1
EXHIBIT 10.08
PARTICIPATION AGREEMENT
dated as of November 25, 1997
among
ALUMAX MILL PRODUCTS,
INC.,
as Lessee
ALUMAX INC.,
as Guarantor,
BMO Leasing (U.S.), Inc.,
as Agent Lessor and Lessor,
BANK OF MONTREAL,
as Lender,
and
BANK OF MONTREAL,
as Administrative Agent and Arranger
--------------------
Lease Financing of Texarkana, Texas
Rolling Mill and Related Equipment
for
ALUMAX MILL PRODUCTS, INC.
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TABLE OF
CONTENTS
SECTION HEADING PAGE
Parties............................................................................................1
Recitals...........................................................................................1
ARTICLE I DEFINITIONS; INTERPRETATION ........................................................1
ARTICLE II INTENTIONALLY OMITTED...............................................................2
ARTICLE III FUNDING OF ADVANCES ................................................................2
Section 3.1 Advances ......................................................................2
Section 3.2. Lessors' Commitments ..........................................................2
Section 3.3. Lenders' Commitments ..........................................................2
Section 3.4. Procedures for Advance ........................................................3
Section 3.5. Interest Rate..................................................................3
Section 3.6. Interest Period Selection/Continuation/Conversion
Elections .....................................................................3
ARTICLE IV YIELD; INTEREST; FEES ..............................................................4
Section 4.l. Yield .........................................................................4
Section 4.2. Interest on Loans .............................................................4
Section 4.3. Prepayments....................................................................4
Section 4.4. Fees...........................................................................5
Section 4.5. Place and Manner of Payments ..................................................5
Section 4.6. Pro Rata Treatment ............................................................5
Section 4.7. Sharing of Payments ...........................................................5
ARTICLE V CERTAIN INTENTIONS OF THE PARTIES ..................................................6
Section 5.1. Nature of Transaction .........................................................6
Section 5.2. Amounts Due Under the Master Lease ............................................7
ARTICLE VI CONDITIONS PRECEDENT TO ACQUISITION DATE ...........................................7
Section 6.1. Acquisition Date ..............................................................7
ARTICLE VII DISTRIBUTIONS......................................................................10
Section 7.1. Basic Rent ...................................................................10
Section 7.2. Purchase Payments by the Lessee ..............................................10
Section 7.3. Payment of Loan Balance ......................................................11
Section 7.4. Sales Proceeds of Remarketing of Property.....................................11
Section 7.5. Supplemental Rent ............................................................12
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Section 7.6. Distribution of Payments after Lease Event of Default.........................12
Section 7.7. Other Payments................................................................13
Section 7.8. Casualty and Condemnation Amounts.............................................13
Section 7.9. Order of Application..........................................................14
Section 7.10. Payments to Account...........................................................14
ARTICLE VIII REPRESENTATIONS....................................................................14
Section 8.1. Representations of the Participants...........................................14
Section 8.2. Representations of the Lessee and the Guarantor ..............................15
ARTICLE IX PAYMENT OF CERTAIN EXPENSES .......................................................19
Section 9.1. Transaction Expenses..........................................................19
Section 9.2. Stamp Taxes...................................................................19
ARTICLE COVENANTS AND AGREEMENTS .................................................................19
Section 10.1. Covenants of the Guarantor....................................................19
Section 10.2. Affirmative Covenant of the Agent Lessor......................................26
ARTICLE XI RENEWALS...............................................................................27
Section 11.1. Extensions of Maturity Date and Expiration Date;
Replacement of Participants...................................................27
Section 11.2. Replacement of Defaulting Participant ........................................28
ARTICLE XII TRANSFERS OF PARTICIPANTS INTERESTS ..................................................28
Section 12.1. Assignments...................................................................28
Section 12.2. Participations ...............................................................29
Section 12.3. Withholding Taxes; Disclosure of Information; Pledge
Under Regulation A............................................................29
ARTICLE XIII INDEMNIFICATION ....................................................................30
Section 13.1. General Indemnification.......................................................30
Section 13.2. End of Term Indemnity ........................................................32
Section 13.3. Environmental Indemnity.......................................................33
Section 13.4. Proceedings in Respect of Claims..............................................34
Section 13.5. General Tax Indemnity.........................................................35
Section 13.6. Indemnity Payments in Addition to Lease Obligations ..........................38
Section 13.7. Rate Determinations...........................................................38
Section 13.8. Funding Indemnity ............................................................38
Section 13.9. Change of Law.................................................................39
Section 13.10. Unavailability of Deposits or Inability to Ascertain, or
Inadequacy of, LIBOR .........................................................39
Section 13.11. Increased Cost and Reduced Return.............................................39
Section 13.12. Lending Offices...............................................................41
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Section 13.13. Discretion of Lenders or Lessors as to Manner of Funding .....................41
Section 13.14. Capital Adequacy..............................................................41
ARTICLE XIV THE AGENT LESSOR .......................................................................42
Section 14.1. Appointment and Authorization ...............................................42
Section 14.2. Delegation of Duties .........................................................43
Section 14.3. Agent Lessor and Affiliates ..................................................43
Section 14.4. Action by Agent Lessor .......................................................43
Section 14.5. Consultation with Experts ....................................................43
Section 14.6. Exculpatory Provisions .......................................................43
Section 14.7. Reliance on Communications ...................................................43
Section 14.8. Notice of Default ............................................................44
Section 14.9. Non-Reliance on Agent Lessor and Other Participant ...........................44
Section 14.10. Indemnification ..............................................................45
Section 14.11. Failure to Act................................................................45
Section 14.12. Resignation and Removal.......................................................45
Section 14.13. Distributions ................................................................46
Section 14.14. Rights of Lessee .............................................................46
ARTICLE XV MISCELLANEOUS ...........................................................................46
Section 15.1. Survival of Agreements .......................................................46
Section 15.2. No Broker ....................................................................46
Section 15.3. Notices ......................................................................47
Section 15.4. Counterparts .................................................................47
Section 15.5. Amendments ...................................................................47
Section 15.6. Headings .....................................................................47
Section 15.7. Parties in Interest ..........................................................47
Section 15.8. Governing Law ................................................................48
Section 15.9. Severability .................................................................48
Section 15.10. Liability Limited.............................................................48
Section 15.11. Further Assurances............................................................49
Section 15.12. [Intentionally Omitted] ......................................................49
Section 15.13. [Intentionally Omitted] ......................................................49
Section 15.14. Waiver of Jury Trial..........................................................49
Section 15.15. No Participant Responsible for Other Participants ............................49
Section 15.16. Each Lessor to Have an Undivided Interest ....................................49
Section 15.17. Simultaneous Transaction......................................................49
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Appendix A -- Definitions
Schedule I -- Commitments
Schedule II -- Notice Information, Wire Instructions and Funding Offices
Schedule III -- Subsidiaries
Schedule IV -- Indebtedness and Liens
Schedule V -- Litigation
Exhibit A-1 -- Form of Legal Opinion of Lessee and Guarantor (R. Wolf)
Exhibit A-2 -- (Irell & Manella LLP)
Exhibit B -- Form of Funding Request
Exhibit C -- Form of Interest Period
Selection/Continuation/Conversion Notice
Exhibit D-1-A -- Form of Secretary's Certificate
Exhibit D-1-B -- Form of Secretary's Certificate
Exhibit D-1-C -- Form of Secretary's Certificate
Exhibit D-2 -- Form of Responsible Officer's Certificate
Exhibit E -- [Intentionally omitted]
Exhibit F -- Form of Assignment Agreement
Exhibit G -- Form of Legal Opinion of Local Counsel to Lessee
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PARTICIPATION
AGREEMENT
THIS PARTICIPATION AGREEMENT (this "Participation Agreement"), dated as
of November 25, 1997, is entered into by and among ALUMAX INC., a Delaware
corporation, as the Guarantor (the "Guarantor"); ALUMAX MILL PRODUCTS, INC., a
Delaware corporation, as the Lessee (the "Lessee"); BMO LEASING (U.S.), INC., a
Delaware corporation, as a Lessor (together with any permitted successors and
assigns thereto, each a "Lessor" and collectively the "Lessors"); BMO LEASING
(U.S.), INC., as Agent Lessor for the Lessors (in such capacity, the "Agent
Lessor"); BANK OF MONTREAL, a Canadian banking organization ("BMO"), and the
other various financial institutions as are or may from time to time become
lenders (the "Lenders") under the Loan Agreement; and BMO as Administrative
Agent (in such capacity, the "Administrative Agent") for the Lenders and as
Arranger (in such capacity, the "Arranger").
W I T N E S S E T H:
WHEREAS, on the Acquisition Date, the Agent Lessor will purchase the
Property and enter into the Ground Lease;
WHEREAS, the Agent Lessor desires to lease to the Lessee, and the
Lessee desires to lease from the Agent Lessor, the Property including its rights
under the Ground Lease; and
WHEREAS, the Lessors are willing to provide a portion of the funding of
the costs of the acquisition of the Property; and
WHEREAS, the Lenders are willing to provide financing for the remaining
portion of the costs of acquisition of the Property; and
WHEREAS, to secure such financing (a) the Lessors will have the benefit
of (i) the Guaranty from the Guarantor and (ii) a first priority Lien on the
Property and (b) the Lenders will have the benefit of (i) the Guaranty from the
Guarantor, (ii) a Lien on the Agent Lessor's right, title and interest in the
Property, and (iii) an assignment of certain of the Agent Lessor's rights
against the Lessee under the Lease;
Now THEREFORE, in consideration of the mutual agreements contained in
this Participation Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Unless the context shall otherwise require, capitalized terms used and
not defined herein shall have the meanings assigned thereto in Appendix A hereto
for all purposes hereof (as such Appendix A may be amended, supplemented,
amended and restated or otherwise modified in writing by agreement of the
parties from time to time, "Appendix A
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to this Participation Agreement"); and the rules of interpretation set forth in
Appendix A to this Participation Agreement shall apply to this Participation
Agreement.
ARTICLE II
INTENTIONALLY OMITTED
ARTICLE III
FUNDING OF ADVANCES
Section 3.1. Advances. Subject to the conditions and terms hereof, the
Agent Lessor shall take the following actions on the Acquisition Date at the
written request of the Lessee with respect to the Property:
(a) the Agent Lessor shall make the Advance (out of funds
provided by the Lessors and the Lenders) at the request and direction
of the Lessee, for the purpose of financing the acquisition of the
Property, and the proceeds of the Advance shall be paid directly to
such parties designated in writing by the Lessee to the Agent Lessor;
(b) the Agent Lessor shall acquire the Property (using funds
provided by the Lessors and the Lenders) and enter into the Ground
Lease; and
(c) the Agent Lessor shall lease (or in the case of the Ground
Lease sublease) the Property to the Lessee under the Master Lease.
Notwithstanding any other provision hereof, the Agent Lessor shall not be
obligated to make the Advance with respect to acquisition of the Property if the
amount of the Advance would exceed the Fair Market Sales Value of Property as
set forth in the Appraisal thereof delivered pursuant to Section 6.1(d).
Section 3.2. Lessors' Commitments. Subject to the conditions and terms
hereof and the other Operative Documents, each of the Lessors shall make
available to the Agent Lessor on the Acquisition Date an amount (relative to
such Lessor, a "Lessor Amount") in immediately available funds equal to such
Lessor's Commitment Percentage of the amount of the Advance. Notwithstanding any
other provision hereof, no Lessor shall be obligated to make available any
Lessor Amount if, after giving effect to the proposed Lessor Amount, the
outstanding aggregate amount of such Lessor's Amount would exceed its Lessor
Commitment.
Section 3.3. Lenders' Commitments. Subject to the conditions and terms
hereof and the other Operative Documents, each of the Lenders shall make a Loan
to the Agent Lessor on the Acquisition Date in an amount (relative to such
Lender, a "Loan") in immediately available funds equal to such Lender's
Commitment Percentage of the amount of the Advance being funded on the
Acquisition Date. Notwithstanding any other provision hereof, no Lender shall be
obligated to make any Loan if, after giving effect to the proposed Loan,
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the outstanding aggregate amount of such Lender's Loan would exceed its Loan
Commitment.
Section 3.4. Procedures for Advance. With respect to the Advance, the
Lessee shall give the Agent Lessor and the Administrative Agent prior written
notice pursuant to a Funding Request substantially in the form of Exhibit B (a
"Funding Request"), which Funding Request shall be delivered not later than 9:00
a.m. (Chicago time), one (1) Business Day prior to the proposed Acquisition
Date, specifying the proposed Acquisition Date, and the amount of Advance
requested. Such Loans and Lessor Amounts made with respect to the Advance on the
Acquisition Date, shall initially be Base Rate Loan/Lessor Amounts. Subject to
timely delivery of a Funding Request and the other terms and conditions of the
Operative Documents, each Participant shall make its Commitment Percentage of
the requested Advance available to the Agent Lessor by 1:00 p.m., Chicago time,
on the requested Acquisition Date. The Agent Lessor and the Administrative Agent
shall calculate the amounts of the Lessor Amounts and the Loans required to fund
the requested Advance.
Section 3.5. Interest Rate; Yield Rate. Each Loan and Lessor Amount
shall accrue interest or Yield, as the case may be, by reference to the Base
Rate or the Eurodollar Rate in accordance with Section 3.6.
Section 3.6. Interest Period Selection/Continuation/Conversion
Elections. By delivering an Interest Period Selection/Continuation/Conversion
Notice to the Agent Lessor and Administrative Agent with respect to Lessor
Amounts and Loans, respectively, the Lessee may from time to time during the
Basic Lease Term irrevocably select, by no later than 10:00 a.m. (Chicago time)
on the date three (3) Business Days' prior to the selected Interest Period, that
all or any portion of the outstanding Loans and Lessor Amounts be, in the case
of Base Rate Loans/Lessor Amounts, converted into Eurodollar Loans/Lessor
Amounts or, in the case of Eurodollar Loans/Lessor Amounts, converted into Base
Rate Loans/Lessor Amounts or continued as Eurodollar Rate Loans/Lessor Amounts
and, with respect to Eurodollar Loans/Lessor Amounts, select the duration for
the next succeeding Interest Period; provided, however, that (i) in the absence
of a delivery of an Interest Period Selection/Continuation/Conversion Notice
with respect to any Eurodollar Loan/Lessor Amount at least three (3) Business
Days before the last day of the then current Interest Period with respect
thereto, Lessee shall be deemed to have selected that such Eurodollar
Loan/Lessor Amount be converted into a Base Rate Loan/Lessor Amount on such last
day, (ii) each such conversion or continuation shall be pro rated among the
applicable outstanding Loans and Lessor Amounts of all Participants, (iii) no
portion of any Loan or Lessor Amount may be continued as, or converted into, a
Eurodollar Loan/Lessor Amount when any Lease Default or Lease Event of Default
has occurred and is continuing, and (iv) the outstanding Loans and Lessor
Amounts may not be apportioned into more than three (3) separate Loans and three
(3) separate Lessor Amounts pursuant to this Section 3.6 at any one time.
Each Interest Period Selection/Continuation/Conversion Notice so
delivered or deemed delivered by the Lessee shall be deemed an effective
election by the Lessors of the method for computing interest on the Loans under
the Loan Agreement.
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ARTICLE IV
YIELD; INTEREST; FEES
Section 4.1. Yield. (a) The amount of the Lessor Amounts outstanding
from time to time shall accrue yield ("Yield") at the Yield Rate, calculated
using the actual number of days elapsed and, when the Yield Rate is based on the
Eurodollar Rate, a 360-day year basis and, if calculated at the Base Rate a 365-
or, if applicable, 366-, day year basis. If all or any portion of the Lessor
Amounts, any Yield payable thereon or any other amount payable hereunder shall
not be paid when due (whether at stated maturity, acceleration thereof or
otherwise), such overdue amount shall bear interest at a rate per annum which is
equal to the Overdue Rate. Upon the occurrence, and during the continuance of an
Event of Default, the Lessor Amounts and, to the extent permitted by law, Yield
on the Lessor Amounts and any other amounts owing hereunder or under the other
Operative Documents shall bear interest, payable on demand, at the Overdue Rate.
The Administrative Agent shall, as soon as practicable, but in no event later
than 12:00 (noon), Chicago time, two Business Days before the effectiveness of
each Eurodollar Rate, cause to be determined such Eurodollar Rate, the resulting
Yield and Lessor Basic Rent, and notify each Lessor thereof.
(b) The Administrative Agent shall distribute, in accordance with
Article VII, the Lessor Basic Rent and all other amounts due with respect to the
Lessor Amounts paid to the Administrative Agent by the Lessee under the Master
Lease from time to time.
(c) Yield on outstanding Lessor Amounts shall be due and payable by
Lessee in cash on each Scheduled Payment Date.
(d) If not repaid sooner, the outstanding aggregate Lessor Amounts
shall be repaid in full on the Maturity Date.
Section 4.2. Interest on Loans. (a) Each Loan shall accrue interest
computed and payable in accordance with the terms of the Loan Agreement. Each
Loan shall become due and payable at the dates and times provided under the Loan
Agreement.
(b) The Administrative Agent shall distribute, in accordance with
Article VII, the Lender Basic Rent and all other amounts due with respect to the
Loans paid to the Administrative Agent by the Lessee under the Master Lease from
time to time.
Section 4.3. Prepayments. (a) Voluntary Prepayments. The Lessee shall
have the right to prepay an amount equal to the aggregate outstanding Lease
Balance in whole, but not in part, pursuant to the exercise of the purchase
option permitted under the Master Lease without premium or penalty.
(b) Mandatory Prepayments. All amounts payable by the Lessee pursuant
to Article XV, XVI, XVIII or XX of the Master Lease shall be applied to the
Loans and the Lessor Amounts in the manner set forth in Article VII.
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(c) Notice. The Lessee will provide notice to the Administrative Agent
of any prepayment by 10:00 A.M. (Chicago time) at least three (3) Business Days
prior to the date of prepayment.
Section 4.4. Fees. The Lessee agrees to pay (as a part of Supplemental
Rent) the fees set forth in, and in accordance with, the Arranger's Fee Letter.
Section 4.5. Place and Manner of Payments. Except as otherwise
specifically provided herein, all payments by the Lessee hereunder, under the
Master Lease or under any other Operative Document shall be made to the
Administrative Agent in Dollars in immediately available funds, without offset,
deduction, counterclaim or withholding of any kind, to the Account in Chicago,
Illinois not later than 1:00 p.m. (Chicago time) on the date when due. Payments
received after such time shall be deemed to have been received on the next
succeeding Business Day. The Lessee shall, at the time it makes any payment
under any Operative Document, specify to the Administrative Agent the Loans and
Lessor Amounts, fees or other amounts payable by the Lessee hereunder to which
such payment is to be applied (and in the event that it fails so to specify, or
if such application would be inconsistent with the terms hereof, the
Administrative Agent shall distribute such payment to the Lenders and the
Lessors in such manner as the Administrative Agent may determine in good faith
to be appropriate in respect of obligations owing by Lessee, subject to the
terms of Section 4.6). The Administrative Agent will distribute such payments to
such Lenders and Lessors in accordance with Article VII, if any such payment is
received prior to 1:00 p.m. (Chicago time) on a Business Day in like funds as
received at or prior to such time, and otherwise the Administrative Agent will
distribute such payment to such Lenders and Lessors on the next succeeding
Business Day. Whenever any payment hereunder shall be stated to be due on a day
which is not a Business Day, the due date thereof shall be extended to the next
Business Day (subject to accrual of interest and fees for the period of such
extension), except that in the case of Eurodollar Loans/Lessor Amounts, if the
extension would cause the payment to be made in the next following calendar
month, then such payment shall instead be made on the next preceding Business
Day.
Section 4.6. Pro Rata Treatment. Except to the extent otherwise
provided herein, each payment or repayment of principal on any outstanding Loan
or Lessor Amount and each payment of interest or Yield shall be allocated pro
rata among the relevant Lenders and Lessors, as the case may be, in accordance
with the respective principal amounts of their outstanding Loans or Lessor
Amounts, as the case may be.
Section 4.7. Sharing of Payments. The Participants agree among
themselves that, in the event that any Participant shall obtain payment in
respect of any Loan or Lessor Amount or any other obligation owing to such
Participant under the Operative Documents through the exercise of a right of
setoff, banker's lien or counterclaim, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Participant
under any applicable bankruptcy, insolvency or other similar law or otherwise,
or by any other means, in excess of its pro rata share of such payment as
provided for in this Agreement, such Participant shall promptly purchase from
the other Participants a participation in such Loans
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or Lessor Amounts and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all
Participants share such payment in accordance with their respective ratable
shares as provided for in this Agreement. The Participants further agree among
themselves that if payment to a Participant obtained by such Participant through
the exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Participant
which shall have shared the benefit of such payment shall, by repurchase of a
participation theretofore sold, return its share of that benefit (together with
its share of any accrued interest payable with respect thereto) to each
Participant whose payment shall have been rescinded or otherwise restored. The
Lessee agrees that any Participant so purchasing such a participation may, to
the fullest extent permitted by law and in accordance with the Operative
Documents, exercise all rights of payment, including setoff, banker's lien or
counterclaim, with respect to such participation as fully as if such Participant
were a holder of such Loan or Lessor Amount or other obligation in the amount of
such participation. Except as otherwise expressly provided herein, if any
Participant, the Agent Lessor or the Administrative Agent shall fail to remit to
the Administrative Agent, the Agent Lessor or any other Participant an amount
payable by such party to the Administrative Agent, the Agent Lessor or such
other Participant pursuant to the Operative Documents on the date when such
amount is due, such payments shall be made together with interest thereon for
each day from the date such amount is due until the date such amount is paid to
the Administrative Agent, the Agent Lessor or such other Participant at a rate
per annum equal to the Federal Funds Rate. If under any applicable bankruptcy,
insolvency or other similar law, any Participant receives a secured claim in
lieu of a setoff to which this Section 4.7 applies, such Participant shall, to
the extent practicable, exercise its rights in respect of such secured claim in
a manner consistent with the rights of the Participants under this Section 4.7
to share in the benefits of any recovery on such secured claim.
ARTICLE V
CERTAIN INTENTIONS OF THE PARTIES
Section 5.1. Nature of Transaction. (a) The parties hereto intend that
(i) for financial accounting purposes with respect to the Lessee and Guarantor,
the Agent Lessor will be treated as the owner and the lessor of the Property and
the Lessee will be treated as the lessee of the Property and (ii) for all other
purposes, including federal and all state and local income tax purposes, state
real estate and commercial law and bankruptcy purposes,
(A) the Lease will be treated as a financing arrangement,
(B) the Lessors and the Lenders will be deemed lenders making
loans to the Lessee in an amount equal to the sum of the Lessor Amounts and the
aggregate outstanding principal amount of the Loans, which amounts are secured
by the Property, and
(C) the Lessee will be treated as the owner of the Property and
will be entitled to all tax benefits ordinarily available to an owner of
property similar to the Property for such tax purposes. Nevertheless, the Lessee
acknowledges and agrees
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that neither the Agent Lessor, the Administrative Agent nor any of the
Lessors or Lenders 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. Each Tax Indemnee represents and
warrants that it will not, prior to the termination of the Master
Lease, claim ownership of (or any tax benefits, including depreciation,
with respect to) the Property for any income tax purposes (unless
required to do so by a Governmental Authority), it being understood
that the Lessee is and will remain the owner of the Property for such
income tax purposes until the termination of the Master Lease.
(b) Specifically, without limiting the generality of clause (a) of this
Section 5.1, the parties hereto intend and agree that in the event 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 or any State or Commonwealth thereof affecting either Lessee,
Guarantor, the Lessors, or any Participant or any collection actions, the
transactions evidenced by the Operative Documents shall be regarded as loans
made by the Lessors and the Lenders as unrelated third party lenders to the
Lessee.
Section 5.2. Amounts Due Under the Master Lease. Anything herein or
elsewhere to the contrary notwithstanding, it is the intention of Lessee, the
Lessors and the Lenders that: (i) the amount and timing of installments of Basic
Rent due and payable from time to time from the Lessee under the Master Lease
shall be equal to the aggregate payments due and payable as principal and
interest on the Loans and principal and Yield on the Lessor Amounts on each
Scheduled Payment Date and each Fixed Rent Payment Date, as applicable; (ii) if
the Lessee elects the Purchase Option or becomes obligated to purchase the
Property under the Master Lease, the Loans, the Lessor Amounts, and all interest
and Yield thereon and all fees and other obligations of the Lessee with respect
to the Operative Documents and the Property owing to the Administrative Agent,
the Agent Lessor, the Lessors and the Lenders shall be immediately due and
payable in full by the Lessee; (iii) if the Lessee properly elects the
Remarketing Option, the Lessee shall only be required to pay to the
Administrative Agent the proceeds of the sale of the Property (up to, and not in
excess of the aggregate of the Lessor Amounts then outstanding), the Loan
Balance and any amounts due pursuant to Article XIII hereof and Section 20.2 of
the Master Lease (which aggregate amounts may be less than the Lease Balance);
and (iv) upon an Event of Default resulting in an acceleration of the Lessee's
obligation to purchase the Property under the Master Lease, the amounts then due
and payable by the Lessee under the Master Lease shall include all amounts
necessary to pay in full the Lease Balance, plus all other amounts then due from
the Lessee to the Participants under the Operative Documents.
ARTICLE VI
CONDITIONS PRECEDENT TO ACQUISITION DATE
Section 6.1. Acquisition Date. The closing date with respect to the
acquisition of the Property (the "Acquisition Date") shall occur on the date
specified in the Funding Request, provided that on or prior to such date all the
conditions precedent thereto set forth in this
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Section 6.1 shall have been satisfied or waived by the applicable parties as set
forth herein. All rights and obligations of the parties under the Operative
Documents (each subject to any conditions specified therein), the obligation of
the Lessors to acquire the Property on the Acquisition Date, the obligation of
each Lessor to make available any related Lessor Amount on the Acquisition Date
and the obligation of each Lender to make any related Loan on the Acquisition
Date, are subject to satisfaction or waiver of the following conditions
precedent:
(a) Funding Request. Each of the Administrative Agent and the Agent
Lessor shall have received a fully executed counterpart of the Funding
Request in accordance with Section 3.4.
(b) Fees. All fees due and payable pursuant to this Participation
Agreement shall have been paid.
(c) Representations and Warranties. On the Acquisition Date, the
representations and warranties of Lessee and Guarantor in this Agreement
and in each of the other Operative Documents shall be true and correct in
all material respects as though made on and as of such date, except to the
extent such representations or warranties relate solely to an earlier date,
in which case such representations and warranties shall have been true and
correct in all material respects on and as of such earlier date.
(d) Appraisal. On or prior to the Acquisition Date, the Agent Lessor
and the Administrative Agent shall have received an Appraisal of the
Property, in form and substance reasonably satisfactory to the
Administrative Agent and the Agent Lessor, which Appraisal shall show that
the Fair Market Sales Value of the Property is not less than the
Acquisition Cost for the Property.
(e) Operative Documents. The Operative Documents shall have been
executed and delivered by the parties thereto.
(f) Certificates. The Agent Lessor and the Administrative Agent shall
have received a Secretary's Certificate, of each of the Lessee and
Guarantor, in substantially the form of Exhibit D-1 attached hereto and a
Responsible Officer's Certificate of each of the Lessee and Guarantor, in
substantially the form of Exhibit D-2 attached hereto, addressed to the
Administrative Agent, the Agent Lessor, each Lender and each Lessor and
dated as of the Acquisition Date.
(g) Evidence of Property Insurance. The Agent Lessor and the
Administrative Agent shall have received evidence that the insurance
maintained by the Lessee with respect to the Property satisfies the
requirements set forth in Article XIII of the Master Lease, setting forth
the respective coverage, limits of liability, carrier, policy number and
period of coverage.
(h) Environmental Audit. On or prior to the Acquisition Date, the Agent
Lessor and the Administrative Agent shall have received an Environmental
Audit with
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respect to the Property in form and substance reasonably satisfactory to
the Agent Lessor and the Administrative Agent.
(i) Deed. The Agent Lessor shall have received on or prior to the
Acquisition Date a Deed with respect to the Property being purchased on the
Acquisition Date, conveying fee simple title to the Property (except for
the leasehold granted by the Ground Lease) to the Agent Lessor and
containing all customary seller's warranties and subject only to Permitted
Property Liens.
(j) Bill of Sale. On or prior to the Acquisition Date, the Agent Lessor
shall have received a bill of sale (a "Bill of Sale"), conveying title to
the Agent Lessor in the Property (except for the leasehold granted by the
Ground Lease).
(k) Purchase Contract. On or prior to the Acquisition Date, the Agent
Lessor shall have received a copy of the purchase contract for the Property
and Lessee shall assign the right to purchase or designate Agent Lessor as
the party to be conveyed title to the Property.
(1) Ground Lease. On or prior to the Acquisition Date, Agent Lessor and
Lessee shall have entered into the Ground Lease.
(m) Lessor Financing Statements. On or prior to the Acquisition Date,
the Lessee shall have delivered to the Agent Lessor all Lessor Financing
Statements relating to the Property as the Agent Lessor may reasonably
request in order to protect the interests of the Agent Lessor and each of
the Lessors under the Master Lease to the extent the Master Lease
constitutes a security agreement.
(n) Recordation of Lessor Mortgage and Lessor Financing Statements;
Search Results. Each of the Participants shall have received (x) evidence
reasonably satisfactory to it that each of (i) the Master Lease and any
other instrument constituting a Lessor Mortgage and (ii) the Lessor
Financing Statements, in each case relating to the Property, has been, or
are being, recorded in a manner sufficient properly to perfect each of
their interests therein and (y) copies of file search reports from the
Uniform Commercial Code filing officer (i) in Bowie County, Texas or (ii)
in the jurisdiction in which is located the chief executive office of the
Lessee, setting forth the results of such Uniform Commercial Code file
searches.
(o) Property Survey. On or prior to the Acquisition Date, the Lessee
shall have delivered to each of the Agent Lessor and the Administrative
Agent a survey of the land leased by the Ground Lease certified to the
Participants and the title company and otherwise in form reasonably
acceptable to the Participants.
(p) Title Insurance. On or prior to the Acquisition Date, the Lessee
shall have delivered to the Administrative Agent and the Agent Lessor a
commitment to deliver an insurance policy covering the Property in favor of
the Agent Lessor, the Administrative Agent and the Participants,
respectively, such policy in an amount of
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$1,000,000.00 and to be reasonably satisfactory to the Required Lenders and
the Lessors with such customary endorsements and affirmative issued by the
title company as a routine matter, if requested by the Agent Lessor or the
Administrative Agent.
(q) 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
cancellation or termination of the US West Agreements and cancellation or
release of all security interests thereunder.
(r) Opinions of Counsel. The Agent Lessor and the Administrative Agent
shall have received opinions of counsel, addressed to the Administrative
Agent, the Agent Lessor, each Lender and each Lessor, substantially in the
form of the opinions attached hereto as Exhibits A-1, A-2 and G.
(s) Plans and Specifications. On or prior to the Acquisition Date, the
Agent Lessor shall have received copies of any existing Material plans and
specifications for the Property.
(t) Good Standing. On or prior to the Acquisition Date, the Agent shall
have received copies of certificates of good standing, existence or its
equivalent, certified as of a recent date by the appropriate governmental
authorities of the state of incorporation of each of Lessee and Guarantor
and, for the Lessee, of the State of Texas.
