 10.2 or 10.3 of the
Participation Agreement.
TERMINATION OF TRUST AGREEMENT
SECTION 8.01. Termination of Trust Agreement. This Trust
Agreement and the trusts created hereby shall terminate and the Trust
Estate shall, subject to the provisions of the Participation Agreement, the
Indenture and Article IV, be distributed to the Owner Participant, and this
Trust Agreement shall be of no further force or effect, upon the earlier of
(i) the written request of the Owner Participant following both the final
discharge of the Indenture pursuant to Section 3.1 thereof and the sale or
other final disposition by the Owner Trustee of all property constituting
part of the Trust Estate and the final distribution by the Owner Trustee of
all moneys or other property or proceeds constituting part of the Trust
Estate in accordance with the terms of Article IV hereof and (ii) 21 years
after the death of the last survivor of the descendants of the late King
George V of the United Kingdom of Great Britain and Northern Ireland who
were living on the date hereof, but if any such rights, privileges or
options shall be or become valid under Applicable Law for a period
subsequent to the 21st anniversary of the death of such last survivor (or,
without limiting the generality of the foregoing, if legislation shall
become effective providing for the validity or permitting the effective
grant of such rights, privileges and options for a period in gross
exceeding the period for which such rights, privileges and options are
hereinabove stated to extend and be valid), then such rights, privileges or
options shall not terminate as aforesaid but shall extend to and continue
in effect, but only if such nontermination and extension shall then be
valid under Applicable Law, until such time as the same shall, under
Applicable Law, cease to be valid.
SECTION 8.02. Termination at Option of the Owner Participant.
Notwithstanding Section 8.01, this Trust Agreement and the trusts created
hereby shall terminate and the Trust Estate shall be distributed to the
Owner Participant, and this Trust Agreement shall be of no further force
and effect, upon the election of the Owner Participant by notice to the
Owner Trustee, if such notice shall be accompanied by the written agreement
of the Owner Participant assuming all the obligations of the Owner Trustee
under or contemplated by the Transaction Documents and all other
obligations of the Owner Trustee incurred by it as trustee hereunder;
provided, however, that the Owner Participant agrees for the express
benefit of the Indenture Trustee and the Noteholders that no such election
shall be effective until the lien and security interest of the Indenture on
the Indenture Estate shall have been released and until full payment of the
principal of, premium, if any, and interest on the Notes and all other sums
due to the Noteholders shall have been made. Such written agreement shall
be reasonably satisfactory in form and substance to the Owner Trustee and
shall release the Owner Trustee from all further obligations of the Owner
Trustee hereunder and under the agreements and other instruments mentioned
in the preceding sentence.
SECTION 8.03. Actions by the Owner Trustee upon Termination.
Upon termination of this Trust Agreement and the trusts created hereby
pursuant to Section 8.01 or Section 8.02, the Owner Trustee shall take such
action as may be requested by the Owner Participant to transfer the Trust
Estate to the Owner Participant, including, without limitation, the
execution of instruments of transfer or assignment with respect to any of
the Transaction Documents to which the Owner Trustee is a party.
SECTION 8.04. Bankruptcy of the Owner Participant. The
bankruptcy, insolvency or other similar incapacity of the Owner Participant
shall not (i) operate to terminate this Trust Agreement, (ii) entitle the
Owner Participant's legal representatives to claim an accounting or to take
any action in any court for a partition or winding up of the Trust Estate
or (iii) otherwise affect the rights, obligations and liabilities of the
parties hereto. Without the prior written consent of the Indenture
Trustee, the Owner Participant may not withdraw from the Trust or obtain
possession of, or otherwise exercise remedies with respect to, the Trust
Estate or any portion thereof prior to the satisfaction and discharge of
the lien and security interest of the Indenture on the Indenture Estate or
prior to the payment in full of the principal of, premium, if any, and
interest on the Notes and all other sums due to the Noteholders; provided,
however, that nothing in this Section 8.04 shall prevent the transfer of
the Owner Participant's beneficial interest in the Trust Estate with
respect to any Property pursuant to Section 11.01 of this Trust Agreement
and Article VIII of the Participation Agreement.
SUCCESSOR OWNER TRUSTEES, CO-OWNER
TRUSTEES
AND SEPARATE OWNER TRUSTEES
The Owner Trustee may resign at any time without cause by
giving at least 30 days' prior written notice to the Owner Participant and
the Indenture Trustee, such resignation to be effective on the acceptance
of appointment by a successor Owner Trustee under Section 9.01(b). The
Owner Trustee may be removed with or without cause at any time by the Owner
Participant with 60 days prior written notice and a copy of which shall be
concurrently delivered by the Owner Participant to the Indenture Trustee.
Any such removal shall be effective upon the acceptance of appointment by a
successor Owner Trustee under Section 9.01(b). In case of the resignation
or removal of the Owner Trustee, the Owner Participant may appoint a
successor Owner Trustee by an instrument signed by the Owner Participant.
If a successor Owner Trustee shall not have been appointed within 30 days
after the giving of written notice of such resignation or the delivery of
the written instrument with respect to such removal, the Owner Trustee or
the Owner Participant may apply to any court of competent jurisdiction to
appoint a successor Owner Trustee to act until such time, if any, as a
successor shall have been appointed and shall have accepted its appointment
as above provided. Any successor Owner Trustee so appointed by such court
shall immediately and without further act be superseded by any successor
Owner Trustee appointed as above provided within one year from the date of
the appointment by such court.
Any successor Owner Trustee, however appointed, shall
execute and deliver to the predecessor Owner Trustee an instrument
accepting such appointment, and thereupon such successor Owner Trustee,
without further act shall become vested with all the estates, properties,
rights, powers, duties and trusts of the predecessor Owner Trustee in the
trusts hereunder with like effect as if originally named an Owner Trustee
herein; but nevertheless, upon the written request of such successor Owner
Trustee such predecessor Owner Trustee shall execute and deliver an
instrument transferring to such successor Owner Trustee, upon the trusts
herein expressed, all the estates, properties, rights, powers, duties and
trusts of such predecessor Owner Trustee, and such predecessor Owner
Trustee shall duly assign, transfer, deliver and pay over to successor
Owner Trustee all moneys or other property then held by such predecessor
Owner Trustee upon the trusts herein expressed.
Any successor Owner Trustee, however appointed, shall be a
bank or trust company incorporated and doing business within the United
States of America and having a combined capital and surplus of at least
$100,000,000, if there be such an institution willing, able and legally
qualified to perform the duties of Owner Trustee hereunder upon reasonable
or customary terms.
Any corporation into which the Owner Trustee may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Owner
Trustee shall be a party, or any corporation to which substantially all the
corporate trust business of the Owner Trustee may be transferred, shall,
subject to the terms of Section 9.01(c), be the Owner Trustee under this
Trust Agreement without further act.
SECTION 9.02. Co-Trustees and Separate Trustees. Whenever the
Owner Trustee or the Owner Participant shall deem it necessary or prudent
in order to conform to any law of any jurisdiction in which all or any part
of the Trust Estate shall be situated or to make any claim or bring any
suit with respect to the Trust Estate, the Notes or any Transaction
Document or the Declaration, or the Owner Trustee or the Owner Participant
shall be advised by counsel satisfactory to it that it is so necessary or
prudent, the Owner Trustee and the Owner Participant shall execute and
deliver an agreement supplemental hereto and all other instruments and
agreements, and shall take all other action, necessary or proper to
constitute one or more Persons, who need not meet the requirements of
Section 9.01(c) (and the Owner Trustee may appoint one or more of its
officers), either as co-trustee or co-trustees jointly with the Owner
Trustee of all or any part of the Trust Estate, or as separate trustee or
separate trustees of all or any part of the Trust Estate, and to vest in
such Persons, in such capacity, such title to the Trust Estate or any part
thereof and such rights or duties as may be necessary or desirable, all for
such period and under such terms and conditions as are satisfactory to the
Owner Trustee and the Owner Participant. In case any co-trustee or
separate trustee shall die, become incapable of acting, resign or be
removed, the title to the Trust Estate and all rights and duties of such co-
trustee or separate trustee shall, so far as permitted by law, vest in and
be exercised by the Owner Trustee, without the appointment of a successor
to such co-trustee or separate trustee.
SECTION 9.03. Notice. At all times that a successor Owner
Trustee is appointed pursuant to Section 9.01, an Owner Trustee resigns
pursuant to Section 9.01 or a co-trustee or separate trustee is appointed
pursuant to Section 9.02, the Owner Participant shall give notice of such
fact within 30 days of its occurrence to (y) the Lessee, if the Lease is
then in effect and (z) the Indenture Trustee, if the Indenture has not been
discharged.
SUPPLEMENTS AND AMENDMENTS
SECTION 10.01. Supplements and Amendments. Subject to
Section 10.02 of this Trust Agreement and Sections 6.2(d) and 6.3(b) of the
Participation Agreement, at the written request of the Owner Participant,
this Trust Agreement shall be amended by a written instrument signed by
State Street and the Owner Participant, but if in the opinion of State
Street any instrument required to be so executed adversely affects any
right, duty or liability of, or immunity or indemnity in favor of, it or
the Owner Trustee under this Trust Agreement or any of the Transaction
Documents to which it or the Owner Trustee is a party, or would cause or
result in any conflict with or breach of any terms, conditions or
provisions of, or default under, its charter documents or by-laws or any
document contemplated hereby to which it or the Owner Trustee is a party,
State Street may in its sole discretion decline to execute such instrument,
unless it shall have been provided an indemnity satisfactory to it by the
Owner Participant.
SECTION 10.02. Limitation on Amendments. Notwithstanding
Section 10.01, State Street shall not, without the consent of the Indenture
Trustee, execute any amendment that might result in the trusts created
hereunder being terminated prior to the satisfaction and discharge of the
lien and security interest of the Indenture on the Indenture Estate or
prior to the payment in full of the principal of and premium, if any, and
interest on the Notes.
TRANSFER OF INTEREST OF THE OWNER
PARTICIPANT
SECTION 11.01. Transfer of Interest of the Owner Participant.
Subject to the provisions of the Transaction Documents, including, without
limitation, Article VIII of the Participation Agreement, the Owner
Participant may assign, convey or otherwise transfer all or any of its
right, title and interest in and to the Trust Estate with respect to any
Property by giving written notice to the Owner Trustee at least 30 days
prior to such proposed transfer specifying (i) the name and address of the
proposed Transferee, (ii) the effective date of the proposed transfer and
(iii) the percentage of the interest of the Owner Participant in such Trust
Estate to be transferred. Upon any assignment, conveyance or transfer of
all of the interest of the Owner Participant the transferor Owner
Participant shall, upon such assignment, conveyance or transfer, be
released and discharged without further act or formality whatsoever from
the indemnification obligations imposed under Section 7.01 arising after
such transfer date. No such assignment, conveyance or transfer shall
violate any provision of Applicable Law or create a relationship which
would be in violation thereof. The Owner Trustee shall not be on notice of
or otherwise be bound by any such assignment, conveyance or transfer until
it shall have received an executed counterpart of the instrument of such
assignment, conveyance or transfer.
SECTION 11.02. Transferee's Agreement. No assignment,
conveyance or other transfer pursuant to Section 11.01 shall be effective
unless the Transferee shall have executed and delivered to State Street an
instrument containing the Transferee's agreement to bound by the terms of
this Trust Agreement.
MISCELLANEOUS
SECTION 12.01. No Legal Title to Trust Estate in the Owner
Participant. The Owner Participant shall not have legal title to any part
of the Trust Estate; provided, however, that the Owner Participant has a
beneficial interest in the Trust Estate. No transfer, by operation of law
or otherwise, of any right, title or interest of the Owner Participant in
and to the Trust Estate or hereunder shall operate to terminate this Trust
Agreement or the Trust or the trusts hereunder or entitle any successor or
transferee to an accounting or to the transfer to it of legal title to any
part of the Trust Estate.
SECTION 12.02. Sale of Lessor Interest in Respect of Any of the
Properties by the Owner Trustee is Binding. Any sale, transfer, or other
conveyance of the Lessor Interest in respect of any of the Properties or
any part thereof, or any assignment of rights under the Lease by the Owner
Trustee made pursuant to the terms of this Trust Agreement or any other
Transaction Document shall bind the Owner Participant and shall be
effective to sell, transfer and convey all right, title and interest of the
Owner Trustee and the Owner Participant in and to the Lessor Interest in
respect of any of the Properties or any part thereof or such rights under
the Lease, as the case may be. No purchaser or other grantee shall be
required to inquire as to the authorization, necessity, expediency or
regularity of such sale or conveyance or as to the application of any sale
or other proceeds with respect thereto by the Owner Trustee.
SECTION 12.03. Limitations on Rights of Others. Nothing in this
Trust Agreement, whether express or implied, shall be construed to give to
any Person, other than
State Street, the Owner Trustee, the Owner Participant and the Indenture
Trustee, any legal or equitable right, remedy or claim under or in respect
of this Trust Agreement, any covenants, conditions or provisions contained
herein or in the Trust Estate.
SECTION 12.04. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices hereunder shall be given as
provided in the Participation Agreement.
SECTION 12.05. Severability. Any provision of this Trust
Agreement that may be determined by competent authority to be 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 12.06. Limitation on the Owner Participant's Liability.
The Owner Participant shall not have any liability for the performance of
this Trust Agreement except as expressly set forth herein.
SECTION 12.07. Separate Counterparts; Dating. This Trust
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. Although this Trust Agreement is dated as of the date first
above written for convenience, the actual dates of execution hereof by the
parties hereto are respectively the dates set forth under the signatures
hereto, and this Trust Agreement shall be effective on the latest of such
dates.
SECTION 12.08. Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit
of, State Street, the Owner Trustee and its successors and assigns and the
Owner Participant and its successors and assigns, all as herein provided.
Any request, notice, direction, consent, waiver or other instrument or
action by the Owner Participant shall bind the successors and assigns of
the Owner Participant. It is the intention of the parties hereto that the
Trust constitute a trust formed pursuant to the laws of the State of
California with the purpose of facilitating the transactions contemplated
by the Transaction Documents.
SECTION 12.09. Headings. The headings of the various articles
and sections herein are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof.
SECTION 12.10. GOVERNING LAW. THIS TRUST AGREEMENT HAS BEEN
DELIVERED IN, AND SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF, THE STATE OF
CALIFORNIA.
SECTION 12.11. Administration of Trust. The principal place of
administration of the Trust shall be in Los Angeles, California.
SECTION 12.12. Performance by the Owner Participant. Any
obligation of the Owner Trustee hereunder or under any Transaction Document
or other document contemplated herein may be performed by the Owner
Participant and any such performance shall not be construed as a revocation
of the trusts created hereby.
SECTION 12.13. Conflict with Transaction Documents. If this
Trust Agreement (or any instructions given by the Owner Participant
pursuant hereto) shall require that any action be taken with respect to any
matter and any other Transaction Document (or any instructions duly given
in accordance with the terms thereof) shall require that a different action
be taken with respect to such matter, and such actions shall be mutually
exclusive, the provisions of such other Transaction Document, in respect
thereof, shall control.
SECTION 12.14. No Implied Waiver. No term or provision of this
Trust Agreement may be changed, waived, discharged or terminated orally,
but only by an instrument in writing entered into as provided in
Section 10.01; and any such waiver of the terms hereof shall be effective
only in the specific instance and for the specific purpose given.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the dates set forth below.
OWNER PARTICIPANT:
PMCC LEASING CORPORATION
By:
Name:
Title:
Date:
OWNER TRUSTEE:
[Corporate Seal]
STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA,
NATIONAL ASSOCIATION
By:
Name:
Title:
Date:
The address of the within named Owner Participant is:
800 Westchester Avenue
Rye Brook, New York 10573-1031
Attn: Senior Vice President - Lease Financing
The address of the within named Owner Trustee is:
c/o State Street Bank and Trust Company of Connecticut,
National Association
725 South Figueroa Street
Los Angeles, California 90017
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The foregoing Trust Agreement was acknowledged before me, the
undersigned Notary Public, in the County of [ ],
[ ], this __th day of ______, 1993, by _____________, as an
Authorized Signatory of PMCC LEASING CORPORATION, a Delaware corporation,
as Owner Participant.
[Notarial Seal]
Notary Public
STATE OF )
) ss.:
COUNTY OF )
The foregoing Trust Agreement was acknowledged before me, the
undersigned Notary Public, in the County of [ ],
[ ], this __th day of ____, 1993, by ___________, as [ ],
of STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, NATIONAL ASSOCIATION,
a [ ].
[Notarial Seal]
Notary Public
Exhibit D-2
BUSINESS TRUST AGREEMENT
dated as of December 21, 1993
Between
CALIFORNIA-RELCO LIMITED PARTNERSHIP,
as REMAINDERMAN PARTICIPANT
and
WILMINGTON TRUST COMPANY
as REMAINDERMAN TRUSTEE
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS 1
1.01. Capitalized Terms. 1
ARTICLE II
ORGANIZATION 3
2.01. Name. 3
2.02. Office. 3
2.03. Purpose and Powers. 4
2.04. Appointment of the Remainderman Trustee. 4
2.05. Declaration of Trust. 5
2.06. Liabilities of Trust. 5
2.07. Situs of Trust. 6
2.08. Title to Remainderman Trust Estate 6
ARTICLE III
CONCERNING THE REMAINDERMAN PARTICIPANT 7
3.01. Action by the Remainderman Participant
with Respect to Certain Matters. 7
3.02. Representations and Warranties of the
Remainderman Participant. 7
ARTICLE IV
AUTHORITY AND DUTIES OF THE TRUSTEE 7
4.01. General Authority. 7
4.02. General Duties. 9
4.03. Restrictions on the Remainderman
Trustee's Power. 9
4.04. Accounting and Reports to the
Remainderman Participant, the Internal Revenue
Service and Others. 9
4.05. Signature of Returns. 10
4.06. Right to Receive Instructions. 10
4.07. No Duties Except as Specified in this
Agreement or in Instructions. 11
4.08. No Action Except Under Specified
Documents or Instructions. 12
4.09.Certain Restrictions on Operations of the Trust. 12
ARTICLE V
CONCERNING THE REMAINDERMAN TRUSTEE 14
5.01. Acceptance of Trusts and Duties. 14
5.02. Furnishing of Documents. 15
5.03. Reliance; Advice of Counsel. 16
5.04. Not Acting in Individual Capacity. 17
ARTICLE VI
COMPENSATION OF TRUSTEE 17
6.01. The Remainderman Trustee's Fees and
Expenses. 17
6.02. Indemnification. 18
ARTICLE VII
TERMINATION OF TRUST 19
7.01. Termination of Trust. 19
7.02. No Termination by the Remainderman
Participant. 19
ARTICLE VIII
SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES 20
8.01. Resignation of the Remainderman Trustee;
Appointment of Successor. 20
8.02 Co-Trustees and Separate Trustees 23
ARTICLE IX
MISCELLANEOUS 26
9.01. Supplements and Amendments. 26
9.02. No Legal Title to Remainderman Trust
Estate in the Remainderman Participant. 26
9.03. Sale of Remainderman Interests by the
Remainderman Trustee is Binding. 27
9.04. Limitations on Rights of Others. 27
9.05. Notices. 28
9.06. Severability. 28
9.07. Separate Counterparts. 29
9.08. Successors and Assigns. 29
9.09. Headings. 29
9.10. Governing Law. 29
BUSINESS TRUST AGREEMENT
BUSINESS TRUST AGREEMENT dated as of December 21, 1993 (this
"Agreement"), between CALIFORNIA-RELCO LIMITED PARTNERSHIP, a Connecticut
limited partnership (the "Remainderman Participant") and WILMINGTON TRUST
COMPANY, a Delaware banking corporation ("Wilmington").
