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EXHIBIT 10.15
EXECUTION COPY
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AMENDED AND RESTATED
PARTICIPATION AGREEMENT
dated as of February 9, 1999
among
SYMANTEC CORPORATION,
as Lessee, Construction Agent, Pledgor and Guarantor,
SUMITOMO BANK LEASING AND FINANCE, INC.,
as Lessor,
VARIOUS FINANCIAL INSTITUTIONS
IDENTIFIED HEREIN,
as Lenders,
THE BANK OF NOVA SCOTIA,
as Documentation Agent,
and
THE SUMITOMO BANK, LIMITED, LOS ANGELES BRANCH
as Agent
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Lease Financing of Properties
for Symantec Corporation
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AMENDED AND RESTATED PARTICIPATION AGREEMENT
THIS AMENDED AND RESTATED PARTICIPATION AGREEMENT (this "Participation
Agreement"), dated as of February 9, 1999, is entered into by and among SYMANTEC
CORPORATION, a Delaware corporation, as the Lessee, Pledgor and Guarantor
(together with its permitted successors and assigns, the "Lessee"; in its
capacity as Pledgor, the "Pledgor"; and in its capacity as Guarantor, the
"Guarantor"); SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation,
as Lessor (together with its permitted successors and assigns, the "Lessor");
the various financial institutions as are or may from time to time become
lenders (the "Lenders") under the Loan Agreement; THE BANK OF NOVA SCOTIA, as
Documentation Agent, and THE SUMITOMO BANK, LIMITED, LOS ANGELES BRANCH, as
Agent (in such capacity, the "Agent").
W I T N E S E T H:
WHEREAS, on each Acquisition Date, the Lessor will purchase from one or
more third parties designated by the Lessee parcels of Land, together with all
Improvements thereon, if any;
WHEREAS, the Lessor desires to lease to the Lessee, and the Lessee
desires to lease from the Lessor, each Property; and
WHEREAS, the Lessor is willing to provide a portion of the funding of
the costs of the acquisition of Land and all Improvements thereon, if any, Fees
and the Transaction Expenses incurred in connection therewith;
WHEREAS, the Lenders are willing to provide financing of the remaining
portion of the costs of acquisition of Land and all Improvements thereon, if
any, Fees and the Transaction Expenses incurred in connection therewith; and
WHEREAS, to secure such financing (a) the Lessor will have the benefit
of a first priority Lien on the Properties and (b) the Lenders will have the
benefit of (i) a Lien on the Lessor's right, title and interest in the
Properties, (ii) a guaranty of all of the obligations of the Lessor under the
Loan Agreement, and (iii) a pledge of certain marketable securities of the
Lessee;
WHEREAS, the Lessee and the Lessor, with the consent of the Lenders wish
to provide for exchange of: (i) the Property subject to Lease Supplement No. 3
and (ii) one million three
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hundred twenty five thousand dollars ($1,325,000.00) for certain new property to
be subjected to the Master Lease pursuant to Lease Supplement No. 4;
WHEREAS, the Lenders and the Lessor wish to finance the refurbishment
and construction of certain Improvements located on the Land which shall be
subject to Lease Supplement No. 4;
WHEREAS, the Lessee, as Construction Agent, will cause to be refurbished
and constructed certain Improvements on the Land subject to Lease Supplement No.
4 and such Improvements, as constructed, will be the property of the Lessor;
WHEREAS, the Lessor desires to lease to the Lessee, and the Lessee
desires to lease from the Lessor, such Improvements;
WHEREAS, the Lessee, the Lessor, the Lenders and the Agent now desire to
amend and create an amended and restated: (a) Participation Agreement, (b)
Appendix A to the Participation Agreement, (c) Master Lease, (d) Lease
Supplement No. 2, (e) Loan Agreement, (f) Guaranty and (g) Assignment of Lease
and Rent;
In consideration of the mutual agreements contained in this
Participation Agreement and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
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; and the rules of interpretation set forth in Appendix A
hereto shall apply to this Participation Agreement.
ARTICLE II
CONDITIONS PRECEDENT TO DOCUMENTATION AND ACQUISITION DATES;
CONDITIONS PRECEDENT TO EACH CONSTRUCTION ADVANCE; CONDITIONS
TO SUBSTANTIAL COMPLETION
SECTION 2.1. Documentation Date. The date of effectiveness of this
Participation Agreement (the "Documentation Date") shall be deemed to have
occurred on the earliest date on which the following conditions precedent shall
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Participation Agreement
have been satisfied or waived, in the reasonable discretion of the Lessor and
Agent:
(a) Participation Agreement. This Participation Agreement shall
have been duly authorized, executed and delivered by the parties hereto.
(b) Master Lease. The Master Lease shall have been duly
authorized, executed and delivered by the parties thereto.
(c) Loan Agreement. The Loan Agreement shall have been duly
authorized, executed and delivered by the parties thereto.
(d) Assignment of Lease and Rent. The Assignment of Lease and
Rent, shall have been duly authorized, executed and delivered by the
Lessor, as assignor, to the Lenders, as assignees, and the Assignment of
Lease and Rent, shall have been consented to and acknowledged by the
Lessee.
(e) Guaranty. The Guaranty shall have been duly authorized,
executed and delivered by the Company.
(f) Pledge Agreement. The Pledge Agreement shall have been duly
authorized, executed and delivered by the parties thereto.
(g) Corporate Documents. The Lessee shall have delivered to the
Agent, the Lessor and each Lender
(i) a certificate of its Secretary or an Assistant
Secretary attaching and certifying as to (A) the resolutions of
the Board of Directors duly authorizing the execution, delivery
and performance by it of each Operative Document to which it is
or will be a party, (B) its certificate of incorporation and
by-laws, and (C) the incumbency and signature of persons
authorized to execute and deliver on its behalf the Operative
Documents to which it is a party; and
(ii) a certificate of good standing with respect to it
issued by the Secretary of State of the State of Delaware.
(h) Legal Opinion. The Agent and the Lessor shall have received,
with a copy for each Lender, an opinion of
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counsel for the Lessee, covering the matters set forth in Exhibit C,
dated the Documentation Date and addressed to the Agent, the Lessor and
the Lenders, and otherwise in form and substance reasonably satisfactory
to the Agent, the Lessor and the Lenders.
(i) Representations and Warranties. On the Documentation Date,
the representations and warranties of each of the Lessee 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.
(j) Fees. The Agent and the Lessor shall have received all Fees
then due and payable pursuant to the Fee Letter.
(k) Certain Transaction Expenses. Counsel for each of the
Participants shall have received, to the extent then invoiced, payment
in full in cash of all Transaction Expenses payable to such counsel
pursuant to Section 9.1.
All documents and instruments required to be delivered pursuant to this Section
2.1 shall be delivered at the offices of Xxxxx, Xxxxx & Xxxxx, 1675 Broadway,
New York, New York, or at such other location as may be determined by the
Lessor, the Lenders and the Lessee, provided that this Agreement shall have no
effect if the Documentation Date does not occur on or prior to February 15,
1999.
SECTION 2.2. Acquisition Dates/Restructuring Date. Each closing date
with respect to the acquisition of Land (and the Improvements existing thereon,
if any), including specifically the Restructuring Date (each, an "Acquisition
Date"), shall occur on the date on which all of the conditions precedent thereto
set forth in this Section 2.2 with respect to such acquisition (or exchange)
shall have been satisfied or waived by the applicable parties as set forth
herein. The parties hereto agree that the Lessor's obligations to acquire any
parcel of Land (and Improvements thereon, if any) and the obligation of the
Lessor to make available any related Lessor Amount shall not be subject to any
conditions precedent set forth in this Section 2.2 to the extent such conditions
are actions required of the Lessor. Subject to the preceding sentence, the
obligation of the Lessor to acquire any Land
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Participation Agreement
(and/or Improvements, if any) on an Acquisition Date, the obligation of the
Lessor to make available any related Lessor Amount on such Acquisition Date and
the obligation of each Lender to make any related Loan on such Acquisition Date,
are subject to satisfaction or waiver of the following conditions precedent:
(a) Funding Request. Each of the Lenders, the Lessor and the
Agent shall have received a fully executed counterpart of the applicable
Funding Request or Exchange Request in accordance with Section 3.4. Each
of the delivery of a Funding Request or Exchange Request and the
acceptance of the proceeds of such Advance or Exchange shall constitute
a representation and warranty by the Lessee that on such Acquisition
Date (both immediately before and after giving effect to the making of
such Advance and the application of the proceeds thereof), the
statements made in Section 8.1 are true and correct.
(b) Responsible Officer's Certificate. The Lessor and the
Lenders shall each have received a Responsible Officer's Certificate of
the Lessee, in substantially the form of Exhibit B attached hereto,
dated as of the Acquisition Date, stating that (i) to such Responsible
Officer's knowledge each and every representation and warranty of the
Lessee contained in each Operative Document to which it is a party is
true and correct in all material respects on and as of such Acquisition
Date; (ii) to such Responsible Officer's knowledge no Default or Event
of Default has occurred and is continuing under any Operative Document
to which it is a party with respect to the Lessee; (iii) to such
Responsible Officer's knowledge each Operative Document to which the
Lessee is a party is in full force and effect with respect to it; and
(iv) the Lessee has duly performed and complied with all conditions
contained herein or in any other Operative Document required to be
performed or complied with by it on or prior to such Acquisition Date.
(c) Deed. On or prior to such Acquisition Date, the Lessor shall
have received a Deed with respect to such Property (and/or all
Improvements located thereon) being purchased on such Acquisition Date,
conveying fee simple title to the applicable Land, and all Improvements
existing thereon, if any, to the Lessor and subject only to Permitted
Liens.
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(d) Xxxx of Sale. On or prior to the Acquisition Date, the
Lessor shall have received a xxxx of sale (a "Xxxx of Sale"), conveying
title to the Lessor in any Improvements and other personal property
(other than inventory) comprising part of the applicable Property.
(e) Lease Supplement Lessor and Financing Statements;
Recordation.
On or prior to the Acquisition Date
(i) the Lessee and the Lessor shall have delivered to
the Agent and the Lenders the original counterpart of each of
the Lease Supplement executed by the Lessee and the Lessor with
respect to the applicable Property;
(ii) the Lessee shall have delivered to the Lessor all
Lessor Financing Statements relating to such Property as the
Lessor or any other Participant may reasonably request in order
to protect the Lessor's interest under the Master Lease and the
Lease Supplement relating to the applicable Property to the
extent the Master Lease and such Lease Supplement constitute
security agreements; and
(iii) each of the Participants shall have received
evidence reasonably satisfactory to it that each of (i) the
Lease Supplement and any other instrument constituting a Lessor
Mortgage, and (ii) the Lessor Financing Statements, in each case
relating to such Property, has been, or are being, recorded in a
manner sufficient to properly secure each of their interests
therein.
(f) Appraisal. On or prior to the Acquisition Date, the Lessor
and the Lenders shall have received an Appraisal of the applicable
Property, in form and substance satisfactory to the Agent and the
Lessor, which Appraisal shall show that, as of the Acquisition Date, the
Fair Market Sales Value of such Property shall not be less than 100% of
the sum of the Property Acquisition Costs for such Property. On or prior
to the Restructuring Date with respect to City Center II, the Lessor and
the Lenders shall have received such an Appraisal with respect to City
Center II and a new Appraisal with respect to City Center I dated within
60 days of such Acquisition Date. If either of the Appraisals referred
to in the preceding sentence indicate that the Fair Market Sales Values
of
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either City Center I or City Center II as of the Maturity Date will be
less than 90% of the Lease Balance therefor, then the parties hereto
shall modify the Basic Rent payments due with respect to such Properties
so that the Lease Balance as of the Final Maturity Date (assuming
payment of all Basic Rent payments as and when due) will equal such
appraised Fair Market Sales Values.
(g) Evidence of Insurance. The Lessor and the Lenders shall have
received evidence that the insurance maintained by the Lessee with
respect to such 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. The Lessor and each Lender shall have
received an Environmental Audit with respect to the applicable Property
in form and Substance reasonably satisfactory to the Lessor and the
Agent. On or prior to the Acquisition Date with respect to City Center
II, the Lessor and Lenders shall have received an Environmental Audit
with respect to City Center II dated within 90 days of such Acquisition
Date and reasonably satisfactory in form and substance to the Lessor and
the Agent.
(i) Property Survey and Title Insurance. On or prior to the
Acquisition Date and on the Restructuring Date, the Lessee shall have
delivered to each of the Lessor and the Agent, on behalf of the Lenders,
an American Land Title Association ("ALTA")/1992 (Urban) Survey of such
Property certified to the Participants and the title company and
otherwise in form reasonably acceptable to the Participants and a
commitment to deliver an ALTA extended owners and lenders title
insurance policy covering such Property in favor of the Lessor and the
Agent, on behalf of the Lenders, respectively, such policy in an amount
not less than the sum of the related Property Acquisition Costs and to
be reasonably satisfactory to the Agent and the Lessor with such
customary endorsements issued by the title company as a routine matter,
if requested by the Agent.
(j) Subleases. With respect to any Property that as of the
Acquisition Date is subject to a sublease between the Lessee, as
sublessor, and the sublessee thereof, then on or prior to such
Acquisition Date (i) the Lessee shall
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have delivered a copy of each such sublease to the Lessor and the Agent,
and (ii) with respect to each such sublease, except for the sublease to
Apple Computer, Inc., the Lessee shall have executed and delivered, and
caused each such sublessee to execute and deliver, to the Lessor and the
Agent, a Subordination, Nondisturbance and Attornment agreement in the
form of Exhibit D.
(k) Governmental Approvals. All necessary Governmental Actions
required by any Requirement of Law or any Property Legal Requirements
for the purpose of authorizing the Lessor to acquire the applicable
Property shall have been obtained or made and be in full force and
effect.
