Exhibit 10.24
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PARTICIPATION AGREEMENT
dated as of August 30, 2000
among
TRIQUINT SEMICONDUCTOR TEXAS, LP,
as Lessee and Construction Agent,
TRIQUINT SEMICONDUCTOR, INC.,
as Guarantor,
TRIQUINT TEXAS GENERAL HOLDING COMPANY,
as Lessee's General Partner,
LEASE PLAN NORTH AMERICA, INC.,
as Lessor and as a Participant,
ABN AMRO BANK N.V.,
as a Participant,
THE OTHER BANKS AND FINANCIAL INSTITUTIONS PARTY HERETO,
as Participants,
TRIQUINT SEMICONDUCTOR, INC.,
as Tranche T Participant,
and
ABN AMRO BANK N.V.,
as Agent
Richardson, Texas Facility
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TABLE OF CONTENTS
PAGE
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SECTION 1 DEFINITIONS; INTERPRETATION.............................................................................2
SECTION 2 CLOSING DATE............................................................................................2
SECTION 3 ACQUISITION OF THE PROPERTY; FUNDING OF ADVANCES........................................................2
SECTION 3.1 Lessor Commitment; Lessee Covenants.....................................................2
SECTION 3.2 Participants' Commitments...............................................................3
SECTION 3.3 Procedures for Acquisition of the Existing Facility.....................................3
SECTION 3.4 Procedures for Advances.................................................................3
SECTION 3.5 Allocation of Commitments...............................................................4
SECTION 3.6 Termination, Reduction, Extension or Increase of Participants' Commitment...............5
SECTION 3.7 Interest Rates, Yield and Payment Dates.................................................8
SECTION 3.8 Computation of Interest and Yield......................................................10
SECTION 3.9 Pro Rata Treatment and Payments........................................................11
SECTION 3.10 The Account............................................................................11
SECTION 3.11 Basic Rent.............................................................................12
SECTION 3.12 Purchase Payments by Lessee............................................................12
SECTION 3.13 Residual Value Guarantee Amount Payments by Lessee.....................................13
SECTION 3.14 Sales Proceeds of Property.............................................................14
SECTION 3.15 Supplemental Rent......................................................................15
SECTION 3.16 Excepted Payments......................................................................15
SECTION 3.17 Distribution of Payments After Event of Default........................................15
SECTION 3.18 Other Payments.........................................................................16
SECTION 3.19 Cash Collateral and Securities Collateral..............................................17
SECTION 3.20 Casualty and Condemnation Amounts......................................................18
SECTION 3.21 Order of Application...................................................................18
SECTION 3.22 Payments to the Tranche T Participant..................................................18
SECTION 3.23 Payments Related to Title Insurance....................................................18
SECTION 4 FEES...................................................................................................19
SECTION 4.1 Commitment Fees........................................................................19
SECTION 4.2 Arrangement Fee........................................................................19
SECTION 4.3 Structuring Fee........................................................................19
SECTION 4.4 Overdue Fees...........................................................................19
SECTION 5 CERTAIN INTENTIONS OF THE PARTIES......................................................................19
SECTION 5.1 Nature of Transaction..................................................................19
SECTION 5.2 Amounts Due Under Lease................................................................20
SECTION 6 CONDITIONS PRECEDENT TO CLOSING DATE AND ADVANCES......................................................21
SECTION 6.1 Conditions Precedent - General.........................................................21
i
SECTION 6.2 Conditions Precedent - Expansion Improvements..........................................27
SECTION 6.3 Further Conditions Precedent...........................................................30
SECTION 7 COMPLETION DATE CONDITIONS.............................................................................31
SECTION 7.1 Conditions to Completion Date..........................................................31
SECTION 8 REPRESENTATIONS........................................................................................33
SECTION 8.1 Representations of the Lessor..........................................................33
SECTION 8.2 Representations of the Participants....................................................34
SECTION 8.3 Representations of the Guarantor.......................................................36
SECTION 8.4 Representations of the Lessee..........................................................40
SECTION 8.5 Representations of the Lessee's General Partner........................................44
SECTION 8.6 Representations of the Lessee and the Construction Agent With Respect to the
Property...............................................................................46
SECTION 8.7 Representations of the Lessee, the Construction Agent and the Guarantor With
Respect to Each Advance................................................................48
SECTION 9 PAYMENT OF CERTAIN EXPENSES............................................................................50
SECTION 9.1 Transaction Expenses...................................................................50
SECTION 9.2 Brokers' Fees and Stamp Taxes..........................................................51
SECTION 9.3 Obligations............................................................................51
SECTION 10 OTHER COVENANTS AND AGREEMENTS........................................................................51
SECTION 10.1 Covenants of the Guarantor.............................................................52
SECTION 10.2 The Guarantor's Financial Covenants....................................................63
SECTION 10.3 Cooperation with the Guarantor.........................................................64
SECTION 10.4 Covenants of the Lessor................................................................64
SECTION 10.5 Covenants of the Lessee, the Lessee's General Partner and the Construction Agent.......65
SECTION 11 AMENDMENTS; ACTIONS ON DEFAULT; RELATIONSHIP OF LESSOR AND PARTICIPANTS...............................65
SECTION 11.1 Amendments.............................................................................65
SECTION 11.2 Forbearance, Execution of Waivers and Amendments by the Lessor; Actions on Default.....66
SECTION 11.3 Actions by Lessor Generally............................................................68
SECTION 11.4 Conflicts..............................................................................68
SECTION 11.5 Refusal to Give Consents or Fund.......................................................69
SECTION 11.6 Required Repayments....................................................................69
SECTION 11.7 Indemnification........................................................................70
SECTION 11.8 Application of Payments Received From Defaulting Participant As a Cure For Payment
Defaults...............................................................................70
SECTION 11.9 Order of Application...................................................................71
SECTION 11.10 Investments Pending Dispute Resolution; Overnight Investments..........................71
SECTION 11.11 Agent to Exercise Lessor's Rights......................................................71
SECTION 11.12 Exculpatory Provisions Regarding the Lessor............................................71
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SECTION 12 TRANSFERS OF PARTICIPANTS'INTERESTS...................................................................72
SECTION 12.1 Restrictions on and Effect of Transfer by Participants.................................72
SECTION 12.2 Covenants and Agreements of Participants...............................................74
SECTION 12.3 Future Participants....................................................................75
SECTION 13 INDEMNIFICATION.......................................................................................75
SECTION 13.1 General Indemnification................................................................75
SECTION 13.2 End of Term Indemnity..................................................................77
SECTION 13.3 Environmental Indemnity................................................................78
SECTION 13.4 Proceedings in Respect of Claims.......................................................80
SECTION 13.5 General Impositions Indemnity..........................................................81
SECTION 13.6 Funding Losses.........................................................................85
SECTION 13.7 Regulation D Compensation..............................................................85
SECTION 13.8 Basis for Determining Interest Rate Inadequate or Unfair...............................86
SECTION 13.9 Illegality.............................................................................86
SECTION 13.10 Increased Cost and Reduced Return......................................................87
SECTION 13.11 Substitution of Participant............................................................88
SECTION 13.12 Indemnity Payments in Addition to Residual Value Guarantee Amount......................89
SECTION 13.13 Limitations on Indemnification.........................................................89
SECTION 13.14 Lessor Indemnification.................................................................89
SECTION 14 THE AGENT.............................................................................................91
SECTION 14.1 Appointment............................................................................91
SECTION 14.2 Delegation of Duties...................................................................91
SECTION 14.3 Exculpatory Provisions.................................................................91
SECTION 14.4 Reliance by Agent......................................................................92
SECTION 14.5 Notice of Default......................................................................92
SECTION 14.6 Non-Reliance on Agent and Other Participants...........................................92
SECTION 14.7 Indemnification........................................................................93
SECTION 14.8 Agent in its Individual Capacity.......................................................93
SECTION 14.9 Successor Agent........................................................................93
SECTION 15 MISCELLANEOUS.........................................................................................94
SECTION 15.1 Survival of Agreements.................................................................94
SECTION 15.2 No Broker, etc.........................................................................94
SECTION 15.3 Notices................................................................................94
SECTION 15.4 Counterparts...........................................................................94
SECTION 15.5 Headings, etc..........................................................................95
SECTION 15.6 Parties in Interest....................................................................95
SECTION 15.7 GOVERNING LAW..........................................................................95
SECTION 15.8 Severability...........................................................................95
SECTION 15.9 Liability Limited......................................................................95
SECTION 15.10 Further Assurances.....................................................................96
SECTION 15.11 Submission to Jurisdiction.............................................................96
SECTION 15.12 Confidentiality........................................................................96
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SECTION 15.13 WAIVER OF JURY TRIAL...................................................................97
iv
SCHEDULES
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SCHEDULE I Participants' Commitments
SCHEDULE II Notice Information and Funding Offices
SCHEDULE III Subsidiaries
SCHEDULE 10.1(b)(i) Existing Indebtedness
SCHEDULE 10.1(b)(ii) Existing Liens
SCHEDULE 10.1(b)(iv)(D) Existing Investments
SCHEDULE 10.4(d) List of Acquired Personal Property
APPENDICES
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APPENDIX 1 Definitions and Interpretation
EXHIBITS
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EXHIBIT A Form of Acquisition Request
EXHIBIT B Form of Funding Request
EXHIBIT C Form of Environmental Certificate
EXHIBIT D Form of Acquired Personal Property Bill of Sale
EXHIBIT E Form of Opinions of Counsel to Lessee
EXHIBIT F Form of Architect's Completion Certificate
EXHIBIT G Form of Lessee's Completion Certificate
EXHIBIT H Form of Assignment and Acceptance
EXHIBIT I Form of Participant's Letter
EXHIBIT J Assignment of Lease and Consent to Assignment
EXHIBIT K Cash Collateral Agreement
EXHIBIT L-1 Tenant Improvements Construction Agency Agreement
EXHIBIT L-2 Expansion Improvements Construction Agency Agreement
EXHIBIT M Construction Agency Agreement Assignments
EXHIBIT N Form of Mortgage
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT, dated as of August 30, 2000 (this
"PARTICIPATION AGREEMENT"), is entered into by and among TRIQUINT
SEMICONDUCTOR TEXAS, LP, a Texas limited partnership, as Lessee and as
Construction Agent (together with its permitted successors and assigns, the
"LESSEE" and the "Construction Agent"); TRIQUINT SEMICONDUCTOR, INC., a
Delaware corporation, as Guarantor (the "Guarantor"); TRIQUINT TEXAS GENERAL
HOLDING COMPANY, a Delaware corporation, as Lessee's General Partner, LEASE
PLAN NORTH AMERICA, INC., an Illinois corporation, as Lessor (together with
its permitted successors and assigns in such capacity, the "LESSOR") and as a
Participant; TRIQUINT SEMICONDUCTOR, INC., a Delaware corporation, as Tranche
T Participant (in such capacity, the "TRANCHE T PARTICIPANT"), ABN AMRO BANK
N.V. and each of the other banks or financial institutions listed on the
signature pages hereto, as Participants (together with the Lessor in its
capacity as a Participant and their permitted successors and assigns, and
together with the Tranche T Participant in its capacity as a Participant,
each a "PARTICIPANT" and collectively the "PARTICIPANTS"); and ABN AMRO BANK
N.V., as Agent (in such capacity, together with its successors in such
capacity, the "AGENT") for the Participants.
PRELIMINARY STATEMENT
In accordance with the terms of this Participation Agreement, the
Lease and the other Operative Documents,
A. the Lessor contemplates acquiring a fee simple interest
in the Existing Facility by acquiring the Property, as purchaser,
from the Existing Owner;
B. using Advances from the Lessor, the Construction Agent
contemplates that it will build certain Improvements to the Existing
Facility consisting of the Tenant Improvements and, if the
Commitments are increased as provided herein, the Expansion
Improvements, which will be used by the Lessee as Lessee's office
space and manufacturing facilities, and that the Construction Agent
will acquire certain items of Equipment to be used in connection
with such Improvements, and that the Lessee will lease, as Lessee,
such Equipment, Improvements and Existing Facility from the Lessor
under the Lease; and
C. the Lessor wishes to obtain, and the Participants are
willing to provide, financing of the funding of the costs of
acquisition of the Existing Facility, the construction of the Tenant
Improvements and, if the Commitments are increased as provided
herein, the Expansion Improvements, and the acquisition of such
Equipment through the purchase of Participation Interests in the
Advances, the Lease and the Rent.
In consideration of the mutual agreements contained in this
Participation Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1
DEFINITIONS; INTERPRETATION
Unless the context shall otherwise require, capitalized terms used
and not defined herein shall have the meanings assigned thereto in APPENDIX 1
hereto for all purposes hereof; and the rules of interpretation set forth in
APPENDIX 1 hereto shall apply to this Participation Agreement.
SECTION 2
CLOSING DATE
The closing date (the "CLOSING DATE") shall occur on the date of the
execution and delivery of this Agreement and the other Operative Documents
referred to in SECTION 6.1 hereof, which shall be the earliest date on which
all the conditions precedent thereto set forth in SECTIONS 6.1 and 6.3 hereof
shall have been satisfied or waived by the applicable parties as set forth
therein.
SECTION
ACQUISITION OF THE PROPERTY; FUNDING OF ADVANCES
SECTION 3.1 LESSOR COMMITMENT; LESSEE COVENANTS.
(a) Subject to the conditions and terms hereof, the Lessor shall take
the following actions at the written request of the Lessee on or after to the
Closing Date or from time to time during the Commitment Period, as the case
may be:
(i) enter into the Operative Documents to be entered into by it
pursuant to the terms hereof;
(ii) make Advances (out of funds provided by the Participants)
for the purpose of financing the acquisition of the Existing
Facility and the Equipment, construction of the Tenant Improvements
and, subject to the satisfaction or waiver of the conditions set
forth in SECTIONS 6.2 and 6.3 hereof, the Expansion Improvements,
and the payment of Transaction Expenses; and
(iii) acquire the Existing Facility and the Equipment (using funds
provided by the Participants).
Upon the applicable Lease Commencement Date, subject to the terms
and conditions hereof and of the other Operative Documents, the Lessor shall
lease the Existing Facility, the Tenant Improvements, the Equipment, and,
subject to the satisfaction or waiver of the conditions set forth in SECTIONS
6.2 and 6.3 hereof, the Expansion Improvements, as lessor, to the Lessee
under the Lease.
2
(b) LESSEE COVENANTS. The Lessee shall, on or prior to the Closing Date,
enter into the Operative Documents to be entered into by it pursuant to the
terms hereof and, upon the applicable Lease Commencement Date, subject to the
terms and conditions hereof and of the other Operative Documents, the Lessee
shall lease the Existing Facility, the Tenant Improvements, the Equipment,
and the Expansion Improvements, as Lessee from the Lessor under the Lease.
SECTION 3.2 PARTICIPANTS' COMMITMENTS. Subject to the terms and
conditions hereof, each Participant other than the Lessor severally shall
purchase a Participation Interest in the Advances being made by the Lessor at
the request of the Lessee from time to time during the applicable Commitment
Period by making available to the Lessor on each Funding Date an amount in
immediately available funds equal to such Participants' applicable Commitment
Percentage (as then in effect with respect to Advances of the Type being so
funded) of the amount of the Advance being funded on such Funding Date.
Notwithstanding any other provision hereof, no Participant shall be obligated
to purchase its Participation Interest in any Advance if (i) the amount of
such purchase would exceed its Available Commitment, or (ii) if, after giving
effect to the proposed Advance, the outstanding aggregate amount of such
Participant's Participation Interest in the Advances would exceed such
Participant's Commitment. Lessor shall repay the Participation Interests,
together with accrued interest and yield thereon as provided herein to the
extent such amounts are received under the Lease.
SECTION 3.3 PROCEDURES FOR ACQUISITION OF THE EXISTING FACILITY. The
Construction Agent shall give the Lessor and the Agent prior written notice
not later than 12:00 noon, Chicago time, three Business Days prior to the
proposed Land Interest Acquisition Date (unless the Advance on the Closing
Date is to bear interest and yield at the Alternate Base Rate, in which case
such notice may be given not later than 12:00 noon Chicago time on the Land
Interest Acquisition Date), pursuant to an Acquisition Request substantially
in the form of Exhibit A (an "ACQUISITION REQUEST"), specifying with respect
to such Existing Facility: (i) the proposed Land Interest Acquisition Date,
(ii) the Property to be acquired, (iii) the Existing Owner of the Existing
Facility, and (iv) the date on which the Lessee will request the Lessor to
fund the Property Acquisition Costs. The Agent shall provide notice of such
Acquisition Request to each Participant.
SECTION 3.4 PROCEDURES FOR ADVANCES. With respect to each funding of an
Advance, the Construction Agent shall give the Lessor and the Agent prior
written notice not later than 12:00 noon, Chicago time, three Business Days
prior to the proposed Funding Date (other than for the Advance on the Closing
Date, if such Advance is to bear interest or yield at a rate equal to the
Alternate Base Rate, where notice shall be on the same Business Day)
pursuant, in each case, to a Funding Request substantially in the form of
Exhibit B (a "FUNDING REQUEST"), specifying (i) the proposed Funding Date,
(ii) the amount and purpose of the Advance requested and the amount of the
Tranche T Participant's Tranche A Participation Interest therein, (iii) the
initial Interest Period for such Advance (on a Tranche by Tranche basis),
(iv) the payees of such Advance, (v) that the Advance will be used to fund
Property Acquisition Costs or Property Improvement Costs, (vi) the allocation
of such Advance to the respective Property Acquisition Costs and Property
Improvements Costs, including allocation to Tenant Improvements and Expansion
Improvements (and pro rata portions of the related remittances from the
Participants shall likewise be deemed to be so allocated in accordance with
their respective Commitment
3
Percentages applicable to each Type of Advance requested), and (vii) that, in
the case of an Expansion Improvements Advance, to the knowledge of the
Construction Agent, no Construction Termination Event has occurred and is
continuing as of the date of such Funding Request. The Agent shall promptly
provide notice of such Funding Request to each Participant. The Construction
Agent shall not request more than one Funding Date during any calendar month.
Each Advance (other than an Interest Payment Advance or an amount capitalized
pursuant to SECTION 3.7(e)) shall be in a minimum amount of $500,000. Subject
to the satisfaction or waiver of the conditions precedent to such Advance set
forth in SECTION 6, each Participant, other than the Lessor, shall fund its
pro rata share of such Advance by making available to the Lessor its
proportionate share of such Advance in immediately available federal funds by
wire transfer to the Agent for deposit to the Lessor's demand deposit account
with the Agent not later than 12:00 noon, Chicago time, on the applicable
Funding Date. Upon (i) the Lessor's receipt of the funds provided by the
Participants with respect to an Advance, and (ii) satisfaction or waiver of
the conditions precedent to such Advance set forth in SECTION 6, the Lessor
shall (A) in the case of an Advance for the acquisition of the Existing
Facility, pay the Property Acquisition Costs to the Existing Owner, and (B)
in the case of other Advances, pay Property Improvement Costs to the payees
specified in the applicable Funding Request, or deliver to the Construction
Agent funds that the Construction Agent reasonably believes will be due, in
the sixty (60) days following such Advance, from the Construction Agent to
third parties in respect of Property Improvements Costs, or as payment or
reimbursement of Property Improvements Costs previously paid by the
Construction Agent, in each case from the funds provided by the Participants
for such Advance.
SECTION 3.5 ALLOCATION OF COMMITMENTS. SCHEDULE I hereto contains an
allocation for each Participant of (i) the amount of its Commitment
representing its Tranche A Participation Interest ("TRANCHE A PARTICIPATION
INTEREST COMMITMENT"), including its Tranche A Existing Facility
Participation Interest Commitment ("TRANCHE A EXISTING FACILITY PARTICIPATION
INTEREST COMMITMENT"), and its Tranche A Tenant Improvements Participation
Interest Commitment ("TRANCHE A TENANT IMPROVEMENTS PARTICIPATION INTEREST
COMMITMENT"), (ii) the amount of its Commitment representing its Tranche B
Participation Interest ("TRANCHE B PARTICIPATION INTEREST COMMITMENT"),
including its Tranche B Existing Facility Participation Interest Commitment
("TRANCHE B EXISTING FACILITY PARTICIPATION INTEREST COMMITMENT") and its
Tranche B Tenant Improvements Participation Interest Commitment ("TRANCHE B
TENANT IMPROVEMENTS PARTICIPATION INTEREST COMMITMENT") and (iii) the amount
of its Commitment representing its Tranche C Equity Interest ("TRANCHE C
EQUITY INTEREST COMMITMENT"), including its Tranche C Equity Interest
Existing Facility Commitment ("TRANCHE C EQUITY INTEREST EXISTING FACILITY
COMMITMENT") and its Tranche C Equity Interest Tenant Improvements Commitment
("TRANCHE C EQUITY INTEREST TENANT IMPROVEMENTS COMMITMENT"). The Lessee, the
Lessor, the Agent and the Participants have approved all such allocations and
percentages. SCHEDULE I shall be amended (including adding Tranche A
Expansion Improvements Participation Interest Commitments, Tranche B
Expansion Improvements Participation Interest Commitments, and Tranche C
Equity Interest Expansion Improvements Commitments in effect prior to and
after the Completion Date with respect to Expansion Improvements) as required
to reflect any increase in the Total Commitment in accordance with SECTION
3.6(d) and to reflect changes in the allocations set forth thereon due to the
addition of additional Participants pursuant to SECTION 12.1.
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SECTION 3.6 TERMINATION, REDUCTION, EXTENSION OR INCREASE OF
PARTICIPANTS' COMMITMENT. (a) The Lessor shall have the right, upon not less
than five Business Days' written notice to the Agent, to terminate the
Participants' Commitments or, from time to time, to reduce the amount of the
Participants' Commitments, PROVIDED that (i) after giving effect to such
reduction, the aggregate outstanding principal amount of the Tranche A
Participation Interests shall not exceed the aggregate Tranche A
Participation Interest Commitments, (ii) after giving effect to such
reduction, the aggregate outstanding principal amount of the Tranche B
Participation Interests shall not exceed the aggregate Tranche B
Participation Interest Commitments, (iii) after giving affect to such
reduction, the aggregate outstanding principal balance of the Tranche C
Equity Interests shall not exceed the aggregate Tranche C Equity Interest
Commitments, and (iv) any such reduction shall be made pro rata among the
Participants' Commitments within each Tranche. Prior to the occurrence and
continuance of an Event of Default, the Lessor shall exercise such right only
as directed by the Lessee and after the occurrence and during the continuance
of an Event of Default the Lessor shall exercise such right only as directed
by the Required Participants.
(b) The Lessee may, by written request to the Lessor and Agent (which
the Agent shall promptly forward to each Participant, together with the
related Renewal Request received by the Agent pursuant to Section 21.1 of the
Lease) given not later than 180 days prior to the Maturity Date then in
effect, request (each, an "EXTENSION REQUEST") that such Maturity Date be
extended to the date that is two (2) years after the Maturity Date then in
effect. No later than the date (the "EXTENSION RESPONSE DATE") which is 90
days after any such request has been delivered to each of the Participants,
each Participant will notify the Lessor in writing (with a copy to the Agent
and the Lessee) whether or not it consents to such Extension Request (which
consent may be granted or denied by each Participant in its sole discretion
and may be conditioned on receipt of such financial information or other
documentation as may be specified by such Participant including without
limitation satisfactory appraisals of the Property), PROVIDED that (i) any
Participant that fails to so advise the Lessor on or prior to the applicable
Extension Response Date shall be deemed to have denied such Extension
Request, and (ii) notwithstanding anything contained herein to the contrary,
the Tranche T Participant shall be deemed to have consented to any such
Extension Request. The extension of the then-current Maturity Date
contemplated by an Extension Request shall become effective as of the
Maturity Date then in effect (the "EXTENSION EFFECTIVE DATE") on or after the
Extension Response Date on which all of the Participants (other than
Non-Consenting Participants which have been replaced by Replacement
Participants in accordance with SECTION 3.6(c)) shall have consented to such
Extension Request; PROVIDED that:
(A) on both the date of the applicable
Extension Request and the applicable Extension
Effective Date, (x) each of the representations
and warranties made by the Lessee, the Guarantor
and the Lessor in or pursuant to the Operative
Documents shall be true and correct in all
material respects as if made on and as of each
such date, except for representations and
warranties made as of a specific date, which
shall be true and correct in all material
respects as of such date, (y) no Default or Event
of Default shall have occurred and be continuing,
and (z) on each of such dates the Agent shall
have received a certificate of the Lessee, the
Guarantor and the Lessor, each as to itself, as
to the matters set forth in
5
CLAUSE (x) above and from the Lessee and
the Guarantor as to the matters set forth in
CLAUSE (y) above, and
(B) the Agent and the Required Participants
shall have received satisfactory evidence that the
Expiration Date shall, after giving effect to any
extension thereof which has become effective on or
prior to such Extension Effective Date, occur on
the Maturity Date then in effect as so extended,
and
(C) in no event shall more than two (2) two-year
extensions of the Initial Maturity Date be requested
pursuant to this SECTION 3.6(b).
(c) The Lessor (after consultation with, and at the direction of, the
Lessee) shall be permitted to replace any Non-Consenting Participant (or any
Participant which has not consented to an increase in the Total Commitment
requested pursuant to SECTION 3.6(d) (an "OTHER NON-CONSENTING PARTICIPANT")
with one or more replacement banks or other financial institutions acceptable
to the Agent (a "REPLACEMENT PARTICIPANT") at any time on or prior to the
date which is 90 days after the Extension Response Date (or the date an Other
Non-Consenting Participant delivered its Commitment Increase Response, as the
case may be); PROVIDED that (i) such replacement does not conflict with any
Requirement of Law, (ii) the Replacement Participant shall purchase, at par,
all of the Participation Interest of such Non-Consenting Participant (or
Other Non-Consenting Participant, as applicable), on or prior to the date of
replacement, (iii) the Lessee shall be liable to such Non-Consenting
Participant (or Other Non-Consenting Participant, as applicable) under
SECTION 13.6 of this Agreement if any Advance (or any Participation Interest
therein) shall be prepaid (or purchased) other than on the last day of the
Interest Period or Interest Periods relating thereto, (iv) the Replacement
Participant, if not already a Participant, shall be reasonably satisfactory
to the Agent, (v) such replacement shall be made in accordance with the
provisions of SECTION 12 of this Agreement (PROVIDED that the Lessee shall be
obligated to pay the Transaction Expenses arising in connection therewith),
and (vi) the Replacement Participant shall have agreed to be subject to all
of the terms and conditions of this Agreement (including the extension of the
Maturity Date contemplated by the Extension Request or increase in the Total
Commitment contemplated by the Commitment Increase Request, as the case may
be) and the other Operative Documents. The Agent hereby agrees to cooperate
with the Lessee and the Lessor in their efforts to arrange one or more
Replacement Participants as contemplated by this SECTION 3.6(c).
(d) Lessee acknowledges that the amount of the Total Commitment as of
the Closing Date is an amount sufficient to fund only the Property
Acquisition Costs, Property Improvement Costs related to Tenant Improvements
not to exceed the amount of the Tenant Improvements Sublimit, and related
broker commissions and Transaction Expenses. Lessee acknowledges that as of
the Closing Date no Participant has committed, sought or obtained internal
investment or credit approval to fund any Property Improvement Costs related
to Expansion Improvements, and no Participant is under any obligation to do
so. In connection with the delivery of the Plans and Specifications, Budget
and Appraisal pursuant to Section 6.2 hereof the Lessee may request (the
"COMMITMENT INCREASE REQUEST") in writing to the Lessor and the Agent that
the Participants (other than the Tranche T Participant) agree to increase the
Total Commitment to an amount to be agreed upon by the parties hereto. The
amount of the increase to the Total Commitment
6
pursuant to this Section shall be referred to herein as the "INCREMENTAL
COMMITMENTS", and, subject to satisfaction of the conditions set forth in
SECTIONS 6.2 and 6.3 hereof, shall be used to fund Property Improvement Costs
related to Expansion Improvements. Within thirty (30) days following the
delivery of such Commitment Increase Request, each Participant (other than
the Tranche T Participant) shall deliver to the Agent and the Lessee written
notice (each, a "COMMITMENT INCREASE RESPONSE") stating (i) whether or not
such Participant consents to the increase in the Total Commitment requested
in the Commitment Increase Request, and (ii) the amount, if any, of the
Incremental Commitments such Participant is willing to purchase. The failure
of a Participant to respond in writing within such time period shall
constitute a denial of the requested commitment increase by such Participant.
The increase in the Total Commitment requested shall be subject to the prior
written consent of the Lessor, the Agent and each Participant (which consent
may be granted or denied by each such Participant in its sole discretion and
may be conditioned upon receipt of such financial information, appraisals,
documents or other information or materials as may be specified by such
Participant and shall further be subject to receipt by each such Participant
of such internal investment and credit approvals as may be required by it and
to such other terms and conditions as each such Participant may request),
PROVIDED that the Tranche T Participant shall be deemed to have consented to
any increase in the Total Commitments requested pursuant to a Commitment
Increase Request so long as the Commitment of the Tranche T Participant is
not increased in connection therewith. The effectiveness of any such increase
shall be subject to the further condition precedent that the Lessee, the
Lessee's General Partner, the Guarantor, the Lessor, the Agent and each
Participant shall have executed and delivered such amendments to the
Operative Documents as may be reasonably required and negotiated in good
faith in order to reflect such increase in, and any conditions to the
increase in the Total Commitment. The parties hereto each acknowledge and
agree that, in the event of any such increase in the Total Commitment, the
Incremental Commitments may be allocated among any or all of the existing
Participants (other than the Tranche T Participant) as of the date of such
increase and/or to a new Participant becoming a party hereto as of the date
of and in connection with such increase, all as determined by the Agent after
consultation with the Lessee; PROVIDED that (i) the Commitment of any
particular Participant shall not be increased pursuant to the foregoing by an
amount greater than the portion of the Incremental Commitments such
Participant was willing to purchase as set forth in the Commitment Increase
Response delivered by such Participant, (ii) neither the Lessee, the Tranche
T Participant nor any other Affiliate of the Lessee shall be permitted to
participate in any such Incremental Commitments during the Construction
Period in respect of the Expansion Improvements, and (iii) the parties hereto
currently anticipate that, subject to satisfaction of the terms and
conditions herein contained (x) ABN AMRO Bank N.V. or one of its affiliates
will provide the Incremental Commitments required to fund the Expansion
Improvements, and (y) the amount of the Incremental Commitments would be
$13,000,000.
(e) On the Outside Completion Date with respect to the Tenant
Improvements, the Participants' Commitments (excluding any Incremental
Commitments then approved and outstanding) shall be reduced automatically
without any notice or other action by Lessor or any Participant hereunder, to
be equal to the then aggregate outstanding principal amount of the respective
Participant's Participation Interests with respect to the Commitments (other
than the Incremental Commitments) If the Expansion Improvements Closing Date
has occurred, then on the Outside Completion Date with respect to the
Expansion Improvements, the Participants' Incremental Commitments shall be
reduced automatically without any notice or other action by
7
Lessor or any Participant hereunder, to be equal to the then aggregate
outstanding principal amount of the respective Participant's Participation
Interests with respect to such Incremental Commitments.
SECTION 3.7 INTEREST RATES, YIELD AND PAYMENT DATES.
(a) Each outstanding Advance (other than that portion of the Advance to
be made on the Closing Date to finance Tranche C Equity Interests, which
shall bear yield at a rate equal to the Alternate Base Rate unless and until
such portion of such Advance is converted to a Eurodollar Rate Advance in
accordance with this SECTION 3.7(a)) shall bear interest (in the case of the
Tranche A Participation Interests and Tranche B Participation Interests
therein) or yield (in the case of the Tranche C Equity Interest therein) for
each day during each Interest Period with respect thereto as follows:
(i) in the case of that portion of the Advances used to finance
(1) during the Term, the Property Acquisition Costs and the Property
Improvements Costs in respect of the Existing Facility and the
Tenant Improvements and (2) after the Construction Period with
respect to Expansion Improvements, the Property Improvements Costs
of the Expansion Improvements:
(A) in respect of the Tranche A Participation
Interests and Tranche B Participation Interests
financing such Property Costs, a rate per annum
for such Interest Period equal to zero percent
PLUS the Applicable Margin; and
(B) in respect of the Tranche C Equity Interests
financing such Property Costs, a rate per annum for
such Interest Period equal to the Eurodollar Rate
determined two (2) Business Days prior to the first
day of such Interest Period PLUS the Applicable
Margin; and
(ii) during the Construction Period with respect to Expansion
Improvements only, in the case of that portion of the Advances used
to finance the Property Improvements Costs of the Expansion
Improvements:
(A) in respect of the Tranche A Participation
Interests and the Tranche B Participation
Interests financing such Property Costs, a rate
per annum equal to the sum of the Eurodollar Rate
with an Interest Period of one month determined
two (2) Business Days prior to the first day of
each such Interest Period PLUS the Applicable
Margin; and
(B) in respect of the Tranche C Equity Interests
financing such Property Costs, a rate per annum for
such Interest Period equal to the Eurodollar Rate
determined two (2) Business Days prior to the first
day of such Interest Period PLUS the Applicable
Margin.
The Lessee shall give irrevocable notice to the Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Appendix 1, of the length of each Interest Period to be applicable to Tranche
C Equity Interests. In the case of the Advance made on the
8
Closing Date, such notice (which may be set forth in the Funding Request
delivered on the Closing Date) shall further set forth the Lessee's election
to convert such Tranche C Equity Interests to a Eurodollar Rate, which
election shall become effective three Business Days following the date of
such notice. There shall not be more than four (4) Interest Periods
outstanding at any time.
(b) If all or a portion of (i) the amount of any Advance, (ii) any
interest or yield payable thereon or (iii) any other amount payable
hereunder, shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest or yield
at a rate per annum which is equal to the Overdue Rate.
(c) Subject to the next sentence of this PARAGRAPH (c), interest and
yield shall be payable in cash in arrears on each Scheduled Payment Date,
PROVIDED that (i) interest and yield accruing pursuant to PARAGRAPH (b) of
this SECTION 3.7 shall be payable from time to time on demand and (ii) each
prepayment of Advances shall be accompanied by accrued interest and yield to
the date of such prepayment on the amount of Advances so prepaid. During the
Construction Period with respect to the Expansion Improvements only, interest
and yield accruing on that portion of the Expansion Improvements Advances
shall be capitalized as provided in SECTION 3.7(d).