WHEREAS, the Remainderman Participant desires to form California-
Relco Limited Partnership Trust, the Delaware business trust created hereby
(the "Trust" or the "Remainderman") for the purpose of purchasing the
Remainderman Interests in the Properties from the Lessee and carrying out
certain transactions contemplated by the Transaction Documents; and
WHEREAS, Wilmington is willing to act as trustee hereunder and to
accept the trusts set forth herein;
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained and of other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01. Capitalized Terms. Unless the context shall otherwise
require and except as contained in this Section 1.01, the capitalized terms
used herein shall have the respective meanings assigned thereto in that
certain Participation Agreement of even date herewith (the "Participation
Agreement") among Smith's Food & Drug Centers, Inc., as Lessee, PMCC
Leasing Corporation, as Owner Participant, Philip Morris Capital
Corporation, as Owner Participant Parent, State Street Bank and Trust
Company of California, National Association, not in its individual capacity
except as expressly stated therein, but solely as Owner Trustee, the
Remainderman Participant, Wilmington, not in its individual capacity except
as expressly stated therein, but solely as remainderman trustee (the
"Remainderman Trustee"), the Remainderman, Wilmington, not in its
individual capacity except as expressly stated therein, but solely as
Indenture Trustee and Pass Through Trustee, and Bank of America National
Trust and Savings Association, as Initial Noteholder. All definitions
contained in this Section 1.01 shall be equally applicable to both the
singular and plural form of the terms defined. For all purposes of this
Agreement, the following terms shall have the meanings set forth below:
"Authorized Officer" means any officer of the Remainderman
Trustee who is authorized to act for the Remainderman Trustee in matters
relating to, and binding upon, the Remainderman and whose name appears on a
list of such authorized officers furnished by the Remainderman Trustee as
such list may be amended or supplemented from to time.
"Business Trust Statute" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. 3801 et seq., as the same may be amended from
time to time.
"Certificate of Trust" means the Certificate of Trust to be filed
by the Remainderman Trustee for the Trust pursuant to Section 3810(a) of
the Business Trust Statute.
"Fiscal year" means the calendar year from each January 1 to the
following December 31.
"Periodic Filings" means any filings or submissions that the
Remainderman is required to make with any state or federal regulatory
agency or under the Code.
"Related Remainderman Agreements" means any instrument or
agreement signed by the Remainderman Trustee on behalf of the Remainderman.
"Remainderman Trust Estate" means all right, title and interest
of the Remainderman in and to the Properties and any property contributed
to the Remainderman by the Remainderman Participant or otherwise acquired
by the Trust, including without limitation all distributions, payments or
proceeds thereon.
"Secretary of State" means the Secretary of State of the State of
Delaware.
ARTICLE II
ORGANIZATION
2.01. Name. The Trust created hereby shall be known as
California-Relco Limited Partnership Trust, in which name the Remainderman
Trustee may conduct business, make and execute deeds, mortgages, deeds of
trust, indentures, leases, contracts and other instruments, acquire,
mortgage, lease, convey and transfer real estate or other property, and sue
and be sued.
2.02. Office. The office of the Trust shall be in care of the
Remainderman Trustee, addressed to Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890-0001, attention: Corporate Trust
Administration, or at such other address as the Remainderman Trustee or any
successor trustee may designate by notice to the Remainderman Participant.
2.03. Purpose and Powers. The sole purpose of the Trust is to
engage in the following activities: (i) acquiring and holding title to the
Remainderman Trust Estate, (ii) accepting as a contribution from the
Remainderman Participant the Remainderman Investment Amount in respect of
the Remainderman Purchase Price for the Remainderman Interests, (iii)
purchasing the Remainderman Interests from the Lessee by paying on the
Closing Date the Remainderman Purchase Price for the Remainderman
Interests, (iv) entering into the Option Agreement with the Owner Trustee
and granting the Owner Trustee the Option, (v) entering into the Out Parcel
Agreement with the Lessee, the Owner Trustee and the Indenture Trustee
providing for reconveyance of certain out-parcels to the Lessee, and (vi)
such other activities as may be required in connection with conservation of
the Remainderman Trust Estate. Effective as of the execution hereof, the
Remainderman Trustee shall have all the rights, powers and duties set forth
herein and in the Business Trust Statute with respect to accomplishing the
purposes of the Trust, and the execution of any Related Remainderman
Agreement shall bind the Trust to the extent provided therein.
2.04. Appointment of the Remainderman Trustee. The Remainderman
Participant hereby appoints the Remainderman Trustee as trustee of the
Trust effective as of the date hereof, to have all the rights, powers and
duties set forth herein. The Remainderman Participant hereby grants to the
Remainderman Trustee, and the Remainderman Trustee acknowledges receipt in
trust from the Remainderman Participant, as of the date hereof, the sum of
one Dollar ($1) constituting the initial Remainderman Trust Estate.
2.05. Declaration of Trust. The Remainderman Trustee hereby
declares that it will hold the Remainderman Trust Estate in trust upon and
subject to the conditions set forth herein for the use and benefit of the
Remainderman Participant, subject to the obligations of the Remainderman
Trustee under the Related Remainderman Agreements. It is the intention of
the parties hereto that the Trust constitutes a business trust under the
Business Trust Statute, that this Agreement constitutes the governing
instrument of the Trust, and that the Remainderman Trustee be authorized to
file a Certificate of Trust with the Secretary of State in accordance with
Section 3810(a) of the Business Trust Statute; provided, however, that
notwithstanding anything set forth herein to the contrary, it is the
intention of the parties hereto that the Trust constitute a grantor trust
within the meaning of Section 671 through 679 of the Code and in accordance
with Section 3809 of the Business Trust Statute.
2.06. Liabilities of Trust. In accordance with the parties'
intention that the Trust constitute a grantor trust for federal income tax
purposes and as permitted by Section 3803 of the Business Trust State, the
Remainderman Participant hereby expressly agrees that it shall be
personally liable for the obligations of the Trust to the same extent as
would a trustor of a common law express trust under Delaware law with terms
and conditions similar to those of this Agreement, including, without
limitation, Article V and Section 7.01 hereof, and therefore that for
purposes of determining the personal liability of the Remainderman
Participant for the performance of any obligations of the Remainderman
Trustee or the Trust hereunder, the Remainderman Participant shall not be
treated as a stockholder of a private corporation for profit within meaning
of Section 3803 of the Business Trust Statute. No later than the Business
Day immediately preceding the date on which the Participation Agreement is
executed, the Remainderman Trustee shall cause the filing of the
Certificate of Trust with the Secretary of State.
2.07. Situs of Trust. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the
Remainderman Trustee on behalf of the Trust shall be located in the State
of Delaware. The Trust shall not have any employees in any state other
than Delaware. Payments will be received by the Trust only in the State of
Delaware and payments will be made by the Trust only from the State of
Delaware. The Trust's only office is and will be at the office of the
Trustee as set forth herein.
2.08. Title to Remainderman Trust Estate. Title to all of the
Remainderman Trust Estate shall be vested in the Trust until this Agreement
terminates pursuant to Article VII hereof; provided, however, that if the
laws of any jurisdiction require that title to any part of the Remainderman
Trust Estate be vested in a trustee of the Trust, then title to that part
of the Remainderman Trust Estate shall be deemed to be vested in the
Remainderman Trustee or any co-trustee or separate trustee, as the case may
be, appointed pursuant to Article VIII of this Agreement.
ARTICLE III
CONCERNING THE REMAINDERMAN PARTICIPANT
3.01. Action by the Remainderman Participant with Respect to
Certain Matters. The Remainderman Participant shall comply with the
applicable provisions of the Code and the applicable Treasury regulations
thereunder in the manner necessary to effect the intention of the parties
that the Trust be treated as a grantor trust as provided in Section 2.06
hereof and that the Trust be accorded such treatment until its termination
pursuant to Section 7.01 hereof and shall take any action required by the
Code or Treasury regulations thereunder in order to maintain the grantor
trust status of the Trust.
3.02. Representations and Warranties of the Remainderman
Participant. The Remainderman Participant hereby represents and warrants
to the Remainderman Trustee that this Agreement has been duly and validly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, the Remainderman Participant, enforceable in accordance with
its terms.
ARTICLE IV
AUTHORITY AND DUTIES OF THE TRUSTEE
4.01. General Authority. The Remainderman Trustee is authorized
to:
(a) execute and deliver the Participation Agreement, the
Tripartite Agreement, the Option Agreement, the Out Parcel Agreement and
the other Related Remainderman Agreements;
(b) pay the Remainderman Purchase Price to the Lessee in
consideration of the purchase of the Remainderman Interests from the
Lessee;
(c) grant the Option to the Owner Trustee in consideration for
receipt of the Option Purchase Price from the Owner Trustee;
(d) accept delivery of the Remainderman Interests in the name
of the Trust pursuant to the Remainderman Interest Deeds on behalf of the
Remainderman Participant pursuant to the Participation Agreement;
(e) on behalf of the Trust, accept and hold title to the
Remainderman Interests for the use and benefit of the Remainderman
Participant pursuant to the Participation Agreement; (f) subject to
Section 5.01(c), execute and deliver all such other instruments, documents
or certificates to which the Trust is a party and take all such other
actions in accordance with the directions of the Remainderman Participant
as the Remainderman Participant may deem necessary or advisable in
connection with the transactions contemplated hereby, the taking of any
such action by the Trustee in the presence of the Remainderman Participant
or its counsel to evidence, conclusively, the direction of the Remainderman
Participant;
(g) subject to the terms of this Agreement, cause the Trust to
exercise its rights and perform its duties under each of the documents,
agreements, instruments and certificates referred to in clauses (a) to (f)
above in accordance with the terms thereof;
(h) subject to the terms of this Agreement, take such actions
as are necessary to cause the Trust to qualify to do business where it is
deemed necessary or appropriate by the Remainderman Participant; and
(i) execute and file in the Office of the Secretary of State
the Certificate of Trust, together with any and all amendments thereto, as
required by the Business Trust Statute.
4.02. General Duties. It shall be the duty of the Remainderman
Trustee to discharge (or cause to be discharged) all of its
responsibilities pursuant to the terms of this Agreement, and to administer
the Trust in the interest of the Remainderman Participant.
4.03. Restrictions on the Remainderman Trustee's Power. The
Remainderman Trustee shall not have the power to take any action which is
inconsistent with the powers and authority granted to the Remainderman
Trustee pursuant to this Agreement or with any of the negative covenants of
the Remainderman Trustee, set forth in Section 6.7 of the Participation
Agreement, without the prior consent of the Remainderman Participant, the
Owner Trustee, the Owner Participant or the Indenture Trustee.
4.04. Accounting and Reports to the Remainderman Participant,
the Internal Revenue Service and Others. The Remainderman Trustee shall,
at the direction and expense of the Remainderman Participant, deliver to
the Remainderman Participant, within 60 days of the end of each Fiscal
Year, or more often, as may be required by the Code and the regulations
thereunder, a statement in such forms and containing such information as
may be required by such regulations, and as is necessary and appropriate to
enable the Remainderman Participant to prepare its federal and state income
tax returns.
4.05. Signature of Returns. The Remainderman Trustee shall sign
on behalf of the Trust the tax returns and other Periodic Filings of the
Trust, unless Applicable Law requires the Remainderman Participant to sign
such documents, in which case, so long as Applicable Law requires the
Remainderman Participant to sign any such document, the Remainderman
Participant shall sign such document. At any time that the Remainderman
Participant is not required by law to sign any such document, then whomever
is required by law to sign such document shall sign.
4.06. Right to Receive Instructions. In the event that the
Remainderman Trustee is unable to decide between alternative courses of
action, or is unsure as to the application of any provision of this
Agreement or any Related Remainderman Agreement, or such provision is
ambiguous as to its application, or is, or appears to be, in conflict with
any other applicable provision, or in the event that this Agreement or any
Related Remainderman Agreement permits any determination by the
Remainderman Trustee or is silent or is incomplete as to the course of
action which the Remainderman Trustee is required to take with respect to a
particular set of facts, the Remainderman Trustee may give notice (in such
form as shall be appropriate under the circumstances) to the Remainderman
Participant requesting instructions and, to the extent that the
Remainderman Trustee shall have acted or refrained from acting in good
faith in accordance with any instructions received from the Remainderman
Participant, the Remainderman Trustee shall not be liable on account of
such action or inaction to any person. If the Remainderman Trustee shall
not have received appropriate instructions within ten days of such notice
(or within such shorter period of time as may be specified in such notice)
the Remainderman Trustee may, but shall be under no duty to, take or
refrain from taking such action, not inconsistent with this Agreement or
the Related Remainderman Agreements, as the Trustee shall deem to be in the
best interests of the Remainderman Participant, and the Remainderman
Trustee shall have no liability to any person for such action or inaction.
4.07. No Duties Except as Specified in this Agreement or in
Instructions. The Remainderman Trustee shall not have any duty or
obligation to manage, make any payment in respect of, register, record,
sell, dispose of or otherwise deal with the Remainderman Trust Estate, or
to otherwise take or refrain from taking any action under, or in connection
with, any document contemplated hereby to which the Trust or the
Remainderman Trustee is a party, except as expressly provided by the terms
of this Agreement and no implied duties or obligations shall be read into
this Agreement against the Remainderman Trustee. Without in any way
limiting the generality of the foregoing, the Remainderman Trustee shall
have no duty to act or refrain from acting on behalf of the Trust pursuant
to any Related Remainderman Agreement in the absence of the written
direction of the Remainderman Participant. The Remainderman Trustee
nevertheless agrees that it will, at its own cost and expense, promptly
take all action as may be necessary to discharge any Remainderman's Liens
on any part of the Remainderman Trust Estate attributable to it in its
individual capacity.
4.08. No Action Except Under Specified Documents or
Instructions. The Remainderman Trustee shall not manage, control, use,
sell, dispose of or otherwise deal with any part of the Remainderman Trust
Estate except (i) in accordance with the powers granted to and the
authority conferred upon the Remainderman Trustee pursuant to this
Agreement and the Related Remainderman Agreements, and (ii) in accordance
with the instructions delivered to the Remainderman Trustee pursuant to
Section 4.01(f) or 4.06 hereof.
4.09. Certain Restrictions on Operations of the Trust. (a)
Unless instructed otherwise by the Remainderman Participant, the Trust
shall:
(i) observe all procedures required by, and comply with the
requirements and limitations of, its Certificate of Trust and this
Agreement, as the "governing instrument" (as such term is defined in
Section 3801(d) of the Business Trust Statute) in respect of the Trust;
(ii) maintain its existence in good standing as a "business
trust" (as such term is defined in Section 3801(a) of the Business Trust
Statute);
(iii) act solely in its own name in the conduct of the Trust's
permitted activities;
(iv) hold the Trust out to the public (including any creditors
of the Trust, Wilmington or the Remainderman Participant) under the Trust's
name as an entity separate and distinct from Wilmington or the Remainderman
Participant;
(v) conduct its business solely in the name of the Trust and
not so as to mislead others as to the separate identities of the Trust,
Wilmington and the Remainderman Participant and, without limiting the
foregoing, make any written communications solely in the name of the Trust
if they relate to the Trust, and solely in the name of Wilmington if they
relate to Wilmington in its individual capacity;
(vi) maintain Trust records and books of account correctly and
separately from those of Wilmington and the Remainderman Participant and
not commingle the Remainderman Trust Estate with the assets of Wilmington
or the Remainderman Participant or any controlling person of Wilmington or
the Remainderman Participant;
(vii) maintain any financial statements of the Trust separate
and distinct from those of Wilmington and the Remainderman Participant and
file any tax returns separate from any tax returns of Wilmington and the
Remainderman Participant;
(viii) disclose, in accordance with and to the extent required by
GAAP, in any annual financial statements of the Trust the effects of the
transactions and activities contemplated by this Agreement and the other
Transaction Documents to which the Remainderman is a party; and
(ix) maintain the Certificate of Trust, this Agreement and any
other governing instrument in respect of the Trust as official records of
the Trust.
(b) The Remainderman Trustee and the Remainderman Participant shall not
knowingly cause the Trust to violate any of the provisions of Section
4.9(a) hereof.
ARTICLE V
CONCERNING THE REMAINDERMAN TRUSTEE
5.01. Acceptance of Trusts and Duties. The Remainderman Trustee
accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to the same but only upon the terms of this
Agreement. The Remainderman Trustee shall not be personally liable under
any circumstances, except: (i) for its own willful misconduct or gross
negligence, (ii) for liabilities arising from the failure by the
Remainderman Trustee to perform obligations expressly undertaken by it in
the last sentence of Section 4.08, or (iii) for taxes, fees or other
charges on, based on or measured by any fees, commissions or compensation
received by the Remainderman Trustee in connection with any of the
transactions contemplated by this Agreement or the Related Remainderman
Agreements. In particular, but not by way of limitation:
(a) The Remainderman Trustee shall not be personally liable
for any error of judgment made in good faith by an Authorized Officer of
the Remainderman Trustee;
(b) The Remainderman Trustee shall not be personally liable
with respect to any action taken or omitted to be taken by the Remainderman
Trustee in good faith in accordance with the instructions of the
Remainderman Participant;
(c) No provision of this Agreement shall require the
Remainderman Trustee to expend or risk its personal funds or otherwise
incur or risk any financial liability in the performance of any of its
rights or powers hereunder, if the Remainderman Trustee shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or
provided to it;
(d) Under no circumstances shall the Remainderman Trustee be
personally liable for any indebtedness of the Trust under any Related
Remainderman Agreement; and
(e) The Remainderman Trustee shall not be personally
responsible for or in respect of the validity or sufficiency of this
Agreement or for the due execution hereof by the Remainderman Participant,
or for or in respect of the validity or sufficiency of the Related
Remainderman Agreements.
5.02. Furnishing of Documents. The Remainderman Trustee shall
furnish to the Remainderman Participant, promptly upon receipt thereof,
duplicates or copies of all material reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to
the Remainderman Trustee hereunder or relating in any way to the
Remainderman Trust Estate (other than documents originated by or otherwise
furnished to the Remainderman Participant).
5.03. Reliance; Advice of Counsel.
(a) The Remainderman Trustee shall incur no liability to
anyone in acting upon any signature, instrument, notice, resolution,
request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Remainderman Trustee may accept
a certified copy of a resolution of the board of directors or other
governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in full
force and effect. As to any fact or matter the manner of ascertainment of
which is not specifically prescribed herein, the Remainderman Trustee may
for all purposes hereof rely on a certificate, signed by the president or
any vice president or by the treasurer or any assistant treasurer or the
secretary or any assistant secretary of the relevant party, as to such fact
or matter, and such certificate shall constitute full protection to the
Remainderman Trustee for any action taken or omitted to be taken by it in
good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder
and in the performance of its duties and obligations under any of the
Related Remainderman Agreements, the Remainderman Trustee (i) may act
directly or, at the expense of the Trust, through agents or attorneys
pursuant to agreements entered into with any of them, and the Remainderman
Trustee shall not be liable for the default or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the
Remainderman Trustee with reasonable care; and (ii) may, at the expense of
the Trust, consult with counsel, accountants and other skilled persons to
be selected with reasonable care and employed by it, and the Remainderman
Trustee shall not be liable for anything done, suffered or omitted in good
faith by it in accordance with the advice or opinion of any such counsel,
accountants or other skilled persons.