(l) Litigation. No action or proceeding shall have been
instituted, nor shall any action or proceeding be threatened, before any
Governmental Authority, nor shall any order, judgment or decree have
been issued or proposed to be issued by any Governmental Authority (i)
to set aside, restrain, enjoin or prevent the full performance of any
Operative Document or any transaction contemplated hereby or thereby or
(ii) which is reasonably likely to materially and adversely affect the
Lessee.
(m) Requirements of Law. The transactions contemplated by the
Operative Documents do not and will not violate any Material Requirement
of Law and do not and will not subject the Lessor to any Material
adverse regulatory prohibitions or constraints.
(n) 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 Land
and Improvements located thereon, if any, requested by such Funding
Request.
(o) No Material Adverse Change. As of the Acquisition Date,
there shall not have occurred any Material adverse change in the
consolidated assets, liabilities, results of operations, or financial
condition of the Lessee from that set forth in the Submitted Financial
Statements.
(p) Supplement to Assignment of Lease and Rent. On or prior to
such Acquisition Date, the Lessor shall have delivered to the Agent a
Supplement to the Assignment of
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Lease and Rent with respect to the applicable Property substantially in
the form of Exhibit A thereto, together with a consent to and
acknowledgement of such Supplement duly executed by the Lessee.
(q) Opinion of Counsel to the Lessee. On the initial Acquisition
Date only, the Participants shall have received an opinion of counsel
located in the jurisdiction in which the applicable Land is situated in
form and substance reasonably acceptable to the Lessor and the Agent.
(r) Exchange Request Procedure. In the event that an Exchange
Request is submitted by the Lessee regarding an exchange of (i) the
Property subject to Lease Supplement No. 3 and (ii) one million three
hundred twenty five thousand dollars ($1,325,000.00) for certain new
property to be subjected to the Master Lease pursuant to Lease
Supplement No. 4, then prior to such exchange there shall be deposited
in an account designated by the Lessor one million three hundred twenty
five thousand dollars ($1,325,000.00). Upon receipt of such funds the
Lessor shall apply such funds to the Lessee's outstanding Lease Balance
with respect to City Center I and City Center II in such proportion as
requested in writing by the Lessee, provided that if no such request is
received by the Lessor prior to the exchange such amount shall be
applied to the Lease Balance for City Center II. After the application
of such funds the Lease Balance for the Property subject to Lease
Supplement No. 3 shall become the Lease Balance for the Property subject
to Lease Supplement No. 4 and the Property subject to Lease Supplement
No. 3 shall be released from the Lease.
All documents and instruments required to be delivered pursuant to this Section
2.2 shall be delivered to the Lessor at the offices of Xxxxx, Xxxxx & Xxxxx,
1675 Broadway, New York, New York, or at such other locations as may be
determined by the Lessor, the Lenders and the Lessee.
SECTION 2.3. Conditions Precedent to each Construction Advance. The
obligations of the Lessor to make a Construction Advance on a Construction
Payment Date is subject to satisfaction or waiver of the following conditions
precedent:
(a) Funding Request. The Agent shall have received a fully
executed counterpart of the applicable Funding Request in accordance
with Section 3.4 (except that the
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Funding Request shall be substantially in the form of Exhibit E to
Master Amendment No. 1) executed by the Lessee, as Construction Agent.
Each of the delivery of a Funding Request and the acceptance of the
proceeds of the applicable Construction Advance shall constitute a
representation and warranty by the Lessee that on such Construction
Payment Date (both immediately before and after giving effect to the
making of such Construction Advance and the application of the proceeds
thereof), the statements made in Section 8.2 are true and correct.
(b) Fees. The Agent and the Lessor shall have received all fees
then due and payable pursuant to Section 4.3.
(c) Accuracy of Representations and Warranties. On the
applicable Construction Payment Date the representations and warranties
of the Lessee contained herein and in each of the other Operative
Documents shall be true and correct in all Material respects as though
made on and as of such date, except to the extent such representations
or warranties relate solely to an earlier date, in which case such
representations and warranties shall have been true and correct in all
Material respects on and as of such earlier date.
(d) Litigation. On the applicable Construction Payment Date
there shall not be any actions, suits or proceedings pending or, to the
knowledge of the Lessee, threatened by or against the Lessee (i) that
are reasonably likely to have a Material adverse effect on City Center
II or (ii) that question the validity of the Operative Documents or the
rights or remedies of the Lessor with respect to the Lessee or City
Center II under the Operative Documents.
(e) No Default. There shall not have occurred and be continuing
any Default or Event of Default under the Master Lease, and no Default
or Event of Default under the Master Lease will have occurred after
giving effect to the making of the Construction Advance requested by
such Funding Request.
(f) Commitment Amount. After giving effect to the applicable
Construction Advance, (x) the condition set forth in Section 3.1(c)
shall not be violated, (y) the Property Improvement Costs for City
Center II shall not exceed the Construction Commitment therefor.
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(g) Cost of Completion. After giving effect to the applicable
Construction Advance, the estimated as yet unpaid cost to the
Construction Agent of completing the Construction pursuant to the
Construction Documents shall not exceed the Available Construction
Commitment.
(h) Building Permits. All building permits required by any
Governmental Authority in connection with the Construction for which the
applicable Construction Advance is being made shall have been obtained.
(i) Prime Construction Contract. With respect to all
Construction Advances, the Prime Construction Contract shall have been
duly executed and delivered by the parties thereto and shall be in form
and substance satisfactory to the Lessor. The Prime Construction
Contract for City Center II shall provide for completion of Construction
by the Outside Completion Date for a fixed price not in excess of the
Available Construction Commitment therefor and shall permit the
Construction Agent to withhold at least 10% of amounts due under such
contract until Substantial Completion.
(j) Title Policy Endorsement. The Lessor shall have received on
the date of such Construction Advance an endorsement to the title policy
delivered pursuant to the Lease (i) indicating that since the date of
the preceding Construction Advance there has been no change in the state
of title, and (ii) updating the title policy to the date of such
Construction Advance.
SECTION 2.4. Conditions to Substantial Completion of the Property.
Substantial Completion shall be deemed to have occurred for purposes of the
Operative Documents at such time as the Construction shall have been
substantially completed in accordance with the Plans and Specifications and all
Applicable Law, as evidenced by certificates of the Architect, the Prime
Contractor and the Construction Agent, all in form and substance reasonably
satisfactory to the Lessor.
ARTICLE III
FUNDING OF ADVANCES
SECTION 3.1. Advances. (a) Subject to the conditions and terms hereof,
the Lessor and the Lenders shall take the following actions at the written
request of the Lessee on the Acquisition Date for each Property:
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(i) the Lessor and the Lenders shall make an Advance
(out of the funds provided by the Lessor and the Lenders) to the
Lessee, for the purpose of financing, if required, the
acquisition of Land and Improvements existing thereon, if any,
and the Fees and the Transaction Expenses incurred in connection
therewith, and the proceeds of such Advances shall be made
directly to the Lessee or to such payees designated in writing
by the Lessee;
(ii) the Lessor shall acquire the Land and Improvements,
if any (using the funds provided by the Lessor and the Lenders
or in exchange for City Center V); and
(iii) the Lessor shall lease the Land and Improvements
to the Lessee under the Master Lease and the respective Lease
Supplements.
(b) Subject to the conditions and terms hereof, (including,
without limitation, receipt of a Funding Request (or Exchange Request)
in accordance with Section 3.4), the Lessor and the Lenders shall make a
Construction Advance on a Construction Payment Date (out of funds
provided by the Lessor and the Lenders) to the Lessee, for the purpose
of financing the Construction of Improvements prior to the Restructuring
Date, for City Center V, and after the Restructuring Date, for City
Center II, and the proceeds of such Construction Advances shall be paid
directly to the Construction Agent or its designee(s) for the purpose of
paying or reimbursing itself for Property Improvement Costs, and paying
Capitalized Interest, the Arrangement Fee, the Commitment Fees,
Transaction Expenses paid or payable by the Lessee in connection
therewith, and all fees paid or payable by the Lessee to the Lessor in
connection with the Operative Documents.
(c) Notwithstanding any other provision hereof, the Participants
shall not be obligated to make any Advance if, after giving effect
thereto, the aggregate outstanding amounts of each of the Loans and the
Lessor Amounts would exceed the Maximum Commitment Amount.
SECTION 3.2. Lessor Commitment. Subject to the conditions and terms
hereof, the Lessor shall make available to the Lessee on each Funding Date an
amount (each such amount, a "Lessor Amount") in immediately available funds
equal to the
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Commitment Percentage of the Lessor of the amount of the Advance being funded on
such Funding Date. Notwithstanding any other provision hereof, the Lessor shall
not be obligated to make available any Lessor Amount if, after giving effect to
the proposed Lessor Amount, the outstanding aggregate amount of the respective
Lessor Amounts of the Lessor would exceed the Lessor's Commitment.
SECTION 3.3. Lenders' Commitments. Subject to the conditions and terms
hereof, the Lenders severally shall make Loans to the Lessor at the request of
the Lessee on each Funding Date for each Property in an amount in immediately
available funds equal to such Lender's Commitment Percentage of the amount of
the Advance being funded to Lessee on such Funding Date. Notwithstanding any
other provision hereof, no Lender shall be obligated to make any Loan if, after
giving effect to the proposed Loan, the outstanding aggregate amount of such
Lender's Loans would exceed such Lender's Commitment.
SECTION 3.4. Procedures for Advances.
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(a) With respect to each funding of an Advance, the Lessee shall
give the Lessor and the Agent prior written notice pursuant to a Funding
Request substantially in the form of Exhibit A (a "Funding Request"),
which Funding Request shall be delivered not later than 10:00 a.m., five
(5) Business Days prior to the proposed Funding Date, specifying: (i)
the proposed Funding Date, (ii) the amount of Advance requested,(iii) to
which Properties such Advance is being allocated and the amount
allocated to each Property. The Agent and the Lessor shall calculate the
amounts of the Lessor Amounts and the Loans required to fund the
requested Advance as it relates to each Property. In the event that the
Lessor and the Lenders are unable to obtain a LIBO Rate (Reserve
Adjusted) for the period of the Advance requested in any Funding
Request, the Lessor and the Lenders shall make available Lessor Amounts
and Loans, as the case may be, at the Alternate Base Rate equal to the
Advance requested in such Funding Request and (iv) in the case of a
Construction Advance, requesting that the proceeds of such Construction
Advance be wire transferred to the accounts and Persons specified
therein. Such Lessor Amounts and Loans shall accrue Yield or Interest,
as the case may be, at the Alternate Base Rate until the date on which
the Lessor and the Lenders shall be able to obtain a LIBO Rate (Reserve
Adjusted) for the amount of such Advance, at which time such Lessor
Amounts and Loans shall convert and thereafter accrue Yield and
Interest, as the case may be, at the LIBO Rate (Reserve Adjusted);
provided, however, that no such conversion shall occur unless the Lessee
shall have submitted an Interest Period Selection Notice in connection
therewith.
(b) The proceeds of each Advance shall be used solely to provide
the Lessee with funds with which to pay or reimburse itself for Property
Acquisition Costs and Property Improvement Costs.
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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 LIBO Rate (Reserve Adjusted), a 360-day year basis and, if
calculated at the Alternate Base Rate, a 360-day year basis if the
Alternate Base Rate is calculated at the Federal Funds Rate, and a 365-,
or, if applicable, 366-, day year basis if the Alternate Base Rate is
calculated at the Prime Rate. 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.
(b) The 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 Agent by the Lessee under the Lease from time
to time.
(c) During the Base Lease Term, Yield shall accrue on
outstanding Lessor Amounts and shall be paid on each Scheduled Payment
Date.
(d) During the Base Lease Term, the Lessee shall make an
amortization payment, if any, with respect to the aggregate Lessor
Amounts, on the date and in the amount(s) set forth in the Master Rent
Schedule.
(e) 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.
(b) The Agent shall distribute, in accordance with the Article
VII, the Lender Basic Rent and all other amounts due with respect to the
Loans paid to the Lessor by the Lessee under the Lease from time to
time.
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SECTION 4.3. Fees; Break Costs. The Lessee hereby agrees to pay the fees
set forth in this Section 4.3. All such fees shall be non-refundable.
(a) Commitment Fees. The Lessee shall pay to the Lessor, for the
period (including any portion thereof when the Lessor's obligations
pursuant to Section 3.2 are suspended by reason of the Lessee's
inability to satisfy any condition of Article II) (x) with respect to
City Center V, commencing on (and including) the Improvements Closing
Date for City Center V and continuing through (but excluding) the
earlier of the Restructuring Date or the last day of the Construction
Commitment Period with respect to City Center V, a Commitment Fee at a
rate of 0.275% per annum on the average daily unused portion of the
Lessor Commitment amount and (y) with respect to City Center II, from
the Restructuring Date) to the last day of the Construction Commitment
Period, a Commitment Fee at a rate of 0.80% per annum on the average
daily unused portion of the Lessor Commitment. The Lessee shall pay to
the Agent for distribution to the Lenders in proportion to their
respective Loan Commitments, with respect to City Center II, commencing
from the Restructuring Date and continuing to the last day of the
Construction Commitment Period, a Commitment Fee at a rate of 0.20% per
annum on the average daily unused portion of the Loan Commitment.
Collectively or individually, as the context may require, the above
Commitment Fees payable by the Lessee to either the Lessor or the Agent
(for the benefit of the Lenders) shall be referred to as a "Commitment
Fee". The Commitment Fee shall be payable by the Lessee in arrears on
each Construction Payment Date and on the last day of the Construction
Commitment Period. The Commitment Fee, including that portion payable to
the Lenders, shall be paid from the proceeds of Advances and the Agent
shall instruct the Lessor and the Lenders to make notations in their
records that such fees have been paid, capitalized and added to the
Lease Balance.