(d) On each date which is three Business Days prior to any Scheduled
Payment Date prior to the Completion Date with respect to the Expansion
Improvements, the Construction Agent shall be deemed to have requested an
Advance comprised of an Interest Payment Advance pursuant to SECTION 3.4 and
the Lessor shall be deemed to have requested a purchase pursuant to SECTION
3.2 of Participation Interests in such Advance in an amount equal to the
aggregate amount of the interest or yield due and payable on such date with
respect to accrued interest and yield on that portion of the outstanding
Expansion Improvements Advances. The Funding Date with respect to any such
Interest Payment Advance and purchase of Participation Interests therein
shall be the relevant Scheduled Payment Date (PROVIDED that such Advance and
the purchase of such Participation Interests shall be subject to satisfaction
of the applicable conditions precedent set forth in SECTION 6) and the
proceeds of such payment shall be applied to pay such accrued interest and
yield.
(e) CAPITALIZATION OF CERTAIN AMOUNTS PRIOR TO COMPLETION DATE WITH
RESPECT TO EXPANSION IMPROVEMENTS.
(i) On each date prior to the Completion Date with respect
to the Expansion Improvements that any amount is payable under
the Operative Documents on account of (A) accrued interest and
accrued yield on outstanding Expansion Improvement Advances (to
be capitalized to the extent provided in SECTION 3.7(d)), (B)
fees pursuant to SECTION 4 (other than SECTION 4.1(a)), (C)
Transaction Expenses of the Lessor, the Agent or any Participant
payable by the Lessor pursuant to SECTION 9, or (D) any other
amounts (other than as described in CLAUSE (ii) of this
SECTION 3.7(e)) required by any provision of the Operative
Documents to be capitalized prior to such Completion Date, such
amounts shall be capitalized by automatically treating such amount
as an Advance and a related purchase of Participation Interests
therein made on such date.
9
(ii) If any Lessor Party shall request the Lessor to capitalize
the amount of (A) any Claims pursuant to CLAUSE (5)(B) of the
proviso to SECTION 13.1, or (B) any loss or liability pursuant
to Section 24.1 of the Lease, and if the Lessor in its discretion
consents to such capitalization, any such amount shall be
capitalized by automatically treating such amount as an Advance and
a related purchase of Participation Interests therein (funded by
such Lessor Party); PROVIDED, HOWEVER, that the Lessee shall
have no obligation to pay any such amounts if the Lessee
exercises the Remarketing Option or is otherwise required to
pay the Expansion Improvements Residual Value Guarantee Amount in
accordance with the Lease and the other Operative Documents except
from the proceeds of the sale or disposition of the Property. If
any such capitalized amounts are included in the Asset Termination
Value, Lease Balance or Participant Balance (the "3.7(e)(ii)
PORTION" of the Asset Termination Value, Lease Balance or
Participant Balance), all the Lessee payments and other amounts
applied to the Asset Termination Value, Lease Balance or
Participant Balance shall be applied as provided in SECTIONS 3.11
through 3.21 of this Agreement. The Agent shall notify the Lessee,
the Lessor and each Participant of each amount capitalized and
treated as an Advance (and a related purchase of Participation
Interests therein) under this SECTION 3.7(e)(ii) within fifteen (15)
days after each such Advance.
(f) CASH COLLATERAL AGREEMENT. On each Funding Date the Lessee shall
deposit cash collateral pursuant to the Cash Collateral Agreement against the
Tranche B Participation Interests and the Tranche C Equity Interests and
shall maintain the Cash Collateral from time to time pursuant to and in
accordance with the terms of the Cash Collateral Agreement. If the Total
Commitment is increased pursuant to SECTION 3.6(d), the parties shall enter
into the Securities Collateral Agreement and in connection with fundings of
Expansion Improvements Advances, the Lessee shall deposit and maintain
additional cash or securities collateral as required thereby.
SECTION 3.8 COMPUTATION OF INTEREST AND YIELD.
(a) Whenever it is calculated on the basis of the Alternate Base Rate,
interest and yield shall be calculated on the basis of a 365- (or 366-, as
the case may be) day year for the actual days elapsed; otherwise, interest
and yield shall be calculated on the basis of a 360-day year for the actual
days elapsed. The Agent shall as soon as practicable notify the Lessor, the
Lessee and the Participants of each determination of a Eurodollar Rate. Any
change in the interest rate or yield rate on an Advance resulting from a
change in the Alternate Base Rate or the Eurocurrency Reserve Requirements
shall become effective as of the opening of business on the day on which such
change becomes effective. The Agent shall as soon as practicable notify the
Lessor, the Lessee and the Participants of the effective date and the amount
of each such change in interest rate or yield rate.
(b) Each determination of an interest rate or a yield rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and binding
on the Lessor, the Lessee and the Participants in the absence of manifest
error. The Agent shall, at the request of such parties, deliver to such
parties a statement showing the quotations used by the Agent in determining
any interest rate or yield rate pursuant to SECTION 3.8(a).
10
SECTION 3.9 PRO RATA TREATMENT AND PAYMENTS.
(a) Each participation in the Advances of a particular Type by the
Participants holding Commitments to fund such Type hereunder and each
reduction of the Commitments of the Participants shall be made pro rata among
the applicable Tranche A Participants, Tranche B Participants and Tranche C
Participants according to the respective applicable Commitment Percentages of
each such Participant then in effect. Except as otherwise provided in
SECTIONS 3.11 through 3.21, each payment (including each prepayment) by the
Lessor on account of Participation Interests representing the amount of
principal and interest or yield on the Advances shall be made pro rata among
the applicable Tranche A Participants, Tranche B Participants and Tranche C
Participants according to the respective Participation Interests of each such
Participant then in effect. Any payment required to be made to the
Participants in any particular Tranche and within any particular Type shall
be made pro rata among such Participants, without priority of any one such
Participant over any others within such Tranche or Type, in the proportion
that such Participant's Participant Balance within such Tranche and Type
bears to the aggregate Participant Balances of all Participants within such
Tranche and Type. All payments (including prepayments) to be made by the
Lessor hereunder to the Participants with respect to their Participation
Interests, whether on account of principal, interest, yield or otherwise,
shall be payable to the extent received by the Lessor from or on behalf of
the Lessee, shall be made without setoff or counterclaim and shall be made
prior to 2:00 p.m., Chicago time, on the due date thereof to the Agent, for
the account of the applicable Participants, at the Agent's office referred to
in SECTION 15.3 of this Agreement, in Dollars and in immediately available
funds. The Agent shall distribute such payments to the applicable
Participants promptly upon receipt in like funds as received; it being
understood that any such payment received by the Agent on a timely basis and
in accordance with the provisions of the Lease shall be distributed on the
date on which such funds are so received. If any payment hereunder (other
than payments of Participation Interests in the Advances) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day. If any payment of Participation Interests
in an Advance becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day unless
the result of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately
preceding Business Day. In the case of any extension or shortening of the due
date of any payment pursuant to the preceding two sentences, interest or
yield thereon shall be payable at the then applicable rate during such
extension or until such shortened due date, as the case may be.
(b) Unless the Agent shall have been notified in writing by any
Participant prior to funding its Participation Interest in an Advance that
such Participant will not make its share of such Advance available to the
Agent, the Agent may assume that such Participant is making such amount
available to the Agent. If such Participant's share of such Advance is not
made available to the Agent by such Participant on or prior to such Funding
Date, the Lessor shall not be required to make such portion of such Advance
to the Lessee.
SECTION 3.10 THE ACCOUNT. The Agent may if it so desires establish
an account (the "ACCOUNT") into which the Agent and the Lessor shall deposit
all payments, receipts and other consideration of any kind whatsoever paid
under the Lease and received by the Agent or the Lessor pursuant to this
Agreement, the Lease and any other Operative Document. Each of
11
the Agent and the Lessor hereby irrevocably instructs the Lessee, and the
Lessee hereby agrees, until otherwise notified by the Agent and except as
otherwise expressly provided in SECTION 3.22 hereof, that all payments to be
made by the Lessee to or for the benefit of the Lessor or the Agent pursuant
to the Lease or any of the other Operative Documents shall be made directly
to the Agent. The Agent shall make distributions of such payments, receipts
and other consideration (and, if an Account is used, from the Account)
pursuant to the requirements of SECTIONS 3.11 through 3.21 hereof.
SECTION 3.11 BASIC RENT. Each payment (or portion thereof) of Basic
Rent comprising interest or yield on the Advances (and any payment of
interest on overdue installments of such components of Basic Rent) received
by the Agent shall be distributed by the Agent (i) first, to the applicable
Tranche A Participants and Tranche B Participants pro rata, and (ii) second
to the Tranche C Participants pro rata, in accordance with, and for
application to, the portion of their Participation Interests in such portion
of Basic Rent, as well as in any overdue interest due to such Participant (to
the extent permitted by applicable law).
SECTION 3.12 PURCHASE PAYMENTS BY LESSEE. Any payment received by
the Agent as a result of:
(a) the purchase of the Lessor's interest in the Property in connection
with the Lessee's exercise of its Purchase Option under Section 20.1 of the
Lease, or
(b) the Lessee's compliance with its obligation to purchase the Lessor's
interest in the Property in accordance with Section 20.2 or 20.3 of the
Lease, or
(c) the payment of the Asset Termination Value in accordance with
Sections 16.2(b) or 16.3 of the Lease,
shall be distributed by the Agent in the following order of priority:
FIRST, to the Tranche A Participants and the Tranche B
Participants, pro rata, for application to pay in full the Tranche A
Participant Balance and Tranche B Participant Balance (other than any
3.7(e)(ii) portion thereof) of each such Participant, and in the case
where the amount so distributed shall be insufficient to pay in full as
aforesaid, then PRO RATA among such Participants;
SECOND, to the Tranche A Participants and the Tranche B
Participants, pro rata to pay in full the 3.7(e)(ii) portion of their
Tranche A Participant Balances and Tranche B Participant Balances until
such portion of such Participant Balances have been paid in full; and
in any case where the amount shall be insufficient to pay in full as
aforesaid, then PRO RATA among the such Participants;
THIRD, to the Tranche C Participants for application to pay in
full the Tranche C Participant Balance (other than any 3.7(e)(ii)
portion thereof) of each Tranche C Participant, and in the case where
the amount so distributed shall be insufficient to pay in full as
aforesaid, then PRO RATA among the Tranche C Participants; and
12
FOURTH, to the Tranche C Participants to pay in full the
3.7(e)(ii) portion of their Tranche C Participant Balances until their
Tranche C Participant Balances have been paid in full; and in any case
where the amount shall be insufficient to pay in full as aforesaid,
then PRO RATA among the Tranche C Participants.
SECTION 3.13 RESIDUAL VALUE GUARANTEE AMOUNT PAYMENTS BY LESSEE.
The payment by the Lessee of any Residual Value Guarantee Amount in
accordance with Section 17.2(h) of the Lease, Section 3.4(b) of the Expansion
Improvements Construction Agency Agreement or Article XXII of the Lease shall
be distributed by the Agent in the following order of priority:
(a) payments received by the Agent in respect of the Existing Facility
and Tenant Improvements Residual Value Guarantee Amount shall be distributed
among the Existing Facility Participants and Tenant Improvements Participants
as follows (it being acknowledged and agreed that any payment of such
Residual Value Guarantee Amount payable to the Tranche T Participant shall be
paid in accordance with SECTION 3.22 hereof prior to any distribution
hereunder)):
FIRST, to the Tranche A Existing Facility Participants and the
Tranche A Tenant Improvements Participants for application to pay in
full the Tranche A Existing Facility Participant Balance and the
Tranche A Tenant Improvements Participant Balance of each Tranche A
Existing Facility Participant and Tranche A Tenant Improvements
Participant, and in the case where the amount so distributed shall be
insufficient to pay in full as aforesaid, then PRO RATA among such
Participants; and
SECOND, to the Tranche B Existing Facility Participants and
the Tranche B Tenant Improvements Participants for application to pay
in full the Tranche B Existing Facility Participant Balance and the
Tranche B Tenant Improvements Participant Balance of each Tranche B
Existing Facility Participant and Tranche B Tenant Improvements
Participant, and in the case where the amount so distributed shall be
insufficient to pay in full as aforesaid, then PRO RATA among such
Participants; and
THIRD, to the Tranche C Existing Facility Participants and
Tranche C Tenant Improvements Participants for application to pay in
full the Tranche C Existing Facility Participant Balance and the
Tranche C Tenant Improvements Participant Balance of each Tranche C
Existing Facility Participant and Tranche C Tenant Improvements
Participant, and in the case where the amount so distributed shall be
insufficient to pay in full as aforesaid, then PRO RATA among such
Participants.
(b) payments in respect of the Expansion Improvements Residual Value
Guarantee Amount shall be distributed among the Expansion Improvements
Participants as follows:
FIRST, to the Tranche A Expansion Improvements Participants
for application to pay in full the Tranche A Expansion Improvements
Participant Balance of each Tranche A Expansion Improvements
Participant, and in the case where the amounts so distributed shall be
insufficient to pay in full as aforesaid, then PRO RATA among such
Tranche A Expansion Improvements Participants;
13
SECOND, to the Tranche B Expansion Improvements Participants
for application to pay in full the Tranche B Expansion Improvements
Participant Balance of each Tranche B Expansion Improvements
Participant, and in the case where the amounts so distributed shall be
insufficient to pay in full as aforesaid, then PRO RATA among the
Tranche B Expansion Improvements Participants; and
THIRD, to the Tranche C Expansion Improvements Participants
for application to pay in full the Tranche C Expansion Improvements
Participant Balance of each Tranche C Expansion Improvements
Participant, and in the case where the amounts so distributed shall be
insufficient to pay in full as aforesaid, then PRO RATA among the
Tranche C Expansion Improvements Participants.
SECTION 3.14 SALES PROCEEDS OF PROPERTY. Any payments received by
the Agent as proceeds from the sale of the Property sold following the
occurrence of an Event of Default under Article XVII of the Lease (in the
case of any portion of such proceeds which, pursuant to SECTION 3.17(a), is
required to be distributed in accordance with this SECTION 3.14), following
the occurrence of a Construction Termination Event or pursuant to the
Lessee's exercise of the Remarketing Option pursuant to Article XXII of the
Lease, together with any payment made by the Lessee as a result of an
appraisal pursuant to SECTION 13.2 of this Agreement, shall be distributed by
the Agent in the following order of priority:
FIRST, to the Tranche B Participants for application to pay in
full the Tranche B Participant Balance (other than any 3.7(e)(ii)
portion thereof) of each Tranche B Participant, and in the case where
the amount so distributed shall be insufficient to pay in full as
aforesaid, then PRO RATA among the Tranche B Participants;
SECOND, to the Tranche A Participants for application to pay
in full the Tranche A Participant Balance (other than any 3.7(e)(ii)
portion thereof and other than any portion thereof paid in accordance
with SECTION 3.22) of each Tranche A Participant, and in the case where
the amount so distributed shall be insufficient to pay in full as
aforesaid, then PRO RATA among the Tranche A Participants;
THIRD, to the Tranche C Participants for application to pay in
full the Tranche C Participant Balance (other than any 3.7(e)(ii)
portion thereof) of each Tranche C Participant, and in the case where
the amount so distributed shall be insufficient to pay in full as
aforesaid, then PRO RATA among the Tranche C Participants;
FOURTH, to the Tranche B Participants to pay in full the
3.7(e)(ii) portion of their Tranche B Participant Balances until their
Tranche B Participant Balances have been paid in full; and in any case
where the amount shall be insufficient to pay in full as aforesaid,
then PRO RATA among the Tranche B Participants;
FIFTH, to the Tranche A Participants to pay in full the
3.7(e)(ii) portion of their Tranche A Participant Balances until their
Tranche A Participant Balances have been paid in full; and in any case
where the amount shall be insufficient to pay in full as aforesaid,
then PRO RATA among the Tranche A Participants;
14
SIXTH, to the Tranche C Participants to pay in full the
3.7(e)(ii) portion of their Tranche C Participant Balances until their
Tranche C Participant Balances have been paid in full; and in any case
where the amount shall be insufficient to pay in full as aforesaid,
then PRO RATA among the Tranche C Participants; and
SEVENTH, the balance, if any, shall be promptly distributed
to, or as directed by, the Lessee.
SECTION 3.15 SUPPLEMENTAL RENT. All payments of Supplemental Rent
received by the Agent (excluding any amounts payable pursuant to the
preceding provisions of this SECTION 3) shall be distributed promptly by
Agent upon receipt thereof to the Persons entitled thereto pursuant to the
Operative Documents.
SECTION 3.16 EXCEPTED PAYMENTS. Notwithstanding any other provision
of this Agreement or the Operative Documents, any Excepted Payment received
at any time by the Agent shall be distributed promptly to the Person entitled
to receive such Excepted Payment pursuant to the Operative Documents.
SECTION 3.17 DISTRIBUTION OF PAYMENTS AFTER EVENT OF DEFAULT. All
payments received and amounts realized by the Lessor or the Agent after an
Event of Default exists (except under the Deposit Agreements), including
under the Guarantee and proceeds from the sale of any of the Property,
proceeds of any amounts from any insurer or any Governmental Authority in
connection with any Casualty or Condemnation, or from Lessee as payment in
accordance with the Lease, including any payment received from Lessee
pursuant to Article XVII of the Lease, shall, if received by Lessor, be paid
to the Agent as promptly as possible and shall be distributed by the Agent in
the following order of priority:
(a) proceeds other than under the Guarantee shall be distributed:
FIRST, so much of such payment or amount as shall be required
to reimburse the Lessor or the Agent for any tax, expense or other loss
incurred by the Lessor or the Agent (including, to the extent not
previously reimbursed, those incurred in connection with any duties of
the Agent as the Agent) and any unpaid ongoing fees of the Lessor and
the Agent shall be distributed to each of them for its own account;
SECOND, so much of such payments or amounts as shall be
required to reimburse the then existing or prior Participants for
payments made by them to the Lessor pursuant to Section 18.1 of the
Lease (to the extent not previously reimbursed or not paid in
accordance with SECTION 3.22) and to pay such then existing or prior
Participants the amounts payable to them pursuant to any expense
reimbursement or indemnification provisions of the Operative Documents
shall be distributed to each such Participant without priority of one
over the other in accordance with the amount of such payment or
payments payable to each such Person;
THIRD, (i) in the case of a sale of the Property, in the order
set forth in SECTION 3.14; (ii) in the case of the payment of any
Expansion Improvements Residual Value Guarantee Amount, Existing
Facility and Tenant Improvements Lease Balance or Asset Termination
Value in connection with a remarketing or return of the Property
pursuant to Section
15
17.2(h) of the Lease prior to the Completion Date with respect
to the Expansion Improvements, in the order of priority set forth in
the applicable provisions of SECTION 3.13(b), as to the Expansion
Improvements Residual Value Guarantee Amount, and SECTION 3.14, as
to the Existing Facility and Tenant Improvements Lease Balance or
the Asset Termination Value; and (iii) in all other cases, so much
of such amount as shall be required to pay in full the Participant
Balance of each Participant, and in the case where the amount so
distributed shall be insufficient to pay in full as aforesaid, then
in the order of priority set forth in SECTION 3.12; and in any case
where the amount of any such payment in this CLAUSE (iii) shall be
insufficient to pay in full as aforesaid, then PRO RATA within a
Tranche without priority of any Participation Interest in such
Tranche over any other Participation Interest within such Tranche;
and
FOURTH, the balance, if any, of such payment or amounts
remaining thereafter shall be promptly distributed to, or as
directed by, the Lessee; and
(b) proceeds in respect of the Guarantee shall be distributed in the
order set forth in SECTION 3.17(a) hereof, omitting from CLAUSES SECOND and
THIRD thereof any such payments or amounts payable to the Tranche T
Participant, omitting from CLAUSE THIRD thereof the priorities described in
CLAUSES (i) and (ii) thereof and omitting CLAUSE fourth thereof.
SECTION 3.18 OTHER PAYMENTS. (a) Except as otherwise provided in
SECTIONS 3.11, 3.12, 3.17, 3.19 and PARAGRAPH (b) below,
(i) any payment received by the Agent for which no provision as
to the application thereof is made in the Operative Documents or
elsewhere in this SECTION 3, and
(ii) all payments received and amounts realized by the Lessor or
the Agent under the Lease or otherwise with respect to the Property
or the Cash Collateral and the Securities Collateral to the extent
received or realized at any time after indefeasible payment in full
of the Participant Balances of all of the Participants and any other
amounts due and owing to the Lessor, the Participants or the Agent,
shall be distributed forthwith by the Agent in the order of priority set
forth in SECTION 3.12 (in the case of any payment described in CLAUSE (i)
above) or in SECTION 3.17(a) hereof (in the case of any payment described in
CLAUSE (ii) above), except that in the case of any payment described in
CLAUSE (ii) above, such payment shall be distributed omitting CLAUSE THIRD of
such SECTION 3.17(a); and the balance, if any (in the case of any payment
described in CLAUSE (i) or (ii) above), shall be distributed to, or as
directed by, the Lessee.
(b) Except as otherwise provided in SECTIONS 3.11 and 3.12 hereof, any
payment received by the Agent for which provision as to the application
thereof is made in an Operative Document but not elsewhere in this SECTION 3
shall be distributed forthwith by the Agent to the Person and for the purpose
for which such payment was made in accordance with the terms of such
Operative Document.
16
SECTION 3.19 CASH COLLATERAL AND SECURITIES COLLATERAL.
Notwithstanding anything herein in the contrary, proceeds of the Cash
Collateral and the Securities Collateral shall be applied as follows:
(a) Proceeds of Cash Collateral shall be distributed:
(i) prior to the Completion Date for the Expansion Improvements:
FIRST, among the Tranche B Existing Facility and the Tenant
Improvements Participants, PRO RATA, to pay in full the Tranche B
Existing Facility and Tenant Improvements Participant Balances of such
Tranche B Participants; and
SECOND, among the Tranche C Existing Facility and Tenant
Improvements Participants, PRO RATA, to pay in full the Tranche C
Existing Facility and Tenant Improvements Participant Balances of such
Tranche C Participants.
(ii) from and after the Completion Date for the Expansion
Improvements:
FIRST, to the Tranche B Participants, PRO RATA, to pay in full the
Tranche B Participant Balances of such Participants; and
SECOND, to the Tranche C Participants, PRO RATA to pay in full
the Tranche C Participant Balances of such Participant.
(b) Proceeds of Securities Collateral shall be distributed:
(i) FIRST, to the Tranche A Expansion Improvements Participants
forapplication to pay in full the Tranche A Expansion Improvements
Participant Balances of such Tranche A Participants;
(ii) SECOND, to the Tranche B Expansion Improvements Participants
for application to pay in full the Tranche B Expansion Improvements
Participant Balances of such Tranche B Participants; and
(iii) THIRD, to the Tranche C Expansion Improvements Participants
to pay in full the Tranche C Expansion Improvements Participant
Balances of such Tranche C Participants.
(c) In order to comply with the limitations on recourse to the Lessee
contained in SFAS 13 and, where applicable, EITF 97-10, the following
restrictions shall apply to the Agent's and the Participants' ability to
retain proceeds of the Cash Collateral and Securities Collateral (and any of
such collateral or proceeds not permitted to be so retained shall be returned
to the Lessee):
(i) with respect to a particular application of the Cash
Collateral, the Agent and the applicable Participants may retain an
amount thereof equal to the amount of the Lessee's recourse
liability in respect of the Tranche B Participation Interests and
Tranche C Participation Interests in the Existing Facility Lease
Balance and the Tenant
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Improvements Lease Balance and, after Completion of the Expansion
Improvements, the Expansion Improvements Lease Balance, under the
applicable provisions of the Operative Documents which, under the
circumstances, may be the Residual Value Guarantee Amount or the
Asset Termination Value in respect thereof, as the case may be; and
(ii) with respect to a particular application of the Securities
Collateral, the Agent and the applicable Participants may retain an
amount thereof equal to the amount of the Lessee's recourse
liability during the Construction Period for the Expansion
Improvements in respect of the Expansion Improvements Lease Balance
under the applicable provisions of the Operative Documents which,
under the circumstances, may be the Expansion Improvements Residual
Value Guarantee Amount, the Expansion Improvements Lease Balance or
otherwise.
SECTION 3.20 CASUALTY AND CONDEMNATION AMOUNTS. Any amounts payable
to the Lessor as a result of a Casualty or Condemnation pursuant to Section
15.1 of the Lease (but excluding any amounts payable pursuant to Section 16.2
of the Lease) shall, if no Lease Event of Default exists, be paid over to
Lessee for the rebuilding or restoration of that portion of the Property to
which such Casualty or Condemnation applied, and any excess proceeds shall be
paid to the Lessee. If a Lease Event of Default exists, then during the
continuance of such Lease Event of Default, all such amounts shall be
delivered to the Agent and upon exercise of the Lessor's remedies under the
Operative Documents shall be distributed pursuant to SECTION 3.17(a).
SECTION 3.21 ORDER OF APPLICATION. To the extent any payment made
to any Participant pursuant to SECTIONS 3.12, 3.13, 3.14 or 3.17 is
insufficient to pay in full the Participant Balance of such Participant, then
each such payment shall first be applied to its Participation Interest in
accrued interest or yield and then to its Participation Interest in principal
or the equity component of the Advances.
SECTION 3.22 PAYMENTS TO THE TRANCHE T PARTICIPANT. Notwithstanding
anything in this Agreement or the other Operative Documents to the contrary,
the parties hereto acknowledge and agree that (a) in the case of any payment
required to be made in respect of the Participant Balance of the Tranche T
Participant, such amount shall be paid by offsetting against such amount the
related portion of the Lease Balance owed by the Lessee to the Lessor in
respect of the Tranche T Participant's Participant Balance without the
necessity of a cash payment being made by the Lessee to the Lessor or the
Agent or by the Lessor to the Agent, and (b) in the context of all
distributions required to be made by the Agent to the Participants or the
Lessee pursuant to SECTIONS 3.11 through 3.20 hereof, all such distributions
shall be made by the Agent assuming that such offsetting payment has in fact
been so made immediately prior to the making by the Agent of any such
distributions.
SECTION 3.23 PAYMENTS RELATED TO TITLE INSURANCE. The Lessee, the
Lessor, the Agent and the Participants acknowledge and agree that (i) the
title insurance policy delivered pursuant to SECTION 6.1(g) includes title
insurance in favor of the Lessee and (ii) if ever any Claim or payment is
made pursuant to such title insurance, the proceeds of such title insurance
shall be distributed first to the Lessor, the Agent and the Participants
pursuant to SECTION 3 until
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all amounts payable pursuant to SECTION 3 to the Lessor, the Agent and the
Participants have been paid and thereafter any excess shall be distributed to
the Lessee.
SECTION 4
FEES
SECTION 4.1 COMMITMENT FEES. The Lessor shall pay to the Agent for
the account of each Participant (other than the Tranche T Participant) a
commitment fee (the "COMMITMENT FEES") for the periods (a) from and including
the Closing Date to the earlier of (i) the Completion Date with respect to
the Tenant Improvements or (ii) the Outside Completion Date with respect to
the Tenant Improvements, and (b) if the Total Commitments have been increased
pursuant to SECTION 3.6(D), from and including the Expansion Improvements
Closing Date, to the earlier of (i) the Completion Date with respect to the
Expansion Improvements or (ii) the Outside Completion Date with respect to
the Expansion Improvements, computed in the case of each such Participant at
a rate per annum equal to the Commitment Fee Rate multiplied by the Available
Commitments of such Participant, in each case during the period for which
payment is made, payable in arrears on each Commitment Fee Payment Date.
Commitment Fees shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. The Commitment Fee
referred to in CLAUSE (b) above shall be funded by Advances funded by the
Participants and capitalized as provided in SECTION 3.7(e)(i).
SECTION 4.2 ARRANGEMENT FEE. The Lessor shall pay to the Arranger
an arrangement fee (the "ARRANGEMENT FEE") on the Closing Date as set forth
in the Fee Letter. The Arrangement Fee shall be funded by an Advance funded
by the Participants and capitalized as provided in SECTION 3.7(e)(i).
SECTION 4.3 STRUCTURING FEE. The Lessee shall pay to the Arranger
a structuring fee (the "STRUCTURING FEE") in the amount and at the times set
forth in the Fee Letter. The Structuring Fee shall be funded by Advances
funded by the Participants and capitalized as provided in SECTION 3.7(e)(i).
SECTION 4.4 OVERDUE FEES. If all or a portion of any fee due
hereunder shall not be paid when due, such overdue amount shall bear
interest, payable by the Lessee on demand, at a rate per annum equal to the
Overdue Rate from the date of such nonpayment until such amount is paid in
full (as well after as before judgment).
SECTION 5
CERTAIN INTENTIONS OF THE PARTIES
SECTION 5.1 NATURE OF TRANSACTION. (a) It is the intent of the
parties hereto that: (i) the Lease constitutes an "operating lease" pursuant
to Statement of Financial Accounting Standards No. 13, as amended and
interpreted, for purposes of Lessee's financial reporting, and (ii) for
purposes of federal, state and local income or franchise taxes (and for any
other tax imposed on or measured by income, and documentary, intangibles and
transfer taxes, the transaction contemplated hereby is a financing
arrangement and preserves ownership in the Property in the
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Lessee. The parties shall take no action inconsistent with such intention.
Nevertheless, the Lessee acknowledges and agrees that neither the Agent, the
Lessor nor any Participant (other than the Tranche T Participant) has made
any representations or warranties to the Lessee concerning the tax,
accounting or legal characteristics of the Operative Documents and that the
Lessee has obtained and relied upon such tax, accounting and legal advice
concerning the Operative Documents as it deems appropriate.
(b) Specifically, without limiting the generality of SUBSECTION (a) of
this SECTION 5.1, the parties hereto intend and agree that with respect to
the nature of the transactions evidenced by the Lease in the context of the
exercise of remedies under the Operative Documents, in the case of any
insolvency or receivership proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency laws or statute of the
United States of America, any State or Commonwealth thereof or any foreign
country affecting the Lessee, the Lessor or any Participant or any
enforcement or collection actions arising out of or relating to bankruptcy or
insolvency laws, (i) the transactions evidenced by the Operative Documents
shall be deemed to be loans made by the Lessor and the Participants to the
Lessee secured by the Property, (ii) the obligations of the Lessee under the
Lease to pay Basic Rent, Supplemental Rent, Asset Termination Value or
Residual Value Guarantee Amount in connection with any purchase or sale of
the Property pursuant to the Lease shall be treated as payments of interest
on and principal of, respectively, loans from the Lessor and the Participants
to the Lessee, and (iii) the Lease grants a security interest and mortgage or
deed of trust lien, as the case may be, in the Property to the Lessor and
assigned by the Lessor to the Agent for the benefit of the Participants to
secure the Lessee's performance and payment of all amounts under the Lease
and the other Operative Documents.
(c) If the transaction evidenced by this Agreement and the other
Operative Documents can no longer be treated as an operating lease pursuant
to GAAP for accounting purposes, all provisions in the Operative Documents
limiting the Lessee's obligation to pay the Asset Termination Value
(including the Remarketing Option) shall no longer apply. If any such change
in accounting treatment shall occur, the Lessee, the Guarantor, the Lessor,
the Construction Agent, the Lessee's General Partner, the Agent and the
Participants shall negotiate in good faith to enter into such amendments to
the Operative Documents as may be reasonably necessary or desirable to
reflect the foregoing.
(d) In the event that, after the date hereof, the UCC as enacted and in
effect in any applicable jurisdiction shall be revised or amended or
amendments thereto shall become effective, the Lessee, the Guarantor, the
Lessor, the Agent and the Participants shall negotiate in good faith to enter
into such amendments to the Operative Documents as may be reasonably
necessary or desirable to effect the intended purposes of this Agreement and
the other Operative Documents in light of the effect of such revisions or
amendments.
SECTION 5.2 AMOUNTS DUE UNDER LEASE. Anything else herein or
elsewhere to the contrary notwithstanding, it is the intention of the Lessee,
the Guarantor, the Lessee's General Partner, the Lessor, the Participants and
the Agent that: (i) the amount and timing of installments of Basic Rent due
and payable from time to time from the Lessee under the Lease shall be equal
to the aggregate payments due to the Participants in respect of their
Participation Interests on each Payment Date; (ii) if the Lessee elects the
Purchase Option or becomes obligated to
20
purchase the Property under the Lease, the Participation Interests, all fees
and all of the interest on overdue amounts thereon and all other obligations
of the Lessee owing to the Lessor, the Participants and the Agent shall be
paid in full by the Lessee; (iii) if the Lessee properly elects the
Remarketing Option, the Lessee shall only be required to pay to the Lessor
the proceeds of the sale of the Property, the Residual Value Guarantee Amount
and any amounts due pursuant to SECTION 13 of this Participation Agreement
and Section 22.2 of the Lease (which aggregate amounts may be less than the
Asset Termination Value); and (iv) upon a Lease Event of Default resulting in
an acceleration of the Lessee's obligation to purchase the Property under the
Lease, the amounts then due and payable by the Lessee under the Lease shall
include all amounts necessary to pay in full the Asset Termination Value,
plus all other amounts then due from the Lessee to the Participants, the
Agent and the Lessor under the Operative Documents.
SECTION 6
CONDITIONS PRECEDENT TO
CLOSING DATE AND ADVANCES
SECTION 6.1 CONDITIONS PRECEDENT - GENERAL. The occurrence of the
Closing Date, the obligation of the Lessor to acquire the Existing Facility
on the Land Interest Acquisition Date and to make the Advance in respect of
the Existing Facility on the Land Interest Acquisition Date, the obligation
of the Lessor to make an Advance to finance the acquisition of Equipment, if
any, or the construction of any Tenant Improvements, and the obligation of
each Participant to purchase its Participation Interest in, and to make
available to the Lessor its related portion of, each such Advance on such
Funding Date are subject to satisfaction or waiver of the following
conditions precedent and the conditions precedent set forth in SECTION 6.3
(it being understood that (i) the Lessor's obligation to acquire such
Existing Facility or to finance such Equipment, if any, or Tenant
Improvements shall not be subject to the conditions precedent set forth in
this SECTION 6.1 or SECTION 6.3 to the extent such conditions are actions
required of the Lessor, and (ii) the Tranche T Participant's obligation to
make available to the Lessor its portion of any Advance on any Funding Date
shall not be subject to the conditions precedent set forth in this SECTION
6.1 or SECTION 6.3 to the extent such conditions are actions required of the
Lessee (as Lessee or as the Construction Agent), the Lessee's General Partner
or the Guarantor, as the case may be) on or prior to the Closing Date, the
Land Interest Acquisition Date or such Funding Date, as the case may be:
(a) ACQUISITION AND FUNDING REQUEST. On or prior to the Land Interest
Acquisition Date or applicable Funding Date, the Agent and the Lessor shall
have received a fully executed counterpart of the Acquisition Request or
Funding Request, as the case may be, appropriately completed by the
Construction Agent, in accordance with SECTIONS 3.3 and 3.4, respectively.