5.04. Not Acting in Individual Capacity. Except as expressly
provided in this Article V, in accepting the trusts hereby created, the
Remainderman Trustee acts solely as trustee hereunder and not in its
individual capacity, and all persons having any claim against the
Remainderman Trustee by reason of the transactions contemplated by this
Agreement or the Related Remainderman Agreements shall look only to the
Remainderman Trust Estate for payment or satisfaction thereof.
ARTICLE VI
COMPENSATION OF TRUSTEE
6.01. The Remainderman Trustee's Fees and Expenses. The
Remainderman Trustee shall receive compensation by the Remainderman
Participant for its services hereunder as may be agreed between the
Remainderman Trustee and the Remainderman Participant. The Remainderman
Trustee shall be entitled to be reimbursed by the Remainderman Participant
for its reasonable expenses hereunder, including, without limitation, the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Remainderman Trustee may employ
in connection with the exercise and performance of its rights and duties
under this Agreement and the Related Remainderman Agreements, and to secure
same, the Remainderman Trustee shall have a lien on the Remainderman Trust
Estate which shall be prior to any interest therein of the Remainderman
Participant.
6.02. Indemnification. The Remainderman Participant shall be
liable for, and hereby agrees to indemnify the Remainderman Trustee (in its
individual capacity) and its successors, assigns, agents and servants, and
any co-trustee or additional trustee appointed pursuant to Section 8.02
hereof (in its individual capacity) (each an "Indemnitee") from and
against, any and all liabilities, obligations, losses, damages, taxes
(other than taxes incurred as the result of the payment of fees and
expenses pursuant to Section 6.01 hereof), claims, actions, suits, costs,
expenses and disbursements (including legal fees and expenses) of any kind
and nature whatsoever (collectively, "Expenses") which may be imposed on,
incurred by or asserted at any time against any Indemnitee (whether or not
indemnified against by other parties) in any way relating to or arising out
of this Agreement, any Related Remainderman Agreement, the administration
of the Remainderman Trust Estate or the action or inaction of the
Remainderman Trustee hereunder, except only that the Remainderman
Participant shall not be required to indemnify any Indemnitee for Expenses
arising or resulting from any of the matters described in the second
sentence of Section 5.01. The indemnities contained in this Section 6.02
shall survive the termination of this Agreement, and to secure the same,
each Indemnitee shall have a lien on the Remainderman Trust Estate which
shall be prior to any interest therein of the Remainderman Participant.
The indemnities contained in this Section 6.02 extend only to the
Indemnitees in their individual capacities and shall not be construed as
indemnities of the Remainderman Trust Estate.
ARTICLE VII
TERMINATION OF TRUST
7.01. Termination of Trust. The trust created hereby shall
terminate and the Remainderman Trust Estate shall be distributed to the
Remainderman Participant and this Agreement shall be of no further force or
effect upon the sale or other final disposition by the Remainderman Trustee
of the Remainderman Trust Estate and the final distribution by the
Remainderman Trustee of all moneys or other property or proceeds of the
Remainderman Trust Estate in accordance with the terms of this Agreement
and the Related Remainderman Agreements. Upon such termination, the
Trustee shall cause the Certificate of Trust to be canceled in accordance
with the provisions of Section 3810 of the Business Trust Statute.
7.02. No Termination by the Remainderman Participant. Except as
provided in Section 7.01, the Remainderman Participant shall not be
entitled to terminate or revoke the Trust established hereunder, without
the prior written consent of the Owner Trustee, the Lessee and the Owner
Participant and the Indenture Trustee, to be granted or denied in their
sole discretion; provided, however, that no such termination shall be
effective until the certificate of cancellation described in Section 7.01
shall have been filed.
The bankruptcy, death or incapacity of the Remainderman
Participant (or any other beneficiary herewith) will not terminate this
Agreement, nor entitle such person's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
petition or winding up of the Remainderman Trust Estate, nor otherwise
affect the rights, obligations and liabilities of the parties hereof. No
creditor of any Noteholder shall obtain legal title to or exercise legal or
equitable remedies with respect to the Remainderman Trust Estate as a
result of such Noteholder's holding a Note. No transfer, by operation of
law or otherwise, of any right, title and interest of any Noteholder in and
to its undivided beneficial interest in the Remainderman Trust Estate shall
operate to terminate this Agreement or the Trust created hereby.
ARTICLE VIII
SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES
8.01. Resignation of the Remainderman Trustee; Appointment of
Successor.
(a) The Remainderman Trustee may resign at any time without
cause by giving at least 60 days' prior written notice to the Remainderman
Participant, such resignation to be effective upon the acceptance of
appointment by a successor remainderman trustee under Section 8.01(b)
below. In addition, the Remainderman Participant may at any time remove
the Remainderman Trustee without cause by an instrument in writing
delivered to the Remainderman Trustee, such removal to be effective upon
the acceptance of appointment by a successor remainderman trustee under
Section 8.01(b) below. In case of the resignation or removal of the
Remainderman Trustee, the Remainderman Participant may appoint a successor
remainderman trustee by an instrument signed by the Remainderman
Participant; provided, however, that (i) in connection with the appointment
of any successor to the Remainderman Trustee, the Remainderman Participant
will consult with the Owner Participant and the Owner Trustee and consider
in good faith their suggestions, (ii) any such successor shall be qualified
to be the trustee of a Delaware business trust under the Business Trust
Statute and (iii) at all times there shall be at least one trustee which
satisfies the requirements of Section 3807 of the Business Trust Statute.
If a successor remainderman trustee shall not have been appointed within 30
days after the giving of written notice of such resignation or the delivery
of the written instrument with respect to such removal, the Remainderman
Trustee or the Remainderman Participant may apply to any court of competent
jurisdiction to appoint a successor remainderman trustee to act until such
time, if any, as a successor remainderman trustee shall have been appointed
as provided above. Any successor remainderman trustee so appointed by such
court shall immediately and without further act be superseded by any
successor remainderman trustee appointed as above provided within one year
from the date of the appointment by such court.
(b) Any successor remainderman trustee, however appointed,
shall execute and deliver to the Remainderman Participant and the
predecessor Remainderman Trustee an instrument accepting such appointment,
and thereupon such successor remainderman trustee, without further act,
shall become vested with all the estates, properties, rights, powers,
duties and trust of the predecessor Remainderman Trustee in the trusts
hereunder with like effect as if originally named the Remainderman Trustee
herein; but nevertheless, upon the written request of such successor
remainderman trustee, such predecessor Remainderman Trustee shall execute
and deliver an instrument transferring to such successor remainderman
trustee, upon the trusts herein expressed, all the estates, properties,
rights, powers, duties and trusts of such predecessor Remainderman Trustee,
and such Predecessor Remainderman trustee shall duly assign, transfer,
deliver and pay over to such successor remainderman trustee all moneys or
other property then held or subsequently received by such predecessor
Remainderman Trustee upon the trusts herein expressed.
(c) Any successor remainderman trustee, however appointed,
shall be a "citizen of the United States" within the meaning of Section
101(16) of the Securities Act and shall also be a bank or trust company
incorporated and doing business within the United States of America and
having a combined capital and surplus of at least $50,000,000, if there by
such an institution willing, able and legally qualified to perform the
duties of the Remainderman Trustee hereunder upon reasonable or customary
terms.
(d) Any corporation into which the Remainderman Trustee may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Remainderman Trustee shall be a party, or any corporation to which
substantially all the corporate trust business of the Remainderman Trustee
may be transferred, shall, subject to the terms of Section 8.01(c), be the
Remainderman Trustee under this Agreement without further act.
(e) Upon the happening of any of the events described in this
Section 8.01, the successor remainderman trustee shall cause an amendment
to the Certificate of Trust to be filed with the Secretary of State, in
accordance with the provisions of Section 3810 of the Business Trust
Statute, indicating the change with respect to the Remainderman Trustee's
identity.
8.02 Co-Trustees and Separate Trustees. Notwithstanding
anything contained herein to the contrary, neither Wilmington nor the
Remainderman Trustee shall be required to take any action in any
jurisdiction other than in the State of Delaware if the taking of such
action will (i) require the consent or approval or authorization or order
of or the giving of notice to, or the registration with or taking of any
action in respect of, any state or other Governmental Authority or agency
of any jurisdiction other than the State of Delaware; (ii) result in any
fee, tax or other governmental charge under the laws of any jurisdiction or
any political subdivisions thereof in existence on the date hereof other
than the State of Delaware becoming payable by Wilmington; or (iii) subject
Wilmington to personal jurisdiction in any jurisdiction other than the
State of Delaware for causes of action arising from acts unrelated to the
consummation of the transactions by Wilmington or the Remainderman Trustee,
as the case may be, contemplated hereby. In addition, as a condition
precedent to the foreclosure or other acquisition of title to any
Remainderman Interest pursuant to this Agreement or otherwise, the
Remainderman Trustee shall be entitled to obtain advice of counsel (which
advice will be an expense to the Remainderman Participant) to determine
whether such foreclosure results in the consequences described in clauses
(i), (ii) and (iii) of the preceding sentence. In the event that such
counsel advises the Remainderman Trustee that such foreclosure or other
acquisition of title will result in such consequences, the Remainderman
Trustee will appoint an additional trustee pursuant to this Section 8.02 to
proceed with such foreclosure or acquisition.
Whenever the Remainderman Trustee or the Remainderman
Participant, pursuant to this Section 8.02 or otherwise, shall deem it
necessary or prudent in order to conform to any law of any jurisdiction in
which all or any part of the Remainderman Trust Estate shall be situated or
to make any claim or bring any suit with respect to the Remainderman Trust
Estate, or any Transaction Document, or the Remainderman Trustee or the
Remainderman Participant shall be advised by counsel satisfactory to it
that it is so necessary or prudent, the Remainderman Trustee and the
Remainderman Participant shall execute and deliver an agreement
supplemental hereto and all other instruments and agreements, and shall
take all other action, necessary or proper to constitute one or more
Persons who need not meet the requirements of Section 9.01(c) (and the
Remainderman Trustee may appoint one or more of its officers) either as co-
trustee or co-trustees jointly with the Remainderman Trustee of all or any
part of the Remainderman Trust Estate, or as separate trustee or separate
trustees of all or any part of the Remainderman Trust Estate, and to vest
in such Persons, in such capacity, such title to the Remainderman Trust
Estate or any part thereof and such rights or duties as may be necessary or
desirable, all for such period and under such terms and conditions as are
satisfactory to the Remainderman Trustee and the Remainderman Participant.
In case any co-trustee or separate trustee shall die, become incapable of
acting, resign or be removed, the title to any part of the Remainderman
Trust Estate vested in such co-trustee or separate trustee shall vest in
the Trust and all rights and duties of such co-trustee or separate trustee
shall vest in the Trust and all rights and duties of such co-trustee or
separate trustee shall, so far as permitted by law, be exercised by the
remaining Remainderman Trustee, without appointment of a successor to the
Remainderman Trustee or such co-trustee or separate trustee.
ARTICLE IX
MISCELLANEOUS
9.01. Supplements and Amendments. This Agreement may be amended
only by a written instrument signed by the Remainderman Trustee and the
Remainderman Participant at the time of such amendment; provided, however,
that if, in the opinion of the Remainderman Trustee, any instrument
required to be so executed adversely affects any right, duty or liability
of, or immunity or indemnity in favor of, the Remainderman Trustee under
this Agreement or any of the documents contemplated hereby to which the
Remainderman Trustee is a party, or would cause or result in any conflict
with or breach of any terms, conditions or provisions of, or default under,
the charter documents or by-laws of the Remainderman Trustee or any
documents contemplated hereby to which the Remainderman Trustee is a party,
the Remainderman Trustee may in its sole discretion decline to execute such
instrument. Notwithstanding the first sentence hereof, Wilmington shall
not, without the consent of the Owner Participant, the Indenture Trustee
and the Owner Trustee (which consent shall not be unreasonably withheld),
execute any amendment that might result in the trusts created hereunder
being terminated prior to the termination of the Ground Lease.
9.02. No Legal Title to Remainderman Trust Estate in the
Remainderman Participant. The Remainderman Participant shall not have
legal title to any part of the Remainderman Trust Estate and shall only
have an undivided beneficial interest therein. No transfer, by operation
of law or otherwise, of any right, title and interest of the Remainderman
Participant in and to its undivided beneficial interest in the Remainderman
Trust Estate hereunder shall operate to terminate this Agreement or the
trusts hereunder or entitle any successor transferee to an accounting or to
the transfer to it of legal title to any part of the Remainderman Trust
Estate.
9.03. Sale of Remainderman Interests by the Remainderman Trustee
is Binding. The sale or conveyance of any Remainderman Interest to any
person by the Remainderman Trustee made under any Related Remainderman
Agreement and pursuant to the terms of this Agreement shall bind the
Remainderman Participant and shall be effective to transfer or convey the
rights of the Remainderman Trustee and the Remainderman Participant in and
to such Remainderman Estate to the extent set forth in such Related
Remainderman Agreement. No purchaser or other grantee shall be required to
inquire as to the authorization, necessity, expediency or regularity of
such sale or conveyance or as to the application of any proceeds with
respect thereto by the Remainderman Trustee.
9.04. Limitations on Rights of Others. Nothing in this
Agreement, whether express or implied, shall be construed to give to any
person other than the Remainderman Trustee (in its individual and trustee
capacities), the Remainderman Participant, the Owner Participant, the
Indenture Trustee or the Lessee any legal or equitable right, remedy or
claim in the Remainderman Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
9.05. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and
delivered by hand, sent by overnight courier service or mailed by certified
mail, postage prepaid, if to the Remainderman Trustee, addressed to:
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001, attention: Corporate Trust Administration,
or to such other address as the Remainderman Trustee may have set forth in
a written notice to the Remainderman Participant; and if to the
Remainderman Participant, addressed to it at c/o Relco Inc., 3 Stamford
Landing, Suite 310, Stamford, Connecticut 06902. Whenever any notice in
writing is required to be given by the Remainderman Trustee hereunder, such
notice shall be deemed given and such requirement satisfied, upon receipt,
if delivered by hand, on the following day if delivered to an overnight
courier service, and 72 hours after such notice is mailed by certified
mail, postage prepaid, addressed as provided above; any notice given by the
Remainderman Participant to the Remainderman Trustee shall be effective
upon receipt by an Authorized Officer of the Remainderman Trustee.
9.06. Severability. Any provision of this Agreement which 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.
9.07. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
9.08. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Remainderman Trustee and its successors and assigns and each Remainderman
Participant and its successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other
instrument or action by the Remainderman Participant shall bind the
successors and assigns of the Remainderman Participant.
9.09. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
9.10. Governing Law. This Agreement shall in all respects be
governed by, and construed in accordance with, the laws of the State of
Delaware (excluding conflict of law rules), including all matters of
construction, validity and performance.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective officers hereunto duly authorized,
as of the day and year first above written.
WILMINGTON TRUST COMPANY
By:
Name:
Title:
CALIFORNIA-RELCO LIMITED
PARTNERSHIP
By: Relco Inc., General Partner
By:
Name: E. Wynn Plaut
Title: President
Exhibit E
Form of
PASS THROUGH TRUST AGREEMENT
[Incorporated herein by reference to Exhibit 4.1 to the
Company's Registration Statment on Form S-3 (File No. 33-51097)
filed with the Securities and Exchange Commission.]
Exhibit F-1
Form of
TRUST INDENTURE
[Set forth as Exhibit 4.3.4 to this Form 8-K]
Exhibit F-2
Form of
DEED OF TRUST, ASSIGNMENT OF LEASES
AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING
(containing a supplemental indenture)
[Series J-2]
dated as of December 21, 1993
among
STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, NATIONAL ASSOCIATION,
a national banking association,
not in its individual capacity except as expressly
stated herein, but solely as Owner Trustee
under the Trust Agreement dated as of December 21, 1993
with the Owner Participant, as Trustor;
STEWART TITLE OF CALIFORNIA,
a California corporation, as Trustee;
and
WILMINGTON TRUST COMPANY,
a Delaware banking corporation,
the Indenture Trustee, as beneficiary
___________________
SMITH'S FOOD & DRUG CENTERS, INC.
Leveraged Lease of One (1) Food and Drug Store
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT
AND FIXTURE FILING [Series J-2], dated as of December 21, 1993, containing
the First Supplemental Indenture to the Trust Indenture and Security
Agreement (the "First Supplemental Indenture"), dated as of December 21,
1993, this First Supplemental Indenture to be recorded in the Official
Records of the county in which the Related Property is located (the
"Recorder's Office") (the "Original Indenture," together with any
supplemental indentures including this First Supplemental Indenture, the
"Indenture"), among State Street Bank and Trust Company of California, a
national banking association, not in its individual capacity, except as
expressly provided herein, but solely as Owner Trustee (the "Owner
Trustee") under the Trust Agreement dated as of December 21, 1993 (the
"Trust Agreement") with the Owner Participant in favor of Stewart Title of
California, a California corporation ("Trustee") and Wilmington Trust
Company, a Delaware banking corporation, as trustee for the benefit of the
Noteholders, as beneficiary hereunder (the "Indenture Trustee").