(b) Arrangement Fee. The Lessee has paid to the Lessor an
Arrangement Fee (the "Arrangement Fee"), with respect to City Center V
which fee was capitalized and included in the Property Improvement Costs
of City Center V. In addition, the Lessee shall pay to the Lessor with
respect to City Center II, for distribution by it to the Lenders in
proportion to their respective Loan Commitments, an amount equal to
0.10% of the Loan Commitment Amount. Such amounts for City Center II
shall be payable on the Restructuring Date and shall be paid from the
proceeds of Advances and the Agent shall instruct
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the Lessor and the Lenders to make notations in their records that such
fees have been paid, capitalized and added to the Lease Balance.
(c) Break Costs. To the extent any Participant incurs Break Costs as a
result of the occurrence of the Restructuring Date, such Break Costs shall be
paid from the proceeds of Advances and the Agent shall instruct the Lessor and
the Lenders to make notations in their records that such Break Costs have been
paid, capitalized and added to the Lease Balance.
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, the Lessor will be treated as the
owner and the lessor of the Properties and the Lessee will be treated as
the lessee of the Properties 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 Lessor 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 outstanding principal amount of the
Loans, which loans are secured by the Properties and (C) the Lessee will
be treated as the owner of the Properties and will be entitled to all
tax benefits ordinarily available to an owner of properties like the
Properties for such tax purposes. Nevertheless, the Lessee acknowledges
and agrees that neither the Lessor nor any of the 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.
(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 the Lessee, the
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Lessor, or the Lenders or any collection actions, the transactions
evidenced by the Operative Documents shall be regarded as loans made by
the Lessor and the Lenders as unrelated third party lenders of the
Lessee.
SECTION 5.2. Amounts Due Under Lease. Anything else herein or elsewhere
to the contrary notwithstanding, it is the intention of the Lessee, the Lessor
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 Lease shall be equal
to the aggregate payments due and payable as interest on the Loans and Yield on
the Lessor Amounts on each Basic Rent Payment Date; (ii) if the Lessee elects
the Purchase Option or becomes obligated to purchase any of the Properties under
the Lease, the Loans, the Lessor Amounts, all interest, Yield and Fees thereon
and all other obligations of the Lessee owing to the Lessor and the Lenders
shall be paid in full by the Lessee; (iii) if the Lessee properly elects the
Remarketing Option, the Lessee shall only be required to pay to the Lessor the
proceeds of the sale of each of the Properties, 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
Properties under the Lease, the amounts then due and payable by the Lessee under
the Lease shall include all amounts necessary to pay in full the Lease Balance,
plus all other amounts then due from the Lessee to the Participants under the
Operative Documents.
SECTION 5.3. Purchase of World Headquarters. In the event that the
Purchase Option for World Headquarters is exercised by the Lessee or an assignee
thereof and the purchase price paid therefor is in excess of the Lease Balance
applicable thereto, the Lessee may deliver all or a portion of such excess to
the Lessor and direct the Lessor to apply the amount of such excess to the
partial payment of the outstanding Lease Balance for either or both of City
Center I or City Center II as agreed upon with the Lessor at the time of such
purchase and the Lessor shall comply with such direction.
ARTICLE VI
ADDITIONAL COLLATERAL
SECTION 6.1. Deficiency. If the fair market value, as determined by the
Collateral Agent, of the Additional Collateral held by the Collateral Agent
shall be less than 102.0% of the Loan Balance then outstanding (any such day of
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Participation Agreement
determination, a "Deficiency Date"), and the Lessee has been given notice of
such deficiency by the Collateral Agent pursuant to the terms and conditions of
the Pledge Agreement, then, within two Business Days of such Deficiency Date,
the Lessee shall deposit with the Collateral Agent such Additional Collateral
("Deficiency Collateral") so as to cause the fair market value, as determined by
the Collateral Agent, of Additional Collateral then held by the Collateral Agent
pursuant to the terms and conditions of the Pledge Agreement, and after giving
effect to the deposit of such Deficiency Collateral, to be equal to or in excess
of 102.0% of the then outstanding Loan Balance.
SECTION 6.2. Surplus. If on any day the fair market value of the
Additional Collateral held by the Collateral Agent pursuant to terms and
conditions of the Pledge Agreement shall exceed 102.0% of the then outstanding
Loan Balance, and provided that no Default or Event of Default has occurred and
is continuing, then the Lessee may request in writing to the Agent and the
Lessor that the Lessor and the Agent cause the Collateral Agent to release to
the Lessee Additional Collateral in an amount such that after giving effect to
such release, the fair market value, as determined by the Collateral Agent of
the remaining Additional Collateral held by the Collateral Agent subject to the
terms and conditions of the Pledge Agreement shall equal or exceed 102.0% of the
then outstanding Loan Balance (such released Additional Collateral, "Surplus
Collateral"). Upon receipt of such notice, and subject to the terms and
conditions of the Pledge Agreement, the Agent and the Lessor promptly shall
cause the Collateral Agent to release such Surplus Collateral to the Lessee;
provided, however, that after giving effect to such release, no Default of Event
of Default shall occur; and provided further, that no release of Surplus
Collateral shall in any way affect the obligations of the Lessee pursuant to
Section 6.1.
ARTICLE VII
DISTRIBUTIONS
SECTION 7.1. Basic Rent. Each payment of Basic Rent (and any payment of
interest on overdue installments of Basic Rent) received by the Agent shall be
distributed by the Agent to the Lessor and the Lenders pro rata, without
priority, in accordance with, and for application to, the Lender Basic Rent and
Lessor Basic Rent then due, as well as any overdue interest or yield due to the
Lenders (to the extent permitted by applicable law).
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Participation Agreement
SECTION 7.2. Purchase Payments by the Lessee.
(a) Any payment received by the Agent as a result of:
(i) the purchase of any or all of the Properties in
connection with the exercise of the Purchase Option under
Section 18.1 of the Master Lease,
(ii) compliance with the obligation to purchase (or
cause its designee to purchase) all of the Properties in
accordance with Section 18.2 of the Master Lease,
(iii) compliance with the obligation to purchase all
unsold Properties in accordance with Section 16.2(e) of the
Master Lease,
(iv) failure to fulfill one or more of the conditions to
exercise of the Remarketing Option with respect to any Property
pursuant to Section 20.1 of the Master Lease and Lessor's
receipt of the Lease Balance pursuant to the next-to-last
paragraph of Section 20.1 of the Master Lease,
(v) the payment of the Property Balance with respect to
any Property in accordance with Section 15.1 of the Master
Lease,
shall be distributed by the Agent to the Lessor 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 Agent in accordance with Section 20.1(k) of the Master Lease upon the
exercise of the Remarketing Option shall be distributed to the Lenders for
application to pay in full the Participant Balance of each Lender.
SECTION 7.4. Sales Proceeds of Remarketing of Properties. Any payments
received by the Agent as proceeds from the sale of the Properties 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
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Participation Agreement
appraisal pursuant to Section 13.2, shall be distributed by Agent in the funds
so received in the following order of priority:
first, to the Lessor for application to pay in full the
Participant Balance of the Lessor, and
second, the balance, if any, shall be promptly paid to the
Lessor to be distributed as provided in the Lease.
SECTION 7.5. Supplemental Rent. All payments of Supplemental Rent
received by the Agent (excluding any amounts payable pursuant to the preceding
provisions of this Article VII) shall be distributed promptly by the Agent upon
receipt thereof to the Persons entitled thereto pursuant to the Operative
Documents.
SECTION 7.6. Additional Collateral Realizations. All amounts realized
and received by the Agent on account of the exercise of its remedies with
respect to the Additional Collateral shall be distributed by the Agent in the
following order of priority:
first, so much of such payment or amount as shall be required to
reimburse the Agent or Collateral Agent for any tax, expense or other
loss incurred by the Agent or Collateral Agent, as the case may be (to
the extent not previously reimbursed and to the extent incurred in
connection with any duties as the Agent or Collateral Agent, as the case
may be), shall be distributed to the Agent for its own account;
second, so much of such payments or amounts as shall be required
to pay the Agent or the Collateral Agent the amounts payable to it
pursuant to any expense reimbursement or indemnification provisions of
the Operative Documents shall be distributed to the Agent or the
Collateral Agent, as the case may be;
third, so much of such payments or amounts as shall be required
to pay the then existing or prior Lenders the amounts payable to them
pursuant to any expense reimbursement or indemnification provisions of
the Operative Documents shall be distributed to each such Lender without
priority of one over the other in accordance with the amount of such
payment or payments payable to each such Person;
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Participation Agreement
fourth, to the Lenders for application to pay in full the
Participant Balance of each Lender and, in the case where the amounts so
distributed shall be insufficient to pay in full as aforesaid, then 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; and
fifth, the balance, if any, of such payment or amounts remaining
thereafter shall be promptly distributed to, or as directed by, the
Lessee.
Notwithstanding the foregoing, (i) proceeds derived from the liquidation
of the Additional Collateral shall be distributed first, 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, second, to the Lessor in satisfaction of the Lessor Balance and third,
to the extent of any excess, to the Lessee and (ii) proceeds derived from the
sale of Properties shall be distributed first, to the Lessor in satisfaction of
the Lessor Balance, second, among the Lenders as provided in foregoing clause
(i) and third, to the extent of any excess, to the Lessee.
SECTION 7.7. Distribution of Payments after Lease Event of Default.
(a) All amounts received by the Agent during the continuance of
a Lease Event of Default, shall, except as provided in Section 7.6, be
distributed by the Agent in the following order of priority:
first, so much of such payment or amount as shall be
required to reimburse the Agent for any tax, expense or other
loss incurred by the Agent (to the extent not previously
reimbursed and to the extent incurred in connection with any
duties as the Agent), shall be distributed to the Agent for its
own account;
second, so much of such payments or amounts as shall be
required to pay the Agent the amounts payable to it pursuant to
any expense reimbursement or indemnification provisions of the
Operative Documents shall be distributed to the Agent;
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third, so much of such payments or amounts as shall be
required to pay the then existing or prior Lenders and the
Lessor 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;
fourth, to the Lessor to pay in full the Lessor Balance
then to the Lenders to pay in full any outstanding Loan Balance;
and
fifth, 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 Agent in
connection with any Condemnation during the continuance of a Lease Event
of Default shall be distributed by the Agent as follows:
(i) in the event that Lessor and the Agent elect to pay
all or a portion of such amounts to the Lessee for the repair of
damage caused by such Condemnation in accordance with Section
14.1(a) of the Master Lease, then such amounts shall be
distributed to the Lessee, and
(ii) in the event that the Lessor and the 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 7.8. Other Payments.
(a) Except as otherwise provided in Sections 7.1, 7.2, 7.6, 7.7
and clause (b) below, any payment received by the Agent for which no
provision as to the application thereof is made in the Operative
Documents or elsewhere in this Article VII shall be distributed pro rata
among the Lenders and the Lessor 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.
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(b) Except as otherwise provided in Sections 7.1, 7.2, 7.6 and
7.7, all payments received and amounts realized by Lessor under the
Master Lease or otherwise with respect to the Properties to the extent
received or realized at any time after indefeasible payment in full of
the Participant Balances of all of the Lenders and the Lessor and any
other amounts due and owing to the Lenders or the Lessor, shall be
distributed forthwith by the Agent in the order of priority set forth in
Section 7.7.
(c) Except as otherwise provided in Sections 7.1 and 7.2, any
payment received by Lessor for which provision as to the application
thereof is made in an Operative Document but not elsewhere in this
Article VI shall be distributed forthwith by the Agent to the Person and
for the purpose for which such payment was made in accordance with the
terms of such Operative Document.
SECTION 7.9. Casualty and Condemnation Amounts. Subject to Section
7.7(b), any amounts payable to the 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:
(a) all amounts payable to a 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 Agent to the Lenders and
the Lessor 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 13.10 shall not apply to any
distribution or prepayment made pursuant to this Section 7.9(b).
SECTION 7.10. Order of Application. To the extent any payment made to
any Lender or the Lessor pursuant to Section 7.2, 7.3, 7.4, 7.6 or 7.7 is
insufficient to pay in full the Participant Balance of such Lender or the
Lessor, then each such payment shall first be applied to accrued interest or
Yield and then to principal or the Lessor Amount, as applicable.
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Participation Agreement
ARTICLE VIII
REPRESENTATIONS
SECTION 8.1. Representations of the Participants. Each Participant
represents and warrants to each other Participant 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 is a commercial bank, savings and
loan association, savings bank, pension plan, depository institution,
insurance company, branch or agency of a foreign bank or other similar
financial institution, or an Affiliate thereof.
(c) Power and Authority. Such Participant has the requisite
power and authority to enter into and perform under the Operative
Documents to which it is a party.
SECTION 8.2. Representations of the Lessee. The Lessee hereby represents
and warrants to each Participant and the Agent that:
(a) Corporate Status. The Lessee (i) is a duly organized and
validly existing corporation in good standing under the laws of the
State of Delaware and (ii) has duly qualified and is authorized to do
business and is in good standing in all jurisdictions where the failure
to do so might have a Material adverse effect on it or its properties.
(b) Corporate Power and Authority. The Lessee has the corporate
power and authority to execute, deliver and carry out the terms and
provisions of the Operative Documents to which it is or will be a party
and has taken all necessary corporate action to authorize the execution,
delivery and performance of the Operative Documents to which it is a
party and has duly executed and delivered each Operative Document
required to be executed and delivered by it and, assuming the due
authorization, execution and delivery thereof on the part of each other
party thereto, each such Operative Document constitutes a legal, valid
and binding obligation enforceable against it in accordance with its
terms, except as the same may be
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Participation Agreement
limited by insolvency, bankruptcy, reorganization or other laws relating
to or affecting the enforcement of creditors' rights or by general
equitable principles and except as the same may be limited by certain
circumstances under law or court decisions in respect of provisions
providing for indemnification of a party with respect to liability where
such indemnification is contrary to public policy.