All documents and instruments required to be delivered pursuant to this
Section 6.1 shall be delivered at such location as may be determined by the
Agent Lessor, the Administrative Agent and the Lessee.
ARTICLE VII
DISTRIBUTIONS
Section 7.1. Basic Rent. Each payment of Basic Rent (and any payment of
interest or Yield on overdue installments of Basic Rent, to the extent permitted
by Applicable Law) received by the Administrative Agent shall be distributed by
the Administrative Agent to the Lessors and the Lenders pro rata in accordance
with, and for application to, the Lender Basic Rent and Lessor Basic Rent then
due, as well as any interest or Yield on overdue installments of Basic Rent due
to the Lessors or the Lenders (to the extent permitted by Applicable Law).
Section 7.2. Purchase Payments by the Lessee. Any payment received by
the Administrative Agent as a result of:
(a) the purchase of the Property in connection with the
exercise of the Purchase Option under Section 18.1 of the Master Lease,
or compliance with the
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obligation to purchase (or cause its designee to purchase) the Property
in accordance with Section 18.2 or 18.3 of the Master Lease; or
(b) compliance with the obligation to purchase the Property in
accordance with Section 16.2(f) of the Master Lease; or
(c) any amounts received pursuant to Section 20.3(b) of the
Master Lease; or
(d) the payment of the Lease Balance with respect to the
Property in accordance with Section 15.1 of the Master Lease or Section
4.3(b) of the Participation Agreement;
shall be distributed by the Administrative Agent to the Lessors and the Lenders
pro rata without priority of one over the other, in the proportion that the
Participant Balance of each of the Lenders and the Lessor bears to the aggregate
of all of the Participant Balances.
Section 7.3. Payment of Loan Balance. The payment of the Loan Balance
to the Administrative Agent pursuant to Section 20.2(f) of the Master Lease
shall be promptly distributed to the Lenders for application to pay in full the
Participant Balance of each Lender.
Section 7.4. Sales Proceeds of Remarketing of Property. Any payments
received by the Administrative Agent as proceeds from the sale of the Property
sold pursuant to the exercise of the Remarketing Option pursuant to Article XX
of the Master Lease, together with any payment made as a result of an appraisal
pursuant to Section 13.2, shall be distributed by the Administrative Agent in
the following order of priority:
first, an amount equal to (x) the aggregate Lessor Balance
minus (y) 3% of the sum of (i) the largest principal amount outstanding
of Lessor Amounts at any one time prior to the distribution hereunder
and (ii) the largest principal amount outstanding of Loans at any one
time prior to the distribution hereunder (such amount under clause (y),
the "Equity Amount"), shall be distributed to the Lessors for
application to the Participant Balance of each Lessor, pro rata among
the Lessors, without priority of one over the other, in the proportion
that the Participant Balance of each such Lessor bears to the aggregate
Participant Balances of all Lessors;
second, to the extent not previously paid as required by
Section 7.3 hereof, an amount equal to Loan Balance shall be
distributed to the Lenders as set forth in Section 7.3;
third, an amount equal to the Equity Amount shall be
distributed to the Lessors for application to pay in full the
Participant Balance of each Lessor, pro rata among the Lessors, without
priority of one over the other, in the proportion that the Participant
Balance of each such Lessor bears to the aggregate Participant Balance
of all Lessors,
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fourth, the balance, if any, shall be promptly paid to the
Administrative Agent to be distributed as provided in Section 20.2(h)
of the Master Lease.
Section 7.5. Supplemental Rent. All payments of Supplemental Rent
received by the Administrative Agent (excluding any amounts payable pursuant to
the preceding provisions of this Article VII) shall be distributed promptly by
the Administrative Agent upon receipt thereof to the Persons entitled thereto
pursuant to the Operative Documents.
Section 7.6. Distribution of Payments after Lease Event of Default. (a)
During the continuance of a Lease Event of Default and subject to clause (b) and
(c) below, all proceeds from the sale of the Property shall be distributed by
the Administrative Agent in the following order of priority:
first, so much of such payment or amount as shall be required
to pay or reimburse the Administrative Agent and the Agent Lessor for
any tax, fees, expense, indemnification or other loss incurred by the
Administrative Agent or the Agent Lessor (to the extent incurred in
connection with any duties as the Administrative Agent or Agent Lessor,
as the case may be), shall be distributed to the Administrative Agent
and the Agent Lessor without priority of one over the other for their
own accounts in accordance with the amount of such payment or amount
payable to such Person;
second, so much of such payments or amounts as shall be
required to pay the Lenders and the Lessors the amounts payable to them
pursuant to any expense reimbursement or indemnification provisions of
the Operative Documents shall be distributed to each such Lender and
Lessor without priority of one over the other in accordance with the
amount of such payment or payments payable to each such Person;
third, an amount equal to the aggregate Lessor Balance minus
the Equity Amount shall be distributed to the Lessors for application
to the Participant Balance of each Lessor, pro rata among the Lessors,
without priority of one over the other, in the proportion that the
Participant Balance of each such Lessor bears to the aggregate
Participant Balances of all Lessors;
fourth, to the Lenders for application to pay in full the Loan
Balance, pro rata among the Lenders, without priority of one over the
other, in the proportion that the Participant Balance of each such
Lender bears to the aggregate Participant Balances of all Lenders;
fifth, an amount equal to the Equity Amount shall be
distributed to the Lessors for application to pay in full the
Participant Balance of each Lessor, pro rata among the Lessors without
priority of one over the other in the proportion that the Participant
Balance of each such Lessor bears to the aggregate Participant Balance
of all Lessors;
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sixth, the balance, if any, of such payment or amounts
remaining thereafter shall be promptly distributed to, or as
directed by, the Lessee.
(b) All payments received and amounts realized by the Administrative
Agent in connection with any Casualty or Condemnation during the continuance of
a Lease Event of Default shall be distributed by the Administrative Agent as
follows:
(i) in the event that the Agent Lessor (at the direction of
the Lessors) and the Administrative Agent elect to pay all or a portion
of such amounts to the Lessee for the repair of damage caused by such
Casualty or Condemnation in accordance with Section 14.1(a) of the
Master Lease, then such amounts shall be distributed to such Lessee,
and
(ii) in the event that the Agent Lessor (at the direction of
the Lessors) and the Administrative Agent elect to apply all or a
portion of such amounts to the purchase price of the related Property
in accordance with Section 14.1(a) and Article XV of the Master Lease,
then such amounts shall be distributed in accordance with clause (a).
Section 7.7. Other Payments. (a) Except as otherwise provided in
Sections 7.1, 7.2, 7.6 and clause (b) below, any payment received by the
Administrative Agent for which no provision as to the application thereof is
made in the Operative Documents or elsewhere in this Article VII (including any
balance remaining after the application in full of amounts to satisfy any
expressed provision) shall be distributed pro rata among the Lenders and the
Lessors without priority of one over the other, in the proportion that the
Participant Balance of each bears to the aggregate of all the Participant
Balances.
(b) Except as otherwise provided in Sections 7.1, 7.2 and 7.6, all
payments received and amounts realized by the Administrative Agent or the Agent
Lessor under the Master Lease or otherwise with respect to the Property to the
extent received or realized at any time after the indefeasible payment in full
of the Participant Balances of all of the Lenders and the Lessors and any other
amounts due and owing to the Lenders or the Lessors, shall be distributed
forthwith by the Administrative Agent or the Agent Lessor, as the case may be,
to or as directed by, the Lessee.
(c) Except as otherwise provided in Sections 7.1 and 7.2, any payment
received by the Administrative Agent or the Agent Lessor for which provisions as
to the application thereof is made in an Operative Document but not elsewhere in
this Article VII shall be distributed forthwith by the Agent Lessor or the
Administrative Agent to the Person and for the purpose for which such payment
was made in accordance with the terms of such Operative Document.
Section 7.8. Casualty and Condemnation Amounts. Subject to Section
7.6(b), any amounts payable to the Administrative Agent as a result of a
Casualty or Condemnation pursuant to Section 14.1 of the Master Lease and the
Assignment of Lease and Rent shall be distributed as follows:
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(a) all amounts payable to the Lessee for the repair of damage
caused by such Casualty or Condemnation in accordance with Section
14.1(a) of the Master Lease shall be distributed to the Lessee, and
(b) all amounts that are to be applied to the purchase price
of the related Property in accordance with Section 14.1(a) and Article
XV of the Master Lease shall be distributed by the Administrative Agent
to the Lenders and the Lessors pro rata without priority of one over
the other, in the proportion that the Participant Balance of each bears
to the aggregate of all of the Participant Balances.
Section 7.9. Order of Application. To the extent any payment made to
any Lender or any Lessor pursuant to Sections 7.2, 7.3, 7.4, 7.6 or 7.7 is
insufficient to pay in full the Participant Balance of such Lender or Lessor,
then each such payment shall first be applied to accrued interest or Yield and
then to principal on the Loans or the Lessor Amounts, as applicable.
Section 7.10. Payments to Account. All payments made to the
Administrative Agent pursuant to the Operative Documents shall be made to the
Account.
ARTICLE VIII
REPRESENTATIONS
Section 8.1. Representations of the Participants. Each Participant
represents and warrants to each other Participant, the Agent Lessor, the
Administrative Agent and the Lessee that:
(a) ERISA. Such Participant is not and will not be making its
Loans or funding its Lessor Amounts hereunder, and is not performing
its obligations under the Operative Documents, with the assets of an
"employee benefit plan" (as defined in Section 3(3) of ERISA) which is
subject to Title I of ERISA, or "plan" (as defined in Section
4975(e)(1) of the Code).
(b) Status. Such Participant meets at least one of the
definitions (other than as a "Lessor" or a "Lender") of the
term "Eligible Assignee."
(c) Securities. Each Participant is participating in the
Transactions for its own account and not with a view toward
redistribution; provided that disposition of its rights hereunder shall
remain in its control, to the extent otherwise permitted by, and the
foregoing shall not affect the ability of any Participant to assign or
sell participations in its rights in accordance with, the Operative
Documents.
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Section 8.2. Representations the Lessee and the Guarantor. Lessee, as
to itself, and Guarantor, as to itself and where applicable the Restricted
Subsidiaries, hereby represent and warrant to each Participant, the Agent Lessor
and the Administrative Agent that:
(a) Corporate Organization and Authority. The Lessee,
Guarantor and each Restricted Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, has all requisite power and authority
and all licenses and permits necessary in any respect material to the
Lessee or to the Guarantor and the Restricted Subsidiaries taken as a
whole to own and operate its properties and to carry on its business as
now conducted and as presently proposed to be conducted and is duly
licensed or qualified and in good standing as a foreign corporation in
each jurisdiction in which the nature of the business transacted by it
or the nature of the Company Property owned or leased by it makes such
licensing or qualification necessary and in which the failure to be so
licensed or qualified would have a Material Adverse Effect. Schedule
III hereto contains a complete and correct list of all Subsidiaries of
the Guarantor as of the date hereof and correctly sets forth, as to
each, whether or not it constitutes a Restricted Subsidiary, the
jurisdiction of incorporation, and the percentage of the issued and
outstanding shares of such Subsidiary owned by the Guarantor or by
Subsidiaries of the Guarantor. All of the issued and outstanding shares
of capital stock of each such Restricted Subsidiary are valid and fully
paid and nonassessable and all such shares of Restricted Subsidiaries
indicated in Schedule III as owned by the Guarantor or a Restricted
Subsidiary are owned, beneficially and of record, by the Guarantor or
such Restricted Subsidiary, free of any Lien.
(b) Outstanding Debt. Schedule IV hereto correctly describes
all Indebtedness of the Guarantor and its Restricted Subsidiaries in
excess of $5,000,000 and generally identifies all Liens securing such
Indebtedness.
(c) Financial Statements. The consolidated and consolidating
balance sheets of the Guarantor and its Consolidated Subsidiaries as at
December 31, 1996, and the related consolidated statements of income,
stockholders' equity and changes in financial position (or cashflow)
for the fiscal year ending on such date, accompanied, in the case of
the consolidated balance sheets and statements, by reports thereon
containing opinions by Coopers & Lybrand L.L.P., and the unaudited
consolidated balance sheet of the Guarantor and its Consolidated
Subsidiaries as at September 30, 1997 and the related consolidated
statements of income, retained earnings and changes in financial
position (or cash flow) for the nine (9) months ending on such date
(copies of which have been furnished to the Agent Lessor, the
Administrative Agent and each Participant), have been prepared in
accordance with GAAP and present fairly the financial position of the
Guarantor and its Consolidated Subsidiaries or Restricted Subsidiaries,
as the case may be as of such dates and the results of their operations
and changes in their financial position for the periods covered
thereby. Since September 30, 1997 and through the date hereof, there
has been no material adverse change in the condition, financial or
otherwise, of the Guarantor and its Consolidated Subsidiaries from that
shown on the above-described balance sheet as of
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such date. It is understood that the adverse ruling in the tax dispute
in respect of the consolidation of the tax returns of the Guarantor and
its Subsidiaries with those of AMAX Inc. for 1984, 1985 and 1986, which
is referred to in Section 8.2(j) below and is described in the
Guarantor's Exchange Act Reports (as defined below) does not and a
subsequent adverse ruling thereon on appeal shall not, constitute a
"material adverse change".
(d) Full Disclosure. The financial statements referred to in
Section 8.2(c) do not, nor does any written statement furnished by or
on behalf of the Guarantor to the Agent Lessor, the Administrative
Agent and each Participant in connection with the negotiation of this
Participation Agreement and the Transactions, contain any untrue
statement of a material fact or omit a material fact necessary to make
the material statements contained therein or herein, in light of the
circumstances under which they were made, not misleading except for
such thereof as were corrected in subsequent written statements
furnished the Agent Lessor, the Administrative Agent and each
Participant, the Agent Lessor, the Administrative Agent and each
Participant acknowledging that as to any projections furnished to the
Agent Lessor, the Administrative Agent or any Participant, the
Guarantor only represents that the same were prepared on the basis of
information and estimates the Guarantor believes to be reasonable.
(e) Pending Litigation. Excluding issues and matters relating
to taxes, which are specifically referred to in Section 8.2(j) hereof,
and excluding any other proceedings or disputes reflected in the
Guarantor's filings with the Securities and Exchange Commission ("SEC")
on Form 10-K for the year ended December 31, 1996 or on Form 10-Q for
the quarters ended March 31, 1997, June 30, 1997 and September 30, 1997
(the "Exchange Act Reports") or reflected on Schedule V hereto, as of
the date hereof, there are no proceedings pending or, to the knowledge
of the Guarantor, threatened against or affecting the Guarantor or any
Restricted Subsidiary in any court or before any governmental authority
or arbitration board or tribunal in which, either individually or in
the aggregate, there is a reasonable possibility of an adverse decision
which could result in a Material Adverse Effect or could result in the
Guarantor's obligations under any of the Operative Documents being
declared invalid. Neither the Guarantor nor any Restricted Subsidiary
is in default with respect to any material order of any court or
governmental authority or arbitration board or tribunal.
(f) Financing is Legal and Authorized. The execution and
delivery of the Operative Documents, the Transactions and compliance by
the Guarantor and the Lessee with all of the provisions of the
Operative Documents are within the respective corporate powers of the
Guarantor and the Lessee and have been duly authorized by proper
corporate action on the part of the Guarantor and the Lessee and will
not violate any provisions of any applicable law or order of any court
or governmental authority or agency of competent jurisdiction and
after giving effect to the acquisition of the Property by the Agent
Lessor and cancellation or termination of the US West Agreements and
cancellation or release of all security interest thereunder will not
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conflict with or result in any breach of any of the terms, conditions
or provisions of, or constitute a default under, the Restated
Certificate of Incorporation or by-laws of the Guarantor and the
Certificate of Incorporation or by-laws of the Lessee or constitute a
material conflict with or breach or default under any material
indenture or other material agreement or instrument to which the
Guarantor or any Restricted Subsidiary is a party or by which any of
them may be bound or result in the imposition of any Liens on any
Company Property of the Guarantor or of any Restricted Subsidiary not
permitted hereby.
(g) Intentionally Omitted.
(h) No Defaults. No Default or Event of Default has occurred
and is continuing, and after giving effect to the acquisition of the
Property by the Agent Lessor and cancellation or termination of the US
West Agreements and cancellation or release of all security interest
thereunder the Guarantor and its Restricted Subsidiaries are not in
material breach of any contract or agreement where such breach may have
a Material Adverse Effect.
(i) Governmental Consent. No approval, authorization, consent
or withholding of objection on the part of any regulatory body, state,
federal or local, is necessary in connection with the execution and
delivery by either the Guarantor or the Lessee of the Operative
Documents or compliance by either the Guarantor or the Lessee with any
of the provisions thereof.
(j) Taxes. All tax returns required to be filed by the
Guarantor or any Consolidated Subsidiary in any jurisdiction have, in
fact, been filed, and all taxes, assessments, fees and other
governmental charges upon the Guarantor or any Consolidated Subsidiary
or upon any of their respective properties, income or franchises, which
are shown to be due and payable in such filed returns have been paid.
The only dispute with respect to the consolidation of the tax returns
of the Guarantor and its Subsidiaries with those of AMAX Inc. is a
dispute concerning the inclusion of the Guarantor and its Subsidiaries
in the consolidated returns of AMAX Inc. for 1984, 1985 and 1986, which
dispute is described in the Guarantor's Exchange Act Reports. Such tax
dispute was decided adversely to the Guarantor by the United States Tax
Court in a decision dated September 30, 1997. As of the date hereof,
the Guarantor has paid the expected deficiency with accrued interest.
There are no other material controversies known to the Guarantor with
respect to other federal or state income tax matters of the Guarantor
and its Subsidiaries in which there is a reasonable possibility of an
adverse decision which would result in a Material Adverse Effect. The
provisions for taxes on the books of the Guarantor and each Subsidiary
are adequate in all material respects for all open years, and for its
current fiscal year.
(k) Not an Investment Company. The Guarantor is not an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended.
(1) Intentionally Omitted.
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(m) ERISA. Each Plan, and, to the knowledge of the Guarantor,
each Multiemployer Plan, is in material compliance in all respects
with, and has been administered in all respects in compliance with, the
applicable provisions of ERISA, the Code and any other Federal or State
law except where failure to be so in compliance or to be so
administered should not result in a Material Adverse Effect.
(n) Compliance with Environmental and Other Laws. (i) Neither
the Guarantor nor any of its Restricted Subsidiaries is (A) in material
default as of the date hereof with respect to any order, writ,
injunction or decree of any court or (B) in default as of the date
hereof in any material respect under any law, ordinance, order,
regulation, license or demand (including ERISA, the Occupational Safety
and Health Act of 1970 and Environmental Laws) of any federal, state,
municipal or other governmental agency, default with respect to or
under which would have a Material Adverse Effect.
(ii) As of the date hereof, the Guarantor and the Lessee are
in compliance with all applicable state and federal environmental,
health and safety statutes and regulations, including, without
limitation, regulations promulgated under the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. ss.ss.6901 et seq., except where
failure to be in compliance would not have a Material Adverse Effect.
After giving effect to applicable reserves on the books of the
Guarantor and its Restricted Subsidiaries for environmental remediation
and related costs and based on current information available to the
Guarantor with respect to the cost of remediation, the nature and
extent of the Guarantor's involvement in sites which are currently
known to require remediation and the anticipated contributions of other
potentially responsible parties as well as applicable insurance, the
Guarantor believes that the anticipated and estimable liabilities of
the Guarantor and its Restricted Subsidiaries resulting from
environmental matters and required expenditures for remediation
programs it may be required to undertake will not have a Material
Adverse Effect.
(o) Offer of Securities. Neither Lessee nor Guarantor nor any
Person authorized to act on their behalf has, directly or indirectly,
offered any interest in the Property 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), for sale to, or solicited
any offer to acquire any of the same from, any Person other than each
Participant and the Administrative Agent, the Agent Lessor and other
similar financial institutions.
(p) Property. The Property and the contemplated use thereof by
the Lessee and its agents, assignees, employees, lessees, licensees and
tenants will comply in all Material respects with all Requirements of
Law (including, without limitation, all zoning and land use laws and
Environmental Laws) and Material Insurance Requirements, except for
such Requirements of Law as it shall be contesting in good faith by
appropriate proceedings. 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 its knowledge,
threatened with respect to the Property
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which materially adversely affects the title to, or the use, operation
or value of, the Property. No Casualty with respect to the Property has
occurred which Casualty has had a Material Adverse Effect on the
Property.
(q) Permits and Utilities. The Property has available all
Material services and other utilities necessary for use and operation
of the Property for its 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 between the Property and public highways
for pedestrians and motor vehicles. All Material utilities serving the
Property, are located in, and vehicular access to the Property is
provided by, either public rights-of-way abutting the Property or
Appurtenant Rights. Lessee has obtained, and has and will keep in full
force and effect, all Material operating permits necessary to allow for
the Property to be operated in accordance with its intended use.
(r) Intentionally Omitted.
(s) Insurance. Lessee has obtained insurance coverage covering
the Property which meets the requirements of the Master Lease, and such
coverage is in full force and effect.
(t) 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.
ARTICLE IX
PAYMENT OF CERTAIN EXPENSES
Section 9.1. Transaction Expenses. The Lessee shall pay, or cause to be
paid, from time to time all Transaction Expenses in respect of the Transactions
within thirty (30) days after the Lessee has received written invoices therefor.
Section 9.2. Stamp Taxes. The Lessee shall pay or cause to be paid any
and all stamp, transfer and other similar taxes, fees and excise, if any,
including any interest and penalties, which are payable in connection with the
Transactions.
ARTICLE X
OTHER COVENANTS AND AGREEMENTS
Section 10.1. Covenants of the Guarantor. The Guarantor covenants and
agrees with the Arranger, the Agent Lessor, the Administrative Agent, the
Lessors and the Lenders that, so long as this Participation Agreement shall
remain in effect or any amounts constituting Rent shall be unpaid or any amounts
payable under the Operative Documents shall remain payable by the Guarantor,
unless the Required Participants shall otherwise consent in writing, the
Guarantor will, and will cause each of its Restricted Subsidiaries to:
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(a) Corporate Existence, Etc. The Guarantor will preserve and
keep in force and effect, and will cause each Restricted Subsidiary to
preserve and keep in force and effect, its corporate existence and all
material franchises, licenses and permits necessary to the proper
conduct of its business provided, however, that neither the Guarantor
nor any Restricted Subsidiary shall be required to preserve any such
franchise, license or permit or, in the case of any Restricted
Subsidiary, its corporate existence, if the Guarantor shall determine
that the preservation thereof is no longer desirable in the conduct of
the business of the Guarantor and its Restricted Subsidiaries taken as
a whole.
(b) Insurance. The Guarantor will maintain, and will cause
each Restricted Subsidiary to maintain, insurance coverage from
financially sound and reputable insurers in such forms and amounts,
with such deductibles and against such risks, as is, taken as a whole,
generally consistent with those maintained by manufacturing companies
with similar revenues and asset values, with due regard to the nature
of their assets and business, their loss experience, and conditions in
the insurance markets.
(c) Taxes, Claims for Labor and Materials, Compliance with
Laws. (i) The Guarantor will promptly pay and discharge, and will cause
each Restricted Subsidiary promptly to pay and discharge, all lawful
taxes, assessments and governmental charges or levies imposed upon it
or upon or in respect of all or any part of its property or business
and all claims for work, labor or materials which, if unpaid, might
become a Lien or charge upon any Company Property material to the
Guarantor and its Restricted Subsidiaries taken as a whole unless
permitted by Section 10.1(k) hereof; provided the Guarantor or such
Restricted Subsidiary shall not be required to pay any such tax,
assessment, charge, levy, account payable or claim if (i) the validity,
applicability or amount thereof is being contested in good faith by
appropriate actions or proceedings which will prevent the forfeiture or
sale of any Company Property of the Guarantor or such Restricted
Subsidiary or any material interference with the use thereof by the
Guarantor or such Restricted Subsidiary, and (ii) the Guarantor or such
Restricted Subsidiary shall set aside on its books reserves deemed by
the Guarantor in its reasonable business judgment to be adequate with
respect thereto or such greater amount as may be required by GAAP.
(ii) The Guarantor will comply, and will cause each Restricted
Subsidiary to comply, with all laws, ordinances or governmental rules
and regulations to which it is subject, including without limitation,
the Occupational Safety and Health Act of 1970, as amended, ERISA and
all laws, ordinances, governmental rules and regulations relating to
environmental protection in all applicable jurisdictions, the violation
of which would have a Material Adverse Effect.
(d) Maintenance of Properties and Business. The Guarantor will
maintain, preserve and keep, and will cause each Restricted Subsidiary
to maintain, preserve and keep, its material properties which are
necessary in any respect material to the Guarantor and its Restricted
Subsidiaries taken as a whole for the conduct of its
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business (whether owned in fee or a leasehold interest) in good repair
and working order (ordinary wear and tear excepted) and from time to
time will make all necessary repairs, replacements, renewals and
additions so that at all times the efficiency thereof shall be
maintained; provided, however, that nothing in this Section l0.l(d)
shall prevent the Guarantor or any Restricted Subsidiary from
discontinuing the operation and maintenance of any of its Company
Properties if such discontinuance is, in the judgment of the Guarantor,
desirable in the conduct of the business of the Guarantor or such
Restricted Subsidiary, as the case may be.
(e) Nature of Business. Neither the Guarantor nor any
Restricted Subsidiary will engage in any business or activity if, as a
result, the general nature of the business, taken on a consolidated
basis, which would then be engaged in by the Guarantor and its
Restricted Subsidiaries would be substantially changed from the general
nature of the business engaged in by the Guarantor and its Subsidiaries
on the date of this Participation Agreement.
(f) Reports and Rights of Inspection. The Guarantor will keep,
and will cause each Subsidiary to keep, proper books of record and
account in which full and correct entries will be made of all dealings
or transactions of or in relation to the business and affairs of the
Guarantor or such Subsidiary in accordance with GAAP and will furnish
to the Administrative Agent with sufficient copies for each
Participant:
(i) Quarterly Statements. As soon as available and in
any event within 90 days after the end of each quarterly
fiscal period (except the last) of each fiscal year, copies of
consolidated balance sheets as of the close of such quarterly
period, and consolidated statements of income and changes in
financial position (or cash flow) for such quarterly period
and for the portion of the fiscal year then ended, in each
case setting forth in comparative form the figures for the
corresponding period of the preceding fiscal year, as set
forth in the Guarantor's Form 10-Q report filed with the SEC
and certified as presenting fairly the consolidated financial
condition of the Guarantor and its Consolidated Subsidiaries
as of the end of such period and the results of their
operations for such period, subject to changes resulting from
year-end adjustments (which the certificate shall indicate are
not expected to be material or, if expected to be material,
the nature and scope thereof shall be specified) and to
footnote disclosures, by the chief financial officer or chief
accounting officer of the Guarantor;
(ii) Annual Statements. As soon as available and in
any event within 120 days after the close of each fiscal year
of the Guarantor, copies of consolidated and consolidating
balance sheets as of the close of such fiscal year and
consolidated statements of income, retained earnings and
changes in financial position (or cash flow) for such fiscal
year, and accompanied in the case of said consolidated
statements, by an opinion thereon of independent certified
public accountants of recognized national standing, which
opinion shall
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state that said consolidated financial statements fairly
present the consolidated financial condition and results of
operations of the Guarantor and its Consolidated Subsidiaries
as at the end of, and for, such fiscal year in accordance with
GAAP, and a certificate of such accountants stating that, in
making the examination necessary for their opinion, they
obtained no knowledge, except as specifically stated, of any
Default.
(iii) SEC and Other Reports. Promptly upon their becoming
available, one copy of each financial statement, report,
notice or proxy statement sent by the Guarantor to its
stockholders generally, and of each regular or periodic
report, and any registration statement or prospectus filed by
the Guarantor or any Subsidiary with the SEC or any successor
agency;
(iv) Officers' Certificates. Within the periods provided
in paragraphs (i) and (ii) above, a certificate of an
Authorized Financial Officer of the Guarantor stating that
such Authorized Financial Officer has reviewed the provisions
of this Participation Agreement and setting forth: (A) the
information and computations (in sufficient detail) required
in order to establish whether the Guarantor was in compliance
with the requirements of Sections 10.1(g), (h), (i) and (j)
hereof at the end of the period covered by the financial
statements then being furnished, and (B) to the best of such
officer's knowledge, whether there exists on the date of the
certificate or existed at any time during the period covered
by such financial statement any Default or Event of Default
and, if any such condition or event exists on the date of the
certificate or existed during such period, specifying the
nature and period of existence thereof and the action the
Guarantor is taking, has taken or proposes to take with
respect thereto; and
(v) Notices of Default and Rating Change. Promptly after
knowledge thereof shall have come to the attention of the
chief financial officer of the Guarantor, notice of any
Default or Event of Default hereunder and of any change in the
S&P Rating.
Without limiting the foregoing, the Guarantor will permit Administrative Agent
and each Participant (or such Persons as any Participant may designate), upon
reasonable notice, to visit and inspect, under the Guarantor's guidance, books
of account, records, reports and other papers of the Guarantor, to make copies
and extracts therefrom (except with respect to confidential or proprietary
information), and to discuss the Guarantor's affairs, finances and accounts with
its officers and employees, all at such reasonable times and as often as may be
reasonably requested, provided that the Guarantor may establish reasonable
procedures for joint visits and inspections if more than one Bank requests the
right to visit and inspect.
All information which is furnished to or obtained by any Participant
pursuant to this Participation Agreement shall be received and held in
confidence unless or until the same has been publicly disclosed (other than by
or on behalf of any Participant);
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provided, however, that no Participant shall in any way be inhibited in
the use of such information in order to determine and enforce
compliance with the terms and conditions of this Participation
Agreement or take any lawful action which it deems necessary to protect
its interests herein and in the Notes and the Certificates, and
provided, further, that any Participant may furnish any such
information in compliance with any court order or to any regulatory
body, agency, authority or commission to whose jurisdiction such
Participant may be subject, to its independent accountants, to any
Person to whom such holder owes any duty of disclosure, to any
affiliate of such Participant which needs to know such information in
connection with approving or evaluating such Participant's
participation in this Participation Agreement or monitoring compliance
herewith and to any Person to whom such holder is considering selling a
participation herein or in any Note or Certificate or assigning its
interest hereunder; provided, however, in making any such use, such
Participant shall take all reasonable measures to preserve the
confidentiality of any such information including, without limitation,
obtaining a written undertaking of any Person to whom such information
may be furnished to maintain the confidentiality thereof in accordance
with this Participation Agreement and shall furnish copies of such
undertaking to the Guarantor.
(g) Net Worth. The Guarantor shall at all times maintain
Tangible Net Worth of not less than $900,000,000.
(h) Leverage Ratio. The Guarantor will not permit the ratio of
Restricted Tangible Net Assets to Restricted Funded Debt to be less
than 2.0 to 1 at any time.