RECITALS:
(a) The Owner Trustee has heretofore executed and delivered the
Original Indenture to the Indenture Trustee to provide for the issuance
from time to time of notes to be issued in one or more series (the
"Notes");
(b) Sections 2.13 and 11.1 of the Original Indenture provide,
among other things, that the Owner Trustee and the Indenture Trustee may
enter into indentures supplemental to the Original Indenture for, among
other things, the purpose of establishing the form and terms of Notes of
any series as permitted by Sections 2.13 and 11.1 of the Original
Indenture;
(c) As contemplated by Section 7.1 of the Original Indenture and
Section 2.4 of the Participation Agreement, the Owner Trustee desires the
issuance of a series of Notes to be designated as "Series J Notes" (the
"Series J Notes") in order to finance a portion of the Lessor Purchase
Price in connection with the purchase by the Owner Trustee of the Lessor
Interests;
(d) Pursuant to this First Supplemental Indenture, the Owner
Trustee (i) desires to issue a subseries of the Series J Notes to be
designated as the "J-2 Note" and (ii) has requested the Indenture Trustee
to enter into this First Supplemental Indenture for the purpose of
establishing the form and terms of the J-2 Note;
(e) The Original Indenture (as defined below) provides for the
execution and delivery of Supplemental Indentures thereto in order to
specifically mortgage a particular Lease and the Lessor Interest leased
thereby in order to secure a particular series of Notes;
(f) All action on the part of the Owner Trustee necessary to
authorize the issuance of the J-2 Notes under the Original Indenture and
this First Supplemental Indenture has been duly taken; and
(g) All acts and things necessary to make the J-2 Notes, when
executed by the Owner Trustee and authenticated and delivered by the
Indenture Trustee as provided in the Original Indenture, the legal, valid
and binding obligations of the Owner Trustee, and to constitute a valid and
binding supplemental indenture, deed of trust, leasehold deed of trust,
assignment of leases and rents and security agreement according to its
terms, have been done and performed, and the execution of this First
Supplemental Indenture and the creation and issuance under the Indenture of
the J-2 Notes have in all respects been duly authorized, and the Owner
Trustee, in the exercise of the legal right and power vested in it,
executes this First Supplemental Indenture and proposes to create, execute,
issue and deliver the J-2 Notes;
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH
that, in order to establish the form and terms of and to authorize the
authentication and delivery of the J-2 Notes and to grant security for the
payment thereof, and in consideration of the premises, of the acceptance by
the Indenture Trustee of the trust hereby created and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, in order to secure (a) the payment of the principal of,
Premium, if any, and interest on the J-2 Notes outstanding from time to
time hereunder according to their tenor and effect, and (b) the performance
and observance by the Owner Trustee for the benefit of the holders from
time to time of the J-2 Notes and the Indenture Trustee of all the
covenants, agreements and provisions contained herein and in the J-2 Notes,
in each case for the uses and purposes and subject to the terms and
provisions hereof:
GRANTING CLAUSE:
The Owner Trustee hereby irrevocably grants, transfers, assigns,
mortgages, warrants, conveys, aliens, demises, releases, assigns,
transfers, sets over, delivers and conveys to the Trustee, in trust, with
power of sale and right of entry, for the benefit of the Indenture Trustee,
its successors and assigns, upon the terms and conditions of this First
Supplemental Indenture, the following described property, rights and
privileges, whether now owned or held or hereafter acquired (herein called
the "Indenture Estate [Series B]"), to wit:
(a) all right, title and interest of the Owner Trustee, now
existing or hereafter arising, in and to the Related Lessor Interest in
respect of Property B as more fully described in Exhibit A attached hereto
and incorporated herein;
(b) all right, title and interest of the Owner Trustee, now
existing or hereafter arising, in and to the Deed in respect of the Related
Lessor Interest, the Option Agreement to the extent that such Option
Agreement relates to Property B, Lease B in respect of the Related Lessor
Interest, and all sums now or hereafter payable to the Owner Trustee with
respect thereto, including, without limitation, (A) all amounts of Rent
under Lease B, payments pursuant to Section 16 of Lease B, insurance
proceeds and condemnation, requisition and other awards and payments of any
kind for or with respect to any part of the Indenture Estate [Series B] as
contemplated in or by the Granting Clause Documents (the foregoing sums,
excluding all Excepted Payments, being hereinafter referred to as the
"Assigned Payments") and (B) all rights (exclusive of Excepted Rights) of
the Owner Trustee, now existing or hereafter arising, to exercise any
election or option or to make any decision or determination or to give or
receive any notice, consent, waiver or approval or to take any other action
under or in respect of any Granting Clause Document relating to or in
connection with the Related Lessor Interest (including, without limitation,
but subject to Section 6(c) of Lease B, all the Owner Trustee's right,
title, interest and estate in, to and under, any and all warranties and
other claims against dealers, manufacturers, vendors, contractors and
subcontractors relating to the construction, use or maintenance of the
Related Lessor Interest), as well as all rights, powers and remedies on the
part of the Owner Trustee, now existing or hereafter arising and whether
arising under any Granting Clause Document relating to or in connection
with the Related Lessor Interest, or by statute or at law or equity or
otherwise, arising out of any Event of Default under Lease B;
(c) all moneys and securities now or at any time hereafter
paid to or deposited with or required to be paid to or deposited with the
Indenture Trustee pursuant to any provision of the Original Indenture or
any Granting Clause Document, in each case, relating to or in connection
with the Related Lessor Interest and held or required to be held by the
Indenture Trustee hereunder or under the Original Indenture;
(d) all rents (including Rent), issues, profits, products,
revenues and other income of all property from time to time subjected to
the lien and security interest of this First Supplemental Indenture (other
than such amounts derived from Lessee's Property or properties title to
which has vested in the Lessee pursuant to Section 8(e) of Lease B), and
all right, title and interest of every nature whatsoever of the Owner
Trustee, now existing or hereafter arising, in and to the same and every
part thereof;
(e) all other property of every kind and description, real,
personal and mixed, and all interests therein (other than the Lessee's
Property referred to in Section 8(h) of Lease B), now owned or hereafter
acquired by the Owner Trustee, pursuant to the provisions of the Granting
Clause Documents relating to or in connection with the Related Lessor
Interest (excluding removed parts as to which title has vested in the
Lessee pursuant to Section 8(g) of Lease B, whether located in the Related
Lessor Interest or elsewhere, without the necessity of Supplemental
Indentures), and the Indenture Trustee is hereby authorized to receive any
such property and to hold and apply any and all such property subject to
and in accordance with the terms of this First Supplemental Indenture as
then supplemented;
(f) all right, title and interest of the Owner Trustee, now
existing or hereinafter arising, in and to the Tripartite Agreement to the
extent such Tripartite Agreement relates to Property B; and
(g) all proceeds of any of the foregoing.
BUT EXCLUDING, HOWEVER, from the Indenture Estate [Series B] any
and all Excepted Payments and Excepted Rights now existing or hereafter
arising and subject to the following provisions:
(aa) So long as no Indenture Event of Default shall have
occurred and be continuing, the Owner Trustee at all times shall retain, to
the exclusion of the Indenture Trustee, all rights of the Owner Trustee,
now existing or hereafter arising, to exercise any election or option or to
make any decision or determination or to give or receive any notice,
consent, waiver or approval or to take any other action under or in respect
of the Granting Clause Documents as relating to or in connection with the
Related Lessor Interest, as well as all rights, powers and remedies on the
part of the Owner Trustee, now existing or hereafter arising, and arising
under the Granting Clause Documents as relating to or in connection with
the Related Lessor Interest or by statute or at law or in equity or
otherwise, arising out of any Default or Event of Default under Lease B;
provided, however, that, except insofar as the same relates to Excepted
Payments to which the Owner Trustee or the Owner Participant is entitled,
the Owner Trustee shall not, without prior written consent of the Indenture
Trustee given with the consent of a Majority in Interest of Noteholders,
agree to any amendment to, or any modification, waiver, discharge,
supplement, or termination of, or grant any consent under, any term or
provision of (i) the following provisions of Lease B: Section 2(a),
Section 2(b) (if the result thereof would be to shorten the term of Lease B
to a period shorter than the period ending with the latest maturity of the
J-2 Notes), Section 3(a), Section 3(b) (if the result thereof would be that
the Basic Rent payable thereunder would be insufficient to pay principal or
interest on the J-2 Notes as same became due and payable), Section 3(c)(i),
Section 3(c)(ii) (if the result thereof would be that the Supplemental Rent
payable thereunder would be insufficient to pay Premium, if any, in respect
of the J-2 Notes), Section 3(c)(iii) (if the result thereof would be to
reduce any amount payable to or for the account of the Indenture Trustee or
the Pass Through Trustee), Section 3(g), Section 4, Section 5(a) (if the
result thereof would permit a use not permitted by Applicable Law or which
would constitute a public or private nuisance), Section 5(b), Section 6(a),
Section 6(b), Section 7, Section 8(a)(i), Section 8(c) (with respect to the
proviso of the penultimate sentence thereto), Section 8(g), Section 8(h),
Section 8(i), Section 9 (if the result thereof would be to lower the
threshhold for a Casualty to constitute an Event of Loss or adversely
affect or delay or decrease the amount of any prepayment of the J-2 Notes
in the event of an Event of Loss), Section 10 (other than Section 10(b)),
Section 11(a), Section 11(b) (other than consents and actions of the Owner
Trustee, set forth in such section), Section 11(e), Section 14 (if the
result thereof would be to adversely affect, delay or decrease the amount
of any prepayment of the J-2 Notes), Section 15 and Section 16; (ii) the
definitions contained in Appendix A to the extent that any amendment,
modification, waiver, discharge, supplement or termination, or consent to
any thereof, would result in a substantive change to any of the foregoing
provisions which would contradict or alter any such provision in a manner
that would be prohibited as set forth above; and provided, further, that
the Owner Trustee may not, without the prior written consent of the
Indenture Trustee given with the consent of a Majority in Interest of
Noteholders, terminate Lease B except as provided by clause (bb) below.
(bb) During the continuance of any Indenture Event of
Default caused by an Event of Default under Lease B, the Owner Trustee at
all times shall be entitled on a non-exclusive basis with the Indenture
Trustee to (i) enforce any covenant or obligation (including obligations in
respect of the payment of Rent) of the Lessee under Lease B; provided, that
in so enforcing any such covenant, the Owner Trustee may not exercise any
remedies under Section 16(a) (i) of Lease B other than as provided in
clause (ii) below, unless such exercise is required by law in order to
effect the Owner Trustee's rights under clause (ii) below, (ii) declare
Lease B in default and exercise remedies solely pursuant to Section 16(a)
(v) (D) thereof (and such other remedies as are required by law in order to
effect the rights of the Owner Trustee under this clause), (iii)
[INTENTIONALLY OMITTED] and (iv) receive any notice under the Granting
Clause Documents as relating to or in connection with the Related Lessor
Interest, provided that any amount obtained by the Owner Trustee, as a
consequence of any of the above actions which is payable to the Indenture
Trustee or any Noteholder or to which the Indenture Trustee is entitled
shall (apart from Excepted Payments) be received by the Owner Trustee, for
the benefit of, and immediately paid over to, the Indenture Trustee.
(cc) Subject to subparagraph (aa) above, but otherwise
without the consent of any of the Noteholders, at any time and from time to
time, the respective parties to the Transaction Documents may modify, amend
or supplement any of such Transaction Documents (other than this First
Supplemental Indenture or the Original Indenture) for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions thereof or modifying in any manner the rights of the respective
parties thereunder or may give any consent or waiver thereunder; provided,
however, that no such modification, amendment, supplement, consent or
waiver shall without the consent of each Noteholder affected thereby,
modify, amend or supplement, or give any consent in respect of or waive any
provision of, Lease B in such manner (i) as to reduce the amounts payable
by the Lessee under Lease B assigned to the Indenture Trustee, or change
the time for the payment thereof, so that such payments are less than the
amounts necessary to pay the principal of, Premium, if any, and interest on
the Outstanding J-2 Notes when due (whether at maturity, upon acceleration
or otherwise) or (ii) as would release the Lessee from its obligation in
respect of payment of Basic Rent, Casualty Value, Termination Value or any
other amount payable under Lease B and intended to be used to pay the
principal of, Premium, if any, or interest on the J-2 Notes, in any manner
inconsistent with clause (i) above.
To the extent any portion of the Indenture Estate [Series B]
constitutes personal property under Applicable Law, the Owner Trustee
hereby grants to the Indenture Trustee a security interest in such property
and the proceeds thereof and the Indenture Trustee shall have, in addition
to all rights and remedies provided herein and in the Original Indenture,
all rights and remedies of a "secured party" under the Uniform Commercial
Code and this First Supplemental Indenture shall also be deemed to be a
"security agreement" for purposes of the Uniform Commercial Code. This
First Supplemental Indenture, in addition to constituting a security
agreement covering any personal property that is part of the Indenture
Estate [Series B], constitutes (i) a deed of trust, and an absolute
assignment of rents with respect to all estates in land, fixtures,
leaseholds, easements or other interests in real property that are part of
the Indenture Estate [Series B] and the rents, issues and profits thereof
and (ii) a financing statement filed as a fixture filing under Section
9402(b) of the California Uniform Commercial Code, as amended or recodified
from time to time, covering any portion of the Indenture Estate which is
now or later may become fixtures. For purposes of such fixture filing, the
"debtor" is the Owner Trustee whose address is State Street Bank and Trust
Company of California, National Association, 725 S. Figueroa Street, Los
Angeles, California 90017 and the "secured party" is the Indenture Trustee
whose address is Wilmington Trust Company, Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890.
OBLIGATIONS SECURED:
This First Supplemental Indenture is given for the purpose of
securing payment and performance of the following obligations
(collectively, the "Secured Obligations"): (a) the payment of the
principal of, Premium, if any, and interest on the Series J-2 Notes
outstanding from time to time hereunder according to their tenor and
effect; (b) the performance and observance by the Owner Trustee of all the
covenants, agreements and provisions contained herein and in the Series J-2
Notes; and (c) all present and future obligations of the Owner Trustee
under this First Supplemental Indenture.
The lien and security interest created hereby is created for the
equal ratable benefit and security of the Indenture Trustee, as trustee for
the Noteholders of the Outstanding Series J-2 Note from time to time
without preference, priority or distinction of any one Note over any other
so that all Outstanding Series J-2 Notes shall have the same right, lien
and preference under and by virtue of this First Supplemental Indenture,
and for the uses and purposes and subject to the terms and conditions set
forth in the Indenture.
PROVIDED, HOWEVER, that if the principal of, Premium, if any, and
interest on the J-2 Notes, and all other amounts payable under or secured
by this First Supplemental Indenture shall have been paid pursuant to
Section 3.1 of the Original Indenture or otherwise and the Owner Trustee
shall have performed and complied with all the covenants, agreements, terms
and provisions of the Indenture and this First Supplemental Indenture, then
the Indenture and the rights hereby and thereby granted and assigned with
respect to the J-2 Notes shall terminate with respect to the J-2 Notes.
IT IS HEREBY COVENANTED AND AGREED that all the J-2 Notes are to
be issued and delivered, and that all property, rights and privileges
subject or to become subject to this First Supplemental Indenture, are to
be held subject to the further covenants, conditions, uses and trusts
herein and therein set forth, and the Owner Trustee, intending to be
legally bound hereby, hereby covenants and agrees with the Indenture
Trustee for itself and for the equal and proportionate benefit and security
of the Noteholders of the Outstanding Notes from time to time, and the
Indenture Trustee agrees to accept the trust and duties herein set forth,
as follows:
ARTICLE 1
THE NOTES
SECTION 1.1 Definitions. Unless the context shall otherwise
require, each of the capitalized terms used in this First Supplemental
Indenture and not otherwise defined in this First Supplemental Indenture
shall have the meaning assigned to it in Appendix A to this First
Supplemental Indenture. As used in this First Supplemental Indenture, the
term "parties" means, collectively, the Owner Trustee and the Indenture
Trustee. Unless otherwise indicated, references in this First Supplemental
Indenture to articles, sections, paragraphs, clauses, appendices, schedules
and exhibits are to the same contained in or attached to this First
Supplemental Indenture.
SECTION 1.2 Designation of the Notes. There is created by the
First Supplemental Indentures collectively the Series J Notes. There is
created by this First Supplemental Indenture the subseries J-2 Notes of the
Series J Notes. The J-2 Notes may forthwith be executed by the Owner
Trustee and delivered to the Indenture Trustee for authentication and
delivery by the Indenture Trustee in accordance with the provisions of
Section 2.11 of the Original Indenture.
SECTION 1.3 Maximum Principal Amount. Except as otherwise
provided in the Indenture, the J-2 Notes shall be limited in an aggregate
principal amount to $20,000,000, each having a Stated Maturity of no later
than January 2, 2019.
SECTION 1.4 Maturities. The Series J-2 Notes shall be dated the
date hereof, shall have stated maturities on the dates and years set forth
below, and shall have aggregate principal amounts as set forth below:
Aggregate
Stated Principal
Note Maturity Amount
J-2 July 2, 2018 $7,025,201.19
Pursuant to the terms of the Participation Agreement, the Series J-2 Notes
shall be initially issued to the Initial Noteholder.
SECTION 1.5 Denominations. The Series J-2 Notes shall be issued
in denominations of $1,000 of principal amount or integral multiples
thereof, except that one J-2 Notes of each Stated Maturity may be in an
amount that is not an integral multiple of $1,000.
SECTION 1.6 Principal; Interest Payments and Interest Rates.
(a) Each of the J-2 Notes shall bear interest at the rates
provided in Schedule 1.6 hereto on the principal amount from time to time
outstanding in respect of the period commencing on and including the Series
J Commencement Date and ending on and excluding the date when the principal
amount of such J-2 Notes shall have been paid in full and shall be payable
on each Series J Interest Payment Date; provided, that if such Series J
Interest Payment Date shall not be a Business Day, any such interest shall
be payable on the next succeeding Business Day and such extension of time
shall not be included in the computation of interest; provided, further,
that if such extension would cause interest on any amount to be paid in the
next following calendar month, such interest shall be payable on the next
preceding Business Day.
(b) The principal of each J-2 Note shall be payable in
installments, on each Installment Payment Date and at Stated Maturity, in
amounts equal to the Installment Payment Amount for each Installment
Payment Date and Stated Maturity, as provided in Schedule 1.6 hereto.
(c) Payment of interest and Installment Payment Amounts, if any,
payable on any Series J Interest Payment Date or any Installment Payment
Date (other than the Stated Maturity of the J-2 Notes) shall be on each
Series J Interest Payment Date or Installment Payment Date (other than the
Stated Maturity of the J-2 Notes) to the holder of record on the relevant
Record Date. With respect to the J-2 Notes, "Record Date" for the interest
or Installment Payment Amounts payable on any Series J Interest Payment
Date or Installment Payment Date, shall mean the calendar day (whether or
not a Business Day) which is 15 calendar days prior to the related Series J
Interest Payment Date or Installment Payment Date.
(d) The principal of, Premium, if any, and interest on the J-2
Notes shall be payable in immediately available funds at the principal
corporate trust office of the Indenture Trustee or at any office or agency
maintained for such purpose pursuant to Section 5.3 of the Original
Indenture, or as otherwise directed in the manner herein provided.
Notwithstanding the foregoing or any provision in any J-2 Notes to the
contrary, the Indenture Trustee will pay, or cause to be paid; if so
requested by any Holder of J-2 Notes by written notice to the Owner Trustee
and the Indenture Trustee, all amounts payable by Owner Trustee hereunder
to such Holder of J-2 Notes or a nominee therefor either (i) by
transferring by wire in immediately available funds to an account
maintained by such Holder of J-2 Notes with a bank in the United States the
amount to be distributed to such Noteholder or (ii) by mailing a check
denominated in U.S. dollars to such Holder of J-2 Notes at such address as
such Holder of J-2 Notes shall have specified in such notice, in any case
without any presentment or surrender of any J-2 Notes, except that any
Holder of J-2 Notes shall surrender any J-2 Notes to the Indenture Trustee
upon payment in full of the principal amount of and interest on such J-2
Notes and such other sums payable to such Holder hereunder or under the J-2
Notes.
SECTION 1.7 Redemption. (a) Redemption on Debt Refinancing
Date. On the Debt Refinancing Date, all of the Outstanding J-2 Notes are
subject to redemption pursuant to Section 2.6 of the Participation
Agreement and Section 7.2 of the Original Indenture. The Redemption Price
of each such J-2 Note to be redeemed shall be equal to the aggregate unpaid
principal amount of such J-2 Note together with accrued but unpaid
interest, together with Premium, if any, thereon to but excluding the
applicable Redemption Date.
(b) Optional Redemption. All of the J-2 Notes are subject to
redemption in whole, pursuant to Section 2.5 of the Participation
Agreement. Notice of any such redemption shall be given in accordance with
Sections 6.2 and 6.4 of the Original Indenture. The Redemption Price of
each such Series J-2 Note to be redeemed shall be equal to the aggregate
unpaid principal amount of such Series J-2 Note together with accrued but
unpaid interest, together with Premium, if any, thereon to, but not
including, the applicable Redemption Date.
SECTION 1.8 Special Redemptions.
(a) If an Event of Loss under Lease B shall occur, the J-2 Notes
are subject to redemption as set forth in Section 6.1(b) (i) of the
Original Indenture.
(b) If Lease B shall be terminated pursuant to Section 14
thereof, the J-2 Notes are subject to redemption as set forth in Section
6.1(b) (ii) of the Original Indenture.
(c) The J-2 Notes are also subject to redemption at the option
of the Owner Trustee in accordance with the terms of Section 8.10(c) of the
Original Indenture.
Except as provided in Section 1.8(c) above, Premium, if any, shall be
payable in connection with any redemption of prepayment or purchase of the
Series J-2 Notes.
SECTION 1.9 Paying Agent and Note Registrar. The initial Paying
Agent and Note Registrar for the J-2 Notes shall be the Indenture Trustee.
SECTION 1.10 Form of the J-2 Notes. The J-2 Notes shall be
issued in substantially the form attached as Exhibit B hereto.