(c) No Violation. Neither the execution, delivery and
performance by the Lessee of the Operative Documents to which it is or
will be a party nor compliance with the terms and provisions thereof,
nor the consummation by the Lessee of the transactions contemplated
therein (i) will result in a violation by the Lessee of any provision of
any Applicable Law or Materially adversely affect (x) the validity or
enforceability of the Operative Documents to which the Lessee is a
party, or the title to, or value or condition of, any Property, or (y)
the consolidated financial position, business or consolidated results of
operations of the Lessee or the ability of the Lessee to perform its
obligations under the Operative Documents, (ii) will conflict with or
result in any breach which would constitute a default under, or (other
than pursuant to the Operative Documents) result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any
of the property or assets of the Lessee pursuant to the terms of any
indenture, loan agreement or other agreement for borrowed money to which
the Lessee is a party or by which it or any of its property or assets is
bound or to which it may be subject (other than Permitted Liens), or
(iii) will violate any provision of the certificate of incorporation or
by-laws of the Lessee.
(d) Litigation. There are no actions, suits or proceedings
pending (except for the actions which have been disclosed to the Lessor
in the Lessee's 10-K for the fiscal year ending on April 1, 1998 and
10-Q for the quarterly period ending on October 2, 1998 or, to the
knowledge of the Lessee, threatened (i) that are reasonably likely to
have a Materially Adverse Effect on any Property or on the businesses,
operations, financial condition or Material Assets of the Lessee or (ii)
that question the validity of the Operative Documents or the rights or
remedies of any Participant with respect to the Lessee or any Property
under the Operative Documents. There is no action, suit or proceeding
(including any proceeding in condemnation or eminent domain or under any
Environmental Law) pending or, to the best of the Lessee's
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Participation Agreement
knowledge, threatened with respect to the Lessee or any Property which
adversely Materially affects the title to, or the use, operation or
value of, such Property.
(e) Governmental Approvals. No Governmental Action by any
Governmental Authority having jurisdiction over the Lessee or any
Property is required to authorize or is required in connection with (i)
the execution, delivery and performance by the Lessee of any Operative
Document to which it is a party, (ii) the Construction (other than those
that have been obtained or will be obtained as needed), or (iii) the
legality, validity, binding effect or enforceability against the Lessee
of any Operative Document to which it is a party.
(f) Investment Company Act. The Lessee is not an "investment
company" or a company "controlled" by an "investment company," within
the meaning of the Investment Company Act.
(g) Public Utility Holding Company Act. The Lessee is not a
"holding company" or a "subsidiary company", or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company",
within the meaning of the Public Utility Company Act of 1935, as
amended.
(h) Provided Information. The information and materials which
have been provided by the Lessee or on its behalf by any Person to any
Participant with respect to each Property, in each case as supplemented
or amended prior to the Funding Date, are true and accurate in all
Material respects on the date as of which such information and materials
are dated or certified and are not incomplete by omitting to state any
fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided.
(i) Taxes. All United States Federal income tax returns and all
other tax returns which are required to have been filed have been or
will be filed by or on behalf of the Lessee by the respective due dates,
including extensions, and all taxes due with respect to the Lessee
pursuant to such returns or pursuant to any assessment received by the
Lessee have been or will be paid. The charges, accruals and reserves on
the books of the Lessee in respect of taxes or other governmental
charges are, in the opinion of the Lessee adequate.
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Participation Agreement
(j) Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA
and the Code with respect to each Plan and is in compliance in all
Material respects with the presently applicable provisions of ERISA and
the Code with respect to the Plan. No member of the ERISA Group has (i)
sought a waiver of the minimum funding standard under Section 412 of the
Code in respect of any Plan, (ii) failed to make any contribution or
payment to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the
posting of a bond or other security under ERISA or the Code or (iii)
incurred any liability under Title IV of ERISA other than a liability to
the PBGC for premiums under Section 4007 of ERISA. No Plan Termination
Event has occurred with respect to any Plan or Multiple Employer Plan.
No member of the ERISA Group has any knowledge of any event that could
result in a liability of any such member to the PBGC, whether under a
Plan, a Multiemployer Plan, a Multiple Employer Plan, or otherwise.
There have not been any nor are there now existing any events or
conditions that would permit any Plan to be terminated under
circumstances that would cause the lien provided under Section 4068 of
ERISA to attach to the Material Assets of the Lessee or its ERISA
Affiliates. The value of the Plans' benefits guaranteed under Title IV
of ERISA on the date hereof does not exceed the value of such Plans'
assets allocable to such benefits as of the date of this Agreement. No
"Prohibited Transaction" within the meaning of Section 406 of ERISA
exists or will exist upon the execution and delivery of this Agreement
or any Operative Document.
(k) Environmental Laws. The Lessee is in compliance with all
Environmental Laws relating to pollution and environmental control in
all domestic jurisdictions in which all real property of the Lessee,
including the Land, are located, other than those the non-compliance
with which would not have a Material adverse effect on such real
property, including the Land, or the consolidated results of operations,
business, or consolidated financial position of the Lessee.
(l) Offer of Securities, etc. Neither the Lessee nor any Person
authorized to act on the Lessee's behalf has, directly or indirectly,
offered any interest in each 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 each such Property), for sale to, or solicited
any offer to acquire any of the same
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from, any Person other than each Participant and the Agent and other
"accredited investors" (as defined in Regulation D of the Securities and
Exchange Commission).
(m) Financial Statements.
(i) The Submitted Financial Statements, copies of which
have been delivered to the Agent and each Participant, present
fairly, in conformity with GAAP subject to the disclosures in
the Lessee's Form 8-K dated January 6, 1999 filed with the SEC,
the financial position of the Lessee as of such date and its
results of operations and cash flows for such fiscal year.
(ii) The unaudited consolidated statement of financial
position of the Lessee as of the quarterly period ending on
October 2, 1998 and the related unaudited consolidated
statements of income, and cash flows for the year to date,
copies of which have been delivered to the Agent and each
Participant, present fairly, in conformity with GAAP subject to
the disclosures in the Lessee's Form 8-K dated January 6, 1999
filed with SEC applied on a basis substantially consistent with
the financial statements referred to in clause (i) of this
subsection (m), the consolidated financial position of the
Lessee as of such date and its consolidated results of
operations and cash flows for such year-to-date period (subject
to normal year-end adjustments).
(n) Property. Each Property and the contemplated use thereof by
the Lessee and its agents, assignees, employees, lessees, licensees and
tenants complies with all Material 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 the Lessee 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 the Lessee's knowledge, threatened with
respect to the Lessee, its Affiliates, or any Property which Materially
adversely affects the title to, or the use, operation or value of, any
Property.
(o) Utilities, etc.. All water, sewer, electric, gas, telephone
and drainage facilities and all other utilities required to adequately
service the applicable Improvements for such Property's intended use are
available pursuant to adequate permits (including any that
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Participation Agreement
may be required under applicable Environmental Laws). No fire or other
casualty with respect to any Property has occurred which fire or other
casualty has had a Material adverse effect on any such Property. Each
Property has available all Material services of public facilities and
other utilities necessary for use and operation of each Property for its
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 such
Improvements and public highways for pedestrians and motor vehicles. All
utilities serving each Property are located in, and vehicular access to
the Improvements on each Property is provided by, either public
rights-of-way abutting each Property or Appurtenant Rights. All Material
licenses, approvals, authorizations, consents, permits (including,
without limitation, building, demolition and environmental permits,
licenses, approvals, authorizations and consents), easements and
rights-of-way, including proof and dedication, required for the use,
treatment, storage, transport, disposal or disposition of any Hazardous
Substance on, at, under or from each Property during the use thereof
have either been irrevocably obtained from the appropriate Governmental
Authorities having jurisdiction or from private parties, as the case may
be, or will be irrevocably obtained from the appropriate Governmental
Authorities having jurisdiction or from private parties, as the case may
be, prior to commencing any use and operation of such Property.
(p) Title. The applicable Deed will be in form and substance
sufficient to convey good and marketable title to the applicable
Property in fee simple, subject only to Permitted Liens. The Lessor will
at all times during the applicable Term have good title to all Equipment
located on each Property and in any Improvements on each Property,
subject only to Permitted Liens.
(q) Insurance. The Lessee has obtained insurance coverage
covering the applicable Property which meets the requirements of the
Master Lease, and such coverage is in full force and effect. The Lessee
carries insurance with reputable insurers in respect of its Material
Assets, in such manner, in such amounts and against such risks as is
customarily maintained by other Persons of similar size engaged in
similar business.
(r) Flood Hazard Areas. Except as otherwise identified on the
applicable survey delivered pursuant to Section 2.1(q), no portion of
any Property is located in
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an area identified as a special flood hazard area by the Federal
Emergency Management Agency or other applicable agency. If any Property
is located in an area identified as a special flood hazard area by the
Federal Emergency Management Agency or other applicable agency, then
flood insurance has been obtained for such Property in accordance with
Article XIII of the Lease and in accordance with the National Flood
Insurance Act of 1968, as amended.
(s) Outstanding Debt. As of the date hereof, the Lessee has no
outstanding Indebtedness, other than Indebtedness arising or permitted
hereunder or under the Operative Documents, except as reflected on the
balance sheets in the Submitted Financial Statements.
(t) Title to Properties. The Lessee has good and marketable
title to all of its Material Assets reflected on the balance sheets in
the Submitted Financial Statements, except for such Material Assets as
have been disposed of in the ordinary course of business, and all such
Material Assets are free and clear of any Lien, except as reflected in
the Submitted Financial Statements and/or notes thereto or as otherwise
permitted by the provisions hereof or under the Operative Documents, and
except for Permitted Liens. The Lessee has such trademarks, trademark
rights, trade names, trade name rights, franchises, copyrights, patents,
patent rights and licenses as to allow it to conduct its business as now
operated, without known conflict with the rights of others.
(u) Defaults. The Lessee is not in default under (and no event
has occurred which with the lapse of time or notice or action by a third
party could result in a default under) any instrument evidencing any
Indebtedness in excess of $1,000,000.00 or under any agreement relating
thereto or any indenture, mortgage, deed of trust, security agreement,
lease, franchise or other agreement or other instrument to which any
such Person is a party or by which any such Person or any of its
Material Assets is subject to or bound.
(v) Use of Advances. No part of any Advance will be used
directly or indirectly for the purpose of purchasing or carrying, or for
payment in full or in part of Debt that was incurred for the purposes of
purchasing or carrying, any margin security as such term is defined in
Section 207.2 of Regulation G of the Board of Governors of the Federal
Reserve System (12 C.F.R., Chapter II, Part 207).
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(w) Solvency. The Lessee is Solvent.
ARTICLE IX
PAYMENT OF CERTAIN EXPENSES
The Lessee agrees, for the benefit of the Lessor, the Agent and the
Lenders, that:
SECTION 9.1. Transaction Expenses.
(a) The Lessee shall pay, or cause to be paid, from time to time
all Transaction Expenses in respect of the transactions on the
Documentation Date and each Funding Date; provided, however, that, if
the Lessee has not received written invoices therefor prior to such
date, such Transaction Expenses shall be paid within ten (10) days after
the Lessee has received written invoices therefor.
(b) The Lessee shall pay or cause to be paid (i) all Transaction
Expenses incurred by the Lessor, the Agent or any Lender in entering
into any future amendments or supplements with respect to any of the
Operative Documents, whether or not such amendments or supplements are
ultimately entered into, or giving or withholding of waivers of consents
hereto or thereto, in each case which have been requested by or approved
by the Lessee, (ii) all Transaction Expenses incurred by the Lessor, the
Agent or the Lenders in connection with any purchase of any Property by
the Lessee or other Person pursuant to Articles XVIII and XXI of the
Master Lease and (iii) all Transaction Expenses incurred by any of the
other parties hereto in respect of enforcement of any of their rights or
remedies against the Lessee or any other Affiliate of the Lessee in
respect of the Operative Documents.
SECTION 9.2. Brokers' Fees and Stamp Taxes. The Lessee shall pay or
cause to be paid any brokers' fees and any and all stamp, transfer and other
similar taxes, fees and excises, if any, including any interest and penalties,
which are payable in connection with the transactions contemplated by this
Participation Agreement and the other Operative Documents.
SECTION 9.3. Loan Agreement and Related Obligations. The Lessee shall
pay, without duplication of any other obligation of the Lessee to pay any such
amount under the Operative Documents, before the due date thereof, all costs,
expenses and other amounts (other than principal and interest
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on the Loans which are payable to the extent otherwise required by the Operative
Documents) required to be paid by the Lessor under the Loan Agreement.