(b) OPERATIVE DOCUMENTS. Each of the Operative Documents to be entered
into on or prior to the Closing Date shall have been duly authorized,
executed and delivered by the parties thereto, and shall be in full force and
effect, including, without limitation, (i) this Participation Agreement, (ii)
the Lease, (iii) the Lease Supplement; (iv) the Tenant Improvements
Construction Agency Agreement, (v) the Construction Agency Agreement
Assignment with
21
respect to the Tenant Improvements Construction Agency Agreement, (vi) the
Construction Documents Assignment related to the Tenant Improvements
Construction Agency Agreement, (vii) the Mortgage, (viii) the Assignment of
Lease, (ix) the Consent to Assignment, (x) the Assignment of Property
Purchase Agreement, (xi) the Cash Collateral Agreement, (xii) the Guarantee
and (xiii) the Deed. No Default or Event of Default shall exist thereunder
(both before and after giving effect to the transactions contemplated by the
Operative Documents), and the Lessor, the Agent and each Participant (other
than the Tranche T Participant) shall each have received a fully executed
copy of each of the Operative Documents (other than the Lease and Lease
Supplement, of which the Agent shall receive the original and the Lessor and
the Participants shall receive specimens). On or prior to the Closing Date,
the Operative Documents (or memoranda thereof), any supplements thereto and
any financing statements in connection therewith required under the Uniform
Commercial Code shall have been recorded, registered and filed, if necessary,
in such manner as to enable the Lessee's counsel to render its opinion
referred to in CLAUSE (l) below.
(c) ENVIRONMENTAL CERTIFICATE. On or prior to the Closing Date, the
Agent, each Participant (other than the Tranche T Participant) and the Lessor
shall have received an Environmental Certificate substantially in the form of
EXHIBIT C (an "ENVIRONMENTAL CERTIFICATE") with respect to the Property,
accompanied by the Environmental Audit for the Property, addressed to the
Agent, each Participant and the Lessor, each of which shall have been
approved by the Agent, the Required Participants and the Lessor.
(d) APPRAISAL. On or prior to the Closing Date, the Agent, the Lessor
and the Participants shall have received an Appraisal of the Existing
Facility and Tenant Improvements, which Appraisal shall show as of the
Closing Date the Fair Market Sales Value of the Existing Facility (including
the respective Fair Market Sales Values of the Land Interest and the Existing
Improvements thereon) and as of the projected Completion Date with respect to
the Tenant Improvements the Fair Market Sales Value of the Existing Facility
and Tenant Improvements (which Fair Market Sales Value as of the projected
Completion Date with respect to the Tenant Improvements shall not be less
than $100,000,000), and meet the other applicable requirements set forth in
the definition of the term "Appraisal" contained in APPENDIX 1.
(e) PROPERTY PURCHASE AGREEMENT CONDITIONS; EXISTING FACILITY
ACQUISITION DOCUMENTS. On or prior to the Closing Date, the Lessor, the Agent
and the Participants shall have received a copy of the Property Purchase
Agreement, the Correction Deed and copies of the Tax Abatement Agreements;
the Property Purchase Agreement shall be in full force and effect and shall
have been validly assigned to the Lessor pursuant to the Assignment of
Property Purchase Agreement; and the conditions to closing under the Property
Purchase Agreement shall have been satisfied to satisfaction of, or waived
by, the Lessor, the Agent and the Participants (other than the Tranche T
Participant). On or prior to the Land Interest Acquisition Date, the
Correction Deed with respect to the Existing Facility shall have been duly
executed and delivered by Micron Technology, Inc. in favor of the Existing
Owner and in conformity with Applicable Law, which Correction Deed shall be
in appropriate for recording with the applicable Governmental Authorities,
shall have been so recorded, and shall convey fee simple title to the
Existing Facility to the Existing Owner. On the Land Interest Acquisition
Date, the Tax Abatement Agreements shall be in full force and effect and the
Assignment and Assumption of Tax Abatement Agreements shall have been duly
executed and delivered by the Existing Owner,
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the Lessor and the Lessee in form appropriate for recording with the
applicable Governmental Authorities. On the Land Interest Acquisition Date,
the Lessor shall have received a warranty deed (the "DEED"), in conformity
with Applicable Law and appropriate for recording with the applicable
Governmental Authorities, with respect to the Existing Facility, conveying
fee simple title to the Existing Facility to the Lessor, subject only to
Permitted Exceptions.
(f) LEASE SUPPLEMENT; EQUIPMENT SCHEDULE. The Lessee and the Lessor
shall have delivered to the Agent (i) on or prior to the Land Interest
Acquisition Date, an original counterpart of the Lease Supplement, executed
by the Lessee and the Lessor and (ii) on or prior to the applicable Funding
Date, a duly executed Equipment Schedule covering any Equipment, if any,
being acquired with the proceeds of the related Advance by the Lessor.
(g) SURVEY AND TITLE INSURANCE. On or prior to the Land Interest
Acquisition Date, the Lessee shall have delivered (i) an ALTA/ACSM
(1992) (Urban) Survey of the Property, including Table A numbers 1, 2, 3, 4,
6, 8, 9, 10 and 11, or other form of survey acceptable to the title company
and the Agent, certified to the Lessor, the Participants and the title
company and otherwise in form reasonably acceptable to the Agent, (ii) an
ALTA (1992) owners title insurance policy (or other form of title insurance
policy acceptable to the Agent) with extended coverage, to the extent
available over the general exceptions, insuring fee simple title in the
Lessor to the Property, subject only to the Permitted Exceptions and, if
elected by Lessee, Lessee may also be insured as their interest may appear,
but in a form and substance satisfactory to the Agent, and (iii) an ALTA
(1992) Loan Policy (or other form of title insurance policy acceptable to the
Agent) insuring the Agent that the Lien of the Mortgage is a first and
primary Lien on the Lessor's fee simple title to the Property, subject only
to pending disbursements for construction and the Permitted Exceptions; such
policies each in an amount not less than the Property Acquisition Cost, the
Tenant Improvements Sublimit and the Expansion Improvements Costs and to be
reasonably satisfactory to the Lessor and the Agent with extended coverage,
access, separate tax parcel, survey identicality, variable rate, future
advances, usury, comprehensive, doing business, fraudulent conveyances
(deletion of creditors rights exclusion), mechanics liens and zoning
endorsements (deletion of exclusion) as and to the extent available in such
jurisdiction where the Property is located, if requested by the Agent.
(h) EVIDENCE OF RECORDING AND FILING. On or prior to the Land Interest
Acquisition Date, the Agent shall have received evidence reasonably
satisfactory to it that (i) each of the Correction Deed (to the extent not
previously recorded), the Deed, the Assignment and Assumption of Tax
Abatement Agreements, the Lease Supplement, the Assignment of Lease, and the
Consent to Assignment have been delivered to the title company for recording
or are being recorded with the appropriate Governmental Authorities in the
order in which such documents are listed in this clause, (ii) the Mortgage
and the Micron SNDA have been delivered to the title company for recording
and will be recorded, in that order, on the first Business Day after the Land
Interest Acquisition Date and (iii) that the UCC Financing Statements with
respect to the Property being acquired have been delivered to the title
company for filing or are being filed with the appropriate Governmental
Authorities on the first Business Day after the Land Interest Acquisition
Date.
(i) EVIDENCE OF INSURANCE. On or prior to the Land Interest Acquisition
Date, the Agent, the Lessor and each Participant (other than the Tranche T
Participant) shall have received
23
certificates of insurance with respect to the Property required to be
maintained pursuant to the Lease setting forth the respective coverages,
limits of liability, carrier, policy number and period of coverage.
(j) CONSTRUCTION BUDGET; PLANS AND SPECIFICATIONS. On or prior to the
Closing Date, the Lessor, the Agent and each Participant (other than the
Tranche T Participant) shall have received a copy of the Budget with respect
to the Existing Facility and the Tenant Improvements to be constructed
thereon, and on or prior to the initial Funding Date for Property
Improvements Costs in respect of the Tenant Improvements, the Lessor, the
Agent and the Participants (other than the Tranche T Participant) shall have
received a copy of the Plans and Specifications for the Tenant Improvements,
each in a form reasonably satisfactory to each of them.
(k) TAXES. On or prior to the Land Interest Acquisition Date, all taxes,
fees and other charges in connection with the execution, delivery, recording,
filing and registration of the Operative Documents shall have been paid or
provisions for such payment shall have been made to the satisfaction of the
Agent and the Lessor.
(l) OPINION OF COUNSEL. On or prior to the Closing Date the Lessee shall
have delivered to the Agent, each Participant (other than the Tranche T
Participant) and the Lessor the opinion of Fulbright & Jaworski, L.L.P.,
counsel to the Lessee, the Lessee's General Partner, and the Guarantor,
addressing the matters set forth in EXHIBIT E, which opinions shall be in
form and substance reasonably satisfactory to the Agent and the Lessor.
(m) APPROVALS. All necessary (or, in the reasonable opinion of the
Lessor, the Participants (other than the Tranche T Participant) or the Agent
or any of their respective counsel, advisable) Governmental Actions and
consents and approvals of or by any Governmental Authority or other Person,
in each case required by any Requirement of Law, covenant or restriction
affecting the Property or the transactions contemplated thereby, shall have
been obtained or made and be in full force and effect by the time required by
any Requirement of Law.
(n) LITIGATION. No action or proceeding shall have been instituted, nor
shall any action or proceeding be threatened, before any Governmental
Authority, nor shall any order, judgment or decree have been issued or
proposed to be issued by any Governmental Authority (i) to set aside,
restrain, enjoin or prevent the full performance of this Participation
Agreement, the Lease or any other Operative Document or any transaction
contemplated hereby or thereby or (ii) which is reasonably likely to have a
Material Adverse Effect.
(o) REQUIREMENTS OF LAW. In the reasonable opinion of the Lessor, the
Participants (other than the Tranche T Participant), the Agent and their
respective counsel, the transactions contemplated by the Operative Documents
do not and will not violate any Requirement of Law and do not and will not
subject the Lessor, the Agent or any Participant to any adverse regulatory or
tax prohibitions or constraints.
(p) RESPONSIBLE OFFICER'S CERTIFICATE OF THE LESSEE. On or prior to the
Closing Date, the Lessor, each Participant (other than the Tranche T
Participant) and the Agent shall each have received a Responsible Officer's
Certificate, dated as of the Closing Date, of the Lessee's
24
General Partner stating that (i) each and every representation and warranty
of the Lessee contained in the Operative Documents to which it is a party is
true and correct in all material respects on and as of the Closing Date; (ii)
no Default or Event of Default under the Lease, the Property Purchase
Agreement or the Tenant Improvements Construction Agency Agreement has
occurred and is continuing; (iii) each Operative Document to which the Lessee
is a party is in full force and effect with respect to the Lessee; and (iv)
the Lessee has duly performed and complied with all covenants, agreements and
conditions contained herein or in any Operative Document required to be
performed or complied with by the Lessee on or prior to the Closing Date.
(q) THE LESSEE'S RESOLUTIONS AND INCUMBENCY CERTIFICATE, ETC. On or
prior to the Closing Date, the Lessor, each Participant (other than the
Tranche T Participant) and the Agent shall each have received (i) a
certificate of the Secretary or an Assistant Secretary of the Lessee's
General Partner attaching and certifying as to (A) the resolutions of the
Board of Directors of Lessee's General Partner, duly authorizing the
execution, delivery and performance by the Lessee of documents and agreements
of the type represented by each Operative Document to which it is or will be
a party, (B) its limited partnership agreement and certificate of limited
partnership, and (C) the incumbency and signature of persons authorized to
execute and deliver on its behalf the Operative Documents to which it is a
party, and (ii) a certificate of authority from the appropriate officer of
the Lessee's state of formation and of the state in which the Property is
located.
(r) RESPONSIBLE OFFICER'S CERTIFICATE OF THE GUARANTOR. On or prior to
the Closing Date, the Lessor, each Participant (other than the Tranche T
Participant) and the Agent shall each have received a Responsible Officer's
Certificate, dated as of the Closing Date, of the Guarantor stating that (i)
each and every representation and warranty of the Guarantor contained in the
Operative Documents to which it is a party is true and correct in all
material respects on and as of the Closing Date; (ii) no Default or Event of
Default under the Lease, the Property Purchase Agreement, the Tenant
Improvements Construction Agency Agreement or the Guarantee has occurred and
is continuing; (iii) each Operative Document to which the Guarantor is a
party is in full force and effect with respect to the Guarantor; and (iv) the
Guarantor has duly performed and complied with all covenants, agreements and
conditions contained herein or in any Operative Document or the Guarantee
required to be performed or complied with by the Guarantor on or prior to the
Closing Date.
(s) GUARANTOR'S RESOLUTIONS AND INCUMBENCY CERTIFICATE, ETC. On or prior
to the Closing Date, the Lessor, each Participant (other than the Tranche T
Participant) and the Agent shall each have received (i) a certificate of the
Secretary or an Assistant Secretary of the Guarantor attaching and certifying
as to (A) the resolutions of the Board of Directors of the Guarantor, duly
authorizing the execution, delivery and performance by the Guarantor of
documents and agreements of the type represented by each Operative Document
to which it is or will be a party, (B) its certificate of incorporation and
bylaws, and (C) the incumbency and signature of persons authorized to execute
and deliver on its behalf the Operative Documents to which it is a party, and
(ii) a good standing certificate from the appropriate officer of the
Guarantor's state of incorporation and a certificate of authority from the
appropriate officer of the state in which the Property is located.
25
(t) RESPONSIBLE OFFICER'S CERTIFICATE OF THE LESSEE'S GENERAL
PARTNER. On or prior to the Closing Date, the Lessor, each Participant (other
than the Tranche T Participant) and the Agent shall each have received a
Responsible Officer's Certificate, dated as of the Closing Date, of the
Lessee's General Partner stating that (i) each and every representation and
warranty of the Lessee's General Partner contained in the Operative Documents
to which it is a party is true and correct in all material respects on and as
of the Closing Date; (ii) each Operative Document to which the Lessee's
General Partner is a party is in full force and effect with respect to
Lessee's General Partner; and (iii) the Lessee's General Partner has duly
performed and complied with all covenants, agreements and conditions
contained herein or in any Operative Document required to be performed or
complied with by Lessee's General Partner it on or prior to the Closing Date.
(u) LESSEE'S GENERAL PARTNER'S RESOLUTIONS AND INCUMBENCY
CERTIFICATE, ETC. On or prior to the Closing Date, the Lessor, each
Participant (other than the Tranche T Participant) and the Agent shall each
have received (i) a certificate of the Secretary or an Assistant Secretary of
the Lessee's General Partner attaching and certifying as to (A) the
resolutions of the Board of Directors of the Lessee's General Partner, duly
authorizing the execution, delivery and performance by the Lessee's General
Partner of documents and agreements of the type represented by each Operative
Document to which it is or will be a party, (B) its certificate of
incorporation and bylaws, and (C) the incumbency and signature of persons
authorized to execute and deliver on its behalf the Operative Documents to
which it is a party, and (ii) a good standing certificate from the
appropriate officer of the Lessee's General Partner's state of incorporation.
(v) CLOSING DATE AND LAND INTEREST ACQUISITION DATE. The Closing Date
and the Land Interest Acquisition Date shall occur on or prior to August 31,
2000.
(w) NO MATERIAL ADVERSE EFFECT. As of each Funding Date, no event or
condition shall have occurred that would result in a Material Adverse Effect.
(x) OFFICER'S CERTIFICATE OF THE LESSOR. On or prior to the Closing
Date, the Lessee, the Lessee's General Partner, the Guarantor, the Agent and
each Participant shall have received a certificate of an authorized officer
of the Lessor, dated as of the Closing Date, stating that (i) each and every
representation and warranty of the Lessor contained in the Operative
Documents to which it is a party is true and correct in all material respects
on and as of the Closing Date, (ii) each Operative Document to which the
Lessor is a party is in full force and effect with respect to Lessor, and
(iii) the Lessor has duly performed and complied with all covenants,
agreements and conditions contained herein or in any Operative Document
required to be performed or complied with by Lessor on or prior to the
Closing Date.
(y) THE LESSOR'S RESOLUTIONS AND INCUMBENCY CERTIFICATE, ETC. On or
prior to the Closing Date, the Lessee, the Lessee's General Partner, the
Guarantor, the Agent and each Participant shall have received a certificate
of the Secretary or an Assistant Secretary of the Lessor attaching and
certifying as to (A) the resolutions of the Board of Directors duly
authorizing the execution, delivery and performance by the Lessor of
documents and agreements of the type represented by each Operative Document
to which it is or will be a party, (B) its certificate of incorporation and
by-laws and (C) the incumbency and signature of persons authorized to execute
and deliver on its behalf the Operative Documents to which it is a party.
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(z) LEGAL FEES AND EXPENSES. The Lessor and the Lessee shall have
caused to be paid and capitalized as Advances as provided in SECTION 9 all
reasonable fees and expenses of attorneys for the Agent, the Lessor and any
Participant (other than the Tranche T Participant) (which attorneys may be
employees of such Person) paid or incurred in connection with the
preparation, negotiation, execution and delivery of the Operative Documents.
(aa) MICRON SNDA. The Lessor and Micron shall have entered into the
the Micron SNDA.
SECTION 6.2 CONDITIONS PRECEDENT - EXPANSION IMPROVEMENTS. The
occurrence of the Expansion Improvements Closing Date, the obligation of the
Lessor to make an Advance to finance the construction of any Expansion
Improvements or the funding of any Interest Payment Advance or other
capitalized amount on any Funding Date in respect of the Expansion
Improvements and the obligation of each Expansion Improvements Participant to
purchase its Participation Interest in, and to make available to the Lessor
its related portion of, each such Advance on such Funding Date are subject to
the increase of the Total Commitment as provided in SECTION 3.6(d) and to
satisfaction or waiver of the following conditions precedent and the
conditions precedent set forth in SECTION 6.3 (it being understood that the
Lessor's obligation to finance such Expansion Improvements shall not be
subject to the conditions precedent set forth in this SECTION 6.2 or SECTION
6.3 to the extent such conditions are actions required of the Lessor) on or
prior to the Expansion Improvements Closing Date, or such Funding Date, as
the case may be:
(a) FUNDING REQUEST. On or prior to the Expansion Improvements
Closing Date or applicable Funding Date, the Agent and the Lessor shall have
received a fully executed counterpart of a Funding Request, appropriately
completed by the Construction Agent in accordance with SECTION 3.4; PROVIDED,
that this condition shall be deemed to have been satisfied in connection with
an Interest Payment Advance pursuant to SECTION 3.7(d) hereof or any amount
capitalized pursuant to SECTION 3.7(e) hereof.
(b) OPERATIVE DOCUMENTS AND AMENDMENTS TO OPERATIVE DOCUMENTS. Each
of the Operative Documents to be entered into on or prior to the Expansion
Improvements Closing Date shall have been duly authorized, executed and
delivered by the parties thereto, and shall be in full force and effect, and
the following documents shall have been duly authorized, executed and
delivered by the parties thereto, and shall be in full force and effect: (i)
amendments to any of the Operative Documents referred to in SECTION 6.1(b),
as reasonably required by the Agent or the Expansion Improvements
Participants, (ii) the Restated Lease Supplement, (iii) the Expansion
Improvements Construction Agency Agreement, (iv) the Construction Agency
Agreement Assignment with respect to the Expansion Improvements Construction
Agency Agreement, (v) the Construction Documents Assignment related to the
Expansion Improvements Construction Agency Agreement, (vi) the Securities
Collateral Agreement and (vii) any other document or agreement reasonably
required by Agent or the Participants. No Default or Event of Default shall
exist thereunder (both before and after giving effect to the transactions
contemplated by such Funding Request), and the Lessor, the Agent and each
Expansion Improvements Participant shall each have received a fully executed
copy of each of the Operative Documents. On or prior to the Expansion
Improvements Closing Date, the Operative Documents (or memoranda thereof),
any supplements thereto and any financing statements in connection therewith
required
27
under the Uniform Commercial Code shall have been recorded, registered and
filed, or updates to prior filings shall have been made, if necessary, in
such manner as to enable the Lessee's counsel to render its opinion referred
to in CLAUSE (j) below.
(c) APPRAISAL. On or prior to the Expansion Improvements Closing
Date, the Agent, the Lessor and the Participants shall have received an
updated Appraisal of the Property, which Appraisal shall show as of the
projected Completion Date with respect to the Expansion Improvements the Fair
Market Sales Value of the Property and shall otherwise be acceptable to
Lessor and Agent in their sole discretion and shall meet the other applicable
requirements set forth in the definition of the term "Appraisal" contained in
APPENDIX 1.
(d) LAND ACQUISITION CLOSING. All conditions to the Land Interest
Acquisition Date shall have been satisfied or waived and Lessor shall have
acquired, and as of the Expansion Improvements Closing Date Lessor shall be
the owner of, fee simple title to the Existing Facility and Tenant
Improvements, subject only to Permitted Exceptions.
(e) RESTATED LEASE SUPPLEMENT. The Lessee and the Lessor shall have
delivered to the Agent on or prior to the Expansion Improvements Closing
Date, an original counterpart of the Restated Lease Supplement executed by
the Lessee and the Lessor.
(f) TITLE INSURANCE. On or prior to the Expansion Improvements
Closing Date, the Lessee shall have delivered endorsements to the title
policies provided under SECTION 6.1(g) increasing the amounts of such
policies to be not less than the estimated Property Cost following the
completion of all Improvements (if and to the extent not accomplished
previously), up to a maximum coverage amount of $118,500,000.
(g) EVIDENCE OF RECORDING AND FILING. On or prior to the Expansion
Improvements Closing Date, the Agent shall have received evidence reasonably
satisfactory to it that the Restated Lease Supplement has been delivered to
the title company for recording or is being recorded with the appropriate
Governmental Authorities.
(h) CONSTRUCTION BUDGET; PLANS AND SPECIFICATIONS. On or prior to the
Expansion Improvements Closing Date, the Lessor and the Agent shall have
received a copy of the Plans and Specifications and the Budget with respect
to the Expansion Improvements, each in a form reasonably satisfactory to each
of them.
(i) TAXES. On or prior to the Expansion Improvements Closing Date,
all taxes, fees and other charges in connection with the execution, delivery,
recording, filing and registration of the Operative Documents shall have been
paid or provisions for such payment shall have been made to the satisfaction
of the Agent and the Lessor.
(j) OPINION OF COUNSEL. On or prior to the Expansion Improvements
Closing Date, the Lessee shall have delivered to the Agent, the Lessor and
the Participants a bring-down opinion of counsel to the Lessee, Lessee's
General Partner and Guarantor, which opinion shall be in form and substance
reasonably satisfactory to the Agent and the Lessor.
(k) APPROVALS. All necessary (or, in the reasonable opinion of the
Lessor, the Participants or the Agent or any of their respective counsel,
advisable) Governmental Actions
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and consents and approvals of or by any Governmental Authority or other
Person, in each case required by any Requirement of Law, covenant or
restriction affecting the Property or the transactions contemplated thereby,
shall have been obtained or made and be in full force and effect by the time
required by any Requirement of Law.
(l) LITIGATION. No action or proceeding shall have been instituted,
nor shall any action or proceeding be threatened, before any Governmental
Authority, nor shall any order, judgment or decree have been issued or
proposed to be issued by any Governmental Authority (i) to set aside,
restrain, enjoin or prevent the full performance of this Participation
Agreement, the Lease or any other Operative Document or any transaction
contemplated hereby or thereby or (ii) which is reasonably likely to have a
Material Adverse Effect.
(m) REQUIREMENTS OF LAW. In the reasonable opinion of the Lessor, the
Participants (other than the Tranche T Participant), the Agent and their
respective counsel, the transactions contemplated by the Operative Documents
in connection with the Expansion Improvements do not and will not violate any
Requirement of Law and do not and will not subject the Lessor, the Agent or
any Participant (other than the Tranche T Participant) to any adverse
regulatory or tax prohibitions or constraints.
(n) RESPONSIBLE OFFICER'S CERTIFICATE OF THE LESSEE. On or prior to
the Expansion Improvements Closing Date, the Lessor, Participants (other than
the Tranche T Participant) and the Agent shall each have received a
Responsible Officer's Certificate, dated as of the Expansion Improvements
Closing Date, of the Lessee's General Partner stating that (i) each and every
representation and warranty of the Lessee contained in the Operative
Documents to which it is a party is true and correct on and as of the
Expansion Improvements Closing Date; (ii) no Default or Event of Default
under the Lease or either Construction Agency Agreement has occurred and is
continuing; (iii) each Operative Document to which the Lessee is a party is
in full force and effect with respect to it; and (iv) the Lessee has duly
performed and complied with all covenants, agreements and conditions
contained herein or in any Operative Document required to be performed or
complied with by it on or prior to the Expansion Improvements Closing Date.
(o) RESPONSIBLE OFFICER'S CERTIFICATE OF THE GUARANTOR. On or prior
to the Expansion Improvements Closing Date, the Lessor, the Participants
(other than the Tranche T Participant) and the Agent shall each have received
a Responsible Officer's Certificate, dated as of the Expansion Improvements
Closing Date, of the Guarantor stating that (i) each and every representation
and warranty of the Guarantor contained in the Operative Documents to which
it is a party is true and correct on and as of the Expansion Improvements
Closing Date; (ii) no Default or Event of Default under the Lease, either
Construction Agency Agreement or the Guarantee has occurred and is
continuing; (iii) each Operative Document to which the Guarantor is a party
is in full force and effect with respect to it; and (iv) the Guarantor has
duly performed and complied with all covenants, agreements and conditions
contained herein or in any Operative Document or the Guarantee required to be
performed or complied with by it on or prior to the Expansion Improvements
Closing Date.
(p) RESPONSIBLE OFFICER'S CERTIFICATE OF THE LESSEE'S GENERAL
PARTNER. On or prior to the Expansion Improvements Closing Date, the Lessor,
the Participants (other than the Tranche T Participant) and the Agent shall
each have received a Responsible Officer's Certificate, dated
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as of the Expansion Improvements Closing Date, of the Lessee's General
Partner stating that (i) each and every representation and warranty of the
Lessee's General Partner contained in the Operative Documents to which it is
a party is true and correct on and as of the Expansion Improvements Closing
Date; (ii) each Operative Document to which the Lessee's General Partner is a
party is in full force and effect with respect to it; and (iii) the Lessee's
General Partner has duly performed and complied with all covenants,
agreements and conditions contained herein or in any Operative Document
required to be performed or complied with by it on or prior to the Expansion
Improvements Closing Date.
(q) NO MATERIAL ADVERSE EFFECT. As of each Funding Date, no event or
condition shall have occurred that would result in a Material Adverse Effect.
(r) LEGAL FEES AND EXPENSES. The Lessor shall have caused to be paid
and capitalized as Advances as provided in SECTION 9 all reasonable fees and
expenses of attorneys for the Agent, the Lessor and any Participant (which
attorneys may be employees of such Person) paid or incurred in connection
with the preparation, negotiation, execution and delivery of the Operative
Documents on the Expansion Improvements Closing Date.
SECTION 6.3 FURTHER CONDITIONS PRECEDENT. The occurrence of the
Closing Date and the Expansion Improvements Closing Date, the obligation of
the Lessor to acquire the Existing Facility on the Land Interest Acquisition
Date or to make an Advance on any Funding Date and the obligation of each
applicable Participant to purchase its Participation Interest in, and to make
available its related portion of, such Advance on such Funding Date are
subject to satisfaction or waiver of the following conditions precedent and
to satisfaction on or before the Closing Date, the Land Interest Acquisition
Date, the Expansion Improvements Closing Date or such Funding Date, as the
case may be, of the following additional conditions precedent (it being
understood that (i) the Lessor's obligations to acquire the Property and
finance the Improvements and Equipment and each applicable Participant's
obligation to fund the purchase of its Participation Interest in an Advance
shall not be subject to the conditions precedent set forth in this SECTION
6.3 to the extent such conditions are actions required of the Lessor or such
Participant, as the case may be, and (ii) without limitation of the
foregoing, the Tranche T Participant's obligation to make available to the
Lessor its portion of any Advance on any Funding Date shall not be subject to
the conditions precedent set forth in this SECTION 6.3 to the extent such
conditions are actions required of the Lessee (as Lessee or as Construction
Agent), the Lessee's General Partner or the Guarantor, as the case may be):
(a) REPRESENTATIONS AND WARRANTIES. On such date the representations
and warranties of the Lessee, the Lessee's General Partner, the Guarantor,
the Lessor and each Participant contained herein and in each of the other
Operative Documents shall be true and correct as though made on and as of
such date, except to the extent such representations or warranties relate
solely to an earlier date, in which case such representations and warranties
shall have been true and correct on and as of such earlier date.
(b) PERFORMANCE OF COVENANTS. The parties hereto shall have performed
their respective agreements contained herein and in the other Operative
Documents to be performed by them on or prior to such date.
30
(c) TITLE. Title to the Property shall conform to the representations
and warranties set forth in SECTIONS 8.4(h), 8.6(c) and 8.7(c).
(d) NO DEFAULT. There shall not have occurred and be continuing any
Default or Event of Default under any of the Operative Documents, and no
Default or Event of Default under any of the Operative Documents will have
occurred after giving effect to the acquisition of the Property and/or the
making of the Advance requested by such Funding Request, as the case may be.
(e) CASH COLLATERAL AND SECURITIES COLLATERAL. In the case of any
Advance to be made on any Funding Date in respect of Property Acquisition
Costs or Property Improvements Costs of the Existing Facility or the Tenant
Improvements, the Lessee shall have deposited with the Agent, in accordance
with the Cash Collateral Agreement, Cash Collateral in immediately available
funds in an amount equal to the aggregate amount of the Tranche B
Participation Interests and Tranche C Participation Interests in such Advance
to be made on such Funding Date and otherwise as of such date shall have made
all deposits of Cash Collateral then required pursuant to the Cash Collateral
Agreement. In the case of any Advance to be made on any Funding Date in
respect of the Expansion Improvements, the Lessee shall have deposited with
the Agent (i) in accordance with the Securities Collateral Agreement,
Securities Collateral as and to the extent required by such agreement as of
such Funding Date (after giving effect to the Advance requested on such
Funding Date), and (ii) in accordance with the Cash Collateral Agreement,
Cash Collateral and to the extent required by such agreement as of such
Funding Date (after giving effect to the Advance requested on such Funding
Date).
SECTION 7
COMPLETION DATE CONDITIONS
SECTION 7.1 CONDITIONS TO COMPLETION DATE. The occurrence of the
applicable Completion Date shall be subject to the fulfillment to the
satisfaction of, or waiver by, the Required Participants of the
following conditions precedent:
(a) CONSTRUCTION COMPLETION. The construction of the Expansion
Improvements or the Tenant Improvements, as the case may be, shall have been
completed substantially in accordance with the applicable Plans and
Specifications and all Requirements of Law and Insurance Requirements, and
the Expansion Improvements or Tenant Improvements, as the case may be, shall
be ready for occupancy and use as in the facility described in RECITAL B of
this Agreement. This shall require, without limiting the generality of the
preceding sentence, that (i) all utilities required to adequately service the
Expansion Improvements or Tenant Improvements, as the case may be, for their
intended use are available and "tapped on" and hooked up pursuant to adequate
permits (including any that may be required under applicable Environmental
Laws), and (ii) access to the Expansion Improvements or Tenant Improvements,
as the case may be, for motor vehicles and, if required, pedestrians from
publicly dedicated streets and public highways is available. All Fixtures,
furniture, furnishings, Equipment and other property contemplated under the
applicable Plans and Specifications to be incorporated into or installed in
the Property shall have been incorporated or installed free and clear of all
Liens except for Permitted Exceptions.
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(b) ARCHITECT'S CERTIFICATE; DATE DOWN ENDORSEMENT. The Lessee shall
have furnished to the Lessor and Agent (i) with respect to the Expansion
Improvements only, a certificate of the Architect (substantially in the form
of EXHIBIT F) dated at or about the Completion Date with respect to the
Expansion Improvements and stating that (a) the Expansion Improvements have
been completed substantially in accordance with the applicable Plans and
Specifications and such portion of the Property is ready for occupancy and
(b) the Property, as so completed, complies in all material respects with
applicable laws and ordinances, and that attached thereto are true and
complete copies of an "as built" or "record" set of the applicable Plans and
Specifications and a plat of survey of the Property "as built" showing all
paving, driveways, fences and exterior improvements; (ii) a date-down
endorsement to or amendment and restatement of the title insurance policies
described in SECTION 6.1(g) removing the pending disbursement clause and
satisfying other reasonable requirements of the Agent, to the extent possible
under Applicable Law, and (iii) a certificate of occupancy for the applicable
Improvements issued by the City of Richardson, Texas.
(c) LESSEE CERTIFICATION. The Lessee shall have furnished the Lessor
and the Agent with a certification of the Lessee (substantially in the form
of EXHIBIT G) as follows:
(i) The representations and warranties of the Lessee with
respect to the Property set forth in SECTION 8.6(b) are true and
correct in all material respects as of the applicable Completion
Date, except to the extent such representations or warranties relate
solely to an earlier date, in which case such representations and
warranties shall have been true and correct in all material respects
on and as of such earlier date. All amounts owing to third parties
for the construction of the applicable Improvements and the
acquisition of any Equipment have been paid in full.
(ii) No changes or modifications were made to the related Plans
and Specifications after the Closing Date that have had a Material
Adverse Effect on the value, use or useful life of the Property.
(iii) The conditions set forth in SECTIONS 7.1(a), (b), and
(d) hereof have been satisfied.
(d) INSURANCE. The Lessee shall have obtained and there shall be in full
force and effect all insurance policies (including all endorsements thereto)
required under Article XIV of the Lease in respect of the Property as of the
applicable Completion Date and the Lessee shall have delivered to the Lessor and
the Agent certificates of insurance in form and substance satisfactory to the
Lessor and the Agent.
(e) NOTICE OF COMPLETION DATE. Upon receipt by the Lessor and the
Agent of the certificates and other items required pursuant to SECTIONS
7.1(b), 7.1(c) and 7.1(d) above and satisfaction or waiver of the other
conditions set forth in this SECTION 7.1, the Lessor shall promptly deliver
written notice to the parties hereto that completion of the Expansion
Improvements or Tenant Improvements, as the case may be, contemplated by the
applicable Plans and Specifications and the Operative Documents
("COMPLETION") has occurred with respect to the applicable portion of the
Property, and the applicable Completion Date shall be deemed to be the date
which is one Business Day following the date of such notice.