(i) Sale Leasebacks. The Guarantor will not, nor will it
permit any of its Restricted Subsidiaries to, enter into any sale and
leaseback transaction covering any fixed or capital Company Property,
except for sale and leaseback transactions which either (i)
collectively cover Company Property the aggregate fair market value of
which, as determined for each item of Company Property as at the time
such Company Property became the subject of such a transaction, does
not exceed 5% of Tangible Net Worth, as determined on the date of the
most recent such transaction or (ii) relate solely to Property acquired
after the date hereof and are entered into within 180 days after any
such acquisition; provided that in no event shall the aggregate fair
market value of all such Company Property referred to in the foregoing
clauses (i) and (ii), as determined for each item of Company Property
as at the time such Company Property became the subject of such a
transaction, exclusive of operating or "true" leases, exceed 20% of
Tangible Net Worth, as determined on the date of the most recent such
transaction.
(j) Indebtedness. The Guarantor will not permit any of its
Subsidiaries to create, incur or suffer to exist any Indebtedness other
than:
(i) Indebtedness outstanding on the date hereof and
either listed on Schedule IV hereto or being in an amount of
$5,000,000 or less in each instance and not greater than
$10,000,000 in the aggregate (exclusive of
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indebtedness listed on Schedule IV) and any extension, renewal
or replacement thereof that does not increase the aggregate
principal amount of the Indebtedness (including, for purposes
of this paragraph (a), unfunded commitments) so extended,
renewed or replaced;
(ii) Indebtedness to the Guarantor or to other
Subsidiaries of the Guarantor;
(iii) Indebtedness of any Unrestricted Subsidiary in
respect of which neither the Guarantor nor any other
Restricted Subsidiary is directly or contingently liable, by
Guarantee or otherwise;
(iv) Indebtedness secured by the Liens referred to in
paragraphs (vii) and (viii) of Section 10.1(k) hereof, and any
extension, renewal or replacement thereof which does not
increase the indebtedness thereby secured or extend the Liens
to other property; and
(v) Indebtedness for working capital, trade financing
and cash management activities, provided that the aggregate
outstanding principal amount thereof plus the aggregate amount
of obligations not constituting Indebtedness secured by Liens
permitted by Section 10.1(k)(i) hereof shall not represent
more than 15% of Tangible Net Worth at the time of incurrence
of each such obligation or item of Indebtedness.
(k) Limitation on Liens. The Guarantor will not, and will not
permit any Restricted Subsidiary to, create or incur, or suffer to be
incurred or to exist, any Lien of any kind on its or their Company
Property, whether now owned or hereafter acquired, or upon any income
or profits therefrom, or transfer any Company Property for the purpose
of subjecting the same to the payment of obligations in priority to the
payment of its or their general creditors, or acquire or agree to
acquire, or permit any Restricted Subsidiary to acquire or agree to
acquire, any Company Property or assets upon conditional sales
agreements or other title retention devices, except:
(i) Liens in existence on the date hereof and listed
in Schedule IV hereto;
(ii) Liens imposed by any governmental authority or
instrumentality to secure the performance of conditions to
governmental grants or advances which are not repayable absent
a failure to satisfy such conditions or for taxes, assessments
or charges which are not in any instance yet due or which are
being contested in good faith and by appropriate proceedings
if adequate reserves with respect thereto are maintained on
the books of the Guarantor or the affected Restricted
Subsidiaries, as the case may be, in accordance with GAAP;
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(iii) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the
ordinary course of business which are not overdue for a period
of more than 30 days after the Guarantor is notified of same
or which are being contested in good faith and by appropriate
proceedings and Liens securing judgments but only to the
extent for an amount and for a period not resulting in a Lease
Event of Default under Section 16.1(h) of the Master Lease;
(iv) pledges or deposits under worker's
compensation, unemployment insurance and other social security
legislation;
(v) deposits to secure the performance of bids,
trade contracts (other than for borrowed money), leases,
statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the
ordinary course of business;
(vi) easements, rights-of-way, restrictions and
other similar encumbrances incurred in the ordinary course of
business and encumbrances consisting of zoning restrictions,
easements, licenses, restrictions on the use of Company
Property or minor imperfections in title thereto which, in the
aggregate, are not material in amount, and which do not in any
case materially detract from the value of the Company Property
subject thereto or interfere with the ordinary conduct of the
business of the Guarantor or any of its Restricted
Subsidiaries;
(vii) Liens on Company Property of any corporation
which becomes a Restricted Subsidiary of the Guarantor after
the date of this Participation Agreement, provided that such
Liens are in existence at the time such corporation becomes a
Restricted Subsidiary of the Guarantor and were not created in
anticipation thereof;
(viii) Liens upon real and/or tangible personal
Company Property acquired after the date hereof (by purchase,
construction or otherwise) by the Guarantor or any of its
Restricted Subsidiaries, each of which Liens either (A)
existed on such Company Property before the time of its
acquisition and was not created in anticipation thereof, or
(B) was created solely for the purpose of securing
Indebtedness representing, or incurred to finance, refinance
or refund, the cost (including the cost of construction) of
such Company Property; provided that no such Lien shall extend
to or cover any Property of the Guarantor or such Restricted
Subsidiary other than the Company Property so acquired and
improvements thereon; and provided, further, that the
principal amount of Indebtedness secured by any such Lien
shall at no time exceed 80% of the fair market value (as
determined in good faith by a responsible officer of the
Guarantor) of such Company Property at the time it was
acquired (by purchase, construction or otherwise);
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(ix) additional Liens upon real and/or personal
Company Property created after the date hereof; provided that
the aggregate amount of obligations secured thereby shall not
represent more than 15% of Tangible Net Worth as of the date
each such obligation is incurred; and
(x) any extension, renewal or replacement of the
foregoing, provided, however, that the Liens permitted
hereunder shall not be spread to cover any additional
Indebtedness or Company Property (other than a substitution of
like Company Property).
(1) Prohibition of Fundamental Changes. The Guarantor will not
merge, consolidate or amalgamate with any Person unless the Guarantor
is the surviving corporation and immediately after giving effect to
that transaction there is no Default hereunder, or liquidate, wind up
or dissolve (or suffer any liquidation or dissolution). The Guarantor
will not permit any Restricted Subsidiary to merge, consolidate or
amalgamate with any other Person unless (A) immediately after giving
effect thereto there is no Default hereunder, (B) if the transaction is
between a Restricted Subsidiary and an Unrestricted Subsidiary, the
conditions to designating the Subsidiary which will not survive into a
Subsidiary of the other type (as set forth in the definition of the
term "Restricted Subsidiary") could be satisfied immediately prior to
the transaction in question and (C) if the survivor of the transaction
will not be a Subsidiary, the Guarantor or immediate parent of the
Restricted Subsidiary will receive consideration in connection with
such transaction which would satisfy the requirements of the
immediately following sentence had the Restricted Subsidiary in
question been sold. The Guarantor will not, nor will it permit any of
its Restricted Subsidiaries to, convey, sell, lease, transfer or
otherwise dispose of, in one transaction or a series of transactions,
all or any part of its business or Company Property, whether now owned
or hereafter acquired (including, without limitation, receivables and
leasehold interests) except for fair market value in exchange for
reasonable consideration (as determined by the Board of Directors of
the Guarantor in any transaction, or series of related transactions,
involving consideration exceeding $100,000,000 in cash or Company
Property).
Section 10.2. Affirmative Covenant of the Agent Lessor. The Agent
Lessor covenants and agrees with the Arranger, the Lessee, the Guarantor, the
Administrative Agent and the Lenders that, so long as this Participation
Agreement shall remain in effect or the principal or interest on any Loan, or
any fees or any other expenses or amounts payable under any Operative Document
to the Administrative Agent or the Lenders shall be unpaid, unless the Required
Lenders shall otherwise consent in writing, the Agent Lessor will, upon the
written request of the Required Lenders after the occurrence and during the
continuance of an Event of Default qualify to do business in every jurisdiction
where such qualification is necessary for the Agent Lessor to exercise its
remedies under the Master Lease or any other Operative Document.
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ARTICLE XI
RENEWALS
Section 11.1. Extensions of Maturity Date and Expiration Date; Replacement
of Participants. (a) So long as the Lessee has not elected the Remarketing
Option, the Lessee may, on any date between 365 days and 180 days prior to the
Maturity Date, direct a written request to the Agent Lessor and the
Administrative Agent that the Expiration Date then in effect under the Master
Lease be extended to the date occurring one (1) year or two (2) years after such
Expiration Date and concurrently therewith request that the Administrative Agent
and the Agent Lessor direct a written request to the Lessors and the Lenders
that the applicable Maturity Date be extended to the same date (each such
additional year or two (2) years, a "Renewal Term"). In no event may the
Expiration Date or the Maturity Date be extended more than once if for a
two-year Renewal Term or twice if for a one-year renewal term pursuant to this
Section l1.1(a). Each Participant may grant or deny its consent to a Renewal
Term in its sole discretion by notifying the Administrative Agent and the Agent
Lessor in writing (with a copy to the Lessee); provided, however, that any
Participant that fails to respond to such request for a Renewal Term within
sixty (60) days after its receipt thereof shall be deemed to have denied such
request for a Renewal Term.
(b) In connection with a written request of the Lessee for a Renewal
Term, upon the request of the Lessee, the Administrative Agent and the Agent
Lessor shall be permitted to replace any non-consenting Participant and any
Participant that fails to respond to the Administrative Agent's and the Agent
Lessor's written request for a Renewal Term within the time period specified in
clause (a) above (each, a "Non-Consenting Participant") with a replacement bank
or other financial institution (a "Replacement Participant") satisfactory to the
Lessee, the Lessors and the Lenders, with such replacement to be effective as of
the Expiration Date and Maturity Date in effect prior to the requested Renewal
Term; provided, however, that (i) such replacement does not conflict with any
Requirement of Law, (ii) the Replacement Participant shall purchase from the
Non-Consenting Participant (A) at par, all Loans, in the case of a Lender, and
all Lessor Amounts, in the case of a Lessor, (B) all accrued interest, in the
case of a Lender, and all accrued Yield, in the case of a Lessor, and (C) all
other amounts owing to such Non-Consenting Participant on or prior to the date
of replacement, in each case, (iii) the Lessee shall be liable to such
Non-Consenting Participant under Section 13.10 if any Loan or Lessor Amount, as
the case may be, owing to such Non-Consenting Participant shall be prepaid (or
purchased) other than on the last day of the Interest Period or Interest Periods
relating thereto, (iv) such replacement shall be made in accordance with the
provisions of Article XII (provided that the Lessee or the relevant Replacement
Participant shall be obligated to pay the Transaction Expenses arising in
connection therewith), and (v) the Replacement Participant shall have agreed to
be subject to all of the terms and conditions of the applicable Operative
Documents (including the extension of the Maturity Date contemplated by the
relevant request for a Renewal Term and the related extension). The
Administrative Agent, the Agent Lessor and Lessee hereby agree to cooperate with
each other in an effort to arrange one or more Replacement Participants as
contemplated by this Section 11.1(b).
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(c) Except as otherwise provided in this Article XI, all other terms of
the Operative Documents shall remain unchanged and with the same force and
effect (including the pricing categories and pricing ratios), and there shall
not be any additional up-front fee in connection with such Renewal Term;
provided that Fixed Rent shall continue to be paid annually at the same rate as
set forth in the Master Lease.
Section 11.2. Replacement of Defaulting Participant. The Lessee shall have
the right (but not the obligation) to require any Defaulting Participant to
assign and delegate in accordance with Section 12.1 all of such Lender's or
Lessor's total Loans or Lessor Amounts, as the case may be, and Commitment, if
any, to any other financial institution that, in each case, is willing to accept
such assignment and delegation and is reasonably satisfactory to the
Administrative Agent, Agent Lessor and Lessee.
ARTICLE XII
TRANSFERS OF PARTICIPANTS' INTERESTS
Section 12.1. Assignments. Each Participant may, from time to time, with the
consent of the Guarantor and the Administrative Agent (which will not in any
instance be unreasonably withheld), assign to other financial institutions part
of the indebtedness evidenced by the Loan Commitments or the Lessor Commitments
then owned by it pursuant to written agreements executed by the assignor, the
assignee and the Guarantor, which agreements shall specify in each instance the
portion of the indebtedness evidenced by the Loan Commitments or the Lessor
Commitments which are to be assigned to each such assignor and the portion of
the Loan Commitment or the Lessor Commitment of the assignor (the "Assignment
Agreements"), provided that the Guarantor may in its sole discretion withhold
its consent to any assignment by a Participant of less than all of its Loan
Commitment or the Lessor Commitment if as a result thereof the assignor will
have a Commitment hereunder of less than $10,000,000 (or $5,000,000 if the
assignee thereof will have a Commitment hereunder of at least $10,000,000 in all
cases as adjusted proportionately to reflect payments of Fixed Rent) or the
assignee will have a Commitment hereunder of less than $10,000,000 (or
$5,000,000 if the assignor thereof will have a Commitment hereunder of at least
$10,000,000 in all cases as adjusted proportionately to reflect payments of
Fixed Rent), further provided that nothing herein contained shall restrict, or
be deemed to require any consent as a condition to, or require payment of any
fee in connection with, any sale, discount or pledge by any Participant of any
Note or Certificate or other obligation hereunder to a Federal Reserve Bank.
Upon the execution of each Assignment Agreement by the assignor, the assignee
and the Guarantor (i) such assignee shall thereupon become a "Participant" (and
either a "Lessor" or "Lender" as the case may be, or both) for all purposes of
this Participation Agreement with a Commitment in the amount set forth in such
Assignment Agreement and with all the rights, powers and obligations afforded a
Participant hereunder, (ii) the assignor shall have no further liability for
funding the portion of its Commitment assumed by such other Participant and
(iii) the address for notices to such Participant shall be as specified in the
Assignment Agreement executed by it. Concurrently with the execution and
delivery of such Assignment Agreement, and upon return to the Agent Lessor of
the outstanding Note or Certificate (as the case may be) of the Assignor, the
Agent Lessor shall execute and deliver a Note or
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Certificate (as the case may be) to the assignee Participant in the amount of
its Commitment to the assignee and a new Note or Certificate (as the case may
be) to the assignor Participant in the amount of its Commitment after giving
effect to the reduction occasioned by such assignment, all such Note or
Certificate (as the case may be) to constitute "Notes" or "Certificates" for all
purposes of this Participation Agreement, and there shall be paid to the
Administrative Agent, as a condition to such assignment, an administrative fee
of $3,500 plus any out-of-pocket costs and expenses incurred by it in effecting
such assignment, such fee to be paid by the assignor or the assignee as they may
mutually agree, but under no circumstances shall any portion of such fee be
payable by or charged to the Guarantor.
Section 12.2. Participations. Each Participant shall have the right at its
own cost to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Advances by such Participant at any time
and from time to time to one or more other financial institutions, provided that
no such participant shall have any rights under this Participation Agreement or
any Note or Certificate (the participant's rights against the Participant
granting its participation to be those set forth in the participation agreement
between the participant and such Participant). Each such Participant shall be
entitled to the benefits of yield protection provisions hereof to the extent
such Participant would have been so entitled had no such participation been
sold, but such Participant shall not be entitled to any additional benefits as a
result of, and shall indemnify the Lessee against, any claim arising out of the
sale of such participation.
Section 12.3. Withholding Taxes; Disclosure of Information; Pledge Under
Regulation A. (a) If any Participant (or the assignee of or subparticipant of a
Participant, each a "Transferee") is organized under the laws of any
jurisdiction other than the United States or any State thereof, then such
Participant or the Transferee of such Participant, as applicable, shall (as a
condition precedent to acquiring or participating in such Loan or Lessor Amount
and as a continuing obligation to the Lessor and the Lender) (i) furnish to each
of the Administrative Agent, the Agent Lessor and the Lessee in duplicate, for
each taxable year of such Participant or Transferee during the term of the
Lease, a properly completed and executed copy of either Internal Revenue Service
Form 4224 or Internal Revenue Service Form 1001 and any additional form (or such
other form) as is necessary to claim complete exemption from United States
withholding taxes (wherein such Transferee claims entitlement to complete
exemption from United States withholding taxes on all payments hereunder), and
(ii) provide to each of the Administrative Agent, the Agent Lessor and the
Lessee a new Internal Revenue Service Form 4224 or Internal Revenue Service Form
1001 and any such additional form (or any successor form or forms) upon the
expiration or obsolescence of any previously delivered form and comparable
statements in accordance with applicable United States laws and regulations and
amendments duly executed and completed by such Participant or Transferee, and to
comply from time to time with all applicable United States laws and regulations
with regard to such withholding tax exemption. By its acceptance of a
participation or assignment hereunder, each Transferee shall be deemed bound by
the provisions set forth in this Article XII.
(b) Any Participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Article
XII, disclose to such assignee
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or participant or proposed assignee or participant, any information relating to
Lessee, Guarantor or the Transactions, subject to appropriate confidentiality
requirements relating to such information.
(c) Anything in this Article XII to the contrary notwithstanding, any
Participant may without the consent of Lessee or Guarantor, the Administrative
Agent or the Agent Lessor, assign and pledge all or any portion of the Notes
held by it to any Federal Reserve Bank, the United States Treasury or to any
other financial institution as collateral security pursuant to Regulation A of
the F.R.S. Board and any operating circular issued by the Federal Reserve System
and/or the Federal Reserve Bank or otherwise; provided, any payment by Lessee or
Guarantor for the benefit of the assigning or pledging Participant shall be
deemed to satisfy such Lessee's or Guarantor's obligations with respect thereto.
(d) If any Participant determines, as a result of any change in
Applicable Law, regulation or treaty, or in any official application or
interpretation thereof, that it is unable to submit any form or certificate that
such Participant is obligated to submit pursuant to subsection (a) of this
Section 12.3 or that such Participant is required to withdraw or cancel any such
form or certificate previously submitted or any such form or certificate
otherwise becomes ineffective or inaccurate, such Participant shall promptly
notify the Lessee, Agent Lessor and the Administrative Agent of such fact and
such Participant shall to that extent not be obligated to provide any such form
or certificate and will be entitled to withdraw or cancel any affected form or
certificate, as applicable. In the event any Participant so notifies the Lessee,
Agent Lessor and the Administrative Agent, such Participant agrees that it will
at any time thereafter at the request of the Lessee assign its Notes and/or
Lessor Amounts and rights and obligations hereunder to another lender or lessor
as the case may be designated by the Lessee and approved by the Administrative
Agent and the Agent Lessor (which approvals will not be unreasonably withheld)
under and pursuant to Section 12.1 hereof (except that the assignment and
retention minimums shall not apply) upon payment to it of the amount of
principal and accrued and unpaid interest and fees owing it as of the date such
assignment becomes effective.
ARTICLE XIII
INDEMNIFICATION
Section 13.1. General Indemnification. The Lessee agrees 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, except to the extent otherwise
provided in this Section 13.1), unless such Indemnitee shall be indemnified as
to any such Claim by any other Person and unless such Claim arises or accrues
prior to the applicable Acquisition 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,
and any amendment, modification or waiver in respect thereof;
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(b) the Property or any part thereof or interest therein;
(c) the purchase, design, construction, preparation,
installation, inspection, delivery, nondelivery, 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, 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 law or in tort (on the basis of strict liability or otherwise), (2)
latent or other defects, 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 to the
Property in violation of any Material Insurance Requirements imposed by
any insurance policies required to be maintained by the Lessee pursuant
to the Master Lease which are in effect at the time such modifications
are made with respect to the Property or any part thereof, (5) any
Claim for patent, trademark or copyright infringement, and (6) Claims
arising from any public improvements with respect to the Property
resulting in any change or special assessments being levied against the
Property or any plans to widen, modify or realign any street or highway
adjacent to the Property, or any Claim for utility "tap-in" fees;
(d) the breach by Lessee or Guarantor of any covenant,
representation or warranty made by it or deemed made by it in any
Operative Document or any certificate required to be delivered by any
Operative Document;
(e) the existence of any Lien on or with respect to the
Property, 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, or any of its contractors or agents or by
reason of the financing of any personalty or equipment purchased or
leased by the Lessee or modifications to the Property constructed by
the Lessee, except Lessor Liens and Liens in favor of the Lenders or
the Lessors;
(f) subject to the accuracy of any Participant's
representation set forth in Section 8.1(a), as to such Participant, the
Transactions in respect of a prohibited transaction under ERISA or the
Code.
Provided, however, that 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 or the breach of any representation,
warranty or covenant of such Indemnitee set forth in any Operative
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Document, (2) any Claim resulting from Lessor Liens which the Agent Lessor, the
Administrative Agent or any of the Lessors or Lenders is responsible for
discharging under the Operative Documents, (3) any Claim arising from a breach
or alleged breach by the Lenders or the Lessors of any agreement entered into in
connection with the assignment or participation of any Loan or Lessor Amount and
(4) any Claim arising in respect of the Property in the period after the Lessee
ceases to lease the Property from the Lessors under the related Master Lease,
provided that the circumstances giving rise to such Claim occur after such
period. 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 Master Lease or any other Operative
Document, provided, however, that no Indemnitee shall have the right to assign
or otherwise transfer its rights hereunder to any purchaser of its interest in
the Master Lease or the Property other than as permitted by Article XII hereof.
Without limiting the express rights of any Indemnitee under this Section 13.1,
this Section 13.1 shall be construed as an indemnity only and not a guaranty of
residual value of the Property or as a guaranty of the Notes.
Section 13.2. End of Term Indemnity. (a) If the Lessee elects the
Remarketing Option and there would, after giving effect to the proposed
remarketing transactions, be a Shortfall Amount, then prior to the Expiration
Date and as a condition to the Lessee's right to complete the remarketing of the
Property pursuant to Article XX of the Master Lease, the Lessee shall cause to
be delivered to the Agent Lessor at least one hundred twenty (120) days prior to
the Expiration Date, at the Lessee's sole cost and expense, a report from the
Appraiser in form and substance reasonably satisfactory to the Agent Lessor, the
Administrative Agent and the 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 any of the Property from that anticipated for such
date in the Appraisal delivered with respect to the Property.
(b) If the Lessee elects the Remarketing Option, on or prior to the
Expiration Date the Lessee shall pay to the Agent Lessor for the account of each
of the Lessors 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
any of the following, but in all cases only to the extent in breach or violation
of any of the Operative Documents and not otherwise consented to pursuant to
Section 15.5 hereof:
(i) extraordinary use; failure to maintain, repair, restore,
rebuild or replace; failure to comply with 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
(iii) the existence of any Environmental Violations, the
indemnity for which shall not exceed the cost of the remediation
thereof; or
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(iv) any restoration or rebuilding carried out by the
Lessee, or
(v) any condemnation of any portion of any of the Property
pursuant to Article XIV of the Master Lease; or
(vi) any use of any of the Property or any part thereof by
the Lessee or any sublessee other than aluminum rolling mill facility
as contemplated by the Appraisal; or
(vii) any grant, release, dedication, transfer, annexation or
amendment made pursuant to Section 11.2 of the Master Lease; or
(viii) the failure of the Lessors to have good and marketable
title to the Property free and clear of all Liens (excluding Permitted
Property Liens); or
(ix) the existence of any sublease relating to the Property
that shall survive the Expiration Date.
Section 13.3. Environmental Indemnity. Without limitation of the other
provisions of this Article XIII, the Lessee and Guarantor hereby agree to
indemnify, hold harmless and defend each Indemnitee from and against any and all
Claims, arising in whole or in part, out of:
(a) lack of compliance with Environmental Laws; or any act or
omission causing an environmental condition that requires remediation
or disposition thereof or would allow any Governmental Authority to
record a Lien on the Property and the cost of disposition or
remediation of any such environmental condition or costs and damage
resulting from death or injury associated therewith; or
(b) any residual contamination on or under the Property, or
affecting any natural resources, and to any contamination of any
property or natural resources arising in connection with the
generation, use, handling, storage, transport or disposal of any
Hazardous Materials (or the Release thereof), and irrespective of
whether any of such activities were or will be undertaken in accordance
with applicable laws, regulations, codes and ordinances;
provided, however, that the Lessee and Guarantor shall not be required to
indemnify any Indemnitee under this Section 13.3 for any Claim to the extent
resulting from the willful misconduct or gross negligence of such Indemnitee and
with respect to matters not caused by an act or omission of the Lessee such
indemnification shall include only defense costs of Indemnitee. It is expressly
understood and agreed that the indemnity provided for herein shall survive the
expiration or termination of the Lease Term with respect to any Claim to the
extent it is based on facts or circumstances arising prior to or during the
Lease Term, and shall be separate and independent from any remedy under the
Lease or any other Operative Document; provided, however, that no Indemnitee
shall have the right to assign or
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otherwise transfer its rights hereunder to any purchaser of its interest in the
Lease or the Property other than as permitted by Article XII hereof.
Section 13.4. Proceedings in Respect of Clans. If any Claim shall be brought
against any Indemnitee, such Indemnitee shall promptly notify the Lessee of the
commencement thereof, and the Lessee shall be entitled, at the Lessee's expense,
to participate in, or, 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 fully to indemnify such Indemnitee in
respect of such Claim, except to the extent the Claim arose due to the willful
misconduct or gross negligence of such Indemnitee, 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) such Indemnitee has obtained and provided Lessee with a copy of a reasonable
good faith written opinion of counsel that, (x) such action, suit or proceeding
involves a reasonable risk of imposition of criminal liability on the Indemnitee
or will involve a reasonable risk of the sale, forfeiture or loss of, or the
creation of any Lien (other than a Permitted Property Lien) on the Property or
any part thereof unless, in the case of civil liability, the Lessee shall have
posted a bond or other security reasonably satisfactory to the relevant
Indemnitees in respect to such risk or (y) the control of such action, suit or
proceeding would involve an actual or potential conflict of interest, (B) such
proceeding predominantly 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 will join in the Lessee's efforts to sever
such action. The Indemnitee may participate 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 prior written consent of the Indemnitee, which consent shall not
be unreasonably withheld, unless such settlement unconditionally releases the
Indemnitee from all liabilities associated with such Claim and does not involve
an admission of liability of such Indemnitee.
Each Indemnitee shall at the expense of the Lessee 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 Claim to the extent
permitted by Section 13.1 or 13.3. Each Indemnitee shall at the expense of the
Lessee cooperate fully with the Lessee in the defense of all Claims for which
indemnification has been requested and in which the Lessee has assumed and is
controlling the defense. No Indemnitee shall enter into any settlement or other
compromise or make any admission against interest, except as required by law,
without the prior written consent of the Lessee, unless such Indemnitee waives
its rights to be indemnified under this Article XIII.
Upon satisfaction 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
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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 Tax Indemnity. (a) Indemnification. The Lessee shall
pay and assume liability for, and does hereby agree to indemnify, protect and
defend the Property and all Tax Indemnitees, and hold them harmless against, all
Impositions on an After Tax Basis.
(b) Contests. If any Claim in respect of an Imposition shall be made
against any Tax Indemnitee or if any proceeding shall be commenced against any
Tax Indemnitee (including a written notice of such proceeding) as to which the
Lessee may have an indemnity obligation pursuant to this Section 13.5, or if any
Tax Indemnitee shall determine that any Imposition to which the Lessee may have
an indemnity obligation pursuant to this Section 13.5 may be payable, such Tax
Indemnitee shall promptly (and in any event, within thirty (30) days) notify the
Lessee in writing (provided that failure to so notify the Lessee within thirty
(30) days shall not alter such Tax Indemnitee's rights under this Section 13.5
except to the extent such failure precludes or prejudices the ability to contest
such Imposition) and shall not take any action with respect to such Claim,
proceeding or Imposition without the written consent of the Lessee (such consent
not to be unreasonably withheld or unreasonably delayed) 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 such Tax Indemnitee shall be required
by law or regulation to take action prior to the end of such thirty (30) day
period, such Tax Indemnitee shall, in such notice to the Lessee, so inform the
Lessee and such Tax Indemnitee shall not take any action with respect to such
Claim, proceeding or Imposition without the consent of the Lessee (such consent
not to be unreasonably withheld or unreasonably delayed) for ten (10) days after
the receipt of such notice by the Lessee unless such Tax Indemnitee shall be
required by law or regulation to take action prior to the end of such ten (lO)
day period.
The Lessee shall be entitled for a period of thirty (30) days from
receipt of such notice from such Tax Indemnitee (or such shorter period as such
Tax Indemnitee has notified the Lessee is required by law or regulation for such
Tax Indemnitee to commence such contest), to request in writing that such Tax
Indemnitee contest the Imposition at the Lessee's expense. If (x) such contest
can be pursued in the name of the Lessee and independently from any other
proceeding involving a Tax liability of such Tax Indemnitee for which the Lessee
has not agreed to indemnify such Tax Indemnitee, (y) such contest must be
pursued in the name of such Tax Indemnitee, but can be pursued independently
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from any other proceeding involving a Tax liability of such Tax Indemnitee for
which the Lessee has not agreed to indemnify such Tax Indemnitee or (z) such Tax
Indemnitee so requests, then the Lessee shall have the right to control the
contest of such Claim, provided that in the case of a contest described in
clause (y), if such Tax Indemnitee obtains and provides the Lessee with the
reasonable good faith opinion of such Tax Indemnitee's counsel that such contest
by the Lessee could have a material adverse impact on the business or operations
of such Tax Indemnitee, including an explanation to the Lessee of such
determination, such Tax Indemnitee may elect to control or reassert control of
the contest, and provided that by taking control of the contest, the Lessee
acknowledges that it is responsible for the Imposition ultimately determined to
be due by reason of such Claim, and provided, further, that in determining the
application of clauses (x) and (y) above, each Tax Indemnitee shall take any and
all reasonable steps to segregate Claims for any Taxes for which the Lessee
indemnifies hereunder from Taxes for which the Lessee is not obligated to
indemnify hereunder, so that the Lessee can control the contest of the former.
In all other Claims requested to be contested by the Lessee, such Tax Indemnitee
shall control the contest of such Claim, acting through counsel reasonably
acceptable to the Lessee. In no event shall the Lessee be permitted to contest
(or such Tax Indemnitee required to contest) any Claim, (A) if such Tax
Indemnitee provides the Lessee with a legal opinion of counsel reasonably
acceptable to the Lessee that such action, suit or proceeding involves a
reasonable risk of imposition of criminal liability or will involve a material
risk of the sale, forfeiture or loss of, or the creation of any Lien (other than
a Permitted Lien) on any Property or any part thereof unless the Lessee shall
have posted and maintained a bond or other security reasonably satisfactory to
the relevant Tax Indemnitee in respect to such risk, (B) if an Event of Default
has occurred and is continuing, (C) unless the Lessee shall have agreed to pay
and shall pay, to such Tax Indemnitee on demand all reasonable out-of-pocket
costs, losses and expenses that such Tax Indemnitee may incur in connection with
contesting such Imposition including all reasonable legal, accounting and
investigatory fees and disbursements, or (D) if such contest shall involve the
payment of the Tax prior to the contest, unless the Lessee shall provide to such
Tax 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 costs
to such Tax Indemnitee). In addition for Tax Indemnitee controlled contests and
Claims contested in the name of such Tax Indemnitee in a public forum, no
contest shall be required: (A) unless 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 any or all such Tax Indemnitees with
respect to any period for which the Lessee may be liable to pay an indemnity
under this Sec 13.5(b)) exceeds $250,000 and (B) unless, if requested by such
Tax Indemnitee, the Lessee shall have provided to such Tax Indemnitee an opinion
of counsel selected by the Lessee (which may be in-house counsel) (except, in
the case of income taxes indemnified hereunder, in which case such opinion shall
be an opinion of independent tax counsel selected by such Tax Indemnitee and
reasonably acceptable to the Lessee) that a reasonable basis exists to contest
such Claim. In no event shall a Tax Indemnitee be required to appeal an adverse
judicial determination to the United States Supreme Court.