ARTICLE X
OTHER COVENANTS AND AGREEMENTS
SECTION 10.1. Affirmative Covenants of Lessee. The Lessee hereby agrees
that so long as this Participation Agreement is in effect, the Lessee shall:
(a) Information. The Lessee will deliver to the Agent, and each
Participant:
(i) as soon as available and in any event within one
hundred (100) days after the end of each fiscal year of the
Lessee, consolidated statements of financial position of the
Guarantor and its consolidated subsidiaries as of the end of
such fiscal year and the related consolidated statements of
income and cash flows for such fiscal year, setting forth in
each case in comparative form the figures for the previous
fiscal year, with such consolidated financial statements
reported on by Ernst & Young or other independent public
accountants of nationally recognized standing reasonably
acceptable to the Required Participants;
(ii) as soon as available and in any event within sixty
(60) days after the end of each of the first three quarters of
each fiscal year of the Guarantor, a consolidated statement of
financial position of the Guarantor as of the end of such
quarter and the related consolidated statements of income and
cash flows for such quarter and for the portion of the
Guarantor's fiscal year ended at the end of such quarter;
(iii) if and when any member of the ERISA Group (1)
gives or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA) with
respect to any Plan which might constitute grounds for a
termination of such Plan under Title IV or ERISA, or knows that
the plan administrator of any Plan has given or is required to
give notice of any such reportable event, a copy of the notice
of such reportable event given or required to be given to the
PBGC; (2) receives notice of complete or partial withdrawal
liability under Title IV of ERISA or notice that any
Multiemployer Plan is
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in reorganization, is insolvent or has been terminated, a copy
of such notice; (3) receives notice from the PBGC under Title IV
of ERISA of an intent to terminate, impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or
appoint a trustee to administer any Plan, a copy of such notice;
(4) applies for a waiver of the minimum funding standard under
Section 412 of the Code, a copy of such application; (5) gives
notice of intent to terminate any Plan under Section 4041(c) of
ERISA, a copy of such notice and other information filed with
the PBGC; (6) gives notice of withdrawal from any Plan pursuant
to Section 4063 of ERISA, a copy of such notice; or (7) fails to
make any payment or contribution to any Plan or Multiemployer
Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted
or could result in the imposition of a Lien or the posting of a
bond or other security, a certificate of the chief financial
officer or the chief accounting officer of the Lessee setting
forth details as to such occurrence and action, if any, which
the Lessee or applicable member of the ERISA Group is required
or proposes to take;
(iv) as soon as possible and in any event within five
days after the occurrence of each Event of Default or each event
that, with the giving of notice or time elapse, or both, would
constitute an Event of Default continuing on the date of such
statement, a statement of the authorized officer setting forth
details of such Event of Default or event and the action that
the Lessee proposes to take with respect thereto;
(v) immediately upon any change of the Lessee's
independent public accountants, notification thereof and such
further information as the Agent or the Lessor may reasonably
request concerning the resignation, refusal to stand for
reappointment after completion of the current audit or dismissal
of such accountants;
(vi) promptly upon becoming aware thereof, written
notice of any Material adverse change in the business, or
operations of the Lessee;
(vii) promptly upon becoming aware thereof, written
notice of the commencement or existence of any proceeding
against the Lessee or any Affiliate of the Lessee by or before
any court or governmental
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agency that might, in the reasonable judgment of the Lessee,
result in a Material adverse effect on the business, operations
or financial conditions of the Lessee or the ability of the
Lessee to perform its obligations under the Operative Documents;
(viii) as soon as possible and in any event within five
days after the occurrence of any material violation or alleged
violation of an Environmental Law, a statement of an authorized
officer setting forth the details of such violation and the
action which the Lessee proposes to take with respect thereto;
(ix) promptly but no later than five Business Days after
a Change in Control shall have occurred, provide written notice
to the Lessor and the Agent of such occurrence; and
(x) from time to time such additional information
regarding the business, properties, condition or operations,
financial or otherwise, of the Lessee, or regarding any Property
or the status of any construction thereon, as the Agent or the
Lessor may reasonably request.
(b) Compliance with Laws. The Lessee will comply in all Material
respects with all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities (including, without limitation,
Environmental Laws and ERISA and the rules and regulations thereunder)
with respect to its Material Assets, including each Property, except
where the necessity of compliance therewith is contested in good faith
by appropriate proceedings.
(c) Further Assurances. The Lessee shall take or cause to be
taken from time to time all action necessary to assure that the intent
of the parties pursuant to the Operative Documents is given effect as
contemplated by this Lease and that the Lessor holds a perfected Lien on
each Property securing the Lease Balance as contemplated by Article V.
The Lessee shall execute and deliver, or cause to be executed and
delivered, to the Lessor and the Agent from time to time, promptly upon
request therefor, any and all other and further instruments (including
correction instruments and supplemental mortgages, deeds of trust and
security agreements) that may be reasonably requested by the any
Participant to cure any deficiency in the execution and delivery of any
Operative Document to which it is a party.
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(d) Preservation of Existence, Etc. The Lessee will preserve and
maintain its existence and all rights, privileges and franchises
necessary and desirable in the normal conduct of its business and the
performance of its obligations hereunder and under the Operative
Documents.
(e) Payment of Taxes, Etc. The Lessee shall pay and discharge
before the same shall become delinquent, (i) all taxes, assessments and
governmental charges or levies imposed upon it or upon its Material
Assets, and (ii) all lawful claims that, if unpaid, might by law become
a Lien upon its Material Assets; provided, however, that the Lessee
shall not be required to pay or discharge any such tax, assessment,
charge or claim that is being contested in good faith and by proper
proceedings, so long as no public tax sale divesting Lessee of its
interest in the Lessor Property can occur during such proceedings.
(f) Financial Covenants.
(i) Quick Ratio. The Lessee shall maintain as of the
last day of any fiscal quarter (on a consolidated basis) a ratio
of "A" to "B" where:
"A" means the sum of cash, short-term investments, marketable
securities not classified as long-term investments, accounts
receivable and restricted investments held as collateral under
the Pledge Agreement with Sumitomo Bank dated as of October 18,
1996, as amended or restated from time to time ("Restricted
Investments"), less the aggregate amount of outstanding
liabilities secured or supported by all security interests,
liens, encumbrances or rights of others (including any agreement
to grant such a security interest, lien or encumbrance in the
future, whether contingent or not, and including any lien on the
Restricted Investments permitted under subsection 9.03 of the
Credit Agreement) on such assets; and "B" means current
liabilities, including all funded obligations, outstanding
Letter of Credit Obligations and guaranties issued by Borrower
(as defined in the Credit Agreement) to the Bank (as defined in
the Credit Agreement) outstanding under the Credit Agreement and
all similar unfunded instruments outstanding under the Credit
Agreement and, in each case, any instrument and agreement
required under the Credit Agreement; at least equal to the
following number with respect to the following fiscal quarters
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ending: (a) on January 1, 1999 and on April 2, 1999 - 0.75; (b)
on July 7, 1999 and thereafter - 1.00.
(ii) Tangible Net Worth. The Lessee shall maintain as of
the last day of any fiscal quarter (on a consolidated basis)
Tangible Net Worth during the period beginning on April 3, 1999,
in an amount equal to at least 85% of Tangible Net Worth as of
April 2, 1999, plus the sum of (i) 75% of net income after
income taxes (without subtracting losses) earned in each
quarterly accounting period commencing after April 2, 1999 and
(ii) 100% of Equity Proceeds (as defined in the Credit
Agreement);
(iii) Total Debt to Adjusted EBITDA Ratio. Permit as of
the last day of any fiscal quarter the ratio (determined on a
consolidated basis) of (a) total debt (which shall include
Letter of Credit Obligations under the Credit Agreement) to (b)
Adjusted EBITDA not to exceed 1.00 : 1:00, where Adjusted EBITDA
shall mean the aggregate net income for the immediately
preceding four fiscal quarters ending as of that day plus (A) to
the extent deducted from gross revenues in computing such net
income (i) interest expense, (ii) tax expense, (iii)
depreciation, (iv) amortization of goodwill, software
development expenses, and other intangibles of any kind, and (v)
post-closing, non-cash restructuring charges taken in
conjunction with, and within three months following the closing
of, each Acquisition (as defined in the Credit Agreement)
permitted under the Credit Agreement, minus (B) (i) software
development expenses capitalized during such period and (ii)
capital expenditures during such period.
ARTICLE XI
LESSEE DIRECTIONS
SECTION 11.1. Lessee Directions. The Lessor and the Lenders hereby agree
that, so long as no Lease Default or Lease Event of Default exists, the Lessee
shall have the exclusive right to exercise any right of the Lessor under the
Loan Agreement upon not less than two (2) Business Days' prior written notice
from the Lessee to the Lessor.
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Participation Agreement
ARTICLE XII
TRANSFERS OF PARTICIPANTS' INTERESTS
SECTION 12.1. Assignments. All or any part of the interest of any
Participant in, to or under this Participation Agreement, the other Operative
Documents, the Properties or the Notes may be assigned or transferred by such
Participant at any time; provided, however, that (a) each assignment or transfer
shall comply with all applicable securities laws, (b) any assignment or transfer
by a Lender to a Person that is not an Affiliate of the transferor thereof shall
be subject to the consent of the Lessee (which consent shall not be unreasonably
withheld, and no such consent being required with respect to the interest of the
Lessor under the Operative Documents), and (c) any assignee or transferee (i)
acknowledges that the obligations to be performed from and after the date of
such transfer or assignment under this Participation Agreement and all other
Operative Documents are its obligations, including the obligations imposed by
this Section 12.1 (and the transferor and transferee Participant shall deliver
to the Lessee, the Lessor and the Agent an Assignment Agreement, in
substantially the form of Exhibit E, executed by the assignee or transferee) and
(ii) further represents and warrants to the Lessor, each Participant and the
Lessee that:
(A) it is a commercial bank, savings and loan association,
savings bank, pension plan, depository institution, insurance company,
branch or agency of a foreign bank or other similar financial
institution, in each case, having a minimum capital and surplus of
$50,000,000;
(B) it has the requisite power and authority to accept such
assignment or transfer;
(C) it will not transfer such Note or interest in a Lessor
Amount, as the case may be, unless the proposed transferee makes the
foregoing representations and covenants;
(D) it will not take any action with respect to such Note or
interest in a Lessor Amount, as the case may be, that would violate any
applicable securities laws; and
(E) it will not assign or transfer any interest such Note or
interest in a Lessor Amount, as the case may be, except in compliance
with this Section 12.1.
Notwithstanding the foregoing, the Lessor shall not sell, transfer,
assign or otherwise encumber title to any Property, or any portion of any
Property, except as expressly permitted by the Operative Documents or enter into
any lease or easement with respect to any Property, or portion of any Property,
except as expressly permitted by the Operative Documents.
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Participation Agreement
SECTION 12.2. Participations. Any Participant may at any time sell to
one or more commercial banks or other Persons (each of such commercial banks and
other Persons being herein called a "Sub-Participant"), participating interests
in all or a portion of its rights and obligations under this Participation
Agreement, the other Operative Documents, the Properties or its Notes
(including, without limitation, all or portion of the Rent owing to it);
provided, however, that
(a) no participation contemplated in this Section 12.2 shall
relieve such Participant from its obligations hereunder or under any
other Operative Document;
(b) such Participant shall remain solely responsible for the
performance of its Commitment and such other obligations;
(c) the Lessee shall continue to deal solely and directly with
such Participant in connection with such Participant's rights and
obligations under this Participation Agreement and each of the other
Operative documents;
(d) such Participant shall notify the Lessee of any proposed
Sub-Participant; and
(e) no Sub-Participant shall be entitled to require such
Participant to take or refrain from taking any action hereunder or under
any other Operative Document except with respect to (i) any change to
the amount or timing of the payment of any fees, principal or interest;
or (ii) the release of any Lien under the Operative Document.
Each Participant agrees that it will notify the Lessee and Agent promptly of the
identity of each Sub-Participant to which it sells a participating interest
hereunder and the amount of such participating interest. The Lessee acknowledges
and agrees that each Sub-Participant, for purposes of Article XIII, shall be
considered a Participant.
SECTION 12.3. Withholding Taxes; Disclosure of Information; Pledge Under
Regulation A.
(a) If any Participant (or the assignee of or sub-participant 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
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Participation Agreement
continuing obligation to the Lessor and the Lessee) (i) furnish to the
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 Internal Revenue Service Form
W-8 or Internal Revenue Service Form W-9 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 the Lessor and the Lessee a new Internal
Revenue Service Form 4224 or Internal Revenue Service Form 1001 and
Internal Revenue Service Form W-8 or Internal Revenue Service Form W-9
and any such additional form (or any successor form or forms) upon the
expiration or obsolescence of any previously delivered form and
comparable statements in accordance with applicable United States laws
and regulations and amendments duly executed and completed by such
Participant or Transferee, and to comply from time to time with all
applicable United States laws and regulations with regard to such
withholding tax exemption. By its acceptance of a participation or
assignment of a Participant's Note, 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 the assignee or participant or proposed
assignee or participant, any information relating to the Lessee, subject
to any confidentiality requirements relating to such information.
(c) Anything in this Article XII to the contrary
notwithstanding, any Participant may without the consent of the Lessee
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 the Lessee for the benefit of the assigning or pledging
Participant shall be deemed to satisfy the Lessee's obligations with
respect thereto.
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Participation Agreement
ARTICLE XIII
INDEMNIFICATION
SECTION 13.1. General Indemnification.
(a) Interim Term. The Construction Agent agrees, whether or not any of
the transactions contemplated hereby shall be consummated, to assume liability
for, and to indemnify, protect, defend, save and keep harmless the Lessor (which
right to indemnify may be assigned by the Lessor to the Lenders), on an After
Tax Basis, from and against, any and all Claims relating to City Center II and
arising during the Interim Term for such Property that may be imposed on,
incurred by or asserted against the Lessor (whether because of action or
omission by the Lessor), whether or not the Lessor shall also be indemnified as
to any such Claim by any other Person and whether or not such Claim arises or
accrues prior to the Restructuring Date or after the Expiration Date, in any way
relating to or arising out of any of the circumstances described in clauses (i)
through (vii) of Section 13.1(b) below, where such Claims relate to the action
or omission of the Lessee or its Affiliates while located, on, in possession of,
controlling or acting or failing to act with respect to such Property or arise
from fraud, misapplication of funds, illegal acts or willful misconduct of the
Lessee or its Affiliates. The Lessee acknowledges and agrees in this connection
that (x) such Property (other than City Center II which shall not be in the
exclusive control of the Lessee until March 5, 1999) is in its exclusive control
and possession during the Interim Term therefor, (y) it is responsible as
Construction Agent for the acts and omissions of its subcontractors and agents
and (z) it has agreed to maintain such Property free from injury or mishap to
third persons.