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SECTION 8
REPRESENTATIONS
SECTION 8.1 REPRESENTATIONS OF THE LESSOR. The Lessor represents
and warrants to each of the other parties hereto as follows:
(a) DUE ORGANIZATION, ETC. It is a corporation duly organized,
validly existing and in good standing under the laws of the State of Illinois
and has the corporate power and authority to enter into and perform its
obligations under each of the Operative Documents to which it is or will be a
party and each other agreement, instrument and document to be executed and
delivered by it in connection with or as contemplated by each such Operative
Document to which it is or will be a party.
(b) AUTHORIZATION; NO CONFLICT. The execution, delivery and
performance of each Operative Document to which it is or will be a party has
been duly authorized by all necessary action on its part and neither the
execution and delivery thereof, nor the consummation of the transactions
contemplated thereby, nor compliance by it with any of the terms and
provisions thereof (i) does or will require any approval or consent of any
trustee or holders of any of its indebtedness or obligations, (ii) does or
will contravene any current United States or Illinois law, governmental rule
or regulation, (iii) does or will contravene or result in any breach of or
constitute any default under, or result in the creation of any Lien upon any
of its property under, its certificate of incorporation or by-laws, or any
indenture, mortgage, deed of trust, conditional sales contract, credit
agreement or other agreement or instrument to which it is a party or by which
it or its properties may be bound or affected or (iv) does or will require
any Governmental Action by any Governmental Authority, except such as have
been obtained on the Lessee's or the Lessor's behalf.
(c) ENFORCEABILITY, ETC. Each Operative Document to which the Lessor
is or will be a party has been, or on or before the Closing Date (or the Land
Interest Acquisition Date, as the case may be) will be duly executed and
delivered by the Lessor and each such Operative Document to which the Lessor
is a party constitutes, or upon execution and delivery will constitute, a
legal, valid and binding obligation enforceable against the Lessor in
accordance with the terms thereof, except as the same may be limited by
insolvency, bankruptcy, reorganization or other laws relating to or affecting
creditors' rights or by general equitable principles.
(d) LITIGATION. There is no action or proceeding pending or, to its
knowledge, threatened to which it is a party, before any Governmental
Authority that, if adversely determined, would materially and adversely
affect its ability to perform its obligations under the Operative Documents
to which it is a party, would have a material adverse effect on the financial
condition of the Lessor or would question the validity or enforceability of
any of the Operative Documents to which it is or will become a party.
(e) ASSIGNMENT. It has not assigned or transferred any of its right,
title or interest in or under the Lease except to the Agent and the
Participants in accordance with this Agreement and the other Operative
Documents.
33
(f) DEFAULTS. No default or event of default under the Operative
Documents attributable to it has occurred and is continuing.
(g) SECURITIES ACT. Neither the Lessor nor any Person authorized by
the Lessor to act on its behalf has offered or sold any interest in the
Lease, or in any similar security relating to the Property, or in any
security the offering of which for the purposes of the Securities Act would
be deemed to be part of the same offering as the offering of the
aforementioned securities to, or solicited any offer to acquire any of the
same from, any Person other than the Agent and the Participants, and neither
the Lessor nor any Person authorized by the Lessor to act on its behalf will
take any action which would subject the issuance or sale of any interest in
the Lease or the Property to the provisions of Section 5 of the Securities
Act or require the qualification of any Operative Document under the Trust
Indenture Act of 1939, as amended.
(h) CHIEF PLACE OF BUSINESS. The Lessor's chief place of business,
chief executive office and office where the documents, accounts and records
relating to the transactions contemplated by this Participation Agreement and
each other Operative Document are kept are located at 135 South LaSalle
Street, Chicago, Illinois 60603.
(i) FEDERAL RESERVE REGULATIONS. The Lessor is not engaged
principally in, and does not have as one of its important activities, the
business of extending credit for the purpose of purchasing or carrying any
margin stock (within the meaning of Regulation U of the Board), and no part
of the proceeds of the purchase of the Participation Interests will be used
by it to purchase or carry any margin stock or to extend credit to others for
the purpose of purchasing or carrying any such margin stock or for any
purpose that violates, or is inconsistent with, the provisions of Regulations
T, U, or X of the Board.
(j) INVESTMENT COMPANY ACT. The Lessor is not an "investment company"
or a company controlled by an "investment company" within the meaning of the
Investment Company Act.
(k) NO PLAN ASSETS. The Lessor is not acquiring its interests in the
Property with the assets of any "employee benefit plan" (as defined in
Section 3(3) of ERISA) which is subject to Title I of ERISA, or "plan" (as
defined in Section 4975(e)(1) of the Code).
SECTION 8.2 REPRESENTATIONS OF THE PARTICIPANTS. Each Participant
represents and warrants to the Lessor, each of the other Participants, the
Lessee and, other than in the case of the Tranche T Participant, to the
Guarantor, as follows:
(a) NO PLAN ASSETS. Such Participant is not and will not be funding
its Participation Interest hereunder, and is not performing its obligations
under the Operative Documents, with the assets of an "employee benefit plan"
(as defined in Section 3(3) of ERISA) which is subject to Title I of ERISA,
or "plan" (as defined in Section 4975(e)(1) of the Code). The advancing of
any amount with respect to its Participation Interest on any Funding Date
shall constitute an affirmation by the subject Participant of the preceding
representation and warranty as of such date.
(b) DUE ORGANIZATION, ETC. It is either (i) a duly organized and
validly existing corporation in good standing under the laws of the state of
its incorporation, or (ii) a national
34
banking association duly organized and validly existing under the laws of the
United States or (iii) a banking corporation duly organized and validly
existing under the laws of the jurisdiction of its organization, and, in each
case, has the corporate power and authority to execute, deliver and carry out
the terms and provisions of the Operative Documents to which it is a party.
(c) AUTHORIZATION; NO CONFLICT. The execution, delivery and
performance of each Operative Document to which it is or will be a party has
been duly authorized by all necessary action on its part and neither the
execution and delivery thereof, nor the consummation of the transactions
contemplated thereby, nor compliance by it with any of the terms and
provisions thereof (i) does or will require any approval or consent of any
trustee or holders of any of its indebtedness or obligations, (ii) does or
will contravene any current law, governmental rule or regulation of the
United States or the state or country of its organization, (iii) does or will
contravene or result in any breach of or constitute any default under, or
result in the creation of any Lien upon any of its property under, its
certificate of incorporation or bylaws, articles of association or other
organizational documents or any indenture, mortgage, deed of trust,
conditional sales contract, credit agreement or other agreement or instrument
to which it is a party or by which it or its properties may be bound or
affected or (iv) does or will require any Governmental Action by any
Governmental Authority.
(d) ENFORCEABILITY, ETC. Each Operative Document to which it is a
party has been, or on or before the Closing Date will be, duly executed and
delivered by it and each such Operative Document to which it is a party
constitutes, or upon execution and delivery will constitute, a legal, valid
and binding obligation enforceable against it in accordance with the terms
thereof, except as the same may be limited by insolvency, bankruptcy,
reorganization or other laws relating to or affecting creditors' rights or by
general equitable principles.
(e) LITIGATION. There is no action or proceeding pending or, to its
knowledge, threatened to which it is or will be a party before any
Governmental Authority that is reasonably likely to be adversely determined
and, if adversely determined, would materially and adversely affect its
ability to perform its obligations under the Operative Documents to which it
is a party.
(f) INVESTMENT. The Participation Interest being acquired by such
Participant is being acquired by such Participant for investment and not with
a view to the resale or distribution of such interest or any part thereof,
but without prejudice, however, to the right of such Participant at all times
to sell or otherwise dispose of all or any part of such interest under a
registration available under the Securities Act or under an exemption from
such registration available under the Securities Act, it being understood
that the disposition of the Participation Interest to be purchased by such
Participant shall, at all times, remain entirely within its control subject
to the provisions of Section 12 below.
(g) OFFER OF SECURITIES, ETC. Neither such Participant nor any Person
authorized to act on its behalf has, directly or indirectly, offered to sell
its Participation Interest or any other similar securities (the sale or offer
of which would be integrated with the sale or offer of the Participation
Interest), for sale to, or solicited any offer to acquire any of the same
from, any Person.
35
(h) NO REGISTRATION. Such Participant understands and acknowledges
that the Participation Interest has not been and will not be registered under
the Securities Act in reliance upon the exemption provided in Section 4(2) of
the Securities Act or any other applicable exemption, that Participation
Interest has not and will not be registered or qualified under the securities
or "blue sky" laws of any jurisdiction, that the Participation Interest may
be resold or otherwise transferred only if so registered or qualified or if
an exemption from registration or qualification is available, that neither
Lessee nor Lessor is required to register the Participation Interest and that
any transfer must comply with the provisions of the Operative Documents
relating thereto. Such Participant will comply with all applicable federal
and state securities laws in connection with any subsequent resale of the
Participation Interest held by it.
(i) ACCREDITED INVESTOR. Such Participant is a sophisticated investor
and an "accredited investor" as defined in paragraph (1), (2), (3) or (7) of
Rule 501(a) of the Securities Act, and has knowledge and experience in
financial and business matters and is capable of evaluating the merits and
risks of its investment in the Participation Interest and is able to bear the
economic risk of such investment. Such Participant has been given such
information concerning the Participation Interest, the other Operative
Documents, the Property, the Guarantor and Lessee as it has requested.
SECTION 8.3 REPRESENTATIONS OF THE GUARANTOR. The Guarantor
represents and warrants to each of the other parties hereto that:
(a) ORGANIZATION; POWERS; QUALIFICATION. Each of the Guarantor and
its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, (b) has all requisite
corporate or limited partnership, as applicable, power and authority to own,
lease and operate its properties, to carry on its business as now conducted
and as proposed to be conducted, to enter into the Operative Documents to
which it is a party and to carry out the transactions contemplated hereby and
thereby, and (c) is qualified to do business and is in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, except in jurisdictions where the failure to be
so qualified or in good standing has not had, and could not be reasonably
expected to have, a Material Adverse Effect. The Guarantor's chief place of
business is located at 2300 N.E. Brookwood Parkway, Hillsboro, Oregon 97124.
(b) AUTHORIZATION OF OPERATIVE DOCUMENTS; NO CONFLICT. The execution,
delivery and performance by the Guarantor of the Operative Documents to which
it is or will be a party have been or as of the relevant date of execution
and delivery thereof will be duly authorized by all necessary corporate
action on the part of the Guarantor. The execution, delivery and performance
by the Guarantor of the Operative Documents to which it is or will be a party
and the consummation by the Guarantor of the transactions contemplated by the
Operative Documents do not and will not (i) violate any material provision of
any law or any governmental rule or regulation applicable to the Guarantor,
any of the certificate of incorporation or bylaws of the Guarantor, or any
order, judgment or decree of any court or other agency of government binding
on the Guarantor or the Property; (ii) conflict with, result in a breach or
acceleration of or entitle any other Person to accelerate (with due notice or
lapse of time or both) or constitute (with due notice or lapse of time or
both) a default under, any indenture, loan agreement, other agreement for
borrowed money or other material agreement or material contractual arrangement
36
by which the Guarantor or any of its property or assets may be subject; (iii)
result in or require the creation or imposition of any Lien (or the
obligation to create or impose any Lien upon any of the properties or assets
of the Guarantor (other than any Liens created under any of the Operative
Documents and other than Permitted Liens); or (iv) require any approval of
stockholders or any approval or consent of any Person under any indenture,
loan agreement, other agreement for borrowed money or other material
agreement or material contractual arrangement by which the Guarantor or any
of its property or assets may be subject, except for such approvals or
consents which will be obtained on or before the Closing Date.
(c) GOVERNMENTAL CONSENTS. The execution, delivery and performance by
the Guarantor of the Operative Documents to which it is or will be a party
and the consummation by the Guarantor of the transactions contemplated by the
Operative Documents do not and will not require any Governmental Action by
any Governmental Authority.
(d) BINDING OBLIGATION. Each Operative Document to which the
Guarantor is or will be a party has been or will be duly executed and
delivered by the Guarantor and (assuming due authorization by the other
parties thereto, other than the Lessee and the Lessee's General Partner) is
or will be the legally valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with its respective terms,
except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights
generally or by equitable principles relating to enforceability.
(e) HISTORICAL FINANCIAL STATEMENTS. The Historical Financial
Statements comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
Commission with respect thereto, have been prepared in accordance with GAAP
(except as may be indicated in the notes thereto) and fairly present the
consolidated financial position of the Guarantor and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (except in the case of
interim period financial information for normal year-end adjustments).
Neither Guarantor nor any of its Subsidiaries has any contingent liability,
any liability for taxes, or any other outstanding obligation that is not
reflected in the Historical Financial Statements or the notes thereto and
which in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of the
Guarantor and its Subsidiaries taken as a whole.
(f) NO MATERIAL ADVERSE EFFECT. Since December 31, 1999, no event or
change has occurred that has caused, either in any case or in the aggregate,
a Material Adverse Effect.
(g) LITIGATION; ADVERSE PROCEEDINGS. There are no Adverse Proceedings
pending or, to the knowledge of the Guarantor, threatened individually or in
the aggregate, (i) that seek to enjoin, either directly or indirectly, the
execution, delivery or performance by the Guarantor of the Operative
Documents or the transactions contemplated hereby or thereby, or question the
validity of the Operative Documents or the rights or remedies of the Lessor,
the Agent or the Participants with respect to the Guarantor or the Property
under the Operative Documents or (ii) could reasonably be expected to have a
Material Adverse Effect. Neither the Guarantor nor any of its Subsidiaries is
subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal,
state, municipal or other
37
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(h) PAYMENT OF TAXES. All federal and all material state, local and
foreign tax returns and reports of the Guarantor and its Subsidiaries
required to be filed by any of them have been timely filed where the failure
to file would have a Material Adverse Effect, and all taxes shown on such tax
returns to be due and payable and all assessments, fees and other
governmental charges upon the Guarantor and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are
due and payable have been paid when due and payable, other than those
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP have been made and subject, in the case of
the Property to the terms of the Lease. The Guarantor knows of no material
proposed tax assessment against the Guarantor or any of its Subsidiaries
which is not being actively contested by the Guarantor or such Subsidiary in
good faith and by appropriate proceedings; PROVIDED, such reserves or other
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor, and PROVIDED FURTHER that, in the
case of the Property, any such contest shall be subject to the terms of the
Lease.
(i) NO DEFAULTS. Neither the Guarantor nor any of its Subsidiaries is
in violation of or in default with respect to (i) any provision of any
Applicable Law, which violation or default could reasonably be expected to
have a Material Adverse Effect, or (ii) the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in
any indenture, mortgage, deed of trust, conditional sale contract, credit
agreement or other material agreement or instrument to which it is a party or
by which it or its properties may be bound or affected, which violation or
default could reasonably be expected to have a Material Adverse Effect. No
condition exists that, with the giving of notice or the lapse of time or
both, could constitute such a violation or default, except where the
consequences, direct or indirect, of such default or defaults, if any, could
not reasonably be expected to have a Material Adverse Effect.
(j) GOVERNMENTAL REGULATION. The Guarantor is not subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment Company Act of 1940,
any state public utilities code or under any other federal or state statute
or regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the obligations of the Guarantor to
the Lessor, the Agent or the Participants under the Operative Documents
unenforceable.
(k) EMPLOYEE BENEFIT PLANS.
(i) Neither the Guarantor nor any ERISA Affiliate maintains
or contributes to, or has ever maintained a Pension Plan. Neither the
Guarantor nor any ERISA Affiliate has any liability with respect to
any post-retirement benefit under any Employee Benefit Plan which is
a welfare plan (as defined in Section 3(1) of ERISA), other than
liability for health plan continuation coverage described in Part 6
of Title I(B) of ERISA, which liability for health plan coverage is
not reasonably likely to have a Material Adverse Effect.
38
(ii) Each Employee Benefit Plan complies, in both form and
operation, in all material respects, with its terms, ERISA and the
Code, and no condition exists or event has occurred with respect
to any such plan which would result in the incurrence by either the
Guarantor or any ERISA Affiliate of any material liability, fine
or penalty. Each Employee Benefit Plan, related trust agreement,
arrangement and commitment of the Guarantor or any ERISA Affiliate
is legally valid and binding and in full force and effect in all
material respects. No Employee Benefit Plan is being audited or
investigated by any governmental authority or is subject to any
pending or, to the best knowledge of Guarantor, threatened, claim
or suit. Neither the Guarantor nor any ERISA Affiliate nor any
fiduciary of any Employee Benefit Plan has engaged in a prohibited
transaction under Section 406 of ERISA or section 4975 of the Code.
No breach of fiduciary responsibility has occurred with respect
to any Employee Benefit Plan under Section 404 of ERISA or Section
4975 of the Code.
(iii) Neither the Guarantor nor any ERISA Affiliate
contributes to or has ever contributed to any Multiemployer Plan.
(iv) If the Guarantor or any ERISA Affiliate on or after the
date of this Participation Agreement: (1) maintains or
contributes to a Pension Plan; (2) contributes or has any
material contingent obligations to any Multiemployer Plan; or (3)
incurs a liability with respect to any post-retirement benefit
under any Employee Benefit Plan which is a welfare plan (as defined
in Section 3(1) of ERISA), other than liability for health plan
continuation coverage described in Part 6 of Title I(B) of ERISA,
which liability for health plan coverage is not reasonably likely
to have a Material Adverse Effect, then such Guarantor or ERISA
Affiliate shall promptly provide a written notice thereof and a
statement affirming that no Material Adverse Effect could
reasonably be expected to occur as a result thereof.
(l) LICENSES, PERMITS, ETC. The Guarantor and its Subsidiaries own or
possess all licenses, permits, franchises, authorizations, patents,
copyrights, service marks, trademarks and trade names or rights thereto, that
individually or in the aggregate, are material, without known conflict with
the rights of others, the failure of which to so own or possess could
reasonably be expected to have a Material Adverse Effect. To the best
knowledge of Guarantor, no product of the Guarantor or any its Subsidiaries
infringes in any material respect on any license, permit, franchise,
authorization, patent, copyright, service mark, trademark, trade name or
other right owned by any other Person, which infringement could reasonably be
expected to have a Material Adverse Effect. To the best knowledge of the
Guarantor, there is no material violation by any Person of any right of the
Guarantor or any of its Subsidiaries with respect to any patent, copyright,
service mark, trademark, trade name or other right owned or used by the
Guarantor or any of its Subsidiaries, which violation could reasonably be
expected to have a Material Adverse Effect.
(m) SUBSIDIARIES. SCHEDULE III identifies each Subsidiary, the
jurisdiction of its incorporation or formation, the percentage of issued and
outstanding shares of each class of its capital stock or other equity
interests owned by the Guarantor and its Subsidiaries and, if such percentage
is not 100% (excluding directors' qualifying shares as required by law), a
description of each class of its authorized capital stock and the number of
shares of each class issued and
39
outstanding. Such shares owned by the Guarantor and its Subsidiaries are
owned beneficially, and of record, free of any Lien.
(n) OFFER OF SECURITIES, ETC. Neither the Guarantor nor any Person
authorized to act on its behalf has, directly or indirectly, offered or will
offer any interest in the Property or the Lease or any other interest similar
thereto (the sale or offer of which would be integrated with the sale or
offer of such interest in the Property or the Lease), for sale to, or
solicited or will solicit any offer to acquire any of the same from, any
Person other than the Agent or Participants, the Lessor and other "accredited
investors" (as defined in Regulation D of the Securities and Exchange
Commission).
(o) DISCLOSURE. The representations and warranties of the Guarantor
contained in any Operative Document and in any other document, certificate or
written statement furnished to the Lessor, the Agent and/or the Participants
by or on behalf of the Guarantor for use in connection with the transactions
contemplated hereby, when taken as a whole, do not contain any untrue
statement of a material fact or omit to state a material fact (known to the
Guarantor, in the case of any document not furnished by the Guarantor)
necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. There
are no facts known (or which should upon the reasonable exercise of diligence
be known) to the Guarantor that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have
not been disclosed herein or in such other documents, certificates and
statements furnished to the Lessor, the Agent and/or the Participants for use
in connection with the transactions contemplated hereby.
SECTION 8.4 REPRESENTATIONS OF THE LESSEE. The Lessee represents
and warrants to each of the other parties hereto that:
(a) ORGANIZATION; POWERS; QUALIFICATION. The Lessee (a) is a limited
partnership duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization, (b) has all requisite partnership
power and authority to own, lease and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to enter into the
Operative Documents to which it is or will be a party and to carry out the
transactions contemplated hereby and thereby, and (c) is qualified to do
business and is in good standing as a foreign limited partnership in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, except in jurisdictions where the failure to be
so qualified or in good standing has not had, and could not be reasonably
expected to have, a Material Adverse Effect. Lessee's chief place of business
is located at 13512 North Central Expressway, Dallas, Texas 75243.
(b) AUTHORIZATION OF OPERATIVE DOCUMENTS; NO CONFLICT. The execution,
delivery and performance by the Lessee of the Operative Documents to which it
is or will be a party have been or prior to the execution and delivery
thereof will be duly authorized by all necessary action on the part of the
Lessee. The execution, delivery and performance by the Lessee of the
Operative Documents to which it is or will be a party and the consummation by
the Lessee of the transactions contemplated by the Operative Documents do not
and will not (i) violate any material provision of any law or any
governmental rule or regulation applicable to the Lessee, any of the
certificate of incorporation or bylaws of Lessee's General Partner or the
limited
40
partnership agreement or certificate of limited partnership of the Lessee, or
any order, judgment or decree of any court or other agency of government
binding on the Lessee or the Property; (ii) conflict with, result in a breach
or acceleration of or entitle any other Person to accelerate (with due notice
or lapse of time or both) or constitute (with due notice or lapse of time or
both) a default under any indenture, loan agreement, other agreement for
borrowed money or other material agreement or contractual arrangement by
which the Lessee or any of its property or assets may be subject; (iii)
result in or require the creation or imposition of any Lien (or the
obligation to create or impose any Lien upon any of the properties or assets
of the Lessee (other than any Liens created under any of the Operative
Documents and other than Permitted Liens); or (iv) require any approval of
partners (other than the Lessee's General Partner) or any approval or consent
of any Person under any indenture, loan agreement, other agreement for
borrowed money or other material agreement or contractual arrangement by
which the Lessee or any of its property or assets may be subject, except for
such approvals or consents which will be obtained on or before the Closing
Date.
(c) GOVERNMENTAL CONSENTS. The execution, delivery and performance by
the Lessee of the Operative Documents to which it is a party and the
consummation by Lessee of the transactions contemplated by the Operative
Documents do not and will not require any Governmental Action by any
Governmental Authority except for filings and recordings of the Operative
Documents listed in SECTION 8.6(f) hereof with the appropriate Governmental
Authorities, all of which will have been completed on or prior to, or will in
due course be completed following, the Land Interest Acquisition Date.
(d) BINDING OBLIGATION. Each Operative Document to which the Lessee
is a party has been duly executed and delivered by the Lessee and (assuming
due authorization by the other parties thereto, other than the Guarantor and
the Lessee's General Partner) is the legally valid and binding obligation of
the Lessee, enforceable against the Lessee in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights
generally or by equitable principles relating to enforceability.
(e) NO MATERIAL ADVERSE EFFECT. Since December 31, 1999, no event or
change has occurred that has caused, either in any case or in the aggregate,
a Material Adverse Effect with respect to Lessee.
(f) LITIGATION; ADVERSE PROCEEDINGS. There are no Adverse Proceedings
pending or, to the knowledge of the Lessee, threatened individually or in the
aggregate, that (i) seek to enjoin, either directly or indirectly, the
execution, delivery or performance by the Lessee of the Operative Documents
or the transactions contemplated hereby or thereby, or question the validity
of the Operative Documents or the rights or remedies of the Lessor, the Agent
or the Participants with respect to the Lessee or the Property under the
Operative Documents or (ii) could reasonably be expected to have a Material
Adverse Effect. The Lessee is not subject to or in default with respect to
any final judgments, writs, injunctions, decrees, rules or regulations of any
court or any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
that, individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect.
41
(g) PAYMENT OF TAXES. All federal and all material state, local and
foreign tax returns and reports of the Lessee required to be filed by it have
been timely filed where the failure to file would have a Material Adverse
Effect, and all taxes shown on such tax returns to be due and payable and all
assessments, fees and other governmental charges upon the Lessee and upon its
properties, assets, income, businesses and franchises which are due and
payable have been paid when due and payable, other than those being contested
in good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP have been made and subject, in the case of the Property,
to the terms of the Lease. The Lessee knows of no proposed tax assessment
against the Lessee which is not being actively contested by the Lessee in
good faith and by appropriate proceedings; PROVIDED, such reserves or other
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor, and PROVIDED FURTHER that, in the
case of the Property, any such contest shall be subject to the terms of the
Lease.
(h) TITLE TO PROPERTY. The Lessee has a valid leasehold interest in,
the Property. Except as permitted by this Agreement, the Property is free and
clear of Liens other than Permitted Exceptions. The Lessee has complied with
all obligations under all material leases to which it is a party and all such
leases are in full force and effect. The Lessee enjoys peaceful and
undisturbed possession under such leases.
(i) ENVIRONMENTAL MATTERS. Except as disclosed in the Environmental
Audit delivered as of the Closing Date, the Environmental Certificate and the
Purchase Agreement:
(i) The Property does not contain, and has not previously
contained, any Materials of Environmental Concern in amounts or
concentrations which (A) constitute or constituted a violation of, or
(B) could reasonably be expected to give rise to liability under, any
Environmental Law.
(ii) The Property complies, and has in the last three years been
in compliance, in all material respects with all applicable
Environmental Laws, and there is no contamination at or under (or, to
the knowledge of the Lessee, about) the Property.
(iii) The Lessee has not received any notice of violation,
alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws
with regard to the Property, nor does the Lessee have knowledge or
reason to believe that any such notice will be received or is being
threatened.
(iv) Materials of Environmental Concern have not been
transported or disposed of from the Property by Lessee or any of its
Affiliates or, to Lessee's knowledge, by any other Person, in violation
of, or in a manner or to a location which could reasonably be expected
to give rise to material liability under, any Environmental Law, nor
have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Property in violation
of, or in a manner that could reasonably be expected to give rise to
material liability under, any applicable Environmental Law.
42
(v) There are no judicial proceedings or governmental or
administrative actions pending or, to the best knowledge of the
Lessee, threatened, under any Environmental Law in which the Lessee
or any of its Subsidiaries is named as a party, or to the best
knowledge of Lessee, will be named as a party, with respect to the
Property nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or any administrative
or judicial requirements outstanding under any Environmental Law with
respect to the Property.
(vi) There has been no release or threat of release of
Materials of Environmental Concern at or from the Property, or
arising from or related to the operations of the Lessee or in
connection with the Property in violation of or in amounts or in a
manner that could reasonably give rise to material liability under
Environmental Laws.
(j) NO DEFAULTS. The Lessee is not in violation of or in default with
respect to (i) any provision of any Applicable Law, which violation or
default could reasonably be expected to have a Material Adverse Effect, or
(ii) the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement to which it is a party or
by which it or its properties may be bound or affected, which violation or
default could reasonably be expected to have a Material Adverse Effect. No
condition exists that, with the giving of notice or the lapse of time or
both, could constitute such a violation or default, except where the
consequences, direct or indirect, of such default or defaults, if any, could
not reasonably be expected to have a Material Adverse Effect.
(k) GOVERNMENTAL REGULATION. The Lessee is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act,
the Interstate Commerce Act or the Investment Company Act of 1940, any state
public utilities code or under any other federal or state statute or
regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the obligations of the Lessee to the
Lessor, the Agent or the Participants under the Operative Documents
unenforceable.
(l) LICENSES, PERMITS, ETC. The Lessee owns or possesses all
licenses, permits, franchises, authorizations, patents, copyrights, service
marks, trademarks and trade names or rights thereto, that individually or in
the aggregate, are material, without known conflict with the rights of
others, the failure of which to so own or possess could reasonably be
expected to have a Material Adverse Effect. To the best knowledge of Lessee,
no product of the Lessee infringes in any material respect on any license,
permit, franchise, authorization, patent, copyright, service mark, trademark,
trade name or other right owned by any other Person, which infringement could
reasonably be expected to have a Material Adverse Effect. To the best
knowledge of the Lessee, there is no material violation by any Person of any
right of the Lessee with respect to any patent, copyright, service mark,
trademark, trade name or other right owned or used by the Lessee, which
violation could reasonably be expected to have a Material Adverse Effect.
(m) SUBSIDIARIES. The Lessee has no Subsidiaries.
(n) OFFER OF SECURITIES, ETC. Neither the Lessee nor any Person
authorized to act on its behalf has, directly or indirectly, offered or will
offer any interest in the Property or the Lease or
43
any other interest similar thereto (the sale or offer of which would be
integrated with the sale or offer of such interest in the Property or the
Lease), for sale to, or solicited or will solicit any offer to acquire any of
the same from, any Person other than the Agent or Participants, the Lessor
and other "accredited investors" (as defined in Regulation D of the
Securities and Exchange Commission).
(o) DISCLOSURE. The representations or warranties of the Lessee
contained in any Operative Document and in any other document, certificate or
written statement furnished to the Lessor, the Agent and/or the Participants
by or on behalf of the Lessee for use in connection with the transactions
contemplated hereby, when taken as a whole, do not contain any untrue
statement of a material fact or omit to state a material fact (known to the
Lessee, in the case of any document not furnished by the Lessee) necessary in
order to make the statements contained herein or therein not misleading in
light of the circumstances in which the same were made. There are no facts
known (or which should upon the reasonable exercise of diligence be known) to
the Lessee that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect and that have not been
disclosed herein or in such other documents, certificates and statements
furnished to the Lessor, the Agent and/or the Participants for use in
connection with the transactions contemplated hereby.
(p) BANKRUPTCY. The Lessee has not filed a voluntary petition in
bankruptcy or been adjudicated a bankrupt or insolvent. No court of competent
jurisdiction has entered an order, judgment or decree appointing a petition
filed against the Lessee making any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any federal or
state bankruptcy act or other law relating to relief for debtors, and no
other liquidator has been appointed for the Lessee or of all or any part of
its properties or the Property and no such action is pending. The Lessee has
not given notice to any Governmental Authority of insolvency or pending
insolvency or suspension or pending suspension of operations.
(q) SOLVENCY. The Lessee is solvent and has assets having a value
both at fair value and at present fair saleable value at least equal to the
amount of its liabilities.
SECTION 8.5 REPRESENTATIONS OF THE LESSEE'S GENERAL PARTNER. The
Lessee's General Partner represents and warrants to each of the other parties
hereto that:
(a) ORGANIZATION; POWERS; QUALIFICATION. The Lessee's General Partner
(a) is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, (b) has all requisite
power and authority to own, lease and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to execute on
behalf of the Lessee each of the Operative Documents to which the Lessee, as
Lessee or as Construction Agent, is or will be a party, to enter into this
Agreement and, to the extent applicable, to carry out the transactions
contemplated hereby and thereby, and (c) is qualified to do business and is
in good standing in every jurisdiction where its assets are located and
wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has
not had, and could not be reasonably expected to have, a Material Adverse
Effect.
44
(b) AUTHORIZATION OF OPERATIVE DOCUMENTS; NO CONFLICT. The execution,
delivery and performance by the Lessee's General Partner of the Operative
Documents to which the Lessee (as Lessee or as Construction Agent) is or will
be a party and the execution, delivery and, to the extent applicable,
performance by the Lessee's General Partner of the Operative Documents to
which it is or will be a party have each been duly authorized by all
necessary action on the part of the Lessee's General Partner. The execution,
delivery and performance by the Lessee's General Partner of the Operative
Documents to which it is a party and the consummation of the transactions
contemplated by the Operative Documents do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to the
Lessee's General Partner, any of the certificate of incorporation or bylaws
of the Lessee's General Partner, or any order, judgment or decree of any
court or other agency of government binding on the Lessee's General Partner
or the Property; (ii) conflict with, result in a breach or acceleration of or
entitle any other Person to accelerate (with due notice or lapse of time or
both) or constitute (with due notice or lapse of time or both) a default
under any indenture, loan agreement, or other agreement for borrowed money or
other material agreement or contractual arrangement by which the Lessee's
General Partner or any of its property or assets may be subject; (iii) result
in or require the creation or imposition of any Lien (or the obligation to
create or impose any Lien upon any of the properties or assets of the
Lessee's General Partner (other than any Liens created under any of the
Operative Documents and other than Permitted Liens); or (iv) require any
approval of stockholders or any approval or consent of any Person under any
indenture, loan agreement, other agreement for borrowed money or other
material agreement or contractual arrangement by which the Lessee's General
Partner or any of its property or assets may be subject, except for such
approvals or consents which will be obtained on or before the Closing Date
and disclosed in writing to the Lessor and the Agent.
(c) BINDING OBLIGATION. Each Operative Document to which the Lessee's
General Partner is a party has been duly executed and delivered by the
Lessee's General Partner and is the legally valid and binding obligation of
the Lessee's General Partner, enforceable against the Lessee's General
Partner in accordance with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
(d) LITIGATION; ADVERSE PROCEEDINGS. There are no Adverse Proceedings
pending or, to the knowledge of the Lessee's General Partner, threatened
individually or in the aggregate, that (i) seek to enjoin, either directly or
indirectly, the execution, delivery or performance by the Lessee's General
Partner of the Operative Documents to which it is a party or the transactions
contemplated hereby or thereby, or question the validity of the Operative
Documents or the rights or remedies of the Lessor, the Agent or the
Participants with respect to the Lessee's General Partner under the Operative
Documents or (ii) could reasonably be expected to have a Material Adverse
Effect on the Lessee's General Partner. The Lessee's General Partner is not
subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect on
the Lessee's General Partner.
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(e) DISCLOSURE. The representations or warranties of the Lessee's
General Partner contained in any Operative Document and in any other
document, certificate or written statement furnished to the Lessor, the Agent
and/or the Participants by or on behalf of the Lessee's General Partner for
use in connection with the transactions contemplated hereby, when taken as a
whole, do not contain any untrue statement of a material fact or omit to
state a material fact (known to the Lessee's General Partner, in the case of
any document not furnished by the Lessee's General Partner) necessary in
order to make the statements contained herein or therein not misleading in
light of the circumstances in which the same were made. There are no facts
known (or which should upon the reasonable exercise of diligence be known) to
the Lessee's General Partner that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect on the Lessee's
General Partner and that have not been disclosed herein or in such other
documents, certificates and statements furnished to the Lessor, the Agent
and/or the Participants for use in connection with the transactions
contemplated hereby.