The party conducting the contest shall consult in good faith with the
other party and its counsel with respect to the contest of such Claim for Taxes
(or Claim for refund) but the
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decisions regarding what actions to be taken shall be made by the controlling
party in its sole judgment, provided, however, that if such Tax Indemnitee is
the controlling party and the Lessee recommends the acceptance of a settlement
offer made by the relevant Governmental Authority and such Tax Indemnitee
rejects such settlement offer then the amount for which the Lessee will be
required to indemnify such Tax Indemnitee with respect to the Taxes subject to
such offer shall not exceed the amount which it would have owed if such
settlement offer had been accepted. In addition, the controlling party shall
keep the non-controlling party reasonably informed as to the progress of the
contest, and shall provide the non-controlling party with a copy of (or
appropriate excerpts from) and reports or Claims issued by the relevant auditing
agents or taxing authority to the controlling party thereof, in connection with
such Claim or the contest thereof.
Each Tax Indemnitee shall, at the Lessee's expense, 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 this Section 13.5(b). Notwithstanding
anything in this Section 13.5(b) to the contrary, no Tax Indemnitee shall enter
into any settlement or other compromise or fail to appeal an adverse ruling with
respect to any Claim which is entitled to be indemnified under this Section 13.5
(and with respect to which contest is required under this Section 13.5(b))
without the prior written consent of the Lessee, unless such Tax Indemnitee
waives its right to be indemnified under this Section 13.5 with respect to such
Claim.
Notwithstanding anything contained herein to the contrary, a Tax
Indemnitee will not be required to contest (and the Lessee shall not be
permitted to contest) a Claim with respect to the imposition of any Tax if such
Tax Indemnitee shall waive its right to indemnification under this Section 13.5
with respect to such Claim (and any Claim with respect to such year or any other
taxable year the contest of which is materially adversely affected as a result
of such waiver).
(c) [Intentionally omitted]
(d) Payments. Any Imposition indemnifiable under this Section 13.5
shall be paid directly when due to the applicable taxing authority if direct
payment is practicable and permitted. If direct payment to the applicable taxing
authority is not permitted or is otherwise not made, any amount payable to a Tax
Indemnitee pursuant to Section 13.5 shall be paid within thirty (30) days after
receipt of a written demand therefor from such Tax Indemnitee accompanied by a
written statement describing in reasonable detail the amount so payable, but not
before two (2) Business Days prior to the date that the relevant Taxes are due.
Any payments made pursuant to this Section 13.5 shall be made directly to such
Tax Indemnitee entitled thereto or the Lessee, as the case may be, in
immediately available funds at such bank or to such account as specified by the
payee in written directions to the payor, or, if no such direction shall have
been given, by check of the payor payable to the order of the payee by certified
mail, postage prepaid at its address as set forth in Schedule II hereto. Upon
the request of any Tax Indemnitee with respect to a Tax that the Lessee is
required to pay, the Lessee shall furnish to such Tax Indemnitee the original or
a certified copy of a
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receipt for the Lessee's payment of such Tax or such other evidence of payment
as is reasonably acceptable to such Tax Indemnitee.
(e) Reports. In the case of any report, return or statement required to
be filed with respect to any Taxes that are subject to indemnification under
this Section 13.5 and of which the Lessee has knowledge, the Lessee shall
promptly notify such Tax Indemnitee of such requirement and, at the Lessee's
expense (i) if the Lessee is permitted (unless otherwise required by such Tax
Indemnitee) by Applicable Law, timely file such report, return or statement in
its own name or (ii) if such report, return or statement is required to be in
the name of or filed by such Tax Indemnitee or such Tax Indemnitee otherwise
requests that such report, return or statement be filed in its name, prepare and
finish such statement for filing by such Tax Indemnitee in such manner as shall
be satisfactory to such Tax Indemnitee and send the same to such Tax Indemnitee
for filing no later than fifteen (15) days prior to the due date therefor. In
any case in which such Tax Indemnitee will file any such report, return or
statement, the Lessee shall, upon written request of such Tax Indemnitee,
provide such Tax Indemnitee with such information as is reasonably necessary to
allow such Tax Indemnitee to file such report, return or statement and the Tax
Indemnitee shall provide the Lessee with an information copy or a copy of any
such report, return or statement.
(f) [Intentionally omitted]
Section 13.6. Indemnity Payments in Addition to Lease Obligations. The
Lessee acknowledges and agrees that the Lessee's obligations to make indemnity
payments under this Article XIII are separate from, in addition to, and do not
reduce, Lessee's obligation to pay any amounts owing from time to time under the
Lease.
Section 13.7. Rate Determinations. The Administrative Agent shall determine
each interest rate applicable to the Loans and Lessor Amounts hereunder in
accordance herewith, and its determination thereof if reasonably made shall be
prima facie correct, subject to a showing of error.
Section 13.8. Funding Indemnity. In the event any Lender or Lessor shall
incur any loss, cost or expense (including, without limitation, any loss, cost
or expense incurred by reason of the liquidation or re-employment of deposits or
other funds acquired by such Lender or Lessor to fund or maintain any Eurodollar
Loan/Lessor Amount or the relending or reinvesting of such deposits or amounts
paid or prepaid to such Lender or Lessor, and any loss of profit) as a result
of:
(a) any payment or prepayment of a Eurodollar Loan/Lessor
Amount on a date other than the last day of its Interest Period for any
reason; or
(b) any failure by the Lessee to make any payment of a
Eurodollar Loan/Lessor Amount when due (whether by acceleration,
mandatory prepayment or otherwise),
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then, upon the demand of such Lender or Lessor, the Lessee shall pay to such
Lender or Lessor such amount as will reimburse such Lender or Lessor for such
loss, cost or expense. If any Lender or Lessor makes such a claim for
compensation, it shall provide to the Lessee a certificate executed by an
officer of such Lender or Lessor setting forth the amount of such loss, cost or
expense in reasonable detail (including an explanation of the basis for and the
computation of such loss, cost or expense) and such certificate shall be deemed
prima facie correct.
Section 13.9. Change of Law. Notwithstanding any other provisions of this
Participation Agreement, if at any time any change in applicable law or
regulation or in the interpretation thereof makes it unlawful for any Lender or
Lessor to make or continue to maintain Eurodollar Loans/Lessor Amounts or to
give effect to its obligations to make Eurodollar Loans/Lessor Amounts as
contemplated hereby, such Lender or Lessor shall promptly give notice thereof to
the Lessee and the Administrative Agent, and such Lender's or Lessor's
obligations to make or maintain Eurodollar Loans/Lessor Amounts under this
Participation Agreement shall terminate until it is no longer unlawful for such
Lender or Lessor to make or maintain Eurodollar Loans/Lessor Amounts. To the
extent required to comply with any such law as changed, the Lessee shall prepay
on demand the outstanding principal amount of any affected Eurodollar
Loans/Lessor Amounts, together with all interest accrued thereon and all other
amounts then due and payable to such Lender or Lessor under this Agreement;
provided, however, subject to all of the terms and conditions of this
Participation Agreement, the Lessee may then elect to convert the principal
amount of the affected Eurodollar Loan/Lessor Amount from such Lender or Lessor
to a Base Rate Loan/Lessor Amount from such Lender or Lessor that shall not be
converted ratably by the Lenders or Lessors but only from such affected Lender
or Lessor.
Section 13.10. Unavailability of Deposits or Inability to Ascertain, or
Inadequacy of, LIBOR. If on or prior to the first day of any Interest Period for
any Eurodollar Loans/Lessor Amounts the Administrative Agent is advised by the
Required Lenders or Required Lessors that deposits in United States Dollars (in
the applicable amounts) are not being offered to them in the relevant market for
such Interest Period, then the Administrative Agent shall forthwith give notice
thereof to the Lessee and the Lenders and Lessors, whereupon until the
Administrative Agent notifies the Lessee that the circumstances giving rise to
such suspension no longer exist, the obligations of the Lenders or Lessors to
continue or convert Eurodollar Loans shall be suspended.
Section 13.11. Increased Cost and Reduced Return. If on or after the date
hereof, 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 Lender or Lessor
(or its Lending Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency:
(a) shall subject any Lender or Lessor (or its Lending Office)
to any tax, duty or other charge with respect to its Eurodollar
Loans/Lessor Amounts, or shall change the basis of taxation of payment
to any Lender or Lessor (or its Lending
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Office) of the principal of or interest on its Eurodollar Loans/Lessor
Amounts or any other amounts due under this Participation Agreement in
respect of its Eurodollar Loans/Lessor Amounts or its obligation to
make Eurodollar Loans/Lessor Amounts (except for changes involving the
imposition or increase of a tax on the overall net income or gross
receipts of such Lender or Lessor or its Lending Office); or
(b) shall impose, modify or deem applicable any reserve,
special deposit or similar requirements (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal
Reserve System against assets of, deposits with or for the account of,
or credit extended by, any Lender or Lessor (or its Lending Office) or
shall impose on any Lender or Lessor (or its Lending Office) or on the
United States market for certificates of deposit or the London
interbank market any other condition affecting its Eurodollar
Loans/Lessor Amounts;
and the result of any of the foregoing is to increase the cost to such Lender or
Lessor (or its Lending Office) of making or maintaining any Eurodollar
Loan/Lessor Amount, or to reduce the amount of any sum received or receivable by
such Lender or Lessor (or its Lending Office) under this Participation
Agreement, by an amount deemed by such Lender or Lessor to be material, then,
within 15 days after demand by such Lender or Lessor (with a copy to the
Administrative Agent), the Lessee shall pay to such Lender or Lessor such
additional amount or amounts as will compensate such Lender or Lessor for such
increased cost or reduction. A certificate of any Lender or Lessor claiming
compensation under this Section 13.11 and setting forth the additional amount or
amounts to be paid to it hereunder shall be prima facie correct subject to a
showing of error. In determining such amount, such Lender or Lessor may use any
reasonable averaging and attribution methods. A Lender or Lessor shall not be
entitled to compensation under this Section 13.11 with respect to any adoption
or change for any period which is more than thirty days prior to the date it
notifies the Lessee of the adoption or change giving rise to the request for
compensation (except to the extent the adoption or change has a retroactive
effective date in which case such Lender or Lessor shall also be entitled to
compensation for the period given retroactive effect to the extent not covered
by the thirty (30) day period prior to such notice) and any Lender or Lessor
desiring to claim compensation hereunder shall notify the Lessee of the adoption
or change giving rise to the claim in question as promptly as practicable and in
any event within thirty days after becoming aware of same.
Without limiting the generality of the foregoing, the Lessee shall pay
to each Lender and Lessor, so long as such Lender or Lessor shall be required
under regulations of the Board of Governors of the Federal Reserve System to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency liabilities, additional interest on the unpaid principal
amount of each Eurodollar Loan/Lessor Amount of such Lender or Lessor, from the
effective date of such requirement until such principal amount is paid in full,
at an interest rate per annum equal at all times to the remainder obtained by
subtracting (i) LIBOR for the Interest Period for such Eurodollar Loan/Lessor
Amount from (ii) the rate obtained by dividing such LIBOR by a percentage equal
to 100% minus the Eurodollar Reserve Percentage of such Lender or Lessor for
such Interest Period, payable on each date on which interest is payable on such
Eurodollar Loan/Lessor Amount. Such additional
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interest shall be determined by such Lender or Lessor and notified to the Lessee
through the Administrative Agent, and such determination shall be prima facie
correct, subject to showing of error.
Section 13.12. Lending Offices. Each Lender and Lessor may, at its option,
elect to make its Loans or Lessor Amounts hereunder at the branch, office or
affiliate specified on the appropriate signature page hereof (each a "Lending
Office") for each type of Loan available hereunder or at such other of its
branches, offices or affiliates as it may from time to time elect and designate
in a notice to the Lessee and the Administrative Agent (but such funds shall in
any event be made available to the Lessee at the office of the Administrative
Agent as herein provided for), provided that the Lessee shall not be required to
reimburse any Lender or Lessor under any of the provisions of this Article 3 for
any cost which such Lender or Lessor would not have incurred but for changing
its lending or funding branch unless the Lessee consented to such change after
being advised by such Lender or Lessor of any increased costs then existing for
which such Lender or Lessor could claim reimbursement from the Lessee if such
Lender or Lessor made the change in its lending or funding branch in question.
Section 13.13. Discretion of Lenders or Lessors as to Manner of Funding.
Notwithstanding any other provision of this Agreement, each Lender and Lessor
shall be entitled to fund and maintain its funding of all or any part of its
Loans and Lessor Amounts in any manner it sees fit, it being understood,
however, that for the purposes of this Agreement all determinations under this
Agreement shall be made as if each Lender and Lessor had actually funded and
maintained each Eurodollar Loan/Lessor Amount through the purchase of deposits
in the relevant market having a maturity corresponding to such Loan's or
Lessor's Amount Interest Period and bearing an interest rate equal to LIBOR for
such Interest Period.
Section 13.14. Capital Adequacy. If any Lender or Lessor shall determine
that the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof or compliance
by such Lender or Lessor (or its Lending Office) with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Lender's or Lessor's capital as a
consequence of its obligations hereunder or credit extended by it hereunder to a
level below that which such Lender or Lessor could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's or
Lessor's policies with respect to capital adequacy) by an amount deemed by such
Lender or Lessor to be material, then from time to time as specified by such
Lender or Lessor the Lessee shall pay to such Lender or Lessor, such additional
amount or amounts as will compensate such Lender or Lessor for such reduction. A
certificate of any Lender or Lessor claiming compensation under this Section
13.14 and setting forth the additional amount or amounts to be paid to it
hereunder shall be prima facie evidence thereof subject to a showing of error.
In determining such amount, such Lender or Lessor may use any reasonable
averaging and attribution methods.
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Section 13.15. Participant Replacement. If any Lender or Lessor requests
compensation for increased costs or other amounts pursuant to Sections 13.11 or
13.14, or suspends its obligation to make Eurodollar Loans/Lessor Amounts under
Section 13.9 or 13.11 hereof or the Lessee is required to make any reduction or
withholding with respect to any payment due any Lender or Lessor hereunder (each
Lender or Lessor hereby undertaking to promptly notify the Lessee if it becomes
aware of circumstances which would require such a reduction or withholding), or
if any Lender or Lessor fails or would not be able to comply with its
obligations under this Participation Agreement (in any such case a "Replaceable
Lender or Lessor") the Lessee may, with the consent of the Agent Lessor and
Administrative Agent, or if the Replaceable Lender or Lessor is the
Administrative Agent or Agent Lessor, with the consent of the Agent Lessor or
the Administrative Agent and Required Participants, which consent in either case
shall not be unreasonably withheld, propose that another bank or lessor (a
"Replacement Lender or Lessor"), which bank or lessor may be an existing
Participant, be substituted for and replace the Replaceable Lender or Lessor for
purposes of this Participation Agreement. If a Replacement Lender or Lessor is
so substituted for the Replaceable Lender or Lessor, the Replaceable Lender or
Lessor shall enter into an Assignment Agreement with the Replacement Lender or
Lessor, the Lessee, the Agent Lessor and the Administrative Agent (or the other
Lender or Lessor, if either the Agent Lessor or the Administrative Agent is the
Replaceable Lender or Lessor) to assign and transfer to the Replacement Lender
or Lessor the Replaceable Lender or Lessor's Commitment and Lessor Amounts or
Loans hereunder pursuant to and in accordance with the provisions and
requirements of Section 12.1 and, as a condition to its execution thereof, the
Replaceable Lender or Lessor shall concurrently receive the full amount of its
Loan or Lessor Amounts, as the case may be, interest (or Yield as the case may
be) thereon and all accrued fees to which it is entitled under this
Participation Agreement.
ARTICLE XIV
THE AGENT LESSOR
Section 14.1. Appointment and Authorization. Each Lessor irrevocably
appoints and authorizes BMO Leasing (U.S.), Inc. as Agent Lessor (in such
capacity as Agent Lessor hereunder and under the other Operative Documents, the
"Agent Lessor") of such Lessor to enter into the Operative Documents (including,
without limitation, the Master Lease and each Lease Supplement) on behalf of
such Lessor and to act as specified herein and in the other Operative Documents,
and each such Lessor hereby authorizes the Agent Lessor as agent for such
Lessor, to take such action on its behalf under the provisions of this
Participation Agreement and the other Operative Documents and to exercise such
powers and perform such duties as are expressly delegated by the terms hereof
and thereof, together with such other powers as are reasonably incidental
thereto (including, without limitation, the execution and delivery from time to
time in accordance with the provisions and terms hereof and the various other
documents, conveyances, terminations, assignments and instruments contemplated
herein to be delivered by the Agent Lessor on behalf of the Lessors). Each
action taken by the Agent Lessor under any Operative Document shall be deemed to
be on behalf of each the Lessors, unless otherwise indicated. Notwithstanding
any
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provision to the contrary elsewhere herein or in the other Operative Documents,
the Agent Lessor shall not have any duties or responsibilities, except those
expressly set forth herein and therein, or any fiduciary relationship with any
Lessor, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Participation Agreement or
any of the other Operative Documents, or shall otherwise exist against the Agent
Lessor.
Section 14.2. Delegation of Duties. The Agent Lessor may execute any of its
duties hereunder or under 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 Lessor 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. Agent Lessor and Affiliates. The Agent Lessor shall have the
same rights and powers under this Participation Agreement and under the other
Operative Documents as any other Lessor, and may exercise or refrain from
exercising the same as though it were not the Agent Lessor.
Section 14.4. Action by Agent Lessor. The obligations of the Agent Lessor
hereunder and under the other Operative Documents are only those expressly set
forth herein and therein. Without limiting the generality of the foregoing, the
Agent Lessor shall not be required to take any action with respect to any
Default or Event of Default, except as expressly provided herein and in the
other Operative Documents.
Section 14.5. Consultation with Experts. The Agent Lessor may consult with
legal counsel (who may be counsel for Lessee, Guarantor, a Participant, the
Administrative Agent, the Arranger or any Affiliate of any of them), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with
the advice of such counsel, accountants or experts.
Section 14.6. Exculpatory Provisions. Neither the Agent Lessor nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be responsible for or have any duty to ascertain, inquire into or verify
(a) any statement, warranty or representation made in connection with the
Operative Documents; (b) the performance or observance of any of the covenants
or agreements of Lessee or Guarantor; (c) the satisfaction of any condition
precedent specified herein or in any other Operative Document; (d) the validity,
effectiveness or genuineness of any of the Operative Documents or any other
instrument or writing furnished in connection herewith or therewith; (e) the use
of the proceeds of the Advance; (f) the existence of any Default or Event of
Default; or (g) the properties, books or records of Lessee or Guarantor.
Section 14.7. Reliance on Communications. The Agent Lessor shall be entitled
to rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it in good faith to be genuine and correct
and to have been signed, sent or made by the proper Person or
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Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to Lessee or Guarantor), independent accountants and other
experts selected by the Agent Lessor with reasonable care. The Agent Lessor may
deem and treat the Participants as the owner of their respective interests
hereunder and under the other Operative Documents for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Agent Lessor in accordance with Section 12.1 of the Participation
Agreement. The Agent Lessor, acting in its capacity as Agent Lessor, shall be
fully justified in failing or refusing to take any action under this
Participation Agreement or under any of the other Operative Documents unless it
shall first receive such advice or concurrence of the Lessors 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 Lessor
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder or under any of the other Operative Documents in accordance with a
request of the Lessors and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Participants (including their
successors and assigns).
Section 14.8. Notice of Default. The Agent Lessor shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent Lessor has received notice from a Participant, Lessee
or Guarantor referring to the Operative Document, describing such Default or
Event of Default and stating that such notice is a "notice of default" and has
received evidence that the matter referenced constitutes an Event of Default. In
the event that the Agent Lessor receives such a notice, the Agent Lessor shall
give prompt notice thereof to the Participants. The Agent Lessor shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lessors.
Section 14.9. Non-Reliance on Agent Lessor and Other Participants. Each
Participant expressly acknowledges that neither the Agent Lessor (other than in
its role as Participant) nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to it
and that no act by the Agent Lessor or any affiliate thereof hereafter taken,
including any review of the affairs of Lessee or Guarantor, shall be deemed to
constitute any representation or warranty by the Agent Lessor to any
Participant. Each Participant represents to the Agent Lessor that it has,
independently and without reliance upon the Agent Lessor or any other
Participant, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial, and other conditions, prospects and
creditworthiness of Lessee and Guarantor and made its own decision to make its
proportionate share of the Advances hereunder and under the other Operative
Documents and enter into this Participation Agreement and the other Operative
Documents. Each Participant also represents that it will, independently and
without reliance upon the Agent Lessor or any other Participant, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Participation Agreement, and to make such
investigation as it deems necessary to inform itself as to the business, assets,
operations, property, financial and other conditions, prospects and
creditworthiness of Lessee and
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Guarantor. Except for notices, reports and other documents expressly required to
be furnished to the Participants by the Agent Lessor hereunder, the Agent Lessor
shall not have any duty or responsibility to provide any Participant with any
credit or other information concerning the business, operations, assets,
property, financial or other conditions, prospects or creditworthiness of Lessee
and Guarantor which may come into the possession of the Agent Lessor or any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates.
Section 14.10. Indemnification. The Lessors agree to indemnify the Agent
Lessor in its capacity as such (to the extent not reimbursed by Lessee or
Guarantor and without limiting the obligation of Lessee and Guarantor to do so),
ratably according to their respective Commitments, 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
Obligations) be imposed on, incurred by or asserted against the Agent Lessor in
its capacity as such in any way relating to or arising out of this Participation
Agreement or 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 the Agent Lessor under or in connection with
any of the foregoing; provided that no Lessor shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
gross negligence or willful misconduct of the Agent Lessor. If any indemnity
furnished to the Agent Lessor for any purpose shall, in the opinion of the Agent
Lessor, be insufficient or become impaired, the Agent Lessor may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished. The agreements in this
Section shall survive the payment in full of the Obligations and all other
amounts payable hereunder and under the other Operative Documents.
Section 14.11. Failure to Act. Except for action expressly required of the
Agent Lessor hereunder, the Agent Lessor shall in all cases be fully justified
in failing or refusing to act hereunder unless it shall be indemnified to its
satisfaction by the Lessors against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
Section 14.12. Resignation and Removal. The Agent Lessor may resign at any
time upon at least thirty (30) days' prior notice to the Lessee and the
Participants, and may be removed as such at any time by vote of the Required
Lessors and notice to the retiring Agent Lessor, the Administrative Agent and
the Lessee. In the event of any such resignation or removal, the Required
Lessors shall as promptly as practicable (but with five (5) Business Days' prior
written notice being given to the Lessee) appoint a successor Agent Lessor,
provided that such successor Agent Lessor shall be approved by the
Administrative Agent, and, unless an Event of Default is continuing, be approved
by the Lessee (which approval shall not be unreasonably withheld or delayed)
and, if the Lessee has not responded within such five Business Day period, the
Lessee shall be deemed to have approved such new Agent Lessor. If no successor
Agent Lessor shall have been so appointed and shall have accepted such
appointment within thirty (30) days after either the retiring Agent Lessor's
giving of
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notice of resignation or the Required Lessors' vote to remove the retiring Agent
Lessor, then the retiring Agent Lessor may, on behalf of the Lessors, appoint a
successor Agent Lessor (subject, absent a Lease Event of Default, to the
reasonable approval of the Lessee), which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof or under
the laws of another country that is doing business in the United States and
having a combined capital, surplus and undivided profits of at least
$100,000,000, or a wholly owned subsidiary of such bank. Upon its acceptance of
its appointment, such successor Agent Lessor shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Agent Lessor, and the retiring Agent Lessor shall be discharged from all further
duties and obligations as Agent Lessor under this Participation Agreement and
under the other Operative Documents. After any retiring Agent Lessor's
resignation or removal hereunder as Agent Lessor, the provisions of this
Participation Agreement and of the other Operative Documents shall continue to
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent Lessor under this Participation Agreement. No resignation or
renewal of the Agent Lessor may become effective until a successor Agent Lessor
has been appointed as provided above.
Section 14.13. Distributions. The Agent Lessor shall, as promptly as
practicable, distribute to each Participant its appropriate portion, if any, of
payments received (in good, collected funds) by the Agent Lessor from Lessee or
Guarantor for the account of the Participants or of any such payments so
received for the account of such Participant.
Section 14.14. Rights of Lessee. Except where Lessee is expressly referenced
in this Article XIV, (w) the Agent Lessor shall act solely as agent of the
Lessors and does not assume and shall not be deemed to have assumed any
obligation or relationship of agency or trust with or for Lessee, (x) this
Article XIV is for the benefit of the Agent Lessor and the Participants only,
(y) Lessee shall have no right to enforce any part of this Article XIV and shall
have no rights as third party beneficiary or otherwise therein, and (z) this
Article XIV may be amended by the approval of Agent Lessor and the Required
Participants, without any need to obtain the approval of Lessee.
ARTICLE XV
MISCELLANEOUS
Section 15.1. Survival of Agreements. All representations, warranties and
covenants made herein or in other Operative Document shall survive the execution
and delivery of this Participation Agreement and of the Notes, and shall
continue in full force and effect with respect to the date as of which they were
made as long as any Loans or Lessor Amounts are outstanding hereunder. All
indemnities shall survive the termination of this Participation Agreement and
the payment of the Loans and Lessor Amounts.
Section 15.2. No Broker. 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 or in the other Operative Documents nor has
it authorized any broker, finder or financial adviser
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retained or employed by any other Person so to act. Any party which is in breach
of this representation shall indemnify and hold the other parties harmless from
and against any liability arising out of such breach of this representation.
Section 15.3. Notices. All communications provided for herein shall be in
writing or by telex or by telecopy, except as otherwise specifically provided
for hereinabove, addressed to the appropriate party at their respective
addresses set forth opposite their respective signatures hereto, or at such
other address as shall be designated by any party hereto in a written notice to
each other party pursuant to this Section 15.3. Any notice in writing shall be
deemed to have been given or made when served personally or when received if
sent by United States mail, and any notice given by telex or telecopy means
shall be deemed given when transmitted (answerback confirmed); provided that
any notice to the Administrative Agent, the Agent Lessor or any Participant
under Article III or Sections 4.3 and 4.5 hereof shall only be effective upon
receipt.
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 be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 15.5. Amendments. No provision of this Participation Agreement may
be amended or waived except in writing signed by the Lessee, the Guarantor and
the Required Participants and, if the rights or duties of the Administrative
Agent or the Agent Lessor are affected thereby, by the Administrative Agent
and/or the Agent Lessor (as appropriate); provided that no such amendment or
waiver shall, unless signed by a Participant, (i) increase or extend the
Commitment of such Participant or subject such Participant to any additional
obligation, (ii) reduce the principal of or rate of interest on any Loan or
Yield on any Lessor Amount from such Participant or any fees due such
Participant hereunder or (iii) change the stated time or manner of any payment
of principal of or interest on any Loan or Yield on any Lessor Amount from such
Participant or any fees due such Participant hereunder, and no such amendment
shall, unless signed by all Participants, change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes, the Lessor
Amounts, or the number of Participants, required for the Participants or any of
them to take any action under this Section 15.5 or any other provisions of this
Participation Agreement or the other Operative Documents.
Section 15.6. Headings. The Table of Contents and headings of the various
Articles and Sections of this Participation Agreement are for convenience of
reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof.
Section 15.7. Parties in Interest. Except as expressly provided herein, none
of the provisions of this Participation Agreement is intended for the benefit of
any Person except the parties hereto. The Lessee shall not assign or transfer
any of its rights or obligations under the Operative Documents except in
accordance with the terms and conditions thereof.
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Section 15.8. GOVERNING LAW; SUBMISSION TO JURISDlCTION. THIS PARTICIPATION
AGREEMENT AND (UNLESS EXPRESSLY STATED OTHERWISE) THE OTHER OPERATIVE DOCUMENTS
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK. EACH PARTY HERETO 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 CITY FOR THE PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS PARTICIPATION AGREEMENT, THE
OTHER OPERATIVE DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO TO 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 15.9. Severability. Any provision of this Participation Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 15.10. Liability Limited. (a) The parties hereto agree that except
as specifically set forth herein or in any other Operative Document, no Lessor
shall have any personal liability whatsoever to any Participant or their
respective successors and assigns for any claim based on or in respect hereof or
any of the other Operative Documents or arising in any way from the transactions
contemplated hereby or thereby and recourse, if any, shall be solely had against
such Lessor's interest in the Property; provided, however, that each Lessor
shall be liable in its individual capacity (a) for its own willful misconduct or
gross negligence, (b) breach of any of its representations, warranties or
covenants under the Operative Documents, or (c) for any Tax based on or measured
by any fees, commission or compensation received by it for acting as a Lessor as
contemplated by the Operative Documents. It is understood and agreed that,
except as provided in the preceding sentence: (i) no Lessor shall have any
personal liability under any of the Operative Documents as a result of acting
pursuant to and consistent with any of the Operative Documents; (ii) all
obligations of each Lessor to any Lender are solely nonrecourse obligations
except to the extent that such Lessor has received payment from others
(including, without limitation, obligations with respect to the Loans); and
(iii) all such personal liability of any Lessor is expressly waived and released
as a condition of, and as consideration for, the execution and delivery of the
Operative Documents by such Lessor.
(b) No Participant shall have any obligation to any other Participant
or to Lessee, the Lessors or the Lenders with respect to transactions
contemplated by the Operative Documents, except those obligations 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.
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Section 15.11. 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
preserve the security interests and liens (and the priority thereof) intended to
be created pursuant to this Participation Agreement, the other Operative
Documents, and the transactions thereunder. 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, or as so requested, in order to maintain and protect all
security interests provided for hereunder or under any other Operative Document.
Section 15.12. [Intentionally Omitted].
Section 15.13. [Intentionally Omitted].
Section 15.14. WAIVER OF JURY TRIAL. THE PARTIES HERETO VOLUNTARILY WAIVE
(TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHTS THEY MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS PARTICIPATION AGREEMENT OR ANY OTHER
OPERATIVE DOCUMENT OR THE TRANSACTIONS AND AGREEMENTS CONTEMPLATED HEREBY AND
THEREBY.
Section 15.15. No Participant Responsible for Other Participants. The
obligations of each Participant under this Participation Agreement and the other
Operative Documents are several and not joint; and, in the event of a failure by
a Participant to perform any of its obligations hereunder or under any other
Operative Document, neither the Agent Lessor nor the Administrative Agent nor
any other Participant (other than the defaulting Participant) shall have any
liability as a consequence thereof.
Section 15.16. Each Lessor to Have an Undivided Interest. The Agent Lessor
hereby confirms that it is holding the Property on behalf of the Lessors, each
of which shall hold an undivided interest in the Property (and all proceeds
thereof), in each case such interest to be equal to the Commitment of such
Lessor relative to the aggregate amount of the Lessor Commitment of all Lessors.