(b) Basic Term. The Lessee agrees, whether or not any of the
transactions contemplated hereby shall be consummated, to assume liability for,
and to indemnify, protect, defend, save and keep harmless each Indemnitee, on an
After Tax Basis, from and against, any and all Claims that may be imposed on,
incurred by or asserted against such Indemnitee (whether because of action or
omission by such Indemnitee or otherwise), whether or not such Indemnitee shall
also be indemnified as to any such Claim by any other Person and whether or not
such Claim arises or accrues prior to the Acquisition Date or after the
Expiration Date, in any way relating to or arising out of:
(i) any of the Operative Documents or any of the transactions
contemplated thereby, and any amendment, modification or waiver in
respect thereof;
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Participation Agreement
(ii) the Properties or any part thereof or interest therein;
(iii) the purchase, design, construction, preparation,
installation, inspection, delivery, non-delivery, acceptance, rejection,
ownership, management, possession, operation, rental, lease, sublease,
repossession, maintenance, repair, alteration, modification, addition or
substitution, storage, transfer of title, redelivery, use, financing,
refinancing, disposition, operation, condition, sale (including, without
limitation, any sale pursuant to Section 16.2(c), 16.2(e) or 18.3 of the
Master Lease or any sale pursuant to Article XV, XVIII or XX of the
Master Lease), return or other disposition of all or any part or any
interest in the Properties 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 (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 Properties, (4) the making of any Modifications
in violation of any standards imposed by any insurance policies required
to be maintained by Lessee pursuant to the Lease which are in effect at
any time with respect to the Properties 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 Properties
resulting in any change or special assessments being levied against any
Property or any plans to widen, modify or realign any street or highway
adjacent to any of the Properties, or any Claim for utility "tap-in"
fees;
(iv) the breach by the Lessee of any covenant, representation or
warranty made by it or deemed made by it in any Operative Document or
any certificate required to be delivered by any Operative Document;
(v) the retaining or employment of any broker, finder or
financial advisor by the Lessee to act on its behalf in connection with
this Participation Agreement;
(vi) the existence of any Lien on or with respect to the
Properties, the Improvements, 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
any
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Participation Agreement
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 constructed by the Lessee, except
Lessor Liens and Liens in favor of the Lender or the Lessor; or
(vii) subject to the accuracy of any Participant's
representation set forth in Section 8.1(a), as to such Participant, the
transactions contemplated by the Lease or by any other Operative
Document, in respect of the application of Parts 4 and 5 of Subtitle B
of Title I of ERISA and any prohibited transaction described in Section
4975(c) of the Code;
Notwithstanding Section 13.1 (a) or 13.1(b) 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 or any member of its Indemnitee Group (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 Document, (2) any Claim
resulting from Lessor Liens which the Lessor is, or the Lenders are responsible
for discharging under the Operative Documents, (3) any Claim to the extent
attributable to acts or events occurring after the Expiration Date or the return
or remarketing of any Property so long as the Lessor or the Lenders are not
exercising remedies against the Lessee in respect of the Operative Documents,
and (4) any Claim arising from a breach or alleged breach by the Lenders or the
Lessor of any agreement entered into in connection with the assignment or
participation of any Loan or Lessor Amount. It is expressly understood and
agreed that the indemnity provided for herein shall survive the expiration or
termination of and shall be separate and independent from any remedy under the
Lease or any other Operative Document. 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 Properties 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
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Participation Agreement
Lessee's right to complete the remarketing of the Properties pursuant to
Section 20.1 of the Master Lease, the Lessee shall cause to be delivered
to the 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 satisfactory to 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 the applicable Property from that anticipated for such date in
the Appraisal delivered on the Acquisition Date/Restructuring Date.
(b) If the Lessee elects the Remarketing Option, then on or
prior to the Expiration Date the Lessee shall pay to the Lessor an
amount (not to exceed the Shortfall Amount) equal to the portion of the
Shortfall Amount that the End of the Term Report demonstrates was the
result of a decline in the Fair Market Sales Value of the applicable
Property due to
(i) any rebuilding of the applicable Properties or any
part thereof by the Lessee (except in connection with a
Casualty, unless such rebuilding failed to restore the Property
as required under the Lease), or any failure to restore a
Property after a Condemnation where the proceeds derived
therefrom were made available to the Lessee for restoration, or
(ii) the existence of any Hazardous Activity, Hazardous
Materials or Environmental Violations, the indemnity for which
shall not exceed the cost of the remediation thereof, or
(iii) any restoration or rebuilding carried out by the
Lessee, or
(iv) any condemnation of any portion of any of the
applicable Properties pursuant to Article XIV of the Master
Lease, or
(v) any use of any of the applicable Properties or any
part thereof by the Lessee or any sublessee other than as
contemplated by the applicable Appraisal, or
(vi) any grant, release, dedication, transfer,
annexation or amendment made pursuant to Section 11.2 of the
Master Lease, or
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(vii) the failure of the Lessor to have good and
marketable title to any of the applicable Properties free and
clear of all Liens (excluding Permitted Liens), or
(viii) the existence of any sublease relating to any of
the applicable Properties that shall survive the Expiration
Date.
SECTION 13.3. Environmental Indemnity. Without limitation of the other
provisions of this Article XIII, the Lessee hereby agrees to indemnify, hold
harmless and defend each Indemnitee from and against any and all claims
(including without limitation third party claims for personal injury or real or
personal property damage), losses (including but not limited to, to the extent
the Lease Balance has not been fully paid, any loss of value of the Property
related thereto), damages, liabilities, fines, penalties, charges,
administrative and judicial proceedings (including informal proceedings) and
orders, judgments, remedial action, requirements, enforcement actions of any
kind, and all reasonable and documented costs and expenses incurred in
connection therewith (including but not limited to reasonable and documented
attorneys' and/or paralegals' fees and expenses), including, but not limited to,
all costs incurred in connection with any investigation or monitoring of site
conditions or any clean-up, remedial, removal or restoration work by any
federal, state or local government agency, arising in whole or in part, out of
(a) the presence on or under any of the Properties of any
Hazardous Materials, or any releases or discharges of any Hazardous
Materials on, under, from or onto any of the Properties,
(b) any activity, including, without limitation, construction,
carried on or undertaken on or off any of the Properties, and whether by
the Lessee or any predecessor in title or any employees, agents,
contractors or subcontractors of the Lessee or any predecessor in title,
or any other Persons (including such Indemnitee), in connection with the
handling, treatment, removal, storage, decontamination, clean-up,
transport or disposal of any Hazardous Materials that at any time are
located or present on or under or that at any time migrate, flow,
percolate, diffuse or in any way move onto or under any of the
Properties,
(c) loss of or damage to any property or the environment
(including, without limitation, clean-up costs, response costs,
remediation and removal costs, cost of corrective action, costs of
financial assurance, fines
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and penalties and natural resource damages), or death or injury to any
Person, and all expenses associated with the protection of wildlife,
aquatic species, vegetation, flora and fauna, and any mitigative action
required by or under Hazardous Materials Laws,
(d) any claim concerning lack of compliance with Hazardous
Materials Laws, or any act or omission causing an environmental
condition that requires remediation or would allow any Governmental
Authority to record a Lien on the land records, or
(e) any residual contamination on or under any of the Land, 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 such Hazardous
Materials, and irrespective of whether any of such activities were or
will be undertaken in accordance with applicable laws, regulations,
codes and ordinances;
provided, however, the Lessee shall not be required to indemnify any Indemnitee
under this Section 13.3 for (1) any Claim to the extent resulting from the
willful misconduct or gross negligence of such Indemnitee or (2) any Claim to
the extent attributable to acts or events occurring after the expiration of the
Term or the return or remarketing of any such Property so long as the Lessor and
the Lenders are not exercising remedies against the Lessee in respect of the
Operative Documents. It is expressly understood and agreed that the indemnity
provided for herein shall survive the expiration or termination of and shall be
separate and independent from any remedy under the Lease or any other Operative
Document.
SECTION 13.4. Proceedings in Respect of Claims. With respect to any
amount that the Lessee is requested by an Indemnitee to pay by reason of Section
13.1 or 13.3, such Indemnitee shall, if so requested by the Lessee and prior to
any payment, submit such additional information to the Lessee as the Lessee may
reasonably request and which is in the possession of such Indemnitee to
substantiate properly the requested payment.
In case any action, suit or proceeding shall be brought against any
Indemnitee, such Indemnitee shall notify the Lessee of the commencement thereof,
and the Lessee shall be entitled, at its expense, to participate in, and, to the
extent that the Lessee desires to, assume and control the defense thereof;
provided, however, that the Lessee shall have acknowledged in writing its
obligation to fully indemnify such Indemnitee in
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respect of such action, suit or proceeding, and, the Lessee shall keep such
Indemnitee fully apprised of the status of such action, suit or proceeding and
shall provide such Indemnitee with all information with respect to such action,
suit or proceeding as such Indemnitee shall reasonably request, and provided,
further, that the Lessee shall not be entitled to assume and control the defense
of any such action, suit or proceeding if and to the extent that, (A) in the
reasonable opinion of such Indemnitee, (x) such action, suit or proceeding
involves any risk of imposition of criminal liability or will involve a 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, in the case of civil
liability, the Lessee shall have posted a bond or other security satisfactory to
the relevant Indemnitees in respect to such risk or (y) the control of such
action, suit or proceeding would involve an actual or potential conflict of
interest, (B) such proceeding involves Claims not fully indemnified by the
Lessee which the Lessee and the Indemnitee have been unable to sever from the
indemnified claim(s), or (C) a Lease Event of Default has occurred and is
continuing. The Indemnitee will join in the Lessee's efforts to sever such
action. The Indemnitee may participate in a reasonable manner at its own expense
and with its own counsel in any proceeding conducted by the Lessee in accordance
with the foregoing. The Lessee shall not enter into any settlement or other
compromise with respect to any Claim which is entitled to be indemnified under
Section 13.1 or 13.3 without the prior written consent of the Indemnitee, which
consent shall not be unreasonably withheld in the case of a money settlement not
involving an admission of liability of such Indemnitee.
Each Indemnitee shall at the expense of the Lessee supply the Lessee
with such information and documents reasonably requested by the Lessee as are
necessary or advisable for the Lessee to participate in any action, suit or
proceeding to the extent permitted by Section 13.1 or 13.3. Unless an Event of
Default under the Lease shall have occurred and be continuing, no Indemnitee
shall enter into any settlement or other compromise with respect to any Claim
which is entitled to be indemnified under Section 13.1 or 13.3 without the prior
written consent of the Lessee, which consent shall not be unreasonably withheld,
unless such Indemnitee waives its right to be indemnified under Section 13.1 or
13.3 with respect to such Claim.
Upon payment in full of any Claim by the Lessee pursuant to Section 13.1
or 13.3 to or on behalf of an Indemnitee, the Lessee, without any further
action, shall be subrogated to any and all claims that such Indemnitee may have
relating thereto (other than claims in respect of insurance policies maintained
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Participation Agreement
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
applicable Property and all Tax Indemnitees, and hold them harmless
against, all Impositions on an After Tax Basis.
(b) Contests. If any claim shall be made against any Tax
Indemnitee or if any proceeding shall be commenced against any Tax
Indemnitee (including a written notice of such proceeding) for any
Imposition as to which 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 30 days) notify the Lessee in writing
(provided that failure to so notify the Lessee within 30 days shall not
alter such Tax Indemnitee's rights under this Section 13.5 except to the
extent such failure precludes or materially adversely affects the
ability to conduct a contest of any indemnified Taxes) and shall not
take any action with respect to such claim, proceeding or Imposition
without the written consent of the Lessee (such consent not to be
unreasonably withheld or unreasonably delayed) for 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
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 10 days after the
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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
10-day period.
The Lessee shall be entitled for a period of 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 of such Tax,
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 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 be permitted
to control the contest of such claim, provided that in the case of a
contest described in clause (y), if such Tax Indemnitee determines
reasonably and in good faith that such contest by the Lessee could have
a material adverse impact on the business or operations of such Tax
Indemnitee and provides a written 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) of the preceding sentence, 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 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 of any thereof unless the
Lessee shall have posted and maintained a bond or other security
satisfactory to the relevant Tax Indemnitee in respect to such risk, (B)
if an Event of Default has occurred and is continuing unless the Lessee
shall have posted and maintained a bond or other security
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Participation Agreement
satisfactory to the relevant Tax Indemnitee in respect of the Taxes
subject to such claim and any and all expenses for which the Lessee is
responsible hereunder reasonably foreseeable in connection with the
contest of such claim, (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
such Tax Indemnitee with respect to any period for which the Lessee may
be liable to pay an indemnity under this Section 13.5(b)) exceeds
$75,000 or (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 which 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 decisions regarding what
actions to be taken shall be made by the controlling party in its sole
judgement, 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
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Participation Agreement
settlement offer had been accepted. In addition, the controlling party
shall keep the noncontrolling party reasonably informed as to the
progress of the contest, and shall provide the noncontrolling party with
a copy of (or appropriate excerpts from) any reports or claims issued by
the relevant auditing 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 from
Lessee 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) Reimbursement for Tax Savings. If (x) a Tax Indemnitee or
any Affiliate thereof realizes a deduction, offset, credit or refund of
any Taxes or any other savings or benefit as a result of any indemnity
paid by the Lessee pursuant to this Section 13.5 or (y) by reason of the
incurrence or imposition of any Tax (or the circumstances or event
giving rise thereto) for which a Tax Indemnitee is indemnified hereunder
or any payment made to or for the account of such Tax Indemnitee by the
Lessee pursuant to this Section 13.5 or any payment made by a Tax
Indemnitee to the Lessee by reason of this Section 13.5(c), such Tax
Indemnitee at any time actually realizes a reduction in any Taxes for
which the Lessee is not required to indemnify such Tax Indemnitee
pursuant to this Section 13.5 which reduction in Taxes was not taken
into account in computing such payment by the Lessee to or for the
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Participation Agreement
account of such Tax Indemnitee or by such Tax Indemnitee to the Lessee,
then such Tax Indemnitee shall promptly pay to the Lessee (xx) the
amount of such deduction, offset, credit, refund, or other savings or
benefit together with the amount of any interest received by such Tax
Indemnitee on account of such deduction, offset, credit, refund or other
savings or benefit or (yy) an amount equal to such reduction in Taxes,
as the case may be, in either case together with an amount equal to any
reduced Taxes payable by such Tax Indemnitee as a result of such
payment; provided that no such payment shall be made so long as a
Default or Event of Default shall have occurred and be continuing but
shall be paid promptly after cure of such Default or Event of Default.