SECTION 8.6 REPRESENTATIONS OF THE LESSEE AND THE CONSTRUCTION
AGENT WITH RESPECT TO THE PROPERTY. The Lessees and the Construction Agent
hereby represent and warrant to each of the other parties hereto, on the
Closing Date and on each other date on which representations and warranties
of the Lessee and the Construction Agent are made or deemed made pursuant to
the Operative Documents, as follows:
(a) REPRESENTATIONS. The representations and warranties of the
Construction Agent and the Lessee set forth in the Operative Documents to
which each is a party are true and correct on and as of such date, except to
the extent such representations or warranties relate solely to an earlier
date, in which case such representations and warranties shall have been true
and correct on and as of such earlier date. The Construction Agent and the
Lessee are each in compliance with their respective obligations under the
Operative Documents to which they are a party and there exists no Default or
Event of Default.
(b) PROPERTY. The Property consists of the Existing Facility on which
Improvements of the type described in RECITAL B to this Agreement will be
constructed pursuant to the Construction Agency Agreements. The Property is
located in Richardson, Texas. The Property does, and as improved in
accordance with the applicable Plans and Specifications will, and the use
thereof by the Lessee and its agents, assignees, employees, invitees,
lessees, licensees, contractors and tenants does and will comply in all
material respects with all Requirements of Law (including, without
limitation, Title III of the Americans with Disabilities Act, all zoning and
land use laws, all Environmental Laws and all building, planning, zoning and
fire codes), except for such Requirements of Law as the Lessee shall be
contesting in good faith by appropriate proceedings and in accordance with
the applicable provisions of the Lease, and complies with all Insurance
Requirements. The applicable Plans and Specifications have been or will be
prepared in all material respects in accordance with applicable Requirements
of Law (including, without limitation, Title III of the Americans with
Disabilities Act, all zoning and land use laws, all Environmental Laws and
all building, planning, zoning and fire codes) and the Existing Facility does
not, and upon completion of the Expansion Improvements and Tenant
Improvements in accordance with the applicable Plans and Specifications, such
Improvements and the other Improvements on such Property will not encroach in
any manner onto any adjoining land (except as permitted by express written
easements or as insured by appropriate title insurance). The Existing
Facility is, and upon completion of the applicable Improvements in
46
accordance with the related Plans and Specifications, such Improvements
(including, without limitation, structural members, the plumbing, heating,
air conditioning and electrical systems thereof), and all water, sewer,
electric, gas, telephone and drainage facilities, will be completed in a
workmanlike manner and in accordance with the applicable Plans and
Specifications and will be, fit for use as first class facilities of the type
described in RECITAL B to this Agreement, and all other utilities required to
adequately service the Improvements for their intended use are or will be
available and "tapped on" and hooked up pursuant to adequate permits
(including any that may be required under applicable Environmental Laws).
There is no action, suit or proceeding (including any proceeding in
condemnation or eminent domain or under any Environmental Law) pending or, to
the best of the Lessee's or the Construction Agent's knowledge, threatened
with respect to the Lessee, its Affiliates or the Property which materially
adversely affects the title to, or the use, operation or value of, the
Property. Except as may be disclosed to the Lessor and the Agent in writing
in accordance with Section 15.1(c) of the Lease, no fire or other casualty
with respect to the Property has occurred. The Property has available (or,
with respect to the Expansion Improvements and Tenant Improvements will have
available by the applicable Completion Date) all material services of public
facilities and other utilities necessary for use and operation of such
facilities and the other Improvements for their primary intended purposes,
including, without limitation, adequate water, gas and electrical supply,
storm and sanitary sewerage facilities, telephone, other required public
utilities and means of access to such facilities from publicly dedicated
streets and public highways for pedestrians and motor vehicles. All utilities
serving the Property, or proposed to serve the Property in accordance with
the applicable Plans and Specifications, are (or will be) located in, and
vehicular access to the Improvements on the Property is provided by, either
public rights-of-way abutting such Property or Appurtenant Rights. All
material licenses, approvals, authorizations, consents, permits (including,
without limitation, building, and environmental permits, licenses, approvals,
authorizations and consents), easements and rights-of-way, including proof
and dedication, required for (x) the use, treatment, storage, transport,
disposal or disposition of any Hazardous Substance on, at, under or from the
Property during the construction of the Expansion Improvements and Tenant
Improvements thereon, and (y) the use, operation and construction of such
Improvements in accordance with the applicable Plans and Specifications and
the applicable Construction Agency Agreement, have either been obtained from
the appropriate Governmental Authorities having jurisdiction or from private
parties, as the case may be, or will be obtained from the appropriate
Governmental Authorities having jurisdiction or from private parties, as the
case may be, prior to commencing any such construction or use and operation,
as applicable, and will in each case be maintained by the Lessee during the
periods for which they are required by Applicable Law or such Governmental
Authorities.
(c) TITLE. The Deed providing for the acquisition of the Existing
Facility is sufficient to convey title to the Existing Facility in fee
simple, subject only to Permitted Exceptions. Upon conveyance of the Deed on
the Land Interest Acquisition Date, the Lessor will own fee simple title to
the Existing Facility and any Improvements, subject to Permitted Exceptions,
and will have the right to grant the Mortgage on the Property. The Lessor
will at all times during the Term after the Land Interest Acquisition Date
have good title to all Equipment, if any.
(d) INSURANCE. The Lessee has obtained insurance coverage covering
the Property which meets the requirements of Article XIV of the Lease, and
such coverage is in full force and effect.
47
(e) LEASE. (i) Upon the execution and delivery of the Lease
Supplement (and with respect to the Expansion Improvements, the Restated
Lease Supplement) to the Lease, the Lessee will have unconditionally accepted
the related portion of the Property covered thereby and will be bound by the
terms of the Lease Supplement and Restated Lease Supplement and, upon the
applicable Lease Commencement Date will have a valid leasehold interest in
the related portion of the Property, subject only to the Permitted
Exceptions; (ii) from and after the applicable Lease Commencement Date, the
Lessee's obligation to pay Rent will be an independent covenant and no right
of deduction or offset will exist with respect to any Rent or other sums
payable under the Lease; and (iii) from and after the applicable Lease
Commencement Date, no Rent under the Lease will have been prepaid and the
Lessee will have no right to prepay the Rent, except as specifically set
forth therein or in the Expansion Improvements Construction Agency Agreement.
(f) PROTECTION OF INTERESTS. (i) On the Land Interest Acquisition
Date (or with respect to the Mortgage and the UCC Financing Statements, on
the first Business Day after the Land Interest Acquisition Date and with
respect to the Restated Lease Supplement, on the Expansion Improvements
Closing Date), the Lease Supplement, the Restated Lease Supplement, the
Assignment of Lease, the Consent to Assignment and the Mortgage are each in a
form sufficient, and have been or will be recorded with the Collin County
Clerk's Office, which is the only recording office necessary to grant
perfected first priority liens on the applicable portion of the Property
covered thereby to the Agent or the Lessor, as the case may be, (ii) the
Agent Financing Statements are each in a form sufficient, and have been
delivered to the title company for filing or will be filed with the Secretary
of State of the State of Texas and the Collin County Clerk's Office, which
are all filing offices necessary to create a valid and perfected first
priority security interest in the Lessor's interest in all Equipment, if any,
to be located on the Property and the Improvements; and (iii) the Lessor
Financing Statements are each in a form sufficient, and have been delivered
to the title company for filing or will be filed with the Secretary of State
of the State of Texas and the Collin County Clerk's Office, which are all
filing offices necessary to perfect the Lessor's interest under the Lease to
the extent the Lease is a security agreement.
(g) FLOOD HAZARD AREAS. No portion of the Property is located in an
area identified as a special flood hazard area by the Federal Emergency
Management Agency or other applicable agency, or if any portion of the
Property is located in an area identified as a special flood hazard area by
the Federal Emergency Management Agency or other applicable agency, then
flood insurance has been obtained for the Property or such portion thereof in
accordance with Section 14.3 of the Lease and in accordance with the National
Flood Insurance Act of 1968, as amended.
(h) CONDITIONS PRECEDENT. All conditions precedent on the part of the
Lessee or the Construction Agent contained in this Agreement and in the other
Operative Documents relating to the acquisition and, upon the applicable
Lease Commencement Date, leasing of the applicable portion Property by the
Lessor have been satisfied in full.
SECTION 8.7 REPRESENTATIONS OF THE LESSEE, THE CONSTRUCTION AGENT AND
THE GUARANTOR WITH RESPECT TO EACH ADVANCE. The Lessee, the Construction
Agent and the Guarantor each hereby represents and warrants as of each
Funding Date on which an Advance is made as follows:
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(a) REPRESENTATIONS. The representations and warranties of the
Guarantor, the Construction Agent and the Lessee set forth in the Operative
Documents to which each is a party (including the representations and
warranties set forth in SECTIONS 8.3, 8.4 and 8.6) are true and correct in
all material respects on and as of such Funding Date, except to the extent
such representations or warranties relate solely to an earlier date, in which
case such representations and warranties shall have been true and correct in
all material respects on and as of such earlier date. The Guarantor, the
Construction Agent and the Lessee are in compliance in all material respects
with their respective obligations under the Operative Documents and there
exists no Default or Event of Default. No Default or Event of Default will
occur as a result of, or after giving effect to, the Advance requested by the
Acquisition Request or the Funding Request on such date.
(b) IMPROVEMENTS. With respect to any Funding Date after the Land
Interest Acquisition Date, construction of the Improvements prior to such
Funding Date has been performed in a good and workmanlike manner,
substantially in accordance with the applicable Budget and the applicable
Plans and Specifications and in compliance in all material respects with all
Requirements of Law and in compliance with all Insurance Requirements.
(c) NO LIENS. There are no Liens against the Property other than
Permitted Exceptions. The Participation Interests funding such Advance are
secured by the Lien of the Mortgage.
(d) ADVANCE. The amount of the Advance requested represents amounts
owing in respect of the acquisition price of the Existing Facility or amounts
that the Construction Agent reasonably believes will be due in the sixty (60)
days following such Advance from the Construction Agent to third parties in
respect of Property Improvements Costs, or amounts paid by the Construction
Agent to third parties in respect of Property Costs for which the
Construction Agent has not previously been reimbursed by an Advance. The
conditions precedent on the part of the Lessee and the Construction Agent to
such Advance and the related remittances by the Participants with respect
thereto set forth in SECTION 6 have been satisfied.
(e) ACCEPTANCE AND LEASE OF EQUIPMENT. Upon the execution and
delivery of each Equipment Schedule to the Lease, if any, the Lessee will
have unconditionally accepted the Equipment, if any, subject to the Lease
Supplement or Restated Lease Supplement, as the case may be, and from and
after the applicable Lease Commencement Date, will have good and marketable
title to a valid and subsisting leasehold interest in such Equipment, subject
only to Permitted Exceptions.
(f) PROTECTION OF INTERESTS IN EQUIPMENT. On each Funding Date for
the acquisition of Equipment, if any, (i) the Lease, the Lease Supplement,
the applicable Equipment Schedule and the Mortgage are each in a form
sufficient to grant perfected Liens on the Lessee's and the Lessor's
interests, respectively, in the Equipment to the Lessor and Agent,
respectively, (ii) the Agent Financing Statements are each in a form
sufficient, and have been or will be filed with the Secretary of State of the
State of Texas and the Collin County Clerk's Office, which are all filing
offices necessary to perfect a valid first priority security interest in such
interest in such Equipment, and (iii) the Lessor Financing Statements are
each in a form sufficient, and have been or will be filed with the Secretary
of State of the State of Texas and the Collin County
49
Clerk's Office, which are all filing offices necessary to perfect a valid
first priority security interest in such Equipment under the Lease to the
extent the Lease is a security agreement.
(g) TITLE INSURANCE DATE DOWN ENDORSEMENT. Upon substantial
completion of the Tenant Improvements, and again upon substantial completion
of the Expansion Improvements, the Lessee shall, to the extent available in
accordance with Applicable Law, furnish the Lessor an endorsement or other
coverage reasonably acceptable to the Lessor from the title insurance company
issuing the policies pursuant to SECTION 6.1(a), insuring the Lessor and the
Agent that (i) all mechanics' or similar liens and claims for such liens
which could arise from that part of the Property Improvements Costs
previously paid for, if any, or to be paid for with the then proposed
Advance, have been waived and (ii) there has not been filed with respect to
all or any part of the Property any mechanics' or similar liens or claims of
such liens that are not discharged of record, or insured over by the title
insurance company, in respect of any part of the Property.
(h) INSURANCE. The Lessee has obtained insurance coverage covering
the Property which meets the requirements of Article XIV of the Lease, and
such coverage is in full force and effect.
SECTION 9
PAYMENT OF CERTAIN EXPENSES
The Lessee agrees, for the benefit of the Lessor, the Agent and the
Participants, that:
SECTION 9.1 TRANSACTION EXPENSES. (a) At all times from and after the
Closing Date, the Lessee shall pay from time to time all (i) Transaction
Expenses of the Lessee in respect of the transactions consummated on the
Closing Date, the Land Interest Acquisition Date or any Funding Date, (ii)
all Transaction Expenses arising out of or resulting from a Fully
Indemnifiable Event or an Environmental Obligation, and (iii) unless
requested to be capitalized and funded by related fundings of Participation
Interests (and permitted to be so capitalized by the Participants), all
Transaction Expenses arising with respect to the Existing Facility and the
Tenant Improvements.
(b) With respect to the Expansion Improvements only, prior to the
Completion Date with respect to the Expansion Improvements, (i) the Lessee
shall pay from time to time all Transaction Expenses arising with respect to
the Expansion Improvements from an event or circumstance Within the Lessee's
Control, PROVIDED that if such Transaction Expense is related to an inability
or failure to complete construction of the Expansion Improvements, the
Lessee's monetary obligation provided in this CLAUSE (b)(i), together with
all other similarly limited amounts payable prior to the Completion Date with
respect to the Expansion Improvements under CLAUSE (b)(i) of SECTION 9.3,
CLAUSE 5(A)(2) of the proviso to SECTION 13.1, SECTION 13.10, clause (i)(b)
of the proviso to Section 24.1 of the Lease and any similarly limited payment
obligation of the Lessee in connection with the return or sale of the
Lessor's interest in the Property under the Lease or the Expansion
Improvements Construction Agency Agreement, shall not exceed the maximum
Expansion Improvements Residual Value Guarantee Amount unless such
Transaction Expense also arises out of or results from a Fully Indemnifiable
Event or an
50
Environmental Obligation, in which case such limitation shall not be
applicable, and (ii) all other Transaction Expenses shall be capitalized as
provided in SECTION 3.7(e) and paid as Advances funded by related fundings of
Participation Interests on the date of payment.
(c) After the Completion Date with respect to the Expansion
Improvements, Lessee shall pay or cause to be paid all Transaction Expenses.
SECTION 9.2 BROKERS' FEES AND STAMP TAXES. The Lessee shall pay or
cause to be paid any brokers' fees and any and all stamp, transfer and other
similar taxes, fees and excises, if any, including any interest and
penalties, which are payable in connection with the transactions contemplated
by this Participation Agreement and the other Operative Documents.
SECTION 9.3 OBLIGATIONS. (a) At all times from and after the Closing
Date, the Lessee shall pay, on or before the due date thereof, all costs,
expenses and other amounts required to be paid by the Mortgage and the
Assignment of Lease (other than the principal amount or equity component of,
or interest or yield on, the Advances) to the extent such costs, expenses or
other amounts arise out of or result from a Fully Indemnifiable Event or an
Environmental Obligation or are related to the Existing Facility or the
Tenant Improvements.
(b) With respect to the Expansion Improvements only, prior to the
Completion Date with respect to the Expansion Improvements, (i) the Lessee
shall pay from time to time all costs, expenses and other amounts required to
be paid pursuant to the Mortgage and the Assignment of Lease arising from an
event or circumstance Within the Lessee's Control, PROVIDED that if such
costs, expenses or other amounts become payable due to an inability or
failure to complete construction of the Expansion Improvements, the Lessee's
monetary obligation provided in this CLAUSE (b)(i), together with all other
similarly limited amounts payable prior to the Completion Date with respect
to the Expansion Improvements under CLAUSE (b)(i) of SECTION 9.1, CLAUSE
5(a)(2) of the proviso to SECTION 13.1, SECTION 13.10, clause (i)(b) of the
proviso to Section 24.1 of the Lease and any similarly limited payment
obligation of the Lessee in connection with the return or sale of the
Lessor's interest in the Property under the Lease or the Expansion
Improvements Construction Agency Agreement, shall not exceed the maximum
Expansion Improvements Residual Value Guarantee Amount unless such cost,
expense or other amount also arises out of or results from a Fully
Indemnifiable Event or an Environmental Obligation, in which case such
limitation shall not be applicable, and (ii) all other such costs, expenses
or other amounts shall be capitalized as provided in SECTION 3.7(e) and paid
as Advances funded by related fundings of Participation Interests on the date
of payment.
(c) From and after the Completion Date with respect to the Expansion
Improvements, the Lessee shall pay from time to time all costs, expenses and
other amounts required to be paid pursuant to the Mortgage and the Assignment
of Lease, howsoever arising.
SECTION 10
OTHER COVENANTS AND AGREEMENTS
51
SECTION 10.1 COVENANTS OF THE GUARANTOR.
(a) AFFIRMATIVE COVENANTS. The Guarantor hereby agrees that, so long
as this Agreement is in effect or any amount is owing to any Participant, the
Lessor or the Agent hereunder or under any other Operative Document, the
Guarantor shall and (except in the case of delivery of financial information,
reports, and notices) shall cause each of its Subsidiaries to perform each of
the following covenants:
(i) GENERAL BUSINESS OPERATIONS. Each of the Guarantor and
its Subsidiaries shall (i) preserve and maintain its corporate
existence and all of its rights, privileges and franchises
reasonably necessary to the conduct of its business, and (ii)
conduct its business activities in compliance with all
applicable laws and governmental rules and regulations, and all
indentures, loan agreements or other agreements for borrowed money
or other material agreements or contractual arrangements
applicable to such entity or its property or assets, the violation
of which is reasonably likely to have a Material Adverse Effect;
PROVIDED, HOWEVER, that the Guarantor and its Subsidiaries may
dissolve or liquidate any of its Subsidiaries other than Lessee if
such dissolution or liquidation is not reasonably likely to
have a Material Adverse Effect. The Guarantor shall maintain its
chief executive office and principal place of business in the
United States and shall not relocate its chief executive office of
principal place of business outside of the State of Oregon except
upon not less than thirty (30) days prior written notice to the Agent.
(ii) MAINTENANCE OF PROPERTIES. Subject, in the case of the
Property, to the provisions of the Lease and of SECTION 8.3 hereof,
the Guarantor will, and will cause each of its Subsidiaries to,
maintain or cause to be maintained in all material respects in good
repair, working order and condition, ordinary wear and tear excepted,
all property useful and necessary in the business of the Guarantor
and its Subsidiaries.
(iii) PAYMENT OF TAXES AND CLAIMS. Subject, in the case of
the Property, to the provisions of the Lease and of SECTION 8.3
hereof, the Guarantor will, and will cause each of its
Subsidiaries to, pay all taxes, assessments and other
governmental charges imposed upon it or any of its properties or
assets or in respect of any of its income, businesses or franchises
before any penalty accrues thereon, and all claims (including claims
for labor, services, materials and supplies) for sums that have
become due and payable and that by law have or may become a Lien
upon any of its properties or assets, prior to the time when any
penalty or fine shall be incurred with respect thereto; PROVIDED,
no such charge or claim need be paid if it is being contested in good
faith by appropriate proceedings promptly instituted and
diligently conducted and for which appropriate reserves as
required by GAAP are maintained. The Guarantor will not, nor will
it permit any of its Subsidiaries to, file or consent to the
filing of any consolidated income tax return with any Person
(other than the Guarantor or any of its Subsidiaries).
(iv) FINANCIAL STATEMENTS AND OTHER REPORTS. The Guarantor
will deliver or cause to be delivered to the Agent (with sufficient
copies for each of the Participants, other than the Tranche T
Participant) and to the Lessor:
52
(A) within ten (10) Business Days after such statement is
filed with the Commission after the end of each fiscal year of the
Guarantor, an audited statement of financial position of the
Guarantor and its consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated statements of income,
shareholder's equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the
previous fiscal year, all accompanied by the unqualified
opinion of KPMG Peat Marwick or other independent public
accountants of nationally recognized standing stating that such
consolidated financial statements present fairly the financial
position of the Guarantor and its Consolidated Subsidiaries for
the periods indicated, in conformity with GAAP, and applied on a
basis consistent with prior years; together with a Responsible
Officer's Certificate containing a computation of, and showing
compliance with, each of the financial ratios and restrictions
contained in SECTION 10.2 and to the effect that the Responsible
Officer executing such certificate is not aware of any Event of
Default or Default that has occurred and is continuing, or if
such officer is aware of any such Event of Default or Default,
describing it and the steps, if any, being taken to cure it;
(B) as soon as available and in any event within fifty
(50) days after the end of each of the first three quarters of
each fiscal year of the Guarantor, a consolidated statement of
financial position of the Guarantor as of the end of such quarter
and the related consolidated statements of income, shareholder's
equity and cash flows for such quarter and for the portion of the
Guarantor's fiscal year ended at the end of such quarter, together with
a Responsible Officer's Certificate containing a computation of,
and showing compliance with, each of the financial ratios and
restrictions contained in SECTION 10.2 and that no Default or Event
of Default has occurred or is continuing or, if any Default or Event of
Default has occurred and is continuing, describing it and the steps,
if any,being taken to cure it;
(C) if, as a result of any change in accounting principles
and policies from those used in the preparation of the Historical
Financial Statements, the consolidated financial statements of the
Guarantor and its Subsidiaries delivered pursuant to SECTIONS
10.1(a)(iv) or 10.1(a)(v)(b) will differ in any material respect
from the consolidated financial statements that would have been
delivered pursuant to such Sections had no such change in accounting
principles and policies been made, then together with the first
delivery of such financial statements after such change a statement
of reconciliation for all such prior financial statements in form
and substance satisfactory to the Required Participants;
(D) promptly upon their becoming available, copies of (i) all
financial statements sent or made available generally by the
Guarantor to its Security holders acting in such capacity or by any
Subsidiary of the
53
Guarantor to its Security holders other than the Guarantor or
another Subsidiary of the Guarantor and (ii) all regular
and periodic reports and all registration statements and
prospectuses, if any, filed by the Guarantor or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory
authority;
(E) promptly upon any Responsible Officer of the
Guarantor obtaining knowledge (i) of any condition or event that
constitutes a Default or an Event of Default or that notice has
been given to the Guarantor by the Lessor, the Agent or any
Participant with respect thereto; (ii) that any Person has given
any notice to the Guarantor or any of its Subsidiaries or taken any
other action with respect to any event or condition set forth
in Section 11.1(c) of the Guarantee; (iii) of any condition or
event of a type required to be disclosed in a current report on Form
8-K of the Securities and Exchange Commission (excluding Item 3 as
in effect on the date hereof) which condition or event could
reasonably be expected to have a Material Adverse Effect; or
(iv) of the occurrence of any event or change that has caused or
evidences, either in any case or in the aggregate, a Material
Adverse Effect, a certificate of a Responsible Officer specifying
the nature and period of existence of such condition, event or
change, or specifying the notice given or action taken by any
such Person and the nature of such claimed Event of Default,
Default, default, event or condition, and what action the
Guarantor has taken, is taking and proposes to take with respect
thereto;
(F) promptly upon any Responsible Officer of the
Guarantor obtaining knowledge of the institution of, or
non-frivolous threat of, any Adverse Proceeding not previously
disclosed in writing by the Guarantor to the Lessor, the Agent and
the Participants either (i) involving potential monetary damages
payable by Guarantor or its Subsidiaries of $5,000,000 or more
(alone or in the aggregate), or (ii) seeking to enjoin or
otherwise prevent the consummation or performance of, or to
recover any damages or obtain relief as a result of, the
transactions contemplated by the Operative Documents, written
notice thereof together with such other information as may be
reasonably available to the Guarantor to enable the Lessor, the
Agent and the Participants and their counsel to evaluate such matters
including information from time to time of any material development
in any such Adverse Proceeding;
(G) (i) promptly upon becoming aware of the occurrence of any
ERISA Event, a written notice specifying the nature thereof, what
action the Guarantor, any of its Subsidiaries or any of their
respective ERISA Affiliates has taken, is taking or proposes to take
with respect thereto and, when known, any action taken or threatened
by the Internal Revenue Service, the Department of Labor or the PBGC
with respect thereto; and (ii) upon request of the Agent and with
reasonable promptness, copies of
54
such other documents or governmental
reports or filings relating to any Employee Benefit Plan as the Agent
shall reasonably request;
(H) promptly, written notice of any change in either Moody's
or S&P's rating for Guarantor's long term Indebtedness, if
applicable; and
(I) the Guarantor and its Subsidiaries shall at all times
keep proper books of record and account in which full, true and
correct entries will be made of their transactions in accordance with
GAAP;
(J) with reasonable promptness, such other instruments,
agreements, certificates, opinions, statements, documents and other
information and data with respect to the operations or condition
(financial or otherwise) of Guarantor or any of its Subsidiaries and
compliance by Guarantor with the terms of this Agreement and the
other Operative Documents as from time to time may be reasonably
requested by the Lessor, the Agent or any Participant; and
(K) Notwithstanding the foregoing, the requirement for
delivery of financial statements under 10.1(a)(iv) may be satisfied
by delivery of a copy of Forms 10-K or 10-Q as the case may be as
filed by the Guarantor with the Commission for the most recent Fiscal
Year or Fiscal Quarter then ended. The Guarantor may remit its
financial statements via electronic format through delivery by e-mail
or otherwise.
(v) INSPECTION RIGHTS. Subject, in the case of the Property, to the
requirements of the Lease, the Guarantor will, and will cause each of its
Subsidiaries to, permit any authorized representatives designated by the
Lessor, the Agent or any Participant (other than the Tranche T Participant)
to visit and inspect its and their financial and accounting records (to the
extent reasonably requested by the Lessor, the Agent or any Participant other
than the Tranche T Participant), and to discuss its and their affairs,
finances and accounts with its and their Responsible Officers (provided, the
Guarantor may, if it so chooses, be present at or participate in any such
discussion), all upon reasonable notice to the chief financial officer,
treasurer or the vice president of finance of the Guarantor, at such
reasonable times during normal business hours and as often as may reasonably
be requested; PROVIDED, the Participants (other than the Tranche T
Participant) shall use their reasonable efforts to coordinate with the Lessor
and the Agent in order to minimize the number of such inspections and
discussions. The Guarantor will, upon the request of the Lessor, the Agent or
the Required Participants, participate in a meeting of the Lessor, the Agent
and the Participants once during each Fiscal Year to be held at the
Guarantor's corporate offices (or at such other location as may be agreed to
by the Guarantor and the Agent) at such time as may be agreed to by the
Guarantor and the Agent.
(vi) ENVIRONMENTAL.
(A) ENVIRONMENTAL DISCLOSURE. The Guarantor will deliver to
the Lessor and the Agent:
55
(1) as soon as practicable following the Guarantor's or any
of its Subsidiaries' receipt thereof, copies of all environmental
audits, investigations, analyses and reports with respect to any
material environmental matter at any facility or property of the
Guarantor or any of its Subsidiaries or with respect to any
Environmental Claim arising after the Closing Date at any such
facility or property which (other than in the case of the Property)
could reasonably be expected to have a Material Adverse Effect;
(2) promptly upon the Guarantor or any of its Subsidiaries
becoming aware of the occurrence thereof, written notice describing
in reasonable detail (1) any Release required to be reported to any
federal, state or local governmental or regulatory agency under any
applicable Environmental Laws, which Release could reasonably be
expected to have a Material Adverse Effect, and (2) any remedial
action taken by the Guarantor or any other Person in response to (x)
any Hazardous Activities the existence of which could be reasonably
be expected to result in one or more Environmental Claims that (other
than in the case of the Property) could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect,
or (y) any Environmental Claims that (other than in the case of the
Property), individually or in the aggregate, have a reasonable
possibility of resulting in a Material Adverse Effect;
(3) as soon as practicable following the sending or receipt
thereof by the Guarantor or any of its Subsidiaries, a copy of any
and all material written communications with any third party with
respect to (1) any Environmental Claims that (other than in the case
of the Property), individually or in the aggregate, have a reasonable
possibility of giving rise to a Material Adverse Effect, (2) any
Release required to be reported to any federal, state or local
governmental or regulatory agency, which Release could reasonably be
expected to have a Material Adverse Effect, and (3) any request for
information from any Governmental Authority that suggests such
Governmental Authority is investigating whether the Guarantor or any
of its Subsidiaries may be potentially responsible for any Hazardous
Activity, the liability for which could reasonably be expected to
have a Material Adverse Effect;
(4) prompt written notice describing in reasonable detail (1)
any proposed acquisition of stock, assets, or property by the
Guarantor or any of its Subsidiaries that could reasonably be
expected to (A) expose the Guarantor or any of its Subsidiaries to,
or result in, Environmental Claims that could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect
or (B) affect the ability of the Guarantor or any
56
of its Subsidiaries to maintain in full force and effect all material
Governmental Actions required under any Environmental Laws for their
respective operations, which failure to maintain could reasonably be
expected to have a Material Adverse Effect, and (2) any proposed
action to be taken by the Guarantor or any of its Subsidiaries to
modify current operations in a manner that could reasonably be
expected to subject the Guarantor or any of its Subsidiaries to any
additional material obligations or requirements under any
Environmental Laws, which obligations or requirements could
reasonably be expected to have a Material Adverse Effect; and
(5) with reasonable promptness, such other documents and
information as from time to time may be reasonably requested by the
Lessor or the Agent in relation to any matters disclosed pursuant to
this SECTION 10.1(a)(vi).
(B) HAZARDOUS MATERIALS ACTIVITIES, ETC. The Guarantor shall promptly
take, and shall cause each of its Subsidiaries promptly to take, any
and all actions necessary to (i) cure any violation of applicable
Environmental Laws by the Guarantor or such Subsidiaries that (other
than in the case of the Property) could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect,
and (ii) make an appropriate response to any Environmental Claim
against the Guarantor or such Subsidiaries and discharge any
obligations it may have to any Person thereunder where (other than in
the case of the Property) failure to do so could reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect.
(vii) COMPLIANCE WITH LAWS. The Guarantor will comply, and shall
cause each of its Subsidiaries and all other Persons, if any, on or
occupying any facilities or properties of the Guarantor or any or its
Subsidiaries to comply, with the requirements of all applicable laws,
rules, regulations and orders of any Governmental Authority (including
all Environmental Laws), noncompliance with which could (other than in
the case of the Property) reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
(b) NEGATIVE COVENANTS. The Guarantor hereby agrees that, so long as this
Agreement remains in effect or any amount is owing to any Participant, the
Lessor or the Agent hereunder or under any other Operative Document, the
Guarantor shall, and shall cause each of its Subsidiaries to, comply with each
of the following covenants:
(i) INDEBTEDNESS. The Guarantor shall not nor shall it permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or
guaranty, or otherwise become or remain directly or indirectly liable
with respect to any Indebtedness, except:
57
(A) Indebtedness of the Guarantor and its
Subsidiaries arising from the endorsement of instruments for
collection in the ordinary course of the Guarantor's or a
Subsidiary's business;
(B) Indebtedness of the Guarantor and its
Subsidiaries for accounts payable, provided that (i) such
accounts arise in the ordinary course of business and (ii) no
material part of any such account is more than ninety (90)
days past due (unless subject to a bona fide dispute and for
which adequate reserves as required by GAAP have been
established);
(C) Indebtedness owed to any Person providing
worker's compensation, health, disability or other employee
benefits or property, casualty or liability insurance to the
Guarantor or any Subsidiary thereof, or which may be deemed
to exist pursuant to reimbursement or indemnification
obligations to such Person;
(D) Indebtedness of the Guarantor and its
Subsidiaries with respect to performance, surety, statutory,
appeal or similar obligations incurred in the ordinary course
of business;
(E) Indebtedness in respect of netting services,
overdraft protections and otherwise in connection with
Deposit Accounts;
(F) Guaranties by the Guarantor of Indebtedness of
its Subsidiaries or guaranties by a Subsidiary of the
Guarantor of Indebtedness of the Guarantor or another
Subsidiary with respect, in each case, to Indebtedness
otherwise permitted to be incurred pursuant to this SECTION
10.1(b)(i);
(G) Indebtedness described in SCHEDULE 10.1(b)(i),
but not any extensions, renewals or replacements of such
Indebtedness except (i) renewals and extensions expressly
provided for in the agreements evidencing any such
Indebtedness as the same are in effect on the date of this
Agreement and (ii) refinancings and extensions of any such
Indebtedness if the terms thereof are no less favorable to
the obligor thereon or to the Participants (other than the
Tranche T Participant), but giving effect to then-current
market conditions, than the Indebtedness being refinanced or
extended; PROVIDED, such Indebtedness permitted under clause
(i) or clause (ii) above shall not be (1) Indebtedness of an
obligor that was not an obligor with respect to the
Indebtedness being extended, renewed or refinanced, (2) in a
principal amount which exceeds the Indebtedness being
renewed, extended or refinanced or (3) incurred, created or
assumed if any Default or Event of Default has occurred and
is continuing or would result therefrom;
(H) Indebtedness with respect to Capital Leases in an
aggregate amount not to exceed $105,000,000 at any time from
and after the Closing
58
Date through and including December 31, 2001, such maximum
amount to be increased by an additional $25,000,000 in each
calendar year thereafter, in each case with respect to the
Guarantor and all of its Subsidiaries in the aggregate;
(I) Purchase Money Indebtedness in an aggregate
amount not to exceed at any time $10,000,000 with respect to
the Guarantor and all of its Subsidiaries in the aggregate;
PROVIDED, any such Indebtedness (i) shall be recourse only
to the asset acquired in connection with the incurrence
of such Indebtedness, (ii) such Indebtedness is incurred
by such Person at the time of, or not later than thirty
(30) days after, the acquisition by such Person of the
property so financed, (iii) such Indebtedness does not
exceed the purchase price of the property so financed, and
(iv) no Default or Event of Default has occurred and is
continuing at the time the Indebtedness is incurred or will
occur after giving effect to such Indebtedness;
(J) The obligations of the Lessee and the Guarantor
to the Lessor, the Agent and the Participants under the
Operative Documents, to the extent they are deemed to
constitute Indebtedness; and
(K) Other Indebtedness of the Guarantor and its
Subsidiaries, provided that the aggregate principal amount of
all such other Indebtedness does not exceed $15,000,000 at
any time.
(ii) LIENS. The Guarantor shall not, nor shall it permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or
permit to exist any Lien on or with respect to any property or asset
of any kind (including any document or instrument in respect of goods
or accounts receivable) of the Guarantor or any of its Subsidiaries,
whether now owned or hereafter acquired, or any income or profits
therefrom, or file or permit the filing of, or permit to remain in
effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the
UCC of any state or under any similar recording or notice statute,
except: (A) Permitted Exceptions, in the case of the Property, and
(B) Permitted Liens, in all other cases.