Section 15.17. Simultaneous Transaction. The parties acknowledge and agree
that each of Lessee's and Guarantor's representations, warranties, covenants and
satisfaction of conditions is made as of the Acquisition Date and predicated
upon the acquisition of the Property from the current owner thereof and
cancellation or termination of the U.S. West Agreements and cancellation or
release of all security interests thereunder.
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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.
ALUMAX INC., as Guarantor
By /s/ Marc Crown
--------------------------------
Marc Crown
Its Assistant Treasurer
Address for Notices:
3424 Peachtree Road, N.E.
Suite 2100
Atlanta, Georgia 30326
Attention: Assistant Treasurer
Facsimile No: (404) 846-4657
with a copy to:
Alumax Inc.
3424 Peachtree Road, N.E.
Suite 2100
Atlanta, Georgia 30326
Attention: Senior Vice President and
General Counsel
Facsimile: (404) 846-4769
S-1
56
ALUMAX MILL PRODUCTS, INC., as Lessee
By /s/ Marc Crown
-------------------------------------
Marc Crown
Its Assistant Treasurer
Address for Notices:
c/o Alumax Inc.
3424 Peachtree Road, N.E.
Suite 2100
Atlanta, Georgia 30326
Attention: Assistant Treasurer
Facsimile No: 404-846-4657
with a copy to:
Alumax Inc.
3424 Peachtree Road, N.E.
Suite 2100
Atlanta, Georgia 30326
Attention: Senior Vice President and
General Counsel
Facsimile: (404) 846-4769
S-2
57
BMO LEASING (U.S.), INC., as Agent Lessor
and as a Lessor
By /s/ Ernest C. Cechetto
--------------------------------------
Ernest C. Cechetto
Its Managing Director
Addresses for Notices:
111 West Monroe Street
Chicago, Illinois 60603
Attention: Terri Perez-Ford
Facsimile: (312) 750-3827
Lending Office:
111 West Monroe Street
Chicago, Illinois 60603
S-3
58
BANK OF MONTREAL, as Administrative
Agent and as a Lender
By /s/ Ernest C. Cechetto
--------------------------------
Ernest C. Cechetto
Its Managing Director
Addresses for Notices:
115 South LaSalle Street
Chicago, Illinois 60603
Attention: Terri Perez-Ford
Facsimile: (312) 750-3827
Lending Office:
115 South LaSalle Street
Chicago, Illinois 60603
S-4
59
SCHEDULE I
TO PARTICIPATION AGREEMENT
COMMITMENTS
COMMITMENT
PARTICIPANT COMMITMENT PERCENTAGE
LENDERS
Bank of Montreal $81,929,093.51 84.50%
LESSORS
BMO Leasing (U.S.), Inc. $15,028,413.75 15.50%
TOTAL $96,957,507.26 100%
I-1
60
SCHEDULE II
TO PARTICIPATION AGREEMENT
Notice Information, Wire Instructions and Funding Offices, Lessee,
Administrative Agent, Lessors, Lenders and Guarantor:
AGENT LESSOR: LESSEE AND GUARANTOR:
BMO LEASING (U.S.), INC. ALUMAX INC.
311 West Monroe Street 3424 Peachtree Road, N.E.
Chicago, Illinois 60603 Suite 2100
Atlanta, Georgia 30326
Attention: Terri Perez-Ford
Facsimile No.: (312) 750-3827 Attention:
-------------------
Wire Transfer Instructions: Facsimile No.: (404) 846-4541
Bank: Harris Trust and Savings Bank
ABA Number: 071-000-288 Wire Transfer Instructions:
Account Name: BMO Leasing Bank: Chase Manhatten Bank, New York
Account Number: 1814165 ABA Number: 021000021
Ref: Alumax Mill Products, Inc. - Account Name: Alumax Inc.
Synthetic Lease Account Number: 9101428028
Ref:
------------------------------------
LENDERS AND ADMINISTRATIVE AGENT:
BANK OF MONTREAL
115 South LaSalle Street
Chicago, Illinois 60603
Attention: Terri Perez-Ford
Facsimile No.: (312) 750-3827
Wire Transfer Instructions:
Bank: Harris Bank
ABA Number: 071-000-288
Account Name: Bank of Montreal
Account Number 124-8566
Ref: Alumna Mill Products, Inc. -
Synthetic Lease
II-1
61
SCHEDULE III
SUBSIDIARIES
THE COMPANY'S SUBSIDIARIES ARE AS FOLLOWS:
RESTRICTED SUBSIDIARIES:
Percentage of Voting
Stock or Other Equity
Name of Jurisdiction of Interest Owned Directly
Subsidiary Organization By The Company
- ---------- --------------- -----------------------
Alumax Inc. Nevada 100%
Alumax Aluminum Corporation Delaware 100%
Alumax Astechnology, Inc. Delaware 100%
Alumax Becancour, Inc. Delaware 100%
Alumax Employee Services, Inc. Delaware 100%
Alumax Engineered Metal Processes, Inc. Delaware 100%
Alumax Extrusions, Inc. Pennsylvania 100%
Alumax Extrusions, Inc. New York 100%
Alumax Foil Industrial Redevelopment Corp. Missouri 100%
Alumax Foils, Inc. Delaware 100%
Alumax International Company Nevada 100%
Alumax Japan, Inc. Delaware 100%
Alumax of Maryland, Inc. Delaware 100%
Alumax Materials Management, Inc. Delaware 100%
Alumax Mill Products, Inc. Delaware 100%
Alumax Primary Aluminum Corporation Delaware 100%
Alumax Quebec, Inc. Wyoming 100%
Alumax Remelt Corporation Delaware 100%
Alumax Retiree Services, Inc. Delaware 100%
Alumax 6100 South Broadway
Redevelopment Corporation Missouri 100%
Alumax of South Carolina, Inc. Delaware 100%
Alumax Technical Center, Inc. Delaware 100%
Alumax Technical Services, Inc. Delaware 100%
Alumax Technology Corporation Delaware 100%
Alumax Warehouse Corporation Delaware 100%
Alumax of Washington, Inc. Delaware 100%
Alumet Corporation Delaware 100%
Eastalco Aluminum Company Delaware 100%
Hillyard Aluminum Recovery Corporation Delaware 100%
Intalco Aluminum Corporation Delaware 100%
Kawneer Company, Inc. Delaware 100%
Kawneer Europe, Inc. Delaware 100%
Kawneer France, Inc. Delaware 100%
Kawneer Germany, Inc. Delaware 100%
Kawneer Polska Sp. zo.o. Poland 100%
Mt. Holly Plantation, Inc. Delaware 100%
Murphy Properties, Inc. Delaware 100%
Alumax Asia Limited Hong Kong 100%
Alumax Asia Pacific Pty. Limited Australia 100%
Alumax de Mexico, S.A. de C.V. Mexico 100%
62
Percentage of Voting
Stock or Other Equity
Name of Jurisdiction of Interest Owned Directly
Subsidiary Organization By The Company
---------- --------------- -----------------------
Alumax Extrusions Australia Pty. Limited Australia 100%
Alumax Extrusions B.V. The Netherlands 100%
Alumax Extrusions Limited United Kingdom 100%
Alumax Holdings B.V. The Netherlands 100%
Alumax Holdings de Mexico, S.A. de C.V. Mexico 100%
Alumax Extrusions Mexico, S.A. de C.V. Mexico 100%
Comercializadora Alumax Extrusions
Mexico, S.A. de C.V. Mexico 100%
Alumax Holdings S.A. France 100%
Alumax Polska Sp. zo.o. Poland 100%
Alumax Recycling B.V. The Netherlands 100%
Alumax S.A. Spain 100%
Alumax U.K. Limited United Kingdom 100%
Amax Holdings Australia Limited Australia 100%
Amax Resources Australia Limited Australia 100%
Asesoria Mexicana Empresarial, S.A. de C.V. Mexico 100%
Intalco Aluminum Company, Ltd. Alberta, Canada 100%
Kawneer Deutschland G.m.b.H. Germany 100%
Kawneer Company Canada Limited Ontario, Canada 100%
Kawneer Europe B.V. The Netherlands 100%
Kawneer France S. A. France 100%
Kawneer Installations Limited Ontario, Canada 100%
Kawneer Maroc S.A. Morocco 100%
Kawneer U.K. Limited United Kingdom 100%
SUBSIDIARIES (OTHER THAN RESTRICTED SUBSIDIARIES):
Percentage of Voting
Stock or Other Equity
Name of Jurisdiction of Interest Owned Directly
Subsidiary Organization By The Company
---------- --------------- -----------------------
Alamo Resources Corporation Delaware 100%
Alumax PD Holdings Pte. Ltd. Singapore 50%
Aluminerie Lauralco, Inc. Delaware 100%
Amax Asia, Inc. Delaware 100%
Canalco, Inc. Delaware 100%
Honduras-Rosario Mining Company Delaware 100%
Lauralco Quebec, Inc. Delaware 100%
Lauralco Superieur, Inc. Delaware 100%
Lauralco Trois-Rivieres, Inc. Delaware 100%
Rosario Mining of Nicaragua, Inc. Delaware 100%
Rosario Resources Corporation New York 100%
The Durango Corporation Delaware 100%
The Fresnillo Company New York 100%
Yunnan Xinmeilu Aluminum Foil Co., Ltd. China 56%
63
SCHEDULE IV
TO PARTICIPATION AGREEMENT
INDEBTEDNESS IN EXCESS OF $5,000,000
OF COMPANY AND RESTRICTED SUBSIDIARIES
OUTSTANDING AT NOVEMBER 25, 1997
I. INDEBTEDNESS
1. ALUMAX MILL PRODUCTS, INC. TEXARKANA FACILITY LEVERAGED LEASE FINANCING
Lease Agreement dated as of November 25, 1986, between Connecticut
National Bank, as Owner Trustee for the benefit of U.S. West Capital
Corporation under an Owner Trust Agreement dated as of November 25,
1986, and Alumax Mill Products, Inc.
Guaranty of Alumax Inc. dated as of July 30, 1993, Re: Obligations of
Alumax Mill Products, Inc. Amended and Restated Reimbursement Agreement
dated as of July 5, 1995, between Alumax Inc. and Union Bank of
Switzerland, New York Branch.
* To be cancelled upon the Texarkana Restructuring (November 25, 1997)
2. ALUMAX INC. AMENDED AND RESTATED CREDIT AGREEMENT
U.S. $800,000,000 Revolving Credit Agreement dated as of May 19, 1995,
and as amended by the First Amendment to Credit Agreement, dated as of
May 30, 1997, and the Second Amendment dated October 9, 1997, among
Alumax Inc., The Banks Signatory Thereto, Royal Bank of Canada, as
Agent, Arranger, and Letter of Credit Issuer, and Canadian Imperial
Bank of Commerce, as Administrative Agent.
11/25
-----
Current Percent: N/A
Current Balance: $410,000,000
3. $9,880,000 FREDERICK COUNTY, MARYLAND, ECONOMIC DEVELOPMENT REVENUE
REFUNDING BONDS, SERIES 1992 (ALUMAX OF MARYLAND, INC. PROJECT)
Loan Agreement dated January 1, 1992, by and between Alumax of
Maryland, Inc. and County Commissioners of Frederick County.
Current Percent: 7.25%
Current Balance: $9,880,000
1
64
4. CITY OF YANKTON, SOUTH DAKOTA, $9,000,000 PRINCIPAL AMOUNT OF
INDUSTRIAL DEVELOPMENT REFUNDING REVENUE BONDS, SERIES A (ALUMAX
PROJECT)
Loan Agreement dated May 21, 1997, by and between City of Yankton,
South Dakota and Alumax Extrusions, Inc., Alumax Project Series 1997.
Guaranty Agreement dated May 21, 1997, executed by Alumax Inc. in favor
of The First National Bank of Chicago, as Trustee.
Current Percent: 4.00%
Current Balance: $9,000,000
5. PLANNED INDUSTRIAL EXPANSION AUTHORITY OF THE CITY OF ST. LOUIS
$7,500,000 INDUSTRIAL DEVELOPMENT REFUNDING REVENUE BONDS, SERIES 1992
(ALUMAX FOILS, INC. PROJECT)
Amended and Restated Lease Agreement between Planned Industrial
Expansion Authority of the City of St. Louis and Alumax 6100 South
Broadway Redevelopment Corporation dated as of June 1, 1992.
Current Percent: 3.7955%
Current Balance: $6,835,000
6. DEVELOPMENT AUTHORITY OF GWINNETT COUNTY $5,250,000 INDUSTRIAL
DEVELOPMENT REVENUE BONDS, SERIES 1984 (KAWNEER COMPANY, INC. PROJECT)
Loan Agreement dated as of June 1, 1984, by and between the Development
Authority of Gwinnett County, Georgia, and Kawneer Company, Inc.
Guaranty Agreement dated as of June 1, 1984, executed by Alumax Inc. in
favor of SunTrust Bank, as Trustee.
Guaranty Agreement dated as of June 1, 1984, executed by Alumax Inc. in
favor of Bankers Trust Company.
Current Percent: 9.5%
Current Balance: $5,250,000
2
65
7. $27,450,000 BERKELEY COUNTY, SOUTH CAROLINA POLLUTION CONTROL REFUNDING
REVENUE BONDS (ALUMAX PROJECT) SERIES 1996
Loan Agreement dated September 1, 1996, by and between Berkeley County,
South Carolina and Alumax of South Carolina, Inc., relating to
Pollution Control Refunding Revenue Bonds Series 1996.
Guaranty Agreement dated September 1, 1996, executed by Alumax Inc. in
favor of The Bank of New York, as Trustee.
Current Percent: 4.00%
Current Balance: $27,450,000
8. LETTERS OF CREDIT
Bank Maturity Date Amount
---- ------------- ------
Royal Bank of Canada 02/27/98 $24,457,000
Commerzbank 03/01/98 $10,000,000
Fuji Bank 04/30/98 $14,569,000
Credit Lyonnais* 12/30/97 $44,767,049
PNC Bank 09/15/98 $ 6,969,777
Royal Bank of Canada 09/18/98 $27,901,233
Union Bank of Switzerland* 12/31/97 $39,000,000
Bank of America 05/20/98 $ 9,147,946
* To be cancelled upon the Texarkana Restructuring (November 25, 1997)
9. GUARANTIES
Guaranty dated August 20, 1996, on behalf of Alumax Materials
Management, Inc. in favor of J. Aron & Co. in an amount not to exceed
$6,000,000.
Guaranty dated July 15, 1996, on behalf of Alumax Materials Management,
Inc. in favor of AIG Trading Corp. in an amount not to exceed
$6,000,000.
Guaranty dated October 30, 1996, on behalf of Alumax Materials
Management, Inc. in favor of Morgan Guaranty Trust Co. in an amount not
to exceed $6,000,000.
Guaranty dated June 5, 1996, on behalf of Alumax Materials Management,
Inc. in favor of Morgan Stanley & Co. International Limited in an
amount not to exceed $6,000,000.
3
66
Guaranty dated April 26, 1993, on behalf of Intalco Aluminum
Corporation in favor of Washington Department of Ecology in the amount
of $12,391,500.
Guaranty dated May 23, 1997, on behalf of Alumax Materials Management,
Inc. in favor of Prudential-Bache (International) Limited in an amount
not to exceed $6,000,000.
Guaranty dated September 20, 1997, on behalf of Alumax Materials
Management, Inc. in favor of Lehman Brothers, Inc. in an amount not to
exceed $6,000,000.
Guaranty dated September 4, 1997, on behalf of Alumax of South
Carolina, Inc. in favor of South Carolina Public Service Authority
securing payment of power charges at the Mt. Holly facility.
Guaranty dated October 1, 1995, on behalf of Intalco Aluminum
Corporation in favor of British Columbia Power Exchange Corporation
securing payment of power charges at the Intalco facility.
Guaranty dated February 1, 1990, on behalf of Aluminerie Lauralco,
Inc., in favor of Hydro Quebec, securing payment of power charges at
the Deschambault facility.
II. MATERIAL LIENS
ALUMAX MILL PRODUCTS, INC. TEXARKANA FACILITY LEVERAGE LEASE FINANCING
A Deed of Trust (With Security Agreement) dated as of November 25,
1986, which was given as part of the Agreement referenced in Schedule
I, Indebtedness, Item 1, by Alumax Mill Products, Inc. in favor of
Gilman N. Gauvin, as Trustee for the benefit of The Connecticut
National Bank, was executed in connection with the conveyance of a
security interest in the land at the Texarkana facility.
* To be cancelled upon the Texarkana Restructuring (November 25, 1997)
4
67
SCHEDULE V
TO PARTICIPATION AGREEMENT
LITIGATION
None.
68
EXHIBIT A-1
TO PARTICIPATION AGREEMENT
FORM OF LEGAL OPINION OF
R.P. WOLF, ESQ.
November 25, 1997
To the Participants, Administrative
Agent and Agent Lessor party to
the Participation Agreement
referred to below
Ladies and Gentlemen:
I am Senior Vice President and General Counsel of Alumax Inc., a
Delaware corporation (the "Company"), and in such capacity have overseen and
participated in the provision of legal advice and assistance to the Company and
Alumax Mill Products, Inc., a Delaware corporation and a wholly owned subsidiary
of the Company (the "Lessee"), in connection with the negotiation of and the
closing of the transactions contemplated by (i) the Participation Agreement (the
"Participation Agreement"), dated as of November 25, 1997, among the Lessee, the
Company, Agent Lessor, Lessors, Lenders, the Administrative Agent and the
Arranger and (ii) each of the other Operative Documents. Terms used herein and
not defined shall have their respective defined meanings as set forth in
Appendix A to the Participation Agreement.
In rendering the opinions expressed below, I have examined originals,
conformed copies, or copies otherwise identified to my satisfaction of such
corporate records, agreements, and instruments of the Company and Lessee, such
certificates of public officials and of officers, employees, and agents of the
Company and Lessee and such other agreements and documents as I have deemed
necessary for the purpose of expressing the opinions herein. Though I have
examined such matters of law as I deemed necessary for the purpose of expressing
the opinions herein, please note that with respect to the opinion expressed in
Paragraph 2 below and the incorporation of the term "applicable" therein, my
opinion is limited to a review of only those laws and regulations that, based
upon my review of the Operative Documents, I have considered to be applicable to
the transactions contemplated thereby. Also, for purposes of the opinion
expressed in Paragraph 1 below as to the due qualification to transact business
as a foreign corporation in certain jurisdictions, I have relied solely upon a
review of a certificate of the Secretary of State (or other similar official)
of each such jurisdiction.
For purposes of my opinion expressed in Paragraph 2 hereof, I have not
made any independent review or investigation of any agreements or instruments to
which the Lessee or
69
Company is bound, except I have reviewed or caused to be reviewed those
agreements and instruments listed on Schedule I hereto (hereinafter referred to
as "Material Agreements"), and such opinion is based upon the audited
consolidated financial statements of the Company as at and for the year ended
December 31, 1996, without giving effect to any obligations incurred under the
Operative Documents. Schedule I sets forth all agreements and instruments
entered into by the Company or Lessee and deemed by the Company to be "material
contracts" of the Company under item 601(b)(10)(i) and (ii) of Regulation S-K
("Regulation S-K") promulgated by the Securities and Exchange Commission (the
"Commission") or otherwise entered into by the Company or Lessee and filed by
the Company with the Commission as an exhibit under Item 601(b)(4) of
Regulation S-K. Furthermore, for purposes of my opinion expressed in Paragraph 3
hereof, I have not examined plaintiff or defendant indexes in any federal, state
or other court or any other tribunal.
During the course of all such examinations, I have assumed (i) the
genuineness of all signatures other than those of the Company and Lessee on the
Operative Documents, (ii) the authenticity of all documents submitted to me as
originals, (iii) the conformity to the original documents of all documents
submitted to me as certified, conformed, facsimile, or photographic copies, and
(iv) that certificates and telephonic and telecopy confirmations given by public
officials have been properly given and are accurate. I have further assumed,
except where this opinion expressly addresses such matters as to the Company and
Lessee, (i) the power and authority of all parties to enter into the
transactions contemplated by the Operative Documents and (ii) the due
authorization and valid execution and delivery by such parties of the agreements
and instruments necessary in connection with such transactions.
Based upon and subject to the foregoing and subject to the
qualifications set forth herein, I am of the opinion that:
1. The Company has the necessary corporate power to execute
and deliver the Participation Agreement and Guaranty and to perform its
obligations thereunder. The Lessee has the necessary corporate power to
execute and deliver the Participation Agreement and other Operative
Documents and to perform its obligations thereunder. The Company is
duly qualified to transact business in all jurisdictions where the
failure to qualify would have a Material Adverse Effect. The Lessee is
duly qualified to transact business in the State of Texas and in all
other jurisdictions, where the failure to qualify would have a Material
Adverse Effect.
2. The execution and delivery by the Company and Lessee of the
Operative Documents to which they are a party and the performance by
the Company and Lessee of their respective obligations under such
Operative Documents (i) do not and will not, to my knowledge, violate
(a) any provision of applicable law or regulation or (b) any order or
decree known to me by which the Company or Lessee, or any of their
respective Company Properties, may be bound, which in either case (a)
or (b) would result in a Material Adverse Effect; (ii) do not and will
not violate any provision of the charter or by-laws of the Company or
Lessee; and (iii) do not
A-1-2
70
and will not result in the breach of, or constitute a default or
require any consent under, or result in the creation of any Lien upon,
any of the properties, revenues, or assets of the Company or Lessee
under any Material Agreement other than the US West Agreements.
3. Except as to the matters disclosed in Section 8.2(j) of the
Participation Agreement, reflected in the Company's filings with the
Commission on Form 10-K for the year ended December 31, 1996 or on Form
10-Q for the quarters ended March 31, June 30 and September 30, 1997 or
reflected on Schedule V to the Participation Agreement, there are no
legal or arbitral proceedings, and no proceedings by or before any
governmental or regulatory authority or agency, pending or threatened
against or affecting the Company, any of its Restricted Subsidiaries or
Lessee, or any of their respective properties known to me the outcome
of which I have reasonable cause to believe could be expected to have a
Material Adverse Effect.
This opinion is limited to the matters stated herein and no opinion is
implied or may be inferred beyond the matters expressly stated. Opinions
rendered herein are as of the date hereof, and I make no undertaking and
expressly disclaim any duty to supplement such opinions if, after the date
hereof, facts or circumstances come to my attention or changes in the law occur
which could affect such opinions.
In rendering the foregoing opinions, I am expressing no opinion as to
matters of law other than the General Corporation Law of the State of Delaware
and the federal laws of the United States of America. I am admitted to practice
law only in the Commonwealth of Virginia and before certain federal courts. I am
not licensed to practice law in the State of Texas, the State of Delaware, or
the State of New York.
This opinion is rendered solely for the benefit of the Participants,
the Administrative Agent, the Agent Lessor, their prospective or actual
successors and assigns, and their legal advisors and accountants and only with
respect to the transactions described herein. No further distribution or use of
this opinion is authorized and this opinion may not be quoted in full or in part
or otherwise referred to in any financial statements, nor may it be filed with
or furnished to any governmental agency (other than those examining the
Participants, the Administrative Agent, Agent Lessor, or their successors and
assigns) or other party without the prior written consent of the undersigned.
Very truly yours,
R. P. Wolf
Enclosures: Schedule I
A-1-3
71
SCHEDULE I - OPINION LETTER OF R. P. WOLF
TO FINANCIAL INSTITUTIONS PARTY TO THE FIRST AMENDMENT
MATERIAL AGREEMENTS OF ALUMAX INC.
AND ITS RESTRICTED SUBSIDIARIES
1. Bridge Loan Agreement, dated as of January 17, 1996, among Alumax
Inc., The Chase Manhattan Bank, N.A., as Syndication Agent, Royal Bank of
Canada, as Documentation and Administrative Agent, and the Bank's signatory
thereto.
2. Amended and Restated Credit Agreement, dated as of October 9, 1997,
by and among Alumax Inc., Royal Bank of Canada, as Agent, Arranger and Letter of
Credit Issuer and Canadian Imperial Bank of Commerce, as Administrative Agent.
3. Lease Agreement, dated as of November 25, 1986, by and between
Connecticut National Bank as Owner Trustee for the benefit of U.S. West Capital
Corporation under an Owner Trust Agreement, dated as of November 25, 1986, and
Alumax Mill Products, Inc. (US West Agreements).
4. Facility Purchase Agreement, executed and effective as of September
18, 1996, among Alumax Mill Products, Inc., Fleet National Bank and U.S. West
Financial Services, Inc. (US West Agreements).
5. Purchase Agreement, dated as of June 24, 1996, between Euramax
International plc and Alumax Inc.
6. Acquisition Agreement, dated as of January 26, 1996, between Alumax
of South Carolina, Inc. and Glencore Primary Aluminum Company, LLC.
7. Stock Purchase Agreement by and among the Shareholders of Cressona
Aluminum Company, as Sellers, and Alumax Inc., as Purchaser, dated October 6,
1995.
8. Acquisition Agreement among Eastalco Aluminum AluTrlinum Company,
Eastalco Venture, Alumax of Maryland, Inc. and Alumet Corporation, Atmos
(U.S.A.) Incorporated and Mitalco Inc., dated March 31, 1995.
9. Restated Sales Agreement, dated as of January 1, 1986, as amended
and supplemented as of April 8, 1992, and April 9, 1992, by and between Alcoa of
Australia Limited and Alumax Inc.
10. Power Sales Agreement, dated as of October 1, 1995, between British
Columbia Power Exchange Corporation and Intalco Aluminum Corporation.
11. Power Sales Agreement, dated September 28, 1995, as amended,
between Intalco Aluminum Corporation and Bonneville Power Administration.
72
12. Electric Service Agreement, dated as of November 11, 1994, as
amended October 10, 1997, by and between Eastalco Aluminum Company and The
Potomac Edison Company.
13. South Carolina Public Service Authority Service Agreement for Large
Power Electric Service, made and entered in July 1, 1997, by and between the
South Carolina Public Service Authority and Alumax of South Carolina, Inc.
14. Rights Agreement, dated as of February 22, 1996, between Alumax
Inc. (the "Company") and Chemical Mellon Shareholder Services, L.L.C., as Rights
Agent.
-2-
73
EXHIBIT A-2
TO PARTICIPATION AGREEMENT
FORM OF LEGAL OPTION OF
IRELL & MANELLA LLP
November 25, 1997
To the Administrative Agent,
Agent Lessor and Participants to the
Participation Agreement referred to below.
Dear Sirs:
In connection with the Participation Agreement, dated as of November
25, 1997 (the "Participation Agreement"), among Alumax Mill Products, Inc., a
Delaware corporation (the "Lessee"), Alumax Inc., a Delaware corporation (the
"Guarantor"), BMO Leasing (U.S.), Inc., as Agent Lessor and Lessor and Bank of
Montreal as Administrative Agent, Lender and Arranger, we, as counsel for the
Lessee and Guarantor, have examined such corporate records, certificates and
other documents, and such questions of law, as we have considered necessary or
appropriate for the purposes of this opinion, including, but not limited to, the
following:
A. the Participation Agreement;
B. the Master Lease;
C. the Loan Agreement;
D. each Note;
E. the Assignment of Lease and Rent;
F. the Deed;
G. the Lessor Mortgage;
H. the Guaranty; and
I. the Ground Lease.
74
November 25, 1997
Page 2
Terms used herein and not defined shall have their respective defined meanings
as set forth in Appendix A to the Participation Agreement.
In all of our examinations of documents, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as copies and the
authenticity of the originals of such latter documents, the lack of undisclosed
modifications or amendments to any documents, and the accuracy of the factual
statements contained in all documents reviewed by us. With your permission, we
have relied as to certain matters on information obtained from public officials,
officers of the Guarantor and Lessee and other sources believed by us to be
reliable.
On the basis of the foregoing, and in reliance thereon, and subject to
the limitations, qualifications and exceptions set forth herein, we are of the
opinion that:
(1) The Guarantor is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware.
(2) The Lessee is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware.
(3) The execution and delivery by Guarantor of those Operative
Documents to which Guarantor is a party have been duly and validly
authorized by all necessary corporate action by Guarantor.
(4) The execution and delivery by Lessee of those Operative
Documents to which Lessee is a party have been duly and validly
authorized by all necessary corporate action by Lessee.
(5) Each Operative Document to which Guarantor is a party has
been executed and delivered by Guarantor and constitutes a legal and
binding obligation of Guarantor, enforceable against Guarantor in
accordance with the respective terms thereof.
(6) Each Operative Document to which Lessee is a party has
been duly executed and delivered by Lessee (with respect to the Ground
Lease, to the extent the Delaware General Corporation Law is applicable
to the due execution and delivery thereof) and each such Operative
Document (other than the Ground Lease) constitutes a legal and binding
obligation of Lessee, enforceable against Lessee in accordance with the
respective terms thereof.
75
November 25, 1997
Page 3
(7) There are no regulatory consents, authorizations,
approvals or filings required to be obtained or made by the Lessee or
Guarantor under the Federal laws of the United States, the laws of the
State of New York or the General Corporation Law of the State of
Delaware for the execution and delivery of the Operative Documents by
the Lessee and Guarantor on the date hereof pursuant thereto, or for
the performance by the Lessee and Guarantor of their respective
obligations under the Operative Documents.
The opinions set forth in Paragraphs 5 and 6 above are subject to and
limited by the following:
a. The effect of bankruptcy, insolvency, reorganization,
moratorium and other laws and court decisions of general application (including,
without limitation, laws relating to fraudulent conveyances, preferences and
equitable subordination) and other legal or equitable principles relating to,
limiting or affecting the enforcement of creditors' rights generally.
b. The discretion of any court of competent jurisdiction in
awarding equitable remedies including, but not limited to, specific performance
or injunctive relief.
c. We express no opinion regarding the enforceability of any
(i) rights or remedies involving any real or personal property security for the
obligations of Guarantor or Lessee, and (ii) rights or remedies against Lessee
or Guarantor arising out of, involving or resulting from the characterization of
the obligation of Lessee as other than an obligation to repay money borrowed by
Lessee from Agent Lessor and the Lessors. We note that the enforcement of the
obligations of Lessee and Guarantor may be affected by the existence of real and
personal property security for such obligations.
d. The effects of judicially created rules of public policy
limiting the extent to which indemnity agreements and exculpatory clauses will
be enforced.
We express no opinion as to the laws of any jurisdiction except the
laws of the State of New York and, to the extent specifically referred to
herein, the federal laws of the United States and the General Corporation Law of
the State of Delaware, in each case as in effect on the date hereof. In this
regard, no opinion is expressed as to the enforceability of certain remedies
relating to real property, which are governed by the laws of the State of Texas,
the situs of the Property.
For purposes of our opinion in Paragraphs 5 and 6 above, we have
assumed, with your permission, that the relationship between Lessors (including
Agent Lessor) and
76
November 25, 1997
Page 4
Lessee under the Operative Documents is that of lender and borrower and not that
of lessor and lessee.