SECTION 1.11 Certificate of Authentication. The form of the
certificate of authentication for the subseries of the J-2 Notes to be
executed by the Indenture Trustee shall be as set forth at the end of
Exhibit B. The alternate form of certificate of authentication for the J-2
Notes to be executed by an Authenticating Agent on behalf of the Indenture
Trustee shall be as set forth in Section 9.10 of the Original Indenture.
SECTION 1.12 Other Terms. The J-2 Notes shall have and be
subject to such other terms not inconsistent with the terms of this First
Supplemental Indenture as are set forth in the Original Indenture.
SECTION 1.13 No Other Notes. So long as any Series J Notes are
outstanding, no other series of Notes may be issued and Outstanding, except
as contemplated by Sections 6.7 and 7.2 of the Original Indenture.
SECTION 1.14 Auxiliary Payments.
(a) Increased Costs. If due to either (i) the introduction of
or any change (other than any change by way of imposition or increase of
reserve requirements included in the Reserve Percentage referred to in
Section 1.14(b) in or in the interpretation of any law or regulation or
(ii) the compliance with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law),
there shall be any increase in the cost (other than with respect to income,
franchise or withholding taxes or other taxes of a similar nature) to any
Noteholder of a J-2 Note of agreeing to make or making, funding or
maintaining the loan to the Owner Trustee, then (x) such Noteholder of a J-
2 shall, as soon as such Noteholder of a J-2 Note becomes aware of such
increased cost, but in any event not later than sixty (60) days after such
increased cost was incurred for which such Noteholder intends to seek
reimbursement, deliver to the Owner Trustee, the Indenture Trustee and the
Lessee a certificate as described below in paragraph (f) stating the actual
amount of such increased cost incurred by such Noteholder of a J-2 Note and
(y) the Owner Trustee shall, within thirty (30) days after its receipt of
such certificate pay to the Noteholder of a J-2 Note amounts sufficient to
compensate such Noteholder of a J-2 Note for the increased cost incurred by
it as set forth in the certificate referred to above. In determining the
amount set forth in such certificate such Noteholder of a J-2 Note may use
reasonable averaging and attribution methods. If the Owner Trustee so
notifies the Noteholder of a J-2 Note within five Business Days after
receipt of any certificate delivered to the Owner Trustee pursuant to the
provisions of this Section 1.14(a), the Owner Trustee may prepay in full
all the Notes then outstanding held by such Noteholder of a J-2 Note, plus
Premium, if any, and, additionally, reimburse such Noteholder of a J-2 Note
for such increased cost in accordance with this Section 1.14(a).
(b) Reserve Requirement Amount. If any Noteholder of a J-2 Note
shall be required under Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time ("Regulation D"), to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency liabilities, as defined in Regulation D, then such
Noteholder of a J-2 Note shall within 60 days after the end of any
applicable interest period during which such Noteholder of a J-2 Note was
required to maintain such reserves give notice to the Indenture Trustee,
the Owner Trustee and the Lessee, together with a certificate as described
below in paragraph (c) stating that such Noteholder of a J-2 Note was
required to maintain reserves and as a result incurred additional costs in
connection with making the loan to the Owner Trustee represented by its J-2
Note and that it is such Noteholder of a J-2 Note's customary practice,
from and after the date of this Indenture, to charge its borrowers for
reserves so maintained by it, and, promptly following receipt of such
certificate, the Owner Trustee shall pay to such Noteholder of a J-2 Note
additional interest on the unpaid principal amount of each such loan,
represented by a J-2 Note, payable on the same day or days on which
interest is payable on such loan represented by a J-2 Note, at an interest
rate per annum equal at all times during each Interest Period for such loan
to the excess of (i) the rate obtained by dividing the LIBOR for such
applicable interest period by a percentage equal to 100% minus the Reserve
Percentage (defined in the next sentence), if any, applicable during such
applicable interest period over (ii) the LIBOR for such applicable interest
period. The "Reserve Percentage" for any such period, with respect to any
loan, means the reserve percentage applicable thereto under Regulation D
for determining the maximum reserve requirement incurred by such Noteholder
of a J-2 Note (including, but not limited to, any emergency, supplemental
or other marginal reserve requirement) with respect to liabilities or
assets consisting of or including eurocurrency liabilities, as defined in
Regulation D, and having a term equal to such period. The provisions of
this Section 1.14(b) shall not be applicable to any Noteholder of a J-2
Note during any period when the provisions of Section 1.14 are applicable.
(c) Capital Adequacy. If the Initial Noteholder shall, at any
time, reasonably determine that (each of the following conditions being
herein referred to as a "Rate of Return Condition") (i) the adoption (x) at
any time, of any other applicable law, government rule, regulation or order
regarding capital adequacy of banks or bank holding companies, (ii) any
change in (x) any of the foregoing or (y) the interpretation or
administration of any of the foregoing by any Governmental Authority,
central bank or comparable agency or (iii) compliance with any policy,
guideline, directive or request regarding capital adequacy (whether or not
having the force of law and whether or not failure to comply therewith
would be unlawful) of any Governmental Authority, central bank or
comparable agency, would have the effect of reducing the rate of return on
the capital of such Noteholder, to a level below that which such Noteholder
could have achieved but for such adoption, change or compliance (taking
into consideration the policies of such Noteholder with respect to capital
adequacy in effect immediately before such adoption, change or compliance)
and (A) such reduction is as a consequence of the making of a loan
(represented by a Series J-2 Note) to the Owner Trustee hereunder by the
Initial Noteholder, (B) such reduction is reasonably deemed by the Initial
Noteholder to be material, and (C) the Initial Noteholder desires the Owner
Trustee to compensate such Noteholder therefor as provided in this Section
1.14(c), then the Initial Noteholder shall deliver to the Owner Trustee,
the Indenture Trustee and the Lessee a certificate as described in
paragraph (d) below stating the reduction in the rate of return the Initial
Noteholder will in the future suffer as a result of its loan hereunder and
the Owner Trustee shall, within thirty (30) days after its receipt of such
certificate pay the Initial Noteholder such amounts as shall be sufficient
to compensate the Initial Noteholder for such reduced return until such
time and thereafter from time to time on the same day on which interest is
payable on the Series J-2 Notes held by it. In determining the amount set
forth in such certificate, the Initial Noteholder may use reasonable
averaging and attribution methods. After receipt by the Owner Trustee of
any certificate delivered pursuant to the provisions of this Section
1.14(c), the Owner Trustee may, upon at least five (5) Business Days' prior
written notice to the Indenture Trustee and the Initial Noteholder, prepay
in full all the Series J-2 Notes then outstanding held by the Initial
Noteholder, together with Premium, if any, accrued interest and any other
amounts then due and owing to the Initial Noteholder under the Transaction
Documents.
(d) A certificate as to the amount of any such increased cost,
increased interest or reduced return under Section 1.14(a); (b) or (c),
submitted to the Owner Trustee, the Indenture Trustee and the Lessee, by
such Noteholder of a J-2 Note, shall describe the nature of such increased
cost, increased interest, or reduced return and set forth in reasonable
detail the computations thereof.
(e) Transfer. If the Initial Noteholder shall assign its
interest in the Series J-2 Notes in accordance with Section 2.8 of the
Participation Agreement, any obligation to make auxiliary payments under
Section 1.14(a), (b) or (c) to any such permitted assignee shall not exceed
the corresponding obligations that the Owner Trustee would have had to the
Initial Noteholder if no such assignment had occurred. This Section 1.14
shall under no circumstances apply to any participant in the Initial
Noteholder's interests in the Series J-2 Notes.
SECTION 1.15 Series of Notes. Subject to the satisfaction or
waiver of the requirements of Section 2.5, 2.6 or 2.7 of the Participation
Agreement or Section 8(f) of the Related Lease, as the case may be, the
Owner Trustee shall have the right from time to time to issue Notes to
provide (a) sufficient funds to redeem the principal amount of Related
Series J Notes of any series or subseries theretofore authenticated and
delivered hereunder, (b) sufficient funds to refinance any Outstanding
Series J Notes or (c) all or a portion of the amount necessary to finance
any Modification. The terms, conditions, designations and maximum aggregate
principal amount of each series of such Notes (to the extent not
inconsistent with this First Supplemental Indenture) shall be set forth, in
the case of clause (c), in an amendment to this First Supplemental
Indenture executed by the Owner Trustee and the Indenture Trustee; provided
that the Installment Payment Dates or the Series J Interest Payment Dates
and the Record Dates for all Notes shall not differ. The Indenture Trustee
shall authenticate and deliver all Notes subject to the conditions of
Section 2.13 of the Original Indenture.
SECTION 1.16 Equally and Ratably Secured Notes. All Series J-2
Notes shall be equally and ratably secured by the Indenture, this First
Supplemental Indenture and the Indenture Estate [Series B], without
preference, priority or distinction on account of the date or dates or the
actual time or times of the issue or Stated Maturity of such Series J-2
Notes, so that all Outstanding Series J-2 Notes shall have the same right,
lien and preference under and by virtue of the Indenture, this First
Supplemental Indenture and the Indenture Estate [Series B].
SECTION 1.17 Indenture Estate. Neither the Owner Participant
nor the Initial Noteholder shall have legal title to any part of the
Indenture Estate [Series B]. No transfer, by operation of law or
otherwise, of any Series J-2 Note or other right, title or interest of the
Owner Participant or of the Initial Noteholder in and to the Indenture
Estate [Series B] or hereunder shall operate to terminate this Indenture or
the trusts hereunder or entitle any successor or transferee of the Owner
Participant or of the Initial Noteholder to any accounting or to the
transfer to it of legal title to any part of the Indenture Estate [Series
B], other than as set forth in the Indenture and this First Supplemental
Indenture, and such restriction shall run with the land and survive any
termination of this and this First Supplemental Indenture in violation
thereof.
SECTION 1.18 Assignment of Rents. The Owner Trustee irrevocably
and absolutely grants, transfers and assigns to the Indenture Trustee, for
so long as any of the Series J-2 Notes remain outstanding, all of the Owner
Trustee's right, title and interest in and to the Rent under Lease B.
Nothing contained in this First Supplemental Indenture, nor the exercise of
the right by the Indenture Trustee to collect the Rent under Lease B, shall
be deemed to make the Indenture Trustee a "mortgagee in possession" or
shall be, or be construed to be, an affirmation by the Indenture Trustee
of, or an assumption of liability by the Indenture Trustee under, or a
subordination of the lien of this First Supplemental Indenture to, any
tenancy, lease or option.
SECTION 1.19 Default; Remedies. Upon the occurrence of any
Indenture Event of Default, but subject to the terms of the Original
Indenture, including, but not limited to, Sections 8.2, 8.3, 8.10 and 8.15
of the Original Indenture: (a) the Owner Trustee shall be in default under
this First Supplemental Indenture, and upon acceleration of the maturity of
any Secured Obligations in accordance with the terms of the Series J-2
Notes and the Original Indenture, all Secured Obligations shall immediately
become due and payable without further notice to the Owner Trustee and (b)
the Indenture Trustee may, without notice to or demand upon the Owner
Trustee, which are expressly waived by the Owner Trustee (except for
notices or demands otherwise required by Applicable Law to the extent not
effectively waived by the Owner Trustee and any notices or demands
specified below), and without releasing the Owner Trustee from any of the
Secured Obligations, exercise any one or more of the following remedies as
the Indenture Trustee may determine:
(i) The Indenture Trustee may, either directly or through an
agent or court-appointed receiver, and without regard to the
adequacy of any security for the Secured Obligations, but subject
to Section 8.3(a) and 8.10 of the Original Indenture, exercise
any or all of the rights and powers and pursue any or all of the
remedies under the Lease affecting Property B (including Section
16 thereof) and, in connection therewith, corresponding remedies
under this Section 1.19, and may take possession of all or part
of the Indenture Estate [Series B] and may exclude the Owner
Trustee and the Lessee and, to the extent permitted by Applicable
Law, all Persons claiming under either of them wholly or partly
therefrom.
(ii) The Indenture Trustee may execute and deliver to
Trustee written declaration of default and demand for sale and
written notice of default and of election to cause all or any
part of the Indenture Estate [Series B] to be sold, which notice
Trustee shall cause to be filed for record; and after the lapse
of such time as may then be required by law following the
recordation of such notice of default, and notice of sale having
been given as then required by law, Trustee, without demand on
the Owner Trustee, shall sell such property at the time and place
fixed by it in such notice of sale, either as a whole or in
separate parcels and in such order as the Indenture Trustee may
direct (the Owner Trustee waiving any right to direct the order
of sale), at public auction to the highest bidder for cash in
lawful money of the United States (or cash equivalents acceptable
to Trustee to the extent permitted by applicable law), payable at
the time of sale. Trustee may postpone the sale of all or any
part of the Indenture Estate [Series B] by public announcement at
such time and place of sale, and from time to time after any such
postponement may postpone such sale by public announcement at the
time fixed by the preceding postponement. Trustee shall deliver
to the purchaser at such sale its deed conveying the property so
sold, but without any covenant or warranty, express or implied,
and the recitals in such deed of any matters or facts shall be
conclusive proof of the truthfulness thereof. Any person,
including Trustee or the Indenture Trustee, may purchase at such
sale, and any bid by the Indenture Trustee may be, in whole or in
part, in the form of cancellation of all or any part of the
Secured Obligations. Any such sale shall be free and clear of
any interest of the Owner Trustee and any lease, encumbrance or
other matter affecting the property so sold which is subject or
subordinate to this First Supplemental Indenture, except that any
such sale shall not result in the termination of any such lease
(A) if and to the extent otherwise provided in any estoppel or
other agreement executed by the tenant and the Indenture Trustee
(or executed by the tenant in favor of, and accepted by, the
Indenture Trustee), or (B) if the purchaser at such sale gives
written notice to the tenant, within 30 days after date of sale,
that the lease will continue in effect.
(iii) With respect to any personal property secured hereby,
the Indenture Trustee shall have in any jurisdiction where
enforcement of this First Supplemental Indenture is sought all
remedies of a secured party under the UCC and may require the
Owner Trustee, on demand, to assemble all personal property
secured hereby and make it available to the Indenture Trustee at
places that the Indenture Trustee may select that are reasonably
convenient for both parties, whether at the premises of the Owner
Trustee or elsewhere.
(iv) The Indenture Trustee may proceed to protect, exercise
and enforce any and all other remedies provided under the Series
J-2 Notes, the Original Indenture or by applicable laws.
Each of the remedies provided in this First Supplemental
Indenture is cumulative and not exclusive of, and shall not prejudice, any
other remedy provided in this First Supplemental Indenture or by applicable
laws or under any other Transaction Document. Each remedy may be exercised
from time to time as often as deemed necessary by Trustee and the Indenture
Trustee, and in such order and manner as the Indenture Trustee may
determine. This First Supplemental Indenture is independent of any other
security for the Secured Obligations, and upon the occurrence of an
Indenture Event of Default, Trustee or the Indenture Trustee may proceed in
the enforcement of this First Supplemental Indenture independently of any
other remedy that Trustee or the Indenture Trustee may at any time hold
with respect to the Indenture Estate [Series B] or the Secured Obligations
or any other security. The Owner Trustee, for itself and for any other
person claiming by or through the Owner Trustee, waives, to the fullest
extent permitted by applicable laws, all rights to require a marshalling of
assets by Trustee or the Indenture Trustee or to require Trustee or the
Indenture Trustee to first resort to any particular portion of the
Indenture Estate [Series B] or any other security (whether such portion
shall have been retained or conveyed by the Owner Trustee) before resorting
to any other portion, and all rights of redemption, stay and appraisal.
Anything to the contrary provided in this First Supplemental
Indenture or the Original Indenture notwithstanding, the Indenture Trustee
shall not exercise any remedy hereunder other than the commencement of an
action for judicial foreclosure of the lien of this First Supplemental
Indenture unless the Indenture Trustee shall either (i) simultaneously and
in conjunction with the exercise of such remedy, commence and pursue an
action for judicial foreclosure of the lien of this First Supplemental
Indenture or (ii) deliver to the Owner Trustee an Opinion of Counsel in
form and from counsel reasonably satisfactory to the Owner Trustee that the
exercise of such remedy in the absence of a concurrent action for judicial
foreclosure will not impair the exercise of any rights or remedies reserved
to the Owner Trustee pursuant to clause (bb) of the Granting Clauses of
this First Supplemental Indenture or Section 8.15 of the Original
Indenture.
Section 1.20 Costs, Fees and Expenses. The Owner Trustee shall
pay, on demand, all costs, fees, expenses, advances, charges, losses and
liabilities of Trustee and the Indenture Trustee under or in connection
with this First Supplemental Indenture or the enforcement of, or the
exercise of any remedy or any other action taken by Trustee or the
Indenture Trustee under, this First Supplemental Indenture or the
collection of the Secured Obligations, in each case including (a)
reconveyance and foreclosure fees of Trustee, (b) costs and expenses of the
Indenture Trustee or Trustee or any receiver appointed under this First
Supplemental Indenture in connection with the operation, maintenance,
management, protection, preservation, collection, sale or other liquidation
of the Indenture Estate [Series B] or foreclosure of this First
Supplemental Indenture, (c) advances made by the Indenture Trustee to
complete or partially construct all or any part of any construction which
may have commenced on the Indenture Estate [Series B] or otherwise to
protect the security of this First Supplemental Indenture, (d) cost of
evidence of title, and (e) the reasonable fees and disbursements of
Trustee's and the Indenture Trustee's legal counsel and other
out-of-pocket expenses, and the reasonable charges of the Indenture
Trustee's internal legal counsel; together with interest on all such
amounts until paid (i) at the Overdue Interest Rate in the case of any such
interest payable to the Indenture Trustee, and (ii) at the rate provided by
law in the case of any such interest payable to Trustee.
Section 1.21 Substitution of Trustee. The Indenture
Trustee may from time to time, by instrument in writing, substitute a
successor or successors to any Trustee named in or acting under this First
Supplemental Indenture, which instrument, when executed by the Indenture
Trustee and duly acknowledged and recorded in the office of the recorder of
the county or counties where the real property secured hereby is situated,
shall be conclusive proof of proper substitution of such successor Trustee
or Trustees who shall, without conveyance from the predecessor Trustee,
succeed to all of its title, estate, rights, powers and duties. Such
instrument must contain the name of the original Owner Trustee, Trustee and
the Indenture Trustee, the book and page where this First Supplemental
Indenture is recorded (or the date of recording and instrument number) and
the name and address of the new Trustee.
SECTION 1.22 Certain Remedies. If, and only if, a Trigger Event
shall have occurred, Section 8.3(a) of the Original Indenture shall be
deemed to be amended such that the following language shall be inserted
after the last word of the last sentence of such Section 8.3(a):
provided, that the Indenture Trustee has taken or is
concurrently taking action under the Related Lease to
dispossess the Lessee, to terminate the Related Lease or to
effect a comparable remedy unless the Indenture Trustee is
stayed or otherwise prevented by Applicable Law from
exercising such remedies under the Related Lease and either
(i) two hundred seventy (270) days shall have elapsed since
the commencement of such stay or imposition of such
prohibition or (ii) the Lessee has rejected the Related
Lease under the Bankruptcy Code.
Such amendment shall only be deemed to be effective from and after the
occurrence of a Trigger Event until such time as the Series J-2 Notes shall
no longer be Outstanding and this First Supplemental Indenture shall have
been superseded by a subsequent Supplemental Indenture.
ARTICLE 2
MISCELLANEOUS
SECTION 2.1 Satisfaction and Discharge. The J-2 Notes shall be
subject to satisfaction and discharge as provided in Section 3.1 of the
Original Indenture.