(iii) DIVIDENDS, REDEMPTIONS, ETC. Neither the Guarantor nor any of
its Subsidiaries shall pay any dividends or make any distributions on
its Equity Securities; purchase, redeem, retire, defease or otherwise
acquire for value any of its Equity Securities; return any capital to
any holder of its Equity Securities as such; make any distributions of
assets, Equity Securities, obligations or securities to any holder of
its Equity Securities as such; or set apart any sum for any such
purpose; except as follows:
(A) either the Guarantor or any of its Subsidiaries
may pay dividends on its capital stock payable solely in such
Person's own capital stock;
59
(B) any Subsidiary of the Guarantor may pay
dividends to the Guarantor or to such Subsidiary's direct
parent (including, in the case of the Lessee, to the
Lessee's General Partner and its limited partners);
(C) the Guarantor may purchase shares of its
capital stock for its employee stock option plans,
provided that (A) the aggregate amount of such purchases
does not exceed $15,000,000 in any Fiscal Year, and (B)
no Default has occurred and is continuing at the time of
such purchase or will occur after giving effect to such
purchase; and
(D) the Guarantor may purchase shares of its
capital stock with the proceeds received by it from a
substantially concurrent issue of new shares of its
capital stock.
(iv) INVESTMENTS. Neither the Guarantor nor any of its
Subsidiaries shall directly or indirectly make any Investment except
for Investments in the following:
(A) Investments of Guarantor and its
Subsidiaries in Cash Equivalents;
(B) Any transaction permitted by SECTION
10.1(b)(i);
(C) Money market mutual funds registered with
the Securities and Exchange Commission, meeting the
requirements of Rule 2a-7 promulgated under the
Investment Company Act of 1940;
(D) Investments listed on SCHEDULE
10.1(b)(iv)(D) existing on the date of this Agreement; and
(E) Other Investments in Persons principally
involved in the semiconductor business in an aggregate
amount not to exceed at any time more than twenty-five
(25%) percent of the Guarantor's Tangible Net Worth as of
the date of any such Investment.
(v) FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS. The
Guarantor shall not, and shall not permit any of its Subsidiaries to,
alter the corporate, capital or legal structure of the Guarantor or
any of its Subsidiaries if any such alteration could reasonably be
expected to have a Material Adverse Effect, or enter into any
transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or
convey, sell, lease or sub-lease (as lessor or sublessor), transfer
or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets,
whether now owned or hereafter acquired, or acquire by purchase or
otherwise all or substantially all the business, property or fixed
assets of, or stock or other evidence of beneficial ownership of, any
Person or any division or line of business of any Person, except:
(A) Any Domestic Subsidiary of the Guarantor (other
than the Lessee) may be merged with or into Guarantor or
any Wholly-Owned
60
Domestic Subsidiary (other than the Lessee), or be
liquidated, wound up or dissolved, or all or any part of
its business,property or assets may be conveyed, sold,
leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to Guarantor or
any Wholly-Owned Domestic Subsidiary (other than the
Lessee); PROVIDED,in the case of such a merger, Guarantor or
such Wholly-Owned Domestic Subsidiary shall be the
continuing or surviving Person; and PROVIDED further that
in the case of any such transaction involving the Guarantor,
the surviving Person (if not the Guarantor) shall have
agreed in writing to assume all of the obligations and
liabilities of the Guarantor under the Operative Documents.
(B) Any Foreign Subsidiary of the Guarantor may be
merged with or into the Guarantor or any Wholly-Owned
Foreign Subsidiary, or be liquidated, wound up or
dissolved, or all or any part of its business, property
or assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of
transactions, to the Guarantor or any Wholly-Owned
Foreign Subsidiary; PROVIDED, in the case of such a
merger, the Guarantor or such Wholly-Owned Foreign
Subsidiary shall be the continuing or surviving
corporation;
(C) Sales or other dispositions of Investments
permitted by SUBPARTS (a) and (c) of SECTION 10.1(b)(iv)
for not less than fair value;
(D) Sales of inventory by the Guarantor and its
Subsidiaries in the ordinary course of their businesses;
(E) Sales of surplus, damaged, worn or obsolete
equipment or inventory for not less than fair market
value;
(F) Sales or assignments of defaulted receivables to
a collection agency in the ordinary course of business;
(G) Licenses to other Persons of intellectual
property by the Guarantor or any Subsidiary thereof in
the ordinary course of business PROVIDED that, in each
case, the terms of the transaction are terms which then
would prevail in the market for similar transactions
between unaffiliated parties dealing at arm's length;
(H) Sales or other dispositions of assets and
property by the Guarantor to any of the Guarantor's
Subsidiaries (other than the Lessee) or by any of the
Guarantor's Subsidiaries (other than the Lessee) to the
Guarantor or any of its other Subsidiaries (other than
the Lessee), provided that the terms of any such sales or
other dispositions by or to the Guarantor are terms which
are no less favorable to the Guarantor than would prevail
in the market for similar transactions between
unaffiliated parties dealing at arm's length;
(I) Transactions permitted under SECTION 10.1(b)(iv);
61
(J) Sales of accounts receivable of the
Guarantor and its Subsidiaries (other than the
Lessee), PROVIDED that (A) each such sale is (1)
for not less than fair market value and (2) for
cash, and (B) the aggregate book value of all
such accounts receivable so sold in any
consecutive four quarter period does not exceed
ten percent (10%) of the consolidated total
accounts receivable of the Guarantor and its
Subsidiaries on the last day immediately
preceding such four quarter period; and
(K) Other sales, leases, transfers and
disposal of assets and property (other than sales
by the Lessee) for not less than fair market
value, provided that the aggregate book value of
all such assets and property so sold, leased,
transferred or otherwise disposed of in any
consecutive four quarter period does not exceed
ten percent (10%) of the Consolidated Assets of
the Guarantor and its Subsidiaries on the last
day immediately preceding such four quarter
period;
PROVIDED, HOWEVER, that the foregoing exceptions shall not be construed to
permit any sales, leases, transfers or disposals of any of the Property,
except as expressly permitted by the Operative Documents.
(vi) ACCOUNTING CHANGES. Neither the Guarantor nor any of its
Subsidiaries shall change (i) its Fiscal Year (currently January 1 through
December 31) or (ii) its accounting practices except as permitted by GAAP.
(vii) CHANGE IN BUSINESS. Neither the Guarantor nor any of its
Subsidiaries shall engage, either directly or indirectly through Affiliates
thereof, in any material line of business other than the business conducted
by such Persons as of the Closing Date and other businesses incidental or
reasonably related thereto.
(viii) ERISA. Neither the Guarantor nor any ERISA Affiliate shall
(i) adopt or institute any Employee Benefit Plan that is an employee
pension benefit plan within the meaning of Section 3(2) of ERISA, (ii)
take any action which will result in the partial or complete withdrawal,
within the meanings of Section 4203 and 4205 of ERISA, from a
Multiemployer Plan, (iii) engage or permit any Person to engage in any
transaction prohibited by Section 406 of ERISA or Section 4975 of the Code
involving any Employee Benefit Plan or Multiemployer Plan which would
subject either the Guarantor or any ERISA Affiliate to any tax, penalty or
other liability including a liability to indemnify, (iv) incur or allow to
exist any accumulated funding deficiency (within the meaning of Section
412 of the Code or Section 302 of ERISA), (v) fail to make full payment
when due of all amounts due as contributions to any Employee Benefit Plan
or Multiemployer Plan, (vi) fail to comply with the requirements of
Section 4980B of the Code or Part 6 of Title I(B) of ERISA, or (vii)
adopt any amendment to any Employee Benefit Plan which would require
the posting of security pursuant to Section 401(a)(29) of the Code,
which, in the case of clauses (i) through (vii) above, singly or
cumulatively, could reasonably be expected to have a Material Adverse Effect.
62
SECTION 10.2 THE GUARANTOR'S FINANCIAL COVENANTS. So long as this
Agreement remains in effect or any amount is owing to any Participant, the
Lessor or the Agent hereunder or under any other Operative Document, the
Guarantor will comply and will cause compliance, on a consolidated basis with
the following financial covenants:
(a) DEBT SERVICE COVERAGE RATIO. The Guarantor shall not permit the Debt
Service Coverage Ratio to be greater than (i) 3.00 to 1.00, as of the last
day of any Fiscal Quarter for the four Fiscal Quarter period then ended
during the period from and including the Closing Date to and including June
30, 2001, and (ii) 2.50 to 1.00 as of the last day of any Fiscal Quarter
thereafter for the four Fiscal Quarter period then ended.
(b) QUICK RATIO. The Guarantor shall not permit its Quick Ratio
for any Fiscal Quarter to be less than 1.25 to 1.00.
(c) FIXED CHARGE COVERAGE RATIO. The Lessee shall not permit its Fixed
Charge Coverage Ratio as of the last day of any Fiscal Quarter for the four
Fiscal Quarter period then ended during the periods set forth below to be
less than the following ratios for such periods:
PERIOD RATIO
January 1, 2001 through December 31, 2001 1.50
January 1, 2002 and thereafter 2.00
(d) TANGIBLE NET WORTH. The Guarantor shall not permit its Tangible Net
Worth on the last day of any Fiscal Quarter (such date to be referred to
herein as a "determination date") to be less than the sum on such
determination date of the following:
(i) ninety percent (90%) of the Tangible Net Worth of the
Guarantor and its Subsidiaries as of December 31, 1999 (the "BASE
DATE");
PLUS
(ii) seventy-five percent (75%) of the sum of the Guarantor's
consolidated quarterly net income determined without deduction of
any quarterly losses and determined without deduction of non-cash
charges for in-process research and development for entities
acquired by the Guarantor or its Subsidiaries for each Fiscal
Quarter after the base date through and including the Fiscal
Quarter ending on the determination date;
PLUS
(iii) seventy-five percent (75%) of the Net Proceeds of all
Equity Securities issued by the Guarantor and its Subsidiaries (to
Persons other than the Guarantor or its Subsidiaries) during the
period commencing on the base date and ending on the determination
date;
63
PLUS
(iv) seventy-five percent (75%) of the tax benefits received from
disqualifying dispositions related to qualified stock plans, to the
extent the tax benefits were expensed on the income statement of the
Guarantor with a corresponding positive adjustment to equity, during
the period commencing on the base date and ending on the determination
date.
SECTION 10.3 COOPERATION WITH THE GUARANTOR. The Lessor, the
Participants and the Agent shall, to the extent reasonably requested by the
Guarantor (but without assuming additional liabilities, duties or other
obligations on account thereof), at the Guarantor's expense, cooperate with
the Guarantor in connection with its covenants contained herein including,
without limitation, at any time and from time to time, upon the request of
the Guarantor, to promptly and duly execute and deliver any and all such
further instruments, documents and financing statements (and continuation
statements related thereto) as the Guarantor may reasonably request in order
to perform such covenants.
SECTION 10.4 COVENANTS OF THE LESSOR. The Lessor hereby agrees
that so long as this Participation Agreement is in effect:
(a) DISCHARGE OF LIENS. The Lessor will not create or permit to
exist at any time, and will, at its own cost and expense, promptly take such
action as may be necessary duly to discharge, or to cause to be discharged,
all Lessor Liens on the Property attributable to it; PROVIDED, HOWEVER, that
the Lessor shall not be required to so discharge any such Lessor Lien while
the same is being contested in good faith by appropriate proceedings
diligently prosecuted so long as such proceedings shall not involve any
material danger of impairment of the Liens of the Lease or the Security
Documents or of the sale, forfeiture or loss of, and shall not interfere with
the use or disposition of, the Property or title thereto or any interest
therein or the payment of Rent; PROVIDED, FURTHER, that in the event the
Lessee purchases the Property the Lessor shall discharge all such Lessor
Liens on or prior to the date on which the purchase is effective under the
Lease.
(b) CHANGE OF CHIEF PLACE OF BUSINESS. The Lessor shall give prompt
notice to the Lessee and the Agent if the Lessor's chief place of business or
chief executive office, or the office where the records concerning the
accounts or contract rights relating to the Property are kept, shall cease to
be located at 135 South LaSalle Street, Chicago, Illinois 60603, or if it
shall change its name, identity or corporate structure.
(c) USE OF PROCEEDS. The proceeds of the purchase of the Participation
Interests shall be applied by the Lessor solely in accordance with the
provisions of the Operative Documents.
(d) ACQUIRED PERSONAL PROPERTY BILL OF SALE. Immediately following the
acquisition of the Existing Facility by the Lessor, the Lessor will execute
and deliver to the Lessee the Acquired Personal Property Bill of Sale,
pursuant to which the Lessor shall convey to the Lessee all of the Lessor's
right, title and interest in and to the Acquired Personal Property. The
Acquired Personal Property is identified and described on Schedule 10.4(d)
hereto.
64
SECTION 10.5 COVENANTS OF THE LESSEE, THE LESSEE'S GENERAL
PARTNER AND THE CONSTRUCTION AGENT. The Lessee, the Lessee's General Partner
and the Construction Agent hereby agree that, so long as this Agreement is in
effect or any amount is owing to any Participant, the Lessor, or the Agent
hereunder or under any other Operative Document, the Lessee, the Lessee's
General Partner and the Construction Agent shall perform each of the
covenants applicable to Subsidiaries set forth in SECTION 10.1.
SECTION 11
AMENDMENTS; ACTIONS ON DEFAULT; RELATIONSHIP
OF LESSOR AND PARTICIPANTS
SECTION 11.1 AMENDMENTS. Subject to the other provisions of this
SECTION 11, no Operative Document nor any of the terms thereof may be
terminated, amended, supplemented, waived or modified with respect to the
Lessee, the Construction Agent, the Lessee's General Partner, the Guarantor,
the Lessor, the Agent or any Participant, except (a) in the case of a
termination, amendment, supplement, waiver or modification to be binding on
the Lessee, the Construction Agent, the Lessee's General Partner, the
Guarantor, the Lessor or the Agent, with the written agreement or consent of
such party, (b) prior to the occurrence and continuation of an Event of
Default, the Lessee's consent shall be required to amend or modify any
Operative Document to which it is not a party, and (c) in the case of a
termination, amendment, supplement, waiver or modification to be binding on
the Participants, with the written agreement or consent of the Required
Participants; provided, however, that
(a) no such termination, amendment, supplement, waiver or modification
shall without written agreement or consent of each Participant (except the
Tranche T Participant other than with respect to CLAUSE (vii) below):
(i) modify any of the provisions of this SECTION 11, change the
definition of "REQUIRED PARTICIPANTS" or modify or waive any
provision of an Operative Document requiring action by the foregoing;
(ii) amend, modify, waive or supplement any of the provisions of
SECTIONS 3.6, 3.7 OR 3.10 through 3.20 of this Participation
Agreement or the representations of such Participant in SECTION 8 or
the covenants in SECTION 10 of this Participation Agreement;
(iii) reduce, modify, amend or waive any fees or indemnities in
favor of any Participant, including without limitation amounts
payable pursuant to SECTION 13 (except that any Person may consent
to any reduction, modification, amendment or waiver of any indemnity
payable to it);
(iv) modify, postpone, reduce or forgive, in whole or in
part, any payment of Rent (other than pursuant to the terms of any
Operative Document), any payment in respect of its participation
Interest, or any payment of any Asset Termination Value,
65
Commitment Fee, any Residual Value Guarantee Amount, amounts due
pursuant to Section 22.2 of the Lease, or interest or yield or,
subject to CLAUSE (iii) above, any other amount payable under the
Lease or this Participation Agreement, or modify the definition
or method of calculation of Rent (other than pursuant to the terms
of any Operative Document), Participation Interest, Asset
Termination Value, Lease Balance, Commitment Fee, Shortfall
Amount, Residual Value Guarantee Amount, Property Improvements
Cost, Participant Balance, Tranche A Participant Balance,
Tranche B Participant Balance, Tranche C Participant Balance or
any other definition which would affect the amounts to be advanced
or which are payable under the Operative Documents;
(v) consent to any assignment of the Lease (other than pursuant
to the terms thereof), releasing the Lessee from its obligations in
respect of the payments of Rent and any Asset Termination Value or
changing the absolute and unconditional character of such obligation;
(vi) except as authorized by the Operative Documents, release
the Lessor's interest in all or a substantial part of the Property;
or
(vii) increase the amount of the Commitment of such Participant;
and
(b) no other termination, amendment, supplement, waiver or modification
shall, without the written agreement or consent of the Lessor and the
Required Participants, be made to the Lease or SECTION 6 of this
Participation Agreement or the definition of "EVENT OF DEFAULT."
SECTION 11.2 FORBEARANCE, EXECUTION OF WAIVERS AND AMENDMENTS BY THE
LESSOR; ACTIONS ON DEFAULT.
(a) The Lessor shall have the right to forebear from exercising rights
against the Lessee to the extent the Lessor shall determine in good faith
that such forbearance is appropriate and is permitted by this SECTION 11.
Upon the direction of the Required Participants, the Lessor shall execute any
waiver, modification or amendment of the Lease or any Construction Agency
Agreement requested by the Lessee; PROVIDED, that: (i) the waiver,
modification or amendment is not prohibited by the provisions of this SECTION
11, (ii) the waiver, modification or amendment does not (A) increase the
amount the Lessor may be required to pay to the Lessee or anyone else, or (B)
reduce or postpone (and cannot reasonably be expected to reduce or postpone)
any payments that the Lessor would, but for such modification or amendment,
be expected to receive, or (C) release the Lessor's interest in all or a
substantial part of the Property; and (iii) the Lessor is not excused from
executing the waiver, modification or amendment by SECTION 11.4.
(b) The Lessor will, with reasonable promptness, provide each
Participant (other than the Tranche T Participant) with copies of all default
notices it sends or receives under the Lease or any Construction Agency
Agreement and notify each Participant (other than the Tranche T Participant)
of any Event of Default under the Lease or any Construction Agency Agreement
of which it is aware and of any other matters which, in the Lessor's
reasonable judgment, are likely to materially affect the payments each such
Participant will be required to make or be entitled to receive under this
Agreement, but the Lessor will not in any event be liable to any such
66
Participant for the Lessor's failure to do so unless such failure constitutes
gross negligence or willful misconduct on the part of the Lessor.
(c) Before taking possession of the Property or exercising foreclosure
or offset rights against the Property, the Cash Collateral or the Securities
Collateral or filing any lawsuit against the Lessee because of any breach by
the Lessee of the Operative Documents or if requested in writing by any
Participant (other than the Tranche T Participant) at any time when an Event
of Default has occurred and is continuing, the Lessor shall promptly call a
meeting with each Participant (other than the Tranche T Participant) and the
Agent to discuss what, if anything, the Lessor should do. Such meeting shall
be scheduled during regular business hours in the offices of the Agent, or
another appropriate location in Chicago, Illinois not earlier than five (5)
and not later than twenty (20) Business Days after the Lessor's receipt of
the written request from a Participant (other than the Tranche T
Participant). If the Required Participants shall direct the Lessor in writing
to (a) send any default notices required before a Default can become an Event
of Default, or (b) bring a lawsuit against the Lessee to enforce the
Operative Documents when an Event of Default has occurred and is continuing,
then the Lessor shall send the notice or bring the suit, and the Lessor shall
prosecute any such suit with reasonable diligence using reputable counsel.
However, if the Agent is not a member of the Required Participants voting
pursuant to this SECTION 11.2(c) in favor of the giving of any such notice or
the bringing of any such suit, then the Lessor may require that it first
receive the written agreement (in form reasonably acceptable to the Lessor)
of the members of the Required Participants so voting to indemnify the Agent
and the Lessor from and against all costs, liabilities and claims that may be
incurred by or asserted against the Lessor because of the action the Required
Participants direct the Agent or the Lessor to take. In no event shall any
Participant instigate any suit or other action directly against the Lessee
with respect to the Operative Documents or the Property, even if such
Participant would, but for this agreement, be entitled to do so as a third
party beneficiary or otherwise under the Operative Documents.
(d) In the event the Lessee or its designee fails to purchase the
Property after any exercise of its Purchase Option or Expiration Date
Purchase Obligation or following the occurrence and continuance of an Event
of Default, the Lessor shall, if the Required Participants shall agree in
writing, bring suit against the Lessee to enforce the Operative Documents in
such form as shall be recommended by reputable counsel, and thereafter the
Lessor shall prosecute the suit with reasonable diligence in accordance with
the advice of reputable counsel. If, after the occurrence and continuance of
an Event of Default, the Lessor acquires the interests of the Lessee in any
of the Property as a result of such suit or otherwise (unless the Lessor
acquires such interests through a Voluntary Retention of the Property and
pays to each Participant all amounts payable to such Participant hereunder,
including, without limitation, such Participant's Participation Interest in
all amounts payable by the Lessee on the Designated Payment Date and any
Shortfall Amount), the Lessor shall thereafter proceed with reasonable
diligence to sell the Property in a commercially reasonable manner to one or
more bona fide third party purchasers and shall in any event endeavor to
consummate the sale of the entire Property (through a single sale of the
entire Property or a series of sales of parts) within five (5) years
following the date the Lessor recovers possession of the Property at the best
price or prices the Lessor believes are reasonably attainable within such
time. Further, after the Designated Payment Date and prior to the Lessor's
sale of the entire Property, the Lessor shall retain a property management
company experienced in the area where the Property is located to manage the
operation of the Property and
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pursue the leasing of any completed Improvements which are part of the
Property. The Lessor shall not retain an Affiliate of the Lessor to act as
the property manager except under a bona fide, arms-length management
contract containing commercially reasonable terms. Further, after the
Designated Payment Date and until the Lessor sells the Property, the Lessor
shall (i) endeavor in good faith to maintain, or shall obtain the agreement
of one or more of such tenants to maintain, the Property in good order and
repair, (ii) procure and maintain casualty insurance against risks
customarily insured against by owners of comparable properties, in amounts
sufficient to eliminate the effects of coinsurance, (iii) keep and allow each
Participant (other than the Tranche T Participant) to review accurate books
and records covering the operation of the Property, and (iv) pay prior to
delinquency all taxes and assessments lawfully levied against the Property.
(e) Notwithstanding the foregoing, Defaulting Participants shall have no
voting or consent rights under this SECTION 11.2 and no rights to require the
Lessor to call a meeting pursuant to SECTION 11.2(d) until they cease to be
Defaulting Participants. During any period that any Defaulting Participants
have no voting rights under this SECTION 11.2, only the Commitment
Percentages of the other Participants that still have voting rights will be
considered for purposes of determining the Required Participants.
SECTION 11.3 ACTIONS BY LESSOR GENERALLY. Subject to the limitations set
forth in SECTION 11.2 and the provisions of SECTION 11.11:
(a) The Lessor shall have the exclusive right to take any action and to
exercise any available powers, rights and remedies to enforce the obligations
of the Lessee under the Operative Documents, or to refrain from taking any
such action or exercising any such power, right or remedy.
(b) The Lessor shall be entitled to (i) give any consent, waiver or
approval requested by the Lessee with respect to any construction or other
approval contemplated in the Lease or any Construction Agency Agreement or
(ii) waive or consent to any adverse title claims affecting the Property,
PROVIDED that, in either case, such action will not have a material adverse
effect on the Lessee's obligations or ability to make the payments required
under the Operative Documents, the Lessor's rights and remedies under the
Operative Documents or any Participant's rights hereunder.
SECTION 11.4 CONFLICTS. Notwithstanding anything to the contrary
herein contained, the Lessor shall be entitled, even over the objection of
each Participant or the Required Participants, (i) to take any action
required of the Lessor by, or to refrain from taking any action prohibited
by, the Operative Documents or any law, rule or regulation to which the
Lessor is subject (PROVIDED, that this Section shall not be construed to
authorize the Lessor to take any action required by a modification of the
Operative Documents prohibited by SECTION 11.2), and (ii) after notice to the
Participants (other than the Tranche T Participant), to bring and prosecute a
suit against the Lessee in the form recommended by and in accordance with
advice of reputable counsel at any time when a breach of the Operative
Documents by the Lessee shall have put the Lessor (or any of its officers or
employees) at risk of criminal prosecution or significant liability to third
parties or at any time after the Lessee or its designee fails to purchase the
Property on the Designated Payment Date. Nothing herein contained shall be
construed to require the Lessor to agree to modify the Operative Documents or
to take any action or refrain
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from taking any action in any manner that could increase the Lessor's
liability to the Lessee or others, that could reduce or postpone payments to
which the Lessor is entitled thereunder, or that could reduce the scope and
coverage of the indemnities provided for the Lessor's benefit therein.
SECTION 11.5 REFUSAL TO GIVE CONSENTS OR FUND. If any Participant
declines to consent to any amendment, modification, waiver, release or
consent for which such Participant's consent is requested or required by
reason of this Agreement, or if any Participant fails to pay any amount owed
by it hereunder, the Lessor shall have the right, but not the obligation and
without limiting any other remedy of the Lessor, to terminate such
Participant's rights to receive any further payments under SECTION 3 of this
Agreement by paying such Participant a termination fee equal to the total of:
(i) all amounts actually advanced by such Participant to the
Lessor under SECTION 3.4 hereof before the termination; excluding,
however, any such amounts that were repaid to such Participant
before the termination by actual payments made to such Participant
by the Lessor of, or the Lessor's offset against, sums representing:
(A) Such Participant's Commitment Percentage (as then in
effect) times any payments of Rent received by the Lessor
under the Lease; plus
(B) Such Participant's Commitment Percentage (as then in
effect) times any sales proceeds or proceeds of any
casualty or condemnation or any payments of Asset
Termination Value received by the Lessor under the Lease;
and
(ii) Such Participant's Commitment Percentage (as then in effect),
times:
(A) the then accrued but unpaid Basic Rent or, during the
Construction Period in respect of the Expansion
Improvements, accrued but unpaid interest or yield, and
Commitment Fees due hereunder; plus
(B) interest on past due amounts described in the
preceding clause (A) computed at the Federal Funds
Effective Rate; plus
(C) interest on any amounts (other than interest itself)
past due from the Lessee or its designees under the
Operative Documents, computed at the Federal Funds
Effective Rate.
SECTION 11.6 REQUIRED REPAYMENTS. Each Participant shall repay to
the Lessor, upon written request or demand by the Lessor (i) any sums paid by
the Lessor to such Participant under this Agreement from, or that were
computed by reference to, any Rent or other amounts which the Lessor shall be
required to return or pay over to another party, whether pursuant to any
bankruptcy or insolvency law or proceeding or otherwise and (ii) any interest
or other amount that the Lessor is also required to pay to another party with
respect to such sums. Such repayment by any Participant shall not constitute
a release of such Participant's right to receive such Participant's
Commitment Percentage (as then in effect) times the amount of any such Rent
or any such other amount (or any interest thereon) that the Lessor may later
recover.
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SECTION 11.7 INDEMNIFICATION. Each Participant agrees to indemnify
and defend the Lessor (to the extent not reimbursed by the Lessee within ten
(10) days after demand) from and against such Participant's Commitment
Percentage (as then in effect) of any and all liabilities, obligations,
claims, expenses or disbursements (including reasonable fees of attorneys,
accountants, experts and advisors) of any kind or nature whatsoever (in this
SECTION 11.7 collectively called "COVERED LIABILITIES") which to any extent
(in whole or in part) may be imposed on, incurred by or asserted against the
Lessor growing out of, resulting from or in any other way associated with the
Property or the Operative Documents (including the enforcement thereof,
whether exercised upon the Lessor's own initiative or upon the direction of
the Required Participants) and the transactions and events at any time
associated therewith or contemplated therein. The foregoing indemnification
shall apply whether or not such Covered Liabilities are in any way or to any
extent caused, in whole or in part, by any negligent act or omission of any
kind by the Lessor; PROVIDED, that no Participant shall be obligated under
this SECTION 11.7 to indemnify the Lessor (i) for Covered Liabilities that
would not have been incurred but for a Voluntary Retention of the Property by
the Lessor, (ii) for Covered Liabilities incurred in connection with any
transfer or assignment by the Lessor of its right to receive Rent or its
rights and interests in and to the Property, the Operative Documents or this
Agreement to its Affiliates, or (iii) for that portion or percentage, if any,
of any of the Covered Liabilities which is proximately caused by: (A) the
Lessor's own gross negligence or willful misconduct; (B) any representation
made by the Lessor in the Operative Documents that is false in any material
respect and that the Lessor knew was false at the time of the Lessor's
execution of the Operative Documents; or (C) Lessor Liens not claimed by,
through or under any of the Participants. After each Participant has paid its
Commitment Percentage (as then in effect) of any Covered Liabilities, each
Participant shall be entitled to payment from the Lessor of an amount equal
to the Adjusted Percentage (as defined below) of any payments subsequently
received by the Lessor as Excess Reimbursement (as defined below) for such
Covered Liabilities. As used in this Section "ADJUSTED PERCENTAGE" as of any
date of determination shall equal (i) such Participant's Commitment
Percentage then in effect, divided by (ii) the sum of the Commitment
Percentages of all Participants who have paid the Lessor their respective
shares of the Covered Liabilities at issue. As used in this Section, the term
"EXCESS REIMBURSEMENT" shall mean, for the Covered Liabilities at issue,
amounts reimbursed or paid by the Lessee to or on behalf of the Lessor on
account of such Covered Liabilities in excess of an amount equal to the
product of (i) such Covered Liabilities, multiplied by (ii) the Commitment
Percentages of any Participants that have not paid the Lessor their
respective Percentages of such Covered Liabilities.
SECTION 11.8 APPLICATION OF PAYMENTS RECEIVED FROM DEFAULTING
PARTICIPANT AS A CURE FOR PAYMENT DEFAULTS. If after a failure to make a
payment required by SECTION 3.4, any Defaulting Participant cures such
failure, in whole or in part, by paying to the Lessor all or part of such
payment and interest thereon at the Late Payment Rate, then the Lessor shall
apply the payments so made to the Lessor, net of the costs of collecting such
payments (the "NET CURE PROCEEDS"), or other funds available to the Lessor
equal to the Net Cure Proceeds, in the following order before applying the
same to any other purpose:
(i) first, to make payments to the Lessor itself equal to its
Excess Investment (if any) until the Lessor shall no longer have any
Excess Investment; and
70
(ii) second, to make further Advances to the Lessee under this
Agreement to the extent the Lessor is required or deems it
appropriate to do so; PROVIDED, that such further Advances do not
cause the total Property Cost to exceed the sum of the Commitments.
SECTION 11.9 ORDER OF APPLICATION. For purposes of this Agreement,
the Lessor shall be entitled, but not required, to apply any payments
received from the Lessee under the Operative Documents to satisfy costs
incurred by the Lessor because of any sale under the Lease before applying
such payments to satisfy the Lessee's other obligations, regardless of how
the Lessee may have designated such payments.
SECTION 11.10 INVESTMENTS PENDING DISPUTE RESOLUTION; OVERNIGHT
INVESTMENTS. Whenever the Lessor in good faith determines that it does not
have all information needed to determine how payments to Participants must be
made on account of any then existing Participation Interests which the Lessor
has received, or whenever the Lessor in good faith determines that there is
any dispute among the Participants about payments which must be made on
account of Participation Interests actually received by the Lessor, the
Lessor may choose to defer the payments which are the subject of such missing
information or dispute. However, to minimize any such deferral, the Lessor
shall attempt diligently to obtain any missing information needed to
determine how payments to the Participants must be made. Also, pending any
such deferral, or if the Lessor is otherwise required to invest funds pending
distribution to the Participants, the Lessor shall invest funds equal to (i)
the total of the Commitment Percentages of all Participants to whom payments
have not been made with respect to the Participation Interests at issue,
times (ii) the total payments at issue. In addition, the Lessor shall
endeavor to invest payments of Participation Interests it receives after
12:00 noon, Chicago time, on the day in question that are to be paid to a
Participant on the next Business Day pursuant to SECTION 3; PROVIDED that the
Lessor shall have no liability to any Participant if the Lessor is unable to
make such investments. Investments by the Lessor shall be in the overnight
federal funds market pending distribution, and the interest earned on each
Dollar of principal so invested shall be paid to the Person entitled to
receive such Dollar of principal when the principal is paid to such Person.
SECTION 11.11 AGENT TO EXERCISE LESSOR'S RIGHTS. The Lessor has
assigned its interest in the Lease to the Agent, for the benefit of the
Participants, pursuant to the Assignment of Lease. To the extent provided
therein, the rights, remedies, duties and responsibilities of the Lessor
contained in this SECTION 11 and in the other Operative Documents with
respect thereto shall be exercisable by, binding upon and inure to the
benefit of the Agent, for the benefit of the Participants.
SECTION 11.12 EXCULPATORY PROVISIONS REGARDING THE LESSOR. Subject
to the provisions of SECTION 11.11, each Participant hereby irrevocably
authorizes the Lessor to take such actions on its behalf as are expressly
vested in or delegated to the Lessor by the terms of this Agreement and the
other Operative Documents, together with such powers as are reasonably
incidental thereto. The provisions of the following Sections of this
Agreement are hereby incorporated by reference into this SECTION 11.12,
substituting the word "Lessor" for "Agent" therein:
71
(i) SECTION 14.1 - second sentence.
(ii) SECTION 14.2 - all.
(iii) SECTION 14.3 - all.
(iv) SECTION 14.4 - all.
(v) SECTION 14.5 - first sentence.
(vi) SECTION 14.6 - last sentence.
SECTION 12
TRANSFERS OF PARTICIPANTS' INTERESTS
SECTION 12.1 RESTRICTIONS ON AND EFFECT OF TRANSFER BY
PARTICIPANTS. No Participant may (without the prior written consent of the
Agent, not to be unreasonably withheld) assign, convey or otherwise transfer
(including pursuant to a participation) all or any portion of its right,
title or interest in, to or under its Participation Interest or any of the
Operative Documents or the Property, PROVIDED that (x) any Participant (other
than the Tranche T Participant) may pledge its interest without the consent
of the Agent or the Lessee to any Federal Reserve Bank, (y) without the prior
written consent of the Agent, any Participant (other than the Tranche T
Participant) may transfer all or any portion of its interest to any Affiliate
of such Participant or to any other existing Participant, and (z) the Tranche
T Participant may not assign, convey or otherwise transfer any portion of its
right, title or interest in, to or under its Participation Interest or any of
the Operative Documents or the Property without the prior written consent of
the Agent; PROVIDED, FURTHER, that in the case of any transfer (other than a
transfer to an Affiliate of the relevant Participant pursuant to CLAUSE (y)
above) each of the following conditions and any other applicable conditions
of the other Operative Documents are satisfied:
(a) REQUIRED NOTICE AND EFFECTIVE DATE. Any Participant desiring to
effect a transfer of its interest shall give written notice of each such
proposed transfer to the Lessee and the Agent at least five (5) Business Days
prior to such proposed transfer, setting forth the name of such proposed
transferee, the percentage or interest to be retained by such Participant, if
any, and the date on which such transfer is proposed to become effective. All
reasonable out-of-pocket costs (including, without limitation, legal
expenses) incurred by the Lessor, the Lessee, the Agent or any Participant in
connection with any such disposition by a Participant under this SECTION 12.1
shall be borne by such transferring Participant. In the event of a transfer
under this SECTION 12.1, any expenses incurred by the transferee in
connection with its review of the Operative Documents and its investigation
of the transactions contemplated thereby shall be borne by such transferee or
the relevant Participant, as they may determine, but shall not be considered
costs and expenses which the Lessee is obligated to pay or reimburse under
SECTION 9. Any such proposed transfer shall become effective upon the later
of (i) the date proposed in the transfer notice referred to above and (ii)
the date on which all conditions to such transfer set forth in this SECTION
12.1 shall have been satisfied.