Each Tax Indemnitee agrees to take such actions as the Lessee may
reasonably request (provided in the good faith judgment of such Tax
Indemnitee, such actions would not result in a material adverse effect
on such Tax Indemnitee for which such Tax Indemnitee is not entitled to
indemnification from the Lessee) and to otherwise act in good faith to
claim such refunds and other available Tax benefits, and take such other
actions as may be reasonable to minimize any payment due from the Lessee
pursuant to this Section 13.5 and to maximize the amount of any Tax
savings available to it. The disallowance or reduction of any credit,
refund or other tax savings with respect to which a Tax Indemnitee has
made a payment to the Lessee under this Section 13.5(c) shall be treated
as a Tax for which the Lessee is obligated to indemnify such Tax
Indemnitee hereunder without regard to the exclusions set forth in the
definition of Impositions except the exclusions set forth in (iv), (v),
(vi), (vii), (ix), (x), (xi), (xiv) and (xvi).
(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 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,
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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 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 requested 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 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 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.
(f) Verification. At the Lessee's request, the amount of any
indemnity payment by the Lessee or any payment by a Tax Indemnitee to
the Lessee pursuant to this Section 13.5 shall be verified and certified
by an independent public accounting firm mutually acceptable to the
Lessee and such Tax Indemnitee. The costs of such verification shall be
borne by the Lessee unless such verification shall result in an
adjustment in the Lessee's favor of the lesser of (i) $10,000, and (ii)
5 percent of the payment as computed by such Tax Indemnitee, in which
case such fee shall be paid by such Tax Indemnitee. In no event shall
the Lessee have the right to review such Tax Indemnitee's tax returns or
receive any other confidential information from such Tax Indemnitee in
connection with such verification. Any information provided to such
accountants by any Person shall be and remain the exclusive property of
such Person and shall be deemed by the parties to be (and the
accountants will confirm in writing that they will treat such
information as) the
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Participation Agreement
private, proprietary and confidential property of such Person, and no
Person other than such Person and the accountants shall be entitled
thereto and all such materials shall be returned to such Person. Such
accounting firm shall be requested to make its determination within 30
days of the Lessee's request for verifications and the computations of
the accounting firm shall be final, binding and conclusive upon the
Lessee and such Tax Indemnitee. The parties agree that the sole
responsibility of the independent public accounting firm shall be to
verify the amount of a payment pursuant to this Master Lease and that
matters of interpretation of this Master Lease are not within the scope
of the independent accounting firm's responsibilities.
(g) Tax Ownership. Each Tax Indemnitee 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) any Property for any income tax purposes, it being understood that
the Lessee is and will remain the owner of the applicable Property for
such income tax purposes until the termination of the Master Lease. If,
notwithstanding the income tax intentions of the parties as set forth
herein, any Tax Indemnitee actually receives any income tax deductions,
reductions in income tax or other income tax benefit as a result of any
claim for, or recharacterization requiring such party to take, any tax
benefits attributable to ownership of any Property for income tax
purposes, such Tax Indemnitee shall pay to the Lessee, together with an
amount equal to any reduced Taxes payable by such Tax Indemnitee as a
result of such payment, the amount of such income tax savings actually
realized by such Tax Indemnitee (less the amount of any anticipated
increase in income tax which such Tax Indemnitee determines is currently
payable as a result of such claim or recharacterization), provided that
the Lessee shall agree to reimburse such Tax Indemnitee for any
subsequent increase in such Tax Indemnitee's income taxes resulting from
such claim or recharacterization not taken into account in the payment
made to the Lessee, up to the net amount paid to the Lessee by each Tax
Indemnitee. The parties agree that this Section 13.5(g) is intended to
require a payment to the Lessee if and only if each Tax Indemnitee shall
have actually received an unanticipated tax savings with respect to any
Property that would not have been received if each Tax Indemnitee had
advanced funds to the Lessee in the form of a loan secured by such
Property in an amount equal to the applicable Property Cost. Nothing in
this Section 13.5(g) shall be construed to require each Tax Indemnitee
to take
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Participation Agreement
any affirmative action to realize any tax savings if in its good faith
reasonable judgment such action may have a material adverse affect on
each Tax Indemnitee.
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, the Lessee's obligation to pay under the Lease that portion of the Lease
Balance constituting the Loan Balance.
SECTION 13.7. LIBO Rate Lending Unlawful. 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 Participant (or
its Funding Office) with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency shall
make it unlawful or impossible for any Participant (or its Funding Office) to
make, maintain or fund Loans or Lessor Amounts, as applicable, and such
Participant shall so notify the Lessee, whereupon until such Participant
notifies the Lessee that the circumstances giving rise to such suspension no
longer exist, the obligation to make Loans or Lessor Amounts, as applicable,
shall be suspended. Such Participant, with the consent of the Lessee (which
consent shall not unreasonably be withheld), will designate a different Funding
Office if such designation will avoid the need for giving such notice and will
not, in the judgment of such Participant, be otherwise disadvantageous to such
Participant. If such notice is given (i) each Lessee shall be entitled upon its
request to a reasonable explanation of the factors underlying such notice and
(ii) each Advance then outstanding shall begin to bear interest at the Alternate
Base Rate either (a) on the last day of the then current Interest Period
applicable thereto, if such Participant may lawfully continue to maintain and
fund such Advance to such day or (b) immediately, if such Participant shall
determine that it may not lawfully continue to maintain and fund such Advance to
such day.
SECTION 13.8. Deposits Unavailable. If any of the Participants shall
have determined that
(i) Dollar deposits in the relevant amount and for the relevant
Interest Period are not available to the Participant in its relevant
market; or
(ii) by reason of circumstances affecting the Participant's
relevant market, adequate means do not exist for ascertaining the
interest rate or Yield, as the case
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may be, applicable to such Participant's Loans or Lessor Amounts,
then, upon notice from such Participant to the Lessee and the other
Participants, (i) the obligations of the Participants to make Loans or Lessor
Amounts, as the case may be, shall be suspended and (ii) each outstanding Loan
or Lessor Amount, as the case may be, shall begin to bear interest or accrue
Yield at the Alternate Base Rate on the last day of the then current Interest
Period applicable thereto.
SECTION 13.9. Increased Costs, etc.
(a) In the event that the adoption of any applicable law, rule
or regulation, or any change therein or in the interpretation or
application thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof or compliance by any Participant with any request or directive
after the date hereof (whether or not having the force of law) of any
such authority, central bank or comparable agency:
(i) does or shall subject any Participant to any
additional tax of any kind whatsoever with respect to the
Operative Documents or any Loan or Lessor Amount, as applicable,
made by it, or change the basis or the applicable rate of
taxation of payments to such Participant of principal, interest
or any other amount payable hereunder (except for the imposition
of or change in any tax on or measured by or with respect to the
overall gross or net income, or gross or net receipts
(including, without limitation, any minimum taxes, income or
capital gains taxes, or taxes on, or measured by or with respect
to or in the nature of capital, net worth, excess profits, items
of tax preference, capital stock, business privilege or doing
business or any other similar taxes) of such Participant (other
than any such tax imposed by means of withholding and
specifically excluding income taxes merely collected by means of
withholding) or any tax imposed in lieu thereof);
(ii) does or shall impose, modify or hold applicable any
reserve, special deposit, insurance assessment, compulsory loan
or similar requirement against assets held by, or deposits or
other liabilities in or for the account of, advances or loans
by, or other credit extended by, or any other acquisition of
funds by, any office of such Participant which are not otherwise
included in
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determination of the rate of interest on Loan or Lessor Amount,
as applicable, hereunder; or
(iii) does or shall impose on such Participant any other
condition;
and the result of any of the foregoing is to increase the cost to such
Participant of making or maintaining Loan or Lessor Amount, as
applicable, or to reduce any amount receivable hereunder, then in any
such case, the Lessee shall promptly pay to such Participant, upon
demand, any additional amounts necessary to compensate such Participant
for such increased cost or reduced amount receivable which such
Participant deems to be material as determined by such Participant with
respect to Loan or Lessor Amount, as applicable.
(b) If any Participant shall have determined that, after the
date hereof, the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of
reducing the rate of return on capital of such Participant (or any
entity directly or indirectly controlling such Participant) as a
consequence of such Participant's obligations under the Operative
Documents to a level below that which such Participant (or any entity
directly or indirectly controlling such Participant) could have achieved
but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by an
amount deemed by such Participant to be material, then from time to
time, within fifteen (15) days after demand by such Participant, the
Lessee shall pay to such Participant such additional amount or amounts
as will compensate such Participant (or its Parent) for such reduction.
(c) Each Participant will promptly notify the Lessee of any
event of which it has knowledge, occurring after the date hereof, which
will entitle such Participant to compensation pursuant to this Section
and will, if practicable, with the consent of the Lessee (which consent
shall not unreasonably be withheld), designate a different Funding
Office or take any other reasonable action if such designation or action
will avoid the need for, or reduce the amount of, such compensation and
will not, in the
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Participation Agreement
reasonable judgment of such Participant, be otherwise disadvantageous to
such Participant. A certificate of such Participant claiming
compensation under this Section and setting forth in reasonable detail
its computation of the additional amount or amounts to be paid to it
hereunder shall be presumed correct in the absence of demonstrable
error. In determining such amount, such Participant may use any
reasonable averaging and attribution methods.
(d) Notwithstanding the foregoing clauses (a) and (b) of this
Section 13.9, the Lessee shall only be obligated to compensate such
Participant for any amount arising or accruing both:
(i) during (A) any time or period commencing (x) in the
case of subsection (a), not earlier than the first day of any
Interest Period in effect on the date which, and (y) in the case
of subsection (b), not earlier than the date on which such
Participant notifies the Lessee that it proposes to demand such
compensation and identifies to the Lessee the statute,
regulation or other basis upon which the claimed compensation is
or will be based and (B) any time or period during which,
because of the retroactive application of such statute,
regulation or other basis, such Participant did not know that
such amount would arise or accrue; and
(ii) within six months prior to any demand therefor,
accompanied by a certificate of such Participant claiming
compensation and setting forth in reasonable detail its
computation of the additional amount or amounts to be paid to it
hereunder.
SECTION 13.10. Funding Losses. If any payment of principal amount of any
Loan or Lessor Amount is made on any day other than the last day of an Interest
Period applicable thereto, the Lessee shall reimburse the party claiming
reimbursement therefor within fifteen (15) days after demand for any resulting
loss or expense incurred by it, including (without limitation) any loss incurred
in obtaining, liquidating or employing deposits from third parties, but
excluding loss of margin for the period after any such payment or conversion or
failure to borrow or prepay, provided that the such party shall have delivered
to the Lessee a certificate as to the amount of such loss or expense, which
certificate shall be presumed correct in the absence of demonstrable error. Such
party will, at the request of the Lessee, furnish such
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Participation Agreement
additional information concerning the determination of such loss as the Lessee
may reasonably request.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. Survival of Agreements. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Documents, and the parties' obligations under any and all thereof,
shall survive the execution and delivery of this Participation Agreement, the
transfer of any Property to the Lessor, any disposition of any interest of the
Lessor in any Property or any Improvements and the payment of the Notes and any
disposition thereof and shall be and continue in effect notwithstanding any
investigation made by any party and the fact that any party may waive compliance
with any of the other terms, provisions or conditions of any of the Operative
Documents. Except as otherwise expressly set forth herein or in other Operative
Documents, the indemnities of the parties provided for in the Operative
Documents shall survive the expiration or termination of any thereof for a
period not to exceed one year after the later of (x) the Expiration Date and (y)
the payment in full in cash of the Lease Balance.
SECTION 14.2. No Broker, etc. Each of the parties hereto represents to
the others that it has not retained or employed any broker, finder or financial
adviser, except Xxxx Financial Corporation to act on its behalf in connection
with this Participation Agreement or the transactions contemplated herein, nor
has it authorized any broker, finder or financial adviser retained or employed
by any other Person so to act. Any party who is in breach of this representation
shall indemnify and hold the other parties harmless from and against any
liability arising out of such breach of this representation.
SECTION 14.3. Notices. Unless otherwise specifically provided herein,
all notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to any
Person shall be given in writing by United States mail, by nationally recognized
courier service, by hand or by facsimile transmission and any such notice shall
become effective five Business days after being deposited in the mails,
certified or registered with appropriate postage prepaid or one Business Day
after delivery to a nationally recognized courier service specifying overnight
delivery or, if delivered by hand or facsimile transmission, when received, and
shall be directed to
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Participation Agreement
the address of such Person as indicated on Schedule II. From time to time any
party may designate a new address for purposes of notice hereunder by written
notice to each of the other parties hereto in accordance with this Section.
SECTION 14.4. 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 14.5. Amendments.
(a) The provisions of this Participation Agreement may from time
to time be amended, modified or waived, provided, however, that such
amendment, modification or waiver is in writing and consented to by the
Lessee and the Required Participants; provided, further, however, that
no amendment or waiver of any provision relating to payment or
performance of an obligation owed to any Participant shall be effective
against such Participant unless it has been consented to in writing by
such Participant.