SECTION 2.2 Execution as Supplemental Indenture. This First
Supplemental Indenture is executed and shall be construed as an indenture
supplemental to the Original Indenture and, as provided in the Original
Indenture, this First Supplemental Indenture forms a part thereof.
SECTION 2.3 Responsibility for Recitals, Etc. The recitals
contained herein and in the J-2 Notes, except the Indenture Trustee's
certificate of authentication, shall be taken as the statements of the
Owner Trustee, and the Indenture Trustee assumes no responsibility for the
correctness of the same.
SECTION 2.4 GOVERNING LAW. THIS FIRST SUPPLEMENTAL INDENTURE
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF CALIFORNIA WITHOUT REFERENCE TO THE CHOICE OF LAW DOCTRINE OF SUCH
STATE.
SECTION 2.5 Ratification of Indenture. As supplemented by this
First Supplemental Indenture, the Original Indenture is in all respects
ratified and confirmed and the Original Indenture as so supplemented by
this First supplemental Indenture shall be read, taken and construed as one
and the same instrument.
SECTION 2.6 Counterparts. This First Supplemental Indenture may
be executed in any number of counterparts, each of which when so executed
shall be deemed to be an original; but all such counterparts shall together
constitute but one and the same instrument.
SECTION 2.7 Request for Notice. The Owner Trustee requests that
a copy of any notice of default and a copy of any notice of sale be mailed
to the Owner Trustee at the Owner Trustee's address set forth above.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this First Supplemental
Indenture to be duly executed by their respective officers thereunto duly
authorized and their corporate seals to be hereunto affixed, all as of the
date and year first above written.
STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, NATIONAL
ASSOCIATION, not in its individual
capacity except to the extent set forth
herein, but as Owner Trustee under the
Trust Agreement.
By: __________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
Indenture Trustee
By: ________________________
Name:
Title:
The address of the within
named mortgagee is:
____________________________________
on behalf of Mortgagee
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The foregoing Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Filing (containing a Supplemental Indenture)
[Series J-2] ("Deed of Trust"), was acknowledged before me, the undersigned
Notary Public, in the County of New York this ___ day of December 1993, by
W. Jeffrey Kramer, as Assistant Vice President of STATE STREET BANK AND
TRUST COMPANY OF CALIFORNIA, NATIONAL ASSOCIATION, not in its individual
capacity, except as expressly set forth in the foregoing Deed of Trust, but
solely as Owner Trustee, on behalf of the Owner Trustee.
(Notarial Seal)
______________________________________
Notary Public
My commission expires: 1994
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The foregoing Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Fixture Filing (containing a Supplemental Indenture)
[Series J-2] was acknowledged before me, the undersigned Notary Public, in
the County of New York this ___ day of December 1993, by Emmett R. Harmon
as Vice President of WILMINGTON TRUST COMPANY, on behalf of the Indenture
Trustee.
("Notarial Seal")
______________________________________
Notary Public
My commission expires: 1994
SCHEDULE 1.6
Interest Rates and
Installment Payment Dates and
Installment Payment Percentages
J-2 Notes
Interest
Each Holder of a J-2 Note will receive a payment of interest, which
shall accrue on the principal amount from time to time Outstanding
(computed on the basis of a 360-day year of twelve 30-day months) in
respect of the period commencing on and including the date of such J-2 Note
and ending on and excluding the date when the principal amount thereof
shall have been paid in full, at as follows:
(i) during the period commencing on or after the Closing Date and
ending prior to or on, but excluding, the sixty (60) days after the
Closing Date, LIBOR (or IBOR, as applicable) plus sixty (60) basis
points,
(ii) during the period commencing on or after the date sixty (60)
days after the Closing Date and ending prior to or on, but
excluding, the date one hundred twenty (120) days after the Closing
Date, LIBOR (or IBOR, as applicable) plus one hundred twenty (120)
basis points,
(iii) during the period commencing on or after the date one hundred
twenty (120) days after the Closing Date and ending prior to or on,
but excluding, the date one hundred eighty (180) days after the
Closing Date, LIBOR (or IBOR, as applicable) plus two hundred forty
(240) basis points,
(iv) during the period commencing on or after the date one hundred
eighty (180) days after the Closing Date and ending prior to or on,
but excluding, the date two hundred seventy (270) days after the
Closing Date, LIBOR (or IBOR, as applicable) plus three hundred
seventy-five (375) basis points,
(v) during the period commencing on or after the date two hundred
seventy (270) days after the Closing Date and ending prior to or
on, but excluding, the date three hundred sixty (360) days after
such date, the higher of LIBOR (or IBOR, as applicable) and the
Treasury Rate applicable to the Series J Notes plus five hundred
(500) basis points,
(vi) during the period commencing on or after the last date of the
last applicable interest period to which clause (v) applies and
ending prior to or on, but excluding, the date three hundred sixty
(360) days after such date, the higher of LIBOR (or IBOR, as
applicable) and the Treasury Rate applicable to the Series J Notes
plus six hundred (600) basis points, and
(vii) during the period commencing on or after the last date of the
last applicable interest period to which clause (vi) applies and ending
prior to or on, but excluding, the date on which the principal amount of
such Series J Notes shall have been paid in full, LIBOR (or IBOR, as
applicable) and the Treasury Rate applicable to the Series J Notes plus
seven hundred (700) basis points, provided, however, that if on the date
occurring 180 days after the Closing Date, the Refinancing Notes to be
issued shall have received a rating of lower than "Baa2" from Moody's or a
rating of "BBB" from Standard and Poor's, the margin added in clause (iv)
shall be five hundred (500) basis points, the margin in clause (v) shall be
six hundred (600) basis points, and the margin in clause (vi) shall be
seven hundred (700) basis points; and (c) all interest accrued on the
Related Outstanding Notes shall not accrete into the Relevant Principal
Amount of any Notes, such that the principal amount of the notes at all
times during the transaction shall be the Outstanding principal amount of
the Series J Notes from time to time.
EXHIBIT B to
First Supplemental Indenture [Series J-2]
FORM OF SERIES J NOTES FOR J-2 NOTES
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT.
No.J-2
$ _________ (________ United States Dollars)
STATE STREET BANK AND TRUST
COMPANY OF CALIFORNIA, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Owner Trustee
under the Trust Agreement
dated as of December 21, 1993
INTEREST RATE: SEE ANNEX A HERETO
STATED MATURITY: [ ]
REGISTERED NOTEHOLDER: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, NATIONAL
ASSOCIATION, a national banking association, not in its individual
capacity, but solely as Owner Trustee under the Trust Agreement
(hereinafter called the "Owner Trustee," which term includes any successor
corporation under the Indenture referred to herein) dated as of December
21, 1993, with the Owner Participant named therein (together with its
permitted successors and assigns, hereinafter called the "Owner
Participant"), for value received and intending to be legally bound, hereby
promises to pay to the Registered Noteholder named above or registered
assigns, the principal sum in Dollars equal to $ _________ (________ United
States Dollars) in installments on each Installment Payment Date as set
forth in Annex A hereto with the final installment due and payable at
Stated Maturity Specified above and to pay interest (computed on the basis
of a 360-day year of twelve 30-day months) at the interest rate per annum
specified in Annex A hereto on the principal amount from time to time
Outstanding in respect of the period commencing on and including the date
hereof and ending on and excluding the date when the principal amount
hereof shall have been paid in full, payable on each Series J Interest
Payment Date as set forth in Annex A hereto.
All amounts payable by the Owner Trustee hereunder and under the
Indenture and Security Agreement dated as of December 21, 1993, between the
Owner Trustee and Wilmington Trust Company, as Indenture Trustee (herein
called the "Indenture Trustee," which term includes any successor Indenture
Trustee under the Indenture (as defined below)), which Trust Indenture, as
supplemented by the First Supplemental Indenture, Deed of Trust, Leasehold
Deed of Trust, Assignment of Leases and Rents and Security Agreement
[Series J-2], dated as of December 21, 1993 (the "First Supplemental
Indenture"), which First Supplemental Indenture is intended to be recorded
forthwith in the Recorder's Office (the Trust Indenture, and Security
Agreement (the "Original Indenture"), together with all indentures
supplemental thereto, herein called the "Indenture"), shall be made only
from assets subject to, or intended to be subject to the Lien of the
Indenture, the income and all payments of principal and interest shall be
made in accordance with the terms of the Indenture. Each Noteholder, by
its acceptance of this J-2 Notes, agrees that (a) except as otherwise
expressly provided in the Indenture, it will look solely to the assets
subject to or intended to be subject to the Lien of the Indenture in
respect of the Indenture Estate [Series B] or the income and proceeds
received by the Indenture Trustee therefrom to the extent available for
distribution to the Noteholder as provided in the Indenture and (b) neither
the Owner Participant nor, except as otherwise expressly provided in the
Indenture and the other Transaction Documents, the Owner Trustee, in its
individual capacity, is liable to the Noteholder for any amounts payable
under this J-2 Notes or the Indenture. Without in any way affecting the
limitations on liability set forth in Sections 1.13 and 2.12 of the
Original Indenture, Article II of the Participation Agreement and Section 4
and 21(i) of Lease B, the Indenture Trustee, and each Noteholder by
accepting this J-2 Note, hereby acknowledges and agrees that none of the
Owner Trustee, the Owner Participant, or any director, officer, employee,
stockholder, agent or Affiliate of the Owner Trustee or the Owner
Participant (the "Exculpated Persons") shall have any obligation, duty or
liability of any kind whatsoever to the Indenture Trustee or any such
Noteholder in connection with the exercise by any Exculpated Person of any
rights of the Owner Trustee under Section 8 of Lease B, or the taking of
any action or the failure to take any action by any Exculpated Person in
connection with any rights of the Owner Trustee under Section 8 of the
respective Leases, and the Indenture Trustee and each such Noteholder
hereby waives and releases, to the extent permitted by Applicable Law, each
Exculpated Person of any and all such obligations, duties or liabilities.
The interest or Installment Payment Amount (other than that
payable on the Stated Maturity hereof) so payable, and punctually paid or
duly provided for, on the applicable Series J Interest Payment Date or
Installment Payment Date, as the case may be, will, as provided in the
Indenture, shall be paid to the Person in whose name this J-2 Note is
registered at the close of business on the Record Date for payment of such
interest or Installment Payment Amount, which shall be the fifteenth day
(whether or not a Business Day) next preceding such Series J Interest
Payment Date or Installment Payment Date, as the case may be. Any such
interest or Installment Payment Amount not so punctually paid or duly
provided for shall forthwith cease to be payable to the registered
Noteholder on such Record Date and may be paid to the Person in whose name
this J-2 Notes is registered at the close of business on a subsequent
Record Date for the payment of such Defaulted Interest or Defaulted
Installment to be fixed by the Indenture Trustee (which date shall be not
less than 10 Business Days prior to the payment of such Defaulted Interest
or Defaulted Installment), notice of which shall be given to Noteholders
entitled thereto not less than 15 days preceding such subsequent Record
Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
J-2 Notes may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.
The principal of, Premium, if any, and interest on this J-2 Note shall
be payable in immediately available funds at the principal corporate trust
office of the Indenture Trustee or at any office or agency maintained for
such purpose pursuant to Section 5.3 of the Original Indenture, or as
otherwise directed in the manner provided in the Indenture.
Notwithstanding the foregoing or any provision herein to the contrary, the
Indenture Trustee will pay, or cause to be paid, if so requested by any
Holder of this J-2 Note by written notice to the Owner Trustee and the
Indenture Trustee, all amounts payable by the Owner Trustee hereunder to
such Holder of this J-2 Notes or a nominee therefor either (i) by
transferring by wire in immediately available funds to an account
maintained by such Holder with a bank in the United States the amount to be
distributed to such Holder or (ii) by mailing a check denominated in U.S.
dollars to such Holder at such address as such Holder of this J-2 Note
shall have specified in such notice, in any case without any presentment or
surrender of this J-2 Note except that the Holder shall surrender this J-2
Note to the Indenture Trustee upon payment in full of the principal amount
of and interest on this J-2 Note and such other sums as may then be payable
to such Holder under the Indenture or under this J-2 Note.
Capitalized terms used in this J-2 Note which are not otherwise
defined herein shall have the meanings ascribed thereto in Appendix A to
the Indenture. Reference is made to the Indenture and all supplements and
amendments thereto (a copy of which is on file with the Indenture Trustee
at its principal corporate trust office) for a more complete statement of
the terms and provisions thereof, including a statement of the properties
thereby conveyed, pledged, mortgaged and assigned, the nature and extent of
the security, the respective rights thereunder of the Owner Trustee, the
Indenture Trustee and the Noteholders and the terms upon which the J-2
Notes are, and are to be, executed and delivered, as well as a statement of
the terms and conditions of the trust created by the Indenture, to all of
which terms and conditions in the Indenture each Holder agrees by its
acceptance of this J-2 Note.
As more fully provided in the Indenture, the J-2 Notes are
subject to redemption under the circumstances set forth in Article 6 of the
Indenture and under the circumstances set forth in Article 7 of the
Indenture.
If an Indenture Event of Default shall occur and be continuing,
the principal amount remaining unpaid and any interest accrued hereon of
the J-2 Notes may, subject to certain rights of the Owner Trustee or the
Owner Participant (or both) contained or referred to in the Indenture, be
declared due and payable in the manner and with the effect provided in the
Indenture. If, and only if, such an Indenture Event of Default constitutes
an Event of Default under Lease B by the Lessee, subject to the provisions
of the Indenture, including certain specified limitations, the Indenture
Trustee may declare Lease B to be in default, and may exercise one or more
of the remedies of the Owner Trustee provided in Lease B. Such remedies
include the right to terminate Lease B and repossess and use or relet the
Lessor Interest originally leased under Lease B, to sell such Lessor
Interest or any part thereof free and clear of the Lessee's rights and
retain the proceeds and, so long as the Owner Trustee has not sold such
Lessor Interest, to require the Lessee to pay as liquidated damages for
loss of bargain and not as a penalty (in lieu of Basic Rent due after the
payment date) and, in the case of a payment under clause (d) below, as
consideration for the Owner Trustee's obligation to transfer such Lessor
Interest to the Lessee and to surrender certain unpaid Rent under Lease B.
The Owner Trustee or the Owner Participant may cure any default
by the Lessee under Lease B arising from the failure of the Lessee to make
any payment of Basic Rent under Lease B, provided that such failure of the
Lessee is not the third consecutive such failure, or the sixth cumulative
such failure. In the event of any default by the Lessee of any obligation
under Lease B (other than the obligation to pay Basic Rent), the Owner.
Trustee or the Owner Participant may (but are not obligated to, to the
extent not prohibited by Applicable Law), make any payment or perform or
comply with any such agreement as the Lessee shall be obligated to pay,
perform or comply with under Lease B.
The right of the Holder of this J-2 Note to institute action for
any remedy under the Indenture, including the enforcement of payment of any
amount due hereon, is subject to certain restrictions specified in the
Indenture.
The Indenture contains provisions for defeasance at any time of
the entire principal of all the Notes of any or all series (including the
Series J-2 Notes) upon compliance by the Owner Trustee with certain
conditions set forth therein.
Following an Indenture Event of Default, the Owner Trustee may,
subject to the conditions specified in the Indenture, purchase all of the
Notes in accordance with the terms of the Indenture. Each Noteholder, by
accepting this J-2 Note, agrees, subject to the provisions of the
Indenture, that, upon payment to the Indenture Trustee of the aggregate
unpaid principal amount of the Outstanding Notes, without Premium or
penalty, together with accrued but unpaid interest thereon to the date of
such payment (as well as any interest on overdue principal and, to the
extent permitted by Applicable Law, overdue interest) and any other amounts
due and payable to the Noteholders, and upon satisfaction of all of the
conditions contained in the Indenture pertaining to the purchase of the
Notes by the Owner Trustee, such Holder shall be deemed to have sold this J-
2 Note to the Owner Trustee or its designee.
As provided in the Indenture and subject to certain limitations
therein set forth, this J-2 Note is transferable on the Note Register, upon
surrender of this J-2 Note for registration of transfer at the office or
agency of the Note Registrar to be maintained for that purpose in the
Wilmington, Delaware or at any other office or agency of the Note Registrar
maintained for that purpose, duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Note Registrar duly
executed by the Noteholder or his attorney duly authorized in writing, and
thereupon one or more new J-2 Notes of the same series with the same
interest rate and Stated Maturity as the J-2 Notes so to be transferred; of
authorized denominations and for the same aggregate principal amount, will
be issued to the designated transferee or transferees.
The J-2 Notes are issuable only in registered form in
denominations of $1,000 or integral multiples thereof except that one J-2
Notes of each maturity may be in a denomination other than an integral
multiple of $1,000. As provided in the Indenture and subject to certain
limitations therein set forth, the J-2 Notes are exchangeable at the office
or agency of the Note Registrar maintained for that purpose for an equal
aggregate principal amount of J-2 Notes of the same series with the same
interest rate and Stated Maturity and of a different authorized
denomination or denominations, as requested by the J-2 Noteholder
surrendering the same.
No service charge will be made to any Noteholder for any such
transfer or exchange, but the Note Registrar may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentation of this Note for registration or
transfer, the Person in whose name this J-2 Note is registered shall be
deemed to be the absolute owner hereof for the purpose of receiving payment
as herein provided and for all other purposes whether or not this J-2 Note
shall be overdue, regardless of any notice to anyone to the contrary.
THE J-2 NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CHOICE OF
LAW DOCTRINE OF SUCH STATE.
IN WITNESS WHEREOF, the Owner Trustee has caused this instrument
to be duly executed.
Date:_________ STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Owner
Trustee
By:______________________
Name:
Title:
[FORM OF CERTIFICATE OF AUTHENTICATION]
This is one of the J-2 Notes, due [ ] described in the
within mentioned First Supplemental Indenture.
WILMINGTON TRUST COMPANY,
as Indenture Trustee
By:________________________
Authorized
Officer
ANNEX A TO J-2 NOTE
Principal
Each Holder of a J-2 Note will receive a payment of principal
equal to the Installment Payment Percentage for such Installment Payment
Date multiplied by the principal mount of the respective J-2 Note which is
set forth on the face thereof on each Installment Payment Date set forth
below:
Installment Installment
Payment Payment
Date Percentage
_______%
_______%
_______%
_______%
_______%
_______%
_______%
_______%
_______%
_______%
_______%
_______%
_______%
_______%
_______%
_______%
_______%
_______%
_______%
_______%
INTEREST
Interest shall accrue and be payable on the J-2 Note as follows:
(i) during the period commencing on or after the Closing Date and
ending prior to or on, but excluding, the sixty (60) days after
the Closing Date, LIBOR (or IBOR, as applicable) plus sixty (60)
basis points,
(ii) during the period commencing on or after the date sixty (60)
days after the Closing Date and ending prior to or on, but
excluding, the date one hundred twenty (120) days after the
Closing Date, LIBOR (or IBOR, as applicable) plus one hundred
twenty (120) basis points,
(iii) during the period commencing on or after the date one
hundred twenty (120) days after the Closing Date and ending prior
to or on, but excluding, the date one hundred eighty (180) days
after the Closing Date, LIBOR (or IBOR, as applicable) plus two
hundred forty (240) basis points,
(iv) during the period commencing on or after the date one
hundred eighty (180) days after the Closing Date and ending prior
to or on, but excluding, the date two hundred seventy (270) days
after the Closing Date, LIBOR (or IBOR, as applicable) plus three
hundred seventy-five (375) basis points,
(v) during the period commencing on or after the date two hundred
seventy (270) days after the Closing Date and ending prior to or
on, but excluding, the date three hundred sixty (360) days after
such date, the higher of LIBOR (or IBOR, as applicable) and the
Treasury Rate applicable to the Series J Notes plus five hundred
(500) basis points,
(vi) during the period commencing on or after the last date of
the last applicable interest period to which clause (v) applies
and ending prior to or on, but excluding, the date three hundred
sixty (360) days after such date, the higher of LIBOR (or IBOR,
as applicable) and the Treasury Rate applicable to the Series J
Notes plus six hundred (600) basis points, and
(vii) during the period commencing on or after the last date of
the last applicable interest period to which clause (vi) applies and ending
prior to or on, but excluding, the date on which the principal amount of
such Series J Notes shall have been paid in full, LIBOR (or IBOR, as
applicable) and the Treasury Rate applicable to the Series J Notes plus
seven hundred (700) basis points, provided, however, that if on the date
occurring 180 days after the Closing Date, the Series J Notes to be issued
shall have received a rating of lower than "Baa2" from Moody's or a rating
of "BBB" from Standard and Poor's, the margin added in clause (iv) shall be
five hundred (500) basis points, the margin in clause (v) shall be six
hundred (600) basis points, and the margin in clause (vi) shall be seven
hundred (700) basis points; and (c) all interest accrued on the Related
Outstanding Notes shall not accrete into the Relevant Principal Amount of
any Notes, such that the principal amount of the notes at all times during
the transaction shall be the Outstanding principal amount of the Series J
notes from time to time.