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(b) ASSUMPTION OF OBLIGATIONS. Any transferee pursuant to this SECTION
12.1 shall execute and deliver to the Agent and the Lessee an Assignment and
Acceptance in substantially the form attached as EXHIBIT H ("ASSIGNMENT AND
ACCEPTANCE"), duly executed by such transferee and the transferring
Participant, and a letter in substantially the form of the Participant's
Letter attached hereto as EXHIBIT I ("PARTICIPANT'S LETTER"), and thereupon
the obligations of the transferring Participant under the Operative Documents
shall be proportionately released and reduced to the extent of such transfer.
Upon any such transfer as above provided, the transferee shall be deemed to
be bound by all obligations (whether or not yet accrued) under, and to have
become a party to, all Operative Documents to which its transferor was a
party, shall be deemed the pertinent "Participant" for all purposes of the
Operative Documents and shall be deemed to have made that portion of the
payments pursuant to this Participation Agreement previously made or deemed
to have been made by the transferor represented by the interest being
conveyed; and each reference herein and in the other Operative Documents to
the pertinent "Participant" shall thereafter be deemed a reference to the
transferee, to the extent of such transfer, for all purposes. Upon any such
transfer, the Agent shall deliver to each Participant, the Lessor and the
Lessee a new SCHEDULE I and a new SCHEDULE II to this Agreement, each revised
to reflect the relevant information for such new Participant and the
Commitment of such new Participant (and the revised Commitment of the
transferor Participant if it shall not have transferred its entire interest).
(c) EMPLOYEE BENEFIT PLANS. No Participant may make any such assignment,
conveyance or transfer to or in connection with any arrangement or
understanding in any way involving any employee benefit plan (or its related
trust), as defined in Section 3(3) of ERISA, or with the assets of any such
plan (or its related trust), as defined in Section 4975(e)(1) of the Code.
(d) REPRESENTATIONS. Notwithstanding anything to the contrary set forth
above, no Participant may assign, convey or transfer its interest to any
Person, unless such Person shall have delivered to the Agent and the Lessee a
certificate (which certification may be contained within the Assignment and
Acceptance executed and delivered by such Person) confirming the accuracy of
the representations and warranties set forth in SECTION 8 with respect to
such Person (other than as such representation or warranty relates to the
execution and delivery of Operative Documents) and representing that such
Person has, independently and without reliance upon the Agent, any other
Participant or, except to the extent of the Lessee's representations made
under the Operative Documents when made, the Lessee, and based on such
documents and information as it has deemed appropriate, made its own
appraisal of and investigation into this transaction, the Property and the
Lessee and made its own decision to enter into this transaction.
(e) AMOUNTS; AGENT'S FEE. Any transfer of Participation Interests shall
be in a principal amount which is equal to or greater than $5,000,000;
PROVIDED, that no such minimum transfer limitation shall be imposed on a
transfer of a Tranche B Participation Interest or a Tranche C Equity
Interest. Each transferring Participant shall pay to the Agent a transfer fee
of $2,500.
(f) APPLICABLE LAW. Such transfer shall comply with Applicable Law and
shall not require registration under any securities law applicable thereto.
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(g) EFFECT. From and after any transfer of its Participation Interest
the transferring Participant shall be released, to the extent assumed by the
transferee, from its liability and obligations hereunder and under the other
Operative Documents to which such transferor is a party in respect of
obligations to be performed on or after the date of such transfer. Upon any
transfer by a Participant as above provided, any such transferee shall be
deemed a "Participant" for all purposes of such documents and each reference
herein to a Participant shall thereafter be deemed a reference to such
transferee for all purposes to the extent of such transfer, except as the
context may otherwise require. Notwithstanding any transfer as provided in
this SECTION 12.1, the transferor shall be entitled to all benefits accrued
and all rights vested prior to such transfer, including, without limitation,
rights to indemnification under this Participation Agreement or any other
Operative Document.
SECTION 12.2 COVENANTS AND AGREEMENTS OF PARTICIPANTS.
(a) PARTICIPATIONS. Each Participant covenants and agrees that it will
not grant participations in its Participation Interest to any Person (a
"SUB-PARTICIPANT") unless such participation complies with Applicable Law and
does not require registration under any securities law applicable thereto and
such Sub-Participant (i) is a bank or other financial institution and (ii)
represents and warrants, in writing, to such Participant for the benefit of
the Participants, the Lessor and the Lessee that (A) no part of the funds
used by it to acquire an interest in any Participation Interest constitutes
assets of any "employee benefit plan" (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA, or "plan" (as defined in Section
4975(e)(1) of the Code) and (B) such Sub-Participant is acquiring its
interest for investment purposes without a view to the distribution thereof;
PROVIDED that notwithstanding the foregoing the Tranche T Participant shall
not grant any participation in its Participation Interest to any
Sub-Participant without the prior written consent of the Agent. Any such
Person shall require any transferee of its interest in its Participation
Interest to make the representations and warranties set forth in the
preceding sentence, in writing, to such Person for its benefit and the
benefit of the Participants, the Lessor and Lessee. In the event of any such
sale by a Participant of a participating interest in its Participation
Interest to a Sub-Participant, such Participant's obligations under this
Participation Agreement and under the other Operative Documents shall remain
unchanged, such Participant shall remain solely responsible for the
performance thereof, such Participant shall remain the holder of its
Participation Interest for all purposes under this Participation Agreement
and under the other Operative Documents, and the Lessor, the Agent and,
except as set forth in SECTION 12.2(b), the Lessee shall continue to deal
solely and directly with such Participant in connection with such
Participant's rights and obligations under this Participation Agreement and
under the other Operative Documents.
(b) TRANSFEREE INDEMNITIES. Each Sub-Participant shall be entitled to
the benefits of SECTIONS 13.5, 13.6, 13.7 and 13.10 with respect to its
participation in the Participation Interests outstanding from time to time;
PROVIDED that no Sub-Participant shall be entitled to receive any greater
amount pursuant to such Sections than the transferor Participant would have
been entitled to receive in respect of the amount of the participation
transferred by such transferor Participant to such Sub-Participant had no
such transfer or participation occurred.
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SECTION 12.3 FUTURE PARTICIPANTS. Each Participant shall be deemed
to be bound by and, upon compliance with the requirements of this SECTION 12,
will be entitled to all of the benefits of the provisions of, this
Participation Agreement.
SECTION
INDEMNIFICATION
SECTION 13.1 GENERAL INDEMNIFICATION. The Lessee agrees, whether or
not any of the transactions contemplated hereby shall be consummated, to
assume liability for, and to indemnify, protect, defend, save and keep
harmless each Indemnitee, on an After Tax Basis, from and against, any and
all Claims that may be imposed on, incurred by or asserted against such
Indemnitee (whether because of action or omission by such Indemnitee or
otherwise), whether or not such Indemnitee shall also be indemnified as to
any such Claim by any other Person and whether or not such Claim arises or
accrues prior to the Closing Date or after the Expiration Date, in any way
relating to or arising out of:
(a) any of the Operative Documents or any of the transactions
contemplated thereby or any violation thereof, or any investigation,
litigation or proceeding in connection therewith and any amendment,
modification or waiver in respect thereof;
(b) the Property, the Lease, any permitted sublease or any part
thereof or interest therein;
(c) the purchase, design, construction, preparation, installation,
inspection, delivery, non-delivery, acceptance, rejection, ownership,
management, possession, operation, rental, lease, sublease, repossession,
maintenance, repair, alteration, modification, addition or substitution,
storage, transfer of title, redelivery, use, financing, refinancing,
disposition, operation, condition, sale (including, without limitation, any
sale pursuant to Sections 16.2, 16.3, 17.2(c), 17.2(e), 17.2(h) or 17.4 of
the Lease or any sale pursuant to Articles XX or XXII of the Lease, except
for any amounts payable pursuant to SECTION 13.2 hereof), return or other
disposition of all or any part or any interest in the Property or the
imposition of any Lien (or incurring of any liability to refund or pay over
any amount as a result of any Lien) thereon, including, without limitation:
(1) Claims or penalties arising from any violation of foreign, federal, state
or local law, rule, regulation or order or in tort (strict liability or
otherwise) arising in connection with the Property, the Operative Documents
or the transactions contemplated thereunder, including Claims made by
invitees of Lessee or any assignee or any sublessee of Lessee or any
assignee, or by any other Person entering on or in the Property, (2) latent
or other defects in, to or affecting the Property, whether or not
discoverable, (3) any Claim based upon a violation or alleged violation of
the terms of any restriction, easement, condition or covenant or other matter
affecting title to the Property, (4) the making of any Modifications in
violation of the Lease or any standards imposed by any insurance policies
required to be maintained by Lessee pursuant to the Lease which are in effect
at any time with respect to the Property or any part thereof, (5) any Claim
for patent, trademark or copyright infringement, (6) Claims arising from any
public improvements with respect to the Property resulting in any charge or
special assessments being levied against the Property or any plans to widen,
modify or realign any street or highway adjacent to the Property, (7) Claims
based on violations or failure of title arising in connection with the zoning
ordinances,
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rules, regulations or laws applicable to the Property, (8) any Claim
resulting from or related to the leasing or subleasing of the Property or the
construction of the Improvements, and any amendment, modification or waiver
in respect thereof, and (9) any Claim related to or arising out of the Tax
Abatement Agreements or Lessor's assignment and assumption thereof pursuant
to the Assignment and Assumption of Tax Abatement Agreements;
(d) the offer, issuance or sale of the Participation Interests or any
interest therein in accordance with the terms of the Operative Documents;
(e) the breach by the Lessee of any covenant, representation or warranty
made by it or deemed made by it in any Operative Document or any certificate
required to be delivered by any Operative Document;
(f) the retaining or employment of any broker, finder or financial
advisor by the Lessee or any Affiliate to act on its behalf in connection
with this Participation Agreement, or the incurring of any fees or
commissions to which the Lessor might be subjected by virtue of entering into
the transactions contemplated by this Participation Agreement;
(g) the existence of any Lien on or with respect to the Property, the
Improvements, the Equipment, the Lease, the Cash Collateral or Securities
Collateral, any Basic Rent or Supplemental Rent, title thereto, or any
interest therein including any Liens which arise out of the possession, use,
occupancy, construction, repair or rebuilding of the Property or by reason of
labor or materials furnished or claimed to have been furnished to the Lessee,
the Existing Owner, the Lessor or any of their contractors or agents or by
reason of the financing of the Property or any personalty or equipment
purchased or leased by the Lessee or Improvements or Modifications
constructed by the Lessee or any sublessee, except Lessor Liens and Liens in
favor of the Agent or the Lessor;
(h) the transactions contemplated hereby, by the Lease or by any other
Operative Document, in respect of the application of Parts 4 and 5 of
Subtitle B of Title I of ERISA and any prohibited transaction described in
Section 4975(c) of the Code (other than any Claim resulting from a breach of
representation or warranty of the Lessor or any Participant); or
(i) the purchase of the Property by the Lessor, or any matters
arising therefrom or related thereto;
PROVIDED, HOWEVER, the Lessee shall not be required to indemnify any Indemnitee
under this SECTION 13.1 for any of the following: (1) any Claim to the extent
resulting from the willful misconduct or gross negligence of such Indemnitee (IT
BEING UNDERSTOOD that the Lessee shall be required to indemnify an Indemnitee
even if the ordinary (but not gross) negligence of such Indemnitee caused or
contributed to such Claim), (2) any Claim resulting from Lessor Liens which the
Lessor is responsible for discharging under the Operative Documents, (3) any
Imposition or other claims for Taxes of the type(s) described in SECTION 13.5,
PROVIDED, HOWEVER that Lessee acknowledges that any Claims relating to or
arising under the Tax Abatement Agreements or the Assignment and Assumption of
Tax Abatement Agreements that do not constitute Claims for Impositions or other
Taxes for which indemnification is provided under SECTION 13.5 shall be subject
to indemnification by Lessee under this SECTION 13.1, (4) any
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Claims of the type(s) described in SECTIONS 13.2, 13.6, 13.7, 13.8 and 13.10,
or (5) any such Claim under this SECTION 13.1 arising with respect to the
Expansion Improvements only prior to the Completion Date with respect to
Expansion Improvements, except as follows:
(A) The Lessee shall indemnify the Lessor from
and against any Claim Within the Lessee's Control,
subject to the following:
(1) if such Claim is not related
to an inability or failure to complete
construction of the Expansion Improvements
(or if such Claim is related to an inability
or failure to complete construction of the
Expansion Improvements but also constitutes or
arises out of a Fully Indemnifiable Event),
the indemnification provided in this SECTION
13.1 shall not be subject to monetary limitation;
and
(2) if such Claim is related to an
inability or failure to complete construction
of the Expansion Improvements and such Claim
does not constitute or arise out of a Fully
Indemnifiable Event, the Lessee's monetary
obligation for indemnification in respect of
the Expansion Improvements provided in this
SECTION 13.1 together with all other
similarly limited amounts payable prior to the
Completion Date with respect to the Expansion
Improvements under SECTION 9.1(b)(i), SECTION
9.3(b)(i), SECTION 13.10, clause (i)(B) to
the proviso of Section 24.1 of the Lease
and any similarly limited payment obligation
of the Lessee in connection with the
return or sale of the Property under the
Lease or the Expansion Improvements
Construction Agency Agreement, shall not
exceed the maximum Expansion Improvements
Residual Value Guarantee Amount.
(B) If any Lessor Party incurs any such claims
or expenses for which the Lessee is not obligated to
indemnify such Lessor Party pursuant to CLAUSE (5) of
this SECTION 13.1, such claims shall, if such Lessor
Party shall so request by a written notice to the Lessor
and the Lessor shall give its prior written consent
thereto, be capitalized pursuant to SECTION 3.7(e)(ii).
It is expressly understood and agreed that the indemnity provided for herein
shall survive the expiration or termination of and shall be separate and
independent from any remedy under the Lease or any other Operative Document.
SECTION 13.2 END OF TERM INDEMNITY.
(a) If the Lessee elects the Remarketing Option and it is determined, in
accordance with the provisions of Section 22.1(j) of the Lease, that there
would, after giving effect to the proposed remarketing transaction, be a
Shortfall Amount, then as a condition to the Lessee's right to complete the
remarketing of the Property pursuant to Section 22.1 of the Lease, the
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Lessee shall cause to be delivered to the Lessor at least 30 days prior to
the Expiration Date, at the Lessee's sole cost and expense, a report from an
appraiser selected by the Lessor and reasonably satisfactory to the Agent and
the Required Participants and the Lessee in form and substance reasonably
satisfactory to the Lessor, the Agent and the Required Participants (the "END
OF THE TERM REPORT") which shall state the appraiser's conclusions as to the
reason for any decline in the Fair Market Sales Value of the Property from
that anticipated for such date in the Appraisal delivered on the Closing Date.
(b) On the Expiration Date, the Lessee shall pay to the Lessor an amount
(not to exceed the Shortfall Amount) equal to the portion of the Shortfall
Amount that the End of the Term Report demonstrates was the result of a
decline in the Fair Market Sales Value of the Property due to:
(i) extraordinary wear and tear, excessive usage, failure to
maintain, to repair, to restore, to rebuild or to replace, failure
to comply with the Lease and all applicable laws, failure to use,
workmanship, method of installation or removal or maintenance,
repair, rebuilding or replacement (excepting in each case ordinary
wear and tear); or
(ii) any Modification made to, or any rebuilding of, the
Property or any part thereof by the Lessee or any sublessee; or
(iii) the existence of any Hazardous Activity, Hazardous Substance
or Environmental Violations; or
(iv) any restoration or rebuilding carried out by the Lessee or
any sublessee; or
(v) any condemnation of any portion of the Property pursuant to
Article XV of the Lease; or
(vi) any use of the Property or any part thereof by the Lessee
or any sublessee other than as facilities of the type described in
Recital B to this Agreement; or
(vii) any grant, release, dedication, transfer, annexation or
amendment made pursuant to Section 12.2 of the Lease; or
(viii) the failure of the Lessor to have a good and marketable fee
estate in the Property, as required by the Operative Documents, free
and clear of all Liens (including Permitted Liens) and exceptions to
title, except (A) such Liens or exceptions to title that existed on
the Closing Date and were disclosed in the title report and approved
by the Agent; (B) Liens that would be released as a result of
consummation of the Remarketing Option or other required sale of the
Property; (C) Lessor Liens and (D) easements, rights-of-way,
agreements and other rights permitted by Section 12.2 of the Lease.
SECTION 13.3 ENVIRONMENTAL INDEMNITY. Without limitation of the
other provisions of this SECTION 13, the Lessee hereby agrees to indemnify,
hold harmless and defend each Indemnitee, on an After Tax Basis, from and
against any and all claims (including without limitation third party claims
for personal injury or real or personal property damage), losses (including
but not limited to any loss of value of the Property), damages, liabilities,
fines,
78
penalties, charges, administrative and judicial proceedings (including
informal proceedings) and orders, judgments, remedial action, requirements,
enforcement actions of any kind, and all reasonable and documented costs and
expenses incurred in connection therewith (including but not limited to
reasonable and documented attorneys' and/or paralegals' fees and expenses),
including, but not limited to, all costs incurred in connection with any
investigation or monitoring of site conditions or any clean-up, remedial,
removal or restoration work by any foreign, federal, state or local
government agency, which such Indemnitee becomes subject to because of its
involvement with the Property, the transactions contemplated by the Operative
Documents or any other matter referred to in PARAGRAPHS (a) through (i) of
SECTION 13.1 arising in whole or in part, out of:
(a) the presence on or under the Property of any Hazardous Substances,
or any Releases or discharges of any Hazardous Substances on, under, from or
onto the Property;
(b) any activity, including, without limitation, construction, carried
on or undertaken on or off the Property, and whether by the Lessee, the
Lessor, the Existing Owner, any predecessor in title or any sublessee or any
employees, agents, contractors or subcontractors of the Lessee, the Lessor,
the Existing Owner or any predecessor in title, or any other Persons
(including such Indemnitee), in connection with the handling, treatment,
removal, storage, decontamination, cleanup, transport or disposal of any
Hazardous Substances that at any time are located or present on or under or
that at any time migrate, flow, percolate, diffuse or in any way move onto or
under the Property;
(c) loss of or damage to any property or the environment (including,
without limitation, cleanup costs, response costs, remediation and removal
costs, cost of corrective action, costs of financial assurance, fines and
penalties and natural resource damages), or death or injury to any Person,
and all expenses associated with the protection of wildlife, aquatic species,
vegetation, flora and fauna, and any mitigative action required by or under
Environmental Laws;
(d) any claim concerning lack of compliance with Environmental Laws, or
any act or omission causing an environmental condition that requires
remediation or would allow any Governmental Authority to record a Lien on the
land records;
(e) any residual contamination on or under the Property, or affecting
any natural resources, or any contamination of any property or natural
resources arising in connection with the generation, use, handling, storage,
transport or disposal of any such Hazardous Substances, and irrespective of
whether any of such activities were or will be undertaken in accordance with
applicable Environmental Laws; or
(f) any material inaccuracies, misrepresentations, misstatements, and
omissions and any conflicting information contained in or omitted from the
Environmental Audit;
PROVIDED, HOWEVER, the Lessee shall not be required to indemnify any
Indemnitee under this SECTION 13.3 for (1) any Claim to the extent resulting
from the willful misconduct or gross negligence of such Indemnitee (IT BEING
UNDERSTOOD that the Lessee shall be required to indemnify an Indemnitee even
if the ordinary (but not gross) negligence of such Indemnitee
79
caused or contributed to such Claim), (2) any Imposition or other
claims for Taxes of the type(s) described in SECTION 13.5, or (3) any Claims
of the type(s) described in SECTIONS 13.2, 13.6, 13.7, 13.8 and 13.10. It is
expressly understood and agreed that the indemnity provided for herein shall
survive the expiration or termination of and shall be separate and
independent from any remedy under the Lease or any other Operative Document.
SECTION 13.4 PROCEEDINGS IN RESPECT OF CLAIMS. With respect to any
amount that the Lessee is requested by an Indemnitee to pay by reason of
SECTION 13.1 or 13.3, 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 and which is in the possession of such
Indemnitee to substantiate properly the requested payment.
In case any action, suit or proceeding shall be brought against any
Indemnitee, such Indemnitee shall notify the Lessee of the commencement
thereof, and if the Construction Period limitation on indemnification set
forth in CLAUSE (5) of the proviso to SECTION 13.1 does not apply, the Lessee
shall be entitled, at its expense, to participate in, and, to the extent that
the Lessee desires to, assume and control the defense thereof; PROVIDED,
HOWEVER, that the Lessee shall have acknowledged in writing its obligation to
fully indemnify such Indemnitee in respect of such action, suit or
proceeding, and the Lessee shall keep such Indemnitee fully apprised of the
status of such action, suit or proceeding and shall provide such Indemnitee
with all information with respect to such action, suit or proceeding as such
Indemnitee shall reasonably request, and PROVIDED FURTHER, that the Lessee
shall not be entitled to assume and control the defense of any such action,
suit or proceeding if and to the extent that, (A) in the reasonable opinion
of such Indemnitee, (x) such action, suit or proceeding involves any
possibility of imposition of criminal liability or any risk of material civil
liability on such Indemnitee or will involve a material risk of the sale,
forfeiture or loss of, or the creation of any Lien (other than a Permitted
Exception) on, the Property or any part thereof unless, in the case of civil
liability or Lien, the Lessee shall have posted a bond or other security
satisfactory to the relevant Indemnitee in respect to such risk or (y) the
control of such action, suit or proceeding would involve an actual or
potential conflict of interest, (B) such proceeding involves Claims not fully
indemnified by the Lessee which the Lessee and the Indemnitee have been
unable to sever from the indemnified claim(s), or (C) an Event of Default
under the Lease has occurred and is continuing. The Indemnitee may
participate in a reasonable manner at its own expense and with its own
counsel in any proceeding conducted by the Lessee in accordance with the
foregoing. The Lessee shall not enter into any settlement or other compromise
with respect to any Claim which is entitled to be indemnified under SECTION
13.1 or 13.3 without the prior written consent of the Indemnitee which
consent shall not be unreasonably withheld in the case of a money settlement
not involving an admission of liability of such Indemnitee.
Each Indemnitee shall at the expense of the Lessee cooperate with
and supply the Lessee with such information and documents reasonably
requested by the Lessee as are necessary or advisable for the Lessee to
participate in any action, suit or proceeding to the extent permitted by
SECTION 13.1 or 13.3. Unless an Event of Default under the Lease shall have
occurred and be continuing, no Indemnitee shall enter into any settlement or
other compromise with respect to any Claim which is entitled to be
indemnified under SECTION 13.1 or 13.3 without the prior written consent of
the Lessee, which consent shall not be unreasonably withheld, unless such
80
Indemnitee waives its right to be indemnified under SECTION 13.1 or 13.3 with
respect to such Claim.
Upon payment in full of any Claim by the Lessee pursuant to SECTION
13.1 or 13.3 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 relating thereto (other than claims in respect of
insurance policies maintained by such Indemnitee at its own expense), and
such Indemnitee shall execute such instruments of assignment and conveyance,
evidence of claims and payment and such other documents, instruments and
agreements as may be necessary to preserve any such claims and otherwise
cooperate with the Lessee and give such further assurances as are necessary
or advisable to enable the Lessee vigorously to pursue such claims.
Any amount payable to an Indemnitee pursuant to SECTION 13.1 or 13.3
shall be paid to such Indemnitee promptly upon receipt of a written demand
therefor from such Indemnitee, accompanied by a written statement describing
in reasonable detail the basis for such indemnity and the computation of the
amount so payable.
SECTION 13.5 GENERAL IMPOSITIONS INDEMNITY.
(a) INDEMNIFICATION. The Lessee shall pay and assume liability for, and
does hereby agree to indemnify, protect and defend the Property and all
Indemnitees, and hold them harmless against, all Impositions on an After Tax
Basis.
(b) PAYMENTS.
(i) Subject to the terms of SECTION 13.5(f), the Lessee shall
pay or cause to be paid all Impositions directly to the taxing
authorities where feasible and otherwise to the Indemnitee, as
appropriate, and the Lessee shall at its own expense, upon such
Indemnitee's reasonable request, furnish to such Indemnitee copies
of official receipts or other satisfactory proof evidencing such
payment.
(ii) In the case of Impositions for which no contest is
conducted pursuant to SECTION 13.5(f) and which the Lessee pays
directly to the taxing authorities, the Lessee shall pay such
Impositions prior to the latest time permitted by the relevant
taxing authority for timely payment. In the case of Impositions
for which the Lessee reimburses an Indemnitee, the Lessee shall
do so within twenty (20) days after receipt by the Lessee of
demand by such Indemnitee describing in reasonable detail the
nature of the Imposition and the basis for the demand (including
the computation of the amount payable), but in no event shall the
Lessee be required to pay such reimbursement prior to thirty
(30) days before the latest time permitted by the relevant
taxing authority for timely payment. In the case of Impositions
for which a contest is conducted pursuant to SECTION 13.5(f), the
Lessee shall pay such Impositions or reimburse such Indemnitee
for such Impositions, to the extent not previously paid or
reimbursed pursuant to SECTION 13.5(a), prior to the latest time
permitted by the relevant taxing authority for timely payment
after conclusion of all contests under SECTION 13.5(f).
(iii) Impositions imposed with respect to the Property for a
billing period during which the Lease expires or terminates (unless
the Lessee has exercised the
81
Renewal Option or the Purchase Option with respect to the Property)
shall be adjusted and prorated on a daily basis between the Lessee
and the Lessor, whether or not such Imposition is imposed before or
after such expiration or termination and each party shall pay or
reimburse the other for each party's pro rata share thereof.
(c) REPORTS AND RETURNS. (i) The Lessee shall be responsible for
preparing and filing any real and personal property or ad valorem tax returns
in respect of the Property. In case any other report or tax return shall be
required to be made with respect to any obligations of the Lessee under or
arising out of SECTION 13.5(a) and of which the Lessee has knowledge or
should have knowledge, the Lessee, at its sole cost and expense, shall notify
the relevant Indemnitee of such requirement and (except if such Indemnitee
notifies the Lessee that such Indemnitee intends to prepare and/or file such
report or return, which preparation and/or filing to the extent related to
the transactions contemplated hereby shall be at Lessee's cost and expense;
PROVIDED, THAT Lessee shall not be responsible for such Indemnitee's costs
and expenses of preparing and filing such report or return, if such
Indemnitee files such report or return without so notifying Lessee and Lessee
also files such report or return) (A) to the extent required or permitted by
and consistent with Applicable Law, make and file in its own name such
return, statement or report; and (B) in the case of any other such return,
statement or report required to be made in the name of such Indemnitee,
advise such Indemnitee of such fact and prepare such return, statement or
report for filing by such Indemnitee or, where such return, statement or
report shall be required to reflect items in addition to any obligations of
the Lessee under or arising out of SECTION 13.5(a), provide such Indemnitee
at the Lessee's expense with information sufficient to permit such return,
statement or report to be properly made with respect to any obligations of
the Lessee under or arising out of SECTION 13.5(a). Such Indemnitee shall,
upon the Lessee's request and at the Lessee's expense, provide any data
maintained by such Indemnitee (and not otherwise available to or within the
control of the Lessee) with respect to the Property which the Lessee may
reasonably require to prepare any required tax returns or reports. Each
Indemnitee agrees to use its best efforts to send to the Lessee a copy of any
written request or other notice that the Indemnitee receives with respect to
any reports or returns required to be filed with respect to the Property or
the transactions contemplated by the Operative Documents, it being understood
that no Indemnitee shall have any liability for failure to provide such
copies; PROVIDED that in the event of any such failure by any Indemnitee, the
Lessee shall have no obligation to indemnify such Indemnitee for any
penalties or fines imposed that would not have been imposed but for such
failure.
(d) INCOME INCLUSIONS. If as a result of the payment or reimbursement by
the Lessee of any expenses of the Lessor or the payment of any Transaction
Expenses incurred in connection with the transactions contemplated by the
Operative Documents, the Lessor or any Indemnitee or Affiliate shall suffer a
net increase in any federal, state, local or foreign income tax liability,
the Lessee shall indemnify such Persons (without duplication of any
indemnification required by SECTION 13.5(a)) on an After Tax Basis for the
amount of such increase. The calculation of any such net increase shall take
into account any current or future tax savings realized or reasonably
expected to be realized by such Person in respect thereof, as well as any
interest, penalties and additions to tax payable by the Lessor, or any
Indemnitee or such Affiliate, in respect thereof.
82
(e) WITHHOLDING TAXES. As between the Lessee on one hand, and the
Lessor or the Agent or any Participant on the other hand, the Lessee shall be
responsible for, and, subject to the provisions of SECTIONS 13.5(g) and (h),
the Lessee shall indemnify and hold harmless the Lessor, the Agent and the
Participants (without duplication of any indemnification required by SECTION
13.5(a)) on an After Tax Basis against, any obligation for United States or
foreign withholding taxes imposed in respect of payments with respect to the
Participation Interests or with respect to Rent payments under the Lease or
payments of the Asset Termination Value, Lease Balance or Purchase Option
Price (and, if the Lessor, the Agent or any Participant receives a demand for
such payment from any taxing authority, the Lessee shall discharge such
demand on behalf of the Lessor, the Agent or such Participant).
(f) CONTESTS OF IMPOSITIONS.
(i) If a written claim is made against any Indemnitee or if
any proceeding shall be commenced against such Indemnitee
(including a written notice of such proceeding), for any
Impositions, such Indemnitee shall promptly notify the Lessee in
writing and shall not take action with respect to such claim or
proceeding without the consent of the Lessee for thirty (30)
days after the receipt of such notice by the Lessee; PROVIDED,
however, that, in the case of any such claim or proceeding, if
action shall be required by law or regulation to be taken prior to
the end of such 30-day period, such Indemnitee shall, in such
notice to the Lessee, inform the Lessee of such shorter period,
and no action shall be taken with respect to such claim or
proceeding without the consent of the Lessee before 2 days before
the end of such shorter period; PROVIDED, FURTHER, that the
failure of such Indemnitee to give the notices referred to
this sentence shall not diminish the Lessee's obligation
hereunder except to the extent such failure precludes the Lessee
from contesting all or part of such claim.
(ii) If, within thirty (30) days of receipt of such notice
from the Indemnitee (or such shorter period as the Indemnitee
has notified the Lessee is required by law or regulation for the
Indemnitee to commence such contest), the Lessee shall request in
writing that such Indemnitee contest such Imposition, the
Indemnitee shall, at the expense of the Lessee, in good faith
conduct and control such contest (including, without limitation,
by pursuit of appeals) relating to the validity, applicability
or amount of such Impositions (PROVIDED, however, that (A) if such
contest involves a tax other than a tax on net income and can be
pursued independently from any other proceeding involving a tax
liability of such Indemnitee, the Indemnitee, at the Lessee's
request, shall allow the Lessee to conduct and control such
contest and (B) in the case of any contest, the Indemnitee may
request the Lessee to conduct and control such contest) by,
in the sole discretion of the Person conducting and controlling
such contest, (1) resisting payment thereof, (2) not paying the
same except under protest, if protest is necessary and proper, (3)
if the payment be made, using reasonable efforts to obtain a refund
thereof in appropriate administrative and judicial proceedings, or
(4) taking such other action as is reasonably requested by the
Lessee from time to time.
(iii) The party controlling any contest shall consult in good
faith with the non-controlling party and shall keep the
non-controlling party reasonably informed as to the conduct of
such contest; PROVIDED, that all decisions ultimately shall be
made in the
83
sole discretion of the controlling party. The parties agree that
an Indemnitee may at any time decline to take further action with
respect to the contest of any Imposition and may settle such
contest if such Indemnitee shall waive its rights to any indemnity
from the Lessee that otherwise would be payable in respect of
such claim (and any future claim by any taxing authority, the
contest of which is precluded by reason of such resolution of
such claim) and shall pay to the Lessee any amount previously paid
or advanced by the Lessee pursuant to this SECTION 13.5 by way of
indemnification or advance for the payment of an Imposition other
than expenses of such contest.
(iv) Notwithstanding the foregoing provisions of this SECTION
13.5, an Indemnitee shall not be required to take any action and the
Lessee shall not be permitted to contest any Impositions in its own
name or that of the Indemnitee unless (A) the Lessee shall have
agreed to pay and shall pay to such Indemnitee on demand and on an
After Tax Basis all reasonable costs, losses and expenses that such
Indemnitee actually incurs in connection with contesting such
Impositions, including, without limitation, all reasonable legal,
accounting and investigatory fees and disbursements, (B) in the
case of a claim that must be pursued in the name of an Indemnitee
(or an Affiliate thereof), the amount of the potential indemnity
(taking into account all similar or logically related claims that
have been or could be raised in any audit involving such Indemnitee
for which the Lessee may be liable to pay an indemnity under this
SECTION 13.5) exceeds $100,000, (C) the Indemnitee shall have
reasonably determined that the action to be taken will not result
in any material danger of sale, forfeiture or loss of the Property,
or any part thereof or interest therein, will not interfere with
the payment of Rent, and will not result in risk of criminal
liability, (D) if such contest shall involve the payment of the
Imposition prior to the contest, the Lessee shall provide to the
Indemnitee an interest-free advance in an amount equal to the
Imposition that the Indemnitee is required to pay (with no
additional net after-tax cost to such Indemnitee), (E) in the case
of a claim that must be pursued in the name of an Indemnitee (or an
Affiliate thereof), the Lessee shall have provided to such
Indemnitee an opinion of independent tax counsel selected by the
Indemnitee and reasonably satisfactory to the Lessee stating that a
reasonable basis exists to contest such claim (or, in the case of an
appeal of an adverse determination, an opinion of such counsel to
the effect that there is substantial authority for the position
asserted in such appeal) and (F) no Event of Default hereunder
shall have occurred and be continuing. In no event shall an
Indemnitee be required to appeal an adverse judicial determination
to the United States Supreme Court. In addition, an Indemnitee
shall not be required to contest any claim in its name (or that of
an Affiliate) if the subject matter thereof shall be of a
continuing nature and shall have previously been decided adversely
by a court of competent jurisdiction pursuant to the contest
provisions of this SECTION 13.5, unless there shall have been a
change in law (or interpretation thereof) and the Indemnitee shall
have received, at the Lessee's expense, an opinion of independent
tax counsel selected by the Indemnitee and reasonably acceptable to
the Lessee stating that as a result of such change in law (or
interpretation thereof), it is more likely than not that the
Indemnitee will prevail in such contest.