(b) Neither any Operative Document nor any of the terms thereof
may be terminated (except upon payment in full of the Lease Balance or
effective exercise and consummation of the Remarketing Option in
accordance with Article XX of the Master Lease and payment in full of
all amounts due in accordance therewith), amended, supplemented, waived
or modified without the written agreement or consent of each party
thereto and, regardless of whether the Lenders and the Lessor are
parties thereto, the Required Participants.
SECTION 14.6. Headings, etc. The Table of Contents and headings of the
various Articles and Sections of this Participation Agreement are for
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof.
SECTION 14.7. 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.
SECTION 14.8. GOVERNING LAW. THIS PARTICIPATION AGREEMENT SHALL IN ALL
RESPECTS BE GOVERNED BY THE LAW OF THE
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Participation Agreement
STATE OF CALIFORNIA (EXCLUDING ANY CONFLICT-OF-LAW OR CHOICE- OF-LAW RULES WHICH
MIGHT LEAD TO THE APPLICATION OF THE INTERNAL LAWS OF ANY OTHER JURISDICTION) AS
TO ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
SECTION 14.9. 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 14.10. Liability Limited. (a) The parties hereto agree that
except as specifically set forth herein or in any other Operative Document,
Lessor shall have no personal liability whatsoever to the Lessee or 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 the recourse shall be
solely had against the Lessor's interest in any Property; provided, however,
that Lessor shall be liable in its individual capacity (a) for its own willful
misconduct or gross negligence (or negligence in the handling of funds), (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 the Lessor as
contemplated by the Operative Documents. It is understood and agreed that,
except as provided in the preceding sentence: (i) Lessor shall have no personal
liability under any of the Operative Documents as a result of acting pursuant to
and consistent with any of the Operative Documents; (ii) all obligations of
Lessor to the Lessee are solely nonrecourse obligations except to the extent
that it has received payment from others; and (iii) all such personal liability
of Lessor is expressly waived and released as a condition of, and as
consideration for, the execution and delivery of the Operative Documents by
Lessor.
(b) No Participant shall have any obligation to any other Participant or
to the Lessee, the Lessor 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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Participation Agreement
SECTION 14.11. 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 (including, without limitation, the
preparation, execution and filing of any and all Uniform Commercial Code
financing statements and other filings or registrations which the parties hereto
may from time to time request to be filed or effected); provided, however, that
the Lessee shall not be required to pay expenses pursuant to this Section to the
extent arising from a breach or alleged breach by the Lenders or the Lessor of
any agreement entered into in connection with the assignment or participation of
any Loan or Lessor Amount. The Lessee, at its own expense and without need of
any prior request from any other party, shall take such action as may be
necessary (including any action specified in the preceding sentence), or as so
requested, in order to maintain and protect all security interests provided for
hereunder or under any other Operative Document.
SECTION 14.12. Submission to Jurisdiction. The Lessee hereby submits to
the nonexclusive jurisdiction of any United States District Court located in the
State of California for purposes of all legal proceedings arising out of or
relating to the Operative Documents or the transactions contemplated hereby. The
Lessee irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
SECTION 14.13. Setoff. The Lenders and the Lessor shall, upon the
occurrence of any Lease Event of Default, have the right to appropriate and
apply to the payment of the Lessee's obligations under the Lease as security for
the payment of such obligations, any and all balances, credits, deposits,
accounts or moneys of the Lessee then or thereafter maintained with any Lender
or Lessor. The rights of the Lenders and the Lessor under this Section are in
addition to other rights and remedies (including other rights of setoff under
applicable law or otherwise) which such Person may have.
SECTION 14.14. Replacement of Lender. If a Lender fails to fund its
share of the Loans, and such failure is not based on a right granted thereto
under the Operative Documents, then the Lessee shall have the right (but not the
obligation) to
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Participation Agreement
require such Lender to assign and delegate in accordance with Section 12.1 all
of such Lender's total Loans and Commitment to any of the Lenders or to any
other financial institution selected by Lessee that, in each case, is willing to
accept such assignment and delegation and if no such Lender or financial
institution will accept such assignment and delegation, the Lessee shall (in
addition to any other right Lessee may have at law or in equity) have the right
to prepay all outstanding amounts with respect to such Lender and terminate such
Lender's Commitment.
SECTION 14.15. WAIVER OF JURY TRIAL. THE PARTIES HERETO VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS PARTICIPATION AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
ANY OF THE PARTIES HERETO. THE PARTIES HERETO HEREBY AGREE THAT THEY WILL NOT
SEEK TO CONSOLIDATE ANY SUCH LITIGATION WITH ANY OTHER LITIGATION IN WHICH A
JURY TRIAL HAS NOT OR CANNOT BE WAIVED. THE PROVISIONS OF THIS SECTION 14.15
HAVE BEEN FULLY NEGOTIATED BY THE PARTIES HERETO AND SHALL BE SUBJECT TO NO
EXCEPTIONS. THE LESSEE ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER OPERATIVE DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE PARTICIPANTS ENTERING INTO THIS PARTICIPATION
AGREEMENT AND EACH SUCH OTHER OPERATIVE DOCUMENT.
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Participation Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
SYMANTEC CORPORATION,
as Lessee, Construction Agent,
Pledgor and Guarantor
By /s/ Xxxx Xxxxx
-------------------------------
Name: Xxxx Xxxxx
Title: VP, Finance
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Participation Agreement
SUMITOMO BANK LEASING AND FINANCE, INC.,
as Lessor
By /s/ Xxxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
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Participation Agreement
THE SUMITOMO BANK, LIMITED, LOS
ANGELES BRANCH, as Agent
By /s/ Xxxx Xxxxxxx
----------------------------------
Name: Xxxx xxxxxxx
Title: Vice President
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68
Participation Agreement
THE BANK OF NOVA SCOTIA,
as Lender and Documentation Agent
By /s/ XXXXXX XXXXXX
------------------------------------
Name: Xxxxxx Xxxxxx
Title: Relationship Manager
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69
Participation Agreement
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A.,
"Rabobank Nederland," New York Branch
By /s/ XXX XXXXX
------------------------------------
Name: Xxx Xxxxx
Title: Senior Credit Officer
By /s/ M. XXXXXXXXX XXXXXX
------------------------------------
Name: M. Xxxxxxxxx Xxxxxx
Title: Vice President
S-5
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SCHEDULE I
TO PARTICIPATION AGREEMENT
COMMITMENTS
================================================================================
PARTICIPANT COMMITMENT
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Lender
--------------------------------------------------------------------------------
The Bank of Nova Scotia [ ]
--------------------------------------------------------------------------------
Rabobank Nederland [$50,000,000.00]
--------------------------------------------------------------------------------
Lessor
--------------------------------------------------------------------------------
Sumitomo Bank Leasing [ ]
and Finance, Inc.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL: $94,000,000.00
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
71
SCHEDULE II
TO PARTICIPATION AGREEMENT
Notice Information, Wire Instructions and Funding Offices
Lessee, Construction Agent and Guarantor
Notice Information, Wire Instructions and Funding Offices
Lessee, Construction Agent and Guarantor
SYMANTEC CORPORATION
00000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Treasury Department
Facsimile No: (000) 000-0000
Wire Transfer Instructions:
Bank: Bank of America
ABA Number: 000000000
Account Number: 12338-10287
Ref: Symantec Lease
Lessor:
SUMITOMO BANK LEASING AND FINANCE, INC.
000 Xxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Credit Officer
Facsimile No.: (000) 000-0000
Wire Transfer Instructions:
Bank: Citibank, N.A. New York
ABA Number: 000000000
F/B/O: The Sumitomo Bank, Ltd., N.Y.
Account Number: 00000000
Further Credit to: Sumitomo Bank Leasing and Finance, Inc.
A/C Number 283572
Ref: Symantec Lease
72
Agent:
THE SUMITOMO BANK, LTD., LOS ANGELES BRANCH
C|O SUMITOMO BANK LEASING AND FINANCE, INC.
000 Xxxx Xxxxxx - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Credit Officer
Facsimile No.: (000) 000-0000
Wire Transfer Instructions:
Bank: Citibank, N.A. New York
ABA Number: 000000000
F/B/O: The Sumitomo Bank, Ltd., N.Y.
Account Number: 00000000
Further Credit to: Sumitomo Bank Leasing and Finance, Inc.
A/C Number 283572
Ref: Symantec Lease
Lenders:
THE BANK OF NOVA SCOTIA
RABOBANK NEDERLAND, NEW YORK BRANCH
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TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS; INTERPRETATION
ARTICLE II
CONDITIONS PRECEDENT TO DOCUMENTATION AND ACQUISITION DATES;
CONDITIONS PRECEDENT TO EACH CONSTRUCTION ADVANCE; CONDITIONS TO
SUBSTANTIAL COMPLETION
SECTION 2.1. Documentation Date.....................................................................2
SECTION 2.2. Acquisition Dates/Restructuring Date...................................................4
SECTION 2.3. Conditions Precedent to each Construction
Advance..............................................................................9
SECTION 2.4. Conditions to Substantial Completion of
the Property........................................................................11
ARTICLE III
FUNDING OF ADVANCES
SECTION 3.1. Advances..............................................................................12
SECTION 3.2. Lessor Commitment.....................................................................13
SECTION 3.3. Lenders' Commitments..................................................................13
SECTION 3.4. Procedures for Advances...............................................................13
ARTICLE IV
YIELD; INTEREST; FEES
SECTION 4.1. Yield.................................................................................14
SECTION 4.2. Interest on Loans.....................................................................15
SECTION 4.3. Fees; Break Costs.....................................................................15
ARTICLE V
CERTAIN INTENTIONS OF THE PARTIES
SECTION 5.1. Nature of Transaction.................................................................16
SECTION 5.2. Amounts Due Under Lease...............................................................17
ARTICLE VI
ADDITIONAL COLLATERAL
SECTION 6.1. Deficiency............................................................................18
SECTION 6.2. Surplus...............................................................................18
ARTICLE VII
DISTRIBUTIONS
SECTION 7.1. Basic Rent............................................................................19
SECTION 7.2. Purchase Payments by the Lessee.......................................................19
SECTION 7.3. Payment of Loan Balance...............................................................20
SECTION 7.4. Sales Proceeds of Remarketing of
Properties..........................................................................20
SECTION 7.5. Supplemental Rent.....................................................................20
SECTION 7.6. Additional Collateral Realizations....................................................20
SECTION 7.7. Distribution of Payments after Lease
Event of Default....................................................................21
SECTION 7.8. Other Payments........................................................................23
SECTION 7.9. Casualty and Condemnation Amounts.....................................................23
SECTION 7.10. Order of Application..................................................................24
74
ARTICLE VIII
REPRESENTATIONS
SECTION 8.1. Representations of the Participants...................................................24
SECTION 8.2. Representations of the Lessee.........................................................24
ARTICLE IX
PAYMENT OF CERTAIN EXPENSES
SECTION 9.1. Transaction Expenses..................................................................31
SECTION 9.2. Brokers' Fees and Stamp Taxes.........................................................32
SECTION 9.3. Loan Agreement and Related Obligations................................................32
ARTICLE X
OTHER COVENANTS AND AGREEMENTS
SECTION 10.1. Affirmative Covenants of Lessee.......................................................32
ARTICLE XI
LESSEE DIRECTIONS
SECTION 11.1. Lessee Directions.....................................................................36
ARTICLE XII
TRANSFERS OF PARTICIPANTS' INTERESTS
SECTION 12.1. Assignments...........................................................................37
SECTION 12.2. Participations........................................................................38
SECTION 12.3. Withholding Taxes; Disclosure of
Information; Pledge Under Regulation A..............................................39
ARTICLE XIII
INDEMNIFICATION
SECTION 13.1. General Indemnification...............................................................40
SECTION 13.2. End of Term Indemnity.................................................................43
SECTION 13.3. Environmental Indemnity...............................................................44
SECTION 13.4. Proceedings in Respect of Claims......................................................45
SECTION 13.5. General Tax Indemnity.................................................................47
SECTION 13.6. Indemnity Payments in Addition to Lease
Obligations.........................................................................54
SECTION 13.7. LIBO Rate Lending Unlawful............................................................54
SECTION 13.8. Deposits Unavailable..................................................................55
SECTION 13.9. Increased Costs, etc..................................................................55
SECTION 13.10. Funding Losses........................................................................57
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. Survival of Agreements................................................................58
SECTION 14.2. No Broker, etc........................................................................58
SECTION 14.3. Notices...............................................................................59
SECTION 14.4. Counterparts..........................................................................59
SECTION 14.5. Amendments............................................................................59
SECTION 14.6. Headings, etc.........................................................................60
SECTION 14.7. Parties in Interest...................................................................60
SECTION 14.8. GOVERNING LAW.........................................................................60
SECTION 14.9. Severability..........................................................................60
SECTION 14.10. Liability Limited.....................................................................60
SECTION 14.11. Further Assurances....................................................................61
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75
SECTION 14.12. Submission to Jurisdiction............................................................61
SECTION 14.13. Setoff................................................................................62
SECTION 14.14. Replacement of Lender.................................................................62
SECTION 14.15. WAIVER OF JURY TRIAL..................................................................62
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SCHEDULES
SCHEDULE I Participants' Commitments
SCHEDULE II Notice Information, Wire Instructions, and
Funding Offices
EXHIBITS
EXHIBIT A Form of Funding Request
EXHIBIT B Form of Responsible Officer's Certificate
EXHIBIT C Form of Legal Opinion
EXHIBIT D Form of Nondisturbance, Subordination and
Attornment Agreement
EXHIBIT E Form of Assignment Agreement
EXHIBIT F Excepted Subleases
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