Exhibit F-3
Form of
SUPPLEMENTAL INDENTURE
[Set forth as Exhibit 4.3.5 to this Form 8-K]
EXHIBIT H
SMITH'S FOOD & DRUG CENTERS, INC.
NOTICE OF CLOSING
, 199_
To Each of the Persons Listed On
Schedule 1 hereto
NOTICE OF CLOSING
Pursuant to Section 2.2 of the Participation Agreement, dated as
of December 21, 1993 (the "Participation Agreement"), among Smith's Food &
Drug Centers, Inc. as Lessee, PMCC Leasing Corp. as Owner Participant,
Philip Morris Capital Corporation as Owner Participant Parent, State Street
Bank and Trust Company of Connecticut, N.A. not in its individual capacity
except as expressly stated therein, but solely as Connecticut Owner
Trustee, State Street Bank and Trust Company of California, N.A., not in
its individual capacity except as expressly stated therein, but solely as
California Owner Trustee, California-Relco Limited Partnership the
Remainderman Participant, Delaware Business Trust as Remainderman,
Wilmington Trust Company (not in its individual capacity but solely as
Remainderman Trustee), Wilmington Trust Company (not in its individual
capacity but solely as Indenture Trustee), Bank of America, National Trust
and Savings Association as the Initial Noteholder and Wilmington Trust
Company not in its individual capacity except as expressly stated therein,
but solely as Pass Through Trustee (all capitalized terms used in this
Notice of Closing and not defined herein having the meanings given them in
Appendix A to the Participation Agreement), the Lessee does hereby give
notice that:
(i) The Closing under the Participation Agreement shall take
place on _________________;
(ii) In respect of the aggregate Lessor Purchase Price for the
Lessor Interests, the Investment Amount to be paid by the Owner Participant
is equal to [$_____________] and the Debt Financing Amount to be loaned to
the Owner Trustee by the Initial Noteholder is equal to [$______________];
and in respect of the aggregate Remainderman Purchase Price for the
Remainderman Interests, the Remainderman Investment Amount to be made by
the Remainderman is equal to [$_________], which amount includes the
aggregate Option Amount. All such amounts shall be payable to Smith's Food
& Drug Centers, Inc.
(iii) All payments to Smith's Food & Drug Centers, Inc.
referenced above shall be made to the following account:
Smith's Food & Drug Centers, Inc.
Account #
ABA #
Very truly yours,
Smith's Food & Drug Centers, Inc.
By:
Name: Casey Jones
Title: Director
of Capital Development & Banking
SCHEDULE 1
Owner Participant:
PMCC Leasing Corp.
Owner Participant Parent:
Philip Morris Capital Corporation
Remainderman Participant:
California - Relco Limited Partnership
Remainderman:
California - Relco Limited
Partnership Trust
Remainderman Trustee:
Wilmington Trust Company
Indenture Trustee:
Wilmington Trust Company
Owner Trustee:
State Street Bank & Trust Company
of California, National Association
c/o State Street Bank & Trust Company
of Connecticut, National Association
Initial Noteholder:
Bank of America National Trust
and Savings Association
Pass Through Trustee:
Wilmington Trust Company
Exhibit L
Form of
CERTIFICATE RE EQUITY INVESTMENT
[Nor reproduced]
EXHIBIT M
FORM OF SURVIVING LESSEE'S ASSUMPTION AGREEMENT
This ASSIGNMENT and ASSUMPTION AGREEMENT, dated as of
____________, __, by and among [Surviving Lessee], a __________________
corporation (the "Surviving Lessee") and Smith's Food & Drug Centers, Inc.,
a Delaware corporation, as Lessee.
WHEREAS, in connection with a leveraged lease transaction with
respect to certain facilities owned by Lessee, Lessee entered into a
certain Participation Agreement dated as of December 21, 1993 with and
among PMCC Leasing Corporation, a Delaware corporation, as Owner
Participant; Philip Morris Capital Corporation, a Delaware corporation, as
Owner Participant Parent; State Street Bank and Trust Company of
California, National Association, a national banking association, not in
its individual capacity except as expressly stated herein, but solely as
Owner Trustee; California-Relco Limited Partnership, as the Remainderman
Participant; California-Relco Limited Partnership Trust, a Delaware
business trust, as the Remainderman; Wilmington Trust Company, a Delaware
banking corporation, in its individual capacity as the Remainderman
Trustee; Wilmington Trust Company, a Delaware banking corporation, not in
its individual capacity except as expressly stated herein, but solely as
Indenture Trustee; Bank of America National Trust and Savings Association,
a national banking association, as the Initial Noteholder; and Wilmington
Trust Company, a Delaware banking corporation, not in its individual
capacity except as expressly stated herein, but solely as Pass Through
Trustee.
WHEREAS, Section 6.1(e) of the Participation Agreement provides
that the Lessee shall not consolidate with any Person, merge into any
Person, or convey, transfer, lease or otherwise dispose of to any Person
all or substantially all of its assets in any single transaction (or series
of related transactions) unless, if the Lessee is not the surviving
corporation, the Surviving Lessee shall assume each obligation of the
Lessee under the Participation Agreement and each other Transaction
Document to which, immediately prior to such transaction, the Lessee was a
party.
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions. For purposes of this Assignment and Assumption
Agreement, capitalized terms used but not defined herein shall have the
meanings assigned to them in Appendix A to the Participation Agreement.
Any term defined by reference to an agreement, instrument or other document
shall have the meaning so assigned to it whether or not such document is in
effect. Unless otherwise indicated, references in this Assignment and
Assumption Agreement to sections, paragraphs, clauses, appendices,
schedules and exhibits are to the same contained in or attached to this
Assignment and Assumption Agreement.
2. Assignment. The Lessee does hereby assign, transfer, and set over
unto the Surviving Lessee all of the Lessee's right, title and interest in
and to the Transaction Documents to which, immediately prior to the
execution of this Assignment and Assumption Agreement, it was a party,
except such rights and benefits of the Lessee as have vested, arisen or
accrued prior to the date hereof (the "Assignment").
3. Assumption. The Surviving Lessee hereby assumes, and covenants and
agrees to pay, perform and discharge, all of the obligations of the Lessee
arising or accruing from and after the date hereof under the Transaction
Documents to which the Lessee, immediately prior to the execution of this
Assignment and Assumption Agreement, was a party (the "Assumption").
4. Consent and Amendment. By executing this Assignment and Assumption
Agreement, the Owner Participant, the Owner Participant Parent, the Owner
Trustee, the Indenture Trustee, the Remainderman Participant, the
Remainderman, the Remainderman Trustee, the Initial Noteholder, and the
Pass Through Trustee each acknowledges, and consents to, the Assignment and
the Assumption and confirms that from and after the date hereof the
Surviving Lessee shall be deemed a party to each Transaction Document to
which the Lessee, immediately prior to the execution of this Assignment and
Assumption Agreement, was a party and each reference to the Lessee
contained in the Transaction Documents shall be deemed to include a
reference to the Surviving Lessee for all purposes.
5. Representations and Warranties. The Surviving Lessee represents and
warrants that:
(a) it is a corporation duly organized, validly existing
and in good standing under the laws of the State of [ ]
and has all requisite power and authority enter into and carry
out the transactions contemplated by this Assignment and
Assumption Agreement and to carry out and perform the obligations
of the Lessee under the Transaction Documents to which it is a
party, and, upon giving effect to the transfer being effected
hereby, it will not be in breach of any covenant, agreement or
condition required to be performed or observed by the Lessee in
the Transaction Documents to which it is a party;
(b) this Assignment and Assumption Agreement and the
Transaction Documents constitute the legal, valid and binding
obligations of the Surviving Lessee, enforceable against it in
accordance with the terms hereof and thereof except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors', mortgagee's or lessors' rights in
general and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law), and this Assignment and Assumption Agreement
has been duly authorized, executed and delivered by the Surviving
Lessee.
(c) The representations and warranties of the Lessee set
forth in Section 5.1(a) of the Participation Agreement and, to
the extent that they pertain to the assignment referred to above
or to documents required to be executed or prepared (including
amendments to the Transaction Documents) in connection with the
assignment, the representations and warranties set forth in
Sections 5.1(b), (c), (d), (e), (h), (m), (p), (q),(r) and (v) of
the Participation Agreement shall be true and correct as to the
Surviving Lessee as of the effective date of the assignment in
all material respects with the same effect as if made on such
date and each of the Owner Participant, Owner Trustee and
Indenture Trustee shall have received an Officers' Certificate of
the Lessee to such effect.
1. Successors and Assigns. This Assignment and Assumption Agreement
shall be binding upon and run to the benefit of the parties hereunder and
their respective successors and assigns.
2. GOVERNING LAW. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REFERENCE TO THE CHOICE OF LAW DOCTRINE OF SUCH STATE.
3. Counterparts. This Assignment and Assumption Agreement may be
executed in any number of counterparts and by each of the parties hereto in
separate counterparts, all such counterparts constituting but one and the
same instrument.
4. Notices. All notices and other communications, declarations,
demands and notices provided for in this Assignment and Assumption Agreement
shall be given or made in the manner set forth in Section 13.1 of the
Participation Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Assumption Agreement to be duly executed as of the date
first written above.
[SURVIVING LESSEE], as
Surviving Lessee
By: ____________________________
Name:
Title:
SMITH'S FOOD & DRUG CENTERS, INC., as Lessee
By:____________________________
Name:
Title:
Acknowledged and Agreed:
PMCC LEASING CORPORATION, as
Owner Participant
By:_____________________________
Name:
Title:
PHILIP MORRIS CAPITAL
CORPORATION, as Owner
Participant Parent
By:____________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, NATIONAL ASSOCIATION,
as Owner Trustee
By:_____________________________
Name:
Title:
CALIFORNIA-RELCO LIMITED
PARTNERSHIP, as
Remainderman Participant,
By:_____________________________
Name:
Title:
CALIFORNIA-RELCO LIMITED
PARTNERSHIP TRUST, as
Remainderman,
By:_____________________________
Name:
Title:
WILMINGTON TRUST COMPANY, as
Indenture Trustee
By:_____________________________
Name:
Title:
WILMINGTON TRUST COMPANY, as Pass
Through Trustee
By:_____________________________
Name:
Title:
WILMINGTON TRUST COMPANY, as
Remainderman Trustee
By:_____________________________
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Initial Noteholder
By:_____________________________
Name:
Title:
EXHIBIT N TO THE
PARTICIPATION AGREEMENT
FORM OF
OWNER PARTICIPANT PARENT GUARANTY
OWNER PARTICIPANT PARENT GUARANTY (this "Guaranty") dated as of
December __, 1993, by PHILIP MORRIS CAPITAL CORPORATION, a corporation
organized under the laws of Delaware (together with its successors and
assigns, the "Guarantor"), for the benefit of the other entities named in
the second recital below (together with their respective successors and
assigns, the "Beneficiaries").
WHEREAS, PMCC Leasing Corporation, a Delaware corporation
("PMCC"), is a direct wholly-owned subsidiary of the Guarantor;
WHEREAS, PMCC, as Owner Participant, has entered into a
Participation Agreement, dated as of December 21, 1993 (as amended,
supplemented or otherwise modified from time to time, the "Participation
Agreement"), with Smith's Food & Drug Centers, Inc., as Lessee, the
Guarantor, California-Relco Limited Partnership Trust, as Remainderman,
California-Relco Limited Partnership, as Remainderman Participant, State
Street Bank and Trust Company of California, National Association, not in
its individual capacity except as expressly stated in the Participation
Agreement, but solely as Owner Trustee, Wilmington Trust Company, not in
its individual capacity except as expressly stated in the Participation
Agreement, but solely as Remainderman Trustee, Wilmington Trust Company,
not in its individual capacity except as expressly stated in the
Participation Agreement, but solely as Indenture Trustee, Bank of America
National Trust and Savings Association, as Initial Noteholder, and
Wilmington Trust Company, not in its individual capacity except as
expressly stated in the Participation Agreement, but solely as Pass Through
Trustee;
WHEREAS, it is a condition of the Participation Agreement that
the Guarantor enter into this Guaranty and to induce the Beneficiaries to
enter into the Participation Agreement, the Guarantor is executing and
delivering this Guaranty to the Beneficiaries;
NOW, THEREFORE, for value received, the Guarantor hereby agrees
with and for the benefit of each of the Beneficiaries as follows:
ARTICLE I
Defined Terms
SECTION 1.01. Definitions. For purposes of this Guaranty,
capitalized terms used but not defined herein shall have the meanings
assigned to them in Appendix A to the Participation Agreement. Any term
defined by reference to an agreement, instrument or other document shall
have the meaning so assigned to it whether or not such document is in
effect.
ARTICLE II
Guarantee
SECTION 2.01. Guarantee of Obligations under Transaction
Documents. The Guarantor irrevocably and unconditionally guarantees to
each of the Beneficiaries the due (whether at the stated maturity, by
acceleration or otherwise), complete and punctual performance and
observance of all payment obligations of PMCC under the Transaction
Documents to which it is or becomes a party (the "OP Transaction
Documents") and the faithful and timely performance of, and compliance
with, all other covenants and agreements of PMCC under the OP Transaction
Documents, strictly in accordance with the terms thereof and agrees to pay
on demand any and all expenses (including reasonable attorneys' fees and
disbursements) that may be paid or incurred by any Beneficiary in enforcing
any rights with respect to, or collecting, any or all payments due pursuant
to the terms of the OP Transaction Documents and/or enforcing any rights
with respect to, or collecting against, the Guarantor under this Guaranty
(all such payment obligations and other covenants and agreements being
referred to herein as the "Obligations"). In case PMCC shall fail to
perform or observe any Obligation, the Guarantor will forthwith perform and
observe such Obligation or cause the same forthwith to be performed or
observed, and, in case PMCC shall fail to pay or perform duly, completely
and punctually any Obligation when and as the same shall be due (whether at
the stated maturity, by acceleration or otherwise) and payable, or required
to be performed, as the case may be, in accordance with the terms of the
requisite OP Transaction Document, the Guarantor will immediately pay or
perform, as the case may be, the same to the Beneficiary entitled thereto
pursuant to such OP Transaction Document, regardless of whether or not any
of the Noteholders, the Indenture Trustee, the Owner Trustee, the
Remainderman, the Remainderman Participant, the Remainderman Trustee, the
Pass Through Trustee, the Initial Noteholder, the Owner Participant or
anyone on behalf of any of them shall have instituted any suit, action or
proceeding or exhausted its remedies or taken any steps to enforce any
rights against PMCC or any other Person or entity to compel any such
performance or to collect all or any part of such amount pursuant to the
provisions of the OP Transaction Documents or at law or in equity, or
otherwise, and regardless of any other condition or contingency.
SECTION 2.02. Unconditional Obligations. This Guaranty is a
primary obligation of the Guarantor and is an unconditional, absolute,
present and continuing obligation and guarantee of payment and performance
(and not merely of collection) and the validity and enforceability of this
Guaranty shall be absolute and unconditional irrespective of, and shall not
be impaired, affected or in any way conditioned or contingent upon (a) the
making of demand, the institution of suit or the taking of any other action
to enforce performance or observance of the Obligations, (b) the validity,
regularity or enforceability of any OP Transaction Document or any of the
Obligations or any collateral security, other guarantee, if any, or credit
support therefor or right of offset with respect thereto at any time or
from time to time held by any Beneficiary, (c) any defense, set-off or
counterclaim (other than a defense of payment or performance) that may at
any time be available to or be asserted by PMCC or the Guarantor against
any Beneficiary, (d) any attempt to collect from PMCC or any other entity
or to perfect or enforce any security or upon any other condition or
contingency or (e) upon any other action, occurrence or circumstance
whatsoever. The Guarantor waives any requirement that the Indenture
Trustee, the Owner Trustee, the Pass Through Trustee, the Remainderman, the
Remainderman Participant, the Remainderman Trustee, the Initial Noteholder,
the Owner Participant or anyone on behalf of any of them shall have
instituted any suit, action or proceeding or exhausted its remedies or
taken any steps to enforce any rights against the Lessee or any other
Person or entity to compel any such performance or to collect all or any
part of such amount pursuant to the provisions of the Transaction Documents
to which the Lessee is a party or at law or in equity, or otherwise, and
regardless of any other condition or contingency.
SECTION 2.03. Waiver by Guarantor. The Guarantor hereby
irrevocably waives any claim that it may have against PMCC or any of its
Affiliates by reason of any payment to any other Person pursuant to or in
respect of this Guaranty, including any claims by way of subrogation,
contribution, reimbursement, indemnity or otherwise.
SECTION 2.04. Amendments, etc., with Respect to the Obligations.
The Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against the Guarantor and without notice
to or further assent by the Guarantor, (a) any demand for payment or
performance of any of the Obligations made by any Beneficiary may be
rescinded by such party and any of the Obligations continue, (b) the
Obligations, or the liability of any other party upon or for any part
thereof, and any collateral security or guarantee therefor or right of
offset with respect thereto, may be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by any
Beneficiary, (c) any OP Transaction Document, or any collateral security
document or other guarantee or document executed and delivered in
connection therewith or related thereto, may be amended, modified,
supplemented or terminated, in accordance with its terms, as the parties
thereto may deem advisable, and (d) any collateral security, guarantee or
right to offset held by any Beneficiary for the payment or performance of
the Obligations may be sold, exchanged, waived, surrendered or released.
No Beneficiary shall have any obligation to protect, secure, perfect or
insure any Lien at any time held by it as security for the Obligations or
for this Guaranty or any property subject thereto. For purposes hereof,
"demand" shall include the commencement and continuance of any legal
proceedings.