(g) DOCUMENTATION OF WITHHOLDING STATUS. Each Participant (or any
successor thereto or transferee thereof) that is organized under the laws of
a jurisdiction outside of the United States of America shall:
84
(i) on or before the date it becomes a party to any Operative
Document, deliver to the Lessor and the Lessee any certificates,
documents, or other evidence that shall be required by the Code or
Treasury Regulations issued pursuant thereto to establish its
exemption from United States Federal withholding requirements,
including two valid, duly completed, original copies of
Internal Revenue Service Form W-8BEN or Form W-8ECI or
successor applicable form, properly and duly executed,
certifying in each case that such party is entitled to receive
payments pursuant to the Operative Documents without deduction
or withholding of United States Federal income taxes and is a
foreign person thereby entitled to an exemption from the United
States backup withholding taxes;
(ii) on or before the date that any such form described above
expires or becomes obsolete, or after the occurrence of any event
requiring a change in the most recent such form previously delivered
to the Lessor and the Lessee, deliver to the Lessor and the Lessee
two further valid, duly completed, original copies of any such form
or certification, properly and duly executed; and
(iii) comply from time to time with all United States laws and
regulations with regard to such withholding tax exemptions.
(h) LIMITATION ON TAX INDEMNIFICATION. The Lessee shall not be required
to indemnify any Indemnitee, or to pay any increased amounts to any
Indemnitee or tax authority with respect to any withholding taxes pursuant to
this SECTION 13.5 to the extent that (i) any obligation to withhold, deduct,
or pay amounts with respect to Tax existed on the date such Indemnitee became
a party to any Operative Document (and, in such case, the Lessee may deduct
and withhold such Tax from payments pursuant to the Operative Documents), or
(ii) such Indemnitee fails to comply with the provisions of SECTION 13.5(g)
(and, in such case, the Lessee may deduct and withhold all Taxes required by
law as a result of such noncompliance from payments made by the Lessee
pursuant to the Operative Documents). With respect to any transferee of any
Participant (including a transfer resulting from any change in the
designation of the lending office of a Participant), the transferee shall not
be entitled to any greater payment or indemnification under this SECTION 13.5
than the transferor would have been entitled to.
SECTION 13.6 FUNDING LOSSES. If any payment of any Advance or any
portion of any Participation Interest is made on any day other than the last
day of an Interest Period applicable thereto, or if the Lessee fails to
utilize the proceeds of any purchase of Participation Interests after notice
has been given to the Lessor or any Participant in accordance with SECTION 3
or 6, the Lessee shall reimburse the Lessor and each Participant on an After
Tax Basis within fifteen (15) days after demand for any resulting loss or
expense incurred by it, including (without limitation) any loss incurred in
obtaining, liquidating or employing deposits from third parties, provided
that the Lessor or such Participant, as the case may be, shall have delivered
to the Lessee a certificate as to the amount of such loss or expense, which
certificate shall be conclusive in the absence of manifest error. The Lessor
or such Participant, as applicable, will, at the request of the Lessee,
furnish such additional information concerning the determination of such loss
as the Lessee may reasonably request.
SECTION 13.7 REGULATION D COMPENSATION. For so long as the Lessor
or any Participant is required to increase its existing reserve percentage
against "Eurocurrency
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Liabilities" (or any other category of liabilities which include deposits by
reference to which the interest rate on its Participation Interest in any
Advance is determined or any category of extensions of credit or other assets
which includes loans by a non-United States office of the Lessor or such
Participant, as applicable, to United States residents), and, as a result,
the cost to the Lessor or such Participant (or such Participant's Funding
Office) of purchasing or maintaining its Participation Interest in any
Advance is increased, then the Lessor or such Participant may require the
Lessee to pay, on an After Tax Basis, contemporaneously with each payment of
interest on the Advances an additional amount on the Participation Interest
of such Participant in the Advances at a rate per annum up to but not
exceeding the excess of (i) (A) the applicable Eurodollar Rate divided by (B)
one minus the Eurocurrency Reserve Requirements over (ii) the applicable
Eurodollar Rate.
SECTION 13.8 BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR
UNFAIR. If on or prior to the first day of any Interest Period:
(a) deposits in Dollars (in the applicable amounts) are not being
offered to the Agent in the relevant market for such Interest Period or any
Participant shall advise the Agent that the Eurodollar Rate as determined by
the Agent will not adequately and fairly reflect the cost to such Participant
of funding its Participation Interest in any Advance for such Interest
Period; or
(b) any Participant determines that, by reason of the adoption, on or
after the date of this Participation Agreement, of any applicable law, rule
or regulation, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by any Participant (or its Funding Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or governmental agency, it is restricted, directly or
indirectly, in the amount it may hold of (i) a category of liabilities that
includes deposits by reference to which, or on the basis of which, the
interest rate applicable to Advances based on the Eurodollar Rate is directly
or indirectly determined, or (ii) the category of assets which includes
Advances based on the Eurodollar Rate; the Agent shall forthwith give notice
thereof to the Lessee and the Participants, whereupon the obligation of the
Participants to provide funding at rates based upon the Eurodollar Rate shall
be suspended and, until the Agent notifies the Lessee that the circumstances
giving rise to such suspension no longer exist, each outstanding Advance
shall begin to bear interest at the Alternate Base Rate on the last day of
the then current Interest Period applicable thereto.
SECTION 13.9 ILLEGALITY. If, on or after the date of this
Participation Agreement, the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by any Participant (or its Funding Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency, shall make it unlawful or impossible for
any Participant (or its Funding Office) to purchase, maintain or fund its
Participation Interest in any Advance and such Participant shall so notify
the Agent, the Agent shall forthwith give notice thereof to the other
Participants and the Lessee, whereupon until such Participant notifies the
Lessee and the Agent that the circumstances giving rise to such
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suspension no longer exist, the obligation of such Participant to purchase
its Participation Interest in any Advance shall be suspended. Before giving
any notice to the Agent pursuant to this Section, such Participant shall, if
practicable, with the consent of the Lessee (which consent shall not
unreasonably be withheld), designate a different Funding Office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Participant, be otherwise disadvantageous to such
Participant. If such notice is given (i) the Lessee shall be entitled upon
its request to a reasonable explanation of the factors underlying such notice
and (ii) each outstanding Participation Interest in any Advance of such
Participant then outstanding shall begin to bear interest at the Alternate
Base Rate either (a) on the last day of the then current Interest Period
applicable to such Advance if such Participant may lawfully continue to
maintain and fund such Participation Interest to such day or (b) immediately
if such Participant shall determine that it may not lawfully continue to
maintain and fund such Participation Interest to such day.
SECTION 13.10 INCREASED COST AND REDUCED RETURN. (a) In the event
that the adoption of any applicable law, rule or regulation, or any change
therein or in the interpretation or application thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation
or administration thereof or compliance by the Lessor or any Participant with
any request or directive after the date hereof (whether or not having the
force of law) of any such authority, central bank or comparable agency:
(i) does or shall subject the Lessor or such Participant to any
additional tax of any kind whatsoever with respect to the Operative
Documents or any Advance made by such Person or any purchase of a
Participation Interest in any Advance, or change the basis or the
applicable rate of taxation of payments to the Lessor or such
Participant of its Participation Interest or any other amount
payable hereunder (except for the imposition of or change in any tax
on or measured by the overall net income of the Lessor or such
Participant (other than any such tax imposed by means of
withholding));
(ii) does or shall impose, modify or hold applicable any
reserve, special deposit, insurance assessment, compulsory loan or
similar requirement against assets held by, or deposits or other
liabilities in or for the account of, advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office
of the Lessor or such Participant which are not otherwise included
in determination of the rate of interest on Advances hereunder; or
(iii) does or shall impose on the Lessor or such Participant any other
condition;
and the result of any of the foregoing is to increase the cost to the Lessor
or such Participant of making or maintaining its Advances or purchasing or
maintaining its Participation Interest in any Advance or to reduce any amount
receivable hereunder with respect thereto, then, in any such case (A) if such
Advances constitute Expansion Improvements Advances, prior to the Completion
Date with respect to the Expansion Improvements, the Lessor shall pay to the
Participants and the Lessee shall pay to the Lessor, and thereafter the
Lessee shall promptly pay, or (B) with respect to all other Advances, the
Lessee shall promptly pay the Lessor or such Participant, as the case may be,
upon its demand, on an After Tax Basis any additional amounts necessary to
compensate the Lessor or such Participant for such increased cost or reduced
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amount receivable which the Lessor or such Participant deems to be material
as determined by the Lessor or such Participant.
(b) If the Lessor or any Participant shall have determined that, after
the date hereof, the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency has or would have the effect of reducing
the rate of return on capital of the Lessor or such Participant, as the case
may be (or any entity directly or indirectly controlling the Lessor or such
Participant), as a consequence of the Lessor's or such Participant's
obligations under the Operative Documents to a level below that which the
Lessor or such Participant (or any entity directly or indirectly controlling
the Lessor or such Participant), as applicable, could have achieved but for
such adoption, change, request or directive (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by the Lessor
or such Participant to be material, then from time to time, within 15 days
after demand by the Lessor or such Participant (with a copy to the Agent),
(i) with respect to Expansion Improvements, prior to the Completion Date with
respect to the Expansion Improvements, the Lessor shall pay to the
Participants and the Lessee shall pay to the Lessor, and thereafter the
Lessee shall pay, or (ii) with respect to the Existing Facility and the
Tenant Improvements, the Lessee shall pay to the Lessor or such Participant,
as the case may be, on an After Tax Basis, such additional amount or amounts
as will compensate such Participant (or its parent) or the Lessor for such
reduction.
(c) The Lessor and each Participant will promptly notify the Lessee and
the Agent of any event of which it has knowledge, occurring after the date
hereof, which will entitle the Lessor or such Participant, as the case may
be, to compensation pursuant to this Section and will, if practicable, with
the consent of the Lessee (which consent shall not unreasonably be withheld),
designate a different Funding Office or take any other reasonable action if
such designation or action will avoid the need for, or reduce the amount of,
such compensation and will not, in the judgment of the Lessor or such
Participant, as applicable, be otherwise disadvantageous to the Lessor or
such Participant. A certificate of the Lessor or any Participant claiming
compensation under this Section and setting forth in reasonable detail its
computation of the additional amount or amounts to be paid to it hereunder
shall be conclusive in the absence of manifest error. In determining such
amount, the Lessor or such Participant, as the case may be, may use any
reasonable averaging and attribution methods. This Section shall survive the
termination of this Participation Agreement and payment of the outstanding
Advances and Participation Interests.
SECTION 13.11 SUBSTITUTION OF PARTICIPANT. If (i) the obligation of
any Participant to purchase or maintain its Participation Interest has been
suspended pursuant to this SECTION 13, or (ii) any Participant has demanded
compensation or given notice of its intention to demand compensation under
SECTION 13.10, the Lessee shall have the right, with the assistance of the
Agent, to seek one or more mutually satisfactory substitute banks or
financial institutions (which may be one or more of the Participants) to
replace such Participant under the Operative Documents.
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SECTION 13.12 INDEMNITY PAYMENTS IN ADDITION TO RESIDUAL VALUE
GUARANTEE AMOUNT. The Lessee acknowledges and agrees that its obligations to
make indemnity payments under this SECTION 13 are separate from, in addition
to, and do not reduce, its obligation to pay, any Residual Value Guarantee
Amount under the Lease; PROVIDED, that in the event the Lessee elects the
Remarketing Option, the Lessee shall only be required to pay any Shortfall
Amount to the extent set forth in SECTION 13.2 hereof.
SECTION 13.13 LIMITATIONS ON INDEMNIFICATION. Notwithstanding any
other provisions of SECTIONS 13.1 or 13.10 hereof or Section 24.1 of the
Lease (the "INDEMNIFICATION SECTIONS") to the contrary, with respect to the
Expansion Improvements only, prior to the Completion Date with respect to the
Expansion Improvements only, the Lessee (i) shall be obligated to indemnify
only the Lessor for any Claims of the Lessor under SECTION 13.1 or costs or
losses under SECTION 13.10 or losses under Section 24.1 of the Lease
(collectively "LESSOR LOSSES") PROVIDED, that such Lessor Losses shall
include costs and expenses of the Lessor under SECTION 13.14 and (ii) shall
have no right to contest any matter covered under SECTIONS 13.1 or 13.10
hereof or SECTION 24.1 of the Lease, notwithstanding the language of SECTIONS
13.1 or 13.10 hereof or SECTION 24.1 of the Lease, if such matter is not
fully indemnifiable by the Lessee because of the operation of this SECTION
13.13 or because such matter is not indemnifiable due to the exclusions set
forth in CLAUSE 5(A)(2) of the proviso to SECTION 13.1, or clause (i)(B) of
the proviso to Section 24.1 of the Lease.
SECTION 13.14 LESSOR INDEMNIFICATION.
(a) INDEMNIFIED LOSSES. Prior to the Completion Date with respect to the
Expansion Improvements, the Lessor shall pay, indemnify, protect, defend,
save and keep harmless each Indemnitee (other than the Lessor, its
Affiliates, successors, assigns, directors, shareholders, partners, officers,
employees and agents) (an "INDEMNIFIED PARTY") on an After Tax Basis from and
against any Losses (as hereinafter defined) arising from Covered Matters (as
hereinafter defined), subject to the limitations set forth in this SECTION
13.14.
(b) DEFINITIONS. For purposes of this SECTION 13.14, the following terms
shall have the meanings set forth below:
"COVERED MATTERS" means each of the matters set forth in the
Indemnification Sections (subject to the exceptions and exclusions set forth
therein) relating to the Expansion Improvements.
"LOSSES" means each of the Claims, Impositions, losses, costs or
expenses indemnified against pursuant to any of the Indemnification Sections
relating to or arising in respect of the Expansion Improvements (subject to
the exceptions and exclusions set forth therein) and arising prior to the
Completion Date with respect to the Expansion Improvements.
(c) NO INDEMNIFICATION FOR CERTAIN MATTERS. The Lessor shall not be
required to indemnify or hold harmless any Indemnified Party hereunder
against any matter referred to in clause (a) of this SECTION 13.14 to the
extent of the exceptions or exclusions from indemnification contained in any
of the Indemnification Sections.
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(d) LIMITATIONS ON INDEMNIFICATION BY LESSOR. The Lessor's obligation to
indemnify and hold harmless any Indemnified Party under this Section:
(i) is not an individual or personal obligation of the Lessor,
but solely its obligation in its capacity as Lessor, and nothing
herein shall be construed as creating any liability on the Lessor,
individually or personally, to pay, indemnify or hold harmless any
Indemnified Party under this Section;
(ii) is not an obligation binding on the Lessor except to the
extent of any payments received by the Lessor pursuant to the
Indemnification Sections;
(iii) shall be paid and discharged solely and exclusively from
amounts received by the Lessor pursuant to the Indemnification
Sections, and it is expressly agreed by each Indemnified Party that
the sole recourse of each such Person for payment or discharge of
the indemnification obligations created under this SECTION 13.14
shall be to such amounts paid by the Lessee or the Guarantor
pursuant to the Indemnification Sections; and
(iv) is the sole and exclusive right of each Indemnified Party
against the Lessor, and any right to proceed against the Lessor
individually or otherwise under common law, federal or state
securities laws or otherwise for indemnification or contribution in
connection with the matters covered by this SECTION 13.14, is hereby
expressly waived by each Indemnified Party (other than claims that
may be made against the Lessor, individually or personally, for
fraud, gross negligence or willful misconduct).
Nothing in this SECTION 13.14 is intended as or should be construed as a
limitation on the right of any Indemnified Party to make indemnification,
contribution or other claims of any kind against the Lessee or the Guarantor, to
the extent that such claims otherwise may be made, with respect to any matter,
including indemnification for Losses of the type referred to in this SECTION
13.14.
(e) REPAYMENT TO THE LESSOR. To the extent that any payments made
pursuant to the Indemnification Sections are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid
by the Lessor to a trustee, debtor in possession, receiver or other Person
under any Bankruptcy Code, common law or equitable cause, then to such
extent, the Indemnified Parties who received any such payments from the
Lessor (or any portion thereof) shall repay on an After Tax Basis any such
amounts to the Lessor, or as may otherwise be directed by a court of
competent jurisdiction, provided that no such Indemnified Party shall be
obligated to repay to the Lessor an amount greater than the payment received
by such Indemnified Party from the Lessor.
(f) SURVIVAL, REINSTATEMENT. The indemnification obligations of the
Lessor under this Section shall survive and be reinstated to the same extent,
for the same period and in the same manner as the indemnification obligations
of the Lessee under the Indemnification Sections.
(g) INDEMNIFICATION PROCEDURES. The right of any Indemnified Party to
seek indemnification from the Lessor under this SECTION 13.14 is subject to
and conditioned upon compliance by any such Indemnified Party with the
notice, cooperation, appointment of counsel, contest rights and other
provisions in the Indemnification Sections (including, without limitation,
the exceptions to or exclusions from indemnification set forth therein) as
fully as if such Sections
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were set forth herein, except that any reference in the Indemnification
Sections to the Lessee shall be deemed to be a reference to the Lessor or, if
the Lessor so directs in any case, the Lessor and/or the Lessee for purposes
of this Section.
SECTION 14
THE AGENT
SECTION 14.1 APPOINTMENT. Each Participant hereby irrevocably
designates and appoints the Agent as the agent of such Participant under this
Agreement and the other Operative Documents, and each Participant irrevocably
authorizes the Agent, in such capacity, to take such action on its behalf
under the provisions of this Agreement and the other Operative Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Agent by the terms of this Agreement and the other Operative Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement,
the Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any
Participant or any other party to the Operative Documents, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Operative Document or
otherwise exist against the Agent.
SECTION 14.2 DELEGATION OF DUTIES. The Agent may execute any of its
duties under this Agreement and the other Operative Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
SECTION 14.3 EXCULPATORY PROVISIONS. Neither the Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (a) liable for any action lawfully taken or omitted to be taken by
it or such Person under or in connection with this Agreement or any other
Operative Document (except for its or such Person's own gross negligence or
willful misconduct or negligence with respect to the handling of funds) or
(b) responsible in any manner to any of the Participants or any other party
to the Operative Documents for any recitals, statements, representations or
warranties made by the Lessor, the Lessee, the Construction Agent, Lessee's
General Partner or the Guarantor or any officer thereof contained in this
Agreement or any other Operative Document or in any certificate, report,
statement or other document referred to or provided for in, or received by
the Agent under or in connection with, this Agreement or any other Operative
Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Operative
Document or for any failure of the Lessor, the Lessee, the Construction
Agent, Lessee's General Partner or the Guarantor to perform its obligations
hereunder or thereunder. The Agent shall not be under any obligation to any
Participant or any other party to the Operative Documents to ascertain or to
inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Operative
Document, or to inspect the properties, books or records of the Lessor, the
Lessee, the Construction Agent, Lessee's General Partner or the Guarantor.
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SECTION 14.4 RELIANCE BY AGENT. The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Lessor or the Lessee), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or
any other Operative Document unless it shall first receive such advice or
concurrence of the Required Participants as it deems appropriate or it shall
first be indemnified to its satisfaction by the Participants against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and
the other Operative Documents in accordance with a request of the Required
Participants, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Participants.
SECTION 14.5 NOTICE OF DEFAULT. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
unless the Agent has received notice from a Participant, the Lessor, the
Lessee, the Construction Agent, Lessee's General Partner or the Guarantor
describing such Default or Event of Default and stating that such notice is a
"notice of default." In the event that the Agent receives such a notice, the
Agent shall give notice thereof to the other parties hereto. Subject to the
provisions of SECTION 11 hereof, the Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed
by the Required Participants; provided that unless and until the Agent shall
have received such directions, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests
of the Participants.
SECTION 14.6 NON-RELIANCE ON AGENT AND OTHER PARTICIPANTS. Each
Participant expressly acknowledges that neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the Agent
hereinafter taken, including any review of the affairs of the Lessor, the
Lessee, the Construction Agent, Lessee's General Partner or the Guarantor,
shall be deemed to constitute any representation or warranty by the Agent to
any Participant. Each Participant represents to the Agent that it has,
independently and without reliance upon the Agent or any other Participant,
and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, operations,
property, financial and other condition and creditworthiness of the Lessor,
the Lessee, the Construction Agent, Lessee's General Partner, the Guarantor
and the Property and made its own decision to purchase its Participation
Interest hereunder and enter into this Agreement. Each Participant also
represents that it will, independently and without reliance upon the Agent,
the Lessor or any other Participant, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Operative Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of
the Lessor, the Lessee, the Construction Agent, Lessee's General Partner and
the Guarantor. Except for notices, reports and other documents expressly
92
required to be furnished to the Participants by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Participant
with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness
of the Lessor, the Lessee, the Construction Agent, Lessee's General Partner
or the Guarantor which may come into the possession of the Agent or any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates.
SECTION 14.7 INDEMNIFICATION. The Participants agree to indemnify
the Agent in its capacity as such (to the extent not reimbursed by the Lessee
and without limiting the obligation of the Lessee to do so), ratably
according to their respective Commitment Percentages in effect on the date on
which indemnification is sought under this SECTION 14.7 (or, if
indemnification is sought after the date upon which the Commitments shall
have terminated and the Participation Interests shall have been paid in full,
ratably in accordance with their Commitment Percentages in effect immediately
prior to such date), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including,
without limitation, at any time following the payment of the Participation
Interests) be imposed on, incurred by or asserted against the Agent in any
way relating to or arising out of, the Commitments, this Agreement, the
Property, any of the other Operative Documents or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby
or thereby or any action taken or omitted by any of them under or in
connection with any of the foregoing; provided that no Participant shall be
liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the gross negligence or willful
misconduct of the Agent. The agreements in this SECTION 14.7 shall survive
the payment of the Participation Interests and all other amounts payable
hereunder.
SECTION 14.8 AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the Lessor, the Lessee, the Construction Agent, the
Lessee's General Partner or the Guarantor as though the Agent were not the
Agent hereunder and under the other Operative Documents. With respect to its
Participation Interest purchased by it, the Agent shall have the same rights
and powers under this Agreement and the other Operative Documents as any
Participant and may exercise the same as though it were not the Agent, and
the terms "Participant" and "Participants" shall include the Agent in its
individual capacity.
SECTION 14.9 SUCCESSOR AGENT. The Agent may resign as Agent upon 30
days' notice to the Participants, the Lessor and the Lessee. If the Agent
shall resign as Agent under this Agreement and the other Operative Documents,
then the Required Participants shall appoint a successor Agent for the
Participants. Any such successor Agent shall be a commercial bank organized
under the laws of the United States of America or any State thereof or under
the laws of another country which is doing business in the United States of
America and having a combined capital, surplus and undivided profits of at
least $100,000,000 (provided that so long as no Default or Event of Default
exists, the successor Agent shall be approved by the Lessee (which approval
shall not be unreasonably withheld)). Upon such appointment (a) such
successor Agent shall succeed to the rights, powers and duties of the Agent,
and the term "Agent" shall mean such successor Agent effective upon such
appointment, and (b) the former
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Agent's rights, powers and duties as Agent shall be terminated, without any
other or further act or deed on the part of such former Agent or any of the
parties to this Agreement. If no successor Agent has accepted appointment as
Agent by the date which is 30 days following a resigning Agent's notice of
resignation, the resigning Agent's resignation shall nevertheless thereupon
become effective and the Participants shall perform all of the duties of the
Agent hereunder until such time, if any, as the Required Participants appoint
a successor Agent as provided above. After any retiring Agent's resignation
as Agent, all of the provisions of this SECTION 14 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent under
this Agreement and the other Operative Documents.
SECTION 15
MISCELLANEOUS
SECTION 15.1 SURVIVAL OF AGREEMENTS. The representations,
warranties, covenants, indemnities and agreements of the parties provided for
in the Operative Documents, and the parties' obligations under any and all
thereof, shall survive the execution and delivery of this Participation
Agreement, the transfer of the Property to the Lessor, the construction of
any Improvements, any disposition of any interest of the Lessor in the
Property or any Improvements, payment of the Advances and the Participation
Interests and any disposition thereof and shall be and continue in effect
notwithstanding any investigation made by any party or the fact that any
party may waive compliance with any of the other terms, provisions or
conditions of any of the Operative Documents. Except as otherwise expressly
set forth herein or in other Operative Documents, the indemnities of the
parties provided for in the Operative Documents shall survive the expiration
or termination of any thereof.
SECTION 15.2 NO BROKER, ETC. Each of the parties hereto represents
to the others that it has not retained or employed any broker, finder or
financial adviser to act on its behalf in connection with this Participation
Agreement or the transactions contemplated herein, nor has it authorized any
broker, finder or financial adviser retained or employed by any other Person
so to act. Any party who is in breach of this representation shall indemnify
and hold the other parties harmless on an After Tax Basis from and against
any liability arising out of such breach of this representation.
SECTION 15.3 NOTICES. Unless otherwise specifically provided
herein, all notices, consents, directions, approvals, instructions, requests
and other communications required or permitted by the terms hereof to be
given to any Person shall be given in writing and delivered (i) personally,
(ii) by a nationally recognized overnight courier service, (iii) by mail (by
registered or certified mail, return receipt requested, postage prepaid) or
(iv) by facsimile, in each case directed to the address of such Person as
indicated on SCHEDULE II. Any such notice shall be effective upon receipt or
refusal.
From time to time any party may designate a new address for purposes of
notice hereunder by written notice to each of the other parties hereto in
accordance with this Section.
SECTION 15.4 COUNTERPARTS. This Participation Agreement may be
executed by the parties hereto in separate counterparts, each of which when
so executed and delivered shall
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be an original, but all such counterparts shall together constitute but
one and the same instrument.
SECTION 15.5 HEADINGS, ETC. The Table of Contents and headings of
the various Sections of this Agreement are for convenience of reference only
and shall not modify, define, expand or limit any of the terms or provisions
hereof.
SECTION 15.6 PARTIES IN INTEREST. Except as expressly provided
herein, none of the provisions of this Participation Agreement are intended
for the benefit of any Person except the parties hereto. Subject to the
provisions of Section 25.1 of the Lease, the Lessee shall not assign or
transfer any of its rights or obligations under the Operative Documents
without the prior written consent of the Lessor, the Agent and the
Participants.
SECTION 15.7 GOVERNING LAW. THIS PARTICIPATION AGREEMENT SHALL IN
ALL RESPECTS BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (EXCLUDING ANY
CONFLICT-OF-LAW OR CHOICE-OF-LAW RULES (OTHER THAN SECTION 5-1401 OR SECTION
5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK) WHICH MIGHT
LEAD TO THE APPLICATION OF THE INTERNAL LAWS OF ANY OTHER JURISDICTION) AS TO
ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE EXCEPT AS TO MATTERS
RELATING TO THE CREATION OF LEASEHOLD INTERESTS, AND THE CREATION, ATTACHMENT
AND PERFECTION OF SECURITY INTERESTS OR EXERCISE OF REMEDIES WITH RESPECT
THERETO, WHICH MATTERS SHALL BE GOVERNED BY THE LAWS OF THE STATE IN WHICH
THE PROPERTY IS LOCATED SUBJECT TO SECTIONS 9-103 AND 1-105 OF THE APPLICABLE
UNIFORM COMMERCIAL CODE.
SECTION 15.8 SEVERABILITY. Any provision of this Participation
Agreement that is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 15.9 LIABILITY LIMITED. (a) The Lessee, the Construction
Agent, the Guarantor, the Lessee's General Partner, the Agent, and the
Participants each acknowledge and agree that the Lessor shall not be liable
or accountable under any circumstances whatsoever in its individual capacity
for or on account of any statements, representations, warranties, covenants
or obligations stated to be those of the Lessor, except for its own gross
negligence or willful misconduct or negligence in the handling of funds and
as otherwise expressly provided herein or in the other Operative Documents,
and it is understood and agreed that all obligations of the Lessor to the
Lessee, the Construction Agent, the Lessee's General Partner, the Guarantor,
the Agent and any Participant under the Operative Documents are solely
nonrecourse obligations (except as otherwise expressly provided therein)
enforceable only against the Lessor's interest in the Property.
(b) No Participant shall have any obligation to any other Participant or
to the Lessee, the Construction Agent, the Lessee's General Partner, the
Guarantor, the Lessor or the Agent with respect to transactions contemplated
by the Operative Documents, except those obligations
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of such Participant expressly set forth in the Operative Documents or except
as set forth in the instruments delivered in connection therewith, and no
Participant shall be liable for performance by any other party hereto of such
other party's obligations under the Operative Documents except as otherwise
so set forth.
SECTION 15.10 FURTHER ASSURANCES. The parties hereto shall promptly
cause to be taken, executed, acknowledged or delivered, at the sole expense
of the Lessee, all such further acts, conveyances, documents and assurances
as the other parties may from time to time reasonably request in order to
carry out and effectuate the intent and purposes of this Participation
Agreement, the other Operative Documents, and the transactions contemplated
hereby and thereby (including, without limitation, the preparation, execution
and filing of any and all Uniform Commercial Code financing statements and
other filings or registrations which the parties hereto may from time to time
request to be filed or effected). The Lessee, at its own expense and without
need of any prior request from any other party, shall take such action as may
be necessary (including any action specified in the preceding sentence), or
(if the Lessor shall so request) as so requested, in order to maintain and
protect all security interests provided for hereunder or under any other
Operative Document.
SECTION 15.11 SUBMISSION TO JURISDICTION. Each of the Lessee, the
Construction Agent, the Lessee's General Partner and the Guarantor hereby
submits to the nonexclusive jurisdiction of the United States District Court
for the Southern District of New York and of any New York State court sitting
in New York County for purposes of all legal proceedings arising out of or
relating to the Operative Documents or the transactions contemplated hereby.
Each of the Lessee, the Construction Agent, the Lessee's General Partner and
the Guarantor irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
SECTION 15.12 CONFIDENTIALITY. The Lessor, the Agent and each
Participant (other than the Tranche T Participant) represent that they will
maintain the confidentiality of the transactions contemplated by, and of any
written or oral information provided under, the Operative Documents by or on
behalf of the Lessee, the Construction Agent, the Lessee's General Partner or
the Guarantor (hereinafter collectively called "Confidential Information"),
subject to the Lessor's, the Agent's and each such Participant's (a)
obligation to disclose any such Confidential Information pursuant to a
request or order under applicable laws and regulations or pursuant to a
subpoena or other legal process, (b) right to disclose any such Confidential
Information to its bank examiners, Affiliates, auditors, counsel and other
professional advisors and to other Participants, (c) right to disclose any
such Confidential Information in connection with any litigation or dispute
involving the Participants and the Lessee, the Construction Agent, the
Lessee's General Partner, the Guarantor or any of its Subsidiaries and
Affiliates and (d) right to provide such information to Sub-Participants,
prospective Sub-Participants to which sales of participating interests are
permitted pursuant to this Participation Agreement and prospective assignees
to which assignments of interests are permitted pursuant to this
Participation Agreement, but only if (i) such Sub-Participant, prospective
Sub-Participant or prospective assignee agrees in writing to maintain the
confidentiality of such information on terms substantially similar to those
of this Section as if it were a "Participant" party hereto and (ii) the
Lessee, the Construction Agent, the Lessee's
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General Partner and the Guarantor receive copies of such written agreement
prior to the release of such information. Notwithstanding the foregoing, any
such information supplied to a Participant, Sub-Participant, prospective
Sub-Participant or prospective assignee under this Participation Agreement
shall cease to be Confidential Information if it is or becomes known to such
Person by other than unauthorized disclosure, or if it becomes a matter of
public knowledge.
SECTION 15.13 WAIVER OF JURY TRIAL. EACH OF THE LESSEE, THE
CONSTRUCTION AGENT, THE GUARANTOR, THE AGENT, THE LESSEE'S GENERAL PARTNER,
THE LESSOR, AND EACH PARTICIPANT HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE
OPERATIVE DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
TRIQUINT SEMICONDUCTOR TEXAS, LP,
as Lessee and as Construction Agent
By: TriQuint Texas General Holding Company,
its general partner
By: /S/ STEVEN J. SHARP
---------------------------------------
Name: STEVEN J. SHARP
---------------------------------------
Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
---------------------------------------
TRIQUINT TEXAS GENERAL HOLDING COMPANY,
as Lessee's General Partner
By: /S/ STEVEN J. SHARP
---------------------------------------
Name: STEVEN J. SHARP
---------------------------------------
Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
---------------------------------------
TRIQUINT SEMICONDUCTOR, INC.,
as Guarantor
By: /S/ STEVEN J. SHARP
---------------------------------------
Name: STEVEN J. SHARP
---------------------------------------
Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
---------------------------------------
LEASE PLAN NORTH AMERICA, INC.,
as Lessor and as a Participant
By: /S/ ELIZABETH R. McCELLAN
---------------------------------------
Name: ELIZABETH R. McCELLAN
---------------------------------------
Title: VICE PRESIDENT
---------------------------------------
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ABN AMRO BANK N.V., as Agent
By: /S/ ELIZABETH R. McCELLAN
---------------------------------------
Name: ELIZABETH R. McCELLAN
---------------------------------------
Title: VICE PRESIDENT
---------------------------------------
By: /S/ BLAKE J. LACHER
---------------------------------------
Name: BLAKE J. LACHER
---------------------------------------
Title: VICE PRESIDENT
---------------------------------------
ABN AMRO BANK N.V., as a Participant
By: /S/ ELIZABETH R. McCELLAN
---------------------------------------
Name: ELIZABETH R. McCELLAN
---------------------------------------
Title: VICE PRESIDENT
---------------------------------------
By: /S/ BLAKE J. LACHER
---------------------------------------
Name: BLAKE J. LACHER
---------------------------------------
Title: VICE PRESIDENT
---------------------------------------
TRIQUINT SEMICONDUCTOR, INC.,
as Tranche T Participant
By: /S/ STEVEN J. SHARP
---------------------------------------
Name: STEVEN J. SHARP
---------------------------------------
Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
---------------------------------------
99