In rendering this opinion, to the extent that the obligations of Lessee
and/or Guarantor under the Operative Documents may be dependent upon such
matters, we have assumed that (a) Agent Lessor, the Lessors, the Administrative
Agent and the Lenders have duly and validly executed and delivered each of the
Operative Documents to be executed by them and such agreements are legal, valid
and binding obligations of Agent Lessor, the Lessors, the Administrative Agent
and the Lenders, as the case may be, enforceable against them in accordance with
their respective terms, (b) consideration for the obligations of Lessee and
Guarantor under the Operative Documents has been given by Agent Lessor, the
Lessors, the Administrative Agent and the Lenders, (c) Agent Lessor, the
Lessors, the Administrative Agent and the Lenders are duly qualified and validly
existing under the laws of the jurisdiction of their respective organization and
have obtained, and kept in force at all relevant times, all licenses, permits
and qualifications necessary for them to transact its business, and obtain and
enforce contractual rights, in the State of New York, (d) Agent Lessor, the
Lessors, the Administrative Agent and the Lenders have the power and authority
to deliver and perform the Operative Documents to which they are respectively a
party and have taken all necessary action to authorize the execution, delivery
and performance of each of the Operative Documents to which they are
respectively a party.
This opinion is rendered as of the date hereof, and we make no
undertaking and expressly disclaim any duty to supplement this opinion if, after
the date hereof, facts and circumstances come to our attention or changes in the
law occur which could affect this opinion.
This opinion is rendered solely for the benefit of Agent Lessor, the
Lessors, the Administrative Agent and the Lenders in connection with the
subject transaction, and may not be relied upon for any other purpose. This
opinion may not be furnished to, used, circulated, quoted or referred to by, any
other person without our prior written consent; provided, however that Agent
Lessor, Administrative Agent and any other Lessor or Lender may furnish this
opinion to a financial institution in connection with a proposed assignment of
Agent Lessor's, Administrative Agent's or such Lessor's or Lender's interest or
grant of a participation therein.
Very truly yours,
IRELL & MANELLA LLP
77
EXHIBIT B
(TO PARTICIPATION AGREEMENT)
FORM OF FUNDING REQUEST
November __, 1997
TO: the Agent Lessor and the Administrative Agent, pursuant to the
Participation Agreement (the "Participation Agreement") dated as of
November __, 1997 among the Lessee, the Guarantor, the Agent Lessor,
the Lessors, the Lenders, the Administrative Agent and the Arranger as
the same may be amended, supplemented, amended and restated or
otherwise modified from time to time (capitalized terms used herein
shall have the meanings ascribed thereto in the Participation
Agreement).
FROM: Alumax Mill Products, Inc. ("Lessee")
RE: Acquisition Date
1. This irrevocable Funding Request is hereby delivered by Lessee pursuant
to Section 3.4(a) of the Participation Agreement.
2. The Acquisition Date is scheduled for November 25, 1997.
3. The amount of the Advance is $96,957,507.26.
4. The Loans and Lessor Amounts will be Base Rate Loans/Lessor Amounts.
5. Funds shall be sent by wire transfer as follows:
a. Each Lessor and Lender shall transfer its Commitment Percentage
of $ __________ to the following account of Agent Lessor:
Bank:
ABA Number:
Account Name:
Account Number:
Ref:
Further Credit to:
[amount to be provided by the Lessee]
b. Lessee hereby instructs Agent Lessor to distribute the funds as
follows:
[information to be provided by the Lessee]
78
In connection with such requested Advance, the Lessee hereby represents
and warrants to you as follows:
a. On the Acquisition Date, both immediately before and after
giving effect to the requested Advance and the application of
the proceeds thereof, the statements made by the Lessee and
the Guarantor in Section 8.2 of the Participation Agreement
are true and correct in all material respects, except to the
extent such statements relate solely to an earlier date, in
which case such statements shall have been true and correct in
all material respects on and as of such earlier date.
b. All of the conditions precedent set forth in Article VI of the
Participation Agreement applicable to the Advance have been or
will be satisfied or will be waived on the Acquisition Date.
IN WITNESS WHEREOF, I have signed my name this ____ day of November,
1997.
ALUMAX MILL PRODUCTS, INC.
By:
-------------------------------
Name:
Title:
B-2
79
EXHIBIT C
(TO PARTICIPATION AGREEMENT)
FORM OF INTEREST PERIOD SELECTION/
CONTINUATION/CONVERSION NOTICE
RE: ALUMAX MILL PRODUCTS, INC.
To: Agent Lessor and Administrative Agent
This Interest Period Selection/Continuation/Conversion Notice is
delivered to you pursuant to Section 3.6 of the Participation Agreement
dated as of November_, 1997 (the "Participation Agreement"), among the
Lessee, the Guarantor, the Agent Lessor, the Lessors, the Lenders, the
Administrative Agent and the Arranger as the same may be amended,
supplemented, amended and restated or otherwise modified from time to
time.
Alumax Mill Products, Inc. (the "Lessee") hereby requests that on ____,
19_, all or any portion of the currently outstanding principal amount of the
Loans and Lessor Amounts:
(1) which are currently [Base Rate Loans/Lessor Amounts]
[Eurodollar Loans/Lessor Amounts with an Interest Period ending on_____
___, 19_],
(2) be [continued as] [converted into],
(3) [Base Rate Loans/Lessor Amounts] [Eurodollar Loans/Lessor
Amounts having an Interest Period of ____ months].
Any and all capitalized terms used in this Notice for
Selection/Continuation/ Conversion shall have the meaning ascribed thereto in
the Participation Agreement, unless specifically defined herein.
The Lessee hereby certifies, represents and warrants that no Lease
Default or Lease Event of Default exists or will (after giving effect to the
selection, continuation or conversion requested hereby) exist.
80
The Lessee has caused this notice to be executed and delivered by its
Responsible Officer this ____________ day of ______________, 19___.
ALUMAX MILL PRODUCTS, INC.
By:
------------------------------------
Name:
Title:
C-2
81
EXHIBIT D-1-A
(TO PARTICIPATION AGREEMENT)
FORM OF SECRETARY'S CERTIFICATE
The undersigned, __________________ [Assistant] Secretary of [Name of
Guarantor/Lessee], a Delaware corporation (["Guarantor"]["Lessee"]), pursuant to
the Participation Agreement dated as of November 25, 1997 (the "Participation
Agreement"), among the Lessee, the Guarantor, the Agent Lessor, the Lessors, the
Lenders, the Administrative Agent and the Arranger as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time, does
hereby certify as follows (capitalized terms used herein shall have the meanings
ascribed thereto in the Participation Agreement):
1. Attached hereto as Exhibit A is a true, correct and
complete copy of [Guarantor's/Lessee's] Restated Certificate of
Incorporation, as amended, and in effect on the date hereof, certified
by the Secretary of State of the State of Delaware.
2. Attached hereto as Exhibit B is a true, correct and
complete copy of [Guarantor's/Lessee's] By-Laws, as amended, and in
effect on the date hereof, and such by-laws have been in full force and
effect since ______________, 19_ without modification or amendment.
IN WITNESS WHEREOF, I have signed my name this day ____________ of
____________, 199___.
------------------------------------------
[Assistant] Secretary as aforesaid
I, __________________, [Vice] President of [Name of Guarantor/Lessee],
hereby certify that _______________________________ is on the date hereof the
duly elected, qualified and acting [Assistant] Secretary of [Name of
Guarantor/Lessee], and that the signature set forth above is such person's true
and correct signature.
Dated:____________, 199_____
---------------------------------------
[Vice] President as aforesaid
82
EXHIBIT D-1-B
(TO PARTICIPATION AGREEMENT)
FORM OF SECRETARY'S CERTIFICATE
The undersigned, _______________ [Assistant] Secretary of [Name of
Guarantor/Lessee], a Delaware corporation (["Guarantor"]["Lessee"]), pursuant to
the Participation Agreement dated as of November 25, 1997 (the "Participation
Agreement"), among the Lessee, the Guarantor, the Agent Lessor, the Lessors, the
Lenders, the Administrative Agent and the Arranger as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time, does
hereby certify that (capitalized terms used herein shall have the meanings
ascribed thereto in the Participation Agreement) attached hereto as Exhibit C
are true, correct and complete copies of all resolutions adopted by the Board of
Directors of [Guarantor/Lessee] relating to the Participation Agreement and the
other Operative Documents to which [Guarantor/Lessee] is a party, which
resolutions have not been amended or rescinded and are in full force and effect
on the date hereof.
IN WITNESS WHEREOF, I have signed my name this day ___________ of
____________, 199_.
---------------------------------------
[Assistant] Secretary as aforesaid
I, ___________________, [Vice] President of [Name of Guarantor/Lessee],
hereby certify that __________________________________ is on the date hereof
the duly elected, qualified and acting [Assistant] Secretary of [Name of
Guarantor/Lessee], and that the signature set forth above is such person's true
and correct signature.
Dated:________________ , 199___
---------------------------------------
[Vice] President as aforesaid
83
EXHIBIT D-1-C
(TO PARTICIPATION AGREEMENT)
FORM OF SECRETARY'S CERTIFICATE
The undersigned, ________________ [Assistant] Secretary of [Name of
Guarantor/Lessee], a Delaware corporation (["Guarantor"]["Lessee"]), pursuant to
the Participation Agreement dated as of November 25, 1997 (the "Participation
Agreement"), among the Lessee, the Guarantor, the Agent Lessor, the Lessors, the
Lenders, the Administrative Agent and the Arranger as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time, does
hereby certify that (capitalized terms used herein shall have the meanings
ascribed thereto in the Participation Agreement) the following individuals on
the date hereof are duly appointed, qualified and authorized pursuant to the
resolutions referred to in paragraph 3 above to execute and deliver the
Operative Documents and any other documents to be executed on behalf of
[Guarantor/Lessee] in connection with the transactions contemplated by the
Participation Agreement, and the signature of such individuals appearing on such
documents are the respective genuine signatures of each such person:
NAME SIGNATURE
------------------ -----------------------
------------------ -----------------------
IN WITNESS WHEREOF, I have signed my name this day __________ of
____________, 199_____.
--------------------------------------------
[Assistant] Secretary as aforesaid
I, ______________________, [Vice] President of [Name of
Guarantor/Lessee], hereby certify that __________________________ is on the date
hereof the duly elected, qualified and acting [Assistant] Secretary of [Name of
Guarantor/Lessee], and that the signature set forth above is such person's true
and correct signature.
Dated:___________, 199___
--------------------------------------------
[Vice] President as aforesaid
84
EXHIBIT D-2
(TO PARTICIPATION AGREEMENT)
FORM OF RESPONSIBLE OFFICER'S CERTIFICATE
Pursuant to the Participation Agreement dated as of November 25, 1997
(the "Participation Agreement"), among the Lessee, the Guarantor, the Agent
Lessor, the Lessors, the Lenders, the Administrative Agent and the Arranger as
the same may be amended, supplemented, amended and restated or otherwise
modified from time to time, I, [name of Responsible Officer], [position of
Responsible Officer] of [Guarantor/Lessee] (the ["Guarantor"/"Lessee"]), do
hereby certify as follows (capitalized terms used herein shall have the meanings
ascribed thereto in the Participation Agreement):
1. To my knowledge, the representations and warranties of the
[Guarantor/Lessee] contained in the Participation Agreement and other Operative
Documents to which it is a party are true, correct and complete in all material
respects on and as of the date hereof with the same effect as if such
representations and warranties had been made on and as of the date hereof,
except to the extent such statements relate solely to an earlier date, in which
case such statements shall have been true and correct in all material respects
on and as of such earlier date.
2. To my knowledge, no Lease Default or Lease Event of Default has
occurred and is continuing under any Operative Document to which the
[Guarantor/Lessee] is a party.
3. To my knowledge, each Operative Document to which the
[Guarantor/Lessee] is a party is in full force and effect with respect to it.
4. The [Guarantor/Lessee] has duly performed and complied with all
conditions contained in the Participation Agreement or in any other Operative
Document required to be performed or complied with by it on or prior to the date
hereof, where failure to perform such obligation shall have a Material Adverse
Effect.
IN WITNESS WHEREOF, I have signed my name this _____ day of
___________, 199___ and certify that I am the [position of Responsible Officer]
of the [Guarantor/Lessee].
[GUARANTOR/LESSEE]
By:
------------------------------
Name:
Title:
85
EXHIBIT E
(TO PARTICIPATION AGREEMENT)
[INTENTIONALLY OMITTED]
86
EXHIBIT F
(TO PARTICIPATION AGREEMENT)
FORM OF ASSIGNMENT AGREEMENT
To: Alumax Mill Products, Inc., as the Lessee
BMO Leasing (U.S.), Inc., as Agent Lessor
Bank of Montreal, as Administrative Agent
Reference is made to Section 12.1 of the Participation Agreement dated
as of November 25, 1997 (the "Participation Agreement"), among the Lessee, the
Guarantor, the Agent Lessor, the Lessors, the Lenders, the Administrative Agent
and the Arranger as the same may be amended, supplemented, amended and restated
or otherwise modified from time to time (the "Participation Agreement").
Unless otherwise defined herein, capitalized terms used herein shall have the
meanings given thereto in the Participation Agreement.
[Name of assigning Participant] (the "Assignor") and [Name of Eligible
Lender Assignee/Eligible Lessor Assignee] hereby agree as follows:
1. The Assignor hereby sells and assigns, without recourse, to
the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, a [____]% interest in and to all the Assignor's rights and
obligations under the Operative Documents as of the Effective Date (as
defined below) (including, without limitation, such percentage interest
in the [Lender] [Lessor] Commitment of the Assignor on the Effective
Date and such percentage interest in each [Loan] [Lessor Amounts] owing
to the Assignor outstanding on the Effective Date together with such
percentage interest in all unpaid [interest] [Yield] and fees
(excluding those fees under Section 4.4 of the Participation Agreement)
accrued to the Effective Date).
2. The Assignor (a) represents and warrants that as of the
date hereof its [Lender] [Lessor] Commitment (without giving effect to
assignments thereof which have not yet become effective) is
$[___________ ], and the outstanding aggregate principal balance of its
[Loans] [Lessor Amounts] (without giving effect to assignments thereof
which have not yet become effective) is $ _____________] and (b) makes
no representation or warranty and assumes no responsibility (i) with
respect to any statements, warranties or representations made in or in
connection with any Operative Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of any
Operative Document or any other instrument or document furnished
thereunder or pursuant thereto, except that it represents and warrants
that it is the legal and beneficial owner of the interests being
assigned by it hereunder and that such interests are free and clear of
adverse claims, and (ii) with respect to the financial position of the
Lessee or the Guarantor or the performance or observance by the Lessee
or the Guarantor of any of their respective obligations under any
Operative
87
Document or any other instrument or document furnished thereunder or
pursuant thereto.
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment Agreement; (b) confirms that
it has received a copy of each of the Participation Agreement, the
Lease and the Loan Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 10.1(f) of the
Participation Agreement and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to
enter into this Assignment Agreement; (c) agrees that it will,
independently and without reliance upon the Administrative Agent, the
Agent Lessor, the Assignor 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 decisions in taking or not taking
action under any Operative Document; (d) appoints and authorizes the
Administrative Agent and the Agent Lessor, as applicable, to take such
action on its behalf and to exercise such powers under the Operative
Documents as are delegated to the Administrative Agent and the Agent
Lessor, as applicable, by the terms thereof, together with such powers
as are reasonably incidental thereto; and (e) agrees that it will
perform in accordance with its terms all the obligations which by the
terms of the Operative Documents are required to be performed by it as
a Participant.
4. From and after the Effective Date (a) the Assignee shall be
party to and be bound by the provisions of the Operative Documents as a
[Lender] [Lessor] and, to the extent of its interests assigned by this
Assignment Agreement, have the rights and obligations of a ["Lender"]
["Lessor"] and as a "Participant" thereunder and (b) the Assignor
shall, to the extent of its interests assigned by this Assignment
Agreement, relinquish its rights and be released from its obligations
under the Operative Documents.
5. This Assignment Agreement will be delivered to each of the
Administrative Agent and the Agent Lessor together with a transfer fee
of $3,500 payable by the Assignor or the Assignee to the Administrative
Agent for its own account.
[6. The Assignor shall surrender to the Administrative Agent
its Note or Notes representing the Assignor's interest in and to all
the Assignor's rights and obligations under the Operative Documents,
and the Administrative Agent will (upon execution and delivery thereof
by the Agent Lessor) promptly provide to the Assignor and the Assignee
separate promissory notes in the amount of their respective interests
substantially in the form of the original Note (each such note with a
notation thereon that it is given in substitution for and replacement
of the original Note or any replacement notes thereof).]**
- -------------------
** This Section to apply only if the Assignor is a Lender.
F-2
88
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
8. The effective date of this Assignment Agreement shall be
___________________, 19___ (the "Effective Date").
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed and delivered by their respective duly authorized
officers as of the date first written above.
Adjusted Commitment [ ]
---------------------------
as Assignor
Commitment to make Loans:
$
---------------------
Commitment Percentage: % By:
------ -------------------------
Name:
Commitment to advance Title:
Lessor Amounts:
$
---------------------
Commitment Percentage: %
------
Commitment [ ]
---------------------------
as Assignee
Commitment to make Loans:
$
---------------------
Commitment Percentage: % By:
------ -------------------------
Name:
Commitment to advance Title:
Lessor Amounts:
$
---------------------
Commitment Percentage: %
------
Address for Notices:
-----------------------------
-----------------------------
-----------------------------
Attention:
--------------------
Telecopy ( ) -
--- ----- --------
Telecopy ( ) -
--- ----- --------
F-3
89
Agreed to and Accepted:
ALUMAX MILL PRODUCTS, INC.,
as Lessee
By:
------------------------------
Name:
Title:
BANK OF MONTREAL,
as Administrative Agent
By:
------------------------------
Name:
Title:
BMO LEASING (U.S.), INC.,
as Agent Lessor
By:
------------------------------
Name:
Title:
F-4
90
EXHIBIT G
(TO PARTICIPATION AGREEMENT)
FORM OF LEGAL OPTION OF LOCAL COUNSEL TO LESSEE
November 25, 1997
To the Parties Listed on
Schedule A attached hereto
Re: Alumax Mill Products, Inc. - Lease Financing of Rolling Mill and Related
Equipment
Ladies and Gentlemen:
We have acted as special counsel in the State of Texas (the "State")
for Alumax Mill Products, Inc., a Delaware corporation ("Lessee"), in connection
with the transactions contemplated by that certain Participation Agreement
(herein so called) dated as of November 25, 1997, by and among Lessee, the
Guarantor, the Agent Lessor, the Lessors, the Lenders, the Administrative Agent
and the Arranger (as each of such terms are defined in the Participation
Agreement). Although we are serving as special counsel to Lessee, as to matters
governed by laws other than the State, you are, unless otherwise denoted herein,
relying upon the opinions of separate counsel.
This opinion is rendered to you at the request of Borrower pursuant to
Section 6.1 of the Participation Agreement. Capitalized terms used but not
otherwise defined herein have the respective meanings specified in Appendix A to
the Participation Agreement.
I.
Documents Reviewed
In connection with the opinions contained herein, we have examined and
are familiar with originals of or copies identified to our satisfaction of the
documents listed on Schedule B attached hereto (the "Subject Documents"). In
addition, we have examined and are familiar with such legal matters as we have
deemed necessary for purposes of rendering this opinion.
II.
Opinions
Based solely upon our review of the Subject Documents, and subject to
the qualifications and assumptions set for herein, it is our opinion that:
91
To the Parties Listed on
Schedule A attached hereto
November 25, 1997
Page 2
1. The Ground Lease and, to the extent Texas law is applicable to the
Master Lease, the Master Lease, each constitutes the legal, valid and binding
obligation of the parties thereto and is enforceable against each party in
accordance with the terms thereof.
2. The Deed is in form sufficient under the laws of the State of Texas
to convey all interests in the property described therein intended to be
conveyed thereby, and such instrument, when filed or recorded in the Real
Property Records of Bowie County, Texas (the "Recording Office") will have been
filed or recorded in the appropriate public offices in the State in which such
filing and recording is necessary to convey valid title to the property
described therein to the Agent Lessor.
3. If the transaction contemplated by the Master Lease is characterized
as a lease transaction, the Master Lease is in form sufficient under the laws of
the State of Texas to demise to the Lessee a valid leasehold interest in the
Property. The Master Lease or the Memorandum of Lease, when recorded with the
Recording Office, will have been filed or recorded in all public offices in the
State of Texas in which such filing or recording is necessary to provide
constructive notice of the Master Lease to third Persons and to establish of
record the interest of the Agent Lessor thereunder.
4. If the transactions as provided in the Master Lease are
characterized as a loan transaction:
(a) Section 25.2 of the Master Lease is effective to create a
power of sale in favor of the Lessee; and
(b) The Master Lease is in form sufficient under the laws of
the State of Texas to create a valid lien or security interest in favor
of the Agent Lessor, and to secure all the obligations of the Lessee
under the Subject Documents, in the Property. The Master Lease or the
Memorandum of Lease, when recorded with the Recording Office, will have
been filed or recorded in all public offices in the State of Texas in
which such filing or recording is necessary to perfect the lien of the
Agent Lessor thereunder to the extent that the Property constitutes
real estate. The Master Lease provides the Agent Lessor with remedies
customarily obtained by lenders in the State of Texas in connection
with the type of loan and security provided thereby.
5. The Assignment of Lease and Rent is in form sufficient under the
laws of the State of Texas to create a valid lien or security interest in favor
of the Lenders in the collateral described therein, and when recorded with the
Recording Office, will have been filed or recorded in all public offices in the
State of Texas in which such filing or recording is necessary to perfect
92
To the Parties Listed on
Schedule A attached hereto
November 25, 1997
Page 3
the lien of the Lenders thereunder to the extent that such collateral
constitutes real estate. The Assignment of Lease and Rent provides the Lenders
with remedies customarily obtained by lenders in the State of Texas in
connection with the type of loan and security provided for thereby.
6. The law (statutory or otherwise) of the State of Texas does not
require a lienholder to make an election of remedies where such lienholder holds
security interests and liens on both the real and the personal property of a
debtor or to take recourse first or solely against or otherwise exhaust its
remedies against its collateral before otherwise proceeding to enforce against
such debtor the obligations of such debtor.
7. The UCC Financing Statements which are to be recorded or filed
within the State, the forms of which are attached as Schedule C hereto, are in
form sufficient under the laws of the State for filing, or recording, and when
recorded with the Recording Office and the Texas Secretary of State will have
been filed or recorded in all public offices in the State in which such filing
or recording is necessary to perfect the interest of the Agent Lessor in the
collateral described therein, to the extent the same can be perfected by filing
or recording in the State.
8. Assuming that the Agent Lessor is qualified to transact business in
the State of Texas, to the best of our knowledge, neither the execution and
delivery of the Subject Documents, nor the fulfillment of or the compliance with
the provisions thereof by the Agent Lessor results in a violation of, or
contravenes any statute, law, rule, code, ordinance or regulation of the State
of Texas to which the Agent Lessor is subject.
9. It is our opinion that a Texas court in a properly presented case
should apply the laws of the State of Texas to the perfection of the lien and
security interest in the Property and the rights and remedies of the Trustee and
the Agent Lessor with respect to the Property (collectively, the "Remedies
Provisions") as provided in Section 26.8 of the Master Lease. In delivering such
opinion, we are relying in part on Tex.Bus.Comm.Code, ss.35.51(b). Although
no Texas courts have decided a case under Tex.Bus.Comm.Code, ss.35.51(b), we
believe that a Texas court sitting and applying the laws of the State in a
properly presented case should characterize the Master Lease as a "qualified"
transaction with a reasonable relationship to the State of Texas and will uphold
and enforce such choice of law provision. In rendering the opinions set forth
herein, we are expressly assuming, without opining, that the Subject Documents
are enforceable, and that any references in the provisions of the Master Lease
to the other Subject Documents, or to any remedies available to the Trustee or
Agent Lessor under any or all of the Subject Documents, are valid and effective.
We render no opinion, express or implied, as to the effect, if any, of (i) the
effectiveness or enforceability of such remedies or (ii) the validity of any
provisions of any of the Subject Documents which purport to be governed by the
laws of a
93
To the Parties Listed on
Schedule A attached hereto
November 25, 1997
Page 4
jurisdiction other than the State. We render no opinion as to the effect of the
reference to the laws of the State of New York or New York procedures contained
in the Master Lease or any of the other Subject Documents.
You have further requested our opinion as to whether a Texas court in a
properly presented case should apply the laws of the State of New York to the
Subject Documents, except to the extent of the Ground Lease and the Remedies
Provisions of the Master Lease. Each of the remaining Subject Documents is, by
its terms, governed by the laws of the State of New York, and in rendering the
opinions contained herein, we are in no manner expressly or impliedly rendering
opinions as to the laws of the State of New York. We are advised that the
parties have determined based on a series of financing transactions that the
State of New York has a significant relationship to the Subject Documents which
are not the subject of Texas law and that the State of New York has a
significant relationship to the obligations of the Lessee thereunder. Assuming
such determination is correct, we are of the opinion that a Texas court in a
properly presented case should apply the laws of the State of New York to the
Subject Documents except to the extent of the Remedies Provisions of the Master
Lease. This opinion is based in part on Tex.Bus.Comm.Code, ss.35.51(b), although
no Texas courts have decided a case under such statute.
10. Except for the filings and recordings described above, no approval,
consent, or filing or registration with, any governmental authority or
regulatory body in the State of Texas is required to be made or taken in the
State of Texas to establish, protect and preserve title to, interests in, liens
on and security interests in the Property as contemplated by the Subject
Documents, except for UCC continuation statements.
11. Assuming without opining that the transaction contemplated by the
Master Lease is characterized as a loan for federal income tax purposes, except
for federal, state and local franchise, withholding and income taxes, no taxes,
fees or other charges imposed by the State of Texas, Bowie County or any other
local governmental entity are payable by the Agent Lessor or the Lenders solely
as a result of the execution, delivery, recordation or filing (where applicable)
of the Subject Documents and all other instruments delivered in connection with
the transactions contemplated thereby (except for nominal filing or recording
fees payable at the time of filing or recording).
12. Assuming without opining that the transaction contemplated by the
Subject Documents is a loan, and assuming without opining that a court would
find that the laws of the State of Texas would apply to such transaction
notwithstanding the parties' choice of New York law, we believe that a Texas
court sitting and applying the laws of the State in a properly
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November 25, 1997
Page 5
presented case would give effect to the usury savings provisions set forth in
Section 26.13 of the Master Lease.
III.
Qualifications
The opinions expressed herein are subject to and limited by the
following additional qualifications, assumptions and exclusions:
(a) The opinion as to the enforceability of the Subject
Documents is subject to the qualification that enforcement of the
Ground Lease and the Master Lease is limited by the following: (i) the
rights of the United States under the Federal Tax Lien Act of 1966, as
amended; (ii) principles of equity which may limit the availability of
certain equitable remedies; (iii) bankruptcy, insolvency,
reorganization, liquidation, conservatorship, receivership, fraudulent
or preferential conveyance, moratorium and other laws applicable to
creditors' rights or the collection of debtors' obligations generally;
and (iv) the power of courts to award damages in lieu of granting
equitable remedies. As to the matters specified in (ii) and (iv) above,
such matters will not render the Ground Lease nor the Master Lease
invalid as a whole nor preclude (x) the acceleration of the obligation
of Lessee to repay the indebtedness, upon default by Lessee in the
payment of such indebtedness or upon a material default in any other
material provision of the Master Lease, and (y) the foreclosure of the
lien of the Master Lease in accordance with the laws of the State, of
the lien on and security interest in the collateral created by the
Master Lease upon maturity or upon acceleration described in
subparagraph (b) above.
(b) Without opining as to the character of the transaction
contemplated by the Master Lease as a loan or lease, the opinion as to
the enforceability of the Master Lease and the Ground Lease is further
subject to the qualification that the enforceability of certain of the
remedial, waiver and other provisions of the Master Lease and the
Ground Lease is further limited by applicable laws of the State and the
United States in addition to those described in subparagraph (a) above;
however, such applicable laws do not, in our opinion, substantially
interfere with the practical realization of the essential benefits
expressed in the Master Lease or the Ground Lease, except for the
economic consequences which might result from any procedural delay
which may result therefrom, nor does such unenforceability render the
Master Lease or the Ground Lease invalid as a whole or substantially
interfere with the principal benefits and/or security provided thereby.
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November 25, 1997
Page 6
(c) No opinion is expressed regarding the enforceability of
any of the provisions of the Ground Lease or the Master Lease which
purport to: (i) confer self-help or equitable remedies such as specific
performance or injunctive relief; (ii) establish evidentiary standards
for suits or proceedings or restrict, limit or deny access to courts;
(iii) waive or release the legal rights, benefits or claims of any
party in advance; (iv) allow or authorize the delay or omission of any
remedy, indemnity or consent judgment; (v) avoid or ignore the
doctrines of mortgagee-in-possession or commercial influence; (vi)
establish non-culpability for actions taken by or on behalf of Agent
Lessor or any other person; (vii) take possession of rents, profits or
issues derived from the Property or purport to establish the assignment
of rents, profits and issues from the Property as a direct or absolute
assignment (as opposed to a collateral assignment) thereof prior to the
time Agent Lessor obtains possession thereof through foreclosure of the
liens against or a judicial appointment of receivership for the
Property in question, or take some action which is judicially deemed to
be the equivalent thereof; (viii) allow Agent Lessor to take possession
of any of the real property collateral for the transaction prior to an
order of a competent jurisdiction or a valid foreclosure upon such
collateral or as to any personal property collateral for the
transaction prior to full compliance by Agent Lessor of the applicable
terms of the Uniform Commercial Code in effect; (ix) authorize Agent
Lessor or any other party to act as attorney-in-fact for the Lessee;
(x) appoint a receiver to the extent the appointment of a receiver is
governed by applicable statutory requirements and to the extent any
such provision of the Master Lease may not be in compliance with such
statutory requirements; (xi) establish waiver and define rights
relating to subrogation, exculpation, waiver, ratification of future
acts, trespass, conversions, gross negligence or fraud; (xii) relate to
arbitration or appraisal remedies and rights; and (xiii) permit the
Agent Lessor to accelerate the maturity of the indebtedness evidenced
and governed by the Master Lease without notice to the Lessee.
As to the matters specified in this subparagraph (c), without
opining as to the character of this transaction contemplated by the
Master Lease as a loan or a lease, in our opinion, the unenforceability
of such provisions will not render the Master Lease invalid as a
whole, nor preclude (y) the acceleration of the obligation of Lessee to
repay such indebtedness, upon default by Lessee, the payment of such
indebtedness or upon a material default in any other material provision
of the Master Lease, and (z) the foreclosure of the lien of the Master
Lease in accordance with the laws of the State, of the lien on and
security interest in the collateral created by the Master Lease upon
maturity or upon acceleration described in subparagraph (b) above.
(d) We express no opinion herein as to: (i) the effect of any
land use or environmental law, rule, regulation or ordinance; (ii) the
perfection of any security interest
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November 25, 1997
Page 7
in collateral to the extent that it purports to secure any indebtedness
arising other than under the Master Lease; and (iii) the validity or
enforceability of any security interest in or assignment of any account
receivable with respect to which the account debtor is the United
States or any agency, department or instrumentality of the United
States.
(e) No examination of title to the Property was undertaken,
nor is any opinion expressed (i) with respect thereto or (ii) with
respect to the adequacy of the description of the collateral or the
creation or perfection or priority of any liens or security interests
to be created or modified pursuant to the Master Lease and financing
statements. To the extent title to any real or personal property is
required to be held by any party in order to perform its obligations
under the Master Lease or the Ground Lease, we have assumed, without
any investigation, that such party holds title adequate to perform its
obligations.
(f) The opinions rendered herein are based upon the further
assumptions that: (i) the drafts of the Subject Documents reviewed by
us have been duly executed by the parties thereto; (ii) each of the
parties to the Subject Documents has all the legal capacity, power and
authority required for it to enter into the Subject Documents to which
it is a party, and to perform its respective obligations thereunder;
(iii) all such matters have received any corporate or other
authorization required by any applicable charter, bylaw, law or
regulation; (iv) all documents submitted to us as originals are
authentic and all documents submitted to us as copies are true and
correct reproductions of the originals of such documents; (v) each of
the agreements made by the parties to the Subject Documents and every
Subject Document executed by the parties to the Subject Documents is
valid, binding and enforceable against parties to the Subject Documents
as appropriate to the extent that such validity, binding effect and
enforceability affects the opinions herein expressed; and (iv) all
individuals executing the Subject Documents are sui juris.
(g) No opinion is given or expressed, nor should any opinion
be inferred or implied, as to: (i) the financial ability of the Lessee
or any other obliger pursuant to the Subject Documents to meet or
satisfy their respective obligations thereunder; (ii) the truthfulness,
completeness or accuracy of any applications, reports, plans,
documents, financial statements or other matters furnished to parties
to the Subject Documents or their agents or representatives by Lessee
or any other obligor under the Subject Documents or by any party acting
by, for or at the discretion of Lessee or any other obligers or in
conjunction with the transaction as evidenced by the Subject Documents;
(iii) the truthfulness, completeness or accuracy of any representation,
warranty, certification or statement by Lessee and all other parties to
the Subject Documents or any document or item referred to or described
in the Subject Documents; and (iv) the
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November 25, 1997
Page 8
compliance by the Lessee or any other person or entity with applicable
federal and state securities laws and/or regulations in connection with
the transactions as evidenced by the Subject Documents.
(h) The qualification of any opinion or statement herein by
the use of words "knowledge", "current actual knowledge" or "to our
knowledge" or "known to us" means that during the course of our
representation of Lessee in connection with the subject transaction, no
facts or circumstances has come to the attention of the attorneys
involved in such representation which gives such attorneys actual
knowledge of the existence of the documents or facts so qualified.
Furthermore, except as otherwise expressly set forth herein, we have
not undertaken any investigation to determine the existence of such
documents or facts, and no inference as to our knowledge thereof shall
be drawn from the fact of our representation of any party or otherwise.
(i) We have further assumed, with your permission, that each
of the parties to the Subject Documents is duly organized, validly
existing and in good standing under the laws of its state of
incorporation, and has all requisite corporate power and authority to
execute, deliver and perform their obligations under the Subject
Documents.
IV.
Scope and General Statements
This opinion is provided for the purpose of complying with the
requirements of the Participation Agreement, and without prior consent, may not
be relied upon, used, circulated, quoted or otherwise referred to in any manner
by any person, firm or governmental authority or entity whatsoever other than
reliance thereon by Agent Lessor and the other addressees of this opinion
letter, any participants of Agent Lessor and Agent Lessor's successors and
assigns, solely for the purposes of consummating the transaction evidenced by
the Subject Documents, except to the extent, and only to the extent, required by
applicable governmental regulations or requirements. This opinion shall not be
construed as or be deemed to be a guaranteeing or insuring instrument. Further,
although we have acted as special counsel in the specific manner delineated
herein for Lessee in connection with the transactions relating to or in respect
of the Participation Agreement, our representation has been limited to specific
matters from time to time referred to us for substantive legal attention by
Lessee, and factual matters or agreements pertaining to the Participation
Agreement, the Subject Documents, and the Property may exist of which we have no
knowledge or information. However, we have no current actual knowledge of any
facts or circumstances which would make any opinion expressed herein incorrect
or subject to question or require further investigation of any laws, facts or
circumstances.
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November 25, 1997
Page 9
This opinion is rendered as of the date hereof, and we undertake no,
and hereby disclaim any, obligation to advise you of any changes in or any new
developments which might affect any matters or opinions set forth herein. We are
licensed to practice law only in the State of Texas, and we express no opinion
with respect to any laws other than the laws of the State of Texas upon the
validity, binding effect and enforceability of the Master Lease and the Ground
Lease.
WINSTEAD SECHREST & MINICK P.C.,
a Professional Corporation
By: /s/ J. Kenneth Kopf
-----------------------------------
J. Kenneth Kopf
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Schedule A
Addressees of Opinion Letter
BMO Leasing (U.S.), Inc.
311 West Monroe Street
Chicago, IL 60603
Bank of Montreal
115 South LaSalle Street
Chicago, IL 60603
Chapman and Cutler
111 West Monroe Street
Chicago, IL 60603-4080
Schedule A, Addressees of Opinion Letter - Solo Page
100
APPENDIX A
TO PARTICIPATION AGREEMENT
A. Interpretation. In each Operative Document, unless a clear contrary
intention appears:
(i) the singular number includes the plural number and vice
versa;
(ii) reference to any Person includes such Person's
successors and assigns but, if applicable, only if such successors and
assigns are permitted by the Operative Documents, and reference to a
Person in a particular capacity excludes such Person in any other
capacity or individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement, document or instrument
(including any Operative Document) means such agreement, document or
instrument as amended or modified and in effect from time to time in
accordance with the terms thereof and, if applicable, the terms of the
other Operative Documents, and reference to any promissory note
includes any promissory note which is an extension or renewal thereof
or a substitute or replacement therefor;
(v) reference in any Operative Document to any Article,
Section, Appendix, Schedule or Exhibit means such Article or Section
thereof or Appendix, Schedule or Exhibit thereto;
(vi) "hereunder," "hereof", "hereto" and words of similar
import shall be deemed references to an Operative Document as a whole
and not to any particular Article, Section or other provision thereof;
and
(vii) "including" (and with correlative meaning "include")
means including without limiting the generality of any description
preceding such term.
B. Computation of Time Periods. Unless otherwise specified in any
Operative Document, for purposes of computation of periods of time under the
Operative Documents, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding."
C. Accounting Terms and Determinations. Unless otherwise specified in
any Operative Document, all terms of an accounting character used therein shall
be interpreted, and all accounting determinations hereunder shall be made in
accordance with GAAP applied (to the extent relevant) on a basis consistent
(except for changes concurred in by the Lessee's or the Guarantor's independent
public accountants or otherwise required by a change in GAAP) with the most
recent financial statements of the Lessee and the Guarantor delivered to the
Administrative Agent, the Agent Lessor and the Participants.
101
D. Conflict in Operative Documents. If there is any conflict between
any Operative Documents, such Operative Documents shall be interpreted and
construed, if possible, so as to avoid or minimize such conflict but, to the
extent (and only to the extent) of such conflict, the Participation Agreement
shall prevail and control.
E. Legal Representation of the Parties. The Operative Documents were
negotiated by the parties with the benefit of legal representation and any rule
of construction or interpretation otherwise requiring the Operative Documents to
be construed or interpreted against any party shall not apply to any
construction or interpretation hereof or thereof.
F. Defined Terms. Unless a clear contrary intention appears, terms
defined herein have the respective indicated meanings when used in each
Operative Document.
"Account" means the account identified by the Administrative Agent into
which all payments by the Lessee under the Operative Documents shall be made.
The Account shall be specified on Schedule II to the Participation Agreement.
"Acquisition Cost" means the amount of the Advance made available to
the Lessee for the purpose of acquiring the Property as such amount is set forth
in the Funding Request relating to the acquisition of the Property.
"Acquisition Date" is defined in Section 6.1 of the Participation
Agreement.
"Administrative Agent" means BMO in its capacity as Administrative
Agent, and any successors or permitted assigns thereto in such capacity.
"Advance" means the advance of funds to the Lessee pursuant to Article
III of the Participation Agreement.
"Affiliate" means any Person (a) which directly or indirectly through
one or more intermediaries Controls, or is Controlled by, or is under common
Control with, a Person or (b) which is the beneficial owner of 10% or more of
any class of the Voting Stock of such Person.
"After Tax Basis" means, with respect to any payment to be received,
the amount of such payment increased so that, after deduction of the amount of
all Taxes required to be paid by the recipient (less any Tax savings realized
and the present value of any Tax savings projected to be realized by the
recipient as a result of the payment of the indemnified amount) with respect to
the receipt by the recipient of such amounts, such increased payment (as so
reduced) is equal to the payment otherwise required to be made.
"Agent Lessor" means BMO Leasing (U.S.), Inc., a Delaware corporation,
together with its successors permitted pursuant to Section 14.12 of the
Participation Agreement.
"Aggregate Commitment Amount" means, $96,957,507.26.
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"ALTA/ACSM" is defined in Section 6.1(o) of the Participation
Agreement.
"Applicable Law" means all Federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions affecting the Property or the demolition, construction,
use or alteration thereof, in force and effect at the relevant point in time,
including any that require repairs, modifications or alterations in or to the
Property or in any way limits the use and enjoyment thereof (including all
building, zoning and fire codes and the Americans with Disabilities Act of 1990,
42 U.S.C. S 1201 et seq. and any other similar federal, state or local laws or
ordinances and the regulations promulgated thereunder) and all Environmental
Laws, and all permits, certificates of occupancy, licenses, authorizations and
regulations relating thereto, and all covenants, agreements, restrictions and
encumbrances contained in any instruments which are either of record or known to
the Lessee affecting the Property, the Appurtenant Rights and any easements,
licenses or other agreements entered into pursuant to Section 11.2 of the Master
Lease.
"Appraisal" means an appraisal by the Appraiser of the Fair Market
Sales Value of the Property.
"Appraiser" means the appraiser which prepared an Appraisal of the
Property or an up-date to an Appraisal of the Property as selected by the
Administrative Agent, Lessee and the Agent Lessor.
"Appurtenant Rights" means, with respect to the Land, (i) all
agreements, easements, rights of way or use, rights of ingress or egress,
privileges, appurtenances, tenements, and other rights and benefits belonging or
pertaining to the Land or the Improvements thereon, including, without
limitation, the use of any streets, ways, alleys, vaults or strips of land
adjoining, abutting, adjacent or contiguous to the Land and (ii) all permits,
licenses and rights, whether or not of record, appurtenant to the Land.
"Arranger" means BMO in its capacity as Arranger and any successors and
assigns thereto in such capacity.
"Arranger's Fee Letter" means that certain engagement letter and
attached indicative term sheet dated as of October 27, 1997, between the
Guarantor and the Arranger.
"Assignment of Lease and Rent" means the Assignment of Lease and Rent
dated as of November 25, 1997, from the Agent Lessor, as assignor, to the
Administrative Agent for the benefit of the Lenders, as assignee.
"Authorized Financial Officer" of any Person means the Chief Financial
Officer, Chief Accounting Officer, Treasurer or Assistant Treasurer or such
other Persons as any such officer may from time to time designate in writing to
the Administrative Agent and the Agent Lessor.
"Bankruptcy Code" is defined in Section 5.1(e) of the Loan Agreement.
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"Base Rate" means for any day the greater of:
(i) the rate of interest announced by the Administrative Agent from
time to time as its prime commercial rate for Dollar loans made in the United
States (it being understood that such rate may not be the Administrative Agent's
best or lowest rate), with any change in the Base Rate resulting from a change
in said prime commercial rate to be effective as of the date of the relevant
change in said prime commercial rate; and
(ii) the sum of (x) the rate for that day set forth opposite the
caption "Federal Fund (Effective)" in the daily statistical release designated
as "Composite 3:30 P.M. Quotations for U.S. Governmental Securities", or any
successor publication, published by the Federal Reserve Bank of New York or, if
such publication shall be suspended or terminated, the arithmetic average of the
rates quoted to the Administrative Agent as the prevailing rates per annum
(rounded upward, if necessary, to the next higher 1/100 of 1%) bid at
approximately 11:00 A.M. (New York time) (or as soon thereafter as is
practicable) on such day by two or more New York Federal funds dealers of
recognized standing selected by the Administrative Agent for the purchase at
face value of Federal funds in the secondary market in an amount comparable to
the Loan amount owed to the Administrative Agent for which such rate is being
determined, plus (y) 1/2 of 1%.
"Base Rate Loan/Lessor Amount" means a Loan or Lessor Amount, as the
case may be, bearing interest at the Base Rate.
"Basic Rent" means the sum of (i) the Lender Basic Rent and (ii) the
Lessor Basic Rent, calculated as of the applicable date on which Basic Rent is
due.
"Bill of Sale" is defined in Section 6.1(j) of the Participation
Agreement.
"BMO" means Bank of Montreal (Chicago Branch), a Canadian banking
organization.
"Break Costs" means an amount equal to the amount, if any, required to
compensate any Participant for any additional losses (including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or funds acquired by such Participant to fund its
obligations under the Operative Documents) it may incur as a result of (x)
Lessee's payment of any Rent other than on a Scheduled Payment Date, (y)
Lessee's payment of the Lease Balance on any date other than a Scheduled Payment
Date, or (z) as a result of any conversion of the London Interbank Offered Rate
in accordance with Section 13.9 or 13.10 of the Participation Agreement. A
statement as to the amount of such loss, cost or expense, prepared in good faith
and in reasonable detail and submitted by such Participant, as the case may be,
to the Lessee, shall be correct and binding on the Lessee absent manifest error.
"Business Day" means any day other than a Saturday or Sunday on which
banks are generally open for business in Chicago, Illinois and New York, New
York and, when used with reference to a Eurodollar Loan/Lessor Amount, a day on
which banks are also open for business and dealing in Dollar deposits in London,
England.
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"Capital Lease Obligations" shall mean, for any Person, all obligations
of such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Company Property to the extent such obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP (including Statement of Financial Accounting
Standards No. 13 of the Financial Accounting Standards Board), and, for purposes
of this Agreement, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP (including such Statement No.
13).
"Casualty" means any damage or destruction of all or any portion of the
Property as a result of a fire, flood, earthquake or other similar occurrence.
"Certifying Party" is defined in Section 22.1 of the Master Lease.
"Claims" means any and all obligations, dimunition in value, damages,
liabilities, losses, actions, Environmental Law orders, Environmental Law
notices, suits, judgments, penalties, fines, claims, demands, settlements, costs
and expenses (including, without limitation, reasonable legal fees and expenses)
of any nature whatsoever.
"Code" means the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Commitment" means (i) as to any Lender, its Loan Commitment, and (ii)
as to any Lessor, its Lessor Commitment.
"Commitment Percentage" means, with respect to any Participant, the
percentage set forth opposite such Participant's name under the heading
"Commitment Percentage" on Schedule I to the Participation Agreement, as such
Schedule may be amended, supplemented, amended and restated or otherwise
modified from time to time.
"Company Property" shall mean, as to any Person, any interest of any
kind of such Person in property or assets, whether real, personal or mixed, and
whether tangible or intangible.
"Condemnation" means, with respect to the Property, any condemnation,
requisition, confiscation, seizure or other taking or sale of the use, access,
occupancy, easement rights or title to the Property or any part thereof, wholly
or partially (temporarily or permanently), by or on account of any actual or
threatened eminent domain, proceeding or other taking of action by any Person
having the power of eminent domain, including an action by a Governmental
Authority to change the grade of, or widen the streets adjacent to, the Property
or alter the pedestrian or vehicular traffic flow to the Property so as to
result in change in access to the Property, or by or on account of an eviction
by paramount title or any transfer made in lieu of any such proceeding or
action. A "Condemnation" shall be deemed to have occurred on the earliest of the
dates that use, occupancy or title vests in the condemning authority.
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"Consolidated Subsidiary" shall mean, for any Person, each Subsidiary
of such Person (whether now existing or hereafter created or acquired) the
financial statements of which shall be (or should have been) consolidated with
the financial statements of such Person in accordance with GAAP.
"Contract" means (a) any agreement (whether bi-lateral or executory or
non-executory and whether a Person entitled to rights thereunder is so entitled
directly or as a third-party beneficiary), including an indenture, lease or
license or (b) any deed or other instrument of conveyance.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise, and
"Controlling" and "Controlled" shall have meanings correlative thereto.
"Deed" means a quitclaim deed with respect to the real property
comprising the Property, in conformity with Applicable Law and appropriate for
recording with the applicable Governmental Authorities, conveying title to such
real property to the Agent Lessor, subject only to Permitted Property Liens.
"Default" means any condition, occurrence or event which, after notice
or lapse of time or both, would constitute an Event of Default.
"Defaulting Participant" means, at any time, any Participant that, at
such time (a) has failed to make an Advance of a Loan or Lessor Amount, as the
case may be, required pursuant to the terms of the Participation Agreement, (b)
has failed to pay to the Administrative Agent, the Agent Lessor, any Lender, or
any Lessor an amount owed by such Participant pursuant to the terms of the
Operative Documents, or (c) has been declared insolvent or has become subject to
a bankruptcy or insolvency proceeding or to a receiver, trustee or similar
official, or (d) in the case of any Lessor, a Loan Agreement Event of Default
with respect thereto shall have occurred and be continuing.
"Dollars" and "$" mean dollars in lawful currency of the United States
of America.
"Eligible Assignee" means an Eligible Lessor Assignee or an Eligible
Lender Assignee, as the case may be.
"Eligible Lender Assignee" means any Lender or any Affiliate or
Subsidiary of a Lender; and any other commercial bank or other financial
institution with combined capital and surplus in excess of $50,000,000.
"Eligible Lessor Assignee" means any Lessor or any Affiliate or
Subsidiary of a Lessor; and any other commercial bank or other financial
institution with combined capital and surplus in excess of $50,000,000.
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"End of the Term Report" is defined in Section 13.2(a) of the
Participation Agreement.
"Environmental Audit" means a Phase One environmental site assessment
(the scope and performance of which meets or exceeds the then most current ASTM
Standard Practice E1527 for Environmental Site Assessments: Phase One
Environmental Site Assessment Process) of the Property.
"Environmental Laws" means any and all applicable laws, statutes,
rules, regulation or ordinances of any Governmental Authority regulating or
imposing liability or standards of conduct concerning protection of human health
or the environment in connection with the use, storage, handling, disposal,
treatment, generation, discharge, emission or disposal of any hazardous, toxic
or dangerous materials, substances, chemicals, wastes or pollutants that from
time to time are defined as a hazardous waste, hazardous substances or
pollutants under the Resource Conservation and Recovery Act of 1976, as amended,
42 U.S.C. ss.ss.6091, et seq., the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. ss.ss.9601, et seq., as
amended, the Clean Air Act, 42 U.S.C. ss.7401, et seq., the Toxic Substance
Control Act, 15 U.S.C. ss.206, et seq., and any other similar law, statute,
rule, regulation or ordinance adopted from time to time by any Governmental
Authority.
"Environmental Violation" means, with respect to the Property, any
activity, occurrence or condition that constitutes a violation, which violation
results in material non-compliance with any applicable Environmental Laws.
"Equipment" means equipment, apparatus, fittings and personal property
of every kind and nature whatsoever purchased, leased or otherwise acquired by
the Agent Lessor using the proceeds of the Loans and/or the Lessor Amounts and
now or subsequently attached to, contained in or used or usable in any way in
connection with any operation of the Property, including but without limiting
the generality of the foregoing, the items of equipment set forth in Schedule II
to the Master Lease. Notwithstanding the foregoing, any equipment or personal
property constituting Excluded Equipment shall not be "Equipment" for purposes
of the Operative Documents.
"Equity Amount" shall have the meaning provided in Section 7.4 of the
Participation Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business that
is a member of any group of organizations (i) described in Section 414(b) or (c)
of the Code of which the Guarantor is a member and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which the
Guarantor is a member.
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"Eurodollar Loan/Lessor Amount" means a Loan or Lessor Amount as the
case may be, bearing interest at the Eurodollar Rate.
"Eurodollar Rate" means with respect to an Interest Period for
Eurodollar Loans/Lessor Amounts, (a) the LIBOR Index Rate for such Interest
Period, if such rate is available, and (b) if the LIBOR Index Rate is
unavailable or cannot be determined generally or for the Interest Period in
question, the arithmetic average of the rates of interest per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) at which deposits in U.S.
dollars in immediately available funds are offered to the Administrative Agent
at 11:00 a.m. (London, England time) two (2) Business Days before the beginning
of such Interest Period by three (3) or more major banks in the interbank
eurodollar market selected by the Administrative Agent for a period equal to
such Interest Period and in an amount equal to or comparable to the principal
amount of such Eurodollar Loans/Lessor Amount outstanding from the
Administrative Agent.
"Eurodollar Reserve Percentage" means for any day during an Interest
Period for a Eurodollar Loan/Lessor Amount, the rate at which reserves
(including, without limitation, any supplemental, marginal and emergency
reserves) are imposed on such day by the Board of Governors of the Federal
Reserve System (or any successor) on "Eurocurrency liabilities", as defined in
such Board's Regulation D, (or in respect of any other category of liabilities
that includes deposits by reference to which the interest rate on Eurodollar
Loan/Lessor Amounts is determined on any category of extension of credit or
other assets that include loans by non-United States offices of any Bank to
United States residents) subject to any amendments of such reserve requirement
by such Board or its successor, taking into account any transitional adjustments
thereto. For purposes of this definition, the Eurodollar Loan/Lessor Amounts
shall be deemed to be Eurocurrency liabilities as defined in Regulation D
without benefit or credit for any prorations, exemptions or offsets under
Regulation D.
"Event of Default" means a Lease Event of Default or a Loan Agreement
Event of Default.
"Exchange Act Reports" is defined in Section 8.2(e) of the
Participation Agreement.
"Excepted Payments" means:
(a) all indemnity payments (including indemnity payments made
pursuant to Article XIII of the Participation Agreement) to which the
Administrative Agent, the Arranger, the Agent Lessor, any Lender, any
Lessor or any of their respective Affiliates, agents, officers,
directors or employees is entitled;
(b) any amounts (other than Basic Rent or amounts payable by
Lessee pursuant to Section 15.2 of the Master Lease or Articles XVI,
XVIII or XX of the Master Lease) payable under any Operative Document
to reimburse the Administrative Agent, the Arranger, the Agent Lessor,
any Lender, any Lessor or any of their respective Affiliates (including
the reasonable expenses of the Administrative
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Agent, the Arranger, the Agent Lessor, any Lender, any Lessor or such
Affiliates incurred in connection with any such payment) for performing
or complying with any of the obligations of the Lessee under and as
permitted by any Operative Document;
(c) any insurance proceeds (or payments with respect to risks
self-insured or policy deductibles) under liability policies payable to
the Agent Lessor or any Lessor;
(d) any insurance proceeds under policies maintained by any
Participant;
(e) Transaction Expenses or other amounts or expenses paid or
payable to or for the benefit of the Administrative Agent, the
Arranger, the Agent Lessor, any Lender or any Lessor; and
(f) any payments in respect to interest to the extent
attributable to payments referred to in clauses (a) through (e) above.
"Excluded Equipment" means the equipment and personal property listed
on Schedule III of the Master Lease.
"Expiration Date" means the earlier of the date the Master Lease shall
have been terminated in accordance with the provisions of the Master Lease or
any of the other Operative Documents and the Maturity Date; provided, however,
with respect to Article XX of the Master Lease, the Expiration Date shall be the
later of (i) the Maturity Date and (ii) the Extended Expiration Date.
"Expiration Date Purchase Obligation" means the Lessee's obligation,
pursuant to Section 18.2 of the Master Lease, to purchase the Property on the
Expiration Date.
"Extended Expiration Date" is defined in Section 20.3(a) of the Master
Lease.
"Fair Market Sales Value" means the amount, which in any event shall
not be less than zero, that would be paid in cash in an arm's-length transaction
between an informed and willing purchaser and an informed and willing seller,
neither of whom is under any compulsion to purchase or sell, respectively, for
the ownership of the Property. The Fair Market Sales Value of the Property shall
be determined based on the assumption that, except for purposes of Article XVI
of the Master Lease and Section 13.2 of the Participation Agreement, the
Property is in the condition and state of repair required under Section 9.1 of
the Master Lease and the Lessee is in compliance with the other requirements of
the Operative Documents relating to the condition of the Property.
"Federal Funds Rate" means, for any day or period, as applicable, the
rate per annum (rounded upwards, if necessary, to the nearest 1/l00th of it) at
which Federal funds in the amount equal to the principal amount of the related
Loans or Lessor Amounts are offered in the interbank market to BMO as of 10:00
A.M., Chicago time, on such day for such day or for such period, as applicable.
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"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"Fixed Rent" means the amounts designated as "Fixed Rent" for the Loans
and the Lessor Amounts as set forth in Schedule IV to the Master Lease (which
amounts are intended to amortize the Loans and the Lessor Amounts).
"Fixed Rent Payment Date" means each date set forth under the heading
"Fixed Rent Payment Dates" in Schedule IV to the Master Lease or, if such date
is not a Business Day, the next succeeding Business Day.
"Funded Debt" shall mean, on any date and for any Person, without
duplication, (i) all Indebtedness of such Person for money borrowed (including
Capital Lease Obligations), whether issued, assumed or Guaranteed, which has a
final maturity (or which, pursuant to its terms, is renewable or extendible at
the option of such Person, without regard to whether such option is subject to
specified conditions, for a period ending or to a date) more than 12 months
after such date, notwithstanding the fact that payments in respect thereof
(whether installment, serial maturity or sinking fund payments or otherwise) are
required to be made by such Person, less than 12 months after the date of the
computation thereof, (ii) Guarantees by such Person of Funded Debt of other
Persons or of dividends and (iii) in the case of any Restricted Subsidiary, all
preferred stock of such Restricted Subsidiary. Notwithstanding the foregoing,
the term "Funded Debt" shall not include deferred revenue accounts arising from
forward sales.
"Funding Request" is defined in Section 3.4 the Participation
Agreement.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Action" means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgments, written
interpretations, decrees, licenses, exemptions, publications, filings, notices
to and declarations of or with, or required by, any Governmental Authority, or
required by any Applicable Law, and shall include, without limitation, all
environmental and operating permits and licenses that are required for the full
use, occupancy, zoning and operation of the Property.
"Governmental Authority" means any federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Gross Remarketing Proceeds" is defined in Section 20.2(h) of the
Master Lease.
"Ground Lease" means that certain Ground Lease dated the Acquisition
Date between Agent Lessor and Lessee with respect to the land described on
Schedule I of the Master Lease.
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"Guarantee" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, net worth, working capital or earnings of any Person, or a
guarantee of the payment of dividends or other distributions upon the stock or
equity interests of any Person or an agreement to purchase, sell or lease (as
lessee or lessor) Property or services primarily for the purpose of enabling a
debtor to make payment of such debtor's obligations or an agreement to assure a
creditor against loss, and including, without limitation, causing a bank or
other financial institution to issue a letter of credit or other similar
instrument for the benefit of another Person, but excluding endorsements for
collection or deposit in the ordinary course of business. The terms "Guarantee"
and "Guaranteed" used as a verb shall have a correlative meaning.
"Guaranty" means the Guaranty dated as of November 25, 1997, made by
the Guarantor in favor of each of the Agent Lessor, the Lessors, the
Administrative Agent and the Lenders, as the same may be amended, supplemented,
amended and restated or otherwise modified from time to time.
"Hazardous Materials" means any hazardous, toxic or dangerous
materials, substances, chemicals, wastes or pollutants that from time to time
are defined by or pursuant to or are regulated under any Environmental Laws,
including asbestos, polychlorinated biphenyls, petroleum, petroleum derivatives
or by-products, other hydrocarbons, urea formaldehyde and any material,
substance, pollutant or waste that is defined as a hazardous waste under
Environmental Laws or defined as a hazardous substance under Environmental Laws.
"Impositions" means any and all liabilities, losses, expenses and costs
for fees, taxes, levies, imposts, duties, charges, assessments or withholdings
of any nature ("Taxes") (including, without limitation, (i) real and personal
property taxes, and taxes in the nature of property taxes; (ii) sales, use,
rent, intangibles, excise and other similar taxes (iii) transfer, conveyance,
mortgage, stamp and documentary recording taxes and fees; (iv) franchise,
income, value added, gross receipts, privilege and doing business taxes, license
and registration fees; and (v) assessments on the Property, including
assessments for public improvements or benefits (whenever commenced or
completed) which at any time may be levied, assessed or imposed by any Federal,
state or local authority upon or with respect to (a) any Tax Indemnitee, the
Property or any part thereof or interest therein, or the Lessee or any sublessee
or user of the Property; (b) the Notes or other Indebtedness with respect to the
Property or transfer thereof; (c) the rentals, receipts, earnings or income
arising from the Property or any part thereof or interest therein or the sale or
disposition thereof; (d) the Operative Documents or any payment made or accrued
pursuant thereto; or (e) otherwise in connection with the transactions
contemplated by the Operative Documents.
Notwithstanding the foregoing (except as provided in the final
paragraph of this definition) the term "Imposition" shall not mean or include:
(i) Taxes (other than Taxes that are, or are in the nature of,
sales, use, rental, transfer or property taxes) that are based upon or
measured by the overall net income, gross receipts or capital gains of
any Tax Indemnitee (including, without
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limitation, franchise or doing business Taxes) provided that this
clause (i) shall not be interpreted to prevent a payment from being
made on an After Tax Basis if such payment is otherwise required to be
so made; provided, further, that this clause (i) shall not apply to any
Taxes imposed on the Agent Lessor as a result of its compliance with
the terms of Section 10.2 of the Participation Agreement during the
continuance of an Event of Default;
(ii) any Tax for so long as it is being contested in
accordance with the provisions of Section 13.5(b) of the Participation
Agreement, provided that the foregoing shall not limit Lessee's
obligation under such Section to advance to such Tax Indemnitee amounts
with respect to Taxes that are being contested in accordance therewith
or any expenses incurred in connection therewith with such contest;
(iii) Taxes payable by a Tax Indemnitee resulting from, or
that would not have been imposed but for the existence of, any Lessor
Lien created by or through such Tax Indemnitee or an Affiliate thereof
and not caused by acts or omissions of Lessee;
(iv) any Tax imposed by its express terms in lieu of or in
substitution for a Tax not subject to indemnity pursuant to the
provisions of Section 13.5 of the Participation Agreement;
(v) Taxes imposed on or with respect to or payable by any
Tax Indemnities based on measured by or imposed with respect to any
fees received by such Tax Indemnities;
(vi) any Taxes imposed against or payable by a Tax
Indemnitee resulting from or that would not have been imposed but for,
the gross negligence (or negligence with respect to the handling of
funds) or willful misconduct of such Tax Indemnitee;
(vii) Taxes imposed on or payable by a Tax Indemnitee to the
extent such Taxes would not have been imposed but for a breach by the
Tax Indemnitee or any Affiliate thereof of any representations,
warranties or covenants set forth in the Operative Documents (unless
such breach is caused by the Lessee's breach of its representations,
warranties or covenants set forth in the Operative Documents); or
(viii) any Tax imposed with respect to, or that would not have
been imposed but for, any voluntary transfer, sale, financing or other
voluntary disposition by a Tax Indemnitee (other than a transfer
contemplated and permitted by the Operative Documents) of any interest
in any Property or any interest in or created pursuant to, the
Operative Documents.
Notwithstanding the foregoing, no exclusion from the definition of
Impositions set forth above shall apply to any Taxes or any increase in Taxes
imposed on a Tax Indemnitee net of any decrease in Taxes realized by such Tax
Indemnitee, to the extent that such tax increase or decrease would not have
occurred if on the Acquisition Date the Agent Lessor
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had advanced funds for the Property acquisition in the form of a loan secured by
the Property in an amount equal to the Acquisition Cost, with debt service for
such loan equal to the Basic Rent payable on each Scheduled Payment Date and a
principal balance at the maturity of such loan in an amount equal to the then
outstanding amount of the Advances at the end of the term of the Master Lease,
as determined by such Tax Indemnitee, which determination shall be deemed prima
facie correct.
"Improvements" means all buildings, structures, fixtures, Equipment and
other improvements of every kind existing at any time and from time to time
(including those purchased with amounts advanced by the Participants pursuant to
the Participation Agreement) on or under the Land to be acquired pursuant to the
terms of the Operative Documents and all easements for offsite improvements,
including, without limitation, railroad spur and drill tracks and all utility
and roadway easements, if any, together with any and all appurtenances to such
buildings, structures or improvements, including sidewalks, utility pipes,
conduits and lines, parking areas and roadways, and, subject to the Master
Lease, including all Modifications and other additions to or changes in the
Improvements at any time.
"Indebtedness" shall mean, for any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such Property from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of Property or services, other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred in the ordinary course of business so long as such trade accounts
payable are payable within ninety (90) days of the date the respective goods or
services are delivered or rendered; (c) Indebtedness of others secured by a Lien
on the Property of such Person, whether or not the respective Indebtedness so
secured has been assumed by such Person; (d) obligations of such Person in
respect of letters of credit or similar instruments issued or accepted by banks
and other financial institutions for account of such Person; (e) Capital Lease
Obligations of such Person; and (f) Indebtedness of others Guaranteed by such
Person. Notwithstanding the foregoing, the term "Indebtedness" shall not include
swap or other agreements not constituting Indebtedness for borrowed money,
entered into to hedge against fluctuations in the prices of commodities and
currencies, deferred revenue accounts arising from forward sales or guarantees
of either thereof.
"Indemnitee" means each Lender, each Lessor, the Administrative Agent
and the Agent Lessor.
"Insolvency" means, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent" means pertaining to a condition of Insolvency.
"Insurance Requirements" means all terms and conditions of any
insurance policy required by the Master Lease to be maintained by the Lessee.
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"Interest Period" means, with respect to each Eurodollar Loan/Lessor
Amount, the period commencing on (and including) the date such Eurodollar
Loan/Lessor Amount is continued as, or converted into, a Eurodollar Loan/Lessor
Amount pursuant to Section 3.4 or 3.6 of the Participation Agreement, and ending
on but excluding the numerically corresponding day one (1), two (2), three (3)
or six (6) months thereafter, as selected (or deemed selected) by the Lessee
from time to time pursuant to an Interest Period
Selection/Continuation/Conversion Notice; provided, however, that the foregoing
provisions in clauses (a) and (b) relating to Interest Periods are subject to
the following:
(i) Interest Periods commencing on the same date for
Eurodollar Loans/Lessor Amounts comprising part of the same Advance
shall be of the same duration;
(ii) if any Interest Period would otherwise end (or if
payments are otherwise due with respect to Eurodollar Loans/Lessor
Amounts) on a day that is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;
(iii) any Interest Period that would otherwise extend beyond
the Expiration Date shall end on the Expiration Date; and
(iv) if any Interest Period begins on a day for which there
is no numerically corresponding day in a calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month.
"Interest Period Selection/Continuation/Conversion Notice" means a
notice duly executed by a Responsible Officer of the Lessee substantially in the
form of Exhibit C to the Participation Agreement.
"Interest Rate" is defined in Section 2.4(a) of the Loan Agreement.
"Investment" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, time deposit or otherwise.
"Land" means the real property leased pursuant to the Ground Lease and
described on Schedule I to the Master Lease, and includes all Appurtenant Rights
attached thereto.
"Lease Balance" means, as of any date of determination, an amount equal
to the sum, without duplication, of the Loan Balance and the Lessor Balance and
all other amounts owing by the Lessee under the Operative Documents (including
without limitation, accrued and unpaid Rent and Supplemental Rent, if any).
"Lease Default" means any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute a Lease Event of
Default.
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"Lease Event of Default" is defined in Section 16.1 of the Master
Lease.
"Lease Term" means the period commencing on (and including) the
Acquisition Date and ending on (but excluding) the Expiration Date.
"Lender Basic Rent" means, as determined as of any Scheduled Payment
Date, the sum of (a) the interest due on the Loans, determined in accordance
with Section 2.4 of the Loan Agreement and excluding (i) any interest at the
applicable Overdue Rate on any installment of Basic Rent not paid when due and
(ii) any fine, penalty, interest or cost assessed or added under any agreement
with a third party for nonpayment or late payment of Lender Basic Rent plus (b)
the Fixed Rent due under the Master Lease with respect to the Loans.
"Lenders" is defined in the introductory paragraph of the Participation
Agreement.
"Lending Office" is defined in Section 13.12 of the Participation
Agreement.
"Lessee" means Alumax Mill Products, Inc., a Delaware corporation.
"Lessor Amount" is defined in Section 3.2 of the Participation
Agreement.
"Lessor Balance" means, as of any date of determination, an amount
equal to the sum of the outstanding Lessor Amounts together with all accrued and
unpaid Yield thereon.
"Lessor Basic Rent" means, as determined as of any Scheduled Payment
Date, the sum of (a) the amount of accrued Yield due on the Lessor Amounts,
determined in accordance with Section 4.1 of the Participation Agreement as of
any Scheduled Payment Date and excluding (i) any interest at the applicable
Overdue Rate on any installment of Lessor Basic Rent not paid when due and (ii)
any fine, penalty, interest or cost assessed or added under any agreement with a
third party for nonpayment or late payment of Lessor Basic Rent plus (b) the
Fixed Rent due under the Master Lease with respect to the Lessor Amounts.
"Lessor Commitment" means the Commitment of each Lessor in the amount
set forth on Schedule I of the Participation Agreement, as such Schedule may be
amended, supplemented, amended and restated, reduced or otherwise modified from
time to time.
"Lessor Financing Statements" means UCC financing statements
appropriately completed and executed for filing in the applicable jurisdiction
in order to protect the Agent Lessor's and the Lenders' interest under the
Master Lease to the extent the Master Lease is a security agreement.
"Lessor Lien" means any Lien, true lease or sublease or disposition of
title arising as a result of (a) any claim against any Participant not resulting
from the transactions contemplated by the Operative Documents, (b) any act or
omission of any Participant which is not required or permitted by the Operative
Documents or is in violation of any of the terms of the Operative Documents, (c)
any claim against any Participant, with respect to Taxes or Transaction Expenses
against which the Lessee is not required to indemnify any
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Participant, pursuant to Article IX of the Participation Agreement, or (d) any
claim against the Agent Lessor arising out of any transfer by the Agent Lessor
of all or any portion of the interest of the Agent Lessor in the Property or the
Operative Documents other than the transfer of title to or possession of the
Property by the Agent Lessor pursuant to and in accordance with the Master
Lease, the Loan Agreement or the Participation Agreement (but excluding any
transfer pursuant to Section 12.1 of the Participation Agreement) or pursuant to
the exercise of the remedies set forth in Section 16.2 of the Master Lease.
"Lessor Margin" means, with respect to the Lessor Amounts on any day,
the percentage set forth below opposite the highest of the long-term debt
ratings of Guarantor in effect for such date for the Lessor Amount bearing yield
at the Eurodollar Rate:
S&P RATINGS LIBO MARGIN
A- or greater .550%
BBB+ .575%
BBB .625%
BBB- .725%
BB+ or lower .925%
"Lessor Mortgage" means the Master Lease and any and all other security
instruments in appropriate recordable form in Bowie County, Texas sufficient to
grant to the Agent Lessor a first priority Lien on the Property.
"Lessors" is defined in the introductory paragraph of the Participation
Agreement.
"LIBOR Index Rate" means, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) for deposits in U.S. Dollars for a period equal to such
Interest Period, which appears on the Telerate Page 3750 as of 11:00 a.m.
(London, England time) on the day two Business Days before the commencement of
such Interest Period.
"Lien" means, with respect to any asset, any mortgage, deed of trust,
lien, pledge, charge, security interest or encumbrance of any kind, or any other
type of preferential arrangement that has the practical effect of creating a
security interest, in respect of such asset. For the purposes of the Operative
Documents, the Lessee or the Guarantor shall be deemed to own subject to a Lien
any asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"Loan" is defined in Section 3.3(b) of the Participation Agreement.
"Loan Agreement" means the Loan Agreement, dated as of November 25,
1997, among the Agent Lessor, as borrower thereunder, the Lenders, and the
Administrative
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Agent, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time.
"Loan Agreement Event of Default" is defined in Section 5.1 of the Loan
Agreement.
"Loan Balance" means, as of any date of determination, an amount equal
to the sum of the outstanding Loans together with all accrued and unpaid
interest thereon pursuant to the Loan Agreement.
"Loan Commitment" means the Commitment of each Lender in the amount set
forth on Schedule I to the Participation Agreement, as such Schedule may be
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Loan Documents" means the Loan Agreement and the Notes.
"Loan Margin" means, with respect to the Loans on any day, the
percentage set forth below opposite the highest of the long-term debt ratings of
Guarantor in effect for such day for the Loan bearing interest at the Eurodollar
Rate:
S&P RATINGS LIBO MARGIN
A- or greater .250%
BBB+ .275%
BBB .325%
BBB- .425%
BB+ or lower .625%
"Marketing Period" means the period commencing on the date 180 days
prior to the Expiration Date and ending on the Expiration Date.
"Master Lease" means the Master Lease, Deed of Trust and Security
Agreement, dated as of November 25, 1997, among the Agent Lessor, the Lessee and
the Trustee as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time.
"Material" and "Materially" mean material to (i) the ability of the
Guarantor or the Lessee to perform its obligations under the Operative Documents
to which it is a party, or (ii) the value or condition of the Property, except
as used in other defined terms in this Appendix A or the Operative Documents or
where the context in which used clearly indicates a different meaning.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the Property, business, operations, financial condition, liabilities or
capitalization of the Guarantor and its Subsidiaries taken as a whole, (b) the
ability of the Guarantor to perform its Obligations under any of the Operative
Documents, (c) the validity or enforceability of any of the
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Operative Documents, (d) the rights and remedies of the Participants, the Agent
and the Administrative Agent under any of the Operative Documents or (e) the
timely payment of the principal of or interest or Yield on the Note or
Certificates or other amounts payable in connection therewith. No claim,
liability or circumstance shall be deemed to have a Material Adverse Effect if
the same can be discharged by the payment of money in an amount not exceeding
$50,000,000 in excess of applicable reserves and tax benefits reasonably
anticipated in connection with such payment plus the amount the Guarantor in
good faith reasonably believes can be recovered out of insurance or from
creditworthy third parties. The adverse ruling in the tax dispute in respect of
the consolidation of the tax returns of the Guarantor and its Subsidiaries with
those of AMAX Inc. for 1984, 1985 and 1986, which is referred to Section 8.2(j)
hereof and is described in the Guarantor's Exchange Act Reports does not, and a
subsequent adverse ruling thereon on appeal shall not, constitute a Material
Adverse Effect.
"Maturity Date" means with respect to the Loans and the Lessor Amounts,
the fifth (5th) anniversary of the Acquisition Date, unless the Maturity Date is
extended pursuant to Section 2.7 of the Loan Agreement and Section 11.1 of the
Participation Agreement.
"Mill Facility" means the facility, of which the Property is a part,
leased, operated or owned by Lessee located in Texarkana, Texas and commonly
known as the Texarkana Mill.
"Modifications" is defined in Section 10.1 of the Master Lease.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means any multiple employer plan, as defined in
Section 3(37) of ERISA to which contributions have been made by the Guarantor or
any ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Proceeds" means all amounts received by the Agent Lessor in
connection with any Casualty or Condemnation or any sale of the Property
pursuant to the Agent Lessor's exercise of remedies under Section 16.2 of the
Master Lease or the Lessee's exercise of the Remarketing Option under Article XX
of the Master Lease and all interest earned thereon, less the expense of
claiming and collecting such amounts, including all costs and expenses in
connection therewith for which the Agent Lessor or any Participant is entitled
to be reimbursed pursuant to the Master Lease.
"Non-Consenting Participant" is defined in Section ll.l(b) of the
Participation Agreement.
"Notes" is deemed in Section 2.2 of the Loan Agreement.
"Obligations" means all obligations (monetary or otherwise) of Lessee
arising under or in connection with any of the Operative Documents.
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"Operative Documents" means the following:
(a) the Participation Agreement;
(b) the Master Lease;
(c) the Loan Agreement;
(d) each Note;
(e) the Assignment of Lease and Rent;
(f) the Deed;
(g) the Lessor Mortgage;
(h) the Lessor Financing Statements;
(i) the Arranger's Fee Letter;
(j) the Guaranty, and
(k) the Ground Lease.
"Other Plan" means an employee pension benefit plan (other than a Plan
or a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code.
"Overdue Rate" means, with respect to any Loan or Lessor Amount, the
Base Rate or the Adjusted Eurodollar Rate then in effect for such Loan or Lessor
Amount, as the case may be, plus two percent (2%).
"Participant Balance" means, with respect to any Participant as of any
date of determination: (i) with respect to any Lender, an amount equal to the
aggregate outstanding Loans of such Lender, together with all accrued and unpaid
interest thereon or (ii) with respect to any Lessor, an amount equal to the
aggregate outstanding Lessor Amounts of such Lessor, together with all amounts
of accrued and unpaid Yield thereon.
"Participants" means, collectively, each Lender and each Lessor, and
their successors and assigns.
"Participation Agreement" means the Participation Agreement dated as
of November 25, 1997 among the Lessee, Guarantor, the Agent Lessor, the Lessors,
the Lenders, the Administrative Agent and the Arranger.
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"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"Permitted Property Liens" means, with respect to the Property, any of
the following:
(i) the respective rights and interests of the parties to
the Operative Documents as provided in the Operative Documents;
(ii) the rights of any sublessee under a sublease permitted
by the terms of the Master Lease;
(iii) Liens for Taxes that either are not yet subject to
interest or penalties or are being contested in accordance with the
provisions of Section 12.1 of the Master Lease;
(iv) Liens arising by operation of law, materialmen's,
mechanics', workers', repairmen's, employees', carriers',
warehousemen's and other like Liens relating to the construction of the
Improvements or in connection with any Modifications or arising in the
ordinary course of business for amounts that either are not more than
sixty (60) days past due or are being contested in good faith by
appropriate proceedings, so long as such proceedings satisfy the
conditions for the continuation of proceedings set forth in Section
12.1 of the Master Lease;
(v) Liens of any of the types referred to in clause (iv)
above that have been bonded for not less than the full amount in
dispute (or as to which other security arrangements reasonably
satisfactory to the Agent Lessor have been made), which bonding (or
arrangements) shall comply with applicable Requirements of Law, and has
effectively stayed any execution or enforcement of such Liens;
(vi) Liens arising out of judgments or awards with respect
to which appeals or other proceedings for review are being prosecuted
in good faith and for the payment of which adequate reserves have been
provided as required by GAAP or other appropriate provisions have been
made, so long as such proceedings have the effect of staying the
execution of such judgments or awards and satisfy the conditions for
the continuation of proceedings set forth in Section 12.1 of the Master
Lease;
(vii) easements, rights of way and other encumbrances on
title to real property pursuant to Section 11.2 of the Master Lease or
shown on the title policy or UCC searches delivered to Administrative
Agent pursuant to the Participation Agreement;
(viii) Lessor Liens; or
(ix) Liens described on the title insurance policy delivered
with respect to the Property pursuant to Section 6.1(p) of the
Participation Agreement, other than Liens described in clause (iv) or
(vi) above that are not removed within sixty (60) days of their
discovery by Lessee.
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"Person" means any natural person, corporation, trust, joint venture,
association, company, partnership or government, or any agency or political
subdivision thereof.
"Plan" shall mean an employee benefit or other plan established and
maintained by the Guarantor or any ERISA Affiliate and that is covered by Title
IV of ERISA other than a Multiemployer Plan.
"Property" means (i) the Agent Lessor's interest in the Ground Lease,
(ii) all of the buildings and Improvements at any time located on or under the
Land and (iii) the Equipment.
"Property Cost" means the sum of the Acquisition Cost.
"Purchase Contract" means that certain Facility Purchase Agreement
dated as of September 18, 1996 between Lessee and Fleet National Bank, not in
its individual capacity but solely as the Owner Trustee for U S West Financial
Services, Inc. ("Seller"), together with the designation letter from Lessee
acknowledged by Seller to convey the property described therein to Agent Lessor.
"Purchase Notice" means an irrevocable written notice by the Lessee
delivered to the Agent Lessor pursuant to Section 18.1 of the Master Lease,
notifying the Agent Lessor of the Lessee's intention to exercise its option
pursuant to such Section, and identifying the proposed purchase date therefor.
"Purchase Option" means the Lessee's option to purchase all (but not
less than all) of the Property in accordance with the provisions of Section 18.1
of the Master Lease.
"Purchase Option Price" is defined in Section 18.1 of the Master
Lease.
"Ouarterly Payment Date" means the last day of each February, May,
August and November or, if any such day is not a Business Day, the next
succeeding Business Day.
"Release" means any release, pumping, pouring, emptying, injecting,
escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal or
emission of a Hazardous Material.
"Remarketing Option" is defined in Section 20.1 of the Master Lease.
"Renewal Term" is defined in clause (a) of Section 11.1 of the
Participation Agreement.
"Rent" means, collectively, the Basic Rent and the Supplemental Rent,
in each case payable under the Master Lease.
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"Reorganization" means with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of such term as
used in Section 4241 of ERISA.
"Replacement Participant" is defined in Section ll.l(b) of the
Participation Agreement.
"Requesting Party" is defined in Section 22.1 of the Master Lease.
"Required Lenders" means, at any time, Lenders having Loans outstanding
representing at least 66-2/3% of the aggregate Loans outstanding; provided,
however, that if any Lender shall be a Defaulting Participant at such time, then
there shall be excluded from the determination of "Required Lenders" such
Defaulting Participant's principal balance of the Loans owing to such Defaulting
Participant.
"Required Lessors" means, at any time, Lessors having Lessor Amounts
representing at least 66-2/3% of the aggregate Lessor Amount outstanding;
provided however that if any Lessor shall be a Defaulting Participant at such
time, then there should be excluded from the definition of "Required Lessors",
the amount of the Lessor Amount owing to such Defaulting Participant.
"Required Modification" is defined in Section 10.1 of the Master Lease.
"Required Participants" means at any time Participants representing
66-2/3% of the aggregate of Loans and Lessor Amounts outstanding; provided,
however, that there shall be excluded therefrom any Defaulting Participant's
Loans or Lessor Amounts, as the case may be.
"Requirement of Law" means, as to any Person (a) the partnership
agreement, certificate of incorporation, bylaws or other organizational or
governing documents of such Person, and (b) all Federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions affecting the Property, the
Improvements or the demolition, construction, use or alteration thereof, whether
now or hereafter enacted and in force, including any that require repairs,
modifications or alterations in or to the Property or in any way limit the use
and enjoyment thereof (including all building, zoning and fire codes and the
Americans with Disabilities Act of 1990, 42 U.S.C. S 1201 et seq. and any other
similar Federal, state or local laws or ordinances and the regulations
promulgated thereunder) and any that may relate to environmental requirements
(including all Environmental Laws), and all permits, certificates of occupancy,
licenses, authorizations and regulations relating thereto, and all covenants,
agreements, restrictions and encumbrances contained in any instruments which are
either of record or known to Lessee affecting the Property, the Appurtenant
Rights and any easements, licenses or other agreements entered into pursuant to
Section 11.2 of the Master Lease.
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"Responsible Officer" means the Chairman of the Board, President, any
Vice President, the Secretary, the Treasurer, any Assistant Secretary, or any
Assistant Treasurer of such Person.
"Responsible Officer's Certificate" means a certificate signed by any
Responsible Officer in substantially the form of Exhibit D-2 to the
Participation Agreement, which certificate shall certify as true and correct the
subject matter being certified to in such certificate.
"Restricted Funded Debt" shall mean on any date, all Funded Debt of the
Guarantor and its Restricted Subsidiaries determined on a consolidated basis in
accordance with GAAP.
"Restricted Subsidiary" shall mean any Subsidiary of the Guarantor
which is identified as a Restricted Subsidiary on Schedule III hereto or which,
after the date of this Agreement, is designated by the Guarantor (by resolution
of its Board of Directors and prior notice to the Administrative Agent) to be a
Restricted Subsidiary, provided that any Restricted Subsidiary may be
redesignated by the Guarantor (by the same procedure) as an Unrestricted
Subsidiary in accordance with the provisions of this definition. Any such
designation or redesignation may be made more than once with respect to any
Subsidiary of the Guarantor. Notwithstanding the foregoing: (i) no Restricted
Subsidiary may be designated an Unrestricted Subsidiary unless (A) such
Subsidiary, at the time of such designation, does not own, directly or
indirectly, any capital stock of any other Restricted Subsidiary or have any
Lien upon any of the assets of any other Restricted Subsidiary and (B)
immediately prior to and after such designation no Default shall exist; and (ii)
no Unrestricted Subsidiary may be designated a Restricted Subsidiary unless (A)
at the time of such designation, such Subsidiary does not have outstanding any
obligations with respect to a sale or leaseback transaction which would have
been prohibited under Section 10.1(i) hereof had such Subsidiary been a
Restricted Subsidiary at the time of such transaction and (B) immediately prior
to and after such designation no Default shall exist and the representations and
warranties made by the Guarantor in Section 8.2 of the Participation Agreement
shall be true on and as of the date of such designation with the same force and
effect as if made on and as of such date.
"Restricted Tangible Net Assets" shall mean, on any date, all Property
of the Guarantor and its Restricted Subsidiaries (including the amount of any
investment in any Person, other than an Unrestricted Subsidiary and other than a
Person that was an Unrestricted Subsidiary at the time of the investment but is
not a Subsidiary on the date of determination, valued at the cost of the equity
interest of the Guarantor and its Restricted Subsidiaries in such Person) which
in accordance with GAAP are classified as assets and appear on the asset side of
the consolidated balance sheet of the Guarantor and its Restricted Subsidiaries,
less, without duplication, (i) the liabilities of the Guarantor and its
Restricted Subsidiaries which in accordance with GAAP are classified as
liabilities and appear on the liability side of such consolidated balance sheet,
excluding any Funded Debt, capital stock and surplus, surplus reserves,
provisions for deferred income taxes and minority interests in Restricted
Subsidiaries, (ii) depreciation and valuation reserves and other reserves and
items deductible in accordance with GAAP other than contingency reserves not
allocated to a
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particular purpose, (iii) goodwill, trade names and trademarks, patents, patent
application, copyrights, franchises, licenses, permits, unamortized debt
discount and expense, research, development or experimental expense not properly
carried in inventory, organizations expenses and other similar intangible
assets, (iv) minority interests, if any, in Restricted Subsidiaries and (v)
treasury shares, if any, carried as an asset on such balance sheet.
"S&P" means Standard & Poor's, a division of The McGraw-Hill Companies,
Inc.
"S&P Rating" shall mean at any time the rating assigned by Standard &
Poor's Corporation to the outstanding unsecured long-term senior indebtedness of
the Guarantor. References to specific ratings are references to such ratings as
currently defined by Standard & Poor's Corporation and in the event Standard &
Poor's Corporation changes its rating system, each reference to a particular S&P
Rating shall be deemed to be a reference to the rating under such new or changed
rating system which most closely approximates the credit quality of the
particular rating as currently defined. If for any reason an S&P Rating is
unavailable for the long-term unsecured indebtedness of the Guarantor, and such
a rating is available from one or more other nationally recognized rating
agency, then the Administrative Agent, after consultation with the Guarantor and
approval of the Required Participants, shall select one of such available rating
systems to be used in lieu of the S&P Rating and the Guarantor and the Required
Participants shall then negotiate in good faith for an amendment to this
agreement substituting such new ratings for the S&P Rating. If no such
substitute rating is available or agreed to, then in that event (i) the
applicable margin shall be determined by the Administrative Agent, after
consultation with the Guarantor, so as to approximate the Administrative Agent's
estimate of what the ratings of long-term unsecured senior indebtedness of the
Guarantor would have been had S&P Ratings been available, the determination of
the Administrative Agent to be final and conclusive provided that it has been
made in good faith, and (ii) changes in the applicable Lessor Margin and Loan
Margin shall become effective as of and on the date of a change in the rating
used to determine the same.
"Scheduled Payment Date" means:
(a) as to any Eurodollar Loan/Lessor Amount, the last day of
each applicable Interest Period (and, if any such Interest Period shall
exceed three (3) months, on each date occurring every three (3) months
after the first day of such Interest Period) and the Maturity Date; and
(b) as to any Base Rate Loan/Lessor Amount, each Quarterly
Payment Date and the Maturity Date; provided, however, that if any such
day is not a Business Day, then the "Scheduled Payment Date" shall be
the immediately succeeding Business Day (except as otherwise required
by clause (ii) of the proviso in the definition of "Interest Period"
with respect to Eurodollar Loans/Lessor Amounts).
"Shortfall Amount" means, as of the Expiration Date, an amount equal to
(i) the Lease Balance, minus (ii) the Loan Balance received by the
Administrative Agent from the Lessee pursuant to Section 20.2(f) of the Master
Lease, minus (iii) the aggregate amount of
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the highest, binding, written, unconditional, irrevocable offer to purchase the
Property obtained by the Lessee pursuant to Section 20.2(a) of the Master Lease;
provided, however, that if the sale of the Property to the Person submitting
such offer is not consummated on or prior to the Expiration Date, then the term
"Shortfall Amount" shall mean an amount equal to (i) the Lease Balance, minus
(ii) the Loan Balance received by the Administrative Agent pursuant to Section
20.2(f) of the Master Lease.
"Significant Casualty" means a Casualty that the Administrative Agent
and the Agent Lessor determines in their reasonable good faith judgment based
upon consultation with a qualified professional (a) renders the Property
unsuitable for continued use as property of the type of the Property immediately
prior to such Casualty, or (b) is so substantial in nature that restoration of
the Property to substantially its condition as it existed immediately prior to
such Casualty would be impracticable or impossible.
"Significant Condemnation" means (a) a Condemnation that involves a
taking of the Agent Lessor's entire title to the Land, or (b) a Condemnation
that the Administrative Agent and the Agent Lessor determines in their
reasonable good faith judgment based upon consultation with a qualified
professional (i) renders the Property unsuitable for continued use as property
of the type of the Property immediately prior to such Condemnation, or (ii) is
so substantial in nature that restoration of the Property to substantially its
condition as it existed immediately prior to such Condemnation would be
impracticable or impossible.
"Subsidiary" shall mean, for any Person, any corporation, partnership
or other entity of which at least a majority of the securities or other
ownership interests having by the terms thereof ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
of such corporation, partnership or other entity (irrespective of whether or not
at the time securities or other ownership interests of any other class or
classes of such corporation, partnership or other entity shall have or might
have voting power by reason of the happening of any contingency) is at the time
directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person. "Wholly Owned Subsidiary" shall mean any such corporation,
partnership or other entity of which all of the equity securities or other
ownership interests (other than, in the case of a corporation, directors'
qualifying shares) are so owned or controlled.
"Supplemental Rent" means all amounts, liabilities and obligations
(other than Basic Rent) which the Lessee assumes or agrees to pay to the
Administrative Agent, any Participant or any other Person under the Master
Lease, or under any of the other Operative Documents and any amount payable
under the Ground Lease.
"Survey" is defined in Section 6.l(o) of the Participation Agreement.
"Tangible Net Worth" shall mean, as at any date, the sum for the
Guarantor and its Consolidated Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), of the following: (a) the gross
book value of assets (excluding goodwill, patents, trademarks, tradenames,
organization expense, treasury stock,
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unamortized debt discount and expense, deferred charges and other like
intangibles) minus (b) the sum of the following: (i) reserves applicable to the
assets referred to in the foregoing clause (a), and (ii) all liabilities
(including accrued and deferred income taxes and subordinated Indebtedness).
"Tax Indemnitee" means each Lender, each Lessor, the Administrative
Agent and the Agent Lessor.
"Taxes" is defined in the definition of Impositions.
"Telerate Page 3750" means the display designated as "Page 3750" on
the Telerate Service (or such other page as may replace Page 3750 on that
service or such other services as may be nominated by the British Bankers'
Association as the information vendor for the purpose of displaying British
Bankers' Association Interest Settlement Rates for U.S. Dollar deposits).
"Termination Date" is defined in Section 15.2 of the Master Lease.
"Transaction Expenses" means all reasonable costs and expenses incurred
in connection with the preparation, execution and delivery of the Operative
Documents and the Transactions including without limitation:
(a) the reasonable fees, out-of-pocket expenses and
disbursements of Chapman and Cutler, special counsel for the
Administrative Agent and Arranger, Agent Lessor and Lessors, and such
fees, expenses and disbursements of counsel for the Lessee, in
negotiating the terms of the Operative Documents and the other
transaction documents, preparing for the closing under, and rendering
opinions in connection with, such transactions and in rendering other
services customary for counsel representing parties to transactions of
the types involved in the Transactions;
(b) the reasonable fees, out-of-pocket expenses and
disbursements of one special counsel for the Administrative Agent,
Arranger, Agent Lessor and Lessors in connection with (1) any
amendment, supplement, waiver or consent with respect to any Operative
Documents requested or approved by Lessee, and (2) any enforcement of
any rights or remedies against Lessee in respect of the Operative
Documents that arise after an Event of Default;
(c) any and all Taxes and fees incurred in recording,
registering or filing any Operative Document or any other transaction
document, any deed, declaration, mortgage, security agreement, notice
or financing statement with any public office, registry or governmental
agency in connection with the Transactions.
(d) all reasonable out-of-pocket expenses, disbursements and
costs of the Administrative Agent, Arranger and the Agent Lessor paid
or incurred in connection with the Transactions;
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(e) all title fees, premiums and escrow costs and other
expenses relating to title insurance and the closings contemplated by
the Operative Documents;
(f) all expenses relating to property surveys and
Environmental Audits; and
(g) all fees and other expenses relating to Appraisals.
"Transactions" shall mean the transactions contemplated by the
Operative Documents.
"Transferee" is defined in Section 12.3 of the Participation Agreement.
"Trustee" means Ward Williford, Esq., as deed of trust trustee under
the Master Lease.
"Unfunded Current Liability" of any Plan means the amount, if any, by
which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan.
"Uniform Commercial Code" and "UCC" means the Uniform Commercial Code
as in effect in any applicable jurisdiction.
"Unrestricted Subsidiary" shall mean any Subsidiary of the Guarantor
other than a Restricted Subsidiary.
"U S West Agreements" means any documents or agreements to be
conveyed, assigned, terminated or canceled pursuant to the terms of the Purchase
Contract.
"Yield" is defined in Section 4.1(a) of the Participation Agreement.
"Yield Rate" means the sum of the Base Rate or the LIBOR Rate, as
applicable, plus the Lessor Margin.
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