SECTION 2.05. The Guarantor's Obligations Not Affected. The
Guarantor expressly agrees that the duties and obligations of the Guarantor
under this Guaranty shall remain in full force and effect, without the
necessity of any reservation of rights against the Guarantor or notice to
or further assent by the Guarantor at any time and from time to time, in
whole or in part, and without regard to, and shall not be impaired,
released discharged, terminated or affected by:
any extension, modification or renewal of, termination,
addition or supplement to, or deletion from, any of the terms of
or indulgence with respect to, or substitutions for, the
Obligations or any part thereof or any agreement relating thereto
at any time;
any failure, refusal or omission to enforce any right,
power or remedy with respect to the Obligations or any part
thereof or any agreement relating thereto;
any waiver of any right, power or remedy or of any
default with respect to the Obligations or any part thereof or
any agreement relating thereto;
any release, surrender, compromise, settlement, waiver,
subordination or modification, with or without consideration, of
any other guarantees with respect to the Obligations or any part
thereof, or any other obligation of any Person with respect to
the Obligations or any part thereof;
the lack of genuineness, unenforceability or invalidity
of the Obligations or any part thereof or the lack of
genuineness, unenforceability or invalidity of any agreement
relating thereto;
any change in the ownership of PMCC or the insolvency,
bankruptcy or any other change in the legal status of PMCC or any
rejection or modification of the obligations of PMCC or those of
any Person under the OP Transaction Documents as a result of any
bankruptcy, reorganization, insolvency or similar proceeding;
the change in or the imposition of any law, decree,
regulation or other governmental act that does or might impair,
delay or in any way affect the validity, enforceability or the
payment when due of the Obligations;
the failure of PMCC or the Guarantor to maintain in
full force, validity or effect or to obtain or renew when
required all governmental and other approvals, licenses or
consents required in connection with the Obligations or this
Guaranty, or to take any other action required in connection with
the performance of all obligations pursuant to the Obligations or
this Guaranty;
the existence of any claim, set-off or other rights
that the Guarantor may have at any time against PMCC or any other
Person in connection herewith or with an unrelated transaction;
any limitation of the remedies of any Beneficiaries
against PMCC under any of the OP Transaction Documents or any
limitation of the liability of PMCC under the terms of any OP
Transaction Document, which may now or hereafter be imposed by
any statute, regulation or Applicable Law;
any merger or consolidation of PMCC or the Guarantor
into or with any other Person, or any sale, lease or transfer of
any or all of the assets of PMCC or the Guarantor to any other
Person;
any indebtedness of PMCC to any Person, including the
Guarantor;
the failure to give the Guarantor any notice under the
OP Transaction Documents;
the rights, powers or privileges any Beneficiary may
now or hereafter have against any Person or collateral; or
any other action, omission, occurrence or circumstance,
whatsoever which may in any manner or to any extent vary the risk
as a discharge of the Guarantor as a matter of law.
SECTION 2.06. Waiver by the Guarantor. The Guarantor
unconditionally waives and releases, to the fullest extent permitted by
Applicable Law, any and all (a) notice of the acceptance of this Guaranty
and of any change in PMCC's financial condition, (b) notices of the
creation, renewal, extension or accrual of any Obligation or any of the
matters referred to in Section 2.05 hereof or any notice of or proof of
reliance by any of the Beneficiaries upon this Guaranty or acceptance of
this Guaranty (the Obligations, and any of them, shall conclusively be
deemed to have been created, contracted, incurred or renewed, extended,
amended or waived in reliance upon this Guaranty and all dealings between
PMCC or the Guarantor and each Beneficiary shall be conclusively presumed
to have been had or consummated in reliance upon this Guaranty), (c)
notices which may be required by statute, rule of law or otherwise, now or
hereafter in effect, to preserve intact any rights of any of the
Beneficiaries against the Guarantor, including, without limitation, any
demand, presentment and protest, proof of notice of non-payment under any
Transaction Document and notice of default or any failure on the part of
PMCC to perform and comply with any Obligation, (d) the right to interpose
all substantive and procedural defenses of the law of guaranty,
indemnification and suretyship, except the defenses (i) of prior payment or
prior performance by PMCC (of the obligations that the Guarantor is called
upon to pay or perform under this Guaranty) or (ii) that there is no
obligation on the part of PMCC with respect to the matter claimed to be in
default; (e) all rights and remedies accorded by Applicable Law to
guarantors, or sureties, including, without limitation, any extension of
time conferred by any law now or hereafter in effect; (f) the right to
trial by jury, in any action or proceeding of any kind arising on, under,
out of, or by reason of or relating, in any way, to this Guaranty or the
interpretation, breach or enforcement thereof; (g) the right to interpose
any set-off or counterclaim of any nature or description in any action or
proceeding arising hereunder or with respect hereto; (h) any right or claim
of right to cause a marshalling of PMCC's assets or to cause any
Beneficiary to proceed against PMCC or any collateral held by any
Beneficiary at any time or in any particular order; (i) rights to the
enforcement, assertion or exercise by any of the Beneficiaries of any
right, power, privilege or remedy conferred herein or in any Transaction
Document or otherwise, (j) requirements of promptness or diligence on the
part of any of the Beneficiaries, (k) requirements on the part of any of
the Beneficiaries to mitigate the damages resulting from any default
hereunder or under any Transaction Document, (l) notices of the sale,
transfer or other disposition of any right, title to or interest in any
Transaction Document or (m) other circumstances whatsoever which might
otherwise constitute a legal or equitable discharge, release or defense of
a guarantor or surety, or which might otherwise limit recourse against this
Guarantor. No failure to exercise and no delay in exercising, on the part
of any Beneficiary, any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege preclude any other or further exercise thereof, or the
exercise of any other power or right. The rights and remedies herein
provided are cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 2.07. Payments. The Guarantor hereby guarantees that
all payments hereunder shall be made in United States dollars and shall be
paid without regard to or deduction for any set-off, counterclaim,
deduction or defense that the Guarantor may have or assert.
SECTION 2.08. Reinstatement. This Guaranty shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, in
whole or in part, of any of the Obligations is rescinded or must otherwise
be restored or returned by any Beneficiary upon the bankruptcy, insolvency,
reorganization, arrangement, adjustment, composition, dissolution,
liquidation, or the like, of PMCC or the Guarantor, or as a result of, the
appointment of a custodian, receiver, trustee or other officer with similar
powers with respect to PMCC or the Guarantor or any substantial part of
such Person's respective property, or otherwise, all as though such payment
had not been made notwithstanding any termination of this Guaranty or any
Transaction Document.
ARTICLE III
No Waiver; Cumulative Remedies
SECTION 3.01. The failure or delay of any Beneficiary in
exercising any right or remedy granted it hereunder shall not operate as a
waiver of such right or remedy or be construed to be a waiver of any breach
of any of the terms and conditions hereof or to be an acquiescence therein.
Each and every right, power and remedy herein specifically given to each
Beneficiary shall be cumulative and shall be in addition to every other
right, power and remedy herein specifically given or now or hereafter
existing at law, in equity or by statute and the exercise or the beginning
of the exercise of any right, power or remedy shall not be construed as a
waiver of the right to exercise at the same time or thereafter any other
right, power or remedy. A waiver by a Beneficiary of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right
or remedy that such Beneficiary or any other Beneficiary would otherwise
have.
ARTICLE IV
Notices, etc.
SECTION 4.01. All notices, demands, declarations, consents,
directions, approvals, instructions, requests and other communications
required or permitted by the terms hereof shall be in writing and shall be
given in accordance with Section 13.1 of the Participation Agreement and,
in the case of the Guarantor, shall be addressed to it at 800 Westchester
Avenue, Rye Brook, New York 10573-1301, Attention: Senior Vice President-
Lease Financing, telecopy number (914) 335-1287.
ARTICLE V
Amendments and Waivers; Successors and Assigns
SECTION 5.01. Neither this Guaranty nor any of the terms hereof
may be terminated, amended, supplemented, waived or modified orally, but
only by an instrument in writing signed by the Guarantor and each
Beneficiary. This Guaranty shall be binding upon the Guarantor and its
successors and assigns and shall inure to the benefit of the Beneficiaries
and their respective successors and assigns. The Guarantor shall not assign
any of its obligations hereunder without the express prior consent of each
Beneficiary; provided, however, the Guarantor shall have the right to
assign such obligations without such consent provided such assignment
either occurs by operation of law or is to a Person who meets the
requirements of Section 8.1(b) of the Participation Agreement.
ARTICLE VI
Severability of this Guaranty
SECTION 6.01. Any provision of or obligation under this Guaranty
that is determined by competent authority to be prohibited and
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions or obligations hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision or obligation in any other
jurisdiction. To the extent permitted by Applicable Law, the Guarantor
hereby waives any provision of law that renders any provision or obligation
hereof prohibited or unenforceable in any respect.
ARTICLE VII
Termination
SECTION 7.01. Subject to the provisions of Section 2.08 hereof,
this Guaranty and the Guarantor's duties and obligations hereunder shall
remain in full force and effect and be binding in accordance with its
terms, until the date on which all Obligations and the obligations of the
Guarantor hereunder shall have been satisfied by payment and performance in
full.
ARTICLE VIII
Miscellaneous
SECTION 8.01. This Guaranty constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral
between or among the Guarantor, PMCC and each Beneficiary with respect to
the subject matter hereof. The headings of the various Articles and
Sections of this Guaranty are for convenience of reference only and shall
not modify, define, expand or limit any of the terms or provisions hereof.
The obligations of the Guarantor hereunder may not be assigned without the
written consent of each Beneficiary. THIS GUARANTY SHALL IN ALL RESPECTS
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAW DOCTRINE OF SUCH STATE.
ARTICLE IX
Jurisdiction
SECTION 9.01. Any suit, action or proceeding, whether at law or
in equity, including any declaratory judgment or similar suit or action,
instituted by or against the Guarantor arising out of or relating in any
way to this Guaranty may be brought and enforced in the courts of the State
of New York or of the United States for the Southern District of New York,
and the Guarantor irrevocably consents and submits to the jurisdiction of
each such court in respect of any suit, action or proceeding. The
Guarantor further irrevocably consents to the service of process in any
such suit, action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, return receipt requested, to
the Guarantor at its address as set forth in Section 4.01. The foregoing
shall not limit the right of the Beneficiaries to serve process in any
other manner permitted by law or to bring any action or proceeding, or to
obtain execution of any judgment, in any other jurisdiction.
SECTION 9.02. The Guarantor hereby irrevocably waives any option
or objection that it may now or hereafter have to the laying of venue of
any such action or proceeding arising under or relating to this Guaranty in
any court located in the Borough of Manhattan, City and State of New York,
and hereby further irrevocably waives any claim that a court located in the
Borough of Manhattan, City and State of New York is not a convenient forum
for any such action or proceeding.
SECTION 9.03. The Guarantor hereby irrevocably waives, to the
fullest extent permitted by applicable United States federal and state law,
all immunity (whether on the basis of sovereignty or otherwise) from
jurisdiction, service of process, attachment (both before and after
judgment) and execution to which it might otherwise be entitled in any
action or proceeding relating in any way to this Guaranty in the courts of
the State of New York, of the United States or of any other country or
jurisdiction, and the Guarantor hereby waives any right it might otherwise
have to raise or claim or cause to be pleaded any such immunity at or in
respect of any such action or proceeding.
ARTICLE X
SECTION 10.01. Survival. All warranties, representations and
covenants made by the Guarantor herein or in any certificate or other
instrument delivered by it or on its behalf under this Guaranty shall be
considered to have been relied upon by the Beneficiaries and shall survive
the execution and delivery of this Guaranty, regardless of any
investigation made by the Beneficiaries on behalf of any of them. All
statements in any such certificate or other instrument shall constitute
warranties and representations by the Guarantor hereunder.
IN WITNESS WHEREOF, the undersigned has caused this Guaranty to
be duly executed by its duly authorized representative as of the day and
year first above written.
PHILIP MORRIS CAPITAL CORPORATION
By:____________________________
Name:
Title:
EXHIBIT O TO THE
PARTICIPATION AGREEMENT
FORM OF
OWNER PARTICIPANT'S TRANSFER AGREEMENT
OWNER PARTICIPANT'S TRANSFER AGREEMENT dated as of _____________
(this "Agreement"), between PMCC LEASING CORPORATION, a Delaware
corporation (the "Transferor"), and [NAME OF TRANSFEREE], a ______________
corporation (the "Transferee").
WHEREAS, pursuant to and in accordance with Article VIII of the
Participation Agreement dated as of December 21, 1993 (as amended, modified
and supplemented from time to time, the "Participation Agreement"), among
Smith's Food & Drug Centers, Inc., as Lessee, the Transferor, Philip Morris
Capital Corporation, as Owner Participant Parent, California-Relco Limited
Partnership Trust, as Remainderman, California-Relco Limited Partnership,
as Remainderman Participant, State Street Bank and Trust Company of
California, National Association, not in its individual capacity except as
expressly stated therein, but solely as Owner Trustee, Wilmington Trust
Company, not in its individual capacity except as expressly stated therein,
but solely as Remainderman Trustee, Wilmington Trust Company, not in its
individual capacity except as expressly stated therein, but solely as
Indenture Trustee, Bank of America National Trust and Savings Association,
as Initial Noteholder, and Wilmington Trust Company, not in its individual
capacity except as expressly stated therein, but solely as Pass Through
Trustee, the Transferor desires to assign [a portion of] its interests as
Owner Participant to the Transferee.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Definitions. Unless the context otherwise requires,
capitalized terms used herein and not otherwise defined herein shall have
the respective meanings assigned thereto in Appendix A to the Participation
Agreement.
Assignment. The Transferor does hereby sell, assign,
convey, transfer and set over unto the Transferee as of the date hereof,
[_____%] of its present and future right, title and interest in, under and
with respect to the Properties, the Trust Estate, the Participation
Agreement, the Trust Agreement, the Tax Indemnification Agreement or any
other contract, agreement, document or instrument relating to the Trust
Estate by which Transferor is bound, each other Transaction Document and
all proceeds of the foregoing, together with all other documents and
instruments evidencing any of such right, title and interest, except such
rights and benefits of the Transferor as have vested, arisen or accrued in
favor of the Transferor prior to the Effective Date of this Agreement (as
hereinafter defined) (including, without limitation, the right to receive
any amounts due to or accrued for the account of the Transferor under the
Transaction Documents prior to the Effective Date and the continuing right
to receive any indemnity payment pursuant to any of the Transaction
Documents with respect to events and matters occurring or arising prior to
such Effective Date).
Assumption. The Transferee hereby assumes, and covenants
and agrees, for the benefit of the Transferor, the Owner Trustee, the
Indenture Trustee, the Remainderman, the Remainderman Participant, the
Remainderman Trustee, the Initial Noteholder, the Pass Through Trustee and
the Lessee and their successors and assigns, to pay, perform and discharge,
all of the duties, obligations and liabilities of the Owner Participant,
whenever accrued, under the Transaction Documents, and all of the duties,
obligations and liabilities of the Owner Participant, whenever accrued,
under the Trust Estate. The Transferee hereby confirms that from and after
any transfer is effected in accordance with Article VIII of the
Participation Agreement it shall be deemed [the] [an] "Owner Participant"
for all purposes of each Transaction Document and each other contract,
agreement, document and instrument hereby assumed, and shall be deemed to
have made [____% of] the Investment made by such Owner Participant and paid
any additional equity investments paid by such Owner Participant pursuant
to any of the Transaction Documents and, except as provided in the next
sentence, each reference to such Owner Participant contained in the
Transaction Documents shall, to the extent of such Owner Participant's
interest transferred, be deemed a reference to the Transferee for all
purposes, and such Transferee shall be bound by all the terms thereof as if
therein named as the Owner Participant. After any such transfer is
effected, the Transferor shall not be released from any obligation arising
or accruing prior to such transfer, but shall not be liable for any
obligation arising or accruing thereafter. The Transferor shall
nevertheless be entitled to all benefits accrued and all rights vested
prior to such transfer, including, without limitation, any right to
indemnification under this Agreement or the Tax Indemnification Agreement.
Release of Transferor. Upon the Effective Date of this
Agreement, the Transferor shall have no further duties, obligations or
liabilities under the Transaction Documents or under any other contract,
agreement, document or other instrument relating to the Trust Estate to
which the Transferor is a party or by which it is bound, [except to the
extent of the ____% of the Owner Participant interest being retained by the
Transferor].
Appointment as Attorney-in-Fact. In furtherance of the
assignment made herein, the Transferor hereby constitutes and appoints the
Transferee, and its successors and assigns, the true and lawful attorneys
of the Transferor, with full power of substitution, in the name of the
Transferee or in the name of the Transferor but on behalf of and for the
benefit of and at the expense of the Transferee, to collect for the account
of the Transferee all items sold, transferred or assigned to the Transferee
pursuant hereto; to institute and prosecute, in the name of the Transferor
or otherwise, but at the expense of the Transferee, all proceedings that
the Transferee may deem proper in order to collect, assert or enforce any
claim, right or title of any kind in or to the items sold, transferred or
assigned; to defend and compromise at the expense of the Transferee any and
all actions, suits or proceedings as to title to or interest in any of the
property acquired by the Transferee; and to do all such acts and things in
relation thereto at the expense of the Transferee as the Transferee shall
reasonably deem advisable.
Payments. The Transferor hereby covenants and agrees to pay
over to the Transferee, if and when received following the Effective Date
of this Agreement, any amounts (including any sums payable as interest in
respect thereof) paid to or for the benefit of the Transferor that, under
Section 2 hereof, belong to the Transferee, and the Transferee hereby
covenants and agrees to pay over to the Transferor, if and when received
following the Effective Date of this Agreement, any amounts (including any
sums payable as interest in respect thereof) paid to or for the benefit of
the Transferee that, under Section 2 hereof, belong to the Transferor.
Representations and Warranties. The Transferee represents
and warrants that:
it is a corporation duly organized, validly existing and in
good standing under the laws of the State of _______________ and has
all requisite power and authority to enter into and perform the
obligations of the Owner Participant under the Participation Agreement
and the other Transaction Documents to which the Owner Participant is
a party and, upon giving effect to the transfer being effected hereby,
the Transferee will not be in breach of any covenant, agreement or
condition required to be performed or observed by the Owner
Participant in the Participation Agreement and the other Transaction
Documents to which the Owner Participant is a party;
the Transferee is qualified to do business in the State of
California and has not failed to qualify to do business or be in good
standing where failure so to qualify or to be in good standing would
materially and adversely affect the Transferee's ability to perform
its obligations under the Participation Agreement or the other
Transaction Documents to which the Owner Participant is or is to
become a party;
it shall be deemed a party to, and shall be bound by all of the
provisions of, the Participation Agreement and the other Transaction
Documents to which the Owner Participant is a party and shall be
obligated to perform and observe each covenant, agreement and
condition required to be performed or observed by the Owner
Participant in the Participation Agreement and the other Transaction
Documents to which the Owner Participant is a party;
on and as of the date hereof, the representations and
warranties of the Owner Participant contained in or made pursuant to
the Participation Agreement and the other Transaction Documents are
true and correct as to the Transferee;
it is either (x) a Qualified Institution or (y) an Affiliate of
the Owner Participant Parent under Section 8.1(b) of the Participation
Agreement, and, to the best of its knowledge, each of the conditions
set forth in Article VIII that relate to the Transferee have been
satisfied;
such transfer shall not violate any provision of, or create a
relationship that would be in violation of, any Applicable Law; and
this Agreement constitutes the legal, valid and binding
obligation of the Transferee, enforceable against it in accordance
with the terms hereof.
Effective Date. This Agreement and the assignment and
assumption effected hereby shall be effective on ________________ (the
"Effective Date").
GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO THE CHOICE OF LAW DOCTRINE OF SUCH STATE.
Counterparts. This Agreement may be executed by the parties
hereto on separate counterparts and on any number of 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized as
of the day and year first above written.
PMCC LEASING CORPORATION
By:
Name:
Title:
[TRANSFEREE]
By:
Name:
Title: